CMS announces appeals settlement option for IRFs

CMS recently agreed to settle an ongoing dispute with inpatient rehabilitation facilities (IRF) over the backlog of denied Medicare claims.

The settlement is the result of two years of negotiations between the agency and the American Rehabilitation Providers Association, the Fund for Access to Inpatient Rehabilitation, and the Federation of American Hospitals, over frequently denied Medicare claims for IRF services. The claims in question were denied for a variety of reasons, such as if the provider did not document a few minutes of therapy time or did not specify why group, as opposed to individual therapy, was warranted.

The settlement option is available to IRF providers who filed appeals prior to August 31, 2018. To qualify for settlement, an IRF appeal must be currently pending appeal at one of the four levels of administrative appeal. Extrapolated denials and Medicare claims denied by the Office of Inspector General are exempt from the settlement.

Under the settlement, CMS has agreed to pay 69% of the net payable amount for most claims currently pending appeal. The agency will pay 100% of the net payable amount for IRF appeals that:

• Were denied solely because the threshold of therapy time was not met. In addition, the claim must have not undergone comprehensive review for medical necessity based on the individual facts of the case.
• Were denied solely because the justification for group therapy was not documented in the medical record.

CMS is accepting submissions for settlements until September 17. Additional information on eligibility requirements and instructions for submitting an Expression of Interest for the settlement option is available on the CMS website.