Bulletin: CMS Offers Inpatient Hospital Settlement

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CMS has announced a settlement request to Inpatient hospitals that have claims in appeal status. “Unprecedented growth in claim appeals” has been cited as the reason for the offer. The number of claim appeals has been overwhelming CMS’s available resources and ability to respond in a timely manner. Consequently, CMS has made the following offer in an effort to quickly reduce inpatient-status claims currently on appeal.

Note: This administrative offer has been made to Inpatient hospitals only.

CMS is asking hospitals to withdraw any active claims in the appeal process and in return (CMS) is willing to pay 68% of the net allowable to eligible hospitals.

This agreement applies to admissions occurring prior to October 1, 2013. Hospitals wishing to participate must send their request to participate to CMS by October 31, 2014.

Note: There is an extension available if the facility cannot meet the deadline.


1. Step One: The hospital will submit a tentative spreadsheet of eligible claims/appeals to CMS.

2. Step Two: The hospital will review any discrepancies found in the first round validation process and submit a revised spreadsheet along with an Administrative Agreement for CMS Validation within 2 weeks of receipt.

3. Step Three (Reconciliation Process): If the ALJ or DAB identify errors in the agreed upon settlements they will ask that CMS initiate action.


1. Acute Care Hospitals, including those paid via Prospecitve Payment System (PPS), Periodic Interim Payments (PIP), and Maryland waiver
2. Critical Access Hospitals.


1. Psychiatric hospitals paid under the Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS)

2. Inpatient Rehabilitation Facilities (IRFs)

3. Long-Term Care Hospitals (LTCHs)

4. Cancer hospitals

5. Children’s hospitals.


If you have any questions, you can email: MedicareSettlementFAQs@cms.hhs.gov. Your questions will be answered on the MLN Connects Call and will be used to create frequently asked questions and answers that will be posted to the Inpatient Hospital Reviews web page. For additional information and updates you can go to:



For additional information, or to contact Medical Recovery Services, go to:


or call Donald Tapella at (816) 229-4887, ext.111