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CMS agrees to settle appeals for IRF facilities following a two-year disputed with the industry.

The Centers for Medicare & Medicaid Services (CMS) has announced voluntary settlement options for inpatient rehabilitation facility (IRF) providers with claims that have not yet exhausted the Qualified Independent Contractor (QIC), Office of Medicare Hearings and Appeals (OHMA) and/or Council levels of appeals. 

The initiative is part of a CMS effort to reduce the burden on IRFs with appeals pending.

For claims CMS approves for participation, the agency will pay 69 percent of the net payable amount. This would apply for claims that do not meet certain special criteria:

  • Intensity-of-Therapy Appeals: For those claims denied solely due to intensity of therapy time, CMS will pay 100 percent of the net payable amount of the claim; and
  • Group Therapy: For those claims denied solely because the justification for group therapy was not documented in the medical record, CMS will also pay 100 percent of the net payable amount of the claim.

Which Claims Are Covered?

  • Appeals filed with the Medicare Administrative Contractor (MAC) for redetermination no later than Aug. 31, 2018;
  • Appeals currently pending or eligible for further appeal at the MAC, QIC, OMHA, or Council levels.

There are a number of types of claims that are excluded from the settlement offer.

All appeals that meet the eligibility requirements must be settled; you may not choose to settle some eligible appeals but continue through the appeals process for others.

What are the Key Steps in the Settlement Process?

  • The IRF appellant will submit an expression of interest to CMS.
  • CMS will provide a spreadsheet of potentially eligible appeals and the associated claims to the IRF, along with an administrative agreement for the appellant to sign.
  • The appellant will validate the spreadsheet and associated claims.
  • If there are disagreements/discrepancies, an eligibility determination request should be made by the appellant.
  • The appellant will sign the administrative agreement when it agrees with the spreadsheet.
  • CMS will countersign.
  • The appeals will be stayed. (Note: up until this time, appeals will remain in the system and the IRF can continue with those appeals if they do not sign the agreement).
  • The MAC will price the associate claims and issue one payment per settlement agreement within 180 days of CMS’s signature on the agreement.
  • The settled appeals will be dismissed.

What’s the Timeline?

  • The expression of interest (EOI) will be accepted from June 17, 2019, through Sept. 17, 2019.
  • CMS agrees to work expeditiously to create the eligible spreadsheet listing and to countersign and return payment within 190 days of the countersignature.

Where Can I Find More Information?
The following link to the CMS website will provide you with a number of helpful documents: IRF Appeals Initiative

Programming Note:
Listen to Angela Phillips report this story live during Monitor Monday, Monday, June 24, 10-10:30 a.m. EST.


Angela Phillips, PT

Angela M. Phillips, PT, is President & Chief Executive Officer of Images & Associates. A graduate of the University of Pennsylvania, School of Allied Health Professions, she has almost 45 years of experience as a consultant, healthcare executive, hospital administrator, educator, and clinician. Ms. Phillips is one of the nation’s leading consultants assisting Inpatient Rehabilitation Facilities in operating effectively under the Medicare Prospective Payment System (PPS) and in addressing key issues related to compliance.

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