Source: New York Times.com
…Medicare quietly announced on Friday that it would settle hundreds of thousands of hospital appeals over bills for short-term care…The decision is an effort by the government agency to end a protracted battle with thousands of hospitals over the amount they should receive for treating patients who stay just a day or two. So many hospitals have filed appeals with Medicare that a backlog now stretches for 18 months or more before the disputes are being resolved…
Medicare “is offering an administrative agreement to eligible hospitals willing to resolve their pending appeals in exchange for timely partial payment,” said Aaron Albright, a Medicare spokesman. Mr. Albright described the offer as an opportunity for the hospitals “to alleviate the administrative burden of current appeals on both the hospital and Medicare system.”
…Medicare and its contractors say many hospitals have overbilled the government for treating patients who underwent simple operations or were in the emergency room for a lengthy evaluation. They say that under Medicare rules, a hospital should receive a lower outpatient rate for that type of care rather than the much higher reimbursement for a full hospital stay, a difference that can add up to thousands of dollars for each patient.
Contractors, who conduct audits of the hospitals’ claims, assert that hundreds of millions of dollars have been assessed inappropriately for that type of care. But the hospitals have resisted, arguing they are billing correctly for these stays. The contract auditors, which are private companies hired by Medicare to do such reviews, are tantamount to bounty hunters reaping contingency fees for finding overbilling, the hospitals contend.
Under the proposed settlement, hospital claims involving inpatient stays that are now under appeal would be paid 68 cents for every dollar billed. The hospitals have two months to decide whether to accept the settlement, and Medicare says it will pay them within 60 days of when they reach an agreement…
Medicare “is taking a big step forward to get rid of a major problem,” said Mark D. Polston, a partner in the health care practice at King & Spalding, which represents some hospitals that have sought to appeal their rejected claims. While he applauded the agency for finding a creative way to address the backlog, estimated as high as 800,000 cases, he said hospitals “will have to consider whether this is a good deal for them…I would hate to see hospitals sign up expecting a check right away only to find more delay.”
…How the agreement will affect patients is unclear.