Medicare Claim Appeal Agreement

Appeal Relief for Critical Access Hospitals & Acute Care Hospitals

Medicare has a massive backlog in appeals they are handling for both ambulatory and inpatient denials.  Getting a denial is one thing but having to wait for eternity for your appeal to even be reviewed is something else and no matter how you slice it these things can greatly affect the revenue cycle.  Well, there is a small ray of hope for Critical Access Hospitals (CAH) and Acute Care Hospitals (ACH).

In an effort to reduce the volume CMS is offering to pay for 68% of the appealed claim’s value for withdrawing the pending appeal.  While it is definitely not the right solution for everyone it may be a good option for appealed claims that meet a certain criteria.

Here is the full CMS announcement below:


Inpatient Hospital Reviews

Updates 9-9-2014

As noted in a Federal Register Notice released by the Office of Medicare Hearings and Appeals (OMHA) in January 2014, “the unprecedented growth in claim appeals continues to exceed the available adjudication resources to address [such] appeals…” The Centers for Medicare & Medicaid Services (CMS) supports OMHA’s efforts to bring efficiencies to the OMHA appeals process.

CMS believes that the changes in Final Rule 1599-F (published in August 2013) will not only reduce improper payments under Part A, but will also reduce the administrative costs of appeals for both hospitals and the Medicare program.

To more quickly reduce the volume of inpatient status claims currently pending in the appeals process, CMS is now offering an administrative agreement to any hospital willing to withdraw their pending appeals in exchange for timely partial payment (68% of the net allowable amount). CMS encourages hospitals with inpatient status claims currently in the appeals process or within the timeframe to request an appeal to make use of this administrative agreement mechanism to alleviate the administrative burden of current appeals on both the hospital and Medicare system.   

The following facility types ARE ELIGIBLE to submit a settlement request:

  • Acute Care Hospitals, including those paid via Prospective Payment System (PPS), Periodic Interim Payments (PIP), and Maryland waiver; and
  • Critical Access Hospitals.

The following facility types are NOT eligible to submit a settlement request:

  • Psychiatric hospitals paid under the Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS);
  • Inpatient Rehabilitation Facilities (IRFs);
  • Long-Term Care Hospitals (LTCHs);
  • Cancer hospitals; and
  • Children’s hospitals.

A full definition of each of these facility types can be found at §1886(d) or §1820(c) of the Social Security Act.This agreement applies to all eligible claims from eligible providers. Eligible claims are those denied by a Medicare contractors on the basis that services may have been reasonable and necessary but treatment on an inpatient basis was not, that are either under appeal or within their administrative timeframe to request an appeal review, with dates of admissions prior to October 1, 2013, and where the patient was not a Part C enrollee. The hospital may not choose to settle some claims and continue to appeal others. Certain hospitals may be excluded from this settlement opportunity based on pending False Claims Act litigation or investigations.

To request such an agreement, a hospital must:

  • Print, sign, and scan to pdf the Administrative Agreement (see Downloads section below)
  • Follow the directions in the Hospital Participant Settlement Instructions (see Downloads section below) to complete the Eligible Claim Spreadsheet (see Downloads section below)
  • Send an email to containing
    • a pdf of the signed Administrative Agreement (file name: PROVIDER NAME–6 DIGIT PROV NUM–ROUND ONE.PDF); and
    • an excel file of the Eligible Claim Spreadsheet (file name: PROVIDER NAME–6 DIGIT PROV NUM–ROUND ONE.XLS).

Hospitals should send their request by October 31, 2014. Providers who aren’t able to meet this timeframe should request an extension from CMS.

CMS will review and validate each Administrative Agreement  and claim spreadsheet. CMS anticipates that validation will be (up to) a three step process:

(1) Round 1: Hospital will submit their proposed spreadsheet of eligible claims/appeals for CMS review with a signed Administrative Agreement. CMS will validate the information and notify the hospital if there are any discrepancies from the contractor eligible claims list.  Proceedings on all eligible pending  appeals will be stayed.   

  • If CMS has identical information to that submitted, the original agreement will be countersigned by CMS, and payment will be provided. The impacted appeals will be dismissed.
  • If discrepancies are identified, the subset of agreed upon claims will be made the subject of an initial agreement signed by both parties, payment will be provided, and the impacted appeals will be dismissed. The subset of claims in which there is disagreement regarding eligibility will continue on to the second round of review. Appeals will continue to be suspended as the settlement is reviewed.

(2) Round 2: Hospital will review the discrepancies  from the first round validation process and resubmit a revised spreadsheet and Administrative Agreement for CMS validation within 2 weeks of receipt.

  • If CMS has identical information to that submitted, the original agreement will be countersigned by CMS, and payment will be provided within 60 days. The included appeals will be dismissed.
  • If discrepancies are identified, CMS and the hospital will conduct Round 2 discussions until both parties are in agreement, and a new agreement  will be signed for payment and appeal dismissal regarding any appeals that there has been agreement upon.

NOTE: Data analyzed during Round 1 and Round 2 will be fully validated by the Medicare Administrative Contractor (MAC) for level 1 appeals/ redeterminations and Administrative Qualified Independent Contractor (AdQIC) for level 2 appeals/reconsiderations. The Administrative Law Judge (ALJ) or Departmental Appeals Board (DAB) data will be sampled by the AdQIC for purposes of expedient validation and payment. The ALJ and DAB will then later review the agreed upon settlement for validation purposes during the “Reconciliation Process”.

(3) Reconciliation Process: If the ALJ or DAB later identify  errors in the agreed upon settlements  they will request that CMS initiate action to:

  • Take back monies for claims that were ineligible for settlement that were inadvertently included in an agreement; or
  • Pay providers the settlement amount for claims pending appeal that were inadvertently omitted from an agreement.

Hospitals seeking general information regarding the process can listen to a recording of a teleconference held on September 9th.The recording will be posted soon at MLN Connects™ Upcoming Calls.

CMS posted an updated  list of Frequently Asked Questions(see Downloads section below) about this settlement process on September 9th. Email any questions to

CMS also posted on a REVISED Eligible Claim Spreadsheet (see Downloads section below) on September 9th.