Medicare Hospital Settlements

The Centers for Medicare and Medicaid (CMS)  announced that approximately 300,000 Medicare claims have been settled for more than 1,900 hospitals in the amount of $1.3 billion dollars. There was a backlog of almost 800,000 claims that were being appealed by hospitals with an 18-month backlog waiting for a resolution of their cases. These claims were the result of audits by Recovery Audit Contractors (“RACs”). The settlement offered 68% of the amount due for hospitals that provided reasonable and necessary medical services but necessarily on an inpatient basis (RACs contended the patients should have been treated on an outpatient basis). The cases that qualified for consideration were hospital admissions prior to October 1, 2013. Hospitals could submit their cases for the settlement until October 1, 2014 with some additional extension dates.

The American Hospital Association reported that hospitals spend hundreds of thousands to millions of dollars each year to respond to RAC audits. This money could be better spent improving patient care.

Our hospital clients are burdened with annual audits on behalf of Medicare and Medicaid and the overregulation unique to the health care industry. The combination of both these items puts tremendous pressure on hospital management to effectively plan for the future of their organizations.