CMS made its offer last August, and only acute care and critical access hospitals were permitted to take part in the settlement process. Claims that occurred prior to Oct. 1, 2013, and were pending appeal — including claims where an administrative law judge had ruled against a hospital, and the hospital was appealing to a higher level — were eligible for settlement.
Hospitals interested in settling had to file paperwork requesting settlement by Oct. 31, 2014, and they had to agree to drop their pending appeals. The $1.3 billion paid to the hospitals represented 300,000 claims, according to CMS.
The backlog stemmed from hospitals appealing Recovery Audit Contractor decisions. RACs are hired by Medicare to review claims and return misused funds to the Medicare Trust Fund. Hospitals have the option of appealing a RAC decision if they disagree with. In 2013, more than 94 percent of overpayments identified were from inpatient hospital claims, with many of the top overpayment determinations due to short-stay inpatient hospital admissions that auditors determined were medically unnecessary.
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