Data Versus Detection

Including Andrew Wachler’s Comments regarding CMS’ 68% Settlement Offer

Monday Monitor

September 15, 2014

You know, fascinating opportunity for hospitals to consider. If you looked at the tortured history of when this started back from the Pilot Program in ’06 with the different variations on ALJ’s granting Part B, to being allowed to bill for Part B, to now not being allowed to bill for Part B for new claims, and finally this settlement offer, there is a lot to consider. There is hundreds of millions of dollars at stake for the hospital community. We’re faced with a situation where although there is a statutory requirement that these decisions must be made within 90 days, they’re taking three years, and I’ve also had some frank discussions with ALJs that think it will take longer.

So there’s a number of factors that each hospital has to consider. We have a deadline of October 31st. I advise hospitals to treat it as a hard deadline, although if you look at the language from CMS, it does not necessarily appear to be one. They will allow requests for extensions. They refer to this as the initial offer. They use the word “recommended deadline,” but I think we should use it as a hard deadline. They’ve made the offer. They’ve placed it in a way that requires serious consideration. We’re going to talk on the webcast on the variety of factors that will be considered, but let me highlight a few.

935 interest. If you did not write a check or if you did not sign an agreement for automatic deductions where you actually waive 935 interest, hospitals are entitled to interest from the time of withholding at over 11% per year. So, just one thing to consider when you’re looking at this. If you had a $10,000 claim and they are offering 68%, you’re looking at $6,800.00. Fine, it’s 68%. But, by the time you had your hearing, that claim would be worth $13,000.00. So you’re basically settling your winners for half.

There’s a number of other factors, the case mix, whether you have surgeries with implants, whether you appealed all of your good cases. For one client, we appealed everything to the appeals council. Those are still eligible. So we’re going to run through on Wednesday the rules of engagement, the details of it, and the factors that the hospitals should consider in making this very important financial decision.