News & Insights


September 15, 2014

Health Headlines – September 15, 2014


CMS Clarifies Terms of Global Settlement Offer  – As previously reported, on August 29, 2014, CMS issued a global settlement offer (GSO) to acute care hospitals with pending appeals of denials for inpatient claims.  Specifically, CMS is offering to settle all qualifying claims at 68 percent of the “net paid amount” of such claims within 60 days of CMS’s execution of an “Administrative Agreement.”  On September 9, 2014, CMS further clarified the terms of the GSO during a Medicare Learning Network (MLN) National Provider Call.  Gerald Walters, Senior Advisor to the Chief Financial Officer, Office of Financial Management; Melanie Combs-Dyer, Director, Provider Compliance Group; and Amy Cinquegrani, Health Insurance Specialist, Provider Compliance Group, presented on behalf of CMS. 

During the MLN call, CMS acknowledged the massive backlog of the Medicare Appeals System and encouraged hospital providers to participate in the GSO to alleviate the appeals backlog.  CMS also stated that the implementation of the Two Midnight Rule is designed to reduce future appeals.  CMS, however, did not address the need for contractor reform during the call. 

Since the issuance of the GSO on August 29, 2014, providers have raised several questions concerning how the settlement process and claim reconciliation would be effectuated as well as the potential reimbursement consequences of participating in the GSO.  CMS addressed some of these questions during the MLN call.

For example, CMS addressed the timeliness of the claim reconciliation process.  According to the terms of the GSO, CMS must pay the settlement amount to a provider within 60 days of a fully executed Administrative Agreement.  CMS set no timetable for when it must countersign an Administrative Agreement after reconciling a provider’s list of eligible claims.  During the MLN call, CMS confirmed that contractors will assist CMS with this reconciliation process and further stated that the “goal” is for contractors to respond to a provider’s GSO submission within 30 days.  However, CMS explained that the length of time required to reconcile a provider’s list of eligible claims will largely depend on a provider’s claim volume.

CMS also clarified during the call that settled claims will not count toward a hospital’s inpatient days which will impact graduate medical education (GME) payments.  Additionally, CMS clarified certain limitations on collecting money from beneficiaries if a hospital elects to participate in the GSO.  Although providers are not required to refund previously collected beneficiary deductibles and coinsurance, a hospital provider cannot continue collecting such funds once the hospital has applied for the GSO unless the beneficiary has already entered into a repayment plan with the hospital.  CMS also clarified that to the extent there are unpaid deductibles and coinsurance associated with the claims included in the GSO, a hospital cannot report these unpaid fees as bad debt.

CMS also reserved answering questions on a few topics (such as secondary insurance and Part B rebilling issues) because it plans to address those issues in future guidance. 

The audio recording and transcript of the MLN call are not yet available, but will be posted here when they become available.  The presentation materials are available here.

CMS also posted updated FAQs on September 9, 2014.  The FAQs are available by clicking here.

Reporter, Stephanie F. Johnson, Atlanta, + 1 404 572 4629,

CMS Seeks Comments on Data Sharing Effort With Treasury Department  – CMS issued a Notice of Computer Matching Program (Program) on September 8, 2014, requesting comments on a planned data matching partnership with the United States Department of Treasury.  The Program authorizes the Treasury Department’s Bureau of the Fiscal Service (Fiscal Service) to provide CMS with certain data concerning individuals and entities that have been excluded from receiving federal payments, contract awards, or other benefits.  The purpose of the Program is to allow CMS to more easily determine whether an individual or entity is eligible to receive such payments, awards, or benefits. 

Under the Program, CMS will match data maintained in its Provider, Enrollment, Chain, and Ownership System (PECOS) against data from Fiscal Service’s system.  According to the notice, CMS plans to use information derived from the Program for a “variety of activities” relating to health care professional enrollment, to verify payments, to confirm that providers submitting claims are not deceased, and for debt-collection efforts.  The notice states that certain matching data may be disclosed to “CMS contractors, consultants, and grantees assisting CMS with PECOS purposes.”  The notice also notes that Fiscal Service is permitted to disclose information to CMS to identify, prevent or recoup improper payments. 

According to the notice, “[t]he CMP shall become effective no sooner than 40 days after the report of the matching program is sent to [the Office of Management and Budget] and Congress,” or 30 days following publication in the Federal Register, whichever is later.

The notice was published in the Federal Register on September 8, 2014, and comments are due by October 8, 2014.

Reporter, Greg Sicilian, Atlanta, +1 404 572 2810,

AHA Files Joint Amicus Brief in Supreme Court FCA Case – The American Hospital Association (AHA) recently filed a joint amicus curiae brief with several other associations, including the American Medical Association and the Pharmaceutical Research and Manufacturers of America, requesting that the U.S. Supreme Court overturn the Fourth Circuit’s decision in Kellogg Brown & Root Servs., Inc. v. United States ex rel. Carter, in which the Fourth Circuit ruled that the Wartime Suspension of Limitations Act (WSLA) applies to whistleblower suits, even if unrelated to any war contract, and even when the government declines to intervene.  If affirmed, the brief described that the rulings would “invite private plaintiffs and the Government to pursue indefinitely and repeatedly any claim involving alleged fraud against the Government.” 

The briefing parties argued that the Fourth Circuit’s interpretation of the WSLA expands the statute beyond its intended scope and would effectively apply the WSLA to all False Claims Act (FCA) claims, whether civil or criminal and whether or not related to any war activities.  Additionally, the brief argued that because conflicts or “armed hostilities” abroad may never cease to the extent required by the WSLA, the Fourth Circuit’s interpretation provides potentially indefinite tolling.  The AHA argued that this interpretation was unnecessary, as both private relators and the government have filed numerous healthcare-related FCA claims without application of the WSLA, and that the Fourth Circuit’s decision would lead to the filing of stale claims.  The AHA argued that the stale claims would require healthcare providers to spend increased dollars on defense, which costs would “ultimately be borne by the consuming public.”  The brief also countered the Fourth Circuit’s interpretation of the FCA’s “first-to-file” bar, which would effectively permit the filing of a duplicative suit with no new information as soon as the prior suit is no longer pending.

Reporter, Christina A. Gonzalez, Houston, +1 713 276 7340,


Federation of State Medical Boards Releases Final Interstate Licensure Compact Guidance – The Federation of State Medical Boards (FSMB) released model legislation on September 5, 2014, to guide states in making it easier for doctors to practice in more than one state.  According to a statement released by the FSMB, the draft legislation, if adopted by state legislatures, would “significantly reduce barriers to the process of gaining licensure in multiple states, helping facilitate licensure portability and telemedicine while expanding access to health care by physicians, particularly in underserved areas of the nation.”  The model legislation is available here.

DEA Issues Final RUle to Allow Pharmacies, Other Entities to Take Back Unused Rx Drugs – On July 31, 2014, CMS released the final Medicare FY 2015 payment rule for skilled nursing facilities (SNFs).  The final rule adopts a net market basket update of 2.0%.  The agency also discussed the status of its efforts to identify an alternative payment methodology for SNF therapy services and declined to offer a timeline for development of the new model.  The final rule is effective October 1, 2014, and is expected to be published in the Federal Register on August 5, 2014.  A display copy is available here

The content of this publication and any attachments are not intended to be and should not be relied upon as legal advice.

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