BREAKING: CMS Stops MAC Recoupment of Short-Stay Denials

Latest move by CMS raises more questions.

CGS, a Medicare Administrative Contractor (MAC), on Thursday released an email notice indicating that the Centers for Medicare & Medicaid Services (CMS) has instructed it to stop seeking recoupment or issuing demand letters for Beneficiary and Family-Centered Care Quality Improvement Organization (BFCC-QIO) Hospital Short Stay (Two-Midnight Rule) Patient Status Reviews.

In this notice, CGS reported that “CMS has directed (it) to not adjust any claims prior to the implementation date of Change Request 10600, which is Sept. 11, 2018. Therefore, CGS will follow this instruction and will not be seeking recoupment or sending demand letters for any QIO actions.”

The referenced change request and associated MLN Matters, MM10060, outline the required steps for the MACs to process short-stay inpatient admission denials conveyed to them by the BFCC-QIOs, and how formal appeals of these denials should be handled. The MACs are instructed to handle these denials as Non-Medicare Secondary Payer (Non-MSP) provider overpayments; therefore, adjustments to these claims must follow the existing guidelines outlined in the Medicare Financial Management Manual, Chapter 4, Section 10.

“It is unclear from the statement if CMS is instructing the MACs not to recoup any payment for denials issued by the QIOs that has yet to be recouped for denials issued prior to Sept. 11, 2018, or if this prohibition is retroactive to the start of the short-stay audit process by the QIOs, and recoupments already collected will be refunded,” said Ronald Hirsch, MD, in an email to RACmonitor.

RACmonitor will keep investigating this developing story.

Program Note: Listen to Dr. Hirsch on Monitor Monday, Monday, Jan. 21, at 10 a.m. EST for more details.