Medicare Providers Should Consider Participation in Office of Medicare Hearings and Appeals’ (OMHA) Expanded Settlement Conference Facilitation Program

In June, the Office of Medicare Hearings and Appeals (OMHA) publicly implemented an expanded Settlement Conference Facilitation (SCF) program. SCF is an alternative dispute resolution process which provides appellants and the Center for Medicare and Medicaid Services (CMS) an opportunity to discuss a mutually agreeable resolution for claims appealed to the Administrative Law Judge (ALJ) or Medicare Appeals Council (Council) levels of appeal. This program applies mediation principles to resolve eligible Medicare appeals in an expedient and efficient manner. Through this program, an OMHA senior attorney or program analyst trained in mediation techniques acts as a neutral facilitator between the appellant and CMS in a one-day mediation, to negotiate a lump-sum settlement on eligible appeals.

OMHA has significantly modified the eligibility criteria for appellants and appeals under the expanded program. This program was first released in the summer of 2014 and was restricted to Medicare Part B providers and suppliers. Nearly two years later, given wide support and interest in the program, it was expanded to Medicare Part A providers. As of December 31, 2017, OMHA resolved 70,785 appeals through the various phases of the SCF program. Notably, this is the equivalent of almost an entire year’s disposition capacity for all of OMHA.ⁱ Resolving nearly an entire year’s worth of appeals from the ALJ level of the appeals process frees up considerable resources for OMHA to adjudicate claims that are not eligible for SCF or other resolution processes, or claims that appellants preferred to try at hearing.

In the most recent SCF expansion, OMHA has significantly expanded the program’s eligibility criteria for appellants and appeals. For appellants, any Medicare Part A or Part B provider or supplier (with an assigned National Provider Identifier number) is eligible for participation, so long as that provider or supplier has not filed for bankruptcy or expects to file for bankruptcy in the future; does not have past or current False Claims Act litigation or investigations against them or other program integrity concerns such as civil, criminal or administrative investigations; and has either: (1) 25 or more eligible appeals pending at OMHA and the Council combined, or (2) less than 25 eligible appeals pending at OMHA or the Council and at least one appeal has more than $9,000 in billed charges.

Appeal eligibility criteria are as follows:

• Appeals must involve requests for ALJ hearing or Council review filed on or before November 3, 2017;
• The request(s) for ALJ hearing or Council review must arise from a Medicare Part A or Part B Qualified Independent Contractor (QIC) reconsideration decision;
• All jurisdictional requirements for OMHA or Council review must be met for the eligible appeals;
• All pending OMHA and Council appeals associated with a single NPI and corresponding Provider Transaction Access Number (PTAN) must be included in SCF;
• Appeals must not be scheduled for an ALJ hearing and an ALJ hearing must not have been conducted;
• The billed amount of each individual claim must be $1,000,000 or less. For the purposes of a statistical sample, the extrapolated overpayment amount stated in the initial demand notice must be $1,000,000 or less;
  • Settlement agreements with individual claims, or extrapolated overpayments, of $100,000 or less will be fully executed when CMS and the appellant sign the settlement agreement.
  • Settlement agreements with any individual claims, or extrapolated overpayments, in excess of $100,000 (and up to $1,000,000) will be subject to U.S. Department of Justice (DOJ) approval prior to full execution by CMS and the appellant.
• Appeals must not be involved in OMHA’s Statistical Sampling Initiative;
• Appeals must not be actively engaged in a CMS Medicare appeals initiative made available on or after November 3, 2017 (i.e. the Low Volume Appeals Settlement, the QIC Demonstration Project, or the CMS Serial Claims Initiative);
• The beneficiary must not have been found liable for the amount in controversy after the initial determination or participated in the reconsideration;
• Appeals must not involve items, services, drugs or biologicals billed under unlisted, unspecified, unclassified or miscellaneous healthcare codes;
• Appeals must not involve payment disputes (but appeals arising from down coding of claims can be eligible for SCF);
• Appeals must not arise from a QIC or ALJ dismissal order; and
• Appeals must not be beneficiary-initiated appeals of QIC reconsiderations or any appeals arising from Medicare Part C, Part D or appeals of Social Security Administration decisions regarding entitlement, Part B late enrollment penalties, and Part B and Part D income-related monthly adjustment amounts (IRMAA).

To initiate SCF under the expanded program, an appellant must submit a Request for SCF to OMHA. CMS will have 15 calendar days to accept or reject participation in the process. If CMS agrees to participate, OMHA will create a SCF Request Spreadsheet identifying all potentially eligible appeals for SCF resolution. OMHA will then send the spreadsheet to the appellant in a Preliminary Notification Package. An appellant will have 20 calendar days from receipt of the Preliminary Notification Package to accept or reject participation in the SCF process. Following OMHA’s receipt of the appellant’s Preliminary Notification Package the appellant will be issued an SCF Confirmation Notice.

In a significant departure from prior iterations of this program, certain eligible appellants may participate in a “fast track” resolution process. Specifically, appellants with appealed claims that have billed amounts of $100,000 or less or appeals of an extrapolated overpayment that is $100,000 or less are eligible to participate in the “fast track” process. These appellants will be offered an “SCF Express” settlement offer in the initial stages of the process. This offer is a non-negotiable settlement sum and OMHA clearly communicated that the SCF Express offer is not based on a medical review of an appellant’s eligible appeals. Appellants do not have the opportunity to submit initial information for CMS’ consideration as part of the SCF Express process. However, appellants should expect that the SCF Express settlement offer will be based on preliminary data available to CMS regarding the appellant and its claims, such as the appellant’s track record of favorable findings before ALJ hearing and the Council, or the number or scope of prior audits initiated by CMS regarding the appellant. If an appellant accepts the SCF Express settlement offer, the appellant and CMSwill sign a settlement agreement memorializing the terms of the settlement and the covered claims will be dismissed from the Medicare appeals process.

If an appellant rejects the SCF Express settlement offer but wishes to proceed to the SCF conference, OMHA will coordinate a Pre-Settlement Conference between the appellant and CMS. At the Pre-Settlement Conference, the appellant, CMS and the OMHA facilitator will discuss the logistics for the settlement conference, schedule a date and time for the settlement conference, select sample claims for CMS’ and the appellant’s consideration, and schedule the timing of submission of supporting materials such as a position paper. At the day of the conference, if settlement is not reached, the appeals will return to the previous assigned adjudicator, if applicable, or to the OMHA and Council docket for future assignment in the order in which the request for review was received. If a settlement is reached, a settlement agreement is signed the day of the facilitation and the settled claims are dismissed from the Medicare appeals process.

There are recommended best practices and strategies for participation in SCF. For one, appellants should prepare a thorough evaluation of any sample claims identified during the Pre-Settlement Conference. The thorough evaluation should include a comprehensive position paper with supporting documentary evidence and testimonial support. Appellants should timely submit this information to CMS for CMS’ consideration in advance of the SCF conference. Appellants should also consider showcasing their major strengths, accolades and any unique considerations for CMS’ review. A thorough and strong posturing of the case prior to the conference can have a substantial impact on the success of the conference. Although at the conference there are no findings of fact or rulings of law, participants should be prepared to make an opening statement which highlights major issues and concepts for CMS’ consideration. Following opening statements, the SCF conference then proceeds through private sessions with the OMHA facilitator, who acts as a neutral intermediary in facilitating a resolution between the appellant and CMS.

The voluntary and expedited nature of the SCF process should be attractive to Medicare appellants seeking a cost-effective and efficient resolution of their pending appeals. If settlement is not reached, an appellant’s claims return to the ALJ appeals process in the order in which they were originally received. Although OMHA did not establish a firm time table for completion of the SCF process, a conservative estimate is that this process takes at least 10 weeks from the date an appellant receives OMHA’s spreadsheet identifying eligible claims until the date of the SCF conference. That is considerably faster than the Medicare traditional five-step appeals process that at recent estimates takes nearly 173 weeks at the ALJ level of appeal alone. As there currently is no deadline by which appellants must elect to participate in this program, providers and suppliers should review their potentially eligible claims and consider participation.

ⁱ At a recent speech regarding the appeals process and new initiatives to combat the backlog and improve the appeals process, Chief Administrative Law Judge Nancy Griswold of OMHA estimated that in FY 2017 OMHA decided 84,729 appeals. “Latest Policy & Regulatory Changes to the Medicare Appeals Process,” American Health Lawyer’s Association Conference, March 21-23, 2018, presentation by Nancy J. Griswold, Chief Administrative Law Judge, OMHA.