Providers urged to review potentially eligible claims and consider participation in the expanded SCF process.
The Office of Medicare Hearings and Appeals (OMHA) publicly implemented the long-awaited expansion to its Settlement Conference Facilitation (SCF) process on June 15. SCF is an alternative dispute resolution process that provides appellants and the Centers for Medicare & 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.
SCF is a one-day mediation in which an OMHA senior attorney or program analyst trained in mediation techniques acts as a neutral facilitator between the appellant and CMS to negotiate a lump-sum settlement on eligible appeals. 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.
SCF was initially introduced in June 2014 and made available to Medicare Part B providers and suppliers. For a Part B claim to be eligible under the initial SCF, an ALJ hearing request had to have been filed in 2013, and the appeal could not already be assigned to an ALJ for a hearing.
OMHA then expanded SCF in its “Phase II” program in the fall of 2015. Phase II expanded claim eligibility criteria to ALJ hearing requests filed on or before Sept. 30, 2015, and those not yet scheduled for an ALJ hearing. Under Phase II, at least 20 claims had to be at issue, or at least $10,000 in controversy if fewer than 20 claims were involved.
In February 2016, OMHA expanded SCF to all Medicare Part A providers in its “Phase III” program. For a Part A claim to be eligible at this point, the ALJ hearing request must have been filed on or before Dec. 31, 2015 and the case not yet scheduled for an ALJ hearing. Additionally, each individual claim had to have a value of $100,000 or less, and there had to be at least 50 claims and $20,000 collectively in controversy.
As of Dec. 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. That frees up considerable resources for OMHA to adjudicate claims that are not eligible for SCF or participate in other resolution processes, or address claims that appellants preferred to try at hearing.
In the most recent SCF expansion, OMHA 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, or NPI, number) is eligible for participation, as 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: 25 or more eligible appeals pending at OMHA and the Council combined, or less than 25 eligible appeals pending at OMHA or the Council, with at least one appeal having more than $9,000 in billed charges.
Appeal eligibility criteria are as follows:
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 appeals potentially eligible for SCF resolution. OMHA then will send the spreadsheet to the appellant in a preliminary notification package. Appellants will have 20 calendar days from receipt of the package to accept or reject participation in the SCF process. Following OMHA’s receipt of the appellant’s package, the appellant will be issued an SCF confirmation notice.
Under the expanded SCF program, appellants with appealed claims that have billed amounts of $100,000 or less, or appeals of an extrapolated overpayment valued at $100,000 or less, will be offered an “SCF express” settlement offer. The SCF express offer will be communicated to appellants within 30 days of the SCF confirmation notice. An appellant will have only seven calendar days from the date of the express offer to accept or reject it. The SCF express offer is a non-negotiable settlement sum and will not be 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 hearings 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 CMS will sign a settlement agreement memorializing the terms, and the covered claims will be dismissed from the Medicare appeals process. If an appellant rejects the SCF express settlement offer, the appellant can proceed to SCF.
If an appellant rejects the SCF express settlement offer but wishes to proceed to SCF, OMHA will coordinate a pre-settlement conference between the appellant and CMS. At this conference, the appellant, CMS, and the OMHA facilitator will discuss the logistics for the settlement conference, schedule a date and time, select sample claims for CMS’s and the appellant’s consideration, and schedule the timing of submission of supporting materials such as a position paper.
In a settlement conference wherein all appealed claims have billed amounts of $100,000 or less or the extrapolated overpayment is $100,000 or less, and the parties reach an agreement, CMS and the appellant will sign the settlement agreement on the day of the conference. In a settlement conference wherein the appealed claims subject to the conference have billed amounts in excess of $100,000 or the extrapolated overpayment is in excess of $100,000, and the parties reach an agreement, the OMHA facilitator will inform the Department of Justice of the proposed settlement terms. If the DOJ approves, the OMHA facilitator will allow CMS and the appellant one business day, respectively, to sign and return the proposed settlement agreement to OMHA. 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.
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 its 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 its outcome. Although at the conference there are no findings of fact or rulings of law, participants should be prepared to make an opening statement that 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, again, 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 timetable for completion of the SCF process, a conservative estimate is that this process takes approximately 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, which at recent estimates takes nearly 173 weeks at the ALJ level of appeal alone.
Providers and suppliers should begin reviewing their potentially eligible claims and consider participation in the expanded SCF process.
Program Note:
Listen to Monitor Monday on June 25, 10-10:30 a.m. ET to hear Erin Diesel Roumayah report on the settlement conference facilitation program.
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