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Brady Questions HHS Medicare Appeals Settlement

September 16, 2014

Washington, DC – Ways and Means Subcommittee on Health Chairman Kevin Brady (R-TX) wrote to Health and Human Services (HHS) Secretary Sylvia Burwell regarding HHS’ unilateral action to clear the backlog of Medicare appeals through a “settlement” process.  In the letter, Brady asked HHS to clearly articulate its statutory authority for this settlement process. 

In releasing the letter, Brady stated: “While the backlog of Medicare appeals is at an unacceptable high, settling all appeals without reviewing the merits of the appeals or coming up with any plan to address the backlog is just throwing money at a problem to make it go away.  It hurts the integrity of Medicare and is a waste of taxpayer dollars.”

In the letter, Brady raised a number of concerns: 

  • Why has CMS offered an “all or nothing” settlement approach?  Each discharge is unique and the circumstances that apply pertaining to medical necessity in one case do not necessarily transfer to all cases.  It seems that the “all or nothing” nature of this approach is based on what would be easiest to implement, however that does not protect the due process rights of Medicare providers and may lead to improper precedent.

  • Further, CMS has not provided an empirical analysis to justify offering a settlement rate of 68 percent.  How can the Committee ensure that this settlement is in the best interest of the limited resources available in the hospital insurance Trust Fund?

  • How can hospitals be sure this rate is reflective of current reimbursement standards in either of CMS’ inpatient or outpatient prospective payment systems?  We urge you to make all data analysis CMS used to derive the 68 percent settlement rate publicly available immediately.

To read the response from Secretary Burwell, please click here.