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CMS to Rescind Prior Audit Denials for Mid-Build Exceptions

For CEOs, CFOs, COOs, compliance officers

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The Centers for Medicare & Medicaid Services (CMS) announced it is rescinding prior audit denials for hospitals that failed to qualify for the “mid-build exception” to the site-neutral payment policy. CMS will review each previously failing provider’s audit findings for compliance with statutory requirements, as well as for accuracy and completeness.

CMS will consider any additional documentation providers choose to submit to support their eligibility for the mid-build exception and can include documentation submitted by providers both before and after the January 2021 issuance of the audit determination letters.

The reviews will utilize a broadened interpretation of what constitutes a valid construction contract required to qualify for the mid-build exception. For example, there now may be scenarios in which a lease agreement executed by the provider could satisfy this exception.

Providers that received failing audit determinations are no longer required to report or return overpayments based on those determinations. Each provider will receive a letter rescinding the previous determination. An updated audit determination letter will be issued following the review of each provider’s audit, Should the provider receive a failing audit determination, a new overpayment return deadline for self-identified overpayments will be included in that letter.