Recently, a Medicare Advantage (MA) plan began issuing settlement offers to hospitals for 340B Underpayments and separately some hospitals have independently reached settlement for their 340B Underpayments. Active pursuit of damages by hospitals including demand letters, activation of arbitration clauses, threat of litigation, and/or factors within the MA plan’s portfolio may have all contributed to these developments.
GDS recommends that hospitals seek legal counsel to determine if taking some action such as sending and documenting a demand letter may protect their claims to damages from expiring in accordance with local or state law.
Settlement offers from MA plans should be reconciled to the actual payment data. Do not get caught settling for less than the actual damages incurred from underpayments! MA settlement offers may be for much less than the underpayments that occurred. Any current or future offer for settlement could have a timeline to accept or decline the offer.
Hospitals who took early action and outsourced production of reports documenting damages to third parties or whom had third parties verify internal reports are in a strong position to evaluate settlement offers. Providers who chose to “wait and see” may be scrambling to produce valid reports or to find a qualified party such as GDS to quantify their damages. Providers who "go it alone" should be prepared for their internal employees or report writers to be deposed under oath and to possibly testify in front of Magistrates or at jury trial on the detailed and complicated outpatient payment profiles.
Most providers should have 340B Underpayment damages quantified and documented by a third party or at least have their internal reports reviewed.
Contact Adam Blackwell at adamblackwell@govdataservices.com for further discussion or to schedule a complimentary initial consultation on the status of 340B MA Underpayment efforts.