Category Archives: Medicaid Recipients

Obamacare, Health Care Exchanges, Subsidies, Typos, and Speak-o’s

Have you ever said something that you immediately wished you could put back in your mouth? I know I have! In fact, just recently, I was eating lunch with my husband and one of our closest friends Josh. Josh, his wife, Tracey, my husband Scott and I ride horses together almost every weekend. Our daughters come with us, and it’s a fun family event. So, I should have known that a manger is a tool used in barns to hold the hay for the horses to eat, not just baby Jesus’ bed.

Josh tells me that he is going to pick up a manger. To which I respond, “Josh, why do you need a baby manger?” If words came out of your mouth on a string, I would have grabbed that string and shoved it back into my mouth. Of course, my husband had no end to his ribbing. “Josh, why do they sell baby mangers in Tractor Supply?” And “Baby Jesus was so lucky that someone put a manger in that barn for when he was born.”

At that point, I would have liked to claim that I had a “speak-o.” You know, like a typo, but for speech.

At least this is what Jonathan Gruber has claimed…that he made a speak-o in 2012.

Jonathan Gruber is one of the architects of the Affordable Care Act (ACA). He drafted much of the language included in the ACA. After the ACA was passed, Gruber was interviewed by a number of journalists regarding specific sections of the ACA. One of the sections on which he spoke was the section that allowed for health care premium subsidies for people enrolled in the program who reside in states which created state-run health care exchanges as opposed to states that opted to use the federal exchange. For ease of this blog, I will call this ACA section the “Health Care Premium Subsidies Section.”

As I am sure you are aware if you follow my blog, two appellate court cases came out July 22, 2014, regarding the Health Care Premium Subsidies Section, with polar opposite holdings. In Halbig v. Burwell, the D.C. Circuit Court found that the clear language of the ACA only allows the health care premium subsidies in states that created their own state-run health care exchanges, i.e, residents in NC along with 35 other states would not be eligible for the subsidies. See my blog: “Halbig: Court Holds Clear Language of the ACA Prohibits Health Care Subsidies in Federally-Run Exchanges.”

Juxtapose the 4th Circuit Court’s decision in King v. Burwell, which held that “For reasons explained below, we find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS’s determination, however, we uphold the rule as a permissible exercise of the agency’s discretion.”

The two cases were released within hours of each other and came to two entirely different conclusions. Halbig: ACA is clear; King: ACA is ambiguous.

Interesting to note is that D.C. is not a state, and the 4th Circuit clearly embraces five states.

In my Halbig blog, I explain the legal analysis of statutory interpretation. I also explain that based on my reading of the Health Care Premium Subsidies Section, I tend to side with the D.C. courts and opine that the Section is not ambiguous.

If, however, a court finds that the statutory language is ambiguous, the court defers to the agency’s interpretation “so long as it is based on a permissible construction of the statute,” which is clear case law found in the 4th Circuit.

Therefore, once the 4th Circuit determined that the statute is ambiguous, the court made the correct determination to defer to the IRS’ ruling that all states could benefit from the subsidies.

Yet another approach to statutory interpretation is considering the legislative intent. The courts may attempt to evaluate legislative intent when the statute is ambiguous. In order to discern legislative intent, courts may weigh proposed bills, records of hearing on the bill, amendments to the bill, speeches and floor debate, legislative subcommittee minutes, and/or published statements from the legislative body as to the intent of the statute.

Recently, some journalists have uncovered 2012 interviews with Gruber during which he states that the Health Care Premium Subsidies Section was drafted intentionally to induce the states to create their own health care subsidies and not rely on the federal exchange. How’s that for intent?

The exact language of that part of the 2012 interview is as follows:

Interviewer: “You mentioned the health information [sic] Exchanges for the states, and it is my understanding that if states don’t provide them, then the federal government will provide them for the states.”

Gruber: “I think what’s important to remember politically about this is if you’re a state and you don’t set up an Exchange, that means your citizens don’t get the tax credits… I hope that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these Exchanges, and that they’ll do it.”

What do you think? You think Gruber is pretty explicit as to legislative intent? Well, at least in 2012….

In 2014, Gruber states, as to his 2012 comment, “I honestly don’t remember why I said that. I was speaking off-the-cuff. It was just a mistake. People make mistakes. Congress made a mistake drafting the law and I made a mistake talking about it.”

According to Gruber, Congress made a typo; Gruber made a speak-o.

“It’s unambiguous that it’s a typo,” Gruber tells reporter Chris Matthews from NBC and MSNBC.

Um…a typo when the statement is spoken? Hence, the new word “speak-o” blowing up Twitter.

If Gruber’s statement was truly a speak-o, it was a re-occurring speak-o. Gruber also made two speeches in which he listed three possible threats to the implementation of Obamacare. In both cases the third “threat” was that states would not set up exchanges and, instead, would rely on the federal government.

I anticipate that Gruber’s 2012 and contrary 2014 statements will be at issue as these cases, Halbig and King, move forward.

As for me, I would like to invoke my own speak-o’s. I can only imagine how I will be received when I appear before a court and say, “Your Honor, I apologize. That was a speak-o.”

Halbig: Court Holds Clear Language of the ACA Prohibits Health Care Subsidies in Federally-Run Exchanges

Remember my post, “The Great and Powerful ACA: Are High, Inflated Premiums Hiding Behind the Curtain?” I warned of the possible consequences of Halbig v. Burwell…and it happened.

Halbig v. Burwell was decided earlier today.

The Halbig court held that the Internal Revenue Service (IRS) went too far in extending subsidies to those who buy insurance through the federally run, Healthcare.gov website.

The Halbig court ruled that the subsection of the ACA that allows high insurance premium tax credits, according to the plain language of the statute, only applies to those individuals enrolled “through an exchange established by the state.” (emphasis added). Therefore, if Halbig is upheld on en banc review by the D. C. Circuit (see below) or on appeal to the U. S. Supreme Court, residents who reside in two-thirds (or 36) of the states that did not establish state-run health care exchanges (including NC), will not benefit from the health care subsidies.

Looking at the decision through a purely objective, legal lens, I believe the federal court of appeals is correct in its ruling. I also agree that the ruling will have drastic and devastating consequences for the ACA and the people who would have benefited from the health care subsidies.

However, the law governing statutory construction and interpretation is clear. Statutory interpretation is the process by which courts interpret legislation.

For years, the U.S. Supreme Court has been explicit on statutory interpretation. “We begin with the familiar canon of statutory construction that the starting point for interpreting a statute is the language of the statute itself. Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.” Consumer Product Safety Commission et al. v. GTE Sylvania, Inc. et al., 447 U.S. 102 (1980).

In other words, if the words of a statute are unambiguous, then the statutory interpretation ends. The clear words of the statute must be followed.

Let me give an example of ambiguous language:

A magazine printed the following: “Rachel Ray enjoys cooking her family and her dogs.” If that were true, Rachel Ray’s family and dogs would be very upset. I am sure what the editor meant to write was “Rachel Ray enjoys cooking, her family, and her dogs.”

It is amazing how important a comma is.

The Halbig court held that the section of the ACA allowing health care subsidies only apply to those enrolled in an exchange established by the state is not ambivalent. Thus, according to statutory interpretation rules, the judicial inquiry ends.

So what happens now?

A request for an en banc ruling by the D. C. Circuit is the next step for Department of Justice. An en banc ruling is a decision made by all the justices, or the entire bench, of an appeals court, instead of a panel selected by the bench. In this case, three federal judges sat on the panel and the case was decided 2-1. An appeals court can only overrule a decision made by one of its panels if the court is sitting en banc.

Looking beyond any en banc ruling, the case could, potentially, be heard by the U.S. Supreme Court, especially in light of the importance of the decision and the fact that a 4th Circuit Court of Appeals ruled the opposite way literally hours after Halbig was announced. See David King, et al. v. Burwell, et al.

The Fourth Circuit found the ACA ambiguous, and it states, “For reasons explained below, we find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS’s determination, however, we uphold the rule as a permissible exercise of the agency’s discretion. We thus affirm the judgment of the district court.”

Bizarre that two courts hold opposing positions on the same issue and publish both decisions on the same day.  It reminds of the old Sam the Sheepdog cartoon, “Duh! Which way did he go? Which way did he go, George?”

Finally, in closing, and on a personal note, I would like to dedicate this blog to my lab-doberman mix, Booker T, who, sadly, passed Sunday.  He was my best friend for over 14 years.  You will be greatly missed, Booker T.  Rest in peace.

Booker T

The Great and Powerful Affordable Care Act: Are High, Inflated Premiums Hiding Behind the Curtain?

A lawsuit that could come out as early as tomorrow could be catastrophic for the Affordable Care Act (ACA) in as many as 36 states and impact approximately 5.4 million Americans.

In so many ways, in the last year or so, the all-changing, great and powerful ACA that promised affordable health care for all and “if you like your health care coverage, you can keep it,” has fallen monumentally short of its original, lofty promises.

In a way, we all wanted to believe in the promises of the ACA, like Dorothy in “The Wizard of Oz.” Who can forget the disappointed sigh Dorothy expels when Toto pulls back the curtain of the Great and Powerful Oz only to see a mundane, elderly man with absolutely no super powers or means to grant her wishes. Dorothy wanted Oz to be real. She wanted desperately for Oz to be as Great and Powerful as he proclaimed. However, in reality, he was not.

Like Dorothy wanted Oz to be real, we all wanted the ACA to create an affordable, nationwide health care system…this health care utopia.

So many lofty promises of the ACA have already been crushed, either by the Supreme Court’s decision that allows states to opt-out of Medicaid expansion, or by President Obama himself in executive actions, including an action delaying the employee mandate.

The courts may deflate the illusions of grandeur of the ACA even more with an upcoming and anxiously awaited decision. The case of Halbig v. Burwell, a D.C. Court of Appeals case, has concerned citizens everywhere, who wait on bated breath for a ruling. Halbig could have a huge (negative) impact on health care premiums. Halbig could be the Toto that pulled back the curtain on the ACA.

Let me explain:

There is a subsection of the ACA that allows high insurance premium tax credits, in an effort to make premiums more affordable for low-income families. The subsection applies to individuals who make less than $46,075. In implementing the ACA, it was contemplated that those individuals who make under $46,075 will have difficulty affording the insurance premiums; therefore, the ACA gives nice, large tax credits to offset the costs of premiums.

However, according to the plain language of the statute, these tax credits only apply to those individuals enrolled “through an exchange established by the state.” (emphasis added). Yet two-thirds (or 36) of the states did not establish state-run health care exchanges (including NC). Instead, these states relied on the federal exchange, in part, to avoid additional cost expenditures.

Here is a map of states according to whether it is expanding Medicaid:

current-status-of-the-medicaid-expansion-decisions-healthreform1

The Halbig case asks the question: Can people living in states run by a federal health exchange reap the benefit of tax credits intended for those people participating in an exchange run by the state?

If the Halbig Court takes that stance that the statute is not ambivalent and must be followed exactly as it is written, then millions of Americans will become ineligible for the tax credits for health care premiums, because they will not be enrolled in a state-run exchange. Premiums would sky-rocket and many Americans would be unable to afford health care…again. It is estimated that without the tax credits, the health care premiums will cost 4x as much.

Interestingly, the Internal Revenue Service (IRS) weighed in and issued a highly-contested rule authorizing the federal exchange to issue tax credits. Amidst all the tomfoolery about the IRS targeting 501(c) charities owned by the Tea Party, it is surprising, at least to me, that the IRS would issue such a contentious ruling in favor of the ACA and anti-conservatives.

Hence, the Halbig case, in which Plaintiffs argue that the IRS has exceeded its statutory authority in issuing tax credits to those residing in states with federal exchanges, when the ACA clearly states that the tax credits only apply to state-run exchanges.

If the D.C. Court of Appeals sides in favor of the Plaintiffs, the following could occur:

• Residents of 36 states could pay health care premiums 4x more than promised;
• The ACA would fall short of promises…again;
• The IRS will have exceeded its authority to benefit Democrats…again;
• People may not be able to afford the health care premiums;
• The ACA could risk the downfall of many more promises.

We all wanted the ACA to create health care utopia. We all wanted the Great and Powerful Oz to be Great and Powerful.

But the courts may tell us we just can’t say, “Pay no attention to the man behind the curtain!!”

“The Times They Are a-Changin’”: A Look at Possible Ramifications on Medicaid by Senate Bill 744

I think of Bob Dylan’s raspy voice singing:

Then you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’.

In 1933, Franklin D. Roosevelt took the presidency during a time of severe poverty. The Great Depression, which would last until the late 1930s or early 1940s, cast shadows and doubt over the future of America. People were starving. Unemployment and homelessness were at an all-time high.

FDR’s first 100 days in office were monumental. In fact, FDR’s first 100 days in office changed America forever. With bold legislation and a myriad of executive orders, he instituted the New Deal. The New Deal created government jobs for the homeless, banking reform, and emergency relief to states and cities. During those 100 days of lawmaking, Congress granted every major request Roosevelt asked. This is an example of what I call blending of the separation of powers. In a time of great national need, Congress took an expansive view of the president’s constitutional powers and cooperated with him to effect major change.

I am in no way comparing our General Assembly to Congress back in the 1930s nor am I comparing FDR to Gov. McCrory. In fact, there are vast differences. I am only making the point that rarely does the legislative body create such change.

But North Carolina’s current Senate Bill 744 may create this change. For example, if Senate Bill 744 passes the House, the Department of Health and Human Services (DHHS), Division of Medical Assistance (DMA) may no longer manage Medicaid. That’s right. A whole new state agency may manage Medicaid.

This past Friday, May 30, 2014, the state Senate passed a $21.2 billion budget, which is known as Senate Bill 744. On May 31, 2014, Senate Bill 744 passed its 3rd reading and will now go on to the House. So far, it has been revised 3 times, so we do not know whether the House will make substantial changes. But, as it stands today, it is shocking. Is it good? Bad? I don’t think we can know whether the changes are good or bad yet, and, quite honestly, I have not had time to digest all of the possible implications of Senate Bill 744. But, regardless, the changes are shocking.

Of the most shocking changes (should SB 744 get passed), consider the following:

1. DHHS must immediately cease all efforts to transition Medicaid to the affordable care organizations (ACOs) system that DHHS had touted would be in effect by July 2015;

2. DHHS’s DMA will no longer manage Medicaid. Instead, a new state entity will be formed to manage Medicaid. (A kind of…”scratch it all and start over” method);

3. All funds previously appropriated to DMA will be transferred to the Office of State Budget and Management (OSBM) and will be used for Medicaid reform and may not be used for any other purpose such as funding any shortfalls in the Medicaid program.

4. Categorical coverage for recipients of the optional state supplemental program State County Special Assistance is eliminated.

5. Coverage for the medically needy is eliminated, except those categories that the State is prohibited from eliminating by the “maintenance of effort” requirement of the Patient Protection and Affordable Care Act. Effective October 1, 2019, coverage for all medically needy categories is eliminated.

6. It is the intent of the General Assembly to reduce optional coverage for certain aged, blind, and disabled persons effective July 1, 2015, while meeting the State’s obligation under the Americans with Disabilities Act and the United States Supreme Court decision in Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581 (1999).

7. Repeal the shared savings program and just reduce the reimbursement rates by 3%.

8. DHHS shall implement a Medicaid assessment program for local management entities/managed care organizations (LME/MCOs) at a rate of three and one-half percent (3.5%).

9. For additional notices as to State Plan Amendments (SPAs), DHHS must post the proposed SPAs on its website at least 10 days prior to submitting the SPAs to the federal Center for Medicare and Medicaid Services (CMS).

10. Reimbursement rate changes become effective when CMS approves the reimbursement rate changes.

11. The Department of Health and Human Services shall not enter into any contract involving the program integrity functions listed in subsection (a) of this section of SB 774 that would have a termination date after September 1, 2015.

12. The Medicaid PROVIDER will have the burden of proof in contested case actions against the Department.

13. The Department shall withhold payment to any Medicaid provider for whom the DMA, or its vendor, has identified an overpayment in a written notice to the provider. Withholding shall begin on the 75th day after the day the notice of overpayment is mailed and shall continue during the pendency of any appeal until the overpayment becomes a final overpayment (can we say injunction?).

Senate Bill 744 purports to make immense modifications to our Medicaid system. I wonder what Gov. McCrory and Secretary Wos think about Senate Bill 744. If SB 744 passes, McCrory and Wos can no longer continue down the ACO path. Does the General Assembly even have the authority to bind their hands from creating ACOs? It seems so.

As for the “new state agency” that will manage Medicaid, maybe the General Assembly is right and we do need to scratch out the current Medicaid management and start over…I doubt anyone would disagree that DHHS has had some “oops” moments in the past year or so. But (a) is this the way to start all over; and (b) does the General Assembly have the legal power to remove the management of Medicaid from Secretary Wos?

Going to the reduction of optional services for the “medically needy,” what services are considered optional? Here is a list of optional services, as defined by the Center of Medicare and Medicaid Services (CMS):

• Case Management
• Mental Health
• Podiatry
• Intermediate Care Facilities (ICF-MR)
• Personal Care Services
• Prosthetics
• Respiratory Therapy
• Hospice
• Adult Dentures
• Prescription Drugs
• Community Alternative Programs (CAP)
• Private Duty Nursing
• Chiropractor
• Home Infusion Therapy
• Physical Therapy/Speech Therapy
• Transportation

I cannot comment on all the changes proposed by Senate Bill 744; I simply have not had enough time to review them in detail, because there are so many changes. I do not purport to know whether these modifications are ultimately for the good or for the bad.

All I know is that we better start swimming or we will sink like a stone, because the times they are a-changin’.

Medicaid Expansion, Polarization, and Diving Head-First Into the Unknown

I have always believed in the concept to think first, act second. I rarely react; I try to act. In politics, generally, this mantra is not followed. If a public poll states that the public is in favor of X, then the leaders need to consider X. If it is an election year, then the politicians will do X.

I’m reminded of an awful book I read a couple of years ago. I can’t remember the name of it, but it began with a young teen-age couple at a lake. The boyfriend dives off of a dock into the lake and dies because his head hit a rock underneath the water. (I do not suggest reading the book). But I remember thinking… “How tragic,” then… “Why in the world would this guy dive head-first into a lake without knowing the depth or pitfalls? This was a preventable death.”

This is a perfect example of why we should think first, act second.

However, in politics, the polarization of the two parties, Republican and Democrat, sometimes causes politicians to RE-act according to the party lines. Nowhere is this polarization more prevalent than the concept of Medicaid expansion. See my blog: “To Expand, Or Not To Expand, A Nationwide Draw?” It seems that if a state has a Republican governor, without question, that state will refuse to expand (I know there are few exceptions, but there are few). If a state elected a Democratic governor, then the state has elected to expand Medicaid.

Are these issues so black and white? Or have we become so politically polarized that true intellect and research no longer matters? Doesn’t that actual state of the state matter in deciding to expand?

For example, according to a 50-state survey by USA Today, North Dakota is the best run state. North Dakota has zero budget deficit, and an unemployment rate of 3.1%, the lowest of all 50 states. North Dakota has opted to expand Medicaid.

On the other hand, according to the same study, North Carolina has an unemployment rate of 9.5%, which is the 4th highest in the nation. What does high unemployment mean? A large number of Medicaid recipients.

North Dakota has approximately 82,762 Medicaid recipients, according to the Kaiser Foundation for FYE 2010. Conversely, North Carolina, for the same year, had 1,813,298 Medicaid recipients.

So my question is: Can, or should, a state with 1.8 million Medicaid recipients adopt the same Medicaid eligibility rules as a state with 82,000 Medicaid recipients?

And how can we know the consequences of expansion prior to deciding to expand? Because, after all, shouldn’t we think first, act second? Who wants to dive into an unknown lake?

But issues that apparently no one had contemplated are cropping up…

States across America are seeing unexpected Medicaid costs increase. According to the Associated Press, prior to Medicaid expansion there were millions of Americans who were eligible for Medicaid but who, for whatever reason, had never signed up. Now that there has been so much publicity about health care, those former un-insured but Medicaid-eligible people are signing up in droves.

In California, State officials say about 300,000 more already-eligible Californians are expected to enroll than was estimated last fall.  See article.

Rhode Island has enrolled 5000-6000 more than its officials expected. In Washington State, people who were previously eligible represent about one-third of new Medicaid enrollments, roughly 165,000 out of a total of nearly 483,000.

While the Feds are picking up the costs for Medicaid recipients now eligible because of the expansion (at least for a few years), state budgets have to cover these new Medicaid recipients signing up who had been eligible in the past.

For states blue or red, the burden of these unanticipated increased costs will be on the shoulders of the states (with federal contribution).

Going back to the extremely polarized view of Medicaid expansion (Democrats expanding and Republicans not expanding)…maybe it’s not all black and white. Maybe we should shed our elephant or donkey skins and actually research our own states. How many Medicaid recipients do we have? What does our budget cover now?

Maybe we should research the consequences before diving in the lake.

Knicole Emanuel to Appear on UNC-TV Tonight! Tune In at 7:30pm!

Heather Burgiss, a UNC-TV journalist, created a 3-part television series called, “Mental Health Services in NC.” Part 1 will air tonight on UNC-TC at 7:30, and I will be discussing the important topic of the current status of our mental health system in NC.  So tune in to watch!!!!

The three-part series is intended to educate North Carolinians on the current state of mental health in NC, as well as discuss the upcoming Medicaid reform consisting of the Accountable Care Organizations (ACOs) for physical health services.

P.S. It is intimidating how UNC-TV interviews you, so forgive any bad grammar, etc. :)  During the interview, they cut off all the lights and shine a bright light on you.  It creates a strange environment in which you can hear the person asking you questions, but you cannot see him or her.  Plus, the light is super hot.

But, we will see, Heather was very nice in dealing with my novice handling of the interview.

And, BTW, when you see the scene during which I am walking down the hall of my law firm, I had a strange sensation to start doing the MC Hammer.  But I did not succumb.

General Assembly in Full Swing: What Medicaid Bills Are On the Agenda??

It’s that time of year again. The legislators are back in town. Moral Mondays resume. And all eyes are on the General Assembly. But, this is the short session, and the General Statutes limit the powers of legislative law-making in the short session.

For those of you who do not know how our General Assembly (GA) works and the difference between the short and long sessions, let me explain:

In odd-numbered years, the GA meets in January and continues until it adjourns. There is no requirement as to the length of the long session, but it is normally about 6 months. In the long session, everything is fair game. New laws or changes to the existing laws can be proposed in long sessions for all of the subjects on which the GA legislates.

The short session reconvenes every even-numbered year and typically lasts 6 weeks. Last year the long session adjourned July 26, 2013, and the GA reconvened May 14, 2014.

There are limits as to what measures may be considered in the short session. In fact, at the end of the long session, the GA passed Resolution 2013-23, which states exactly what topics/bills may be considered in the short session.

So…the question is: What Medicaid bills may be considered during this short session?

H0674
H0867
H0320

Now there are of course, exceptions. For example, any bill that directly and primarily affects the State Budget can be introduced. Obviously, a Medicaid bill could, arguably, directly and primarily affect the budget.

The bills I enumerated above, however, are the bills that are allowed to be considered in the short session because they constitute a crossover bill, that is, these bills were passed one house and were received in the other during last year’s long session and are considered “still alive” for consideration during the current short session.

So what do these Medicaid bills propose?

House Bill 674 could be a game changer for Medicaid providers. The bill, which passed the House last year with a vote of 116-0, would direct the Program Evaluation Division to study the contested case process in regards to Medicaid providers. There are 3 key components in this study according to the bill:

1. The Division must review the procedures for a contested case hearing under NCGS 150B and determine whether there is a way to streamline the process and decrease backlog.
2. The Division must consider alternative methods of review other than the contested cases.
3. The Division must review NCGS 108C-12 to determine whether any amendments to the law would improve the cost-effectiveness and efficiency of the Medicaid appeal process. (NCGS 108C-12 is the statute that allows providers to appeal adverse decisions to the Office of Administrative Hearings (OAH)).

Whew. The Program Evaluation Division would have its work cut out for it if the bill passes!

House Bill 674 was received by the Senate on May 5, 2013, and it passed its first reading.

House Bill 867 is named “An Act to Allow for the Movement of Certain Medicaid Recipients,” and it purports to allow those recipients with an 1915(c) Innovations Waiver slot to move about the State and for the slots to be recognized uniformly across the State. This way a person with an Innovations Waiver would not need to re-apply in another county if he or she moves there. However, for those served by the managed care organizations (MCOs), residency is determined by the county in which the recipient currently resides.

Then we come to House Bill 320. See my blog,”HB320: The Good News and the Bad News for NC Medicaid Providers.”

House Bill 320 mainly speaks to Medicaid recipient appeals, but imbedded within the language is one tiny proposed change to NCGS 108C-1. Just an itty, bitty change.

NCGS 108C-1 provides the scope of 108C (which applies to providers) and currently reads, “This Chapter applies to providers enrolled in Medicaid or Health Choice.”

If House Bill 320 passes, NCGS 108C-1 will read, “This Chapter applies to providers enrolled in Medicaid or Health Choice. Except as expressly provided by law, this Chapter does not apply to LME/MCOs, enrollees, applicants, providers of emergency services, or network providers subject to Chapter 108D of the General Statutes.”

What????

If House Bill 320 passes, what, may I ask, will be a Medicaid provider’s appeal options if NCGS 108C does not apply to MCOs? And would not the new scope of NCGS 108C-1 violate the State Plan, which explicitly gives OAH the jurisdiction over any contracted entity of the Department of Health and Human Services (DHHS)?  See my blogs on MCOs: “NC MCOs: The Judge, Jury and Executioner,” and “A Dose of Truth: If an MCO Decides Not to Contract With You, YOU DO HAVE RIGHTS!

I also wonder, if House Bill 320 passes, what effect this revision to NCGS 108C-1 will have. Arguably, it could have no effect because of the above-mentioned language in the State Plan, the 4th Circuit Court of Appeals case that determined that MCOs are agents of the state, and the fact that the Department is defined in 108C-2 to include any of its legally authorized agents, contractors, or vendors.

On the other hand, in every single lawsuit that I would bring on behalf of a provider against an MCO, I would have another legal obstacle to overcome. The MCO’s attorney would invariably make the argument that OAH does not have jurisdiction over the MCO because the scope of 108C has been changed to exclude the MCOs. They have been arguing already that OAH lacks jurisdiction over the MCOs since NCGS 108D was passed, but to no avail.

Needless to say, the MCO lobbyists will be pushing hard for H 320 to pass. H 320 passed its 3rd reading on May 15, 2013, by a vote of 114-0, and the Senate received it on May 16, 2013.

Medicaid, Medicare, Nursing Facilities, and Death and Taxes: Our Uncertain Future for Our Aged Population

There are few “knowns” in life. In 1789, Benjamin franklin penned a correspondence to Jean-Baptiste Leroy, in which he wrote, “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”

Certainly the phrase “death and taxes” had existed prior to Franklin’s 1789 usage, but considering how famous Franklin became in history for our country, many people attribute the phrase to Franklin.

Think about it. Nothing is certain, but death and taxes. It is a rather bleak view of the world. Why not “nothing is certain except happiness and sadness?” Or “nothing is certain but you being alive and dying?” Why do both “certain” items have to be bleak?

For purposes of this blog, I am using my own phrase:

“Nothing is certain except old age, unless you die early.”

For one day, we will all be old (unless we die early). And when we age, as much as we would love to ignore the fact, the fact is that most of us will be placed in an assisted living facility (ALF) or a nursing home of some sort.

But what will the world of ALFs look like 20…30…40 years from now? With the low Medicare and Medicaid reimbursement rates for personal care services (PCS), how many nursing homes will exist in the future?

Already, in Massachusetts, nursing homes are dropping like flies due to low reimbursement rates. What does this mean to the aged population?

In NC, our PCS reimbursement rate continues to be slashed. What will this mean for our aged population?

In the past few years, with approval from the Center for Medicare and Medicaid Services (CMS), NC Department of Health and Human Services (DHHS) has lowered the reimbursement rates for non-medical PCS provided both in the home and in a facility.

In October 2013, DHHS officials proposed to CMS a cut in the Medicaid PCS hourly rate by $2.40 per hour, down to $13.12 per hour, retroactive to July 1 (At the time, the PCS hourly rate was $15.52 and allowed up to 130 hours of care per month or, roughly, 4 hours a day).

Interestingly, DHHS has the PCS reimbursement rate for facilities and for home health care providers the same. Yet, facilities face much higher overhead, staffing costs, and building and equipment costs than does a home care provider. So why do both different types of providers receive the same reimbursement rate?

Prior to 2010, DHHS had two separate PCS rates, one for facilities and one for home health care providers. Obviously, the reimbursement rate in facilities was higher than the PCS rate for home health care providers to account for the additional overhead costs.

However, Disability Rights of NC warned DHHS that paying lower reimbursement rates for people living in the home versus a facility violated the Americans with Disabilities Act (ADA). The U.S. Department of Justice (DOJ) agreed, and, in 2012, the General Assembly (GA) had to make a decision: (1) lower the reimbursement rate for PCS in facilities; (2) increase the reimbursement rates for PCS in the home; (3) or come up with some innovative way to not violate the ADA.

Feeling pinched, the GA passed legislation that made it more difficult for recipients to qualify for PCS and decreased the number of allowable hours of PCS to from 130 to 80 hours per month, although if a person suffered from dementia, the PCS provider could get an extra 50 hours/week.

Plus, starting January 1, 2014, the shared savings plan went into effect, which decreased reimbursement rates by 3% across the board.

What does all this mean? It points to a couple of things.

Nursing facilities are facing financial distress.

In Massachusetts nursing facilities have already begun to close down. As of May 19, 2014, within 5 months, 4 nursing homes have gone out of business. According to The Boston Globe, the 4 nursing homes closed because they were “unable to make ends meet with the money they get from Medicaid because reimbursement rates have not increased in nearly a decade, according to the Massachusetts Senior Care Association, the industry trade group. Scores more are on the edge of shutting down.”

Scores more are on the verge of shutting down? For those of you who do not recall Lincoln’s speech, “Four scores and seven years ago…,” a score equals 20. According to the Boston Globe scores are on the verge of shutting down??? 40? 60?

With our aged population growing by the day, what does the future look like for nursing homes and the aged population?

Nothing may be certain except death and taxes, but I think it is certain that you will grow old, unless you die early.

NCFast: Should We Go Back to Atari???

Computer systems have come a long way. I remember my Tandy3000 when I was growing up (which had Lotus Notes on it). I also remember the best video game was Pong. Yes, slowly, we advanced to Pac Man, Q-bert and Frogger. But when I bought (actually when my parents bought) my Atari, it worked as expected. When I wanted to play the Decathlon, if I wiggled my joy stick fast enough, I could be an Olympian. When I pushed the jump button for Donkey Kong, Mario jumped.

So, now in this day and age of computer advancement, someone please tell me why computer systems put into place in NC for DHHS simply do not work, have glitches, and fail. Seriously! Why, with a price tag of $21 million and counting (although one journalist cites the price tag at $48 million), why does NCFast not work??? NCFast is simply not fast. NCSlow would be more apropos.

NCFast has a Medicaid eligibility backlog of approximately 86,000 applications.

While the food stamp backlog has mostly been cleared, an even larger backlog is looming. Acting Medicaid Director Sandy Terrell warned lawmakers that nearly 86,000 Medicaid applications are delayed beyond federal processing timelines.

Why is a backlog of Medicaid eligibility important?

Imagine you are on Medicaid and pregnant. You apply for Medicaid for your unborn child. And the Department of Health and Human Services (DHHS) tells you that there is a backlog. Your child is born (healthy), but you cannot take your baby to the pediatrician for the first check-up because the baby has not received a Medicaid card.

Or imagine you are an adult on Medicaid suffering from cancer. April 1, 2014, the Department of Health and Human Services (DHHS) re-processes your Medicaid eligibility. You have been on Medicaid for years and depend on Medicaid to get your monthly prescriptions for pain, etc. But now it is May 6, 2014, and your Medicaid eligibility has not been processed. You go to the pharmacy that you go to every month and the pharmacist says, “Sorry. We cannot give out medication hoping to get paid in the future. Your Medicaid application has not been processed.”

Are we as North Carolinians just doomed to hire contractors who cannot meet the standards required? Or are we poorly choosing contractors? Are these contractors overstating their abilities? Or are we not conducting due diligence to determine whether these contractors are overstating their abilities?

What if Superman told us, “Trust me! I can fly! I am super strong! I will foil all of your villains!” Only to find out that Superman is Verne Troyer in costume?

Why should we care?

Three reasons:

1. People are not getting food stamps in a timely way.
2. People are not getting Medicaid eligibility applications timely processed.
3. We, as taxpayers, paid for this computer system and expect it to run reasonably well.

My Atari, at least, met expectations!

The Future of Medicaid, a POPPED Balloon, and Proposals

There are more people on Medicaid than Medicare.

Think about that.  There are more people in America who qualify for Medicaid than Medicare.  Yet, as a nation, we spend more on Medicare than Medicaid.  (I assume because the older population requires more expensive services).  58 million people relied on Medicaid in 2012 as their insurance.

And Medicaid is growing.  There is no question that Medicaid is growing.  When I say Medicaid is growing, I mean the population dependent on Medicaid is growing, the demand for services covered is growing, and the amount of money required to satisfy the demand is growing.  This means that every year we will spend more and more on Medicaid.  Logically, at some point, at its current growth pattern, there will come a point at which we can no longer afford to sustain the Medicaid budget.

If you think of the Medicaid budget as a super, large balloon, imagine trying to inflate the balloon more and more.  At some point, the balloon cannot withstand the amount of air being put into it and it…POPS.

Will Medicaid eventually POP if we keep cramming more people into it, demanding more services, and demanding more money to pay for the increased services?

First, let’s look at the amount of money spent on Medicaid last year.

The Center for Medicare and Medicaid Services (CMS) just released the 2013 Actuarial Report on the Financial Outlook on Medicaid and its report considers the effect of Obamacare.

The CMS report found that total Medicaid outlays in 2012 were $431.9 billion.

The feds put in $250.5 billion or 58%.  States paid $181.4 billion or 42%.  In 2011, the federal government’s percentage of the whole Medicaid expenditure was 64%.

The CMS report also made future projections.

“We estimate that the [Affordable Care] Act will increase the number of Medicaid enrollees by about 18 million in 2022 and that Medicaid costs will grow significantly as a result of these changes starting in 2014.”

The 10 year projection, according to the report, is an increase in expenditures at an annual rate of 7.1%.  By 2022, the expenditures on Medicaid will be $853.6 billion.

Just for some perspective…a billion is a thousand million.

If you sat down to count from one to one billion, you would be counting for 95 years (go ahead…try it!).

If I gave you $1000 per day (not counting interest), how long would it take you to receive one billion dollars?  Answer: 2,737.85 years (2,737 years, 10 months, 7 days).  Now multiply 2,737.85 years by 853.6.

That’s a lot of years!!

In the next ten years, average enrollment is projected to reach 80.9 million in 2022.  It is estimated that, currently, 316 million people live in America.

So the question becomes, how can we reform, change, alter (whatever verb you want to use) Medicaid so that we can ensure that the future of Medicaid is not a POPPED balloon?  While I do not have the answer to this, I do have some ideas.

According to the CMS report, per enrollee spending for health goods and services was estimated to be $6,641 in 2012.  I find this number interesting because, theoretically, each enrollee could use $6,641 to purchase private insurance.

Remember my blog: “A Modest Proposal?” For that blog, I used the number $7777.78 per enrollee to purchase private insurance, which would require an increase in Medicaid spending assuming we give $7,777.78 to each enrollee.  But think of this…the amount would be a known amount.  Not a variable.

My health care, along with health care for my husband, costs $9,000/year.  My cost includes two people.  If I wanted individual insurance it would only have cost $228/month or $2,736/year.

What are other options to decrease the future Medicaid budgets and to avoid the big POP:

  • Decrease Medicaid reimbursements (really? Let’s make LESS providers accept Medicaid);
  • Decrease covered services (I would hope this idea is obviously stupid);
  • Decrease the number of recipients (I believe the ACA shot this one out of the water);
  • Create a hard cap on Medicaid spending and refuse to allow services over the cap regardless of the medical necessity (Again, I would hope this idea is obviously stupid);
  • Decrease administrative costs (this is apparently an impossible feat);
  • Create more difficult standards for medical necessity (I believe the ADA would have something to say about that); or
  • Print more money (Hmmmm…can we say inflation?).

Please, if anyone else has a good idea, let me, or, better yet, your General Assembly, know.

Because without question the future of Medicaid is larger and more expensive than today.  We want to avoid that…

POP!!

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