Category Archives: Termination of Medicaid Contract
Documentary on New Mexico Behavioral Health: Breaking Bonds: The Shutdown of New Mexico’s Behavioral Health Care Providers
How the ACA Has Redefined the Threshold for “Credible Allegation of Fraud” and Does It Violate Due Process?
I believe that everyone would agree with me that The Affordable Care Act (ACA) has done more to impact health care legally…probably since 1966 when Medicare was established. Whether you think the impact is beneficial or negative, it does not matter. The impact exists nonetheless.
One of the changes the ACA has yielded is the threshold for suspending Medicare and Medicaid payments to providers based on credible allegations of fraud is lower.
While CMS regulations authorized the suspension of Medicare and Medicaid payments prior to the enactment of the ACA, § 6402(h) lowers the standard the government must meet in order to suspend payments based upon suspected fraud.
The lower standard for a state to suspend Medicaid and Medicare payments nip…nay, I say…bite at the fabric of due process.
First, what is a “credible allegation of fraud?”
Credible allegation of fraud means an allegation from any source, such as data mining, whistleblowers, and/or fraud hotline complaints. Quite literally, you could be accused of having credible allegations of fraud because an ex, disgruntled employee calls the fraud hotline.
The definition of “credible” is equally as scary. If there is “indicia of reliability,” it is credible. I have no idea what “indicia” means, but it does not sound like much. So if there is indicia of reliability when your ex, disgruntled employee calls the fraud hotline, there may be credible allegations of fraud against you.
When you have credible allegations of fraud against you, your Medicaid/Medicare payments are suspended. Without an opportunity to rebut the allegations. Without you even knowing from where the allegation came.
I make the analogy (albeit, admittedly, a poor one) of my law license. Or an M.D.’s license. Or a teacher’s license. We do not have a right to a law license. But, I argue, once you go through the process and pass the necessary tests and are awarded a law license (or M.D. license or teacher’s license), you have a protected property right in continuing in the profession.
There is a good cause exception and you should try to assert the exceptions, but this blog concentrates on the suspension and the due process (or lack thereof) involved.
CMS states that providers have “ample opportunity to submit information to us in the established rebuttal statement process to demonstrate their case for why a suspension is unjust.”
However, think of this…in Medicare, notice to the provider is not required prior to the suspension. So, I ask you, how can you plead the suspension is unjust when you have no notice? Obviously, only after the suspension has been put into place. Due process violation?
In Medicaid, the agency must notify the provider of the suspension within 5 days of taking the action. Although it can be extended to 90-days upon request of a law enforcement agency.
Even though the Medicare suspension statutes do not require notice, the Medicare statutes are a bit more provider-friendly when it comes to the length of time during which you may be suspended. For Medicare providers, the suspension can last a period of 180 days. However, the 180 days can be extended.
Conversely, for Medicaid providers, there is no scheduled period of suspension.
In my cursory review of case law, I found one case in which the Medicaid provider had suffered suspension of Medicaid reimbursements for over 4 years. Obviously, the company had closed and staff had been terminated. You cannot maintain a business without revenue.
So, is the suspension of Medicare and Medicaid payments upon a credible allegation of fraud a violation of due process?
Do not even get me started on the importance of due process. In fact, I have blogged about the importance of due process before in this blog. “NC Medicaid and Constitutional Due Process.”
Due process is generally described as notice and an opportunity to be heard. But due process does not apply to everything. For example, you do not have due process rights to your drivers’ license. Certain infractions will cause you to lose your drivers’ license without due process. That is because driving is a privilege, not a right. You do not have a right to drive. Instead due process attaches when a liberty or a property right is deprived.
The right to vote (for some…not felons)
Freedom of religion
Freedom of speech
Obviously, in certain circumstances, those rights can be restricted (shouting fire in a crowded movie theatre, for example). But, generally, you have due process to the deprivation of any of your rights.
For purposes of this blog, we are concentrating on whether due process attaches to the deprivation of Medicare and Medicaid reimbursements. If someone takes away your Medicaid and/or Medicare reimbursements, are you entitled to due process…or notice and an opportunity to be heard?
Some courts have held that “health care providers have a constitutionally protected property interest in continued participation in the Medicare and Medicaid programs.”
Obviously, in the jurisdictions in which this view is followed, without question, you have a right to due process upon suspension of Medicaid and/or Medicare reimbursements.
However, the view that Medicaid and Medicare participation is a constitutionally protected right is not the majority view. Or, I should say, this particular issue has not arisen in all jurisdictions. Some jurisdictions have not even considered whether the participation in Medicaid and Medicare is a protected property interest.
To be completely clear, there is no protected property interest in procuring a Medicaid or Medicare contract. Only once you receive the contract does your interest in the contract become protected (in those certain jurisdictions).
North Carolina, for example, has not contemplated this issue (at least, not since after 10 NCAC 22F.0605 was enacted).
Interestingly enough, 10A N.C. A. C. 22F.0605 states “[a]ll provider contracts with the North Carolina State Medicaid Agency are terminable at will. Nothing in these Regulations creates in the provider a property right or liberty right in continued participation in the Medicaid program.”
So, one would think that, in NC, there is no protected property interest in continued participation in the Medicaid program.
However, in the Office of Administrative Hearings (OAH), this very issue was contemplated in a few contested case hearings and the Administrative Law Judges (ALJ) have decided that there is a protected property interest in the continued participation of the Medicaid program, despite 10A N.C. A. C. 22F.0605. The decisions are based on federal and state law.
“North Carolina statutes and rules provide procedural due process. Federal Medicaid regulations are replete with provisions that require that notice be given to the provider of the suspension or termination of Medicaid payment for services.”
“The Supreme Court has ruled that property rights can be created by administrative regulations and that the “sufficiency of the claim of entitlement must be decided by reference to state law.”‘ (Internal cite omitted). Bowens v. N.C. Dept. of Human Res., 710 F.2d 1015, 1017 (4th Cir. 1983). Our state statutes and rules have the procedural and substantive safeguards, indicating that the provider’s participation is not terminable at will.” (This opinion was written after 10A N.C. A. C. 22F.0605 was enacted).
While these OAH decisions have not undergone judicial review, at least, in OAH, providers may have a protected property interest in the continuation of participation in the Medicaid program. And analogous argument would exist for Medicare providers.
Who knows? Maybe NC will follow the view that providers have a protected property interest in continuing participation in Medicaid…
Just imagine if the government could snatch away law licenses…or M.D.’s licenses…or teachers’ licenses…without any due process. We would live in fear of losing our livelihoods.
Medicaid Providers: Do Not Omit Information on Your Medicaid Application or NC Ct of Appeals Says, “You Can Lose Your Medicaid Contract Without Notice.”
We’ve all told our share of little, white lies, right? “Yes, honey, you look fantastic in that dress!” Or… “I never think about my ex-boyfriend!” But omissions are also lies. People have told me in the past that omissions are not lies, but they are, obviously, wrong. Even in the court of law, a nonverbal action (or omission) can be used against you.
For example, if your neighbor comes up to you and accuses you of killing his cat and you say nothing except shut the door, you better believe that when your neighbor testifies in court that your “nonassertion” or “non- dispution” (I know, not a word) his allegation will be admitted into the court, or at least the attempt will be made. Even though the “nonassertion” would be considered hearsay.
Hearsay is an out of court statement made by someone other than the testifying witness to be admitted to prove the truth of the matter asserted. For example, if I were on the stand and I said, “My neighbor told me that he killed my cat.” If, in fact, I was testifying in a trial in which I was trying to prove that my neighbor killed my cat, then my statement would be hearsay and not admitted into evidence. The same would be true if I were testifying that I accused my neighbor of killing my cat and he said nothing. His nonadmission would be hearsay as well…because a normal person would protest to killing the cat if accused and innocent.
However, in the law, there are always grey areas. Sometimes when the “statement” is nonverbal, the hearsay objection will be overlooked. Attorneys argue that the hearsay rule is almost always, in the abstract, phrased in terms of “statements” or “utterances” and the possible application of the rule to “conduct” may not be immediately apparent.
However, CAVEAT, In the world of Medicaid, omissions can cost you your Medicaid contract.
In a recent North Carolina Court of Appeals decision, Powell’s Medical Facility v. NC DHHS, the NC Court of Appeals upheld the trial court’s decision to uphold the Division of Medical Assistance’s (DMA) termination of Dr. Eddie N. Powell’s (I know, really? Who’s name is legally Eddie and not Edward?) Medicaid contract based on Dr. Powell’s omission on his Medicaid verification packet to Computer Sciences Corporation (CSC).
In 2009, CSC began to re-verify Medicaid providers in an effort to determine that all Medicaid providers met criteria as a Medicaid provider (yes, folks, this is the very same CSC that has catastrophically rolled-out NCTracks).
In Dr. Powell’s case, DMA informed him, in the termination letter, that if a provider were convicted of a criminal offense or made “any mistatement…or omission while submitting the provider application” that DMA had the authority to terminate a provider without notice.
Dr. Powell’s attorneys argued that the termination was erroneous because “the sole basis for DMA’s decision to terminate Dr. Powell’s participation in Medicaid is the mere existence of Dr. Powell’s criminal conviction.” (emphasis in the original)(Notice, people, that I have not told you what the criminal offense was…that is on purpose. Once I read the criminal conviction, I was tainted for the remainder of the Court’s opinion. So you will find out the criminal conviction at the end. Those of you impatient readers, can scroll down. But, for now, imagine that the criminal conviction is for stealing a loaf of bread for his family. See “Les Miserables” by Victor Hugo.)
The Court, however, disagreed.
A witness for the Respondent (DMA) testified on recross that Dr. Powell’s termination was based on (1) the conviction (of stealing bread); and (2) the OMISSION to disclose his conviction (of stealing bread) on his application.
Supposedly, the result of the this opinion is that if you were convicted of a criminal offense and it does not involve something really, really, bad (such as stealing bread) and you DO disclose it on the Medicaid application that you would not be terminated.
Moral of the story? Disclose everything!
If you were convicted of littering when you were 18, disclose it.
The problem with Dr. Powell? He was not convicted of littering when he was 18. He also was not convicted of stealing bread for his starving family like Jean Valjean.
He was convicted of the felonies of incest and taking liberties with a minor, who is his stepdaughter. (To which my husband, asked, “Is it incest if it was his stepdaughter?” To which, I said, “Hmmmmm. I don’t know. I am not a criminal attorney.”)
Regardless, Dr. Powell is a convicted sex offender.
Interestingly, one issue before the NC Court of Appeals was whether a Medicaid contract is a “property right” to a provider. That is a HUGE issue for NC Medicaid providers!!! This issue goes back to the whole “is a Medicaid contract terminable at will?” Obviously, DMA and the managed care organizations want the Medicaid contracts to be terminable at will so they can terminate a contract without due process.
But the NC Court of Appeals did not rule as to this very important issue. The Court ruled that “even assuming, arguendo, that Dr. Powell’s enrollment was not terminable at will, DMA had substantial evidence to terminate the contract.
However, the moral is obvious. We don’t need Aesop to tell us the moral. If you are a Medicaid provider and have been convicted of a criminal offense in the past, disclose the conviction on all Medicaid applications. Period.