Category Archives: Termination of Medicaid Contract
Our Medicaid Budget Does More Than Allocate Money; It Places the Burden of Proof on Medicaid Providers!!!
Are you a health care provider in NC? Are you wonderful enough to help Medicaid patients but accept low Medicaid reimbursements? Are you dedicated to helping our most needy? Well, guess what???? YOU now have the burden of proof if you disagree with an adverse determination by the State.
That’s right. The newly-enacted state budget quietly changes the statutes and shifts the burden of proof from the Department to YOU. I am reminded of my Grandpa Carson. Whenever he couldn’t believe what he just heard, he would bellow, “Wooooo weee.” Growing up in the south, we have certain sayings, such as “Bless your heart,” “Y’all come back now, ya hear?” and “That food is so good I could slap my momma.” My Grandpa Carson, God rest his soul, was as southern as southern can get. If he were here and heard about the burden shift onto the providers, he would say, “Wooo weeeee.”
Last week while I was on my first week-long vacation in 2 years, the North Carolina state budget, known as Session Law 2014-100, was signed into law by Governor McCrory. (Which is why I missed a week of blogging…my vacation, not McCrory’s signature). Since I was at my family reunion started by my Grandpa, I am dedicating this blog to my grandpa, Nat Carson, who created a family tradition that has lasted for over 40 years. Our (huge) extended family vacation together once a year at Emerald Isle for a family reunion. FOUR generations attend!
Going back to the budget…
An “adverse determination” in this case includes decisions by North Carolina’s Department of Health and Human Services (DHHS) under the Medicaid program such as the Department’s termination of a contract with the provider, a Managed Care Organization’s (MCO) termination of a provider contract, or the Department or one its many vendors determines that the providers owes an overpayment back to the state.
Not only does the state budget shift the burden of proof onto providers when they contest an adverse determination by the State, which we will discuss more below, but it also takes a lot of DHHS decision-making power away. It is apparent that the General Assembly does NOT think DHHS can do its job of managing Medicaid and creating Medicaid reform competently. The General Assembly (GA) has decided that, for whatever reason, it will be more hands-on regarding Medicaid decisions in the future.
Here are a few examples of the GA’s hands-on attitude found in the Session Law 2014-100 (with some emphasis I have made by putting some words in bold-faced type)
- “Until the General Assembly enacts legislation authorizing a plan to reform Medicaid, the Department of Health and Human Services (i) shall continue to consult with stakeholder groups, study, and recommend options for Medicaid reform that will provide greater budget predictability for the Medicaid program and (ii) shall not commit the State to any particular course on Medicaid reform and shall not submit any reform-related State plan amendments, waivers, or grant applications nor enter into any contracts related to implementing Medicaid reform.”
- “The Department may submit drafts of the waiver to the Centers for Medicare and Medicaid Services (CMS) to solicit feedback but shall not submit the waiver for CMS approval until authorized by the General Assembly.”
- “The Department of Health and Human Services shall make payments to the contractor hired by the Joint Legislative Oversight Committee on Health and Human Services from funds appropriated elsewhere in this budget for this contract…”
- “The Department of Health and Human Services shall not make any other modifications to the portion of the Medicaid State Plan referenced in this section, except as provided herein.”
- “The Department may submit drafts of the waivers to the Centers for Medicare and Medicaid Services (CMS) to solicit feedback but shall not submit the waivers for CMS approval until authorized by the General Assembly.”
- “[T]he Division of Medical Assistance shall ensure that any Medicaid-related or NC Health Choice-related State contract entered into after the effective date of this section contains a clause that allows the Department or the Division to terminate the contract without cause upon 30 days’ notice.”
- “No fewer than 10 days prior to submitting an amendment to the State Plan to the federal government, the Department shall post the amendment on its Web site and notify the members of the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division that the amendment has been posted.”
Basically, the GA has estopped DHHS from reforming Medicaid without the consent of the General Assembly.
Then, stuck in the middle of the state budget is the amendment to N.C. Gen. Stat. 108C…. “Woooo weeee!”
MODIFY MEDICAID APPEALS SECTION 12H.27.
(a) G.S. 108C-12(d) reads as rewritten: “(d) Burden of Proof. – The
Department petitioner shall have the burden of proof in appeals of Medicaid providers or applicants concerning an adverse determination.”
Does anyone else understand what this teeny, tiny clause within Session Law 2014-100 means????
What is the importance of burden of proof? Enormous! And this clause changes the playing field for Medicaid providers. It may not have been a level field prior to Session Law 2014-100, but now it’s even more slanted.
The easiest way to explain “burden of proof” is that when a petitioning Medicaid provider challenges some adverse determination by DHHS, for example, the Department’s termination of a contract with the provider, the “burden of proof” decides which party must persuade the reviewing tribunal that the party’s assertions are correct. Up until this amendment of G.S.108C-12(d), the Department has had the burden to present evidence showing that its adverse determination was correct. The petitioner could then respond to that evidence, to try to show the contrary, but the burden of proving the correctness of the adverse determination still rested on the Department in cases filed by Medicaid providers under Chapter 108C.
In court, one of the first questions a judge will ask is, “Who carries the burden of proof?” Because the legal burden of proof is just that…a burden…that must be satisfactorily carried in order to win.
Health care providers who accept Medicaid have notoriously been given the short-end of the stick, i.e., low reimbursement rates, undergoing burdensome audits, but, at least, in NC, historically, the Department has had to prove the correctness of its allegations, whether it be an alleged overpayment, a termination of a Medicaid contract, or other allegations.
But now? DHHS’ allegations against a health care provider are true…unless the provider can prove DHHS wrong. The uphill fight of a provider seeking to correct a DHHS adverse determination, just became much steeper, and it was done with little or no fanfare.
So can you do? Only options as far as I see it:
- Call and email your state representatives.
- Hire a lobbyist.
- Bring a lawsuit to change it.
- Do nothing.
Per L. Warren’s comment, I am adding #5.
5. Stop taking Medicaid clients.
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.