Category Archives: Medicaid Contracts
A colleague sent the following article to me this morning. When I first read it, I was thrilled, because I have been beseeching the North Carolina legislators to demand accountability of the Department of Health and Human Services (DHHS), Division of Medical Assistance (DMA) for the sake of health care providers who accept Medicaid in NC (especially behavioral health care providers).
So few providers accept Medicaid as is. But with the Medicaid system in such a downward spiral, more providers decide to NOT accept Medicaid every day. Providers just don’t want to deal with the harassment (not to mention the low reimbursement rates).
According to this News and Observer article below, “black legislators” are demanding accountability from DHHS.
Again, my first response was, thank goodness, at least someone is. But when I talked to my husband about this, he asked, “Why are just the black legislators demanding accountability? Where are the white legislators? Where are the other ethnicities?”
Providers across NC are having their Medicaid contracts erroneously terminated or not renewed. Providers are going out of business. Providers are not accepting Medicaid. Medicaid recipients are being denied medically necessary services. Medicaid recipients are unable to find providers willing to accept Medicaid. Especially in behavioral health. What will it take for people to care? A Columbine?
Is this a “black” problem? A “white” problem? A Republican or Democrat problem?
NO! It is a North Carolina problem.
So, bravo, members of the Legislative Black Caucus!!! Bravo for being a leader. But I hope your leadership causes all legislators, no matter the color or party-affiliation, to question DHHS.
Here is the article:
Leading black legislators are calling on the head of the Department of Health and Human Services to explain delays in Medicaid payments to providers, problems getting food stamps to the needy, and agency employee raises.
Members of the Legislative Black Caucus said at a news conference Wednesday that they were not receiving timely and accurate information about activities in the department. Their news conference came a few hours after DHHS distributed information touting the department’s accomplishments.
DHHS spokesman Ricky Diaz said the agency provides legislators with regular updates and will continue to do so.
The department has been under scrutiny for the past few months for personnel decisions and problems with expensive computer systems.
The department included on its list of accomplishments the Medicaid payment system called NC Tracks. The system continues to frustrate some providers who have trouble getting paid for patient care.
The lawmakers, all Democrats, sent their letter to Dr. Aldona Wos, the department’s secretary, and Gov. Pat McCrory. The letter was full of questions about NC Tracks and NC FAST, another computer system, which handles food assistance. The letter also asked questions about personnel matters.
The department has a personal services contract with Joe Hauck, a vice president in Wos’ husband’s firm, that has paid Hauck more than $228,000 for about eight months of work as an adviser.
Rep. Garland Pierce, a Scotland County Democrat and president of the Black Caucus, referred to the Hauck contract as one of the “questionable decisions made by her that almost call her integrity into question.”
Wos sent an email to a small group of legislators last week saying Hauck has done important work for the department. Black Caucus members said the email should have been widely distributed.
Legislators also questioned salaries and raises given to new staff and long-time top administrators.
Diaz explained that Wos walked into a department without a leadership team or a succession plan. She had to find top people quickly, he said.
“We have attracted talent to the department to take on these challenges,” Diaz said. Meanwhile, the agency has cut its payroll $23 million, he said.
Lawmakers said they need accurate information from DHHS because health care providers ask them when the agency’s computer problems will be fixed and because low-income people are going hungry.
Sen. Earline Parmon, a Winston-Salem Democrat, said she was on a conference call with Wos and others in the department about two weeks ago, where they offered a “glowing perspective” on the computer systems.
“A few minutes later, I got information that everything they told us was not factual,” Parmon said. “First of all, we need for them to sit with us and admit that there are problems.”
The legislators’ letter included a report from the Triangle Business Journal that said for the week ending Aug. 23, the department missed three of four targets for approved Medicaid claims and had a backlog of more than 90,000 items.
Diaz noted that the system has processed 29 million claims and paid out $1.4 billion.
The department told the public there would be a 60- to 90-day rough patch once NC Track started running, Diaz said.
“Those who are trained come to realize the benefits of it,” he said.
I am finally back home in North Carolina from beautiful New Mexico. If you ever forget how large America is, fly across country for one day and come back. I think I ate 12 packets of Delta peanuts, and I know I spent over $8 for a hamburger at the Atlanta airport during a layover (How do they sleep at night charging that much for a hamburger?!). But…WOW!!…did I learn some eye-opening, Medicaid information.
It is without question that, recently, North Carolina providers that accept Medicaid have undergone serious, over-zealous scrutiny and audits. Even more so than normal. And, even more so, behavioral health care providers are undergoing increased scrutiny with the implementation of the Managed Care Organizations (MCOs).
But what I saw in New Mexico that has happened to 15 behavioral health care providers (BHP) in New Mexico, which served 87% of the NM Medicaid recipients, would make any American cringe.
Let me set the stage:
These BHP have been in business for a very long time without issue. OptumHealth (Optum) is one of the acting MCOs in New Mexico (NM). Analogous to our Alliance, EastPointe, or East Carolina Behavioral Health. From my understanding, sometime in January 2013, Optum contacted the NM single state entity that manages Medicaid. (In NC, the single state entity is the Department of Health and Human Services (DHHS), Division of Medical Assistance (DMA); in NM, it is Human Services Department (HSD)). Optum alleged that 15 BHP were committing abhorrent billing practices.
According to the representative for HSD, HSD decided to contract with Public Consulting Group (PCG) to conduct an independent audit to determine whether Optim’s allegations had merit. So, in Jan or Feb. 2013, HSD contracted with PCG to conduct the independent audit on the 15 BHP. The PCG Executive Summary of its audit was published in February 2013.
You can find the entire Executive Summary here.
PCG found, in pertinent part:
I know, hard to read. Anyway, PCG found over $36 million in overpayments to these 15 providers.
At first blush, one would think, “Holy cow! These providers were overpaid $36 million!” But hold on…how many providers here in NC have undergone a PCG audit, only to find that PCG’s audit was erroneous, the extrapolation was inflated, and many noncompliance claims were actually compliant?
See NC Medicaid Extrapolation Audits: How Does $100 Become $100,000? Check for Clusters! Or Overinclusive NC Medicaid Recoupments and the Provider “Without Fault” Defense. Or NC Medicaid RACs Paid to Find Errors By Providers, No Incentive to Find Errors By DMA. Or The Exaggeration of the Tentative Notice of Overpayments.
The reality is that most PCG audits (at least the ones I have reviewed) are erroneous.
At the end of the day, the provider does NOT owe the over-inflated amount PCG claims. So, with the knowledge that many (all that I have seen) of PCG’s audits are erroneous, let me get back to my story.
Based on PCG’s audit, HSD determined that credible allegations of fraud existed and immediately suspended the Medicaid payments for all 15 providers.
But…get this…HSD provided zero appeal rights. The providers were unable to appeal the State’s decision to suspend the Medicaid payments. And even worse, PCG and the State refused to give the providers the data compiled by PCG that, supposedly, demonstrated the credible allegations of fraud. So the providers could not even defend themselves against the audit results because the providers were not allowed to see the audit results. To this day, the providers do not know what documents PCG audited or what the purported noncompliance is.
This would be similar to me accusing you of embezzling money from my company, but never showing you what proof I have. Firing you for embezzlement and calling the police. The police arresting you based on my accusation, but you never get a day in court or even the proof to defend yourself.
In America, really? Where is the due process?
The Fourteenth Amendment of the U.S. Constitution states, in pertinent part:
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
I mean, come on, due process is a benchmark of our country. As American as cheeseburgers and the 4th of July…
Yet, these 15 providers in New Mexico received no due process.
During the Tuesday, September 3, 2013, New Mexico behavioral health subcommittee, Larry Heyek, the HSD Deputy General Counsel, cited the authority for HSD’s preliminary investigation as 42 C.F.R. 455.14, which states that:
“If the agency receives a complaint of Medicaid fraud or abuse from any source or identifies any questionable practices, it must conduct a preliminary investigation to determine whether there is sufficient basis to warrant a full investigation.”
Interestingly enough, the C.F.R. section preceding 455.14 requires due process.
42 CFR 455.13 states:
The Medicaid agency must have—
Yet, the State of New Mexico, based on PCG’s audit, infringed on the legal rights of all 15 providers and no provider was afforded due process of law.
So what happened to these 15 providers due to the PCG audit? Did HSD attempt a recoupment of the $36 million? Did HSD terminate the 15 providers’ Medicaid contract? A plan of correction?
HSD went to Arizona, hired 3-5 (not sure on the number) large, health care providers to take over the 15 providers’ companies. Literally, these Arizona companies have gone to the 15 providers’ buildings and have either purchased the buildings or leased the buildings and the 15 providers no longer exist (realistically…legally, the companies still exist). Staff was fired. Medicaid recipients were not serviced.
Talk about a hostile takeover!!!
But, here is the kicker….
HSD, supposedly, hired PCG to conduct an independent audit on the 15 providers. Yet, Thomas Aldrich, a manager at PCG, testified at the NM subcommittee’s meeting that Mr. Aldrich (PRIOR to conducting the “independent” audit) flew with Secretary Sidonie Squier, and others, to Arizona to vet health care providers to take over the 15 NM providers.
PRIOR to the audit!!!!
Secretary Squier did not know whether Optum’s allegations of abhorrent billing practices had merit. Yet, she and Mr. Aldrich flew to Arizona, on NM Medicaid dollars, and sought out Arizona companies that could take over the 15 NM providers. BEFORE any proof of truly abhorrent billing.
BEFORE the providers could defend themselves.
Imagine the State of North Carolina coming and taking over your company. Imagine you have no due process. Imagine you don’t even understand the charges with which the State is charging you.
Now imagine that the scenario is reality…in New Mexico.
Oh, BTW, Thomas Aldrich, the manager at PCG, testified in front of the NM behavioral health committee that he is in charge of two major projects: (1) the New Mexico audit; and (2) the North Carolina audits.
As you know, I traveled to New Mexico earlier this week to testify before the New Mexico subcommittee for behavioral health about Public Consulting Group (PCG) Medicaid audits in North Carolina. Interestingly, I learned that Thomas Aldrich, a manager at PCG, is in charge of two projects: (1) the New Mexico audit; and (2) the North Carolina audits. Hmmmmm….and the plot thickens….oh, what a tangled web we weave…
More to come tonight…. (I’m still trying to catch up for the days I was gone).
By James Staley
By Steve Terrell
Why My Career, as a Medicaid Litigator/Medicaid Provider Advocate, is the Best, Most Rewarding Career…Ever!
I have the best and most rewarding career…EVER! It’s not the easiest career. It’s not a 9-5 job. When I schedule family trips, I normally have to cancel the trips or cut them short.
Like next week, my extended family on my dad’s side gets together every year for a week at Emerald Isle, NC. So about 3 months ago, I put in my secured leave with the Office of Administrative Hearings (OAH) for next week. Lawyers have to request “secured leave” for vacations. That way, the courts will not schedule hearings or mediations, etc. during the requested vacation time. Secured leave is really the only way to ensure an attorney gets a vacation. In my Medicaid practice, I normally only practice in OAH. For the most part, my clients have administrative complaints, not civil complaints, which would take me to Superior Court. So, I filed my secured leave in OAH only. Well, it just so happens that one of the State’s agents has refused to comply with an Order executed by an Administrative Law Judge (ALJ) in OAH. The consequences of the agent’s refusal could be dire. So, we had no choice but to file a Writ of Mandamus in Superior Court. A Writ of Mandamus is an extremely, extraordinary motion. We filed it last week. Superior Court scheduled the Writ hearing for Monday, June 24th (supposedly the 3rd day of my family vacation). So, my vacation is shortened. My client, especially in this specific instance, is just more important than a day or two at the beach.
Anyway, going back to how my career is the best career ever…
My clients are health care providers that choose to accept Medicaid. They are behavioral healthcare providers, dentists, durable medical equipment suppliers, neurologists, primary care physicians, speech therapists, ER physicians/hospitals, hospice providers, etc. No matter the service my clients provide, the common thread is that the provider chooses to provide services to Medicaid recipients. In some fields, these providers willing to accept Medicaid are few and far between. Sometimes Medicaid recipients are placed on a 3-5 month waiting list only to get to see a health care provider for the first time.
My clients are good people. My clients are empathetic. They understand that few providers choose to accept Medicaid. Nevertheless, these providers choose to provide services to the most needy people in North Carolina.
My clients are not greedy. They choose to accept Medicaid despite the low reimbursement rates, despite the complex and burdensome amount of regulations, despite the need to constantly google “NC Medicaid” for Implementation Updates or Special Bulletins, despite the need to constantly attend seminars on Medicaid updates, despite the need to jump through hoops, whether it be CAHBA certifications or applications with the Managed Care Organizations (MCOs), despite the need to undergo harassing audits, and despite the risk of the Division of Medical Assistance, or one of its agents, to merely terminate their Medicaid contract without due process. My clients understand these risks and negative aspects, yet they choose to continue to serve Medicaid recipients.
My clients serve the most needy, most mute, and most underserved population in NC. Obviously, Medicaid recipients, by definition, are the most poor citizens in our state.
My clients are scared. They have been told by the state or its agents that they owe money, that they have “credible allegations of fraud,” or indications of “abhorrent billing practices.” These allegations are unsubstantiated. My clients served their consumers well. But they have to defend these McCarthian-istic allegations, and health care providers, in general, are not litigious. My clients are scared.
My career is the best and most rewarding career ever because I represent clients, who are good people doing good things.
My career is the best and most rewarding career ever because, by helping my clients, I am helping voiceless, Medicaid recipients.
A week or so ago, a client sent me a card saying, “Knicole and Elizabeth [one of my upcoming star-associates], Thank you for all you have done. You have saved a company, 140 jobs, and over 500 Medicaid recipients from having no provider. I almost cried.
I have always looked at my career as: By devoting my career to Medicaid providers, I am able to serve, indirectly, Medicaid recipients. Medicaid recipients, for the most part, sadly, cannot hire me (believe me, I wish I could work for free), but, by my work for Medicaid providers, I am able to help Medicaid recipients by helping the providers the recipients so desperately need.
But this past week, I had the opportunity to help a Medicaid recipient directly, not indirectly. And, I left the hearing with goosebumps, good feelings, and a desire for more.
One of my clients had his or her Medicaid contract terminated; let’s call this person X. Because of X’s termination of Medicaid contract, a Medicaid consumer, a teenage girl, who had seen X weekly for 6 years, was, suddenly, disallowed to see X. Let’s call her ‘A.’ Without X, A spiraled. A became suicidal and homicidal, both at home and at school. She begged to see X. Since not being able to X, A was hospitalized 2x and was taken from her family home and placed in therapeutic foster care. All because A was disallowed to see the one therapist she had become to trust over the course of 6 years.
I decided to take A’s case pro bono.
I filed a Temporary Restraining Order, Motion to Stay, and Preliminary Injunction (TRO) on behalf of A. I argued that A was stable (as stable as possible for a person suffering from her mental illnesses) while she was able to see X. When X’s Medicaid contract was terminated, A was not able to be seen by X. A refused to go to another provider and spiraled. I argued that A should be able to see X while A and X’s lawsuits went forward. A should not suffer while X’s Medicaid contract was erroneously terminated.
A’s mother testified emotionally.
The Judge has not officially ruled yet. But, at the end of the hearing, he wanted to ensure that, while he was deciding the ruling, A would be able to receive services from X. I informed him that, no, A was not currently receiving services from X (despite the TRO being granted the prior week before the preliminary injunction hearing).
The judge looked at counsel for the MCO (the MCO that was not allowing X to see any Medicaid recipients) and said…Why?
Long story, short, my Medicaid recipient client was emotional (in a happy way) with the outcome. While my provider clients are also emotional (in a happy way) with the outcomes, this seemed different. Had I not agreed to work pro bono, this person may never had received relief for her daughter.
Pro bono is tough. You go into a pro bono case understanding that your legal fees will not be paid. But it is rewarding. In OAH, after the final disposition of the case, an attorney may petition for attorneys’ fees. I hope my petition is granted…not because I want these legal fees so badly (honestly, my salary stays the same whether I get these attorneys’ fees or not), but because, if my attorneys’ fees are awarded in this case, maybe, just maybe, I would be able to take on more pro bono cases and help more Medicaid recipients directly.
Regardless, in my career, I go to bed knowing that I have helped good people, good providers and, indirectly, helped Medicaid recipients.
What is the legal process?
How long does it take?
How much does it cost?
What is the likelihood of success?
If I win, what will happen?
These are probably the most FAQ by providers who have either been placed on prepayment review or been through prepayment review, only to have their Medicaid contracts terminated at the end of six months.
First, what is prepayment review?
If you are an old hat to this blog, then skip this section. Most likely, you already know what the dreaded term “prepayment review” means. If you are a newbie, prepayment review is a status. A bad status. A status created by the Department of Health and Human Services (DHHS). In essence, prepayment review means that, for 6 months, you must have all claims evaluated by a third-party prior to being paid. You can render medically necessary services (for which you obtained prior authorization) and the third-party could decide that you do not deserve to be reimbursed. You can go 6 months without reimbursement, but provide services and pay your staff, then have your Medicaid contract terminated erroneously and because of the subjective and incorrect opinion of the third-party contractor.
However, this blog is about the legal process of fighting your Medicaid contract termination, not the absurdity of the prepayment review process.
The legal process:
You determine that (a) you are wrongfully withheld Medicaid reimbursements while on prepayment review; or (b) your Medicaid contract has been terminated based on an erroneous prepayment review.
1. You hire counsel. (It does not have to be me. Just a knowledgeable Medicaid attorney).
2. The attorney files a Motion to Stay, Temporary Restraining Order, and Preliminary Injunction (TRO) against DHHS, DMA. The third-party auditor that conducted the prepayment review does not need to be named because the auditor is considered to be an agent of the state. In fact, whenever I have filed a TRO, DMA automatically brings a witness from the third-party auditor. If DMA did not, DMA would not be able to dispute my contention that the prepayment review was conducted erroneously.
3. NC Civil Rule of Procedure, Rule 65 governs injunctions (A TRO is legally considered an injunction. The difference is between a court of equity and a court of law).
4. Usually within 7-10 days, (barring some unforeseen hurdle) the Administrative Law Judge (ALJ) will either grant or deny the TRO.
It is important to note that not all ALJ’s procedural postures for TROs are identical. One ALJ may grant the TRO with no legal arguments heard from opposing counsel and schedule the Preliminary Injunction hearing in the near future. Another ALJ may require telephonic legal arguments prior to granting the TRO. Yet another ALJ may require legal arguments in person at the Office of Administrative Hearings (OAH).
5. Once the TRO is granted, status quo governs. In other words, the TRO allows you to have your Medicaid contract, service Medicaid recipients, and get reimbursed…just as if the prepayment review had never happened.
6. A TRO is VERY temporary. For the most part, if executed strictly according to Rule 65, a TRO is granted without hearing from the other side. Therefore, a preliminary injunction hearing must be scheduled as soon as possible. The ALJ does not want to burden an unheard party’s rights for too long without hearing that unheard party’s side.
7. Within a month or so after the grant of the TRO, a preliminary injunction hearing is scheduled. (This is normally conducted in one, full-day hearing…sometimes shorter if you have one particular Judge, because he or she has such a clear understanding of the facts).
8. At the preliminary injunction hearing, you must show: (1) likelihood of success on the merits; and (2) irreparable harm. Which means, in the vernacular, (1) that the prepayment review was conducted incorrectly (or your Medicaid reimbursements are being wrongly withheld); and (2) if the termination of your Medicaid contract is not stopped, then you would suffer great consequences.
9. If the ALJ grants the preliminary injunction, then that grant of relief maintains status quo until the full-blown hearing.
10. The full-blown hearing will be held, generally, over 6 months in the future. Which means that you will be able to render medically necessary services for Medicaid recipients and be reimbursed for services rendered until the final adjudication of the lawsuit.
Basically, once the TRO is filed, you could be “back to normal” or status quo within 7-10 days. That does not mean that the legal battle is over. In fact, once the TRO is granted and you are back to normal, the legal battle just begins. The legal battle can be a long, stressful and drawn-out process. But, at least, you are able to render medically necessary services and receive reimbursement.
As to cost, the legal process is expensive. Obviously, cost depends on the attorney that you hire, that hired attorney’s billable rate, and that hired attorney’s legal knowledge of Medicaid. Be sure to ask many questions prior to engaging any attorney. Anybody would hate to get an unexpectedly high bill.
Also, check with your liability insurance to determine whether your liability insurance will cover attorneys’ legal fees. Many times your liability insurance will cover regulatory audits.
Also, NCGS 6-19.1 allows a party defending against an agency decision to petition the court for attorneys fees within 30 days of final disposition of the case. Therefore, there is a possibility to have your attorneys’ fees reimbursed, but not until the very, very end of your case. You would be responsible for fronting the attorneys’ fees with a chance of not recovering your attorneys’ fees at the back-end.
As to likelihood of success, obviously, it depends on your particular facts. Was the third-party auditor really actually wrong in its audit denials? Does your documentation actually meet compliance requirements. Remember, just because the auditor believes that your documents are not compliant, does not mean your documents are actually noncompliant. But likelihood of success rests primarily in your facts/documents. Your attorney should be able to be more specific.