Category Archives: Medicaid Contracts

NC Medicaid Providers: “Credible Allegations of Fraud?” YOU ARE GUILTY UNTIL PROVEN INNOCENT!!

“Credible allegations of fraud.”  What does that mean???

As it pertains to Medicaid, “credible allegations of fraud” was first introduced into law by the Affordable Care Act (ACA) in 2010.  The Centers for Medicare and Medicaid (CMS) issued its Final Rule February, 2, 2011, and the Informational Bulletin in March 2011.

As you can see, “credible allegations of fraud,” as pertaining to Medicaid, is a relatively new concept.  But what does it mean?  The ACA does not define “credible allegations of fraud.”

I know what “allegation” means.  I also know allegations are not always true.  I also know allegations can change your life. 

When I was a senior in high school, I had been dating my high school sweetheart for 2 years.  An acquaintance, and an apparently, mean-spirited girl, alleged that my boyfriend cheated on me with another girl.  I was so angered and so hurt that I called up my boyfriend immediately and broke up with him.  For weeks, my boyfriend hounded me, professing his innocence.  But I was not to be swayed.  I refused phone calls, avoided seeing him, and publicly disparaged him to my friends.  20 years later I saw him.  I asked him whether he had really cheated on me, knowing that he had no reason to lie now (he is married with 4 children; I am happily married with one child).  But I was just curious because that allegation that he had cheated changed both our lives.  I am not saying that had it not been for the allegation that he and I would be together…not at all…in fact, I am sure we would have eventually broken up.  The point is that the allegation that he cheated, for good or for bad, changed our lives.  And, to me, he was guilty based on the allegation.

20 years later I found out that the allegation was false.  He never cheated.  But his innocence did not change the consequences of the accusation.  He was guilty until proven innocent.

Similarly (and more importantly), a mere accusation that a Medicaid provider is undergoing abhorrent billing practices or committing Medicaid fraud, and without any proof, can change a provider’s life.  A mere allegation of fraud suspends a Medicaid provider’s reimbursements.  The consequence of which can be dire…You are guilty until proven innocent.  Just like my boyfriend.  The accusation alone made him guilty.

According to 42 C.F.R. 447.90, “This section implements section 1903(i)(2)(C) of the Act which prohibits payment of FFP with respect to items or services furnished by an individual or entity with respect to which there is pending an investigation of a credible allegation of fraud except under specified circumstances.”  FYI: FFP stands for Federal Financial Participation (or Medicaid reimbursements in the vernacular).

Section 1903(i)(2)(C) of the Social Security Act (SSA) states that no payments shall be paid to “any individual or entity to whom the State has failed to suspend payments under the plan during any period when there is pending an investigation of a credible allegation of fraud against the individual or entity, as determined by the State in accordance with regulations promulgated by the Secretary for purposes of section 1862(o) and this subparagraph, unless the State determines in accordance with such regulations there is good cause not to suspend such payment.”

But what does “credible allegation of fraud” mean? Where is the definition?  Not in the SSA.

On March 25, 2011, CMS issued an Informational Bulletin in which “credible allegations of fraud” is defined…sort of…

The Informational Bulletin states, “In the final rule, CMS provides certain bounds around the definition of “credible allegation of fraud” at 42 C.F.R. § 455.2. Generally, a “credible allegation of fraud” may be an allegation that has been verified by a State and that has indicia of reliability that comes from any source. Further, CMS recognizes that different States may have different considerations in determining what may be a “credible allegation of fraud.” Accordingly, CMS believes States should have the flexibility to determine what constitutes a “credible allegation of fraud” consistent with individual State law. However, a credible allegation of fraud, for example, could be a complaint made by an employee of a physician alleging that the physician is engaged in fraudulent billing practices,  i.e., the physician repeatedly bills for services at a higher level than is actually justified by the services rendered to beneficiaries. Upon State review of the physician’s billings, the State may determine that the allegation has indicia of reliability and is, in fact, credible. “

1. An allegation

An allegation by its very definition is “a claim or assertion that someone has done something illegal or wrong, typically one made without proof.” See Wikipedia.  Without proof!!!  Why without proof? Because an allegation is preliminary…an accusation…not a conclusion. Girl alleges my boyfriend cheated on me.

2. Verified by a State

Makes sense to need to be verified…

2. Indicia of reliability

Indicia? Indicia means “distinctive marks: indication.” See Dictionary.com.  Not quite sure what that means, but indicia of reliability does not sound like a very high threshold.  Nothing like preponderance of the evidence or beyond a reasonable doubt.  Could be as low a threshold as I applied when the girl alleged my boyfriend cheated on me.

3. Comes from any source

Are you kidding me?? So, if I were a Medicaid provider, my ex-husband, out of spite and hatred, could call up Patrick Piggott over at Program Integrity (PI) and accuse me of Medicaid fraud…or the disgruntled employee I fired….or my next door neighbor who is angry about the bush I planted on his property…you get the point.

Why is it important what the definition is of “credible allegation of fraud?”

As a Medicaid attorney, I represent Medicaid providers (duh).  The point is that I have seen the dire consequences, first-hand, to many, many a Medicaid provider accused of “credible allegations of fraud.”  Here are a few, real-life examples (names have been changed to protect the innocent):

  • Provider Leroy is accused of “credible allegations of fraud.”  Leroy is placed on prepayment review and all Medicaid reimbursements are suspended.  Leroy provides residential services (the people he serves actually live in his home because of severe mental illnesses).  Without Medicaid reimbursements, Leroy cannot pay the mortgage, his staff’s hourly wages, or anything else.  He acquires a $200,000 loan to help him through, and the interest is high.  He truly thinks that he will get off prepayment review and save his company and his Medicaid recipients from not having a home or Medicaid mental health services.  After 6 months of barely sliding by, Leroy receives a Notice of Termination terminating his Medicaid contract with the State.  (It is important to note that the termination was based of a faulty audit by an inept contractor).  He declares bankruptcy and all the Medicaid recipients are discharged to the homes that could not care for them in the first place.  The “credible allegation of fraud?” It came from a disgruntled employee.
  • Provider Lacey receives a Tentative Notice of Overpayment (TNO) in the amount of over $2 million based on “credible allegations of fraud.”  Provider Lacey (after her initial heart attack) hires Attorney Clueless.  Clueless appeals the TNO and gets the overpayment amount reduced to $1.5 million.  Lacey does not have $1.5 million and asks Clueless to appeal again.  Clueless fails to appeal the overpayment by the appeal deadline, and Lacey gets a judgment entered against her and her company.  Lacey’s husband is sick and tired of hearing about the Medicaid audit and abandons her and her two children.  Lacey declares bankruptcy.  Lacey used to support herself and her family.  Now North Carolina does.  The “credible allegation of fraud?” Lacey’s husband (apparently he had issues WAY before he left).
  • Provider Larry receives notice from a managed care organization (MCO) terminating his Medicaid contract based on “credible allegations of fraud” and demanding a $700,000 recoupment.  Larry also hires Clueless.  Clueless files a lawsuit against the Department of Health and Human Services (DHHS) and the MCO.  Clueless did some homework and actually makes a good argument in court.  But by the time Clueless gets to court, 4 months has passed and Larry racked up $50,000 in legal fees.  Larry can’t pay the attorney fees.  Clueless withdraws as counsel.  Larry goes bankrupt.  The 400 Medicaid recipients that his company serviced do not receive the health care needed.  The “credible allegation of fraud?” One of his own recipients receiving substance abuse services in a state of incoherence while on crack cocaine.
  • Provider Lucy receives notice from the Medicaid Investigative Department  (MID) that she is under criminal investigation based on a “credible allegation of fraud.”  Lucy does not have enough money to hire an attorney, so she opts for the public defender, who knows nothing about Medicaid and is also named Clueless.  The public defender did not even review Lucy documentation because she did not understand the complex system of Medicaid.  Clueless provided poor representation, and Lucy was sentenced to 5 years in prison.  Lucy said, “I was the first in my family to get a PhD and the first to go to jail.”  The “credible allegation of fraud?”  Her local competitor.
  • 15 providers in New Mexico, based on “credible allegations of fraud,” have their Medicaid reimbursements suspended.  The 15 providers cannot pay staff, rent on buildings, and other bills.  The State of New Mexico brings in Arizona providers to replace the 15 Medicaid providers.  The Arizona provider takes over the 15 providers’ buildings, most staff and all consumers.  The 15 providers are out of business.  Without a trial.  Without even reviewing the evidence against them.  Based on a mere allegation of fraud, 15 providers go bankrupt…lose their careers…are unemployed… The “credible allegation of fraud?” Unknown.

Remember “credible allegation of fraud” is preliminary, and, at times, without any proof, yet the consequences are dire. 

Innocent until proven guilty is a bedrock principle in the American justice system.  Yet, innocent until proven guilty does not apply to Medicaid providers.  Our founding fathers created the concept of innocent until proven guilty.  While innocent until proven guilty is not explicitly codified in the Bill of Rights, the presumption of innocence is widely held to follow from the 5th, 6th, and 14th amendments. See also Coffin v. United States and In re Winship.

Here’s the problem….presumption of innocence only applies to criminal law.  Even when the consequences of a civil action is so monumental, so dire, so irreparable, the presumption of innocence does not apply.

So “credible allegation of fraud?”  It does not matter what the definition is.  The fact is that if ANYBODY alleges a “credible allegation of fraud” against you, you are guilty.  You are my boyfriend who never cheated on me, but a girl alleged that he did cheat. 

No evidence…You are GUILTY based on the ALLEGATION of fraud!

Credible?

“Black legislators question DHHS as agency touts accomplishments.” Where Are the White Legislators?

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?”

I agree.

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.

The NC Medicaid Mental Health 10-Ring Circus: How 10 Mini-Jurisdictions Will Be the Downfall of Mental Health

Ever been to a three-ring circus? It is hard to stay focused on one ring because so much is happening in all 3 rings.  Are you supposed to watch the lion-tamer? The trapeze artists? Or the motorcycles jumping through rings of fire? You can’t watch all the acts.  You end up turning your head back and forth like a water sprinkler, only to catch some of each act.

Now imagine a 10-ring circus.

You wouldn’t be able to see much of any act.

This is similar to our NC Medicaid mental health system.  Instead of the one single state entity running our mental health system for Medicaid, we have 10 entities.  And all 10 entities have different rules.  Different Medicaid rates.  (Not to mention this is in violation of the federal “single state agency” mandate).

So what is the effect of these 10 mini-jurisdictions with different rules on our Medicaid mental health system?

Providers are going out of business.  Medicaid recipients are not receiving medically necessary, mental health services.

While the dancing bears, the fire-eaters and the acrobats are all performing, the ringmaster loses control.

Yesterday a psychologist-friend (We will call her Dr. Liz) told me that a mother called her asking whether Dr. Liz could see her child.  Dr. Liz soon learned that the mother and the child were on Medicaid.  Dr. Liz agreed to assess the child, but sadly informed the mother that it was highly unlikely that Dr. Liz could provide therapy for the child because the child is on Medicaid.

The mother burst into tears.  She explained that she lives in Fayetteville.  (Dr. Liz provides services in Durham).  One and a half hours away.  The mother said that Dr. Liz was the 30th provider she called.

29 providers either refused to see the child or had waiting lists months and months long because the child is on Medicaid.

The mother explained that the psychologist the child had routinely seen went out of business and that she did not understand why there were no psychologists within an hour and a half drive of her that were willing or able to provide services to her child.

She cried, “Why won’t anyone take Medicaid?”

When Dr. Liz told me this story, I was deeply saddened.  Yet this is reality.

Dr. Liz could not provide services to the child because, despite the fact that Dr. Liz has a Medicaid contract with the Department of Health and Human Services (DHHS) to provide Medicaid services throughout North Carolina, one managed care organization (MCO), Alliance Behavioral Health (Alliance), has decided that Dr. Liz cannot provide services in Durham County (where Dr. Liz is located).

We have 11 MCOs across North Carolina.

MCO map

Although after September 30, 2013, we will have 10 MCOs.  After Sept. 30, Western Highlands will be consolidated with Smoky Mountain, and Smoky Mountain will oversee management of mental health services for 23 western North Carolina counties.

So I will use 10 MCOs in this blog as there will be 10 within a few weeks.  BTW: There is also a lot of talk that MeckLINK will soon be the next MCO to disappear, but we shall see.

So how are these 10 MCO creating mini-jurisdictions? And why are these mini-jurisdictions causing the downfall of NC Medicaid mental health?

Let me explain:

Dr. Liz lives and works in Durham county.  Alliance is the MCO.  Alliance has refused to provide Dr. Liz with a Medicaid contract.  Therefore, Dr. Liz is not allowed to provide Medicaid services in Wake, Durham, Cumberland, or Johnston counties, because Alliance is in charge of those counties.

However, if Dr. Liz drives over to Fuquay Varina (Harnett county), Dr. Liz CAN provide Medicaid services there because Sandhills, the MCO for Harnett county, contracted with Dr. Liz.

Do you see the issue?

In essence, by Alliance not contracting with Dr. Liz, Alliance has taken Dr. Liz’s Medicaid contract with DHHS and torn a chunk out of it.  Dr. Liz’s contract with DHHS states she can provide services statewide.  But Alliance removed Dr. Liz’s ability to provide services in 4 counties, Wake, Cumberland, Durham and Johnston.  Since Dr. Liz could, theoretically, provide services in 96 other counties, Alliance removed a small chunk of Dr. Liz’s contract with DHHS…but still a chunk nonetheless.

If Dr. Liz ONLY provided services within Alliance’s catchment, then Alliance, by refusing to contract with Dr. Liz, would have either (1) put Dr. Liz out of business; (2) caused Dr. Liz to no longer accept Medicaid; or (3) forced Dr. Liz to relocate.

As all 10 MCOs are managing Medicaid differently, one provider could be allowed to provide Medicaid services in half the state, but not the other half.

While, theoretically, on paper, it may seem easy to tell Dr. Liz to just relocate her practice to Fuquay Varina, in reality, this is much more difficult.

Dr. Liz signed a 5-year lease for her building in Durham, and she is only in her first year (she just renewed it) of the lease.  She also has a daughter who attends school nearby her office.  Were Dr. Liz to move her office, she would no longer be able to transport her daughter to school.  Her clients cannot drive to Fuquay.  Most of her Medicaid clients lack transportation or the funds to pay for gas to drive 30 minutes further.  She has no clients in Fuquay.  She has no staff in Fuquay.  Her staff will not follow her to Fuquay; they all live in Durham. 

Dr. Liz does not have monetary ability to go lease another building in Fuquay.  But she is unable to perform her work where she is located now in Durham.

So what happens?

More times than not…the provider’s company goes bankrupt.  Which is why the mother cannot find services for her child in Fayetteville.  Many providers in Fayetteville and across NC have gone belly up.  The few remaining providers are either limiting the number of Medicaid patients they will accept or have long waiting lists.

Not only do the MCOs determine the providers with whom to contract differently, the MCOs even reimburse certain Medicaid services differently.

Assertive Community Treatment Team (ACTT) is a 24-hour service for the severely mentally ill.  All 10 MCOs must provide ACTT services, but the MCOs do not have to reimburse uniformly.

Therefore, if Dr. Liz were to provide ACTT services in the western part of the state, Dr. Liz may receive $295.32 per unit.  But if Dr. Liz provided the services in southern NC, she may have been reimbursed $323.98 per unit.

This Medicaid reimbursement rate changing depending on which MCO is paying would be like a Chatham county DMV charging $25 to renew your license, but a Mecklenburg county DMV charging $75.  It is a North Carolina state license!  The price to renew should be statewide.

Just like Medicaid should be uniform across the state. 

But, instead, here in NC, we have created 10 mini-jurisdictions.

In each of the 10 mini-jurisdictions, the MCO dictate the rules.  In each of the 10 MCOs, the rules are different.  Each MCO can choose to contract with a provider (or not) with zero regard as to the effect on the provider, the provider’s company, and the Medicaid recipients.  The MCOs can reimburse the same Medicaid services at different rates.

The dancing bears, the fire-eater, and the acrobats are all charging different entrance fees, depending on which entrance you entered.  (And we all know that a dancing bear should not be in charge of entrance fees!) 

The ringmaster is sleeping.

There is no uniformity in Medicaid mental health in NC. 

It is a 10-ring circus!

NC General Assembly: Hold Contracted Companies Accountable in NC Medicaid! (If You Do Not, Who Will?)

Our government is made of checks and balances.  The reason for having checks and balances is to create independent governing bodies with separate powers, thereby preventing any one branch from having more power over another.

The legislative branch (General Assembly), most importantly, passes bills (makes the laws) and has broad taxing and spending power.

The executive branch (Governor), most importantly, makes appointments, may veto bills, but those vetoes may be overridden, and executes the spending allowed by the legislature.

The judicial branch (court system), most importantly, interprets the laws passed by the legislature, exercises injunctions and judicial reviews.

How these checks and balances can play out in real life are endless.  But, without question, if the legislative branch fails to check the executive branch, even if the judicial branch is checking the executive branch, then the executive branch exceeds its power and the legislative branch is failing its intended job.

It has nothing to do with Republicans versus Democrats.  No one cares that the executive branch is conservative or liberal or whether the legislative branch is 60% Republicans or 70% Democrats.  It is a matter of the legislative branch doing its job.  The legislative branch’s job is to check and balance the executive and judicial branch.

Here, in North Carolina, it appears that the legislative branch is not checking the executive branch.  (While all our branches of government have their own shortcomings, I am concentrating on the legislative branch in today’s blog because, recently, I have seen other legislative branches step-up.  Now our state legislative branch needs to step-up.)  It certainly appears that our judicial branch is providing the checks and balances on the executive branch via the Office of Administrative Hearings (OAH).

But where is the legislative branch’s checks and balances? If our legislators do not demand accountability, who will? 

Me?

You?

Recently, I have seen two instances in which legislative branches checked and balanced the executive branch.  These two legislative branches stepped-up to the plate…

Last Tuesday (September 3, 2013), the New Mexico behavioral health subcommittee convened and demanded accountability from Public Consulting Group (PCG).  Coincidentally, last Tuesday, Mecklenburg county commissioners also held a meeting and demanded accountability from MeckLINK, the managed care organization (MCO) in Mecklenburg county, managing Medicaid behavioral health services. (Was it a full moon?)

To see my blog explaining the events in NM leading up to the NM subcommittee meeting, click here.

To see my blog explaining the events in Mecklenburg county leading to the commissioner’s meeting, see all posts on my blog.  Or if you don’t have time to read all posts in my blog over the past 9-10 months, click here.

So why hasn’t the NC General Assembly held a meeting to demand accountability from all MCOs, PCG, and the Department of Health and Human Services (DHHS), Division of Medical Assistance (DMA)? 

I do not know.

Because of our government’s system of checks and balances, the legislative branch has the power over the money, both the taxing and spending power.  So the legislative branch has the authority to have DHHS appear before the General Assembly or a subcommittee and demand accountability for the tax dollars spent…as to all DHHS’ contracted companies…and DHHS’ apparent lack of supervision over these contracted companies.

Other legislative entities have done this.

As I already said, last week, the New Mexico behavioral health subcommittee convened to hold HSD (NM’s DHHS) and PCG accountable.

NM legislature

As you can see, the NM subcommittee formed a “U”-shape.  At the table facing the subcommittee, sat:

(1) Larry Heyek, the HSD Deputy General Counsel (remember, HSD = North Carolina’s DMA), Brent Earnest, Deputy Secretary HSD (representing Secretary Sidonie Squier, who was unable to attend due to eye surgery), and Diana McWilliams, Chief Executive Officer, Interagency Behavioral Health Purchasing Collaborative; Director, Behavioral Health Services Division, HSD.

Then…

(2) Me…to be joined later by Thomas Aldrich, manager at PCG.

Then…

(3) William Boyd Kleefisch, F.A.C.H.E., Executive Director, HealthInsight New Mexico, Margaret A. White, R.N., B.S.N., M.S.H.A., Director, External Quality Review, HealthInsight New Mexico, and Greg Lújan, L.I.S.W., Project Manager, Behavioral Health, HealthInsight New Mexico.

The above-listed people all testified before the NM behavioral health subcommittee because the subcommittee demanded accountability from HSD, PCG and others due to the disastrous state of mental health in NM.

Why hasn’t the North Carolina legislature demanded the same accountability?

Similarly, September 3, 2013, the Mecklenburg county commissioners held a meeting and demanded accountability of MeckLINK. 

Mecklenburg county

Apparently, behavioral health care providers have been complaining to their county commissioners about MeckLINK denying medically necessary services and targeting certain providers.

See article.

So, when NM providers complained to their State legislators, the NM subcommittee for behavioral health held a meeting to investigate the source of these complaints.

When Mecklenburg county providers complained to their county commissioners, the County commissioners held a meeting to investigate the source of these complaints.

Have not enough providers complained about PCG and the actions of the MCOs to our North Carolina legislature?

I find that hard to believe, but, just in case, providers….CONTACT YOUR STATE SENATOR AND REPRESENTATIVE!

DEMAND ACCOUNTABILITY!!

Let our elected officials know that:

There is NOT statewide consistency with the MCOs. 

Where 1 MCO denies services, another will authorize.  Where 1 MCO terminates a Medicaid contract of a provider, another does not. Where 1 MCO finds a provider compliant, another does not.

The DMA Clinical Policies and Innovations Waiver are not being applied consistently across the state.  Because of these inconsistencies, the MCOs have created 11 Medicaid jurisdictions. Where is the single state entity?

The MCOs are terminating provider contracts in violation of federal law.

Federal Medicaid law dictates that a “single state entity” manage Medicaid.  In NC, that single state entity is DHHS, DMA.  Yes, DMA may contract with companies.  Yes, DMA may delegate some duties to contracted entities.  BUT, DMA cannot allow a contracted entity substitute its judgment for DMA’s judgment.  See K.C. v. Shipman.  See also my blog: NC Medicaid: One Head Chef in the Kitchen Is Enough!

If DHHS is allowing 11 different companies to decide (use its own judgment) as to whether a provider can provide Medicaid services, the MCOs are substituting their decision-making in place of DHHS.

Also, at times, the MCOs are terminating the providers based on erroneous audits from the Carolinas Center of Medical Excellence.  For more on that…click here.

The MCOs are denying Medicaid recipients medically necessary mental health services.

The MCOs are prepaid, risk-based models.  What does that mean? That the MCOs have monetary incentives to DENY services in lieu of cheaper services.  In an extreme case, one MCO has denied 100% of ACTT services (24-hour, 7/days/week mental health care) in lieu of weekly, one-hour sessions of therapy.  Really?  24-hour care…reduced to weekly therapy????  But authorizing weekly therapy instead of 24-hour care saves the MCO thousands, if not hundreds of thousands.

What happens to the Medicaid recipients denied medically necessary services?  Answer: Imprisonment and hospitalizations.  So, fret not, taxpayers, you are actually paying MORE in taxes when the MCOs deny medically necessary services.  The increase in tax expenditure just will not be funded by the MCO’s Medicaid money.

As an aside, the attorney for the MCO stated that the Medicaid recipients should be the ones to appeal these erroneous denials.  To which I say, “Ha!”  One denied recipient suffered auditory and visual hallucinations (birds, snakes and crocodiles attacking.)  Another attacked his mother with a knife after services were denied.  Another was evicted from her home and, subsequently, jailed.  Another believed Satan spoke to him, telling him to kill himself.  I ask, when should the Medicaid recipients have (a) gotten themselves to a computer; (b) googled the NC Office of Administrative Hearings (OAH); (c) found the form to appeal a Medicaid denial of services; (d) filled-out the legal reasons they disagree with the denial of services; (d) complied with OAH procedure and drafted a prehearing statement, conducted any necessary discovery, and created all legal arguments to demonstrate medical necessity; and (e) attended a hearing in front of a judge…before or after hospitalization?  Before or after the recipient has had his/her conversation with Satan?

PCG’s audits are NOT 95% accurate (not even close).

I’ve heard that PCG’s contract with DHHS places an obligation on PCG that its audits be 95% accurate.  One person questioned whether that was 95% accurate as to PCG must be able to recoup (defend upon appeal) 95% of the audit results.  Obviously, that is not the case, because the inverse is probably closer to true.  95% of PCG’s audits are overturned (obviously, this number is not accurate…I am making a point).  Another person wondered whether the 95% accuracy meant that if 1 PCG auditor comes up with a $1 million overpayment, and the next day another PCG auditor audits the same documentation, that the 2nd auditor would be within 95% accurate of the $1 million the 1st auditor deemed needed to be recouped.  If the latter is the case, I can see why PCG may have 95% accuracy.  If you teach all your staff how to audit a Medicaid provider and all staff are taught to audit incorrectly, then, no matter the staff member auditing, the audit will be incorrect…but consistent.

Regardless, for a multitude of reasons, I have found almost all PCG audits erroneous. 

Yet, these PCG audits are terrifying Medicaid providers, causing them to ramp up attorney fees to defend themselves, and, in some cases, putting providers out of business.  And, in all cases, increasing the provider’s administrative burden and decreasing the time a provider can allot to serving the Medicaid recipients.

Contact your state legislators!   Help our General Assembly provide the checks and balances needed!

Just to help out, here is a link to all NC State Senators’ telephone numbers.

Because, in the absence of the legislative branch properly checking and balancing the executive branch, the legislative branch loses power and the executive branch gains power.

New Mexico Affords No Due Process Based on a PCG Audit!

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:

PCG Exec Summ

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?

Don’t know?

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—

(a) Methods and criteria for identifying suspected fraud cases;

(b) Methods for investigating these cases that—

(1) Do not infringe on the legal rights of persons involved; and

(2) Afford due process of law; and

(c) Procedures, developed in cooperation with State legal authorities, for referring suspected fraud cases to law enforcement officials.

(emphasis added).

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?

No.

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.

Providers, beware!

Articles Surrounding PCG Audit in New Mexico: Editorial Coming Tonight…(You Won’t Want to Miss It!)

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).

 

Details of mental health audit emerge at legislative hearing

By James Staley

 

Auditing firm manager says he helped vet Ariz. providers

By Steve Terrell

NC Medicaid MCOs: You Cannot Prove a Negative!

In philosophy, you learn about “evidence of absence.” It’s kind of like a logical assumption based on the LACK of evidence. Such as: P implies Q is false, but Q is false, therefore P is false.  Or Knicole takes a break from blogging on the weekends.  Knicole did not blog today, therefore it must be a weekend.

There is also some who say you cannot prove a negative.  You cannot prove that flying reindeer do not exist; it is up to the flying reindeer to prove they do exist.  Personally, I think this way of thinking is pessimistic and leaves little room for faith.  But, in some circumstances, such as…how are my tax dollars being used for Medicaid recipients, I do not want a non-proven negative.  I want proof.

Recently, WFAE, Charlotte’s NPR News station, ran a piece entitled, “Frustrations with MeckLINK Grows as Denials for Care Increase.”

The point of the article was the drastic decrease in behavioral health service authorizations within MeckLINK’s catchment area (Mecklenburg county) for Medicaid services since MeckLINK went live.

Here is the chart WFAE provided in its article:

MeckLINK_June_Slide

If this graph is correct, MeckLINK has some serious questions to answer to taxpayers. Within 4 months, the number of mental health Medicaid consumers in Mecklenburg county decreased OVER HALF??!!!  From 1,518 to 689!

Did the 829 people, who were receiving mental health services back in February/March 2013, move from Mecklenburg county/die/heal (in order to not need the mental health services in June)? Or has MeckLINK (and other MCOs) simply begun to deny medically necessary mental health services???

If it is the latter and not the former, I ask, as a taxpayer, where did my Medicaid tax dollars go? To MeckLINK salaries?  And, if it is the latter and not the former, as a person concerned with mental services, especially for Medicaid recipients, I ask, what has happened to the 829 Medicaid recipients no longer receiving mental health services??  Hospitalization? Incarceration? Homelessness? Or just sitting at home depressed…unable to function as they could when they did receive services?

Well, Ben Bradford, of WFAE, asked MeckLINK’s chief financial officer, Ken O’Neil, this question.

O’Neil’s answer? The evidence of absence.

O’Neil revealed that MeckLINK is on tenuous financial footing. It ran a deficit in May and June at a rate that would put it out of business in less than a year.  He also argues those deficits are proof that MeckLINK isn’t sacrificing care for profit.

See Article.

O’Neil argues that MeckLINK’s deficits are proof that MeckLINK is not sacrificing care for profit.  Proof that flying reindeer do not exist!

O’Neil contends that MeckLINK’s deficit proves that MeckLINK is not denying medically necessary services to mentally ill Medicaid recipients. BTW: O’Neil contends this non-proven negative despite the graph showing that more than half of recipients in Mecklenburg county are no longer receiving services.

O’Neil’s contention (that a deficit proves MeckLINK is not sacrificing care for profit) has a gaping, logistic flaw.

Remember my blog, published June 10, 2013? “Higher Medicaid Administrative Costs = Less Medicaid Money for Providers to Service Recipients

In this blog, I wrote about CenterPoint’s “hefty salaries to its top-executives.  In addition to these hefty salaries, CenterPoint pays for all employees’ health insurance, as well as the health insurance for all employees’ families!!”

I estimated (and probably underestimated) that CenterPoint, by paying for its employees and employees’ families’ health premiums, was spending approximately $1.5 million in health care premiums…money that should have gone to Medicaid recipients.

So MeckLINK’s (O’Neil’s) contention that MeckLINK’s deficits are proof that MeckLINK is not sacrificing care for profit is flawed.  Where is the proof that MeckLINK is not over-paying its top executives? Where is the proof that MeckLINK is not over-spending on its employees, i.e., paying for employees’ health care premiums…as well as the families of employees?

Well, I found a few graphs published by DMA that caused me more reason to believe that O’Neil’s “proof of a negative” is flawed.

DMA issues reports on the MCOs.  A recent dashboard report cites that, in its “Trends to Watch,”

1. Behavioral health related claims (e.g., Inpt MH, ICF/MR, CAP-MR and non-physician practitioners) continue to decline with the implementation of BH MCOs. Please note that several of the BH-related types of service have volatile costs per service unit and service units per recipient. This is a consequence of the drastic drop in utilization due to the implementation of MCOs and does not reflect a widespread trend. We will likely remove several of these types of service from the report soon.

I have SO many issues with this “trend.”  Such as: “Continue to decline.” “With the implementation of BH (behavioral health) MCOs.”  “Drastic drop in utilization.”  “Due to the implementation of BH MCOS.”  “Not reflect a widespread???”  (Aren’t the MCOs statewide?).  “We will…remove?… several of these services from the report”….WHY? We don’t want to track the fact that the mentally ill are not receiving Medicaid services?

The DMA Dashboard Report also depicts numerous graphs.  Many of the graphs depict last fiscal years’ Medicaid services’ dollars spent (with a blue line) and this years’ Medicaid services’ dollars spent (with the red line).

Most years, both last fiscal year and this fiscal year, are fairly similar.

Such as Medicaid physicians’ office visits:

Example pic

Notice the interplay between the red and blue lines.  The expenditures for physicians’ office visits from last fiscal year to this fiscal year is, relatively, similar.

Now let’s look at a behavioral health service (ICF/MR):

Chart DMA

See the difference?

The blue line depicts last fiscal year.  The red line depicts the current fiscal year.  The left side of the graph shows dollars, while the bottom side shows months.

As you can see, the blue line (last fiscal year) shows a semi-constant, horizontal line with a small down tick in April 2012.  The red line, however, (this fiscal year) begins where the blue line left off, but, then, in January-ish 2013, a massive decrease in dollars spent.

So….a massive decrease….surely the MCOs were not paid the same…oh, and surely not more!!!???

Because, remember, if an MCO has a deficit, that means that the MCO is “not sacrificing care for profit.”

Here is DMA’s graph on MCO capitation payments per 1000 eligibles:

Capitation Pic

Now, mind you, I am no math expert, but this chart, to me, appears to show a 700% plus uptick in MCO capitation payments.

So, according to O’Neil, MeckLINK is running at a deficit, at least for a couple of months.  Yet, DMA’s graphs demonstrate a decrease in mental health services and an increase in payments to MCOs.

Hmmmm.

Here are proofs of negatives:

The fact that Knicole did not blog today proves that it is a weekend. (Surely, Knicole was not just too busy on a weekday to get out a blog).

MeckLINK’s deficits are proof that MeckLINK is not sacrificing care for profit.  (Surely, MeckLINK did not pay hefty salaries to top executives or all health care premiums for employees and families). 

You cannot prove a negative.  But you CAN show proof.

Day 2 NCTracks: Is It Working? Take This Poll.

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.

Best….Career….Ever!!!!

What Is the Legal Process for Contesting a Termination of a Medicaid Contract?

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.

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