Category Archives: Medicaid Recipients
Come one! Come all! Step right up to be one of the first 6 states to test the new Medicare-Medicaid Affordable Care Act (ACO) pilot program.
Let your elderly population be the guinea pigs for the Center for Medicare and Medicaid Services (CMS). Let your most needy population be the lab rats for CMS.
On December 15, 2016, CMS announced its intent to create Medicare/caid ACOs. Currently, Medicare ACOs exist, and if your physician has opted to participate in a Medicare ACO, then, most likely, you understand Medicare ACOs. Medicare ACOs are basically groups of physicians – of different service types – who voluntarily decide (but only after intense scrutiny by their lawyers of the ACO contract) to collaborate care with the intent of higher quality and lower cost care. For example, if your primary care physician participates in a Medicare ACO and you suffer intestinal issues, your primary care doctor would coordinate with a GI specialist within the Medicare ACO to get you an appointment. Then the GI specialist and your physician would share medical records, including test results and medication management. The thought is that the coordination of care will decrease duplicative tests, ensure appointments are made and kept, and prevent losing medical records or reviewing older, moot records.
Importantly, the Medicare beneficiary retains all benefits of “normal” Medicare and can choose to see any physician who accepts Medicare. The ACO model is a shift from “fee-for-service” to a risk-based, capitated amount in which quality of care is rewarded.
On the federal level, there have not been ACOs specially created for dual-eligible recipients; i.e., those who qualify for both Medicare and Medicaid…until now.
The CMS is requesting states to volunteer to participate in a pilot program instituting Medicare/Medicaid ACOs. CMS is looking for 6 brave states to participate. States may choose from three options for when the first 12-month performance period for the Medicare-Medicaid ACO Model will begin for ACOs in the state: January 1, 2018; January 1, 2019; or January 1, 2020.
Any state is eligible to apply, including the District of Columbia. But if the state wants to participate in the first round of pilot programs, intended to begin 2018, then that state must submit its letter of intent to participate by tomorrow by 11:59pm. See below.
I tried to research which states have applied, but was unsuccessful. If anyone has the information, I would appreciate it if you could forward it to me.
Participating in an ACO, whether it is only Medicare and Medicare/caid, can create a increase in revenue for your practices. Since you bear some risk, you also reap some benefit if you able to control costs. But, the decision to participate in an ACO should not be taken lightly. Federal law yields harsh penalties for violations of Anti-Kickback and Stark laws (which, on a very general level, prohibits referrals among physicians for any benefit). However, there are safe harbor laws and regulations specific to ACOs that allow exceptions. Regardless, do not ever sign a contract to participate in an ACO without an attorney reviewing it.
Food for thought – CMS’ Medicare/caid ACO Model may exist only “here in this [Obama] world. Here may be the last ever to be seen of [healthcare.gov] and their [employee mandates]. Look for it only in [history] books, for it may be no more than a [Obamacare] remembered, a [health care policy] gone with the wind…”
As, tomorrow (January 20, 2017) is the presidential inauguration. The winds may be a’changing…
You could hear the outrage in the voices of some of the NC legislators (finally, for the love of God – our General Assembly has taken the blinders off their eyes regarding the MCOs) at the Joint Legislative Oversight Committee on Medicaid and NC Health Choice on Tuesday, December 6, 2016, when Cardinal Innovations‘, a NC managed care organization (MCO) that manages our Medicaid behavioral health care in its catchment area, CEO, Richard Topping, stated that his salary was raised this year from $400,000 to $635,000 – with our tax dollars. (Whoa – totally understand if you have to read that sentence multiple times; it was extraordinarily complex).
Senator Tommy Tucker (R-Waxhaw) was especially incensed. He said, “I received minutes from your board, Sept. 16 of 2016, they made that motion, that your 2017 comp package, they raised your salary from $400,000 to $635,000, they gave you a 0 to 30 percent bonus potential which could be roughly another $250,000 and also you have some sort of annuity or long-term package of $412,000,” said Sen. Tommy Tucker.
Sen. Tucker was not alone.
Representative Dollar was also concerned. But even more surprising than our legislators stepping up to the plate and holding an MCO accountable (MCOs have expensive lobbyists – with our tax dollars), the State’s Department of Health and Human Services (DHHS) Secretary Rick Brajer was visibly infuriated. He spoke sharply and interrogated Topping as to his acute income increase, as well as the benefits attached.
As a health care blogger, I receive so many emails from blog readers, including parents of disabled children, who are not receiving the medically necessary Medicaid behavioral health care services for their developmentally disabled children. MCOs are denying medically necessary services. MCOs are terminating qualified health care providers. MCOs are putting access to care at issue. BTW – even if the MCOs only terminated 1 provider and stopped 1 Medicaid recipient from receiving behavioral health care services from their provider of choice, that MCO would be in violation of federal law access to care regulations. But, MCOs are terminating multiple – maybe hundreds – of health care providers. MCOs are nickeling and diming health care providers. Yet, CEO Topping will reap $635,000+ as a salary.
The MCOs, including Cardinal, do not have assets except for our tax dollars. They are not incorporated. They are not private entities. They are extensions of our “single state agency” DHHS. The MCOs step into the shoes of DHHS. The MCOs are state agencies. The MCOs are paid with our tax dollars. Our tax dollars should be used (and are budgeted) to provide Medicaid behavioral health care services for our most needy and to be paid to those health care providers, who still accept Medicaid and provide services to our most vulnerable population. News alert – These providers who render behavioral health care services to Medicaid recipients do not make $635,000/year, or anywhere even close. The reimbursement rates for Medicaid is paltry, at best. Toppings should be embarrassed for even accepting a $635,000 salary. The money, instead, should go to increasing the reimbursements rates – or maintaining a provider network without terminating providers ad nauseum. Or providing medically necessary services to Medicaid recipients.
Rest assured, Cardinal is not the only MCO lining the pockets of its executives. While both Trillium and Alliance, other MCOs, pay their CEOs under $200,000 (still nothing to sneeze at). Alliance, however, throws its tax dollars at private, legal counsel. No in-house counsel for Alliance! Oh, no! Alliance hires expensive, private counsel to defend its actions. Another way our tax dollars are at work. And – my question – why in the world does Alliance, or any other MCO, need to hire legal counsel? Our State has perfectly competent attorneys at our Attorney General’s office, who are on salary to defend the state, and its agencies, for any issue. The MCOs stand in the shoes of the State when it comes to Medicaid for behavioral health. The MCOs should utilize the attorneys the State already employs – not a high-dollar, private law firm. These are our tax dollars!
There have been few times that I have praised DHHS in my blogs. I will readily admit that I am harsh on DHHS’ actions/nonactions with our tax dollars. And I am now not recanting any of my prior opinions. But, last Tuesday, Sec. Brajer held Toppings feet to the fire. Thank you, Brajer, for realizing the horror of an MCO CEO earning $635,000/year while our most needy population goes under-served, and, sometimes not served at all, with medically necessary behavioral health care services.
What is deeply concerning is that if Sec. Brajer is this troubled by actions by the MCOs, or, at least, Cardinal, why can he not DO SOMETHING?? Where is the supervision of the MCOs by DHHS? I’ve read the contracts between the MCOs and DHHS. DHHS is the supervising entity over the MCOs. Our Waiver to the federal government promises that DHHS will supervise the MCOs.
If the Secretary of DHHS cannot control the MCOs, who can?
Disclosure: This is the opinion/facts from the Kaiser Family Foundation, not me. But I found this interesting. My opinion will be forthcoming.
Kaiser Family Foundation article:
Medicaid covers about 73 million people nationwide. Jointly financed by the federal and state governments, states have substantial flexibility to administer the program under existing law. Medicaid provides health insurance for low-income children and adults, financing for the safety net, and is the largest payer for long-term care services in the community and nursing homes for seniors and people with disabilities. President-elect Trump supports repeal and replacement of the Affordable Care Act (ACA) and a Medicaid block grant. The GOP plan would allow states to choose between block grant and a per capita cap financing for Medicaid. The new Administration could also make changes to Medicaid without new legislation.
1. HOW WOULD ACA REPEAL AFFECT MEDICAID?
A repeal of the ACA’s coverage expansion provisions would remove the new eligibility pathway created for adults, increase the number of uninsured and reduce the amount of federal Medicaid funds available to states. The Supreme Court’s 2012 ruling on the ACA effectively made the Medicaid expansion optional for states. As of November 2016, 32 states (including the District of Columbia) are implementing the expansion. The full implications of repeal will depend on whether the ACA is repealed in whole or in part, whether there is an alternative to the ACA put in place and what other simultaneous changes to Medicaid occur. However, examining the effects of the ACA on Medicaid provide insight into what might be at stake under a repeal.
What happened to coverage? The ACA expanded Medicaid eligibility to nearly all non-elderly adults with income at or below 138% of the federal poverty level (FPL) – about $16,396 per year for an individual in 2016. Since summer of 2013, just before implementation of the ACA expansions, through August 2016 about 16 million people have been added to Medicaid and the Children’s Health Insurance Program. While not all of this increase is due to those made newly eligible under the ACA, expansion states account for a much greater share of growth. States that expanded Medicaid have had large gains in coverage, although ACA related enrollment has tapered. From 2013 to 2016 the rate of uninsured non-elderly adults fell by 9.2% in expansion states compared to 6% in non-expansion states.
What happened to financing? The law provided for 100% federal funding of the expansion through 2016, declining gradually to 90% in 2020 and beyond. Expansion states have experienced large increases in federal dollars for Medicaid and have claimed $79 billion in federal dollars for the new expansion group from January 2014 through June 2015. Studies also show that states expanding Medicaid under the ACA have realized net fiscal gains despite Medicaid enrollment growth initially exceeding projections in many states.
What other Medicaid provisions were in the ACA? The ACA required states to implement major transformations to modernize and streamline eligibility and enrollment processes and systems. The ACA also included an array of new opportunities related to delivery system reforms for complex populations, those dually eligible for Medicare and Medicaid and new options to expand community-based long-term care services.
2. WHAT WOULD CHANGES IN THE FINANCING STRUCTURE MEAN FOR MEDICAID?
A Medicaid block grant or per capita cap policy would fundamentally change the current structure of the program. These policies are typically designed to reduce federal spending and fix rates of growth to make federal spending more predictable, but could eliminate the guarantee of coverage for all who are eligible and the guarantee to states for matching funds. States would gain additional flexibility to administer their programs but reduced federal funding could shift costs and risk to beneficiaries, states, and providers.
How would it work? Block grants or per capita caps could be structured in multiple ways. Key policy decisions would determine levels of federal financing as well as federal and state requirements around eligibility, benefits, state matching requirements, and beneficiary protections. Previous block grant proposals have determined a base year financing amount for each state and then specified a fixed rate of growth for federal spending. Under a Medicaid per capita cap, the federal government would set a limit on how much to reimburse states per enrollee. Payments to states would be based on per enrollee spending multiplied by enrollees. Spending under per capita cap proposals fluctuate based on changes in enrollment, but would not account for changes in the costs per enrollee beyond the growth limit. To achieve federal savings, the per capita growth amounts would be set below the projected rates of growth under current law.
What are the key policy questions? Key questions in designing these proposals include: what new flexibility would be granted to states, what federal requirements would remain in place, what requirements would be in place for state matching funds, what is the base year and growth rates, and how would a potential repeal of the ACA work with a block grant proposal? Given the lack of recent administrative data, setting a base year could be challenging. These financing designs could lock in historic spending patterns and variation in Medicaid spending across states, resulting in states deemed “winners” or “losers.”
What are the implications? Capping and reducing federal financing for Medicaid could have implications for beneficiaries, states, and providers including: declines in Medicaid coverage or new financial barriers to care; limited funding for children (the majority of Medicaid enrollees) as well as the elderly and those with disabilities (populations that represent the majority of Medicaid spending); reduced funding for nursing homes and community-based long-term care (Medicaid is the largest payer of these services); reductions in federal revenues to states and Medicaid revenues for safety-net providers. A block grant would not adjust to increased coverage needs during a recession. Block grants or per capita caps would not adjust to changes in health care or drug costs or emergencies. Recently Medicaid costs have increased due to high cost specialty drugs and Medicaid has been used to help combat the growing opioid crisis.
3. HOW COULD MEDICAID BE CHANGED THROUGH ADMINISTRATIVE ACTIONS?
The Administration could make changes to Medicaid without changes in legislation.
How can changes be made through guidance? A new administration can reinterpret existing laws through new regulations and new sub-regulatory guidance. While there are rules that govern how to change regulations, a new administration has more flexibility to issue or amend sub-regulatory guidance, such as state Medicaid director letters. Rules promulgated by the Obama administration could be rolled back or changed.
How can changes be made through waivers? Throughout the history of the Medicaid program, Section 1115 waivers have provided states an avenue to test and implement demonstrations that, in the view of the Health and Human Services Secretary, advance program objectives but do not meet federal program rules. Longstanding federal policy has required waivers to be budget neutral for the federal government.
What kind of waivers may be considered? Seven states are using waivers to implement the ACA Medicaid expansion, including Indiana. The Indiana waiver, implemented under then Governor Pence, includes provisions to impose: premiums on most Medicaid beneficiaries; a coverage lock-out period for individuals with incomes above the poverty level who fail to pay premiums; health savings accounts; and healthy behavior incentives. The Obama administration has not approved waivers that would require work as a condition of Medicaid eligibility. It also has denied Ohio’s waiver request to impose premiums regardless of income and exclude individuals from coverage until all arrears are paid on the basis that this would restrict or undermine coverage from existing levels. Many other states are using waivers to implement payment and delivery system reforms. The incoming administration could decide whether or not to renew existing waivers and can approve a new set of waivers to promote its own program goals.
It is a timeless joke. What goes down, but never goes up? Medicaid rates!
Having a Medicaid card is as useful as holding a lottery ticket. Sure, maybe you’ll hit the jackpot and find a quality health care provider with whom you share some common connection, but, most likely, you will receive nothing but false hope. 10% of nothing is nothing.
For health care providers that do accept Medicaid – how many of you are accepting new patients? Or maybe the better question is – how many of you are profitable from your Medicaid patients?
Because we live in a society in which we need money to live, if Medicaid pays less than the cost, health care providers will not accept Medicaid. And you cannot blame them. It’s happening all over the country. In Utah, dentists are un-enrolling in Medicaid, i.e., refusing their Medicaid patients. See article. Pennsylvania has a shortage of psychiatrists..even more so who accept Medicaid. See article. “Some 55% of doctors in major metropolitan areas refuse to take new Medicaid patients, according to a 2014 report by Merritt Hawkins. The Department of Health and Human Services reported that same year that 56% of Medicaid primary-care doctors and 43% of specialists weren’t available to new patients.” See article.
Medicaid is failing our most vulnerable and many more. Medicaid, as it exists now, fails every taxpayer, every health care provider who accepts it, and every family member of a developmentally disabled person who is dependent on Medicaid.
The cost of the Medicaid program is expected to rise from $500 billion to $890 billion by 2024, according to the Center for Medicare and Medicaid Services (CMS). Yet – throwing more money at a dysfunctional program does not equate to Medicaid recipients gaining access to quality care. The increased money is not going to the services for Medicaid recipients. The ballooned Medicaid budget is not earmarked to elevate the current, inadequate Medicaid reimbursements, which would induce more health care providers to accept Medicaid. The higher the cost of Medicaid, the more the government slashes the reimbursement rates. Yet our government is willing to throw Medicaid dollars at managed care organizations (MCOs) to release the burden of managing such shortfalls and turn a blind eye when our taxpayers’ money is not used to provide Medicaid medically necessary services to recipients, but to compensate CEOs $400,000 or allow alleged extortion.
For example, in obstetrics, if the national Medicaid reimbursement rate for ob/gyn visits is $1.00, here, in NC, Medicaid reimburses ob/gyns 88¢. Which is why only 34% of North Carolina ob/gyns accept Medicaid.
If it is imperative for the Medicaid reimbursements to increase (to, at the very least, cost, if not a slight profit), then how do we accomplish such an insurmountable task?
There are two options: (1) lobbying (which, obviously, has not been successful thus far); and (2) litigation.
Section 30(A) of the Medicaid Act requires that a state provide Medicaid reimbursement rates at a level to “assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population…”
In an article entitled “Nurse Staffing Levels and Medicaid Reimbursement Rates in Nursing Facilities,” written by Charlene Harrington, James H. Swan, and Helen Carrillo, the authors found that the Medicaid nursing home reimbursement rates were linked to quality of care, as to both RN hours and total nursing hours.
“Resident case mix was a positive predictor of RN hours and a negative predictor of total nursing hours. Higher state minimum RN staffing standards was a positive predictor of RN and total nursing hours while for-profit facilities and the percent of Medicaid residents were negative predictors.” Id.
Numerous other articles have been published in the last few years that cite the direct correlation between reimbursement rates and quality of care.
How do we stop Medicaid reimbursement rates from dropping and the executives of those companies charged with managing Medicaid funds from lining their own pockets?
According to the Supreme Court, suing under the Supremacy Clause is not the answer.
In Armstrong v. Exceptional Child Services, providers of habilitative Medicaid services sued the State of Idaho for Medicaid reimbursements rates being too low as to violate Section 30(A) of the Medicaid Act.
In the Armstrong decision from last year, the Supreme Court, Scalia found that, in enacting §1902(a)(30)(A) Congress had empowered the HHS Secretary to withhold all Federal funds from states that violate federal law. According to Armstrong, this “express provision of an administrative remedy” shows that Congress intended that the Secretary be the enforcer – not the courts. In other words, the Supreme Court held that
“The sole remedy Congress provided for a State’s failure to comply with Medicaid’s requirements—for the State’s “breach” of the Spending Clause contract—is the withholding of Medicaid funds by the Secretary of Health and Human Services.” Armstrong.
In other words, according to Armstrong, the sole remedy for health care providers who demand higher Medicaid reimbursement rates, will be for the Secretary of HHS to withhold Medicaid funds from the state. Such a drastic measure would undoubtedly cause the state such a budgetary shortfall that the state would soon be in a position in which it could not reimburse health care providers at all. Therefore, the providers go from receiving woefully low reimbursement rates to receiving none at all. That seems hardly the situation that the Supreme Court would want.
There are still litigation options for health care providers to sue in order to increase the Medicaid reimbursement rate. Just not through the Supremacy Clause.
I have a joke: What goes down, but never goes up?
A recent State Auditor report found that DHHS “had approximately 2,500 non-competitively bid contracts with a value of approximately $2.4 billion between state fiscal year 2012 through 2014. The value of the no-bid contracts accounts for more than 32% of all contracts during the same period.”
No bid contracts are exactly that – the company awarded the contract received the contract without competition, or a bid process. Think of a no bid contract as a try out for a professional football team, but only one person is trying out. Generally, competition breeds better results because people try harder when they compete, rather than a solo act.
In contract bidding, rivalry also breeds a lower contract price. It’s only logical. If you know that other companies are submitting bids, you are going to submit the lowest number possible.
So how is DHHS allowed to award no bid contracts?
NC Statute dictates that the AG or the AG’s attorney shall review “all proposed contracts for supplies, materials, printing, equipment, and contractual services that exceed one million dollars…” as of June 27, 2011. See NCGS 114-8.3 as amended by Session Law 2011-326 and Session Law 2013-234.
But – Per 09 NCAC 06B .0901, “…competition may be limited or waived where a factual basis demonstrates support of one or more of the conditions set forth in Paragraph (b) of this Rule. If the procurement is within a purchasing agency’s general delegation, then the purchasing agency may waive competition in conformance with this Rule. If the procurement is greater than the agency’s delegation, requests for limited or waived competition shall be submitted to the State CIO for approval.”
Here are the exceptions found in 09 NCAC 06B.0901(b):
(b) Competition may be limited or waived under the following conditions:
- Competition is not available;
- A needed product or service is available from only one source of supply;
- Emergency action is indicated;
- Competition has been solicited but no responsive offers have been received;
- Standardization or compatibility is the overriding consideration;
- A donation stipulates the source of supply;
- Personal or particular professional services are required;
- A product or service is needed for a person with disabilities and there are overriding considerations for its use;
- Additional products or services are needed to complete an ongoing job or task;
- A particular product or service is desired for educational, training, experimental, developmental or research work;
- Equipment is already installed, connected and in service, and it is determined advantageous to purchase it;
- Items are subject to rapid price fluctuation or immediate acceptance;
- There is evidence of resale price maintenance or other control of prices or collusion on the part of persons or entities that thwarts normal competitive procedures unless otherwise prohibited by law;
- A purchase is being made and a price is available from a previous contract;
- The requirement is for an authorized cooperative project with another governmental unit(s) or a charitable non-profit organization(s); or
- A used item is available on short notice and subject to prior sale.
Did all the no bid contracts that DHHS procured between state fiscal year 2012 through 2014 to equal approximately $2.4 billion fit within 1 or more of the above referenced exceptions?
At least, according to the State Auditor – No.
Here are the key findings of the State Auditor’s Report:
- Many no-bid contracts lacked required review and approval to protect state interests
- Many no-bid contracts lacked documentation of negotiations to improve pricing or terms
- Many no-bid contracts lacked adequate written justification to waive competition, which increases the risk of favoritism, unfavorable terms, and poor performance
It appears that DHHS failed this audit. Should we extrapolate?
The Effects of Medicaid Expansion under the ACA: Findings from a Literature Review — The Henry J. Kaiser Family Foundation
Research on the effects of Medicaid expansions under the Affordable Care Act (ACA) can help increase understanding of how the ACA has impacted coverage; access to care, utilization, and health outcomes; and various economic outcomes, including state budgets, the payer mix for hospitals and clinics, and the employment and labor market. These findings also may…
I do not believe that I have been more excited to post a blog than I am right now. For the past two weeks, an associate DeeDee Murphy and I have been in trial in Albuquerque, New Mexico. For those of you who do not know about the Draconian, governmental upheaval of the 15 behavioral health care companies in New Mexico, see blog. And blog. And documentary.
Going back to what it is that I am so excited to share…
A federal preliminary injunction is rare. It is about as rare as rocking horse poo. But when I met Dr. B, I knew I had to try. Poo or not. Dr. B is a geneticist, who accepts Medicaid. Her services are essential to her patients, who receive ongoing, genetic counseling from her. 70% of her practice comprised of Medicaid recipients.
You see, when Dr. B came to me, she had been represented by legal counsel for over two years but had received no recourse at all. For two years she had retained counsel to fight for her Medicaid contract with the State of Indiana, and for two years, she had no Medicaid contract to render services. For the previous 2 years, Dr. B had been subject to prepayment review and paid nothing – or next to nothing…certainly not enough to pay expenses.
When I met Dr. B, she had not been paid for two years. She continued to render medically necessary services, but she received no reimbursement. She had exhausted all her loans, her credit limit, and even borrowed money from family. She had been forced to terminate staff. Dr. B was on the brink of financial and career ruin. She was about to lose the company and work that she had put over 40 years into. Since her company’s revenue consisted of over 70% Medicaid without Medicaid reimbursements, her company could not survive.
Yet, she continued to provide services to her patients. She is a saint. But she was about to be an unemployed, financially-ruined saint, whose sainthood could not continue.
On December 10, 2015, we filed a Motion for Preliminary Injunction in the Northern District of Indiana requesting that the Court enjoin the Indiana Medicaid agency (“FSSA”) from terminating Dr. B from the Medicaid program and from continuing to suspend the money owed to her for the past two year period that she had been subject to prepayment review.
Senior counsel, Josh Urquhart, from our Denver office, and I attended and argued on behalf of Dr. B in a 5-day trial from January 19-25, 2016.
On April 14, 2016, in a 63-page opinion, our preliminary injunction enjoining Indiana from terminating Dr. B from Medicaid was GRANTED. Dr. B is back in the Medicaid program!!!!!
The rocking horse poo is rampant!
This is not just a win for Dr. B. This is a win for all her Medicaid patients, as well. Two mothers with children-patients of Dr. B testified as to the fact that their children rely heavily on Dr. B. Both testified that without Dr. B their children would be irreparably harmed.
When Dr. B informed her former attorneys that she was hiring me, an attorney from North Carolina, those attorneys told Dr. B that “anyone who tells that they can get a federal preliminary injunction is blowing smoke up your ass.” [Pardon the cuss word – their words, not mine]. To which I would like to say, “[insert raspberry], here’s your smoke!”
A preliminary injunction is an extraordinary and drastic remedy, which is why it is rare. However, rare objects exist. The plaintiff must show the court that he/she has a reasonable likelihood of success on the merits, no adequate remedy at law, and irreparable harm absent the injunction. I felt that we had these criteria covered in Dr. B’s case.
The Court agreed with our contention that FSSA’s without cause termination violates her patients’ freedom to choose their provider. This is a big deal!
In our arguments to the Court, we relied heavily on Planned Parenthood of Indiana. We argued that Indiana’s without cause termination was merely a “business decision” and was not germane to Dr. B’s qualifications. As her qualifications remained intact, to disallow Dr. B from providing medically necessary services violates the patients’ freedom to choose their providers.
The Court held that FSSA “must rescind its without cause termination of Dr. B and reinstate her Medicaid provider agreement until this Court reaches a final decision.”
Even rocking horses poo every now and then.
In a groundbreaking decision published today by the Court of Appeals (COA), the Court smacked down Public Consulting Group’s (PCG), as well as any other contracted entity’s, authority to wield an “adverse decision” against a health care provider. This solidifies my legal argument that I have been arguing on this blog and in court for years!
The Department of Health and Human Services (DHHS) is the “single state agency” charged with managing Medicaid. Federal law requires that that one agency manage Medicaid with no ability to delegate discretionary decisions. Case law in K.C. v. Shipman upheld the federal law. See blog.
Yet, despite K.C. v. Shipman, decided in 2013, in Court, DHHS continued to argue that it should be dismissed from cases in which a contracted vendor rendered the adverse decision to recoup, terminate, or suspend a health care provider. DHHS would argue that it had no part of the decision to recoup, terminate, or suspend, that K.C. Shipman is irrelevant to health care provider cases, and that K.C. v. Shipman is only pertinent to Medicaid recipient cases, to which I countered until I was “blue in the face” is a pile of horse manure.
DHHS would argue that my interpretation would break down the Medicaid system because DHHS cannot possibly review and discern whether every recoupment, termination, and/or suspension made by a contracted vendor was valid (my words, not theirs). DHHS argued that it simply does not have the manpower, plus if it has the authority to contract with a company, surely that company can determine the amount of an alleged overpayment…WRONG!!
In fact, in DHHS v. Parker Home Care, LLC, the COA delineates the exact process for the State determining an overpayment with its contracted agent PCG.
- DHHS may enter into a contract with a company, such as PCG.
- A private company, like PCG, may perform preliminary and full investigations to collect facts and data.
- PCG must submit its findings to DHHS, and DHHS must exercise its own discretion to reach a tentative decision from six options (enumerated in the NC Administrative Code).
- DHHS, after its decision, will notify the provider of its tentative decision.
- The health care provider may request a reconsideration of the tentative decision within 15 days.
- Failure to do so will transform the tentative decision into a final determination.
- Time to appeal to OAH begins upon notification of the final determination by DHHS (60 days).
Another interesting part of this decision is that the provider, Parker Home Care, received the Tentative Notice of Overpayment (TNO) in 2012 and did nothing. The provider did not appeal the TNO.
However, because PCG’s TNO did not constitute a final adverse decision by DHHS (because PCG does not have the authority to render a final adverse decision), the provider did not miss any appeal deadline. The final adverse decision was determined to be DHHS’ action of suspending funds to collect the recoupment, which did not occur until 2014…and THAT action was timely appealed.
The COA’s message to private vendors contracted with DHHS is crystal clear: “There is only one head chef in the Medicaid kitchen.”
Another Win for Gordon & Rees! Judge Finds NM HSD Arbitrary, Capricious, and Not Otherwise in Accordance of Law! And JUSTICE PREVAILS!
For those of you who have followed my blog for a while, you understand the injustices that occurred in New Mexico against 15 behavioral health care providers in 2013. For those of you who do not recall, for background, see blog, and blog and blog. These 15 agencies comprised 87% of NM behavioral health care services. And they were all shut down by immediate suspensions of reimbursements on June 23, 2013, collectively.
My team (Robert Shaw, Special Counsel, and Todd Yoho, Master Paralegal) and I worked our “behinds off” in these two New Mexico administrative hearings that have so far been held. The first was for The Counseling Center (TCC) headed up by Jim Kerlin (seen below). And our decision was finally rendered this past Friday!
BTW: It is officially Jim Kerlin day in Otero county, NM, on June 11th.
The second hearing, which appeal is still pending, was for Easter Seals El Mirador, headed up by Mark Johnson and Patsy Romero. Both companies are outstanding entities and we have been blessed to work with both. Over the last 20-30 years, both companies have served the New Mexican Medicaid population by providing mental health, developmentally disabled, and substance abuse services to those most in need.
After both companies were accused of committing Medicaid fraud, and, while, subsequently, the Attorney General’s office in NM found no indications of fraud, both companies were told that they owed overpayments to HSD. We filed Petitions for Contested Cases. We disagreed.
NM HSD based its decision that all 15 behavioral health care companies were guilty of credible allegations of fraud based on an audit conducted by Public Consultant Group (PCG). While I have seen the imperfections of PCG’s auditing skills, in this case, PCG found no credible allegations of fraud. HSD, nonetheless, took it upon itself to discard PCG’s audit and find credible allegations of fraud.
These cases were brought in administrative court. For those who do not know, administrative court is a quasi-judicial court, which is specially carved out from our state and federal civil courts. In NC, our Office of Administrative Hearings (OAH) is the administrative court in which health care providers and Medicaid recipients seek relief from adverse agency actions. Similarly, NM also has an administrative court system. The administrative court system is actually a part of the executive branch; the Governor of the State appoints the administrative law judges (ALJs).
However, 42 CFR 431.10 mandates that each state designate a single state entity to manage Medicaid. In NM, that single state agency is Human Services Department (HSD); in NC, it is the Department of Health and Human Services (DHHS) (for now).
42 CFR 431.10 states that if the single state agency delegates authority to another entity, that other entity cannot “have the authority to change or disapprove any administrative decision of that agency, or otherwise substitute their judgment for that of the Medicaid agency with respect to the application of policies, rules, and regulations issued by the Medicaid agency.”
If an ALJ is deciding an issue with Medicaid, then her or she would be substituting his or her judgment for that of the Medicaid agency with respect to the application of policies, rules, and regulations issued by the Medicaid agency.
This is why, in NC, prior to 2013, our ALJs could only make a Recommendation, not an Order or Decision. See blog. In 2013, NC was granted a Waiver to the single state agency mandate allowing ALJs to render decisions on behalf of Medicaid.
In New Mexico, however, there has been no such Waiver. Thus, the ALJ only recommends a decision. In NC, our ALJs are appointed and are independent of DHHS. Juxtapose, in NM, the ALJ answers to the single state entity AND only issues a recommendation, which the agency may accept or reject.
Needless to say, in TCC v. HSD, the ALJ ruled against us. And HSD accepted the recommended decision. We appealed to Superior Court with a Petition for Judicial Review.
Judges in Superior Courts are not employed by their single state agencies. I have found, generally, that Superior Court judges truly try to follow the law. (In my opinion, so do ALJs who do not have to answer to the single state agency, like in NC).
This past Friday, October 23, 2015, Judge Francis Matthew, issued a Decision REVERSING HSD’s decision that TCC owed any money and ordered all funds being withheld to be released. Here are a couple quotes:
Special Counsel, Robert Shaw, our paralegal, Todd Yoho, our local counsel Bryan Davis, and I are beyond ecstatic with the result. Robert and I worked weeks upon weeks of 12-16 hour days for this case.
I remember the night before the 1st day of trial, local counsel encountered an unexpected printing problem. I had just flown into New Mexico and Robert Shaw was on his way, but his flight was delayed. Robert got to the hotel in Santa Fe at approximately 7 pm New Mexico time, which was 10 pm eastern time.
It’s 7:00 pm the evening before the trial…and we have no exhibits.
Robert went to the nearby Kinko’s and printed off all the exhibits and organized the binders until 2:00 am, 5:00 am eastern time. During which time I was preparing opening statement, direct examinations, and cross examinations (although I went to bed way before 2:00 am).
Regardless, Robert was dressed, clean-shaven, and ready to go the next day at 9:00 am with the exhibits (of which there were approximately 10 bankers’ boxes filled).
The trial lasted all week. Every day we would attend trial 9:00-5:00. After each day concluded, our evenings of preparation for the next day began.
I am not telling you all this for admiration, consternation, or any other reason except to shed some light as to our absolutely unbridled joy when, on Friday, October 23, 2015, Bryan Davis emailed us the Order that says that HSD’s decision “is REVERSED in its entirety…”
See the article in The Santa Fe New Mexican.
We hope this sets good precedent for Easter Seals El Mirador and the other 13 behavioral health care agencies harmed by HSD’s allegations of fraud in 2013.
42 CFR 455.23 mandates a state to suspend reimbursements for a provider upon “credible allegations of fraud.” Obviously, this is an extreme measure that will undoubtedly put that accused provider out of business without due process. BTW: the “credible” allegation can be non-credible. It does not matter. See blog. 42 CFR 455.23 is the modern day guillotine for health care providers.
Which leads me to say…It is my sincere hope, that, going forward, state agencies realize the magnitude of implementing measures mandated by 42 CFR 455.23. Instead of wielding the power willy-nilly, it is imperative to conduct a good faith investigation prior to the accusation.
And, certainly, do not conduct an investigation, discard the results, and accuse 87% of your behavioral health care providers in your state. Think of the recipients!! The employees!! And all the families affected!!