Category Archives: Termination of Medicaid Contract

Another Win for the Good Guys! Gordon & Rees Succeeds in Overturning Yet Another Medicaid Contract Termination!

Getting placed on prepayment review is normally a death sentence for most health care providers. However, our health care team here at Gordon Rees has been successful at overturning the consequences of prepayment review. Special Counsel, Robert Shaw, and team recently won another case for a health care provider, we will call her Provider A. She had been placed on prepayment review for 17 months, informed that her accuracy ratings were all in the single digits, and had her Medicaid contract terminated.

We got her termination overturned!! Provider A is still in business!

(The first thing we did was request the judge to immediately remove her off prepayment review; thereby releasing some funds to her during litigation.  The state is only allowed to maintain a provider on prepayment review for 12 months).

Prepayment review is allowed per N.C. Gen. Stat. 108C-7.  See my past blogs on my opinion as to prepayment review. “NC Medicaid: CCME’s Comedy of Errors of Prepayment Review“NC Medicaid and Constitutional Due Process.

108C-7 states, “a provider may be required to undergo prepayment claims review by the Department. Grounds for being placed on prepayment claims review shall include, but shall not be limited to, receipt by the Department of credible allegations of fraud, identification of aberrant billing practices as a result of investigations or data analysis performed by the Department or other grounds as defined by the Department in rule.”

Being placed on prepayment review results in the immediate withhold of all Medicaid reimbursements pending the Department of Health and Human Services’ (DHHS) contracted entity’s review of all submitted claims and its determination that the claims meet criteria for all rules and regulations.

In Provider A’s situation, the Carolinas Center for Medical Excellence (CCME) conducted her prepayment review. Throughout the prepayment process, CCME found Provider A almost wholly noncompliant. Her monthly accuracy ratings were 1.5%, 7%, and 3%. In order to get off prepayment review, a provider must demonstrate 70% accuracy ratings for 3 consecutive months. Obviously, according to CCME, Provider A was not even close.

We reviewed the same records that CCME reviewed and came to a much different conclusion. Not only did we believe that Provider A met the 70% accuracy ratings for 3 consecutive months, we opined that the records were well over 70% accurate.

Provider A is an in-home care provider agency for adults. Her aides provide personal care services (PCS). Here are a few examples of what CCME claimed were inaccurate:

1. Provider A serves two double amputees. The independent assessments state that the pateint needs help in putting on and taking off shoes. CCME found that there was no indication on the service note that the in-home aide put on or took off the patients’ shoes, so CCME found the dates of service (DOS) noncompliant. But the consumers were double amputees! They did not require shoes!

2. Provider A has a number of consumers who require 6 days of services per week based on the independent assessments. However, many of the consumers do not wish for an in-home aide to come to their homes on days on which their families are visiting. Many patients inform the aides that “if you come on Tuesday, I will not let you in the house.” Therefore, there no service note would be present for Tuesday. CCME found claims inaccurate because the assessment stated services were needed 6 days a week, but the aide only provided services on 5 days.  CCME never inquired as to the reason for the discrepancy.

3. CCME found every claim noncompliant because the files did not contain the service authorizations. Provider A had service authorizations for every client and could view the service authorizations on her computer queue. But, because the service authorization was not physically in the file, CCME found noncompliance.

Oh, and here is the best part about #3…CCME was the entity that was authorizing the PCS (providing the service authorizations) and, then, subsequently, finding the claim noncompliant based on no service authorization.

Judge Craig Croom at the Office of Administrative Hearings (OAH) found in our favor that DHHS via CCME terminated Provider A’s Medicaid contract arbitrarily, capriciously, erroneously, exceeded its authority or jurisdiction, and failed to act as accordingly to the law. He ruled that DHHS’ placement of Provider A on prepayment review was random

Because of Judge Croom’s Order, Provider A remains in business. Plus, she can retroactively bill all the unpaid claims over the course of the last year.

Great job, Robert!!! Congratulations, Provider A!!!

Consider Nominating This Blog for the 2015 Best Legal Blog Contest (Please)!

The 2015 Legal Blog Contest is here!

For all you that follow this blog, thank you!  I hope that you agree that I provide you with valuable and up-to-date information on Medicaid/care regulatory issues.  At least, that is my hope in maintaining this blog.  And maintaining this blog takes a lot of time outside my normal, hectic legal career and my time as a mom and wife.  Don’t get me wrong…I love blogging about these issues because these issues are near and dear to my heart.  I am passionate about health care, health care providers, Medicaid and Medicare, and access to quality care.

If you are a follower, then you know that I try to keep my readers current on Medicaid/care fraud, federal and state laws, legal rights for health care providers, bills in the General Assembly germane to health care, extrapolation issues, CMS rulings, managed care matters, reimbursement rates, RAC audits and much, much more!

If you enjoy my blog, I ask a favor. Please consider nominating my blog for the 2015 Best Legal Blog Contest.

If you want to nominate my blog, please click here.

Scroll down until you see this:

blog contest

Enter your name, email address, my blog address. which is:

https://medicaidlawnc.wordpress.com/

For category, click on “Niche and Specialty.”  I do not believe the other categories correctly describe my blog.

And type a reason why you enjoy my blog.  Much appreciated!

OIG Finds Questionable Billing! California Medicaid Dentists: Expect Withholdings or Other Penalties!

Currently, dentists who accept Medicaid are ripe for pickings as targets for regulatory audits from both the federal and state governments. Actually, this is true for any provider that accepts Medicaid. It just happens that, recently, I have noticed an uptick in dental audits both in North Carolina and nationwide. Some dentists, who accept pregnancy Medicaid, may even bear the burden of determining pregnancy prior to a teeth cleaning…however, that is a topic for another day.  Although, I tell you what, if my dentist asked whether I were pregnant prior to cleaning my teeth, he may have an abnormally red cheek the remainder of the day and I may join Crossfit.

Moving on….

Generally, dentists tend to not accept Medicaid. The reimbursement rates barely cover overhead. Add high regulatory compliance requirements, the likelihood of undergoing audits, and the government’s robust and zealous desire to tackle fraud, waste, and abuse (FWA), and it is no wonder why most dentists opt to not accept Medicaid. See blog. And blog.

Those dentists (and other providers) that do make the decision to accept Medicaid, these brave and noble souls, are subject to onerous audits; the result of a recent California audit is probably sending shock waves through the California dental community.

335 dental providers in California have been targeted by OIG as having questionable billing issues. Sadly, this is only the beginning for these 335 providers. Now the state will audit the providers, and these 335 providers may very well become the subject of a payment withhold in the near future.

What will happen next?

I will look into my crystal ball, otherwise known as experience, and let you know.

First, the Office of Inspector General (OIG) recently published a report called: “QUESTIONABLE BILLING FOR MEDICAID PEDIATRIC DENTAL SERVICES IN CALIFORNIA.

One can only imagine by the title that OIG found alleged questionable billing. Otherwise the title may have been, “A Study into Medicaid Billing for Medicaid Pediatric Dental Services,” instead of “Questionable Billing.” With such a leading title, a reader knows the contents before reading one word.

What is questionable billing?

Importantly, before addressing what IS questionable billing, what is NOT questionable billing? Questionable billing is not abhorrent billing practices. Questionable billing is not wasteful billing or abusive billing. And questionable billing is certainly not fraudulent billing. That is not to say that some of these questionable billing will be investigated and, perhaps, fall into one the aforementioned categories. But not yet. Again, these dentists have a long journey ahead of them.

In this context, questionable billing seems to mean that the OIG report identifies dentists who perform a higher number of services per day. OIG analyzed rendering dental providers’ NPI numbers to determine how many services each rendering provider was providing per day. Then OIG compared the average Medicaid payment per kid, number of services per day, and number of services provided per child per visit. OIG determined a “threshold” number for each category and cited questionable billing practices for those dentists that fell egregiously outside the thresholds. Now, obviously, this is a simplistic explanation for a more esoteric procedure, but the explanation is illustrative.

This study of California Medicaid dentists is not first dental study OIG has undertaken. Recently, OIG studied Medicaid dentists in New York, Louisiana, and Indiana. What stands out in the California Medicaid dental study is the volume of dentists involved in the study. In Indiana, OIG reviewed claims for 787 dentists; in New York it reviewed claims for 719 dentists, and in Louisiana, OIG studied 512 dentists’ claims, all of whom rendered services to over 50 Medicaid children.

In California, OIG studied 3,921 dentists.

Why such a difference?

Apparently, California has more dentists than the other three states and more dentists who accept Medicaid. So, if you are Medicaid dentists, apparently, there is more competition in California.

Juxtapose that, in California, in 2012, only 3 periodontists, 3 prosthodontists, 2 endodontists, and 1 oral pathologist provided services to 50 or more children with Medicaid in California.

Going back to the audit findings…

OIG considered dentists who exceeded its identified threshold for one or more of the seven measures to have questionable billing.

The result?

OIG identified 329 general dentists and 6 orthodontists out of 3,921 providers as having with questionable billing. But these findings are only the beginning of what will, most likely, become a long and tedious legal battle for these 335 providers. Lumping together so many dentists and claiming questionable billing practices will inevitably include many dentists who have done nothing irregular. Many other dentists, will have engaged in unintentional billing errors and may owe recoupments. But I foresee a very small number of these dentists to actually have committed fraudulent billing.

Here is an example found in the OIG’s report, OIG identified that 108 dentists provided stainless steel crowns to 18% of the children served by these dentists, compared to an average of only 5% of children receiving stainless steel crowns by those served by all general dentists (non-Medicaid).

Another example is that 98 dentists provided pulpotomies to 18% of the children, while the statewide percentage is 5% to undergo pulpotomies.

Do these examples show that 108 dentists providing stainless steel crowns and that 98 dentists providing pulpotomies are improperly billing?

Of course not.

It is only logical that dentists who accept Medicaid would have a significantly higher number of pulpotomies compared to dentists who service the privately insured. Usually, although not always, a Medicaid recipient will have more issues with their teeth than those privately insureds. In order to qualify for Medicaid, the family must live in poverty (some more than others with the expansion of Medicaid in some states). Some of kids in this population will have parents who do not harp on the importance of dental hygiene, thus allowing many kids in this population to have decay in their teeth. Obviously, this is a generalization; however, I am confident that many studies exist to back up this generalization.

Therefore, if you accept  my generalization, it makes sense that Medicaid dentists perform more pulpotomies than private insurance dentists.

And stainless steel crowns go hand in hand with pulpotomies. Unless you extract the tooth after the removal of the decay, you will need to provide a stainless steel crown to protect the tooth from future damage.

What will happen next?

OIG admits in its report that “our findings do not prove that providers either billed fraudulently or provided medically unnecessary services, providers with extreme billing patterns warrant further scrutiny.”

Which is precisely what will happen next…”further scrutiny”…

The OIG report recommends to California that it:

• Increase its monitoring of dental providers to identify patterns of questionable billing
• Closely monitor billing by providers in dental chains
• Review its payment processes for orthodontic services
• Take appropriate action against dental providers with questionable billing

It is that last recommendation, taking appropriate action, which will determine the future course for these 335 Medicaid providers. Because, as many of you know if you have followed my blog, the California Department of Health Care Services (DHCS) has a large toolbox with a considerable amount of tools for which it may yield its power against these providers…right or wrong. The same goes for all state Medicaid agencies. When it comes to a Medicaid provider and a Medicaid state agency, there is no balance of powers, in fact, there is only one power. Instead the scales of justice have one arm on the ground and the other raised in the air. There is an imbalance of power, unless you arm yourself with the right allies.

Possible future actions by DHCS:

• Payment suspensions
• Withholds of all reimbursements
• Post payment review
• Prepayment review

And combinations thereof.

DCHS stated that “it will review the dental providers referred by OIG and will determine by December 2015 what appropriate action may be warranted. Should there exist any provider cases not previously evaluated by existing program monitoring efforts, DHCS will take appropriate action through the available channels.”

First, December 2015 is a short timeframe for DCHS to audit 335 providers’ records and determine the proper course of action. So, expect a vendor for DCHS to be hired for this task. Also, expect that an audit of 335 providers in 7 months will have flaws.

These California dentists and orthodontists need to arm themselves with defense tools. And, quickly. Because it is amazing how fast 7 months will fly by!!

The report also states that OIG will be undertaking a study in the future to determine access to dental care issues.  I will be interested in the result of that study.

These possible penalties that I already enumerated above are not without defenses.

These 335 CA Medicaid dental providers have administrative remedies to prevent these possible penalties.   In other words, these 335 CA Medicaid dental providers do not have to take this lying down. Even though it appears that an imbalance of power exists between the state agency and the providers, these providers have appeal rights.

The second that any of these providers receive correspondence from DCHS, it is imperative that the provider contact its attorney.

Remember, some appeals have very short windows for which to appeal.  Do not miss an appeal deadline!!

A Brave New World With Mergers and Acquisitions of Behavioral Health Care Providers: Not Always Happily Ever After!

Unintentionally, I misrepresented the Benchmark panel discussion on which I appeared last Thursday. See blog.  I thought that I would be sitting on the panel along with MCO representatives. I honestly cannot tell you from where I got this idea. Maybe it was a subconscious desire. Regardless, the panel discussion was about merges and acquisitions among behavioral health care providers. While the subject of managed care organizations (MCOs) did come up, managed care was not the primary subject.  And the only MCO representative that I saw was Smokey Mountain’s attorney.

panelpic2

Nevertheless, the panel discussion went fantastic and was informative for those who attended.  I will summarize the panel discussion here for those who could not attend.  First, if you are a behavioral health care provider in NC, joining an association, such as Benchmarks, is an asset.  Not only do you get the benefit of attending educational programs, but you also have the opportunity to meet other behavioral health care providers across the state at the events.  You never know the potential relationships that could be created by attending a Benchmark event.

Going back to the panel…

There were 5 people sitting on the panel.  Besides myself, the panel consisted of Robert Shaw, Senior Counsel with me at Gordon & Rees, Frank Williams, a broker who facilitates mergers and acquisitions for health care providers, and two CEOs of health care providers who have undergone successful mergers and/or acquisitions.

The general consensus of the panel was that the future of behavioral health care will be larger companies which offer multiple services, instead of mom and pop shops that provide few types of services.  The panel was intended to bring potential mergers/acquisitions together in one venue and to educate the providers on “Do’s and Don’ts of Merging/Acquiring,” which is summarized below.

This consensus is generally derived from the MCO atmosphere here in NC.  Right or wrong, the MCOs are operating in closed networks and have the financial incentives to save money by contracting with fewer providers and decreasing authorizations for Medicaid services requested by Medicaid recipients.  See blog. And blog. And blog.

The MCOs seem to be terminating or refusing to contract with smaller health care providers, which, in turn, incentivize small health care providers to join other providers in order to grow its footprint.

Merging or acquiring a company is similar to partnering with another person in marriage.  Both parties have to familiarize themselves with the other’s habits, expectations, learn the other’s faults/liabilities, and, ultimately, have to work together on projects, issues and other matters.  And as we can discern from today’s high divorce rate, not everyone lives happily ever after.

Some marriages, as well as mergers, simply do not work.  Others live happily ever after.

The two provider panelists shared successful merger/acquisition stories.  Both shared experiences in creating new and larger entities effectively.  Both panelists were happy with the mergers/acquisitions and hopeful as to what the future will bring both new entities.

But all mergers and acquisitions do not have happy endings.  The two entities do not always live happily ever after.

Robert and I shared a story of an acquisition from Hades. There is no other way to describe the outcome of the acquisition.

The story of these two companies begins with the fact that the companies leased space in the same building.  One company was on floor 2 and the other was on floor 1.  The staff knew each other in passing.

The problem with the merger of these companies stemmed from a difference in culture.

Theoretically, the two companies did everything right.  The owner of the company getting acquired agreed to stay and work for the company buying it in order to ensure consistency. The buying company agreed to hire all the seller’s employees at their current salaries.  The acquisition was to be seamless.

The problems arose when news of the acquisition passed to the employees.  There was genuine discontentment with the arrangement.  The employees from the seller reacted with hostility and resentment.  Prior to the acquisition, the seller was fairly lax in regulatory compliance.  For example, if a service note was not drafted and filed the date of services….eh?…not that big of a deal.  Well, the buyer had strict document compliance rules for daily service notes.  Anytime more stringent policies are enacted on employees, there is sure to be a negative reaction.  The buyer also expected the seller’s employees to provide more services for the same salary received before the acquisition.

There was no legal or logical step omitted in the acquisition of the one company to the other.  On paper, the acquisition should have been successful.  But, then, personalities got in the way of happily ever after.

The other panelists offered great advice as to mergers and acquisitions, both from the providers’ view and a broker’s view.  I have compiled the advice that I recall below.  I have taken the liberty to provide analogous dating advice, as well, since marriages and mergers/acquisitions are so similar.  Hope it helps!!

Do’s and Don’ts of Mergers/Acquisitions

  • Do not let the secret out.

One provider panelist explained that if your employees learn of a possible merger/acquisition, they will kill the deal. Confide only in the CEO of the firm of which you are looking to merge, acquire, or sell.  Those dating: Never tell other that you want to marry (until the appropriate time).

  • Look outside your catchment area.

The reason companies merge/acquire is to grow.  Think of potential companies outside your own catchment area to grow even more.  For example, if you are in Alliance’s catchment area, think of merging with a company in ECBH/Eastpointe’s area.  Those dating: Have you exhausted your resources? Think of others, such as church, Match.com, etc.

  • Do your due diligence

This is a task as important as the oxygen you breath.  The last thing that you want is to acquire or merge with a company that owes $500,000 in employment taxes or an alleged overpayment.  Part of due diligence will be to check the credentials of every single staff member.  If someone is acting in the role of a LCAS, ensure the person is appropriately licensed.  Those dating: Is he/she employed? Have significant debt?

  • Review the other company’s documentation policies

This could be lumped into the due diligence section, but I think its importance is worth emphasizing.  Whatever service(s) the other company provides, what are its policies as to documentation? Does the provider have a computer program to maintain electronic health records (EHR)? Does it employ paper copies? Does the other company require the providers to submit daily service notes? Look at your own documentation policies.  Contemplate whether your own documentation policies would mesh well with the other company’s policies.  Those dating: How does your potential partner document spending, taxes, and calendared events?

  • Analyze both company’s corporate culture

Merging or acquiring a company is difficult in many ways, but it’s also hard on staff.  Imagine walking into work one day and you notice that the staff had doubled…or tripled.  And you and your colleagues are being told what to do by someone you never met.  This is not an uncommon occurrence with mergers and acquisitions.  Sometimes accepting change of supervision or team members can be a bitter pill to swallow.  How will you work through employee issues?  Personality clashes?  Ego fights?  Those dating: Analyze both person’s personalities, dispute resolutions, religion and beliefs.  Do you like his/her friends?

In addition to the potential conflicts with employees that stay with the merged entity, you also need to contemplate which employees, if any, may, potentially leave the new entity.  Disgruntled employees are a liability.  Those dating: How does he/she treat ex-partners?

  • Research the company’s relationship with its MCO

In our current MCO atmosphere, it is imperative to know, before merging or acquiring, whether the company has a good relationship with its MCO.  What if you acquire the company and its MCO refuses to continue to contract with the new entity.  Knowing the company’s relationship with the MCO is not an absolute.  As in, the company may believe it to have a good relationship with the MCO, while, in truth, it does not.  Ask to review some correspondence between the company and the MCO to discern the tone of the communications.  Those dating: How does he/she treat his/her mother/father?

  • Surround yourself with knowledge

Have a broker and an attorney with expertise in Medicaid.  Those dating: What do your friends think?

To watch the video of me speaking as a panelist for Benchmark, click here.  Scroll down until you see the video with Robert and me.

Otherwise, I hope you live happily ever after!

Is Health Care Fraud on the Rise? Or Just the Accusations??

Recent stories in the news seem to suggest that health care fraud is running rampant.  We’ve got stories about Eric Leak‘s Medicaid agency, Nature’s Reflections, funneling money to pay athletes, a seizure of property in Greensboro for alleged Medicaid fraud, and, in Charlotte, a man was charged with Medicaid fraud and sentenced to three years under court supervision and ordered to pay $3,153,074. And these examples are local.

Health care fraud with even larger amounts of money at stake has been prosecuted in other states.  A nonprofit up in NY is accused of defrauding the Medicaid system for over $27 million.  Overall, the federal government opened 924 criminal health care fraud investigations last year.

What is going on? Are more people getting into the health care fraud business? Has the government become better at detecting possible health care fraud?

I believe that the answer is that the federal and state governments have determined that it “pays” high dividends to invest in health care fraud investigations.  More and more money is being allocated to the fraud investigative divisions.  More money, in turn, yields more health care fraud allegations…which yields more convictions….and more money to the government.

Believe me, I understand the importance of detecting fraud.  It sickens me that those who actually defraud our Medicaid and Medicare systems are taking medically necessary services away from those who need the services.  However, sometimes the net is cast so wide…so far…that innocent providers get caught in the net.  And being accused of health care fraud when you innocent is a gruesome, harrowing experience that (1) you hope never happens; and (2) you have to be prepared in case it does.  I have seen it happen.

As previously stated, in fiscal year (FY) 2014, the federal government opened 924 new criminal health care fraud  investigations.  That’s 77 new fraud investigations a month!!  This number does not include civil investigations.

In FY 2012, the Department of Justice (DOJ) opened 2,016 new health care fraud investigations (1,131 criminal, 885 civil).

The Justice Department launched 903 new health-care fraud prosecutions in the first eight months of FY 2011, more than all of FY 2010.

These numbers show:

  • an 85% increase over FY 2010,
  • a 157% increase over FY 2006
  • and 822% over FY 1991.

And the 924  investigations opened in fiscal 2014 only represent federal investigations.  Concurrently, all 50 states are conducting similar investigations.

What is being recovered? Are the increased efforts to detect health care fraud worth the effort and expenditures?

Heck, yes, it is worth it to both the state and federal governments!

Government teams recovered $4.3 billion in FY 2013 and $19.2 billion over the last five years.  While still astronomically high, the numbers dropped slightly for FY 2014.  In FY 2014, according to the Annual Report of the Departments of Health and Human Services and Justice, the federal government won or negotiated over $2.3 billion in health care fraud judgments and settlements.  Due to these efforts, as well as efforts from preceding years, the federal government retrieved $3.3 billion from health care fraud investigations.

So the federal and state governments are putting more money into investigating health care fraud.  Why?

The Affordable Care Act.

Obviously, the federal and state governments conducted health care fraud investigations prior to the ACA.  But the implementation of the ACA set new mandates to increase fraud investigations. (Mandates, which were suggestions prior to the ACA).

In 2009, Barack Obama signed Executive Order 13520, which was targeted to reduce improper payments and to eliminate waste in federal programs.

On March 23, 2010, President Obama signed the ACA into law.  A major part of the ACA is focused on cost containment methods. Theoretically, the ACA is supposed to be self-funding.  Detecting fraud, waste and abuse in the Medicare/Medicaid system helps to fund the ACA.

Unlike many of the other ACA provisions, most of the fraud and abuse provisions went into effect in 2010 or 2011. The ACA increases funding to the Healthcare Fraud and Abuse Control Program by $350 million over the next decade. These funds can be used for fraud and abuse control and for the Medicare Integrity Program.

The ACA mandates states to conduct post payment and prepayment reviews, screen and audit providers, terminate certain providers, and create provider categories of risk.

While recent articles and media seem to indicate that health care fraud is running rampant, the substantial increase in accusations of health care fraud really may be caused by factors other than more fraud is occurring.

The ACA mandates have an impact.

And, quite frankly, the investigation units may be a bit overzealous to recover funds.

What will happen if you are a target of a criminal health care fraud investigation?

It depends whether the federal or state government is conducting the investigation.

If the federal government is investigating you, most likely, you will be unaware of the investigation.  Then, one day, agents of the federal government will come to your office and seize all property deemed related to the alleged fraud.  Your accounts will be frozen.  Whether you are guilty or not will not matter.  What will matter is you will need an experienced, knowledgeable health fraud attorney and the funds with which to compensate said attorney with frozen accounts.

If the state government is conducting the investigation, it is a little less hostile and CSI-ish.  Your reimbursements will be suspended with or without your notice (obviously, you would notice the suspension once the suspension occurred).  But the whole “raid on your office thing” is less likely.

There are legal remedies available, and the “defense” should begin immediately.

Most importantly, if you are a health care provider and you are not committing fraud, you are not safe from accusations of fraud.

Your insurance, most likely, will not cover attorneys’ fees for alleged intention fraud.

The attorney of your choice will not be able to accept funds that are “tainted” by alleged fraud, even if no fraud occurred.

Be aware that if, for whatever reason, you are accused, you will need to be prepared…for what you hope never happens.

Source: [New Mexico] Human Services Secretary Squier Resigns!

“Gov. Susana Martinez’s controversial Human Services Department Secretary Sidonie Squier resigned on Thursday, sources inside the department confirmed,” according to the Santa Fe New Mexican.

Patsy Romero, COO of Easter Seals El Mirador wrote to me, “post on your blog and say thank God that this woman is out after she falsely accused innocent people of being criminal and specifically targeted individuals without any evidence to support her allegations.”

According to a member of legislature, Squier had stated to the member that she was “after Patsy and Roque.” (Roque is the CEO of the Rio Grande Behavioral Health).

See the documentary about the events in New Mexico leading up to the accusations of fraud against 15 behavioral healthcare providers here.

Obviously, I cannot comment or have an opinion, so here is the rest of the article from the Santa Fe New Mexican:

“In a state that ranks at or near the bottom of the nation in childhood hunger, poverty and unemployment, Squier has been a target of criticisms from groups that advocate for the poor, beginning with a statement in an email last year from her office that no evidence of hunger in the state exists in New Mexico.

Squier later backed off the statement, but came under fire again last year over the sudden removal of 15 behavioral health providers accused of fraud and their replacement with Arizona companies. The Human Services Department’s suspicions have yet to be proven.  See my blog: “Because of PCG Audit, New Mexico Freezes Mental Health Services!

Democrats in the New Mexico Senate this year targeted Squier with a “no confidence” resolution over her remarks about hunger in the state and the behavioral health shakeup.

Since then, a federal judge chided the Human Services Department when he ordered it to immediately eliminate a backlog of thousands of applications for food and health benefits from poor New Mexicans that were months overdue for processing. The department has since satisfied the court that the backlog for those most desperately in need of food assistance has been eliminated, but advocates for impoverished residents of the state say problems in other areas continue to deny eligible applicants much needed benefits.

While working to satisfy the court order over the benefit delays, Squier announced plans to restore a requirement that some food benefit recipients work, receive job training or perform community service in order to keep receiving assistance. A state district judge in Santa Fe delayed the launch of the regulatory change last week in a lawsuit that challenged whether the Human Services Department fully disclosed all the relevant details of the requirement before adopting it.

On Wednesday, the department announced it will start the hearing process for the work requirement anew, further delaying its implementation.

As election results came in Tuesday night and Martinez was swept into office for a second term by a large margin, U.S. Rep. Michelle Lujan Grisham, D-New Mexico, said she planned to apply pressure on the governor to dump Squier based on the volume of complaints Lujan Grisham’s office has received about human services in the state.

“I don’t think that Sidonie Squier is the right leadership for the Human Services Department,” Lujan Grisham told The New Mexican.”

Broken Promises and the NC Waiver: You Do NOT Get Your Choice of Provider!!

“One can talk good and shower down roses, but it’s the receiver that
has to walk through the thorns, and all its false expectations.” –Anthony Liccione

In the 1968 Presidential campaign, Richard Nixon stated that “new leadership will end the war” in Vietnam. Also, in a 1968 interview, Nixon said he had “no magic formula” or “gimmick” for ending the Vietnam War. Then, in his memoirs, Nixon stated he never claimed to have such a plan. This is called a broken election promise.

Sadly, Richard Nixon’s broken election promise was not the first, nor would it be the last. We have become used to politicians making election promises and breaking those same promises which got them elected once they are in office.

“If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”

“Read my lips: no new taxes.”

Over the last few years, I have written ad nausem about accountability and proper supervision when it comes to the Managed Care Organizations (MCOs) in North Carolina. The other day, I was reviewing some pertinent federal regulations and came across this:

§ 438.52 Choice of MCOs, PIHPs, PAHPs, and PCCMs.

• General rule. Except as specified in paragraphs (b) and (c) of this section, a State that requires Medicaid beneficiaries to enroll in an MCO, PIHP, PAHP, or PCCM must give those beneficiaries a choice of at least two entities.

Obviously, North Carolina is not adhering to the above-referenced requirement.

Pull up the Waiver. In order to offer Medicaid enrollees only one MCO or other such entity, North Carolina would have had to request a waiver of 42 CFR § 438.52.If you rely on Medicaid for behavioral health care and live in Wake County, you have no choice but to rely on the provider network of only entity, Alliance Behavioral Health (Alliance), to receive services. For example, you do not get to choose between Alliance’s provider network and Eastpointe Behavioral Healthcare’s (Eastpointe) provider network. Staying with the same theoretical hypothesis, if your provider was not anointed with the gift of being in Alliance’s network, then you do not get to stay with your provider.

“If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”

Similar to President Barack Obama’s contention quoted above, we made similar promises to the Center for Medicare and Medicaid Services (CMS). Our promises are found within our Waivers. We have two Waivers, one for the developmentally disabled population and one for the mentally ill/substance abuse population. Each Waiver waives certain federal exceptions. However, in lieu of the federal requirements, we make certain promises to CMS. In order to waive 42 CFR § 438.52, we made certain promises to CMS in order to circumvent the necessary provisions of 42 CFR § 438.52.

The State sought a waiver of section 1902(a)(4) of the Act:

“The State seeks a waiver of section 1902(a)(4) of the Act, which requires States to offer a choice of more than one PIHP or PAHP per 42 CFR 438.52. Please describe how the State will ensure this lack of choice of PIHP or PAHP is not detrimental to beneficiaries’ ability to access services.”

Here are our promises:

“Under these circumstances, the State does not believe that making only one plan available in each geographic area of the State will negatively impact recipients’ access to care.”

“The LMEs have decades of experience locating and developing services for consumers with MH/IDD/SAS needs, and over the years, have built strong and collaborative working relationships with the providers of these services.”

“These providers support this initiative and consumers have at least as much choice in individual providers as they had in the non-managed care environment.

“Enrollees will have free choice of providers within the PIHP serving their respective geographic area and may change providers as often as desired. If an individual joins the PIHP and is already established with a provider who is not a member of the network, the PIHP will make every effort to arrange for the consumer to continue with the same provider if the consumer so desires.

“If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”

My two personal favorites among the State’s promises to CMS are: (1) “consumers have at least as much choice in individual providers as they had in the non-managed care environment;” and (2) the PIHP will make every effort to arrange for the consumer to continue with the same provider if the consumer so desires.”

These promises, in reality, are utter horsefeathers.

Over and over my provider clients come to me because one of the MCOs has terminated their Medicaid contract, usually for absolutely no valid reason. Over and over my provider clients tell me that their consumers are devastated by the news that they may lose their provider. I have had consumers contact me to beg me to help the provider. I have had consumers appear in court stating how much they want that particular provider. I have had provider clients cry in my office because their consumers are so upset and regressing because of the news that they may have to find another provider.

Yet, we have promised CMS that consumers have just as much choice in providers than when there was no managed care.

In the words of Dorothy from the Wizard of OZ, “You ought to be ashamed of yourself. Frightening him like that when he came to you for help.”

Similarly, our Medicaid recipients go to their providers for help. They create relationships…trust…bonds. And the MCOs are terminating these very providers, most for invalid and erroneous reasons, and, certainly, without the consideration of our promise to CMS.

But, remember, we are told the PIHPs will make every effort to keep the consumer with the chosen provider…

It would be interesting to do a public records request as to how many providers have been terminated by the MCOs in the last 2 years. Because, even if only 1 provider were terminated in the past 2 years and its consumers still wanted to go to that particular provider, then our State has broken its promise.

Apparently, due to my outspoken positions, DHHS will no longer honor my public records requests, which I think is absolutely preposterous. I am, still, a paying taxpayer last time I checked, which is every pay-day when I only get 60% of my wages. If any of you would submit this public records request, please forward it to me. I would be grateful for the information.

Another Win for the Good Guys! Gordon & Rees Succeeds in Overturning Yet Another Medicaid Contract Termination!

Getting placed on prepayment review is normally a death sentence for most health care providers. However, our health care team here at Gordon Rees has been successful at overturning the consequences of prepayment review. Special Counsel, Robert Shaw, and team recently won another case for a health care provider, we will call her Provider A. She had been placed on prepayment review for 17 months, informed that her accuracy ratings were all in the single digits, and had her Medicaid contract terminated.

We got her termination overturned!! Provider A is still in business!

(The first thing we did was request the judge to immediately remove her off prepayment review; thereby releasing some funds to her during litigation.  The state is only allowed to maintain a provider on prepayment review for 12 months).

Prepayment review is allowed per N.C. Gen. Stat. 108C-7.  See my past blogs on my opinion as to prepayment review. “NC Medicaid: CCME’s Comedy of Errors of Prepayment Review“NC Medicaid and Constitutional Due Process.

108C-7 states, “a provider may be required to undergo prepayment claims review by the Department. Grounds for being placed on prepayment claims review shall include, but shall not be limited to, receipt by the Department of credible allegations of fraud, identification of aberrant billing practices as a result of investigations or data analysis performed by the Department or other grounds as defined by the Department in rule.”

Being placed on prepayment review results in the immediate withhold of all Medicaid reimbursements pending the Department of Health and Human Services’ (DHHS) contracted entity’s review of all submitted claims and its determination that the claims meet criteria for all rules and regulations.

In Provider A’s situation, the Carolinas Center for Medical Excellence (CCME) conducted her prepayment review. Throughout the prepayment process, CCME found Provider A almost wholly noncompliant. Her monthly accuracy ratings were 1.5%, 7%, and 3%. In order to get off prepayment review, a provider must demonstrate 70% accuracy ratings for 3 consecutive months. Obviously, according to CCME, Provider A was not even close.

We reviewed the same records that CCME reviewed and came to a much different conclusion. Not only did we believe that Provider A met the 70% accuracy ratings for 3 consecutive months, we opined that the records were well over 70% accurate.

Provider A is an in-home care provider agency for adults. Her aides provide personal care services (PCS). Here are a few examples of what CCME claimed were inaccurate:

1. Provider A serves two double amputees. The independent assessments state that the pateint needs help in putting on and taking off shoes. CCME found that there was no indication on the service note that the in-home aide put on or took off the patients’ shoes, so CCME found the dates of service (DOS) noncompliant. But the consumers were double amputees! They did not require shoes!

2. Provider A has a number of consumers who require 6 days of services per week based on the independent assessments. However, many of the consumers do not wish for an in-home aide to come to their homes on days on which their families are visiting. Many patients inform the aides that “if you come on Tuesday, I will not let you in the house.” Therefore, there no service note would be present for Tuesday. CCME found claims inaccurate because the assessment stated services were needed 6 days a week, but the aide only provided services on 5 days.  CCME never inquired as to the reason for the discrepancy.

3. CCME found every claim noncompliant because the files did not contain the service authorizations. Provider A had service authorizations for every client and could view the service authorizations on her computer queue. But, because the service authorization was not physically in the file, CCME found noncompliance.

Oh, and here is the best part about #3…CCME was the entity that was authorizing the PCS (providing the service authorizations) and, then, subsequently, finding the claim noncompliant based on no service authorization.

Judge Craig Croom at the Office of Administrative Hearings (OAH) found in our favor that DHHS via CCME terminated Provider A’s Medicaid contract arbitrarily, capriciously, erroneously, exceeded its authority or jurisdiction, and failed to act as accordingly to the law. He ruled that DHHS’ placement of Provider A on prepayment review was random

Because of Judge Croom’s Order, Provider A remains in business. Plus, she can retroactively bill all the unpaid claims over the course of the last year.

Great job, Robert!!! Congratulations, Provider A!!!

Our Medicaid Budget Does More Than Allocate Money; It Places the Burden of Proof on Medicaid Providers!!!

Are you a health care provider in NC? Are you wonderful enough to help Medicaid patients but accept low Medicaid reimbursements? Are you dedicated to helping our most needy? Well, guess what???? YOU now have the burden of proof if you disagree with an adverse determination by the State.

That’s right. The newly-enacted state budget quietly changes the statutes and shifts the burden of proof from the Department to YOU. I am reminded of my Grandpa Carson. Whenever he couldn’t believe what he just heard, he would bellow, “Wooooo weee.” Growing up in the south, we have certain sayings, such as “Bless your heart,” “Y’all come back now, ya hear?” and “That food is so good I could slap my momma.” My Grandpa Carson, God rest his soul, was as southern as southern can get. If he were here and heard about the burden shift onto the providers, he would say, “Wooo weeeee.”

Last week while I was on my first week-long vacation in 2 years, the North Carolina state budget, known as Session Law 2014-100, was signed into law by Governor McCrory.  (Which is why I missed a week of blogging…my vacation, not McCrory’s signature).  Since I was at my family reunion started by my Grandpa, I am dedicating this blog to my grandpa, Nat Carson, who created a family tradition that has lasted for over 40 years. Our (huge) extended family vacation together once a year at Emerald Isle for a family reunion. FOUR generations attend!

Going back to the budget…

An “adverse determination” in this case includes decisions by North Carolina’s Department of Health and Human Services (DHHS) under the Medicaid program such as the Department’s termination of a contract with the provider, a Managed Care Organization’s (MCO) termination of a provider contract, or the Department or one its many vendors determines that the providers owes an overpayment back to the state.

Not only does the state budget shift the burden of proof onto providers when they contest an adverse determination by the State, which we will discuss more below, but it also takes a lot of DHHS decision-making power away. It is apparent that the General Assembly does NOT think DHHS can do its job of managing Medicaid and creating Medicaid reform competently. The General Assembly (GA) has decided that, for whatever reason, it will be more hands-on regarding Medicaid decisions in the future.

Here are a few examples of the GA’s hands-on attitude found in the Session Law 2014-100 (with some emphasis I have made by putting some words in bold-faced type)

  • “Until the General Assembly enacts legislation authorizing a plan to reform Medicaid, the Department of Health and Human Services (i) shall continue to consult with stakeholder groups, study, and recommend options for Medicaid reform that will provide greater budget predictability for the Medicaid program and (ii) shall not commit the State to any particular course on Medicaid reform and shall not submit any reform-related State plan amendments, waivers, or grant applications nor enter into any contracts related to implementing Medicaid reform.”
  • “The Department may submit drafts of the waiver to the Centers for Medicare and Medicaid Services (CMS) to solicit feedback but shall not submit the waiver for CMS approval until authorized by the General Assembly.”
  • “The Department of Health and Human Services shall make payments to the contractor hired by the Joint Legislative Oversight Committee on Health and Human Services from funds appropriated elsewhere in this budget for this contract…”
  • “The Department of Health and Human Services shall not make any other modifications to the portion of the Medicaid State Plan referenced in this section, except as provided herein.”
  • “The Department may submit drafts of the waivers to the Centers for Medicare and Medicaid Services (CMS) to solicit feedback but shall not submit the waivers for CMS approval until authorized by the General Assembly.
  • “[T]he Division of Medical Assistance shall ensure that any Medicaid-related or NC Health Choice-related State contract entered into after the effective date of this section contains a clause that allows the Department or the Division to terminate the contract without cause upon 30 days’ notice.”
  • “No fewer than 10 days prior to submitting an amendment to the State Plan to the federal government, the Department shall post the amendment on its Web site and notify the members of the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division that the amendment has been posted.”

Basically, the GA has estopped DHHS from reforming Medicaid without the consent of the General Assembly.

Then, stuck in the middle of the state budget is the amendment to N.C. Gen. Stat. 108C…. “Woooo weeee!”

MODIFY MEDICAID APPEALS SECTION 12H.27.

(a) G.S. 108C-12(d) reads as rewritten: “(d) Burden of Proof. – The Department petitioner shall have the burden of proof in appeals of Medicaid providers or applicants concerning an adverse determination.”

Does anyone else understand what this teeny, tiny clause within Session Law 2014-100 means????

What is the importance of burden of proof? Enormous! And this clause changes the playing field for Medicaid providers. It may not have been a level field prior to Session Law 2014-100, but now it’s even more slanted.

The easiest way to explain “burden of proof” is that when a petitioning Medicaid provider challenges some adverse determination by DHHS, for example, the Department’s termination of a contract with the provider, the “burden of proof” decides which party must persuade the reviewing tribunal that the party’s assertions are correct. Up until this amendment of G.S.108C-12(d), the Department has had the burden to present evidence showing that its adverse determination was correct. The petitioner could then respond to that evidence, to try to show the contrary, but the burden of proving the correctness of the adverse determination still rested on the Department in cases filed by Medicaid providers under Chapter 108C.

In court, one of the first questions a judge will ask is, “Who carries the burden of proof?” Because the legal burden of proof is just that…a burden…that must be satisfactorily carried in order to win.

Health care providers who accept Medicaid have notoriously been given the short-end of the stick, i.e., low reimbursement rates, undergoing burdensome audits, but, at least, in NC, historically, the Department has had to prove the correctness of its allegations, whether it be an alleged overpayment, a termination of a Medicaid contract, or other allegations.

But now? DHHS’ allegations against a health care provider are true…unless the provider can prove DHHS wrong. The uphill fight of a provider seeking to correct a DHHS adverse determination, just became much steeper, and it was done with little or no fanfare.

“Woooooooo weeeeeee!”

So can you do? Only options as far as I see it:

  1. Call and email your state representatives.
  2. Hire a lobbyist.
  3. Bring a lawsuit to change it.
  4. Do nothing.

Per L. Warren’s comment, I am adding #5.

5. Stop taking Medicaid clients.

NC Medicaid Providers: Do Not Be a Cockey Lockey! Know Your Due Process Rights to Defend Against Administrative Penalties

An acorn falls on Chicken Little’s head. His first immediate thought is, “The sky is falling. The sky is falling.” So Chicken Little begins his travels to tell the king that the sky is falling. Along the way he meets Cockey Lockey, Ducky Lucky, Drakey Lakey and Goosey Loosey, to name a few of his well-feathered friends. Each new waterfowl asks Chicken Little where he is going. To which Chicken Little replies, “The sky is falling. The sky is falling. We have to tell the king.” And the fowl join Chicken Little in his travel to the king.

None of the characters question Chicken Little’s assertion that the sky is falling. They simply accept the fact that the sky is falling.

All too often, people, like Cockey Lockey and Goosey Loosey, accept what they are told without questioning the source.

Over and over I talk to health care providers who are told:

• by the Department of Health and Human Services (DHHS), Division of Medical Assistance (DMA) that they owe DMA hundreds of thousands of dollars for Medicaid overpayments;
• by the managed care organization (MCO) that the provider’s Medicaid contract is terminated;
• by a contracted entity that the provider is out of compliance with rules and regulations;
• by Program Integrity (PI) that there is a complaint filed against the provider; or
• by an MCO that its network is closed.

And some providers just accept the overpayment, the contract termination, the penalty, or the refusal to contract.

Don’t be a Cockey Lockey!

You do have rights! You deserve due process!

Let’s talk about the possible penalties allowed by Medicaid regulations and your right to defend against such penalties and the procedural safeguards enacted to protect you.

10A NCAC 22F .0602 governs “Administrative Sanctions and Remedial Measures,” and it enumerates the following possible sanctions for provider abuse:

• Warning letters for those instances of abuse that can be satisfactorily settled by issuing a warning to cease the specific abuse. The letter will state that any further violations will result in administrative or legal action initiated by the Medicaid Agency.
• Suspension of a provider from further participation in the Medicaid Program for a specified period of time, provided the appropriate findings have been made and provided that this action does not deprive recipients of access to reasonable service of adequate quality.
• Termination of a provider from further participation in the Medicaid Program, provided the appropriate findings have been made and provided that this action does not deprive recipients of access to reasonable services of adequate quality.
• Probation whereby a provider’s participation is closely monitored for a specified period of time not to exceed one year. At the termination of the probation period, the Medicaid Agency will conduct a follow-up review of the provider’s Medicaid practice to ensure compliance with the Medicaid rules.

Remedial Measures are to include:

• placing the provider on “flag” status whereby his claims are remanded for manual review;
• establishing a monitoring program not to exceed one year whereby the provider must comply with pre-established conditions of participation to allow review and evaluation of his Medicaid practice, i.e., quality of care.

Furthermore, certain factors must be considered prior to the levy of a sanction, including:

• seriousness of the offense;
• extent of violations found;
• history or prior violations;
• prior imposition of sanctions;
• period of time provider practiced violations;
• provider willingness to obey program rules;
• recommendations by the investigative staff or Peer Review Committees; and
• effect on health care delivery in the area

All of this information is found in 10A NCAC 22F, et al, which is an administrative code. The code also defines provider fraud and abuse. The penalties enumerated above are penalties allowed for instances of provider abuse, but, only after proper investigation, proper notice to the provider, and proper consideration of lesser penalties. In other words, due process.

For example, 10A NCAC 22F.0302 states that “[a]busive practices shall be investigated according to the provisions of Rule .0202 of this Subchapter.”

Rule .0202 requires a preliminary investigation prior to a full investigation. Additionally, Rule .0302 requires the investigative unit to prepare a “Provider Summary Report,” furnishing the full investigative findings of fact, conclusions, and recommendations. Then the Department is to review the Provider Summary Report and make a “tentative” recommendation as to the penalty, and that tentative recommendation is reviewable under Rule .0400, which allows a reconsideration review. The provider will receive the results of the reconsideration review within 5 business days following the date of the review.

If a provider is unhappy with the results of a reconsideration review, then the provider can appeal to the Office of Administrative Hearings (OAH) within 60 days.

All of the above-mentioned administrative procedures exist in order to protect a provider from unfair, arbitrary, capricious, erroneous actions by DMA and any of its contracted entities. That means Public Consulting Group (PCG), Carolinas Center for Medical Excellence (CCME), all the MCOs, HMS, and any other state contractor must also follow these administrative procedures.

So next time you are told that you owe hundreds of thousands of dollars to the state, that your Medicaid contract has been terminated, or your Medicaid reimbursements are being withheld, do not take these penalties at face value! Know you rights!

Do not be a Cockey Lockey!!

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