A Federal Regulation Violates the U.S. Constitution and Ruins Careers; Yet It Sits…Vaguely
There is a federal regulation that is putting health care providers out of business. It is my legal opinion that the regulation violates the U.S. Constitution. Yet, the regulation still exists and continues to put health care providers out of business.
Why?
Because so far, no one has litigated the validity of the regulation, and I believe it could be legally wiped from existence with the right legal arguments.
How is this important?
Currently, the state and federal government are legally authorized to immediately suspend your Medicare or Medicaid reimbursements upon a credible allegation of fraud. This immense authority has put many a provider out of business. Could you survive without any Medicare or Medicaid reimbursements?
The federal regulation to which I allude is 42 CFR 455.23. It is a federal regulation, and it applies to every single health care provider, despite the service type allowed by Medicare or Medicaid. Home care agencies are just as susceptible to an accusation of health care fraud as a hospital. Durable medical equipment agencies are as susceptible as dentists. Yet the standard for a “credible allegation of fraud” is low. The standard for which the government can implement an immediate withhold of Medicaid/care reimbursements is lower than for an accused murderer to be arrested. At least when you are accused of murder, you have the right to an attorney. When you are accused to health care fraud on the civil level, you do not receive the right to an attorney. You must pay 100% out of pocket, unless your insurance happens to cover the expense for attorneys. But, even if your insurance does cover legal fees, you can believe that you will be appointed a general litigator with little to no knowledge of Medicare or Medicaid regulatory compliance litigation.
42 USC 455.23 states that:
“The State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud for which an investigation is pending under the Medicaid program against an individual or entity unless the agency has good cause to not suspend payments or to suspend payment only in part.
(2) The State Medicaid agency may suspend payments without first notifying the provider of its intention to suspend such payments.
(3) A provider may request, and must be granted, administrative review where State law so requires.”
In the very first sentence, which I highlighted in red, is the word “must.” Prior to the Affordable Care Act, this text read “may.” From my years of experience, every single state in America has used this revision from “may” to “must” for governmental advantage over providers. When asked for good cause, the state and or federal government protest that they have no authority to make a decision that good cause exists to suspend any reimbursement freeze during an investigation. But this protest is a pile of hooey.
In reality, if anyone could afford to litigate the constitutionality of the regulation, I believe that the regulation would be stricken an unconstitutional.
Here is one reason why: Due Process
The Fifth and Fourteenth Amendments to the Bill of Rights provide us our due process rights. Here is the 5th Amendment:
“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”
There have been a long and rich history of interpretation of the due process clause. The Supreme Court has interpreted the due process clauses to provide four protections: (1) procedural due process (in civil and criminal proceedings), (2) substantive due process, (3) a prohibition against vague laws, and (4) as the vehicle for the incorporation of the Bill of Rights.
42 CFR 455.23 violates procedural due process.
Procedural due process requires that a person be allowed notice and an opportunity to be heard before a government official takes a person’s life, liberty, or property.
Yet, 42 CFR 455.23 allows the government to immediately withhold reimbursements for services rendered based on an allegation without due process and taking a provider’s property; i.e., money owed for services rendered. Isn’t this exactly what procedural due process was created to prevent???? Where is the fundamental fairness?
42 CFR 455.23 violates substantive due process.
The Court usually looks first to see if there is a fundamental right, by examining if the right can be found deeply rooted in American history and traditions.
Fundamental rights include the right to vote, right for protection from pirates on the high seas (seriously – you have that right), and the right to constitutional remedies. Courts have held that our right to property is a fundamental right, but to my knowledge, not in the context of Medicare/caid reimbursements owed; however, I see a strong argument.
If the court establishes that the right being violated is a fundamental right, it applies strict scrutiny. This test inquires into whether there is a compelling state interest being furthered by the violation of the right, and whether the law in question is narrowly tailored to address the state interest.
Where the right is not a fundamental right, the court applies a rational basis test: if the violation of the right can be rationally related to a legitimate government purpose, then the law is held valid.
Taking away property of a Medicare/caid provider without due process violates substantive due process. The great thing about writing your own blog is that no one can argue with you. Playing Devil’s advocate, I would anticipate that the government would argue that a suspension or withhold of reimbursements is not a “taking” because the withhold or suspension is temporary and the government has a compelling reason to deter health care fraud. To which, I would say, yes, catching health care fraud is important – I am in no way advocating for fraud. But important also is the right to be innocent until proven guilty, and in civil cases, our deeply-rooted belief in the presumption of innocence is upheld by the action at issue not taking place until a hearing is held.
For example, if I sue my neighbor and declare that he is encroaching on my property, the property line is not moved until a decision is in my favor.
Another example, if I sue my business partner for breach of contract because she embezzled $1 million from me, I do not get the $1 million from her until it is decided that she actually took $1 million from me.
So to should be – if a provider is accused of fraud, property legally owned by said provider cannot just be taken away. That is a violation of substantive due process.
42 CFR 455.23 violates the prohibition against vague laws
A law is void for vagueness if an average citizen cannot understand it. The vagueness doctrine is my favorite. According to census data, there are 209.3 million people in the US who are over 24-years. Of those over 24-years-old, 66.9 million have a college degree. 68% do not.
Although here is a quick anecdote: Not so sure that a college degree is indicative of intelligence. A recent poll of law students at Columbia University showed that over 60% of the students, who were polled, could not name what rights are protected by the 1st Amendment. Once they responded “speech,” many forgot the others. In case you need a refresher for the off-chance that you are asked this question in an impromptu interview, see here.
My point is – who is to determine what the average person may or may not understand?
Back to why 42 CFR 455.23 violates the vagueness doctrine…
Remember the language of the regulations: “The State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud…”
“Credible allegation of fraud” is defined as an allegation, which has been verified by the State, from any source, including but not limited to the following:
- Fraud hotline complaints.
- Claims data mining.
- Patterns identified through provider audits, civil false claims cases, and law enforcement investigations. Allegations are considered to be credible when they have indicia of reliability and the State Medicaid agency has reviewed all allegations, facts, and evidence carefully and acts judiciously on a case-by-case basis.”
With a bit of research, I was able to find a written podcast published by CMS. It appears to be a Q and A between two workers at CMS discussing whether they should suspend a home health care agency’s reimbursements, similar to a playbook. I assume that it was an internal workshop to educate the CMS employees considering that the beginning of the screenplay begins with a “canned narrator” saying “This is a Medicaid program integrity podcast.”
The weird thing is that when you pull up the website – here – you get a glimpse of the podcast, but, at least on my computer, the image disappears in seconds and does not allow you to read it. I encourage you to determine whether this happens you as well.
While the podcast shimmered for a few seconds, I hit print and was able to read the disappearing podcast. As you can see, it is a staged conversation between “Patrick” and “Jim” regarding suspicion of a home health agency falsifying certificates of medical necessity.
On page 3, “Jim” says, “Remember the provider has the right to know why we are taking such serious action.”
But if your Medicare/caid reimbursements were suddenly suspended and you were told the suspension was based upon “credible allegations of fraud,” wouldn’t you find that reasoning vague?
42 CFR 455.23 violates the right to apply the Bill of Rights to me, as a citizen
This esoteric doctrine only means that the Bill of Rights apply to State governments. [Why do lawyers make everything so hard to understand?]
Medicaid Reform: As Addictive as Fortnite
Do you have a kid addicted to Fortnite? The numbers are rising…
For those of you who have been living under a rock for the past year, this is how Fortnite is explained on the internet:
“In short, it’s a mass online brawl where 100 players leap out of a plane on to a small island and then fight each other until only one is left. Hidden around the island are weapons and items, including rifles, traps and grenade launchers, and players must arm themselves while exploring the landscape and buildings. It’s also possible to collect resources that allow you to build structures where you can hide or defend yourself. As the match progresses, the playable area of land is continually reduced, so participants are forced closer and closer together. The last survivor is the winner.”
More than 40 million people play Fortnite. According to the May 2018 Medicaid Enrollment Report, 73,633,050 Americans are enrolled in Medicaid or CHIP, so government-assisted health insurance definitely trumps Fortnite on participation.
Recently, the General Assembly passed and the Governor signed two Bills into law pertaining to Medicaid reform: (1) HB 403 (Session Law 2018-48); and (2) HB 156 (Session Law 2018-49). Notice that the Session Laws are one digit separate from each other. That is because Governor Cooper signed these two bills consecutively and on the same day. But did he read them? I do not know the answer, but I do know this: Medicaid reform in NC has become a Fortnite. The MCOs, provider-led entities, ACOs, auditors, DHHS…everyone is vying for a piece of the very large Medicaid budget, approximately $3.6 billion – or 16% of NC’s total budget. It is literally a firehose of money if you can manage to be a player in the Medicaid Fortnite – a fight to eliminate everyone but you. Unlike Fortnite, the pay-off for winning Medicaid Fortnite is financially lucrative. But it is a fight with few winners.
Session Law 2018-48 is entitled, “An Act to Modify the Medicaid Transformation Legislation.”
Session Law 2018-49 is entitled, “An Act to Require Medicaid Prepaid Health Plans to Obtain a License from the Department of Insurance and to Make Other Changes Pertaining to Medicaid Transformation and the Department of Insurance.”
Don’t you like how the House decided to use the term “transformation” instead of “reform?” The term “reform” had been over-utilized.
Recently, the North Carolina Medical Society announced that it is throwing its metaphoric hat in the ring to become “Carolina Complete Health,” a provider-led patient-care center.
The New Laws
Session Law 2018-48
Session Law 2018-48 defines provider-led entity (PLE) as an entity that meets the following criteria: (1) A majority of the entity’s ownership is held by an individual or entity that has its primary business purpose the operation of a capitated contract for Medicaid; (2) A majority of the entity’s governing body is composed of licensed physicians, physician assistants, nurse practitioners, or psychologist and have experience treating Medicaid beneficiaries; (3) Holds a PHP license issued by the Department of Insurance (see Session Law 2018-49).
Services covered by PHP’s will include physical health services, prescription drugs, long-term services and supports, and behavioral health care services for North Carolina Health Choice recipients. The PHP’s will not cover services currently covered by the managed care organizations (MCOs).
Session Law 2018-48 allows for 4 contracts with PHPs to provide services for Medicaid and NC Health Choice (statewide contracts). Plus, it allows up to 12 regional contracts.
What is the future of behavioral health and the MCO system?
For now, they will still exist. The double negative wording of the new Session Law makes it seem like the MCOs will have less authority, but the MCOs will continue to cover for services described in subdivisions a, d, e, f, g, j, k, and l of this subdivision.
Session Law 2018-48 also creates new entities called BH IDD Tailored Plans. Session Law 2018-48 carves out developmentally disabled services (or IDD). It mandates that DHHS create a detailed plan for implementation of a new IDD program under the 1115 Waiver. Services provided by the new Tailored Plans shall pay for and manage services currently offered under the 1915(b)(c) Waiver.
Here’s the catch for providers: “Entities operating BH IDD Tailored Plans shall maintain closed provider networks for behavioral health, intellectual and developmental disability, and traumatic brain injury services and shall ensure network adequacy.” (emphasis added). Fortnite continues with providers jockeying to be included in the networks.
For the next four years only an MCO may operate a BH IDD Tailored Plan. This tells me that the MCOs have sufficiently lawyered up with lobbyists. After the term of the initial contracts, the Tailored Plans will be the result of RFPs issued by DHHS and the submission of competitive bids from nonprofit PHPs.
DHHS was to report to the Joint Legislative Oversight Committee with a plan for the implementation of the Tailored Plans by June 22, 2018. – Sure would’ve loved to be a fly on that wall.
Starting August 31, 2018, DHHS is authorized to take any actions necessary to implement the BH IDD Tailored Plans in accordance with all the requirements in this Act.
Session Law 2018-49
A provider-led entity must meet all the following criteria: (1) A majority of the entity’s ownership is held by an individual or entity that has as its primary business purpose operating a capitated contract with with Medicaid providers; and (2) A majority of the governing body is composed of individuals who are licensed as physicians, physician assistants, nurse practitioners, or psychologists and all of whom have experienced treating Medicaid beneficiaries.
Session Law 2018-49 requires that all PHPs apply for a license with the Commissioner of Insurance. With the application, all entities would need to provide proof of financial stability and other corporate documents. This new law definitely increases the authority of the Commissioner of Insurance (Mike Causey).
The remaining portion of the law pertains to protection against insolvency, continuation of healthcare services in case of insolvency, suspension or revocation of licenses, administrative procedures, penalties and enforcement, confidentiality of information, and that sort.
Session Law 2018-49 also applies to the current opioid crisis. It allows a “lock-in programs” for those consumers who use multiple pharmacies and multiple doctors to “lock them in” to one pharmacy and one doctor.
Besides the “lock-in” program, Session Law 2018-49 is basically a law that brings the Department of Insurance into the Medicaid arena.
Let Fortnite begin!
COA Dismisses AHA 340B Lawsuit!
The 340B drug program is a topic that needs daily updates. It seems that something is happening constantly. Like a prime time soap opera or The Bachelor, the 340B program is all the talk at the water cooler. From lawsuits to legislation to executive orders – there is no way of knowing the outcome, so we all wait with bated breath to watch who will hold the final rose.
On Tuesday, July 17, 2018, the metaphoric guillotine fell on the American Hospital Association (AHA) and on hospitals across the country. The Court of Appeals (COA) dismissed AHA’s lawsuit.
The Background
On November 1, 2017, the US Department of Health and Human Services released a Final Rule implementing a payment reduction for most covered outpatient drugs billed to Medicare by 340B-participating hospitals from the current Average Sales Price (ASP) plus 6% rate to ASP minus 22.5%, which represents a payment cut of almost 30%.
Effective January 1, 2018, the 30% slash in reimbursement rates became reality, but only for locations physically connected to participating hospitals. CMS is expected to broaden the 30% reduction to all 340B-participating entities in the near future.
What is the 340B drug program? The easiest explanation for the 340B program is that government insurance, Medicare and Medicaid, do not want to pay full price for medicine. In an effort to reduce costs of drugs for the government payors, the government requires that all drug companies enter into a rebate agreement with the Secretary of the Department of Health and Human Services (HHS) as a precondition for coverage of their drugs by Medicaid and Medicare Part B. If a drug manufacturer wants its drug to be prescribed to Medicare and Medicaid patients, then it must pay rebates.
The Lawsuit
The American Hospital Association (“AHA”) filed for an injunction last year requesting that the US District Court enjoin CMS from implementing the 340B payment reduction. On the merits, AHA argues that the HHS’s near-30% rate reduction constitutes an improper exercise of its statutory rate-setting authority.
The US District Court did not reach an opinion on the merits; it dismissed the case, issued December 29, 2017, based on lack of subject matter jurisdiction. The District Court found that: Whenever a provider challenges HHS, there is only one potential source of subject matter jurisdiction—42 U.S.C. § 405(g). The Medicare Act places strict limits on the jurisdiction of federal courts to decide ‘any claims arising under’ the Act.
The Supreme Court has defined two elements that a plaintiff must establish in order to satisfy § 405(g). First, there is a non-waivable, jurisdictional requirement that a claim for benefits shall have been “presented” to the Secretary. Without presentment, there is no jurisdiction.
The second element is a waivable requirement to exhaust administrative remedies. I call this legal doctrine the Monopoly requirement. Do not pass go. Go directly to jail. Do not collect $200. Unlike the first element, however, a plaintiff may be excused from this obligation when, for example, exhaustion would be futile. Together, § 405(g)’s two elements serve the practical purpose of preventing premature interference with agency processes, so that the agency may function efficiently and so that it may have an opportunity to correct its own errors, to afford the parties and the courts the benefit of its experience and expertise, and to compile a record which is adequate for judicial review. However, there are ways around these obsolete legal doctrines in order to hold a state agency liable for adverse decisions.
Following the Dec. 29, 2017, order by the District Court, which dismissed the lawsuit on jurisdictional grounds, the plaintiffs (AHA) appealed to the U.S. Court of Appeals (COA), which promptly granted AHA’s request for an expedited appeal schedule.
In their brief, AHA contends that the District Court erred in dismissing their action as premature and that their continued actual damages following the Jan. 1 payment reduction’s effective date weighs heavily in favor of preliminary injunctive relief. More specifically, AHA argues that 30% reduction is causing irreparable injury to the plaintiffs “by jeopardizing essential programs and services provided to their communities and the vulnerable, poor and other underserved populations, such as oncology, dialysis, and immediate stroke treatment services.”
By contrast, the government’s brief rests primarily on jurisdictional arguments, specifically that: (1) the Medicare Act precludes judicial review of rate-setting activities by HHS; and (2) the District Court was correct that no jurisdiction exists.
Oral arguments in this appeal were May 4, 2018.
AHA posted in its newsletter that the COA seemed most interested in whether Medicare law precludes judicial review of CMS’ rule implementing the cuts. AHA says it hopes a ruling will be reached in the case sometime this summer.
In a completely different case, the DC District Court is contemplating a request to toll the time to file a Section 340B appeal.
AHA v. Azar, a case about RAC audits and the Medicare appeal backlog. During a March 22, 2018, hearing, the COA asked AHA to submit specific proposals that AHA wishes the COA to impose and why current procedures are insufficient. It was filed June 22, 2018.
In it proposal, AHA pointed out that HHS is needlessly causing hospitals to file thousands of protective appeals by refusing to toll the time for hospitals to file appeals arising out of the reduction in reimbursement that certain 340B hospitals. In order to avoid potential arguments from the government that 340B hospitals that do not administratively appeal the legality of a reduced rate will be time barred from seeking recovery if the court holds that the reduction in payments is unlawful, AHA proposed that the Secretary agree to toll the deadline for such appeals until resolution of the 340B litigation—an arrangement that would preserve the 340B hospitals’ right to full reimbursement in the event the 340B litigation is not successful. HHS has refused to toll the time, meaning that Section 340B hospitals will have to protect their interests in the interim by filing thousands upon thousands of additional claim appeals, which will add thousands upon thousands of more appeals to the current ALJ-level backlog.
The Decision
In a unanimous decision, three judges from the COA sided with HHS and ruled the hospitals’ suit was filed prematurely because hospitals had not formally filed claims with HHS because they were not yet experiencing cuts.
Basically, what the judges are saying is that you cannot ask for relief before the adverse action occurs. Even though the hospitals knew the 30% rate reduction would be implemented January 1, 2018, they had to wait until the pain was felt before they could ask for relief.
The lawsuit was not dismissed based on the doctrine of exhaustion of administrative remedies. The Decision noted that in some cases plaintiffs might be justified in seeking judicial review before they have exhausted their administrative remedies, but that wouldn’t be the solution here.
Hindsight is always 20-20. I read the 11 page decision. But I believe that AHA failed in two ways that may have changed the outcome: (1) Nowhere in the decision does it appear that the attorneys for AHA argued that the subject matter jurisdiction issue was collateral to the merits; and (2) The lawsuit was filed pre-January 1, 2018, but AHA could have amended its complaint after January 1, 2018, to show injury and argue that its comments were rejected (final decision) by the rule being implemented.
But, hey, we will never know.
A Comparison of All the #1 European Health Care Systems in the World
The United States currently spends more per person on health care than any other developed country. So when my daughter and I recently vacationed the “Highlights of Europe” tour, I was interested in learning about the varied health care systems, country-by-country. We visited England, France, Switzerland, Austria, Germany, the Netherlands, and Italy. It was awesome!! She turned 13 during the trip, and she starts 8th grade next week. Where does the time go?
While I do not protest to know all the answers, during our vacation, I researched the diverse countries’ healthcare system and methods of payment, but, most importantly, I interviewed people. I interviewed people who were begging for money. I interviewed my taxi drivers. I interviewed the bus drivers. I interviewed people on the streets. I interviewed shop owners. I interviewed the hotel concierge. I interviewed bartenders and waiters.
This blog is intended to memorialize my findings. It has not been fact checked. In other words, if a person told me something about the healthcare system and their personal experiences, I did not go back and review that country’s laws to determine whether that person was telling the truth or that the person’s rendition of their experience was compliant with the law. I did this for a reason. Sometimes what the laws dictate as to healthcare is not what actually occurs in reality. I wanted personal perspectives. I wanted an opinion from citizens of other countries as to how healthcare was or was not working in their country. I did not want to meet health care policy, rules, regulations. I wanted the cold, hard, real truth.
At least one person in every country – Austria, The Netherlands, France, England, Germany, Switzerland, and Italy told me, “[Country name] has the best health care in the world.” Obviously, they cannot all be right. And I certainly heard the worst case scenarios in country’s that claimed to be the best in the world.
This is what I learned:
ENGLAND
England has the best health care system in the world! England’s healthcare system is drastically different from the USA’s. England’s National Health Service (NHS) is a free healthcare program for all permanent residents of United Kingdom. Reading the fine print, however, the NHS is not completely free. There are charges associated with eye tests, dental care, prescriptions, and many aspects of personal care.
England relies on primary care more so than specializations. Mental health services, for example, are largely treated by the general practitioners (GPs). Provider trusts, fed by taxes, compensate most health care, the main examples in the hospital trust and the ambulance trusts which send the money allocated to them by commissioning trusts. Hospitals normally receive the lion’s share of NHS funding as hospital’s have the most expenses.
Our taxi driver (Jim) told me that paperwork is minimal with the NHS, which makes it super easy to use. Although he was quick to point out that the health care system in England does vary in quality and timeliness depending on where you live, but I believe we can say the same about the USA. Jim also told me that he and his family has had problems with wait-times to be seen by specialists. Jim’s wife suffered persistent and serious acid reflux. Her general practitioner referred her to a gastroenterologist. However, she could not get an appointment until 20 weeks later. But, in the end, she was seen, and had no waiting period on the day of her appointment. Generally, Jim is happy with the NHS. The costs are minimal, and, he believes that the quality of care is high.
The hotel concierge (let’s call him Blake) was extremely open about his experiences with the health care system in England. It appears from his enthusiasm that health care is just as big of a political issue in England than it is in the US. He told me that he has never waited more than four hours in an emergency room. Apparently, his children frequent it. However, I do place an asterisk on Blake’s comment. You will see below that Alice from France waited for 7 hours at the ER in the UK with her husband. Some of the stories that I heard contradicted each other.
Blake also told me that for traumatic experiences, such a broken arm due to a car accident, which his youngest daughter recently endured, the wait time is significantly less than when his best buddy got drunk at the pub and broke his finger. Blake also told me that, for day-to-day, general, “I have a tummy ache” appointments, English citizens do not get to choose appointment times. You leave a voice mail message for the nurse and the nurse informs you when you need to present yourself. While this may sound inconvenient, Blake stated that there are no wait times. I know that I have waited many an hour to see my general practitioner.
Dental insurance, on the other hand, is a whole new can of worms. Basically, general practitioners are free, but dentists are not. The wait times to see a dentist are extensive, and, if you do not have private dental insurance, the wait times can be even longer. My take-away? If I were a dentist, I’d move the the UK. This also explains a lot about English actors and actresses.
We cannot analyze any country’s health care system without taking into account the taxes that you must pay in order to maintain such a health care system, no matter how poor or amazing that health care system is. Income taxes in the UK are 40% if you make more than 46,351 pounds. Once you hit 150,000 pounds, then your taxes increase to 45%. Almost half of your wages are taken by the government, but you get, essentially, free health care. Does it balance out?
THE NETHERLANDS
The Netherlands has the best health care system in the world! Every person that I asked in Amsterdam, informed me that Dutch health care is among the best in the world. It seemed that the Dutch took pride in their health care system. So, I wanted details. If Dutch health care is the best, why doesn’t everyone else mimic it?
I learned that everyone who lives or works in the Netherlands is legally obligated to take out standard health insurance. All insurers offer the same standard package. The standard insurance package includes general practitioners, some medications, dental care until the age of 18, nutritional and dietary care, medical aids, mental health services, and much more. It does not cover over-the-counter aspirin or cosmetic surgery procedures. But neither does insurance in America.
In Amsterdam, my daughter and I rented bicycles for two days. It was an absolute blast. The rental process, however, took a bit longer than expected. The gentleman behind the counter needed our passport numbers, information on our hotel, credit card information, and provided us with an instruction program on how to properly secure the bicycles. Given the length of the process, I took the opportunity to ask him about health care.
Let’s call the bicycle rental agent Stefan.
Stefan explained that the Dutch believe in misery first. According to him, regardless the affliction, general practitioners will tell you to take an aspirin and come back in two weeks if you are not dead. I am fairly sure that he was exaggerating. But I have always been of the opinion that exaggerations have some form of truth.
In the Netherlands, the general practitioners are called huisarts, which are expected to know all aspects of medicine. I liken the huisarts to attorneys who practice general law. What attorney could know all aspects of family law and criminal law? The answer is none. A generalist knows a tad about everything, but nothing much about anything.
Preventive care is rare in the Netherlands, certainly in terms of women’s health. For example, in the US, France, and Spain, it is typical to get a test for cervical cancer at least every 2 to 3 years. Here, in Amsterdam, insurance will only pay for one every 5 years. Hormone replacement therapy is also rare here, as most GPs are still following outdated guidelines, based on a flawed study from 2002.
It seems as though I am overly negative as to the health care in the Netherlands. All I can write is that I began this blog with an open mind because if any country has mastered health care then we should learn from it. I was also swayed by my interviewees.
While other countries maintained high income taxes to pay for “free health care,” the Netherlands does not use tax dollars to pay for health care. Every Dutch resident is required to buy their own health insurance on top of the taxes they pay to the government.
Taxes in the Netherlands is exorbitant. If you make over 66,421 euros, taxes are 52% of your income. These taxes, remember, do not include health insurance.
In Amsterdam, there was a pub across the river from our hotel Movenpick. A group of guys were “celebrating” an upcoming wedding and were drinking bottles upon bottles of wine at the river’s edge. Multiple times members of the group ended up swimming.
So, imagine my surprise when one of the intoxicated gentlemen sat at our table and ensued with a semi-intelligent conversation about health care. We will call him Henry. Henry had recently been married and his wife gave birth last year to a premature baby. I completely related because my daughter was born at 28 weeks and 2 pounds and 2 ounces. I asked Henry about the health care coverage for his premature baby girl’s birth and subsequent surgeries. He told me that, besides the meals that he ate during the two-month stay in the hospital, once his new daughter and wife were free to leave, his hospital bill was zero. His daughter endured a two-month stay in the neonatal department, his wife had a two-month, inpatient hospital stay, his daughter underwent multiple surgeries for her lungs and heart, and his daughter had 24-hour care for 60 days. All for zero euros. All children in the Netherlands are automatically insured by the government.
While I see the downside of paying 52% of your income to the Dutch government and having to pay for health insurance, I do see the benefit of Dutch insurance if you have a medical emergency, like a premature baby.
FRANCE
France has the best health care system in the world! In a 2000 World Health Organization (WHO) comparison of 191 different countries’ health care, France came out at number one. And they are not afraid to tell you. Even though the WHO ranking is from 2000, the French still tout its outcome because there have been no other such rankings since then. The French believe in the universal right to health care.
The entire population must pay compulsory health insurance.
Our two-hour ride on the Eurostar from Paris to London gave me a unique opportunity to ask other passengers about health care, especially since there is bar in one of the cabins. People congregated there to drink, eat, and talk, plus one nosy American asking about health care. The following are summaries of the stories I heard:
Nancy, who is from Devon, England and has lived in France with her family since 2006 thinks that French health care is the best. Since she moved to France her family has, unfortunately, undergone 6 operations. Her husband had cancer a couple of years ago and the Oncopole (oncologist) encouraged alternative therapies and even told him the taxi drivers (bringing patients home from the hospital) often go straight to a rebouteuse (a healer) after radiotherapy. A lot of doctors practice homeopathy, which is fantastic, according to Nancy. She also said that doctors prescribe “sacks full of medicine.” The good news is that Nancy’s husband is in remission.
Alice, a former British citizen, who moved to France told me the French health care system saved her husband’s life. Five years ago, her husband started to feel ill while visiting the UK. They couldn’t get a family/general practitioner to come to their home (I thought, my doctor wouldn’t come to my home in the US either). Over the phone, the general practitioner said, “take an aspirin and rest.” They also went to the ER but gave up after 7 hours waiting as her husband was in extreme pain (Juxtapose Blake’s recount that he never waited over 4 hours in the ER in the UK). A few days later they flew home, and her husband could not walk. Within an hour of arriving in France, her husband was admitted to a hospital. He was diagnosed with stage 4 kidney failure and stage 5 equates to dialysis. Needless to say, Alice is a French health care fan.
My daughter and I used a tour group company for our mommy-daughter vacation, and, while in France, I heard one person tout that health care is free in France. I will contend, from my travels, that French health care is great, but not completely free. I saw a presumably-homeless, elderly gentleman with no legs begging for money. In extremely, broken Frenglish and impromptu sign language, I asked the gentleman why he didn’t have health coverage and was he a French citizen? To the best of my ability, I interpreted his responses to indicate that, yes, he is a French citizen, but that free, French health care does not include prosthetics.
Taxes are approximately 41% if you make over $72,617. Whereas, in the US, if you make over $72,000 your tax bracket is 15.55%, barring extraordinary circumstances.
ITALY
Italy has the best health care system in the world! From my travels, I gathered that Italians believe that their health care system is the best (over France’s – I believe that there is a bit of a friendly rivalry). In 2000, the World Health Organization (WHO) ranked Italy as the 2nd best health care system in the world, right under France. In 2012, WHO found Italy’s life expectancy to be 82.3 years.
Italy has a regionally organized National Health Service (“SSN” – Servizio Sanitario Nazionale) that provides citizens with free or low-cost healthcare. It’s funded through national income taxes and regional VAT, and generally the standard of care is very high. I was pleased to discover that foreign citizens living in Italy with a regular stay permit are entitled to all the same treatment and rights as Italian citizens. Retirement 2035 – here I come!
For a country with the best health care in the world, I saw the most homeless, medically-challenged beggars than any other country. Maybe there are more homeless, medically-challenged beggars in Italy than other country because the weather is so nice, the gelato is so delicious, the population is greater, mental health care is worse, or the food is so amazing…I do not know. But I saw the most homeless, medically challenged beggars in Italy than anywhere else. Oddly, the afflictions were the same. Their feet were misshapen and curled inward to a degree that did not allow them to walk. It was heartbreaking. I googled it and discovered that medical articles have been written on the anomaly of foot deformities in southern Italy.
Taxes in Italy are as follows:
- 23% for amounts up to $36,000
- 33% for the next band from $36,001 to $39,300
- 39% for amounts between $39,301 and $119,200
- 45% for amounts $119,201 and over.
I met Valentina in Roma. Europe has strict hourly limits for bus drivers and our original bus driver, apparently, over-drove. Valentina stepped in and was very chatty, unlike the original bis driver who spoke no English. Considering our group consisted of 21 English-speaking vacationers and one couple fluent in Spanish and English, a bus driver who only spoke French was unhelpful.
Valentina told me that in Italy, mainly in the south, public hospitals are very crowded and offer very limited and sometimes hasty assistance, so that patients are too soon sent to rehabilitation centers, very few of which are public. This almost entirely private field is financially sustained by the National Health Service, which pays a per diem for a patient’s clinic stay. If a patient still needs rehabilitation after 2 months in a rehabilitation clinic or center, reimbursement from the National Health Service will be in any case cut by about 40%. Private insurance is very rare and usually is not involved in rehabilitation.
In private rehabilitation centers, physicians often have to deal with overworked nurses and angry, worried patients and relatives.
Valentina said that her mother went to her general practitioner complaining of frequent headaches, depression, anxiety, dizziness, and recurrent fatigue. Her general practitioner, diagnosed her as “a hysteric neurotic,” and she was prescribed anxiolytics. Her headaches continued. When she finally was able to see a specialist, her magnetic resonance image report showed that she had several cerebral metastatic lesions from an otherwise silent neoplasia – basically, a death sentence.
SWITZERLAND
Switzerland has the best health care system in the world! The Swiss health care system is regulated by the Swiss Federal Law on Health Insurance. There are no free state-provided health services, but private health insurance is compulsory for all persons residing in Switzerland (within three months of taking up residence or being born in the country) (country #2 on my options for retirement).
Like every country we visited, Switzerland has a universal health care system, requiring all to buy insurance. Switzerland holds a special place in my heart. My mother’s mother, Martha Zuin (imagine an umlaut over the ‘u’), immigrated to the US from Switzerland, so I still have family living in Switzerland.
The plans in Switzerland resemble those in the United States under the Affordable Care Act: offered by private insurance companies, community-rated and guaranteed-issue, with prices varying by things like breadth of network, size of deductible and ease of seeing a specialist. Almost 40% of people get subsidies offsetting the cost of premiums, on a sliding scale pegged to income. Although these plans are offered on a nonprofit basis, insurers can also offer coverage on a for-profit basis, providing additional services and more choice in hospitals. For these voluntary plans, insurance companies may vary benefits and premiums; they also can deny coverage to people with chronic conditions. Most doctors work on a national fee-for-service scale, and patients have considerable choice of doctors, unless they’ve selected a managed-care plan.
Both Swiss and German systems cost their countries about 11 percent of GDP.
Mia, the hotel clerk at Lake Maggiore, is a Swiss resident. She informed me that insurance premiums are not adequately adjusted to income, and they have doubled in price since 1996, while salaries have risen by just one-fifth. It comes as no surprise, then, that just over a quarter of the population needed government assistance to pay their premiums in 2014. She says that over 1/2 of Swiss residents owe money for medical bills.
You can be blacklisted from reimbursement for health insurance in Switzerland. Some 30,000 blacklisted patients so far have lost their right to be reimbursed for medical services under basic insurance and can be refused care, save for emergencies. A policy initially designed to encourage people to pay up has instead come under fire for going against the principle of basic health coverage for all. In 2017, EHR became mandatory for most, which increased the costs for many health care visits.
Research told me that Switzerland is the second most expensive country for health care other than USA with The Netherlands, Sweden, Germany, and Denmark closely following.
GERMANY
Germany has the best health care system in the world! The German health care system and Switzerland’s have a lot in common. According to interviewees, Germany has slightly better access to health care, especially with respect to costs. Switzerland has higher levels of cost-sharing, but its outcomes are hard to beat — arguably the best in the world – for real.
A majority of Germans (86%) get their coverage primarily though the national public system, with others choosing voluntary private health insurance. Most premiums for the public system are based on income and paid for by employers and employees, with subsidies available but capped at earnings of about $65,000. Patients have a lot of choice among doctors and hospitals, and cost sharing is quite low. It’s capped for low-income people, reduced for care of those with chronic illnesses, and nonexistent for services to children. There are no subsidies for private health insurance, but the government regulates premiums, which can be higher for people with pre-existing conditions. Private insurers charge premiums on an actuarial basis when they first enroll a customer, and subsequently raise premiums only as a function of age — not health status. Most physicians work in a fee-for-service setting based on negotiated rates, and there are limits on what they can be paid annually.
Though mostly public, the German health insurance system is not a state-run system like the National Health Service in the United Kingdom. In fact, more than 100 different health insurers, known as sickness funds, compete for members in Germany’s comparatively decentralized system. These sickness funds are non-profit, non-governmental organizations that operate autonomously. Most Germans’ health insurance contributions are deducted from their paychecks by their employers. The amount, however, is capped at 14.6% of a person’s salary, split fifty-fifty between the employer and the employee, so 7.3% each way. But coverage is not dependent on the employer, so when Germans change or lose their jobs, nothing changes in their health insurance. Recent changes in health care have allowed the wealthy to obtain higher quality and more efficient health care services. Anyone who makes over 57,600 euros/year can opt out of public health care and pay for private health care. Doctors are more prone to be more attentive of their privately-insured patients.
We met Emma at a beer garden; she was our waitress. Emma was as equally inquisitive about American health care as I was about German health care. She said that she could not get her head wrapped around HIPAA. Privacy, she indicated, is not a hot topic issue in Germany. Emma said that doctors in Germany “get it wrong a lot.” When I asked her what she meant, she said that she went to her general practitioner for chest pain. Whereas, in America, chest pain is considered serious, Emma said that her doctor did not even place a stethoscope on her chest. Instead, he told her to go home, rest, and take an Ibuprofen. Emma’s friend had a baby with a problem in one eye. She went to several doctors and they told her nothing can be done. She finally went to a specialist in Spain and received a concrete diagnostic and special glasses for the 7 month-old-baby, because the eye movement was related to the eye condition.
AUSTRIA
Austria has the best health care system in the world! If European health care were on a bell curve, Austria would be at the bottom (hmmmmm…..although I have not compared Austria to the US). Dr. Clemens Martin Auer is the President of the European Health Forum Gastein and Director General at the Austrian Federal Ministry of Health.
Dr. Auer is focused on digital health and access to drugs. Talking to people in other European countries, who complained about over prescribing, Austria, apparently, has a high cost issue barring many people from receiving prescriptions.
In Austria, the health care system is largely financed by social security contributions and taxes, to a lesser part also by private sources, such as prescription charges, compulsory personal contributions, per-diem charges for hospital stays or contributions to private health insurance.
Each month a contribution will be taken from your tax payment, which is worked out according to how much you earn. This gives you access to basic healthcare including treatment in hospitals, medication, dental care, and some specialist appointments. If you make over 31,000 euros, you pay 41% tax.
According to Tobias, the man I met in Innsbruck, people wait months to see a specialist. So, if you have a cold, you are good, but of you have cancer, then get on the waiting list. Tobias also told me that people do not go to hospitals unless they have a severe injury or serious surgery. Instead, the general practitioners are heavily relied on. I am not sure I like the idea of going to a generalist for everything. If I have stark knee pain, I want to see an orthopedic, not a general internist. But I am learning that free health care may not equate to the best health care.
Breaking Down the Barriers to Telehealth: CMS’s Latest Rural Health Strategy
CMS unveils new rural healthcare strategy via telehealth.
The Centers for Medicare & Medicaid Services (CMS) wants to reduce hospital readmissions and unnecessary ER visits with its newly unveiled Rural Health Strategy.
Currently, there are significant barriers to accessing telehealth. While physicians and providers have to answer to their respective healthcare boards within the states in which they are licensed, if you provide telemedicine, you are held accountable and ordered to follow the federal rules and regulations (of which there are many!) – and the rules and regulations of every state in which you provide services. For example, say Dr. Hyde resides in New York and provides medication management via telehealth. Patient Jekyll resides in New Jersey. Dr. Hyde must comply with all rules and regulations of the federal government, New York, and New Jersey.
Currently, 48 state medical boards, plus those of Washington, D.C., Puerto Rico, and the Virgin Islands, require that physicians engaging in telemedicine be licensed in the state in which a patient resides. Fifteen state boards issue a special purpose license, telemedicine license or certificate, or license to practice medicine across state lines to allow for the practice of telemedicine. There are 18 States that only allow Medicaid recipients to receive telemedicine services. One state requires only private insurance companies to reimburse for services provided through telemedicine. Twenty-eight states, plus D.C., require both private insurance companies and Medicaid to cover telemedicine services to the same extent as face-to-face consultations.
As you can see, telehealth can leave hospitals and providers wondering whether they took a left at Albuquerque.
Getting paid for telemedicine has been an issue for many hospitals and medical providers – not only in rural areas, but in all areas. However, according to CMS, rural hospitals and providers feel the pain more acutely. We certainly hope that the progress CMS initially achieves with rural providers and telehealth will percolate into cities and across the nation.
The absolute top barrier to providing and getting reimbursed for telehealth is the cross-state licensure issue, and according to CMS’s Rural Health Strategy, the agency is seeking to reduce the administrative and financial burdens.
Through interviews with providers and hospitals across the country and many informal forums, CMS has pinpointed eight methods to increase the use of telehealth:
- Improving reimbursement
- Adapting and improving quality measures and reporting
- Improving access to services and providers
- Improving service delivery and payment models
- Engaging consumers
- Recruiting, training, and retaining the workforce
- Leveraging partnerships/resources
- Improving affordability and accessibility of insurance options
What this new Rural Health Strategy tells me, as a healthcare attorney and avid “keeper of the watchtower” germane to all things Medicare and Medicaid, is that the current barriers to telehealth may come tumbling down. Obviously, CMS does not have the legal authority to change the Code of Federal Regulations, which now requires that telehealth physicians be licensed in the state in which a patient resides, but CMS has enough clout, when it comes to Medicare and Medicaid, to make Congress listen.
My crystal ball prediction? Easier and more telehealth is in everyone’s future.
*My blog was published on RACMonitor on June 7, 2018.
CMS Initiates Process to Decrease the Medicare Appeal Backlog: But You May Have to Beg!
Last week, (May 22nd) the Center for Medicare and Medicaid Services (CMS) unveiled a new, streamlined appeal process aimed at decreasing the massive Medicare appeal backlog. CMS is hopeful that providers, like you, will choose to settle your Medicare appeal cases instead continuing the litigious dispute. Remember, currently, the backlog at the third level of Medicare appeals, the administrative law judge (ALJ) level, is approximately 5 – 8 years (I will use 8 years for the purpose of this blog). Recoupment can legally begin after level two, so many providers go out of business waiting to be heard at the third level. See blog.
The new “settlement conference facilitation” (SCF) process will allow CMS to make a settlement offer and providers have seven days to accept or proceed with the longer-lasting route. I have a strong sense that, if litigated, a judge would find forcing the decision between accepting a quick settlement versus enduring an 8-year waiting-period to present before an ALJ, coercion. But, for now, it is A choice other than the 8-year wait-period (as long as the provider met the eligibility requirements, see below).
To initiate said SCF process, a provider would have to submit a request in writing to CMS. CMS would then have 15 days to reply. If the agency chooses to take part, a settlement conference would occur within four weeks. Like that underlined part? I read the SCF process as saying, even if the provider qualifies for such process, CMS still has the authority to refuse to participate. Which begs the question, why have a process that does not have to be followed?
The SCF process is directed toward sizable providers with older and more substantial, alleged overpayments. In order to play, you must meet the criteria to enter the game. Here are the eligibility requirements:
The Backlog
In fiscal year (FY) 2016, more than 1.2 billion Medicare fee-for-service claims were processed. Over 119 million claims (or 9.7%) were denied. Of the denied claims, 3.5 million (2.9% of all Medicare denied claims) were appealed. That seems surprisingly low to me. But many claims are denied to Medicare recipients, who would be less inclined to appeal. For example, my grandma would not hire an attorney to appeal a denied claim; it would be fiscally illogical. However, a hospital that is accused of $10 million in alleged overpayments will hire an attorney.
In recent years, the Office of Medicare Hearings and Appeals (OMHA) and the Council have received more appeals than they can process within the statutorily-defined time frames. From FY 2010 through FY 2015, OMHA experienced an overall 442% increase in the number of appeals received annually. As a result, as of the end of FY 2016, 658,307 appeals were waiting to be adjudicated by OMHA. Under current resource levels (and without any additional appeals), it would take eight years for OMHA and ten years for the Council to process their respective backlogs.
The SCF “Fix”
While I do not believe that the creation of the SCF process is a fix, it is a concerted step in the right direction. Being that it was just enacted, we do not have any trial results. So many things on paper look good, but when implemented in real life end so poorly. For example, the Titanic.
Considering that there is a court case that found Health and Human Services (HHS) in violation of federal regulations that require level three Medicare appeals to be adjudicated in 90 days, instead of 8 years and HHS failed to follow the Order, claiming impossibility, at least HHS is making baby steps. See blog. At some point, Congress is going to have to increase funding to hire additional ALJs. I can only assume that the Hospital Association and American Medical Association are lobbying to get this action, but you know what they say about assuming…
As broached above, I do not like the fact that – if you do not accept whatever amount CMS proposes as settlement – BOOM – negotiation is over and you suffer the 8-year backlog time, undergo recoupments (that may not be appropriate), and incur tens of thousands of attorneys’ fees to continue litigation. Literally, CMS has no incentive to settle and you have every reason to settle. The only incentive for CMS to settle that I can fathom is that CMS wants this SCF program to be a success for the jury of public opinion, therefore, will try to get a high rate of success. But do not fool yourself.
You are the beggar and CMS is the King.
Former Cardinal CEO files countersuit to retain severance
Here are our tax dollars continuing to be used for such great purposes!!! I completely understand Cardinal’s desire to recoup our tax dollars that went into Topping’s pocket – noble, indeed. But I am stumped as how, supposedly, Topping had the executive authority to unilaterally name his salary?? Did he have such authority – or, like many companies, was Topping’s exorbitant salary a Board decision? And – if Topping’s salary were a Board decision – is Cardinal suing itself for past poor decisions???? Curiouser and curiouser.
Regardless, let’s give a “hat’s off” and a “thank you” to Richard Craver staying on top of this important and upsetting issue. #icantwaituntilwererich (see below for context).
By Richard Craver Winston-Salem Journal
The fired chief executive of Cardinal Innovations, Richard Topping Jr., filed Tuesday his countersuit to thwart the agency’s attempt to recover $1.68 million in paid severance.
A reconstituted board of directors for Cardinal, the state’s largest behavioral health managed care organization, has alleged that Topping used his post to enrich himself and three other executives. That board filed its lawsuit March 29.
Both lawsuits were filed in Mecklenburg Superior Court.
The agency oversees providers of mental, substance abuse and development disabilities services for 20 counties, including Forsyth County. It has responsibility for more than 850,000 Medicaid recipients and more than $675 million in federal and state Medicaid funding.
According to an investigation done by former federal prosecutor Kurt Meyers at the new board’s request, Topping convinced the former board leadership to pay him the severance before he was removed by state health Secretary Mandy Cohen on Nov. 27 as part of a N.C. Department of Health and Human Services takeover of Cardinal.
The current Cardinal board not only wants to recoup $3.8 million in overall executive severance, but also at least $125,000 in damages. The complaint called Topping’s severance “excessive and unlawful payments.”
Topping faces seven claims in the Cardinal lawsuit: breach of contract; breach of fiduciary duties; breach of implied duty of good faith and fair dealing (in his role as CEO); conversion (deleting data from Cardinal-owned devices and not returning Cardinal electronic property); unjust enrichment; constructive trust (knowingly accepting overpayments in severance); and constructive fraud (taking without permission highly confidential Cardinal financial and operational data).
“He inflated his salary without regard to the reputational, regulatory and legal damages it was going to cause,” Meyers said.
Topping claims his reputation has been “severely damaged” in the healthcare sector by the Cardinal lawsuit and investigation.
Topping called claims made in Meyers’ detailed presentation “misleading and false” even though it contained email and text exchanges between Topping, former Cardinal executives and former board chairwoman Lucy Drake about his post-Cardinal plans.
“Topping took these steps acknowledging he would never get another contract with Cardinal, nor likely with any other North Carolina healthcare provider,” Trey Sutten said March 29. Sutten was named as interim CEO by Cohen on Nov. 27 and full-time CEO on March 29.
The Charlotte Observer said among those named by Topping as defendants were Cardinal general counsel Chuck Hollowell, deputy general counsel Stephen Martin and board vice chairwoman Carmen Hooker Odom. DHHS said Tuesday it had no comment about Topping’s countersuit.
Topping was paid as much as $635,000 in annual salary, about 3½ times the maximum allowed under state law.
Topping has claimed the salary, which was raised twice by the former board during his term, was justified based on an independent market survey of Charlotte-area healthcare executives. The Charlotte Observer said Topping claims he and the other former executives were paid at the 50th percentile of market rates.
According to Meyers’ investigation, Topping pressured the former board not to fire him for several months by saying that if he was terminated, his entire management team would also leave with him. According to Meyers, Topping told the board that if that action occurred, it would “end Cardinal as they knew it.”
Topping claimed he did not create the severance platform in dispute.
“Cardinal Innovations Healthcare, Carmen Hooker Odom, Chuck Hollowell and Stephen Martin deny the false claims and baseless allegations brought by former CEO Richard Topping,” Cardinal spokeswoman Ashley Conger said in a statement.
Texts and emails between Topping and Pete Murphy, former chief information officer, epitomized their self-enrichment thinking, Meyers said.
The former board paid $1.7 million in severance to Topping, along with $740,000 to Murphy; $690,000 to Will Woodell, chief operating officer; and $684,000 to Dr. Ranota Hall, chief medical officer.
One exchange— sent Nov. 17 before Topping was fired by the former board — involved Murphy and Topping discussing Topping’s securing 1.5-gigabytes of highly confidential Cardinal management files, including personnel files, before leaving his post.
Murphy wrote that Topping “was smart to take files now.” Topping ended the text with an emoji with a finger over the lips. Meyers said he interpreted that emoji as saying “Shhh. Be quiet, and don’t tell anyone what I’m doing.”
An email exchange between the former executives took place after Topping’s termination by the former board. The board agreed to allow Topping to remain as CEO through Nov. 30.
The context, according to Meyers, was Topping’s work to secure venture capital or private equity for a private startup business, potentially to compete against Cardinal in the planned Medicaid reform marketplace with Cardinal’s confidential financial and operational information in hand.
“I can’t wait until we’re rich,” Murphy wrote. Topping answered, “I’ve made great progress on that front.” (emphasis added).
Topping’s lawsuit claims he was gathering information to create a healthcare smartphone app.
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Exclusive: Medicaid: The State of the Union
Here is an article that I wrote as a Medicaid news update, state-by-state, as seen on RACMonitor.
The latest and greatest in Medicaid news, state by state.
While Medicare is a nationwide healthcare insurance program, Medicaid, the government-funded health insurance for the poor and developmentally disabled, is state-specific, generally speaking. The backbone of Medicaid is federal; federal regulations set forth the minimum requirements that states must follow. It is up to the states to decide whether to mandate more stringent or more regulatory oversight than is required by the federal regulations.
Why is it important for you to know the latest up-to-date information on Medicaid issues? First, if you accept Medicaid, you need to know. Secondly, if you are thinking about expanding into different states, you need to be aware of how Medicaid is handled there.
What is happening in your State?
| Alabama: | Alabama did not expand Medicaid. The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) recommended that Alabama improve its Medicaid security program, aligning it with federal requirements. The OIG also stated that Alabama also needs to provide adequate oversight to its contractors and address other vulnerabilities OIG found in its audit. Expect more audits here. In particular, the Medicaid Maternity Program is under the microscope. Apparently, healthcare providers that provide medically necessary services to women on the Maternity Program have been duped before, as some of the women enrolled had already given birth. Recoupment! |
| Alaska: | Alaska expanded Medicaid in 2015. Currently, lawmakers in the legislature here have introduced bills that would require the state to seek 20-hour work requirements for those enrolled in Medicaid. |
| Arizona: | Arizona expanded Medicaid, but with an approved section 1115 waiver. Arizona has failed to collect up to $36.7 million in rebates from prescription drug manufacturers since 2010 and may need to pay the federal government a portion of that amount, according to a new federal audit, which means more audits to reconcile the payback. Arizona State Rep. Kelli Butler wants to allow uninsured individuals to buy into the state’s Medicaid program. Butler is expected to introduce legislation to authorize a buy-in or direct state officials to study the proposal. The buy-in option would require consumers to pay the full cost of their insurance coverage. |
| Arkansas: | Arkansas expanded Medicaid, but with an approved section 1115 waiver. On March 5, 2018, it became the third state to win the Trump administration’s permission to compel Medicaid recipients to work or prepare for a job. The state’s program integrity is focusing its upcoming audits on home health, long-term care facilities, and inpatient hospital stays. |
| California: | California expanded Medicaid. The state’s Medicaid agency has posted draft language of a new state plan amendment (SPA) that would make major changes to Federally Qualified Health Center (FQHC) and Rural Health Clinic (RHC) reimbursement. If approved, the SPA would be retroactive to Jan. 1, 2018, so expect audits and recoupments. The proposed SPA would implement multiple new requirements for FQHC and RHCS. For example, the proposed productivity standard requires physicians to document 3,200 visits per year and applicable allied health professionals such as physician assistants and nurse practitioners to document 2,600 visits per year. In January 2018, Aetna received approval to participate in California’s Medicaid program as “Aetna Better Health of California.” |
| Colorado: | Colorado expanded Medicaid. Not unexpectedly, the state has one of the more lenient regulatory environments. For example, Colorado’s permissive approach to regulating more than 700 licensed residential and outpatient drug treatment centers got the attention of a congressional subcommittee investigating the drug rehab industry last year. Also, Colorado’s governor announced that he is not opposed to work requirements for Medicaid beneficiaries. |
| Connecticut: | Connecticut expanded Medicaid. The Connecticut Health Policy Project data shows that net pharmacy spending minus rebates from Connecticut’s Medicaid program tripled from 2000 to 2017. After rebates, Medicaid’s pharmacy costs decreased from $542 million in 2015 to $465 million in 2017, a drop of over 14 percent. Interestingly, on March 21, 2018, the state’s General Assembly increased Connecticut’s 8,500 home care workers’ wages, and adding worker’s compensation, even those workers are being compensated by Medicaid. The increased wage will rise to $16.25 per hour by 2020 and will cost the state, after federal Medicaid reimbursement, $725,790 in 2018, almost $7 million in 2019, and over $9.3 million in 2020. If you have a home health agency here, you better make sure that lawmakers are smart enough to increase the reimbursement rates; otherwise, a lot of home health agencies will go out of business. |
| Delaware: | Delaware expanded Medicaid, but since it is so small in size and population, the expansion only added approximately 10,000 Medicaid recipients. This year, after two years of increasing Medicaid spending by approximately $70 million, Delaware’s Medicaid costs are expected to decrease a small amount, even with the expansion. Beginning this year, Delaware gives additional weight to value-based care when determining payment. Rather than paying solely for volume of care – hospital stays, tests and procedures, regardless of outcomes – the state will pay for achieving optimal health for its Medicaid recipients. |
| Florida: | Florida did not expand Medicaid. Lawmakers are considering opioid prescription limits for Medicaid recipients. The proposals would limit prescriptions for opioids to three-day supplies, but also allow for up to seven-day supplies if physicians deem it medically necessary. If passed, I question whether lawsuits will be filed claiming that such a move violates the Equal Protection Clause of the Constitution, because it violates parity between Medicaid recipients and the private-pay insured. And what about the people suffering with chronic, long-term pain? (especially considering the state’s demographics). In other news, Gov. Rick Scott has proposed to transition the state’s Children’s Medical Services program to a private managed care organization, beginning in 2019. |
| Georgia: | Georgia did not expand Medicaid. Recently, the Georgia Department of Community Health mistakenly issued multiple Medicaid ID numbers to hundreds of patients. Those mistakes led the state and federal governments to make duplicate payments for care of some Medicaid patients. Now, Georgia is being asked to refund the federal government’s share of the duplicate payments — more than $665,000. Expect more audits to fund the repayment. |
| Hawaii: | Hawaii expanded Medicaid. But the state is cracking down on its providers. In an effort to improve fraud prevention, Hawaii is performing more comprehensive screening, credentialing, and enrollment for all Medicaid providers. Those of you who are already credentialed here, expect tougher standards for re-credentialing. |
| Idaho: | Idaho did not expand Medicaid, but it did expand dental coverage. On March 12, 2018, the state’s Senate passed a bill that restores Medicaid non-emergency dental coverage. The coverage was cut in 2011 during the recession. The bill, HB 465, already passed the House and now moves to Gov. Butch Otter. It is expected to cost $38 a year per patient. |
| Illinois: | Illinois expanded Medicaid. On Jan. 12, 2018, five nursing home operators filed a federal lawsuit against the state, arguing that low Medicaid payment rates and the claims backlog are jeopardizing patient care. The lawsuit was filed by Generations Health Care Network, Carlyle Healthcare Center, St. Vincent’s Home, Clinton Manor Living Center, and Extended Care Clinical, which operate 100 skilled nursing facilities throughout the state. Because of Section 30(A) of the Social Security Act (SSA), which mandates that reimbursement rates allow for quality of care, why aren’t more health care providers filing lawsuits to increase Medicaid reimbursement rates? |
| Indiana: | Indiana expanded Medicaid, but with an approved section 1115 waiver, which includes work requirements and adds premium penalties for tobacco users. The state also plans to use an enrollment block on members who fail to meet work requirements. Indiana focuses its audits on outliers: in other words, a provider that provides significantly more services than like-specialties. |
| Iowa: | Iowa expanded Medicaid, but with an approved section 1115 waiver. The state’s Department of Human Services announced on March 12, 2018 that Iowa is in the process of searching for additional managed care organizations for the current program. So if you have the capacity to act as an Managed Care Organization (MCO), throw your name in the ring. Because of pressure from the federal government, Iowa has implemented more prepayment reviews. Specifically, auditors are reviewing hospital discharge records for any sign of noncompliance. |
| Kansas: | Kansas did not expand Medicaid. On Feb. 15, 2018, the American Civil Liberties Union (ACLU) filed a federal class-action lawsuit arguing that the state’s Medicaid program is improperly denying Hepatitis C medication to members until they are severely ill. The suit names Kansas Department of Health and Environment (KDHE) Secretary Jeff Andersen and KDHE Division of Health Care Finance Director Jon Hamdorf. Medicaid managed care plans in the state either require “severe liver damage” before covering the drugs or allow some coverage before that point. If you have a Kansas Medicaid contract, on Feb. 18, 2018, Maximus instituted a compliance plan and announced that it is committed to reaching a June 1 deadline to deal with state concerns over the company’s processing of Medicaid applications. Maximus is required to reach certain performance standards or face fines and the potential loss of its contract. |
| Kentucky: | Kentucky expanded Medicaid, but with an approved section 1115 waiver. In January, Kentucky’s waiver was approved by the federal government to implement work requirements for Medicaid recipients. Implementation will start in April 2018, with full implementation by July 2018. The waiver was approved for five years, through Sept. 30, 2023. In state audit news, non-emergency medical transportation (NEMT) providers are on the chopping block. |
| Louisiana: | Louisiana expanded Medicaid, but now the state may remove 46,000 elderly and disabled individuals from Medicaid as part of a series of healthcare-related budget cuts proposed by Gov. John Bel Edwards for 2019. The proposal would cut $657 million in state healthcare funding and as much as $2.4 billion, including federal matching funds, in total. The proposal would also cut funding to safety net hospitals and eliminate mental health services for adults who don’t otherwise qualify for Medicaid. |
| Maine: | Maine expanded Medicaid. The state adopted the Medicaid expansion through a ballot initiative in November 2017; the measure required submission of the state plan amendment within 90 days and implementation of expansion within 180 days of the effective date. In Maine audit news, a behavioral healthcare provider accused of fraud has put behavioral healthcare providers on the front line. |
| Maryland: | Maryland expanded Medicaid. Maryland’s system of pushing hospitals to achieving lower admissions has added up to hundreds of millions of dollars in savings, a new report shows. Since 2014, the state caps hospitals’ revenue each year, letting them keep the difference if they reduce inpatient and outpatient treatment while maintaining care quality. Per capita hospital spending by all insurers has grown by less than 2 percent a year in Maryland, below the economic growth rate, defined four years ago as 3.58 percent annually, a key goal for the program. |
| Massachusetts: | Massachusetts expanded Medicaid. The state has begun to roll out new Accountable Care Organization (ACO) networks. Members assigned to an ACO have until May 31 to switch before they are locked in for nine months. The changes are expected to impact more than 800,000 Medicaid recipients and are designed to better manage patient care, reimburse providers based on quality, and address social determinants of health. There is expected confusion with this change among Medicaid patients and providers. |
| Michigan: | Michigan expanded Medicaid, but with an improved section 1115 waiver. On Feb. 18, 2018, Michigan announced that it would consider a proposal to transition the state’s $2.8 billion Medicaid nursing home and long-term care services programs into managed care. An initial review by the state Department of Health and Human Services is expected to begin by July 1. |
| Minnesota: | Minnesota expanded Medicaid. MN has a proposed Medicaid waiver bill, which requests permission from the federal government to implement an 80-hour-per-month requirement that would mandate Medicaid beneficiaries who are able-bodied adults and not the sole caretaker of a child to work, actively seek employment, participate in educational or training programs, or volunteer. |
| Mississippi: | Mississippi did not expand Medicaid. The five-year waiver request from Gov. Phil Bryant seeks to require nondisabled adults, including low-income parents and caretakers, to participate in at least 20 hours per week of “workforce training.” To be eligible, Medicaid beneficiaries must work, be self-employed, volunteer, or be in a drug treatment program, among other approved activities. If people don’t comply, they’ll be kicked off Medicaid. |
| Missouri: | Missouri did not expand Medicaid. The Missouri Hospital Association has won a lawsuit against the Centers for Medicare & Medicaid Services (CMS) over a rule that deducts Medicare and commercial insurance reimbursements from total disproportionate-share hospital (DSH) allotments. U.S. District Judge Brian Wimes ruled that the agency exceeded its authority. State hospitals would have had to pay back $96 million for 2011 and 2012 alone. Expect more scrutiny on hospitals in light of this decision. |
| Montana: | Montana expanded Medicaid, but with an approved 1115 waiver. Montana is one of many states that have proposed budget cuts to Medicaid. A new proposed rule, which would take effect April 1, would move the state’s addiction counseling from a needs-based system to a cap of 12 individual sessions. The rule may be retroactive, so expect audits to recoup if the rule passes. |
| Nebraska: | Nebraska did not expand Medicaid. On March 7, 2018, advocates for Medicaid expansion launched a petition drive, “Insure the Good Life,” to place the expansion issue on the November 2018 general election ballot. State lawmakers have rejected the expansion measure the past five legislative attempts. Nebraska has paid millions to the federal government in the past few years for noncompliance. Many think it will owe millions more. Audits on providers will increase in Nebraska to compensate for money paid to the federal government – in all service types. |
| Nevada: | Nevada did expand Medicaid. It paid the federal government roughly $4.1 million in 2017 to use HealthCare.gov. CMS also asked for 1.5 percent of the premium payments that were collected through its exchange last year, a percentage that will double in 2019. Nevada plans to cut its IT costs by replacing its use of HealthCare.gov with a new health insurance exchange in 2019. Pain management providers and pharmacies are the target of Medicaid audits here. |
| New Hampshire: | New Hampshire expanded Medicaid, but with an approved section 1115 waiver. On March 9, 2018, the New Hampshire Senate passed a bill to continue the state’s Medicaid expansion program. The legislation, which now heads to the House, would impose work requirements on members and utilize 5 percent of liquor revenues to cover the cost of expansion. The Senate voted to reauthorize the Medicaid program for five years and transition to managed care in 2019. The current expansion program, the New Hampshire Health Protection Program, covers about 50,000 individuals. |
| New Jersey: | New Jersey expanded Medicaid. On March 13, 2018, Gov. Phil Murphy delivered his first budget address, unveiling a $37.4 billion budget with a projected surplus of $743 million. 2019 revenues are projected to grow by 5.7 percent from last year. Among the healthcare provisions are: a) close to $4.4 billion in state funds to provide healthcare to almost 1.8 million residents through New Jersey’s Medicaid program, NJ FamilyCare; b) $8.5 million to implement autism spectrum disorder services for Medicaid-eligible children and teens to help 10,000+ families with behavioral and physical supports; c) $11 million in state and federal funds to expand family planning services under NJ FamilyCare to residents at or below 200 percent of the federal poverty level; d) $252 million to fund the hospital Charity Care program; and e) $100 million to fund addiction initiatives (list not exhaustive). |
| New Mexico: | New Mexico expanded Medicaid. The 15 behavioral healthcare providers that were put out of business in 2013 have filed lawsuits against the state. Speculation has it that after the election this year – likely taking Gov. Susana Martinez out of office – the providers may get compensated. New Mexico auditors are focused on the delivery of babies and services to the elderly. |
| New York: | New York expanded Medicaid. Recently, the state’s Assembly released its one-house budget bill. The plan restores $135 million in reductions to the Medicaid program. The big news in the Big Apple regarding Medicaid is in home health. The New York Court of Appeals, the state’s highest court, has agreed to hear a case regarding wages for home care workers. A state Appellate Court ruled in September 2017 that home care agencies must pay live-in home health aides for 24 hours per day, not the 13 hours that is the industry standard, assuming that they are allowed eight hours of sleep and three hours for meals. The New York Department of Labor has issued an emergency regulation that maintains the policy of allowing employers to pay home care workers for 13 hours of a 24-hour shift. If the decision stands, it means that agencies must pay for an additional 11 hours of care per day, almost doubling the cost of care. It is estimated that it will increase costs for home care in New York’s Medicaid program by tens of millions of dollars. Any of you who have home health care agencies in New York, which are dependent on Medicaid, beware that the reimbursement rates are not increasing to accommodate for the increased wages. Many home health companies will go out of business if the decision stands. |
| North Carolina: | North Carolina did not expand Medicaid. The state is seeking to transition its Medicaid program from a fee-for-service model to a managed care model for all services. The transition of beneficiaries with a serious mental illness, a serious emotional disturbance, a substance use disorder, or an intellectual/developmental disability (IDD) will be delayed until the launch of behavioral health and IDD tailored plans. The state estimates that 2.1 million individuals will be eligible for managed care. This is a huge overhaul of the Medicaid system. |
| North Dakota: | North Dakota expanded Medicaid. The state received substantial funds from a settlement designed to compensate states, in part, for the billions of dollars in healthcare costs associated with treating tobacco-related diseases under state Medicaid programs. To date, states have received more than $50 billion in settlement payments. North Dakota is also one of the “test” states to allow Medicare Advantage Value-Based Insurance Design to waive many requirements of federal regulation. |
| Ohio: | Ohio expanded Medicaid. On March 13, 2018, it was announced that the Ohio Pharmacists Association alleged that CVS Caremark overcharges Medicaid managed care plans for medications while often reimbursing pharmacists less than the cost of the drugs. CVS denied accusations of overcharging in an attempt to drive out retail competition and reported that there are strict firewalls between their retail business and their pharmacy benefit manager (PBM) business, CVS Caremark. Beginning in July, Medicaid MCOs will be required to report to state regulators how much PBMs are paying pharmacies. |
| Oklahoma: | Oklahoma did not expand Medicaid. On March 6, 2018, Gov. Mary Fallin issued an executive order to develop Medicaid work requirements. On March 13, 2018, the OK Senate approved legislation to tighten the income threshold for Medicaid eligibility among parents and caretakers to 20 percent of the federal poverty level, down from 40 percent under current state law. The move could impact nearly 44,000 of the 107,000 parents and caretakers on Medicaid in the state. The legislation now moves to the House. |
| Oregon: | Oregon expanded Medicaid. But how it will be funded makes state hospitals angry. Voters approved taxes on hospitals and health plans to continue to fund the state’s Medicaid expansion. The taxes, which were approved in a ballot measure, are expected to generate $210 million to $320 million over two years by imposing a 0.7 percent tax on some hospitals and a 1.5 percent tax on gross health insurance premiums and on managed care organizations. Unions and large, self-insured employers are exempt. |
| Pennsylvania: | Pennsylvania expanded Medicaid. On March 8, 2018, the state’s Department of Human Services discussed HB 59, a bill that would require able-bodied Medicaid recipients to prove they are looking for work. The bill was passed last year by the General Assembly, but vetoed by Gov. Wolf. Acting Human Services Secretary Teresa Miller said implementing the requirements would be expensive, estimating that the project could run up to $600 million in the first year. |
| Rhode Island: | Rhode Island expanded Medicaid. On Feb. 14, 2018, it was announced that the number of recently released inmates in Rhode Island who died from an opioid overdose decreased between 2016 and 2017. The study attributed the decrease to the availability of medication-assisted treatment in correctional facilities starting in 2016. Rhode Island was the first state to offer inmates methadone, buprenorphine, and naltrexone. |
| South Carolina: | South Carolina did not expand Medicaid. The state is overhauling its Medicaid Management Information System. Cognosante was awarded the contract, effective March 6, 2018 through March 5, 2023. |
| South Dakota: | South Dakota did not expand Medicaid. Furthermore, the state is seeking permission from the Trump administration to implement Medicaid work requirements, a move that would affect 4,500 beneficiaries. In South Dakota audit news, Program Integrity has ramped up the number of audits and prepayment reviews, especially on behavioral healthcare, dental care, hospital care, and home health. |
| Tennessee: | Tennessee did not expand Medicaid. In February, the Centers for Medicare & Medicaid Services approved a proposal to launch a two-year pilot designed to improve prescription drug adherence and effectiveness for Medicaid beneficiaries. As part of the pilot, pharmacists will work with Medicaid beneficiaries enrolled in patient-centered medical homes to ensure that medications are appropriate, safe, and taken as directed. As many as 300,000 enrollees may be affected by the pilot. This initiative will affect pharmacies based within hospitals. |
| Texas: | Texas did not expand Medicaid. The state’s Health and Human Services Commission (HHSC) announced contract awards for the state’s Children’s Health Insurance Program (CHIP) in rural areas. The six awardees are Blue Cross and Blue Shield of Texas (Central Region), Driscoll Children’s Health Plan (Hidalgo Region), Molina Healthcare of Texas, Inc. (Central, Hidalgo, Northeast, and West Regions), Superior Health Plan, Inc./Centene (West Region), and TX Children’s Health Plan, Inc. (Northeast Region). Contracts are slated to begin on Sept. 1, 2018. This is a big change to Texas Medicaid. |
| Utah: | Utah did not expand Medicaid. On March 9, 2018, Utah legislators passed a limited Medicaid expansion bill. The legislation would cover approximately 70,000 individuals who earn under 100 percent of the federal poverty level and impose a work requirement and spending cap for enrollees. |
| Vermont: | Vermont expanded Medicaid. One hospital here recently paid $1.6 million to resolve allegations that it violated the False Claims Act (FCA). According to the government, between January 2012 and September 2014, Brattleboro Memorial knowingly submitted a number of outpatient laboratory claims that lacked proper documentation. On another note, Vermont only has 188 beds in its mental health system, and patients are placed on waiting lists or forced to rely on hospital ERs. This is an ongoing problem for patients and hospitals. |
| Virginia: | Virginia did not expand Medicaid. On March 2, 2018, Gov. Ralph Northam told state budget legislators to include Medicaid expansion spending plans or he would add the expansion as a budget amendment. In state audit news, Program Integrity’s spotlight is shining on long-term care facilities, durable medical equipment, transportation, and hospitals. |
| Washington: | Washington expanded Medicaid. On Feb. 20, 2018, the state announced that it approved all nine Accountable Communities of Health (ACH) Medicaid Transformation Project Plans. The Medicaid Transformation Project is the state’s Section 1115 waiver, approved by the Centers for Medicare & Medicaid Services (CMS) in 2017. Under the waiver, the first initiative involves transforming Medicaid delivery in each regional service area through ACHs. The newly approved project plans will look to improve the overall health of Medicaid beneficiaries by tackling the opioid crisis and integrating behavioral health, among other aims. |
| West Virginia: | West Virginia expanded Medicaid. On March 6, 2018, it was announced that Medicaid funding could be at risk after Gov. James Justice signed a bill increasing state workers’ and teachers’ pay by 5 percent following a statewide teachers’ strike. According to West Virginia Senate Finance Chairman Craig Blair, the pay raises could be funded through cuts to Medicaid, among other areas; however, the Governor stated that the Medicaid budget would not be cut. The strike was in response to low pay and rising health insurance costs. The raises are expected to cost the state treasury approximately $110 million a year. |
| Wisconsin: | Wisconsin did not expand Medicaid. The state covers adults up to 100 percent of the federal poverty line in Medicaid, but it did not adopt the Patient Protection and Affordable Care Act (PPACA) expansion. Still, managed care will soon be mandatory. The state’s Department of Health Services reported that through June 2018, it will roll out mandatory enrollment for many Supplemental Security Income (SSI) beneficiaries in Medicaid managed care. Approximately 28,000 beneficiaries may be impacted. The change impacts members who live an SSI managed care service area, are age 19 or older, and have a Medicaid SSI or SSI-related disability. Previously, SSI beneficiaries could opt out of managed care after two months. Up to two-thirds of eligible beneficiaries typically opt out of managed care. |
| Wyoming: | Wyoming did not expand Medicaid. A bill that would have required able-bodied Medicaid recipients in Wyoming to work at a job, go to school, or do volunteer work died this month in a House committee. The state’s Department of Health is partnering with Medicity to develop a new health information exchange for the state. The Wyoming Frontier Information Exchange will be a centralized repository of clinical data for participating patients, powered in part by Medicity’s data aggregation and interoperability technology. |
5th Circuit Finds Subject Matter Jurisdiction For Medicare and Medicaid Providers – Why Collards Matter
“I’d like some spaghetti, please, and a side of meatballs.” – This sentence is illogical because meatballs are integral to spaghetti and meatballs. If you order spaghetti – and -meatballs, you are ordering “spaghetti and meatballs.” Meatballs on the side is not a thing.
Juxtapose, a healthcare provider defending itself from an alleged overpayment, But during the appeal process undergoes a different penalty – the state or federal government begins to recoup future funds prior to a decision that the alleged recoupment is authorized, legal, or warranted. When a completely new issue unrelated to the allegation of overpayment inserts itself into the mix, then you have spaghetti and meatballs with a side of collard greens. Collard greens need to be appealed in a completely different manner than spaghetti and meatballs, especially when the collard greens could put the company out of business because of the premature and unwarranted recoupments without due process.
I have been arguing this for years based off of, not only, a 1976 Supreme Court case, but multiple state case law, as well as, success I have had in the federal and administrative courts, and BTW – logic.
On March 27, 2018, I was confirmed again. The Fifth Circuit Court of Appeals decided a landmark case for Medicare and Medicaid providers across the country. The case, Family Rehab., Inc. v Azar, 2018 U.S. App. LEXIS 7668, involved a Medicare home health service provider, which was assessed for approximately $7.8 million in Medicare overpayments. Family Rehab, the plaintiff in the case, relied on 88% to 94% of its revenue from Medicare. The company had timely appealed the alleged overpayment, and it was at the third level of the Medicare five step process for appeals. See blog. But there is a 3 – 5 year backlog on the third level, and the government began to recoup the $7.8 million despite the ongoing appeal. If no action were taken, the company would be out of business well-before any ALJ could rule on the merits of the case, i.e. whether the recoupment was warranted. How is that fair? The provider may not owe $7.8 million, but before an objective tribunal decides what is actually owed, if anything, we are going to go ahead and take the money and reap the benefit of any interest accrued during the time it takes the provider to get a hearing.
The backlog for Medicare appeals at the ALJ level is unacceptably long. See blog and blog. However, the federal regulations only prevent recoupment during the appeal process during the first and second levels. This is absolutely asinine and should be changed considering we do have a clause in the Constitution called “due process.” Purported criminals receive due process, but healthcare providers who accept Medicare or Medicaid, at times, do not.
At the third level of appeal, Family Rehab underwent recoupments, even though it was still appealing the decision, which immediately stifled Family Rehab’s income. Family Rehab, because of the premature recoupments, was at risk of losing everything, going bankrupt, firing its staff, and no longer providing medically necessary home health services for the elderly. This situation mimics a situation in which I represented a client in northern Indiana who was losing its Medicaid contract. I also successfully obtained a preliminary injunction preventing the provider from losing its Medicaid contract. See blog.
It is important to note that in this case the ZPIC had audited only 43 claims. Then it used a statistical method to extrapolate the alleged over-billings and concluded that the alleged overpayment was $7,885,803.23. I cannot tell you how many times I have disputed an extrapolation and won. See blog.
42 USC 1395(f)(f)(d)(1)(A) states that the ALJ shall conduct and conclude the hearing and render a decision no later than 90 days after a timely request. Yet the Fifth Circuit Court of Appeals found that an ALJ hearing would not be forthcoming not within 90 days or even 900 days. The judge noted in his decision that the Medicare appeal backlog for an ALJ hearing was 3 – 5 years. The District Court held that it lacked subject matter jurisdiction because Family Rehab had not exhausted its administrative remedies. Family Rehab appealed.
On appeal, Family Rehab argued the same arguments that I have made in the past: (1) its procedural due process and ultra vires claims are collateral to the agency’s appellate process; and (2) going through the appellate process would mean no review at all because the provider would be out of business by the time it would be heard by an ALJ.
What does collateral mean? Collard greens are collateral. When you think collateral; think collards. Collard greens do not normally come with spaghetti and meatballs. A collateral issue is an issue that is entirely collateral to a substantive agency decision and would not be decided through the administrative appeal process. In other words, even if Family Rehab were to only pursue the $7.8 million overpayment issue through the administrative process, the issue of having money recouped and the damage to the company that the recoupment was causing would never be heard by the ALJ because those “collateral” issues are outside the ALJ’s purview. The premature recoupment issue could not be remedied by an ALJ. The Fifth Circuit Court of Appeals agreed.
The collateral argument also applies to terminations of Medicare and Medicaid contracts without due process. In an analogous case (Affiliated Professional), the provider argued that the termination of its Medicare contract without due process violated its right to due process and the Equal Protection Clause and was successful.
The upshot is obvious, if the Court must examine the merits of the underlying dispute, delve into the statute and regulations, or make independent judgments as to plaintiff’s eligibility under a statute, the claim is not collateral.
The importance of this case is that it verifies my contention that if a provider is undergoing a recoupment or termination without due process, there is relief for that provider – an injunction stopping the premature recoupments or termination until due process has been completed.
Take Medicare or Medicaid? Why You Should Have an Attorney on Retainer
They say that lightning never strikes the same place twice, but tell that to my colleague Bill. Bill has been struck by lightning twice and has lived to tell the story. Granted, he was not physically standing in the same place that he was struck the first time as when he was hit by lightning the second time – so lightning technically didn’t hit the same place twice. But it did strike the same person twice. Maybe Bill is just extremely unlucky, or maybe Bill is extremely lucky because he lived through the incidents.
An intense shock can severely impair most of the body’s vital functions. Cardiac arrest is common. Yet Bill lived. Twice.
No one ever thinks they will get struck by lightning. But it happens. According to the National Weather Service, so far this year, lightning strikes have killed at least 20 people in the US, and that does not even take into consideration the people who were just injured, like my pal Bill.
A lightning strike is a massive electrical discharge between the atmosphere and an earth-bound object. A lightning bolt can heat the surrounding air to 50,000 degrees Fahrenheit—that’s five times hotter than the sun—and can contain up to 300kV of energy.
Yet most people do survive, in part because lightning rarely passes through the body.
Instead, a “flashover” occurs, meaning that the lightning zips over the body, traveling via ultra-conductive sweat (and often rainwater), which provides an external voltage pathway around the body. When people do die from a lightning strike, it is usually due to an electrical discharge-induced hear attack. A body hit by lightning will show various signs of trauma.
Like a gunshot, a lightning strike causes both an exit and entrance wound, marking where the current both entered and left the victim. Lichtenberg scarring, which outlines ruptured blood vessels, frequently covers the body in odd, almost beautiful, spiderweb patterns.
Surprisingly enough, many lightning strike survivors do not remember being struck. Instead, the only evidence of the traumatic event is burnt, displaced clothing and marks along the body.
For instance, many lightning strike survivors report memory issues, trouble with concentration and severe headaches, all of which last decades after the initial strike.
Due to the rarity of lightning strike cases, less time and resources have been devoted to better understanding how these strikes impact long-term brain function. An unpublished study by medical doctor Mary Ann Cooper found that there were “significant differences in brain activity between lightning-strike victims and healthy people as they performed mental-aptitude tests.”
Aside from impacting long-term brain function, lightning strikes are also known to blow out eardrums, prompting constant muscle twitches and moderate to severe nerve damage. Overall, the effects of a lightning strike may range from a slight inconvenience to a debilitating, lifelong struggle. In the case of my colleague, you would never be able to tell mind looking at him that he has been hit by lightning twice.
Why is this – extensive – discussion about lightning strikes relevant? – Or is it not?
If you are a health care provider and accept Medicare or Medicaid, the risk of an audit far exceeds your chances of getting struck by lightning. In FY 2016, CMS continued its use of the Affordable Care Act authority to suspend Medicare payments to providers during an investigation of a credible allegation of fraud. CMS also has authority to suspend Medicare payments if reliable information of an overpayment exists. During FY 2016, there were 508 payment suspensions that were active at some point during the fiscal year. Of the 508 payment suspensions, 291 new payment suspensions were imposed during FY 2016.
Medicare and Medicaid audits far exceed lightning strikes. Yet, providers believe in their heart of hearts that and on an audit (or an audit with bad results) will never happen to them, which causes providers to not engage in attorney until after the lightning strikes. Then it’s too late, and you have Lichtenberg scarring across your arm.
There is scene in Breaking Bad in which Saul, the attorney, stops a person from talking. He says, “Give me a dollar. Don’t tell me anything until you give me a dollar. Once money is exchanged, we will have attorney-client privilege.” What Saul was saying is that the exchange of money catalyzed the duty for Saul to keep all conversation confidential.
This was a low-point of legal-fiction television. It made great drama with zero accuracy.
The question is why should you have an attorney on retainer?
The obvious response is that you can have confidential conversations with said attorney at your beck and call. The honest truth is that you do not have to have an attorney on retainer in order for your conversations to be confidential. But is smart to do so, and I will tell you why.
If you call me and I have never represented you and you ask me a legal question, our conversation is legally protected, even if you hire a different attorney.
No – the reason to have an attorney on retainer is to be able to consult him or her with legal questions on a daily basis, and, especially of there is an ongoing audit. Most of my clients do not contact me when they receive the document request. They think, “Oh, this is no big deal. I will give my records to [state] or [federal] – [and/or its contractors] government and they will determine that my [Medicare] or [Medicaid] records are amazing. In fact the [state] or [federal] government my even ask me to educate other providers on what pristine records should look like. I got this. Easy, peasy, lemon-squeezey.” They contact me when they get an accusation of an alleged overpayment of $5 million. Lichtenberg scarring has already occurred.
The smartest clients contact me prior to receiving an alleged overpayment of $12 million or an accusation of fraud. They contact me the moment they receive a notice of an audit or a request for documents…before ever submitting documents to the government.
Because, regardless the type of provider, be it dentist, behavioral counseling, podiatrist, chiropractor, or hospital, understand that every communication with a government auditor and/or contractor is admissible in court – if the communication does not go through an attorney. When the [state/federal] auditor asks to see a record and you say, “Let me get it from my off-site storage facility” – BAM – HIPAA violation. When the state/federal auditor asks to see a record and you say, “Here it is,” and fail to keep a copy for yourself, there can be discrepancy in the future as to what you actually provided. And you are in a “he said she said” battle – never good.
On the other hand, if you have an attorney on retainer, you can ask any question you need, you can get any advice you desire, and it’s all confidential. It is as though you have Siri in your back pocket. It’s the 411 for legal information. It’s an ATM for legal advice. AND it is all confidential.
Next time you think to yourself, “Self, I will ace any Medicaid or Medicare audit. I don’t need counsel. I can talk to the auditors myself without an attorney. I got this.”
Think again. [Don’t, necessarily, call Saul, but call someone.] Because, like lightning strike victims, you may not even remember the audit. Until you are scarred.
