NC MCOs: Accountability Must be Somewhere

Who is accountable for the Managed Care Organizations (MCOs): The MCO itself? Or the contractor, NC Department of Health and Human Services (DHHS)?

Over the last month, I have pondered this question over and over.  When I run in the morning (my de-stressor) I ponder: Who is in charge of Alliance Behavioral Health (Alliance), one of North Carolina’s MCOs, Alliance or DHHS?

Why is this important?

Let me set the stage.

In North Carolina, if a health care provider wants to provide health care services to Medicaid recipients, the provider must obtain a contract with whichever MCO is in charge of their providing area.  It just so happens that Alliance is the one of the largest MCOs in NC, managing the public mental health, intellectual/ developmental disability and substance abuse services for the citizens of Durham and Wake counties. Alliance contracted with DHHS (Division of Medical Assistance (DMA) is the sub-set in charge of Medicaid) to act as an MCO for North Carolina.

Now, North Carolina (DHHS) is in the process of conducting prepayment reviews, which is a review of a provider’s claims before they are paid to ensure that the provider complied with all Medicaid payment rules.  One of the contracted companies  is the Carolinas Center of Medical Excellence (CCME).

So if DMA places a provider on prepayment review, causing a prepayment review by CCME, automatically, that provider is “not in good standing” with DMA.  Because the provider is “not in good standing” with DMA, Alliance (or whichever MCO) rescinds the Medicaid contract with the provider, resulting in the provider having to close its doors and the Medicaid recipients being discharged.

Obviously, the repercussions of “not being in good standing” with DMA carries dire consequences to both the provider and Medicaid recipients.  Already Medicaid recipients have difficulty finding providers willing to accept Medicaid. Terminating more providers from the Medicaid contract only worsens the situation.

Nonetheless, a domino effect occurs.

Domino 1: DMA places a provider on prepayment review;

Domino 2: CCME begins an audit process of  the provider’s records, which will take at least 6 months and provide little chance of any provider meeting 70% accuracy rate;

Domino 3: DMA places the provider on the “naughty list” or “not in good standing;”

Domino 4:  Alliance (or whichever MCO) sends correspondence stating that it is up to the provider to resolve the “not in good standing” with DMA, because, if resolved, Alliance would be able to contract with the provider;

Domino 5:  CCME determines that the provider is unable to meet the 70% (because, although the denials meet the appropriate clinical policy, the documents fail to meet the  arbitrary and ever-changing requirements of CCME);

Domino 6: DMA terminates the provider’s Medicaid contract.

Domino 7: Alliance (or whichever MCO) sends correspondence stating that the MCO is rescinding the Medicaid contract with that provider due to the provider “not being in good standing;”

Domino 8: (a) Either the provider ceases to provide Medicaid services (which either closes its doors or closes its doors to Medicaid recipients); or (b) the provider goes belly -up.

Domino 9: The Medicaid recipients suffer.  The Medicaid recipients served by the now-defunct or now-nonMedicaid-accepting  provider loses his or her needed services, is forced to find another provider, when the relationship had already been built with his or her current provider, and with the very real risk that another provider of equal quality does not exist in the area.

I’ve recently discovered that, as intertwined as DMA and Alliance is, neither entity truly understands the relationship.  Such as, if Alliance rescinds a Medicaid contract from a provider, Alliance may not truly want to rescind the contract, but Alliance feels as if Alliance is forced to rescind a contract if the provider is in “not in good standing” with DMA.  Likewise, if Alliance rescinds a contract, DMA feels that Alliance’s decision to rescind the Medicaid contract is strictly that, Alliance’s decision.

So what is the answer? Which entity is in charge?

Sadly, I do not think that anyone knows the answer as of yet, including Alliance and DMA.

But, people are noticing the problem.  Today at a hearing for an injunction against the State to force DMA to instruct Alliance to accept a provider’s Medicaid contract, the Administrative Law Judge (ALJ), before any evidence was presented, stated that he understood the issue.  He stated that whatever the answer, SOMEONE (or SOME ENTITY) MUST be accountable.

Whether Alliance is standing in the shoes of DMA as an agent or Alliance is an independent contractor with no accountability to DMA, whichever the case, regardless, SOME ENTITY MUST BE ACCOUNTABLE.

Bravo, ALJ Judge.

Alliance cannot blame DMA while DMA argues it has no control over its contracted entity, Alliance. Either Alliance or DMA is incorrect. Some entity must be in charge.

Who is accountable for the Managed Care Organizations (MCOs): The MCO itself? Or the contractor, NC Department of Health and Human Services (DHHS)?

I do not know the answer. But I am hopeful that we will know the answer soon.


About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on March 7, 2013, in Alliance, CCME, Division of Medical Assistance, Health Care Providers and Services, Injunctions, MCO, Medicaid, Medicaid Audits, Mental Health, Mental Illness, NC DHHS, North Carolina, OAH and tagged , , , . Bookmark the permalink. 2 Comments.

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