Monthly Archives: April 2013

Medicaid Jurisdictional Questions? Answer is OAH, OAH, OAH!!

Jurisdiction…ugh…what a dry, boring topic.  But wait!! Legal jurisdiction is imperative information for all my health care provider readers. Let me explain:

  • Say you disagree with a Medicaid denial of services for one of your patients; or
  • Say you disagree with the denial of your Critical Access Behavioral Health Agencies (CABHA) certification; or
  • Say you disagree with being placed on prepayment review or undergoing a post-payment audit.

In what venue do you have to legally pursue the claim?  Right now, some DMA-contracted companies are claiming that OAH does not have jurisdiction over them. In fact, I even have an Order signed by a Judge directing the contracted company to act, yet the company argues that OAH has no control over it.  However, the State Plan states differently….

The Office of Administrative Hearings (OAH) has jurisdiction (meaning OAH can hear lawsuits against) state agencies.  “Agency” is statutory defined as an agency or an officer in the executive branch of the government of this State and includes the Council of State, the Governor’s Office, a board, a commission, a department, a division, a council, and any other unit of government in the executive branch. A local unit of government is not an agency.

The state court system, instead is for civil actions.  The district court division is the proper division for the trial of all civil actions in which the amount in controversy is ten thousand dollars ($10,000) or less; and the superior court division is the proper division for the trial of all civil actions in which the amount in controversy exceeds ten thousand dollars ($10,000).

Whether you are required to proceed legally at OAH or state court will impact your claim A TON!

The OAH Mission Statement is:

To serve the citizens of North Carolina, with quality and efficiency, by providing an independent forum for prompt and impartial resolution of administrative law contested cases involving citizens and state agencies; investigating alleged acts of unlawful employment practices in state government; functioning as the State’s codifier and publisher of all administrative rules; and reviewing rules before the Rules Review Commission.

Daily, OAH decides cases against the state government.  Therefore, the judges at OAH are intimately involved in state legislation and the state governments limits.  Also, OAH is a much faster process.  A Contested Case Hearing filed in OAH will be heard in months (a preliminary injunction, even quicker); whereas a complaint filed in Wake County Superior Court may not be heard for years (it may be faster or slower in rural areas. I just don’t know).

From my cursory explanation of OAH, it would appear that any Medicaid issue against the state government would automatically be heard at OAH, right? Well, recently, I have encountered a number of Division of Medical Assistance’s agents arguing that (1) these agents are not agents, they are independent contractors; and (2) that OAH does not have jurisdiction over the agents.

Specifically, DMA contracts with companies to manage Medicaid, conduct audits, conduct investigations, etc.  The Managed Care Organizations have been contracted with DMA to manage Medicaid behavioral health.  Remember, since Western Highlands was consumed by Smokey Mountain, North Carolina now has 10 MCOs.  They are, in no particular order:

  • Coastal Care
  • East Carolina Behavioral Health
  • Alliance Behavioral Health
  • Cardinal Innovations HealthCare Solutions
  • CenterPointe Human Services
  • Smokey Mountain Center
  • Partners Behavioral Health Management
  • Sandhills
  • MeckLink Behavioral Healthcare
  • EastPointe

So what if you have a legal disagreement with an MCO? State court or OAH?  So far, all MCOs have declared themselves to be out of OAH jurisdiction.

However, remember my blog, “Final Agency Decision No Longer Needed in Appeals” from March 5, 2013? If not, feel free to go back and read it.

The point is, unless North Carolina receives a specific Waiver from the federal government, NC must follow federal law which requires a single state agency to administer Medicaid. If OAH is allowed a final decision, then, in essence, another entity is deciding a Medicaid issue.

So, is NC in violation of federal law? Well, yes, as to other federal laws, but not in this case.  NC submitted a State Plan Waiver, which was granted on December 27, 2012.

The Waiver states, in pertinent part, OAH acknowledges and also agrees that the issue to be determined at final hearings conducted in accordance with this waiver is whether a single state Medicaid agency or one of its contractors or agents exceeded its authority or jurisdiction, acted erroneously, failed to use proper procedure, acted arbitrarily or capriciously, and/or failed to act as required by law or rule…”

According to the Waiver, it does not matter if the MCO is a contractor or agent. Either way, OAH has jurisdiction.

Know Your Rights, Medicaid Providers! RACs Cannot Recoup Claims Paid Over 3 Years Ago

Undergoing a Medicaid audit can seem overwhelming, to say the least.  I mean, the Department of Health and Human Services (DHHS), Division of Medical Assistance (DMA) has these Recovery Audit Contractors (RACs) reviewing Medicaid claims going back years.  If you have to pull the DMA Clinical Policy from 2007 in order to determine your compliance then the RACs are going  back too far, right? There has to be a statute of limitations or statute of repose, right?

There is.

RACs are prohibited from identifying overpayments on claims more than 3 years from the date the claim was paid. There is also a hard look-back limit of October 1, 2007.

HOT TIP:  If you have a Tentative Notice of Overpayment, check the dates you were paid for the claims.

My question is: Who or What entity is supervising the RACs to ensure no claims are recouped from more than 3 years ago? If the provider does not know the 3 year limit, is the RAC self-enforcing itself? Well, at least everyone reading my blog is knowledgeable now.

Also, RACs must comply with all reopening regulations found in 42 C.F.R. 405.980 (2008) because, in essence, these RACs are reopening claims that already were authorized, paid for, and done.

The regulations require that if a RAC reopens a claim more than 1 year after it was paid, then the RAC must show good cause….AND….document such good cause.

How many providers have asked the RACs to show the documented good cause for claims paid over one year ago?

Now you know you can…and should!

Medicaid Provider Tip: How to Read a Claim Audit Finding

Claim Audit Findings (CAF).  It even sounds scary. Not to mention, if you receive a CAF, it means that you have been audited by the State or an agent thereof (which, in it of itself, is a scary process). So seeing a CAF does not make you happy. But it helps if you understand what the CAF is and, more importantly, is NOT telling you.

Here is what a CAF looks like:


This particular CAF was drafted more recently (the review was conducted March 2012, but this CAF was not drafted until much later).  I have seen earlier CAFs handwritten.

For the sake of this example, we are reviewing a CAF for 16 units billed for Community Support Team. Regardless of the type of health care service, the CAF will be on an identical form or very similar.

At the top of the CAF, you have all the information you need to pull the particular file to compare your file to the CAF.  The Medicaid recipient’s name, date of birth, and Medicaid number is listed.  Most importantly, the date of service (DOS) is listed.  No matter how many times you provided services to this recipient, the DOS on the CAF is the only DOS that matters.  However, word of caution, most of the time, you will receive 2-10 CAFs for one particular client for 2-10 DOS.  All the DOS matter in that case.

Moving to the middle section of the CAF, you can see on the left side, the CAF reads either “administrative” or “clinical.”  The middle of the middle (nice explanation, huh?) has a question.  Then the right side (of the middle section) has “Not Met/No,” or “Yes/Met,” etc.

I will go through each type of administrative or clinical topic.  The bottom of the CAF supposedly details more specifics about each topic.  Although I will show you how unhelpful the explanations are. In fact, the only helpful part of the bottom section is the fact that it shows you which year’s Clinical Policy the auditor used (as in which date. Since the policies have been revised so many times, the auditor frequently uses the incorrect policy.  It is important to have the policy in front of you that was in place for the particular DOS).

Ok, the topics on the CAF (the middle section of the CAF).  The topics are divided between administrative and clinical.  Administrative issues are (seemingly) objective; are the documents in the file? Clinical issues are more subjective, such as was there a demonstration of medical necessity and were the service notes adequately written (apparently these auditors believe that every provider should also be an ametuer novelist).

Let’s go through the administrative topics.

A1: Authorizations

“Is there an authorization in place covering this date of service?”  This is just a matter of did the Medicaid auditor review an authorization in the file at the time he or she reviewed the file.  Even if you had a valid authorization in place at the DOS, if  the auditor did not see the authorization in the file ate the time of the audit, you will receive a “Not Met” for A1.  

(“Not met” means you failed that particular facet of the audit and you will need to repay the amount received for the service.)

Another reason I have seen “Not Met” under A1 is for services that do not require authorizations.  The auditors apparently cannot figure out which services require authorizations and which do not.

A2: Service Orders:

“Is there a valid service order for the service billed?”  Again, the auditor looks in the file for a service order for the code billed.   The “Not Mets” I have seen for service orders range from the signature on the service order being illegible; therefore, the credentials of the signator could not be assessed to the service order ordering one CPT code, while the service was a different CPT code.  

A3: Person-Centered Plan (PCP)

“Is there a valid PCP in place for the date of service billed?”  Now, obviously, PCPs are used in Community  Support Team (CST), but not in all areas of health care, not even in all areas of behavioral health.  Nonetheless, I have seen CAFs require a PCP, even when a PCP is not required for particular service.  I’ve also seen CAFs that read “treatment plan/PCP,” but the CAF will not inform you for which (a treatment plan or PCP) the auditor has been told to look. Many “Not Mets” are because of the confusion on the part of the auditors as to what documentation is actually required for a service.

A4: Staffing Requirements:

“Does the team meet staffing requirements per the service definition?”  For A4, the auditors will actually look beyond the file (usually). As the onset of an audit you will be required to provide the auditor with all your staff’s credentials.  Beware: Many, many times I have a “Not Met” for A4 because the auditor could not read the signature; therefore, the auditor could not determine which staff member rendered services, much less whether the staff member met all required credentials.  But the auditor will not ask you whose signature is on the document; apparently, there is some rule somewhere in the world according to Medicaid auditors that signatures must be legible, because I sure as heck have not seen that rule.

A5: Staff Qualifications:

“Is there documentation that the staff is qualified to provide the service billed?”  This is a tad different from A4.  In A4, the governing criteria is the DMA Clinical Policy (whichever is applicable to the services you provide).  A5 is more specific.  If the staff member is providing substance abuse prevention, does the staff have the credentials showing that he or she is certified to provide substance abuse services.  The qualifications required depends on the service provided.

A6:Health Care Public Registry

“Did the provider agency complete a Health Care Public Registry check on any unlicensed staff providing the service billed prior to the date of service?”  Just as it reads, A6 requires the provider agency to complete a Health Care Public Registry for any unlicensed staff.  Here, the auditor will look for a piece of paper proving that the Registry check was conducted prior to the date of service.  But like most other topics, the auditor will not simply ask you whether you have completed a Registry check if the Registry check is not easily found, such as filed in the individual staff member’s file, not multiple copies filed with every single recipient who receives services from that staff member.  You will just receive a “Not Met.”

A7: Disclosure of Criminal Convictions

“Did the provider agency require disclosure of criminal convictions by staff person(s) who provided the service?”  A7 is so poorly drafted.  My high school English teacher would be appalled.  This is a classic example of a sentence in the English language not doing its job (which is to communicate).  Does the provider have to show the auditor that the provider has a written rule/policy that all staff members are required to disclose any criminal convictions? Or is the auditor actually looking for a criminal background check of all staff? A7 gives no guidance.  If you go down to A7 in the bottom section (that we will talk about later) you see that no further guidance is given.  So, you will just have to hold your breath in anticipation as to the answer until I get to the bottom section explanations.

C8: Entrance Criteria

“Does the Comprehensive Clinical Assessment support entrance criteria, per the service definition?”  C8 is the topic at which my blood begins to boil. Essentially, C8 is asking whether the Medicaid recipient meets entrance criteria for the service provided.  Mind you, providers (unless prior authorization is not required for the specific service) cannot bill for a service unless there is prior authorization from DMA (or, more specifically, the contracted company that was reviewing prior authorization for the state…it was ValueOptions for behavioral health).  So these auditors are reviewing services for recipients for which the provider already received prior authorization (meaning entrance criteria was met) from DMA or its acting agent and now, another contracted company, sometimes years later, is saying, “Hold on there. I know you already received prior authorization for this service, but in my subjective opinion, I disagree. I don’t think medical  necessity was met; entrance criteria was not met.” I don’t know how many due process or fundamental fairness rules C8 violates, but, so far, C8 is still part of the Medicaid audits.

C9: Individualized PCP

“Is the PCP individualized for the person?” Remember, above I wrote that sometimes, for different services, C9 will read treatment plan/PCP.  Regardless, if prior authorization is required for the service, the PCP was already reviewed before prior authorization was given.  See argument for C8.

C10: Crisis Plan

“Does the Crisis Plan include the required elements per the PCP Instruction Manual?” Again, C10 may change depending on the service.  But, regardless, if prior authorization is required for the service, the PCP, including the Crisis Plan, was already reviewed before prior authorization was given.  See argument for C8.

C11: Timeframe of Signature

“Is the documentation signed by the person who provided the service within the designated timeframe?”  This may be one of my favorites. Because you do not necessarily submit service notes for reimbursement daily, there are times that you submit multiple claims on one day.  Maybe you have an electronic service note system that you draft all service notes then sign them all as you submit them. (This is only one example of many of the nonsensical results of C11). The auditors will claim that you must sign all service notes on the DOS.  You will be told your service note is out of compliance if the dates of signature and service do not match. But my question is out of compliance with what? With the utopian laws of providing health care services? Certainly not out of compliance with the DMA clinical policy (that I have seen) or the Basic Medicaid Billing Guide.  Nothing that I have seen states that providers must sign the service notes on the date the service was provided.  The policies state the service notes must have the DOS and must be signed. Period.

C12: Billed Units

“Does the documentation support the units billed?”  For this topic, the auditors are looking at the service note and trying to locate a “time in” and “time out.”  Or a duration period noted on the service note.  The issue with C12 that I have seen is that some CPT codes, not all, but some, have, in the very definition, the duration specified. For example, in Outpatient Behavioral Health services, 90834 (now) denotes 38-52 minutes of psychotherapy. Before January 2013, 90804 denoted 25-30 minutes of individualized therapy.  If the definition of the CPT code defines the duration, why is there an additional requirement to physically write the time in and out on the service note? Apparently, the auditors know of a reason.

C13: Goals on PCP

“Does the service note relate to the goals in the PCP?” Again, C13 may change depending on the service.  But, regardless, C 13 is asking whether the treatment plan or the medical objectives for the patient are germane to the activities on the service note.  This is such a subjective determination.  However, I’ve had auditors deem no germaneness when a goal for the recipient is improving relationships with non-family members, and the service note denotes that the therapeutic treatment was role-playing as if the therapist was a non-family member. Hmm. Germane?

C14: Assessment of Progress

“Does the service note reflect assessment of progress toward goals?”  C14 is similar to C13 as to its subjectiveness.  Here, I have had auditors determine “Not Met” for C14 when the service note stated that the recipient is improving, but scared of consequences of result. Hmmm. Assessed progress?

C15: Individualized Interventions

“Are the interventions in the service note individualized per person and reflective of the service definition?”  What? How are services for a specific individual not “individualized?” What the auditors are not telling you in C15 is that the auditors are looking for service notes that appear to “cut and pasted” from prior service notes with minimal changes.  Apparently the auditors believe that if you provide one hour of therapy to a Medicaid recipients that that specific goal was met and that at next therapy session you can move on to the next goal.  Apparently, you do not have to work on one goal more than once.

A16: Unit Conformity

“Do the units documented match the units paid?” This is an administrative topic, but basically, mirrors C12.

Ok, there are the topics and my 2 cents worth on them.

Going to the bottom section of the CAF, I believe I discussed most of the issues in the bottom while I was describing the middle section. 

But for example, in bottom section C7 (of which you have so calmly awaited the explanation), “no employee information” submitted means (in auditor language) the auditor did not see a criminal background check prior to DOS.  wouldn’t it be so much easier if the explanations found in the bottom section actually stated what document was actually needed?

Or, for example, in bottom section A5, the auditor may not necessarily be saying that no staff information was provided.  A5 may actually mean that either (1) the auditor could not read the staff’s signature; and, therefore, the auditor could not determine whether the qualifications had been submitted; or (2) the service note was not in the file at the time the auditor reviewed the file, so the auditor cannot determine which staff member conducted the service.  But it is up to you to decipher.

Or, for example, in bottom section C8, when the auditor writes that no documentation submitted to show entrance criteria was met, the auditor is actually saying that, at the time the auditor reviewed the file, the file did not contain either an assessment or initial intake or referral or something to show the diagnoses of the patient.  However, it is interesting to note that during the audit of the file, if a provider tries to supplement the file with documents for which he or she knows the auditor is looking, the auditor refuses, saying that he or she can only review the file.  But C8 can mean that, in the subjective opinion of the auditor, that the documentation provided does not meet entrance criteria, or it can mean that the auditor does not have a full understanding of the entrance criteria, or it can mean that a documents proving entrance criteria was accidentally misdated.  C8 can mean a plethora of different scenarios; none of which are explained in the “explanation” of C8.

So, there you go, Claim Audit Findings 101.  Surely, you have no questions; it’s so easy!!

Regardless, appeal, appeal, appeal.

2013 Health Care Today: Knicole C. Emanuel Will Be a Panelist as Medicaid Expert

For anyone interested, the Triangle Business Journal, is hosting a Health Care symposium discussion, which will mainly revolve around the issues affecting employers, health care providers, insurance and benefits consulting companies as everyone gets ready for the implementation of federal health care law in 2014.  I am sitting as a panelist for the discussion.

Here is the link:

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2013 Health Care Today

How will the upcoming health care changes affect small businesses and their employees? Join us to find out!

  • When: Thursday, May 2, 2013,7:30am-9:30am Add to my calendar
  • Where: Sheraton Imperial4700 Emperor Blvd. Durham NC 27703

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  • Suggested Dress: Business

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2013 Health Care Today:  Your Impact, Your Dollars

How will the upcoming changes affect small businesses and their employees?

The symposium discussion will mainly revolve around the issues affecting employers, health care providers, insurance and benefits consulting companies as everyone gets ready for the implementation of federal health care law in 2014.

Moderator:  Triangle Business Journal Health Care Reporter Jason deBruyn


  • Dr. Allen Dobson, President and CEO of Community Care of North Carolina
  • Rick Kelly, Senior Vice President of Progressive Benefit Solutions
  • Adam Searing, Director of Health Access Coalition for the North Carolina Justice Center
  • Brad Wilson, President and CEO of Blue Cross and Blue Shield of North Carolina
  • And me:) Knicole C. Emanuel, Medicaid Attorney

More panelists to be announced soon…

Join Triangle Business Journal as a panel of experts discuss these very important changes in the health care rules that could have a profound impact on our economy.

Current North Carolina Medicaid Eligibility

Since this blog provides me with the unique perspective to review the search engines that people are using when they find my blog, I have noticed that many people are just trying to out whether they are Medicaid eligibile.  They hear about Obamacare expanding Medicaid to more recipients and they want to know whether Obamacare applies to them.

Therefore, let me explain to NC Medicaid recipients:

Obamacare (as it applies to Medicaid eligibility due to expansion under the Affordable Care Act (ACA)) does NOT apply to NC as of yet.  There is a chance NC will expand if we can reform the Medicaid system we have now.

Therefore, below is the current eligibility requirements for NC Medicaid eligibility: (I am also providing a link to the actual charts on the Department of Health and Human Services’ (DHHS) website because I understand that these pictures of the chart can be blurry and difficult to read, especially when you zoom in.)

Medicaid Eligibility Chart



NC Medicaid and Constitutional Due Process

Due process.  What is due process? We hear the phrase due process constantly in the media, in movies, in everyday vernacular…but what is “due process?” And is due process germane to Medicaid contracts?

Due process is part of our Constitution’s fabric.  Thomas Jefferson, one of our founding fathers, drafted the passage in the Declaration of Independence that states “all men are created equal…” there are “unalienable rights…” including “life, liberty and the pursuit of happiness.”  He influenced the Due Process Clauses of the Fifth and Fourteenth Amendments, which provide that no person shall be deprived of “life, liberty, or property without due process of law.”

For a definition of due process, I am going to utilize the wonderful website of “Wikipedia.” Few websites have such a broad-defining ability and its definition of due process and the importance thereof is great:

“The Fifth and Fourteenth Amendments to the United States Constitution each contain a Due Process Clause. Due process deals with the administration of justice and thus the Due Process Clause acts as a safeguard from arbitrary denial of life, liberty, or property by the Government outside the sanction of law.[1] The Supreme Court of the United States interprets the Clauses however more broadly because these clauses provide four protections: procedural due process (in civil and criminal proceedings), substantive due process, a prohibition against vague laws, and as the vehicle for the incorporation of the Bill of Rights.”

Legally, the key components to due process is “denial of life, liberty or property.”  In order to trigger due process, you have to prove that whatever is being taken from you is a denial of “life” “liberty” or “property.”  For example, if you argue that a policeman cannot take your license from you without due process, the answer is, yes he or she can because driving is a privilege, not a right.

So is a Medicaid contract a right? Or a property right? A property right that requires due process prior to termination?

There are a number of ways to argue this.  Of course, one argument is, no, a Medicaid contract is a privilege not a right. I’m sure that the Division of Medical Assistance (DMA) would argue the former.  However, I disagree.  I also think that federal law would disagree (if it could speak).

In order to receive federal funding for Medicaid, North Carolina is required to submit a State Plan under Title XIX of the Social Security Act.  The State Plan defines the scope of Medicaid and presents “promises” to which NC agrees to adhere.  Part of the State Plan is adhering to all pertinent federal statutes, regulations, as well as  including adherence to the Constitution of the United States.

Our State Plan states, in pertinent part, that it promises that “The State has an adequate appeal process in place for entities to appeal any adverse determination by the Medicaid RACs.”

Yet, N.C. Gen. Stat. 108C-7 states, in pertinent part, “[t]he decision to place or maintain a provider on prepayment claims review does not constitute a contested case under Chapter 150B of the General Statutes. A provider may not appeal or otherwise contest a decision of the Department to place a provider on prepayment review.”

How does our State Plan promise an appeal process while the NC Gen. Stat. states no appeal is allowed? It would appear to me that the State Plan and NC Gen. Stat. 108C-7 are at odds.

Let’s set the stage:

The RACs are the Recovery Audit Contractors that manage the audits and exploration of prepayment reviews for a health care provider. In North Carolina, the RACs are the Carolinas Center for Medical Excellence (CCME), Public Consulting Group (PCG, and HP Enterprises (HP).

Prepayment reviews are reviews on certain types of claims that historically result in high rates of improper payments. These reviews will focus on seven states with high populations of fraud- and error-prone providers (FL, CA, MI, TX, NY, LA, IL) and four states with high claims volumes of short inpatient hospital stays (PA, OH, NC, MO) for a total of 11 states.

While on prepayment review, the health care provider may not be reimbursed for Medicaid services rendered until “the provider achieves three consecutive months with a minimum seventy percent (70%) clean claims rate.” (See N.C. Gen. Stat. 108C-7(f)).

Those withholdings of Medicaid reimbursements, I argue, meet the standard of “property.” I would also argue that the withholding of Medicaid funds without due process constitutes “illegal state action” (see below) if the provider can prove that the prepayment review is conducted erroneously.

Theoretically prepayment reviews are designed to catch Medicaid fraud.  In reality, the prepayment reviews are overbroad and threatening the very existence of quality health care providers.

So, are the RACs’ withholding of Medicaid reimbursements for services rendered a deprivation of “life, liberty or property?”

In the Supreme Court case, Wilder v. Virginia Hospital Association, in 1990, the Supreme Court held that providers also had a private cause of action under Section 1983 against illegal state action.

Arguably, North Carolina’s implementation and enforcement of N.C. Gen. Stat. 108C-7 that refuses providers a right to appeal would be an illegal state action according to federal law.

Agree? Just haven’t had a chance to challenge 108C-7 yet.  There are so many arguments against its constitutionality.  But due process is one argument.

Prisons and Emergency Rooms: Our New Medicaid Mental Health Care Providers?

Emergency rooms and jails are our mental health care providers for Medicaid recipients?

My best friend is an ER trauma nurse.  She told me that a majority of patients are mentally ill.  One man came in to the ER, screaming at the top of his lungs, “Get me my lilly pad!”  Apparently he believed that he was a frog.  While you may smile at the humorous notion of the lilly pad man, it is a sad tribute to the state of mental illness in North Carolina.  Why was he not getting the care he needed?

And here I  thought mental health care was so important. In light of recent events, I would venture to say that mental health is quickly becoming our nation’s most pressing issue.

First let me say, Boston…so tragic.  My prayers are with all families affected by the bombing.

So you would think with all the hoopla in the aftermath of the Boston bombing and other serious heinous acts (Connecticut) that our mental health system would be top priority.

Is there a correlation between poor mental health systems and violent crime? Yes.

Here are some studies:

  • The present study of public psychiatric beds in the United States suggests that 42 of the 50 states have less than half the minimum number of beds considered to be reasonable by knowledgeable experts. In 32 of the states, the shortage is critical or severe.
  •  A study in Ohio compared 122 patients with schizophrenia who had committed violent acts with 111 patients with schizophrenia who had not committed such acts. The violent patients had significantly more prominent symptoms and significantly less awareness of their illness. Friedman L, Hrouda D, Noffsinger S et. al. Psychometric relationships of insight in patients with schizophrenia who commit violent acts. Schizophrenia Research 2003;60:81.
  • A study of 961 young adults in New Zealand reported that individuals with schizophrenia and associated disorders were two-and-one-half times more likely than controls to have been violent in the past year. If the person was also a substance abuser, the incidence of violent behavior was even higher. Arseneault L, Moffitt TE, Caspi A et. al. Mental disorders and violence in a total birth cohort. Archives of General Psychiatry 2000;57:979–986.
  • A study of 63 inpatients with schizophrenia in Spain reported that the best predictors of violent behavior were being sicker (i.e., higher scores on symptom measures) and less insight into their illness. “The single variable that best predicted violence was insight into psychotic symptoms.” Arango C, Barba AC, Gonzalez-Salvador T et. al. Violence in schizophrenic inpatients: a prospective study. Schizophrenia Bulletin 1999;25:493–503.
  • A 10-year follow-up of 1,056 severely mentally ill patients discharged from mental hospitals in Sweden in 1986 reported that “of those who were 40 years old or younger at the time of discharge, nearly 40 percent had a criminal record as compared to less than 10 percent of the general public.” Furthermore, “the most frequently occurring crimes are violent crimes.” Belfrage H. A ten-year follow-up of criminality in Stockholm mental patients. British Journal of Criminology 1998;38:145–155.
  • A study of 331 individuals with severe mental illness in the United States reported that 17.8 percent “had engaged in serious violent acts that involved weapons or caused injury.” It also found that “substance abuse problems, medication noncompliance, and low insight into illness operate together to increase violence risk.” Swartz MS, Swanson JW, Hiday VA et. al. Violence and severe mental illness: the effects of substance abuse and nonadherence to medication. American Journal of Psychiatry 1998;155:226–231.

What about North Carolina? Where are our mentally ill? In jails? Hospitalized? Or receiving quality mental health care.

The study “More Mentally Ill Persons are in Jails and Prisons…” states, “Using 2004–2005 data not previously published, we found that in the United States there are now more than three times more seriously mentally ill persons in jails and prisons than in hospitals. Looked at by individual states, in North Dakota there are approximately an equal number of mentally ill persons in jails and prisons compared to hospitals. By contrast, Arizona and Nevada have almost ten times more mentally ill persons in jails and prisons than in hospitals. It is thus fact, not hyperbole, that America’s jails and prisons have become our new mental hospitals.”

Having a strong, competent, and easily accessible system to serve those people suffering from mental illness is key to so many things you would want in a society: (1) those suffering from mental illnesses would receive the quality health care so needed; (2) there would be less homeless; (3) there would be less violence (see above-referenced studies).

Now, since this is a Medicaid blog, I will obviously concentrate on the Medicaid population.

So what is North Carolina doing regarding the mental health system for Medicaid recipients?

With the implementation of the Managed Care Organizations (MCOs), the hiring of Recovery Audit Contractors (RACs) and the utter lack of supervision by the Division of Medical Assistance (DMA), the Medicaid mental health system is spiraling downward.

Medicaid recipients are not receiving the care needed because of the state’s, MCOs’ and RACs’ treatment of health care providers willing to accept Medicaid.

Here are some serious and real-life examples:

1. The MCOs are denying authorizations for more expensive mental health services.

In a certain county, a certain MCO is denying all ACTT services, stating the Medicaid recipients do not meet eligibility requirements. ACTT, or Assertive Community Treatment Team services.  ACTT is a 24-hour, 7 day/week service for the seriously mentally  ill. Since the MCO denied ACTT services in this certain county, despite medical necessity, 2 discharged ACTT recipients have committed crimes and become incarcerated. One discharged recipient attempted suicide. Two in jail; one in a hospital.  Thank you, new mental health care providers.

2. The RACs are causing quality health care providers who have never committed fraud to have their Medicaid contracts terminated based on paperwork nit-picking and causing Medicaid recipients to lose their provider.

One such provider serves teen-age boys suffering mental illnesses with violent tendencies. With its Medicaid contract terminated and the inability to pay its staff, those boys may soon be homeless and on their own. The consequences could be catastrophic. Jails and hospitals, I am sure.

What is DMA doing about the MCOs denying medically necessary services and the RACs terminating health care providers needlessly and erroneously?


DMA states that MCOs and RACs are independent contractors; therefore, DMA cannot supervise the MCOs and RACs. I say, “Hog-wash.” DMA cannot divorce itself the duties of managing Medicaid.

But, regardless, stop pointing fingers.  Who cares if its DMA’s fault that the teenage boys receiving residential Medicaid services will be homeless because the RACs erroneously and without due process terminated the provider’s contract? Just fix it. Period.

Stop the jails and emergency rooms from becoming North Carolina’s mental health care providers!

More Audits, Less Health Care Providers Who Accept Medicaid!

In my profession, I come across so many health care providers…of all sorts….dentists, psychiatrists, speech therapists, general practitioners, etc. Many of these providers and most of my clients, despite the audits, despite the immense paperwork, despite the low reimbursements, despite the lack of communication with the Division of Medical Assistance (DMA) and all agents, most providers still want to serve Medicaid recipients, even after the horrible events the providers are dragged through.

But, today, I had two potential clients receive a consultation.  When I asked, “Is your goal to get your Medicaid contract back?” Potential clients answered (paraphrasing), “Heck no!!!!”

These potential clients were quality health care providers.  Like so many other providers, these potential clients committed no fraud.  All they did was provide quality health care services to Medicaid recipients and fell victim to paperwork nitpicking by DMA and agents (Managed Care Organizations (MCOs) and Recovery Audits Contractors (RACs)).

But these potential clients were sick of it. They were continuing their practices, but without Medicaid recipients.  So when they open their doors and Medicaid recipients come for help, there will be two more health care providers saying, “Sorry. We don’t accept Medicaid.”

Recently, I have watched Gov. McCrory and Director Wos in interviews.  I seem to remember Director Wos saying, in an interview, that she wanted North Carolina to be the best place for providers to practice health care and accept Medicaid.

I think, if memory serves me right, that part of making providers want to accept Medicaid recipients in NC, would be to not harass providers by conducting audits in a an erroneous manner (by contracting out to minimum wage,  non- knowledgeable “contractors”), would be to not terminate Medicaid contracts without due process and without real cause, would be to not cause quality health care providers to force Medicaid recipients to be discharged from care.

If Gov. McCrory and Director Wos truly want to make health care providers want to accept Medicaid in NC, (which I actually believe) then what about what is happening right now?? I understand that, in the future, providers may be happy in NC, but, right now, providers are losing their businesses because of ridiculous audits with ridiculous outcomes.  We are worried about providers NOW.  I beg of all politicians with pull to save these Medicaid providers, please use that pull now.  One week from now, 3-9 providers could be out of business. Two weeks from now, 6-18 providers could be bankrupt.

Worry about now. Fix now. Help these providers, before these quality providers go out-of-business.

You Have Been Placed on PrePayment Review: Now What?

You receive a certified correspondence. You sign for it. You open it.  The letter states that your company (that provides health care services to Medicaid recipients) has been placed on prepayment review.

As if this letter is not scary enough, the letter also cites all this North Carolina statutory laws and alludes to the federal regulations.  The letter talks about “credible allegations of fraud” and “aberrant billing practices” and, even scarier, states that “a provider may not appeal or otherwise contest a decision…to be placed on prepayment review.”

What a second!! So the NC state government is unilaterally placing you on prepayment review, which automatically suspends your Medicaid reimbursements for an indefinite period of time, potentially causing you monetary damages, your staff monetary damages, and your recipients to potentially lose their provider, and this unilateral decision is not appealable???

Not so fast!! (Although the legality of prepayment reviews and the lack of due process will need to be reserved for another blog).

First of all, what the heck is prepayment review?

Prepayment review is phrase denoting the Department of Health and Human Services (DHHS), Division of Medicaid (DMA)’s decision to place a health care provider on a kind of “heightened awareness list.”  So instead of just billing Medicaid services through your Managed Care Organization (MCO) or DMA, you have to send documents to another outside contracted companies, Recovery Audit Contrators (RACs), which, in turn, will decide whether your documentation is, at least, 70% compliant for 3 consecutive months.

So you know what a prepayment review is (at least in theory), so WHAT do you do?

Let’s start with what NOT to do:

  • Do not fool yourself into thinking that your documents are good enough to pass the 70%.  I am in no way saying that your documents are not compliant.  In fact, most likely, your documents are compliant.  I am merely stating that from prior experience, the RACs make passing the audits impossible. You probably will not believe me until you witness it firsthand, but the RACs will tell you what documentation is lacking, you will send the document to the RAC, and your claim will be denied for a completely different reason (but equally as ridiculous).
  • Do not live in the river called De-Nile and refuse to believe that your Medicaid contract will be terminated. It will, most likely, be terminated in the next 6 months.
  • Do not believe that DMA/Program Integrity (PI)/the RACs/the individual auditors are actually put in place to help you. While you hear, “Oh, your documents are in great shape,” you will receive denials after denials until your Medicaid contract is terminated.
  • Do not think that the harder you work to comply, the more likely you will comply and be placed off prepayment review.
  • Do not ignore the prepayment review status.
  • Do not think prepayment review is “no big deal.”
  • Do not think there is nothing you can do.

What to do:

  • Get a Medicaid attorney (as usual, I must say that you should get an attorney, not necessarily me, just any lawyer knowledgeable about Medicaid. I am not trying to advocate for myself; I am merely trying to help providers). The quicker you begin to contest the prepayment review status the better.
  • In a very detailed-oriented way, review your documents as if you were an objective outsider.  Remember, the RACs are objective (arguably) outsiders.
  • At the same as the above-mentioned action, review the pertinent DMA Clinical Policy that is germane to your practice (i.e., Outpatient Behavioral Therapy (OBT) follows Policy 8C), review the Basic Medicaid Billing Guide, and review the Medicaid contract you signed. Being knowledgeable is key.
  • Keep detailed notes on every communication and document you send to the RACs.
  • Keep a chart of all Medicaid recipients that are being reviewed, including the dates of service (DOS).
  • Stay organized.  If, for example, the RAC asks for an authorization for Patient X in an initial document request, you send it, then in a final request asks for the service note, you send it, then denies the service because of lack of patient’s consent for treatment, you need to be able to show the timeline of events.
  • Understand that you are not the only one.
  • Stay strong.

Remember, this is your business, your life, how you pay the bills and how you contribute to the community. It is important enough to not back down. As of today, prepayment reviews, according to North Carolina general statutes are allowed without appeal.

But, in the future, with enough providers challenging these statutes as being in violation of federal law, due process will be required.

Fear Prevents Medicaid Providers From Fighting DMA: Fear of Retaliation?

A client called me today asking whether there was anything he could do legally against the Division of Medical Assistance (DMA) for terminating his Medicaid contract. The convo went something like this:

“Of course,” I said. “When was your Medicaid contract terminated?”
“Last January.”
“As in, January 2012?”
“Why didn’t you call me January 2012?
“Because I was scared of retaliation by DMA.”

What I did NOT say: You were scared of retaliation by DMA when you were wrongly terminated from your Medicaid contract, your company was forced to file bankruptcy and dissolve, you, personally, lost your livelihood, your company, and your self-worth, you were forced to terminate all staff, and all Medicaid recipients were forced to be discharged???? What else could possibly happen? Maybe DMA could’ve kicked your dog.

In all seriousness, most of the time, this fear of retaliation comes way before all the dire and irreparable consequences. Such as a provider refuses to seek legal counsel when the provider is initially placed on prepayment review. Normally the provider thinks, “I can get through this,” “70% is not that hard,” “My documents are compliant,” or “If I get counsel, DMA will just retaliate.”

Most health care providers view their roles in society as helping people. The thought of hiring an attorney is against the providers’ very core being, like rubbing a shark against its grain.

Yet, the fact is that the government is not always right. The government’s contracted companies are not always right. Or even better, the way the employees hired by the contracted companies complete their tasks is similar to playing “phone” in grade school. The employees hired by the contracted companies get their work orders from supervisors hired by contracted companies, who, in turn, get their work orders from someone else hired by the contracted companies, and so on. The hierarchy of order creates a distorted work order.

For example, perhaps the DMA employee who hired the contracted company stated, “Always follow DMA Clinical Policies and federal and state law. When in doubt err on the side of the provider.”

But 20 people down the line, you have Ms. Sweet (fictional) from the Carolinas Center of Medical Excellence (CCME) getting paid $10/hour going to providers’ offices with her standing orders as she understands them as “Always follow DMA policies. When in doubt err on the side of the State.” It’s not Ms. Sweet’s fault that the audit is conducted incorrectly, but, regardless of fault, the audit is conducted incorrectly.

The provider, during the whole process, believes Ms. Sweet when Ms. Sweet states that she knows what she is doing, has hope vested in all the telephone calls made to Program Integrity (PI) in which PI informed the provider that its documents are “great” or “some of the best they’ve seen,” only to open the mailbox a week later with a letter stating the provider’s Medicaid contract had been terminated with a signature from the very person from PI that informed the provider that the documents were “great.” (And of course, the provider took no notes of any telephone calls….But Attorney X, I swear John Doe at PI told me my documents were great!)

I have a saying (that I just made up) In Medicaid, your fear of the unknown coupled with your nonaction will cause all those fears to come true.

In the words of Arthur Ashe: “Fear isn’t an excuse to come to a standstill. It’s the impetus to step up and strike.”

Standing still in the face of Medicaid unknown allows DMA (or whatever contracted company) to decide your fate without hearing your side. If you think DMA or PI (or whatever entity) is listening to your side, then, at the very least, take copious notes of all conversations, write memos to the file regarding conversations, and prepare for the worst.

In my experience fear of DMA does nothing except create negative consequences.

So instead of blissfully following PCG or CCME or HP Enterprises (the Recovery Audit Companies)’s audit requirements and receiving denial after denial (despite your knowledge that the documents were in compliance), don’t wait until your Medciaid contract is terminated. Be proactive. Shake off your fear of retaliation by DMA. Buck up. The only thing to fear, is fear itself. Put on your big boy pants. Stand strong. Don’t get run over. Put on your dancing shoes. Get a stiff upper lip.

(Ok, I’m out of cliches)