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.

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on April 29, 2013, in DHHS, Division of Medical Assistance, Federal Law, Health Care Providers and Services, Jurisdiction, Legal Analysis, Legislation, MCO, Medicaid, Medicaid Appeals, Medicaid Contracts, Mental Health, North Carolina, OAH, Petitions for Contested Cases, Provider Medicaid Contracts and tagged , , , , , , , , , . Bookmark the permalink. Leave a comment.

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