Proposed NC Medicaid Bill: Circumventing the State Plan?

Proposed House Bill 320 will be heard in committee on Tuesday, May 14, 2013.

For those of you who do not know what House Bill 320-2013 is, let me explain:

As of now, when a health care provider’s Medicaid contract is terminated or suspended by a Managed Care Organization (MCO), the Office of Administrative Hearings (OAH), not superior court, has jurisdiction over the grievance.  OAH is the administrative court set up to hear grievances against a state agency. 

When North Carolina ceased DHHS’ issuance of a Final Agency Decision after the OAH decision back toward the end of 2012, North Carolina, in essence, was handing OAH a decision-making role in Medicaid.  The reason that any entity getting a decision-making role in Medicaid is so important is because the federal statutes specifically state that Medicaid must be run by a single state entity.  The fact that OAH had a decision-making role in Medicaid would violate the single state entity requirement.

So what did NC do in order to ensure compliance with the single state entity requirement set forth by the federal government?

NC asked the federal government for a Waiver.  Or, in other words, an exception.  NC asked the federal government, “Can we have permission to allow OAH to have a decision-making role and not be in violation of the single state entity requirement?”

The federal government authorized our request, which can be found as the State Plan, Attachment 1.1D.

Our State Plan, Attachment 1.1B states:

“OAH acknowledges and also agrees that the issue to be determined at final hearings conducted in accordance with this waiver is whether the 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; that it will conduct de novo reviews in beneficiary.”

Therefore, according to our State Plan and the federal government’s authorization, OAH hears cases involving DMA and its contractors or agents.

Yet proposed House Bill 320 states, in pertinent part (at 108D-18(d), “Notwithstanding any other law, OAH does not have jurisdiction over any dispute between an LME/MCO and a provider or applicant.”

Obviously the State Plan and the legislature are at odds.  After receiving the authorization to do something by the federal government, can NC legislate around what the feds told us to do? Seems pretty hairy.  Personally, I would go with that whole Supremacy Clause stuff.

Proposed House Bill 320 would take the decision-making role regarding Medicaid away from OAH and simply hand the superior court the authority…with zero authority from the federal government.  This is like a teenage boy asking for permission to go to Billy Bob’s house, but really sneaking out to go see Betty Lou.

Well, Betty Lou, here we come…

 

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on May 10, 2013, in Congress, DHHS, Division of Medical Assistance, Federal Law, Health Care Providers and Services, Jurisdiction, Legal Analysis, Legislation, MCO, Medicaid, Medicaid Appeals, Medicaid Contracts, North Carolina, OAH, Provider Medicaid Contracts, Termination of Medicaid Contract and tagged , , , , , , , , , , , , , . Bookmark the permalink. 4 Comments.

  1. So what jurisdiction does Superior Court cover? Is this where federal and state programs can have procedural reviews?

    • According to NCGS 7A-240, “original general jurisdiction of all justiciable matters of a civil nature cognizable in the General Court of Justice is vested in the aggregate in the superior court division and the district court division as the trial divisions of the General Court of Justice.”

      Basically, if a matter involves over $10,000, then superior court takes it; if the matter is under $10,000, district court.

      But, no, state programs (if you are talking about Medicaid, etc) go to OAH….as of now.

  2. Linda Francis

    So…the waiver granted by the Feds does not carry force of law (as in, “Notwithstanding any other law”….)-?

  3. I’ll never forget being asked by the ALJ if I knew what de novo meant…

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