Monthly Archives: January 2014
Have you ever wondered about warning labels? I mean, some of them are so ridiculous that you have to wonder who the person was that created the need for such a ridiculous warning label.
For example, the warning label on the sleep-aid Nytol warns, “May cause drowsiness.” I hope so!
This weekend my husband and I let friends borrow our chainsaw. The warning on the chainsaw says, “Do not hold on wrong side of chainsaw.” Really? What moronic person would grab a chainsaw by the saw blade? But the warning is there, so there must have been at least one person who held the chainsaw by the saw blade, turned on the saw and…you know.
Then comes my personal favorite…my egg carton from the grocery store states, “This product may contain eggs.” My egg carton! Really?
Medicaid cards should come with warning labels. Multiple warning labels. Such as:
“Warning: You may not be able to find a physician willing to accept Medicaid.”
“Warning: This may not be your card. Review the name prior to use.”
“Warning: This card could lead to you losing your home.”
For most people, your home is your biggest investment in your lifetime. Many people want to pass their houses down to children, or, at least, give the children the right to sell the home and keep the money. To some, the home is the biggest inheritance…maybe the only inheritance.
So how can NC take your home if you are on Medicaid?
According to NC Department of Health and Human Services (DHHS), the estates of Medicaid recipients may be subject to estate recovery if (1) The Medicaid recipient applied on or after October 1, 1994. (Considering it is 2014, I would guess that most people fall into this category); and one of the following:
(a) is under age 55 and an inpatient in a nursing facility, intermediate care facility for the intellectual developmentally disabled, or other medical institution, and cannot reasonably be discharged to return home; or
(b) is 55 years of age or older and is living in medical facility and receiving medical care services, or home and community-based services, or In Home Care Services (IHC).
Also, In Home Care Services (IHC) claims for SA recipients ages 55 and over are subject to Medicaid Estate Recovery.
This estate recovery is not new. Recently, I have seen a few articles on the internet that state that this estate recovery is a new addition to the Affordable Care Act (ACA). This is incorrect information. In 1965, estate recovery was optional and states could only recoup Medicaid costs spent on those 65 years or older. In 1993, Congress passed a budget bill that required states to recover the expense of long-term care and related costs for deceased Medicaid recipients 55 or older. The 1993 federal law also gave states the option to recover all other Medicaid expenses. The only change that the ACA made to the estate recovery rule is, by expanding Medicaid, providing more estates to be recovered.
“Warning: Medicaid can take your home!”
The estate recovery oddly seems to disproportionately affect people over 55 years of age.
DHHS does state that it will NOT seek a lien on your property while you are alive. DHHS only seeks the estate recovery after your death. DHHS also states that estate recovery is waived in some circumstances. What circumstances are those? And why wouldn’t those circumstances apply to everyone?
What exactly can the state seek to recover?
“At a minimum, states must recover amounts spent by Medicaid for long-term care and related drug and hospital benefits, including Medicaid payments for Medicare cost sharing related to these services. However, they have the option of recovering the costs of all Medicaid services paid on the recipient’s behalf. The majority of states recover spending for more than the minimum of long-term care and related expenses.” (emphasis added). See HHS’s website.
Isn’t Medicaid intended to be free health care for low-income and needy people? If the state can recover from a person’s estate after death, did that person really receive free health care? Or was the health care merely a loan?
Warning on the Medicaid card: “Warning! By accepting Medicaid, you are authorizing the state to recover from your estate, and, in some circumstances, your home.”
But the warning is very tiny print.
Muhammad Ali said, “Everybody has a plan until they get punched in the face.”
Whew…it’s a new year. While I thoroughly enjoyed 2013, I am excited and hopeful for 2014. Work is so busy that it seems like I’ve barely had time to breathe this January….that’s a good thing, right? Hey, anyone see me on TV? 🙂 Check out WRAL.
Hospitals, on the other hand, may be anxious and doubtful about their 2014s. Hospitals have good reason to wonder about the future. Our NC General Assembly was fairly harsh on hospitals in the last session, passing numerous session laws that directly or indirectly negatively affect hospitals.
But to be fair, the 2013 NC General Assembly didn’t ONLY affect hospitals…see Stephen Kobert’s report on North Carolina legislature. Kobert’s graphic simulation is hilarious!
Senate Bill 4 entitled “No NC Exchange/No Medicaid Expansion,” was one of the first bills out of the gate. While I am not necessary an advocate for expanding Medicaid (see my blog “Medicaid Expansion: Bad for the Poor“), I understand that Medicaid expansion would greatly benefit the hospitals, as well as Medicaid recipients.
Here is an interesting scenario:
Bradford Regional Medical Center and Olean General Hospital sit only 20 miles apart on opposite sides of the Pennsylvania/New York border. (See “Hospitals Facing Big Divide In Pro- and Anti- ACA States” by Beth Kutscher). New York expanded Medicaid and Pennsylvania did not. New York also opted to set up its own health exchange, which is working. Pennsylvania is floundering with healthcare.gov. Olean projects billions in lost revenue due to non-Medicaid expansion. I bet Olean wishes it could move the border of New York! Or its hospital!
House Bill 998 capped the sales tax refund that non-profit organizations, which was largely aimed at non-profit hospitals.
House Bill 834 and Senate Bill 473 require certain hospitals and health care facilities to publicize the costs many health care procedures. So when you need a CAT scan, you can see what UNC’s costs are for a CAT scan versus WakeMed’s and make an individual choice as to which hospital to present yourself. Sounds like a fair and reasonable request, but imagine the administrative cost for the hospitals to abide by the requirements.
Furthermore, the budget reduced hospital outpatient payments from 80% to 70% of costs. The budget further instituted a 3% Medicaid reimbursement “withhold” that the states calls a “shared savings plan.” The budget changed the hospital provider assessment state retention formula. Now the state can collect 25.9% of total assessment, instead of the cap of $43 million.
Not just the NC General Assembly affects hospitals. On the federal level, the Center for Medicare and Medicaid Services CMS) also took a stab. A new CMS rule converts the current Medicare 5-level, intensity-based payment system for clinic visits to one, single outpatient visit code. Prior to this change, a hospital could be reimbursed for a Medicare patient visit anywhere from $56.77 for a level 1 new patient to $175.79 for a level 5 new patient. Now all Medicare clinic visits are reimbursed at $88.31. You can see that some hospitals would not like this change.
But, as Ali said, “Everyone has a plan until they get punched in the nose.”
The possible punch to NC Hospitals?
Medicaid RAC audits…
For two years, we have been required to sign up Medicaid recovery audit contractors (RACs). But we have been slow. HMS, the RAC with contracts in 28 states, including North Carolina says that it has been slow getting started with Medicaid RACs because the state-by-state data have been scant and the procedural hurdles were difficult. But, according to “Report on Medicare Compliance,” Medicaid RAC audits will be in full swing for hospitals this year.
According to the same article, in North Carolina, two targets are tonsillectomies/adenoidectomies and ambulance services. Also, at issue in NC, are the DRGs and the medical necessity of inpatient admissions vs. outpatient services. While RACs are only to audit going back 3 years, the RACs can get permission to go back 5 years.
Medicaid RACs collect contingency fees anywhere between 9.5% to 12.5%, so they have the incentive to find problems.
HMS boasts that in two mid-Atlantic states, the Medicaid RAC recovered over $12.5 million through credit balance audits of inpatient facilities.
Pow!! Right in the kisser!
My law partner Camden Webb and I filed a class action lawsuit today alleging on behalf of medical providers who accept Medicaid in North Carolina.
Williams Mullen Medicaid Litigation Team Files Class Action Lawsuit Against NCTracks
Raleigh, NC. (Jan. 16, 2013) – This morning, Williams Mullen attorneys Knicole Emanuel and Camden Webb filed a class action lawsuit on behalf of Medicaid providers in North Carolina against NCTracks, the system that processes Medicaid claims.
The suit alleges that NCTracks was launched before it was ready to be implemented, and its poor design has resulted in catastrophic losses for health care providers. NCTracks had over 3,200 software errors in the first few months of operation, and payments to Medicaid providers were delayed, unpaid, or “shorted” by over half a billion dollars in the first 90 days. In some instances, providers have decided not to accept Medicaid patients or have even closed their practices, and some of North Carolina’s most needy citizens have suffered a reduction in the health care resources available to them.
“We’re filing on behalf of health care providers, but we’re also serving the low-income Medicaid recipients of North Carolina that rely on these providers to receive care,” said Knicole Emanuel, a Litigation Partner“Since these providers have experienced financial hardship due to NCTracks, many of them are no longer able to serve the state’s most vulnerable population of health care consumers.”
About Williams Mullen
Williams Mullen is an AmLaw 200 law firm that blends the law, government relations and economic development to help grow the business of our clients and the economy of our region across North Carolina, Virginia and Washington, D.C. Our attorneys and consultants strive to help connect clients to opportunities and solutions they need. Putting our clients’ needs first has been the foundation of our approach since the firm was founded 103 years ago. Visit us at www.williamsmullen.com.
You know you know someone like this! No matter how horrible the circumstance, they just say positive things. You know, like a Disney character…oblvious to reality. Think about Snow White…her step-mother wants to kill her, she is run into the deep forest by a huntsman who was supposed to kill her, she is told to NEVER return home, she finds 7, extremely, short men with whom she has to live (smelly) and become their maid (dirty), yet she whistles while she works!
So to was Ricky Diaz, the communications director for the North Carolina Department of Health and Human Services (DHHS). In the face of NCTracks’ catastrophic roll out, Diaz says, “While we’re pleased with the success of the new system…”
“Although NC Tracks has processed more claims than it has denied…”
NC Tracks has now processed more than 15 million claims that paid health care providers more than $1.1 billion, according to Diaz.
Diaz said he does not feel as though the state rushed into this transition. “We processed more than 15 million claims and paid health care providers more than $750 million during July,” he emphasized.
And (my personal favorite, in a DHHS News Release after the go-live date)
“NCTracks is on track.”
“Whistle while you work…” Well this cheery, optimistic communications director resigned. His resignation came on the heels of providing reporters false information about the Medicaid debacle. See my blog: “DHHS Blunder Could Cost Millions! “Oops I Did It Again.””
Ricky Diaz announced his resignation today (Wednesday, January 8, 2014) on Twitter, saying he is proud to be joining a small public affairs and media relations firm in Washington, D.C.
“Proud to be joining…” That’s our Ricky…upbeat and positive…”Whistle while you work…”
But now who will provide us with the positive soundbites for the media?
We can add one more “oops” to the Department of Health and Human Services (DHHS) repertoire of “oopses.” I am reminded of Captain Edward Smith when he banged the Titanic into an iceberg. Talk about an “oops” moment. Not to mention the lives lost, hitting that iceberg cost $7.5 million in ship building costs back in 1909.
DHHS hit another iceberg yesterday. How much will this “oops” costs?
DHHS made its “oops” by sending 48,752 new Medicaid cards to the WRONG people. Oops! Medicaid cards have HIPAA protected information on them, such as names, Medicaid numbers and dates of birth.
Let me tell you a little about HIPAA. HIPAA stands for the Health Insurance Portability and Accountability Act of 1996 (HIPAA). It was signed into law by Bill Clinton, Title II of HIPAA requires the establishment of national standards for electronic health care transactions and national identifiers for providers, health insurance plans, and employers. Why is this important? This act also provides significant penalties if privileged information is disseminated.
Hence the DHHS Medicaid card debacle. Iceberg, ahoy! “Oops I did it again!”
The questions are (1) how much will NC be penalized for the dissemination of so much private information; and (2) will NC actually have to pay the penalty?
Recently, HIPAA was revamped. Beginning September 2013, HIPAA became even more stringent with harsher penalties and began to apply to more people (including law firms). For example, prior to September 2013, my firm Williams Mullen treated my documents received from clients the same as all other privileged information in our firm. Obviously, almost everything at a law firm is confidential. Now I have to lock my door (we had to install a lock) anytime I leave my office, even for lunch. Bright yellow flags have been added to all my files that contain privileged health information (PHI), which is every file. My partners cannot access my documents on our computer network system unless granted access. I feel like Edward Snowdon.
I also remember a story about a nurse who worked at a hospital. Her husband was admitted into the ER while she was on her shift and she looked up his condition on the computer. She was fired for violating HIPAA.
How bad can it be?
The feds imposed a penalty of $4.3 million against Cignet Health of Prince George’s County, MD, for HIPAA violations in 2011. Oops!
And, in light of the “new HIPAA,” last week, DHHS disseminates privileged information to 48,752 people.
What are the penalties for violating HIPAA?
There are four violation categories (1) did not know; (2) reasonable cause; (3) willful neglect-corrected; and (4) willful neglect-not corrected. Here are the penalties:
Assuming DHHS’ HIPAA violation is the least severe, “did not know,” DHHS could be liable for $100-$50,000 per violation. Here, there are, at least, 48,752 violations. So we are talking a penalty anywhere from $4,875,200 to a number bigger than my calculator allows.
Thankfully for DHHS and, ultimately, our tax dollars, there are caps to HIPAA penalties. There is a $1.5 million cap per calendar year.
However, DHHS could be liable for multiple violations of multiple provisions and a violation of each provision can be counted separately. So, theoretically, DHHS could be liable for multiple violations of up to $1.5 million cap for each violation, which would result in a total penalty well above $1.5 million.
The other question is whether the federal government will hold a state liable for such HIPAA violations. I don’t know the answer to this, but it would seem fundamentally unfair if HIPAA applies to people and companies, but not the state.
Then, again, how many of you want our tax dollars going toward paying these HIPAA penalties?
You can also see this story on WRAL. (Yes, I was interviewed 🙂 )
Will Aldona Wos also have a $7.5 million “oops” like Captain Smith? Because, regardless who committed the “oops,” Wos is captain of the ship. It is believed that Capt. Smith went down with the Titanic.
Hello, 2014! And Hello 3% Decrease in Medicaid Reimbursements (But Call the Decrease “Shared Savings”)
Tomorrow is the first Medicaid checkwrite for 2014 (and its my birthday too). Happy New Year! Happy birthday!! (I’m turning 29 for the 10th year). For New Years, my husband and I had a very quiet evening eating crab legs at home. Yum! I am sure many of you made New Years resolutions…work harder…lose weight…get paid 3% less….WHAT?
With the first Medicaid checkwrite tomorrow, due to Session Law 2013-360, many health care providers will receive 3% less in Medicaid reimbursements. You will receive a 3% cut if you are the following types of providers:
- Inpatient hospital.
- Physician, excluding primary care until January 1, 2015.
- Optical services and supplies.
- Hearing aids.
- Personal care services.
- Nursing homes.
- Adult care homes.
- Dispensing drugs.
(This is the exact list as found in Session Law 2013-360. I am well aware that the list is grammatically-challenged, but I did not write it). Both the federal government and NC are calling this 3% withholding “Shared Savings Plan with Provider.”
How is this “shared savings with providers” when the government is withholding money from providers??? Sure, supposedly, there will be a “pay for performance payment” to some providers, but most providers will just be reimbursed 3% less.
How is this fair? How is this “shared savings?”
Here’s an example:
Say I work at Harris Teeter and my manager comes up to me and says, “Hey, Knicole, Harris Teeter is really concerned with our overhead costs. Salaries seem to be a big cost, and we want to “share the savings” with you. So we are going to cut your pay by 3%. If we, subjectively, determine, at the end of the year, that you are working hard and saving us money, then we will give you a performance reward. It will not be all the money we retained, but it will be some amount. This way Harris Teeter profits off the interest of the 3% we retain all year, plus the amount we never give you.”
Folks, the above example is called a decrease in pay and a swift kick in the bottom. It is not “shared savings.”
In DHHS’ shared savings scheme, the money will go to:
“The Department of Health and Human Services shall use funds withheld from payments for drugs to develop with Community Care of North Carolina (CCNC) a program for Medicaid and Health Choice recipients based on the ChecKmeds NC program. The program shall include the following:
- At least 50 community pharmacies by June 30, 2015.
- At least 500 community pharmacies in at least 70 counties by June 30, 2016.
- A per member per month (PMPM) payment for care coordination and population health services provided in conjunction with CCNC.
- A pay for performance payment.”
According to the Centers for Medicare and Medicaid Services (CMS), “[a] shared savings methodology typically comprises four important concepts: a total cost of care benchmark, provider payment incentives to improve care quality and lower total cost of care, a performance period that tests the changes, and an evaluation to determine the program cost savings during the performance period compared to the benchmark cost of care and to identify the improvements in care quality.”
Employers chop salaries all the time in order to maximize profit. Back in 2011, Sony proposed 11% salary cuts for executives due to such a terrible fiscal year. But guess what is different between Sony’s 11% cut and Medicaid’s 3%? I know…I know…a lot….but what difference am I thinking about?
Sony sought shareholder approval.
I guess you can make the argument that the General Assembly sought voter approval because our citizens voted for all the legislators in the General Assembly. But I think that argument is weak. No legislator ran his or her campaign on: “Vote for Me! If you are a Medicaid provider, I plan to decrease your salary by 3%!”
Better yet, with the Sony salary cut, executives had the option to seek employment elsewhere. What is a Medicaid provider’s option? Move? Not take Medicaid? (Sadly, I see this as a more viable option).
On a legal note, I question the constitutionality of our new shared savings plan. Wouldn’t the decrease of 3% in Medicaid reimbursements be considered an unlawful taking without due process. In essence, could one argue that the decrease of 3% in Medicaid reimbursements is just a way for the State to decrease Medicaid reimbursements without going through the proper lawful process?
Then again, maybe we won’t need to worry about the 3% decrease at all…given NCTracks’ track record, it is plausible that NCTracks will not be able to adjust the Medicaid reimbursements by 3%.
Medicaid Providers: Do Not Omit Information on Your Medicaid Application or NC Ct of Appeals Says, “You Can Lose Your Medicaid Contract Without Notice.”
We’ve all told our share of little, white lies, right? “Yes, honey, you look fantastic in that dress!” Or… “I never think about my ex-boyfriend!” But omissions are also lies. People have told me in the past that omissions are not lies, but they are, obviously, wrong. Even in the court of law, a nonverbal action (or omission) can be used against you.
For example, if your neighbor comes up to you and accuses you of killing his cat and you say nothing except shut the door, you better believe that when your neighbor testifies in court that your “nonassertion” or “non- dispution” (I know, not a word) his allegation will be admitted into the court, or at least the attempt will be made. Even though the “nonassertion” would be considered hearsay.
Hearsay is an out of court statement made by someone other than the testifying witness to be admitted to prove the truth of the matter asserted. For example, if I were on the stand and I said, “My neighbor told me that he killed my cat.” If, in fact, I was testifying in a trial in which I was trying to prove that my neighbor killed my cat, then my statement would be hearsay and not admitted into evidence. The same would be true if I were testifying that I accused my neighbor of killing my cat and he said nothing. His nonadmission would be hearsay as well…because a normal person would protest to killing the cat if accused and innocent.
However, in the law, there are always grey areas. Sometimes when the “statement” is nonverbal, the hearsay objection will be overlooked. Attorneys argue that the hearsay rule is almost always, in the abstract, phrased in terms of “statements” or “utterances” and the possible application of the rule to “conduct” may not be immediately apparent.
However, CAVEAT, In the world of Medicaid, omissions can cost you your Medicaid contract.
In a recent North Carolina Court of Appeals decision, Powell’s Medical Facility v. NC DHHS, the NC Court of Appeals upheld the trial court’s decision to uphold the Division of Medical Assistance’s (DMA) termination of Dr. Eddie N. Powell’s (I know, really? Who’s name is legally Eddie and not Edward?) Medicaid contract based on Dr. Powell’s omission on his Medicaid verification packet to Computer Sciences Corporation (CSC).
In 2009, CSC began to re-verify Medicaid providers in an effort to determine that all Medicaid providers met criteria as a Medicaid provider (yes, folks, this is the very same CSC that has catastrophically rolled-out NCTracks).
In Dr. Powell’s case, DMA informed him, in the termination letter, that if a provider were convicted of a criminal offense or made “any mistatement…or omission while submitting the provider application” that DMA had the authority to terminate a provider without notice.
Dr. Powell’s attorneys argued that the termination was erroneous because “the sole basis for DMA’s decision to terminate Dr. Powell’s participation in Medicaid is the mere existence of Dr. Powell’s criminal conviction.” (emphasis in the original)(Notice, people, that I have not told you what the criminal offense was…that is on purpose. Once I read the criminal conviction, I was tainted for the remainder of the Court’s opinion. So you will find out the criminal conviction at the end. Those of you impatient readers, can scroll down. But, for now, imagine that the criminal conviction is for stealing a loaf of bread for his family. See “Les Miserables” by Victor Hugo.)
The Court, however, disagreed.
A witness for the Respondent (DMA) testified on recross that Dr. Powell’s termination was based on (1) the conviction (of stealing bread); and (2) the OMISSION to disclose his conviction (of stealing bread) on his application.
Supposedly, the result of the this opinion is that if you were convicted of a criminal offense and it does not involve something really, really, bad (such as stealing bread) and you DO disclose it on the Medicaid application that you would not be terminated.
Moral of the story? Disclose everything!
If you were convicted of littering when you were 18, disclose it.
The problem with Dr. Powell? He was not convicted of littering when he was 18. He also was not convicted of stealing bread for his starving family like Jean Valjean.
He was convicted of the felonies of incest and taking liberties with a minor, who is his stepdaughter. (To which my husband, asked, “Is it incest if it was his stepdaughter?” To which, I said, “Hmmmmm. I don’t know. I am not a criminal attorney.”)
Regardless, Dr. Powell is a convicted sex offender.
Interestingly, one issue before the NC Court of Appeals was whether a Medicaid contract is a “property right” to a provider. That is a HUGE issue for NC Medicaid providers!!! This issue goes back to the whole “is a Medicaid contract terminable at will?” Obviously, DMA and the managed care organizations want the Medicaid contracts to be terminable at will so they can terminate a contract without due process.
But the NC Court of Appeals did not rule as to this very important issue. The Court ruled that “even assuming, arguendo, that Dr. Powell’s enrollment was not terminable at will, DMA had substantial evidence to terminate the contract.
However, the moral is obvious. We don’t need Aesop to tell us the moral. If you are a Medicaid provider and have been convicted of a criminal offense in the past, disclose the conviction on all Medicaid applications. Period.