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.