Monthly Archives: July 2014
NC State Auditor Releases New NCTracks Audit: Unresolved Risks Could Delay Federal Certification
This just in!!!!
Our State Auditor Beth Wood just released a new audit entitled, “Department of Health and Human Services-NCTRACKS-Federal Government Certification Status.”
More to come…
Obamacare, Health Care Exchanges, Subsidies, Typos, and Speak-o’s
Have you ever said something that you immediately wished you could put back in your mouth? I know I have! In fact, just recently, I was eating lunch with my husband and one of our closest friends Josh. Josh, his wife, Tracey, my husband Scott and I ride horses together almost every weekend. Our daughters come with us, and it’s a fun family event. So, I should have known that a manger is a tool used in barns to hold the hay for the horses to eat, not just baby Jesus’ bed.
Josh tells me that he is going to pick up a manger. To which I respond, “Josh, why do you need a baby manger?” If words came out of your mouth on a string, I would have grabbed that string and shoved it back into my mouth. Of course, my husband had no end to his ribbing. “Josh, why do they sell baby mangers in Tractor Supply?” And “Baby Jesus was so lucky that someone put a manger in that barn for when he was born.”
At that point, I would have liked to claim that I had a “speak-o.” You know, like a typo, but for speech.
At least this is what Jonathan Gruber has claimed…that he made a speak-o in 2012.
Jonathan Gruber is one of the architects of the Affordable Care Act (ACA). He drafted much of the language included in the ACA. After the ACA was passed, Gruber was interviewed by a number of journalists regarding specific sections of the ACA. One of the sections on which he spoke was the section that allowed for health care premium subsidies for people enrolled in the program who reside in states which created state-run health care exchanges as opposed to states that opted to use the federal exchange. For ease of this blog, I will call this ACA section the “Health Care Premium Subsidies Section.”
As I am sure you are aware if you follow my blog, two appellate court cases came out July 22, 2014, regarding the Health Care Premium Subsidies Section, with polar opposite holdings. In Halbig v. Burwell, the D.C. Circuit Court found that the clear language of the ACA only allows the health care premium subsidies in states that created their own state-run health care exchanges, i.e, residents in NC along with 35 other states would not be eligible for the subsidies. See my blog: “Halbig: Court Holds Clear Language of the ACA Prohibits Health Care Subsidies in Federally-Run Exchanges.”
Juxtapose the 4th Circuit Court’s decision in King v. Burwell, which held that “For reasons explained below, we find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS’s determination, however, we uphold the rule as a permissible exercise of the agency’s discretion.”
The two cases were released within hours of each other and came to two entirely different conclusions. Halbig: ACA is clear; King: ACA is ambiguous.
Interesting to note is that D.C. is not a state, and the 4th Circuit clearly embraces five states.
In my Halbig blog, I explain the legal analysis of statutory interpretation. I also explain that based on my reading of the Health Care Premium Subsidies Section, I tend to side with the D.C. courts and opine that the Section is not ambiguous.
If, however, a court finds that the statutory language is ambiguous, the court defers to the agency’s interpretation “so long as it is based on a permissible construction of the statute,” which is clear case law found in the 4th Circuit.
Therefore, once the 4th Circuit determined that the statute is ambiguous, the court made the correct determination to defer to the IRS’ ruling that all states could benefit from the subsidies.
Yet another approach to statutory interpretation is considering the legislative intent. The courts may attempt to evaluate legislative intent when the statute is ambiguous. In order to discern legislative intent, courts may weigh proposed bills, records of hearing on the bill, amendments to the bill, speeches and floor debate, legislative subcommittee minutes, and/or published statements from the legislative body as to the intent of the statute.
Recently, some journalists have uncovered 2012 interviews with Gruber during which he states that the Health Care Premium Subsidies Section was drafted intentionally to induce the states to create their own health care subsidies and not rely on the federal exchange. How’s that for intent?
The exact language of that part of the 2012 interview is as follows:
Interviewer: “You mentioned the health information [sic] Exchanges for the states, and it is my understanding that if states don’t provide them, then the federal government will provide them for the states.”
Gruber: “I think what’s important to remember politically about this is if you’re a state and you don’t set up an Exchange, that means your citizens don’t get the tax credits… I hope that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these Exchanges, and that they’ll do it.”
What do you think? You think Gruber is pretty explicit as to legislative intent? Well, at least in 2012….
In 2014, Gruber states, as to his 2012 comment, “I honestly don’t remember why I said that. I was speaking off-the-cuff. It was just a mistake. People make mistakes. Congress made a mistake drafting the law and I made a mistake talking about it.”
According to Gruber, Congress made a typo; Gruber made a speak-o.
“It’s unambiguous that it’s a typo,” Gruber tells reporter Chris Matthews from NBC and MSNBC.
Um…a typo when the statement is spoken? Hence, the new word “speak-o” blowing up Twitter.
If Gruber’s statement was truly a speak-o, it was a re-occurring speak-o. Gruber also made two speeches in which he listed three possible threats to the implementation of Obamacare. In both cases the third “threat” was that states would not set up exchanges and, instead, would rely on the federal government.
I anticipate that Gruber’s 2012 and contrary 2014 statements will be at issue as these cases, Halbig and King, move forward.
As for me, I would like to invoke my own speak-o’s. I can only imagine how I will be received when I appear before a court and say, “Your Honor, I apologize. That was a speak-o.”
NC Medicaid Providers: Do Not Be a Cockey Lockey! Know Your Due Process Rights to Defend Against Administrative Penalties
An acorn falls on Chicken Little’s head. His first immediate thought is, “The sky is falling. The sky is falling.” So Chicken Little begins his travels to tell the king that the sky is falling. Along the way he meets Cockey Lockey, Ducky Lucky, Drakey Lakey and Goosey Loosey, to name a few of his well-feathered friends. Each new waterfowl asks Chicken Little where he is going. To which Chicken Little replies, “The sky is falling. The sky is falling. We have to tell the king.” And the fowl join Chicken Little in his travel to the king.
None of the characters question Chicken Little’s assertion that the sky is falling. They simply accept the fact that the sky is falling.
All too often, people, like Cockey Lockey and Goosey Loosey, accept what they are told without questioning the source.
Over and over I talk to health care providers who are told:
• by the Department of Health and Human Services (DHHS), Division of Medical Assistance (DMA) that they owe DMA hundreds of thousands of dollars for Medicaid overpayments;
• by the managed care organization (MCO) that the provider’s Medicaid contract is terminated;
• by a contracted entity that the provider is out of compliance with rules and regulations;
• by Program Integrity (PI) that there is a complaint filed against the provider; or
• by an MCO that its network is closed.
And some providers just accept the overpayment, the contract termination, the penalty, or the refusal to contract.
Don’t be a Cockey Lockey!
You do have rights! You deserve due process!
Let’s talk about the possible penalties allowed by Medicaid regulations and your right to defend against such penalties and the procedural safeguards enacted to protect you.
10A NCAC 22F .0602 governs “Administrative Sanctions and Remedial Measures,” and it enumerates the following possible sanctions for provider abuse:
• Warning letters for those instances of abuse that can be satisfactorily settled by issuing a warning to cease the specific abuse. The letter will state that any further violations will result in administrative or legal action initiated by the Medicaid Agency.
• Suspension of a provider from further participation in the Medicaid Program for a specified period of time, provided the appropriate findings have been made and provided that this action does not deprive recipients of access to reasonable service of adequate quality.
• Termination of a provider from further participation in the Medicaid Program, provided the appropriate findings have been made and provided that this action does not deprive recipients of access to reasonable services of adequate quality.
• Probation whereby a provider’s participation is closely monitored for a specified period of time not to exceed one year. At the termination of the probation period, the Medicaid Agency will conduct a follow-up review of the provider’s Medicaid practice to ensure compliance with the Medicaid rules.
Remedial Measures are to include:
• placing the provider on “flag” status whereby his claims are remanded for manual review;
• establishing a monitoring program not to exceed one year whereby the provider must comply with pre-established conditions of participation to allow review and evaluation of his Medicaid practice, i.e., quality of care.
Furthermore, certain factors must be considered prior to the levy of a sanction, including:
• seriousness of the offense;
• extent of violations found;
• history or prior violations;
• prior imposition of sanctions;
• period of time provider practiced violations;
• provider willingness to obey program rules;
• recommendations by the investigative staff or Peer Review Committees; and
• effect on health care delivery in the area
All of this information is found in 10A NCAC 22F, et al, which is an administrative code. The code also defines provider fraud and abuse. The penalties enumerated above are penalties allowed for instances of provider abuse, but, only after proper investigation, proper notice to the provider, and proper consideration of lesser penalties. In other words, due process.
For example, 10A NCAC 22F.0302 states that “[a]busive practices shall be investigated according to the provisions of Rule .0202 of this Subchapter.”
Rule .0202 requires a preliminary investigation prior to a full investigation. Additionally, Rule .0302 requires the investigative unit to prepare a “Provider Summary Report,” furnishing the full investigative findings of fact, conclusions, and recommendations. Then the Department is to review the Provider Summary Report and make a “tentative” recommendation as to the penalty, and that tentative recommendation is reviewable under Rule .0400, which allows a reconsideration review. The provider will receive the results of the reconsideration review within 5 business days following the date of the review.
If a provider is unhappy with the results of a reconsideration review, then the provider can appeal to the Office of Administrative Hearings (OAH) within 60 days.
All of the above-mentioned administrative procedures exist in order to protect a provider from unfair, arbitrary, capricious, erroneous actions by DMA and any of its contracted entities. That means Public Consulting Group (PCG), Carolinas Center for Medical Excellence (CCME), all the MCOs, HMS, and any other state contractor must also follow these administrative procedures.
So next time you are told that you owe hundreds of thousands of dollars to the state, that your Medicaid contract has been terminated, or your Medicaid reimbursements are being withheld, do not take these penalties at face value! Know you rights!
Do not be a Cockey Lockey!!
Halbig: Court Holds Clear Language of the ACA Prohibits Health Care Subsidies in Federally-Run Exchanges
Remember my post, “The Great and Powerful ACA: Are High, Inflated Premiums Hiding Behind the Curtain?” I warned of the possible consequences of Halbig v. Burwell…and it happened.
Halbig v. Burwell was decided earlier today.
The Halbig court held that the Internal Revenue Service (IRS) went too far in extending subsidies to those who buy insurance through the federally run, Healthcare.gov website.
The Halbig court ruled that the subsection of the ACA that allows high insurance premium tax credits, according to the plain language of the statute, only applies to those individuals enrolled “through an exchange established by the state.” (emphasis added). Therefore, if Halbig is upheld on en banc review by the D. C. Circuit (see below) or on appeal to the U. S. Supreme Court, residents who reside in two-thirds (or 36) of the states that did not establish state-run health care exchanges (including NC), will not benefit from the health care subsidies.
Looking at the decision through a purely objective, legal lens, I believe the federal court of appeals is correct in its ruling. I also agree that the ruling will have drastic and devastating consequences for the ACA and the people who would have benefited from the health care subsidies.
However, the law governing statutory construction and interpretation is clear. Statutory interpretation is the process by which courts interpret legislation.
For years, the U.S. Supreme Court has been explicit on statutory interpretation. “We begin with the familiar canon of statutory construction that the starting point for interpreting a statute is the language of the statute itself. Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.” Consumer Product Safety Commission et al. v. GTE Sylvania, Inc. et al., 447 U.S. 102 (1980).
In other words, if the words of a statute are unambiguous, then the statutory interpretation ends. The clear words of the statute must be followed.
Let me give an example of ambiguous language:
A magazine printed the following: “Rachel Ray enjoys cooking her family and her dogs.” If that were true, Rachel Ray’s family and dogs would be very upset. I am sure what the editor meant to write was “Rachel Ray enjoys cooking, her family, and her dogs.”
It is amazing how important a comma is.
The Halbig court held that the section of the ACA allowing health care subsidies only apply to those enrolled in an exchange established by the state is not ambivalent. Thus, according to statutory interpretation rules, the judicial inquiry ends.
So what happens now?
A request for an en banc ruling by the D. C. Circuit is the next step for Department of Justice. An en banc ruling is a decision made by all the justices, or the entire bench, of an appeals court, instead of a panel selected by the bench. In this case, three federal judges sat on the panel and the case was decided 2-1. An appeals court can only overrule a decision made by one of its panels if the court is sitting en banc.
Looking beyond any en banc ruling, the case could, potentially, be heard by the U.S. Supreme Court, especially in light of the importance of the decision and the fact that a 4th Circuit Court of Appeals ruled the opposite way literally hours after Halbig was announced. See David King, et al. v. Burwell, et al.
The Fourth Circuit found the ACA ambiguous, and it states, “For reasons explained below, we find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS’s determination, however, we uphold the rule as a permissible exercise of the agency’s discretion. We thus affirm the judgment of the district court.”
Bizarre that two courts hold opposing positions on the same issue and publish both decisions on the same day. It reminds of the old Sam the Sheepdog cartoon, “Duh! Which way did he go? Which way did he go, George?”
Finally, in closing, and on a personal note, I would like to dedicate this blog to my lab-doberman mix, Booker T, who, sadly, passed Sunday. He was my best friend for over 14 years. You will be greatly missed, Booker T. Rest in peace.
The Great and Powerful Affordable Care Act: Are High, Inflated Premiums Hiding Behind the Curtain?
A lawsuit that could come out as early as tomorrow could be catastrophic for the Affordable Care Act (ACA) in as many as 36 states and impact approximately 5.4 million Americans.
In so many ways, in the last year or so, the all-changing, great and powerful ACA that promised affordable health care for all and “if you like your health care coverage, you can keep it,” has fallen monumentally short of its original, lofty promises.
In a way, we all wanted to believe in the promises of the ACA, like Dorothy in “The Wizard of Oz.” Who can forget the disappointed sigh Dorothy expels when Toto pulls back the curtain of the Great and Powerful Oz only to see a mundane, elderly man with absolutely no super powers or means to grant her wishes. Dorothy wanted Oz to be real. She wanted desperately for Oz to be as Great and Powerful as he proclaimed. However, in reality, he was not.
Like Dorothy wanted Oz to be real, we all wanted the ACA to create an affordable, nationwide health care system…this health care utopia.
So many lofty promises of the ACA have already been crushed, either by the Supreme Court’s decision that allows states to opt-out of Medicaid expansion, or by President Obama himself in executive actions, including an action delaying the employee mandate.
The courts may deflate the illusions of grandeur of the ACA even more with an upcoming and anxiously awaited decision. The case of Halbig v. Burwell, a D.C. Court of Appeals case, has concerned citizens everywhere, who wait on bated breath for a ruling. Halbig could have a huge (negative) impact on health care premiums. Halbig could be the Toto that pulled back the curtain on the ACA.
Let me explain:
There is a subsection of the ACA that allows high insurance premium tax credits, in an effort to make premiums more affordable for low-income families. The subsection applies to individuals who make less than $46,075. In implementing the ACA, it was contemplated that those individuals who make under $46,075 will have difficulty affording the insurance premiums; therefore, the ACA gives nice, large tax credits to offset the costs of premiums.
However, according to the plain language of the statute, these tax credits only apply to those individuals enrolled “through an exchange established by the state.” (emphasis added). Yet two-thirds (or 36) of the states did not establish state-run health care exchanges (including NC). Instead, these states relied on the federal exchange, in part, to avoid additional cost expenditures.
Here is a map of states according to whether it is expanding Medicaid:
The Halbig case asks the question: Can people living in states run by a federal health exchange reap the benefit of tax credits intended for those people participating in an exchange run by the state?
If the Halbig Court takes that stance that the statute is not ambivalent and must be followed exactly as it is written, then millions of Americans will become ineligible for the tax credits for health care premiums, because they will not be enrolled in a state-run exchange. Premiums would sky-rocket and many Americans would be unable to afford health care…again. It is estimated that without the tax credits, the health care premiums will cost 4x as much.
Interestingly, the Internal Revenue Service (IRS) weighed in and issued a highly-contested rule authorizing the federal exchange to issue tax credits. Amidst all the tomfoolery about the IRS targeting 501(c) charities owned by the Tea Party, it is surprising, at least to me, that the IRS would issue such a contentious ruling in favor of the ACA and anti-conservatives.
Hence, the Halbig case, in which Plaintiffs argue that the IRS has exceeded its statutory authority in issuing tax credits to those residing in states with federal exchanges, when the ACA clearly states that the tax credits only apply to state-run exchanges.
If the D.C. Court of Appeals sides in favor of the Plaintiffs, the following could occur:
• Residents of 36 states could pay health care premiums 4x more than promised;
• The ACA would fall short of promises…again;
• The IRS will have exceeded its authority to benefit Democrats…again;
• People may not be able to afford the health care premiums;
• The ACA could risk the downfall of many more promises.
We all wanted the ACA to create health care utopia. We all wanted the Great and Powerful Oz to be Great and Powerful.
But the courts may tell us we just can’t say, “Pay no attention to the man behind the curtain!!”
Our Medicaid Budget: Are We Just Putting Lipstick on an 800 lbs. Pig?
Too often, I have heard an analogy about the Medicaid budget and a pig wearing lipstick. Normally it goes like this: “Are we just putting lipstick on an 800 lb. pig?”…and the Medicaid budget is the 800 lbs. pig, not the lipstick.
For those of you who do not know, I own a pet pig. She is a micro pig. Not a pot belly pig; those get to be 150 lbs. Oh, no. A micro pig; those stay very small. Our Oink is only 21 pounds.
Here is a picture:
Notice she does not have lipstick on. So when someone says, “Are we just putting lipstick on an 800 lbs. pig?” I think, “Is that so bad?”
I understand that saying to put “lipstick on a pig” is a rhetorical expression. An expression used to demonstrate that making a superficial or cosmetic change is a futile attempt to disguise the true nature of a product. However, Oink and I take offense, because she is so much more beautiful than the Medicaid budget (and much smaller).
Although my Oinky-Oink is only 21 pounds. The expression that I have heard most often involves an 800 lbs. pig. If our Medicaid budget were Oink’s size, the General Assembly would probably be home.
Seriously, here is my question on my “Pigs and Medicaid” blog:
How can we expect the General Assembly to create a “knowable” and “concrete” Medicaid budget when the Department of Health and Human Services (DHHS) cannot provide the General Assembly with accurate data?
Literally, DHHS cannot tell the General Assembly how many people are enrolled in Medicaid. Legislatures are being told to guesstimate. Guesstimate???
Between 2009-2012, North Carolina exceeded its approved Medicaid budget by 5.4 billion. In the last decade, our Medicaid spending has increased by more than 90%.
Not to mention DHHS has difficulty filling and retaining employees. Attrition is prominent. As of June 1, 2014, a quarter of the division’s 332 jobs were vacant; the average unfilled job had been open for 347 days, or nearly a year. In November, DHHS’ chief financial officer sent out a cry for help. The Medicaid office “does not have adequate staff with the necessary experience and skills to properly manage the … program,” Rod Davis wrote to the state budget office.
To compensate for too few employees, DHHS gave a no-bid contract to Alvarez & Marsal to help create a Medicaid budget. We all know how that turned out.
With the help of Alvarez & Marsal, DHHS proposed to tax the then-10 managed-care organizations (MCOs) that manage Medicaid services for mental health, developmentally disabled, and substance abuse. But we needed approval by the feds.
It was DHHS’ hope that the extra funds would be the catalyst for a federal match twice that size. Once we got the federal match, DHHS would refund the taxed dollars to the MCOs and use the federal money to pay for programs. Maybe I’m wrong, but the idea sounds like a “bait and switch.” Analogously, I have a client pay me $50,000 on January 31, 2015, the end of our fiscal year, only to refund it February 1, 2015. I would get credit for collecting the $50,000 in fiscal year 2014, but it was not a real collection. It was fake.
And the feds knew it. The answer was, “No.”
Sen. Bob Rucho, R-Mecklenburg, said the information presented Wednesday should have been made available months ago, and he noted that it’s still not detailed enough for a forecast.
“When will we get the numbers that we need to have so that we can have a good budget number?” asked Rucho. And his question is not an anomaly. He is not alone.
“I’ve asked them every time I’ve had the opportunity, and I’m astounded that a $13 billion organization does not have budget numbers,” said Sen. Tommy Tucker (R-Waxhaw), one of the more outspoken members of the Joint Legislative Oversight Committee on Health and Human Services.
Medicaid Chief Financial Officer Rod Davis told Senator Ralph Hise that his department has an idea of how much they’ve paid to providers, but that they can’t forecast what’s to come.
“Would it be like saying we know what checks we wrote, we just don’t know what we’ve paid for,” Hise asked.
Going back to my question:
How can we expect the General Assembly to create a “knowable” and “concrete” Medicaid budget when the Department of Health and Human Services (DHHS) cannot provide the General Assembly with accurate data?
Are we putting too much pressure on the General Assembly and not on DHHS?
The General Assembly is responsible for creating a Medicaid budget. But how can we hold the General Assembly to create an accurate Medicaid budget if the “single state agency,” DHHS, charged with managing Medicaid cannot provide the General Assembly with accurate data???
Here is my political soapbox: We have a Republican General Assembly and we have a Republican governor. Shouldn’t the General Assembly and the governor be on the same side???? Perhaps it’s more than politics. Perhaps it’s more than a donkey and an elephant.
Otherwise with a Republican General Assembly and a Republican Governor, there should be no tension between the “balance of the powers.” Yet there is.
Let’s put lipstick on a pig:
By the way, whoever created the saying “Are we just putting lipstick on an 800 lbs. pig?” obviously did not own a pig. Because Oink did NOT enjoy getting lipstick on her snout. In fact, she squealed like a pig.
