Monthly Archives: August 2014
Prior To Means BEFORE: An Amendment to N.C. Gen. Stat 108C-5(i) and Renovating the Leaning Tower of Pisa
The way it works with our three, separate branches of government is that if the court system determines that a statute should be interpreted as ‘A,’ and the legislative branch does not appreciate the way in which the statute was interpreted, then, during the next session, the legislative branch can pass a bill into law that specifically states that the statute is ‘B’ (provided the statutes are consistent with the constitution).
Take the leaning Tower of Pisa. It was built on unsteady ground and within 10 years of its construction, the builders knew it would lean…much like many of our Medicaid and Medicare laws. A beautiful tower, on paper, may not work in real life and on unsteady ground. But once the tower is erected, renovations can occur that will stop the tower from falling over (supposedly, the leaning Tower of Pisa is now stable).
Similarly, when a new law is enacted, no one can predict whether the law will work in real life or be effective in the manner for which it was intended.
N.C. Gen. Stat. 108C-5 was enacted in 2011 and allows the Department of Health and Human Services (DHHS) to audit a small sample of a health care provider’s medical records and extrapolate the error rate against the universe of all of the provider’s records. For example, HMS, one of NC’s hired auditors, asks a Hospital X for all 99222, 99219 and 99235 codes, that is, initial hospital encounter codes, for the period of time of January 1, 2010 – January 1, 2011. After HMS reviews a sample of those medical records, it determines that Hospital X is miscoding at an error rate of 45% (a conclusion which is ALWAYS likely to be wrong, from my experience) for an actual overpayment amount (from just that particular record sample) of $100,000.00. N.C. Gen. Stat. 108C-5 allows HMS to extrapolate the actual overpayment over a universe all of the Hospital’s records for ‘x’ number of years, to reach an alleged overpayment amount of $4,000,000.00 for the audited time period
It really is ridiculous. For example, one of my clients, a behavioral health care provider, who works very hard for his clients, received from the auditor an alleged notice of overpayment of $640,441.00. My associate, Robert Shaw, reviewed the exact same documents that the auditors reviewed and determined that the audit was erroneous. Robert didn’t even have to take it to court. After he drafted correspondence to the auditing company with explanations of why the audit was incorrect, the auditing company admitted that almost every single one of its conclusions was in error, and agreed to accept $258.20 for one claim.
Going back to N.C. Gen. Stat. 108C-5, subsection (i) used to state, “Prior to extrapolating the results of any audits, the Department shall demonstrate and inform the provider that (i) the provider failed to substantially comply with the requirements of State or federal law or regulation or (ii) the Department has credible allegation of fraud concerning the provider.”
Using the plain language of the statute, in court, I would often argue in defense of a health care provider that the extrapolation should be thrown out because DHHS would send a Tentative Notice of Overpayment (TNO) that included the extrapolated amount in the same correspondence in which DHHS was “demonstrating and informing” the health care provider that either: (i) the provider failed to substantially comply with the requirements of State or federal law or regulation or (ii) the Department has a credible allegation of fraud concerning the provider. N.C. Gen. Stat. 108C-5 clearly states that the demonstration and informing should be given to the health care provider prior to extrapolating.
The DHHS attorney would argue that my argument would create absurd results in that DHHS could demonstrate and inform the provider in one correspondence, then one minute later send the extrapolation. The judges at the Office of Administrative Hearings (OAH) agreed with me to a point. They agreed that the first extrapolation should be thrown out because DHHS did not demonstrate and inform prior to extrapolating.
However, when a provider receives an extrapolation, the first level of appeal is an informal reconsideration review within DHHS, Division of Medical Assistance (DMA). The hearing officers are hired by DHHS and do not, generally, have legal backgrounds; although I can think of one exception. After the reconsideration review, DHHS, through its hired vendor, conducts another extrapolation, which usually does not usually result in a severe decrease in alleged overpayment.
So the Administrative Law Judges (ALJs) held that the subsequent extrapolations…the extrapolations after receiving the TNO which provides the provider notice, are legit…that the TNOs satisfy the requirement of DHHS to demonstrate and inform the provider prior to extrapolating
Well, long story short, DHHS did not like having to defend itself for not providing sufficient notice prior to extrapolating.
Enter Session Law 2014-100, otherwise known as the sneaky Appropriations Bill that appropriates more than our budget.
Session Law 2014-100 revises N.C. Gen. Stat 108C-5(i) to state “(i) Prior to extrapolating the results of any audits, the Department shall demonstrate and inform the provider that (i) the provider failed to substantially comply with the requirements of State or federal law or regulation or (ii) the Department has a credible allegation of fraud concerning the provider. Nothing in the subsection shall be construed to prohibit the Department from identifying the extrapolated overpayment amount in the same notice that meets the requirements of this subsection.”
See the difference? Poof! The leaning Tower of Pisa is renovated!
Session Law 2014-100 retroactively became effective July 31, 2014. So, going forward, I can no longer argue that the TNO is not sufficient notice in order to throw out the first extrapolation.
However, I do have more arguments as to how DHHS is not complying with N.C. Gen. Stat. 108C-5 in an effort to throw out the extrapolation. There is more than one way to skin a cat! In fact, I am waiting for a decision from an ALJ on an innovative argument I made the last week.
Perhaps the leaning Tower of Pisa will lean a little more in the future despite the renovations…
The (Recent) History of PCS Rates and Why There Is Parity of Rates Between Home Health and Long Term Care Facilities
Think of this blog as a history lesson…
As I was preparing my Power Point for speaking at the NC Association of Long Term Care Facilities (NCALTCF), I ran across a number of interesting issues on which I could blog. If you are attending the annual NCALTCF conference September 8-10, this will be a prelude to a portion of my presentation. I will be speaking on September 8th.
I am reviewing the history of personal care services (PCS) rates, and I realize that a few years ago, the parity of PCS rates for home health care providers and long-term care facilities (LTCF) occurred. The issue? Why the parity? I am curious. I remember vividly the parity change in 2012. But, I wonder, why did it occur?
Home health care companies provide PCS to people within their own homes (obviously a much-needed and growing service). Long term care facilities (LTCF) provide PCS within a facility.
But LTCFs have higher overhead due to mortgage/rent, 24-hour staff, monthly bills, more regulatory compliance issues, a cafeteria or kitchen, etc. Whereas, a home health care company does not incur these expenses. Why NOT pay LTCF a higher PCS reimbursement rate?
The answer is…we did, in North Carolina. And the federal government found that we violated the Americans with Disabilities Act (ADA).
Here is the percentage breakdown of people receiving home health, assisted living, nursing homes, hospice, and day service centers, on a national basis in 2013, according to the Centers for Disease Control (CDC).
Notice the green, home health section. Home health has grown at a very rapid rate since 2000. But assisted living (blue) is still predominant.
Back before 2010 and in an attempt to help adult care homes that provide assistance with dementia patients, the General Assembly provided an enhanced Medicaid rate for those facilities.
For decades, the Centers for Medicare and Medicaid (CMS) warned us that the ADA requires that Medicaid reimbursements apply equally to all, including those living in institutional facilities and those who live with family. CMS informed us that we were in violation of Olmstead v. L.C., a Supreme Court decision decided in 1999. In Olmstead, the Supreme Court decided mental illness is a form of disability and that institutional isolation of a person with a disability is a form of discrimination under Title II of the ADA. See Olmstead v. L.C., 527 U.S. 581 (1999) (Remember the Prince song?)
In 2010, Disability Rights filed a complaint with the federal government complaining about NC’s disparate PCS rates between LTCF and home health. In 2011, the US Department of Justice investigated and agreed with Disability Rights. NC was violating Olmstead by providing two different reimbursement rates.
The General Assembly (GA) tackled the issue in 2012. The GA decreased the LTCF’s enhanced PCS rate to the home health’s rate in order to comply with federal law. Although there was a limit as to the number of hours of PCS per month, the GA wrote in an extra 50 hours per month for people suffering from dementia.
Disability Rights originally made the 2010 complaint to the federal government with honest, well-meaning intentions. Disability Rights wanted better care for the mentally ill. And Olmstead had wonderful results for the mentally ill. Now people suffering from mental illness can remain in their homes, if desired (although sometimes a legal battle is required).
But the unknown, unintentional consequence of Olmstead for the owners of LTCFs is that the PCS rate became paired with the home health PCS rate, which keeps declining. For example, prior to October 1, 2013, the PCS rate was $15.52 (now it is $13.88).
The federal minimal wage is $7.25. People who are paid minimum wage, generally, are not licensed professionals.
Most members of a LTCF staff are licensed. Many are certified nurse assistants (CNAs). Most are required to attend yearly continuing education classes. Should these CNAs and licensed professionals make only $6.00 more than minimum wage? Are not professional licensees worth more?
Not to mention…let’s talk about what LTCF staff actually does on a day-to-day basis. My Grandma Carson resides in a LTCF. Thankfully, she still lives in her own independent living house on the LTCF grounds because she can maintain her independent living, but many residents of LTCF cannot. LTCF staff assists in activities of daily living (ADLs), such as toileting, eating, ambulating, and grooming. When my great-grandmother could no longer feed herself, the wonderful staff at Glenaire in Cary, NC fed her. Should a person feeding an elderly person (and bathing and helping go to the bathroom) NOT be paid well-over minimum wage?
Well…the reimbursement rate may be $13.88 (a tad over $6.00 above minimum wage), but a PCS worker for a home health agency AND a LTCF does not earn $13.88/hour, they earn less. Companies are created to earn a profit. There is nothing wrong with earning a profit.
In fact, starting January 1, 2014, PCS workers in home health are now eligible for minimum wage. “ARE NOW ELIGIBLE.” As in, last year, PCS workers could have earned LESS than minimal wage.
In the future, I hope that health care providers who provide PCS services are paid more; I also hope that, in the future, the PCS rate increases. Someday, I will be the recipient of a PCS worker.
Ok, so it took me a couple of days to free up some time to discuss the most recent Performance Audit by our State Auditor. This time of year is CRAZY! We had to get our daughter ready for the 4th grade, which entails buying an absurd amount of school supplies. Thank goodness we don’t have to do “back to school” clothes shopping, because she wears uniforms. Yesterday was her first day of school and, apparently, everything went well.
Now, I want to discuss the recent Performance Audit published by Beth Wood, our NC State Auditor, regarding provider eligibility. Prior to going any further, let me voice my opinion that Beth Wood as our State Auditor rocks. She is smart, courageous, and a force of nature. Any comment that may be negative in nature as to the most recent audit is NOT negative as to the audit itself, but to the possible consequences of such an audit. In other words, I do not believe that the Performance Audit as to Medicaid Provider Eligibility is incorrect; I am only concerned as to the possible consequences of such an audit on the Department of Health and Human Services (DHHS) and health care providers.
The Medicaid Provider Eligibility Performance Audit found that “deficiencies in the enrollment process increase the risk of unqualified providers participating in the Medicaid Program.”
And DHHS’ “enrollment review procedures do not provide reasonable assurance that only qualified providers are approved to participate in the NC Medicaid program.”
And “quality assurance reviews were not conducted or were ineffective.”
Basically, the Performance Audit (in layman’s terms) says that DHHS, again, has little to no oversight, lacks supervision over providers, has program deficiencies, and lacks the ability to manage Medicaid provider eligibility requirements adequately. Considering that DHHS is the single agency charged with managing Medicaid in North Carolina, the Performance Audit is yet another blow to the ability of DHHS to do its job.
Gov. McCrory appointed Sec. Aldona Wos as the head of DHHS, effective January 5, 2013. With Sec. Wos at its helm, DHHS has been riddled by the media with stories of management difficulties, high-level resignations, and mismanaged tax dollars. With the amount of media attention shining on DHHS, it is amazing that Sec. Wos has only been there almost a year and a half. Oh, how time flies.
While, again, I do not discount the accuracy of the Medicaid Provider Eligibility Performance Audit, I am fearful that it will spur DHHS to almost another “Salem witch hunt” extravaganza by pushing the already far-swung pendulum of attacks on providers, in the direction of more attacks. DHHS, through its contractors, agents and vendors, has increased its regulatory audits and heightened its standards to be compliant as a provider for a number of reasons:
1. The U. S. Supreme Court’s Olmstead case;
2. The DOJ settlement as to ACTT providers;
3. More oversight by CMS;
4. The ACA’s push for recovery audit contractors (RACs);
5. General need to decrease the Medicaid budget;
6. Increased fraud, waste, and abuse detection standards in the ACA;
7. Monetary incentives on managed care organizations (MCOs) to decrease the number of providers;
Imagine a pendulum swinging…or, better yet, imagine a child swinging on a swing. Before the child reaches the highest point of the swing, an adult runs behind the child and pushes the child even higher, in order to get a little more “umphf” on the swing. And the child goes even higher and squeals even more in excitement. But that’s not always a great idea. Sometimes the child goes flying off.
I am afraid that the Performance Audit will be that adult pushing the child on the swing. The extra little push…the extra little “umphf” to make the pendulum swing even higher.
As with any Performance Audit, DHHS is allowed to respond to Ms. Wood’s findings. One response is as follows:
“In September 2013, DMA established and implemented Management Monitoring Quality Controls (Monitoring Plan) for reviewing approval and denial decisions related to provider applications referred to it by the Contractor due to a potential concern. The Monitoring Plan established standardized policies and procedures and ensures that staff adheres to them in making enrollment determinations.”
In other words, recently DHHS has put forth a more aggressive oversight program as to health care providers and it will only get more aggressive.
In the last year or so, we have seen more aggressive oversight measures on health care provider that accept Medicaid. More audits, more desk reviews, more fraud investigation…and most (that I have seen) are overzealous and incorrect.
Believe me, I would be fine with increased oversight on health care providers, if the increased oversight was conducted correctly and in compliance with federal and state rules and regulations. But the audits and oversight to which I have been privy are over-bearing on providers, incorrect in the findings, and lacking much of due process for, much less respect to the providers.
I am concerned that the extra little “umphf” by this Performance Audit will impact health care providers’ decisions to accept or not to accept Medicaid patients. See my past blogs on the shortage of health care providers accepting Medicaid. “Shortage of Dentists Who Accept Medicaid: The Shortage Continues.” “Provider Shortage for Medicaid Recipients.” And “Prisons and Emergency Rooms: Our New Medicaid Mental Health Care Providers.”
Instead of increasing overzealous audits on health care providers, maybe we should require DHHS, through its contractors, agents, and vendors, to conduct compliant, considerate, and constitutionally-correct audits and oversight. Maybe the “umphf” should be applied more toward DHHS.
A new audit by the State Auditor shows ANOTHER problem at DHHS. This comes on the heels of another audit earlier this month finding that NCTracks is problematic.
Here is the link: State Audit
More commentary to come this evening when I have time to write about the tomfoolery occurring at DHHS
Our Medicaid Budget Does More Than Allocate Money; It Places the Burden of Proof on Medicaid Providers!!!
Are you a health care provider in NC? Are you wonderful enough to help Medicaid patients but accept low Medicaid reimbursements? Are you dedicated to helping our most needy? Well, guess what???? YOU now have the burden of proof if you disagree with an adverse determination by the State.
That’s right. The newly-enacted state budget quietly changes the statutes and shifts the burden of proof from the Department to YOU. I am reminded of my Grandpa Carson. Whenever he couldn’t believe what he just heard, he would bellow, “Wooooo weee.” Growing up in the south, we have certain sayings, such as “Bless your heart,” “Y’all come back now, ya hear?” and “That food is so good I could slap my momma.” My Grandpa Carson, God rest his soul, was as southern as southern can get. If he were here and heard about the burden shift onto the providers, he would say, “Wooo weeeee.”
Last week while I was on my first week-long vacation in 2 years, the North Carolina state budget, known as Session Law 2014-100, was signed into law by Governor McCrory. (Which is why I missed a week of blogging…my vacation, not McCrory’s signature). Since I was at my family reunion started by my Grandpa, I am dedicating this blog to my grandpa, Nat Carson, who created a family tradition that has lasted for over 40 years. Our (huge) extended family vacation together once a year at Emerald Isle for a family reunion. FOUR generations attend!
Going back to the budget…
An “adverse determination” in this case includes decisions by North Carolina’s Department of Health and Human Services (DHHS) under the Medicaid program such as the Department’s termination of a contract with the provider, a Managed Care Organization’s (MCO) termination of a provider contract, or the Department or one its many vendors determines that the providers owes an overpayment back to the state.
Not only does the state budget shift the burden of proof onto providers when they contest an adverse determination by the State, which we will discuss more below, but it also takes a lot of DHHS decision-making power away. It is apparent that the General Assembly does NOT think DHHS can do its job of managing Medicaid and creating Medicaid reform competently. The General Assembly (GA) has decided that, for whatever reason, it will be more hands-on regarding Medicaid decisions in the future.
Here are a few examples of the GA’s hands-on attitude found in the Session Law 2014-100 (with some emphasis I have made by putting some words in bold-faced type)
- “Until the General Assembly enacts legislation authorizing a plan to reform Medicaid, the Department of Health and Human Services (i) shall continue to consult with stakeholder groups, study, and recommend options for Medicaid reform that will provide greater budget predictability for the Medicaid program and (ii) shall not commit the State to any particular course on Medicaid reform and shall not submit any reform-related State plan amendments, waivers, or grant applications nor enter into any contracts related to implementing Medicaid reform.”
- “The Department may submit drafts of the waiver to the Centers for Medicare and Medicaid Services (CMS) to solicit feedback but shall not submit the waiver for CMS approval until authorized by the General Assembly.”
- “The Department of Health and Human Services shall make payments to the contractor hired by the Joint Legislative Oversight Committee on Health and Human Services from funds appropriated elsewhere in this budget for this contract…”
- “The Department of Health and Human Services shall not make any other modifications to the portion of the Medicaid State Plan referenced in this section, except as provided herein.”
- “The Department may submit drafts of the waivers to the Centers for Medicare and Medicaid Services (CMS) to solicit feedback but shall not submit the waivers for CMS approval until authorized by the General Assembly.”
- “[T]he Division of Medical Assistance shall ensure that any Medicaid-related or NC Health Choice-related State contract entered into after the effective date of this section contains a clause that allows the Department or the Division to terminate the contract without cause upon 30 days’ notice.”
- “No fewer than 10 days prior to submitting an amendment to the State Plan to the federal government, the Department shall post the amendment on its Web site and notify the members of the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division that the amendment has been posted.”
Basically, the GA has estopped DHHS from reforming Medicaid without the consent of the General Assembly.
Then, stuck in the middle of the state budget is the amendment to N.C. Gen. Stat. 108C…. “Woooo weeee!”
MODIFY MEDICAID APPEALS SECTION 12H.27.
(a) G.S. 108C-12(d) reads as rewritten: “(d) Burden of Proof. – The
Department petitioner shall have the burden of proof in appeals of Medicaid providers or applicants concerning an adverse determination.”
Does anyone else understand what this teeny, tiny clause within Session Law 2014-100 means????
What is the importance of burden of proof? Enormous! And this clause changes the playing field for Medicaid providers. It may not have been a level field prior to Session Law 2014-100, but now it’s even more slanted.
The easiest way to explain “burden of proof” is that when a petitioning Medicaid provider challenges some adverse determination by DHHS, for example, the Department’s termination of a contract with the provider, the “burden of proof” decides which party must persuade the reviewing tribunal that the party’s assertions are correct. Up until this amendment of G.S.108C-12(d), the Department has had the burden to present evidence showing that its adverse determination was correct. The petitioner could then respond to that evidence, to try to show the contrary, but the burden of proving the correctness of the adverse determination still rested on the Department in cases filed by Medicaid providers under Chapter 108C.
In court, one of the first questions a judge will ask is, “Who carries the burden of proof?” Because the legal burden of proof is just that…a burden…that must be satisfactorily carried in order to win.
Health care providers who accept Medicaid have notoriously been given the short-end of the stick, i.e., low reimbursement rates, undergoing burdensome audits, but, at least, in NC, historically, the Department has had to prove the correctness of its allegations, whether it be an alleged overpayment, a termination of a Medicaid contract, or other allegations.
But now? DHHS’ allegations against a health care provider are true…unless the provider can prove DHHS wrong. The uphill fight of a provider seeking to correct a DHHS adverse determination, just became much steeper, and it was done with little or no fanfare.
So can you do? Only options as far as I see it:
- Call and email your state representatives.
- Hire a lobbyist.
- Bring a lawsuit to change it.
- Do nothing.
Per L. Warren’s comment, I am adding #5.
5. Stop taking Medicaid clients.