NC State Auditor’s Findings May Cause Overzealous Oversight

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;
8. Etc.

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.

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on August 19, 2014, in "Single State Agency", ACTT, ACTT Services, Beth Wood, CMS, Division of Medical Assistance, Due process, Eligibilty, Health Care Providers and Services, Legislation, MCO, Medicaid, Medicaid Attorney, Medicaid Audits, Medicaid Contracts, Medicaid Eligibility, Medicaid Fraud, Medicaid Providers, Medicaid Reform, Medicaid Services, Medicare and Medicaid Provider Audits, Medicare Attorney, NC, NC DHHS, North Carolina, Office of State Auditor, Olmstead, Performance audit, Provider Medicaid Contracts, RAC Audits, Regulatory Audits, State Budget, State Plan, Tax Dollars and tagged , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 5 Comments.

  1. My sentiments, exactly, Knicole. As a provider, I am and have always been willing to stand accountable. I know many colleagues who are willing to stand accountable as well. But being pressed back on my heels due to the hyper vigilance of auditors pointing their fingers at me shouting “WITCH!!!!” has made providing Medicaid services in NC cost and time prohibitive. I know many who have dropped out of being a Direct Enrolled Provider and I wonder how many more will be able to withstand the repetitive throwing knives coming in their direction.

    Here is a funny vignette from a past audit I went through:

    Auditor: “I see that you circle the interventions that you use during a session from a list on your progress notes…”
    Me: “Yes….”
    Auditor: “…well, you aren’t supposed to do that – you are supposed to hand write your interventions. Since you circled it from a list and didn’t hand write it you have to pay us back for all of those sessions….”
    Me: “….hmmmm….if I hand write the interventions rather then circling them on a list, will that help my client’s symptoms reduce? Will it help my client improve functioning or quality of life?”
    Auditor: “Well….uh….it – – -LOOK, you HAVE to follow the documentation manual and if you don’t then you have to pay us back!!!”

    (I don’t think the auditor liked me….)

  2. Maybe an audit that is performed incorrectly should have the defendant reimbursed for any legal expenses. I bet the auditors would be a lot more vigilant in making sure they were correct in the application of policies and procedures if that happened.

    • Geoffrey, That is classic. Hilarious. I was at a doctor’s office yesterday and he gave me a list of things that the “help desk” staff has said to his office manager (He is an ob/gyn). One lady called an amniocentesis, “amnesia-tesis.”

      Bartley, Spot on. The Medical Society or someone should lobby for a statute to be passed that when auditors err in the audits, attorneys’ fees are awarded.

  3. Bartleby – I support your proposal. Unfortunately, there have been contract auditors who were compensated higher when they found errors. In other words, there was an incentive to find as many errors as possible since that would require back pay by the providers. The more money saved or recovered, the more the auditors would get paid. Now, I consider that a kick-back and CMS has clear anti-kick-back policies.

    The system is skewed against the provider.

    Another piece skewed against the provider has been addressed by Knicole in prior posts. I forget which post exactly, but I recall her mentioning that the ‘burden of proof’ is on the provider – thus, an auditor can make any claim they want and the provider has to fight – appeal – spend time and money – seek representation in order to counter the auditor’s claim.

    So I agree with a systemic change – I just don’t know how likely this will be.

  4. Joseph L Godfrey MD

    Not only should our professional organizations lobby. They should answer in the public forum where the public hears that there are many unqualified providers. That is where we are losing ground and “they” (whoever they are) have been gaining ground since the mid-1960’s.

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