Monthly Archives: December 2015

“A Modest Proposal for the ACA Employer Mandate”

We all know about the ACA employer mandate. It placed a tremendous burden on employers, many of whom will only feel this burden weighing them down as we ring in the new year because, starting in 2016, companies with over 50 employees must offer health insurance to full time employees (those who work over 30 hours per week).

So how much does it cost you, as an employer, to hire an employee? Are there exceptions? Are there loopholes?

We will get to the first question in a second. The answer to the last two questions is a “yes,” which will be discussed further in this blog.

Cost of an employee

Employers have to pay Social Security tax, Medicare tax, state unemployment insurance, and, now in 2016, health care insurance benefits (if the company has 50+ employees).

Social Security tax is 6.2%. Medicare tax is 1.45%. State unemployment tax differs from state to state, but it can range from 0% to 12.27% (Massachusetts). For the sake of clarity, we will use 5%.

Health insurance benefits also can vary greatly depending on the plan. According to the Kaiser Family Foundation/Health Research & Education Trust 2015 Employer Health Benefits Survey, annual premiums for employer-sponsored family health coverage reached $17,545 this year, up 4 percent from last year, with workers on average paying $4,955 towards the cost of their coverage.

This means that the employer, on average, is paying $12,490 per year per employee for health care benefits.

Assuming a base salary of $70,000, an employer would spend:

Social Security tax: $4,340

Medicare tax: $1,015

State unemployment tax: $350

Health care insurance benefits: $12,490

For a whopping total of $18,195 per year.

Think about this…if you offer your employee a salary of $70,000/year, he/she has to produce revenue for that company of, at least, $88,195 per year in order for you to break even. As you well know, successful companies are not in the business of breaking even, so you will expect your employee to create, at least, over $90,000 of profit in order to be paid a salary of $70,000.

None of the above contemplate a 401K plan. If you’re in a position to offer your employees a 401K plan, they will need to be that much more profitable.

So how can you, as the employer of a home health company, a long term care facility, a dentist practice, or other health care provider decrease the amount of money spent on health care benefits?

“A Modest Proposal for the ACA Employer Mandate”

Before we begin our journey of “A Modest Proposal for the ACA Employer Mandate,” I would like to give a bit of an English lesson on satire, lest one of you miss it. Satire is defined as, “the use of humor, irony, exaggeration, or ridicule to expose and criticize people’s stupidity or vices, particularly in the context of contemporary politics and other topical issues.” It is burlesque. And so I write this blog in the vein of Jonathon Swift’s “A Modest Proposal” (for those of you who have not heard of it, I suggest you click on the link above). For the faint of heart, those easily offended, or those too lazy to click on the link, I suggest not reading further.

Below is my “A Modest Proposal for the ACA Employer Mandate.”

  1. Hire childless singles.

Childless singles are cheaper to insure. So screen your potential employees. Ask whether they intend to have children and warn them that you operate a non-child company. Explain that if you discover that any employee has a dependent child it will result in immediate termination. Bonuses for those who undergo voluntary hysterectomies or vasectomies.

2. Hire old people.

People over 65 are eligible for Medicare. They’re loyal; they don’t talk back. The only things they complain about are their ailments. Many expect little pay because they, or their parents, went through the Great Depression. You can be sure that they will not spend their time on Facebook, Twitter, Instagram, or other social media because they don’t know how. If the position involves driving, you can sure they will get no speeding tickets. Best of all, you know that you are not undertaking a long-term commitment.

3. Hire poor people.

People below the poverty line are eligible for Medicaid. They rarely talk on the phone to friends. Many even only talk to themselves, which is fantastic (and not creepy at all) in the workplace. They are never late with excuses of bad traffic; and their homes are, most likely, going to be very near by (and maybe right out front). They never try to “one-up” the Joneses’. You will never see them bragging about their new Iphones, Louis Vuitton bag, or Mercedes Benz.

5. Hire lazy people.

People who work under 30 hours per week do not get offered health care coverage. Hire employees who enjoy video games too excess. All the better if they own Assassin’s Creed: Victory, Battlefield: Hardline, and Dying Light. It’s an office party every day – no need to worry about them working over 30 hours per week – they like vodka, bourbon, and gin. It’s even better if they enjoy the occasional (daily) marijuana. Embrace a drug-friendly environment.

If you follow the above hiring tips, you too can avoid paying the ACA employer mandate. Remember, the key to success is to only hire childless singles, and old, poor, and lazy people.

And you’ve struck gold if you hire a childless, old, lazy, poor, single person….Goldmine!

Broken Promises Could Promise Disaster for Pediatricians! or “I Don’t Give a Damn” What the Law Is!

In 2013 and 2014, those of you who are primary health care physicians received a boost in Medicaid reimbursement rates up to the Medicare rates for E&M and vaccine administration CPT codes. Many of you self-attested to being primary care physicians. In other words, you determined that you act as a primary care physician. No official acting on behalf of the government reviewed your self-attestation and approved or denied your self-attestation.

What if the government decides, retroactively, that you did not qualify as a primary care physician and attempt to recoup the enhanced payments?? Is that allowed? “A retroactive take back?”

We all know that retroactive take backs occur in other types of audits!

This whole situation reminds me of my favorite movie of all time: Gone With the Wind…you know, Scarlett O’Hare, Rhett Butler, the Civil War…Over Thanksgiving, AMC had a Gone With the Wind marathon, and I must have watched it 4 times (I was sick, so I couldn’t do much else).

The plot is that Rhett is in love with Scarlett the entire movie, which spans over a fictious, “movie time” of two decades. And Scarlett is not in love with Rhett the entire movie until the very end.Once she finally realizes her love for Rhett, he is beyond frustrated and wants nothing to do with her.

She asks, “Rhett, oh, Rhett, what am I supposed to do?” To which he responds, “Frankly, my dear, I don’t give a damn!”

There are many themes found in Gone With the Wind, but the one most appropos is “You may think you understand reality, but, in the end, your reality may be a fictitious dream.”

Similarly, in 2013 and 2014, if you are a primary health care physician, you received a boost in Medicaid reimbursement rates up to the Medicare rates for E&M and vaccine administration CPT codes. You believed the rate hike to be reality.

This rate hike was a big deal for physicians, especially pediatricians. Pediatric practices rely heavily on Medicaid, usually from 20-100%. This rate hike took a reimbursement rate of approximately 78% of the Medicare rate, which, by the way, has been frozen by our legislature at the 2002 rate, plus an additional 3% reduction, followed by another 1% reduction to 100% of the Medicare rate. Quite an increase!

Well, that so blissful increase in Medicaid rates may come back to bite you!!! You thought that you were receiving higher Medicaid reimbursement rates, but, in the end, may you have to pay it back?

The reality of receiving higher Medicaid reimbursement rates may truly only have been a fictitious dream.

“Why,” you demand. “Why?” “Well,” says the government, “I don’t give a damn what the law is.”

Caveat lector: It is not 100% certain that you will be audited. This blog is only a warning as to a possibility. If, in fact, you are audited, then you have legal rights!

Let’s go over why there may be audits for those of you who self-attested to being primary care physicians…

In order to receive this increased rate hike, physicians had to self-attest that he/she :

  1. “Is Board certified as family medicine, general internal medicine, or pediatric medicine; and/or
  2. Has furnished evaluation and management services under codes described in paragraph (b) of this section that equal at least 60 percent of the Medicaid codes he or she has billed during the most recently completed CY or, for newly eligible physicians, the prior month.”

If you are Board certified in family medicine, general internal medicine, or pediatric medicine, there should not be a problem. There isn’t anything to argue. You are either Board certified or not.

However, if you are not Board certified, you will be relying on the government’s auditors to determine whether your practice comprises 60% of applicable Medicaid codes during the most recent calendar year.

Hmmmmmm…

Then, if the government’s auditors determine that your practice comprises of only 57% of applicable Medicaid codes, you may be charged with returning all the money you received as enhanced payments during 2013 and 2014.

And we all know how accurate some of our government’s auditors are…

So there you were, a physician, happy to self-attest to being a primary care provider, happy to receive higher reimbursements for two years, and with no thought of recoupments.

Then…BOOM…you are hit with the realization that you may be liable to the government for a recoupment of those enhanced reimbursements.

Because, frankly, my Dear, the government does not give a damn. Your reality was, in fact, a mere fictitious dream.

Medicaid Closed Networks: Can Waivers Waive Your Legal Rights?

Sorry for the lapse in blogging. I took off for Thanksgiving and then got sick. I hope you all had a wonderful Thanksgiving!!

While I was sick, I thought about all the health care providers that have been put out of business because the managed care organization (MCO) in their area terminated their Medicaid contract or refused to contract with them. I thought about how upset I would be if I could not see my doctor, whom I have seen for years. See blog for “You Do Have Rights!

Then I thought about…Can a Waiver waive a legal right?

Federal law mandates that Medicaid recipients be able to choose their providers of choice. Court have also held that this “freedom of choice” of provider is a right, not a privilege.

42 U.S.C. § 1396a states that Medicaid recipients may obtain medical services from “any institution, agency, community pharmacy, or person, qualified to perform the service or services required… who undertakes to provide him such services….” Id. at (a)(23).

So how can these MCOs restrict access?

First, we need to discuss the difference between a right and a privilege.

For example, driving is a privilege, not a right. You have no right to a driver’s license, which is why you can lose your license for things, such as multiple DUIs. Plus, you cannot receive a driver’s license unless you pass a test, because a license is not a right.

Conversely, you have the right to free speech and the right to vote. Meaning, the government cannot infringe on your rights to speak and vote unless there are extraordinary circumstances. For example, the First Amendment does not protect obscenity, child pornography, true threats, fighting words, incitement to imminent lawless action (yelling “fire” in a crowded theater), criminal solicitation or defamation. Your right to vote will be rescinded if you are convicted of a felony. Furthermore, you do not need to take a test or qualify for the rights of free speech and voting.

Likewise, your choice of health care provider is a right. It can only be usurped in extraordinary circumstances. You do not need to take a test or qualify for the right. (Ok, I am going to stop underlining “right” and “privilege” now. You get the point).

Then how are MCOs operating closed networks? For that matter, how can Blue Cross Blue Shield (BCBS) terminate a provider’s contract? Wouldn’t both those actions limit your right to choose your provider?

The answer is yes.

And the answer is simple for BCBS. As for BCBS, it is a private company and does not have to follow all the intricate regulations for Medicare/caid. 42 U.S.C.  § 1396a is inapplicable to it.

But Medicaid recipients have the right to choose their provider.  This “freedom of choice” provision has been interpreted by both the Supreme Court and the Seventh Circuit as giving Medicaid recipients the right to choose among a range of qualified providers, without government interference (or its agents thereof).

What does this mean? How can a managed care organization (MCO) here in NC maintain a closed network of providers without violating the freedom of choice of provider rule?

The “Stepford” answer is that we have our Waivers in NC, which have waived the freedom of choice. In our 1915 b/c Waiver, there are a couple pages that enumerates certain statutes. We “x” out the statutes that we were requesting to waive.

It looks like this:

waiver1

Furthermore, federal law carves out an exception to freedom to choose right when it comes to managed care. But to what extent? It the federal carve unconstitutional?

But…the question is twofold:

  • Would our Waiver stand up to federal court scrutiny?
  • Can our state government waive your rights? (I couldn’t help it).

Let’s think of this in the context of the freedom of speech. Could NC request from the federal government a waiver of our right to free speech? It sounds ludicrous, doesn’t it? What is the difference between your right to free speech and your right to choose a provider? Is one right more important than the other?

The answer is that no one has legally challenged our Waiver’s waiver of the right to freedom of provider with a federal lawsuit claiming a violation of a constitutionally protected right. It could be successful. If so, in my opinion, two legal theories should be used.

  1. A § 1983 action; and/or
  2. A challenge under 42 CFR 431.55(f)

Section 1983 creates a federal remedy against anyone who deprives “any citizen of the United States… of any rights, privileges, or immunities secured by the Constitution and laws” under the color of state law. 42 U.S.C. § 1983. The Supreme Court has explained that § 1983 should be read to generally “authorize[] suits to enforce individual rights under federal statutes as well as the Constitution.” City of Rancho Palos Verdes, Cal. v. Abrams, 544 U.S. 113, 119 (2005).

Section 1983 does not authorize a federal remedy against state interference with all government entitlements, however; “it is rights, not the broader or vaguer ‘benefits’ or ‘interests,’ that may be enforced under the authority of that section.” Gonzaga Univ. v. Doe, 536 U.S. 273, 283 (2002). But the courts have already held that the freedom to choose your provider is a right.

In 2012, the Seventh Circuit confirmed that § 1983 authorizes Medicaid recipients to sue to enforce the right to freely choose among qualified health providers.

In Planned Parenthood, the court was confronted with an Indiana state law prohibiting state agencies from providing state or federal funds to any entity that performs abortions or maintains or operates a facility in which abortions are performed – regardless of whether there is any nexus between those funds and the abortion services. See Planned Parenthood, 699 F.3d at 967 (7th Cir. 2012). In other words, the law effectively prohibited entities that perform abortions from receiving any state or federal funds for any (non-abortion) purpose.

The Court found that the restrictions violated the Medicaid recipients’ right to freedom of choice of provider.

There are, as always, more than one way to skin a cat. You could also attack the Waiver’s waiver of the freedom to choose your health care provider by saying the NC is violating 42 CFR 431.55.

Notice the last sentence in subsection (d) in the picture above. In our Waiver, NC promises to abide by 42 CFR 431.55(f), which states:

(f) Restriction of freedom of choice—
(1) Waiver of appropriate requirements of section 1902 of the Act may be authorized for States to restrict beneficiaries to obtaining services from (or through) qualified providers or practitioners that meet, accept, and comply with the State reimbursement, quality and utilization standards specified in the State’s waiver request.
(2) An agency may qualify for a waiver under this paragraph (f) only if its applicable State standards are consistent with access, quality and efficient and economic provision of covered care and services and the restrictions it imposes—
(i) Do not apply to beneficiaries residing at a long-term care facility when a restriction is imposed unless the State arranges for reasonable and adequate beneficiary transfer.
(ii) Do not discriminate among classes of providers on grounds unrelated to their demonstrated effectiveness and efficiency in providing those services; and
(iii) Do not apply in emergency circumstances.
(3) Demonstrated effectiveness and efficiency refers to reducing costs or slowing the rate of cost increase and maximizing outputs or outcomes per unit of cost.
(4) The agency must make payments to providers furnishing services under a freedom of choice waiver under this paragraph (f) in accordance with the timely claims payment standards specified in § 447.45 of this chapter for health care practitioners participating in the Medicaid program.

Basically, to argue a violation of 42 CFR 431.55, you would have to demonstrate that NC violated or is violating the above regulation by not providing services “consistent with access, quality and efficient and economic provision of covered care and services.”

So, while it is true that NC has requested and received permission from the Center of Medicare and Medicaid Services (CMS) to restrict access to providers, that fact may not be constitutional.

Someone just needs to challenge the Waiver’s waiver.