Category Archives: Affordable Care Act
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Ok – Back to the informative news about the most recent Executive Orders…
My co-panelist on RACMonitor, Matthew Albright, gave a fascinating and informative summary on the recent, flurry of Executive Orders, and, he says, expect many more to come in the near future. He presented the following article on RACMonitor Monitor Monday, August 10, 2020. I found his article important enough to be shared on my blog. Enjoy!!
By Matthew Albright
Original story posted on: August 12, 2020
Presidential Executive Order No. 1 was issued on Oct. 20, 1862 by President Lincoln; it established a wartime court in Louisiana. The most famous executive order was also issued by Lincoln a few years later – the Emancipation Proclamation.
Executive orders are derived from the Constitution, which gives the president the authority to determine how to carry out the laws passed by Congress. The trick here is that executive orders can’t make new laws; they can only establish new – and perhaps creative – approaches to implementing existing laws.
President Trump has signed 18 executive orders and presidential memorandums in the past seven days. That sample of orders and memos are a good illustration of the authority – and the constraints – of presidential powers.
An executive order and a presidential memorandum are basically the same thing; the difference is that a memorandum doesn’t have to cite the specific law passed by Congress that the president is implementing, and a memorandum isn’t published in the Federal Register. In other words, an executive order says “this is what the President is going to do,” and a memorandum says “the President is going to do this too, but it shouldn’t be taken as seriously.”
Executive orders and memorandums often give instructions to federal agencies on what elements of a broader law they should focus on. One good example of this is the executive order signed a week ago by President Trump that provides new support and access to healthcare for rural communities. In that executive order, the President cited the Patient Protection and Affordable Care Act as the broad law he was using to improve access to rural communities.
Executive orders also often illustrate the limits of presidential authority, a good example being the series of executive orders and memorandums that the president signed this past Saturday, intended to provide Americans financial relief during the pandemic.
One of the memorandums signed on Saturday delayed the due date for employers to submit payroll taxes. The idea was that companies would in turn decide to stop taking those taxes out of employees’ paychecks, at least until December.
By looking at the language in the memorandum and seeing what it does not try to do, we can learn a lot about presidential limits.
The memorandum does not give employers or employees a tax break. That power rests unquestionably with Congress. The order only delays when the taxes will be collected. Like the grim reaper, the tax man will come to your door someday, even if you can delay when that “someday” is.
Also, the tax delay is only for employers, and – again, another illustration of the limits of presidential power – it doesn’t tell employers how they should manage this extra time they have to pay the tax. That is, companies could decide to continue to take taxes out of people’s paychecks, knowing that the taxes will still have to be paid someday.
Another memorandum that the president signed on Saturday concerned unemployment benefits. That order illustrates the division in powers between the federal Executive Branch and the authority of the states.
The memorandum provides an extra $400 in unemployment benefits, but in order for it to work, the states would have to put up one-fourth of the money. The memorandum doesn’t require states to put up the money; it “calls on” them to do it, because the President, unless authorized by Congress, can’t make states pay for something they don’t want.
Executive orders and memorandums are reflective of my current position as the father of two pre-teen girls. I can declare the direction the household should go, I can “call on them” to play less Fortnite and eat more fruit, but my orders and their subsequent implementation often just serve to illustrate the limits – both perceived and real –of my paternal power.
Programming Note: Matthew Albright is a permanent panelist on Monitor Mondays (with me:) ). Listen to his legislative update sponsored by Zelis, Mondays at 10 a.m. EST.
Extra, extra, read all about it: Breaking News!
In a 2-1 decision issued December 18, a Fifth Circuit panel held that the individual mandate under the Affordable Care Act (ACA) is unconstitutional after Congress zeroed out the penalty in tax reform legislation.
Although the ruling was a victory for the 18 Republican-led states that initiated the challenge to the ACA, the appeals court side-stepped the critical issue of severability—i.e., whether other parts of the sprawling health care law could stand without the mandate—remanding to the district court for further proceedings.
In December 2018, U.S. District Court for the Northern District of Texas Judge Reed O’Connor ruled that no part of the ACA could stand after the Tax Cuts and Jobs Act (TCJA) essentially eliminated the ACA’s “shared responsibility payment” for failing to comply with the mandate to buy insurance. The judgment was stayed pending appeal.
As a practical matter, the panel decision maintains the status quo and prolongs the litigation, likely leaving a final resolution of the ACA’s fate until after the 2020 elections.
California Attorney General Xavier Becerra, who headed the coalition of mostly Democratic-led states that intervened to defend the law, said California “will move swiftly to challenge this decision.”
“For now, the President got the gift he wanted—uncertainty in the healthcare system and a pathway to repeal—so that the healthcare that seniors, workers and families secured under the Affordable Care Act can be yanked from under them,” Becerra said in a statement.
Texas Attorney General Ken Paxton applauded the panel’s decision, saying the opinion recognized “that the only reason the Supreme Court upheld Obamacare in 2012 was Congress’ taxing power, and without the individual mandate’s penalty, that justification crumbled.”
Judge Jennifer Walker Elrod, who President George W. Bush appointed to the Fifth Circuit, wrote the majority opinion, which was joined by Judge Kurt D. Englehardt, an appointee of President Donald Trump. The third panel member, Judge Carolyn Dineen King, was appointed by President Jimmy Carter, dissented.
The appeals court first concluded that the individual plaintiffs, the 18 plaintiff states, and the intervening states all had standing, an issue that the parties debated during oral arguments in July.
On the merits, the majority held once Congress zeroed out the shared responsibility payment, the individual mandate could no longer be upheld as a tax as it was under the Supreme Court’s decision in Nat’l Fed. of Independent Bus. v. Sebelius, 567 U.S. 519 (2012).
After finding the individual mandate was unconstitutional, the majority declined to resolve whether, or how much, of the ACA could stand on its own.
Instead, the appeals court remanded to the district court to determine “with more precision what provisions of the post-2017 ACA are indeed inseverable from the individual mandate.” The appeals court also told the lower court to consider the federal government’s “newly-suggested relief of enjoining the enforcement only of those provisions that injure the plaintiffs or declaring the Act unconstitutional only as to the plaintiff states and the two individual plaintiffs.”
The complexity of the ACA statutory scheme, which includes provisions regulating insurance, amending Medicare, funding preventative health care programs, enacting antifraud requirements, and establishing or expanding drug regulations, requires “a careful, granular approach” for determining severability, which the majority was not satisfied O’Connor had done.
In the majority’s view, O’Connor’s decision was incomplete because it didn’t sufficiently address the intent of the 2017 Congress in zeroing out the penalty in the TCJA. Nor did O’Connor parse “through the over 900 pages of the post-2017 ACA, explaining how particular segments are inextricably linked to the individual mandate.”
The appeals court therefore remanded with instructions for the district court “to employ a finer-toothed comb . . . and conduct a more searching inquiry into which provisions of the ACA Congress intended to be inseverable from the individual mandate.”
In her dissent, Judge King argued that by refusing to address severability, which in her view was plain given that Congress in 2017 removed the individual mandate’s enforcement mechanism while leaving the remaining provisions of the ACA intact, the majority “unnecessarily prolong[s] this litigation and the concomitant uncertainty over the future of the healthcare sector.”
King said she would vacate the district court’s order because none of the plaintiffs had standing to challenge the coverage requirement, would conclude that the coverage requirement is constitutional without the enforcement mechanism, and would find, in any event, the provision “entirely severable” from the remainder of the ACA.
Texas v. United States, No. 19-10011 (5th Cir. Dec. 18, 2019).
Article from American Health Lawyers Association.
“Medicare for All” is the talk of the town. People are either strong proponents or avid naysayers. Most of the articles that I have seen that have discussed Medicare for All writes about it as if it is a medical diagnosis and “cure-all” for the health care disease debilitating our country. Others articles discuss the amount Medicare for All will cost the taxpayers.
I want to look at Medicare for All from a different perspective. I want to discuss Medicare for All from the health care providers’ perspectives – those who already accept Medicare and those who, currently, do not accept Medicare, but may be forced to accept Medicare under the proposed Medicare for All and the legality or illegality of it.
I want to explore the implementation of Medicare for All by using my personal dentist as an example. When I went to my dentist, Dr. L, today, who doesn’t accept Medicare or Medicaid, he was surprised to hear from the patient (me) in whom he was inserting a crown (after placing a long needle in my mouth to numb my mouth, causing great distress and pain) that he may be forced to accept Medicare in the near future. “I made the decision a long time ago to not accept Medicare or Medicaid,” he said. “Plus, Medicare doesn’t even cover dental services, does it?”
While Medicare doesn’t cover most dental care, dental procedures, or supplies, like cleanings, fillings, tooth extractions, dentures, dental plates, or other dental devices, Medicare Part A (Hospital Insurance) will pay for certain dental services that you get when you’re in a hospital. Part A can pay for inpatient hospital care if you need to have emergency or complicated dental procedures, even though the dental care isn’t covered. However, some Medicare Advantage Plans (Part C) offer extra benefits that original Medicare doesn’t cover – like vision, hearing, or dental. Theoretically, Medicare for All will cover dental services since Part C covers dental, although, there is a question as to how exactly Medicare for All will/would work. Who knows whether dental services would be included in Medicare for All – this is just an example. Insert any type of medical service in lieu of dental, if you wish.
Dr. L had made the decision not accept Medicaid or Medicare. He only accepts private pay or cash pay. If Medicare for All is implemented, Dr. L’s decision to not accept Medicare will no longer be his decision; it would be the government’s decision. The rates that Dr. L charges now and receives for reimbursements now could be slashed in half without Dr. L’s consent or business plan.
In a 2019 RAND study, researchers examined payment and claims data from 2015 to 2017 representing $13 billion in healthcare spending across 25 states at about 1,600 hospitals. The study showed that private insurers pay 235% of Medicare in 2015 to 241% of Medicare in 2017. The statistics differ state to state. In some states private pay reimbursed as low as 150% of Medicare, while in others private pay reimbursed up to 400% of Medicare.
To show how many providers are adverse to accepting Medicare: In 2000, nearly 80% of health care providers were taking new Medicare patients. By 2012, that number dropped to less than 60%. Currently, less than 40% of the health-care system are government run and nearly 33% of doctors won’t see new Medicaid patients. Medicare patients frequently have difficulty finding a new primary-care doctor.
My question is –
Is it legal for the government to force health care providers to accept Medicare rates by issuing a Medicare for All system?
An analogy would be that the government forced all attorneys to charge under $100/hour, or all airplane flights to be $100, or all restaurants to charge a flat fee that is determined by the government. Is this what our country has transformed into? A country in which the government determines the prices of services and products?
Let me be clear and and rebut what some readers will automatically think. This is not simply an anti-Medicare for All blog. Shoot, I’d love to get health care services for free. Instead, I am reviewing Medicare for All from a legal and constitutional perspective to discuss whether government implemented reimbursement rates will/would be legal. Or would government implemented reimbursement rates violate due process, the right to contract, the right to pursue a career, the right to life, liberty, and the pursuit of happiness, and/or our country’s history of capitalism.
The consequences of accepting Medicare can be monumental. Going back to Dr. L, due to the massive decrease of reimbursement rates under Medicare, he may be forced to downsize his staff, stop investing in high tech devices to advance the practice of dentistry, take less of a salary, and, perhaps, work more to offset the reimbursement rate reduction.
Not to mention the immense regulatory oversight, including audits, documentation productions, possible suspensions of Medicare contracts or accusations of credible allegations of fraud that comes hand in hand with accepting Medicare.
I don’t think there is one particular law that would allow or prohibit Medicare for All requiring health care providers to accept Medicare reimbursements, even against their will. Although I do think there is potential for a class action lawsuit on behalf of health care providers who have decided to not accept Medicare if they are forced to accept Medicare in the future.
I do not believe that Medicare for All will ever be implemented. Just think of a world in which there is no need for private insurance companies…a utopia, right? But the private health care insurance companies have enough money and enough sway to keep Medicare for All at bay. Hospitals and the Hospital Association will also have some input regardless the implementation of Medicare for All. Most hospitals claim that, under Medicare for All, they would close.
Regardless the conversation is here and will, most likely, be a highly contested issue in our next election.
Once You STOP Accepting Medicaid/Care, How Much Time Has to Pass to Know You Will Not Be Audited? (For Past Nitpicking Documentation Errors)
I had a client, a dentist, ask me today how long does he have to wait until he need not worry about government, regulatory audits after he decides to not accept Medicare or Medicaid any more. It made me sad. It made me remember the blog that I wrote back in 2013 about the shortage of dentists that accept Medicaid. But who can blame him? With all the regulatory, red tape, low reimbursement rates, and constant headache of audits, who would want to accept Medicare or Medicaid, unless you are Mother Teresa…who – fun fact – vowed to live in poverty, but raised more money than any Catholic in the history of the recorded world.
What use is a Medicaid card if no one accepts Medicaid? It’s as useful as our appendix, which I lost in 1990 and have never missed it since, except for the scar when I wear a bikini. A Medicaid card may be as useful as me with a power drill. Or exercising lately since my leg has been broken…
The answer to the question of how long has to pass before breathing easily once you make the decision to refuse Medicaid or Medicare? – It depends. Isn’t that the answer whenever it comes to the law?
By Whom and Why You Are Being Investigated Matters
If you are being investigated for fraud, then 6 years.
If you are being investigated by a RAC audit, 3 years.
If you are being investigated by some “non-RAC entity,” then it however many years they want unless you have a lawyer.
If being investigated under the False Claims Act, you have 6 – 10 years, depending on the circumstances.
If investigated by MICs, generally, there is a 5-year, look-back period.
ZPICS have no particular look-back period, but with a good attorney, reasonableness can be argued. How can you be audited once you are no longer liable to maintain the records?
The CERT program is limited by the same fiscal year.
The Alternative: Self-Disclosure (Hint – This Is In Your Favor)
If you realized that you made an oops on your own, you have 60-days. The 60-day repayment rule was implemented by the Centers for Medicare and Medicaid Services (“CMS”), effective March 14, 2016, to clarify health care providers’ obligations to investigate, report, and refund identified overpayments under the Affordable Care Act (“ACA”).
Notably, CMS specifically stated in the final rule that it only applies to traditional Medicare overpayments for Medicare Part A and B services, and does not apply to Medicaid overpayments. However, most States have since legislated similar statutes to mimic Medicare rules (but there are arguments to be made in courts of law to distinguish between Medicare and Medicaid).
According to the American Hospital Association, America has 4,840 general hospitals that aren’t run by the federal government: 2,849 are nonprofit, 1,035 are for-profit and 956 are owned by state or local governments.
What is the distinction between a for-profit and not-for-profit hospital… besides the obvious? The obvious difference is that one is “for-profit” and one is “not-for-profit” – but any reader of the English language would be able to tell you that. Unknown to some is that the not-for-profit status does not mean that the hospital will not make money; the status has nothing to do with a hospitals bottom line. Just ask any charity that brings in millions of dollars.
The most significant variation between non-profit and for-profit hospitals is tax status. Not-for-profit hospitals are exempt from state and local taxes. Some say that for-profit hospitals have to be more cost-effective because they have sales taxes and property taxes. I can understand that sentiment. Sales taxes and property taxes are nothing to sneeze at.
The organizational structure and culture also varies at for-profit hospitals rather than not-for-profit hospitals. For-profit hospitals have to answer to shareholders and/or investors. Those that are publicly traded may have a high attrition rate at the top executive level because when poor performance occurs heads tend to roll.
Bargaining power is another big difference between for-profit and non-profit. For-profit has it while non-profit, generally, do not. The imbalance of bargaining power comes into play when the government negotiates its managed care contracts. I also believe that bargaining power is a strong catalyst in the push for mergers. Being a minnow means that you have insect larvae and fish eggs to consume. Being a whale, however, allows you to feed on sea lion, squid, and other larger fish.
A report conducted by the Health Research Institute showed 255 healthcare merger and acquisition (M&A) deals in the second quarter of 2018. Just the second quarter! According to the report, deal volume is up 9.4% since last year.
The most active sub-sector in the second quarter of 2018 is long-term care, with 104 announced healthcare M&A deals representing almost 41% of deal volume.
The trend today is that for-profit hospitals are buying up smaller, for-profit hospitals and, any and all, not-for-profit hospitals. The upshot is that hospitals are growing larger, more massive, more “corporate-like,” and less community-based. Is this trend positive or negative? I will have to research whether the prices of services increase at hospitals that are for-profit rather than not-for-profit, but I have a gut feeling that they do. Not that prices are the only variable to determine whether the merger trend is positive or negative. From the hospital’s perspective, I would much rather be the whale, not the minnow. I would feel much more comfortable swimming around.
My opinion is that, as our health care system veers toward value-based reimbursement and this metamorphous places financial pressure on providers, health care providers are struggling for more efficient means of cost control. The logical solution is to merge and buy up the smaller fish until your entity is a whale. Whales have more bargaining power and more budget.
In 2017, 29 for-profit companies bought 18 for-profit hospitals and 11 not-for-profits, according to an analysis for Kaiser Health News.
10 hospital M&A transactions involved health care organizations with net revenues of $1 billion or more in 2017.
Here, in NC, Mission Health, a former, not-for-profit hospital in Asheville, announced in March 2018 that HCA Healthcare, the largest, for-profit, hospital chain would buy it for $1.5 billion. The NC Attorney General had to sign off on the deal since the deal involved a non-profit turning for-profit, and he did ultimately did sign off on it.
Regardless your opinion on the matter, merger mania has manifested. Providers need to determine whether they want to be a whale or a minnow.
With so much news about Medicare and Medicaid, I decided to do a general update of Medicare and Medicaid in the news. To the best of my ability, I am trying not to put my own “spin” on the stories, but just relay what is happening. Besides, Hurricane Florence is coming, and we have to hunker down. FYI: There is no more water at Costco.
Here is an overview of current “hot topics” for Medicare and Medicaid:
Affordable Care Act
On September 5, 2018, attorneys argued in TX district court whether the Affordable Care Act should be repealed. The Republican attorneys, who want the ACA repealed will argue that the elimination of the tax penalty for failure to have health insurance rendered the entire law unconstitutional because the Supreme Court upheld the ACA in 2012 by saying its requirement to carry insurance was a legitimate use of Congress’ taxing power. We await the Court’s decision.
In Maine, two hospitals illegally turned away emergency room patients in mental health crises and sometimes had them arrested for trespassing. The hospitals are Central Maine Medical Center and St. Mary’s Regional Medical Center, and they have promised to address and change these policies. It is likely that the hospitals will be facing penalties. Generally, turning away a patient from an ER is over $100,000 per violation.
Six San Francisco Bay Area medical professionals have been indicted for an alleged kickback scheme in which three paid and three received kickbacks for healthcare referrals in home health.
Medicaid Work Requirements
In June, Arkansas became the first state to implement a work requirement into its Medicaid program. The guinea pig subjects for the work requirement were Medicaid expansion recipients aged 30-49, without children under the age of 18 in the home, did not have a disability, and who did not meet other exemption criteria. On a monthly basis, recipients must work, volunteer, go to school, search for work, or attend health education classes for a combined total of 80 hours and report the hours to the Arkansas Department of Human Services (DHS) through an online portal. Recipients who do not report hours any three months out of the year lose Medicaid health coverage until the following calendar year. September 5th was the reporting deadline for the third month of the policy, making today the first time that recipients can lose Medicaid coverage as a result of the work requirement. There are 5,426 people who missed the first two reporting deadlines, which is over half of the group of 30-49 year olds subject to the policy beginning in June. If these enrollees do not do not log August hours or an exemption into the portal by September 5th, they will lose Medicaid coverage until January 2019.
Accountable Care Organizations
According to a report in late August, accountable care organizations (ACOs) that requires physicians to take on substantial financial risk saved Medicare just over $100 million in the model’s first year, the CMS said in a report released Monday.
Lower Medicare Drug Costs
Back in May, the Trump administration published a “blueprint” for lowering drug costs. Advocacy groups are pushing back, saying that his plan will decrease access to drugs.
Balance billing is when a patient presents at an emergency room and needs emergency medical services before the patient is able to determine whether the surgeon at the hospital is “in-network” with his insurance…most likely, because the patient is unconscious and no one has time to check for insurance networks. More and more states are passing laws to protect consumers from balance billing. An example of balance billing was Drew Calver, whose health plan paid $56,000 for his 4-day emergency stay at St. David’s Medical Center. Once he was discharged, he received a bill from the hospital for $109,000. The Employee Retirement Income Security Act (ERISA) regulates company plans that practice this. The hospital eventually reduced the bill to $332.
During a fire, staff at two Santa Rosa, California-based nursing homes “abandoned their residents, many of them unable to walk and suffering from memory problems, according to a legal complaint filed by the California Department of Social Services.” The Department of Social Services accused the staff members of being unprepared for the emergency fire.
Makes you wonder what could possibly happen in the fast-approaching hurricane. At least with a hurricane, we have days advance notice. Granted there is no more water in the stores or gasoline at the pumps, but Amazon Prime, one-day service still works…for now.
There is a federal regulation that is putting health care providers out of business. It is my legal opinion that the regulation violates the U.S. Constitution. Yet, the regulation still exists and continues to put health care providers out of business.
Because so far, no one has litigated the validity of the regulation, and I believe it could be legally wiped from existence with the right legal arguments.
How is this important?
Currently, the state and federal government are legally authorized to immediately suspend your Medicare or Medicaid reimbursements upon a credible allegation of fraud. This immense authority has put many a provider out of business. Could you survive without any Medicare or Medicaid reimbursements?
The federal regulation to which I allude is 42 CFR 455.23. It is a federal regulation, and it applies to every single health care provider, despite the service type allowed by Medicare or Medicaid. Home care agencies are just as susceptible to an accusation of health care fraud as a hospital. Durable medical equipment agencies are as susceptible as dentists. Yet the standard for a “credible allegation of fraud” is low. The standard for which the government can implement an immediate withhold of Medicaid/care reimbursements is lower than for an accused murderer to be arrested. At least when you are accused of murder, you have the right to an attorney. When you are accused to health care fraud on the civil level, you do not receive the right to an attorney. You must pay 100% out of pocket, unless your insurance happens to cover the expense for attorneys. But, even if your insurance does cover legal fees, you can believe that you will be appointed a general litigator with little to no knowledge of Medicare or Medicaid regulatory compliance litigation.
42 USC 455.23 states that:
“The State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud for which an investigation is pending under the Medicaid program against an individual or entity unless the agency has good cause to not suspend payments or to suspend payment only in part.
(2) The State Medicaid agency may suspend payments without first notifying the provider of its intention to suspend such payments.
(3) A provider may request, and must be granted, administrative review where State law so requires.”
In the very first sentence, which I highlighted in red, is the word “must.” Prior to the Affordable Care Act, this text read “may.” From my years of experience, every single state in America has used this revision from “may” to “must” for governmental advantage over providers. When asked for good cause, the state and or federal government protest that they have no authority to make a decision that good cause exists to suspend any reimbursement freeze during an investigation. But this protest is a pile of hooey.
In reality, if anyone could afford to litigate the constitutionality of the regulation, I believe that the regulation would be stricken an unconstitutional.
Here is one reason why: Due Process
The Fifth and Fourteenth Amendments to the Bill of Rights provide us our due process rights. Here is the 5th Amendment:
“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”
There have been a long and rich history of interpretation of the due process clause. The Supreme Court has interpreted the due process clauses to provide four protections: (1) procedural due process (in civil and criminal proceedings), (2) substantive due process, (3) a prohibition against vague laws, and (4) as the vehicle for the incorporation of the Bill of Rights.
42 CFR 455.23 violates procedural due process.
Procedural due process requires that a person be allowed notice and an opportunity to be heard before a government official takes a person’s life, liberty, or property.
Yet, 42 CFR 455.23 allows the government to immediately withhold reimbursements for services rendered based on an allegation without due process and taking a provider’s property; i.e., money owed for services rendered. Isn’t this exactly what procedural due process was created to prevent???? Where is the fundamental fairness?
42 CFR 455.23 violates substantive due process.
The Court usually looks first to see if there is a fundamental right, by examining if the right can be found deeply rooted in American history and traditions.
Fundamental rights include the right to vote, right for protection from pirates on the high seas (seriously – you have that right), and the right to constitutional remedies. Courts have held that our right to property is a fundamental right, but to my knowledge, not in the context of Medicare/caid reimbursements owed; however, I see a strong argument.
If the court establishes that the right being violated is a fundamental right, it applies strict scrutiny. This test inquires into whether there is a compelling state interest being furthered by the violation of the right, and whether the law in question is narrowly tailored to address the state interest.
Where the right is not a fundamental right, the court applies a rational basis test: if the violation of the right can be rationally related to a legitimate government purpose, then the law is held valid.
Taking away property of a Medicare/caid provider without due process violates substantive due process. The great thing about writing your own blog is that no one can argue with you. Playing Devil’s advocate, I would anticipate that the government would argue that a suspension or withhold of reimbursements is not a “taking” because the withhold or suspension is temporary and the government has a compelling reason to deter health care fraud. To which, I would say, yes, catching health care fraud is important – I am in no way advocating for fraud. But important also is the right to be innocent until proven guilty, and in civil cases, our deeply-rooted belief in the presumption of innocence is upheld by the action at issue not taking place until a hearing is held.
For example, if I sue my neighbor and declare that he is encroaching on my property, the property line is not moved until a decision is in my favor.
Another example, if I sue my business partner for breach of contract because she embezzled $1 million from me, I do not get the $1 million from her until it is decided that she actually took $1 million from me.
So to should be – if a provider is accused of fraud, property legally owned by said provider cannot just be taken away. That is a violation of substantive due process.
42 CFR 455.23 violates the prohibition against vague laws
A law is void for vagueness if an average citizen cannot understand it. The vagueness doctrine is my favorite. According to census data, there are 209.3 million people in the US who are over 24-years. Of those over 24-years-old, 66.9 million have a college degree. 68% do not.
Although here is a quick anecdote: Not so sure that a college degree is indicative of intelligence. A recent poll of law students at Columbia University showed that over 60% of the students, who were polled, could not name what rights are protected by the 1st Amendment. Once they responded “speech,” many forgot the others. In case you need a refresher for the off-chance that you are asked this question in an impromptu interview, see here.
My point is – who is to determine what the average person may or may not understand?
Back to why 42 CFR 455.23 violates the vagueness doctrine…
Remember the language of the regulations: “The State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud…”
“Credible allegation of fraud” is defined as an allegation, which has been verified by the State, from any source, including but not limited to the following:
- Fraud hotline complaints.
- Claims data mining.
- Patterns identified through provider audits, civil false claims cases, and law enforcement investigations. Allegations are considered to be credible when they have indicia of reliability and the State Medicaid agency has reviewed all allegations, facts, and evidence carefully and acts judiciously on a case-by-case basis.”
With a bit of research, I was able to find a written podcast published by CMS. It appears to be a Q and A between two workers at CMS discussing whether they should suspend a home health care agency’s reimbursements, similar to a playbook. I assume that it was an internal workshop to educate the CMS employees considering that the beginning of the screenplay begins with a “canned narrator” saying “This is a Medicaid program integrity podcast.”
The weird thing is that when you pull up the website – here – you get a glimpse of the podcast, but, at least on my computer, the image disappears in seconds and does not allow you to read it. I encourage you to determine whether this happens you as well.
While the podcast shimmered for a few seconds, I hit print and was able to read the disappearing podcast. As you can see, it is a staged conversation between “Patrick” and “Jim” regarding suspicion of a home health agency falsifying certificates of medical necessity.
On page 3, “Jim” says, “Remember the provider has the right to know why we are taking such serious action.”
But if your Medicare/caid reimbursements were suddenly suspended and you were told the suspension was based upon “credible allegations of fraud,” wouldn’t you find that reasoning vague?
42 CFR 455.23 violates the right to apply the Bill of Rights to me, as a citizen
This esoteric doctrine only means that the Bill of Rights apply to State governments. [Why do lawyers make everything so hard to understand?]
They say that lightning never strikes the same place twice, but tell that to my colleague Bill. Bill has been struck by lightning twice and has lived to tell the story. Granted, he was not physically standing in the same place that he was struck the first time as when he was hit by lightning the second time – so lightning technically didn’t hit the same place twice. But it did strike the same person twice. Maybe Bill is just extremely unlucky, or maybe Bill is extremely lucky because he lived through the incidents.
An intense shock can severely impair most of the body’s vital functions. Cardiac arrest is common. Yet Bill lived. Twice.
No one ever thinks they will get struck by lightning. But it happens. According to the National Weather Service, so far this year, lightning strikes have killed at least 20 people in the US, and that does not even take into consideration the people who were just injured, like my pal Bill.
A lightning strike is a massive electrical discharge between the atmosphere and an earth-bound object. A lightning bolt can heat the surrounding air to 50,000 degrees Fahrenheit—that’s five times hotter than the sun—and can contain up to 300kV of energy.
Yet most people do survive, in part because lightning rarely passes through the body.
Instead, a “flashover” occurs, meaning that the lightning zips over the body, traveling via ultra-conductive sweat (and often rainwater), which provides an external voltage pathway around the body. When people do die from a lightning strike, it is usually due to an electrical discharge-induced hear attack. A body hit by lightning will show various signs of trauma.
Like a gunshot, a lightning strike causes both an exit and entrance wound, marking where the current both entered and left the victim. Lichtenberg scarring, which outlines ruptured blood vessels, frequently covers the body in odd, almost beautiful, spiderweb patterns.
Surprisingly enough, many lightning strike survivors do not remember being struck. Instead, the only evidence of the traumatic event is burnt, displaced clothing and marks along the body.
For instance, many lightning strike survivors report memory issues, trouble with concentration and severe headaches, all of which last decades after the initial strike.
Due to the rarity of lightning strike cases, less time and resources have been devoted to better understanding how these strikes impact long-term brain function. An unpublished study by medical doctor Mary Ann Cooper found that there were “significant differences in brain activity between lightning-strike victims and healthy people as they performed mental-aptitude tests.”
Aside from impacting long-term brain function, lightning strikes are also known to blow out eardrums, prompting constant muscle twitches and moderate to severe nerve damage. Overall, the effects of a lightning strike may range from a slight inconvenience to a debilitating, lifelong struggle. In the case of my colleague, you would never be able to tell mind looking at him that he has been hit by lightning twice.
Why is this – extensive – discussion about lightning strikes relevant? – Or is it not?
If you are a health care provider and accept Medicare or Medicaid, the risk of an audit far exceeds your chances of getting struck by lightning. In FY 2016, CMS continued its use of the Affordable Care Act authority to suspend Medicare payments to providers during an investigation of a credible allegation of fraud. CMS also has authority to suspend Medicare payments if reliable information of an overpayment exists. During FY 2016, there were 508 payment suspensions that were active at some point during the fiscal year. Of the 508 payment suspensions, 291 new payment suspensions were imposed during FY 2016.
Medicare and Medicaid audits far exceed lightning strikes. Yet, providers believe in their heart of hearts that and on an audit (or an audit with bad results) will never happen to them, which causes providers to not engage in attorney until after the lightning strikes. Then it’s too late, and you have Lichtenberg scarring across your arm.
There is scene in Breaking Bad in which Saul, the attorney, stops a person from talking. He says, “Give me a dollar. Don’t tell me anything until you give me a dollar. Once money is exchanged, we will have attorney-client privilege.” What Saul was saying is that the exchange of money catalyzed the duty for Saul to keep all conversation confidential.
This was a low-point of legal-fiction television. It made great drama with zero accuracy.
The question is why should you have an attorney on retainer?
The obvious response is that you can have confidential conversations with said attorney at your beck and call. The honest truth is that you do not have to have an attorney on retainer in order for your conversations to be confidential. But is smart to do so, and I will tell you why.
If you call me and I have never represented you and you ask me a legal question, our conversation is legally protected, even if you hire a different attorney.
No – the reason to have an attorney on retainer is to be able to consult him or her with legal questions on a daily basis, and, especially of there is an ongoing audit. Most of my clients do not contact me when they receive the document request. They think, “Oh, this is no big deal. I will give my records to [state] or [federal] – [and/or its contractors] government and they will determine that my [Medicare] or [Medicaid] records are amazing. In fact the [state] or [federal] government my even ask me to educate other providers on what pristine records should look like. I got this. Easy, peasy, lemon-squeezey.” They contact me when they get an accusation of an alleged overpayment of $5 million. Lichtenberg scarring has already occurred.
The smartest clients contact me prior to receiving an alleged overpayment of $12 million or an accusation of fraud. They contact me the moment they receive a notice of an audit or a request for documents…before ever submitting documents to the government.
Because, regardless the type of provider, be it dentist, behavioral counseling, podiatrist, chiropractor, or hospital, understand that every communication with a government auditor and/or contractor is admissible in court – if the communication does not go through an attorney. When the [state/federal] auditor asks to see a record and you say, “Let me get it from my off-site storage facility” – BAM – HIPAA violation. When the state/federal auditor asks to see a record and you say, “Here it is,” and fail to keep a copy for yourself, there can be discrepancy in the future as to what you actually provided. And you are in a “he said she said” battle – never good.
On the other hand, if you have an attorney on retainer, you can ask any question you need, you can get any advice you desire, and it’s all confidential. It is as though you have Siri in your back pocket. It’s the 411 for legal information. It’s an ATM for legal advice. AND it is all confidential.
Next time you think to yourself, “Self, I will ace any Medicaid or Medicare audit. I don’t need counsel. I can talk to the auditors myself without an attorney. I got this.”
Think again. [Don’t, necessarily, call Saul, but call someone.] Because, like lightning strike victims, you may not even remember the audit. Until you are scarred.
Happy third day of the government shutdown.
According to Twitter (which is not always correct – shocker), the government shutdown may be lifted momentarily. At least, according to Jamie Dupree’s Twitter account, “From the Senate hallways – it seems like there are enough votes now to fund the government & end the shutdown.”
But, as of now, the government shutdown remains in effect, after Senators failed to come to an agreement to end it, late Sunday night. A vote is is ongoing that could end the shutdown with a short-term, spending bill that would last three weeks. A short-term answer to a much bigger problem is like putting a band-aid on a broken leg. In other words, a shutdown can happen again in three weeks. So, even if the shutdown is thwarted today, it may not matter. For future government shutdowns, we need to explore the consequences of a shutdown as it pertains to health care.
If you are a health care provider who accepts Medicare and/or Medicaid, then you are probably worried about the consequences of a federal government shutdown. As in, will you get your reimbursements for services rendered? We are currently on Day 3.
Health Care Related Consequences
The Department of Health and Human Services (DHHS) will send home — or furlough — about half of its employees, or nearly 41,000 people, according to an HHS shutdown contingency plan released this past Friday.
According to the HHS plan, the CDC will suspend its flu-tracking program.
It depends. If the shutdown is short, medical providers will continue to receive reimbursements. If the shutdown is prolonged, reimbursements could be affected. As with Medicaid, Medicare has funding sources that don’t depend on Congress passing annual spending bills. Again, beneficiaries and providers should not be affected by a shutdown, unless it is prolonged.
States already have their funding for Medicaid through the second quarter, or the end of June, so no shortfall in coverage for enrollees or payments to providers is expected. Enrolling new Medicaid applicants is a State function, so that process should not be affected. Federal funding for the health insurance program for the low-income population is secure through the end of June.
States also handle much of the Children’s Health Insurance Program (CHIP), which provides coverage for lower-income children whose families earn too much to qualify for Medicaid. But federal funding for CHIP is running dry — its regular authorization expired on Oct. 1, and Congress has not agreed on a long-term funding solution. However, federal employees, who are necessary to make payments to states running low on funds will continue to work during a shutdown. The definition of “necessary?” Up in the air.
With a shutdown, there will be no new mental health or social services grants awarded and less monitoring of existing grants. The HHS departments most involved in issuing grants to health-care providers around the country would be particularly affected by the shutdown because more of their employees are furloughed. This includes the Substance Abuse and Mental Health Services Administration and the Administration for Children and Families.
The FDA’s food-safety inspection program hits pause. “FDA will be unable to support the majority of its food safety, nutrition and cosmetics activities,” the HHS contingency plan says. The exception is meat and poultry inspections carried out by the Agriculture Department’s Food Safety and Inspection Service.
Not health care related, but NASA tweeted “Sorry, but we won’t be tweeting/responding to replies during the government shutdown. Also, all public NASA activities and events are cancelled or postponed until further notice. We’ll be back as soon as possible! Sorry for the inconvenience.”
Is this legal? Well, as it pertains to Medicare and Medicaid providers receiving reimbursements, the government is required to follow the law.
42 CFR 422.520 require that the contract between CMS and the MA organization must provide that the MA organization will pay 95 percent of the “clean claims” within 30 days of receipt if they are submitted by, or on behalf of, an enrollee of an MA private fee-for-service plan or are claims for services that are not furnished under a written agreement between the organization and the provider.
42 CFR 447.45 requires that the Medicaid agency must pay 90 percent of all clean claims from practitioners, who are in individual or group practice or who practice in shared health facilities, within 30 days of the date of receipt.
Part D has a similar regulation, as does all Medicare and Medicaid service types.
Theoretically, if a government shutdown causes the federal or state government to violate the regulations that instruct those agencies to pay providers within 30 days, then providers would have a legal cause of action against the federal and/or state governments for not following the regulations.
My team and I have transferred to Potomac Law Group! This was such a huge decision for us, but we are so super excited about the move. Nothing much will change – I will still be in Raleigh and will still maintain this blog. In fact, I will be able to blog more often, because Potomac does not require ungodly amount of billable hours! See below for more. Woot! Woot!
Plus, I am joining a team of attorneys who are amazing and talented.
My new contact information is firstname.lastname@example.org, and my telephone number is (919) 219-9319.
- Knicole Emanuel | Partner | Potomac Law Group, PLLC
- 1300 Pennsylvania Avenue, NW, Suite 700
- Washington, D.C. 20004
- *Admitted to practice in NC and GA
- Tel: (919) 219-9319 | Fax: (202) 318-7707
- Raleigh, NC Office
- 3613 Bentgrass Ct.
- Apex, NC 27539
Introducing the Potomac Health Care Group:
He has 40 years of experience advising clients on healthcare issues and handling complex litigation at trial and on appeal. He has briefed and argued appeals in 10 of the 12 U.S. Circuit Courts of Appeal, written briefs and cert. petitions in the U.S. Supreme Court, briefed and argued appeals in various state appellate courts. Impressive!
She also focuses her practice on healthcare, investigations and litigation. Ms. Hendrix provides compliance advice, and conducts internal investigations, with respect to health care regulations, health care guidance, and health care-related company policies.
With over 30 years of legal experience, Mr. McHugh also provides consultation and advice regarding legislative and regulatory developments affecting the employee benefits industry, including retirement, health care and executive compensation matters and related human resource issues.
Neil Belson is a business-savvy attorney with nearly thirty years experience creating, negotiating and closing innovative deals for the development, transfer and protection of critical technologies. For transactions issues…
Ms. Lander focuses her practice on tax and ERISA issues relating to tax-qualified pension and 401(k) plans, health plans, nonqualified deferred compensation plans, other executive compensation, and fringe benefits. For employments issues…
She is a Partner in the firm’s Regulatory, Food & Drug, Healthcare, and Life Sciences practice groups. She provides advice on a range of regulatory issues relevant to manufacturers of prescription drugs, medical devices, in vitro diagnostic products, analyte-specific reagents, laboratory developed tests, infant formula, and food. For regulatory issues…
Sheetal Patel is a patent law specialist with several years of experience litigating chemical, biotech, and pharmaceutical patent cases as well as developing enforcement strategies including invalidity and infringement analyses, and due diligence. For patent issues…
These are not all the attorneys at Potomac Law Group; there many other, extremely talented, experienced, and intelligent attorneys. Plus, Potomac Law Group was named one of the best law firms in 2018 according to U.S. News.
And get this – Potomac Law was named, along with Google, Facebook, and Starbucks, as one of 20 innovative companies in the crucial areas of women’s advancement and work life integration.
According to “Working Mother,” which, by the way, I am, “This firm bucks the overwork tradition of Big Law by giving attorneys freedom and flexibility to work from any location, with most choosing home offices. Founder Benjamin Lieber began Potomac Law Group in 2011 by recruiting stay-at-home-mom lawyers to rejoin the working world at the level of intensity they preferred. Today, half of the firm’s attorneys, partners and management are women. The culture explicitly rejects minimum billable hour requirements and embraces working remotely as a way “to be more productive and efficient in balancing our professional and personal commitments.””
Out of all the companies in America, Potomac was named by Working Mother as the best for, well, working mothers – only 20 companies were named!!
I will need to update my tags and categories for Medicaidlaw-NC…
And here is the obligatory, legal disclaimer:
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While I try to update this site on a regular basis, I do not intend any information on this site to be treated or considered as the most current expression of the law on any given point, and certain legal positions expressed on this site, by passage of time or otherwise, may be superseded or incorrect. Readers should not consider the information provided to be an invitation for an attorney-client relationship, and should always seek the advice of independent legal counsel in the reader’s home jurisdiction.
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