Category Archives: Affordable Care Act
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:
Legal Disclaimer and Note: I welcome your feedback, thoughts, questions, and suggestions. Just a reminder: These materials have been prepared by me for informational purposes only and are not legal advice. Internet followers and online readers should not act upon this information without seeking independent legal counsel.
This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Please note that an attorney-client relationship, and corresponding confidentiality of information, does not arise until Potomac Law Group s has received an executed legal service agreement. Do not send us confidential information until you speak with one of our attorneys and get authorization to send that information to us. Potomac Law Group is pleased to receive inquiries from prospective clients regarding its services and its lawyers. However, an inquiry to Potomac Law Group should not disclose information about a particular matter prompting the inquiry.
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.
The opinions expressed on this site are the opinions of the user, and do not necessarily reflect the opinions or positions of Potomac Law Group.
Low reimbursement rates make accepting Medicaid seem like drinking castor oil. You wrinkle your nose and swallow quickly to avoid tasting it. But if you are a provider that does accept Medicaid and you wish to stop accepting Medicaid – read this blog and checklist (below) before taking any action! Personally, if you do accept Medicaid, I say, “Thank you.” See blog. With more and more Medicaid recipients, the demand for providers who accept Medicaid has catapulted.
The United States has become a Medicaid nation. Medicaid is the nation’s largest health insurance program, covering 74 million, or more than 1 in 5 Americans.
Earlier this year, Kaiser published a report stating that 70% of office-based providers accept new patients covered by Medicaid. But this report does not mean that Medicaid recipients have access to quality health care. I will explain below.
The variation in the above chart is interesting. Reimbursement rates directly impact whether providers in the state accept Medicaid. The participation goes from a low of 38.7% in New Jersey (where primary care reimbursement rates are 48% of Medicare rates) to a high of 96.5% in Nebraska (where the primary care reimbursement is 75% of Medicare). Montana, with a 90% physician participation rate, pays the same rate as Medicare for primary care, while California, with a 54.2% participation rate, pays 42% of the Medicare reimbursement rate. We should all strive to be like Nebraska and Montana … granted the number of Medicaid recipients are fewer in those states. For September 2017, Nebraska ranked 45th out of the 50 states for Medicaid enrollment. Montana ranked 42nd. Wyoming came in dead last.
Statistically writing, Medicaid covers:
- 39% of all children.
- Nearly half of all births in the country.
- 60% of nursing home and other long-term care expenses.
- More than 1/4 of all spending on mental health services and over a fifth of all spending on substance abuse treatment.
However, even if the report is correct and 70% of health care providers do accept Medicaid, that is not indicative of quality access of care for Medicaid recipients. The number of Medicaid recipients is skyrocketing at a rate that cannot be covered by the number of providers who accept Medicaid. Kaiser estimates that by 2020, more than 25% (1 out of 4) of Americans will be dependent on Medicaid. Because of the low reimbursement rates, health care providers who do accept Medicaid are forced to increase the quantity of patients, which, logically, could decrease the quality … or the amount of time spent with each patient. Citing the percentage of providers who accept Medicaid, in this instance, 70%, is not indicative of quality of access of care; the ratio of Medicaid recipients to providers who accept Medicaid would be more germane to quality of access to care for Medicaid recipients. Even if 70% of health care providers accept Medicaid, but we have 74 million Medicaid recipients, then 70% is not enough. My opinion is what it is because based on years of experience with this blog and people reaching out to me. I have people contact me via this blog or email explaining that their mother, father, child, sister, or brother, has Medicaid and cannot find a provider for – dental, mental health, developmentally disabled services. So, maybe, just maybe, 70% is not good enough.
Before dropping Medicaid like a hot potato, ask yourself the following questions:
Will I have enough patients without Medicaid to keep my staff and I busy?
Location! Location! Location! Your location matters. If you provide health care services in areas that are predominantly Medicaid-populated, then you may need to reconsider dropping the ‘Caid. California, New York, and Texas were the top spenders in Medicaid for fiscal year 2016, totaling over a whopping $183 billion of America’s total expenditure on ‘Caid, which was $553 billion.
I am sure that I am preaching to the choir, but choosing to not accept Medicaid is not fiscally sound if you and your staff will be twiddling their thumbs all day. Even low reimbursement rates are better than no reimbursement rates. On the downside, if you choose to accept Medicaid, you need a “rainy-day” fund to pay for attorneys to defend any regulatory audits, termination of Medicaid contracts, accusations of fraud, prepayment review, and/or other adverse determinations by the state (and, if you accept Medicare, the federal government and all its vendors).
2. Have I attested for the Medicaid EHR meaningful use incentives?
If you attested and accepted the EHR incentive payments, you may need to continue seeing Medicaid patients in order to keep/maintain your EHR payments. (Please consult an attorney).
3. Will I still be subject to Medicaid audits in the future?
If avoiding Medicaid audits is your primary reason for dropping ‘Caid, ‘ho your horses. Refusing to accept ‘Caid going forward does not indemnify you from getting future audits. In fact, in cases of credible allegations of fraud, you may be subject to future Medicaid audits for another 6 years after you no longer accept Medicaid. You will also need to continue to maintain all your records for regulatory compliance. If you cease accepting Medicaid, those recipients will need to find new providers. Those medical records are the Medicaid recipients’ property and need to be forwarded to the new provider.
If you are currently under investigation for credible allegations of fraud, of which you may or may not be aware, then suddenly stop accepting Medicaid, it could be a red flag to an investigator. Not that ceasing to accept Medicaid is evidence of wrongdoing, but sometimes sudden change, regardless of the change, can spur curiosity in auditors. For example, in NC DHHS v. Parker Home Care, the Court of Appeals ruled that a tentative notice of overpayment by Public Consulting Group (PCG) does not constitute a final agency decision. The managed care organizations (MCOs) freaked out because the MCOs were frightened that a health care provider could argue, in Court, that Parker Home Care applies to MCOs, as well. They were so freaked out that they filed an Amicus Curiae Brief, which is a Brief on behalf of a person or organization that is not a party to a particular litigation but that is permitted by the court to advise it in respect to some matter of law that directly affects the case in question. The MCOs’ Brief states, “The Court of Appeals’ decision, if allowed to stand, could be construed to undermine the authority explicitly granted to managed care organizations, such as the LME/MCOs in North Carolina, by CMS.” Too bad our Waiver specifically states that DHS/DMA to CMS states, “[DMA] retains final decision-making authority on all waiver policies and requirements.” But I digress. In Parker Home Care, the MCOs filed the Brief to preserve their self-instilled authority over their catchments areas. However, despite the MCOs request that the NC Supreme Court take the issue under consideration, the Supreme Court denied certiorari, which means the Supreme Court refused to entertain the issue. While it is not “law” or “precedent” or “written in stone,” generally, attorneys argue that the Supreme Court’s refusal to entertain an issue means that it does not deem the issue to be a controversy … that the Court agrees with the lower court’s decision. Hence, the argument that the MCOs cannot render final agency decisions.
4. Will I be able to sleep at night?
Health care providers become health care providers, generally, with the intent to help people. This makes most health care providers nurturing people. You have to ask yourself whether you will be comfortable, ethically, with your decision to not accept Medicaid. I cannot tell you how many of my clients tell me, at some point, “I’m just not going to accept Medicaid anymore.” And, then continue to accept Medicaid … because they are good people. It infuriates me when I am in court arguing that terminating a provider’s Medicaid contract will put the provider out of business, and the attorney from the State makes a comment like, “It was the provider’s business decision to depend this heavily on Medicaid.” No, actually, many providers do feel an ethical duty to serve the Medicaid population.
Check your health care community and determine whether other providers with your specialty accept Medicaid. Are they accepting new Medicaid patients? Are they viable options for your patients? Are they as good as you are? Just like attorneys, there are good and bad; experienced and inexperienced; intelligent and not-so-much; capable and not-so-much.
5. Can I delegate Medicaid recipients to a mid-level practitioner?
Physician assistants and nurse practitioners are wonderful assets to have to devote to Medicaid recipients. This is not to say that Medicaid recipients deserve lesser-educated services because, quite frankly, some PAs and NPs are just as good as the MDs. But you get my point. If PAs and NPs have a lower billable rate, then it makes business financial sense to delegate the Medicaid recipients to them. Similarly, I have an amazing, qualified paralegal, Todd Yoho. He has background in medical coding, went to two years of law school, and is smarter than many attorneys. I am blessed to have him. But the reality is that his billable rate is lower than mine. I try to use his services whenever possible to try to keep the attorneys’ fees lower. Same with mid-level practitioner versus using the MD.
6. Instead of eliminating Medicaid patients, can I just decrease my Medicaid patients?
This could be a compromise with yourself and your business. Having the right balance between Medicaid recipients and private pay, or even Medicare patients, can be key in increasing income and maintaining quality of care. Caveat: In most states, you are allowed to cap your Medicaid recipients. However, there are guidelines that you muts follow. Even Medicaid HMOs or MCOs could have different requirements for caps on Medicaid recipients. Again, seek legal advice.
The Center for Medicare and Medicaid Services (CMS) announced the expansion of Targeted Probe and Educate (TPE) audits. At first glance, this appears to be fantastic news coming on the heels of so much craziness at Health and Human Services (HHS). We have former-HHS Secretary Price flying our tax dollars all over. Dr. Don Wright stepping up as our new Secretary. The Medicare appeal backlog fiasco. The repeal and replace Obamacare bomb. Amidst all this tomfoolery, health care providers are still serving Medicare and Medicaid patients, reimbursement rates are in the toilet, which drives down quality and incentivizes providers to not accept Medicare or Medicaid (especially Caid), and providers are undergoing “Audit Alphabet Soup.” I actually had a client tell me that he receives audit letters requesting documents and money every single week from a plethora of different organizations.
So when CMS announced that it was broadening its TPE audits, it was a sigh of relief for many providers. But will TPE audits be the benign beasts they are purporting to be?
What is a TPE audit? (And – Can We Have Anymore Acronyms…PLEASE!)
CMS says that TPE audits are benevolent. CMS’ rhetoric indicates that these audits should not cause the toner to run out from overuse. CMS states that TPE audits will involve “the review of 20-40 claims per provider, per item or service, per round, for a total of up to three rounds of review.” See CMS Announcement. The idea behind the TPE audits (supposedly) is education, not recoupments. CMS states that “After each round, providers are offered individualized education based on the results of their reviews. This program began as a pilot in one MAC jurisdiction in June 2016 and was expanded to three additional MAC jurisdictions in July 2017. As a result of the successes demonstrated during the pilot, including an increase in the acceptance of provider education as well as a decrease in appealed claims decisions, CMS has decided to expand to all MAC jurisdictions later in 2017.” – And “later in 2017” has arrived. These TPE audits are currently being conducted nationwide.
Below is CMS’ vision for a TPE audit:
Clear? As mud?
The chart does not indicate how long the provider will have to submit records or how quickly the TPE auditors will review the documents for compliance. But it appears to me that getting through Round 3 could take a year (this is a guess based on allowing the provider 30 days to gather the records and allowing the TPE auditor 30 days to review).
Although the audit is purportedly benign and less burdensome, a TPE audit could take a whole year or more. Whether the audit reviews one claim or 20, having to undergo an audit of any size for a year is burdensome on a provider. In fact, I have seen many companies having to hire staff dedicated to responding to audits. And here is the problem with that – there aren’t many people who understand Medicare/caid medical billing. Providers beware – if you rely on an independent biller or an electronic medical records program, they better be accurate. Otherwise the buck stops with your NPI number.
Going back to CMS’ chart (above), notice where all the “yeses” go. As in, if the provider is found compliant , during any round, all the yeses point to “Discontinue for at least 12 months.” I am sure that CMS thought it was doing providers a favor, but what that tells me is the TPE audit will return after 12 months! If the provider is found compliant, the audit is not concluded. In fact, according to the chart, the only end results are (1) a referral to CMS for possible further action; or (2) continued TPE audits after 12 months. “Further action” could include 100% prepayment review, extrapolation, referral to a Recovery Auditor, or other action. Where is the outcome that the provider receives an A+ and is left alone??
CMS states that “Providers/suppliers may be removed from the review process after any of the three rounds of probe review, if they demonstrate low error rates or sufficient improvement in error rates, as determined by CMS.”
I just feel as though that word “may” should be “will.” It’s amazing how one word could change the entire process.
On September 6, 2017, I appeared on the Besler Hospital Finance Podcast regarding:
Update on the Medicare appeals backlog [PODCAST]
Feel free to listen to the podcast, download it, and share with others!
But all is not lost… it all lies in the possibility…
A few weeks ago I blogged about Health and Human Services (HHS) possibly being held in contempt of court for violating an Order handed down on Dec. 5, 2016, by U.S. District Judge James Boasberg. See blog.
The District Court Judge granted a motion for summary judgment in favor of the American Hospital Association in AHA v. Burwell. He ordered HHS to incrementally reduce the backlog of 657,955 appeals pending before the agency’s Office of Medicare Hearings and Appeals over the next four years, reducing the backlog by 30% by the end of 2017; 60% by the end of 2018; 90% by the end of 2019; and to completely eliminate the backlog by Dec. 31, 2020.
This was a huge win for AHA – and Medicare providers across the country. Currently, when a provider appeals an adverse decision regarding Medicare, it costs an inordinate amount of attorneys’ fees, and the provider will not receive legal relief for upwards of 6 – 10 years, which can cause financial hardship, especially if the adverse action is in place during the appeal process. Yet the administrative appeal process was designed (poorly) to conclude within 1 year.
With the first deadline (the end of 2017) fast approaching and HHS publicly announcing that the reduction of 30% by the end of 2017 is impossible, questions were posed – how could the District Court hold HHS, a federal agency, in contempt?
We got the answer.
On August 11, 2017, the U.S. Appeals Court for the District of Columbia overturned the District Court; thereby lifting the requirement to reduce the Medicare appeal backlog.
Wiping tear from face.
The first paragraph of the Ruling, indicates the Court’s philosophic reasoning, starting with a quote from Immanuel Kant (not to be confused with Knicole Emanuel), CRITIQUE OF PURE REASON 548 (Norman Kemp Smith trans., Macmillan 1953) (1781) (“The action to which the ‘ought’ applies must indeed be possible under natural conditions.”)
First paragraph of the decision:
“”Ought implies can.” That is, in order for law – man-made or otherwise – to command the performance of an act, that act must be possible to perform. This lofty philosophical maxim, ordinarily relevant only to bright-eyed college freshmen, sums up our reasoning in this case.”
The Appeals Court determined that the District Court commanded the Secretary to perform an act – clear the backlog by certain deadlines – without evaluating whether performance was possible.
The Medicare backlog skyrocketed in 2011 due to the federally-required Medicare Recovery Audit Program (RAC). With the implementation of the RAC program, the number of appeals filed ballooned from 59,600 in fiscal year 2011 to more than 384,000 in fiscal year 2013. These appeals bottlenecked to the third level of appeal, which is before an administrative law judge (ALJ). As of June 2, 2017, there was a backlog of 607,402 appeals awaiting review at this level. On its current course, the backlog is projected to grow to 950,520 by the end of fiscal year 2021.
There is a way for a provider to “skip” the ALJ level and “escalate” the claim, but it comes at a cost. Several procedural rights must be forfeited.
It is important to note that the appellate decision does not state that the District Court does not have the authority to Order HHS to eliminate the appeals backlog.
It only holds that, because HHS claims that compliance is impossible, the District Court must rule on whether compliance is possible before mandating the compliance. In other words, the Appeals Court wants the lower court to make a fact-finding decision as to whether HHS is able to eliminate the backlog before ordering it to do so. The Appeals Court is instructing the lower court to put the horse in front of the cart.
The Appeals Court explicitly states that it is suspect that the Secretary of HHS has done all things possible to decrease the backlog. (“We also share the District Court’s skepticism of the Secretary’s assertion that he has done all he can to reduce RAC-related appeals.”) So do not take the Appeals Court’s reversal as a sign that HHS will win the war.
I only hope that AHA presents every possible legal argument once the case is remanded to District Court. It is imperative that AHA’s attorneys think of every possible legal misstep in this remand in order to win. Not winning could potentially create bad law, basically, asserting that the Secretary has no duty to fix this appeals backlog. Obviously, the Secretary is exactly the person who should fix the backlog in his own agency. To hold otherwise, would thwart the very reason we have a Secretary of HHS. Through its rhetoric, the Appeals Court made it clear that it, too, has severe reservations about HHS’ claim of impossibility. However, without question, AHA’s suggestion to the District Court that a timeframe be implemented to reduce the backlog is not the answer. AHA needs to brainstorm and come up with several detailed proposals. For example, does the court need to include a requirement that the Secretary devote funds to hire additional ALJs? Or mandate that the ALJs work a half day on Saturday? Or order that the appeal process be revised to make the process more efficient? Clearly, the mere demand that HHS eliminate the backlog within a certain timeframe was too vague.
From here, the case will be remanded back to the District Court with instructions to the Judge to determine whether the elimination of the Medicare appeal backlog is possible. So, for now, HHS is safe from being held in contempt. But the Secretary should take heed from the original ruling and begin taking steps in fixing this mess. It is highly likely that HHS will be facing similar deadlines again – once the District Court determines it is possible.
On July 13, 2017, Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Tom Price, M.D., announced the Department of Justice’s (DOJ) biggest-ever health care fraud takedown. 412 health care providers were charged with health care fraud. In total, allegedly, the 412 providers schemed and received $1.3 billion in false billings to Medicare, Medicaid, and TRICARE. Of the 412 defendants, 115 are physicians, nurses, and other licensed medical professionals. Additionally, HHS has begun the suspension process against 295 health care providers’ licenses.
The charges include allegations of billing for medically unnecessary treatments or services that were not really provided. The DOJ has evidence that many of the defendants had illegal kickback schemes set up. More than 120 of the defendants were charged with unlawfully or inappropriately prescribing and distributing opioids and other narcotics.
While this particular sting operation resulted from government investigations, not all health care fraud is discovered through government investigation. A great deal of fraud is uncovered through private citizens coming forward with incriminating information. These private citizens can file suit against the fraudulent parties on behalf of the government; these are known as qui tam suits.
Being a whistleblower goes against what most of us are taught as children. We are taught not to be a tattletail. I have vivid memories from elementary school of other kids acting out, but I would remain silent and not inform the teacher. But in the health care world, tattletails are becoming much more common – and they make money for blowing that metaphoric whistle.
What is a qui tam lawsuit?
Qui tam is Latin for “who as well.” Qui tam lawsuits are a type of civil lawsuit whistleblowers (tattletails) bring under the False Claims Act, a law that rewards whistleblowers if their qui tam cases recover funds for the government. Qui tam cases are a powerful weapon against Medicare and Medicaid fraud. In other words, if an employee at a health care facility witnesses any type of health care fraud, even if the alleged fraud is unknown to the provider, that employee can hire an attorney to file a qui tam lawsuit to recover money on behalf of the government. The government investigates the allegations of fraud and decides whether it will join the lawsuit. Health care entities found guilty in a qui tam lawsuit will be liable to government for three times the government’s losses, plus penalties.
The whistleblower is rewarded for bringing these lawsuits. If the government intervenes in the case and recovers funds through a settlement or a trial, the whistleblower is entitled to 15% – 25% of the recovery. If the government doesn’t intervene in the case and it is pursued by the whistleblower team, the whistleblower reward is between 25% – 30% of the recovery.
These recoveries are not low numbers. On June 22, 2017, a physician and rehabilitative specialist agreed to pay $1.4 million to resolve allegations they violated the False Claims Act by billing federal health care programs for medically unreasonable and unnecessary ultrasound guidance used with routine lab blood draws, and with Botox and trigger point injections. If a whistleblower had brought this lawsuit, he/she would have been awarded $210,000 – 420,000.
On June 16, 2017, a Pennsylvania-based skilled nursing facility operator agreed to pay roughly $53.6 million to settle charges that it and its subsidiaries violated the False Claims Act by causing the submission of false claims to government health care programs for medically unnecessary therapy and hospice services. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by 7 former employees of the company. The whistleblower award – $8,040,000 – 16,080,000.
There are currently two, large qui tam cases against United Health Group (UHG) pending in the Central District of California. The cases are: U.S. ex rel. Benjamin Poehling v. UnitedHealth Group, Inc. and U.S. ex rel. Swoben v. Secure Horizons, et al. Both cases were brought by James Swoben, who was an employee and Benjamin Poehling, who was the former finance director of a UHG group that managed the insurer’s Medicare Advantage Plans. On May 2, 2027, the U.S. government joined the Poehling lawsuit.
The charges include allegations that UHG:
- Submitted invalid codes to the Center for Medicare and Medicaid Services (CMS) that it knew of or should have known that the codes were invalid – some of the dates of services at issue in the case are older than 2008.
- Intentionally avoided learning that some diagnoses codes or categories of codes submitted to their plans by providers were invalid, despite acknowledging in 2010 that it should evaluate the results of its blind chart reviews to find codes that need to be deleted.
- Failed to follow up on and prevent the submissions of invalid codes or submit deletion for invalid codes.
- Attested to CMS each year that the data they submitted was true and accurate while knowing it was not.
UHG would not be in this expensive, litigious pickle had it conducted a self audit and followed the mandatory disclosure requirements.
What are the mandatory disclosure requirements? Glad you asked…
Section 6402(a) of the Affordable Care Act (ACA) creates an express obligation for health care providers to report and return overpayments of Medicare and Medicaid. The disclosure must be made by 60 days days after the date that the overpayment was identified or the date any corresponding cost report is due, if applicable. Identification is defined as the point in which the provider has determined or should have determined through the exercise of due diligence that an overpayment exists. CMS expects the provider to proactively investigate any credible information of a potential overpayment. The consequences of failing to proactively investigate can be seen by the UHG lawsuits above-mentioned. Apparently, UHG had some documents dated in 2010 that indicated it should review codes and delete the invalid codes, but, allegedly, failed to do so.
How do you self disclose?
According to CMS:
“Beginning June 1, 2017, providers of services and suppliers must use the forms included in the OMB-approved collection instrument entitled CMS Voluntary Self-Referral Disclosure Protocol (SRDP) in order to utilize the SRDP. For disclosures of noncompliant financial relationships with more than one physician, the disclosing entity must submit a separate Physician Information Form for each physician. The CMS Voluntary Self-Referral Disclosure Protocol document contains one Physician Information Form.”