Category Archives: TRO
5th Circuit Finds Subject Matter Jurisdiction For Medicare and Medicaid Providers – Why Collards Matter
“I’d like some spaghetti, please, and a side of meatballs.” – This sentence is illogical because meatballs are integral to spaghetti and meatballs. If you order spaghetti – and -meatballs, you are ordering “spaghetti and meatballs.” Meatballs on the side is not a thing.
Juxtapose, a healthcare provider defending itself from an alleged overpayment, But during the appeal process undergoes a different penalty – the state or federal government begins to recoup future funds prior to a decision that the alleged recoupment is authorized, legal, or warranted. When a completely new issue unrelated to the allegation of overpayment inserts itself into the mix, then you have spaghetti and meatballs with a side of collard greens. Collard greens need to be appealed in a completely different manner than spaghetti and meatballs, especially when the collard greens could put the company out of business because of the premature and unwarranted recoupments without due process.
I have been arguing this for years based off of, not only, a 1976 Supreme Court case, but multiple state case law, as well as, success I have had in the federal and administrative courts, and BTW – logic.
On March 27, 2018, I was confirmed again. The Fifth Circuit Court of Appeals decided a landmark case for Medicare and Medicaid providers across the country. The case, Family Rehab., Inc. v Azar, 2018 U.S. App. LEXIS 7668, involved a Medicare home health service provider, which was assessed for approximately $7.8 million in Medicare overpayments. Family Rehab, the plaintiff in the case, relied on 88% to 94% of its revenue from Medicare. The company had timely appealed the alleged overpayment, and it was at the third level of the Medicare five step process for appeals. See blog. But there is a 3 – 5 year backlog on the third level, and the government began to recoup the $7.8 million despite the ongoing appeal. If no action were taken, the company would be out of business well-before any ALJ could rule on the merits of the case, i.e. whether the recoupment was warranted. How is that fair? The provider may not owe $7.8 million, but before an objective tribunal decides what is actually owed, if anything, we are going to go ahead and take the money and reap the benefit of any interest accrued during the time it takes the provider to get a hearing.
The backlog for Medicare appeals at the ALJ level is unacceptably long. See blog and blog. However, the federal regulations only prevent recoupment during the appeal process during the first and second levels. This is absolutely asinine and should be changed considering we do have a clause in the Constitution called “due process.” Purported criminals receive due process, but healthcare providers who accept Medicare or Medicaid, at times, do not.
At the third level of appeal, Family Rehab underwent recoupments, even though it was still appealing the decision, which immediately stifled Family Rehab’s income. Family Rehab, because of the premature recoupments, was at risk of losing everything, going bankrupt, firing its staff, and no longer providing medically necessary home health services for the elderly. This situation mimics a situation in which I represented a client in northern Indiana who was losing its Medicaid contract. I also successfully obtained a preliminary injunction preventing the provider from losing its Medicaid contract. See blog.
It is important to note that in this case the ZPIC had audited only 43 claims. Then it used a statistical method to extrapolate the alleged over-billings and concluded that the alleged overpayment was $7,885,803.23. I cannot tell you how many times I have disputed an extrapolation and won. See blog.
42 USC 1395(f)(f)(d)(1)(A) states that the ALJ shall conduct and conclude the hearing and render a decision no later than 90 days after a timely request. Yet the Fifth Circuit Court of Appeals found that an ALJ hearing would not be forthcoming not within 90 days or even 900 days. The judge noted in his decision that the Medicare appeal backlog for an ALJ hearing was 3 – 5 years. The District Court held that it lacked subject matter jurisdiction because Family Rehab had not exhausted its administrative remedies. Family Rehab appealed.
On appeal, Family Rehab argued the same arguments that I have made in the past: (1) its procedural due process and ultra vires claims are collateral to the agency’s appellate process; and (2) going through the appellate process would mean no review at all because the provider would be out of business by the time it would be heard by an ALJ.
What does collateral mean? Collard greens are collateral. When you think collateral; think collards. Collard greens do not normally come with spaghetti and meatballs. A collateral issue is an issue that is entirely collateral to a substantive agency decision and would not be decided through the administrative appeal process. In other words, even if Family Rehab were to only pursue the $7.8 million overpayment issue through the administrative process, the issue of having money recouped and the damage to the company that the recoupment was causing would never be heard by the ALJ because those “collateral” issues are outside the ALJ’s purview. The premature recoupment issue could not be remedied by an ALJ. The Fifth Circuit Court of Appeals agreed.
The collateral argument also applies to terminations of Medicare and Medicaid contracts without due process. In an analogous case (Affiliated Professional), the provider argued that the termination of its Medicare contract without due process violated its right to due process and the Equal Protection Clause and was successful.
The upshot is obvious, if the Court must examine the merits of the underlying dispute, delve into the statute and regulations, or make independent judgments as to plaintiff’s eligibility under a statute, the claim is not collateral.
The importance of this case is that it verifies my contention that if a provider is undergoing a recoupment or termination without due process, there is relief for that provider – an injunction stopping the premature recoupments or termination until due process has been completed.
Letter to HHS: RAC Audits “Have Absolutely No Direct Impact on the Medicare Providers” – And I Spotted Elvis!
“Recovery audits have absolutely no direct impact on the Medicare providers working hard to deliver much needed healthcare services to beneficiaries.“
And Elvis Presley is still alive! Oh, and did you know that Bill Clinton never had an affair on Hillary? (since when has her name become one word, like Prince or Beyonce?)
This sentence was written in a March 6, 2018, correspondence from The Council for Medicare Integrity to HHS Secretary Alex Azar.
“Recovery auditing has never been an impediment to the delivery of healthcare services nor is it an intrusion in the physician-patient relationship.” – Kristin Walter of The Council for Medicare Integrity. BTW, Ms. Walter, health care has a space between the two syllables.
The purpose of this letter that was sent from the The Council for Medicare Integrity to Secretary Azar was to request an increase of prepayment reviews for Medicare providers. For those of you so blessed to not know what a prepayment review, prepayment review is a review of your Medicare (or Caid) claims prior to being paid. It sounds reasonable on paper, but, in real life, prepayment review is a Draconian, unjust, and preposterous tool aimed at putting healthcare providers out of business, or if not aimed, is the unknown or accidental outcome of such a review. If placed on prepayment review, your Medicare or Medicaid reimbursements are 100% cut off. Gone. Like the girl in that movie with Ben Affleck, Gone Girl Gone, and, like the girl, not really gone because it’s alive – you provided services and are owed that money – but it’s in hiding and may ruin your life. See blog.
Even if I were wrong, which I am not, the mere process in the order of events of prepayment review is illogical. In the interest of time, I will cut-and-paste a section from a prior blog that I wrote about prepayment review:
In real-life, prepayment review:
- The auditors may use incorrect, inapplicable, subjective, and arbitrary standards.
I had a case in which the auditors were denying 100% ACTT services, which are 24-hour mental health services for those 10% of people who suffer from extreme mental illness. The reason that the auditor was denying 100% of the claims was because “lower level services were not tried and ruled out.” In this instance, we have a behavioral health care provider employing staff to render ACTT services (expensive), actually rendering the ACTT services (expensive), and getting paid zero…zilch…nada…for a reason that is not required! There is no requirement that a person receiving ACTT services try a lower level of service first. If the person qualifies for ACTT, the person should receive ACTT services. Because of this auditor’s misunderstanding of ACTT, this provider was almost put out of business.
Another example: A provider of home health was placed on prepayment review. Again, 90 – 100% of the claims were denied. In home health, program eligibility is determined by an independent assessment conducted by the Division of Medical Assistance (DMA) via Liberty, which creates an individualized plan of care. The provider submitted claims for Patient Sally, who, according to her plan, needs help dressing. The service notes demonstrated that the in-home aide helped Sally dress with a shirt and pants. But the auditor denies every claim the provider bills for Sally (which is 7 days a week) because, according to the service note, the in-home aide failed to check the box to show she/he helped put on Sally’s shoes. The auditor fails to understand that Sally is a double amputee – she has no feet.
Quis custodiet ipsos custodes – Who watches the watchmen???
- The administrative burden placed on providers undergoing prepayment review is staggering.
In many cases, a provider on prepayment review is forced to hire contract workers just to keep up with the number of document requests coming from the entity that is conducting the prepayment review. After initial document requests, there are supplemental document requests. Then every claim that is denied needs to be re-submitted or appealed. The amount of paperwork involved in prepayment review would cause an environmentalist to scream and crumple into the fetal position like “The Crying Game.”
- The accuracy ratings are inaccurate.
Because of the mistakes the auditors make in erroneously denying claims, the purported “accuracy ratings” are inaccurate. My daughter received an 86 on a test. Given that she is a straight ‘A’ student, this was odd. I asked her what she got wrong, and she had no idea. I told her to ask her teacher the next day why she received an 86. Oops. Her teacher had accidentally given my daughter an 86; the 86 was the grade of another child in the class with the same first name. In prepayment review, the accuracy ratings are the only method to be removed from prepayment, so the accuracy of the accuracy ratings is important. One mistaken, erroneously denied claim damages the ratings, and we’ve already discussed that mistakes/errors occur. You think, if a mistake is found, call up the auditing entity…talk it out. See below.
- The communication between provider and auditor do not exist.
Years ago my mom and I went to visit relatives in Switzerland. (Not dissimilar to National Lampoon’s European Vacation). They spoke German; we did not. We communicated with pictures and hand gestures. To this day, I have no idea their names. This is the relationship between the provider and the auditor.
Assuming that the provider reaches a live person on the telephone:
“Can you please explain to me why claims 1-100 failed?”
“Don’t you know the service definitions and the policies? That is your responsibility.”
“Yes, but I believe that we follow the policies. We don’t understand why these claims are denied. That’s what I’m asking.”
“Read the policy.”
- The financial burden on the provider is devastating.
If a provider’s reimbursements are 80 – 100% reliant on Medicaid/care and those funds are frozen, the provider cannot meet payroll. Yet the provider is expected to continue to render services. A few years ago, I requested from NC DMA a list of providers on prepayment review and the details surrounding them. I was shocked at the number of providers that were placed on prepayment review and within a couple months ceased submitting claims. In reality, what happened was that those providers were forced to close their doors. They couldn’t financially support their company without getting paid.
Back to the current blog
So to have The Council for Medicare Integrity declare that prepayment review has absolutely no impact on Medicare providers is ludicrous.
Now, I will admit that the RAC (and other acronyms) prepayment and post payment review programs have successfully recovered millions of dollars of alleged overpayments. But these processes must be done right, legally. You can’t just shove an overzealous, for-profit, audit company out the door like an overweight kid in a candy store. Legal due process and legal limitations must be required – and followed.
Ms. Walter does present some interesting, yet factually questionable, statistics:
- “Over the past 5 years alone, Medicare has lost more than $200 billion taxpayer dollars to very preventable billing errors made by providers.”
Not quite sure how this was calculated. A team of compliance auditors would have had to review hundreds of thousands of medical records to determine this amount. Is she referring to money that has been recovered and the appeal process afforded to the providers has been exhausted? Or is this number how much money is being alleged has been overpaid? How exactly were these supposed billing errors “very preventable?” What does that mean? She is either saying that the health care providers could have prevented the ostensible overbillings – or – she is saying that RAC auditors could have prevented these purported overbillings by increased prepayment review. Either way … I don’t get it. It reminds me of Demi Moore in A Few Good Men, “I object.” Judge states, “Overruled.” Demi Moore pleads, “I strenuously object.” Judge states, “Still overruled.” “Very preventable billing errors,” said Ms. Walters. “Still overruled.”
- “Currently, only 0.5 percent of Medicare claims are reviewed, on a post-payment basis, for billing accuracy and adherence to program billing rules. This leaves 99.5 percent of claims immune from any checks and balances that would ensure Medicare payments are correct.”
Again, I am curious as to the mathematic calculation used. Is she including the audits performed, not only by RACs, but audits by ZPICs, CERTS, MACs, including Palmetto, Noridian and CGS, federal and state Program Integrities, State contractors, MFCUs, MICs, MCOs, PERMs, PCG, and HHS? Because I can definitely see that we need more players.
- “The contrast between Medicare review practices and private payers is startling. Despite the dire need to safeguard Medicare dollars, CMS currently allows Recovery Audit Contractors (RACs) to review fewer than 30 Medicare claim types (down from 800 claim types initially) and has scaled back to allow a review of a mere 0.5 percent of Medicare provider claims after they have been paid. Considered a basic cost of doing business, the same providers billing Medicare comply, without issue, with the more extensive claim review requirements of private health insurance companies. With Medicare however, provider groups have lobbied aggressively to keep their overpayments, putting intense pressure on CMS to block Medicare billing oversight.”
Did I wake up in the Twilight Zone? Zombies? Let’s compare Medicare/caid to private health care companies.
First, let’s talk Benjamins (or pennies in Medicare/caid). A study was conducted to compare Texas Medicare/caid reimbursement rates to private pay. Since everything is bigger in Texas, including the reimbursement rates for Medicare/caid, I figured this study is demonstrative for the country (obviously each state’s statistics would vary).
According to a 2016 study by the National Comparisons of Commercial and Medicare Fee-For-Service Payments to Hospitals:
- 96%. In 2012, average payments for commercial inpatient hospital stays were higher than Medicare fee-for-service payments for 96% of the diagnosis related groups (DRGs) analyzed.
- 14%. Between 2008 and 2012, the commercial-to-Medicare payment difference had an average increase of 14%.
- 86%. Longer hospital stays do not appear to be a factor for higher average commercial payments. During this period, 86 percent of the DRGs analyzed had commercial-to-Medicare average length-of-stay of ratios less than one.
The “basic cost of doing business” for Medicare/caid patients is not getting appropriate reimbursement rates.
The law states that the reimbursements rates should allow quality of care. Section 30(A) of the Medicare Act requires that each State “provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan (including but not limited to utilization review plans as provided for in section 1396b(i)(4) of this title) as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.” (emphasis added).
Second, billing under Medicare/caid is much more complex than billing third-party payors, which are not required to follow the over-regulated, esoteric, administrative, spaghetti sauce that mandates providers who accept Medicare and/or Medicaid (a whole bunch of independent vegetables pureed into a sauce in which the vegetables are indiscernible from the other). The regulatory burden required of providing Medicare and/or Medicaid services does not compare to the administrative and regulatory burden associated with private pay, regardless of Ms. Walter’s uncited and unreferenced claims that “the more extensive claim review requirements [are with the] private health insurance companies.” We’re talking kumquats to rack of lamb (are kumquats cheap)?
Third, let’s discuss this comment: “provider groups have lobbied aggressively.” RAC auditors, and all the other alphabet soup, are paid A LOT. Government bureaucracy often does not require the same “bid process” that a private company would need to pass. Some government contracts are awarded on a no-bid process (not ok), which does not create the best “bang for your buck for the taxpayers.”
I could go on…but, I believe that you get the point. My readers are no dummies!
I disagree with the correspondence, dated March 6, 2018, from The Council for Medicare Integrity to HHS Secretary Alex Azar is correct. However, my question is who will push back against The Council for Medicare Integrity? All those health care provider associations that “have lobbied aggressively to keep their overpayments, putting intense pressure on CMS to block Medicare billing oversight.”?
At the end of the day (literally), I questioned the motive of The Council for Medicare Integrity. Whenever you question a person’s motive, follow the money. So, I googled “who funds The Council for Medicare Integrity? Unsurprisingly, it was difficult to locate. According to The Council for Medicare Integrity’s website it provides transparency with the following FAQ:
Again, do you see why I am questioning the source of income?
According to The Council for Medicare Integrity, “The Council for Medicare Integrity is a 501(c)(6) non-profit organization. The Council’s mission is to educate policymakers and other stakeholders regarding the importance of healthcare integrity programs that help Medicare identify and correct improper payments.
As a 501(c)(6) organization, the Council files IRS Form 990s annually with the IRS as required by law. Copies of these filings and exemption application materials can be obtained by mailing your request to the Secretary at: Council for Medicare Integrity, Attention: Secretary, 9275 W. Russell Road, Suite 100, Las Vegas, Nevada 89148. In your request, please provide your name, address, contact telephone number and a list of documents requested. Hard copies are subject to a fee of $1.00 for the first page and $.20 per each subsequent page, plus postage, and must be made by check or money order, payable to the Council for Medicare Integrity. Copies will be provided within 30 days from receipt of payment. These documents are also available for public inspection without charge at the Council’s principal office during regular business hours. Please schedule an appointment by contacting the Secretary at the address above.
This website serves as an aggregator of all the verifiable key facts and data pertaining to this important healthcare issue, as well as a resource center to support the provider community in their efforts to comply with Medicare policy.”
I still question the funding (and the bias)…Maybe funded by the RACs??
Eastpointe Sues DHHS, Former Sec. Brajer, Nash County, and Trillium Claiming Conspiracy! (What It Means for Providers)
In HBO’s Game of Thrones, nine, noble, family houses of Westeros fight for the Iron Throne – either vying to claim the throne or fighting for independence from the throne.
Similarly, when NC moved to the managed care organizations for Medicaid behavioral health care services, we began with 12 MCOs (We actually started with 23 (39 if you count area authorities) LME/MCOs, but they quickly whittled down to 11). “The General Assembly enacted House Bill 916 (S.L. 2011-264) (“H.B. 916) to be effective June 23, 2011, which required the statewide expansion of the 1915(b)/(c) Medicaid Waiver Program to be completed within the State by July 1, 2013.” Compl. at 25. Now the General Assembly is pushing for more consolidation.
Now we have seven (7) MCOs remaining, and the future is uncertain. With a firehose of money at issue and the General Assembly’s push for consolidation, it has become a bloody battle to remain standing in the end, because, after all, only one may claim the Iron Throne. And we all know that “Winter is coming.”
Seemingly, as an attempt to remain financially viable, last week, on Thursday, June 8, 2017, Eastpointe, one of our current MCOs, sued the Department of Health and Human Services (DHHS), Nash County, Trillium Health Resources, another MCO, and former secretary Richard Brajer in his individual and former official capacity. Since the Complaint is a public record, you can find the Complaint filed in the Eastern District of NC, Western Division, Civil Action 5:17-CV-275. My citations within this blog correspond with the paragraphs in the Complaint, not page numbers.
Eastpointe’s Complaint wields a complex web of conspiracy, government interference, and questionable relationships that would even intrigue George R. R. Martin.
The core grievance in the lawsuit is Eastpointe alleges that DHHS, Trillium, Nash County, and Brajer unlawfully conspired and interfered with Eastpointe’s contract to manage behavioral health care services for its twelve (12) county catchment area, including Nash County. In 2012, Nash County, as part of the The Beacon Center, signed a contract and became part of a merger with Eastpointe being the sole survivor (Beacon Center and Southeastern Regional Mental Health were swallowed by Eastpointe). At the heart of Eastpointe’s Complaint, Eastpointe is alleging that Nash County, Trillium, DHHS, and Brajer conspired to breach the contract between Eastpointe and Nash County and unlawfully allowed Nash County to join Trillium’s catchment area.
In June 2013, the General Assembly, pursuant to Senate Bill 208 (S.L. 2013-85 s. 4.(b)), appended N.C.G.S. § 122C-115 to include subparagraph (a3), permitting a county to disengage from one LME/MCO and align with another with the approval of the Secretary of the NCDHHS, who was required by law to promulgate “rules to establish a process for county disengagement.” N.C.G.S. § 122C-115(a3) (“Rules”) (10A N.C.A.C. 26C .0701-03).
Why does it matter whether Medicaid recipients receive behavioral health care services from providers within Trillium or Eastpointe’s catchment area?? As long as the medically necessary services are rendered – that should be what is important – right?
Wrong. First, I give my reason as a cynic (realist), then as a philanthropist (wishful thinker).
Cynical answer – The MCOs are prepaid. In general and giving a purposely abbreviated explanation, the way in which the amount is determined to pre-pay an MCO is based on how many Medicaid recipients reside within the catchment area who need behavioral health care services. The more people in need of Medicaid behavioral health care services in a catchment area, the more money the MCO receives to manage such services. With the removal of Nash County from Eastpointe’s catchment area, Eastpointe will lose approximately $4 million annually and Trillium will gain approximately $4 million annually, according to the Complaint. This lawsuit is a brawl over the capitated amount of money that Nash County represents, but it also is about the Iron Throne. If Eastpointe becomes less financially secure and Trillium becomes more financially secure, then it is more likely that Eastpointe would be chewed up and swallowed in any merger.
Philanthropic answer – Allowing Nash County to disengage from Eastpointe’s catchment area would inevitably disrupt behavioral health care services to our most fragile and needy population. Medicaid recipients would be denied access to their chosen providers…providers that may have been treating them for years and created established trust. Allowing Nash County to disembark from Eastpointe would cause chaos for those least fortunate and in need of behavioral health care services.
Eastpointe also alleges that DHHS refused to approve a merger between Eastpointe and Cardinal purposefully and with the intent to sabotage Eastpointe’s financial viability.
Also in its Complaint, Eastpointe alleges a statewide, power-hungry, money-grubbing conspiracy in which Brajer and DHHS and Trillium are conspiring to pose Trillium as the final winner in the “MCO Scramble to Consolidate,” “Get Big or Die” MCO mentality arising out of the legislative push for MCO consolidation. Because, as with any consolidation, duplicate executives are cut.
Over the last couple years, Eastpointe has discussed merging with Cardinal, Trillium, and Sandhills – none of which occurred. Comparably, Joffrey Lannister and Sansa Stark discussed merging. As did Viserys and Illyrio wed Daenerys to Khal Drogo to form an alliance between the Targaryens.
Some of the most noteworthy and scandalous accusations:
Leza Wainwright, CEO of Trillium and director of the NC Council of Community MH/DD/SA Programs (“NCCCP”) (now I know why I’ve never been invited to speak at NCCCP). Wainwright “brazenly took actions adverse to the interest of Eastpointe in violation of the NCCCP mission, conflicts of interest policy of the organization, and her fiduciary duty to the NCCCP and its members.” Compl. at 44.
Robinson, Governing Board Chair of Trillium, “further informed Brajer that he intended for Trillium to be the surviving entity in any merger with Eastpointe and that “any plan predicated on Trillium and Eastpointe being coequal is fundamentally flawed.”” Compl. at 61.
“On or about May 11, 2016, Denauvo Robinson (“Robinson”), Governing Board Chair of Trillium wrote Brajer, without copying Eastpointe, defaming Eastpointe’s reputation in such a way that undermined the potential merger of Eastpointe and Trillium.” Compl. at 59.
“Robinson, among other false statements, alleged the failure to consummate a merger between Eastpointe, CoastalCare, and East Carolina Behavioral Health LMEs was the result of Eastpointe’s steadfast desire to maintain control, and Eastpointe’s actions led those entities to break discussions with Eastpointe and instead merge to form Trillium.” Compl. at 60.
“Trillium, not Nash County, wrote Brajer on November 28, 2016 requesting approval to disengage from Eastpointe and to align with Trillium.” Compl. at 69.
Dave Richards, Deputy Secretary for Medical Assistance, maintains a “strong relationship with Wainwright” and “displayed unusual personal animus toward Kenneth Jones, Eastpointe’s former CEO.” Compl. at 47.
Brajer made numerous statements to Eastpointe staff regarding his animus toward Jones and Eastpointe. “Brajer continued to push for a merger between Eastpointe and Trillium.” Compl. at 53.
“On December 5, 2016, the same day that former Governor McCrory conceded the election to Governor Cooper, Brajer wrote a letter to Trillium indicating that he approved the disengagement and realignment of Nash County.” Compl. at 72.
“On March 17, 2016, however, Brajer released a memorandum containing a plan for consolidation of the LME/MCOs, in which NCDHHS proposed Eastpointe being merged with Trillium.” Compl. at 55.
Brajer’s actions were “deliberately premature, arbitrary, and capricious and not in compliance with statute and Rule, and with the intent to destabilize Eastpointe as an LME/MCO).” Compl. at 73.
“Brajer conspired with Nash County to cause Nash County to breach the Merger Agreement.” Compl. at 86.
Brajer “deliberately sought to block any merger between Eastpointe and other LME/MCOs except Trillium.” Compl. at 96.
“Brajer and NCDHHS’s ultra vires and unilateral approval of the Nash County disengagement request effective April 1, 2017 materially breached the contract between Eastpointe and NCDHHS. Equally brazen was Brajer’s calculated failure to give Eastpointe proper notice of the agency action taken or provide Eastpointe with any rights of appeal.” Compl. at 101.
Against Nash County
“To date, Nash County is Six Hundred Fifty Three Thousand Nine Hundred Fifty Nine Thousand and 16/100 ($653,959.16) in arrears on its Maintenance of Efforts to Eastpointe.” Compl. at 84.
“While serving on Eastpointe’s area board, Nash County Commissioner Lisa Barnes, in her capacity as a member of the Nash County Board of Commissioners, voted to adopt a resolution requesting permission for Nash County to disengage from Eastpointe and realign with Trillium. In so doing, Barnes violated her sworn oath to the determent of Eastpointe.” Compl. at 85.
What Eastpointe’s lawsuit could potentially mean to providers:
Eastpointe is asking the Judge in the federal court of our eastern district for a Temporary Restraining Order and Preliminary Injunction prohibiting Nash County from withdrawing from Eastpointe’s catchment area and joining Trillium’s catchment area. It is important to note that the behavioral health care providers in Eastpointe’s catchment area may not be the same behavioral health care providers in Trillium’s catchment area. There may be some overlap, but without question there are behavioral health care providers in Trillium’s catchment area that are not in Eastpointe’s catchment area and vice versa.
If Eastpointe is not successful in stopping Nash County from switching to Trillium’s catchment area, those providers who provide services in Nash County need to inquire – if you do not currently have a contract with Trillium, will Trillium accept you into its catchment area, because Trillium runs a closed network?!?! If Trillium refuses to include Nash County’s behavioral health care providers in its catchment area, those Nash County providers risk no longer being able to provide services to their consumers. If this is the case, these Nash County, non-Trillium providers may want to consider joining Eastpointe’s lawsuit as a third-party intervenor, as an interested, aggrieved person. Obviously, you would, legally, be on Eastpointe’s side, hoping to stay Nash County’s jump from Eastpointe to Trillium.
Even if Eastpointe is successful in stopping Nash County’s Benedict Arnold, then, as a provider in Eastpointe’s catchment area, you need to think ahead. How viable is Eastpointe? Eastpointe’s lawsuit is a powerful indication that Eastpointe itself is concerned about the future, although this lawsuit could be its saving grace. How fair (yet realistic) is it that whichever providers happen to have a contract with the biggest, most powerful MCO in the end get to continue to provide services and those providers with contracts with smaller, less viable MCOs are put out of business based on closed networks?
If Nash County is allowed to defect from Eastpointe and unite with Trillium, all providers need to stress. Allowing a county to abscond from its MCO on the whim of county leadership could create absolute havoc. Switching MCOs effects health care providers and Medicaid recipients. Each time a county decides to choose a new MCO the provider network is upended. Recipients are wrenched from the provider of their choice and forced to re-invent the psychological wheel to their detriment. Imagine Cherokee County being managed by Eastpointe…Brunswick County being managed by Vaya Health…or Randolph County being managed by Partners. Location-wise, it would be an administrative mess. Every election of a county leadership could determine the fate of a county’s Medicaid recipients.
Here is a map of the current 7 MCOs:
All behavioral health care providers should be keeping a close watch on the MCO consolidations and this lawsuit. There is nothing that requires the merged entity to maintain or retain the swallowed up entities provider network. Make your alliances because…
“Winter is coming.”
Hospital is shocked to learn that its Medicare contract with Health and Human Services may be terminated by April 16, 2017. Medicaid services may also be adversely affected. The hospital was notified of the possible Medicare contract termination on March 27, 2017, and is faced with conceivably losing its Medicare contract within a month of notification. Legal action cannot act fast enough – unless the hospital requests an emergency temporary restraining order, motion to stay, and preliminary injunction and files it immediately upon learning that its Medicare contract is terminated.
The Center for Medicare and Medicaid Services (CMS) threatened Greenville Memorial Hospital, part of Greenville Health System, in South Carolina, that Medicare reimbursements will cease starting April 16, 2017. According to CMS, Memorial’s emergency department is not compliant with Medicare regulations.
A public notice in the Greenville News says: “Notice is hereby given that effective April 15, 2017, the agreement between GHS Greenville Memorial Hospital, 701 Grove Road, Greenville, S.C. 29605 and the Secretary of Health and Human Service, as a provider of Hospital Services and Health Insurance for the Aged and Disabled Program (Medicare) is to be terminated. GHS Greenville Memorial Hospital does not meet the following conditions of participation. 42 CFR 482.12 Governing Body, 42 CFR 482.13 Patients’ Rights and 42 CFR 482.23 Nursing Services.”
“The Centers for Medicare and Medicaid Services has determined that GHS Greenville Memorial Hospital is not in compliance with the conditions of coverage. The Medicare program will not make payment for hospital services to patients who are admitted after April 16, 2017.”
The findings came after an onsite audit was conducted on March 13, 2017. Memorial was notified of the report on March 27, 2017.
Memorial must have submitted a corrective action plan by April 3, 2017, but it has not been released.
The emergency department at Memorial treats about 300 patients per day. An employee of Memorial estimates that the termination would lose net revenue from Medicare and Medicaid could potentially reach around $495 million. Greenville Memorial received $305 million in Medicare funding and $190 million from Medicaid in the most recent fiscal year, accounting for nearly six in 10 patients, officials said.
While CMS and Memorial refuse to discuss the details of the alleged noncompliance, CMS’ public notice cites three CFR cites: 42 CFR 482.12 Governing Body, 42 CFR 482.13 Patients’ Rights and 42 CFR 482.23 Nursing Services.
42 CFR 482.12 requires that hospitals have governing bodies and plans to follow Medicare regulations. Subsection (f) specifically requires that if a hospital has an emergency department that the hospital must follow 42 CFR 482.55 “Conditions of Participation,” which states that “The hospital must meet the emergency needs of patients in accordance with acceptable standards of practice.
(a) Standard: Organization and direction. If emergency services are provided at the hospital –
- The services must be organized under the direction of a qualified member of the medical staff;
- The services must be integrated with other departments of the hospital;
- The policies and procedures governing medical care provided in the emergency service or department are established by and are a continuing responsibility of the medical staff.
(b) Standard: Personnel.
- The emergency services must be supervised by a qualified member of the medical staff.
- There must be adequate medical and nursing personnel qualified in emergency care to meet the written emergency procedures and needs anticipated by the facility.”
The Memorial audit stemmed from a March 4, 2017, death of Donald Keith Smith, 48, who died as a result of traumatic asphyxiation. After an altercation, the patient was placed on a gurney, supposedly, face-down. South Carolina’s Department of Health and Environmental Controls Site Survey Agency investigated the hospital after the death and the audit found that hospital security officers improperly restrained Smith, strapping him face down to a gurney during an altercation, rendering him unable to breathe. The death was ruled a homicide.
Memorial terminated the security officers involved in the death.
Now the hospital is faced with its own potential death. The loss of Medicare and, perhaps, Medicaid reimbursements could financially kill the hospital. Let’s see what happens…
As if South Carolina didn’t have enough issues with the recent flooding, let’s throw in some allegations of Medicaid fraud against the health care providers. I’m imagining a provider under water, trying to defend themselves against fraud allegations, while treading water. It’s not a pretty picture.
Flash floods happen fast, as those in SC can attest.
So, too, do the consequences of allegations.
Shakespeare is no stranger to false accusations. In Othello, Othello is convinced that his wife is unfaithful, yet she was virtuous. In Much Ado About Nothing, Claudio believes Hero to be unfaithful and slanders her until her death. Interestingly, neither Othello and Claudio came to their respective opinions on their own. Both had a persuader. Both had a tempter. Both had someone else whisper the allegations of unfaithfulness in their ears and both chose to believe the accusation with no independent investigation. So too are accusations of Medicaid/care fraud so easily accepted without independent investigation.
With the inception of the Affordable Care Act (ACA), We have seen a sharp uptick on accusations of credible allegations of fraud. See blog for the definition of credible allegation of fraud.
The threshold for credible allegation of fraud incredibly low. A mere accusation from a disgruntled employee, a mere indicia of credibility, and/or even a computer data mining program can incite an allegation of fraud. Hero was, most likely, committing Medicare/acid fraud too.
The consequences of being accused of fraud is catastrophic for a health care provider regardless whether the accusation is accurate. You are guilty before proving your innocence! Your reimbursements are immediately suspended! Your entire livelihood is immediately crumbled! You are forced to terminate staff! Assets can be seized, preventing you even the ability to hire an attorney to defend yourself!
I have seen providers be accused of credible allegations of fraud and the devastation that follows. In New Mexico. In North Carolina. See documentary. Many NC providers serve SC’s population as well. The Medicaid reimbursement rates are higher in SC.
Obviously, The ACA is nationwide, federal law. Hence, the increase in allegations/accusations of health care fraud is nationwide.
Recently, South Carolina health care providers have been on the chopping block. Othello and Claudio are in the house of Gamecocks!
South Carolina’s single state agency, DHHS, required Medicaid recipients to get a 2nd prior approval before receiving health care services for “rehabilitative behavioral health” services, such as behavioral health care services for substance abuse and mental illness (could you imagine the burden if this were required here in NC?).
Then, last year, SC DHHS eliminated such 2nd prior approval requirement.
With fewer regulations and red tape in which to maneuver, SC saw a drastic uptick of behavioral health care services. Othello and Claudio said, “Fraud! More services with only one prior approval must be prima fracie fraud!”
Hence, behavioral health care providers in SC are getting investigated. But, mind you, during investigations reimbursements are suspended. You say, “Well, Knicole, how will these health care provider agencies afford to defend themselves without getting paid?” “Good question,” I say. “They cannot unless they have a stack of cash on hand for this exact reason.”
“What should these providers do?” You ask.
Hire an attorney and seek an injunction lifting the suspension of payments during the investigation.
Turn a Shakespearean tragedy into a comedy! Toss in a dingy!
Judges have lifted the suspensions. Read the case excerpt below:
As you can read in the above-referenced case, despite 42 455.23(a) mandating a suspension of payments upon credible allegations of fraud, this Judge found that the state failed to carefully weigh the evidence before suspending all payments.
There are legal remedies!!
Recent stories in the news seem to suggest that health care fraud is running rampant. We’ve got stories about Eric Leak‘s Medicaid agency, Nature’s Reflections, funneling money to pay athletes, a seizure of property in Greensboro for alleged Medicaid fraud, and, in Charlotte, a man was charged with Medicaid fraud and sentenced to three years under court supervision and ordered to pay $3,153,074. And these examples are local.
Health care fraud with even larger amounts of money at stake has been prosecuted in other states. A nonprofit up in NY is accused of defrauding the Medicaid system for over $27 million. Overall, the federal government opened 924 criminal health care fraud investigations last year.
What is going on? Are more people getting into the health care fraud business? Has the government become better at detecting possible health care fraud?
I believe that the answer is that the federal and state governments have determined that it “pays” high dividends to invest in health care fraud investigations. More and more money is being allocated to the fraud investigative divisions. More money, in turn, yields more health care fraud allegations…which yields more convictions….and more money to the government.
Believe me, I understand the importance of detecting fraud. It sickens me that those who actually defraud our Medicaid and Medicare systems are taking medically necessary services away from those who need the services. However, sometimes the net is cast so wide…so far…that innocent providers get caught in the net. And being accused of health care fraud when you innocent is a gruesome, harrowing experience that (1) you hope never happens; and (2) you have to be prepared in case it does. I have seen it happen.
As previously stated, in fiscal year (FY) 2014, the federal government opened 924 new criminal health care fraud investigations. That’s 77 new fraud investigations a month!! This number does not include civil investigations.
In FY 2012, the Department of Justice (DOJ) opened 2,016 new health care fraud investigations (1,131 criminal, 885 civil).
The Justice Department launched 903 new health-care fraud prosecutions in the first eight months of FY 2011, more than all of FY 2010.
These numbers show:
- an 85% increase over FY 2010,
- a 157% increase over FY 2006
- and 822% over FY 1991.
And the 924 investigations opened in fiscal 2014 only represent federal investigations. Concurrently, all 50 states are conducting similar investigations.
What is being recovered? Are the increased efforts to detect health care fraud worth the effort and expenditures?
Heck, yes, it is worth it to both the state and federal governments!
Government teams recovered $4.3 billion in FY 2013 and $19.2 billion over the last five years. While still astronomically high, the numbers dropped slightly for FY 2014. In FY 2014, according to the Annual Report of the Departments of Health and Human Services and Justice, the federal government won or negotiated over $2.3 billion in health care fraud judgments and settlements. Due to these efforts, as well as efforts from preceding years, the federal government retrieved $3.3 billion from health care fraud investigations.
So the federal and state governments are putting more money into investigating health care fraud. Why?
The Affordable Care Act.
Obviously, the federal and state governments conducted health care fraud investigations prior to the ACA. But the implementation of the ACA set new mandates to increase fraud investigations. (Mandates, which were suggestions prior to the ACA).
In 2009, Barack Obama signed Executive Order 13520, which was targeted to reduce improper payments and to eliminate waste in federal programs.
On March 23, 2010, President Obama signed the ACA into law. A major part of the ACA is focused on cost containment methods. Theoretically, the ACA is supposed to be self-funding. Detecting fraud, waste and abuse in the Medicare/Medicaid system helps to fund the ACA.
Unlike many of the other ACA provisions, most of the fraud and abuse provisions went into effect in 2010 or 2011. The ACA increases funding to the Healthcare Fraud and Abuse Control Program by $350 million over the next decade. These funds can be used for fraud and abuse control and for the Medicare Integrity Program.
The ACA mandates states to conduct post payment and prepayment reviews, screen and audit providers, terminate certain providers, and create provider categories of risk.
While recent articles and media seem to indicate that health care fraud is running rampant, the substantial increase in accusations of health care fraud really may be caused by factors other than more fraud is occurring.
The ACA mandates have an impact.
And, quite frankly, the investigation units may be a bit overzealous to recover funds.
What will happen if you are a target of a criminal health care fraud investigation?
It depends whether the federal or state government is conducting the investigation.
If the federal government is investigating you, most likely, you will be unaware of the investigation. Then, one day, agents of the federal government will come to your office and seize all property deemed related to the alleged fraud. Your accounts will be frozen. Whether you are guilty or not will not matter. What will matter is you will need an experienced, knowledgeable health fraud attorney and the funds with which to compensate said attorney with frozen accounts.
If the state government is conducting the investigation, it is a little less hostile and CSI-ish. Your reimbursements will be suspended with or without your notice (obviously, you would notice the suspension once the suspension occurred). But the whole “raid on your office thing” is less likely.
There are legal remedies available, and the “defense” should begin immediately.
Most importantly, if you are a health care provider and you are not committing fraud, you are not safe from accusations of fraud.
Your insurance, most likely, will not cover attorneys’ fees for alleged intention fraud.
The attorney of your choice will not be able to accept funds that are “tainted” by alleged fraud, even if no fraud occurred.
Be aware that if, for whatever reason, you are accused, you will need to be prepared…for what you hope never happens.
Why My Career, as a Medicaid Litigator/Medicaid Provider Advocate, is the Best, Most Rewarding Career…Ever!
I have the best and most rewarding career…EVER! It’s not the easiest career. It’s not a 9-5 job. When I schedule family trips, I normally have to cancel the trips or cut them short.
Like next week, my extended family on my dad’s side gets together every year for a week at Emerald Isle, NC. So about 3 months ago, I put in my secured leave with the Office of Administrative Hearings (OAH) for next week. Lawyers have to request “secured leave” for vacations. That way, the courts will not schedule hearings or mediations, etc. during the requested vacation time. Secured leave is really the only way to ensure an attorney gets a vacation. In my Medicaid practice, I normally only practice in OAH. For the most part, my clients have administrative complaints, not civil complaints, which would take me to Superior Court. So, I filed my secured leave in OAH only. Well, it just so happens that one of the State’s agents has refused to comply with an Order executed by an Administrative Law Judge (ALJ) in OAH. The consequences of the agent’s refusal could be dire. So, we had no choice but to file a Writ of Mandamus in Superior Court. A Writ of Mandamus is an extremely, extraordinary motion. We filed it last week. Superior Court scheduled the Writ hearing for Monday, June 24th (supposedly the 3rd day of my family vacation). So, my vacation is shortened. My client, especially in this specific instance, is just more important than a day or two at the beach.
Anyway, going back to how my career is the best career ever…
My clients are health care providers that choose to accept Medicaid. They are behavioral healthcare providers, dentists, durable medical equipment suppliers, neurologists, primary care physicians, speech therapists, ER physicians/hospitals, hospice providers, etc. No matter the service my clients provide, the common thread is that the provider chooses to provide services to Medicaid recipients. In some fields, these providers willing to accept Medicaid are few and far between. Sometimes Medicaid recipients are placed on a 3-5 month waiting list only to get to see a health care provider for the first time.
My clients are good people. My clients are empathetic. They understand that few providers choose to accept Medicaid. Nevertheless, these providers choose to provide services to the most needy people in North Carolina.
My clients are not greedy. They choose to accept Medicaid despite the low reimbursement rates, despite the complex and burdensome amount of regulations, despite the need to constantly google “NC Medicaid” for Implementation Updates or Special Bulletins, despite the need to constantly attend seminars on Medicaid updates, despite the need to jump through hoops, whether it be CAHBA certifications or applications with the Managed Care Organizations (MCOs), despite the need to undergo harassing audits, and despite the risk of the Division of Medical Assistance, or one of its agents, to merely terminate their Medicaid contract without due process. My clients understand these risks and negative aspects, yet they choose to continue to serve Medicaid recipients.
My clients serve the most needy, most mute, and most underserved population in NC. Obviously, Medicaid recipients, by definition, are the most poor citizens in our state.
My clients are scared. They have been told by the state or its agents that they owe money, that they have “credible allegations of fraud,” or indications of “abhorrent billing practices.” These allegations are unsubstantiated. My clients served their consumers well. But they have to defend these McCarthian-istic allegations, and health care providers, in general, are not litigious. My clients are scared.
My career is the best and most rewarding career ever because I represent clients, who are good people doing good things.
My career is the best and most rewarding career ever because, by helping my clients, I am helping voiceless, Medicaid recipients.
A week or so ago, a client sent me a card saying, “Knicole and Elizabeth [one of my upcoming star-associates], Thank you for all you have done. You have saved a company, 140 jobs, and over 500 Medicaid recipients from having no provider. I almost cried.
I have always looked at my career as: By devoting my career to Medicaid providers, I am able to serve, indirectly, Medicaid recipients. Medicaid recipients, for the most part, sadly, cannot hire me (believe me, I wish I could work for free), but, by my work for Medicaid providers, I am able to help Medicaid recipients by helping the providers the recipients so desperately need.
But this past week, I had the opportunity to help a Medicaid recipient directly, not indirectly. And, I left the hearing with goosebumps, good feelings, and a desire for more.
One of my clients had his or her Medicaid contract terminated; let’s call this person X. Because of X’s termination of Medicaid contract, a Medicaid consumer, a teenage girl, who had seen X weekly for 6 years, was, suddenly, disallowed to see X. Let’s call her ‘A.’ Without X, A spiraled. A became suicidal and homicidal, both at home and at school. She begged to see X. Since not being able to X, A was hospitalized 2x and was taken from her family home and placed in therapeutic foster care. All because A was disallowed to see the one therapist she had become to trust over the course of 6 years.
I decided to take A’s case pro bono.
I filed a Temporary Restraining Order, Motion to Stay, and Preliminary Injunction (TRO) on behalf of A. I argued that A was stable (as stable as possible for a person suffering from her mental illnesses) while she was able to see X. When X’s Medicaid contract was terminated, A was not able to be seen by X. A refused to go to another provider and spiraled. I argued that A should be able to see X while A and X’s lawsuits went forward. A should not suffer while X’s Medicaid contract was erroneously terminated.
A’s mother testified emotionally.
The Judge has not officially ruled yet. But, at the end of the hearing, he wanted to ensure that, while he was deciding the ruling, A would be able to receive services from X. I informed him that, no, A was not currently receiving services from X (despite the TRO being granted the prior week before the preliminary injunction hearing).
The judge looked at counsel for the MCO (the MCO that was not allowing X to see any Medicaid recipients) and said…Why?
Long story, short, my Medicaid recipient client was emotional (in a happy way) with the outcome. While my provider clients are also emotional (in a happy way) with the outcomes, this seemed different. Had I not agreed to work pro bono, this person may never had received relief for her daughter.
Pro bono is tough. You go into a pro bono case understanding that your legal fees will not be paid. But it is rewarding. In OAH, after the final disposition of the case, an attorney may petition for attorneys’ fees. I hope my petition is granted…not because I want these legal fees so badly (honestly, my salary stays the same whether I get these attorneys’ fees or not), but because, if my attorneys’ fees are awarded in this case, maybe, just maybe, I would be able to take on more pro bono cases and help more Medicaid recipients directly.
Regardless, in my career, I go to bed knowing that I have helped good people, good providers and, indirectly, helped Medicaid recipients.