Category Archives: Medicaid Audits

Warning: Medicare/caid Billing Confusion May Lead to Jail Time

All health care providers are under serious scrutiny, that is, if they take Medicaid. In Atlanta, GA, a dentist, Dr. Oluwatoyin Solarin was sentenced to a year and six months for filing false claims worth nearly $1 million. She pled guilty, and, I would assume, she had an attorney who recommended that she plead guilty. But were her claims actually false? Did she hire a criminal attorney or a Medicaid attorney? Because the answers could be the difference between being behind bars and freedom.

Dr. Solarin was accused of billing for and receiving payments for dental claims while she was not at the office. U.S. Attorney John Horn stated that “Solarin cheated the Medicaid program by submitting fraudulent claims, even billing the government for procedures she allegedly performed at the same time she was out of the country.”

I receive phone calls all the time from people who are under investigation for Medicare/caid fraud. What spurred on this particular blog was a phone call from (let’s call him) Dr. Jake, a dentist. He, similar to Dr. Solarin, was under investigation for Medicaid fraud by the federal government. By the time Dr. Jake called me, his investigation was well on its way, and his Medicaid reimbursements had been suspended due to credible allegations of fraud for almost a year. He was accused of billing for and receiving payments for dental services while he was on vacation…or sick…or otherwise indisposed. He hired one of the top criminal attorneys, who advised him to take a plea deal for a suspended jail sentence and monetary recompense.

But, wait, he says to me. I didn’t do anything wrong. Why should I have to admit to a felony charge and be punished for doing nothing wrong?

I said, let me guess, Jake. You were the rendering dentist – as in, your NPI number was on the billed claim – but you hired a temporary dentist to stand in your place while you were on vacation, sick, or otherwise indisposed?

How did you know? Jake asks.

Because I understand Medicaid billing.

When my car breaks down, I go to a mechanic, not a podiatrist. The same is true for health care providers undergoing investigation for Medicare/caid fraud – you need a Medicare/caid expert. A criminal attorney,most likely, will not understand the Medicare/caid policy on locum tenens. Or the legal limitations of Medicaid suspensions and the administrative route to get the suspension lifted. Or the good cause exception to suspensions.

Don’t get me wrong, I am not advocating that, when under criminal, health care fraud investigation, you should not hire a criminal attorney. Absolutely, you will want a criminal attorney. But you will also want a Medicare/caid attorney.

What is Locum tenens? It is a Latin phrase that means temporary substitute. Physicians and dentists hire locum tenens when they go on vacation or if they fall ill. It is similar to a substitute teacher. Some days I would love to hire a locum tenens for me. When a doctor or dentist hires a temporary substitute, usually that substitute is paid by the hour or by the services rendered. If the payor is Medicare or Medicaid, the substitute is not expected to submit the billing and wait to be reimbursed. The substitute is paid for the day(s) work, and the practice/physician/dentist bills Medicare/caid, which is reimbursed. For billing purposes, this could create a claim with the rendering NPI number as Dr. Jake, while Dr. Sub Sally actually rendered the service, because Dr. Jake was in the Bahamas. It would almost look like Dr. Jake were billing for services billing the government for procedures he allegedly performed at the same time he was out of the country.

Going back to Dr. Jake…had Dr. Jake hired a Medicare/caid attorney a year ago, when his suspension was first implemented, he may have be getting reimbursed by Medicaid this whole past year – just by asking for a good cause exception or by filing an injunction lifting the suspension. His Medicaid/care attorney could have enlightened the investigators on locum tenens, and, perhaps, the charges would have been dropped, once the billing was understood.

Going back to Dr. Solarin who pled guilty to accusations of billing for services while out of the country…what if it were just a locum tenens problem?

Medicaid Forecast: Cloudy with 100% Chance of Trump

Regardless how you voted, regardless whether you “accept” Trump as your president, and regardless with which party you are affiliated, we have a new President. And with a new President comes a new administration. Republicans have been vocal about repealing Obamacare, and, now, with a Republican majority in Congress and President, changes appear inevitable. But what changes?

What are Trump’s and our legislature’s stance on Medicaid? What could our future health care be? (BTW: if you do not believe that Medicaid funding and costs impact all healthcare, then please read blog – and understand that your hard-working tax dollars are the source of our Medicaid funding).

WHAT IS OUR HEALTHCARE’S FORECAST?

The following are my forecasted amendments for Medicaid:

  1. Medicaid block grants to states

Trump has indicated multiple times that he wants to put a cap on Medicaid expenses flowing from the federal government to the states. I foresee either a block grant (a fixed annual amount per state) or a per capita cap (fixed dollar per beneficiary) being implemented.

What would this mean to Medicaid?

First, remember that Medicaid is an entitlement program, which means that anyone who qualifies for Medicaid has a right to Medicaid. Currently, the federal government pays a percentage of a state’s cost of Medicaid, usually between 60-70%. North Carolina, for example, receives 66.2% of its Medicaid spending from Uncle Sam, which equals $8,922,363,531.

While California receives only 62.5% of its Medicaid spending from the federal government, the amount that it receives far surpasses NC’s share – $53,436,580,402.

The federal funding is open-ended (not a fixed a mount) and can inflate throughout the year, but, in return, the states are required to cover certain health care services for certain demographics; e.g., pregnant women who meet income criteria, children, etc. With a block grant or per capita cap, the states would have authority to decide who qualifies and for what services. In other words, the money would not be entwined with a duty that the state cover certain individuals or services.

Opponents to block grants claim that states may opt to cap Medicaid enrollment, which would cause some eligible Medicaid recipients to not get coverage.

On the other hand, proponents of per capita caps, opine that this could result in more money for a state, depending on the number of Medicaid eligible residents.

2. Medicaid Waivers

The past administration was relatively conservative when it came to Medicaid Waivers through CMS. States that want to contract with private entities to manage Medicaid, such as managed care organizations (MCOs), are required to obtain a Waiver from CMS, which waives the “single state entity” requirement. 42 CFR 431.10. See blog.

This administration has indicated that it is more open to granting Waivers to allow private entities to participate in Medicaid.

There has also been foreshadowing of possible beneficiary work requirements and premiums.Montana has already implemented job training components for Medicaid beneficiaries. However, federal officials from the past administration instructed Montana that the work component could not  be mandatory, so it is voluntary. Montana also expanded its Medicaid in 2015, under a Republican governor. At least for one Medicaid recipient, Ruth McCafferty, 53, the voluntary job training was Godsend. She was unemployed with three children at home. The Medicaid job program paid for her to participate in “a free online training to become a mortgage broker. The State even paid for her 400-mile roundtrip to Helena to take the certification exam. And now they’re paying part of her salary at a local business as part of an apprenticeship to make her easier to hire.” See article.

The current administration may be more apt to allow mandatory work requirements or job training for Medicaid recipients.

3. Disproportionate Share Hospital

When the ACA was implemented, hospitals were at the negotiating table. With promises from the past administration, hospitals agreed to take a cut on DSH payments, which are paid to hospitals to help offset the care of uninsured and Medicaid patients. The ACA’s DSH cut is scheduled to go into effect FY 2018 with a $2 billion reduction. It is scheduled to continue to reduce until FY 2025 with a $8 billion reduction. The reason for this deduction was that the ACA would create health coverage for more people and with Medicaid expansion there would be less uninsured.

If the ACA is repealed, our lawmakers need to remember that DSH payments are scheduled to decrease next year. This could have a dramatic impact on our hospitals. Last year, approximately 1/2 of our hospitals received DSH. In 2014, Medicaid paid approximately $18 billion for DSH payments, so the proposed reductions make up a high percentage of DSH payments.

4. Physician payment predictability

Unlike the hospitals, physicians got the metaphoric shaft when the ACA was implemented. Many doctors were forced to provide services to patients, even when those patients were not covered by a health plan. Many physicians had to  increase the types of insurance they would accept, which increased their administrative costs and the burden.

This go-around, physicians may have the ear of the HHS Secretary-nominee, Tom Price, who is an orthopedic surgeon. Dr. Price has argued for higher reimbursement rates for doctors and more autonomy. Regardless, reimburse rate predictability may stabilize.

Do the Anti-Kickback and Stark Laws Apply to Private Payors?

Good question.

Anti-Kickback statutes (AKS) and Stark law are extremely important issues in health care. Violations of these laws yield harsh penalties. Yet, many healthcare professionals have little to no knowledge on the details of these two legal beasts.

The most common question I get regarding AKS and Stark is: Do AKS and Stark apply to private payers? Health care professionals believe, if I don’t accept Medicare or Medicaid, then I don’t need to worry about AKS and Stark. Are they correct??

The general and overly broad response is that the Stark Law, 42 USC § 1395nn, only applies to Medicare and Medicaid. The AKS, 42 USC § 1320a-7b(b)),applies to any federal healthcare program.

Is there a difference between AKS and Stark?

Answer: Yes. As discussed above, the first difference is that AKS applies to all federal healthcare programs. This stark difference (pun intended) makes the simple decision to not accept Medicare and Medicaid, thus allowing you to never worry about AKS, infinitely more difficult.

Let’s take a step back… What are AKS and Stark laws and what do these laws prohibit? When you Google AKS and Stark, a bunch of legal blogs pop up and attempt to explain, in legalese, what two, extremely esoteric laws purport to say, using words like “renumeration,” “knowing and willful,” and “federal healthcare program.” You need a law license to decipher the deciphering of AKS and Stark. The truth is – it ain’t rocket science.

The AKS is a criminal law; if you violate the AKS, you can be prosecuted as a criminal. The criminal offense is getting something of value for referrals. You cannot refer patients to other health care professionals in exchange for money, reduced rent, use of laboratory equipment, referrals to you, health services for your mother, marketing, weekly meals at Ruth’s Chris, weekly meals at McDonalds, oil changes, discounted theater tickets, Uber rides, Costco coupons, cooking lessons, or…anything of value, regardless the value. 

Safe harbors (exceptions to AKS) exist. But those exceptions better fit squarely into the definition of the exceptions. Because there are no exceptions beyond the enumerated exceptions.

AKS is much more broad in scope than Stark. Other than Medicare and Medicaid, AKS applies to any health care plan that utilizes any amount of federal funds. For example, AKS applies to Veterans Health Care, State Children’s Health Programs (CHIP), Federal Employees Health Benefit Program, and many other programs with federal funding. Even if you opt to not accept Medicare and Medicaid, you may still be liable under AKS.

Stark law, on the other hand, is more narrow and only applies to Medicare and Medicaid. I find the following “cheat sheet” created by a subdivision of the Office of Inspector General to be helpful in understanding AKS and Stark and the differences between the two:

One other important aspect of Stark is that is considered “strict liability,” whereas AKS requires a proving of a “knowing and willful” action.

Feel free to print off the above chart for your reference. However, see that little asterisk at the bottom of the chart? It applies here as well.

Look into My Crystal Ball: Who Is Going to Be Audited by the Government in 2017?

Happy New Year, readers!!! A whole new year means a whole new investigation plan for the government…

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) publishes what is called a “Work Plan” every year, usually around November of each year. 2017 was no different. These Work Plans offer rare insight into the upcoming plans of Medicare investigations, which is important to all health care providers who accept Medicare and Medicaid.

For those of you who do not know, OIG is an agency of the federal government that is charged with protecting the integrity of HHS, basically, investigating Medicare and Medicaid fraud, waste, and abuse.

So let me look into my crystal ball and let you know which health care professionals may be audited by the federal government…

crystal-ball

The 2017 Work Plan contains a multitude of new and revised topics related to durable medical equipment (DME), hospitals, nursing homes, hospice, laboratories.

For providers who accept Medicare Parts A and B, the following are areas of interest for 2017:

  • Hyperbaric oxygen therapy services: provider reimbursement
  • Inpatient psychiatric facilities: outlier payments
  • Skilled nursing facilities: reimbursements
  • Inpatient rehabilitation hospital patients not suited for intensive therapy
  • Skilled nursing facilities: adverse event planning
  • Skilled nursing facilities: unreported incidents of abuse and neglect
  • Hospice: Medicare compliance
  • DME at nursing facilities
  • Hospice home care: frequency of on-site nurse visits to assess quality of care and services
  • Clinical Diagnostic Laboratories: Medicare payments
  • Chronic pain management: Medicare payments
  • Ambulance services: Compliance with Medicare

For providers who accept Medicare Parts C and D, the following are areas of interest for 2017:

  • Medicare Part C payments for individuals after the date of death
  • Denied care in Medicare Advantage
  • Compounded topical drugs: questionable billing
  • Rebates related to drugs dispensed by 340B pharmacies

For providers who accept Medicaid, the following are areas of interest for 2017:

  • States’ MCO Medicaid drug claims
  • Personal Care Services: compliance with Medicaid
  • Medicaid managed care organizations (MCO): compliance with hold harmless requirement
  • Hospice: compliance with Medicaid
  • Medicaid overpayment reporting and collections: all providers
  • Medicaid-only provider types: states’ risk assignments
  • Accountable care

Caveat: The above-referenced areas of interest represent the published list. Do not think that if your service type is not included on the list that you are safe from government audits. If we have learned nothing else over the past years, we do know that the government can audit anyone anytime.

If you are audited, contact an attorney as soon as you receive notice of the audit. Because regardless the outcome of an audit – you have appeal rights!!! And remember, government auditors are more wrong than right (in my experience).

Key Medicaid Questions Post-Election

Disclosure: This is the opinion/facts from the Kaiser Family Foundation, not me. But I found this interesting. My opinion will be forthcoming.

Kaiser Family Foundation article:

Medicaid covers about 73 million people nationwide.  Jointly financed by the federal and state governments, states have substantial flexibility to administer the program under existing law.  Medicaid provides health insurance for low-income children and adults, financing for the safety net, and is the largest payer for long-term care services in the community and nursing homes for seniors and people with disabilities.  President-elect Trump supports repeal and replacement of the Affordable Care Act (ACA) and a Medicaid block grant. The GOP plan would allow states to choose between block grant and a per capita cap financing for Medicaid. The new Administration could also make changes to Medicaid without new legislation.

1. HOW WOULD ACA REPEAL AFFECT MEDICAID?

A repeal of the ACA’s coverage expansion provisions would remove the new eligibility pathway created for adults, increase the number of uninsured and reduce the amount of federal Medicaid funds available to states. The Supreme Court’s 2012 ruling on the ACA effectively made the Medicaid expansion optional for states. As of November 2016, 32 states (including the District of Columbia) are implementing the expansion.  The full implications of repeal will depend on whether the ACA is repealed in whole or in part, whether there is an alternative to the ACA put in place and what other simultaneous changes to Medicaid occur. However, examining the effects of the ACA on Medicaid provide insight into what might be at stake under a repeal.

What happened to coverage? The ACA expanded Medicaid eligibility to nearly all non-elderly adults with income at or below 138% of the federal poverty level (FPL) – about $16,396 per year for an individual in 2016. Since summer of 2013, just before implementation of the ACA expansions, through August 2016 about 16 million people have been added to Medicaid and the Children’s Health Insurance Program.  While not all of this increase is due to those made newly eligible under the ACA, expansion states account for a much greater share of growth. States that expanded Medicaid have had large gains in coverage, although ACA related enrollment has tapered.  From 2013 to 2016 the rate of uninsured non-elderly adults fell by 9.2% in expansion states compared to 6% in non-expansion states.

What happened to financing? The law provided for 100% federal funding of the expansion through 2016, declining gradually to 90% in 2020 and beyond. Expansion states have experienced large increases in federal dollars for Medicaid and have claimed $79 billion in federal dollars for the new expansion group from January 2014 through June 2015.  Studies also show that states expanding Medicaid under the ACA have realized net fiscal gains despite Medicaid enrollment growth initially exceeding projections in many states.

What other Medicaid provisions were in the ACA? The ACA required states to implement major transformations to modernize and streamline eligibility and enrollment processes and systems.  The ACA also included an array of new opportunities related to delivery system reforms for complex populations, those dually eligible for Medicare and Medicaid and new options to expand community-based long-term care services.

2. WHAT WOULD CHANGES IN THE FINANCING STRUCTURE MEAN FOR MEDICAID?

A Medicaid block grant or per capita cap policy would fundamentally change the current structure of the program. These policies are typically designed to reduce federal spending and fix rates of growth to make federal spending more predictable, but could eliminate the guarantee of coverage for all who are eligible and the guarantee to states for matching funds.  States would gain additional flexibility to administer their programs but reduced federal funding could shift costs and risk to beneficiaries, states, and providers.

How would it work? Block grants or per capita caps could be structured in multiple ways. Key policy decisions would determine levels of federal financing as well as federal and state requirements around eligibility, benefits, state matching requirements, and beneficiary protections. Previous block grant proposals have determined a base year financing amount for each state and then specified a fixed rate of growth for federal spending. Under a Medicaid per capita cap, the federal government would set a limit on how much to reimburse states per enrollee.  Payments to states would be based on per enrollee spending multiplied by enrollees. Spending under per capita cap proposals fluctuate based on changes in enrollment, but would not account for changes in the costs per enrollee beyond the growth limit.  To achieve federal savings, the per capita growth amounts would be set below the projected rates of growth under current law.

What are the key policy questions? Key questions in designing these proposals include: what new flexibility would be granted to states, what federal requirements would remain in place, what requirements would be in place for state matching funds, what is the base year and growth rates, and how would a potential repeal of the ACA work with a block grant proposal?  Given the lack of recent administrative data, setting a base year could be challenging.  These financing designs could lock in historic spending patterns and variation in Medicaid spending across states, resulting in states deemed “winners” or “losers.”

What are the implications? Capping and reducing federal financing for Medicaid could have implications for beneficiaries, states, and providers including: declines in Medicaid coverage or new financial barriers to care; limited funding for children (the majority of Medicaid enrollees) as well as the elderly and those with disabilities (populations that represent the majority of Medicaid spending); reduced funding for nursing homes and community-based long-term care (Medicaid is the largest payer of these services); reductions in federal revenues to states and Medicaid revenues for safety-net providers.  A block grant would not adjust to increased coverage needs during a recession.  Block grants or per capita caps would not adjust to changes in health care or drug costs or emergencies.  Recently Medicaid costs have increased due to high cost specialty drugs and Medicaid has been used to help combat the growing opioid crisis.

3. HOW COULD MEDICAID BE CHANGED THROUGH ADMINISTRATIVE ACTIONS?

The Administration could make changes to Medicaid without changes in legislation.

How can changes be made through guidance? A new administration can reinterpret existing laws through new regulations and new sub-regulatory guidance. While there are rules that govern how to change regulations, a new administration has more flexibility to issue or amend sub-regulatory guidance, such as state Medicaid director letters. Rules promulgated by the Obama administration could be rolled back or changed.

How can changes be made through waivers? Throughout the history of the Medicaid program, Section 1115 waivers have provided states an avenue to test and implement demonstrations that, in the view of the Health and Human Services Secretary, advance program objectives but do not meet federal program rules. Longstanding federal policy has required waivers to be budget neutral for the federal government.

What kind of waivers may be considered?  Seven states are using waivers to implement the ACA Medicaid expansion, including Indiana.  The Indiana waiver, implemented under then Governor Pence, includes provisions to impose: premiums on most Medicaid beneficiaries; a coverage lock-out period for individuals with incomes above the poverty level who fail to pay premiums; health savings accounts; and healthy behavior incentives.  The Obama administration has not approved waivers that would require work as a condition of Medicaid eligibility.  It also has denied Ohio’s waiver request to impose premiums regardless of income and exclude individuals from coverage until all arrears are paid on the basis that this would restrict or undermine coverage from existing levels.  Many other states are using waivers to implement payment and delivery system reforms.  The incoming administration could decide whether or not to renew existing waivers and can approve a new set of waivers to promote its own program goals.

Knicole Emanuel Interviewed on Recent Success: Behavioral Health Care Service Still Locked in Overbilling Dispute with State

Last Thursday, I was interviewed by a reporter from New Mexico regarding our Teambuilders win, in which an administrative judge has found that Teambuilders owes only $896 for billing errors. Here is a copy of an article published in the Santa Fe New Mexican, written by Justin Horwath:

Source: Behavioral health care service still locked in overbilling dispute with state

The true tragedy is that these companies, including Teambuilders, should not have been put out of business based on false allegations of fraud. Not only was Teambuilders cleared of fraud, but, even the ALJ agreed with us that Teambuilders does not owe $12 million – but a small, nominal amount ($896.35). Instead of having the opportunity to pay the $896.35 and without due process of law, Teambuilders was destroyed – because of allegations.

NC DHHS Fails: No Bid Contracts – No Bueno!

A recent State Auditor report found that DHHS “had approximately 2,500 non-competitively bid contracts with a value of approximately $2.4 billion between state fiscal year 2012 through 2014. The value of the no-bid contracts accounts for more than 32% of all contracts during the same period.”

No bid contracts are exactly that – the company awarded the contract received the contract without competition, or a bid process. Think of a no bid contract as a try out for a professional football team, but only one person is trying out. Generally, competition breeds better results because people try harder when they compete, rather than a solo act.

In contract bidding, rivalry also breeds a lower contract price. It’s only logical. If you know that other companies are submitting bids, you are going to submit the lowest number possible.

So how is DHHS allowed to award no bid contracts?

NC Statute dictates that the AG or the AG’s attorney shall review “all proposed contracts for supplies, materials, printing, equipment, and contractual services that exceed one million dollars…” as of June 27, 2011. See NCGS 114-8.3 as amended by Session Law 2011-326 and Session Law 2013-234.

But – Per 09 NCAC 06B .0901, “…competition may be limited or waived where a factual basis demonstrates support of one or more of the conditions set forth in Paragraph (b) of this Rule. If the procurement is within a purchasing agency’s general delegation, then the purchasing agency may waive competition in conformance with this Rule. If the procurement is greater than the agency’s delegation, requests for limited or waived competition shall be submitted to the State CIO for approval.”

Here are the exceptions found in 09 NCAC 06B.0901(b):

(b) Competition may be limited or waived under the following conditions:

  1. Competition is not available;
  2. A needed product or service is available from only one source of supply;
  3. Emergency action is indicated;
  4. Competition has been solicited but no responsive offers have been received;
  5. Standardization or compatibility is the overriding consideration;
  6. A donation stipulates the source of supply;
  7. Personal or particular professional services are required;
  8. A product or service is needed for a person with disabilities and there are overriding considerations for its use;
  9. Additional products or services are needed to complete an ongoing job or task;
  10. A particular product or service is desired for educational, training, experimental, developmental or research work;
  11. Equipment is already installed, connected and in service, and it is determined advantageous to purchase it;
  12. Items are subject to rapid price fluctuation or immediate acceptance;
  13. There is evidence of resale price maintenance or other control of prices or collusion on the part of persons or entities that thwarts normal competitive procedures unless otherwise prohibited by law;
  14. A purchase is being made and a price is available from a previous contract;
  15. The requirement is for an authorized cooperative project with another governmental unit(s) or a charitable non-profit organization(s); or
  16. A used item is available on short notice and subject to prior sale.

Did all the no bid contracts that DHHS procured between state fiscal year 2012 through 2014 to equal approximately $2.4 billion fit within 1 or more of the above referenced exceptions?

At least, according to the State Auditor – No.

Here are the key findings of the State Auditor’s Report:

  • Many no-bid contracts lacked required review and approval to protect state interests
  • Many no-bid contracts lacked documentation of negotiations to improve pricing or terms
  • Many no-bid contracts lacked adequate written justification to waive competition, which increases the risk of favoritism, unfavorable terms, and poor performance

It appears that DHHS failed this audit. Should we extrapolate?

Former mental health providers take fight over Medicaid funds to lawmakers

Loyal followers will remember the behavioral health care debacle that happened in New Mexico in June 2013. See blog and blog and blog. Basically, the State of New Mexico accused 15 behavioral health care companies of credible allegations of fraud and immediately froze all the companies’ Medicaid reimbursements. These 15 companies comprised 87.5% of New Mexico’s behavioral health providers. The companies were forced to close their doors. Hundreds of people lost their jobs. Hundreds of thousands of Medicaid recipients no longer received their medically necessary mental health and substance abuse services. It really was and is such a sad tragedy.

Now, more than 3 years later, the consequences of that payment suspension still haunts those providers. Once they were exonerated of fraud by the Attorney General, the single state entity, Human Services Department (HSD), is now accusing them – one by one – of alleged overpayments. These alleged overpayments are extrapolated. So 10 claims for $600 turns into $2 million. See blog.

I will leave Saturday the 30th of July to fly to Albuquerque, NM, to defend one of those behavioral health care providers in administrative court. The trial is scheduled to last two weeks.

Below is a great article from today’s The Santa Fe New Mexican about this:

By: Justin Horwath
ALBUQUERQUE — Executives of three former mental health agencies told state lawmakers Wednesday that they are still fighting the state’s determination that they overbilled Medicaid, and they are expected to repay millions of dollars, even after they have been cleared of criminal wrongdoing.

“Three years after the fact, and we are still plodding through this,” Shannon Freedle, who was an executive with the now-defunct Teambuilders Counseling Services in Santa Fe, told lawmakers on the Health and Human Services Committee during a hearing in Albuquerque. He was referring to allegations in June 2013 against 15 mental health providers that led to a statewide Medicaid service shake-up.

Along with Freedle, executives of the Santa Fe-based Easter Seals El Mirador and Albuquerque-based Hogares Inc. testified about the New Mexico Human Services Department’s continued claims of Medicaid overpayments long after the state Attorney General’s Office announced it found no evidence that any of the providers had committed fraud and many of the firms have shut down.

Some of the providers, meanwhile, say the state’s former Medicaid claims contractor, OptumHealth New Mexico, still owes them millions of dollars in back payments for treating patients before the shake-up. A group of behavioral health providers, including Teambuilders, Easter Seals and Hogares, filed a lawsuit against OptumHealth in state District Court in June. OptumHealth also faces at least three other lawsuits filed this year, accusing it of Medicaid fraud.

State Rep. Bill O’Neill, D-Albuquerque, called the Human Services Department’s actions “outrageous on so many levels.”

Rep. Christine Trujillo, also an Albuquerque Democrat, called for the resignation of Human Services Department Cabinet Secretary Brent Earnest and for “criminal charges to be pressed because this isn’t human error anymore — this is actually criminal behavior.” She is the second member of the committee to call for Earnest to step down.

No Republicans on the bipartisan committee were at the presentation.

Earlier Wednesday — at a news conference in Albuquerque promoting the Martinez administration’s efforts to tackle New Mexico’s drug abuse epidemic — Gov. Susana Martinez made a rare public comment about the decision in June 2013 to freeze Medicaid payments to the 15 mental health providers on allegations they had defrauded Medicaid, the state and federal program that provides health care to low-income residents. The state brought in five Arizona firms to replace the New Mexico providers, but three of them have since left the state, citing financial losses

Martinez said the decision to freeze the Medicaid payments “was recommended by the federal government.”

“But the patients were continued to be serviced and their services were not interrupted,” she said, “unless they decided on their own that they wanted to not continue.”

Asked to clarify Martinez’s statement about the federal government’s role in the Medicaid payment freeze, Michael Lonergan, the governor’s spokesman, said in an email that Martinez was “referencing federal law, which calls for the state to suspend payments and investigate any credible allegations of fraud.”

Federal law gave the state the option to freeze Medicaid payments but didn’t require it.

Kyler Nerison, a spokesman for the Human Services Department, defended the agency’s efforts to pursue the return of funds allegedly overpaid to the former Medicaid providers, saying in an email that the “Attorney General’s limited review of the agencies that had their payments suspended found thousands of cases of billing errors and other regulatory violations.

“Medicaid dollars should be used to help the people who need it most, and if these politicians want to turn a blind-eye to that kind of waste and abuse, that’s solely on them,” Nerison said. “The Human Services Department will continue working to recoup the misspent and overbilled Medicaid dollars as we continue to help more New Mexicans than ever before in both Medicaid and behavioral health services.”

Freedle said he will attend a Human Services Department hearing next week to contest the agency’s claim that Teambuilders owes the state $2.2 million. At issue is the agency’s use of extrapolation to determine the figure of the alleged overbilling. The agency pointed to 12 allegedly errant claims Teambuilders had made to OptumHealth requesting Medicaid reimbursements worth a total of $728.

But Freedle said the Human Services Department used overpayments found in a small sample of claims and multiplied the amount by 3,000 to determine overbilling over a longer period of time, without proving such billing errors occurred. An investigation by the Attorney General’s Office, which found no evidence of criminal fraud, also found a smaller error rate.

Patsy Romero, CEO of Easter Seals El Mirador, and Nancy Jo Archer, who was the CEO of Hogares, broke down in tears as they described the Human Services Department’s “fair hearing process.”

“That’s really and truly an oxymoron,” Archer said.

Medicare Fraud: Do MCOs Have Accountability Too?

Dr. Isaac Kojo Anakwah Thompson, a Florida primary care physician, was sentenced in July 2016 to 4 years in prison and a subsequent two years of supervised release. Dr. Thompson pled guilty to health care fraud.  He was further ordered to pay restitution in the amount of $2,114,332.33. Ouch!! What did he do?

According to the Department of Justice, Dr. Thompson falsely reported that 387 of his clients suffered from ankylosing spondylitis when they did not.

Question: How does faking a patient’s disease make a physician money???

Answer: Hierarchal condition category (HCC) coding. Wait, what?

Basically, Medicare Advantage assigns HCC coding to each patient depending on the severity of their illnesses. Higher HCC scores equals substantially higher monthly capitation payments from Medicare to the managed care organization (MCO). In turn, the MCO will pay physicians more who have more extremely sick patients (higher HCC codes).

Ankylosing spondylitis is a form of arthritis that causes inflammation and damage at the joints; eventually, the inflamed spinal joints can become fused, or joined together so they can’t move independently. It’s a rare disease, affecting 1 in 1000 people. And, importantly, it sports a high HCC code.

In this case, the Office of Inspector General (OIG) found it odd that, between 2006-2010, Dr. Thompson diagnosed 387 Medicare Advantage beneficiaries with ankylosing spondylitis and treated them with such rare disease. To which, I say, if you’re going to defraud the Medicare system, choose common, fabricated diseases (kidding – it’s called sarcasm – I always have to add a disclaimer for people with no humor).

According to the Department of Justice, none or very few of Dr. Thompson’s 387 consumers actually had ankylosing spondylitis.

My issue is as follows: Doesn’t the managed care organization (MCO) share in some of the punishment? Shouldn’t the MCO have to repay the financial benefit it reaped from Dr. Thompson?? Shouldn’t the MCO have a duty to report such oddities?

Let me explain:

In Florida, Humana acted as the MCO. Every dollar that Dr. Thompson received was funneled through Humana. Humana would pay Dr. Thompson a monthly capitation fee from Medicare Advantage based on his patient’s hierarchal condition category (HCC) coding. Increasing even just one patient’s HCC code means more bucks for Dr. Thompson. Remember, according to the DOJ, he increased 387 patients’ HCC codes.

Dr. Thompson reported these diagnoses to Humana, which in turn reported them to Medicare. Consequently, Medicare paid approximately $2.1 million in excess capitation fees to Humana, approximately 80% of which went to Dr. Thompson.

In this case, it is reasonable to expect that Humana had knowledge that Dr. Thompson reported abnormally high HCCs for his patients. For comparison, ankylosing spondylitis has an HCC score of 0.364, which is more than an aortic aneurysm and three times as high as diabetes. Plus, look at the amount of money that the MCO paid Dr. Thompson. Surely, it appeared irregular.

What, if anything, is the MCO’s duty to report physicians with an abnormally high number of high HCC codes? If you have knowledge of someone committing a crime and you do nothing, isn’t that called aiding and abetting?

With the publication of the Yates memo, I expect to see CMS holding MCOs and other state agencies accountable for the actions of its providers. Not to say that the MCOs should actively, independently investigate Medicare/caid fraud, but to notify the Human Services Department (HSD) if abnormalities exist, especially if as blatant as one doctor with 387 patients suffering from ankylosing spondylitis.

Medicare/Caid Audits: Urine Testing Under Fire!!

I have blogged about peeing in a cup before…but we will not be talking about dentists in this blog. Instead we will be discussing pain management physicians and peeing in a cup.

Pain management physicians are under intense scrutiny on the federal and state level due to increased urine testing. But is it the pain management doctors’ fault?

When I was little, my dad and I would play catch with bouncy balls. He would always play a dirty little trick, and I fell for it every time. He would toss one ball high in the air. While I was concentrating on catching that ball, he would hurl another ball straight at me, which, every time, smacked into me – leaving me disoriented as to what was happening. He would laugh and  laugh. I was his Charlie Brown, and he was my Lucy. (Yes, I have done this to my child).

The point is that it is difficult to concentrate on more than one thing. When the Affordable Care Act (ACA) came out, it was as if the federal government wielded 500, metaphoric, bouncy balls at every health care provider. You couldn’t comprehend it in its entirety. There were different deadlines for multiple changes, provider requirements, employer requirements, consumer requirements…it was a bloodbath! [If you haven’t seen the brothers who trick their sister into thinking it’s a zombie apocalypse, you have to watch it!!]

A similar “metaphoric ball frenzy” is occurring now with urine testing, and pain management physicians make up the bulk of prescribed urine testing. The urine testing industry has boomed in the past 4-5 years. This could be caused by a number of factors:

  • increase use of drugs (especially heroine and opioids),
  • the tightening of regulations requiring physicians to monitor whether patients are abusing drugs,
  • increase of pain management doctors purchasing mass-spectrometry machines and becoming their own lab,
  • simply more people are complaining of pain, and
  • the pharmaceutical industry’s direct-to-consumer advertising (DTCA).

Medicare’s spending on 22 high-tech tests for drugs of abuse hit $445 million in 2012, up 1,423% in five years. “In 2012, 259 million prescriptions were written for opioids, which is more than enough to give every American adult their own bottle of pills.” See article.

According to the American Association of Pain Management, pain affects more Americans than diabetes, heart disease and cancer combined. The chart below depicts the number of chronic pain sufferers compared to other major health conditions.

pain

In the world of Medicare and Medicaid, where there is profit being made, the government comes a-knockin’.

But should we blame the pain management doctors if recent years brought more patients due to increase of drug use? The flip side is that we do not want doctors ordering urine tests unnecessarily. But aren’t the doctors supposed to the experts on medical necessity??? How can an auditor, who is not a physician and never seen the patient opine to medical necessity of a urine test?

The metaphoric ball frenzy:

There are so many investigations into urine testing going on right now.

Ball #1: The machine manufacturers. A couple of years ago, Carolina Liquid Chemistries (CLC) was raided by the federal government. See article. One of the allegations was that CLC was misrepresenting their product, a urinalysis machine, which caused doctors to overbill Medicare and Medicaid. According to a source, the federal government is still investigating CLC and all the physicians who purchased the urinalysis machine from CLC.

Ball #2: The federal government. Concurrently, the federal government is investigating urine testing billed to Medicare. In 2015, Millennium Health paid $256 million to resolve alleged violations of the False Claims Act for billing Medicare and Medicaid for medically unnecessary urine drug and genetic testing. I wonder if Millennium bought a urinalysis machine from CLC…

Ball #3: The state governments. Many state governments are investigating urine testing billed to Medicaid.  Here are a few examples:

New Jersey: July 12, 2016, a couple and their diagnostic imaging companies were ordered to pay more than $7.75 million for knowingly submitting false claims to Medicare for thousands of falsified diagnostic test reports and the underlying tests.

Oklahoma: July 10, 2016, the Oklahoma attorney general’s office announced that it is investigating a group of laboratories involved in the state’s booming urine testing industry.

Tennessee: April 2016, two lab professionals from Bristol, Tenn., were convicted of health care fraud in a scheme involving urine tests for substance abuse treatments.

If you are a pain management physician, here are a few recommendations to, not necessarily avoid an audit (because that may be impossible), but recommendations on how to “win” an audit:

  1. Document, document, document. Explain why the urine test is medically necessary in your documents. An auditor is less likely to question something you wrote at the time of the testing, instead of well after the fact.
  2. Double check the CPT codes. These change often.
  3. Check your urinalysis machine. Who manufactured it? Is it performing accurately?
  4. Self-audit
  5. Have an experienced, knowledgeable, health care attorney. Do not wait for the results of the audit to contact an attorney.

And, perhaps, the most important – Do NOT just accept the results of an audit. Especially with allegations involving medical necessity…there are so many legal defenses built into regulations!! You turn around and throw a bouncy ball really high – and then…wallop them!!