Category Archives: Performance audit

Knicole Emanuel Featured on Hospital Finance Podcast – Medicare Appeal Backlog (Legal Update)

On September 6, 2017, I appeared on the Besler Hospital Finance Podcast regarding:

Update on the Medicare appeals backlog [PODCAST]

Feel free to listen to the podcast, download it, and share with others!

 

Merger of Cardinal and Eastpointe: Will [Should] It Go Through?

What if, right before your wedding day, you discover a secret about your betrothed that changes the very fabric of your relationship. For example, you find out your spouse-to-be is actually gay or a heroin addict. Not that there is anything bad about being gay or a heroin addict, but these are important facts to know and accept [or reject] about your future mate prior to the ringing of the wedding bells. The same is true with two companies that are merging to become one. The merged entity will be liable for any secrets either company is keeping. In this hypothetical, Eastpointe just found out that Cardinal has been cheating – and the wedding is set for July 1!

Cardinal Innovations and Eastpointe, two of our managed care organizations (MCO) charged with managing Medicaid behavioral health care funds plan to merge, effective July 1, 2017. Together the monstrous entity would manage Medicaid behavioral funds for 32 counties.

Last week the State Auditor published a scathing Performance Audit on Cardinal. State Auditor Beth Wood found more than $400,000 in “unreasonable” expenses, including corporate retreats at a luxury hotel in Charleston, S.C.; chartering planes to fly to Greenville, Rocky Mount and Smithfield; providing monthly detailing service for the CEO’s car; and purchasing alcohol, private and first-class airline tickets and other items with company credit cards.

Cardinal’s most significant funding is provided by Medicaid. Funding from Medicaid totaled $567 million and $587 million for state fiscal years 2015 and 2016, respectively. In other words, the State Auditor found that Cardinal is using our tax dollars – public money obtained by you and me – for entertainment, while concurrently, denying behavioral health care services and terminating providers from its catchment area. Over 30% of my salary goes to taxes. I do not accept Cardinal mismanaging my hard earned money – or anyone else’s. It is unacceptable!

“The unreasonable spending on board retreats, meetings, Christmas parties and travel goes against legislative intent for Cardinal’s operations, potentially resulting in the erosion of public trust,” the audit states.

Eastpointe, however, is not squeaky clean.

A June 2015 Performance Audit by the State Auditor found that its former chief financial officer Bob Canupp was alleged to have received kickbacks worth a combined $547,595. It was also alleged that he spent $143,041 on three agency vehicles without a documented business purpose. Canupp, chief executive Ken Jones and other employees also were determined to have used Eastpointe credit cards to make $157,565 in “questionable purchases.” There has not been an audit, thus far, on Eastpointe’s management of public funds. One can only hope that the results of the Cardinal audit spurs on Beth Wood to metaphorically lift the skirts of all the MCOs.

Given the recent audit on Cardinal, I would like to think that Eastpointe is hesitant to merge with such an entity. If a provider had mismanaged Medicaid funds like the State Auditor found that Cardinal did, without question, the authorities would be investigating the provider for Medicaid fraud, waste, and abuse. Will Eastpointe continue with the merger despite the potential liability that may arise from Cardinal’s mismanagement of funds? Remember, according to our State Auditor, “Cardinal could be required to reimburse the State for any payroll expenditures that are later disallowed because they were unauthorized.” – Post-payment review!!

Essentially, this is a question of contract.

We learned about the potential merger of Cardinal and Eastpointe back in January 2017, when Sarah Stroud, Eastpointe’s chief executive, announced in a statement that the agency plans to negotiate a binding agreement within weeks. The question is – how binding is binding?

Every contract is breakable, but there will be a penalty involved in breaching the contract, usually monetary. So – fantastic – if Eastpointe does back out of the merger, maybe our tax dollars that are earmarked for behavioral health care services for Medicaid recipients can pay the penalty for breaching the contract.

Another extremely troubling finding in Cardinal’s State Audit Report is that Cardinal is sitting on over $70 million in its savings account. The audit states that “[b]ased on Cardinal’s accumulated savings, the Department of Health and Human Services (DHHS) should consider whether Cardinal is overcompensated. For FY 2015 and 2016, Cardinal accumulated approximately $30 million and $40 million, respectively, in Medicaid savings. According to the Center for Medicaid and Medicare Services (CMS), Cardinal can use the Medicaid savings as they see fit.”

As Cardinal sees fit??!!?! These are our tax dollars. Cardinal is not Blue Cross Blue Shield. Cardinal is not a private company. Who in the world thought it a good idea to allow any MCO to use saved money (money not spent on behavioral health care services for Medicaid recipients) to use as it sees fit. It is unconscionable!

Because of my blog, I receive emails almost daily from mothers and fathers of developmentally disabled or mentally handicapped children complaining about Cardinal’s denials or reductions in services. I am also told that there are not enough providers within the catchment area. One mother’s child was approved to receive 16 hours of service, but received zero services because there was no available provider. Another family was told by an MCO that the family’s limit on the amount of services was drastically lower than the actual limit. Families contact me about reduced services when the recipient’s condition has not changed. Providers contact me about MCO recoupments and low reimbursement rates.

Cardinal, and all the MCOs, should be required to use our tax dollars to ensure that enough providers are within the catchment areas to provide the medically necessary services. Increase the reimbursement rates. Increase necessary services.

According to the report, “Cardinal paid about $1.9 million in FY 2015 employee bonuses and $2.4 million in FY 2016 employee bonuses. The average bonus per employee was about $3,000 in FY 2015, and $4,000 in FY 2016. The bonuses were coded to Cardinal’s administrative portion of Medicaid funding source in both years.” Cardinal employs approximately 635 employees.

Good to know that Cardinal is thriving. Employees are overpaid and receive hefty bonuses. Executives are buying alcohol, private and first-class airline tickets and other items with company credit cards. It hosts lavish Christmas parties and retreats. It sits on a $70 million savings account. While I receive reports from families and providers that Medicaid recipients are not receiving medically necessary services, that there are not enough providers within the catchment area to render the approved services, that the reimbursement rates for the services are too low to attract quality providers, that more expensive services are denied for incorrect reasons, and that all the MCOs are recouping money from providers that should not be recouped.

If I were Eastpointe, I would run, regardless the cost.

NC State Auditor Finds Cardinal Expenditures Unreasonable!!(Finally) #Wastedtaxdollars

The NC State Auditor Beth Wood released an audit report on Cardinal Innovations yesterday, May 17, 2017. Here are the key findings. For the full report click here.

BACKGROUND

Cardinal is a Local Management Entity/Managed Care Organization (LME/MCO) created by North Carolina General Statute 122C. Cardinal is responsible for managing, coordinating, facilitating and monitoring the provision of mental health, developmental disabilities, and substance abuse services in 20 counties across North Carolina. Cardinal is the largest of the state’s seven LME/MCOs, serving more than 850,000 members. Cardinal has contracted with DHHS to operate the managed behavioral healthcare services under the Medicaid waiver through a network of licensed practitioners and provider agencies.

KEY FINDINGS

• Cardinal spent money exploring strategic opportunities outside of its core mission

• $1.2 million in CEO salaries paid without proper authorization

• Cardinal’s unreasonable spending could erode public trust

KEY RECOMMENDATIONS

• Cardinal should consult and collaborate with members of the General Assembly before taking any actions outside of its statutory boundaries

• The Office of State Human Resources should immediately begin reviewing and approving Cardinal CEO salary adjustments

• The Department of Health and Human Services should determine whether any Cardinal CEO salary expenditures should be disallowed and request reimbursement as appropriate

• Cardinal should implement procedures consistent with other LME/MCOs, state laws, and federal reimbursement policy to ensure its spending is appropriate for a local government entity

My favorite? Recoup CEO salaries. Maybe we should extrapolate.

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).

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?

The Yates Memo: It May Be the Second Coming for Individual Executives

The Yates memo? Sadly, we aren’t talking about William Butler Yates, who is one of my favorite poets:

TURNING and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
Surely some revelation is at hand;
Surely the Second Coming is at hand…Part of The Second Coming

Ok, so maybe it is a little melodramatic to compare the Yates memo from the Office of the Deputy Attorney General to the end of the world, the drowning of innocence, and The Second Coming, but I made analogies in past blogs that had stretched and, dare I say, hyberbolized the situation.

What is the Yates memo?

The Yates memo is a memorandum written by Sally Quillian Yates, Deputy Attorney General for the U.S. Dept. of Justice, dated September 9, 2015.

It basically outlines how federal investigations for corporate fraud or misconduct should be conducted  and what will be expected from the corporation getting investigated. It was not written specifically about health care providers; it is a general memo outlining the investigations of corporate wrongdoing across the board. But it is germane to health care providers.

By far the most scary and daunting item discussed within the Yates memo is the DOJ’s interest in indicting individuals within corporations as well as the corporate entities itself, i.e., the executives…the management. Individual accountability.

No more Lehman Brothers fallout with former CEO Dick Fuld leaving the catastrophe with a mansion in Greenwich, Conn., a 40+ acre ranch in Sun Valley, Idaho, as well as a five-bedroom home in Jupiter Island, Fla.  Fuld may have or may not have been a player in the downfall of Lehman Brothers. But the Yates Memo was not published back in 2008.

The Yates Memo outlines 6 steps to strengthen audits for corporate compliance:

  1. To be eligible for any cooperation credit, corporations must provide to the DOJ all relevant facts about individuals involved in corporate misconduct.
  2. Both criminal and civil corporate investigations should focus on individuals from the inception of the investigation.
  3. Criminal and civil attorneys handling corporate investigations should be in routine communication with one another.
  4. Absent extraordinary circumstances, no corporate resolution will provide protection from criminal or civil liability for any individuals.
  5. Corporate cases should not be resolved without a clear plan to resolve related individual cases before the statute of limitations expires and declinations as to individuals in such cases must be memorialized.
  6. Civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.

So why write about now – over 6 months after it was disseminated?

First, since its dissemination, a few points have been clarified that were otherwise in question.

About a month after its publication, U.S. Assistant Attorney General Leslie Caldwell emphasized the Yates memo’s requirement that corporations must disclose all relevant facts regarding misconduct to receive cooperation credit. Caldwell went so far to say that companies must affirmatively seek relevant facts regarding misconduct.

For example, Hospital X is accused of Medicare fraud, waste, and abuse (FWA) in the amount of $15 million. The Yates memo dictates that management at the hospital proactively investigate the allegations and report its findings to the federal government. The memo mandates that the hospital “show all its cards” and turn itself in prior to making any defense.

The problem here is that FWA is such a subjective determination.

What if a hospital bills Medicare for inplantable cardioverter defibrillator, or ICD, for patients that had coronary bypass surgery or angioplasty within 90 days or a heart attack within 40 days? What if the heart attack was never documented? What if the heart attack was so minor that it lasted under 100 milliseconds?

The Medicare National Coverage Determinations are so esoteric that your average Medicare auditor could very well cite a hospital for billing for an ICD even when the patient’s heart attack lasted under 100 milliseconds.

Yet, according to the Yates memo, the hospital is required to present all relevant facts before any defense. What if the hospital’s billing person is over zealous in detecting mis-billings? The hospital could very well have a legal defense as to why the alleged mis-billing is actually compliant. What about a company’s right to seek counsel and defend itself? The Yates memo may require the company to turn over attorney-client privilege.

The second point that has been clarified since the Yates’ memo’s publication came from Yates herself.

Yates remarks that there will be a presumption that the company has access to identify culpable individuals  unless they can make an affirmative showing that the company does not have access to it or are legally prohibited from producing it.

Why should this matter? It’s only a memo, right?

Since its publication, the DOJ codified it into the revised U.S. Attorneys’ Manual, including the two clarifying remarks. Since its inception, the heads of companies have been targeted.

A case was brought against David Bostwick, the founder, owner and chief executive officer of Bostwick Laboratories for  allegedly provided incentives to treating physicians in exchange for referrals of patients who would then be subjected to these tests.

When the pharmaceutical company Warner Chilcott was investigated for health care fraud prosecutors also went after W. Carl Reichel, the former president, for his alleged involvement in the company’s kickback scheme.

Prior to the Yates’ memo, it was uncommon for health care fraud investigations to  involve criminal charges or civil resolutions against individual executives.

The Second Coming?

It may feel that way to executives of health care companies accused of fraud, waste, and abuse.

The Grim Reaper – Prepayment Review!

State Auditor Finds Robeson County School NOT Using Medicaid Money

Our State Auditor Beth Wood’s most recent audit finds that The Public Schools of Robeson County failed to spend approximately $1 million in Medicaid dollars intended for special needs children in schools!!

See audit report.

“The Public Schools of Robeson County (School District) did not use approximately $1 million per year in Medicaid administrative reimbursements to provide required services to students with disabilities. The School District missed this opportunity to better serve students with disabilities because it was unaware of a contractual requirement to use the Medicaid reimbursements to provide required services.

Over the last three years, the School District reported that it used $26,780 out of $3.16 million in Medicaid administrative reimbursements to provide services to students with disabilities.

The amounts reportedly spent each year are as follows:

• $ 8,969 out of $1,010,397 (0.89%) in 2013

• $12,043 out of $872,299 (1.38%) in 2012

• $ 5,768 out of $1,278,519 (0.45%) in 2011”

The question that I have after reading the audit report is…WHERE IS THE MONEY?

Was this $1 million given to the school system and spent on items other than services for children? Is the school district sitting on a surplus of money that was unspent? Or was this amount budgeted to the school system and the remainder or unspent money is sitting in our state checking account?

To me, it is relatively unclear from the audit report which of the above scenarios is an accurate depiction of the facts.  If anyone knows, let me know.

OIG Finds Questionable Billing! California Medicaid Dentists: Expect Withholdings or Other Penalties!

Currently, dentists who accept Medicaid are ripe for pickings as targets for regulatory audits from both the federal and state governments. Actually, this is true for any provider that accepts Medicaid. It just happens that, recently, I have noticed an uptick in dental audits both in North Carolina and nationwide. Some dentists, who accept pregnancy Medicaid, may even bear the burden of determining pregnancy prior to a teeth cleaning…however, that is a topic for another day.  Although, I tell you what, if my dentist asked whether I were pregnant prior to cleaning my teeth, he may have an abnormally red cheek the remainder of the day and I may join Crossfit.

Moving on….

Generally, dentists tend to not accept Medicaid. The reimbursement rates barely cover overhead. Add high regulatory compliance requirements, the likelihood of undergoing audits, and the government’s robust and zealous desire to tackle fraud, waste, and abuse (FWA), and it is no wonder why most dentists opt to not accept Medicaid. See blog. And blog.

Those dentists (and other providers) that do make the decision to accept Medicaid, these brave and noble souls, are subject to onerous audits; the result of a recent California audit is probably sending shock waves through the California dental community.

335 dental providers in California have been targeted by OIG as having questionable billing issues. Sadly, this is only the beginning for these 335 providers. Now the state will audit the providers, and these 335 providers may very well become the subject of a payment withhold in the near future.

What will happen next?

I will look into my crystal ball, otherwise known as experience, and let you know.

First, the Office of Inspector General (OIG) recently published a report called: “QUESTIONABLE BILLING FOR MEDICAID PEDIATRIC DENTAL SERVICES IN CALIFORNIA.

One can only imagine by the title that OIG found alleged questionable billing. Otherwise the title may have been, “A Study into Medicaid Billing for Medicaid Pediatric Dental Services,” instead of “Questionable Billing.” With such a leading title, a reader knows the contents before reading one word.

What is questionable billing?

Importantly, before addressing what IS questionable billing, what is NOT questionable billing? Questionable billing is not abhorrent billing practices. Questionable billing is not wasteful billing or abusive billing. And questionable billing is certainly not fraudulent billing. That is not to say that some of these questionable billing will be investigated and, perhaps, fall into one the aforementioned categories. But not yet. Again, these dentists have a long journey ahead of them.

In this context, questionable billing seems to mean that the OIG report identifies dentists who perform a higher number of services per day. OIG analyzed rendering dental providers’ NPI numbers to determine how many services each rendering provider was providing per day. Then OIG compared the average Medicaid payment per kid, number of services per day, and number of services provided per child per visit. OIG determined a “threshold” number for each category and cited questionable billing practices for those dentists that fell egregiously outside the thresholds. Now, obviously, this is a simplistic explanation for a more esoteric procedure, but the explanation is illustrative.

This study of California Medicaid dentists is not first dental study OIG has undertaken. Recently, OIG studied Medicaid dentists in New York, Louisiana, and Indiana. What stands out in the California Medicaid dental study is the volume of dentists involved in the study. In Indiana, OIG reviewed claims for 787 dentists; in New York it reviewed claims for 719 dentists, and in Louisiana, OIG studied 512 dentists’ claims, all of whom rendered services to over 50 Medicaid children.

In California, OIG studied 3,921 dentists.

Why such a difference?

Apparently, California has more dentists than the other three states and more dentists who accept Medicaid. So, if you are Medicaid dentists, apparently, there is more competition in California.

Juxtapose that, in California, in 2012, only 3 periodontists, 3 prosthodontists, 2 endodontists, and 1 oral pathologist provided services to 50 or more children with Medicaid in California.

Going back to the audit findings…

OIG considered dentists who exceeded its identified threshold for one or more of the seven measures to have questionable billing.

The result?

OIG identified 329 general dentists and 6 orthodontists out of 3,921 providers as having with questionable billing. But these findings are only the beginning of what will, most likely, become a long and tedious legal battle for these 335 providers. Lumping together so many dentists and claiming questionable billing practices will inevitably include many dentists who have done nothing irregular. Many other dentists, will have engaged in unintentional billing errors and may owe recoupments. But I foresee a very small number of these dentists to actually have committed fraudulent billing.

Here is an example found in the OIG’s report, OIG identified that 108 dentists provided stainless steel crowns to 18% of the children served by these dentists, compared to an average of only 5% of children receiving stainless steel crowns by those served by all general dentists (non-Medicaid).

Another example is that 98 dentists provided pulpotomies to 18% of the children, while the statewide percentage is 5% to undergo pulpotomies.

Do these examples show that 108 dentists providing stainless steel crowns and that 98 dentists providing pulpotomies are improperly billing?

Of course not.

It is only logical that dentists who accept Medicaid would have a significantly higher number of pulpotomies compared to dentists who service the privately insured. Usually, although not always, a Medicaid recipient will have more issues with their teeth than those privately insureds. In order to qualify for Medicaid, the family must live in poverty (some more than others with the expansion of Medicaid in some states). Some of kids in this population will have parents who do not harp on the importance of dental hygiene, thus allowing many kids in this population to have decay in their teeth. Obviously, this is a generalization; however, I am confident that many studies exist to back up this generalization.

Therefore, if you accept  my generalization, it makes sense that Medicaid dentists perform more pulpotomies than private insurance dentists.

And stainless steel crowns go hand in hand with pulpotomies. Unless you extract the tooth after the removal of the decay, you will need to provide a stainless steel crown to protect the tooth from future damage.

What will happen next?

OIG admits in its report that “our findings do not prove that providers either billed fraudulently or provided medically unnecessary services, providers with extreme billing patterns warrant further scrutiny.”

Which is precisely what will happen next…”further scrutiny”…

The OIG report recommends to California that it:

• Increase its monitoring of dental providers to identify patterns of questionable billing
• Closely monitor billing by providers in dental chains
• Review its payment processes for orthodontic services
• Take appropriate action against dental providers with questionable billing

It is that last recommendation, taking appropriate action, which will determine the future course for these 335 Medicaid providers. Because, as many of you know if you have followed my blog, the California Department of Health Care Services (DHCS) has a large toolbox with a considerable amount of tools for which it may yield its power against these providers…right or wrong. The same goes for all state Medicaid agencies. When it comes to a Medicaid provider and a Medicaid state agency, there is no balance of powers, in fact, there is only one power. Instead the scales of justice have one arm on the ground and the other raised in the air. There is an imbalance of power, unless you arm yourself with the right allies.

Possible future actions by DHCS:

• Payment suspensions
• Withholds of all reimbursements
• Post payment review
• Prepayment review

And combinations thereof.

DCHS stated that “it will review the dental providers referred by OIG and will determine by December 2015 what appropriate action may be warranted. Should there exist any provider cases not previously evaluated by existing program monitoring efforts, DHCS will take appropriate action through the available channels.”

First, December 2015 is a short timeframe for DCHS to audit 335 providers’ records and determine the proper course of action. So, expect a vendor for DCHS to be hired for this task. Also, expect that an audit of 335 providers in 7 months will have flaws.

These California dentists and orthodontists need to arm themselves with defense tools. And, quickly. Because it is amazing how fast 7 months will fly by!!

The report also states that OIG will be undertaking a study in the future to determine access to dental care issues.  I will be interested in the result of that study.

These possible penalties that I already enumerated above are not without defenses.

These 335 CA Medicaid dental providers have administrative remedies to prevent these possible penalties.   In other words, these 335 CA Medicaid dental providers do not have to take this lying down. Even though it appears that an imbalance of power exists between the state agency and the providers, these providers have appeal rights.

The second that any of these providers receive correspondence from DCHS, it is imperative that the provider contact its attorney.

Remember, some appeals have very short windows for which to appeal.  Do not miss an appeal deadline!!

State Auditor Finds Taxpayer Waste at OMMISS!!!!

New State Auditor report investigates the Office of Medicaid Management Information Systems Services (OMMISS) within the North Carolina Department of Health and Human Services (DHHS).

With DHHS’ emphasis on detecting health care providers’ fraud, waste, and abuse (FWA) across the state, it seems ironic that its own agency is deemed guilty of wastefulness by our State Auditor.  What’s that about glass houses……??

What exactly does OMMISS do?  Well, for one, OMMISS works with Computer Sciences Corporation (CSC) regarding NCTracks.  We all know how wonderfully NCTracks has operated since inception….See blog. And blog.

State Auditor Beth Wood finds:

KEY FINDINGS

 At least $1.6 million wasted through excessive wages and commissions, unjustified overtime, and
holiday pay to ineligible employees

 OMMISS Director engaged in or allowed nepotism

 OMMISS Director received unauthorized compensatory time that may result in inflated retirement
benefits

 Reports to General Assembly omitted at least $260,000 of overtime and compensatory time

 Lack of adequate oversight of OMMISS despite findings in prior audit reports