Category Archives: DMA Clinical Policies

Have an Inkling of a Possible Overpayment, You Must Repay Within 60 Days, Says U.S. District Court!

You are a health care provider.  You own an agency.  An employee has a “hunch” that…

maybe…

perhaps….

your agency was overpaid for Medicare/caid reimbursements over the past two years to the tune of $1 million!

This employee has been your billing manager for years and you trust her…but…she’s not an attorney and doesn’t have knowledge of pertinent legal defenses. You are concerned about the possibility of overpayments, BUT….$1 million? What if she is wrong?  That’s a lot of money!

According to a recent U.S. District Court in New York, you have 60 days to notify and refund the government of this alleged $1 million overpayment, despite not having a concrete number or understanding whether, in fact, you actually owe the money.

Seem a bit harsh? It is.

With the passage of the Affordable Care Act (ACA) on March 23, 2010, many new regulations were implemented with burdensome requirements to which health care providers are required to adhere.  At first, the true magnitude of the ACA was unknown, as very few people actually read the voluminous Act and, even fewer, sat to contemplate the unintentional consequences the Act would present to providers. For example, I daresay that few, if any, legislators foresaw the Draconian effect from changing the word “may” in 42 CFR 455.23 to “must.” See blog and blog and blog.

Another boiling frog in the muck of the ACA is the 60-Day Refund Rule (informally the 60-day rule).

What is the 60-Day Refund Rule?

In 2012, CMS proposed the “60-day Refund Rule,” requiring Medicare providers and suppliers to repay Medicare overpayments within 60 days of the provider or supplier identifying the overpayment.  Meaning, if you perform a self audit and determine that you think that you were overpaid, then you must repay the amount within 60 days or face penalties.

If I had a nickel for each time a clients calls me and says, “Well, I THINK I may have been overpaid, but I’m not really sure,” and, subsequently, I explained how they did not owe the money, I’d be Kardashian rich.

It is easy to get confused. Some overpayment issues are esoteric, involving complex eligibility issues, questionable duplicity issues, and issues involving “grey areas” of “non”-covered services.  Sometimes a provider may think he/she owes an overpayment until he/she speaks to me and realizes that, by another interpretation of the same Clinical Coverage Policy that, in fact, no overpayment is owed. To know you owe an overpayment, generally, means that you hired someone like me to perform the self audit.  From my experience, billing folks are all too quick to believe an overpayment is owed without thinking of the legal defenses that could prevent repayment, and this “quick to find an overpayment without thinking of legal defenses” is represented in Kane ex rel. United States et al. v. Healthfirst et al., the lawsuit that I will be discussing in this blog.  And to the billings folks’ credit, you cannot blame them.  They don’t want to be accused of fraud. They would rather “do the right thing” and repay an overpayment, rather than try to argue that it is not due.  This “quick to find an overpayment without thinking of legal defenses” is merely the billing folks trying to conduct all work “above-board,” but can hurt the provider agency financially.

Nonetheless, the 60-day Refund Rule is apathetic as to whether you know what you owe or whether you hire someone like me.  The 60-Day Refund Rule demands repayment to the federal government upon 60-days after your “identification” of said alleged overpayment.

Section 1128(d)(2) of the Social Security Act states that:

“An overpayment must be reported and returned under paragraph (1) by the later of— (A) the date which is 60 days after the date on which the overpayment was identified; or (B) the date any corresponding cost report is due, if applicable.”

A recent case in the U.S. District Court of New York has forged new ground by denying a health care providers’ Motion to Dismiss the U.S. government’s and New York State’s complaints in intervention under the False Claims Act (FCA).  The providers argued that the 60-day rule cannot start without a precise understanding as to the actual amount of the overpayment. Surely, the 60-day rule does not begin to run on the day someone accuses the provider of a possible overpayment!

My colleague, Jennifer Forsyth, recently blogged about this very issue.  See Jennifer’s blog.

Basically, in Kane ex rel. United States et al. v. Healthfirst et al., three hospitals provided care to Medicaid patients. Due to a software glitch [cough, cough, NCTracks] and due to no fault of the hospitals, the hospitals received possible overpayments.  The single state entity for Medicaid in New York questioned the hospitals in 2010, and the hospitals took the proactive step of tasking an employee, Kane, who eventually became the whistleblower, to determine whether, if, in fact, the hospital did receive overpayments.

At this point, arguably, the hospitals were on notice of the possibility of overpayments, but had not “identified” such overpayments per the 60-day rule.  It was not until Kane made preliminary conclusions that the hospitals were held to have “identified” the alleged overpayments.  But very important is the fact that the Court held the hospitals liable for having “identified” the alleged overpayments prior to actually knowing the veracity of the preliminary findings.

Five months after being tasked with the job of determining any overpayment, Kane emails the hospital staff her findings that, in her opinion, the hospitals had received overpayments totaling over $1 million for over 900 claims.  In reality, Kane’s findings were largely inaccurate, as approximately one-half of her alleged findings of overpayments were actually paid accurately.  Despite the inaccurate findings, the Complaint that Kane filed as the whistleblower (she had been previously fired, which may or may not have contributed to her willingness to bring a whistleblower suit), alleged that the hospitals had a duty under the 60-day rule to report and refund the overpayments, even though there was no certainty as to whether the findings were accurate. And the Court agreed with Kane!

Even more astounding, Kane’s email to the hospitals’ management that contained the inaccurate findings contained phrases that would lead one to believe that the findings were only preliminary:

  • “further analysis would be needed to confirm his findings;” and
  • the spreadsheet provided “some insight to the magnitude of the problem” (emphasis added).

The above-mentioned comments would further the argument that the hospitals were not required to notify the Department and return the money 60 days from Kanes’ email because Kane’s own language within the email was so wishy-washy. Her language in her email certainly does not instill confidence that her findings are accurate and conclusive.

But…

The 60-day rule requires notification and return of the overpayments within 60 days of identification.  The definition of “identification” is the crux of Kane ex rel. United States et al. v. Healthfirst et al. [it depends on what the definition of “is” is].

The Complaint reads, that the hospitals “fraudulently delay[ed] its repayments for up to two years after the Health System knew” the extent of the overpayments” (emphasis added). According to the Complaint, the date that the hospitals “knew” of the overpayment was the date Kane emailed the inaccurate findings.

The hospitals filed a Motion to Dismiss based on the fact that Kane’s email and findings did not conclusively identify overpayments, instead, only provided a preliminary finding to which the hospitals would have needed to verify.

The issue in Kane ex rel. United States et al. v. Healthfirst et al. is the definition of “identify” under the 60-day rule. Does “identify” mean “possibly, maybe?” Or “I know I owe it?” Or somewhere in between?

The hospitals filed a Motion to Dismiss, claiming that the 60-day rule did not begin to run on the date that Kane sent his “preliminary findings.”  The U.S. District Court in New York denied the hospitals’ Motion to Dismiss and stated in the Order, “there is an established duty to pay money to the government, even if the precise amount due is yet to be determined.” (emphasis added).

Yet another heavy burden tossed upon health care providers in the ever-deepening, regulatory muck involved in the ACA.  As health care providers carry heavier burdens, they begin to sink into the muck.

Important take aways:

  • Caveat: Take precautions to avoid creating disgruntled, former employees.
  • Have an experienced attorney on speed dial.
  • Self audit, but self audit with someone highly experienced and knowledgeable.
  • Understand the ACA. If you do not, read it. Or hire someone to teach you.

Another Win for the Good Guys! Gordon & Rees Succeeds in Overturning Yet Another Medicaid Contract Termination!

Getting placed on prepayment review is normally a death sentence for most health care providers. However, our health care team here at Gordon Rees has been successful at overturning the consequences of prepayment review. Special Counsel, Robert Shaw, and team recently won another case for a health care provider, we will call her Provider A. She had been placed on prepayment review for 17 months, informed that her accuracy ratings were all in the single digits, and had her Medicaid contract terminated.

We got her termination overturned!! Provider A is still in business!

(The first thing we did was request the judge to immediately remove her off prepayment review; thereby releasing some funds to her during litigation.  The state is only allowed to maintain a provider on prepayment review for 12 months).

Prepayment review is allowed per N.C. Gen. Stat. 108C-7.  See my past blogs on my opinion as to prepayment review. “NC Medicaid: CCME’s Comedy of Errors of Prepayment Review“NC Medicaid and Constitutional Due Process.

108C-7 states, “a provider may be required to undergo prepayment claims review by the Department. Grounds for being placed on prepayment claims review shall include, but shall not be limited to, receipt by the Department of credible allegations of fraud, identification of aberrant billing practices as a result of investigations or data analysis performed by the Department or other grounds as defined by the Department in rule.”

Being placed on prepayment review results in the immediate withhold of all Medicaid reimbursements pending the Department of Health and Human Services’ (DHHS) contracted entity’s review of all submitted claims and its determination that the claims meet criteria for all rules and regulations.

In Provider A’s situation, the Carolinas Center for Medical Excellence (CCME) conducted her prepayment review. Throughout the prepayment process, CCME found Provider A almost wholly noncompliant. Her monthly accuracy ratings were 1.5%, 7%, and 3%. In order to get off prepayment review, a provider must demonstrate 70% accuracy ratings for 3 consecutive months. Obviously, according to CCME, Provider A was not even close.

We reviewed the same records that CCME reviewed and came to a much different conclusion. Not only did we believe that Provider A met the 70% accuracy ratings for 3 consecutive months, we opined that the records were well over 70% accurate.

Provider A is an in-home care provider agency for adults. Her aides provide personal care services (PCS). Here are a few examples of what CCME claimed were inaccurate:

1. Provider A serves two double amputees. The independent assessments state that the pateint needs help in putting on and taking off shoes. CCME found that there was no indication on the service note that the in-home aide put on or took off the patients’ shoes, so CCME found the dates of service (DOS) noncompliant. But the consumers were double amputees! They did not require shoes!

2. Provider A has a number of consumers who require 6 days of services per week based on the independent assessments. However, many of the consumers do not wish for an in-home aide to come to their homes on days on which their families are visiting. Many patients inform the aides that “if you come on Tuesday, I will not let you in the house.” Therefore, there no service note would be present for Tuesday. CCME found claims inaccurate because the assessment stated services were needed 6 days a week, but the aide only provided services on 5 days.  CCME never inquired as to the reason for the discrepancy.

3. CCME found every claim noncompliant because the files did not contain the service authorizations. Provider A had service authorizations for every client and could view the service authorizations on her computer queue. But, because the service authorization was not physically in the file, CCME found noncompliance.

Oh, and here is the best part about #3…CCME was the entity that was authorizing the PCS (providing the service authorizations) and, then, subsequently, finding the claim noncompliant based on no service authorization.

Judge Craig Croom at the Office of Administrative Hearings (OAH) found in our favor that DHHS via CCME terminated Provider A’s Medicaid contract arbitrarily, capriciously, erroneously, exceeded its authority or jurisdiction, and failed to act as accordingly to the law. He ruled that DHHS’ placement of Provider A on prepayment review was random

Because of Judge Croom’s Order, Provider A remains in business. Plus, she can retroactively bill all the unpaid claims over the course of the last year.

Great job, Robert!!! Congratulations, Provider A!!!

The Nine Habits of a Highly Effective Secretary for DHHS

With the recent passing of the torch from Aldona Wos to Rick Brajer (see blog), I’ve been thinking about…

What are the qualifications of a Secretary of DHHS?

What exactly are the qualities that would make a great Secretary of DHHS?  Remember, in Mary Poppins, when the children draft their requirements for a nanny?  Or, better yet, what are the “Seven Habits of a Highly Effective” Secretary for DHHS?  Or…in this case, the “Nine Habits”…

Here are my “Nine Habits of a Highly Effective Secretary of DHHS;” our Secretary of DHHS should have the following:

  1. A health care background
  2. A successful track record of his/her ability to manage large companies or agencies
  3. An understanding of the Medicaid system, and, maybe, even have first-hand knowledge of how the system affects recipients and providers
  4. A relationship with someone on Medicaid or a parent of someone on Medicaid
  5. A working knowledge of clinical coverage policies, reimbursement rates, and regulations surrounding Medicaid
  6. Both the capacity to listen and speak and do both eloquently and genuinely
  7. True empathy about the physical and mental health of Medicaid recipients and about providers, plus have the patience to handle all types of demographic differences
  8. An understanding that he/she is handling tax payers’ money, that redundancy in staff is excess administrative costs, and ability to trim the fat
  9. An ability to communicate with both the Senate and the House and to be frank with both

wosbrajer

Let us analyze the qualifications of Wos that we came to witness over the last few years, as well as, review the qualifications of soon-to-be Sec. Brajer with information to which we are privy.

Let’s see if both, either, or neither have these “Nine Habits of a Highly-Effective Secretary for DHHS.”

  1. Health care background:

Wos: Yes. And, yet, maybe not.  She is an M.D. Although I do not know whether she ever practiced medicine in North Carolina.  According to Wikipedia, (which is never wrong) Wos “prides herself on her work in the field of preventing HIV and AIDS.”  However, I was unable to find a single clinic in which Wos provided services.  While, generally, an “M.D.” automatically bestows a certain aura of understanding health care, I question whether this “M.D.” automatically has a working knowledge of billing for and receiving reimbursements under Medicaid in North Carolina.

Brajer: Hmmmm.  This one is more tricky. The two companies that Brajer owned, Pro-nerve LLC and LipoScience Inc., are health care related, in that Pro-nerve was an intraoperative neuromonitoring (IONM) company and LipoScience sold a diagnostic tool to health care providers.  Arguably, both companies are health care related, at least, in an ancillary way.  However, Brajer is not a health care professional, and, to my knowledge, has never rendered health care services. Furthermore, neither of Brajer’s companies was successful; quite the opposite is true, in fact. From my understanding, one company declared bankruptcy and the other was not far behind.  Which brings us to the next category…

Answer: Both…kinda.

2. A successful track record of his/her ability to manage large entities:

Wos: Prior to acting as the Secretary to DHHS, Wos served as the Ambassador to Estonia until 2006.  What she did besides political functions between 2006 and 2012, I do not know. Acting as an Ambassador does not entail managing large entities.  The most managerial skills that I can find in her background, prior to being appointed Secretary, are related to political fund-raising. Since I would not call her brief reign as Secretary of DHHS a success, I give Wos a “two thumbs down” on this criterion.

Brajer: He managed two companies.  We can bicker as to whether these companies should be considered large…neither employed 17,000 employees.  Regardless, the “successful” criterion appears to be lacking.

Answer: Neither…pickles.

3. An understanding of the Medicaid system:

Wos: “You’re asking me without having all the data available to answer a question,” she told lawmakers on October 8, 2013.  In her defense, she responded as such when asked whether the State was moving toward privatization for Medicaid.  No one could know the answer, except, maybe, McCrory.

On the other hand, the implementation of NCTracks was nothing short of a catastrophe of epic proportion. See blog. See blog.  Anyone with nominal knowledge of the Medicaid system would have, at least, paused to consider keeping HP Enterprises under contract during the switch to NCTracks or pushed back the go-live date.

Brajer: Unknown

Answer: Here’s to hoping that Brajer does.  I’m cheering for you! Go! Fight! Win!

4. A relationship with someone on Medicaid or a parent of someone on Medicaid:

Wos: Unknown.  If I were shaking a proverbial “8 Ball,” it would read, “Doubtful.”

Brajer: Unknown. Perhaps one of his former employees at Pro-nerve, LLC and LipoScience, Inc. is on Medicaid.

Answer: Gimme a ‘B’! B! Gimme a ‘R’! R! Gimme a ‘A’! A! Gimme a ‘J’! J! Gimme a ‘E’! E! Gimme a ‘R’! R! Whats that spell? Brajer!!

5.  A working knowledge of clinical coverage policies, reimbursement rates, and regulations surrounding Medicaid.

Wos: Unknown. Whatever Wos’ knowledge of regulations and clinical coverage policies is or lacked, she, initially, made up for any knowledge lacked with the key hire and quick resignation of Carol Steckel.  Unfortunately, Steckel’s experience was never replaced.

January 2013: “I am pleased to say that we are already taking steps to address some of these issues,” Wos said. “Now, the most important of this is that we have hired Ms. Carol Steckel, a nationally recognized — nationally recognized — expert in Medicaid to run our Medicaid program for the state. Carol is already moving ahead with systemic reviews of operations in this division. She is reviewing and establishing new policies and procedures.”

September 27, 2013: Steckel resigns. And blog.

Brajer: Unknown.

Answer: B! R! A! J! E! R! Let’s go, Brajer!

6. Both the capacities to listen and speak and do both eloquently.

Wos: Wos brandished an ability to speak publicly with ease.  Listening, on the other hand….eh?

Brajer: Unknown

Answer: I think you can, I think you can, I think you can…

7. Genuine concern about the physical and mental health of Medicaid recipients AND about providers PLUS have the patience to handle all types of demographic differences

Wos: She seems to think so. Her country club does not discriminate.

Brajer: Unknown

Answer: Go! Go! Go! Go! Go, Brajer!!

8. An understanding that he/she is handling tax payers money and that redundancy in staff is excess administrative costs and trim the meat

Wos: “My obligation as secretary is to find the best possible team in order to get the job done.”  Les Merritt served as CFO of DMA on a $300,000-plus contract.  Joe Hauck was paid over $228,000 for 6 months of advise to Wos.  Matt McKillip was paid $87,500 to serve as chief policy maker without any health care background.  Ricky Diaz pulled in $85,000 as communications director. Id.  Wos has handed out $1.7 million in pay hikes to 280 staffers, many with “no career or educational experience for the jobs they hold.” Id. The implementation of the MCOs also fell under Wos’ watchful eye.  The MCO system has created thousands upon thousands of high-paying jobs with our Medicaid dollars.  I believe that in the “trim the fat” category, Sec. Wos scores a goose egg.

Brajer: Unknown.

Answer: Please, Brajer! For the love of Pete!

9. Ability to communicate with both the Senate and the House and to be frank with both.

Wos: “Separation pay” v. “Severance pay?

In April 2013: “I think the word transparency can get pretty dangerous,” Wos said. “Because what does transparency mean? If transparency means that we’re in a planning process and you’re asking us, ‘Tell us all the things you’re planning,’ well, my goodness, allow us to work, and then we’ll give you everything that you want.”

Brajer: Unknown

Answer: Brajer, Brajer, He’s our man! If he can’t do it…[gulp].

____________________________________________

It concerns me that so many of future Sec. Brajer’s core abilities/habits to run and manage DHHS and the Medicaid program in a highly effective manner are unknown.  Nothing like placing all your money on red!  But we have HIGH hopes for Brajer!!!  Don’t let us down!!

The whole point of this blog is to pause and really contemplate what characteristics would comprise a great Secretary for DHHS. Obviously, the Governor has the full authority to appoint the Secretary, meaning that we taxpayers have little to no input as to whether we deem a person qualified, except in the indirect method of voting or not voting for the Governor.

Call this blog an exercise in examining what habits, if in existence, would make the most highly effective Secretary of DHHS and an opinion as to whether these habits exist in our former and future Secretaries.

We are cheering for Brajer!  But…

One fact about the future is that it is unknown.

How EPSDT Allows Medicaid Recipients Under the Age of 21 To Receive More Services Than Covered By NC State Plan

EPSDT. What in the heck is EPSDT?

EPSDT is an acronym for the “Early and Periodic Screening, Diagnosis, and Treatment (EPSDT).” It only applies to Medicaid beneficiaries under the age of 21. As in, if you are 21, EPSDT does not apply to you. The point of EPSDT is to allow beneficiaries under the age of 21 to receive medically necessary services not normally allowed by the NC Medicaid State Plan. (These beneficiaries under the age of 21 I will call “children” for the sake of this blog, despite 18+ being a legal adult).

The definition of each part of the acronym is below:

Early:……. Assessing and identifying problems early
Periodic:…… Checking children’s health at periodic, age-appropriate intervals
Screening:…. Providing physical, mental, developmental, dental, hearing, vision, and other screening tests to detect potential problems
Diagnostic:…. Performing diagnostic tests to follow-up when a risk is identified, and
Treatment:…. Control, correct or reduce health problems found.

Federal Medicaid law at 42 U.S.C.§ 1396d(r) [1905(r) of the Social Security Act] requires state Medicaid programs to provide EPSDT for beneficiaries under 21 years of age. Within the scope of EPSDT benefits under the federal Medicaid law, states are required to cover any service that is medically necessary “to correct or ameliorate a defect, physical or mental illness, or a condition identified by screening,” whether or not the service is covered under the North Carolina State Medicaid Plan.

The services covered under EPSDT are limited to those within the scope of the category of services listed in the federal law at 42 U.S.C. § 1396d (a) [1905(a) of the Social Security Act].

For example, EPSDT will not cover, nor is it required to cover, purely cosmetic or experimental treatments.

Again, EPSDT allows for exceptions to Medicaid policies for beneficiaries under the age of 21. For example, if the DMA clinical policy for dental procedures does not cover a certain procedure, if the dentist determines that the procedure is medically necessary for a beneficiary under the age of 21, then the dentist can request prior approval under EPSDT simply by filling out a “non-covered services form” along with the other supporting documentation to establish medical necessity. More likely than not, the “non-covered procedure” would be approved.

Medical necessity is an interesting term. Medical necessity is not defined by statute. The American Medical Association (AMA) defines medical necessity as:

“Health care services or products that a prudent physician would provide to a patient for the purpose of preventing, diagnosing, treating or rehabilitating an illness, injury, disease or its associated symptoms, impairments or functional limitations in a manner that is: (1) in accordance with generally accepted standards of medical practice; (2) clinically appropriate in terms of type, frequency, extent, site and duration; and (3) not primarily for the convenience of the patient, physician, or other health care provider.”

But, legally, the courts have construed medical necessity broadly when it comes to EPSDT. As in, generally speaking, if a doctor will testify that a procedure or service is medically necessary, then, generally speaking, a judge will accept the medical necessity of the procedure or service.

It seems as though I am degrading the intelligence of the judges that take the face value testimony of the doctors. But I am not.

Judges, like I, are not doctors. We do not have the benefit of a medical education. I say benefit because any education is a benefit, in my opinion.

It would be difficult for anyone who is not a doctor to disagree with the testimony of a physician testifying to medical necessity. I mean, unless the person stayed in a Holiday Inn Express the night before. (I know…bad joke).

Some courts, however, have ruled that the decision as to whether a procedure is medically necessary must be a joint effort by the state and the treating physician. Obviously, for courts that follow the “joint decision for medical necessity” holdings, less procedures would be allowed under EPSDT because, more likely than not, the state will disagree with a treating physician (I say this only from my own experience representing the state when the state disagreed with EPSDT treatments despite the treating physician testifying that the procedure was medically necessary).

For example, the 11th Circuit has held that both the state and the treating physician have a role in determining whether a procedure or treatment is medically necessary to correct or ameliorate a medical condition. The 11th circuit disagreed with the Northern District of Georgia’s determination that the state MUST provide the amount of services which the treating physician dreamed necessary. Moore v. Medows, No. 08-13926, 2009 WL 1099133 (11th Cir. Apr. 24, 2009).

Regardless, in practice, EPSDT is interpreted broadly. A long, long time ago, I worked at the Attorneys’ Generals office. A mother requested hyperbaric oxygen therapy (HBOT) for her autistic children (and I had to oppose her request because that was my job).

For those of you who do not know what HBOT is (I sure didn’t know what HBOT is prior to this particular case)…

“Hyperbaric Oxygen Therapy (HBOT) is the use of high pressure oxygen as a drug to treat basic pathophysiologic processes and their diseases. HBOT has acute and chronic drug effects. Acutely, HBOT has been proven to be the most powerful inhibitor of reperfusion injury, which is the injury that occurs to tissue deprived of blood supply when blood flow is resumed. This is thought to be one of the primary mechanisms of hyperbaric oxygen therapy effects in acute global ischemia, anoxia, and coma. Chronically, HBOT acts as a signal inducer of DNA to effect trophic (growth) tissue changes.” See http://www.hbot.com/hbot.

I went and saw a hyperbaric oxygen treatment chamber in preparation of my case. It’s pretty intimidating. It is a large chamber made of thick metal. It looks like you could get inside, have it submerged under the ocean, and explore. It appears similar to a submarine. And, interestingly, it is most often used for divers who get the bends.

It is highly controversial as to whether HBOT cures, remedies or ameliorates autistic symptoms. I had two experts testifying that HBOT was experimental, and, therefore, not covered by Medicaid, even with EPSDT. (Remember, back then I was at the AG’s office).

Yet, despite the fact that HBOT was still controversial as to whether it ameliorates the symptoms of autism, the Administrative Law Judge (ALJ) used the EPSDT doctrine to rule that the mother’s children could receive HBOT and Medicaid must pay for the services.

That is the power of EPSDT. HBOT was clearly not covered by Medicaid for the purpose of ameliorating symptoms of autism. But, for the children named in the Petition who were under 21, Medicaid paid nonetheless.

HBOT allows beneficiaries under the age of 21 to receive medically necessary services that would not normally be allowed under the North Carolina Medicaid State Plan.

Importantly, EPSDT provides for private rights of action under 1983. At least all the federal circuit court of appeals have held such.

Oh, and, BTW, NCTracks will soon also be in charge of EPSDT determinations.

Extrapolated Medicaid Audits Continue: Be Proactive! (Or Move to West Virginia)

Extrapolated audits are no fun, unless you work for a recovery audit contractor (RAC).  You get a Tentative Notice of Overpayment (TNO) that says the auditor reviewed 100 dates of service (DOS), found an overpayment of $1,000, so you owe $1 million dollars.  Oh, and please pay within 30 days or interest will accrue…

North Carolina’s 2nd recovery audit contractor (RAC) is ramping up.  HMS had a slower start than Public Consulting Group (PCG); the Division of Medical Assistance originally announced that HMS would be conducting post-payment reviews last October 2012 in its Medicaid Bulletin.  NC’s 1st RAC, PCG came charging out the gate.  HMS has been a bit slower, but HMS is active now.

HMS is performing post-pay audits on inpatient and outpatient hospital claims, laboratory, specialized outpatient therapy, x-ray and long-term care claims reviews.

According to the December 2013 Medicaid Bulletin, the findings for the first group of automated lab reviews were released in early November 2013.  Additional lab reviews are expected to be completed and findings released by late December 2013.  The post-payment reviews are targeting excessive drug screening.

And specialized therapy service providers, you are next on the list!

How will the providers know the results of an HMS post-payment review? Same way as with PCG.  You will receive a Tentative Notice of Overpayment (TNO) in the mail with some crazy, huge extrapolated amount that you supposedly owe back to the state.

If you receive a TNO, do not panic (too much), take a deep breath and read my blog: “You Received a Tentative Notice of Overpayment, Now What?”

Or “The Exageration of the Tentative Notices of Overpayments.”

Remember, most of the post-payment reviews that I have seen have numerous auditing mistakes on the part of the auditor, such as the auditor applying the more recent clinical coverage policies rather than the clinical coverage policy that was applicable to dates of services audited.

DMA Clinical Policy 1S-4 “Cytogenetic Studies“, for example, was recently revised February 1, 2013.  Obviously, an auditor should not apply the February 1, 2013, policy to a service provided in 2012…but you would not believe how often that happens!

So what can you do to be prepared?  Well, realistically, you cannot be prepared for audit ineptness.

But you can be proactive.  Contact your insurance policy to determine whether your liability insurance covers attorneys’ fees for regulatory audits.  It is important to be proactive and determine whether your insurance company will cover attorneys’ fees prior to undergoing an audit.  Because if you find out that your liability insurance does not cover attorneys’ fees, then you can upgrade your insurance to cover attorneys’ fees.  I promise, it is way better to pay additional premiums than get hit with $25,000+ bill of attorneys’ fees.  Plus, if you wait until you are audited to determine whether your liability insurance covers attorneys’ fees and you realize it does not, then the insurance company may not allow you to upgrade your insurance.  The audit may be considered a pre-existing condition.

So…proactiveness  is imperative.  But you can always move to West Virginia…

In a survey of 18 states conducted by the National Conference of State Legislatures (NCSL) and published August 29, 2013, NCSL determined that 10 states use extrapolations with the RAC audits, 7 do not and 1 intends to use extrapolations in the future. (No idea why NCSL did not survey all 50 states).

Delaware, Maryland, New Hampshire, Pennsylvania, Vermont, West Virginia, and Wisconsin do not use extrapolations in Medicaid RAC audits.

So moving to West Virginia is an option too…

What is the Difference Between the 1915 b/c Waiver and Technical Guide?

Do you know the difference between the 1915 b/c Waiver and the Technical Guide?

You should!  (If you provide Medicaid mental health or substance abuse services or services to developmentally disabled persons).

What is the 1915 b/c Waiver (the “Waiver”)?

It is a document (a very large document) that all health care providers, recipients and State agencies must adhere to in order for Medicaid recipients to receive the medically necessary services needed.  The consequence of anyone in NC not following the Waiver? The feds can come and recoup Medicaid money…or perform any other allowable remedy/punishment.  Basically, everyone in NC (germane to Medicaid) must follow the Waiver or answer to the federal government.

The Waiver applies to Medicaid recipients suffering mental health issues, developmental disabilities, and substance abuse.

The Centers for Medicare and Medicaid Services (CMS) granted the North Carolina Waiver, which operates under Section 1915 (c) of the Social Security Act. This Waiver operates concurrently with a 1915 (b) Waiver, the North Carolina Mental Health/Developmental Disabilities/ Substance Abuse Services Health Plan (NC MH/DD/SAS Health Plan).

In sum, the Waiver is a document approved by the federal government (CMS). The Waiver applies to Medicaid recipients suffering mental illness, developmental disabilities and substance abuse.  We must adhere to the Waiver…or else.

So what is the Technical Guide?

First, what is it not? If the Waiver is Medicaid “law,” the Technical Guide is not.

When you were in high school, did you ever read Cliffsnotes?  You know, your English teacher assigns “The Great Gatsby,” but you have so many other important things to do in high school other than to read “The Great Gatsby.” So you get the Cliffsnotes.  Easy enough, right?

Until your teacher tests on details in “The Great Gatsby” that were not in the Cliffsnotes…

I am NOT (capital N.O.T.) comparing the Technical Guide to Cliffsnotes.  The Technical Guide is approximately 350 pages.  If Cliffsnotes were 350 pages long, then the actual book would be over 1000 pages.  If the Division of Medical Assistance (DMA) were attempting to draft an abridged version of the Waiver with the Technical Guide, then someone grossly misunderstood the word “abridged.”

DMA prepares the Waiver, and (although I have never been present for the process of its creation) I believe that DMA works extraordinarily hard on the Technical Guide.

Despite, DMA’s hard work, the Technical Guide, generally, is  not identical to the Waiver.

If the Technical Guide were identical to the Waiver, then the Technical Guide and the Waiver would be identical, right?

The Technical Guide is supposed to be a “user-friendly” rendition of the Waiver.  Because, folks, I am here to tell you, the Waiver is NOT “reader-friendly.”

But….beware….if it comes down to a legal argument in a court of law, the Technical Guide is not law…the Waiver is law.  So if you are having your employees read the Technical Guide in lieu of the actual Waiver, you MAY be in violation of the Waiver, even though you meet the Technical Guide criteria.

For example, in the Technical Guide, for authorization of In-Home Intensive Supports, for prior authorization, a Medicaid recipient could use (for prior authorization):

“Until the participant has a Supports Intensity Scale assessment [SIS assessment], the NC SNAP is used and the participant must have a score of at least 4 or 5 in Medical and/or Behavioral.”

According to the Technical Guide, a SNAP score can be used in order to receive authorization for In-Home Intensive Services.

However, the Waiver says nothing about a SNAP score.  According to the Waiver, the ONLY document that can be used for prior authorization for In-Home Intensive Supports is the SIS assessment.

Period.

Not the SNAP!

Ambiguity? I think so…

But, when the English teacher tests on the details of “The Great Gatsby” that were not found in the Cliffsnotes, you fail.

Similarly, when you only follow the Technical Guide, you may find yourself (legally) holding the “Cliffsnotes of the Waiver.”

And liable.

Medicaid Providers: Know What the “Way Back Machine” Is? Perhaps, You Should!

This blog pertains to all Medicaid providers regardless the state and regardless the Medicaid service provided.

Heard of the “Way Back Machine?”  Perhaps, you should have!!!

Scenario: 

You are a Medicaid provider, and you get a Tentative Notice of Overpayment (TNO) based on a Medicaid post-payment review by Public Consulting Group (PCG) or HMS in the extrapolated amount of $800,000 based on a sample size of 100 dates of service (DOS) and multiplied out to some extrapolation universe. You look at the extrapolation data and determine tha you were not even paid $800,000 during the time frame PCG determined was the universe. Or you say…What???…My documents complied with policy!

What do you do?

Sound like a horrible SAT question? Or sound like reality?

Hopefully you answered the former, but if you answered the latter, read on…

You’ve read my blogs before and understand the importance of appealing PCG or HMS’ extrapolated audit.  But you do not have the financial means to hire an attorney.  Or you honestly believe that if the Department of Health and Human Services (DHHS) reviewed your documents that its employees would also agree that PCG or HMS was wrong.  Or you, personally, want to self-audit to determine the veracity of the audit.  Or for whatever reason, you want to know whether PCG or HMS was correct for your own well-being. 

How do you self-audit….the audit?

This may be one of the best “tips” I have given… (sorry for tooting my own horn, but, seriously, this blog can be helpful! I had a client that pointed out he/she had no idea about this “tip.”)

PCG and HMS conduct post-payment reviews.  This means that PCG and HMS are looking at 1-2-3-year-old medical records.

Think about how quickly Medicaid changes.  Now think about the number of times in which the DMA Clinical Policy applicable to your practice has been revised in the last few years.

When I say DMA Clinical Policy, I mean, if you provide Outpatient Behavioral Therapy, Policy 8C is applicable.  If you provide dental services to Medicaid recipients, then Policy 4A is applicable.  If you provide durable medical equipment (DME) to Medicaid providers, then Policy 5A is applicable.  For a full list of the NC Medicaid policies, please click here.

The DMA Clinical Policies change significantly throughout the years.  For example, DMA Clinical Policy 8A, revised January 1, 2009, allowed Community Support for adults and children.  Yet Policy 8A, revised August 1, 2013, does not even allow Community Support (obviously Community Support was disallowed prior to August 2, 2013, but I am making a point).  Also, now we have 16 unmanaged outpatient behavioral therapy visits for children, whereas a couple of years ago we had 26 unmanaged visits.

The point is that when PCG or HMS audits your particular service, the auditors are not always experts in your particular service, nor experts in your particular service’s Clinical Coverage Policy.  See my blog on Dental Audits Gone Awry.  In this blog I show the required (or lack thereof) education/experience to become a PCG auditor.

Therefore, it is imperative that you have access to the applicable Clinical Coverage Policy applicable for the DOS audited.

But, if you google 2009 clinical policy for NC Medicaid dental services, you can’t find it.

So how are you supposed to get access to these old policies that are being used (or mistakenly NOT being used) in Medicaid audits for the older DOS?

It is called: The Way Back Machine.

I know, cheesy!  But I did not name it.

The “Way Back Machine” website looks like this:

Way Back Machine

The beauty of the “Way Back Machine” is that you can go to any current website.  Copy the internet address.  Paste that internet address into the “Way Back Machine” where you see “Way Back Machine” and a white box appears in which to type the website address. Type in the address, and hit the button “Take Me Back.” VOILA…time travel!!!!

Small Tip: I have found that if I use the internet address for the specific policy for which I am researching, I am less successful than if I use the general DMA Policy address found here.  Once you get to the appropriate year on DMA’s general policy website, you can click on the specific policy in which you are interested.

Using the “Way Back Machine,” you can go to the DMA Clinical Policy (for whatever Medicaid service) applicable years ago.

You should never need to go more than 3 years back, as Recovery Audit Contractors (RACs) without permission by DHHS, cannot audit DOS more than three years ago.

But, you need to review the Clinical Policy for [fill-in-the-blank] Medicaid service 2 years ago? No problem! Use the “Way Back Machine” and travel back in time.

Wouldn’t it be great if we could travel back in time “for real?” Prior to RACS…prior to PCG…prior to HMS….? We need a “Way Back Machine” for Medicaid providers (and me) “for real!”

The “Single State Agency” Medicaid Requirement: The Buck Stops With Whom?????

What is THE most important law? I’m sure most people would have a differing opinion.  Maybe you think the most important law is that it is against the law to murder a person. Or to not drive drunk.

Personally, I think the most important law of the United States begins, “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”  The Constitution of the United States.

Well, in the Medicaid arena, in my opinion, the most important law is the “single state entity” requirement.

Why is the “single state entity” requirement so important? 

Have any of you tried to read Title XIX of the Social Security Act? Or the 1915(b)(c) Innovations Waiver? The State Plan?

If you have, then you know how difficult Medicaid laws, rules and regulations are to read, much less understand.  It’s a bit like reading Chaucer in its original language, Middle English, in kindergarten…not impossible, you can sound out all the words…but, in the end, you have no idea what it was you just read.  Wife of whom?

What if we allowed 10 different companies, each with different employees, to implement/interpret Medicaid laws, rules, and regulations?

Each of the 10 companies would read the Medicaid laws, rules and regulations differently.

We would not have a statewide consistent Medicaid system.

Medicaid is tough enough, we, at least, need one agency to implement and interpret all of Medicaid.

Another example is if, suddenly, we had no president or federal government.  And all 50 states’ governors tried to run the country, as a country and not 50 independent states.  We would, obviously, have 50 different “leaders” trying to run one country with 50 different ideas as to how the country should be run.  There would be no nationwide uniformity.

Hence, the “single state agency” requirement.  DHHS must implement/administer/interpret all Medicaid decision for the sake of uniformity.

Not only is the “single state agency” requirement logical, it is federal law.

42 U.S.C. 1396 a(a)(5) requires states participating in the Medicaid program to designate a “single state entity” to operate the Medicaid program.  

In North Carolina, that “single state entity” is the Department of Health and Human Services (DHHS).

Remember the sign on Harry Truman’s desk? “The Buck Stops Here!” Meaning, as a president, President Truman understood that anything that went wrong in any federal department was on his shoulders.  He was the captain of the ship.  He was the big cheese. The buck stopped with Truman.

In NC Medicaid, the buck stops with DHHS.

According to federal law, the “single state entity” may contract with entities, such as Managed Care Organizations (MCOs), Recovery Audit Contractors (RACs), etc. to assist with certain functions of the Medicaid program.  But…that “single state entity” CANNOT delegate its authority to “issue policies, rules, and regulations on program matters.”  42 C.F.R. 431.10.

Moreover, the “single state entity” MUST NOT allow a contracted company to have authority to change or disapprove an administrative decision of the “single state entity.”  42 U.S.C. 1396a(a)(5) states that “either provide for the establishment or designation of a single State agency to administer or to supervise the administration of the plan.”

Similarly, in K.C. v. Shipman, the 4th Circuit Court of Appeals states that:

“If other State or local agencies or offices perform services for the Medicaid agency, they must not have the authority to change or disapprove any administrative decision of that agency, or otherwise substitute their judgment for that of the Medicaid agency with respect to the application of policies, rules, and regulations issued by the Medicaid agency.  42 C.F.R. § 431.10(e)(3).” (emphasis added).

Ok, pretty clear, right?

Then how can an MCO determine that a provider’s Medicaid contract should be terminated without DHHS’ authorization (which, I believe, is a substitute of judgment in applying policies)? How can an MCO determine that a Medicaid recipient’s services should be reduced (another substitution of judgment in applying policies) without DHHS’ authorization?

If you ask me, the MCOs cannot terminate a provider’s Medicaid contract or reduce services without DHHS’ authorization.  Substituting an MCO’s judgment in applying Medicaid policies is a violation of the “single state entity” requirement.

Yet….the MCOs are doing just that.

Even more scary is the recent MCO Communication Bulletin #55, dated August 2, 2013, which states:

MCO Communication Bulletin #55

Date:                August 2, 2013                                                            

To:                   LME-MCO CEOs

From:               Courtney Cantrell, Assistant Director, Behavioral Health Section

Subject:         Provider Appeals

Currently DMA is reviewing LME-MCO contract terminations and service denials when appealed due to LME-MCO manuals stating that appeals of denials should come to DMA prior to Office of Administrative Hearings (OAH).  DMA should not be a part of the LME-MCO appeals process.  We ask that you please correct your manuals by August 7, 2013, and share with your contract managers so that these appeals can be appropriately routed.

Yes, I agree, the author could have written this Communication Bulletin is a way that would have been easier to read. But, maybe that is the point.

I interpret this bulletin to say:

Right now, the MCO manuals instruct MCOs to send DMA all contract terminations and service denials prior to going to the OAH (litigation).  But, DMA does not want to be a part of the appeal process anymore.  Therefore, revise all MCO manuals to reflect that MCOs no longer need to send DMA contract terminations and service denials, even if those denials and terminations are appealed.

I also infer from this language that, since the inception of MCOs, DMA has not reviewed any contract terminations or service denials unless these denials and terminations are appealed.

 DMA does not review prior to the MCO terminating or denying services???? Where is the supervision? Where is the “single state agency?”

And then, even scarier, Bulletin #55 seems to say that DMA wants to be involved even LESS.

In essence, we have 10 MCOs, 10 jurisdictions, 10 interpretations of Medicaid laws, rules and regulations.  And no statewide uniformity.

I guess the buck stops with East Carolina Behavioral Health (ECBH)…and MeckLINK…and Alliance…and Smoky Mountain Center…and Cardinal Innovations…and Centerpoint Human Services…and CoastalCare…and EastPointe…and Partners Behavioral Health Management…and Sandhills…and (at least for a short time) Western Highlands…

That is a lot of bucks.

On Medicaid? Need Home Health Aide Services? You Are Now Limited in Number of Visits.

New revisions to Medicaid policy limit the number of home health aide services for Medicaid recipients, regardless of medical need.

North Carolina Department of Health and Human Services (DHHS), Division of Medical Assistance (DMA) revised the Clinical Policy 3A. The revised policy took effect July 1, 2013.

Prior to this revised policy, home health aide services were limited to the amount, frequency, and duration of services as  ordered by the physician and documented in the Plan of Care (POC). As in, if you needed services four times a week, if your physician ordered the services and the need for such services were documented on the POC, you could receive home health aide services four times a week.

What are home health aide services?

“Home Health (not aide) Services, generally, include medically necessary skilled nursing services, specialized therapies (physical therapy, speech-language pathology, and occupational therapy), home health aide services, and medical supplies provided to beneficiaries who live in primary private residences. Skilled nursing, specialized therapies, and medical supplies can also be provided if the beneficiary resides in an adult care home (such as a rest home or family care home).”

Home health aide services are a subpart of Home Health Services.

“Home health aide services are hands-on paraprofessional services provided by a Nurse Aide I or II (NA I or NA II) under the supervision of the RN. The services are provided in accordance with the established POC to support or assist the skilled service (skilled nursing and specialized therapies).

Home health aide services help maintain a beneficiary’s health and facilitate treatment of the beneficiary’s illness or injury. Typical tasks include:

a. Assisting with activities such as bathing, caring for hair and teeth, eating, exercising, transferring, and eliminating.

b. Assisting a beneficiary in taking self-administered medications that do not require the skills of a licensed nurse to be provided safely and effectively.

c. Assisting with home maintenance that is incidental to a beneficiary’s medical care needs, such as doing light cleaning, preparing meals, taking out trash, and shopping for groceries.

d. Performing simple delegated tasks such as taking a beneficiary’s temperature, pulse, respiration, and blood pressure; weighing the beneficiary; changing dressings that do not require the skills of a licensed nurse; and reporting changes in the beneficiary’s condition and needs to an appropriate health care professional.”

See DMA Clinical Policy 3A, p. 1-3 (emphasis added).

The revised Policy 3A has 5 additional pages (it went from 29 pages to 34 pages, in total), but many more restrictions, many of which are without regard to medical necessity.

Such as, “Home health aide services must be limited to 100 total visits per year per beneficiary.”  Click here for the full text of the revised Policy 3A. Of course, always remember the exception for children: EPSDT.

Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) is a federal Medicaid requirement that requires the state Medicaid agency to cover services, products, or procedures for Medicaid beneficiary under 21 years of age if the service is medically necessary health care  to correct or ameliorate a defect, physical or mental illness, or a condition [health problem] identified through a screening examination (includes any evaluation by a physician or other licensed clinician).

For more information on EPSDT, see my blog: “EPSDT’s Impact on Medicaid Audits.”

 Now, going back to our Medicaid recipient in medical need of 4 home health aide services/week (208 visits/year), he or she is now limited to 100/year (almost 2 visits/week) (This math is using 52 week/year, not 52.1775).

There are other services possible, depending on the medical necessity. But as for home health aide services, you only get 100.

Remember, this limit not only affects Medicaid recipients (obviously the limit impacts the recipients most greatly), but, also, providers will have less work for their home health aides. As one of my readers pointed out to me, the aides are only making around $8/hour.

DMA Clinical Policy 3A, revised July 1, 2013, has other restrictions. See below for some other restrictions.

Skilled Nursing Visits

Pre-filling insulin syringes/Medi-Planner visits (RC 581) must be limited to a maximum of one visit every two (2) weeks with one (1) additional PRN visit allowed each month. There is a limit of 75 skilled nursing visits (inclusive of, and in any combination with, RC 550, RC 551, RC 559, RC 580, RC 581, and RC 589) per beneficiary per state fiscal year.

Miscellaneous Code T1999        

Use of the T1999 code for billing miscellaneous supplies is limited as follows:

  • A maximum of $250 per beneficiary per state fiscal year may be billed without prior approval required.
  • Any amount over $250 per beneficiary per state fiscal year, whether for a single item or a cumulative total, requires prior approval.
  • A maximum of $1,500 per beneficiary per state fiscal year may be billed.

Are these new restrictions only because of a tight Medicaid budget? My question is when does medical necessity for Medicaid recipients become a factor in policy limits?

A Very, Common Blooper in Dental Medicaid Audits

“To err is human…”  Alexander Pope

Remember that show “TV”s Bloopers and Practical Jokes?” I think Dick Clark was in it (maybe not…it was a long time ago…I watched reruns). Anyway, I remember laughing so hard at some of the bloopers.  I also like when, after a movie is over, the director highlights the casts’ bloopers. Something about watching someone else mess up that makes me realize everyone is human.

But accidentally erring is completely different (and a lot funnier) than a RAC auditor misapplying a clinical policy, be called out on it, and continue to audit the same erroneous way without regard or fortitude to change.

I have said over and over, no health care provider who accepts Medicaid is safe from the grasp of the over-zealous, under-trained Medicaid auditors. Welcome, dentists, to the “oh-so-ever-interesting-Medicaid-three-ring-circus.”  Here are your Tentative Notice of OverPayments (TNO). And here are your bloopers.

I’ve seen a few common themes in the claim audit findings for a post-payment review of a dental practice, but want to discuss one re-occurring theme…one that has poked its rearing head more than most other issues I have seen, thus far.

RAC auditor recoups the Medicaid reimbursements because: The “attending provider” NPI number did not match the “provider rendering the services” NPI number.

The RAC auditor cites DMA Clinical Policy 4A as the source of the rule that the attending provider and rendering provider numbers must be the same.

DMA Clinical Policy 4A states, in pertinent part, “Enter the attending provider’s NPI for the individual dentist rendering service. (This number must correspond to the signature in field 53.)” (Field 53 is the field for the treating provider).

Yet,wait, young auditor, what year DMA Clinical Policy 4A are you using? 2013? Or the year that is applicable to the date of service (DOS) you are auditing?

Because prior to the 2013 Clinical Policy 4A, earlier 4A Policies read as such: “Enter the attending provider’s NPI for the individual dentist rendering service. (This number should correspond to the signature in field 53.)”

Should versus must….must versus should…

Look at these examples:

Should:

  • People should protect the environment.
  • People should be kind to others.
  • You should go see “Man of Steel;” it is very good.

Must:

  • Thou shall not murder. (Shall is an old form of must, and a bit more British).
  • People must stop completely at a stop sign.
  • You must stop talking!

See the difference? If someone tells me that I should go see an art exhibit, I will say, “Thank you.  I will see if I can fit it in my schedule.”  If someone tells me that I must abide by a rule, I will ask, “What will be the penalty if I do not?”

“Should” denotes a suggestion.  “Must” denotes a command.

So going back to…

“Enter the attending provider’s NPI for the individual dentist rendering service. (This number should correspond to the signature in field 53.)”So…if the number “SHOULD” correspond, then, obviously, the number “MUST” not correspond. Right?

Bloopers are funny. Redundant errors are not.