Category Archives: Congress
Every once in a blue moon, I am actually happy with the actions of our government. One of these rare occasions occurred on March 17, 2016. Happy St. Patty’s Day!
On March 17, 2016, Senior Senator John Thune from South Dakota introduced S.2736: A bill to require consideration of the impact on beneficiary access to care and to enhance due process protections in procedures for suspending payments to Medicaid providers.
How many times have I blogged about the nonexistence of due process for Medicaid providers??? I cannot even count. (Well,I probably could count, but it take quite some time). My readers know that I have been complaining for years that the federal regulations consider Medicaid provider guilty until proven innocent. See blog. And blog.
Well, finally, someone in Congress has taken notice.What is really cool is that my team at my law firm Gordon & Rees was asked to provide some input for this bill…pretty cool! Although I have to say, everything that we proposed is not included in the proposed bill. Apparently, some of our suggestions were too “pro provider” and “didn’t stand a chance to be passed.” Who would have thought? Baby steps, I was informed.
The bill, if enacted, would require the Secretary of Health and Human Services (HHS) to revise the Code of Federal Regulations, specifically the Title 42 of the CFR.
Currently, 42 CFR 455.23 reads: “the State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud for which an investigation is pending under the Medicaid program against an individual or entity unless the agency has good cause to not suspend payments or to suspend payment only in part.” (emphasis added). Rarely has a state agency found “good cause” to not suspend payments. In fact, quite the opposite. I have seen state agencies use this regulation harshly and with intent to put providers out of business.
S.2736 would revise the above-mentioned language and require that a state agency take certain steps to ensure due process for the provider prior to implementing a suspension in payments.
Prior to implementing a payment suspension, this proposed bill would require the state agency to:
- Consult with the Medicaid fraud unit for the state and receive written confirmation of such a consultation; and
- Certify that the agency considered whether beneficiary access would be jeopardized or whether good cause exists, in whole or in part (according to the new, proposed manner of determining good cause)
We all know that the above bullet points supply more protection than we have now.
Furthermore, there are protections on the back end.
After a suspension is implemented, at the beginning of each fiscal quarter, the state Medicaid agency must:
- certify to the Secretary that it has considered whether the suspension of payments should be terminated or modified due to good cause (as modified by S.2736); and
- if no good cause is found, furnish to the provider the reasons for such determination.
S.2736 allow requires the agency to disclose the specific allegations of fraud that is being investigated (after a reasonable amount of time) and to evaluate every 180 days whether good cause exists to lift the suspension. Regardless, good cause not to continue the suspension will be deemed to exist after 18 months (with some other qualifying details).
According to a government track website, this bill has a 8% chance of getting past committee. And a 3% chance of being enacted.
The stats on all bills’ “pass-ability,” is that only 15% of bills made it past committee and only about 3% were enacted in 2013–2015.
So call your Congressman or woman! Support S.2736! It’s not perfect, but it’s better!!!
What the heck is the False Claims Act and why is it important to you?
When it comes to Medicaid and Medicare, the ghoulish phrase “False Claims Act” is frequently thrown around. If you google False Claims Act (FCA) under the “news” option, you will see some chilling news article titles.
- Pediatric Services of America, units to pay $6.88 in False Claims
- NuVasive, Inc. Agrees to Pay $13.5 Million to Resolve False Claims
- California Oncologist Pays $736k to Settle False Claims Allegations
False claims cases tend to be high dollar cases for health care providers; many times the amounts are at issue that could potentially put the provider out of business. FCA is spine-chilling, and many health care providers would rather play the hiding child rather than the curious investigator in a horror story. Come on, let’s face it, the curious characters usually get killed. But, this is not a horror story, and it is imperative that providers are informed of the FCA and potential penalties.
I have blogged about post payment reviews that use extrapolation, which result in astronomical alleged overpayments. See blog and blog. Interestingly, these alleged overpayments could also be false claims. It is just a matter of which governmental agency is pursuing it (or person in the case of qui tem cases).
But the ramifications of false claims allegations are even more bloodcurdling than the astronomical alleged overpayments. It is important for you to understand what false claims are and how to prevent yourself from ever participating in a false claim, knowingly or unknowingly.
First, what is a false claim?
A false claims occurs when you knowingly present, or cause to be presented, to the US Government a false or fraudulent claim for payment or approval. (abridged version).
The false claim does not have to be billed with actual knowledge that it is false or fraudulent. The false claim does not even have to be fraudulent; it can be merely false. The distinction lies in that a fraudulent claim is one that you intentionally alter. A false claim could merely be incorrect information. Saying it another way, the false claim can be a false or incorrect claim that you had no actual knowledge was false. That is hair-raising.
What is the penalty? It is:
A civil penalty of not less than $5,500 and not more than $11,000 per claim, plus 3 times the amount of the claim. You can see why these are high dollar cases.
The federal government recovered a jaw-dropping $5.7 billion in 2014 under the False Claims Act (FCA). In 2013, the feds recovered $5 billion under the FCA. Expect 2015 to be even higher. Since the inception of the Affordable Care Act (ACA), FCA investigations have increased.
Overwhelmingly, the recoveries are from the health care industry.
Everyone knows that the Medicare Claims Processing Manual is esoteric, verbose, and vague. Let’s face it: just Chapter 1 “General Billing Requirements” alone is 313 pages! Besides me, who reads the Medicare Claims Processing Manual cover to cover? Who, besides me, needs to know that Medicare does not cover deported beneficiaries or the exceptions to the Anti-markup Payment Limitation?
Not to mention, the Manual is not law. The Manual does not get approved by Congress. The Manual is guidance or policy.
However, in FCA cases, you can be held liable for items in the Medicare Claims Processing Manual of which you were not aware. In other words, in FCA cases, you can be found liable for what you should have known.
Real life hypotheticals:
Hospital submits claims to Medicare and received payment for services rendered in a clinical trial involving devices to improve organ transplants. Unbeknownst to the hospital, the Manual prohibits Medicare reimbursements for non-FDA approved services.
Physician A has reciprocal arrangement with Physician B. A undergoes personal surgery and B serves A’s Medicare Part B patients while A is recovering. A returns and bills Medicare and is paid for services rendered by B 61 days+ after A left the office.
A physician accepts assignment of a bill of $300 for covered Medicare services and collects $80 from the enrollee. Physician neglects to depict on the claim form that he/she collected anything from the patient. Medicare’s allowable amount is $250, and since the deductible had previously been met, makes payment of $200 to the physician.
These are just a few examples of situations which could result in a FCA allegation.
But do not fret! There are legal defenses written into the Social Security Act that provides protection for health care providers!
1. Check whether you have insurance coverage for FCA.
2. Have an attorney on hand with FCA experience.
3. Read portions of the Medicare Claims Billing Manual which are pertinent to you.
Most importantly, if you are accused of billing false claims, get your advocate sooner rather than later! Do not engage in any conversations or interviews without counsel!
Appeal all findings!
This is a copy of an article written by William Baude on SCOTUSblog.
In the article, William analyzes the oral arguments for Armstrong v. Exceptional Child Center, a very important Supreme Court case heard by the Justices January 20, 2015. If you don’t recall the lawsuit, see my blog: “Low Medicaid Reimbursement Rates Violate the Supremacy Clause?!… The Supreme Court to Weigh In!”
Here is the analysis:
The Supreme Court has heard a lot of preemption suits, but Tuesday’s arguments in Armstrong v. Exceptional Child Center suggest that the Court has not yet agreed on what exactly the formal underpinnings of those suits are.
The case features a debate about the intersection of two lines of precedent. One line restricts the availability of a federal statutory cause of action unless Congress has deliberately included one. The other line makes a cause of action broadly available when the plaintiff seeks an injunction to enforce a constitutional provision. At issue in this case is whether suits to enforce the preemptive effect of a federal statute are more like constitutional injunctions or statutory suits.
Both lines of precedent were on full display at yesterday’s argument. Shortly after his argument started the state’s counsel, Carl Withroe, was pressed with questions about the many prior preemption cases the Court had heard. Justice Ruth Bader Ginsburg adverted to a list of fifty-seven cases attached to the Medicaid recipients’ brief that are alleged to fail under the state’s theory. Withroe made several different attempts to distinguish those cases, although he did not seem to fully satisfy the Court. Towards the end of Withroe’s argument, Justice Anthony Kennedy asked “Did I miss something? … I thought you were going to give us a principled way to say why this case is different from our other preemption cases.”
Deputy Solicitor General Ed Kneedler took the podium next, attempting to supply that principled basis. He argued that Spending Clause legislation, and Medicaid specifically, was different from the usual preemption case for reasons rooted in the history of equity practice. Traditional equitable remedies, he said, could vindicate a person’s “liberty,” “property,” or “business,” but Medicaid was none of those things because it was a spending program created by a cooperative agreement with the state. Once again, Justice Kennedy chimed in at the end of Kneedler’s time to question whether his theory really distinguished one of the Court’s prior cases, American Trucking Associations v. City of Los Angeles.
Representing the Medicaid recipients, attorney James Piotrowski also faced skepticism about the implications of his position, and seemed to embrace them more than to distinguish them. He openly conceded that his clients would not have a right to sue under the Court’s statutory cause of action cases or under Section 1983. But the Supremacy Clause suit, he stressed, would seek only the narrow remedy of an injunction.
Justice Samuel Alito asked Piotrowksi whether his argument implied that someone could challenge a state’s decision to legalize marijuana as preempted by federal drug laws. Yes, Piotrowksi agreed, so long as Article III standing was satisfied, there would indeed be a cause of action. (Though Justice Alito did not specifically mention a suit by a state, the question might have been inspired by the recent marijuana preemption lawsuit filed in the Supreme Court’s original jurisdiction by two states — Oklahoma and Nebraska.)
And when Chief Justice John Roberts suggested to Piotrowski that his position would open “the courthouse door to everybody who says that federal law was not followed,” Piotrowski agreed: “Yes, your honor, that’s right. We open the courthouse doors.”
At the same time, Piotrowski also conceded that Congress could expressly preclude a preemption suit if it spoke clearly. The key, he argued, is that Congress’s decision not to create a statutory cause of action was not the same as a congressional decision to prohibit a cause of action that came from other background legal principles. Justice Kennedy did not ask Piotrowski any questions.
Lest this abbreviated summary make it seem like argument followed a clear path, I should say that there were also plenty of side points raised throughout. There were questions about how the state’s reimbursement rates related to its formula, a question from Justice Elena Kagan about why nobody from the federal Department of Health and Human Services had signed the federal government’s amicus brief, a response from Chief Justice Roberts about whether DHS was just trying to help the health-care sector “get a bigger chunk of the federal budget,” and a series of questions from Justice Stephen Breyer about the doctrine of “primary jurisdiction,” including a nostalgic reminiscence about the Civil Aeronautics Board “of blessed memory.” But the Justices also constantly reminded one another that the question was whether the suit could be brought, not whether it should prevail.
Four Justices have already answered that question in their dissent three years ago in Douglas v. Independent Living Center. Over the next few months, we will see if they have persuaded any of their colleagues to join them.
Proposed Federal Legislation Will Provide Relief to Hospitals and Medicare Patients in Need of Post-Acute Care
The Center for Medicare and Medicaid (CMS) announced that the new RAC contracts in North Carolina should be ready by the end of the year. This means that, next year, RAC audits on hospitals and other providers will significantly increase in number. Get prepared, providers!!
However, there is proposed federal legislation that could protect hospitals and Medicare patients if passed.
Hypothetical: You present yourself to a hospital. The hospital keeps you in observation for 1 day. You are then formally admitted to the hospital as an inpatient for 2 more days. Under Medicare rules, will Medicare now cover your post-acute care in a skilled nursing facility (SNF)?
Answer: No. Observation days in hospitals do not count toward the Medicare 3-day requirement.
On November 19, 2014, Congressman Kevin Brady introduced draft legislation that would allow hospital observation stays to count toward establishing Medicare eligibility for post-acute services, as well as improve and supervise the RAC program.
You are probably wondering…Why would a hospital keep me in observation for a full day without admitting me as an inpatient when hospitals are reimbursed at a significantly higher rate for inpatient versus outpatient?
Answer: To avoid RAC recoupments.
In recent years, recovery audit contractors (RACs) have been exceedingly aggressive in post payment review audits in challenging hospital claims for short, inpatient stays. The RACs are motivated by money, and all of the RACs are compensated on a contingency basis, which leads to overzealous, sometimes, inaccurate audits. Here in North Carolina, Public Consulting Group (PCG) retains 11.5% of collected audits, and Health Management Systems (HMS) retains 9.75%. See my blog: “NC Medicaid Extrapolation Audits: How Does $100 Become $100,000? Check for Clusters!”
Why have RACs targeted short-stay admissions in hospitals? As mentioned, one-day inpatient stays are paid significantly more than similar outpatient stays. Because of the financial incentives, RACs often focus audits on whether the short-stay is appropriate because this focus will yield a larger overpayment. As a result, hospitals become hesitant to admit patients as an “inpatient” status and, instead, keep the patient in outpatient observation for longer periods of time.
Keeping a person in observation status rather than admitting the person could impact the person’s health and well-being, but it will also impact whether a Medicare patient can receive post-acute care in a SNF (or, rather, whether Medicare will pay for it).
In order for a Medicare patient to receive covered, skilled nursing care after a hospital stay, Medicare requires a 3-day inpatient stay. With the onslaught of RAC audits, hospitals become leery to admit a person as an inpatient. When hospitals are tentative about admitting people, it can adversely affect a person’s post-acute care services.
To give you an idea of how overzealous these RACs are when it comes to auditing Medicare providers, there are over 800,000 pending Medicare appeals. That means that, across the country, RACs and other auditing companies have determined that over 800,000 providers and hospitals that accept Medicare were improperly overpaid for services rendered due to billing errors, etc. Over 800,000 providers and hospitals disagree with the audit results and are appealing. Now, obviously, all 800,000 appeals are hospitals appealing audits findings short-stay admissions not meeting criteria, but enough of them exist to warrant Congressman Brady’s proposed bill.
The proposed bill will significantly impact RAC audits of short-stay admissions in hospitals. But the proposed bill will also extend the current short moratorium on RAC audits on short-stay admissions in hospitals. Basically, the RACs became so overzealous and the Medicare appeals backlog became so large that Congress placed a short moratorium on RACs auditing short-stay admissions under the two-midnight rule through the end of March 2015. The proposed bill will lengthen the moratorium just in time for NC’s new RACs to begin additional hospital audits.
The moral of the story is…you get too greedy, you get nothing…
Remember “The Goose That Laid the Golden Eggs?”
A man and his wife owned a very special goose. Every day the goose would lay a golden egg, which made the couple very rich. “Just think,” said the man’s wife, “If we could have all the golden eggs that are inside the goose, we could be richer much faster.” “You’re right,” said her husband, “We wouldn’t have to wait for the goose to lay her egg every day.” So, the couple killed the goose and cut her open, only to find that she was just like every other goose. She had no golden eggs inside of her at all, and they had no more golden eggs.
Too much greed results in nothing.
Similar to the husband and wife who killed the goose who laid the golden eggs, overzealous and inaccurate audits cause Congress to propose a temporary moratorium on RACs conducting audits on short-term hospital stays until the reimbursement rates are implemented within the same proposed bill (which, in essence will lengthen the moratorium until the rates within the bill are implemented, which also includes additional methods to settle RAC disputes).
The proposed bill, entitled, “The Hospitals Improvements for Payment Act of 2014,” (HIP) would revamp the way in which short hospital stays are reimbursed and how observation days are counted toward Medicare’s 3-day rule for post-acute care; thereby alleviating these painful hospital audits for short inpatient stays. Remember my blog: “Medicare Appeals to OMHA Reaches 15,000 Per Week, Yet Decisions Take Years; Hospital Association Sues Over Medicare Backlog.”
HIP would create a new payment model called the Hospital Prospective Payment System (HPPS) that would apply to short-term hospital stays.
What is a “short stay?” According to the proposed bill, a short stay is a: (1) stay that is less than 3 days; (2) stay that has a national average length of stay less than 3 days; or (3) stay that is “among the most highly ranked discharges that have been denied for reasons of medical necessity.”
Proposed HIP would also require the Department of Health and Human Services (HHS) to establish a new base rate of payment, which will be calculated by blending the base operating rate for short stays and an equivalent base operating rate for overnight hospital outpatient services.
The draft bill would also repeal the 0.2 percent ($200 million per year) reduction that CMS implemented with the two-midnight rule, which is the standard that presumes hospital stays are reasonable if the stay covers two midnights.
The proposed bill also mandates more government supervision as to the RACs.
This proposed bill comes on the cusp of an increased amount of RAC audits in NC on hospitals. As previously discussed, our new RAC contracts will be awarded before the end of this year. So our new RACs will come in with the new year…
The moral of the story?
Expect hospital RAC audits to increase dramatically in the next year, unless this bill is passed.
Over last few months, I have noticed multiple examples of a state government attempting to silence opposing views, especially when it comes to Medicaid expansion/reform. Two of them, from Louisiana and Missouri, are discussed in this blog. Those government efforts to silence protests raise serious concerns about the health of our freedom of speech. Is our freedom of speech so limited now that we cannot express dissimilar views from those in government? The First Amendment of our U.S. Constitution protects the freedom of speech.
Here are some out-of-state examples of attempts to thwart the freedom of speech:
Down in Louisiana, a group called Moveon.org, leased a billboard and advertised the following:
For obvious reasons, the Governor of Louisiana, Bobby Jindal, disapproved of the billboard and brought a lawsuit against Moveon.org in federal court requesting the federal judge to Order Moveon.org to remove the billboard.
The federal judge denied the lieutenant governor Jay Dardenne’s request for an injunction, and the billboard remains.
Similarly, in Kansas City, Missouri a couple dozen clergymen were arrested by Capitol police for singing “Amazing Grace” at the legislature. The pastors were peacefully protesting that refusing to expand Medicaid was an “amazing disgrace.” These pastors should have been protected by the freedom of speech and the freedom to assemble.
North Carolina is not immune from these attempts to silence disparate viewpoints. During the 2013 General Assembly session 924 people were arrested during Moral Monday protests. (The Moral Monday protests consist of people chanting and yelling their political views around and in the legislative building). More have been arrested this year during the short session, which is now in session. My firm has its office in the PNC building downtown Raleigh, so each Monday, I can hear the protestors walking the streets, chanting their cheers, and, subsequently, the police sirens. I understand that many issues drive these Moral Monday protests and that Medicaid expansion/reform is one of these issues.
924 arrested people…that’s a lot of people arrested. For each arrested person, taxpayers are paying for the person’s stint, however short, stay at the police station. The police are devoting resources and time to peaceful protesters instead of violent criminals.
In an effort to stay some of these economic considerations and other considerations, the General Assembly had new Legislative Building rules ready before the beginning of the short session that would prohibit people from “making a noise loud enough to impair others’ ability to conduct a conversation in a normal tone of voice” and would provide for the arrest of those “creating an impediment to others’ free movement around the grounds.”
It is understandable that the legislators would like their offices quiet enough to hold conversations; I know my nerves get irritated by loud music or conversations outside my office door. But is prohibiting the loud noise and arresting those noise culprits the right answer? And who is to say what a “normal tone of voice” is. For gracious sake, Bill Clinton argued about the definition of the word “is.” “Normal tone of voice” is vaguer than the word “is.” I know my husband would tell you that my normal tone of voice is “obnoxiously loud,” so is my tone of voice “normal?”
Recently Judge Carl Fox issued an Order stating that the new Legislative Building rules with phrases that include “disturbing behavior” and “disruptive signs,” are too vague to enforce. Judge Fox stayed the General Assembly’s implementation of the new rules until a determination as to the constitutionality of the rules could be made.
As previously stated, North Carolina is not the only state that is attempting to limit speech and protests. And the Republicans are not the only group attempting to silence opposing views. Earlier this year, the federal government, vis-a-vis the IRS, announced that it would try to rewrite rules to limit how much political activity nonprofits can do and still qualify for tax-exempt status, which would limit the ability of social welfare charities to even discuss the political candidates close to an election (hence, inhibiting the freedom of speech).
But, first, why should we care whether people can protest at the legislature or comment on political views?
When I was a first year law school student, one of the core class requirements was Constitutional Law class. The First Amendment to the U.S. Constitution reads:
“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”
There are always exceptions to the general rule of you having the right to say whatever and wherever you like. Despite these limitations, as of now, in America, we still celebrate the freedom of speech.
When evaluating whether a person has the freedom to say something, it is easy to get caught up on the content of the message. Suppose I wrote something here inflammatory against women. Many people would have a hard time discussing the constitutionality of my speech without focusing on the content of that statement. However, our courts must look past the content of the statement to the constitutionality of the speech.
The Supreme Court set its standard for limiting the freedom of speech (that we use today) back in the 1960s. The High Court overruled its previous “clear and present danger” standard and wrote:
“[Our] decisions have fashioned the principle that the constitutional guarantees of free speech and free press do not allow a State to forbid or proscribe advocacy of the use of force or law violation except where such advocacy is directed to inciting or producing imminent lawless action and is likely to incite or cause such action.”
(emphasis added). The above language was written by the Supreme Court in 1969 and was followed by the Cohen v. California case. In Cohen, the Supreme Court overturned a conviction of a man who was wearing a shirt with the depiction: “Fuck the Draft!” inside a courtroom. In one of the most eloquent decisions in history, Justice John Marshall Harlan, who wrote the majority opinion, stated that Cohen’s jacket constituted protected political speech. He wrote that, despite the use of an expletive, “one man’s vulgarity is another man’s lyric.” The First Amendment recognizes enough breadth to permit a wide range of differing political views, even speech that exceeds traditional limitations of courtesy and polite behavior.
It is the logical assessment by Justice Harlan that we need to continue to implement today. In order to determine whether we should limit a person’s freedom of speech, we must close our ears to the content of the speech and determine whether the speech is protected by the Constitution. Read the Constitution. Read Supreme Court cases regarding the freedom of speech. The more polarized the content of the speech, the more likely we may be to immediately ban the speech without due regard for the Constitution.
Think about….what are your hot button topics? Abortion? Fracking? Stem cell research? The death penalty? Racism? Now think about the worst possible thing that any person could say to you, which would incite your anger uncontrollably. Say it to yourself in your head. Then imagine yourself comparing the “hate speech” to whether “such advocacy is directed to inciting or producing imminent lawless action and is likely to incite or cause such action.” Does the imagined words incite you to lawless action? Unless you imagined statements simply horrible, most likely, the words would cause you anger, frustration and resentment, but not cause you to conduct imminent lawless action.
My point is that we cannot confuse constitutionally protected speech with statements by people with differing political and moral views. I remember my dad told me one time, “If there are two people with the exact same opinions, then one person is not necessary.”
Differing views shape our country. But, recently, in the area of Medicaid, health care and Obamacare, people on both sides of the aisle are forgetting to step back and read the Constitution. People on both sides of the aisle are stooping to name calling and attempts to restrict speech. Our Constitution does not limit the freedom of speech to: “anything that will make everyone happy”…or “any statements that are aligned with the views of whoever is in charge.”
What if we lived in a country in which you are thrown in jail for placing a billboard touting your disagreement with the administration’s decisions or for singing “Amazing Grace” in a legislative building?
If we lived in a country in which you could be thrown in jail for speaking your mind, then we need to make immense amendments to our Constitution, and I also better start researching where to move.
Medicare Appeals to OMHA Reaches 15,000 Per Week, Yet Decisions Take Years; Hospital Association Sues Over Medicare Backlog
When you are a health care provider and make the business determination to accept Medicare or Medicaid, you are agreeing to deal with certain headaches. Low reimbursement rates and more regulations than you can possibly count make accepting Medicare and Medicaid a daunting experience. Throw in some pre- and post-payment review audits, some inept contractors, and dealing with the government, in general, and you have a trifecta of terrible to-dos.
But having to “pay back” (by reimbursement withholding) an alleged overpayment before an appeal decision is rendered is not a headache which hospitals have agreed to take, says the American Hospital Association. And it said so very definitively, in the form of a Complaint in the U. S. District Court for the District of Columbia
In both Medicaid and Medicare audits, if you get audited and are told to pay back XX dollars, you have a right to appeal that determination. Obviously, with Medicare, you appeal on the federal level and with Medicaid, you appeal to the state level. But the two roads to appeal (the state and federal) are not identical. Robert Frost once said, “Two roads diverged in a wood, and I, I took the one less traveled by, And that has made all the difference.” However,the Medicare appeal route is NOT the route less traveled by.
As of February 12, 2014, over 480,000 Medicare appeals were pending for assignment to an Administrative Law Judge (ALJ), with 15,000 new appeals filed each week. In December 2013, HHS Office of Medicare Hearings and Appeals (OMHA) announced a moratorium on assignment of provider appeals to ALJs for at least the next two years, and possibly longer. The average wait-time for a hearing is approximately 24 months, but will undoubtedly increase quickly due to the moratorium. A decision would not come until later. And all the while the parties are waiting, the provider’s reimbursements will be withheld until the alleged overpayment amount is met. Literally, a Medicare appeal could take 3-5 years.
The American Hospital Association is fed up. And who can blame them? On May 22, 2014, the American Hospital Association (AHA) filed a Complaint in the United States District Court in the District of Columbia against Kathleen Selebius, in her official capacity as Secretary of Health and Human Services (HHS), complaining that HHS is noncompliant with federal statutory law because of the Medicare appeal backlog. I am not surprised by AHA’s Complaint; I am only surprised that it took this long for a lawsuit. I am also surprised that more providers, other than hospitals, are not taking action.
AHA is requesting relief under the Mandamus Act, 28 U.S.C. § 1361. The Mandamus Act allows a court to compel an officer or employee of the United States or any agency thereof to perform a duty owed. In this case, the AHA is saying that HHS has a statutory duty to resolve Medicare appeals within 90 days. So, AHA is asking the district court to compel HHS to resolve Medicare appeals by not later than the end of the 90-day period beginning on the date a request for hearing has been timely filed.
And, here, I am obliged to insert a quick, two thumbs-up for our very own Office of Administrative Hearings (OAH) in NC for its handling of Medicaid appeals. If you file a contested case at OAH, it will not take 3-5 years.
AHA’s lawsuit is significant because AHA does not restrict the relief requested to only hospital Medicare appeals. AHA requests that the District Court “enter a declaratory judgment that HHS’s delay in adjudication of Medicare appeals violates federal law.” If granted, I would assume that this declaratory judgment would impact all Medicare providers. The only way to ensure all providers are covered by this decision is for all providers to either (1) file a separate action (to include damages, which is not included in AHA’s action for some reason); or (2) to join AHA’s action (and forego damages), but its impact will be broad. I am not sure why AHA did not seek damages; the time value of money is a real damage…the non-ability for the hospitals to invest in more beds because their money is stuck at HHS is a real damage…the loss of the interest on the withheld money, which is obviously benefiting the feds, is a real damage.
AHA’s request is not dissimilar to an arrested individual’s right to a speedy trial. During a criminal trial, the defendant remains incarcerated. Therefore, because we believe our liberty is so important, the defendant has a right to a speedy trial. That way, if he or she is innocent, the defendant would have spent the least number of days imprisoned.
With a Medicare audit appeal, HHS begins immediately withholding reimbursements until the alleged overpayment amount is met, even though through the appeal, that overpayment will most likely be decreased quite substantially. Apparently, across the nation, the percent of overturned Medicare audits through appeal is around 72%, but I could not find out whether the 72% represents ANY amount overturned or the entire 100% of the audit being overturned. Because, in my personal experience, 99.9% of Medicare appeals have SOME reduction in the alleged amount (I would have said 100%, but we are taught not to use definitive remarks as attorneys).
Because the provider’s Medicare money is withheld based on an allegation of an overpayment, the fact that the cases are backlogged at the ALJ level is financially distressing for any provider.Even without the backlog, Medicare appeals take longer than Medicaid appeals. In Medicare, there is four-step appeal process. Going before the ALJ is the 3rd level.
First, a Medicare appeal begins with the Medicare Administrative Contractor (MAC) for redetermination. The MAC must render a redetermination decision within sixty days.
If unsuccessful, a provider can appeal the MAC’s decision to a Qualified Independent Contractor (“QIC”) for reconsideration. QICs must render a decision within sixty days.
Provided that the amount in controversy is greater than $140 (for calendar year 2014), the next level, and where the backlog begins, is at the level of appeal to an ALJ. The ALJ is required both to hold a hearing and to render a decision within ninety days, which is not happening.
Hence, AHA’s lawsuit. Hopefully AHA will be successful, because a backlog of Medicare appeals at the ALJ level doesn’t help anyone. And audits are not going away.
Study Shows the ACA Will Not Lead Physicians to REDUCE the Number of Medicaid Recipients, Supply and Demand, and Get Me My Pokemon Cards!
A recent “study” by Lippincott, Williams, and Wilkins is entitled “Doctors Likely to accept New Medicaid Patients as Coverage Expands.” (I may or may not have belly laughed when I read that title). See my blog “Medicaid Expansion: Bad for the Poor.”
The beginning of the article reads, “The upcoming expansion of Medicaid under the Affordable Care Act (ACA) won’t lead physicians to reduce the number of new Medicaid patients they accept, suggests a study in the November issue of Medical Care, published by Lippincott Williams & Wilkins, a part of Wolters Kluwer Health.”
The study was published October 16, 2013. (BTW: From what I can discern from the article, the title actually means that physicians will be forced to accept more Medicaid patients because there will not be additional physicians accepting Medicaid). Odd title.
According to this study, the ACA will not cause doctors to reduce the number of Medicaid patients. What does this study NOT say? Nothing indicates that the ACA, which will allow millions more of Americans to become eligible for Medicaid, will cause MORE physicians to accept Medicaid. Nor does the study state that the ACA will cause physicians to accept MORE Medicaid recipients.
Am I the only person who understands supply and demand?
Anyone remember the 1999 Toys.R.Us.com debacle? On-line shopping was just heating up. I was in law school, and I, as well as millions of others, ordered Christmas presents on-line from Toys R Us. I ordered a bunch of Pokemon trading cards for a nephew…remember those? Me either…I just bought them for my nephew. Toys R Us promised delivery by December 10th.
Toys R Us was, apparently, a very popular store that year, because Toys R Us is unable to package and ship orders in time to meet the December 10th deadline. Nor could Toys R Us meet the deadline of Christmas. Employees were working through the weekends. About two days before Christmas, and just in time to create last-minute havoc during Christmas time, Toys R Us sends out thousands of emails saying, “We’re sorry.”
Obviously, Toys R Us was slammed by the media, and thousands of consumers were highly ticked off…including me.
I had to go to the mall (a place to which I detest going) on Christmas Eve (the worst day to shop of the entire year, except Black Friday, which I also avoid) to get my nephew a present.
Toys R Us learned its lesson. It outsourced its shipping to Amazon.com, which, obviously, has the whole shipping thing down pat.
50 million people are currently eligible for (and receive) Medicaid services (these numbers are purely fictional, as I do not know the real numbers…I basically estimated 1 million per state, which, I am sure, is an underestimation). Say there are 3.5 million physicians that accept Medicaid (70,000/state, which is probably a high estimation, when we are considering only physicians and not health care providers, generally).
Our hypothetical yields 14.28 Medicaid recipients per physician. Or a ratio of 14.28:1.
Media state that, if NC expanded Medicaid, that 587,000 more North Carolinians would be eligible for Medicaid if NC expanded Medicaid.
Using NC as a state average, 29.35 million more people would be eligible for Medicaid if all states expanded Medicaid (obviously not all states are expanding Medicaid, but, in my hypothetical, all states are expanding Medicaid). This equals a total of 79.35 million people in America on Medicaid.
But….no additional physicians….
Because, remember, according to the Lippincott study, the upcoming expansion of Medicaid under the Affordable Care Act (ACA) won’t lead physicians to reduce the number of new Medicaid patients they accept. But the ACA does not lead more physicians to accept Medicaid or physicians to accept more Medicaid patients.
This brings the ratio to 22.67:1. 8 1/2 new patients per one physican…and, BTW, that one physician may not be accepting new Medicaid patients or may not have the capacity to accept more Medicaid patients. It’s a Toys R Us disaster!!! No one is getting their Pokemon trading cards!!!
Why not? Why won’t the ACA lead more physicians to accept Medicaid? Why won’t the ACA lead physicians to accept more Medicaid recipients?
Didn’t the ACA INCREASE Medicaid reimbursement rates? Wouldn’t higher reimbursement rates lead more physicians to accept Medicaid and physicians to accept more Medicaid recipients??? I mean, didn’t you hear Obama tout that Medicaid rates would be increased to Medicare rates? I know I did.
One average, Medicaid pays approximately 66% of Medicare reimbursement rates. Obviously, every state differs as to the Medicaid reimbursement rate.
The ACA, however, slashes the Medicare budget by 716 million from 2013 to 2022. The cuts are across-the-board changes in Medicare reimbursement formulas for a variety of Medicare providers, including hospitals, nursing homes, home health agencies, and hospice agencies. Furthermore, the ACA creates the Independent Payment Advisory Board (IPAB), which is intended to determine additional Medicare reimbursement rate cuts. IPAB will be creating a new Medicare spending target; it will be comprised of 15 unelected bureaucrats. The board will be able to make suggestions to Congress to reign in Medicare spending, and one of the biggest tools the IPAB has is cutting physician reimbursement rates.
It’s the old smoke and mirrors trick…We will raise Medicaid rates to Medicare rates…pssst, decrease the Medicare rate so we can meet our own promise!!
While I am extremely happy to hear that, at least according to the Lippincott study, the ACA will not lead physicians to reduce the number of Medicaid patients they accept, I am concerned that the ACA will not lead more physicians to accept Medicaid and physicians to accept more Medicaid recipients.
In fact, the study states that “[t]he data suggested that changes in Medicaid coverage did not significantly affect doctors’ acceptance of new Medicaid patients. “[P]hysicians who were already accepting (or not accepting) Medicaid patients before changes in Medicaid coverage rates continue to do so,” Drs Sabik and Gandhi write. I bet the Drs. did not ask, “Would you continue to accept Medicaid, if you knew that your practice would endure more audits, post-payment reviews, possible prepayment reviews, and, in general, suspensions of reimbursements if anyone alleges Medicaid fraud, irrespective of the truth?”
Which tells me…hello…more Medicaid recipients, not more doctors!! Even if the physicians already accepting Medicaid COULD accept additional Medicaid recipient patients, each physician only has a certain amount of capacity. To my knowledge, the ACA did not increase the number of hours in a day. Supply and demand, people!!
Where are my Pokemon cards???!!!
Representative David Price spoke as the Keynote Speaker at the North Carolina Society of Health Care Attorneys annual meeting yesterday morning. Since Representative Price was actually up in Washington D.C. during the shutdown, it was very interesting to hear him speak. His opinion, as one would expect from his ideology, was that the shutdown was idiotic and unnecessary.
What I found interesting was how he described the relationships between congressmen and women today versus in the 90s. Remember, he has represented NC in Washington for more than one decade. He described the relationships, even across party lines, as more cordial in the 90s than today’s relationships. I wonder why our legislative body has become more segregated.
In the afternoon session, Linwood Jones from the North Carolina Hospital Association spoke about recent legislative action. This legislature was not good to hospitals. As Linwood described the legislative session this year…”It was all about Medicaid.” (I know you were wondering how the NC Society of Health Care Attorneys annual meeting was going to be germane to Medicaid). According to Mr. Jones, the Medicaid budget was the primary factor in almost all budget cuts. And what entities get most of Medicaid funding?
Duh…Hospitals. Hospitals are the biggest providers in the state, and, in some areas, the biggest employers.
Our Medicaid budget is approximately $13 billion.
Remember…36 million a day is what we spend on Medicaid in NC.
How much of that $13 billion Medicaid budget goes to hospitals? According to Kaiser Family Foundation, 25.7% for inpatient care. Or $3.341 billion annually. Or $9.252 million a day!!
Including outpatient care? 38.7% Or $5.031 billion annually. Or $13.932 million a day!!
According to the handy-dandy Wikipedia website, North Carolina has 126 hospitals in 83 counties. For those of you who never went to 6th grade in North Carolina, we have 100 counties in NC. (In the 6th grade, if you grew up here, you learn all about North Carolina geography, which apparently didn’t stick, because I still get lost).
That is $13.932 million dollars a day going to 126 hospitals in NC. That is a lot of money!!!
Does Medicaid matter to hospitals?
Heck, yes!! Remember, a hospital cannot turn anyone away, including Medicaid recipients and uninsured. Add the fact that the mentally ill in NC are not getting medically necessary services because our managed care organizations (MCOs) have monetary incentives to NOT provide the expensive mental health services; PLUS the fact that Medicaid reimbursements are painfully low, which leads to many physicians not accepting Medicaid, and you get the sad sum of Medicaid recipients ending up in emergency rooms of hospitals.
Don Dalton, a spokesman for the Hospital Association, said that statewide about 46 percent of hospitals’ revenue comes from Medicaid. (See Rose Hoban’s article).
But, hospitals don’t make a huge profit. Especially on Medicaid recipients.
On average, Medicaid reimburses hospitals 80% of the actual cost for hospital services.
But this year, the General Assembly created a budget in which the 80% will be reduced to 70%.
Medicaid reimbursements were already bad. But now, the Medicaid reimbursements will be 10% worse. Subtract 10% from the $13.932 million dollars a day…
This is not a good thing for hospitals nor Medicaid recipients.
When Representative Price was speaking, a woman raised her hand with a question/vignette. She said that she and her friends had gotten on the health care exchange (Obamacare) (Healthcare.gov) website and “shopped” for health insurance. She said that all the people who signed up for health care exchange (because it is mandated and there is a penalty for not having insurance) had their premiums increase anywhere from 300%-800%. Although Rep. Price made a good point, that they all should have contacted Blue Cross Blue Shield (BCBS) and asked why BCBS dropped that particular insurance plan. Nonetheless, the woman harped on the fact that Obama had promised, “You like your insurance? You can keep it! You like your doctor? You can keep him/her!” (I added the “her.”)
So, here we are…with low Medicaid reimbursements to begin with, high medical costs, and the General Assembly reducing the Medicaid rates for hospitals by 10%.
Incentive to accept Medicaid recipients? I think not…but hospitals have no choice.
Physicians and other Medicaid providers have the choice as to whether to accept Medicaid patients, but hospitals? No choice there. Hospitals must accept Medicaid recipients. Mandatory!!!
In my opinion, the very first step toward fixing the Medicaid system is RAISING Medicaid reimbursement rates.
Sound counterintuitive? Yes, I agree it sounds counterintuitive. But think about Medicaid like this:
If you agree with me that Medicaid is an entitlement and that the Medicaid budget is way too high, but that all Medicaid recipients deserve quality health care…if you agree with all that…
And you also agree with me that it is drastically more expensive for Medicaid recipients to go to the emergency room (ER) for health issues that could be solved in a family physicians’ office…if you agree with all that…
Then we would save Medicaid dollars by increasing (drastically) the Medicaid reimbursements. If doctors had a monetary incentive to accept Medicaid, then more doctors would accept Medicaid (Logic 101). If more doctors accept Medicaid, then more Medicaid recipients have the ability to go see a doctor. If more recipients have more office visits then ER visits drop. If more unnecessary ER visits drop, then the State pays less money to the hospitals, which is an extremely higher rate (even with the 10% reduction) than a higher Medicaid reimbursement to physicians. Cut the $13.932 million a day to hospitals, not by decreasing the reimbursement rate, but by fewer Medicaid recipient going to the ER…instead have the recipients receive quality care outside the hospital, thus saving money…
By reducing the Medicaid reimbursements to hospitals, the legislature did decrease the Medicaid budget, but not in a way that intelligently attempts to fix the system. The same amount of Medicaid recipients will be going to hospitals. Since the hospitals cannot turn anyone away, reducing reimbursements to hospitals merely hurts the hospitals.
Want to decrease the Medicaid budget? Increase Medicaid reimbursements (drastically) to Medicaid providers. More providers accepting Medicaid means more recipients receiving quality care and NOT checking into the ER….
Money saved intelligently. Too bad the legislature didn’t ask my opinion prior to slashing Medicaid reimbursement rates.
Hey, have you heard??? Our federal government has shut down. So why am I still getting mail???
Unless you have lived under a rock for the past couple weeks, you are aware that our esteemed federal government has shut down. At least…partially. I keep getting mail. Social security is still getting paid. But don’t you dare try to visit a national monument…those are off-limits!! Really? Who decided what gets shut down and what stays open? How is it that I still get my cable bill, but cannot visit Yellowstone National Park??
How is all this tomfoolery affecting Medicaid? Minimally, in most areas, but Medicaid fundings HAS STOPPED in Washington D.C.
Why stop Medicaid funding in D.C. when the federal air traffic controllers are still working. The State Department continues processing foreign applications for visas and U.S. applications for passports. The federal courts are open. The National Weather Service is still working. Student loans are still getting paid. The Veterans’ hospitals are all up and running. The military is still working. I guess, Obama and White House staff are still working. (Although Obama could be on the golf course). The Post Office is delivering mail.
Yet, here are some random federal actions and agencies that are actually stopped/closed: Food safety inspections are suspended; U.S. food inspections abroad have also been stopped. Auto recalls and investigations of safety defects are stopped. Taxpayers, who filed for an extension in the spring, still have to pay their taxes by today, yet the IRS is not processing tax returns (How does this make sense??). The Consumer Product Safety Commission (CSPC) is not working. (Great, after the CPSC starts working again, there are sure to be numerous lawsuits based on new product defects that have been placed in the market over the last 2 weeks). The Environmental Protection Agency (EPA) has ceased to run, which means we have two weeks of allowable pollution. Many at the Federal Bureau of Investigations (FBI) and the federal housing agency are furloughed.
How does this shutdown make any sense?? Who determined that the IRS should not process tax returns, but should accept taxes? Who decided that safety inspections should be stopped, but passports should still be processed?
That safety inspections of food and products should halt, but students should still get federal loans.
Where is the logic?
It is as if someone said, “Shutdown the federal government!! Except not the mail, passports, and the weather service…keep those running!”
And then Medicaid in D.C…. Why did Medicaid funding stop only in D.C.?? While I still think if the mail is being delivered that D.C. providers could get Medicaid fundings, I will attempt to explain the illogical reason below:
Because D.C. is not a state. D.C. is a local government without a state, so its budget must be authorized by U.S. Congress. And Congress has not passed a budget.
D.C. has $2.7 billion budgeted for Medicaid, but providers are getting nothing (and, quite possibly, some recipients). I can only imagine how this is negatively impacting health care providers in D.C. I am sure many of the providers are still rendering services unpaid. But some, I would imagine, are closing up shop. I know I could not last financially without a paycheck for 3 months. I am sure many of the D.C. providers are no different.
But it still makes no sense. Just like NC, D.C. pays for about 30% of Medicaid with the federal government reimbursing about 70%. If NC’s federal reimbursements are still being paid, why not in D.C.?
And why am I still getting mail????
Well, my heart goes out to all the Medicaid providers and Medicaid recipients in D.C. I hope you receive Medicaid fundings very soon.
Although, at least D.C. providers know that, at some point, the Medicaid funds will be funded; whereas in NC we still have NCTracks.