Category Archives: Constitutional Claim

NC Medicaid Reimbursement Rates for Primary Care Physicians Slashed; Is a Potential NC Lawsuit Looming?

Here is my follow-up from yesterday’s blog post, “NC Docs Face Retroactive Medicaid Rate Cut.

Nearly one-third of physicians say they will not accept new Medicaid patients, according to a new study.  Is this shocking in light of the end of the ACA enhanced payments for primary physicians, NC’s implementation of a 3% reimbursement rate cut for primary care physicians, and the additional 1% reimbursement rate cut?  No, this is not shocking. It merely makes economic sense.

Want more physicians to accept Medicaid? Increase reimbursement rates!

Here, in NC, the Medicaid reimbursement rates for primary care physicians and pediatricians have spiraled downward from a trifecta resulting in an epically, low parlay. They say things happen in threes…

(1) With the implementation of the Affordable Care Act (ACA), the Medicaid reimbursement rate for certain primary care services increased to reimburse 100% of Medicare Cost Share for services paid in 2013 and 2014.  This enhanced payment stopped on January 1, 2015.

(2) Concurrently on January 1, 2015, Medicaid reimbursement rates for evaluation and management and vaccination services were decreased by 3% due to enactments in the 2013 NC General Assembly session.

(3) Concurrently on January 1, 2015, Medicaid reimbursement rates for evaluation and management and vaccination services were decreased by 1% due to enactments in the 2014 NC General Assembly session.

The effect of the trifecta of Medicaid reimbursement rates for certain procedure codes for primary care physicians can be seen below.

CCNC

As a result, a physician currently receiving 100% of the Medicare rates will see a 16% to 24% reduction in certain E&M and vaccine procedure codes for Medicaid services rendered after January 1, 2015.

Are physicians (and all other types of health care providers) powerless against the slashing and gnashing of Medicaid reimbursement rates due to budgetary concerns?

No!  You are NOT powerless!  Be informed!!

Section 30(A) of the Medicaid Act states that:

“A state plan for medical assistance must –

Provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan (including but not limited to utilization review plans as provided for in section 1396b(i)(4) of this title) as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.”

Notice those three key goals:

  • Quality of care
  • Sufficient to enlist enough providers
  • So that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area

Courts across the country have held that low Medicaid reimbursement rates which are set due to budgetary factors and fail to consider federally mandated factors, such as access to care or cost of care, are in violation of federal law.  Courts have further held that Medicaid reimbursement rates cannot be set based solely on budgetary reasons.

For example, U.S. District Court Judge Adalberto Jordan held in a 2014 Florida case that:

“I conclude that while reimbursement rates are not the only factor determining whether providers participate in Medicaid, they are by far the most important factor, and that a sufficient increase in reimbursement rates will lead to a substantial increase in provider participation and a corresponding increase to access to care.”

“Given the record, I conclude that plaintiffs have shown that achieving adequate provider enrollment in Medicaid – and for those providers to meaningfully open their practices to Medicaid children – requires compensation to be set at least at the Medicare level.

Judge Jordan is not alone.  Over the past two decades, similar cases have been filed in California, Illinois, Massachusetts, Oklahoma, Texas, and D.C. [Notice: Not in NC].  These lawsuits demanding higher reimbursement rates have largely succeeded.

There is also a pending Supreme Court case that I blogged about here.

Increasing the Medicaid reimbursement rates is vital for Medicaid recipients and access to care.  Low reimbursement rates cause physicians to cease accepting Medicaid patients.  Therefore, these lawsuits demanding increased reimbursement rates benefit both the Medicaid recipients and the physicians providing the services.

According to the above-mentioned study, in 2011, “96 percent of physicians accepted new patients in 2011, rates varied by payment source: 31 percent of physicians were unwilling to accept any new Medicaid patients; 17 percent would not accept new Medicare patients; and 18 percent of physicians would not accept new privately insured patients.”

It also found this obvious fact:  “Higher state Medicaid-to-Medicare fee ratios were correlated with greater acceptance of new Medicaid patients.”

Ever heard the phrase: “You get what you pay for.”?

A few months ago, my husband brought home a box of wine.  Yes, a box of wine.  Surely you have noticed those boxes of wine at Harris Teeter.  I tried a sip.  It was ok.  I’m no wine connoisseur.  But I woke the next morning with a terrible headache after only consuming a couple of glasses of wine.  I’m not sure whether the cheaper boxed wine has a higher level of tannins, or what, but I do not get headaches off of 2 glasses of wine when the wine bottle is, at least, $10.  You get what you pay for.

The same is true in service industries.  Want a cheap lawyer? You get what you pay for.  Want a cheap contractor? You get what you pay for.

So why do we expect physicians to provide the same quality of care in order to receive $10 versus $60?  Because physicians took the Hippocratic Oath?  Because physicians have an ethical duty to treat patients equally?

While it is correct that physicians take the Hippocratic Oath and have an ethical duty to their clients, it’s for these exact reasons that many doctors simply refuse to accept Medicaid.  It costs the doctor the same office rental, nurse salaries, and time devoted to patients to treat a person with Blue Cross Blue Shield as it does a person on Medicaid.  However, the compensation is vastly different.

Why?  Why the different rates if the cost of care is equal?

Budgetary reasons.

Unlike private insurance, Medicaid is paid with tax dollars.  Each year, the General Assembly determines our Medicaid budget.  Reducing Medicaid reimbursement rates, by even 1%, can affect the national Medicaid budget by billions of dollars.

But, remember, rates cannot be set for merely budgetary reasons…

Is a potential lawsuit looming in NC’s not so distant future???

Low Medicaid Reimbursement Rates Violate the Supremacy Clause?! …The Supreme Court to Weigh In!

Tomorrow is a big day.  Not only will most of us return to work after a long weekend, but the Supreme Court will hear oral arguments on a very important issue.

On January 20, 2015, (tomorrow) the Supreme Court of the United States will hear oral arguments on a very important issue that will affect every health care provider in America who accepts Medicaid, and, yet, there has been very little media coverage over this lawsuit.

Legal Issue: Does a Medicaid provider have a private right of action under the Medicaid Act to bring a lawsuit against states under the Supremacy clause.

The Issue Translated from Legalese to English: Can a Medicaid provider sue the state in which the provider does business if the provider believes that the Medicaid reimbursement rate for a particular service or product is too low? For example, can a dentist sue NC for a higher Medicaid reimbursement rate for tooth extractions? Can a long-term care facility and/or a home care agency sue due to low Medicaid personal care services (PCS) rates?

It is my opinion that Medicaid providers across the country have not brought enough lawsuits demanding higher Medicaid reimbursement rates. It is without question that Medicaid reimbursement rates across the country are too low. Low reimbursement rates cause health care providers to refuse to accept Medicaid recipients. See my blog NC Health Care Providers Who Accept Medicaid: Thank you!.

If you hold a Medicaid card, you do not automatically have access to good quality health care. You are segregated from the privately insured and the care you receive is not equal. You are limited in your choice of doctors. If you are an adult, you can forget any dental procedures. Even if you aren’t an adult, you require prior approval for almost all services (regardless of whether you are suffering from pain), which will often be denied (or reduced…or require a significant waiting period). You want mental health care? You better get the very least amount of help possible until you prove you need more help. See my blog NC Medicaid Expansion: Bad for the Poor.

And why won’t more health care providers accept Medicaid? The Medicaid reimbursement rates are too low!! The Medicaid reimbursement rates are too low for health care providers to yield a profit…or, in many instances, even cover the overhead. In fact, providers tell me that when they do accept Medicaid, they are forced to accept more privately insured patients to offset the losses from accepting the finite number of Medicaid patients. In many states, the states refuse to cover psychology costs for Medicaid recipients, and other states refuse to cover the costs for PCS.

So, I say, bring on the lawsuits!!! Force states to increase Medicaid reimbursement rates!!

For example, in obstetrics, if the national Medicaid reimbursement rate for ob/gyn visits is $1.00, here, in NC, we reimburse ob/gyns 88¢. Which is why only 34% of North Carolina ob/gyns accept Medicaid.  See Kaiser.

So far, across the country, federal courts have held that Medicaid providers do have a private right of action to sue states for low reimbursement rates. In fact, in most cases, the providers have PREVAILED and the states have been forced to pay higher rates!!!

Providers of all types have filed lawsuits across the country disputing the states’ Medicaid reimbursement rates as being too low. For example, in California, between April 2008 and April 2009, five lawsuits were filed against the state of California to stop scheduled reductions in reimbursement rates (on behalf of rehabilitation providers, nonemergency medical transportation providers, pharmacies, physicians, and emergency physicians).

A Florida lawsuit that was settled in December 2014 revolved around a young boy on Medicaid who was suffering from a painful sinus infection. His mother contacted multiple physicians and was denied appointments because the mother and her son were on Medicaid. He was forced to wait almost a week for an appointment. The judge in the case wrote, “I conclude that Florida’s Medicaid program has not compensated primary physicians or specialists at a competitive rate as compared with either that of Medicare or private insurance payers….I further conclude that Florida’s structure for setting physician reimbursement fails to account for statutorily mandated factors in the Medicaid Act, including the level of compensation needed to assure an adequate supply of physicians.”

Over the years, the Supreme Court has vacillated over even determining whether a Medicaid provider has a private right of action under the Medicaid Act to bring a lawsuit against states under the Supremacy clause.

In 2002, the Supreme Court denied certiorari (refused to hear the argument) on this very issue. Coming out of the 9th Circuit (which includes California), a Circuit which has been especially busy with lawsuits arguing Medicaid reimbursement rates are too low, the case of Independent Living Center of California v. Shewry would have squarely addressed this issue. But the Supreme Court denied certiorari and did not hear arguments.

In 2012, the Supreme Court decided to hear arguments on this issue. In Douglas v. Independent Living Center, Medicaid beneficiaries and providers sued the California state Medicaid agency, seeking to enjoin a number of proposed provider payment rate cuts. After the Supreme Court heard oral argument, but before it had issued its decision, the Centers of Medicare and Medicaid Services (CMS) approved California’s state plan amendment containing the rate cuts. Consequently, the Douglas majority held that the case should be sent back to the lower courts to consider the effect of CMS’s approval of the state plan amendment, without deciding whether the beneficiaries and providers had a right to sue.

Now the case Armstrong v. Exceptional Child Center will be heard by the Supreme Court on January 20, 2015.

How did this case come about?

In 2005, the Idaho state legislature passed a law requiring the state Medicaid agency to implement a new methodology to determine provider reimbursement rates, and in 2009, the state Medicaid agency published new, higher rates based, in part, on a study of provider costs. CMS approved the state’s new methodology. However, the new rates never were implemented because the state legislature failed to appropriate sufficient funding, making the refusal to increase the reimbursment rate a budgetary issue.  A group of Idaho residential habilitation providers that accept Medicaid sued the Idaho state Medicaid agency and alleged that the state’s failure to implement the new rates conflicted with federal law (the Supremacy Clause).

Section (30)(A) of the Medicaid Act requires state Medicaid agencies to take provider costs into account when setting reimbursement rates. Under case law precedent, the rate must “bear a reasonable relationship to efficient and economical . . . costs of providing quality services.” To deviate from this standard of reasonableness, a state must justify its decisions with more than budgetary reasons.

The argument is that the state’s low reimbursement rate for X service, is too low to provide good quality services and that the low rates were set for purely budgetary reasons.

Once you prove that the reimbursement rates are too low to expect good quality care (which would be fairly easy for almost all Medicaid services in NC), then you argue that the state’s reimbursement rates violate the Supremacy Clause because the federal law requires good quality care.

What is the Supremacy Clause?

The Supremacy Clause can be found in Article VI, Paragraph 2 of the U. S. Constitution. Basically, it establishes that federal law trumps conflicting state laws , even state constitutional provisions, on matters within the Constitution’s grant of powers to the federal government – such as Medicaid..

In this case, we are talking about a state’s Medicaid reimbursement rate violating the federal law requiring that the rate must bear a reasonable relationship to quality of care.

This is not a small matter.

After all is said and done, the Armstrong case, which will be heard by the Supreme Court tomorrow, will be extraordinarily important for Medicaid health care providers. I believe it is obvious which way I hope the Supreme Court decides…in favor of providers!! In favor of a ruling that states are not allowed to underpay health care providers only because the patient holds a Medicaid card.

My wish is that Medicaid providers across the country bring lawsuits against their state to increase Medicaid reimbursement rates…that the providers prevail…that more health care providers accept Medicaid…and that more Medicaid recipients receive quality health care.

Is that too much to ask?

The Supreme Court will most likely publish its opinion this summer.

Its decision could have an extreme impact on both Medicaid providers and recipients.  Higher Medicaid reimbursement rates would increase the number of physicians willing to accept Mediaid, which, in turn, would provide more access to care for Medicaid recipients.

Keep in mind, however, the issue before the Supreme Court in Armstrong is narrow.  If, for whatever reason, the Supreme Court decides that Medicaid providers do not have a private right to sue under the Supremacy Clause…all is not lost!!! There is more than one way to skin a cat.

AZ Supreme Court Holds AZ Legislators Have Standing to Challenge AZ Law, But Media Mischaracterizing the Lawsuit

You know the old adage, “Believe none of what you hear, and only half of what you see?” –Benjamin Franklin.

Well the old adage still holds true, especially when it comes to journalists and the media interpreting and reporting on lawsuits that deal with Medicaid laws, and which, perhaps, only an infinitesimal, ancillary aspect may touch the issue of Medicaid expansion.

Even if the lawsuit will not impact Medicaid expansion, journalists and the media hype the lawsuits as “conservatives challenging Obamacare yet again,” which mischaracterizes the actual lawsuit.

It seems that the media have become so accustomed to polarizing the topic of Medicaid expansion that reporters seem incapable of truly assessing the issues objectively and reporting accordingly.  This has happened recently when the AZ Supreme Court rendered a decision December 31, 2014, regarding legal standing, not the constitutionality of Medicaid expansion as many journalists report.  Biggs, et al. v. Hon. Cooper, et al.

The Arizona Supreme Court only decided that 36 legislators have the legal standing to challenge the passage of House Bill 2010, which was signed into law as A.R.S. § 36-2901.08.

What is A.R.S. § 36-2901.08?

For starters, A.R.S. stands for Arizona Revised Statutes (ARS). For those of you who missed “Schoolhouse Rock” as a child, a statute is a law that is enacted by the legislative body and which governs the state. Statutes are considered “black letter law” and should be interpreted on their face value and plain meaning.

The content of 36-2901.08 allows the State of Arizona to expand Medicaid.  In addition to expanding Medicaid, 35-2901.08 assesses a levy on hospitals to aid in funding the expansion of Medicaid.

36 Arizona legislators voted against 36-2901.08. It passed by a simple majority and was signed into law. The 36 legislators, who voted against the bill, brought a lawsuit to enjoin the statute from being applied or enacted. The State of Arizona’s position is that the 36 legislators lack the legal standing to bring the lawsuit.

Here are the issues in the legislators’ case, BIGGS ET AL. v. HON. COOPER ET AL.:

1. Do the 36 legislators have the standing to bring an injunctive action enjoining Arizona from carrying out 36-2901.08?

2. If the answer to #1 is yes, then have the 36 legislators proven that 36-2901.08 was passed in violation of the AZ Constitution?

I’ve read a number of articles from journalists covering this matter who mischaracterize the Biggs lawsuit as a lawsuit brought by the Arizona legislators, predominantly Republicans, asking the Arizona Supreme Court to strike statute 36-2901.08 because the expansion of Medicaid is unconstitutional, or “challenging Governor Jan Brewer’s Medicaid expansion plan,” or “challenging the legality of the state’s Medicaid expansion…”

These journalists are mischaracterizing the Arizona Supreme Court’s opinion.  And I am not talking about journalists for small, local papers are making these mistakes…the above quotations are from “The New York Times” and “The Associated Press.”

So, let’s discuss the true, correct ramifications of the Arizona Supreme Court opinion in Biggs

First, the Biggs opinion does not hold that Medicaid expansion in Arizona or elsewhere is unconstitutional…nor does it decide whether Medicaid expansion in Arizona is invalid on its face.

The opinion, rendered December 31, 2014, only holds that the 36 legislators have the legal standing to bring the lawsuit…there is no holding as to constitutionality of Medicaid expansion, despite so many journalists across America stating it so.

What is standing?

Standing, or locus standi, is the capacity of a party to bring suit in court.  This is not a question of whether a person is physically capable of bringing a lawsuit, but whether the person prove that he or she has sustained or will sustain a direct injury or harm and that the harm is redressable (or can be fixed or set right by the lawsuit).

The issue on the Supreme Court level in Arizona is only the narrow issue of whether the 36 legislators have standing. Period.

The Arizona Supreme Court held that the 36 legislators do possess the requisite legal standing in order to bring the lawsuit.

Now, the case will be remanded (sent to a lower court), in this instance, to the Superior Court, for a new fact-finding trial now that the issue of standing has been resolved.  In other words, at the lower superior court level, the ref (judge) made a call that the football players on the team (36 legislators) were ineligible to play NCAA football (poor grades, were red-shirted last year), and the alleged ineligible players appealed the decision all the way up.  Now the NCAA (AZ Supreme Court) has determined that the players are eligible and the game will resume.

Again, despite the rhetoric put forth by numerous widespread journalists, the 36 legislators are not merely challenging Arizona Medicaid expansion on its face.

Instead, the Arizona Constitution requires that certain Acts that increase state revenues must pass the legislature by a supermajority vote. See Ariz. Const. art. 9, § 22(A).

Remember from the beginning of this blog that 36-2901.08 was passed by a simple majority.

The 36 legislators argue that the assessment of a levy on Arizona hospitals constitute an Act that requires a supermajority vote, which, obviously would require more than a straight 50% approval.

So the 36 legislators’ lawsuit in AZ is about whether 36-2901.08 needs a supermajority or simple majority to vote it into law.

Not whether Medicaid expansion is constitutional.

Believe none of what you hear, and only half of what you see…especially when it comes to journalists and media reporting on lawsuits regarding Medicaid rules and regulations.

Compelling Personal Care Workers to Pay Union Dues Violates Our Freedom of Speech: But I Still Have to Pay My HOA Dues!

I live in a community that requires homeowner association monthly dues.  We have a homeowner association (HOA).  More than once I have complained at the high cost of these monthly dues and the absurd endeavors on which our HOA spends my money.  For example, we had a beautiful, clay tennis court.  If you have ever played tennis on a clay court, you know how wonderful it is to play on clay.  Clay tennis courts are also expensive to build.  A few years ago, my HOA decided to turn the clay tennis courts into a gardening center.  In place of the tennis nets, they built 10-12 raised beds to which the homeowners could purchase rights to use.  Somehow, my HOA determined the clay tennis court would be better used as a place to hold raised beds instead of playing tennis.

Despite my intense disapproval of this decision, I was forced to continue to pay my HOA dues, and a part of my HOA dues was spent on the conversion from tennis court to garden center.

Not completely dissimilar, in many states, public sector workers are required to contribute to union dues, even if they disagree with the union’s actions.  In-home care workers are considered public sector workers in Illinois because they care for the disabled and elderly and accept Medicaid money.  Including Illinois, 19 states allow bargaining agreements for home care workers.

Last week the Supreme Court sent shockwaves to the 19 states that allow bargaining agreements with home care workers.  The Supreme Court held that Illinois cannot compel personal care workers to pay union dues.

You may be asking yourself, why is Knicole blogging about an Illinois lawsuit and union dues.  How in the world does this affect North Carolina health care providers who accept Medicare and Medicaid?

The narrow answer would be that the case has no effect whatsoever on NC health care providers.  Unlike Illinois, North Carolina does not allow public sector bargaining.  In fact, in NC, union contracts, or bargaining contracts for public sector employees are considered “illegal, unlawful, void and of no effect.”  N.C. Gen. Stat. 95-98.

A broader view, on the other hand, is to understand that increases or decreases in personal care wages, better or worse benefits provided to personal care workers, and the overall profit or loss of personal care workers across the country, is relevant to NC personal care workers, and I prefer this broader view.

In the Supreme Court case, Harris, et al v. Quinn, Justice Alito wrote that compelling public sector workers to compensate a third party to “speak” for them, even if the worker disagrees with the third party’s speech violates the First Amendment.

In the Supreme Court opinion, Justice Alito writes:

“If we accepted Illinois’ argument, we would approve an unprecedented violation of the bedrock principle that, except perhaps in the rarest of circumstances, no person in this country may be compelled to subsidize speech by a third party that he or she does not wish to support.”

Individual states determine labor laws related to government employees.  As previously stated, NC bans bargaining agreements.  Virginia does as well.

In states that do allow bargaining agreements, if workers did not want to participate in the bargaining unit, the worker would opt out of full dues and pay only the cost of grievance administration and collective bargaining.  Supposedly, this prevents the nonmembers, who benefit from the reward of collectively-bargained higher wages or better benefits, from reaping the benefits without paying for them.  The whole “free-ride” idea…

In Illinois, Service Employees International Union (SEIU), a bargaining unit, argued that personal care workers should be compelled to contribute to it because personal care workers are public sector workers.

SEIU claims that it gets higher pay and better benefits for personal care workers.  Approximately 1 million of the 3 million personal care workers nationwide are members of SEIU or other similar organizations.

However, the Supreme Court disagrees.  According to the Harris decision, I shouldn’t have to pay for HOA dues if I disagree with the HOA’s actions (I’m kidding.  Sadly, I have no case to cease paying my HOA dues).

Proponents of unions are not happy with the results, but let’s play out a hypothetical…what if the Supreme Court held that public sector workers were required to pay union dues, even against their will….

Because, think about it…the government cannot prevent us from contributing to political candidates nor can the candidate force you to contribute to a political campaign.  Upholding the freedom of speech is not necessarily anti-union.  The Supreme Court did not rule “against” unions per se.  It ruled that a bargaining unit is “bargaining for” or “speaking for” its members.  And you cannot be forced to pay for speech with which you disagree.

Free speech allows all of us to individually decide which principles to support.  Allowing personal care workers to choose not to support certain ideologies is not an attack on collective bargaining.  Rather, it ensures that the free choices of personal care workers are represented by any union entity, rather than union leaders benefiting from coerced fees.

While the Harris decision does not apply to me and my HOA dues for many reasons, including the fact that I chose to live in the community knowing that the HOA existed, the Harris decision does have possible broad ramifications, especially as to in-home care workers and other public sector workers.  It may mean that the 1 million in-home care workers now compelled to contribute to unions may have standing to stop if they so choose.