Category Archives: N.C. Gen. Stat. 150B

Medicare and Medicaid Appeal Deadlines and Procedures: Laws that EVERY Health Care Provider Should Know

If you are a physician, most likely, you are not a lawyer.  And vice versa.  While there are exceptions, generally, the professions of physicians and attorneys are mutually exclusive.  Personally, one reason I went to law school is because I am awful at math.  However, presumably, I would be able to write a killer essay on early Shakespearean comedies, much unlike my primary care physician.

That said, there are things that every physician who accepts Medicare or Medicaid should know: (1) appeal deadlines; and (2) appeal procedures.

Ignoring either appeal deadlines or procedures does not make them go away.

 Appeal deadlines

They exist.  And if you fail to appeal an adverse decision within the required timeframe, you will be barred from appeal.  Knowing the appeal deadline is imperative!

Putting off hiring legal counsel can lead to missing an appeal deadline.

A client came to me a year or so ago.  We will call him Artagnan, or Art, for short.  Art had received a Tentative Notice of Overpayment (TNO) alleging that Art owed the Department of Health and Human Service (DHHS) $1,780,534.15.  Art hired Attorney Richie.  Richie properly appealed the TNO to a reconsideration review and got the amount decreased by approximately $500.

Per NC statute, you have 60 days to appeal a reconsideration review decision to the Office of Administrative Hearings (OAH).  Art asked Richie to appeal the reconsideration review and paid Richie additional money for the appeal.

Art came to me for a consultation over 90 days after the reconsideration review decision, and we found that no appeal had been filed.  Obviously, Art was upset.

I offered to file a motion throwing ourselves on the mercy of the court, asking for an exception due to the former attorney’s failure to appeal and Art’s reliance on Richie to appeal.  I warned Art that this was a longshot and, most likely, we would lose.

And we did.

The Judge determined (accurately, in my opinion) that OAH has no jurisdiction over the matter once the 60 days has lapsed.

Moral of the story: Know the appeal deadlines.  Abide by the appeal deadlines.

Appeal deadlines (in NC) (these are the general rules and exceptions exist, so go to a lawyer for advice as to your particular situation):

For a Medicaid reconsideration review – 15 days

For a Medicaid petition to OAH – 60 days

For a Medicare redetermination – 120 days

For a Medicare reconsideration – 180 days

For a Medicare ALJ Hearing – 60 days

Procedures to appeal

There are different avenues to follow for appeals depending on  the adverse decision that you are appealing.

For example, for a Medicare payment dispute, there are 5 levels of appeal.

The levels are:

  1. First Level of Appeal: Redetermination by a Medicare carrier, fiscal intermediary (FI), or Medicare Administrative Contractor (MAC).
  2. Second Level of Appeal: Reconsideration by a Qualified Independent Contractor (QIC)
  3. Third Level of Appeal: Hearing by an Administrative Law Judge (ALJ) in the Office of Medicare Hearings and Appeals
  4. Fourth Level of Appeal: Review by the Medicare Appeals Council
  5. Fifth Level of Appeal: Judicial Review in Federal District Court

For a Medicaid payment dispute, there are only, generally, 3 levels of appeal.

The levels are:

  1. Reconsideration review
  2. Petition for Contested Case at OAH
  3. Judicial Review at Superior Court

It is imperative that you and your lawyer follow each step without attempting to jump a level.  There is a legal requirement to “exhaust your administrative remedies” prior to going to court.  For example, if a Medicaid provider filed a lawsuit in Superior Court because of a TNO without first going through the reconsideration review and OAH, the Superior Court judge will dismiss the claim for failing to exhaust your administrative remedies.

Therefore, any health care provider who accepts Medicare and/or Medicaid needs to be highly aware of appeal deadlines and appeal procedures.  Allowing too much time to pass before hiring your attorney and filing an appeal can result in a loss of appeal rights.

General Assembly in Full Swing: What Medicaid Bills Are On the Agenda??

It’s that time of year again. The legislators are back in town. Moral Mondays resume. And all eyes are on the General Assembly. But, this is the short session, and the General Statutes limit the powers of legislative law-making in the short session.

For those of you who do not know how our General Assembly (GA) works and the difference between the short and long sessions, let me explain:

In odd-numbered years, the GA meets in January and continues until it adjourns. There is no requirement as to the length of the long session, but it is normally about 6 months. In the long session, everything is fair game. New laws or changes to the existing laws can be proposed in long sessions for all of the subjects on which the GA legislates.

The short session reconvenes every even-numbered year and typically lasts 6 weeks. Last year the long session adjourned July 26, 2013, and the GA reconvened May 14, 2014.

There are limits as to what measures may be considered in the short session. In fact, at the end of the long session, the GA passed Resolution 2013-23, which states exactly what topics/bills may be considered in the short session.

So…the question is: What Medicaid bills may be considered during this short session?

H0674
H0867
H0320

Now there are of course, exceptions. For example, any bill that directly and primarily affects the State Budget can be introduced. Obviously, a Medicaid bill could, arguably, directly and primarily affect the budget.

The bills I enumerated above, however, are the bills that are allowed to be considered in the short session because they constitute a crossover bill, that is, these bills were passed one house and were received in the other during last year’s long session and are considered “still alive” for consideration during the current short session.

So what do these Medicaid bills propose?

House Bill 674 could be a game changer for Medicaid providers. The bill, which passed the House last year with a vote of 116-0, would direct the Program Evaluation Division to study the contested case process in regards to Medicaid providers. There are 3 key components in this study according to the bill:

1. The Division must review the procedures for a contested case hearing under NCGS 150B and determine whether there is a way to streamline the process and decrease backlog.
2. The Division must consider alternative methods of review other than the contested cases.
3. The Division must review NCGS 108C-12 to determine whether any amendments to the law would improve the cost-effectiveness and efficiency of the Medicaid appeal process. (NCGS 108C-12 is the statute that allows providers to appeal adverse decisions to the Office of Administrative Hearings (OAH)).

Whew. The Program Evaluation Division would have its work cut out for it if the bill passes!

House Bill 674 was received by the Senate on May 5, 2013, and it passed its first reading.

House Bill 867 is named “An Act to Allow for the Movement of Certain Medicaid Recipients,” and it purports to allow those recipients with an 1915(c) Innovations Waiver slot to move about the State and for the slots to be recognized uniformly across the State. This way a person with an Innovations Waiver would not need to re-apply in another county if he or she moves there. However, for those served by the managed care organizations (MCOs), residency is determined by the county in which the recipient currently resides.

Then we come to House Bill 320. See my blog,”HB320: The Good News and the Bad News for NC Medicaid Providers.”

House Bill 320 mainly speaks to Medicaid recipient appeals, but imbedded within the language is one tiny proposed change to NCGS 108C-1. Just an itty, bitty change.

NCGS 108C-1 provides the scope of 108C (which applies to providers) and currently reads, “This Chapter applies to providers enrolled in Medicaid or Health Choice.”

If House Bill 320 passes, NCGS 108C-1 will read, “This Chapter applies to providers enrolled in Medicaid or Health Choice. Except as expressly provided by law, this Chapter does not apply to LME/MCOs, enrollees, applicants, providers of emergency services, or network providers subject to Chapter 108D of the General Statutes.”

What????

If House Bill 320 passes, what, may I ask, will be a Medicaid provider’s appeal options if NCGS 108C does not apply to MCOs? And would not the new scope of NCGS 108C-1 violate the State Plan, which explicitly gives OAH the jurisdiction over any contracted entity of the Department of Health and Human Services (DHHS)?  See my blogs on MCOs: “NC MCOs: The Judge, Jury and Executioner,” and “A Dose of Truth: If an MCO Decides Not to Contract With You, YOU DO HAVE RIGHTS!

I also wonder, if House Bill 320 passes, what effect this revision to NCGS 108C-1 will have. Arguably, it could have no effect because of the above-mentioned language in the State Plan, the 4th Circuit Court of Appeals case that determined that MCOs are agents of the state, and the fact that the Department is defined in 108C-2 to include any of its legally authorized agents, contractors, or vendors.

On the other hand, in every single lawsuit that I would bring on behalf of a provider against an MCO, I would have another legal obstacle to overcome. The MCO’s attorney would invariably make the argument that OAH does not have jurisdiction over the MCO because the scope of 108C has been changed to exclude the MCOs. They have been arguing already that OAH lacks jurisdiction over the MCOs since NCGS 108D was passed, but to no avail.

Needless to say, the MCO lobbyists will be pushing hard for H 320 to pass. H 320 passed its 3rd reading on May 15, 2013, by a vote of 114-0, and the Senate received it on May 16, 2013.

The NC MCOs: Jurisdiction Issues and Possible Unenforceable Contract Clauses with Medicaid Providers

According to NC Superior Court, OAH (and I) has (have) been right all along…OAH does have jurisdiction over the MCOs.  And you cannot contract away protections allowable by statute.

Before I went to law school, I do not recall ever thinking about the word “jurisdiction.”  Maybe in an episode of Law and Order I would hear the word thrown around, but I certainly was not well-versed in its meaning. While I was in law school, the word “jurisdiction” cropped up incessantly.

“Jurisdiction” is extremely important to North Carolina Medicaid providers.  Jurisdiction, in the most basic terms, means in which court to bring the lawsuit or appeal of an adverse determination.

In this blog, I am mostly referring to terminations/refusals to contract with providers by the managed care organizations (MCOs), which manage behavioral health, developmental disability, and substance abuse services for North Carolina. Recently, there have been a slew of providers terminated or told that they would not receive a renewed contract to provide Medicaid services. The MCOs tell the providers that, per contract, the providers have no rights to continued participation in the Medicaid system.

The MCOs also tell the providers that the providers cannot appeal at OAH… That the providers have no recourse… That the providers’ contracts are terminable at will (at the MCO’s will)…. I have been arguing all along that this is simply not true. And now a Superior Court decision sides with me.

The MCO have been arguing in every case that OAH does not have jurisdiction over the actions of the MCOs.  The MCOs have pointed to NC Gen. Stat. 108D and Session Law 2013-397, which amends NC Gen. Stat. 150B-23 to read:

“Solely and only for the purposes of contested cases commenced as Medicaid managed care enrollee appeals under Chapter 108D of the General Statutes, a LME/MCO is considered an agency as defined in G.S. 150B-2(1a). The LME/MCO shall not be considered an agency for any other purpose.”

A termination or denial to participate in the Medicaid program is an adverse determination. Adverse determination is defined in NC Gen. Stat. 108C-2 as, “A final decision by the Department to deny, terminate, suspend, reduce, or recoup a Medicaid payment or to deny, terminate, or suspend a provider’s or applicant’s participation in the Medical Assistance Program.”

The Department is defined as, “The North Carolina Department of Health and Human Services, its legally authorized agents, contractors, or vendors who acting within the scope of their authorized activities, assess, authorize, manage, review, audit, monitor, or provide services pursuant to Title XIX or XXI of the Social Security Act, the North Carolina State Plan of Medical Assistance, the North Carolina State Plan of the Health Insurance Program for Children, or any waivers of the federal Medicaid Act granted by the United States Department of Health and Human Services.”

Obviously, per statute, any entity that is acting on behalf of DHHS would be considered the “Department.” Any adverse act by any entity acting on behalf of DHHS, including terminating a provider’s participation in the Medical Assistance Program is considered an adverse determination.

The MCOs have been arguing that the above-referenced amendment to 150B means that the MCOs are not agents of the state; therefore, OAH has no jurisdiction over them.

Until March 7, 2014, these issues have been argued within OAH and no Superior Court judge had ruled on the issue.  Most of the Administrative Law Judges (ALJ), even without Superior Court’s guidance, has, in my opinion, correctly concluded that OAH does have jurisdiction over the MCOs.  A couple of the ALJs vacillate, but without clear guidance, it is to be expected.

On or about March 7, 2014, the Honorable Donald W. Stephens, Senior Resident Superior Court Judge ruled that OAH does have jurisdiction over the MCOsYelverton’s Enrichment Services, Inc. v. PBH, as legally authorized contractor of and agent for NC Department of Health and Human Services (DHHS).

If these MCOs are acting on DHHS’ behalf in managing the behavioral health Medicaid services, it would be illogical for OAH to NOT have jurisdiction over the MCOs.

In the Yelverton Order, Judge Stephens writes, “OAH did not err or exceed its statutory authority in determining that it had jurisdiction over Yelverton’s contested case.”

The Order also states that the MCO, in this case, PBH (now Cardinal Innovations), agreed that only DHHS had the authority to terminate provider enrollment. The MCO argued that, while only DHHS can terminate provider enrollment, the MCOs do have the authority “to terminate the participation of the provider in the Medical Assistance Program.”

Talk about splitting hairs! DHHS can terminate the enrollment, but the MCO can terminate the participation? If you cannot participate, what is the point of your enrollment?

Judge Stephens did not buy the MCO’s argument.

On March 7, 2014, Judge Stephens upheld ALJ Donald Overby’s Decision that OAH has jurisdiction over the MCOs for terminating provider contracts.

I anticipate that the MCOs will argue in future cases that the Yelverton case was filed prior to Session Law 2013-397, so Yelverton does not apply to post-Session Law 2013-397 fillings. However, I find this argument also without merit. The Yelverton Order expressly contemplates NC Gen. Stat. 108D and House Bill 320.

House Bill 320 was the bill contemplated by the General Assembly in the last legislative session that expressly stated that OAH does not have jurisdiction over the MCOs. It did not pass.

In Yelverton, the MCO argued that the MCO contracts with the providers allow the MCO to terminate without cause and without providing a reason.

Judge Stephens notes that the General Assembly did not pass House Bill 320. The Yelverton Order further states that no matter what the contracts between the providers and the MCOs states, “[c]ontract provisions cannot override or negate the protections provided under North Carolina law, specifically appeal rights set forth in NC Gen. Stat. 108C.”

Will the MCO appeal? That is the million dollar question…

NC Medicaid Providers, Are You Required to Seek an Informal Appeal Prior to Filing a Contested Case at OAH?

Recently, numerous clients have come to me asking whether they have the right to appeal straight to the Office of Administrative Appeals or whether they have to attend informal appeals first, whether the informal appeal is within a managed care organization (MCO), the Division of Medical Assistance (DMA) or any other entity contracted by DMA.

The answer is: No, you are not required to go through the informal review prior to filing a contested case at OAH, but, in some cases, the informal review is beneficial.

Let me explain.

N.C. Gen. Stat. 150B-22-37 (Article 3) applies to:

“[A]ny dispute between an agency and another person that involves the person’s rights, duties, or privileges, including licensing or the levy of a monetary penalty, should be settled through informal procedures. In trying to reach a settlement through informal procedures, the agency may not conduct a proceeding at which sworn testimony is taken and witnesses may be cross-examined. If the agency and the other person do not agree to a resolution of the dispute through informal procedures, either the agency or the person may commence an administrative proceeding to determine the person’s rights, duties, or privileges, at which time the dispute becomes a “contested case.”

N.C. Gen. Stat. 150B-22.

“Any dispute between an agency and another person”…Obviously DMA is a state agency, but is Public Consulting Group (PCG)?  Is the Carolinas Center for Medical Excellence (CCME)? East Carolina Behavioral Health?  HMS?

What if you disagree with a prepayment review result that CCME conducted?  DMA had nothing to do with the actual prepayment review.  Can you bring a contested case at OAH against CCME?

Yes.  But include DHHS, DMA as a named Respondent.  If you include the state agency that contracted with the entity, then jurisdiction is proper at OAH.  The argument being that the actions of a contracted entity is imputed to the principle (DMA).

“Should be settled through informal procedures…”  Notice it states “should,” not “must.”  Time and time again when a provider skips the informal review within the entity (for example, let’s say that MeckLINK terminates Provider Jane’s Medicaid contract and files a grievance with OAH instead of through MeckLINK first) the counsel for the entity (MeckLINK in this example) argues that OAH does not have jurisdiction because Jane failed to exhaust her administrative remedies.  As in, Jane should have appealed through MeckLINK first.

In my opinion, appealing to the very entity that is causing the grievance is futile.  The decision was made.  The entity is not going to rule against itself. 

Plus, there is no requirement for any petitioner to exhaust informal appeals prior to appealing to OAH.  When you receive a Tentative Notice of Overpayment from PCG, you can go to an informal review or you can appeal in OAH. 

The “failing to exhaust administrative remedies” argument is being misapplied by the entities.  In order to file judicial review in Superior Court or a declaratory judgment action in Superior Court, you must exhaust all administrative remedies prior to seeking relief in Superior Court.  But the requirement to exhaust administrative remedies is not applicable to filing at OAH.

The upshot is that any person aggrieved may bring a contested case in OAH without attending an informal appeal first.

However, there are some occasions that, in my opinion, the informal appeal is useful.  Such as an overpayment found by PCG.  If you receive a Tentative Notice of Overpayment by PCG, the informal reconsideration review at DMA can be helpful for a number of reasons.

1.  It forces you to review the audited documents with a fine tooth comb prior to getting in front of a judge.

2. It allows you to find all PCG’s mistakes, and there will be mistakes, and bring those mistakes to the attention of the auditor.

3.  It gives you a chance to decrease the alleged amount owed before a contested case.

Keeping those positive aspects in mind, most likely, the reconsideration review will NOT resolve the case.  Although it has happened occasionally, more times than not, you will not agree with the reduced amount the DHHS hearing officer decides.  The alleged overpayment will still be extrapolated. The alleged overpayment will still be ridiculous.

Other than an overpayment, I have found very little use for the informal appeals.