Category Archives: NCGS 108C-7

Despite State Statute – Perhaps You Can Appeal Medicaid Prepayment Review!

Mar 28

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It’s hard enough to be one of the providers to accept Medicare and Medicaid. The regulatory oversight is burdensome. You are always getting metaphorically yelled at for upcoding or bundling. See blog, thanking providers.

One of the absolute, most-Draconian penalty against a Medicare or Medicaid provider is prepayment review.

Prepayment review is exactly as it sounds. Before you receive payment – for services rendered – an auditor reviews your claims to determine whether you should be reimbursed. Prepayment review is the epitome of being guilty until proven innocent. It flies in the face of American due process. However, no one has legally fought its Constitutionality. Yet many provider-companies have been put out of business by it.

Generally, to get off prepayment review, you have to achieve a 75% or 80% success rate for three consecutive months. It doesn’t sound hard until your auditors – or graders – fail to do their job correctly and fail you erroneously.

Usually, when a provider is placed on prepayment review, I say, “Well, you cannot appeal being placed on prepayment review, but we can get a preliminary injunction to Stay the withhold of reimbursements during the process.” It tends to work.

Most State statutes have language like this:

“(f) The decision to place or maintain a provider on prepayment claims review does not constitute a contested case under Chapter 150B of the General Statutes. A provider may not appeal or otherwise contest a decision of the Department to place a provider on prepayment review.”

However, in a recent case, Halikierra Community Services, LLC v. NCDHHS, the provider disputed being placed on prepayment review and accused NCDHHS of a malicious campaign against it.

Halikierra was the largest, in-home, Medicaid health care provider and it alleged that 2 specific, individuals at DHHS “personally detested” Halikierra because of its size. As an aside, I hear this all the time. I hear that the auditors or government have personal vendettas against certain providers. Good for Halikierra for calling them out!

According to the opinion, these 2 DHHS employees schemed to get Halikierra on prepayment review by accusing it of employing felons, which is not illegal. (Just ask Dave’s Killer Bread). Halikierra sued based on substantive due process and equal protection rights, but not before being forced to terminate its 600 employees and closing its doors because of being placed on prepayment review. It also asserted a claim of conspiracy in restraint of trade under NCG.S. §75-1 against the individual DHHS employees.

The Court held that “[t]he mere fact that an agency action is nonreviewable under the Administrative Procedure Act does not shield it from judicial review.” The upshot? Even if a statute states that you cannot appeal being placed on prepayment review, you can sue for that very determination.

FYI – This case was filed in the Industrial Commission, which has jurisdiction for negligence conducted by the state agencies. Exhaustion of administrative remedies was not necessary because, per the state statute, being placed on prepayment review does not constitute a contested case in administrative court.

Posted in Administrative Remedies, Injunctions, Knicole Emanuel, Legal Analysis, Legal Remedies for Medicaid Providers, Medicaid, Medicaid Appeals, Medicaid Providers, Medicaid Reimbursements, Medicare, Medicare and Medicaid Provider Audits, Medicare Attorney, Medicare Audits, NCGS 108C-7, Prepayment Review, Provider Appeals of Adverse Decisions for Medicare and Medicaid

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

Aug 25

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted in "Single State Agency", Administrative Law Judge, Administrative Remedies, Appeal Rights, Carolinas Center for Medical Excellence, CCME, Credible Allegations of Fraud, Division of Medical Assistance, DMA Clinical Policies, Due process, General Assembly, Health Care Providers and Services, Home Health Aide Services, Home Health Care Agencies, Home Health Services, Knicole Emanuel, Lawsuit, Legal Analysis, Legal Remedies for Medicaid Providers, Legislation, Medicaid, Medicaid Appeals, Medicaid Attorney, Medicaid Providers, Medicaid Recoupment, Medicaid Reimbursements, Medicaid Services, Medicare and Medicaid Provider Audits, Medicare Attorney, NC, NC DHHS, NCGS 108C-7, North Carolina, Personal Care Services, Petitions for Contested Cases, Preliminary Injunctions, Prepayment Review, Provider Medicaid Contracts, Reconsideration Reviews, Suspension of Medicaid Payments, Tentative Notices of Overpayment, Termination of Medicaid Contract

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

Sep 11

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted in Administrative Law Judge, Administrative Remedies, Appeal Rights, Carolinas Center for Medical Excellence, CCME, Division of Medical Assistance, Due process, Health Care Providers and Services, Home Health Aide Services, Home Health Services, In Home Care Services, Injunctions, Knicole Emanuel, Lawsuit, Legal Analysis, Legal Remedies for Medicaid Providers, Legislation, Medicaid, Medicaid Appeals, Medicaid Audits, Medicaid Billing, Medicaid Contracts, Medicaid Providers, Medicare, Medicare Attorney, NC, NC DHHS, NCGS 108C, NCGS 108C-7, North Carolina, Office of Administrative Hearings, Personal Care Services, Prepayment Review, Provider Medicaid Contracts, Suspension of Medicaid Payments, Termination of Medicaid Contract

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CCME’s Medicaid Audit Bloopers: Ring Around the Rosie, We All Fall Down

May 8

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“Ring Around the Rosie.” What a fantastic children’s rhyme; it brings back nostalgic memories of my daughter being young. We would sing “Ring Around the Rosie,” while holding hands and running in a circle, and then fall as hard as possible (without hurting ourselves) onto the ground. We would just flop on the ground and my daughter loved it.

Although many people believe that the rhyme describes the time during the Great Plague in England in 1665, which is pretty morbid, it is still a fun children’s game.

But other than “Ring Around the Rosie,” it is no fun to run in circles until you get dizzy and fall to the ground. People usually just don’t spin around and around for fun.

Sometimes going through a Medicaid or Medicare audit can feel like you are running around and around in circles and getting ready to fall. So too, can you feel this way if you are undergoing a prepayment review with the Carolinas Center for Medical Excellence (CCME).

First, what is prepayment review?

N.C. Gen. Stat. 108C-7 allows for prepayment review. See also my blog, “NC Medicaid: CCME’s Comedy of Errors of Prepayment Review.” Or “CCME’s Prepayment Reviews Violate NCGS 108C-7!! Seriously!!“

Prepayment review means that a contracted entity, in this case CCME, reviews your claims BEFORE you get paid for services rendered. While on prepayment review, you do not receive Medicaid reimbursements. This can continue for 12 months or unless you reach 70% accuracy for three consecutive months.

70% doesn’t sound too hard, right? But, what if the auditing entity runs you in circles, gets you dizzy and makes you fall to the floor?

Here’s the story:

A client of mine owns a home health care company. She and her staff provide personal care services (PCS) to those who are eligible. For those who do not know what PCS is, it is basic caregiving services to help people with activities of daily living (ADLs), such as toileting, dressing, and eating.

My client, we will call her Provider Nancy, was undergoing a prepayment review that had been conducted by The Carolinas Center for Medical Excellence (CCME).

We won’t even talk about the fact that by the time Nancy came to me she had been on prepayment review for 17 months, but that the statute, NCGS 108C-7, only allows a provider to be on prepayment review for 12 months.

When she was undergoing prepayment review, CCME gave her low accuracy rates for a number of reasons, some of which were so absurd, you will laugh out loud.

For example, CCME denied claims because the service notes did not denote that the in-home aid put shoes on two of her clients. There were multiple dates of service (DOS) so these two clients contributed heavily to her low accuracy rating. I asked Nancy why the service note did not denote that her staff put shoes on her clients. She told me that these clients are double amputees. They do not have feet. So Nancy was dinged in her audit for not putting on shoes on someone without feet.

Nancy’s story also highlights the confusion at CCME about its own prior authorization records for PCS. CCME repeatedly demanded a copy of the authorization for Nancy to provide PCS. If a provider like Nancy did not have a prior authorization, she would never have received payment in the first place.  Nonetheless, CCME told Nancy to that she had not documented the prior authorizations. Oddly enough, in order to produce the authorizations she had obtained, Nancy had to contact CCME, because at the time of her prepayment review audit, CCME was the entity that reviewed independent assessments to determine prior authorization.  CCME was saying she had no prior authorization, but it was CCME who gave her the prior authorization!!  How can a system operate like this, when an important reviewing entity does not know what is in its own records?

It got worse: Nancy would then ask CCME for CCME’s prior authorization letter,  but CCME could not or would not give her a copy.  Then CCME reps attended the hearing and stated that Nancy was dinged for not having a prior authorization. Can a system get any more backward??

Ring around the rosie…

Sometimes Nancy’s service notes showed that her in-home aids did extra chores for her clients. Maybe an in-home aide would help a client ambulate because the client had sore muscles that particular day, but, according to the plan of care (POC), the client did not need hands-on assistance to ambulate. CCME would ding Nancy for the service note not being in compliance with the POC. Nancy was getting dinged in the prepayment review for doing MORE GOOD for her clients than what was required. It was not as if Nancy’s in-home aides were foregoing aid to the ADLs on the POC. Oh, no! The in-home aid was going over and above the call of duty for a client. And Nancy would get dinged.

We all fall down!

Needless to say, Nancy did not meet the 70% for three consecutive months in order to be removed from prepayment review. But, remember, Nancy was not paid for 17 months; she came to me 17 months into the prepayment review. She was hurting financially.

Now, because of CCME’s confusing and inaccurate review, Nancy had little money and now had to hire a lawyer. Sure, we got her off prepayment review and got her paid, but she had to shell out thousands of dollars for attorneys’ fees.

If you have to undergo “Ring Around the Rosie” during a prepayment review, I think that the auditing entity, in this case CCME, should have to pay for attorneys’ fees. Give some sort of disincentive for the auditing companies to be sloppy. A penalty.

Now Liberty Mutual, not CCME, authorizes PCS.. But CCME continues to conduct prepayment reviews.

Ring around the rosie
Pocket full of posies
Ashes, ashes
We all fall down!

Posted in Administrative Law Judge, Administrative Remedies, Carolinas Center for Medical Excellence, CCME, Division of Medical Assistance, Health Care Providers and Services, Home Health Aide Services, Home Health Services, In Home Care Services, Lawsuit, Legal Analysis, Legal Remedies for Medicaid Providers, Medicaid, Medicaid Appeals, Medicaid Audits, Medicaid Billing, Medicaid Providers, Medicaid Reimbursements, Medicaid Services, Medicare and Medicaid Provider Audits, NC, NC DHHS, NCGS 108C-7, North Carolina, Office of Administrative Hearings, Personal Care Services, Petitions for Contested Cases, Plan of Care, Prepayment Review, Prior Authorization, Regulatory Audits, Service Notes

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

Mar 25

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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 MCOs.  Yelverton’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…

Posted in Administrative Law Judge, Administrative Remedies, Alliance, Appeal Rights, Behavioral health, Cardinal Innovations, CenterPoint, Division of Medical Assistance, Due process, EastPointe, ECBH, General Assembly, Health Care Providers and Services, Judicial Review, Jurisdiction, Lawsuit, Legal Analysis, Legal Remedies for Medicaid Providers, Legislation, Managed Care, MCO, MeckLINK, Medicaid, Medicaid Appeals, Medicaid Contracts, Medicaid Providers, Medicaid Reimbursement, Medicaid Services, Mental Health, Mental Health Problems, Mental Illness, N.C. Gen. Stat. 150B, NC, NC DHHS, NCGS 108C-5, NCGS 108C-7, NCGS 108D, North Carolina, OAH, Office of Administrative Hearings, Partners, Provider Medicaid Contracts, Termination of Medicaid Contract

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The Doctrine of Exhaustion of Administrative Remedies and Medicare/caid Providers

Mar 5

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What is the doctrine of exhaustion of administrative remedies?  And why is it important?

If you are a Medicaid or Medicare provider (which, most likely, you are if you are reading this blog), then knowing your administrative remedies is vital.  Specifically, you need to know your administrative remedies if you receive an “adverse determination” by the “Department.”  I have placed “adverse determination” and the “Department” in quotation marks because these are defined terms in the North Carolina statutes and federal regulations.

What are administrative remedies? If you have been damaged by a decision by a state agency then you have rights to recoup for the damages.

However, just like in the game of Chess, there are rules…procedures to follow…you cannot bring your castle out until the pawn in front of it has moved.

Similarly, you cannot jump to NC Supreme Court without beginning at the lowest court.

What is an adverse determination?

In Medicaid, NCGS 108C-2 defines “Adverse determination” 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.”

In Medicare, sometimes the phrase “final adverse action” applies.  But, basically an adverse determination in Medicaid and Medicare is a decision by [whatever entity] that adversely affects you, your Medicare/caid contract or reimbursements.

What is the definition of the Department? 

NCGS 108C-2 defines the “Department,” 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.”

On the federal level, the Department would be the Centers for Medicare and Medicaid (CMS) and its agents, contractors and/or vendors.

So, an adverse decision is any final decision by DHHS….OR any of its vendors (Public Consulting Group (PCG), Carolinas Center for Medical Excellence (CCME), HMS, Computer Sciences Corporation (CSC), or any of the 10 managed care organizations (MCOs) (Alliance, Centerpointe, Smokey Mountain Center, Sandhills, East Carolina Behavioral Health, MeckLink, Cardinal Innovations, Eastpointe, CoastalCare, and Partners).

For example, PCG tells a dentist that he/she owes $500,000 in overpayments to the State.  The notice of overpayment is an adverse determination by the Department as defined in the general statutes.

For example, Smokey Mountain Center (SMC) tells a provider that it will no longer contract with the provider as of March 15, 2014.  SMC’s decision to not contract with the provider is an adverse determination by the Department as defined in the general statutes.

For example, CCME tells you that you are subject to prepayment review under NCGS 108C-7, which results in DHHS withholding Medicaid reimbursements.  The notice of suspension of payments is an adverse determination by the Department, as defined in the general statutes (not the fact that you were placed on prepayment review because the placement on prepayment review is not appealable, but the determination that Medicaid reimbursements will be withheld).

The doctrine of exhaustion of administrative remedies is, in essence,  a party must satisfy five conditions before turning to the courts: “(1) the person must be aggrieved; (2) there must be a contested case; (3) there must be a final agency decision; (4) administrative remedies must be exhausted; and (5) no other adequate procedure for judicial review can be provided by another statute.”  Huang v. N.C. State Univ., 107 N.C. App. 710, 713, 421 S.E.2d 812, 814 (1992) (citing Dyer v. Bradshaw, 54 N.C. App. 136, 138, 282 S.E.2d 548, 550 (1981)

Move your pawn before moving your castle.

Typically, if a party has not exhausted its administrative remedies, the party cannot bring a claim before the courts.  However, NC courts have recognized two exceptions that I will explain in a moment.

If you bring a lawsuit based on the adverse determination by the Department, do you go to state Superior Court?  No.

In North Carolina, we are lucky to have the Office of Administrative Hearings (OAH).  OAH is fantastic because the judges at OAH, Administrative Law Judges (ALJs) have immense Medicaid experience.  OAH is a court of limited jurisdiction, meaning that only if a NC statute allows OAH to hear the case is OAH allowed to hear the case.  One facet of OAH’s jurisdiction is adverse determinations by DHHS, its agents, vendors or independent contractors.  Not all states have an administrative court system, and we are lucky to have an accomplished administrative court system.  Our ALJs are well-versed in Medicaid, so, most likely, your issue you bring to OAH will be one already heard by the court.

Another great thing about OAH, is that OAH publishes some opinions.  So you can review some published opinions prior to your hearing.  For the most part, the ALJs are quite consistent in rulings.  For the published opinions of OAH, click here.  And, BTW, if you want to review only cases involving the Department of Health and Human Services, scroll down to the cases with the acronym: DHR.  As you can see, OAH listens to cases involving many different state agencies.

So, let’s review:

If you receive an adverse determination by any state or federal agency, its contractors, vendors and/or independent contractors, you have the right to appeal the adverse determination.  However, you MAY need to exhaust your administrative remedies prior to bringing the action in OAH.  In other words, if the agency’s contractor, vendor, and/or independent contractor notifies you of an adverse determination, check with the contractor, vendor and/or independent contractor for informal appeals. 

There are, however, some small exceptions. (Remember the knights can jump over your pawns.  So can the Queen).

Number 1: Inadequacy.

If the informal administrative appeal process would be inadequate for your remedies then you are not required to exhaust the administrative remedies prior to going to the courts.

A remedy is inadequate “unless it is ‘calculated to give relief more or less commensurate with the claim.’”  Huang v. N.C. State Univ., 107 N.C. App. 710, 713, 421 S.E.2d 812, 814 (1992) (citing Dyer v. Bradshaw, 54 N.C. App. 136, 138, 282 S.E.2d 548, 550 (1981).

An example of inadequacy would be if you are seeking monetary damages and the agency is powerless to grant such relief.

The phrase “monetary damages” means that you are seeking money.  The agency owes you money and you are seeking the money.  Or if you were caused monetary damages because of the agencies actions.  For example, your Medicaid reimbursements were suspended. As a result, you fired staff and closed your doors.  You would want to sue for the money you lost as a result of the reimbursement suspension.  If the agency cannot give money damages or is powerless to give such money damages, then informal agency appeals would be in adequate to address you needs.

Number 2: Futility.

Futility refers to situations where an agency “has deliberately placed an impediment in the path of a party” or where agency policies “are so entrenched that it is unlikely that parties will obtain a fair hearing.”

For example, if by appealing informally within the administrative agency, you will not receive a fair hearing because no independent decision maker exists, you can make the argument that the informal appeal process would be futile.

Here’s the “small print:”

If you claim futility and/or inadequacy, then you must include the futility and/or inadequacy allegations in the Complaint; AND you bear the burden of proving futility and/or inadequacy.

If, however, you exhaust your adminastrative remedies, go to OAH.

Checkmate!

Posted in "Single State Agency", Administrative Law Judge, Administrative Remedies, Agency, Alliance, Appeal Rights, CenterPoint, Division of Medical Assistance, Due process, EastPointe, ECBH, Federal Government, Federal Law, Health Care Providers and Services, HMS, Lawsuit, Legal Analysis, Legal Remedies for Medicaid Providers, Legislation, MCO, MeckLINK, Medicaid, Medicaid Audits, Medicaid Contracts, Medicaid Providers, Medicaid Reimbursements, Medicaid Services, Medicare, NC, NC DHHS, NCGS 108C-5, NCGS 108C-7, North Carolina, OAH, Partners, Provider Medicaid Contracts, Public Consulting Group, Sandhills, Smokey Mountain Center, Suspension of Medicaid Payments, Termination of Medicaid Contract, Timely Payments

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CCME’s Prepayment Reviews Violate NCGS 108C-7!! Seriously!!

Dec 27

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A few months ago I sent a public records request to the Division of Medical Assistance (DMA). I eventually received the information…today.

 I wanted to know how many providers had been put on prepayment review.  A provider can be placed on prepayment review pursuant to N.C. Gen. Stat. 108C-7.  I have blogged about 108C-7 before.  It is a Draconian law.  See my blog: “You Have Been Placed on Prepayment Review, Now What?” 

108C-7 states that a provider cannot appeal being placed on prepayment review.  Yet while on prepayment review, the Carolinas Center for Medical Excellence (CCME) determines which claims submitted by you are “clean.”  For the period that you are on prepayment review, you will not be paid for claims that are not “clean.”  Oh, and CCME can subjectively determine whether you should be paid and you have zero recourse for which to challenge CCME’s subjective determination.  See my blog: “NC Medicaid:CCME’s Comedy of Errors of Prepayment Review.”

The only relief for providers in 108C-7 is that “In no instance shall prepayment claims review continue longer than 12 months.”

The law specifically states that you cannot be forced to endure prepayment review for over 12 months.

One of the documents that DMA sent me is a chart with every single provider that had been placed on prepayment review.  The chart includes the number of months that the provider was on prepayment review.  But, remember, 12 months is the max per law.

CCME Chart

See the highlighted numbers? 16.  11.  34.  34.  7.  Three of the numbers are above 12….which means, three of the 6 on the first page violate state statute.

How many prepayment reviews were unlawfully conducted? (As in, DMA/CCME kept the provider on prepayment review beyond 12 months)?

75.  Seventy-five prepayment reviews violated 108C-7.  75 out of approximately 125. (I started counting each one, but my eyes kept going cross-eyed…Look how small the print is!)

Reagrdless…well over half the prepayment reviews violates 108C-7!!!  That same Draconian law that DHHS holds each provider to…DHHS (via CCME) is ignoring the plain language of the statute.

One poor provider was on prepayment review 46 months!!!! Another 45!  A bunch of the providers were in the 30s!

Why didn’t these providers protest at being on prepayment review for so long?  I have a couple of theories: (1) They are out of business; (2) They had no lawyer and had no idea that there was a 12 month limit.

Well, readers, now you know…There is a 12 month limit to prepayment review!! But DHHS/DMA/CCME is not following it. Seriously!!

Posted in Behavioral health, CCME, Division of Medical Assistance, Health Care Providers and Services, Legal Analysis, Legal Remedies for Medicaid Providers, Legislation, Medicaid, Medicaid Audits, Medicaid Reimbursements, NC, NC DHHS, NCGS 108C-7, North Carolina, Prepayment Review, Provider Medicaid Contracts, Suspension of Medicaid Payments

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“Not In Good Standing” With DMA: Analogous to Santa Clause’s “Naughty” List?

Jun 11

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Lately, I have heard the phrase NOT “in good standing” with DMA too often.  Whenever I hear not “in good standing,” I have this image of the movie “Fred Clause.”  Remember when Vince Vaughn, who is playing Santa’s younger brother, is asked to stamp the children’s Christmas list with “naughty” or “nice?”  At first, he stamps the lists correctly…or per Santa’s orders.  Then Fred Clause gets angry and stamps every Christmas list “Nice.”  Well, being NOT “in good standing” with DMA is like being on the “naughty” list for Santa Clause, especially when Santa, as in the movie “Fred Clause,” contracts out Santa’s very important job to a third-party, Fred Clause, who begins to determine “naughty” and “nice” completely arbitrarily and without due consideration to the individual child’s facts or circumstances.

If you are reading this and thinking….”NOT “in good standing?”…I’ve never heard of such a thing….,” then take a moment, think about all the ways you are blessed (BTW: not knowing what “not in good standing” is one of those blessings).  Take a moment and pat yourself and your team/staff on the back.

If you are reading this and thinking… “Yeah!…What the heck is NOT “in good standing?”…is there such a thing…is this legal?” Then this blog is for you.

What IS not “in good standing?”

Well, we know the consequences are drastic.  If you are found to be “not in good standing,” the MCOs refuse to contract with you or terminate an already existing Medicaid contract.  DMA terminates your Medicaid contract.  You are not reimbursed for Medicaid services rendered.  In drastic cases, you are forced to close your business.  Go bankrupt.  Fire all staff. And never service Medicaid recipients again.

And for all those above-referenced consequences…all because “You are not in good standing with DMA.” What???? What is “not in good standing with DMA?” Is that like getting an ‘F’ in drafting PCPs? Or a ‘C’ in treatment plans? Maybe a B- in service notes?

What IS “in good standing?”

According to the Division of Medical Assistance (DMA) website, “[t]he N.C. Medicaid Program recognizes the need to promote access to care by enrolling all providers in a timely manner and is committed to ensuring the provision of quality care for our citizens. The enrollment process includes credentialing, endorsement, and licensure verification to ensure that all providers are in good standing in the community.”  (emphasis added).

To me, “good standing in the community” means: (1) not committing criminal acts; (2) maybe..being a good neighbor; (3) charitable services; (4) not littering; (5) helping stray animals get back to their owners…

But, obviously, “in good standing” means something completely different to DMA.  So, I looked for a definition. And looked.  I found the July 2012 Medicaid Bulletin that states:

Clarification of the Division of Health Service Regulation Good Standing Status   

The N.C. Division of Health Service Regulation (DHSR) has provided clarification on its definition of good standing status. Effectively immediately, DHSR good standing status is associated with a facility – not an entire agency or an individual associated with an agency or facility. DHSR determines whether facility is in good standing based on current and active administrative actions against the facility.

Actions included in the determination that a facility is not in Good Standing include:

  • Active Type A or Imposed Type B, based on Provider Penalty Tracking Database [criteria in NCGS 122C-23(e1) – non-compliance in Article 3, Client Rights].
  • Current Intent to Revoke – Intent to Revoke is active and has not been rescinded.
  • Active Suspension of Admissions – Suspension of Admissions has not been lifted
  • Active Summary Suspension – Summary Suspension was issued and has not been lifted.
  • Active Notice of Revocation – Notice of Revocation is current, and may be in appeal.
  • Revocation in Effect – Notice of Revocation was issued and the final outcome is that the license for this facility has been revoked and is no longer active.

Local Management Entities-Managed Care Organizations (LME-MCOS) will receive a Good Standing Notice to help determine which agencies under the 1915 b/c waiver have received a determination of good standing from the DHSR. If a facility is not in good standing, LME-MCOs can withhold a decision about whether to contract with the specific facility for 90 days. During this 90-day period, LME-MCOs can check back with DHSR to determine if any resolution or changes to the action have occurred prior to making a final decision.

I also found an actual definition in DMA’s Endorsement Policy (from back in April 2011):

(11) “Good Standing – DHHS” means the same as defined in 10A NCAC 22P.0402.

(12) “Good Standing – LME” means the provider has a history of compliance with DMA Clinical Policy specific to service delivery and does not have an open Plan Of Correction (POC) with the LME. A POC must be timely submitted, approved, and implemented before the POC action can be closed. A POC is fully implemented when the POC is being followed and all out of compliance findings have been minimized or eliminated as determined by the LME in a maximum of two follow-up reviews. The POC action is closed when the provider receives the official notification from the LME stating the action is closed.

 Ok, so the definitions helped…a little.

So I went to 10A NCAC 22P.0402 (which can be found below, courtesy of Benchmarks):

10A NCAC 22P .0402 GOOD STANDING AND CONFLICTS OF INTEREST

(a) A provider is in good standing with the Division of Medical Assistance when all of the following conditions are met, regardless of any appeal filed by the provider or any stay of such action entered by the Office of Administrative Hearings:

(1) The provider or any entities which share the same Employee Identification Number (EIN) as the provider do not owe any outstanding (more than 30 days past due) accounts receivable to DMA or its designee, including Medicaid overpayments, recoupments, program reimbursements, cost settlements, cost assessments, penalties and interest. A provider that entered into an approved payment plan in accordance with Subchapter 22F and Chapter 108C of the North Carolina General Statutes is considered to be in good standing if the provider has not defaulted on the payment plan;

(2) The provider or any entities which share the same Employee Identification Number (EIN) as the provider have not been terminated, suspended, had its Medicaid payments withheld, or been placed on probation in the previous 12 month period;

(3) The provider or any entities which share the same Employee Identification Number (EIN) as the provider is not undergoing prepayment claims review;

(4) The owner(s) or managing employee(s) of the provider agency were not previously the owners or managing employee(s) of a provider agency which had its participation in the N.C. Medicaid program involuntarily terminated for any reason or owes an outstanding accounts receivable to DMA or its designee, irrespective of whether the provider agency is currently enrolled in the N.C. Medicaid program;

(5) The provider and its owners and managing employee(s) are not listed on the U.S. Health and Human Services Office of Inspector General Exclusion list;

(6) The provider, any entities which share the same Employee Identification Number (EIN) as the provider, or its corporate parent, have no unresolved tax or payroll liabilities owed to the U.S. or North Carolina Department of Revenue;

(7) The provider and its owner(s) or managing employee(s) or any entity sharing the same EIN as the provider have no unresolved payroll liabilities owed to the U.S. or North Carolina Department of Labor. Unresolved payroll liabilities owed to the N.C. Department of Labor is defined as:

(A) The provider or its owner(s) or managing employee(s) or any entity sharing the same EIN as the provider having one or more unpaid judgments for wages owed under Chapter 95, Article 2A, the North Carolina Wage & Hour Act, in which the N.C. Department of Labor or Commissioner of Labor is the Plaintiff; or

(B) If one or more of the owner(s) or managing employee(s) of the entity requesting good standing was the owner or managing employee of any other organization against whom the North Carolina Department of Labor has one or more unpaid judgments for wages owed under Chapter 95, Article 2A, the North Carolina Wage & Hour Act, in which the N.C. Department of Labor or Commissioner of Labor is the Plaintiff.

(8) The provider or any entities which share the same Employee Identification Number (EIN) as the provider have not abandoned or destroyed patient medical records or staff records in violation of federal or state law, rule or regulation;

(9) The owner(s) or managing employee(s) of the provider agency were not previously the owners or managing employee(s) of a provider agency which abandoned or destroyed patient medical records or staff records in violation of federal or state law, rule or regulation; and

(10) If incorporated or otherwise applicable, the provider has a current Certificate of Existence issued by the N.C. Secretary of State’s Office.

(b) A provider is in good standing with DMH/DD/SAS when all of the following conditions are met, regardless of any appeal filed by the provider or any stay of such action entered by the Office of Administrative Hearings:

(1) Any approved Plan(s) of Correction (POC) pending with the DMH/DD/SAS Accountability Team has been implemented by the provider and the action has been closed by DMH/DD/SAS. A POC is implemented when the POC is being followed and all out of compliance findings have been minimized or eliminated as determined by a maximum of two DMH/DD/SAS follow-up reviews. The POC action is closed when the provider receives the official notification from the DMH/DD/SAS Accountability Team stating the action is closed; and

(2) The provider has not had any endorsement or credentialing to provide an enhanced or child/adolescent residential treatment service involuntarily withdrawn by any Local Management Entity/Managed Care Organization, and upheld by the DMH/DD/SAS Appeals Panel, in the previous 12 month period.

(c) A provider is in good standing with the Division of Health Service Regulation if it meets the requirements for enrollment and licensure set forth in G.S. 122C-23 (e1), regardless of any appeal filed by the provider or any stay of such action entered by the Office of Administrative Hearings.

(d) The owners, operators, and managing employees of a CABHA may not be employed by, or on the Board of, any Local Management Entity (LME), Prepaid Inpatient Health Plan (PIHP), Managed Care Organization (MCO), accreditation agency, or for-profit hospital.

History Note: Authority G.S. 108A-54; 42 U.S.C. 1396a; 42 C.F.R. 431.51; S.L. 2009-451, Section 10.58(d); Temporary Adoption Eff. December 28, 2010.

 Ok, after reading all those definitions, I am sure you understand what NOT “in good standing” means, right? I mean, could it get any clearer?

Let’s break it down.  For the sake of simplicity, I will use 10A NCAC 22P.0402, for no other reason except, of all the definitions, this administrative code is actually codified.  First of all, 10A NCAC 22P.0402 is a bit confusing from the onset, as the code is drafted with conflicting negatives.  As in, a provider is “in good standing” if (a) the provider does NOT owe…. So I’ve tried to make the code a bit easier to read.

1. A provider is NOT “in good standing” if the provider owes any outstanding (more than 30 days past due) accounts receivable to DMA or its designee, including Medicaid overpayments, recoupments, program reimbursements, cost settlements, cost assessments, penalties and interest.

Ok, easy enough…if you owe money to DMA, you are not “in good standing.”  However, this is what disturbs me: the beginning of 10A NCAC 22P.0402 states regardless of any ongoing appeal or stay.  That language means that if you get a Tentative Notice of Overpayment (TNO) stating that you owe $500,000, but you disagree with the findings and appeal, despite the appeal, you are still NOT “in good standing.”

2. A provider is NOT “in good standing” if “the provider ha[s] [] been terminated, suspended, had its Medicaid payments withheld, or been placed on probation in the previous 12 month period.”

Again, easy enough to understand. But, again, I am disturbed by the fact that, according to the Code, even if you disagree with the termination or suspension, during any appeal, you will still be on the “naughty” list. 

Allow me to get on my soapbox for a moment (as if you have a choice).  You can get placed on prepayment review (for whatever reason), which automatically suspends all Medicaid reimbursements, CCME, or whatever 3rd-party entity can conduct a prepayment review improperly (not in actual accordance with DMA policies), and basically, botch your accuracy ratings to create an impossibility of reaching 70%…[Remember, this whole prepayment review process is not appealable according to NCGS 108C-7, which, I believe, is in direct violation of federal law] and the entire time during which your Medicaid reimbursements are suspended erroneously, you are considered NOT “in good standing,” which, we have already determined, has dire consequences.

My problem with the prepayment review process, in general, is that placing a provider on prepayment review with no due process is an obvious infringement on the legal rights of the persons involved.  Federal law does not allow a state to simply not allow a provider appeal rights. On the contrary, federal law makes it very clear in numerous places that an appeal process SHOULD be in place.  Yet NC does not allow a provider to appeal prepayment review status.

 Because NC does not afford appeal rights for prepayment review, but the entire time a provider is on prepayment review the provider receives zero Medicaid reimbursements and the provider is considered not “in good standing,” both of which have drastic consequences for the provider, NC is, in essence, unilaterally deciding to usurp a provider’s property interest and a U.S. citizen’s right to life, liberty, and the pursuit of happiness without due process.

Yet, the entire time during which the provider is getting Constitutional deprivation to the detriment to the provider, the provider is not “in good standing” with DMA.

The process reminds me of the Don Henley song “Dirty Laundry:”

Kick ’em when they’re up
Kick ’em when they’re down
Kick ’em all around

Not to mention the fact that 42 C.F.R. 455.23 states:

 (a) Basis for suspension

(1) 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; (2) The State Medicaid agency may suspend payments without first notifying the provider of its intention to suspend such payments; (3) A provider may request, and must be granted, administrative review where State law so requires.

Ok, going back to the definition and consequences of not “in good standing.”  The third subsection of 10A NCAC 22P.0402 reads:

3. A provider is NOT “in good standing” if “the provider is []undergoing prepayment claims review.

See #2.

 4.  A provider is NOT “in good standing” if the provider was “involuntarily terminated for any reason or owes an outstanding accounts receivable to DMA or its designee.”

Again, if the provider was involuntarily terminated based on a flawed prepayment review, then see #2.  If providers owes money, see #1.

5. A provider is NOT “in good standing” if the provider is NOT listed on the U.S. Health and Human Services Office of Inspector General (OIG) Exclusion list;

OIG has the authority to exclude individuals and entities from Federally funded health care programs.  One can only hope that those placed on the exclusion list is rightfully placed on the exclusion list,

6. A provider is NOT “in good standing” if the provider has any unresolved tax or payroll liabilities owed to the U.S. or North Carolina Department of Revenue;

Ok, I get it.  The IRS cannot be questioned (despite recent unveilings of misdeeds by the IRS). Death and taxes…

7.  A provider is NOT “in good standing” if the provider has any unresolved payroll liabilities owed to the U.S. or North Carolina Department of Labor.

Department of Labor is like the IRS…got it.

8.  A provider is NOT “in good standing” if the provider has abandoned or destroyed patient medical records or staff records in violation of federal or state law, rule or regulation;

Do not abandon or destroy records….Check.

9.  A provider is NOT “in good standing” if the owner(s) or managing employee(s) of the provider agency were previously the owners or managing employee(s) of a provider agency which abandoned or destroyed patient medical records or staff records in violation of federal or state law, rule or regulation; and

Do not own or manage a provider agency that previously abandoned or destroyed records….Check.

(10)  A provider is “in good standing” if the provider, incorporated or otherwise applicable, has a current Certificate of Existence issued by the N.C. Secretary of State’s Office.

Easy enough.

So, really, I do not take issue with the ENTIRE definition of what is not “in good standing.”  Only subsections 1-4. 

Like I said, the entire process reminds me of Vince Vaughn (the 3rd party contractor) angrily stamping all the children’s Christmas lists as “Nice.”  Except in the case of being not “in good standing,” Vince Vaughn (the 3rd party contractor) is angrily stamping all the lists as “Naughty.”

Posted in Behavioral health, CCME, Division of Medical Assistance, Health Care Providers and Services, MCO, Medicaid, Medicaid Appeals, Medicaid Audits, Medicaid Contracts, Medicaid Recoupment, Mental Health, Mental Health Problems, Mental Illness, NC DHHS, NCGS 108C-7, North Carolina, Not in Good Standing, Office of Inspector General, Post-Payment Reviews, Prepayment Review, Provider Medicaid Contracts, RAC Audits, Regulatory Audits, Tentative Notices of Overpayment, Termination of Medicaid Contract

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Medicaid Provider Tip: How to Read a Claim Audit Finding

Apr 25

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Claim Audit Findings (CAF).  It even sounds scary. Not to mention, if you receive a CAF, it means that you have been audited by the State or an agent thereof (which, in it of itself, is a scary process). So seeing a CAF does not make you happy. But it helps if you understand what the CAF is and, more importantly, is NOT telling you.

Here is what a CAF looks like:

Image

This particular CAF was drafted more recently (the review was conducted March 2012, but this CAF was not drafted until much later).  I have seen earlier CAFs handwritten.

For the sake of this example, we are reviewing a CAF for 16 units billed for Community Support Team. Regardless of the type of health care service, the CAF will be on an identical form or very similar.

At the top of the CAF, you have all the information you need to pull the particular file to compare your file to the CAF.  The Medicaid recipient’s name, date of birth, and Medicaid number is listed.  Most importantly, the date of service (DOS) is listed.  No matter how many times you provided services to this recipient, the DOS on the CAF is the only DOS that matters.  However, word of caution, most of the time, you will receive 2-10 CAFs for one particular client for 2-10 DOS.  All the DOS matter in that case.

Moving to the middle section of the CAF, you can see on the left side, the CAF reads either “administrative” or “clinical.”  The middle of the middle (nice explanation, huh?) has a question.  Then the right side (of the middle section) has “Not Met/No,” or “Yes/Met,” etc.

I will go through each type of administrative or clinical topic.  The bottom of the CAF supposedly details more specifics about each topic.  Although I will show you how unhelpful the explanations are. In fact, the only helpful part of the bottom section is the fact that it shows you which year’s Clinical Policy the auditor used (as in which date. Since the policies have been revised so many times, the auditor frequently uses the incorrect policy.  It is important to have the policy in front of you that was in place for the particular DOS).

Ok, the topics on the CAF (the middle section of the CAF).  The topics are divided between administrative and clinical.  Administrative issues are (seemingly) objective; are the documents in the file? Clinical issues are more subjective, such as was there a demonstration of medical necessity and were the service notes adequately written (apparently these auditors believe that every provider should also be an ametuer novelist).

Let’s go through the administrative topics.

A1: Authorizations

“Is there an authorization in place covering this date of service?”  This is just a matter of did the Medicaid auditor review an authorization in the file at the time he or she reviewed the file.  Even if you had a valid authorization in place at the DOS, if  the auditor did not see the authorization in the file ate the time of the audit, you will receive a “Not Met” for A1.  

(“Not met” means you failed that particular facet of the audit and you will need to repay the amount received for the service.)

Another reason I have seen “Not Met” under A1 is for services that do not require authorizations.  The auditors apparently cannot figure out which services require authorizations and which do not.

A2: Service Orders:

“Is there a valid service order for the service billed?”  Again, the auditor looks in the file for a service order for the code billed.   The “Not Mets” I have seen for service orders range from the signature on the service order being illegible; therefore, the credentials of the signator could not be assessed to the service order ordering one CPT code, while the service was a different CPT code.  

A3: Person-Centered Plan (PCP)

“Is there a valid PCP in place for the date of service billed?”  Now, obviously, PCPs are used in Community  Support Team (CST), but not in all areas of health care, not even in all areas of behavioral health.  Nonetheless, I have seen CAFs require a PCP, even when a PCP is not required for particular service.  I’ve also seen CAFs that read “treatment plan/PCP,” but the CAF will not inform you for which (a treatment plan or PCP) the auditor has been told to look. Many “Not Mets” are because of the confusion on the part of the auditors as to what documentation is actually required for a service.

A4: Staffing Requirements:

“Does the team meet staffing requirements per the service definition?”  For A4, the auditors will actually look beyond the file (usually). As the onset of an audit you will be required to provide the auditor with all your staff’s credentials.  Beware: Many, many times I have a “Not Met” for A4 because the auditor could not read the signature; therefore, the auditor could not determine which staff member rendered services, much less whether the staff member met all required credentials.  But the auditor will not ask you whose signature is on the document; apparently, there is some rule somewhere in the world according to Medicaid auditors that signatures must be legible, because I sure as heck have not seen that rule.

A5: Staff Qualifications:

“Is there documentation that the staff is qualified to provide the service billed?”  This is a tad different from A4.  In A4, the governing criteria is the DMA Clinical Policy (whichever is applicable to the services you provide).  A5 is more specific.  If the staff member is providing substance abuse prevention, does the staff have the credentials showing that he or she is certified to provide substance abuse services.  The qualifications required depends on the service provided.

A6:Health Care Public Registry

“Did the provider agency complete a Health Care Public Registry check on any unlicensed staff providing the service billed prior to the date of service?”  Just as it reads, A6 requires the provider agency to complete a Health Care Public Registry for any unlicensed staff.  Here, the auditor will look for a piece of paper proving that the Registry check was conducted prior to the date of service.  But like most other topics, the auditor will not simply ask you whether you have completed a Registry check if the Registry check is not easily found, such as filed in the individual staff member’s file, not multiple copies filed with every single recipient who receives services from that staff member.  You will just receive a “Not Met.”

A7: Disclosure of Criminal Convictions

“Did the provider agency require disclosure of criminal convictions by staff person(s) who provided the service?”  A7 is so poorly drafted.  My high school English teacher would be appalled.  This is a classic example of a sentence in the English language not doing its job (which is to communicate).  Does the provider have to show the auditor that the provider has a written rule/policy that all staff members are required to disclose any criminal convictions? Or is the auditor actually looking for a criminal background check of all staff? A7 gives no guidance.  If you go down to A7 in the bottom section (that we will talk about later) you see that no further guidance is given.  So, you will just have to hold your breath in anticipation as to the answer until I get to the bottom section explanations.

C8: Entrance Criteria

“Does the Comprehensive Clinical Assessment support entrance criteria, per the service definition?”  C8 is the topic at which my blood begins to boil. Essentially, C8 is asking whether the Medicaid recipient meets entrance criteria for the service provided.  Mind you, providers (unless prior authorization is not required for the specific service) cannot bill for a service unless there is prior authorization from DMA (or, more specifically, the contracted company that was reviewing prior authorization for the state…it was ValueOptions for behavioral health).  So these auditors are reviewing services for recipients for which the provider already received prior authorization (meaning entrance criteria was met) from DMA or its acting agent and now, another contracted company, sometimes years later, is saying, “Hold on there. I know you already received prior authorization for this service, but in my subjective opinion, I disagree. I don’t think medical  necessity was met; entrance criteria was not met.” I don’t know how many due process or fundamental fairness rules C8 violates, but, so far, C8 is still part of the Medicaid audits.

C9: Individualized PCP

“Is the PCP individualized for the person?” Remember, above I wrote that sometimes, for different services, C9 will read treatment plan/PCP.  Regardless, if prior authorization is required for the service, the PCP was already reviewed before prior authorization was given.  See argument for C8.

C10: Crisis Plan

“Does the Crisis Plan include the required elements per the PCP Instruction Manual?” Again, C10 may change depending on the service.  But, regardless, if prior authorization is required for the service, the PCP, including the Crisis Plan, was already reviewed before prior authorization was given.  See argument for C8.

C11: Timeframe of Signature

“Is the documentation signed by the person who provided the service within the designated timeframe?”  This may be one of my favorites. Because you do not necessarily submit service notes for reimbursement daily, there are times that you submit multiple claims on one day.  Maybe you have an electronic service note system that you draft all service notes then sign them all as you submit them. (This is only one example of many of the nonsensical results of C11). The auditors will claim that you must sign all service notes on the DOS.  You will be told your service note is out of compliance if the dates of signature and service do not match. But my question is out of compliance with what? With the utopian laws of providing health care services? Certainly not out of compliance with the DMA clinical policy (that I have seen) or the Basic Medicaid Billing Guide.  Nothing that I have seen states that providers must sign the service notes on the date the service was provided.  The policies state the service notes must have the DOS and must be signed. Period.

C12: Billed Units

“Does the documentation support the units billed?”  For this topic, the auditors are looking at the service note and trying to locate a “time in” and “time out.”  Or a duration period noted on the service note.  The issue with C12 that I have seen is that some CPT codes, not all, but some, have, in the very definition, the duration specified. For example, in Outpatient Behavioral Health services, 90834 (now) denotes 38-52 minutes of psychotherapy. Before January 2013, 90804 denoted 25-30 minutes of individualized therapy.  If the definition of the CPT code defines the duration, why is there an additional requirement to physically write the time in and out on the service note? Apparently, the auditors know of a reason.

C13: Goals on PCP

“Does the service note relate to the goals in the PCP?” Again, C13 may change depending on the service.  But, regardless, C 13 is asking whether the treatment plan or the medical objectives for the patient are germane to the activities on the service note.  This is such a subjective determination.  However, I’ve had auditors deem no germaneness when a goal for the recipient is improving relationships with non-family members, and the service note denotes that the therapeutic treatment was role-playing as if the therapist was a non-family member. Hmm. Germane?

C14: Assessment of Progress

“Does the service note reflect assessment of progress toward goals?”  C14 is similar to C13 as to its subjectiveness.  Here, I have had auditors determine “Not Met” for C14 when the service note stated that the recipient is improving, but scared of consequences of result. Hmmm. Assessed progress?

C15: Individualized Interventions

“Are the interventions in the service note individualized per person and reflective of the service definition?”  What? How are services for a specific individual not “individualized?” What the auditors are not telling you in C15 is that the auditors are looking for service notes that appear to “cut and pasted” from prior service notes with minimal changes.  Apparently the auditors believe that if you provide one hour of therapy to a Medicaid recipients that that specific goal was met and that at next therapy session you can move on to the next goal.  Apparently, you do not have to work on one goal more than once.

A16: Unit Conformity

“Do the units documented match the units paid?” This is an administrative topic, but basically, mirrors C12.

Ok, there are the topics and my 2 cents worth on them.

Going to the bottom section of the CAF, I believe I discussed most of the issues in the bottom while I was describing the middle section. 

But for example, in bottom section C7 (of which you have so calmly awaited the explanation), “no employee information” submitted means (in auditor language) the auditor did not see a criminal background check prior to DOS.  wouldn’t it be so much easier if the explanations found in the bottom section actually stated what document was actually needed?

Or, for example, in bottom section A5, the auditor may not necessarily be saying that no staff information was provided.  A5 may actually mean that either (1) the auditor could not read the staff’s signature; and, therefore, the auditor could not determine whether the qualifications had been submitted; or (2) the service note was not in the file at the time the auditor reviewed the file, so the auditor cannot determine which staff member conducted the service.  But it is up to you to decipher.

Or, for example, in bottom section C8, when the auditor writes that no documentation submitted to show entrance criteria was met, the auditor is actually saying that, at the time the auditor reviewed the file, the file did not contain either an assessment or initial intake or referral or something to show the diagnoses of the patient.  However, it is interesting to note that during the audit of the file, if a provider tries to supplement the file with documents for which he or she knows the auditor is looking, the auditor refuses, saying that he or she can only review the file.  But C8 can mean that, in the subjective opinion of the auditor, that the documentation provided does not meet entrance criteria, or it can mean that the auditor does not have a full understanding of the entrance criteria, or it can mean that a documents proving entrance criteria was accidentally misdated.  C8 can mean a plethora of different scenarios; none of which are explained in the “explanation” of C8.

So, there you go, Claim Audit Findings 101.  Surely, you have no questions; it’s so easy!!

Regardless, appeal, appeal, appeal.

Posted in Division of Medical Assistance, Health Care Providers and Services, Legal Analysis, Medicaid, Medicaid Appeals, Medicaid Audits, Medical Necessity, Mental Health, Mental Illness, NC DHHS, NC DMA Clinical Coverage Policy 8C, NCGS 108C-7, North Carolina, Outpatient Behavioral Health, Petitions for Contested Cases, Reconsideration Reviews, Tentative Notices of Overpayment, ValueOptions

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NC Medicaid and Constitutional Due Process

Due process.  What is due process? We hear the phrase due process constantly in the media, in movies, in everyday vernacular…but what is “due process?” And is due process germane to Medicaid contracts?

Due process is part of our Constitution’s fabric.  Thomas Jefferson, one of our founding fathers, drafted the passage in the Declaration of Independence that states “all men are created equal…” there are “unalienable rights…” including “life, liberty and the pursuit of happiness.”  He influenced the Due Process Clauses of the Fifth and Fourteenth Amendments, which provide that no person shall be deprived of “life, liberty, or property without due process of law.”

For a definition of due process, I am going to utilize the wonderful website of “Wikipedia.” Few websites have such a broad-defining ability and its definition of due process and the importance thereof is great:

“The Fifth and Fourteenth Amendments to the United States Constitution each contain a Due Process Clause. Due process deals with the administration of justice and thus the Due Process Clause acts as a safeguard from arbitrary denial of life, liberty, or property by the Government outside the sanction of law.[1] The Supreme Court of the United States interprets the Clauses however more broadly because these clauses provide four protections: procedural due process (in civil and criminal proceedings), substantive due process, a prohibition against vague laws, and as the vehicle for the incorporation of the Bill of Rights.”

Legally, the key components to due process is “denial of life, liberty or property.”  In order to trigger due process, you have to prove that whatever is being taken from you is a denial of “life” “liberty” or “property.”  For example, if you argue that a policeman cannot take your license from you without due process, the answer is, yes he or she can because driving is a privilege, not a right.

So is a Medicaid contract a right? Or a property right? A property right that requires due process prior to termination?

There are a number of ways to argue this.  Of course, one argument is, no, a Medicaid contract is a privilege not a right. I’m sure that the Division of Medical Assistance (DMA) would argue the former.  However, I disagree.  I also think that federal law would disagree (if it could speak).

In order to receive federal funding for Medicaid, North Carolina is required to submit a State Plan under Title XIX of the Social Security Act.  The State Plan defines the scope of Medicaid and presents “promises” to which NC agrees to adhere.  Part of the State Plan is adhering to all pertinent federal statutes, regulations, as well as  including adherence to the Constitution of the United States.

Our State Plan states, in pertinent part, that it promises that “The State has an adequate appeal process in place for entities to appeal any adverse determination by the Medicaid RACs.”

Yet, N.C. Gen. Stat. 108C-7 states, in pertinent part, “[t]he decision to place or maintain a provider on prepayment claims review does not constitute a contested case under Chapter 150B of the General Statutes. A provider may not appeal or otherwise contest a decision of the Department to place a provider on prepayment review.”

How does our State Plan promise an appeal process while the NC Gen. Stat. states no appeal is allowed? It would appear to me that the State Plan and NC Gen. Stat. 108C-7 are at odds.

Let’s set the stage:

The RACs are the Recovery Audit Contractors that manage the audits and exploration of prepayment reviews for a health care provider. In North Carolina, the RACs are the Carolinas Center for Medical Excellence (CCME), Public Consulting Group (PCG, and HP Enterprises (HP).

Prepayment reviews are reviews on certain types of claims that historically result in high rates of improper payments. These reviews will focus on seven states with high populations of fraud- and error-prone providers (FL, CA, MI, TX, NY, LA, IL) and four states with high claims volumes of short inpatient hospital stays (PA, OH, NC, MO) for a total of 11 states.

While on prepayment review, the health care provider may not be reimbursed for Medicaid services rendered until “the provider achieves three consecutive months with a minimum seventy percent (70%) clean claims rate.” (See N.C. Gen. Stat. 108C-7(f)).

Those withholdings of Medicaid reimbursements, I argue, meet the standard of “property.” I would also argue that the withholding of Medicaid funds without due process constitutes “illegal state action” (see below) if the provider can prove that the prepayment review is conducted erroneously.

Theoretically prepayment reviews are designed to catch Medicaid fraud.  In reality, the prepayment reviews are overbroad and threatening the very existence of quality health care providers.

So, are the RACs’ withholding of Medicaid reimbursements for services rendered a deprivation of “life, liberty or property?”

In the Supreme Court case, Wilder v. Virginia Hospital Association, in 1990, the Supreme Court held that providers also had a private cause of action under Section 1983 against illegal state action.

Arguably, North Carolina’s implementation and enforcement of N.C. Gen. Stat. 108C-7 that refuses providers a right to appeal would be an illegal state action according to federal law.

Agree? Just haven’t had a chance to challenge 108C-7 yet.  There are so many arguments against its constitutionality.  But due process is one argument.

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