Category Archives: NCGS 108D

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…

Attention: All Medicaid Providers Whose Services Require Prior Authorization: A Way to Increase Revenue and Help Medicaid Recipients…Or…Killing Two Birds with One Stone

Attention: All Medicaid Providers Whose Services Require Prior Authorization

A Way to Increase Revenue and Help Medicaid Recipients

Have you heard the cliché: “Killing two birds with one stone….?”

The phrase is thought to have originated in the early 1600s when slingshots were primarily used for bird hunting.  (BTW: My husband, who is an expert bird hunter (with guns), I am sure, would be able to hit two birds with one stone…he is that good.  In fact, he may have already shot two birds with one bullet).  Anyway, Thomas Hobbs, an English political philosopher, is generally given credit for coining the phrase in 1656, although Ovid has a similar expression in Latin over 2000 years prior.  Killing two birds with one stone generally means achieving two objectives with one action. (Which, obviously, is a good thing).

For our purposes here, killing two birds with one stone means that by undergoing one action (appealing all Medicaid recipients’ denials, terminations, and reductions for services requiring prior authorization) two positive results are achieved:

1. The Medicaid recipients have their denials, terminations, and reductions appealed (or…people who need services may actually get those necessary services); and

2. Your provider company makes more money.

Not all Medicaid services require prior authorization.  But many do.  Many prescription drugs require prior approval.  Certain services during a pregnancy for a Medicaid pregnant woman require prior authorization. In behavioral health care, almost all services require prior authorizations (although there are some unmanaged visits in outpatient behavioral health (OBT) that do not require prior authorization).  Even though other Medicaid services require prior authorization, this blog and NCGS 108D only applies to behavioral health care (because NCGS 108D applies to MCOs and the MCOs only manage behavioral health care).  You should appeal all other denied, terminated, or reduced Medicaid services that require prior authorization, but the appeal process in this blog pertains to behavioral health care.

Why care about Medicaid recipient appeals?

It is indisputable that people start companies to make money (except 501(c) companies).  You’ve heard all the cliches…”Money makes the world go around…” “The lack of money is the root of all evil…” “Money: power at its most liquid…”

We’ve also heard all the cliches…”Money can’t buy happiness…” “I have no money, no resources, no hope. I am the happiest man alive….” “Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has the more one wants.”

Regardless whether you believe that money is a necessary evil or the key to happiness, it is without question that people need money to get by in life.  Therefore, when people create companies, it is, normally, with the intent to make money.

Medicaid providers are no exception.

True, Medicaid reimbursements are crappy.  But, despite the crappy/low Medicaid reimbursements, Medicaid providers still hope to make some profit…and do good. (2 birds…1 stone).

We all want to make money and help Medicaid recipients, right? (I know I do).

So with my “handy dandy” tips in this blog, you, too, can kill two birds with stone. You can do both: make more money and help Medicaid recipients.

Wait, I thought providers could not appeal on behalf of our clients? I have heard this incorrect statement over and over from multiple clients.  It simply is not true.

NCGS 108D(4)(b) states that “[e]nrollees, or network providers authorized in writing to act on behalf of enrollees, may file requests for grievances and LME/MCO level appeals orally or in writing. However, unless the enrollee or network provider requests an expedited appeal, the oral filing must be followed by a written, signed grievance or appeal.” (emphasis added).

You just need the Medicaid recipient’s consent in writing.

Increased Profit AND Providing Medicaid Services to Recipients: Two Birds…One Stone!

First, how would appealing all terminations, denials and reductions for Medicaid services increase profit for you, as a provider?

For terminations and reductions (not initial authorizations), if you appeal, the Medicaid recipients are required to receive maintenance of service (MOS).  This means that, at the very least (even if you lose), if you appeal, you are able to provide services and be reimbursed for services during the appeal process. 

For example, you have a developmentally disabled (DD) Medicaid client, who has received 8 hours/day personal care services (PCS) for the last 4 years.  You submit your yearly plan of care (POC) requesting 8 hours PCS/day per norm.  The managed care organization (MCO) reduces your client’s PCS to 6 hours/day.  If you timely appeal the reduction or termination, the MCO will be required to reimburse for 8 hours PCS/day throughout the appeal process.

NCGS 108D-6(c) states: “Continuation of Benefits. – An LME/MCO shall continue the enrollee’s benefits during the pendency of a LME/MCO level appeal to the same extent required under 42 C.F.R. § 438.420.”

42 C.F.R. 438.420 states that:

“Continuation of benefits. The MCO or PIHP must continue the enrollee’s benefits if—

(1) The enrollee or the provider files the appeal timely;
(2) The appeal involves the termination, suspension, or reduction of a previously authorized course of treatment;
(3) The services were ordered by an authorized provider;
(4) The original period covered by the original authorization has not expired; and
(5) The enrollee requests extension of benefits.

Pay particular attention to subsection (5)…the enrollee must request MOS.  Don’t forget to add that little phrase into the form that you have the enrollee sign to consent to appeal.

MOS allows you to be paid during the appeal AND the Medicaid recipient to receive the medically necessary services during the pendency of the appeal.

Two birds…one stone.

For terminations and reductions, there is no need to ask for an expedited hearing (will discuss momentarily), because with MOS, there is no hurry (the recipient is receiving the needed services and you are getting paid).

So, let’s turn to an initial denial for a Medicaid service that requires prior authorization and the appeal process:

If the MCO denies an initial authorization, the Medicaid recipient is not entitled to MOS.  However, appealing these initial denials are just as important to (a) the recipients; and (b) your profit as appealing the terminations and denials.

But an appeal can takes months and the recipient (assuming medical necessity truly exists) needs the behavioral health care services in order to not decompensate. So how can the appeal help?

Answer: Request an expedited appeal.

NCGS 108D-7 states:

“When the time limits for completing a standard appeal could seriously jeopardize the enrollee’s life or health or ability to attain, maintain, or regain maximum function, an enrollee, or a network provider authorized in writing to act on behalf of an enrollee, has the right to file a request for an expedited appeal of a managed care action no later than 30 days after the mailing date of the notice of managed care action. For expedited appeal requests made by enrollees, the LME/MCO shall determine if the enrollee qualifies for an expedited appeal. For expedited appeal requests made by network providers on behalf of enrollees, the LME/MCO shall presume an expedited appeal is necessary.”

Important: You still have 30 days to appeal.

Even more important: The MCO is required, by statute, to PRESUME an expedited appeal is necessary.

True the General Assembly really gave mentally ill, developmentally disabled, and substance abuse population the shaft when they passed, and McCrory signed, Senate Bill 553, now Session Law 2013-397, by placing the legal burden of proof on the Medicaid recipient in all circumstances (really??), but the small ray of hope is that, at least as it pertains to expedited appeals, the MCO must presume that an expedited appeal is necessary for the well-being of the recipient.

Going back to expedited appeals, the MCO must make “reasonable efforts” (yes, there is too much wiggle room there) to notify the Medicaid recipient/provider of a denial of an expedited appeal within 2 days.  I also believe that is in the best interest of an MCO to authorize expedited appeals, because….could you imagine the implications and legal liability on the MCO if the MCO denies an appeal to be expedited and something horrible happens to the Medicaid recipient as a direct result of the MCO’s refusal to expedite the appeal????  Or, even worse, the recipient harms others as a  result of the appeal not being expedited??? WHOOO HOOOO….talk about bad PR!!!

So, two days to determine whether the MCO will accept the request for an expedited appeal.  How long for a decision?

According to NCGS 108D-7(d), “[i]f the LME/MCO grants a request for an expedited LME/MCO level appeal, the LME/MCO shall resolve the appeal as expeditiously as the enrollee’s health condition requires, and no later than three working days after receiving the request for an expedited appeal. The LME/MCO shall provide the enrollee and all other affected parties with a written notice of resolution by United States mail within this three-day period.”  (emphasis added).

So, basically, if the MCO takes 2 days to decide to accept the expedited appeal, then there is only 1 additional day to determine the results of the appeal.  That is fast…I don’t care who you are!!

If the MCO denies the expedited appeal, then the MCO has 45 days to provide a decision.

Very Important:  Any adverse decision from an MCO is appealable to the Office of Administrative Hearings (OAH).

Ok, recap:  You, as a provider, want to appeal all Medicaid recipient denials, terminations, and reductions for the following two reasons:

1. Increase profitability for your company; and

2. Help the Medicaid recipients by appealing denials, terminations or reductions, and, hopefully, obtaining the medically necessary services for your clients.

Win…win.

2 birds…1 stone.