Category Archives: Senate Bill 553

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.

McCrory Signed SB 553: The Legal Burden is Now on Medicaid Recipients

August 23, 2013: Governor Pat McCrory signed Senate Bill 553.  Senate Bill 553 is now Session Law 2013-397.

No words can express my disappointment.

Starting Monday, Without a Veto, the Legal Burden of Proof Will ALWAYS Be on the Medicaid Recipients

I am not sure whether you have noticed, but Medicaid recipients have very little pull in North Carolina government.  Medicaid recipients have very little voice in our society.  Obviously, Medicaid recipients are indigent, so they do not have the money to hire lawyers and lobbyists. 

Politicians (while they are campaigning) always protest that they believe that Medicaid recipients are important…that Medicaid is important…but, most importantly, that it is important that Medicaid recipients receive quality health care….right?

We’ve heard the rhetoric over and over.

But then what happens when the politician takes office?

I can tell you what does NOT happen. Medicaid recipients do not band together, hire a lobbyist and begin influencing government policies.

Per norm, the Medicaid recipients remain invisible.  And mute.

I have a client with a daughter.  This daughter, we will call her Jennifer, is in her 30s, but with mentality of an 18-month old.  Jennifer is diagnosed with Tuberous Sclerosis Complex (“TSC”), a rare, multi-system genetic disease.  She is nonverbal and requires 24 hours/day supervision for health and safety and total care for activities of daily living and incidental activities of daily living, just as an 18-month old would require.

The Managed Care Organization (MCO), where Jennifer resides, is Smokey Mountain Center (SMC).  For the last 4 years in North Carolina (five years ago Jennifer resided in California), Jennifer has received 16 hours/day Medicaid. Once SMC went live and Jennifer’s yearly authorization was up for renewal, SMC reduced Jennifer’s services to 12 hours/day, thereby leaving a 4-hour gap in which Jennifer would be  unsupervised. (Shocking that the MCO did not want to foot the bill for the extra 4 hours, right?)

I will spare you the details of the legal arguments on both sides, as, today, my husband made a comment that my blogs were “too long.”

So, we are in the administrative hearing in front of an Administrative Law Judge (ALJ) with the attorneys for SMC and the Department of Health and Human Services (DHHS) present.  The ALJ asks me, “Counselor, who has the burden of proof, the Petitioner [us] or the Respondents [them]?”

To which I had to think back to my days during which I worked as an Assistant Attorney General (AG) for NC  (yes, I used to work on the other side…where do you think I learned this stuff?? At law school?)

For those of you without law degrees, the burden of proof (onus probandi, in Latin) is the obligation (hence the Latin word “onus“) on the party in a trial, who must prove [something] in court in order for the burden to shift to the other party to dispute.

Sometimes people will explain the burden of proof as “the necessity of proof always lies with the person who lays charges.”  As in, if you claim that I stole your watch, you must prove I stole it.  I do not have to prove that I did NOT steal it.

This may seem like ridiculous semantics to you, but, legally, who bears the burden of proof is huge.

In Jennifer’s example, the ALJ was asking me whether we (Jennifer) had to prove that she medically needed 16 hours/day Medicaid services or whether the State had to prove why Jennifer did NOT need the 16-hours/day Medicaid services.

If we (Jennifer) put on compelling evidence that she needed 16-hours/day services, and Respondents SMC and DHHS put on equally, compelling evidence that she did NOT need 16-hours/day services, then the Judge would have to rule against the party bearing the legal burden of proof.

As of today, here is the law as to burden of proof for Medicaid recipients:

(d) Burden of Proof. – The recipient has the burden of proof to show entitlement to a requested benefit or the propriety of requested agency action when the agency has denied the benefit or refused to take the particular action. The agency has the burden of proof when the appeal is from an agency determination to impose a penalty or to reduce, terminate, or suspend a previously granted benefit. The party with the burden of proof on any issue has the burden of going forward, and the administrative law judge shall not make any ruling on the preponderance of evidence until the close of all evidence.

(emphasis added). 

Senate Bill 553 will change all this.

Senate Bill 553 states that, “The enrollee has the burden of proof on all issues submitted to OAH for a contested case hearing under this section and has the burden of going forward. The administrative law judge shall not make any ruling on the preponderance of evidence until the close of all evidence in the case.”

The enrollee = the Medicaid recipient.

Therefore, even if the MCO terminates an enrollee’s services (and even if the termination is arbitrary and without merit), the Medicaid RECIPIENT bears the legal burden to prove this.

Really?  Let’s make it even harder for Medicaid recipients to appeal denials or reductions in services.  They can handle it!  They can hire a lawyer!  Right?

Who does this change benefit? Who benefits from the Medicaid recipients bearing the burden of proof in a legal action?

Answer? The MCOs.  And guess what?  The MCOs have lobbyists.  The MCOs have lawyers.

Senate Bill 553 was ratified July 26, 2013.  Which means that SB 553 will be law beginning Monday unless Governor McCrory vetoes the bill by Sunday.  On Sunday (August 25, 2013), McCrory can choose to sign SB 553, allow SB 553 to pass without his signature, or veto the bill.

If McCrory does NOT veto the bill, Medicaid recipients will bear the burden of proof in all contested cases. 

I ask you, why would we as a society place the legal burden of proof on the party LEAST likely to be able to afford a lawyer?

Send Gov. McCrory an email. Veto SB 553!!!