Category Archives: CABHA

Managed Care – Eight Reasons Why MCOs Smell Like Pre-Minced Garlic

When it comes to the managed care organizations (MCOs) in NC, something smells rancid, like pre-minced garlic. When I first met my husband, Scott, I cooked with pre-minced garlic that comes in a jar. I figured it was easier than buying fresh garlic and dicing it myself. Scott bought fresh garlic and diced it. Then he asked me to smell the fresh garlic versus the pre-minced garlic. There was no contest. Next to the fresh garlic, the pre-minced garlic smelled rancid. That is the same odor I smell when I read information about the MCOs – pre-minced garlic in a jar.

garlic minced-garlic

In NC, MCOs are charged with managing Medicaid funds for behavioral health care, developmentally disabled, and substance abuse services. When the MCOs were initially created, we had 13. These are geographically situated, so providers and recipients have no choice with which MCO to interact. If you live in Sandhills’ catchment area, then you must go through Sandhills. If you provide services in Cardinal’s catchment area, then you must contract with Cardinal – even though you already have a provider participation agreement with the State of NC to provide Medicaid services in the State of NC.

Over the years, there has been consolidation, and now we have 7 MCOs.

newestmco

From left to right: Smoky Mountain (Duke blue); Partners Behavioral Health (Wake Forest gold); Cardinal Innovations Healthcare (ECU purple); Sandhills (UNCC green); Alliance Behavioral Healthcare (mint green); Eastpointe (Gap Khaki); and Trillium (highlighter yellow/green).

Recently, Cardinal (ECU purple) and Eastpointe (Gap khaki) announced they will consolidate, pending authorization from the Secretary of DHHS. The 20-county Cardinal will morph into a 32-county, MCO giant.

Here is the source of the rancid, pre-minced, garlic smell (in my opinion):

One – MCOs are not private entities. MCOs are prepaid with our tax dollars. Therefore, unlike Blue Cross Blue Shield, the MCOs must answer to NC taxpayers. The MCOs owe a duty of financial responsibility to taxpayers, just like the state government, cities, and towns.

Two – Cardinal CEO, Richard Topping, is paid $635,000, plus he has a 0 to 30 percent bonus potential which could be roughly another $250,000, plus he has some sort of annuity or long-term package of $412,000 (with our tax dollars).

Three – Cardinal is selling or has sold the 26 properties it owns or owned (with our tax dollars) to lease office space in the NASCAR Plaza office tower in uptown Charlotte for $300 to $400 per square foot plus employee parking (with our tax dollars).

Four – Cardinal charges 8% of public funds for its administrative costs. (Does that include Topping’s salary and bonuses?) How many employees are salaried by Cardinal? (with our tax dollars).

Five – The MCOs are prepaid. Once the MCOs receive the funds, the funds are public funds and subject to fiscal scrutiny. However, the MCOs keep whatever funds that it has at the end of the fiscal year. In other words, the MCOs pocket any money that was NOT used to reimburse a provider for a service rendered to a Medicaid recipient. Cardinal – alone – handles around $2.8 billion in Medicaid funding per year for behavioral health services. The financial incentive for MCOs? Terminate providers and reduce/deny services.

Six – MCOs are terminating providers and limiting access to care. In my law practice, I am constantly defending behavioral health care providers that are terminated from an MCO catchment area without cause or with erroneous cause. For example, an agency was terminated from their MCO because the agency had switched administrative offices without telling the MCO. The agency continued to provide quality services to those in need. But, because of a technicality, not informing the MCO that the agency moved administrative offices, the MCO terminated the contract. Which,in turn, puts more money in the MCO’s pocket; one less provider to pay.  Is a change of address really a material breach of a contract? Regardless – it is an excuse.

Seven – Medicaid recipients are not receiving medically necessary services. Either the catchment areas do not have enough providers, the MCOs are denying and reducing medically necessary services, or both. Cardinal cut 11 of its state-funded services. Parents of disabled, adult children write to me, complaining that their services from their MCO have been slashed for no reason….But the MCOs are saving NC money!

Eight – The MCOs ended 2015 with a collective $842 million in the bank. Wonder how much money the MCOs have now…(with our tax dollars).

Rancid, I say. Rancid!

Massive Medicaid Metamorphosis: Providers Beware! Be Proactive NOT Reactive!

Medicaid is ever-changing. But every 5 years or so, it seems, that a substantial section of Medicaid is completely revamped. Sometimes to the detriment of many uninformed, un-suspecting providers. For providers, it is imperative to stay above the curve…to foresee the changes in Medicaid, to plan for those changes, and to morph your own practice into one that will persevere despite the changes to come.

We are on the brink of a massive Medicaid metamorphosis.

Medicaid modifications have happened in the past. For example, a substantial shift in Medicaid occurred when DHHS switched from HP Enterprises to Computer Science Corporation (CSC) as its billing vendor. When the NCTracks system went live, the new NCTracks system forced office managers to re-learn how to bill for Medicaid. It was a rough start and many office managers spent countless hours inputting information into NCTracks, only to get erroneous denials and high blood pressure.

Another example of a Medicaid modification was the implementation of the managed care organizations (MCOs) which came on the heels of the new CABHA certification requirements. Only a couple of years after the shellshock of CABHA certification and thousands of providers going out of business because they could not meet the demands of the CABHA standards, behavioral health care providers were again put through the wringer with new standards created and maintained by the MCOs.

Think about it…Ten years ago, we never used the acronym MCO.

Enter [stage left]: A NEW ACRONYM!!

PLE

Don’t you love acronyms? My family has this game called Balderdash. It is one of my favorite games. The object of the game is to have the best fabricated answer. For example, if the category is “Acronym,” the “Dasher” will read the acronym, say, “PLE.” All the players draft their fake renditions of what “PLE” really means.

Plato Learning Environment; or
Panel of Legal Experts; or
Perinatal Lethality.

You get the point. In the game, the players vote on which answers they believe are correct (BTW: All of the above are real definitions for the acronym “PLE” (according to Google).)

In the Medicaid/care world, we play alphabet soup constantly. MCO, DD, SAIOP, DHHS, BWX, MID CPT….Throw out a few letters, and, most likely, you will have said some acronym that means something to someone. See my acronym page for a list of those pertinent to us (and it is ever-growing).

The most recent new acronym to the Medicaid arena here in North Carolina that I have seen is PLE, which is the crux of the new, upcoming massive Medicaid metamorphosis.

House Bill 372’s short title is “Medicaid Modernization” and has passed in the House.

On June 25, 2015, the Senate passed the House Bill on its first read!

I waited to blog about HB 327 until the Senate had an initial reaction to it. If you recall, the Senate and House has been on contradictory sides when it comes to Medicaid reform. However, it appears that HB 327 may have some traction.

House Bill 372 defines PLE as “[a]ny of the following:

a. A provider.
b. An entity with the primary purpose of owning or operating one or more providers.
c. A business entity in which providers hold a controlling ownership interest.”

Over the last couple years, the Senate and the House have stood divided over whether Medicaid should be managed by ACOs (House) or MCOs (Senate). It appears from the definition of a PLE, that a PLE could be a much simpler version of an ACO, which has had my vote since day 1. The whole concept of an ACO is a provider-run entity in which the providers make the decisions instead of utilization reviews, which have little to no contact with the patients, and, sometimes little health care experience, especially on the provider side.

From my cursory review of the proposed PLEs, it seems that a PLE would mimic an ACO, except, and, further federal research is needed, without some of the highly-regulated mandates that the federal government requires for MCOs (it will still be highly-regulated).

Is this just a question of semantics?  Is this just a question of changing its name?

“What’s in a name? that which we call a rose, By any other name would smell as sweet.” Romeo and Juliet, Act II, Scene II.

Let’s look again at the definition of a PLE, according to Version 3 of House Bill 372.

a. A provider.
b. An entity with the primary purpose of owning or operating one or more providers.
c. A business entity in which providers hold a controlling ownership interest.”

A provider?

Any provider? Does that provider need to ask to become a PLE or is it automatic? Does being a PLE give enhanced benefits other than being just a provider?

The answer is that all providers are not PLEs and providers will need to undertake significant legal and administrative steps to become a PLE.

“PLEs shall implement full-risk capitated health plans to manage and coordinate the care for enough program aid categories to cover at least ninety percent (90%) of Medicaid recipients to be phased in over five years from the date this act becomes law.”

What is “full risk?”

“Full risk” is not defined in HB 372, although, I believe that the definition is self-evident.

Capitation payment is defined by reference to 42 CFR 438.2:

“Capitation payment means a payment the State agency makes periodically to a contractor on behalf of each beneficiary enrolled under a contract for the provision of medical services under the State plan. The State agency makes the payment regardless of whether the particular beneficiary receives services during the period covered by the payment.”

Interestingly, this definition for “capitation payment” is found in the same section of the Code of Federal Regulations (CFR) as all the managed care regulations. Part 438 of the CFR applies to managed care.

We have managed care organizations in our state now managing the behavioral health care aspect of Medicaid. Will the same provisions apply to MCOs…to ACOs…to PLEs?

A rose by any other name…

What else does House Bill 372 purport to do?

• Within 12 months, the Department shall request a waiver from CMS to implement the components of this act.
• Within 24 months, the Department will issue an RFP for provider-led entities to bid on contracts required under this act.
• Within 5 years, 90% of all Medicaid services must be provided from a PLE, except those services managed by the MCOs , dental services, pharmaceutical products and dispensing fees. The Department may implement a pilot within 3 years.

As a provider, if you want to continue to serve the Medicaid population, then you may want to insert your company or agency into the creation of the PLEs, whether you sell, merge, acquire, or create a conglomerate.

It is my prediction that those providers who are reactive, instead of proactive, will lose business, consumers, and, potentially, a lot of cash. It is my “predictive recommendation” [as you are aware, we do not have an attorney/client relationship, so no recommendation of mine is tailored for you] that those providers who proactively seek mergers, acquisitions, and/or business agreements with other providers to morph into PLEs will be more successful, both financially and in serving their consumers better.

What you need to know about the future PLEs:

  • Must cover at least 30,000 recipients
  • Must provide all health benefits and administrative services, including physical, long-term services and supports, and other medical services generally considered physical care
  • Must meet solvency requirements
  • Must provide for appeal processes
  • Will cover 100% of the NC counties

The PLEs will, effectively, absorb the Medicaid dollars for recipients across the entire state and provide care for all physical health needs of Medicaid recipients.

In this environment, providers need to be proactive, not reactive!

If House Bill 327 passes into law, our next Medicaid metamorphosis will be monumental!  And the state will issue an RFP for providers within 2 years!

NC Medicaid: Ready or Not, the Onsite Reviews Have Started; Are You Ready?

Planning for the inevitable is smart. And it is inevitable if you are a provider and you accept Medicaid that you will undergo some sort of review, whether it is onsite or database checks, in the near future. And only two outcomes can result from this upcoming review:

Are YOU ready for that test???

So, it is imperative to arm yourself with knowledge of your rights, a liability insurance policy that covers attorneys’ fees (and lets you pick your attorney), and confidence that your billing practices comply with rules and regulations.  If you do not know whether your billing practices comply, do a self-audit or hire a knowledgeable billing expert to audit you.

Read or not here they come…

Beginning June 9, 2014, Public Consulting Group (PCG) began scheduling post-enrollment site visits to fulfill federal regulations 42 CFR 455.410 and 455.450, which require all participating providers to be screened according to their categorical risk level: high, moderate, or limited.

What does being high, moderate, or limited risk mean?

If you are limited risk, the state will check your licenses, ensure that you, as a provider, meet criteria for applicable federal and state statutes, conduct license verifications, and conduct database checks on a pre- and post-enrollment basis to ensure that providers continue to meet the enrollment criteria for their provider type.  This is the only category that does not need an onsite review.

If you are moderate risk, the state does everything for you as if you are a limited risk plus perform on-site reviews.  (Enter PCG).

If you are high risk, the state will perform all reviews as if you are a moderate risk but also will conduct a criminal background check, and require the submission of a set of fingerprints in accordance with §455.434. (And you thought fingerprints for only for the accused.)

Let’s discuss in which level risk you fall.  NC Gen. Stat §108C-3 spells out the risk levels.  Are you a new personal care service (PCS) provider getting ready to start your own business?  You are high risk.  Are you a directly-enrolled behavioral health care provider rendering outpatient behavioral health care services?  You are high risk.  Do you provide HIV Management services?  You are high risk.

Here is a list of high risk providers:

  • Prospective (newly enrolling) adult care homes delivering Medicaid-reimbursed services.
  • Agencies providing behavioral health services, excluding Critical Access Behavioral Health Agencies
  • Directly enrolled outpatient behavioral health services providers.
  • Prospective (newly enrolling) agencies providing durable medical equipment, including, but not limited to, orthotics and prosthetics.
  • Agencies providing HIV case management.
  • Prospective (newly enrolling) agencies providing home or community-based services pursuant to waivers authorized by the federal Centers for Medicare and Medicaid Services under 42 U.S.C. § 1396n(c).
  • Prospective (newly enrolling) agencies providing personal care services or in-home care services.
  • Prospective (newly enrolling) agencies providing private duty nursing, home health, or home infusion.
  • Providers against whom the Department has imposed a payment suspension based upon a credible allegation of fraud in accordance with 42 C.F.R. § 455.23 within the previous 12-month period. The Department shall return the provider to its original risk category not later than 12 months after the cessation of the payment suspension.
  • Providers that were excluded, or whose owners, operators, or managing employees were excluded, by the U.S. Department of Health and Human Services Office of Inspector General or another state’s Medicaid program within the previous 10 years.
  • Providers who have incurred a Medicaid or Health Choice final overpayment, assessment, or fine to the Department in excess of twenty percent (20%) of the provider’s payments received from Medicaid and Health Choice in the previous 12-month period. The Department shall return the provider to its original risk category not later than 12 months after the completion of the provider’s repayment of the final overpayment, assessment, or fine.
  • Providers whose owners, operators, or managing employees were convicted of a disqualifying offense pursuant to G.S. 108C-4 but were granted an exemption by the Department within the previous 10 years.

Here is a list of moderate risk providers:

  •  Ambulance services.
  • Comprehensive outpatient rehabilitation facilities
  • Critical Access Behavioral Health Agencies.
  • Hospice organizations
  • Independent clinical laboratories.
  • Independent diagnostic testing facilities.
  • Pharmacy Services.
  • Physical therapists enrolling as individuals or as group practices.
  • Revalidating adult care homes delivering Medicaid-reimbursed services.
  • Revalidating agencies providing durable medical equipment, including, but not limited to, orthotics and prosthetics
  • Revalidating agencies providing home or community-based services pursuant to waivers authorized by the federal Centers for Medicare and Medicaid Services under 42 U.S.C. § 1396n(c).
  • Revalidating agencies providing private duty nursing, home health, personal care services or in-home care services, or home infusion.
  • Nonemergency medical transportation.

Here are the limited risk providers:

  • Ambulatory surgical centers.
  • End-stage renal disease facilities.
  • Federally qualified health centers.
  • Health programs operated by an Indian Health Program (as defined in section 4(12) of the Indian Health Care Improvement Act) or an urban Indian organization (as defined in section 4(29) of the Indian Health Care Improvement Act) that receives funding from the Indian Health Service pursuant to Title V of the Indian Health Care Improvement Act.
  • Histocompatibility laboratories.
  • Hospitals, including critical access hospitals, Department of Veterans Affairs Hospitals, and other State or federally owned hospital facilities
  • Local Education Agencies.
  • Mammography screening centers.
  • Mass immunization roster billers.
  • Nursing facilities, including Intermediate Care Facilities for the Mentally Retarded.
  • Organ procurement organizations.
  • Physician or nonphysician practitioners (including nurse practitioners, CRNAs, physician assistants, physician extenders, occupational therapists, speech/language pathologists, chiropractors, and audiologists), optometrists, dentists and orthodontists, and medical groups

According to the June 2014 Medicaid Bulletin, the onsite reviews will last approximately two hours and PCG will send 2 representatives to conduct the review.

How to prepare for the onSite reviews

  1. Read and learn. (or re-learn, whichever the case may be).

“Providers will be expected to demonstrate a working knowledge of N.C. Medicaid through responses to a series of questions.”  See June 2014 Medicaid Bulletin.

Knowledge is power.  Brush up on your applicable DMA Clinical Coverage Policy.  Review the NC Medicaid Billing Guide.  Re-read your provider participation agreement.  If you don’t understand a section, go to your attorney and ask for an explanation.  Actually read the pertinent federal and state statutes quoted in your participation agreements because, whether you know what the laws say or not, you signed that agreement and you will be held to the standards spelled out in the federal and state statutes.

  1. Call your liability insurance.

Be proactive.  Contact your liability insurance agent before you get the notice of an onsite review from PCG.  Have a frank, open discussion about these upcoming onsite reviews.  Explain that you want to know whether you policy covers attorneys’ fees and whether you can choose your attorney.  If your policy does not cover attorneys’ fees or does not allow you to choose your own lawyer, beef up your liability insurance plan to include both.  Believe me, the premiums will be cheaper than an attorney from your own pocket.

  1. Be confident.

Presentation matters.  If you whisper and cower before the PCG reviewers, you will come across as weak and/or trying to hide something.  Be polite and forthcoming, but provide the information that is asked of you; do not  supply more information than the reviewers do not request.

I always tell my clients before their deposition or a cross examination by the other side, “Answer the question that is asked.  No more.  If you are asked if your favorite color is blue, and you favorite color is red, the correct response is “No,” not “No, my favorite color is red.”  Do not over-answer.

If you do not believe that you can be confident, ask your attorney to be present.  I had someone tell me one time that he did not want an attorney present because he felt that the auditors would think he was hiding something and he did not want to appear litigious.  I say, this is your company, your career, and your life.  If you need the support of an attorney, get one.  Whenever I give this advice, I try to imagine that I am telling the same advice to my mother.  My mother, bless her heart, does not have the confidence to stand her ground in high pressure situations.  She would rather yield her position than be the least bit confrontational.  If that also describes you, have your attorney present.

  1. Know your rights.

What if you fail the onsite review?  Can you appeal?  You need to know your rights.  When you get a notice from PCG that an onsite review is scheduled, contact your attorney.  Make sure that BEFORE the onsite review, you understand all the possible consequences.  Knowing your rights will also help with #3, confidence.  If you know the worst case scenario, then you stop creating worse case scenarios in your mind and become more confident.

Ready or not, the PCG reviews are coming, so get ready!