Category Archives: In Home Care Services

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!

The New White Collar Exemptions: The Final Rule, (an exception), and the Possible Consequences

On May 18, 2016, the US Department of Labor (DOL) announced the Final Rule amending the “white collar” overtime exemptions to increase the number of employees eligible for overtime, effective December 1, 2016. Got overtime? There is no phase-in; it is immediately effective on December 1st.

We all know that the Affordable Care Act (ACA) placed heavier burdens on employers with the employer mandate for employee health insurance. But, the burdens didn’t stop with the ACA!! Oh, no!  In 2014, President Obama signed an Executive Order directing the Department of Labor to update the regulations defining which white collar workers are protected by the Fair Labor Standards Act (FLSA) minimum wage and overtime standards. How else could we financially burden employers? We could mandate employers pay overtime to salaried workers!!! Oh, we already do? Let’s raise the overtime salary threshold exemptions so more employees receive overtime!!

aca-white-collar-highres

You ask, “How is the DOL Final Rule on white collar exemptions germane to my health care agency/practice?” Answer: Do you have employees? If yes, the Final Rule is applicable to you. If no, there is no need to read this blog (unless you are a salaried employee and want to receive more overtime).

The new, increased salary threshold for executives, administration, and professionals exemptions swells from $455/week to $913/week or $23,660/year to $47,476/year. The number for the ceiling is actually less than what was proposed by $800/week. These numbers are based on 40th percentile of full-time employees (salaried) in the lowest wage region, which happens to be the South. Don’t get your knickers in a knot.

Furthermore, the exemption for the highly compensated employee will jump from $100,000 to $134,004 (odd number). This number is $12,000 more than the proposed amount. Well, that just dills my pickle!

The Final Rule also requires that the salary threshold for executives, administration, and professionals be reviewed every three years in order to maintain the salary exemption comparable to the 40th percentile of full-time employees (salaried) in the lowest wage census region – the South.

Finally, the salary basis test will be amended to allow employers to use non-discretionary bonuses and incentive payments, such as commissions, to satisfy the requirements up to 10% of the salary threshold.

The allowance of non-discretionary bonuses and incentive payments was meant to soften the blow of the increased salary thresholds. That’s about as useless as a screen door on a submarine/a trapdoor on a canoe.

VERY IMPORTANT EXCEPTION

The Secretary of DOL issued a time-limited non-enforcement policy for providers of Medicaid-funded services for individuals with intellectual or developmental disabilities in residential homes and facilities with 15 or fewer beds. From December 1, 2016 to March 17, 2019, the Department will not enforce the updated salary thresholds.

BUT THE REST OF US BEWARE!!

Do your math!! If the 10% maximum allowance is exceeded, you could find yourself in a world of hurt! We are talking misclassification claims! Also, ensure you know the proper distinctions between discretionary and non-discretionary bonuses!

What likely consequences will arise from this Final Rule? There are a number of possibilities:

  1. Employers will raise employees’ salaries to the new levels;
  2. Employers will pay more overtime;
  3. Employers will convert the salaried employees to hourly;
  4. Employers will change benefits or other operation costs to compensate for the increased burden.

Well, that’s just lower than a snake’s belly in a wagon rut!

A New Year and We Will “Ring In” Even Lower PCS Reimbursement Rates: Time for Litigation?

Merry Christmas, everyone!!! And Happy New Year!!

I hope everyone had a wonderful holiday! Personally, Christmas was wonderful for my family.  I actually took some days off.  And our 9-year-old girl received way too many presents.  Plus, I learned that we should be spending way less on her!! We bought her a new saddle, bridle and breast-strap for her horse, but, when asked what she received for Christmas, she tells everyone about the $2 marshmallow gun she received, not the saddle. Regardless, we were able to spend quality time together with my mom and dad and 2 sisters.  My husband Scott, however, got the flu and he has been in bed for the last few days…yuck! But he was healthy on Christmas.

We have been truly blessed this year, and I want to thank you all for reading my blog.

I received an email today from an owner of a home care agency that reminded me that, especially during the holidays, many people are struggling.  This home care agency owner, “we will call him Al,” informed me that he potentially will be closing his agency, which would put approximately 130 employees out of work. Al told me that his agency has been struggling over the past few years with the decrease in personal care services (PCS) reimbursement rate.

Al is not the only home care agency owner who has contacted me in the last few months bemoaning about the low PCS reimbursement rates.  The PCS reimbursement rates are set by legislature, most of the time in the budget bills.  For example, the General Assembly passed the budget this past year, which will decrease the PCS reimbursement rates by another 3% beginning January 1, 2015. (Happy New Years).

See below, which is from another blog post: “PCS Medicaid Reimbursement Rates Are TOO LOW to Maintain Adequate Quality of Care, in Violation of the Code of Federal Regulations!

“SECTION 12H.18.(b). During the 2013-2015 fiscal biennium, the Department of Health and Human Services shall withhold reduce by three percent (3%) of the payments … on or after January 1, 2014” (emphasis added).”

The PCS reimbursement rate became $13.88. Session Law 2014-100 was signed into law August 7, 2014; however, Session Law 2014-100 purports to be effective retroactively as of October 2013. (This brings into question these possible recoupments for services already rendered, which, in my opinion, would violate federal and state law, but such possible violations (or probable or currently occurring violations are a topic for another blog).

It is without question that the Medicaid reimbursement rate for PCS is too low. In NC, the PCS reimbursement rate is currently set at $13.88/hour (or $3.47/15 minutes). It is also without question that there is a direct correlation between reimbursement rates and quality of care.

Because Medicaid pays for approximately 67% of all nursing home residents and recipients of home health care in USA, the Medicaid reimbursement rates and methods are central to understanding the quality of care received by PCS services and the level of staffing criteria expected.

PCS for adults are not a required Medicaid service. As in, a state may opt to provide PCS services or not. As of 2012, 31 states/provinces provided PCS services for adults and 25 did not. Most notably, Florida, Virginia, and South Carolina did not provide PCS services for adults. See Kaiser Family Foundation website.

According to Kaiser Family Foundation, “For the personal care services state plan option, the average rate paid to provider agencies [across the nation] was $18.19 per hour in 2012, a slight increase from $17.91 per hour in 2011. In states where personal care services providers were paid directly by the state or where reimbursement rates were determined by the state, the average reimbursement rate was $16.31 per hour in 2012. Medicaid provider reimbursement rates are often set by state legislatures as part of the budget process.”

What can be done regarding these low PCS reimbursement rates in NC???

In order to change legislation, one of two avenues exist: (1) lobbying; or (2) litigation.

Over the past few years, while the PCS reimbursement rates have continued to decrease, the associations involved with home care organizations and long term care facilities (companies that provide PCS) have emphasized the lobbying aspect.  No litigation has been filed demanding a reasonable PCS reimbursement rate.

Obviously, the lobbying aspect has yielded less than desirable results.  Instead of increasing the PCS reimbursement rate, the General Assembly has continually decreased the rate.

When one line of attack does not work, you try another.

Maybe it is time for litigation.

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

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!!!

Compelling Personal Care Workers to Pay Union Dues Violates Our Freedom of Speech: But I Still Have to Pay My HOA Dues!

I live in a community that requires homeowner association monthly dues.  We have a homeowner association (HOA).  More than once I have complained at the high cost of these monthly dues and the absurd endeavors on which our HOA spends my money.  For example, we had a beautiful, clay tennis court.  If you have ever played tennis on a clay court, you know how wonderful it is to play on clay.  Clay tennis courts are also expensive to build.  A few years ago, my HOA decided to turn the clay tennis courts into a gardening center.  In place of the tennis nets, they built 10-12 raised beds to which the homeowners could purchase rights to use.  Somehow, my HOA determined the clay tennis court would be better used as a place to hold raised beds instead of playing tennis.

Despite my intense disapproval of this decision, I was forced to continue to pay my HOA dues, and a part of my HOA dues was spent on the conversion from tennis court to garden center.

Not completely dissimilar, in many states, public sector workers are required to contribute to union dues, even if they disagree with the union’s actions.  In-home care workers are considered public sector workers in Illinois because they care for the disabled and elderly and accept Medicaid money.  Including Illinois, 19 states allow bargaining agreements for home care workers.

Last week the Supreme Court sent shockwaves to the 19 states that allow bargaining agreements with home care workers.  The Supreme Court held that Illinois cannot compel personal care workers to pay union dues.

You may be asking yourself, why is Knicole blogging about an Illinois lawsuit and union dues.  How in the world does this affect North Carolina health care providers who accept Medicare and Medicaid?

The narrow answer would be that the case has no effect whatsoever on NC health care providers.  Unlike Illinois, North Carolina does not allow public sector bargaining.  In fact, in NC, union contracts, or bargaining contracts for public sector employees are considered “illegal, unlawful, void and of no effect.”  N.C. Gen. Stat. 95-98.

A broader view, on the other hand, is to understand that increases or decreases in personal care wages, better or worse benefits provided to personal care workers, and the overall profit or loss of personal care workers across the country, is relevant to NC personal care workers, and I prefer this broader view.

In the Supreme Court case, Harris, et al v. Quinn, Justice Alito wrote that compelling public sector workers to compensate a third party to “speak” for them, even if the worker disagrees with the third party’s speech violates the First Amendment.

In the Supreme Court opinion, Justice Alito writes:

“If we accepted Illinois’ argument, we would approve an unprecedented violation of the bedrock principle that, except perhaps in the rarest of circumstances, no person in this country may be compelled to subsidize speech by a third party that he or she does not wish to support.”

Individual states determine labor laws related to government employees.  As previously stated, NC bans bargaining agreements.  Virginia does as well.

In states that do allow bargaining agreements, if workers did not want to participate in the bargaining unit, the worker would opt out of full dues and pay only the cost of grievance administration and collective bargaining.  Supposedly, this prevents the nonmembers, who benefit from the reward of collectively-bargained higher wages or better benefits, from reaping the benefits without paying for them.  The whole “free-ride” idea…

In Illinois, Service Employees International Union (SEIU), a bargaining unit, argued that personal care workers should be compelled to contribute to it because personal care workers are public sector workers.

SEIU claims that it gets higher pay and better benefits for personal care workers.  Approximately 1 million of the 3 million personal care workers nationwide are members of SEIU or other similar organizations.

However, the Supreme Court disagrees.  According to the Harris decision, I shouldn’t have to pay for HOA dues if I disagree with the HOA’s actions (I’m kidding.  Sadly, I have no case to cease paying my HOA dues).

Proponents of unions are not happy with the results, but let’s play out a hypothetical…what if the Supreme Court held that public sector workers were required to pay union dues, even against their will….

Because, think about it…the government cannot prevent us from contributing to political candidates nor can the candidate force you to contribute to a political campaign.  Upholding the freedom of speech is not necessarily anti-union.  The Supreme Court did not rule “against” unions per se.  It ruled that a bargaining unit is “bargaining for” or “speaking for” its members.  And you cannot be forced to pay for speech with which you disagree.

Free speech allows all of us to individually decide which principles to support.  Allowing personal care workers to choose not to support certain ideologies is not an attack on collective bargaining.  Rather, it ensures that the free choices of personal care workers are represented by any union entity, rather than union leaders benefiting from coerced fees.

While the Harris decision does not apply to me and my HOA dues for many reasons, including the fact that I chose to live in the community knowing that the HOA existed, the Harris decision does have possible broad ramifications, especially as to in-home care workers and other public sector workers.  It may mean that the 1 million in-home care workers now compelled to contribute to unions may have standing to stop if they so choose.

Mass Medicare and Medicaid Payment Suspensions Increase Based on “Credible Allegations of Fraud”

One way in which President Obama pushed the Affordable Care Act (ACA) through Congress was the promise that the ACA would, basically, fund itself by the increase in recoupments from providers for fraud, waste, and abuse…hence, the dramatic increase in audits and payments suspensions for both Medicare and Medicaid providers.

Herein lies the problem, by relying on you, who accept Medicare and Medicaid to fund, even a portion, of the ACA, we are de-incentivizing you, as a health care providers, to accept Medicare and Medicaid. Think about this logically, we are placing MORE people in a system (by expanding Medicaid), more people will rely on Medicare and Medicaid as their health insurance, but we are incentivizing FEWER providers to accept Medicaid and Medicare. It is as though we don’t care what happens to the people once we give them insurance. The goal of the ACA seems to be: get more people insured; instead of having the goal to allow everyone to get health care.

But I digress…

Section 6402(h) of the ACA requires suspension of Medicare and/or Medicaid payments when there is a credible allegation of fraud. Before the ACA, the suspension was not mandatory.

So, what constitutes a credible allegation of fraud?

Let me give you a real life example. One of my clients, we will call it Company Good Health, had its Medicare and Medicaid payments suspended based on an anonymous letter claiming Good Health commits Medicaid fraud and sent to the Division of Health and Human Services (DHHS) with no name of the author or return address. Therefore, DHHS had no way to contact the anonymous author to verify whether any sentence within the letter had an ounce of veracity. In fact, the author of the letter may very well have been an ex-girlfriend of the CEO or a bitter competitor for business. There is no way to know.

Yet, according to the ACA, an allegation of fraud is credible if it has an “indicia of reliability.” Look up “indicia.” I did. I found “from Latin plural of indicium (“a notice, information, discovery, sign, mark, token”).” I thought, that’s an unhelpful definition, so I looked up indicia in my legal dictionary, Black’s Law Dictionary. I found, in part, “[t]he term is much used in Civil Law in a sense nearly or entirely synonymous with Circumstantial Evidence. It denotes facts that give rise to inferences, rather than the inferences themselves.” Facts that give rise to inferences. Circumstantial evidence is evidence which may allow a judge or jury to deduce a certain fact from other facts which can be proven. In some cases, there can be some evidence that cannot be proven directly, such as with an eye-witness. (Think of the Scott Peterson trial).

Under the ACA, if there is a fact that gives rise to an inference of an allegation of fraud, the your Medicare and Medicaid reimbursements must be suspended. I underlined the words in the preceding sentence “inference,” “allegation,” and “must” to emphasize the slight and without any factual verification circumstance may be that causes suspension of payments. For many of you, this suspension is financially debilitating and will cause you to go out of business…or, at the very least, never accept Medicare or Medicaid again. Suspensions of payments do not only affect you, if affects your recipients as well.

An example of a mass suspension can be found in our nation’s capital. Recently, in D.C., the Medicaid agency suspended payments to 52% of the city’s home health agencies for personal care services (PCS). The companies hired an attorney and got a temporary restraining order (TRO) preventing the city from withholding funds, but lost at the preliminary injunction.

In an Order denying the preliminary injunction, the Judge stated that “in contrast to a provider’s right to participate in the Medicaid program, there is no constitutional right to receive Medicaid payments.” (To which I disagree, because there is a right to Medicaid payments for services rendered. National case law from multiple jurisdictions illustrates this, but maybe it was not argued before or accepted by this judge).

The Center for Medicare and Medicaid (CMS) has also suspended Medicare payments on a large-scale. CMS suspended Medicare payments to 78 Dallas area home health providers. Last year’s “Health Care Fraud and Abuse Control report” stated that 297 providers were under “active suspension” from Medicare and 105 more suspensions were approved.

Another example of a mass suspension is the behavioral health providers in New Mexico. In June 2013, the Health Services Division (HSD) suspended all reimbursements for 15 behavioral health care providers, all of whom accounted for 87% of New Mexico’s behavioral health care, based on credible allegations of fraud. Most accused providers went out of business.

While both Medicare and Medicaid require the suspension of reimbursements upon a credible allegation of fraud, you are slightly more protected. Medicare suspensions end after 18 months and can only be extended from 6 months in special circumstances.

There is no such protection for you when it comes to Medicaid; the states make the rules. There is a good cause exception that allows the state NOT to suspend payments, but, to date, I have yet to witness one good cause exception being recognized by the state. Instead, relief for the accused providers only comes from filing a lawsuit, most likely, an injunctive lawsuit. The downside of filing a lawsuit is that you have to pay attorney’s fees, which can be daunting, and you must find an attorney that specializes in Medicare and Medicaid. I have seen too many inexperienced, but well-intended, attorneys create bad law for providers due to self-imposed, legal stumbles.

The enigma within the language of the ACA, in this particular section, is the complete disregard for due process. See my blog on “How the ACA Has Redefined the Threshold for “Credible Allegations of Fraud” and Does It Violate Due Process?”  By suspending Medicare and Medicaid reimbursements due to “indicia of reliability of an allegation of fraud,” the government is usurping your right to payment for services rendered without notice and an opportunity to be heard, which is one of the bedrocks of our Constitution.

So what are you to do if you are caught up in this web of mass suspensions based on “indicia of reliability of an allegation of fraud?”

Contact your Medicare and Medicaid litigation attorney!  And do NOT forget to fill out the “good cause” exception…just in case…

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!

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

“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!

Personal Care Services: Will the Fear of the “F” Word (Medicaid Fraud) Cause PCS in the Home to Be Eradicated???

In my career, I call it the “F” word:

Fraud.

Its existence and fear of existence drives Medicare and Medicaid policies.

It is without question that Medicare and Medicaid fraud needs to be eliminated.  In fact, for true Medicare and Medicaid fraud, I propose harsher penalties.  Think about what the fraudulent provider is doing…taking health care dollars from the elderly and poor without providing services.  Medicare and Medicaid recipients receive less medically necessary services because of fraudulent providers.

Just recently, in Charlotte, on April 9, 2014, V.F. Brewton, of Shelby, N.C., was sentenced to 111 months in prison, three years of supervised release and ordered to pay $7,070,426 in restitution to Medicaid and $573,392 to IRS. On April 8, 2014, co-defendant, R. S. Cannon, of Charlotte, was sentenced to 102 months in prison, three years court supervised release and ordered to pay $2,541,306 in restitution.  See press release.  Ouch!

On November 21, 2013, in Miami, Fla., Roberto Marrero, who ran Trust Care, was sentenced 120 months in prison.  From approximately March 2007 through at least October 2010, Trust Care submitted more than $20 million in claims for home health services. Medicare paid Trust Care more than $15 million for these fraudulent claims. Marrero and his co-conspirators have also acknowledged their involvement in similar fraudulent schemes at several other Miami health care agencies with estimated total losses of approximately $50 million. See article.  Ouch!

However, there are never the stories in the newspapers and media about all the services actually rendered to Medicare and Medicaid recipients by upstanding providers who do not commit fraud, but, instead, work very hard every day to stay up-to-date on regulations and policies and who do not reap much profit for the services provided.  I guess that doesn’t make good journalism.

I recently attended the Association for Home and Hospice Care (AHHC) conference in RTP, NC.  I met wonderful and non-fraudulent providers.  Each provider I met was passionate and compassionate about their job.  The only time money was brought up was to discuss the low reimbursement rates and the low profit margin for these providers.

In fact, one of the speakers even opined that, because of the alleged prevalence of fraud in home health care, the federal and state governments will continue to cut reimbursement rates for home health and hospice until over 50% of the agencies operate at a loss by 2017.  That is a dismal thought!  What happened to our right to pursue a career without intervention?

One provider informed me that, upon his or her information and belief, there is a chance that PCS, which is an optional program under Medicaid, may be wiped out in the near future by the General Assembly (PCS for home health and assisted living facilities, not the recipients covered by the Waiver).

What are personal care services (PCS)?

In the world of Medicaid and Medicare, there are a number of different types of PCS.  No, actually, I think it is more apropos to say there are a number of different PCS recipients in the world of Medicaid and Medicare.

First, the definition/eligibility requirements:

Personal Care Services (PCS) are available to individuals who have a medical condition, disability, or cognitive impairment and demonstrate unmet needs for, at a minimum three of the five qualifying activities of daily living (ADLs) with limited hands-on assistance; two ADLs, one of which requires extensive assistance; or two ADLs, one of which requires assistance at the full dependence level. The five qualifying ADLs are eating, dressing, bathing, toileting, and mobility.  See DMA website.

PCS are provided to developmentally disabled people under the 1915 b/c Waivers, people who reside in nursing homes and long-term assisted living facilities, and people who qualify to receive PCS in their homes.  For purposes of this blog, I am writing about the latter three types of recipients.  All 50 states allow PCS for qualified individuals, but the qualifications differ among the states.

In this day and age, the “F” word drives Medicaid and Medicare policies.  Without question Medicaid fraud exists.  Whether Medicaid fraud is as prevalent as some may believe, I am not sure.  I have certainly witnessed honest providers accused of Medicaid fraud.

And home health care providers are viewed by some, generally, as the providers who can most easily commit Medicaid fraud (with which I do not agree, but must concede that home health care is more difficult to monitor).  For example, a home health care provider goes to a person’s home and provides services.  Who would know whether the home health care provider was billing for services on days he or she did not go to the recipient’s house? Not the recipient, because the recipient has no idea for what dates the provider is billing.  Unlike an assisted living facility or nursing home that is easier to monitor and would have the documentation to show that the recipient actually lived in the facility.

Because of the alleged prevalence of fraud in home health care, apparently, (and with no independent verification on my part) some in North Carolina are questioning whether we should continue to reimburse PCS with Medicaid dollars, particularly as to home health.  But if we stopped reimbursing for PCS in the homes, what would be the alternative?  How would it affect North Carolinians? Would eliminating PCS save tax dollar money? Stop fraud?

When we evaluate the effects of whether to continue to reimburse for PCS with Medicaid dollars, we aren’t only talking about those served by PCS, but also the companies and all employees providing the home health.  In 2012 in NC, approximately 40,000 were employed in home health.

Why is home health care important (or is it?)? Should we allow the “F” word to erase PCS  in home health?

What is the alternative to home health?  Answer: (1) Assisted living facilities?  (2) Nursing homes? (3) A dedicated, family caregiver?  (4) Nothing?

While there are, I am sure, many reasons that PCS in home health care is vital to our community, for the purposes of this blog, I am going to concentrate on cost savings to the taxpayers.  Home health costs us (taxpayers) less money than other alternatives to home health.

Also, understand please that I am not advocating that everyone should receive home health instead of entering nursing homes or assisted living facilities.  Quite the contrary, as both nursing homes and assisted living facilities are essential to NC.  I am merely pointing out that all the services (home health, nursing homes, and assisted living facilities) are important.

What is the difference between assisted living and nursing homes?

An assisted living community provides communal living, usually with social activities, a cafeteria, laundry service, etc.  I always think of my grandma at Glenaire in Cary, NC.  She plays bridge, attends a book club, and even takes a computer course!  She actually joined Facebook a couple of years ago!

A nursing home, on the other hand, provides 24-hour supervision by a licensed or registered nursing staff.  Generally, the folks eligible to be admitted into an assisted living facility will be eligible to receive PCS (see the above definition/eligibility requirements).  So, logically, the clientele in an assisted living facility receiving PCS could, in some cases, also be eligible to receive PCS in their home.  Obviously a number of factors come into play to determine whether a person goes into an assisted living facility versus staying at home and receiving home health care: eligibility, family issues, money, condition of your home, money, desire for independence, money, health issues, and money.

Because of the level of supervision and skill required in a nursing home, a nursing home will be much more expensive than an assisted living facility.  Insomuch as the assisted living facility will be less expensive than a nursing home, home health care, because you are paying for your own room and board, will be cheaper than both.

The average national cost for an assisted living facility in 2012 was $3,550/month.  That’s $42,600/year.  The average cost for an assisted living facility in 2012 in NC was $2900/month.

The average cost for a nursing home in NC for a semi-private room is $73,913 and $82,125 for a private room.  That’s $225/day for a private room.  For that price, you could get a room at a Ritz Carlton! (albeit not in a touristy area).

You think nursing homes are expensive in NC? Don’t move to NY!! In NY, for a semi-private room it costs $124,100/year and $130,670/year for a private room ($358/day!). Florida is a bit more expensive that NC too.  In Florida, on average, a semi-private room in a nursing home costs $83,950 and a private room is approximately $91,615.

On the flip side, the average cost for a homemaker is $38,896.  A home health aide costs, on average, $40,040.

If, in fact, NC ceases to reimburse PCS in home health, many of the people residing in their homes and relying on Medicaid-covered PCS will be forced to leave their homes for, in some case, more expensive alternatives.

Though the odd contrast may not be easily seen, there is an argument that erasing PCS in the home may actually cost the tax payers more.  Not to mention that erasing PCS in home health would drive agencies bankrupt and staff jobless.

Remember, I have no verification that our General Assembly would or would not eradicate PCS in the home environment.  It was mere speculation in a conversation.  But the conversation got me thinking about the delicate balance of Medicaid services in NC.  And how one abrupt and drastic change could change our health care system and capitalist ideas so quickly.

And, arguably, all because of the speculative “F” word.  What is that political phrase we heard so much in the last elections? Oh, yes, maybe we should use a scalpel, not an ax?

Medicaid Card Warning: This Card Could Cause the State to Recoup From Your Estate!

Have you ever wondered about warning labels? I mean, some of them are so ridiculous that you have to wonder who the person was that created the need for such a ridiculous warning label.

For example, the warning label on the sleep-aid Nytol warns, “May cause drowsiness.” I hope so!

This weekend my husband and I let friends borrow our chainsaw.  The warning on the chainsaw says, “Do not hold on wrong side of chainsaw.”  Really? What moronic person would grab a chainsaw by the saw blade?  But the warning is there, so there must have been at least one person who held the chainsaw by the saw blade, turned on the saw and…you know.

Then comes my personal favorite…my egg carton from the grocery store states, “This product may contain eggs.” My egg carton!  Really?

Medicaid cards should come with warning labels.  Multiple warning labels.  Such as:

“Warning: You may not be able to find a physician willing to accept Medicaid.”

Or

“Warning:  This may not be your card. Review the name prior to use.”

Or

“Warning:  This card could lead to you losing your home.”

What?

For most people, your home is your biggest investment in your lifetime.  Many people want to pass their houses down to children, or, at least, give the children the right to sell the home and keep the money.  To some, the home is the biggest inheritance…maybe the only inheritance.

So how can NC take your home if you are on Medicaid?

According to NC Department of Health and Human Services (DHHS), the estates of Medicaid recipients may be subject to estate recovery if (1) The Medicaid recipient applied on or after October 1, 1994.  (Considering it is 2014, I would guess that most people fall into this category); and one of the following:

(a) is under age 55 and an inpatient in a nursing facility, intermediate care facility for the intellectual developmentally disabled, or other medical institution, and cannot reasonably be discharged to return home; or

(b) is 55 years of age or older and is living in medical facility and receiving medical care services, or home and community-based services, or In Home Care Services (IHC). 

Also, In Home Care Services (IHC) claims for SA recipients ages 55 and over are subject to Medicaid Estate Recovery.

This estate recovery is not new.  Recently, I have seen a few articles on the internet that state that this estate recovery is a new addition to the Affordable Care Act (ACA).  This is incorrect information.  In 1965, estate recovery was optional and states could only recoup Medicaid costs spent on those 65 years or older.  In 1993, Congress passed a budget bill that required states to recover the expense of long-term care and related costs for deceased Medicaid recipients 55 or older. The 1993 federal law also gave states the option to recover all other Medicaid expenses.  The only change that the ACA made to the estate recovery rule is, by expanding Medicaid, providing more estates to be recovered.

“Warning: Medicaid can take your home!”

The estate recovery oddly seems to disproportionately affect people over 55 years of age.

DHHS does state that it will NOT seek a lien on your property while you are alive.  DHHS only seeks the estate recovery after your death.  DHHS also states that estate recovery is waived in some circumstances.  What circumstances are those? And why wouldn’t those circumstances apply to everyone?

What exactly can the state seek to recover?

“At a minimum, states must recover amounts spent by Medicaid for long-term care and related drug and hospital benefits, including Medicaid payments for Medicare cost sharing related to these services. However, they have the option of recovering the costs of all Medicaid services paid on the recipient’s behalf. The majority of states recover spending for more than the minimum of long-term care and related expenses.”  (emphasis added).  See HHS’s website.

Isn’t Medicaid intended to be free health care for low-income and needy people? If the state can recover from a person’s estate after death, did that person really receive free health care? Or was the health care merely a loan?

Warning on the Medicaid card: “Warning! By accepting Medicaid, you are authorizing the state to recover from your estate, and, in some circumstances, your home.” 

But the warning is very tiny print.