Category Archives: Mental Health Problems
Knicole Partners-Up with Nelson Mullins and Questions NC Partial Hospitalization!
I have an announcement! I have the pleasure of joining Nelson Mullins as a partner. You may have heard of Nelson Mullins; it is a nationwide firm, and its health care team is “spot on.” Instead of spinning my own wheels trying to figure out the health care law; I now will be able to collaborate with colleagues and like-minded, health care, geeks. Yes, I will be doing the same thing – Medicare and Medicaid provider appeals and fighting terminations, suspensions, and penalties for long-term care facilities, home health, DME, hospitals, dentists…basically anyone who receives an adverse decision from any state or the federal government or a contracted vendor, such as RACs, MACs, TPE, UPICs, etc.
Now to my blog… Today I want to talk about partial hospitalization and billing to Medicare and Medicaid. One of my clients has been not getting paid for services rendered, which is always a problem. The 3rd party payor claims that substance abuse treatment is not partial hospitalization. 49 States consider substance abuse intensive outpatient services (“SAIOP”) and substance abuse comprehensive outpatient treatment (“SACOT”) partial hospitalization. Do you agree? Because, apparently, NC is the sole State that refuses to identify SAIOP and SACOT as partial hospitalization.
Partial hospitalization is defined as a structured mental health treatment program that runs for several hours each day, three to five days per week. Clients participate in the scheduled treatment sessions during the day and return home at night. This program is a step down from 24-hour care in a psychiatric hospital setting (inpatient treatment). It can also be used to prevent the need for an inpatient hospital stay. In reality, partial hospitalization saves massive amounts of tax dollars by not taking up a bed in an actual hospital.
In NC, partial hospitalization is codified in 10A NCAC 27G.1101, which states “A partial hospitalization facility is a day/night facility which provides a broad range of intensive and therapeutic approaches which may include group, individual, occupational, activity and recreational therapies, training in community living and specific coping skills, and medical services as needed primarily for acutely mentally-ill individuals. This facility provides services to: (1) prevent hospitalization; or (2) to serve as an interim step for those leaving an inpatient hospital. This facility provides a medical component in a less restrictive setting than a hospital or a rehabilitation facility.”
So, why does this 3rd party payor believe that SAIOP and SACOT are not partial hospitalization? I believe this payor’s stance is wrong. I spoke about their wrongness on RACMoniter, and I hope it may give me some “sway.”
Partial hospitalization is considered a short-term treatment. It is supposed to last 2-3 weeks. However, as many of you know substance abuse is not wiped away in 2-3 weeks. It is a long term process to overcome substance abuse issues. States’ Medicaid programs will question why consumers bounce from SAIOP AND SACOT over and over. In fact, another one of clients is being investigated by the Medicaid Investigative Division (“MID”) for having consumers in SAIOP and SACOT too long or too many times.
Substance abuse services are audited a lot. In fact, Medicare and Medicaid audits occur most often in behavioral health care, home health, and hospice. On January 24, 2023, the New York State Comptroller announced it found $22 million in alleged improper payments. I say alleged because, I would say, 90% of alleged overpayments accusations are inaccurate. The poor provider receives a letter saying you owe $12 million dollars, and their hearts drop. They imagine themselves going out of business. Then they hire a lawyer and it turns out that they owe $896.36. I give that example as a real-life example. I actually had a client accused of owing $12 million dollars and after a 2-week trial, the judge decided that this company owed $896.36. A big difference, right? We appealed nonetheless. 🙂
NC Medicaid OVERHAULED!
NC Medicaid is getting a complete overhaul. Politically, everyone is lost and has no idea how this will work. Back in 2010-ish, when NC went to the MCO model, which we have now, hundreds of providers were not paid or had trouble getting paid until the “dust” settled, and the MCOs were familiar with their jobs. Providers continue to suffer nonpayment from MCOs.
The new model consists of two, separate models: (1) the Standard Plan; and (2) the Tailored Plan models.
What’s the difference?
The Tailored Plan
- People who get Innovations Waiver services
- People who get Traumatic Brain Injury (TBI) Waiver services
- People who may have a mental health disorder,substance use disorder, intellectual /developmental disability (I/DD) or traumatic brain injury (TBI).
The Standard Plan
Applies to everyone else. It is normal, physical Medicaid.
December 1, 2022, is the “go-live” date for the Tailored Plans.
Unlike the MCO model, the Tailored Plan offers physical health, pharmacy, care management and behavioral health services. It is for members who may have significant mental health needs, severe substance use disorders, intellectual/developmental disabilities (I/DDs) or traumatic brain injuries (TBIs). Tailored Plans offer added services for members who qualify. DHHS is trying to distance itself from any Medicaid administration by hiring all these private companies to manage Medicaid for DHHS. DHHS has to get federal Waivers to do this.
The MCOs are taking on a new function. Starting December 1, 2022, the MCOs will be managing physical care, as well as mental health and substance abuse.
I see this HUGE change as good and bad (isn’t everything?). The good side effect of this transition is that Medicaid recipients who suffer mental health and/or substance abuse will have their physical health taken care of by the same MCO that manage their mental health and/or substance abuse services. Despite, this positive side effect, we all know that whenever NC Medicaid is OVERHAULED, consumers fall between cracks on a large scale. Let’s just hope that this transition will be easier than past transitions.
Dave Richard, Deputy Secretary NC Medicaid, NCDHHS, gave a presentation today for the NCSHCA. He said that the transition to MCOs was rocky. What does he think will happen when we transfer to the Tailored Plan?
I think I may ask him whether he thinks whether the MCOs are doing a good job, presently.
He’s a great presenter.
He said that the hospitals have come together in the last 4 weeks. He said that we will see something in the media on Monday.
He wants to expand Medicaid because his agency DHHS would be awarded $1.5 Billion over the course of 2 years. Of course, he wants to expand. He has no idea that the MCOs are “terminating at will” providers within the catchment areas in a disproportionate and discriminatory way.
We are close to expansion, he said. 80%, he guessed. “Expansion is really important.”
Not if there are not enough providers.
I did not ask him my question.
Today Mr. Richard had to get a bunch of data from the “new plans.” We are 2 1/2 months away, and he said they are not prepared yet, but hopes to be prepared by December 1, 2022. They still have the discretion to “pull the plug.” He’s worried about a lot of providers who have invested a lot of money to get compliant and ready for the transformation – that they won’t get paid.
“We have 5 really, strong Standard Plans,” he said. Most Medicaid recipients will choose the 5 Standard Plans,
Attorney from the audience: “We have to raise reimbursement rates.” There is a staffing crisis, the attorney, emphasized.
Mr. Richard stated that there will be a raise, but no indication of how much.
Finally, I did ask him his opinion as to whether he thinks the MCOs are doing better now than when the transformation happened (back in 2010-ish).
He said, that nothing is perfect. And that other Medicaid Deputy Secretaries think very highly of NC’s program. I wonder if he’ll run for office. He would win.
The guy next to me asked, “What is the future of the Tailored Plans when they go out of business in 4 years?”
Mr. Richards said that there needed to be competition for being the “big dogs.”
To Disclose or Not to Disclose: The Answer Could Terminate Your Medicaid Contract
Changes of ownership of a facility can spur RAC, MAC, and MCO audits. In fact, federal regulations require disclosure of changes of ownership within 35 days after any change of ownership. 42 CFR 455.104. The regulations require disclosure, but there is no guidance regarding acceptance of said change of ownership. In other words what if your company undergoes a change in ownership and the MCO or MAC terminates the participation agreement because they don’t appreciate who the new owner is. The federal regulations also require disclosure of any convictions related to Medicaid. 42 CFR 455.106. In the particular case I am discussing, the MCO audited this company 10-15 times over two years. There seemed to be a personal vendetta, for whatever reason, against the company from higher-ups at the MCO.
Managed care can be tricky because, by definition, it removes the management of Medicaid and Medicare from the government agencies into these quasi-private/quasi-governmental agencies. I still think that managed care violates 42 CFR 410(e), the single state agency requirement that states that “The Medicaid agency may not delegate, to other than its own officials, the authority to supervise the plan or to develop or issue policies, rules, and regulations on program matters.” Despite my personal opinion, managed care is definitely the trend. To date, 40 States have managed care organizations (MCOs) to manage Medicaid.
This company is a behavioral health care provider, which provides substance abuse services, SAIOP, SACOT, PSR, OPT, urine tests; they run a Suboxone clinic, a laboratory, and a pharmacy. It also provides free/charitable transportation services to get the consumers to the facility without receiving any money in return. The CEO was accused of personal, tax fraud. He and his wife never submitted their own taxes; they relied on professionals. One, below-stellar accountant performed the companies’ taxes and the CEO’s personal taxes a few years ago. I am no tax expert, but apparently the problem was that he took no salary for two years while the facility was bringing in little profit. His wife is a physician, so they were able to sustain on one income. A lot of confusion later and multiple tax and criminal attorneys, CEO pled guilty to a personal tax plea. It is a Martha Stewart mistake, not a Bernie Madoff. The guilty plea was not germane to Medicaid.
Once the CEO pleads guilty to the personal plea, the newspaper publishes a story. The MCO first terminates the contract based on 42 CFR 455.106, which requires disclosure if – and the exact wording is important – “Has been convicted of a criminal offense related to that person’s involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs.” This guilty plea was not related to Medicaid so the termination was erroneous.
Concurrently, in light of the CEO’s plea, he steps down and his wife who is also a medical physician steps in to transition as CEO to keep the company going. Obviously, a company is bigger than its CEO’s personal transgressions. 200 staff and hundreds of consumers relied on its viability as a company.
Once we argued that the personal guilty plea was not related to Medicaid, the MCO added the additional reason for termination – failing to disclose a change in ownership. A double whammy!
We were able to successfully file a preliminary injunction arguing that irreparable harm would ensue if the termination were upheld. We also argued that the terminations were erroneous. The Judge agreed in this case agreeing that a company is indeed bigger than its CEO’s transgressions.
We always think about audits involving medical records. But audits can also involve audits of corporate disclosures or nondisclosures of managerial issues. Audits of provider executive teams can be deadly to any company.
Terminations of provider agreements are always tricky because, most often, the MCO or MAC will argue that it can terminate the Medicaid/care contract at will. I disagree, first and foremost. See blog, “Property Rights.”
If a facility is terminated for cause, that reason better be accurate!
In this case, the CEO had no duty to disclose his personal, guilty plea per the regulations. Secondly, the MCOs’ assertion that it had no notice of the transfer of ownership was equally as disingenuous. The facility had been open and honest regarding the transition of the company to a new CEO. While no formal notice was ever provided, there was clear communication about the transition to/from the MCO.
Thus, we were successful in obtaining an injunction; thereby keeping the company viable.
New Mexico Settlement…Six Years Later!
For the full press release.
This New Mexico settlement…What a long strange trip it’s been!
The litigation started in 2013 (six years ago). I was a partner at another Raleigh, NC law firm. Out of the blue, a woman called me from New Mexico and asked whether I would be willing to fly to New Mexico to testify before the General Assembly regarding Public Consulting Group (PCG) and the company’s extrapolation and audit history.
I did. I testified before the NM General Assembly’s subcommittee for behavioral health care. Sitting next to me was a gentleman from PCG. He happened to be the team leader (not sure what his exact title was) for PCG’s audits in NM and NC. In his defense, he graciously sat there and testified against me while I told some horror stories of PCG audits. See blog.
I met the 15 behavioral health care providers’ CEOs who were accused of credible allegations of fraud. Their stories were so emotional and heart-tugging. These people had dedicated their lives and careers to New Mexico’s most needy population – those on Medicaid and suffering from mental health, substance abuse, and/or developmental disabilities – not for money, but because they cared. Then June 24, 2013, the State of New Mexico accused them all of credible allegations of fraud. NM’s proof? A PCG audit that found no credible allegations of fraud. But Human Services Department (HSD) instructed PCG to remove “no credible allegations of fraud,” and HSD referred the audits to the Attorney General (AG) claiming that credible allegations of fraud existed. Sound like a movie? It could be; it is a conspiracy theory story along the lines of Area 51. Is it a coincidence that Area 51 and the NM behavioral health care debacle both occurred in NM?
“I’d like to get some sleep before I travel
But if you got a warrant, I guess you’re gonna come in.” – Grateful Dead
A timeline of the events, starting in 2013, has been memorialized by multiple news organizations. See Timeline.
“June 24 — An audit paid for by the New Mexico Human Services Department and conducted by Public Consulting Group (PCG) finds that nearly $33.8 million in Medicaid overpayments were made to 15 behavioral health providers in the state.
June 24 — New Mexico Human Services Department notifies the 15 behavioral health providers that there is a “credible allegation of fraud for which an investigation is pending,” and immediately suspends all Medicaid payments.
June 25 — Officials with the New Mexico Human Services Department send initial contracts to five Arizona companies: Agave Health Inc., Valle Del Sol, La Frontera Inc., Southwest Network Inc., and Turqouise Health and Wellness, Inc., to temporarily take over New Mexico behavioral health organizations for a combined price tag of $17.85 million. It’s estimated the move will impact about 30,000 patients. From a July 18 email: “I am following up on the proposed contract between HSD and Open Skies Healthcare (affiliated with Southwest Network, located in Phoenix). On July 3, 2013, I responded to Larry’s [Heyeck, Deputy General Counsel for HSD] June 25 email concerning the contract…”
July 17 – Eight agencies go to U.S. District Court to restore funding.
July 25 – A memo generated by one of the 15 affected providers, TeamBuilders, indicates it will stop taking new clients.
July 25 – A state district judge turns the PCG audit over to New Mexico State Auditor Hector Balderas, and orders the audit protected from public disclosure.
Aug. 21 – In a 15-1 vote New Mexico’s Legislative Finance Committee objects to the Human Services Department moving $10 million from it’s budget to pay Arizona agencies to take over New Mexico providers due to concerns over secrecy surrounding the process.
Aug. 27 – New Mexico In Depth and the Las Cruces Sun-Newsfile a lawsuit demanding the public release of the PCG audit.
Aug. 28 – Federal officials hold conference call to hear about widespread disruptions to clients of behavioral health providers in transition.
Aug. 29 – An Inspection of Public Records Act request filed by KUNM reveals contract communications between New Mexico Human Services Department officials and Arizona providers as early as May 29, a full month before the audit was released by Public Consulting Group.
Sept. 3 – Public Consulting Group representative Thomas Aldridge tells the New Mexico Legislative Behavioral Health Subcommittee that he helped state officials vet at least one Arizona firm before it even began its audit of agencies in the state.
Sept. 3 — Lawyer Knicole Emanuel testifies to ongoing problems with PCG audits conducted in North Carolina as well as lawsuits triggered by PCG activities. “In some of the PCG audits that I have encountered, PCG has said the Medicaid provider owes $700,000, $800,000, $1.5 million, these exorbitant amounts, and at the end of the day when they look at all the documents, it goes down to like $200 or $300.”
Sept. 10 – The Santa Fe New Mexican reports that political ads defending Gov. Susana Martinez have begun rolling out, framing the behavioral health takeover as a crackdown on Medicaid fraud.”
I litigated 4 administrative appeals. Even after the NM AG came out and stated that there was no fraud, HSD accused the providers of owing alleged overpayments, some upwards of $12 million. These amounts were extrapolated.
In the very first administrative appeal, for The Counseling Center, the extrapolation expert was one of HSD’s attorneys. Upon questions regarding his extrapolation and statistical experience and the foundation for his expertise, he testified that took a class on statistics in college. I guess I could be a bowling expert.
PCG only testified in the first two administrative appeals. I guess after PCG testified that they were never given the opportunity to finish their audit due to HSD and that PCG found no fraud, but HSD removed that language from the report, HSD smartened up and stopped calling PCG as a witness. PCG certainly was not bolstering HSD’s position.
For three of the administrative appeals, we had the same administrative law judge (ALJ), who appeared to have some experience as an ALJ. For one of the appeals, we had a younger gentleman as the ALJ, who, according to LINKEDIN, was a professional photographer.
About 5 years after the accusations of fraud, the AG came out and exonerated all the providers. Apparently, there never was any fraud. Only accusations. These exonerations, however, did not stop the allegations of overpayments to HSD. The exonerations also did not stop these companies from going out of business, being tried as fraudsters in the eyes of the public, losing their companies, firing staff, closing their doors, and losing everything.
This was all done under the administration of Susana Martinez – not saying that politics played a huge role in the act of overthrowing these providers.
The providers all appealed their alleged overpayments and filed a lawsuit against HSD and the State for damages suffered from the original allegation of fraud that was found to be meritless.
After an election and a new administration took control, the State of New Mexico settled with the providers, as you can see from the above press release.
During the long journey over the past 6 years, one of the CEOs, Jose Frietz, passed away. He had started his company Families & Youth, Inc. in 1977. A month before he died on March 2, 2016, the AG exonerated FYI.
In 2013, Larry Heyeck was one of the attorneys for HSD. Multiple times during the witch hunt for Medicaid fraud, it appeared that Heyeck had some sort of personal vendetta against the 15 providers. According to one article, “Heyeck singled out Roque Garcia, former acting CEO of Southwest Counseling Services (Las Cruces), who was a recipient of the payments and asked legislators, “What does this mean? How can this money be accounted for to ensure that it isn’t used for private benefit?” Heyeck then asserted that Garcia had abused agency travel funds largely paid for by Medicaid through lavish travel to resort destinations in a private aircraft.”
Garcia wasn’t the only provider accused of misappropriating Medicaid funds. Shannon Freedle and his wife Lorraine were ostracized for having their abode in Hawaii.
Larry Heyeck, had an article published in the December 2012’s American Bar Association’s “The Health Lawyer” discussing the effect of 42 CFR 455.23 on Medicaid fraud and suspensions of Medicaid reimbursements. It was entitled, “Medicaid Payment Holds Due to Credible Allegations of Fraud.” Seem apropos?
By 2016, all 15 providers were cleared of allegations of fraud, but most were out of business.
Now – December 4, 2019 – a press release is disseminated to show that the last of the providers settled with the State of New Mexico. What the press release fails to express is the struggle, the financial and non-financial damages, the emotional turmoil, and the devastation these companies have endured over the past 6 years. No amount of money could ever right their catastrophic, past 6-years or the complete demise of their companies based on erroneous allegations of fraud.
“Sometimes the light’s all shinin’ on me; Other times, I can barely see; Lately, it occurs to me; What a long, strange trip it’s been.” – Grateful Dead
New Mexico Leads the Nation in Ground-Breaking Legislation in Support of Medicaid Providers
“Gov. Michelle Lujan Grisham signed into law this week a bill (SB41) that ensures service providers accused of overbilling or defrauding Medicaid can review and respond to allegations of wrongdoing before state action is taken.” – Tripp Jennings, New Mexico In Depth.
For those of you who don’t know, in 2013, the State of New Mexico, suspended the Medicaid reimbursements of 15 behavioral health care providers based on “credible allegations of fraud.” 42 CFR 455.23. The Attorney General eventually determined that no fraud existed as to ANY of the 15 behavioral health care providers. These providers constituted 87.5% of the behavioral health care providers in New Mexico, which is predominantly Medicaid and has the highest suicide rate of any state, if you consider the Native American population.
There was no due process. The providers were informed of the immediate Medicaid suspension in a group meeting without ever being told what exactly the “fraud” was that they allegedly committed. They were informed by, then assistant Attorney General, Larry Hyeck, that fraud existed and because of the ongoing investigation nothing could be divulged to those accused. Supposedly, the evidence for such “fraud” was based on an independent audit performed by Public Consulting Group (PCG). However, according to testimony from an employee of PCG at the administrative hearing of The Counseling Center (one of the 15 accused behavioral health care providers), PCG was not allowed by the Human Services Department of NM (HSD) to complete its audit. According to this employee’s testimony, it is PCG’s common practice to return to the providers which are the subject of the audit a 2nd or even 3rd time to ensure that all the relevant documents were collected and reviewed. Human error and the sheer amount of medical records involved in behavioral health care suggest that a piece of paper or two can be overlooked, especially because this audit occurred in 2013, before most of the providers had adopted electronic medical record systems. Add in the fact that PCG’s scanners were less than stellar and that the former Governor Susan Martinez, Optum’s CEO, and the HSD Secretary -at the time- had already vetted 5 Arizona companies to overtake the 15 NM behavioral health care companies – even prior to PCG’s determination – and the sum equals a pre-determined accusation of fraud. PCG’s initial report stated that no credible allegations of fraud existed. However, PCG was instructed to remove that sentence.
Almost all the providers were forced out of business. The staff were terminated or told to be employed by the new 5 AZ companies. The Medicaid recipients lost their mental health services. One company remained in business because they paid the State for fraud that they never committed. Another company held on by a very thin thread because of its developmental disability services. But the former-CEO became taxed and stepped down and many more left or were let go. The 13 other providers were financially ruined, including the largest behavioral health care provider in NM, which serviced over 700 Medicaid recipients and employed hundreds of clinical staff. It had been servicing NM’s poor and those in need of mental health services for over 30 years. Another company had been in business over 40 years (with the same CEO). The careers and live’s work were crumbled in one day and by one accusation that was eventually proven to be wrong.
No one ever foresaw this amount of abuse of discretion to occur by government agents.
Now, today, in 2019, the new Governor of NM, Gov. Michelle Lujan Grisham, signed a law introduced by Senator Mary Kay Papen, a long proponent and advocate that the 15 behavioral health care providers were unjustly accused and forced out of business, that will protect Medicaid providers in NM from ever being subjected to the unjust and arbitrary suspension of Medicaid funds and unfounded allegations of Medicaid fraud.
Even though 42 C.F.R. 455.23 requires a state to suspend Medicaid funding upon “credible allegations of fraud,” NM has taken the first step toward instituting a safeguard for Medicaid providers. Already too few health care providers accept Medicaid – and who can blame them? The low reimbursement rates are nothing compared to the regulatory scrutiny that they undergo merely for accepting Medicaid.
NM SB41 contradicts the harsh language of 42 CFR 455.23, which mandates that a State “must” suspend payments upon a credible allegation of fraud. NM SB41 provides due process for Medicaid providers accused of fraud. Which begs the question – why hasn’t anyone brought a declaratory action to determine that 42 CFR 455.23 violates due process, which happens to be a constitutional right?
Part of the due process enacted by New Mexico is that a suspension of Medicaid reimbursements should be released upon a post of a surety bond and that the posting of a surety bond shall be deemed good cause to not suspend payments during the investigation. Although the new law also states that the Medicaid reimbursement suspension must be released within 10 days of the posting of the surety bond “in the amount of the suspended payment.” After 4 administrative hearings in New Mexico, I can assure you that the provider and HSD will have two disparate views of the “amount of the suspended payment.” And by disparate, I mean REALLY disparate.
Regardless, I view this new law as a giant leap in the direction of the Constitution, which was actually enacted in 1789. So is it apropos that 230 years later NM is forced to enact a law that upholds a legal right that was written and enacted into law 230 years ago?
Thank you, Gov. Michelle Lujan Grisham, Senator Papen, Patsy Romero, and Shawn Mathis for your amazing effort on getting this legislation passed.
And – look forward to my webcast on RACMonitor on Monday, April 8, 2019, detailing how courts across the country are revising their views and granting federal injunctions stopping premature recoupments when a Medicare/caid provider is accused of an overpayment. Due process is on a come-back.
United Behavioral Health SLAMMED by Judge for Improperly Denying Behavioral Health Care Services
We have had parity laws between mental and physical health care services on the books for years. Regardless of the black letter law, mental health health care services have been treated with stigma, embarrassment, and of lesser importance than physical health care services. A broken leg is easily proven by an X-Ray; whereas a broken mind is less obvious.
In an unprecedented Decision ripe with scathing remarks against Optum/United Behavioral Health’s (UBH) actions, a Court recently ruled that UBH improperly denied mental health services to insureds and that those improper denials were financially-driven. A slap-on-the-wrist, this Decision was not. More of a public whipping.
In a 106-page opinion, the US District Court, Northern District of California, slammed UBH in a blistering decision finding that UBH purposely and improperly denied behavioral health care benefits to thousands of mentally ill insureds by utilizing overly restrictive guidelines. This is a HUGE win for the mental health community, which often does not receive the parity of services (of physical health) that it is legally is entitled. U.S. Chief Magistrate Judge Joseph Spero spared no political correctness in his mordacious written opinion, which is rarity in today’s vitriolic world.
The Plaintiffs filed a lawsuit under the Employee Retirement Income Security Act of 1974 (ERISA), saying the insurer denied benefits in violation of the terms of their insurance plans and state law. The Plaintiffs consisted of participants in UBH health care plans and who were denied mental health care services.
Judge Spero found United Behavioral’s guidelines were influenced by financial incentives concerning fully-funded and self-funded ERISA plans:
“While the incentives related to fully insured and self-funded plans are not identical, with respect to both types of plan UBH has a financial interest in keeping benefit expense down … [A]ny resulting shortcomings in its Guideline development process taints its decision-making as to both categories of plan because UBH maintains a uniform set of Guidelines for fully insured and self-funded plans … Instead of insulating its Guideline developers from these financial pressures, UBH has placed representatives of its Finance and Affordability Departments in key roles in the Guidelines development process throughout the class period.”
Surprisingly, this decision came out of California, which is notoriously socially-driven. Attorneys generally avert their eyes when opinions come from the 9th District.
Judge Spero found that UBH violated “generally accepted standards of care” to administer requests for benefits.
The Court found that “many mental health and substance use disorders are long-term and chronic.” It also found that, in questionable instances, the insurance company should err on the caution of placing the patient in a higher level of care. The Court basically cited the old adage – “Better safe than sorry,” which seems a pretty darn good idea when you are talking about mental health. Just ask Ted Bundy.
Even though the Wit Decision involved private pay insurance, the Court repeatedly cited to the Center for Medicare and Medicaid Services’ (CMS) Manual. For example, the Court stated that “the CMS Manual explains, [f]or many . . . psychiatric patients, particularly those with long-term, chronic conditions, control of symptoms and maintenance of a functional level to avoid further deterioration or hospitalization is an acceptable expectation of improvement.” It also quoted ASAM criteria as generally accepted standards, as well as LOCUS, which tells me that the law interprets the CMS Manual, ASAM criteria, and LOCUS as “generally accepted standards,” and not UBH’s or any other private pay insurance’s arbitrary standards. In fact, the Court actually stated that its decision was influenced by the fact that UBH’s adopted many portions of CMS’ Manual, but drafted the language in a more narrow way to ensure more denials of mental health benefits.
The Court emphasized the importance of ongoing care instead of acute care that ceases upon the end of the acute crisis. The denial of ongoing care was categorized as a financial decision. The Court found that UBH’s health care policy “drove members to lower levels of care even when treatment of the member’s overall and/or co-occurring conditions would have been more effective at the higher level of care.”
The Wit decision will impact us in so many ways. For one, if a State Medicaid program limits mental health services beyond what the CMS Manual, ASAM criteria, or LOCUS determines, then providers (and beneficiaries) have a strong legal argument that the State Medicaid criteria do not meet generally accepted standards. Even more importantly, if the State Medicaid policies do NOT limit mental health care services beyond what the CMS Manual, ASAM criteria, and LOCUS defines, but an agent of the State Medicaid Division; i.e, a managed care organization (MCO) deny mental health care services that would be considered appropriate under the generally accepted standards, then, again, both providers and beneficiaries would have strong legal arguments overturning those denials.
I, for one, hope this is a slippery slope…in the right direction.
Hospital Association Joins Lawsuit to Enjoin “Psychiatric Boarding”
New Hampshire hospitals have joined the American Civil Liberties Union (ACLU) in a lawsuit against the State of New Hampshire over the boarding of mental health patients in hospital emergency rooms.
In November 2018, the ACLU filed a class action lawsuit in NH federal court asking the court to order the cease of the practice of “psychiatric boarding,” in which mental health patients are held sometimes against their will and without due process in hospital emergency rooms throughout New Hampshire as they await admission to the state psychiatric hospital, often for weeks at a time. This is not only a New Hampshire problem. This is a problem in every state. The hospitals want the practice abolished because, in most cases of severe mental illness, the patient is unemployed and uninsured. There are not enough psychiatric beds to hold the amount of mentally ill consumers.
Many psychiatric patients rely on Medicaid, but due to the Institution for Mental Disease (IMD) exclusion, Medicaid does not cover the cost of care for patients 21 to 64 years of age (when Medicare kicks in) at inpatient psychiatric or addiction treatment facilities with a capacity greater than 16 beds. This rule makes it difficult for states to fund larger inpatient psychiatric hospitals, which further exacerbates the psychiatric boarding crisis.
The emergency rooms (ER) have become the safety net for mental health. The two most common diagnoses at an ER is alcohol abuse and suicidal tendencies. There has been a sharp increase in ER visits for the people suffering from mental health issues in the recent years. Are we as a population growing more depressed?
It is very frustrating to be in a hospital without the allowance to leave. But that is what psychiatric boarding is – patients present to an ER in crisis and because there is no bed for them at a psychiatric hospital, the patient is held at the hospital against their will until a bed opens up. No psychiatric care is rendered at the ER. It is just a waiting game, which is not fun for the people enduring it.
I recently encountered a glimpse into how it feels to be stuck at a hospital without the ability to leave. On a personal level, although not dealing with mental health but with hospitals in general, I recently broke my leg. I underwent surgery and received 6 screws and a plate in my leg. Around Christmas I became extremely ill from an infection in my leg. After I passed out at my home due to an allergic reaction to my medication which caused an epileptic seizure, my husband called EMS and I was transported to the hospital. Because it was the day after Christmas, the staff was light. I was transported to a hospital that had no orthopedic surgeon on call. (Akin to a mental health patient presenting at an ER – there are no psychiatric residents at most hospitals). Because no orthopedic surgeon was on call, I was transported to a larger hospital and underwent emergency surgery for the infection. I stayed at the hospital for 5 of the longest days of my life. Not because I still needed medical treatment, but because the orthopedic surgeon had taken off for vacation between Christmas and New Year’s. Without the orthopedic’s authorization that I could leave the hospital I was stuck there unless I left against medical advice. Finally, at what seemed to be at his leisurely time, the orthopedic surgeon came back to work the afternoon of January 1, 2019, and I was able to leave the hospital… but not without a few choice words from yours truly. I can tell you without any reservation that I was not a stellar patient those last couple days when I felt well enough to leave but there was no doctor present to allow it.
I imagine how I felt those last couple days in the hospital is how mentally ill patients feel while they are being held until a bed at a psychiatric unit opens up. It must be so frustrating. It certainly cannot be ameliorating any presenting mental health condition. In my case, I had no mental health issues but once I felt like I was being held against my will, mental health issues started to arise from my anger.
A shortage of psychiatric inpatient beds is a key contributing factor to overcrowded ERs across the nation. Between 1970 and 2006, state and county psychiatric inpatient facilities in the country cut capacity from about 400,000 beds to fewer than 50,000.
A study conducted by Wake Forest University found that ER stays for mental health issues are approximately 3.2 times longer stays than for physical reasons.
ER visits rose by nearly 15% between 2006 and 2014, according to the Healthcare Cost and Utilization Project. Over the same time period, ER visits associated with mental health and substance abuse shot up by nearly 44%.
Hopefully if the NH Hospital Association is successful in its lawsuit, other states will follow suit and file a lawsuit. I am not sure where the mentally ill will go if they do not remain at the ER. Perhaps this lawsuit and others that follow will force states to change the current Medicaid laws that do not allow mental health coverage for those over 21 years old. With the mental health and physical health Americans with Disabilities’ parity laws, I do not know why someone hasn’t challenged the constitutionality of the IMD exclusion.
$1.68 million. That’s what company controlling millions in taxpayer dollars wants back from fired CEO
Article in the Winston Salem Journal today:
Cardinal Innovations filed a lawsuit Monday in Mecklenburg Superior Court against fired chief executive Richard Topping.
The state’s largest managed care organization – which controls hundreds of millions in taxpayer dollars – is suing to recoup $1.68 million in severance from Topping, as well as prevent him from collecting any further payments approved by the former board that was disbanded Nov. 27.
The lawsuit says Topping’s severance represents “excessive and unlawful payments.”
Cardinal oversees providers of services for mental health, developmental disabilities and substance abuse for more than 850,000 Medicaid enrollees in 20 counties, including Forsyth and five others in the Triad. It handles more than $675 million in annual federal and state Medicaid money.
An investigation by McGuireWoods LLP was requested by a reconstituted board, formed in January and approved by state health Secretary Mandy Cohen, along with interim chief executive Trey Sutten. It was conducted by McGuireWoods partner Kurt Meyers, a former federal prosecutor.
The lawsuit represents a new action by Cardinal, and is not in response to the previous board’s lawsuit against the state to allow for executive salaries, including for Topping, that exceeded those permitted by state law.
However, it does represent a follow-up on the temporary restraining order and then preliminary injunction won against Topping and the former board filed in the same court.
The injunction prevents Topping and the former board from interfering with N.C. Department of Health and Human Services’ regulatory actions versus Cardinal that began when Cohen ordered the takeover of the organization on Nov. 27.
The former board took action against Topping’s employment at its Nov. 17 meeting by terminating his contract without cause. The board, at Topping’s request, would have been allowed to stay on through Dec. 1.
Cardinal said in the lawsuit that “Topping’s motive in asking the board to allow him to remain CEO was so that he could use his position as CEO to ensure that Cardinal Innovations paid him the lump-sum severance before his departure.”
Now to my opinion:
Disclosure: I have not read the Complaint and would love someone to send it to me. But, on the face of this article, my experience in the legal world, and my limited knowledge about the whole Topping debacle:
While we can all agree that Topping’s salary, plus bonuses and perks, was absolutely repugnant and offensive to taxpayers (like me), Topping did not get there all by himself. The Board of Directors met, discussed Topping’s salary, and voted to give him that salary. The Board of Directors, essentially, is the heart and the brain of Cardinal Innovations.
Is Cardinal Innovations going to sue itself for bestowing such an outrageous salary, plus benefits, to Topping?
Because if I am Topping and I get sued for having a high salary, I am going to point at the Board of Directors and say, “I couldn’t have gotten paid without your votes, Board. So have fun and sue yourself.”
BTW: Isn’t this lawsuit a conflict of interest?? It was only last year that Cardinal filed a lawsuit asking the court to ALLOW TOPPING TO CONTINUE TO RECEIVE SUCH OUTRAGEOUS SALARY THAT NOW – SAME COMPANY – IS SUING BECAUSE IT GAVE THIS SALARY TO IT CEO…which is it, Cardinal? Or is it just a matter of following the wind of public opinion?
Not to mention – HOW IS CARDINAL FUNDING THE LAWSUIT (ATTORNEYS’ FEES) – WITH OUR TAX DOLLARS!!!!!!! I mean, good for Womble Carlyle, the law firm hired with our tax dollars to spend more money on a losing case (my opinion) because Cardinal mismanaged our tax dollars! Winner, winner, chicken dinner! Last year it got paid to file a lawsuit to keep Topping’s salary and perks. Five months later it’s hired to sue for giving Topping’s salary and perks. See blog.
Does anyone else not see how screwed up this is?????
Eastpointe Sues DHHS, Former Sec. Brajer, Nash County, and Trillium Claiming Conspiracy! (What It Means for Providers)
In HBO’s Game of Thrones, nine, noble, family houses of Westeros fight for the Iron Throne – either vying to claim the throne or fighting for independence from the throne.
Similarly, when NC moved to the managed care organizations for Medicaid behavioral health care services, we began with 12 MCOs (We actually started with 23 (39 if you count area authorities) LME/MCOs, but they quickly whittled down to 11). “The General Assembly enacted House Bill 916 (S.L. 2011-264) (“H.B. 916) to be effective June 23, 2011, which required the statewide expansion of the 1915(b)/(c) Medicaid Waiver Program to be completed within the State by July 1, 2013.” Compl. at 25. Now the General Assembly is pushing for more consolidation.
Now we have seven (7) MCOs remaining, and the future is uncertain. With a firehose of money at issue and the General Assembly’s push for consolidation, it has become a bloody battle to remain standing in the end, because, after all, only one may claim the Iron Throne. And we all know that “Winter is coming.”
Seemingly, as an attempt to remain financially viable, last week, on Thursday, June 8, 2017, Eastpointe, one of our current MCOs, sued the Department of Health and Human Services (DHHS), Nash County, Trillium Health Resources, another MCO, and former secretary Richard Brajer in his individual and former official capacity. Since the Complaint is a public record, you can find the Complaint filed in the Eastern District of NC, Western Division, Civil Action 5:17-CV-275. My citations within this blog correspond with the paragraphs in the Complaint, not page numbers.
Eastpointe’s Complaint wields a complex web of conspiracy, government interference, and questionable relationships that would even intrigue George R. R. Martin.
The core grievance in the lawsuit is Eastpointe alleges that DHHS, Trillium, Nash County, and Brajer unlawfully conspired and interfered with Eastpointe’s contract to manage behavioral health care services for its twelve (12) county catchment area, including Nash County. In 2012, Nash County, as part of the The Beacon Center, signed a contract and became part of a merger with Eastpointe being the sole survivor (Beacon Center and Southeastern Regional Mental Health were swallowed by Eastpointe). At the heart of Eastpointe’s Complaint, Eastpointe is alleging that Nash County, Trillium, DHHS, and Brajer conspired to breach the contract between Eastpointe and Nash County and unlawfully allowed Nash County to join Trillium’s catchment area.
In June 2013, the General Assembly, pursuant to Senate Bill 208 (S.L. 2013-85 s. 4.(b)), appended N.C.G.S. § 122C-115 to include subparagraph (a3), permitting a county to disengage from one LME/MCO and align with another with the approval of the Secretary of the NCDHHS, who was required by law to promulgate “rules to establish a process for county disengagement.” N.C.G.S. § 122C-115(a3) (“Rules”) (10A N.C.A.C. 26C .0701-03).
Why does it matter whether Medicaid recipients receive behavioral health care services from providers within Trillium or Eastpointe’s catchment area?? As long as the medically necessary services are rendered – that should be what is important – right?
Wrong. First, I give my reason as a cynic (realist), then as a philanthropist (wishful thinker).
Cynical answer – The MCOs are prepaid. In general and giving a purposely abbreviated explanation, the way in which the amount is determined to pre-pay an MCO is based on how many Medicaid recipients reside within the catchment area who need behavioral health care services. The more people in need of Medicaid behavioral health care services in a catchment area, the more money the MCO receives to manage such services. With the removal of Nash County from Eastpointe’s catchment area, Eastpointe will lose approximately $4 million annually and Trillium will gain approximately $4 million annually, according to the Complaint. This lawsuit is a brawl over the capitated amount of money that Nash County represents, but it also is about the Iron Throne. If Eastpointe becomes less financially secure and Trillium becomes more financially secure, then it is more likely that Eastpointe would be chewed up and swallowed in any merger.
Philanthropic answer – Allowing Nash County to disengage from Eastpointe’s catchment area would inevitably disrupt behavioral health care services to our most fragile and needy population. Medicaid recipients would be denied access to their chosen providers…providers that may have been treating them for years and created established trust. Allowing Nash County to disembark from Eastpointe would cause chaos for those least fortunate and in need of behavioral health care services.
Eastpointe also alleges that DHHS refused to approve a merger between Eastpointe and Cardinal purposefully and with the intent to sabotage Eastpointe’s financial viability.
Also in its Complaint, Eastpointe alleges a statewide, power-hungry, money-grubbing conspiracy in which Brajer and DHHS and Trillium are conspiring to pose Trillium as the final winner in the “MCO Scramble to Consolidate,” “Get Big or Die” MCO mentality arising out of the legislative push for MCO consolidation. Because, as with any consolidation, duplicate executives are cut.
Over the last couple years, Eastpointe has discussed merging with Cardinal, Trillium, and Sandhills – none of which occurred. Comparably, Joffrey Lannister and Sansa Stark discussed merging. As did Viserys and Illyrio wed Daenerys to Khal Drogo to form an alliance between the Targaryens.
Some of the most noteworthy and scandalous accusations:
Leza Wainwright, CEO of Trillium and director of the NC Council of Community MH/DD/SA Programs (“NCCCP”) (now I know why I’ve never been invited to speak at NCCCP). Wainwright “brazenly took actions adverse to the interest of Eastpointe in violation of the NCCCP mission, conflicts of interest policy of the organization, and her fiduciary duty to the NCCCP and its members.” Compl. at 44.
Robinson, Governing Board Chair of Trillium, “further informed Brajer that he intended for Trillium to be the surviving entity in any merger with Eastpointe and that “any plan predicated on Trillium and Eastpointe being coequal is fundamentally flawed.”” Compl. at 61.
“On or about May 11, 2016, Denauvo Robinson (“Robinson”), Governing Board Chair of Trillium wrote Brajer, without copying Eastpointe, defaming Eastpointe’s reputation in such a way that undermined the potential merger of Eastpointe and Trillium.” Compl. at 59.
“Robinson, among other false statements, alleged the failure to consummate a merger between Eastpointe, CoastalCare, and East Carolina Behavioral Health LMEs was the result of Eastpointe’s steadfast desire to maintain control, and Eastpointe’s actions led those entities to break discussions with Eastpointe and instead merge to form Trillium.” Compl. at 60.
“Trillium, not Nash County, wrote Brajer on November 28, 2016 requesting approval to disengage from Eastpointe and to align with Trillium.” Compl. at 69.
Dave Richards, Deputy Secretary for Medical Assistance, maintains a “strong relationship with Wainwright” and “displayed unusual personal animus toward Kenneth Jones, Eastpointe’s former CEO.” Compl. at 47.
Brajer made numerous statements to Eastpointe staff regarding his animus toward Jones and Eastpointe. “Brajer continued to push for a merger between Eastpointe and Trillium.” Compl. at 53.
“On December 5, 2016, the same day that former Governor McCrory conceded the election to Governor Cooper, Brajer wrote a letter to Trillium indicating that he approved the disengagement and realignment of Nash County.” Compl. at 72.
“On March 17, 2016, however, Brajer released a memorandum containing a plan for consolidation of the LME/MCOs, in which NCDHHS proposed Eastpointe being merged with Trillium.” Compl. at 55.
Brajer’s actions were “deliberately premature, arbitrary, and capricious and not in compliance with statute and Rule, and with the intent to destabilize Eastpointe as an LME/MCO).” Compl. at 73.
“Brajer conspired with Nash County to cause Nash County to breach the Merger Agreement.” Compl. at 86.
Brajer “deliberately sought to block any merger between Eastpointe and other LME/MCOs except Trillium.” Compl. at 96.
“Brajer and NCDHHS’s ultra vires and unilateral approval of the Nash County disengagement request effective April 1, 2017 materially breached the contract between Eastpointe and NCDHHS. Equally brazen was Brajer’s calculated failure to give Eastpointe proper notice of the agency action taken or provide Eastpointe with any rights of appeal.” Compl. at 101.
Against Nash County
“To date, Nash County is Six Hundred Fifty Three Thousand Nine Hundred Fifty Nine Thousand and 16/100 ($653,959.16) in arrears on its Maintenance of Efforts to Eastpointe.” Compl. at 84.
“While serving on Eastpointe’s area board, Nash County Commissioner Lisa Barnes, in her capacity as a member of the Nash County Board of Commissioners, voted to adopt a resolution requesting permission for Nash County to disengage from Eastpointe and realign with Trillium. In so doing, Barnes violated her sworn oath to the determent of Eastpointe.” Compl. at 85.
What Eastpointe’s lawsuit could potentially mean to providers:
Eastpointe is asking the Judge in the federal court of our eastern district for a Temporary Restraining Order and Preliminary Injunction prohibiting Nash County from withdrawing from Eastpointe’s catchment area and joining Trillium’s catchment area. It is important to note that the behavioral health care providers in Eastpointe’s catchment area may not be the same behavioral health care providers in Trillium’s catchment area. There may be some overlap, but without question there are behavioral health care providers in Trillium’s catchment area that are not in Eastpointe’s catchment area and vice versa.
If Eastpointe is not successful in stopping Nash County from switching to Trillium’s catchment area, those providers who provide services in Nash County need to inquire – if you do not currently have a contract with Trillium, will Trillium accept you into its catchment area, because Trillium runs a closed network?!?! If Trillium refuses to include Nash County’s behavioral health care providers in its catchment area, those Nash County providers risk no longer being able to provide services to their consumers. If this is the case, these Nash County, non-Trillium providers may want to consider joining Eastpointe’s lawsuit as a third-party intervenor, as an interested, aggrieved person. Obviously, you would, legally, be on Eastpointe’s side, hoping to stay Nash County’s jump from Eastpointe to Trillium.
Even if Eastpointe is successful in stopping Nash County’s Benedict Arnold, then, as a provider in Eastpointe’s catchment area, you need to think ahead. How viable is Eastpointe? Eastpointe’s lawsuit is a powerful indication that Eastpointe itself is concerned about the future, although this lawsuit could be its saving grace. How fair (yet realistic) is it that whichever providers happen to have a contract with the biggest, most powerful MCO in the end get to continue to provide services and those providers with contracts with smaller, less viable MCOs are put out of business based on closed networks?
If Nash County is allowed to defect from Eastpointe and unite with Trillium, all providers need to stress. Allowing a county to abscond from its MCO on the whim of county leadership could create absolute havoc. Switching MCOs effects health care providers and Medicaid recipients. Each time a county decides to choose a new MCO the provider network is upended. Recipients are wrenched from the provider of their choice and forced to re-invent the psychological wheel to their detriment. Imagine Cherokee County being managed by Eastpointe…Brunswick County being managed by Vaya Health…or Randolph County being managed by Partners. Location-wise, it would be an administrative mess. Every election of a county leadership could determine the fate of a county’s Medicaid recipients.
Here is a map of the current 7 MCOs:
All behavioral health care providers should be keeping a close watch on the MCO consolidations and this lawsuit. There is nothing that requires the merged entity to maintain or retain the swallowed up entities provider network. Make your alliances because…
“Winter is coming.”
Darkness Surrounds MCO Mergers: Are Closed Meetings for MCOs Legal?
Recently, Eastpointe Human Services’ board voted unanimously to consolidate with Cardinal Innovations Healthcare, which would make the merged entity the managed care organization (MCO) overseeing 1/3 of NC’s Medicaid, behavioral health services – 32 counties, in all.
The Board’s decision is subject to the approval of the Secretary, but Eastpointe hopes to consolidate by July 1st.
Whether a consolidation between Eastpointe and Cardinal is good for Medicaid recipients and/or our community, I have no opinion.
But the reason that I have no opinion is because the negotiations, which all deal with public funds, have occurred behind closed doors.
Generally, it is our public policy that public bodies’ actions are to be conducted openly. This is why you can stroll on over to our courthouse and watch, virtually, any case be conducted. There are rare cases in which the court will “seal” or close the record, such as to protect privileged health information or the identity of children. Our public policy that strongly encourages open sessions for public entities exists for good reason. As tax payers, we expect full disclosure and transparency as to how our tax dollars are being used. In a way, all tax paying NC residents are shareholders of NC. Those who spend our tax dollars owe us a fiduciary duty to manage our tax dollars in a reasonable and responsible manner, and we should be able to attend all board meetings and review all meeting minutes. The MCOs are the agents of the single state entity, Department of Health and Human Services (DHHS), charged with managing behavioral health care for the Medicaid and state-funded population suffering with mental health/developmentally disabled /substance abuse (MR/DD/SA) issues. As an agent of the state, MCOs are public entities.
But, as I am researching the internet in search of Eastpointe and Cardinal board meeting minutes, I realize that the MCOs are initiating closed meetings and quoting N.C. Gen. Stat. § 143-318.11, ” Closed sessions” as the basis for being able to conduct closed sessions. And the number of closed sessions that I notice is not a small number.
The deliberations of a merger between two MCOs are highly important to the public. The public needs to know whether the board members are concerned about improving quality and quantity of care. Whether the deliberations surround a more inclusive provider network and providing more services to those in need. Whether the deliberations consider using public funds to create playgrounds or to fund more services for the developmentally disabled. Or are the board members more concerned with which executives will remain employed and what salaried are to be compensated?
You’ve heard of the saying, “Give him an inch and he’ll take a mile?” This is what is going through my mind as I review the statute allowing public bodies to hold closed sessions. Is the statute too open-ended? Is the closed session statute a legal mishandling that unintentionally, and against public policy, allows public meetings to act privately? Or are the MCOs misusing the closed session statute?
So I ask myself the following:
1. Is N.C. Gen. Stat. § 143-318.11 applicable to MCOs, or, in other words, can the MCOs conduct closed sessions? and, if the answer to #1 is yes, then
2. Are the MCOs overusing or misusing its ability to hold closed sessions? If the answer to #3 is yes, then
3. What can be done?
These are the three questions I will address in this blog.
Is N.C. Gen. Stat. § 143-318.11 applicable to MCOs, or, in other words, can the MCOs conduct closed sessions?
According to the statute, “”public body” means any elected or appointed authority, board, commission, committee, council, or other body of the State, or of one or more counties, cities, school administrative units, constituent institutions of The University of North Carolina, or other political subdivisions or public corporations in the State that (i) is composed of two or more members and (ii) exercises or is authorized to exercise a legislative, policy-making, quasi-judicial, administrative, or advisory function.”
The MCOs are bodies or agents of the state that are composed of more than 2 members and exercises or is authorized to exercise administrative or advisory functions to the extent allowed by the Waivers.
I determine that, in my opinion, N.C. Gen. Stat. § 143-318.11 is applicable to the MCOs, so I move on to my next question…
Are the MCOs overusing or misusing its ability to hold closed sessions?
As public policy dictates that public bodies act openly, there are enumerated, statutory reasons that a public body may hold a closed session.
A public body may hold a closed session only when a closed session is required:
- “To prevent the disclosure of information that is privileged or confidential pursuant to the law of this State or of the United States, or not considered a public record within the meaning of Chapter 132 of the General Statutes.
- To prevent the premature disclosure of an honorary degree, scholarship, prize, or similar award.
- To consult with an attorney employed or retained by the public body in order to preserve the attorney-client privilege between the attorney and the public body, which privilege is hereby acknowledged. General policy matters may not be discussed in a closed session and nothing herein shall be construed to permit a public body to close a meeting that otherwise would be open merely because an attorney employed or retained by the public body is a participant. The public body may consider and give instructions to an attorney concerning the handling or settlement of a claim, judicial action, mediation, arbitration, or administrative procedure. If the public body has approved or considered a settlement, other than a malpractice settlement by or on behalf of a hospital, in closed session, the terms of that settlement shall be reported to the public body and entered into its minutes as soon as possible within a reasonable time after the settlement is concluded.
- To discuss matters relating to the location or expansion of industries or other businesses in the area served by the public body, including agreement on a tentative list of economic development incentives that may be offered by the public body in negotiations, or to discuss matters relating to military installation closure or realignment. Any action approving the signing of an economic development contract or commitment, or the action authorizing the payment of economic development expenditures, shall be taken in an open session.
- To establish, or to instruct the public body’s staff or negotiating agents concerning the position to be taken by or on behalf of the public body in negotiating (i) the price and other material terms of a contract or proposed contract for the acquisition of real property by purchase, option, exchange, or lease; or (ii) the amount of compensation and other material terms of an employment contract or proposed employment contract.
- To consider the qualifications, competence, performance, character, fitness, conditions of appointment, or conditions of initial employment of an individual public officer or employee or prospective public officer or employee; or to hear or investigate a complaint, charge, or grievance by or against an individual public officer or employee. General personnel policy issues may not be considered in a closed session. A public body may not consider the qualifications, competence, performance, character, fitness, appointment, or removal of a member of the public body or another body and may not consider or fill a vacancy among its own membership except in an open meeting. Final action making an appointment or discharge or removal by a public body having final authority for the appointment or discharge or removal shall be taken in an open meeting.
- To plan, conduct, or hear reports concerning investigations of alleged criminal misconduct.
- To formulate plans by a local board of education relating to emergency response to incidents of school violence or to formulate and adopt the school safety components of school improvement plans by a local board of education or a school improvement team.
- To discuss and take action regarding plans to protect public safety as it relates to existing or potential terrorist activity and to receive briefings by staff members, legal counsel, or law enforcement or emergency service officials concerning actions taken or to be taken to respond to such activity.”
Option 1 clearly applies, in part, to privileged health information (PHI) and such. So I would not expect that little Jimmy’s Medicaid ID would be part of the board meeting issues, and, thus, not included in the minutes, unless his Medicaid ID was discussed in a closed session.
I cannot fathom that Option 2 would ever be applicable, but who knows? Maybe Alliance will start giving out prizes…
I would assume that Option 3 is used most frequently. But notice:
“General policy matters may not be discussed in a closed session and nothing herein shall be construed to permit a public body to close a meeting that otherwise would be open merely because an attorney employed or retained by the public body is a participant.”
Which means that: (1) the closed session may only be used to talk about specific legal strategies and not general policies. For example, arguably, an MCO could hold a closed session to consult with its attorney whether to appeal a specific case, but not to discuss whether, generally, the MCO intends to appeal all unsuccessful cases.
(2) the MCO cannot call for a closed session “on the fly” and only because its attorney happens to be participating in the board meeting.
As I am rifling through random board meeting minutes, I notice the MCO’s attorney is always present. Now, I say “always,” but did not review all MCO meeting minutes. There may very well be board meetings at which the attorneys don’t attend. However, the attorney is present for the minutes that I reviewed.
Which begs the question…Are the MCOs properly using the closed sessions?
Then I look at Options 4, and 5, and 6, and 7, and 8, and 9…and I realize, Geez, according to one’s interpretation, the statute may or may not allow almost everything behind closed doors. (Well, maybe not 9). But, seriously, depending on the way in which each Option is interpreted, there is an argument that almost anything can be a closed session.
Want to hold a closed session to discuss why the CEO should receive a salary of $400,000? N.C. Gen. Stat. § 143-318.11(5)(ii).
Want hold a closed session to discuss the anonymous tip claim that provider X is committing Medicaid fraud? N.C. Gen. Stat. § 143-318.11(7).
Want to hold a closed session to discuss how an MCO can position itself to take over the world? N.C. Gen. Stat. § 143-318.11(4).
In an atmosphere in which there is little to no supervision of the actions of the MCOs, who is monitoring whether the MCOs are overusing or misusing closed sessions?
What can you do if you think that an MCO is holding closed sessions over and above what is allowed by N.C. Gen. Stat. § 143-318.11?
According to N.C. Gen. Stat. § 143-318.16A, “[a]ny person may institute a suit in the superior court requesting the entry of a judgment declaring that any action of a public body was taken, considered, discussed, or deliberated in violation of this Article. Upon such a finding, the court may declare any such action null and void. Any person may seek such a declaratory judgment, and the plaintiff need not allege or prove special damage different from that suffered by the public at large.”
Plus, according to N.C. Gen. Stat. § 143-318.16A, “[w]hen an action is brought pursuant to G.S. 143-318.16 or G.S. 143-318.16A, the court may make written findings specifying the prevailing party or parties, and may award the prevailing party or parties a reasonable attorney’s fee, to be taxed against the losing party or parties as part of the costs. The court may order that all or any portion of any fee as assessed be paid personally by any individual member or members of the public body found by the court to have knowingly or intentionally committed the violation; provided, that no order against any individual member shall issue in any case where the public body or that individual member seeks the advice of an attorney, and such advice is followed.”
In sum, if you believe that an MCO is conducting a closed session for a reason not enumerated above, then you can institute a lawsuit and request attorneys’ fees if you are successful in showing that the MCO knowingly or intentionally committed the violation.
We should also appeal to the General Assembly to revise, statutorily, more narrowly drafted closed session exceptions.