Category Archives: Home Health Services

A Federal Regulation Violates the U.S. Constitution and Ruins Careers; Yet It Sits…Vaguely

There is a federal regulation that is putting health care providers out of business. It is my legal opinion that the regulation violates the U.S. Constitution. Yet, the regulation still exists and continues to put health care providers out of business.

Why?

Because so far, no one has litigated the validity of the regulation, and I believe it could be legally wiped from existence with the right legal arguments.

How is this important?

Currently, the state and federal government are legally authorized to immediately suspend your Medicare or Medicaid reimbursements upon a credible allegation of fraud. This immense authority has put many a provider out of business. Could you survive without any Medicare or Medicaid reimbursements?

The federal regulation to which I allude is 42 CFR 455.23. It is a federal regulation, and it applies to every single health care provider, despite the service type allowed by Medicare or Medicaid. Home care agencies are just as susceptible to an accusation of health care fraud as a hospital. Durable medical equipment agencies are as susceptible as dentists. Yet the standard for a “credible allegation of fraud” is low. The standard for which the government can implement an immediate withhold of Medicaid/care reimbursements is lower than for an accused murderer to be arrested. At least when you are accused of murder, you have the right to an attorney. When you are accused to health care fraud on the civil level, you do not receive the right to an attorney. You must pay 100% out of pocket, unless your insurance happens to cover the expense for attorneys. But, even if your insurance does cover legal fees, you can believe that you will be appointed a general litigator with little to no knowledge of Medicare or Medicaid regulatory compliance litigation.

42 USC 455.23 states that:

The State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud for which an investigation is pending under the Medicaid program against an individual or entity unless the agency has good cause to not suspend payments or to suspend payment only in part.

(2) The State Medicaid agency may suspend payments without first notifying the provider of its intention to suspend such payments.

(3) A provider may request, and must be granted, administrative review where State law so requires.”

In the very first sentence, which I highlighted in red, is the word “must.” Prior to the Affordable Care Act, this text read “may.” From my years of experience, every single state in America has used this revision from “may” to “must” for governmental advantage over providers. When asked for good cause, the state and or federal government protest that they have no authority to make a decision that good cause exists to suspend any reimbursement freeze during an investigation. But this protest is a pile of hooey.

In reality, if anyone could afford to litigate the constitutionality of the regulation, I believe that the regulation would be stricken an unconstitutional.

Here is one reason why: Due Process

The Fifth and Fourteenth Amendments to the Bill of Rights provide us our due process rights. Here is the 5th Amendment:

“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

There have been a long and rich history of interpretation of the due process clause. The Supreme Court has interpreted the due process clauses to provide four protections:  (1) procedural due process (in civil and criminal proceedings), (2) substantive due process, (3) a prohibition against vague laws, and (4) as the vehicle for the incorporation of the Bill of Rights.

42 CFR 455.23 violates procedural due process.

Procedural due process requires that a person be allowed notice and an opportunity to be heard before a government official takes a person’s life, liberty, or property.

Yet, 42 CFR 455.23 allows the government to immediately withhold reimbursements for services rendered based on an allegation without due process and taking a provider’s property; i.e., money owed for services rendered. Isn’t this exactly what procedural due process was created to prevent???? Where is the fundamental fairness?

42 CFR 455.23 violates substantive due process.

The Court usually looks first to see if there is a fundamental right, by examining if the right can be found deeply rooted in American history and traditions.

Fundamental rights include the right to vote, right for protection from pirates on the high seas (seriously – you have that right), and the right to constitutional remedies. Courts have held that our right to property is a fundamental right, but to my knowledge, not in the context of Medicare/caid reimbursements owed; however, I see a strong argument.

If the court establishes that the right being violated is a fundamental right, it applies strict scrutiny. This test inquires into whether there is a compelling state interest being furthered by the violation of the right, and whether the law in question is narrowly tailored to address the state interest.

Where the right is not a fundamental right, the court applies a rational basis test: if the violation of the right can be rationally related to a legitimate government purpose, then the law is held valid.

Taking away property of a Medicare/caid provider without due process violates substantive due process. The great thing about writing your own blog is that no one can argue with you. Playing Devil’s advocate, I would anticipate that the government would argue that a suspension or withhold of reimbursements is not a “taking” because the withhold or suspension is temporary and the government has a compelling reason to deter health care fraud. To which, I would say, yes, catching health care fraud is important – I am in no way advocating for fraud. But important also is the right to be innocent until proven guilty, and in civil cases, our deeply-rooted belief in the presumption of innocence is upheld by the action at issue not taking place until a hearing is held.

For example, if I sue my neighbor and declare that he is encroaching on my property, the property line is not moved until a decision is in my favor.

Another example, if I sue my business partner for breach of contract because she embezzled $1 million from me, I do not get the $1 million from her until it is decided that she actually took $1 million from me.

So to should be – if a provider is accused of fraud, property legally owned by said provider cannot just be taken away. That is a violation of substantive due process.

42 CFR 455.23 violates the prohibition against vague laws

A law is void for vagueness if an average citizen cannot understand it. The vagueness doctrine is my favorite. According to census data, there are 209.3 million people in the US who are over 24-years. Of those over 24-years-old, 66.9 million have a college degree. 68% do not.

Although here is a quick anecdote: Not so sure that a college degree is indicative of intelligence. A recent poll of law students at Columbia University showed that over 60% of the students, who were polled, could not name what rights are protected by the 1st Amendment. Once they responded “speech,” many forgot the others. In case you need a refresher for the off-chance that you are asked this question in an impromptu interview, see here.

My point is – who is to determine what the average person may or may not understand?

Back to why 42 CFR 455.23 violates the vagueness doctrine…

Remember the language of the regulations: “The State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud…”

“Credible allegation of fraud” is defined as an allegation, which has been verified by the State, from any source, including but not limited to the following:

  • Fraud hotline complaints.
  • Claims data mining.
  • Patterns identified through provider audits, civil false claims cases, and law enforcement investigations. Allegations are considered to be credible when they have indicia of reliability and the State Medicaid agency has reviewed all allegations, facts, and evidence carefully and acts judiciously on a case-by-case basis.”

With a bit of research, I was able to find a written podcast published by CMS. It appears to be a Q and A between two workers at CMS discussing whether they should suspend a home health care agency’s reimbursements, similar to a playbook. I assume that it was an internal workshop to educate the CMS employees considering that the beginning of the screenplay begins with a “canned narrator” saying “This is a Medicaid program integrity podcast.”

2018-08-07 -- pic of cms podcast

The weird thing is that when you pull up the website – here – you get a glimpse of the podcast, but, at least on my computer, the image disappears in seconds and does not allow you to read it. I encourage you to determine whether this happens you as well.

While the podcast shimmered for a few seconds, I hit print and was able to read the disappearing podcast. As you can see, it is a staged conversation between “Patrick” and “Jim” regarding suspicion of a home health agency falsifying certificates of medical necessity.

On page 3, “Jim” says, “Remember the provider has the right to know why we are taking such serious action.”

But if your Medicare/caid reimbursements were suddenly suspended and you were told the suspension was based upon “credible allegations of fraud,” wouldn’t you find that reasoning vague?

42 CFR 455.23 violates the right to apply the Bill of Rights to me, as a citizen

This esoteric doctrine only means that the Bill of Rights apply to State governments. [Why do lawyers make everything so hard to understand?]

5th Circuit Finds Subject Matter Jurisdiction For Medicare and Medicaid Providers – Why Collards Matter

“I’d like some spaghetti, please, and a side of meatballs.” – This sentence is illogical because meatballs are integral to spaghetti and meatballs. If you order spaghetti  – and -meatballs, you are ordering “spaghetti and meatballs.” Meatballs on the side is not a thing.

Juxtapose, a healthcare provider defending itself from an alleged overpayment, But during the appeal process undergoes a different penalty – the state or federal government begins to recoup future funds prior to a decision that the alleged recoupment is authorized, legal, or warranted. When a completely new issue unrelated to the allegation of overpayment inserts itself into the mix, then you have spaghetti and meatballs with a side of collard greens. Collard greens need to be appealed in a completely different manner than spaghetti and meatballs, especially when the collard greens could put the company out of business because of the premature and unwarranted recoupments without due process.

I have been arguing this for years based off of, not only, a 1976 Supreme Court case, but multiple state case law, as well as, success I have had in the federal and administrative courts, and BTW – logic.

On March 27, 2018, I was confirmed again. The Fifth Circuit Court of Appeals decided a landmark case for Medicare and Medicaid providers across the country. The case, Family Rehab., Inc. v Azar, 2018 U.S. App. LEXIS 7668, involved a Medicare home health service provider, which was assessed for approximately $7.8 million in Medicare overpayments. Family Rehab, the plaintiff in the case, relied on 88% to 94% of its revenue from Medicare. The company had timely appealed the alleged overpayment, and it was at the third level of the Medicare five step process for appeals. See blog. But there is a 3 – 5 year backlog on the third level, and the government began to recoup the $7.8 million despite the ongoing appeal. If no action were taken, the company would be out of business well-before any ALJ could rule on the merits of the case, i.e. whether the recoupment was warranted. How is that fair? The provider may not owe $7.8 million, but before an objective tribunal decides what is actually owed, if anything, we are going to go ahead and take the money and reap the benefit of any interest accrued during the time it takes the provider to get a hearing.

The backlog for Medicare appeals at the ALJ level is unacceptably long. See blog and blog. However, the federal regulations only  prevent recoupment during the appeal process during the first and second levels. This is absolutely asinine and should be changed considering we do have a clause in the Constitution called “due process.” Purported criminals receive due process, but healthcare providers who accept Medicare or Medicaid, at times, do not.

At the third level of appeal, Family Rehab underwent recoupments, even though it was still appealing the decision, which immediately stifled Family Rehab’s income. Family Rehab, because of the premature recoupments, was at risk of losing everything, going bankrupt, firing its staff, and no longer providing medically necessary home health services for the elderly. This situation mimics a situation in which I represented a client in northern Indiana who was losing its Medicaid contract.  I also successfully obtained a preliminary injunction preventing the provider from losing its Medicaid contract. See blog.

It is important to note that in this case the ZPIC had audited only 43 claims. Then it used a statistical method to extrapolate the alleged over-billings and concluded that the alleged overpayment was $7,885,803.23. I cannot tell you how many times I have disputed an extrapolation and won. See blog.

42 USC 1395(f)(f)(d)(1)(A) states that the ALJ shall conduct and conclude the hearing and render a decision no later than 90 days after a timely request. Yet the Fifth Circuit Court of Appeals found that an ALJ hearing would not be forthcoming not within 90 days or even 900 days. The judge noted in his decision that the Medicare appeal backlog for an ALJ hearing was 3 – 5 years. The District Court held that it lacked subject matter jurisdiction because Family Rehab had not exhausted its administrative remedies. Family Rehab appealed.

On appeal, Family Rehab argued the same arguments that I have made in the past: (1) its procedural due process and ultra vires claims are collateral to the agency’s appellate process; and (2) going through the appellate process would mean no review at all because the provider would be out of business by the time it would be heard by an ALJ.

What does collateral mean? Collard greens are collateral. When you think collateral; think collards. Collard greens do not normally come with spaghetti and meatballs. A collateral issue is an issue that is entirely collateral to a substantive agency decision and would not be decided through the administrative appeal process. In other words, even if Family Rehab were to only pursue the $7.8 million overpayment issue through the administrative process, the issue of having money recouped and the damage to the company that the recoupment was causing would never be heard by the ALJ because those “collateral” issues are outside the ALJ’s purview. The premature recoupment issue could not be remedied by an ALJ. The Fifth Circuit Court of Appeals agreed.

The collateral argument also applies to terminations of Medicare and Medicaid contracts without due process. In an analogous case (Affiliated Professional), the provider argued that the termination of its Medicare contract without due process violated its right to due process and the Equal Protection Clause and was successful.

The upshot is obvious, if the Court must examine the merits of the underlying dispute, delve into the statute and regulations, or make independent judgments as to plaintiff’s eligibility under a statute, the claim is not collateral.

The importance of this case is that it verifies my contention that if a provider is undergoing a recoupment or termination without due process, there is relief for that provider – an injunction stopping the premature recoupments or termination until due process has been completed.

The Reality of Prepayment Review and What To Do If You Are Tagged – You’re It!

Prepayment review is a drastic tool (more like a guillotine) that the federal and state governments via hired contractors review the documentation supporting services for Medicare and Medicaid prior to the provider receiving reimbursement. The providers who are placed on prepayment review are expected to continue to render services, even if the provider is not compensated. Prepayment review is a death sentence for most providers.

The required accuracy rating varies state to state, but, generally, a provider must meet 75% accuracy for three consecutive months.

In the governments’ defense, theoretically, prepayment review does not sound as Draconian as it is. Government officials must think, “Well, if the provider submits the correct documentation and complies with all applicable rules and regulations, it should be easy for the provider to meet the requirements and be removed from prepayment review.” However, this false reasoning only exists in a fantasy world with rainbows and gummy bears. Real life prepayment review is vastly disparate from the rainbow and gummy bears prepayment review.

In real life prepayment review:

  • The auditors may use incorrect, inapplicable, subjective, and arbitrary standards.

I had a case in which the auditors were denying 100% ACTT services, which are 24-hour mental health services for those 10% of people who suffer from extreme mental illness. The reason that the auditor was denying 100% of the claims was because “lower level services were not tried and ruled out.” In this instance, we have a behavioral health care provider employing staff to render ACTT services (expensive), actually rendering the ACTT services (expensive), and getting paid zero…zilch…nada…for a reason that is not required! There is no requirement that a person receiving ACTT services try a lower level of service first. If the person qualifies for ACTT, the person should receive ACTT services. Because of this auditor’s misunderstanding of ACTT, this provider was almost put out of business.

Another example: A provider of home health was placed on prepayment review. Again, 90 – 100% of the claims were denied. In home health, program eligibility is determined by an independent assessment conducted by the Division of Medical Assistance (DMA) via Liberty, which creates an individualized plan of care. The provider submitted claims for Patient Sally, who, according to her plan, needs help dressing. The service notes demonstrated that the in-home aide helped Sally dress with a shirt and pants. But the auditor denies every claim the provider bills for Sally (which is 7 days a week) because, according to the service note, the in-home aide failed to check the box to show she/he helped put on Sally’s shoes. The auditor fails to understand that Sally is a double amputee – she has no feet.

Quis custodiet ipsos custodes – Who watches the watchmen???

  • The administrative burden placed on providers undergoing prepayment review is staggering.

In many cases, a provider on prepayment review is forced to hire contract workers just to keep up with the number of document requests coming from the entity that is conducting the prepayment review. After initial document requests, there are supplemental document requests. Then every claim that is denied needs to be re-submitted or appealed. The amount of paperwork involved in prepayment review would cause an environmentalist to scream and crumple into the fetal position like “The Crying Game.”

  • The accuracy ratings are inaccurate.

Because of the mistakes the auditors make in erroneously denying claims, the purported “accuracy ratings” are inaccurate. My daughter received an 86 on a test. Given that she is a straight ‘A’ student, this was odd. I asked her what she got wrong, and she had no idea. I told her to ask her teacher the next day why she received an 86. Oops. Her teacher had accidentally given my daughter an 86; the 86 was the grade of another child in the class with the same first name. In prepayment review, the accuracy ratings are the only method to be removed from prepayment, so the accuracy of the accuracy ratings is important. One mistaken, erroneously denied claim damages the ratings, and we’ve already discussed that mistakes/errors occur. You think, if a mistake is found, call up the auditing entity…talk it out. See below.

  • The communication between provider and auditor do not exist.

Years ago my mom and I went to visit relatives in Switzerland. (Not dissimilar to National Lampoon’s European Vacation). They spoke German; we did not. We communicated with pictures and hand gestures. To this day, I have no idea their names. This is the relationship between the provider and the auditor.

Assuming that the provider reaches a live person on the telephone:

“Can you please explain to me why claims 1-100 failed?”

“Don’t you know the service definitions and the policies? That is your responsibility.”

“Yes, but I believe that we follow the policies. We don’t understand why these claims are denied. That’s what I’m asking.”

“Read the policy.”

“Not helpful.”

  • The financial burden on the provider is devastating.

If a provider’s reimbursements are 80 – 100% reliant on Medicaid/care and those funds are frozen, the provider cannot meet payroll. Yet the provider is expected to continue to render services. A few years ago, I requested from NC DMA a list of providers on prepayment review and the details surrounding them. I was shocked at the number of providers that were placed on prepayment review and within a couple months ceased submitting claims. In reality, what happened was that those providers were forced to close their doors. They couldn’t financially support their company without getting paid.

Ok, now we know that prepayment review can be a death sentence for a health care provider. How can we prepare for prepayment review and what do we do if we are placed on prepayment review?

  1. Create a separate “what if” savings account to pay for attorneys’ fees. The best defense is a good offense. You cannot prevent yourself from being placed on prepayment review – there is no rhyme or reason for such placement. If you believe that you will never get placed on prepayment review, then you should meet one of my partners. He got hit by lightning – twice! (And lived). So start saving! Legal help is a must. Have your attorney on speed dial.
  2. Self-audit. Be proactive, not reactive. Check your documents. If you use an electronic records system, review the notes that it is creating. If it appears that all the notes look the same except for the name of the recipient, fix your system. Cutting and pasting (or appearing to cut and paste) is a pitfall in audits. Review the notes of the highest reimbursement code. Most likely, the more the reimbursement rate, the more likely to get flagged.
  3. Implement an in-house policy about opening the mail and responding to document requests. This sounds self evident, but you will be surprised how many providers have multiple people getting and opening the mail. The employees see a document request and they want to be good employees – so they respond and send the documents. They make a mistake and BOOM – you are on prepayment review. Know who reviews the mail and have a policy for notifying you if a document request is received.
  4. Buck up. Prepayment review is a b*^%$. Cry, pray, meditate, exercise, get therapy, go to the spa, medicate…whatever you need to do to alleviate stress – do it.
  5. Do not think you can get off prepayment review alone and without help. You will need help. You will need bodies to stand at the copy machine. You will need legal help. Do not make the mistake of allowing the first three months pass before you contact an attorney. Contact your attorney immediately.

RAC Audit Preview: And Those on The Chopping Block Are…(Drum Roll, Please)

The Centers for Medicare & Medicaid Services (CMS) posted its December 2017 list of health care services that the Recovery Audit Contractors (RACs) will be auditing. As usual, home health is on the chopping block. So are durable medical equipment providers. For whatever reason, it seems that home health, DME, behavioral health care, and dentists are on the top of the lists for audits, at least in my experience.

Number one RAC audit issue: 

Home Health: Medical Necessity and Documentation Review

To be eligible for Medicare home health services, a beneficiary must have Medicare Part A and/or Part B per Section 1814 (a)(2)(C) and Section 1835 (a)(2)(A) of the Social Security Act:

  • Be confined to the home;
  • Need skilled services;
  • Be under the care of a physician;
  • Receive services under a plan of care established and reviewed by a physician; and
  • Have had a face-to-face encounter with a physician or allowed Non-Physician Practitioner (NPP).

Medical necessity is the top audited issue in home health. Auditors also love to compare the service notes to the independent assessment. Watch it if you fail to do one activity of daily living (ADL). Watch it if you do too many ADLs out of the kindness of your heart. Deviations from the independent assessment is a no-no to auditors, even if you are going above and beyond to be sweet. And never use purple ink!

Number two RAC audit issue:

Annual Wellness Visits (AWV) billed within 12 months of the Initial Preventative Physical Examination (IPPE) or Annual Wellness Examination (AWV)

This is a simple mathematical calculation. Has exactly 12 months passed? To the day….yes, they are that technical. 365 days from a visit on January 7, 2018 (my birthday, as an example) would be January 7, 2019. Schedule any AWV January 8, 2019, or beyond.

Number three RAC audit issue:

Ventilators Subject to DWO requirements on or after January 1, 2016

This will be an assessment of whether ventilators are medically necessary. Seriously? Who gets a ventilator who does not need one? I was thinking the other day, “Self? I want a ventilator.”

Number four RAC audit issue:

Cardiac Pacemakers

This will be an assessment of whether cardiac pacemakers are medically necessary. Seriously? Who gets a pacemaker who does not need one? I was thinking the other day, “Self? I want a pacemaker.” Hospitals are not the only providers targets for this audit. Ambulatory surgical centers (ASCs) also will be a target. As patient care continues its transition to the outpatient setting, ASCs have quickly grown in popularity as a high-quality, cost-effective alternative to hospital-based outpatient care. In turn, the number and types of services offered in the ASC setting have significantly expanded, including pacemakers.

Number five RAC audit issue:

Evaluation and Management (E/M) Same Day as Dialysis

Except when reported with modifier 25, payment for certain evaluation and management services is bundled into the payment for dialysis services 90935, 90937, 90945, and 90947

It is important to remember that if you receive a notice of overpayment, you need to appeal immediately. The first level of appeal is redetermination, usually with the Medicare Administrative Contractor (MAC). Medicare will not begin overpayment collection of debts (or will cease collections that have started) when it receives notice that you  requested a Medicare contractor redetermination (first level of appeal).

See blog for full explanation of Medicare provider appeals.

The Reality of Prepayment Review and What To Do If You Are Tagged – You’re It!

Prepayment review is a drastic tool (more like a guillotine) that the federal and state governments via hired contractors review the documentation supporting services for Medicare and Medicaid prior to the provider receiving reimbursement. The providers who are placed on prepayment review are expected to continue to render services, even if the provider is not compensated. Prepayment review is a death sentence for most providers.

The required accuracy rating varies state to state, but, generally, a provider must meet 75% accuracy for three consecutive months.

In the governments’ defense, theoretically, prepayment review does not sound as Draconian as it is. Government officials must think, “Well, if the provider submits the correct documentation and complies with all applicable rules and regulations, it should be easy for the provider to meet the requirements and be removed from prepayment review.” However, this false reasoning only exists in a fantasy world with rainbows and gummy bears. Real life prepayment review is vastly disparate from the rainbow and gummy bears prepayment review.

In real life prepayment review:

  • The auditors may use incorrect, inapplicable, subjective, and arbitrary standards.

I had a case in which the auditors were denying 100% ACTT services, which are 24-hour mental health services for those 10% of people who suffer from extreme mental illness. The reason that the auditor was denying 100% of the claims was because “lower level services were not tried and ruled out.” In this instance, we have a behavioral health care provider employing staff to render ACTT services (expensive), actually rendering the ACTT services (expensive), and getting paid zero…zilch…nada…for a reason that is not required! There is no requirement that a person receiving ACTT services try a lower level of service first. If the person qualifies for ACTT, the person should receive ACTT services. Because of this auditor’s misunderstanding of ACTT, this provider was almost put out of business.

Another example: A provider of home health was placed on prepayment review. Again, 90 – 100% of the claims were denied. In home health, program eligibility is determined by an independent assessment conducted by the Division of Medical Assistance (DMA) via Liberty, which creates an individualized plan of care. The provider submitted claims for Patient Sally, who, according to her plan, needs help dressing. The service notes demonstrated that the in-home aide helped Sally dress with a shirt and pants. But the auditor denies every claim the provider bills for Sally (which is 7 days a week) because, according to the service note, the in-home aide failed to check the box to show she/he helped put on Sally’s shoes. The auditor fails to understand that Sally is a double amputee – she has no feet.

Quis custodiet ipsos custodes – Who watches the watchmen???

  • The administrative burden placed on providers undergoing prepayment review is staggering.

In many cases, a provider on prepayment review is forced to hire contract workers just to keep up with the number of document requests coming from the entity that is conducting the prepayment review. After initial document requests, there are supplemental document requests. Then every claim that is denied needs to be re-submitted or appealed. The amount of paperwork involved in prepayment review would cause an environmentalist to scream and crumple into the fetal position like “The Crying Game.”

  • The accuracy ratings are inaccurate.

Because of the mistakes the auditors make in erroneously denying claims, the purported “accuracy ratings” are inaccurate. My daughter received an 86 on a test. Given that she is a straight ‘A’ student, this was odd. I asked her what she got wrong, and she had no idea. I told her to ask her teacher the next day why she received an 86. Oops. Her teacher had accidentally given my daughter an 86; the 86 was the grade of another child in the class with the same first name. In prepayment review, the accuracy ratings are the only method to be removed from prepayment, so the accuracy of the accuracy ratings is important. One mistaken, erroneously denied claim damages the ratings, and we’ve already discussed that mistakes/errors occur. You think, if a mistake is found, call up the auditing entity…talk it out. See below.

  • The communication between provider and auditor do not exist.

Years ago my mom and I went to visit relatives in Switzerland. (Not dissimilar to National Lampoon’s European Vacation). They spoke German; we did not. We communicated with pictures and hand gestures. To this day, I have no idea their names. This is the relationship between the provider and the auditor.

Assuming that the provider reaches a live person on the telephone:

“Can you please explain to me why claims 1-100 failed?”

“Don’t you know the service definitions and the policies? That is your responsibility.”

“Yes, but I believe that we follow the policies. We don’t understand why these claims are denied. That’s what I’m asking.”

“Read the policy.”

“Not helpful.”

  • The financial burden on the provider is devastating.

If a provider’s reimbursements are 80 – 100% reliant on Medicaid/care and those funds are frozen, the provider cannot meet payroll. Yet the provider is expected to continue to render services. A few years ago, I requested from NC DMA a list of providers on prepayment review and the details surrounding them. I was shocked at the number of providers that were placed on prepayment review and within a couple months ceased submitting claims. In reality, what happened was that those providers were forced to close their doors. They couldn’t financially support their company without getting paid.

Ok, now we know that prepayment review can be a death sentence for a health care provider. How can we prepare for prepayment review and what do we do if we are placed on prepayment review?

  1. Create a separate “what if” savings account to pay for attorneys’ fees. The best defense is a good offense. You cannot prevent yourself from being placed on prepayment review – there is no rhyme or reason for such placement. If you believe that you will never get placed on prepayment review, then you should meet one of my partners. He got hit by lightning – twice! (And lived). So start saving! Legal help is a must. Have your attorney on speed dial.
  2. Self-audit. Be proactive, not reactive. Check your documents. If you use an electronic records system, review the notes that it is creating. If it appears that all the notes look the same except for the name of the recipient, fix your system. Cutting and pasting (or appearing to cut and paste) is a pitfall in audits. Review the notes of the highest reimbursement code. Most likely, the more the reimbursement rate, the more likely to get flagged.
  3. Implement an in-house policy about opening the mail and responding to document requests. This sounds self evident, but you will be surprised how many providers have multiple people getting and opening the mail. The employees see a document request and they want to be good employees – so they respond and send the documents. They make a mistake and BOOM – you are on prepayment review. Know who reviews the mail and have a policy for notifying you if a document request is received.
  4. Buck up. Prepayment review is a b*^%$. Cry, pray, meditate, exercise, get therapy, go to the spa, medicate…whatever you need to do to alleviate stress – do it.
  5. Do not think you can get off prepayment review alone and without help. You will need help. You will need bodies to stand at the copy machine. You will need legal help. Do not make the mistake of allowing the first three months pass before you contact an attorney. Contact your attorney immediately.

“Bye Felicia” – Closing Your Doors To a Skilled Nursing Facility May Not Be So Easy – You Better Follow the Law Or You May Get “Sniffed!”

There are more than 15,000 nursing homes across the country. Even as the elderly population balloons, more and more nursing homes are closing. The main reason is that Medicare covers little at a nursing home, but Medicare does cover at-home and community-based services; i.e., personal care services at your house. Medicare covers nothing for long term care if the recipient only needs custodial care. If the recipient requires a skilled nursing facility (SNF), Medicare will cover the first 100 days, although a co-pay kicks in on day 21. Plus, Medicare only covers the first 100 days if the recipient meets the 3-day inpatient hospital stay requirement for a covered SNF stay. For these monetary reasons, Individuals are trying to stay in their own homes more than in the past, which negatively impacts nursing homes. Apparently, the long term care facilities need to lobby for changes in Medicare.

Closing a SNF, especially if it is Medicare certified, can be tricky to maneuver the stringent regulations.  You cannot just be dismissive and say, “Bye, Felicia,” and walk away. Closing a SNF can be as legally esoteric as opening a SNF. It is imperative that you close a SNF in accordance with all applicable federal regulations; otherwise you could face some “sniff” fines. Bye, Felicia!

Section 6113 of the Affordable Care Act dictates the requirements for closing SNFs. SNF closures can be voluntary or involuntary. So-called involuntary closures occur when health officials rule that homes have provided inadequate care, and Medicaid and Medicare cut off reimbursements. There were 106 terminations of nursing home contracts in 2014, according to the federal Centers for Medicare and Medicaid Services (CMS).

Regardless, according to law, the SNF must provide notice of the impending closure to the State and consumers (or legal representatives) at least 60 days before closure. An exception is if the SNF is shut down by the state or federal government, then the notice is required whenever the Secretary deems appropriate. Notice also must be provided to the State Medicaid agency, the patient’s primary care doctors, the SNF’s medical director, and the CMS regional office. Once notice is provided, the SNF may not admit new patients.

Considering the patients who reside within a SNF, by definition, need skilled care, the SNF also has to plan and organize the relocation of its patients. These relocation plans must be approved by the State.

Further, if the SNF violates these regulations the administrator of the facility and will be subject to civil monetary penalty (CMP) as follows: A minimum of $500 for the first offense; a minimum of $1,500 for the second offense; and a minimum of $3,000 for the third and subsequent offenses. Plus, the administrator could be subject to higher amounts of CMPs (not to exceed ($100,000) based on criteria that CMS will identify in interpretative guidelines.

If you are contemplating closing a SNF, it is imperative that you do so in accordance with the federal rules and regulations. Consult your attorney. Do not be dismissive and say, “Bye, Felicia.” Because you could get “sniffed.”

House Bill 403: A Potential Upheaval of Medicaid!

Is this the end of the managed care organizations (MCOs)?

If the Senate’s proposed committee substitute (PCS) to House Bill 403 (HB 403) passes the answer is yes. The Senate’s PCS to House Bill 403 was just favorably reported out of the Senate Health Care Committee on June 15, 2017. The next step for the bill to advance will be approval by the Senate Rules Committee. Click here to watch its progress.

As my readers are well aware, I am not a proponent for the MCOs. I think the MCOs are run by overpaid executives, who pay themselves too high of bonuses, hire charter flights, throw fancy holiday parties, and send themselves and their families on expensive retreats – to the detriment of Medicaid recipients’ services and Medicaid providers’ reimbursement rates. See blog. And blog.

Over the last couple days, my email has been inundated by people abhorred with HB 403 – urging the Senators to retain the original HB 403, instead of the PCS version. As with all legislation, there are good and bad components. I went back and re-read these emails, and I realized multiple authors sat on an MCO Board. Of course MCO Board members will be against HB 403! Instead of hopping up and down “for” or “against” HB 403, I propose a (somewhat) objective review of the proposed legislation in this blog.

While I do not agree with everything found in HB 403, I certainly believe it is a step in the right direction. The MCOs have not been successful. Medically necessary behavioral health care services have been reduced or terminated, quality health care providers have been terminated from catchment areas, and our tax dollars have been misused.

However, I do have concern about how quickly the MCOs would be dissolved and the new PHPs would be put into effect. There is no real transition period, which could provide safety nets to ensure continuity of services. We all remember when NCTracks was implemented in 2013 and MMIS was removed on the same day. There was no overlap – and the results were catastrophic.

The following bullet points are the main issues found in HB 403, as currently written.

  • Effective date – MCOs dissolve immediately (This could be dangerous if not done properly)

Past legislation enacted a transition time to dissolve the MCOs. Session Law 2015-245, as amended by Session Law 2016-121, provided that the MCOs would be dissolved in four years, allowing the State to implement a new system slowly instead of yanking the tablecloth from the table with hopes of the plates, glasses, and silverware not tumbling to the ground.

According to HB 403, “on the date when Medicaid capitated contracts with Prepaid Health Plans (PHPs) begin, as required by S.L. 2015-245, all of the following shall occur:…(2) The LME/MCOs shall be dissolved.”

Session Law 2015-245 states the following timeline: “LME/MCOs shall continue to manage the behavioral health services currently covered for their enrollees under all existing waivers, including the 1915(b) and (c) waivers, for four years after the date capitated PHP contracts begin. During this four-year period, the Division of Health Benefits shall continue to negotiate actuarially sound capitation rates directly
with the LME/MCOs in the same manner as currently utilized.”

HB 403 revises Session Law 2015-245’s timeline by the following: “LME/MCOs shall continue to manage the behavioral health services currently covered for their enrollees under all existing waivers, including the 1915(b) and (c) waivers, for four years after the date capitated PHP contracts begin. During this four-year period, the Division of Health Benefits shall continue to negotiate actuarially sound capitation rates directly with the LME/MCOs in the same manner as currently utilized.

Instead of a 4-year transition period, the day the PHP contracts are effective, the MCOs no longer exist. Poof!! Maybe Edward Bulwer-Lytton was right when he stated, “The pen is mightier than the sword.”

Again, I am not opposed to dissolving the MCOs for behavioral health care; I just want whatever transition to be reasonable and safe for Medicaid recipients and providers.

With the MCOs erased from existence, what system will be put in place? According to HB 403, PHPs shall manage all behavioral health care now managed by MCOs and all the remaining assets (i.e., all those millions sitting in the savings accounts of the MCOs) will be transferred to DHHS in order to fund the contracts with the PHPs and any liabilities of the MCOs. (And what prevents or does not prevent an MCO simply saying, “Well, now we will act as a PHP?”).

What is a PHP? HB 403 defines PHPs as an entity, which may be a commercial plan or provider-led entity with a PHP license from the Department of Insurance and will operate a capitated contract for the delivery of services. “Services covered by PHP:

  1. Physical health services
  2. Prescription drugs
  3. Long-term care services
  4. Behavioral health services

The capitated contracts shall not cover:

  1. Behavioral health
  2. Dentist services
  3. The fabrication of eyeglasses…”

It would appear that dentists will also be managed by PHPs. As currently written, HB 403 also sets no less than three and no more than five contracts between DHHS and the PHPs should be implemented.

Don’t we need a Waiver from the Center for Medicare and Medicaid Services (CMS)?

Yes. We need a Waiver. 42 CFR 410.10(e) states that “[t]he 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.” In order to “Waive” this clause, we must get permission from CMS. We had to get permission from CMS when we created the MCO model. The same is true for a new PHP model.

Technically, HB 403 is mandating DHHS to implement a PHP model before we have permission from the federal government. HB 403 does instruct DHHS to submit a demonstration waiver application. Still, there is always concern and hesitancy surrounding implementation of a Medicaid program without the blessing of CMS.

  • The provider network (This is awesome)

HB 403 requires that all contracts between PHPs and DHHS have a clause that requires PHPs to not exclude providers from their networks except for failure to meet objective quality standards or refusal to accept network rates.

  • PHPs use of money (Also good)

Clearly, the General Assembly drafted HB 403 out of anger toward the MCOs. HB 403 implements more supervision over the new entities. It also disallows use of money on alcohol, first-class airfare, charter flights, holiday parties or similar social gatherings, and retreats, which, we all know these are precisely the activities that State Auditor Beth Wood found occurring, at least, at Cardinal. See Audit Report.

HB 403 also mandates that the Office of State Human Resources revise and update the job descriptions for the area directors and set limitations on salaries. No more “$1.2 million in CEO salaries paid without proper authorization.”

  • Provider contracts with the PHPs (No choice is never good)

It appears that HB 403 will not allow providers to choose which PHP to join. DHHS is to create the regions for the PHPs and every county must be assigned to a PHP. Depending on how these PHPs are created, we could be looking at a similar situation that we have now with the MCOs. If the State is going to force you to contract with a PHP to provide Medicaid services, I would want the ability to choose the PHP.

In conclusion, HB 403 will re-shape our entire Medicaid program, if passed. It will abolish the MCO system, apply to almost all Medicaid services (both physical and mental), open the provider network, limit spending on inappropriate items, and assign counties to a PHP.

Boy, what I would give to be a fly on the wall in all the MCO’s boardrooms (during the closed sessions).

Trump-caid: Medicaid Under the AHCA

It is still unclear whether the American Health Care Act (AHCA), or  H.R. 1628, will be signed into law. On March 6, 2017, the House Energy & Commerce Committee (E&C) and Ways & Means Committee (W&M) officially released the draft bill. The latest action was on April 6, 2017, H.Res.254 — 115th Congress (2017-2018) was placed on the House calendar. The rule provides for further consideration of H.R. 1628. The rule also provides that the further amendment printed Rules Committee Report 115-88 shall be considered as adopted.

So what exactly would AHCA change in relation to Medicaid?

For over fifty (50) years, states have created and implemented Medicaid programs entirely dependent on federal contributions. Medicaid is based on federal law. Although each individual state may have slight variances in the Medicaid program, because the state Medicaid programs must follow federal law, the state Medicaid programs are surprisingly similar. An example of a slight variance is that some Medicaid services are voluntary, like personal care services (PCS); some states offer PCS paid by Medicaid and others do not.

Currently, the federal government does not cap the federal contribution. However much a state spends – no matter how exorbitant – the federal government will match (at whatever percentage allotted for that state). For example, the federal government pays 66.2% of North Carolina’s Medicaid spending. Which means, BTW, that $264,800.00 of Cardinal’s CEO’s salary is funded by the federal government. These percentages are called Federal Medical Assistance Percentages (FMAP).

All this may change under the American Health Care Act (AHCA), or  H.R. 1628, as approved by the House Ways and Means, Energy and Commerce, Budget, and Rules Committees.

The AHCA proposes many changes from the Affordable Care Act (ACA) germane to Medicaid. In my humble opinion, some of the replacements are stellar; others are not. No one (sane and logical) could argue that the ACA was perfect legislation for providers, employers, or recipients. It was not. It mandated that employers pay for health care insurance for their employees, which caused the number of part-time workers to explode. The ACA mandated the states to suspend Medicaid reimbursements upon a credible allegation of fraud, which, basically, could be a disgruntled employee lying with an anonymous accusation. This provision put many providers out of business without due process (Remember New Mexico?). The ACA also put levers in place that meant younger policyholders were subsidizing older ones. Healthy, young adults were paying for older adults. The ACA reduced payments for Medicare Advantage plans, hospitals, and other providers to save money. There was also a provider shortage due to the low reimbursement rates and regulatory audits. The Affordable Care Act was anything but affordable. At least the American Health Care Act does not protest itself to be affordable.

Here are some of the most poignant “repeal and replace” items in Trump-caid:

1. Health Savings Accounts

The AHCA will encourage the use of Health Savings Accounts by increasing annual tax free contribution limits. It will also modify ACA premium tax credits for 2018-2019 to increase the amount for younger adults and to reduce the amount for older adults. In 2020, the AHCA will replace ACA income-based tax credits with flat tax credits adjusted for age. Eligibility for new tax credits phases out at income levels between $75,000 and $115,000.

2. Cap on federal contributions

Beginning in 2020, the AHCA would cap federal contributions to state Medicaid programs. This will result in huge federal savings, but cause severe shortages on the state level. The federal per-enrollee caps would be based on states’ Medicaid expenditures in 2016, trended forward to 2019. A uniform, federal capped system would provide fiscal security for the federal government and shift the risk of over spending on the states.

The following categories would be exempt from the per-capita allotments (i.e. paid for outside of the per-capita caps): DSH payments, administrative payments, individuals covered under CHIP Medicaid expansion program or who receive medical assistance from an IHS facility, breast and cervical cancer patients, and partial benefit-enrollees

With the risk on the states, there is a high probability that optional Medicaid services, such as PCS, may be cut from the budget. If PCS were eliminated, more patients would enter long-term care facilities and fewer patients would be able to remain in their homes. The House bill essentially eliminates the enhanced funding levels that made possible states’ expansion of Medicaid to their poorest working-age adult residents. In all, 31 states expanded Medicaid under the ACA. While the House Bill does not prohibit Medicaid expansion; expansion will be difficult to remain funded by the states.

medicaidexpansion2017

3. Presumptive eligibility program

The House bill would end the ACA’s special hospital presumptive eligibility program, under which hospitals can temporarily enroll patients who “appear” to be eligible and begin to get paid for their care while their full applications are pending. (What in the world does “appear to be eligible” mean. Is it similar to profiling?)

4. Home equity and eligibility

Under current law, states disregard the value of a home when determining Medicaid eligibility for an individual in need of long-term community-supported care.  The bill would take away this state flexibility, capping the equity value at $500,000.

5. Disproportionate Share Hospital Payments

The AHCA would repeal the Medicaid DSH reductions set in motion by the ACA in 2018 for non-expansion States, and 2020 for expansion states.

6. Section 1115 Waivers

States with Waivers will not be penalized for having a Waiver.  In other words, the expenses and payments under the Waiver will be treated in the same manner as if the state did not have a Waiver. However, if a state’s waiver contains payment limitations, the limitations in the new law, not the Waiver, apply.

Again, the future of the AHCA is uncertain. We all remain watchful. One change that I would like to see is that due process is afforded to providers prior to suspension of all funds when there is a credible allegation of fraud.

Look into My Crystal Ball: Who Is Going to Be Audited by the Government in 2017?

Happy New Year, readers!!! A whole new year means a whole new investigation plan for the government…

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) publishes what is called a “Work Plan” every year, usually around November of each year. 2017 was no different. These Work Plans offer rare insight into the upcoming plans of Medicare investigations, which is important to all health care providers who accept Medicare and Medicaid.

For those of you who do not know, OIG is an agency of the federal government that is charged with protecting the integrity of HHS, basically, investigating Medicare and Medicaid fraud, waste, and abuse.

So let me look into my crystal ball and let you know which health care professionals may be audited by the federal government…

crystal-ball

The 2017 Work Plan contains a multitude of new and revised topics related to durable medical equipment (DME), hospitals, nursing homes, hospice, laboratories.

For providers who accept Medicare Parts A and B, the following are areas of interest for 2017:

  • Hyperbaric oxygen therapy services: provider reimbursement
  • Inpatient psychiatric facilities: outlier payments
  • Skilled nursing facilities: reimbursements
  • Inpatient rehabilitation hospital patients not suited for intensive therapy
  • Skilled nursing facilities: adverse event planning
  • Skilled nursing facilities: unreported incidents of abuse and neglect
  • Hospice: Medicare compliance
  • DME at nursing facilities
  • Hospice home care: frequency of on-site nurse visits to assess quality of care and services
  • Clinical Diagnostic Laboratories: Medicare payments
  • Chronic pain management: Medicare payments
  • Ambulance services: Compliance with Medicare

For providers who accept Medicare Parts C and D, the following are areas of interest for 2017:

  • Medicare Part C payments for individuals after the date of death
  • Denied care in Medicare Advantage
  • Compounded topical drugs: questionable billing
  • Rebates related to drugs dispensed by 340B pharmacies

For providers who accept Medicaid, the following are areas of interest for 2017:

  • States’ MCO Medicaid drug claims
  • Personal Care Services: compliance with Medicaid
  • Medicaid managed care organizations (MCO): compliance with hold harmless requirement
  • Hospice: compliance with Medicaid
  • Medicaid overpayment reporting and collections: all providers
  • Medicaid-only provider types: states’ risk assignments
  • Accountable care

Caveat: The above-referenced areas of interest represent the published list. Do not think that if your service type is not included on the list that you are safe from government audits. If we have learned nothing else over the past years, we do know that the government can audit anyone anytime.

If you are audited, contact an attorney as soon as you receive notice of the audit. Because regardless the outcome of an audit – you have appeal rights!!! And remember, government auditors are more wrong than right (in my experience).

New OIG Report, But Same, Ole Results: Medicare and Medicaid Fraud Persistent in PCS

How many times have you heard, “Third time’s a charm?”If that is true, then what is the fifth time? The sixth time?

In an October 3, 2016, advisory report, the Office of Inspector General (OIG) recommends that the Center for Medicare and Medicaid Services (CMS) heighten its scrutiny on personal care services (PCS) in states across the country. The OIG claims “that home health has long been recognized as a program area vulnerable to fraud, waste, and abuse.” Past OIG reports have focused on Medicare. This new one focuses on Medicaid.

OIG is a division of the U.S. Department of Health and Human Services (HHS) and is charged with identifying and combating waste, fraud, and abuse in the HHS’s more than 300 programs. But, evidently, OIG is not happy, happy, happy, when HHS disregards its findings, which appears to be what has happened for a number of years.

PCS are nonmedical services for people who need assistance with activities of daily living (ADLs), such as bathing, eating, and toileting. Most of the time, PCS are allowing the person to remain in his or her home, instead of being institutionalized. However, according to OIG, PCS is fraught with fraud.

PCS is an optional service for Medicaid, i.e., states can choose to cover the cost of PCS with government funds. But, on the federal level, PCS is provided, if medically necessary, in all states.

The OIG report summarizes Medicaid fraud schemes from November 2012 through August 2016. OIG goes on to say that the fraud in this report is merely replicate of Medicare fraud found in a prior reports. In other words,OIG is basically saying that it has found Medicare fraud in home health in multiple, past reports and that CMS has not followed through appropriately. In fact, this report makes over five times, in recent years, that OIG has instructed CMS to increase its regulatory oversight of Medicare/caid personal care services. How many times does it take for your spouse to ask you to take out the trash until you take out the trash? Third time’s a charm??

Mark my words…in the near future, there will be heightened investigations and increased audits on home health.

Here are some scenarios that can trigger an audit of home health:

  1. High percentage of episodes for which the beneficiary had no recent visits with the supervising physician;
  2. High percentage of episodes that were not preceded by a hospital or nursing home stay;
  3. High percentage of episodes with a primary diagnosis of diabetes or hypertension;
  4. High percentage of beneficiaries with claims from multiple home health agencies; and
  5. High percentage of beneficiaries with multiple home health readmissions in a short period of time.

While the above-mentioned scenarios do not prove the existence of Medicare/caid fraud, they are red flags that will wave their presence before health care investigators’ faces.

Here are the states (and cities) which will be targets:

Notice that North Carolina is not highlighted. Notice that Florida is highlighted and contained numerous “hotspots.” Certainly that has nothing to do with the abnormal number of people on Medicare…

Regardless, North Carolina will get its share of Medicare PCS audits. Especially, considering that we have the 7th most number of Medicare beneficiaries in the country – that should have gotten us highlighted per se.

Since the OIG Portfolio report issued in 2012, OIG has opened more than 200 investigations involving fraud and patient harm and neglect in the PCS program across the country. “Given the significant vulnerabilities in the PCS program, including a lack of internal controls, and that PCS fraud continues to be a persistent problem, OIG anticipates that its enforcement efforts will continue to involve PCS cases.”Report.

Fifth time is a ______?? (Sure thing).