Category Archives: Nursing Homes

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).

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

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

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

aca-white-collar-highres

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

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

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

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

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

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

VERY IMPORTANT EXCEPTION

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

BUT THE REST OF US BEWARE!!

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

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

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

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

CMS Proposes Mandatory Bundled Medicare Reimbursements: Financial Risk on Hospitals!

A new CMS proposal could transform durable medical equipment (DME) Medicare reimbursements to hospitals. The proposal, if adopted, would implement a mandatory bundled Medicare reimbursement for hip and knee replacements or lower extremity joint replacements (LEJRs).

CMS has proposed this change to be piloted in 75 metropolitan areas prior to being implemented nationwide.

This mandatory bundled Medicare reimbursement will be unprecedented, as, thus far, CMS has only implemented voluntary bundled reimbursement rates. However, CMS has stated that its goal is to have at least 50% of all Medicare fee-for-service reimbursement to be paid under an alternative payment model by 2018, and, in order to meet this objective, CMS will need to implement more  mandatory alternative payment models.

Another first is that CMS proposes that hospitals bear the brunt of the financial risk. To date, CMS has not targeted a type of health care provider as being a Guinea pig for new ideas, unlike the other proposed and implemented Bundled Payments for Care Improvement (BPCI) initiative where there are many types of providers that can participate and bear risks.

Will this affect NC hospitals?

Yes.

Of the 75 metropolitan areas chosen as “test sites” for the new bundled payment plan, 3 are located in NC.

1. Asheville
2. Charlotte
3. Durham-Chapel Hill

Apparently, CMS believes that Durham and Chapel Hill are one city, but you got to give it to them…by hyphenating Durham and Chapel Hill, CMS gets both Duke and UNC health systems to participate in the mandatory trial. Other large metro areas included in the trial are Los Angeles, New York City, and Miami.

LEJRs are the most frequent surgeries in the Medicare population. The average Medicare expenditures for LEJRs, including surgery, hospitalization, and recovery, can range from $16,500 to $33,000.

The mandatory bundled reimbursement will become effective January 2, 2016; however, the hospitals will not carry the financial risk until January 1, 2017.  So, hospitals, you got a year and a half to figure it out!!

What exactly will this bundled reimbursement rate include?

Answer: Everything from an inpatient admission billed under MS DRG 469 or 470 until 90 days following discharge.

And we are talking about everything.

Thus, you will be reimbursed per “Episode of Care,” which includes:

“All related items and services paid under Medicare Part A and Part B for all Medicare fee-for-service beneficiaries, including physicians’ services, inpatient hospital service, readmissions (subject to limited exceptions), skilled nursing facility services, durable medical equipment, and Part B drugs.”

What should you do if you are a hospital so graciously selected to participate?

1.  Assess your protocol as to discharging patients.  Where do your patients go after being discharged?

2. Determine whether you want to partner with any critical care facilities, skilled nursing agencies, or home health agencies.

3.  Assess your current reimbursement rates and analyze what current delivery patterns must be revamped in order to maintain profitability.

4. Determine future care management and clinical reprogram needs.

5. Analyze ways to provide more efficient delivery components.

6. Communicate with your DME vendors.  Discuss ways to decrease spending and increase efficiency.

7.  Plan all ways in which you will follow the patient after discharge through the 90 day period.

8. Consult your attorney.

If you would like to comment on the proposed rule, you have until September 8, 2015 at 5:00pm.

Liability Insurance for Health Care Providers: Is It Adequate?

When you, as a health care provider, undergo a regulatory Medicare or Medicaid audit, your liability insurance could be your best friend or your worst enemy. It is imperative that you understand your liability coverage prior to ever undergoing an audit.

There are two very important issues that you need to know about your liability insurance:

1. Whether your liability insurance covers your choice of attorney; and
2. Whether your liability insurance covers settlements and/or judgments.

I cannot express the importance of these two issues when it comes to regulatory audits, paybacks and recoupments. Let me explain why…

Does your liability insurance cover attorneys’ fees for your choice of provider?

I have blogged numerous times over the past years about the importance of knowing whether your liability insurance covers your attorneys’ fees. I have come to realize that whether your liability insurance covers your attorneys’ fees is less important than knowing whether your liability insurance covers your choice of attorney. Believe it or not, when it comes to litigating regulatory issues in the Medicare/Medicaid, attorneys are not fungible.

A client of mine summed it up for me today. She said, “I wouldn’t go to my dentist for a PAP smear.”

Case in point, here are some examples of misconceptions that attorneys NOT familiar with the Office of Administrative Hearings (OAH) might think:

Myth: Getting the case continued is a breeze, especially if all the parties consent to it.

Reality: Generally, OAH is reluctant to continue cases, except for good cause, especially when a case has pended for a certain amount of time. (This has been a more recent trend and could change in the future).

Myth: When my case is scheduled for trial on X date, it will be a cattle call and we will only determine when the case will be actually heard, so I don’t need to prepare for trial. (This is true in superior court).

Reality: Incorrect. Most likely, you will be heard. OAH has a number of administrative law judges (ALJs) who are assigned cases. Generally, they only schedule one case per day, although there are exceptions.

Myth: Since we are going to trial next week, the other side must not intend to file a motion to dismiss or motion for summary judgment. I don’t need to prepare any counter arguments.

Reality: The administrative rules allow attorneys to orally file motion the day of trial.

You can imagine how devastating attorney misconceptions can be to your case. An attorney with these misconceptions could very well appear unprepared at a trial, which could have catastrophic consequences on you and your company.

Tip:

Review your liability insurance. Determine whether your liability insurance covers attorneys’ fees. Then determine whether it covers your choice of attorney.

Does your liability insurance cover settlements and/or judgments?

Recently, a client was informed that the agency allegedly owes over $400,000 to the auditing agency. We will call him Jim. Jim came to me, and I instructed him to determine whether his liability insurance covers attorneys’ fees. It turned out that his insurance did cover attorneys’ fees, but only a certain attorney. Jim had overlooked our first issue.

Despite the fact that his insurance would not cover my fees, he opted to stick with me. (Thanks, Jim).

Regardless, once settlement discussions arose between us and the auditing entity, which in this particular case was Palmetto, I asked Jim for a copy of his liability insurance. If his liability insurance covers settlements, then we have all the incentive in the world to settle and skip an expensive hearing.

I was shocked at the language of the liability insurance.

According to the contract, insurance company would pay for attorneys’ fees (just not mine). Ok, fine. But the insurance company would contribute nothing to settlements or judgments.

What does that mean?

Insurance company could provide Jim with bargain basement attorneys, the cheapest it could find, with no regard as to whether the attorney were a corporate, litigation, real estate, tax, bankruptcy, or health care lawyer BECAUSE

The insurance company has no skin in the game. In other words, the insurance company could not care less whether the case settles, goes to trial, or disappears. Its only duty is to pay for some lawyer.

Whereas if the insurance company were liable for, say, 20% of a settlement or judgment, wouldn’t the insurance company care whether the hired lawyer were any good?

Tip:

Print off your liability insurance. Read it. Does your liability insurance cover attorneys’ fees for your choice of provider?

Does your liability insurance cover settlements and/or judgments?

Lordy, Lordy, Look Who’s Forty: A Review of Our 40-Year-Old Stalemate in Health Care Reform

40-birthday

Well, folks, it is official.  I am “over the hill.”  Yup.  My birthday is today, January 7, 1975, and I was born 40 years ago.

Instead of moping around, I have decided to embrace my 40s. For starters, let’s take a look at where we were 40 years ago. Obviously, personally, I was in utero. But what about the country? What about health care?

Not surprisingly, even 40 years ago, politicians were discussing the same issues with health care as we are now. Some things never change…or do they???

In my “40 years in review” blog, I want to discuss why we, as a nation, are still arguing about the same health care issues that we were arguing about 40 years ago.  And, perhaps, the reason why we have been in a 40-year-old stalemate in health care reform.

Today, we have a diverged nation when it comes to health care. Democrats want to expand public health insurance (i.e., Medicaid) and tend to favor a higher degree of government oversight of health care to ensure that health care is available to all people.  Republicans, on the other hand, believe that the financial burden of the Affordable Care Act (ACA) on the federal and state level is unsustainable, and people will receive less than adequate health care. Republicans tend to favor privatization of Medicaid, while liberals oppose such ideas.

Health care reform has been a hot topic for over 40 years…with some interesting differences…

Going back to 1975…

Gerald Ford, a Republican, was our nation’s president, and we were in a nationwide recession.

Under Ford, the American Medical Society (AMA) proposed a new plan for health care, an employer mandate proposal.

According to a 1975 Chicago Tribune journalist, the AMA’s new proposal pushed for a broader government role in health care.  See below.

“The new [ ] plan would cover both employees and the unemployed, along with poor people and those considered uninsurable because of medical or mental problems.  It would require employers to subsidize health care for employees and their families and pay at least 65 % of each premium.  It would also require the government to provide partially subsidized health insurance, financed from general revenues, for the poor and the unemployed. It calls for medical insurance benefits covering 365 days of hospital care during any one year, 100 days of nursing home care, and home health, mental, and dental service for children aged 2 and up.  All but the poorest beneficiaries would share premium costs and would pay 20 per cent for the services provided, but no individual would pay more than $1,500 a year and no family more than $2,000 a year for health care.”

Chicago Tribune, “The A.M.A.’s subsidy plan” April 19, 1975 (emphasis added) (no author was cited).

Interestingly, in that same newspaper from April 19, 1975, advertisements show towels for $1.89, pants for teenagers for $4.99, a swivel rocker for $88, and a BBQ grill for $12.88. My how times have changed!

Those prices also indicate how much buying power was involved with the AMA’s proposal, and what it meant to suggest that an individual might have to pay up to $1,500 a year, and a family up to $2,000 a year, for health care – a lot of money back then!

In 1976, Pres. Ford proposed adding catastrophic coverage to Medicare, offset by increased cost sharing.  These are examples of Pres. Ford (a Republican) creating more government involvement in health care and expanding health care to everyone.

After Pres. Ford, came Pres. Jimmy Carter from 1977-1981, a Democrat.

Pres. Carter campaigned on the notion of “universal health care for everyone;” however, once in office he decided instead to rein in costs, and not expand coverage.  In the prior decade (1960), the consumer price index had increased by 79.7%, while hospital costs had risen 237%.  President Carter proposed an across-the-board cap on hospital charges that would limit annual increases to 1.5 times any rise in the consumer price index.

Pres. Carter was also quoted from public speeches saying, “We must clean up the disgraceful Medicaid scandals.”

Pres. Carter’s stance on “universal” health care was: “that such a program would be financed through both the employer and the payroll taxes, as well as general revenue taxes. Patients would still be free to choose their own physician, but the federal government would set doctor’s fees and establish controls to monitor the cost and quality of health care.”

In May 1979, Senator Ted Kennedy, a Democrat, proposed a new universal national health insurance bill—offering a choice of competing federally-regulated private health insurance plans with no cost sharing financed by income-based premiums via an employer mandate and individual mandate, replacement of Medicaid by government payment of premiums to private insurers, and enhancement of Medicare by adding prescription drug coverage and eliminating premiums and cost sharing.

These are examples of Democrats, Pres. Carter, by not expanding health care coverage and reining in costs, and Sen. Kennedy, by proposing privatization of Medicaid, acting in a more conservative nature, or, as a conservative nature would be perceived today.

So when did the parties flip-flop? Why did the parties flip-flop? And the most important question…if we have been struggling with the exact same issues on health care for over 40 years, why has our health care system not been fixed?  There has certainly been enough time, ideas, and proposed bills.

While I do not profess to know the answer, my personal opinion is the severe and debilitating polarizations of the two main political parties have rendered this country into a 40-year-old stalemate when it comes to health care reform and are the reason why the solution has not been adopted and put into practice.

Maybe back in 1979, when Senator Kennedy proposed replacing Medicaid with private insurance, Republicans refused to agree, simply because a Democrat proposed the legislation.

Today when Republican candidates campaign on privatizing Medicaid and the Democrats vehemently oppose such action, maybe the opposition is not to the idea, but to the party making the proposal.

Just a thought…

And here’s to the next 40!!!

The (Recent) History of PCS Rates and Why There Is Parity of Rates Between Home Health and Long Term Care Facilities

Think of this blog as a history lesson…

As I was preparing my Power Point for speaking at the NC Association of Long Term Care Facilities (NCALTCF), I ran across a number of interesting issues on which I could blog. If you are attending the annual NCALTCF conference September 8-10, this will be a prelude to a portion of my presentation. I will be speaking on September 8th.

I am reviewing the history of personal care services (PCS) rates, and I realize that a few years ago, the parity of PCS rates for home health care providers and long-term care facilities (LTCF) occurred. The issue? Why the parity? I am curious. I remember vividly the parity change in 2012. But, I wonder, why did it occur?

Home health care companies provide PCS to people within their own homes (obviously a much-needed and growing service). Long term care facilities (LTCF) provide PCS within a facility.

But LTCFs have higher overhead due to mortgage/rent, 24-hour staff, monthly bills, more regulatory compliance issues, a cafeteria or kitchen, etc. Whereas, a home health care company does not incur these expenses. Why NOT pay LTCF a higher PCS reimbursement rate?

The answer is…we did, in North Carolina. And the federal government found that we violated the Americans with Disabilities Act (ADA).

Here is the percentage breakdown of people receiving home health, assisted living, nursing homes, hospice, and day service centers, on a national basis in 2013, according to the Centers for Disease Control (CDC).

LTCF pie chart

 

Notice the green, home health section. Home health has grown at a very rapid rate since 2000. But assisted living (blue) is still predominant.

Back before 2010 and in an attempt to help adult care homes that provide assistance with dementia patients, the General Assembly provided an enhanced Medicaid rate for those facilities.

For decades, the Centers for Medicare and Medicaid (CMS) warned us that the ADA requires that Medicaid reimbursements apply equally to all, including those living in institutional facilities and those who live with family. CMS informed us that we were in violation of Olmstead v. L.C., a Supreme Court decision decided in 1999. In Olmstead, the Supreme Court decided mental illness is a form of disability and that institutional isolation of a person with a disability is a form of discrimination under Title II of the ADA. See Olmstead v. L.C., 527 U.S. 581 (1999) (Remember the Prince song?)

In 2010, Disability Rights filed a complaint with the federal government complaining about NC’s disparate PCS rates between LTCF and home health. In 2011, the US Department of Justice investigated and agreed with Disability Rights. NC was violating Olmstead by providing two different reimbursement rates.

The General Assembly (GA) tackled the issue in 2012. The GA decreased the LTCF’s enhanced PCS rate to the home health’s rate in order to comply with federal law. Although there was a limit as to the number of hours of PCS per month, the GA wrote in an extra 50 hours per month for people suffering from dementia.

Disability Rights originally made the 2010 complaint to the federal government with honest, well-meaning intentions. Disability Rights wanted better care for the mentally ill. And Olmstead had wonderful results for the mentally ill. Now people suffering from mental illness can remain in their homes, if desired (although sometimes a legal battle is required).

But the unknown, unintentional consequence of Olmstead for the owners of LTCFs is that the PCS rate became paired with the home health PCS rate, which keeps declining. For example, prior to October 1, 2013, the PCS rate was $15.52 (now it is $13.88).

The federal minimal wage is $7.25. People who are paid minimum wage, generally, are not licensed professionals.

Most members of a LTCF staff are licensed. Many are certified nurse assistants (CNAs). Most are required to attend yearly continuing education classes. Should these CNAs and licensed professionals make only $6.00 more than minimum wage? Are not professional licensees worth more?

Not to mention…let’s talk about what LTCF staff actually does on a day-to-day basis. My Grandma Carson resides in a LTCF. Thankfully, she still lives in her own independent living house on the LTCF grounds because she can maintain her independent living, but many residents of LTCF cannot. LTCF staff assists in activities of daily living (ADLs), such as toileting, eating, ambulating, and grooming. When my great-grandmother could no longer feed herself, the wonderful staff at Glenaire in Cary, NC fed her. Should a person feeding an elderly person (and bathing and helping go to the bathroom) NOT be paid well-over minimum wage?

Well…the reimbursement rate may be $13.88 (a tad over $6.00 above minimum wage), but a PCS worker for a home health agency AND a LTCF does not earn $13.88/hour, they earn less. Companies are created to earn a profit. There is nothing wrong with earning a profit.

In fact, starting January 1, 2014, PCS workers in home health are now eligible for minimum wage. “ARE NOW ELIGIBLE.” As in, last year, PCS workers could have earned LESS than minimal wage.

In the future, I hope that health care providers who provide PCS services are paid more; I also hope that, in the future, the PCS rate increases. Someday, I will be the recipient of a PCS worker.

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

In my career, I call it the “F” word:

Fraud.

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

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

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

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

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

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

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

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

What are personal care services (PCS)?

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

First, the definition/eligibility requirements:

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

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

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

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

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

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

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

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

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

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

What is the difference between assisted living and nursing homes?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Or

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

Or

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

What?

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

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

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

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

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

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

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

“Warning: Medicaid can take your home!”

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

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

What exactly can the state seek to recover?

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

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

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

But the warning is very tiny print.

Hello, 2014! And Hello 3% Decrease in Medicaid Reimbursements (But Call the Decrease “Shared Savings”)

Tomorrow is the first Medicaid checkwrite for 2014 (and its my birthday too).  Happy New Year! Happy birthday!! (I’m turning 29 for the 10th year).  For New Years, my husband and I had a very quiet evening eating crab legs at home. Yum! I am sure many of you made New Years resolutions…work harder…lose weight…get paid 3% less….WHAT?

With the first Medicaid checkwrite tomorrow, due to Session Law 2013-360, many health care providers will receive 3% less in Medicaid reimbursements.  You will receive a 3% cut if you are the following types of providers:

  • Inpatient hospital.
  • Physician, excluding primary care until January 1, 2015.
  • Dental.
  • Optical services and supplies.
  • Podiatry.
  • Chiropractors.
  • Hearing aids.
  • Personal care services.
  • Nursing homes.
  • Adult care homes.
  • Dispensing drugs.

(This is the exact list as found in Session Law 2013-360.  I am well aware that the list is grammatically-challenged, but I did not write it).  Both the federal government and NC are calling this 3% withholding “Shared Savings Plan with Provider.” 

How is this “shared savings with providers” when the government is withholding money from providers??? Sure, supposedly, there will  be a “pay for performance payment” to some providers, but most providers will just be reimbursed 3% less.

How is this fair?  How is this “shared savings?” 

Here’s an example:

Say I work at Harris Teeter and my manager comes up to me and says, “Hey, Knicole, Harris Teeter is really concerned with our overhead costs.  Salaries seem to be a big cost, and we want to “share the savings” with you.  So we are going to cut your pay by 3%.  If we, subjectively, determine, at the end of the year, that you are working hard and saving us money, then we will give you a performance reward.  It will not be all the money we retained, but it will be some amount.  This way Harris Teeter profits off the interest of the 3% we retain all year, plus the amount we never give you.”

Folks, the above example is called a decrease in pay and a swift kick in the bottom.  It is not “shared savings.”

In DHHS’ shared savings scheme, the money will go to:

“The Department of Health and Human Services shall use funds withheld from payments for drugs to develop with Community Care of North Carolina (CCNC) a program for Medicaid and Health Choice recipients based on the ChecKmeds NC program. The program shall include the following:

  1. At least 50 community pharmacies by June 30, 2015.
  2. At least 500 community pharmacies in at least 70 counties by June 30, 2016.
  3. A per member per month (PMPM) payment for care coordination and population health services provided in conjunction with CCNC.
  4. A pay for performance payment.”

Session Law 2013-360.

According to the Centers for Medicare and Medicaid Services (CMS), “[a] shared savings methodology typically comprises four important concepts: a total cost of care benchmark, provider payment incentives to improve care quality and lower total cost of care, a performance period that tests the changes, and an evaluation to determine the program cost savings during the performance period compared to the benchmark cost of care and to identify the improvements in care quality.”

Employers chop salaries all the time in order to maximize profit.  Back in 2011, Sony proposed 11% salary cuts for executives due to such a terrible fiscal year.  But guess what is different between Sony’s 11% cut and Medicaid’s 3%?  I know…I know…a lot….but what difference am I thinking about?

Sony sought shareholder approval.

I guess you can make the argument that the General Assembly sought voter approval because our citizens voted for all the legislators in the General Assembly.  But I think that argument is weak.  No legislator ran his or her campaign on: “Vote for Me! If you are a Medicaid provider, I plan to decrease your salary by 3%!”

Better yet, with the Sony salary cut, executives had the option to seek employment elsewhere.  What is a Medicaid provider’s option? Move?  Not take Medicaid? (Sadly, I see this as a more viable option).

On a legal note, I question the constitutionality of our new shared savings plan.  Wouldn’t the decrease of 3% in Medicaid reimbursements be considered an unlawful taking without due process.  In essence, could one argue that the decrease of 3% in Medicaid reimbursements is just a way for the State to decrease Medicaid reimbursements without going through the proper lawful process?

Then again, maybe we won’t need to worry about the 3% decrease at all…given NCTracks’ track record, it is plausible that NCTracks will not be able to adjust the Medicaid reimbursements by 3%.

On Medicaid? Need Home Health Aide Services? You Are Now Limited in Number of Visits.

New revisions to Medicaid policy limit the number of home health aide services for Medicaid recipients, regardless of medical need.

North Carolina Department of Health and Human Services (DHHS), Division of Medical Assistance (DMA) revised the Clinical Policy 3A. The revised policy took effect July 1, 2013.

Prior to this revised policy, home health aide services were limited to the amount, frequency, and duration of services as  ordered by the physician and documented in the Plan of Care (POC). As in, if you needed services four times a week, if your physician ordered the services and the need for such services were documented on the POC, you could receive home health aide services four times a week.

What are home health aide services?

“Home Health (not aide) Services, generally, include medically necessary skilled nursing services, specialized therapies (physical therapy, speech-language pathology, and occupational therapy), home health aide services, and medical supplies provided to beneficiaries who live in primary private residences. Skilled nursing, specialized therapies, and medical supplies can also be provided if the beneficiary resides in an adult care home (such as a rest home or family care home).”

Home health aide services are a subpart of Home Health Services.

“Home health aide services are hands-on paraprofessional services provided by a Nurse Aide I or II (NA I or NA II) under the supervision of the RN. The services are provided in accordance with the established POC to support or assist the skilled service (skilled nursing and specialized therapies).

Home health aide services help maintain a beneficiary’s health and facilitate treatment of the beneficiary’s illness or injury. Typical tasks include:

a. Assisting with activities such as bathing, caring for hair and teeth, eating, exercising, transferring, and eliminating.

b. Assisting a beneficiary in taking self-administered medications that do not require the skills of a licensed nurse to be provided safely and effectively.

c. Assisting with home maintenance that is incidental to a beneficiary’s medical care needs, such as doing light cleaning, preparing meals, taking out trash, and shopping for groceries.

d. Performing simple delegated tasks such as taking a beneficiary’s temperature, pulse, respiration, and blood pressure; weighing the beneficiary; changing dressings that do not require the skills of a licensed nurse; and reporting changes in the beneficiary’s condition and needs to an appropriate health care professional.”

See DMA Clinical Policy 3A, p. 1-3 (emphasis added).

The revised Policy 3A has 5 additional pages (it went from 29 pages to 34 pages, in total), but many more restrictions, many of which are without regard to medical necessity.

Such as, “Home health aide services must be limited to 100 total visits per year per beneficiary.”  Click here for the full text of the revised Policy 3A. Of course, always remember the exception for children: EPSDT.

Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) is a federal Medicaid requirement that requires the state Medicaid agency to cover services, products, or procedures for Medicaid beneficiary under 21 years of age if the service is medically necessary health care  to correct or ameliorate a defect, physical or mental illness, or a condition [health problem] identified through a screening examination (includes any evaluation by a physician or other licensed clinician).

For more information on EPSDT, see my blog: “EPSDT’s Impact on Medicaid Audits.”

 Now, going back to our Medicaid recipient in medical need of 4 home health aide services/week (208 visits/year), he or she is now limited to 100/year (almost 2 visits/week) (This math is using 52 week/year, not 52.1775).

There are other services possible, depending on the medical necessity. But as for home health aide services, you only get 100.

Remember, this limit not only affects Medicaid recipients (obviously the limit impacts the recipients most greatly), but, also, providers will have less work for their home health aides. As one of my readers pointed out to me, the aides are only making around $8/hour.

DMA Clinical Policy 3A, revised July 1, 2013, has other restrictions. See below for some other restrictions.

Skilled Nursing Visits

Pre-filling insulin syringes/Medi-Planner visits (RC 581) must be limited to a maximum of one visit every two (2) weeks with one (1) additional PRN visit allowed each month. There is a limit of 75 skilled nursing visits (inclusive of, and in any combination with, RC 550, RC 551, RC 559, RC 580, RC 581, and RC 589) per beneficiary per state fiscal year.

Miscellaneous Code T1999        

Use of the T1999 code for billing miscellaneous supplies is limited as follows:

  • A maximum of $250 per beneficiary per state fiscal year may be billed without prior approval required.
  • Any amount over $250 per beneficiary per state fiscal year, whether for a single item or a cumulative total, requires prior approval.
  • A maximum of $1,500 per beneficiary per state fiscal year may be billed.

Are these new restrictions only because of a tight Medicaid budget? My question is when does medical necessity for Medicaid recipients become a factor in policy limits?