Category Archives: Legislation
On September 6, 2017, I appeared on the Besler Hospital Finance Podcast regarding:
Update on the Medicare appeals backlog [PODCAST]
Feel free to listen to the podcast, download it, and share with others!
Four months after the Center for Medicare and Medicaid Services’ (CMS) Final Rule went in effect (March 2017) attempting to eliminate the Medicare appeal backlog and 6 months before United States District Court for the District of Columbia’s first court-imposed deadline (end of 2017) of reducing the Medicare appeal backlog by 30%, the Department of Health and Human Services (HHS) are woefully far from either. According to HHS’ June 2017 report on the Medicare appeal backlog, 950,520 claims will remain in the backlog by 2021. This is in stark contrast to the District Court’s Order that HHS completely eliminate the backlog by 2020. So will HHS be held in contempt? Throw the Secretary in jail? That is what normally happened when someone violates a Court Order.
Supposedly, HHS’ catastrophic inability to decrease the Medicare appeal backlog is not from a lack of giving the ole college try. But, in its June 2017 report, HHS blames funding.
CMS issued a new Final Rule in January 2017, which took effect March 2017, in hopes of reducing the massive Medicare provider appeal backlog that has clogged up the third level of appeal of Medicare providers’ adverse actions. In the third level of appeal, providers make their arguments before an administrative law judge (ALJ). For information on all the Medicare appeal levels, click here.
The Office of Medicare Hearings and Appeals (OMHA) claims that it currently can adjudicate roughly 92,000 appeals annually. The current backlog is approximately 667,326 appeals that HHS estimates will grow to 950,520 by 2021. The average number of days between filing a Petition with OMHA and adjudicating the case is around 1057.2 days.
HHS had high hopes that these changes would eliminate the backlog. In HHS’ Final Rule Fact Sheet, it states “with the administrative authorities set forth in the final rule and the FY 2017 proposed funding increases and legislative actions outlined in the President’s Budget, we estimate that that the backlog of appeals could be eliminated by FY 2020.” The changes made to the Medicare appeals process by the January 2017 Final Rule is the following:
Changes to the Medicare Appeals Process
The changes in the final rule are primarily focused on the third level of appeal and will:
- Designate Medicare Appeals Council decisions (final decisions of the Secretary) as precedential to provide more consistency in decisions at all levels of appeal, reducing the resources required to render decisions, and possibly reducing appeal rates by providing clarity to appellants and adjudicators.
- Allow attorney adjudicators to decide appeals for which a decision can be issued without a hearing and dismiss requests for hearing when an appellant withdraws the request. That way ALJs can focus on conducting hearings and adjudicating the merits of more complex cases.
- Simplify proceedings when CMS or CMS contractors are involved by limiting the number of entities (CMS or contractors) that can be a participant or party at the hearing.
- Clarify areas of the regulations that currently causes confusion and may result in unnecessary appeals to the Medicare Appeals Council.
- Create process efficiencies by eliminating unnecessary steps (e.g., by allowing ALJs to vacate their own dismissals rather than requiring appellants to appeal a dismissal to the Medicare Appeals Council); streamlining certain procedures (e.g., by using telephone hearings for appellants who are not unrepresented beneficiaries, unless the ALJ finds good cause for an appearance by other means); and requiring appellants to provide more information on what they are appealing and who will be attending a hearing.
- Address areas for improvement previously identified by stakeholders to increase the quality of the process and responsiveness to customers, such as establishing an adjudication time frame for cases remanded from the Medicare Appeals Council, revising remand rules to help ensure cases keep moving forward in the process, simplifying the escalation process, and providing more specific rules on what constitutes good cause for new evidence to be admitted at the OMHA level of appeal.
In early June 2017, HHS issued its second status report on the Medicare appeals backlog and the outlook does not look good.
CMS held a call on June 29, 2017, to discuss recent regulatory changes intended to streamline the Medicare administrative appeal processes, reduce the backlog of pending appeals, and increase consistency in decision-making across appeal levels.
Now HHS is in danger of violating a Court Order.
In December 2016, the District Court for the District of Columbia held in American Hospital Association v Burwell case Ordered HHS to release to status reports every 90 days and the complete elimination of the backlog by 2020, HHS is also required to observe several intermediary benchmarks: 30% reduction by the end of 2017, 60% by the end of 2018, 90% by the end of 2019, and then ultimately 100% elimination by the end of 2020.
BUT LITTLE TO NOTHING HAS CHANGED.
HHS itself has maintained since the requirements were instituted that the elimination of the backlog would not be possible. June’s report projects 950,520 claims will remain by 2021, but this projection is still very far from meeting the court order.
HHS blames funding.
But even significant increase of funding (from about $107 million in 2017, to $242 million in 2018) will not cure the problem! I find it very disturbing that $242 million could not eliminate the Medicare appeal backlog. So what will happen when HHS fails to meet the Court’s mandate of a 30% reduction of the backlog by the end of 2017? Hold the Secretary in contempt?
The court in Burwell drafted a “what if” into the Decision—the Court stated: “if [HHS] fails to meet [these] deadlines, Plaintiffs may move for default judgment or to otherwise enforce the writ of mandamus.” This allows the Court authority to enforce its Decision, but it has not motivated HHS to try any innovative procedures to reduce the backlog. So far no additional actions have been attempted, and the backlog remains.
If HHS is in violation of the Court Order at the end of 2017, the Court could issue harsh penalties. (Or the Court could do nothing and be a complete disappointment).
On July 13, 2017, Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Tom Price, M.D., announced the Department of Justice’s (DOJ) biggest-ever health care fraud takedown. 412 health care providers were charged with health care fraud. In total, allegedly, the 412 providers schemed and received $1.3 billion in false billings to Medicare, Medicaid, and TRICARE. Of the 412 defendants, 115 are physicians, nurses, and other licensed medical professionals. Additionally, HHS has begun the suspension process against 295 health care providers’ licenses.
The charges include allegations of billing for medically unnecessary treatments or services that were not really provided. The DOJ has evidence that many of the defendants had illegal kickback schemes set up. More than 120 of the defendants were charged with unlawfully or inappropriately prescribing and distributing opioids and other narcotics.
While this particular sting operation resulted from government investigations, not all health care fraud is discovered through government investigation. A great deal of fraud is uncovered through private citizens coming forward with incriminating information. These private citizens can file suit against the fraudulent parties on behalf of the government; these are known as qui tam suits.
Being a whistleblower goes against what most of us are taught as children. We are taught not to be a tattletail. I have vivid memories from elementary school of other kids acting out, but I would remain silent and not inform the teacher. But in the health care world, tattletails are becoming much more common – and they make money for blowing that metaphoric whistle.
What is a qui tam lawsuit?
Qui tam is Latin for “who as well.” Qui tam lawsuits are a type of civil lawsuit whistleblowers (tattletails) bring under the False Claims Act, a law that rewards whistleblowers if their qui tam cases recover funds for the government. Qui tam cases are a powerful weapon against Medicare and Medicaid fraud. In other words, if an employee at a health care facility witnesses any type of health care fraud, even if the alleged fraud is unknown to the provider, that employee can hire an attorney to file a qui tam lawsuit to recover money on behalf of the government. The government investigates the allegations of fraud and decides whether it will join the lawsuit. Health care entities found guilty in a qui tam lawsuit will be liable to government for three times the government’s losses, plus penalties.
The whistleblower is rewarded for bringing these lawsuits. If the government intervenes in the case and recovers funds through a settlement or a trial, the whistleblower is entitled to 15% – 25% of the recovery. If the government doesn’t intervene in the case and it is pursued by the whistleblower team, the whistleblower reward is between 25% – 30% of the recovery.
These recoveries are not low numbers. On June 22, 2017, a physician and rehabilitative specialist agreed to pay $1.4 million to resolve allegations they violated the False Claims Act by billing federal health care programs for medically unreasonable and unnecessary ultrasound guidance used with routine lab blood draws, and with Botox and trigger point injections. If a whistleblower had brought this lawsuit, he/she would have been awarded $210,000 – 420,000.
On June 16, 2017, a Pennsylvania-based skilled nursing facility operator agreed to pay roughly $53.6 million to settle charges that it and its subsidiaries violated the False Claims Act by causing the submission of false claims to government health care programs for medically unnecessary therapy and hospice services. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by 7 former employees of the company. The whistleblower award – $8,040,000 – 16,080,000.
There are currently two, large qui tam cases against United Health Group (UHG) pending in the Central District of California. The cases are: U.S. ex rel. Benjamin Poehling v. UnitedHealth Group, Inc. and U.S. ex rel. Swoben v. Secure Horizons, et al. Both cases were brought by James Swoben, who was an employee and Benjamin Poehling, who was the former finance director of a UHG group that managed the insurer’s Medicare Advantage Plans. On May 2, 2027, the U.S. government joined the Poehling lawsuit.
The charges include allegations that UHG:
- Submitted invalid codes to the Center for Medicare and Medicaid Services (CMS) that it knew of or should have known that the codes were invalid – some of the dates of services at issue in the case are older than 2008.
- Intentionally avoided learning that some diagnoses codes or categories of codes submitted to their plans by providers were invalid, despite acknowledging in 2010 that it should evaluate the results of its blind chart reviews to find codes that need to be deleted.
- Failed to follow up on and prevent the submissions of invalid codes or submit deletion for invalid codes.
- Attested to CMS each year that the data they submitted was true and accurate while knowing it was not.
UHG would not be in this expensive, litigious pickle had it conducted a self audit and followed the mandatory disclosure requirements.
What are the mandatory disclosure requirements? Glad you asked…
Section 6402(a) of the Affordable Care Act (ACA) creates an express obligation for health care providers to report and return overpayments of Medicare and Medicaid. The disclosure must be made by 60 days days after the date that the overpayment was identified or the date any corresponding cost report is due, if applicable. Identification is defined as the point in which the provider has determined or should have determined through the exercise of due diligence that an overpayment exists. CMS expects the provider to proactively investigate any credible information of a potential overpayment. The consequences of failing to proactively investigate can be seen by the UHG lawsuits above-mentioned. Apparently, UHG had some documents dated in 2010 that indicated it should review codes and delete the invalid codes, but, allegedly, failed to do so.
How do you self disclose?
According to CMS:
“Beginning June 1, 2017, providers of services and suppliers must use the forms included in the OMB-approved collection instrument entitled CMS Voluntary Self-Referral Disclosure Protocol (SRDP) in order to utilize the SRDP. For disclosures of noncompliant financial relationships with more than one physician, the disclosing entity must submit a separate Physician Information Form for each physician. The CMS Voluntary Self-Referral Disclosure Protocol document contains one Physician Information Form.”
“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.”
The Office of Inspector General (OIG) recently disseminated hundreds of recoupment letters to providers in New York who had percentage-based contracts with billing agents. OIG is seeking recoupment for services spanning a five-year period, plus 9% interest. See example redacted letter from OIG.
42 CFR 447.10 prohibits the re-assignment of provider claims and applies only to Medicaid. It is recommended that you pay your billing agent a flat fee or on a time basis.
North Carolina Medical Society also discourages fee splitting. On the NCMS website, the Society warns that “Except in instances permitted by law (N.C. Gen. Stat. § 55B-14(c)), it is the position of the Board that a licensee cannot share revenue on a percentage basis with a non-licensee. To do so is fee splitting and is grounds for disciplinary action.”
Not all States prohibit fee splitting, and if Medicare or Medicaid is not involved, then we look to state law. But if Medicare or Medicaid is involved, then federal law matters. Some States prohibit fee splitting for doctors, chiropractors, and hospitals, while other states do not prohibit fee splitting for massage therapists. So it is important to know your State’s laws.
Lawyers also have fee-splitting prohibitions. To split fees with a nonlawyer constitutes the practice of law without a license (and probably multiple other ethical concerns).
Physicians, group practices and management services organizations should continue to carefully examine their current and proposed arrangements to ensure compliance with the fee-splitting prohibition applicable to your State. If you are unsure, consult an attorney.
OIG may have started these audits in New York, but, as New York State says “Excelsior” – ever upward – we can be sure that OIG will continue across the country.
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:
- Physical health services
- Prescription drugs
- Long-term care services
- Behavioral health services
The capitated contracts shall not cover:
Behavioral health Dentist services
- 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).
Durable Medical Equipment (DME) providers across the country are walking around with large, red and white bullseyes on their backs. Starting back in March 2017, the RAC audits began targeting DME and home health and hospice. DME providers also have to undergo audits by the Comprehensive Error Rate Testing Program (CERT).
The RAC for Jurisdiction 5, Performant Recovery, is a national company contracted to perform Recovery Audit Contractor (RAC) audits of durable medical equipment, prosthetic, orthotic and supplies (DMEPOS) claims as well as home health and hospice claims. Medicare Part B covers medically necessary DME. The following are the RAC regions:
Region 1 – Performant Recovery, Inc.
Region 2 – Cotiviti, LLC
Region 3 – Cotiviti, LLC
Region 4 – HMS Federal Solutions
Region 5 – Performant Recovery, Inc.
As you can see from the above map, we are in Region 3. The country is broken up into four regions. But, wait, you say, you said that Performant Recovery is performing RAC audits in region 5 – where is region 5?
Region 5 is the whole country.
The Centers for Medicare and Medicaid (CMS) has contracted with Performant Recovery to audit DME and home health and hospice across the whole country.
DME and home health and hospice providers – There is nowhere to hide. If you provide equipment or services within the blue area, region 5, you are a target for a RAC audit.
What are some common findings in a RAC audit for DME?
Without question, the most common finding in a RAC or CERT audit is “insufficient documentation.” The problem is that “insufficient documentation” is nebulous, at best, and absolutely incorrect, at worst. This error is by auditors if they cannot conclude that the billed services were actually provided, were provided at the level billed, and/or were medically necessary. An infuriating discovery was when I was defending a DME RAC audit and learned that the “real” reason for the denial of a claim was that no one went to the consumers door, knocked on it, and verified that a wheelchair had, in fact, been delivered. In-person verification of delivery is not a requirement, nor should it be. Such a burdensome requirement would unduly prejudice DME companies. Yes, you need to be able to show a signed and dated delivery slip, but you do not have to go to the consumer’s house and snap a selfie with the consumer and the piece of equipment.
Another common target for RAC audits is oxygen tubing, oxygen stands/racks, portable liquid oxygen systems, and oxygen concentrators. RAC auditors mainly look for medical necessity for oxygen equipment. Hospital beds/accessories are also a frequent find in a RAC audit. A high use of hospital beds/accessories codes can enlarge the target on your back.
Another recurrent issue that the RAC auditors cite is billing for bundled services separately. Medicare does not make separate payment for DME provider when a beneficiary is in a covered inpatient stay. RAC auditors check whether suppliers are inappropriately receiving separate DME payment when the beneficiary is in a covered inpatient stay. Suppliers can’t bill for DME items used by the patient prior to the patient’s discharge from the hospital. Medicare doesn’t allow separate billing for surgical dressings, urological supplies, or ostomy supplies provided in the hospital because reimbursement for them is wrapped into the Part A payment. This prohibition applies even if the item is worn home by the patient when leaving the hospital.
As always, documentation of the face to face encounter and the prescription are also important.
You can find the federal regulation for DME documentation at 42 CFR 410.38 – “Durable medical equipment: Scope and conditions.”
Once you receive an alleged overpayment, know your rights! Appeal, appeal, appeal!! The Medicare appeal process can be found here.
Buried within the Senate Appropriations Act of 2017 (on pages 189-191 of 361 pages) is a new and improved method to terminate Medicaid providers. Remember prepayment review? Well, if SB 257 passes, then prepayment review just…
Prepayment review is allowed per N.C. Gen. Stat. 108C-7. See my past blogs on my opinion as to prepayment review. “NC Medicaid: CCME’s Comedy of Errors of Prepayment Review” “NC Medicaid and Constitutional Due Process.”
N.C. Gen. Stat. 108C-7 states, “a provider may be required to undergo prepayment claims review by the Department. Grounds for being placed on prepayment claims review shall include, but shall not be limited to, receipt by the Department of credible allegations of fraud, identification of aberrant billing practices as a result of investigations or data analysis performed by the Department or other grounds as defined by the Department in rule.” Getting placed on prepayment review is not appealable. Relief can be attainable. See blog. (With a lawyer and a lot of money).
Even without the proposals found within SB 257, being placed on prepayment review is being placed in a torture chamber for providers.
With or without SB 257, being placed on prepayment review results in the immediate withhold of all Medicaid reimbursements pending the Department of Health and Human Services’ (DHHS) contracted entity’s review of all submitted claims and its determination that the claims meet criteria for all rules and regulations. If the majority of your reimbursements come from Medicaid, then an immediate suspension of Medicaid funds can easily put you out of business.
With or without SB 257, in order to get off prepayment review, you must achieve 70% accuracy (or clean claims) for three consecutive months. Think about that statement – The mere placement of you on prepayment review means that, according to the standard for being removed from prepayment review, you will not receive your reimbursements for, at least, three months. How many of you could survive without getting paid for three months. But that’s not the worst of it, the timing and process of prepayment review – meaning the submission of claims, the review of the claims, the requests for more documentation, submission of more documents, and the final decision – dictates that you won’t even get an accuracy rating the first, maybe even the second month. If you go through the prepayment review process, you can count on no funding for four to five months, if you are over 70% accurate the first three months. How many of you can sustain your company without getting paid for five months? How about 24 months, which is how long prepayment review can last?
The prepayment review process: (legally, which does not mean in reality)
Despite your Medicaid funds getting cut off, you continue to provide Medicaid services to your recipients (You also continue to pay your staff and your overhead with gummy bears, rainbows, and smiles). – And, according to SB 257, if your claims submissions decrease to under 50% of the prior three months before prepayment review – you automatically lose. In other words, you are placed on prepayment review. Your funding is suspended (with or without SB 257). You must continue to provide services without any money (with or without SB 257) and you must continue to provide the same volume of services (if SB 257 passes).
So, you submit your claims.
The Department of Health and Human Services (DHHS) or its contracted vendor shall process all clean claims submitted for prepayment review within 20 calendar days of submission by the provider. “To be considered by the Department, the documentation submitted must be complete, legible, and clearly identify the provider to which the documentation applies. If the provider failed to provide any of the specifically requested supporting documentation necessary to process a claim pursuant to this section, the Department shall send to the provider written notification of the lacking or deficient documentation within 15 calendar days of receipt of such claim the due date of requested supporting documentation. The Department shall have an additional 20 days to process a claim upon receipt of the documentation.”
Let’s look at an example:
You file your claim on June 1, 2017.
DHHS (or contractor) determines that it needs additional documentation. On June 16, 2017, DHHS sends a request for documentation, due by July 6, 2017 (20 days later).
But you are on the ball. You do not need 20 days to submit the additional documents (most likely, because you already submitted the records being requested). You submit additional records on June 26, 2017 (within 10 days).
DHHS has until July 16, 2017, to determine whether the claim is clean. A month and a half after you submit your claim, you will be told whether or not you will be paid, and that’s if you are on the ball.
Now imagine that you submit 100 claims per week, every week. Imagine the circular, exponential effect of the continual, month-and-a-half review for all the claims and the amount of documents that you are required to submit – all the while maintaining the volume of claims of, at least over 50% of your average from the three prior months before prepayment review.
Maintaining at least 50% of the volume of claims that you submitted prior to being placed on prepayment review is a new addition to the prepayment review torture game and proposed in SB 257.
If SB 257 does not pass, then when you are placed on prepayment review and your funding is immediately frozen, you can decrease the volume of claims you submit. It becomes necessary to decrease the volume of claims for many reasons. First, you have no money to pay staff and many staff will quit; thus decreasing the volume of claims you are able to provide. Second, your time will be consumed with submitting documents for prepayment review, receiving additional requests, and responding to the additional requests. I have had a client on prepayment review receive over 100 requests for additional documents per day, for months. Maintaining organization and a record of what you have or have not submitted for which Medicaid recipient for which date of service becomes a full-time job. With your new full-time job as document submitter, your volume of services decreases.
Let’s delve into the details of SB 257 – what’s proposed?
SB 257’s Proposed Torture Tactics
The first Catherine’s Wheel found in SB 257 is over 50% volume. Or you will be terminated.
As discussed, SB 257 requires to maintain at least 50% of the volume of services you had before being placed on prepayment review. Or you will be terminated.
Another heretics fork that SB 257 places in the prepayment review torture chamber is punishment for appeal.
SB 257 proposes that you are punished for appealing a termination. If you fail to meet the 70% accuracy for three consecutive months, then you will be terminated from the Medicaid program. However, with SB 257, if you appeal that termination decision, then “the provider shall remain on prepayment review until the final disposition of the Department’s termination or other sanction of the provider.” Normally when you appeal an adverse determination, the adverse determination is “stayed” until the litigation is over.
Another Iron Maiden that SB 257 proposes is exclusion.
SB 257 proposes that if you are terminated “the termination shall reflect the provider’s failure to successfully complete prepayment claims review and shall result in the exclusion of the provider from future participation in the Medicaid program.” Even if you voluntarily terminate. No mulligan. No education to improve yourself. You never get to provide Medicaid services again. The conical frame has closed.
Another Guillotine that SB 257 proposes is no withhold of claims.
SB 257 proposes that if you withhold claims while you are on prepayment review. “any claims for services provided during the period of prepayment review may still be subject to review prior to payment regardless of the date the claims are submitted and regardless of whether the provider has been taken off prepayment review.”
Another Judas Chair that SB 257 proposes is no new evidence.
SB 257 proposes that “[i]f a provider elects to appeal the Department’s decision to impose sanctions on the provider as a result of the prepayment review process to the Office of Administrative Hearings, then the provider shall have 45 days from the date that the appeal is filed to submit any documentation or records that address or challenge the findings of the prepayment review. The Department shall not review, and the administrative law judge shall not admit into evidence, any documentation or records submitted by the provider after the 45-day deadline. In order for a provider to meet its burden of proof under G.S. 108C-12(d) that a prior claim denial should be overturned, the provider must prove that (i) all required documentation was provided at the time the claim was submitted and was available for review by the prepayment review vendor and (ii) the claim should not have been denied at the time of the vendor’s initial review.”
The prepayment review section of SB 257, if passed, will take effect October 1, 2017. SB 257 has passed the Senate and now is in the House.
The NC State Auditor Beth Wood released an audit report on Cardinal Innovations yesterday, May 17, 2017. Here are the key findings. For the full report click here.
Cardinal is a Local Management Entity/Managed Care Organization (LME/MCO) created by North Carolina General Statute 122C. Cardinal is responsible for managing, coordinating, facilitating and monitoring the provision of mental health, developmental disabilities, and substance abuse services in 20 counties across North Carolina. Cardinal is the largest of the state’s seven LME/MCOs, serving more than 850,000 members. Cardinal has contracted with DHHS to operate the managed behavioral healthcare services under the Medicaid waiver through a network of licensed practitioners and provider agencies.
• Cardinal spent money exploring strategic opportunities outside of its core mission
• $1.2 million in CEO salaries paid without proper authorization
• Cardinal’s unreasonable spending could erode public trust
• Cardinal should consult and collaborate with members of the General Assembly before taking any actions outside of its statutory boundaries
• The Office of State Human Resources should immediately begin reviewing and approving Cardinal CEO salary adjustments
• The Department of Health and Human Services should determine whether any Cardinal CEO salary expenditures should be disallowed and request reimbursement as appropriate
• Cardinal should implement procedures consistent with other LME/MCOs, state laws, and federal reimbursement policy to ensure its spending is appropriate for a local government entity
My favorite? Recoup CEO salaries. Maybe we should extrapolate.