Category Archives: Liability Insurance
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.
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?
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?
Planning for the inevitable is smart. And it is inevitable if you are a provider and you accept Medicaid that you will undergo some sort of review, whether it is onsite or database checks, in the near future. And only two outcomes can result from this upcoming review:
Are YOU ready for that test???
So, it is imperative to arm yourself with knowledge of your rights, a liability insurance policy that covers attorneys’ fees (and lets you pick your attorney), and confidence that your billing practices comply with rules and regulations. If you do not know whether your billing practices comply, do a self-audit or hire a knowledgeable billing expert to audit you.
Read or not here they come…
Beginning June 9, 2014, Public Consulting Group (PCG) began scheduling post-enrollment site visits to fulfill federal regulations 42 CFR 455.410 and 455.450, which require all participating providers to be screened according to their categorical risk level: high, moderate, or limited.
What does being high, moderate, or limited risk mean?
If you are limited risk, the state will check your licenses, ensure that you, as a provider, meet criteria for applicable federal and state statutes, conduct license verifications, and conduct database checks on a pre- and post-enrollment basis to ensure that providers continue to meet the enrollment criteria for their provider type. This is the only category that does not need an onsite review.
If you are moderate risk, the state does everything for you as if you are a limited risk plus perform on-site reviews. (Enter PCG).
If you are high risk, the state will perform all reviews as if you are a moderate risk but also will conduct a criminal background check, and require the submission of a set of fingerprints in accordance with §455.434. (And you thought fingerprints for only for the accused.)
Let’s discuss in which level risk you fall. NC Gen. Stat §108C-3 spells out the risk levels. Are you a new personal care service (PCS) provider getting ready to start your own business? You are high risk. Are you a directly-enrolled behavioral health care provider rendering outpatient behavioral health care services? You are high risk. Do you provide HIV Management services? You are high risk.
Here is a list of high risk providers:
- Prospective (newly enrolling) adult care homes delivering Medicaid-reimbursed services.
- Agencies providing behavioral health services, excluding Critical Access Behavioral Health Agencies
- Directly enrolled outpatient behavioral health services providers.
- Prospective (newly enrolling) agencies providing durable medical equipment, including, but not limited to, orthotics and prosthetics.
- Agencies providing HIV case management.
- Prospective (newly enrolling) agencies providing home or community-based services pursuant to waivers authorized by the federal Centers for Medicare and Medicaid Services under 42 U.S.C. § 1396n(c).
- Prospective (newly enrolling) agencies providing personal care services or in-home care services.
- Prospective (newly enrolling) agencies providing private duty nursing, home health, or home infusion.
- Providers against whom the Department has imposed a payment suspension based upon a credible allegation of fraud in accordance with 42 C.F.R. § 455.23 within the previous 12-month period. The Department shall return the provider to its original risk category not later than 12 months after the cessation of the payment suspension.
- Providers that were excluded, or whose owners, operators, or managing employees were excluded, by the U.S. Department of Health and Human Services Office of Inspector General or another state’s Medicaid program within the previous 10 years.
- Providers who have incurred a Medicaid or Health Choice final overpayment, assessment, or fine to the Department in excess of twenty percent (20%) of the provider’s payments received from Medicaid and Health Choice in the previous 12-month period. The Department shall return the provider to its original risk category not later than 12 months after the completion of the provider’s repayment of the final overpayment, assessment, or fine.
- Providers whose owners, operators, or managing employees were convicted of a disqualifying offense pursuant to G.S. 108C-4 but were granted an exemption by the Department within the previous 10 years.
Here is a list of moderate risk providers:
- Ambulance services.
- Comprehensive outpatient rehabilitation facilities
- Critical Access Behavioral Health Agencies.
- Hospice organizations
- Independent clinical laboratories.
- Independent diagnostic testing facilities.
- Pharmacy Services.
- Physical therapists enrolling as individuals or as group practices.
- Revalidating adult care homes delivering Medicaid-reimbursed services.
- Revalidating agencies providing durable medical equipment, including, but not limited to, orthotics and prosthetics
- Revalidating agencies providing home or community-based services pursuant to waivers authorized by the federal Centers for Medicare and Medicaid Services under 42 U.S.C. § 1396n(c).
- Revalidating agencies providing private duty nursing, home health, personal care services or in-home care services, or home infusion.
- Nonemergency medical transportation.
Here are the limited risk providers:
- Ambulatory surgical centers.
- End-stage renal disease facilities.
- Federally qualified health centers.
- Health programs operated by an Indian Health Program (as defined in section 4(12) of the Indian Health Care Improvement Act) or an urban Indian organization (as defined in section 4(29) of the Indian Health Care Improvement Act) that receives funding from the Indian Health Service pursuant to Title V of the Indian Health Care Improvement Act.
- Histocompatibility laboratories.
- Hospitals, including critical access hospitals, Department of Veterans Affairs Hospitals, and other State or federally owned hospital facilities
- Local Education Agencies.
- Mammography screening centers.
- Mass immunization roster billers.
- Nursing facilities, including Intermediate Care Facilities for the Mentally Retarded.
- Organ procurement organizations.
- Physician or nonphysician practitioners (including nurse practitioners, CRNAs, physician assistants, physician extenders, occupational therapists, speech/language pathologists, chiropractors, and audiologists), optometrists, dentists and orthodontists, and medical groups
According to the June 2014 Medicaid Bulletin, the onsite reviews will last approximately two hours and PCG will send 2 representatives to conduct the review.
How to prepare for the onSite reviews
- Read and learn. (or re-learn, whichever the case may be).
“Providers will be expected to demonstrate a working knowledge of N.C. Medicaid through responses to a series of questions.” See June 2014 Medicaid Bulletin.
Knowledge is power. Brush up on your applicable DMA Clinical Coverage Policy. Review the NC Medicaid Billing Guide. Re-read your provider participation agreement. If you don’t understand a section, go to your attorney and ask for an explanation. Actually read the pertinent federal and state statutes quoted in your participation agreements because, whether you know what the laws say or not, you signed that agreement and you will be held to the standards spelled out in the federal and state statutes.
- Call your liability insurance.
Be proactive. Contact your liability insurance agent before you get the notice of an onsite review from PCG. Have a frank, open discussion about these upcoming onsite reviews. Explain that you want to know whether you policy covers attorneys’ fees and whether you can choose your attorney. If your policy does not cover attorneys’ fees or does not allow you to choose your own lawyer, beef up your liability insurance plan to include both. Believe me, the premiums will be cheaper than an attorney from your own pocket.
- Be confident.
Presentation matters. If you whisper and cower before the PCG reviewers, you will come across as weak and/or trying to hide something. Be polite and forthcoming, but provide the information that is asked of you; do not supply more information than the reviewers do not request.
I always tell my clients before their deposition or a cross examination by the other side, “Answer the question that is asked. No more. If you are asked if your favorite color is blue, and you favorite color is red, the correct response is “No,” not “No, my favorite color is red.” Do not over-answer.
If you do not believe that you can be confident, ask your attorney to be present. I had someone tell me one time that he did not want an attorney present because he felt that the auditors would think he was hiding something and he did not want to appear litigious. I say, this is your company, your career, and your life. If you need the support of an attorney, get one. Whenever I give this advice, I try to imagine that I am telling the same advice to my mother. My mother, bless her heart, does not have the confidence to stand her ground in high pressure situations. She would rather yield her position than be the least bit confrontational. If that also describes you, have your attorney present.
- Know your rights.
What if you fail the onsite review? Can you appeal? You need to know your rights. When you get a notice from PCG that an onsite review is scheduled, contact your attorney. Make sure that BEFORE the onsite review, you understand all the possible consequences. Knowing your rights will also help with #3, confidence. If you know the worst case scenario, then you stop creating worse case scenarios in your mind and become more confident.
Ready or not, the PCG reviews are coming, so get ready!
Looking back on all my posts, I realized that I have not written a “Tip” lately. But when I started thinking about my “Tip,” I realized my Today’s Tip is more of a “Tip to Be Proactive in the Era of Medicaid Audits.”
So, I am officially changing the name of my “Tip Blogs” to “Tip #12 to Be Proactive in the Era of Medicaid Audits.” Poof! It’s changed. (Also, I reserve the right to change the title back at any time.)
My Proactive Tip Today:
No.1: Make sure that your liability insurance covers attorneys fees!!!
No. 2: Make sure your insurance, if it does cover attorneys’ fees, that your insurance allows you to choose you attorney.
First, get a copy of your insurance and read it. You are looking to make sure that your insurance covers “regulatory audits.” Here is the important catch…even if your insurance claims to cover regulatory audits, if you receive a Tentative Notice of Overpayment, or a Notice of Prepayment Review, the correspondence will, in some place, state that the action (whichever action it is) is “based on credible allegations of fraud.” Is that actually a true statement? I don’t know. Maybe. Maybe not. The result, however, is that some insurance companies claim that, because the Tentative Notice of Overpayment or Notice of Prepayment Review is based on credible allegations of fraud, that attorneys’ fees are NOT covered because fraud is an intentional action. You will notice that your insurance does not cover actions for fraud.
The insurance companies do not understand that these Notices of Overpayment and Prepayment Review ARE NOT FRAUD. Instead, we are dealing with paperwork nit-picking. And, in many cases, erroneous, paperwork nit-picking.
Second, make sure that your insurance allows you to choose your attorney. What good is an insurance that covers attorneys’ fees, but only covers the fees for these certain 10 lawyers, who have never seen a Medicaid Clinical Policy, graduated law school 2 years ago and passed the Bar on their 4th attempt. I shiver at the thought. (Remember, it does not have to be me that you hire, just hire a good, knowledgable attorney).
After realizing many of my clients were in-need of an insurance company/plan that would cover attorneys’ fees for attorneys’ of their choosing, after a bit of research, I found an insurance broker that I recommend.
Here’s the caveat: If you are already undergoing a Medicaid audit, or already on prepayment review, it will not help you to change your insurance at this point. It would be like a “pre-existing condition” in health insurance. So this Tip is those health care providers, who are not undergoing an audit currently, but wish to be proactive in protecting their interests.
So, if you are interested in obtaining a liability insurance that will 100% cover your attorneys’ fees, contact:Edward M. Smith, CIC Senior Vice President Rutherfoord A Marsh & McLennan Agency LLC Company One S. Jefferson Street, Roanoke, VA 24011 Direct: 540-767-4053 Fax: 540-342-9747 firstname.lastname@example.org www.rutherfoord.com
I must confess…I do not know much about health care providers’ liability insurance. I just haven’t had to deal with liability insurance many times.
But, a client has recently informed me that their liability insurance will compensate them for 100% of my attorney fees that pertain to my representation germane to their regulatory audit. If this is true, then I have many clients that need to have a chat with their insurance companies.
Please understand…I have NOT read the small print with this insurance coverage. I do NOT know the ins and the outs of this insurance, or, even, whether it will actually, truly cover 100% of attorneys fees.
But, IF there is a possibility of your insurance company covering attorneys fees, what is there to lose?
This is all I know:
Alleged insurance that covers legal fees for regulatory audits? “APA Plus.”
From what I understand, if you pay an extra $15/month, the insurance will cover legal fees associated with regulatory audits, up to $50,000.
Again, please understand, this is hearsay, and I have read no insurance contract. The ONLY reason I am blogging about an issue that I do not have verification of its veracity is because if, and only if, there is even a 1% chance that your insurance company will cover legal fees, this could be such a burden off your shoulders during such a stressful time anyway.
What does it hurt to try?