Category Archives: Medicaid Appeals
NC Medicaid Providers Lost Their Property Right in the Continued Participation in Medicaid, According to COA
According to the 4th Circuit Court of Appeals, health care providers possess a property right interest in the continued participation in Medicare and Medicaid. Nationally, the Circuits are split. The rule is, at least in the 4th Circuit, that termination for cause of a provider’s Medicaid contract is allowed, if the cause is correct and the provider was afforded due process. On October 5, 2023, the NC Court of Appeals deviated from legal precedent and ruled no property right exists in B&D Integrated Services v. NC DHHS and its agent Alliance. The COA held that Alliance, a managed care organization (“MCO”) could terminate any provider for any cause at any time for any reason. The 4th Circuit and I beg to differ. I read the Decision, and the Petitioner, unfortunately, according to the Decision, failed to argue that it has a property right in continued participation in Medicaid. I have no earthly idea why Petitioner argued what it did, which is that OAH has no jurisdiction over provider appeals and the OAH decision should be vacated. I have no idea why Petitioner thought that was a good argument. I don’t know if arguing the property right argument would have resulted in a victory, but, to me, it is the most compelling argument. Petitioner failed to argue that MCOs are paid by the tax payor; MCOs are not private companies, so MCOs are agents of the State and must follow pertinent regulations. Instead, Petitioner argues that OAH does not have jurisdiction???? Curiouser and curiouser.
That was not the right argument to make.
And now, unless the General Assembly changes the law, B&D Integrated Health Services v. NC DHHS and its agent Alliance Health, holds that “Alliance was contractually allowed to terminate the contract, with or without cause or for any reason, upon 30 days’ notice.” Which is precisely what I have argued against for the last 15 years or so. See blog. And blog. And blog.
These MCOs are bequeathed a fire hose of tax dollar money and whatever they don’t spend, they keep for bonuses for the executives. Therefore, it is in the MCOs’ financial best interest to terminate providers, which means all the terminated providers’ consumers are immediately cut-off from their Medicaid services, and the MCO saves money.
The following paragraphs are from a Decision from OAH holding that Medicaid contracts are NOT terminable at will:
“In determining whether a property interest exists a Court must first determine that there is an entitlement to that property. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (1985). Unlike liberty interests, property interests and entitlements are not created by the Constitution. Instead, property interests are created by federal or state law and can arise from statute, administrative regulations, or contract. Bowens v. N.C. Dept. of Human Res., 710 F.2d 1015, 1018 (4th Cir. 1983). Under North Carolina case law, the Fourth Circuit Court of Appeals has determined that North Carolina Medicaid providers have a property interest in continued provider status. Bowens, 710 F.2d 1018. In Bowens, the Fourth Circuit recognized that North Carolina provider appeals process created a due process property interest in a Medicaid provider’s continued provision of services, and could not be terminated “at the will of the state.” The court determined that these safeguards, which included a hearing and standards for review, indicated that the provider’s participation was not “terminable at will.” Id. The court held that these safeguards created an entitlement for the provider, because it limits the grounds for his termination such that the contract was not terminable “at will” but only for cause, and that such cause was reviewable. The Fourth Circuit reached the same result in Ram v. Heckler, 792 F.2d 444 (4th Cir. 1986) two years later. Since the Court’s decision in Bowen, a North Carolina Medicaid provider’s right to continued participation has been strengthened through the passage of Chapter 108C. Chapter 108C expressly creates a right for existing Medicaid providers to challenge a decision to terminate participation in the Medicaid program in the Office of Administrative Hearings. It also makes such reviews subject to the standards of Article 3 of the APA. Therefore, North Carolina law now contains a statutory process that confers an entitlement to Medicaid providers. Chapter 108C sets forth the procedure and substantive standards for which OAH is to operate and gives rise to the property right recognized in Bowens and Ram. Under Chapter 108C, providers have a statutory expectation that a decision to terminate participation will not violate the standards of Article 3 of the APA. The enactment of Chapter 108C gives a providers a right to not be terminated in a manner that (1) violates the law; (2) is in excess of the Department’s authority; (3) is erroneous; (4) is made without using proper procedures; or (5) is arbitrary and capricious. To conclude otherwise would nullify the General Assembly’s will by disregarding the rights conferred on providers by Chapter 108C. This expectation cannot be diminished by a regulation promulgated by the DMA which states that provider’s do not have a right to continued participation in the Medicaid program because under the analysis in Bowen the General Assembly created the property right through statutory enactment.” Carolina Comm. Support Serv, Inc., at 22.
Carolina Comm. Support Serv., Inc. v. Alliance Behavioral Healthcare, 14 DHR 1500, April 2, 2015.
ALJ Decisions determining a property right exists went on to be upheld by the 4th Circuit. However, this new NC COA decision, B&D Integrated Health v. NC DHHS, threatens all providers. The reason that termination at will does not work for Medicare and Medicaid versus a private companies’ right to terminate:
- These are our tax dollars, not private money.
- It allows discrimination.
- It allows subjectivity.
- It allows bias.
- It allows an entity to overnight prevent consumers from receiving medically necessary health care services.
- It allows for an entity to, overnight, cause hundreds of staff members to lose their jobs.
B&D Integrated Health v. NC DHHS is a bad decision for health care providers. The Petitioner lost its case because it made the wrong argument. Its argument that administrative courts have no jurisdiction was a losing argument. Now State and federal contractors have more power to be subjective and discriminatory.
Now we have NC case law in State Court that fails to follow federal case law in the 4th Circuit.
There Is No Law to Be Perfect in Medicare; Just Self-Disclose!
We all know that there is no law, regulation or statute that medical records supporting payment by Medicare or Medicaid must be perfect. There is no mandatory 100% compliant standard. Because humans err. In light of the ongoing financial strain brought about by the pandemic and the constraints imposed by Congress on Medicaid coverage disenrollments, State Medicaid agencies are poised to explore additional audits to manage increasing Medicaid expenditures. Recent developments, such as additional flexibilities granted by CMS, suggest a shifting landscape in how States respond to these challenges.
Anticipating a more assertive approach by States in dealing with service providers, potential measures could include rate cuts and enhanced scrutiny through service audits. This prompts a crucial examination of States’ and providers’ rights under federal Medicaid law to audit service provisions and recover overpayments, a legally intricate and noteworthy domain.
Medicaid RAC Audits are governed by 42 CFR 455 Subpart F—Medicaid Recovery Audit Contractors Program. Other Medicaid alleged overpayments are dictated by 42 CFR Chapter 433.
To establish a foundational understanding, it’s essential to consider the mandate imposed by Congress in section 1902(a)(30)(A) of the Social Security Act. States are required to incorporate provisions in their Medicaid plans to “safeguard against unnecessary utilization of … care and services.” This underscores the federal interest in ensuring responsible use of matching funds, given the federal government’s financial contribution to the program.
A landmark case illustrating the complexities of this mandate is the 1999 decision by the Supreme Judicial Court of Massachusetts in Massachusetts Eye and Ear Infirmary v. Commissioner of Medical Assistance. The court evaluated Massachusetts Medicaid’s retrospective utilization review policy, emphasizing the need for meaningful definitions of terms like “inpatient” and “outpatient” to avoid arbitrary penalties on providers.
Moving to the realm of overpayments, CMS regulations, specifically at 42 C.F.R. § 433.316, provide guidance on how States should proceed when identifying overpayments. The regulations recommend written notification to providers, with states having the discretion to choose whether to notify in cases of suspected fraud. Furthermore, States are required to take “reasonable actions” based on state collections law to recoup overpayments, with a one-year timeframe to return the federal share of identified overpayments to CMS.
Determining when a State “discovers” an overpayment is a critical aspect outlined in the regulations. The discovery is pegged to specific events, such as the state contacting the provider, the provider notifying the state, formal initiation of recoupment, or a federal official identifying the overpayment. Significantly, the regulations focus more on CMS’s relationship with the state than on the state’s relationship with providers.
Recent legal precedents, such as the Wisconsin Supreme Court’s decision in Professional Home Care Providers v. Wisconsin Department of Health Services, underscore the need for states to operate within the bounds of their granted authority. In this case, the court rejected a Medicaid agency’s “perfection” policy, emphasizing that state law must align with CMS regulations in overseeing overpayment recovery.
As States grapple with revenue shortfalls exacerbated by the pandemic, the potential for increased efforts to recoup overpayments from providers looms large. Legal challenges, exemplified by recent decisions in Massachusetts and Wisconsin, underscore the delicate balance States must strike in these endeavors, emphasizing the limits within which they must operate as they navigate the complex terrain of Medicaid law and financial constraints.
Expect audits. Be ready to defend yourself. Self audits are so important. If you self audit and find a problem and self-disclose, you will not receive penalties. Self-disclosures are key. When I told a group of law students this key information, one asked, has you told a client to self-disclose and they refused? To which I said yes. One time. A female doctor informed me that she falsified 7 medical records, I said that she should disclose. She screamed at me in her language, fired me, and hired a new attorney and withheld the information about falsifying records.
She is jail currently.
RAC Audits Are BOO-Very Scary, and, Sometimes, Are DEAD wrong!
For Monitor Monday, today, October 30, 2023, I dressed up as a RAC auditor. BOO!!! I get a spooky 13.5% commission for overzealous auditing tactics. RAC auditors come in every shape and size, color or gender.
In my experience, RACs are garishly incorrect in their assessments. I will reveal three, real life examples where these audit contractors accused healthcare providers of owing money but were found to be dead wrong:
Example 1 – Medical Necessity quibbles:
In a haunting case involving a hospital, the RAC alleged that certain cardiac procedures were billed inappropriately, citing concerns about the medical necessity of these services. They claimed the hospital should refund a repugnant amount for these procedures. However, upon closer examination and an appeal process, it was revealed that the services were indeed medically necessary and aligned with the standard protocols. The ghastly RAC’s accusation was disproven, and the hospital was not required to return any funds. Spine-tingling!
Example 2 – Improper Coding of Diagnosis:
A healthcare provider, particularly a large physician group, was accused by the RAC of using suspicious, improper diagnostic codes, leading to overbilling for certain services provided to Medicare and Medicaid beneficiaries. After a thorough internal audit, it was determined that the codes used were accurate and supported by the patient’s medical records. The RAC’s allegations were unfounded, and no repayment was required. Suspicious. A haunting reminder to spook audits.
Example 3 – Alleged Duplicate Billing:
In a murderous case involving a nursing facility, the RAC identified what they believed were instances of duplicate billing for certain procedures and services. Upon further review, it was revealed that the billing discrepancies were due to the RAC’s misunderstanding of the facility’s billing processes. Mysterious. The facility provided evidence showcasing that the billed services were distinct and not duplicates. Consequently, the RAC’s claim was refuted, and no repayment was deemed necessary. Suspicious.
These examples underscore the critical need for providers to have robust internal compliance measures in place. While RACs serve a vital purpose in identifying billing errors, they are not infallible. Providers need to be equipped to challenge these audit findings, ensuring they are based on accurate and comprehensive information.
It’s crucial for healthcare providers to engage in a proactive approach by conducting their internal audits, maintaining accurate documentation, and being prepared to challenge RAC determinations when necessary. These efforts not only protect providers from unwarranted financial obligations but also ensure that Medicare and Medicaid funds are appropriately allocated.
In conclusion, the relationship between RACs, healthcare providers, and government healthcare programs is complex. The examples provided demonstrate that while RACs play a critical role in safeguarding the integrity of Medicare and Medicaid, their findings are not always accurate. Providers must be diligent in ensuring their billing practices align with regulations and be prepared to contest any erroneous audit findings to maintain fiscal stability and fair reimbursement for services rendered.
Happy Halloween!!!!
The No Surprises Act and How It Can Benefit You, Personally! YOU WANT TO READ THIS BLOG!
Surprisingly, I am talking about the No Surprises Act today. Last year, I had an unwelcome surprise. I was thrown from my horse on February 20, 2022. I’ve been thrown from many horses, and usually, I land on my boots or, at worst, my behind. However, last year, I awoke in the ICU after being thrown from a horse. Surprise! Spoiler alert, I ended up ok, according to most. However, I was helicoptered from the extremely rural area to the closest hospital. And you are probably thinking that I was blessed that someone could contact and obtain a helicopter so quickly for me…it probably saved my life. And you may be right. But there are two things about me that you probably don’t know: 1) my best friend in life is an ER Trauma nurse with over 20 years’ experience; and (2) I don’t like to spend $49,753.00 for a helicopter ride that I don’t even remember.
Let me explain. As I said earlier, I was unconscious when someone contacted a helicopter. Let me tell you who I was with. Let me set the stage, so to speak. I was with my husband Scott, my bff Tracey – the ER trauma nurse, and her husband Josh. I never asked them, because, quite frankly, I didn’t think to ask who called the helicopter until now. Regardless, I was helicoptered, and received a bill a month or so later for almost $50k. And I freaked.
I am without a doubt even more sympathetic to my provider-clients who get notices of owing tens of thousands or millions of dollars. That $50k stopped my heart for a second. Then, I thought, Dr. Ronald Hirsh and others have spoken about the NSA multiple times on Monitor Monday. Maybe I should re-listen to a couple, really good, detailed podcast episode. I did so.
Last year, in my unconscious-state, I would have entrusted my life with Tracey to drive me about 30 minutes to a hospital because:
- She is an ER Trauma nurse.
- She is good at her job. She was handed a decapitated arm once. I am sure I would have had nightmares, not she.
- She works at the nearest hospital and it was only 30 minutes away. She is/was friends with the ER surgeons. So, yes, had you asked me whether I wanted a $50k helicopter ride or a 30-minute ride with an experienced ER Trauma nurse – I would have chosen the free one. that, from some of her stories, I think may be more experienced than the MDs she performs under.
However, after I presented this story on RACMonitor, Dr. Hirsch, along with several listeners, one of whom is an emergency physician, told me that they would NEVER recommend a private transfer to the hospital, even if Dr. Hirsch were driving, especially for an unconscious, head injury victim. I was told that the helicopter was the way to go in my case, but that I should not be liable for it. I agree, hence the NSA. However, in the same vein, providers need to be paid. Remember, this paragraph was written after RACMonitor and after I was told the helicopter was the way to go.
However, had you asked me then, I would have chosen the free ride to the hospital. Post haste!!! Instead of getting my consent to pay $50k for a helicopter ride or a free ride with an ER Trauma nurse, I was “forced” to the helicopter. And here is where the NSA gets confusing. It was effective January 2022. The political issue arose a stark “T” or perpendicular “behind a rock and a hard place.” A month or so after my accident, I got the bill for almost $50k. Like I said, my heart palpitated. Just like the doctors, hospitals, DME providers, dentists, LTCF, HH, BHP, and anyone who accepts Medicare or Medicaid hearts’ would palpitate when they receive a bill for tens of millions of dollars that they may or may not truly owe.
The DOS happened to be one month after the NSA went into effect. No one wanted to pay for this ride. My health insurance went to bat for me; or, really, for them. My health insurance also didn’t want to pay for my $50k helicopter ride. The letter from my insurance company to the helicopter company said: “Upon review of your request, we have confirmed the claim was processed according to the terms of the No Surprises Act (NSA). Accordingly, your request does not qualify as an appeal under the terms of the member benefit plan.”
While I agree that I should not have been liable for a $50k helicopter ride, I do have empathy for the helicopter company and its nurses. It expended money on my behalf. And I am appreciative. I feel like there should be a less Draconian law than the NSA. Because of my being unconscious during my helicopter admission and my lack of ability to consent, shouldn’t mean the providers shouldn’t be paid for services rendered.
But maybe the letter, which ostensibly shuts down any appeal to additional funds by the provider, means that the provider was paid an amount, maybe a reduced amount, but an amount nonetheless. If anyone knows whether surprised patients’ medical bills get paid at a reduced rate, let me know! Thanks!
NC Medicaid Expansion: More Consumers, Not More Providers!
Republican-run Congress passed Medicaid expansion today, March 23, 2023.
Today North Carolina took a commendable step forward in healthcare by expanding Medicaid to cover more low-income individuals. Now there are 10 States that have not expanded Medicaid. This decision will provide much-needed healthcare coverage to over 600,000 people in the state who previously did not have access to affordable healthcare. North Carolina has 2.9 million enrollees in traditional Medicaid coverage. Advocates have estimated that expansion could help 600,000 adults. In theory. On paper.
As a legal professional, I commend the North Carolina lawmakers for making this decision. The expansion of Medicaid will go a long way in improving the health and wellbeing of North Carolinians. It is well known that access to quality healthcare is critical for people to lead healthy and productive lives. By expanding Medicaid, the state is taking a proactive step towards ensuring that its citizens have access to the healthcare they need.
However, it is important to note that despite this expansion, many healthcare providers still do not accept Medicaid due to low reimbursement rates and regulatory burdens. This is a major issue that must be addressed if the benefits of the expansion are to be fully realized.
According to a report by the Kaiser Family Foundation, Medicaid patients often face significant challenges in accessing healthcare services due to a shortage of healthcare providers who accept Medicaid. In North Carolina, as of 2021, only 52% of primary care physicians accept Medicaid patients, while only 45% of specialists accept Medicaid patients. 600,000 North Carolinians will get a Medicaid card. A card does not guarantee health care services. See blog.
One area that has been severely impacted by the shortage of Medicaid providers is dental care. According to the American Dental Association, only 38% of dentists in the United States accept Medicaid patients. This has led to many low-income individuals going without essential dental care, which can lead to more serious health issues down the line. Remember, Deamante Driver? See blog.
Another area that has been impacted by the shortage of Medicaid providers is nursing homes. In many cases, nursing homes that accept Medicaid patients struggle to find healthcare providers willing to provide care to their residents. This can lead to residents going without essential medical care, which can have severe consequences.
Specialists are another area where the shortage of Medicaid providers is particularly acute. According to the Kaiser Family Foundation, only 45% of specialists accept Medicaid patients. This can be especially challenging for patients with complex medical needs, who often require specialized care.
The shortage of Medicaid providers is a complex issue that requires a multifaceted solution. One approach is to increase reimbursement rates for healthcare providers who accept Medicaid patients. This would incentivize more healthcare providers to accept Medicaid patients, thereby increasing access to healthcare services for low-income individuals.
Another approach is to reduce regulatory burdens for healthcare providers. This would make it easier for healthcare providers to participate in Medicaid, thereby increasing access to healthcare services for low-income individuals.
These statistics highlight the urgent need to address the issue of low reimbursement rates and regulatory burdens faced by healthcare providers. If more providers are incentivized to accept Medicaid patients, more people will have access to the care they need, and the benefits of the expansion will be fully realized.
In conclusion, North Carolina’s decision to expand Medicaid is a significant step forward in healthcare, and it should be applauded. However, it is crucial that policy change to incentivize providers to accept Medicaid. From dental care to nursing homes and specialists, low-income individuals who rely on Medicaid face significant challenges in accessing essential healthcare services.
Family Practice Doctors: Is It CPT 1995 or 1997 Guidance?
Right now, CMS allows physicians to pick to follow the 1995 or 1997 guidelines for determining whether an evaluation and management (“e/m”) visit qualifies for a 99214 versus a 99213. The biggest difference between the two policies is that the 1995 guideline allows you to check by systems, rather than individual organs. Starting January 1, 2023, there are a lot of revisions, including a 2021 guidance that will be used. But, for dates of service before 2021, physicians can pick between 1995 and 1997 guidance.
Why is this an issue?
If you are a family practitioner and get audited by Medicare, Medicaid, or private pay, you better be sure that your auditor audits with the right policy.
According to CPT, 99214 is indicated for an “office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: a detailed history, a detailed examination and medical decision making of moderate complexity.”
Think 99214 in any of the following situations:
- If the patient has a new complaint with a potential for significant morbidity if untreated or misdiagnosed,
- If the patient has three or more old problems,
- If the patient has a new problem that requires a prescription,
- If the patient has three stable problems that require medication refills, or one stable problem and one inadequately controlled problem that requires medication refills or adjustments.
The above is simplified and shorthand, so read the 1995 and 1997 guidance carefully.
An insurance company audited a client of mine and clearly used the 1997 guidance. On the audit report, the 1997 guidance was checked as being used. In fact, according to the audit report, the auditors used BOTH the 1997 and 1995 guidance, which, logically, would make a harder, more stringent standard for a 99214 than using one policy.
Now the insurance company claims my client owes money. However, if the insurance company merely applied the 1995 guidance only, then, we believe, that he wouldn’t owe a dime. Now he has to hire me, defend himself to the insurance company, and possibly litigate if the insurance company stands its ground.
Sadly, the above story is not an anomaly. I see auditors misapply policies by using the wrong years all the time, almost daily. Always appeal. Never roll over.
Sometimes it is a smart decision to hire an independent expert to verify that the physician is right, and the auditors are wrong. If the audit is extrapolated, then it is wise to hire an expert statistician. See blog. And blog. The extrapolation rules were recently revised…well, in the last two or three years, so be sure you know the rules, as well. See blog.
Celebrating Christmas With an Audit, I mean, a Root Canal
Merry Christmas and Happy Hanukkah! I wanted to thank all my readers for TEN YEARS of this blog! Can you believe it has been 10 years? I started this blog in 2012, and the year is about to turn to 2023!! I going into my 11th year of blogging about Medicare and Medicaid regulatory compliance litigation. Whew! I tell you what: being a full-time attorney, a part-time blogger, mom, and wife is tiring! Try it. You’ll see. Try it for 10 years!
I am so proud to have created a career out of defending health care providers across the country, from HI to AL to NY to FL and everywhere in between.
My birthday is January 7th, right after Christmas and New Year’s Day. I am one year closer to getting Medicare (I cannot wait), but since I rely on private pay health insurance, I am giving myself a special Christmas present to end the year and “wind-down” the health spending plan. I will be undergoing a root canal tomorrow, the 21st of December.
Root canals are not fun. In fact, they remind me of undergoing a Medicare and/or Medicaid audit. No one wants them done, but you got to do it.
I suggest conducting self audits regularly, especially now with the Public Health Emergency (PHE) ending at some point.
Self Audits
The first step for a medical practice or organization is to select the timeframe that will be reviewed during the audit. The timeframe should be large enough to produce meaningful results. For example, in its OIG Data Brief, the OIG looked at a year’s worth of data, from March 1, 2020, through February 28, 2021. There are some key dates and regulations that practices or organizations need to consider when selecting the timeframe. These include:
- January 31, 2020: HHS announced the COVID-19 PHE, which was determined to have existed since January 27, 2020.
- March 27, 2020: The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law.
- March 31, 2020: CMS’ “Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency” became effective.
So many changes to Medicare and Medicaid rules and regulations were implemented during COVID. Some changes will continue after PHE ends and some will not.
Now more so than ever, putting your own facility through a thorough self-audit is imperative. You need to understand the policy changes pertinent to your health care service type and dates the changes occurred and when applicable. Before the “REAL” auditors come knocking on your facility’s door, prepare yourself. Consider hiring an attorney or medical compliance expert to conduct the self audit.
The next step in performing a self-audit is for the practice or organization to select a category of service to review. If the practice or organization provides multiple types of services, the focus should be on one category, such as office visits, for review. When reviewing office visit services, the Current Procedural Terminology (CPT) codes applicable to telehealth visits include, but are not limited to, Office or Other Outpatient Services (99201-99205 [new patient] and 99211-99215 [established patient]) and Non-Face-to-Face Telephone Services (99441-99443 [practitioners who may report E/M services] and 98966-98968 [practitioners who cannot bill independently]). Practitioners who cannot bill independently are qualified non-physician health care professionals, such as social workers, clinical psychologists, and certain therapists. Please note, CPT code 99201 was deleted effective January 1, 2021.
Looking forward to 2023 after my root canal…Cheers!
A Story of Three Medicaid Providers’ Erroneous Terminations
I have a story for you today that affected three, Medicaid, behavioral health care providers back in 2013. Instead of me spouting off legal jargon that no one understands, I am going to tell you a nonfictional story.
Since both stories occurred in NC, we will use DHHS, the Department of Health and Human Services, which is the acronym for NC’s Medicaid agency.
In 2013, a Residential Level IV facility was shut down overnight by the managed care organization (“MCO”), Alliance, which was one of many MCOs that managed all behavioral health care for NC Medicaid recipients within their respective, catchment areas. The facility, we will call Alpha, housed 5-6, at-risk, teenage, African American, males, who could not reside in their family’s home due to mental illness, substance abuse, legal trouble, and/or violence. The owners of Alpha, themselves were large, muscular, African American males, which, I can only imagine, was to their benefit.
Alliance terminated Alpha from its catchment area, but since Alpha only provided Medicaid services in Alliance’s catchment area, Alliance’s decision would close a business immediately, terminate all staff, cause the owners to lose their careers, and the residents would have no home.
Alpha hired me. We were successful in obtaining an injunction. Click on “injunction” to read my blog about this exact situation in 2013, written by me in 2013. I have written numerous blogs on the topic of erroneous terminations of Medicaid providers over the years. Here are a couple: blog and blog.
An Administrative Law Judge (“ALJ”) ruled in our favor that Alliance does not have the legal authority to terminate a provider for no reason or any erroneous reason. The ALJ Stayed the termination and Ordered Alliance to reverse the termination and continue to contract with Alpha.
Whew! We thought. Then, Alliance flat-out ignored the ALJ’s Order.
We brought a Motion for Contempt and/or Sanctions; however, we were instructed, at the time, that a Writ of Mandamus was the appropriate venue in Superior Court. This too was unsuccessful.
During our legal battle for Alpha, we were successful in obtaining injunctions for two other provider also terminated without cause.
Alpha did close. But the bright side of the story is what happened in the future. Those 3 injunctions, which were ignored by MCOs to the detriment of the three providers, were the last ones to be ignored. In the years that followed, OAH ALJs routinely held MCOs accountable for erroneous terminations and without cause terminations.
My team has witnessed successful injunctions across the country that protect providers from arbitrary and capricious terminations. We have litigated many of these successful injunctions.
District Court Upholds ALJ’s Decision that Extrapolation Was Conducted in Error
Today, I am going to write about a hospital in Tennessee that underwent an audit, and the MAC determined that the hospital owed over $5 million. The hospital challenged both the OIG contractor’s sampling methodology and its determinations on specific claims by requesting a hearing before an ALJ. The District Court decision was published in September 2022. The reason that I want to make you aware of this case, is because there have been numerous Medicare provider appeals unsuccessfully challenging the extrapolation, and the ALJs upholding the extrapolations. In this case, the ALJ found the extrapolation in error, the Council reversed the ALJ on its own motion, and the district court reaffirmed the ALJ, saying the extrapolation was faulty. Whenever good case law is published, we want to analyze the Court’s reasoning so we, as attorneys, can replicate the winning arguments.
One of the main reasons that the district court agreed that the extrapolation was faulty was because no testimony supporting the OIG contractor’s extrapolation process or the implementation of its statistical sampling methodology were submitted to that hearing on June 11, 2020, and the contractor did not appear. It’s the mundane scene with an ALJ level appeal and the auditor failing to appear to prove the audit’s veracity. See blog.
In addition to finding that additional claims satisfied Medicare coverage & payment requirements, the ALJ also found that OIG’s statistical extrapolation process did not comply with § 1893 of the Social Security Act, nor with the MPIM’s guidance on statistical extrapolation.
The ALJ held that HHS policy requires that the OIG’s audit must be able to be recreated and that as the audit’s sampling frame utilized data from outside of the audit, the audit could not be recreated.
The Council subsequently reviewed the ALJ’s decision on its own motion and reversed that decision in part, finding that the ALJ’s determination that the sampling process was invalid was an error of law. The Council then concluded that the OIG contractor’s statistical extrapolation met all applicable Medicare legal and regulatory requirements.
The hospital appealed to the federal district court. The district court’s review consists of determining whether, in light of the record as a whole, the Secretary’s determination is supported by “substantial evidence.”
According to the Court, the hospital amply demonstrated that the Council did not have the authority to overturn the decision of the ALJ on own-motion review. Accordingly, the hospital’s Motion for Summary Judgement was GRANTED and the extrapolation was thrown out.
Are UTIs Preventable? OIG Says Yes and CMS Will Audit!
I hope everyone had a fantastic Thanksgiving and are now moving toward the Christmas or Hanukkah holiday. As I discussed last week, CMS and its contracted auditors are turning their watchdog eyes toward nursing homes, critical access hospitals (“CAHs”), and acute care hospitals (“ACHs”). You can hear more on this topic on Thursday, December 8th at 1:30 when I present the RACMonitor webinar, “Warning for Acute Care Hospitals: You Are a Target for Overpayment Audits.”
October 2022, OIG published a new audit project entitled, “Potentially Preventable Hospitalizations of Medicare-Eligible Skilled Nursing Facility Residents.”
Residents of nursing homes and long-term care facilities are frequently transferred to an Emergency Department as an inpatient when they need acute medical care. A proportion of these transfers may be considered inappropriate and may be avoidable, says OIG.
OIG identified nursing facilities with high rates of Medicaid resident transfers to hospitals for urinary tract infections (“UTIs”). OIG describes UTIs as being “often preventable and treatable in the nursing facility setting without requiring hospitalization.” A 2019 OIG audit found that nursing facilities often did not provide UTI detection and prevention services in accordance with resident’s individualized plan of care, which increases the chances for infection and hospitalization. Each resident should have their own prevention policy for whatever they are prone to get. My Grandma, for example, is prone to UTIs, so her personal POC should have prevention measures for trying to avoid contracting a UTI, such as drinking cranberry juice and routine cleansing. In addition to UTIs, OIG noted that previous CMS studies found that five conditions were related to 78% of the resident transfers to hospitals: pneumonia, congestive heart failure, UTIs, dehydration, and chronic obstructive pulmonary disease/asthma. OIG added a sixth condition citing that sepsis is considered a preventable condition when the underlying cause of sepsis is preventable. In my humble opinion, the only condition listed as preventable that is actually preventable is dehydration.
OIG’s new audit project involved a review of Medicare and Medicaid claims related to inpatient hospitalizations of nursing home residents with any of the six conditions noted previously. The audit will focus on whether the nursing homes being audited provided services to residents in accordance with the residents’ care plans and related professional standards (or whether the nursing homes caused preventable inpatient admissions due to non-compliance with care plans and professional standards).
What can you do to prepare for these upcoming audits? Review your facilities’ policies, procedures, and practices germane to the identification of the 6 conditions OIG flagged as preventable. Ensure that your policies and procedures lay out definitive steps to prevent or try to prevent these afflictions. Educate and train your staff of detection, prevention, treatment, and care planning related to the six conditions. Collect and analyze data of trends of frequency and cause of inpatient hospitalizations and determine whether these inpatient hospitalizations could have been prevented and how.
In summary, be prepared for audits of inpatient hospitalizations with explanations of attempted prevention. You cannot prevent all afflictions, but you can have policies in place to try. As always, it’s the thought that counts, as long as, it’s written down.
