Category Archives: Medicaid Bonus

Argument analysis: Working out the broader implications of a Medicaid suit

This is a copy of an article written by William Baude on SCOTUSblog.

In the article, William analyzes the oral arguments for Armstrong v. Exceptional Child Center, a very important Supreme Court case heard by the Justices January 20, 2015.  If you don’t recall the lawsuit, see my blog: “Low Medicaid Reimbursement Rates Violate the Supremacy Clause?!… The Supreme Court to Weigh In!

Here is the analysis:

The Supreme Court has heard a lot of preemption suits, but Tuesday’s arguments in Armstrong v. Exceptional Child Center suggest that the Court has not yet agreed on what exactly the formal underpinnings of those suits are.

The case features a debate about the intersection of two lines of precedent. One line restricts the availability of a federal statutory cause of action unless Congress has deliberately included one. The other line makes a cause of action broadly available when the plaintiff seeks an injunction to enforce a constitutional provision. At issue in this case is whether suits to enforce the preemptive effect of a federal statute are more like constitutional injunctions or statutory suits.

Both lines of precedent were on full display at yesterday’s argument. Shortly after his argument started the state’s counsel, Carl Withroe, was pressed with questions about the many prior preemption cases the Court had heard. Justice Ruth Bader Ginsburg adverted to a list of fifty-seven cases attached to the Medicaid recipients’ brief that are alleged to fail under the state’s theory. Withroe made several different attempts to distinguish those cases, although he did not seem to fully satisfy the Court. Towards the end of Withroe’s argument, Justice Anthony Kennedy asked “Did I miss something? … I thought you were going to give us a principled way to say why this case is different from our other preemption cases.”

Deputy Solicitor General Ed Kneedler took the podium next, attempting to supply that principled basis. He argued that Spending Clause legislation, and Medicaid specifically, was different from the usual preemption case for reasons rooted in the history of equity practice. Traditional equitable remedies, he said, could vindicate a person’s “liberty,” “property,” or “business,” but Medicaid was none of those things because it was a spending program created by a cooperative agreement with the state. Once again, Justice Kennedy chimed in at the end of Kneedler’s time to question whether his theory really distinguished one of the Court’s prior cases, American Trucking Associations v. City of Los Angeles.

Representing the Medicaid recipients, attorney James Piotrowski also faced skepticism about the implications of his position, and seemed to embrace them more than to distinguish them. He openly conceded that his clients would not have a right to sue under the Court’s statutory cause of action cases or under Section 1983. But the Supremacy Clause suit, he stressed, would seek only the narrow remedy of an injunction.

Justice Samuel Alito asked Piotrowksi whether his argument implied that someone could challenge a state’s decision to legalize marijuana as preempted by federal drug laws. Yes, Piotrowksi agreed, so long as Article III standing was satisfied, there would indeed be a cause of action. (Though Justice Alito did not specifically mention a suit by a state, the question might have been inspired by the recent marijuana preemption lawsuit filed in the Supreme Court’s original jurisdiction by two states — Oklahoma and Nebraska.)

And when Chief Justice John Roberts suggested to Piotrowski that his position would open “the courthouse door to everybody who says that federal law was not followed,” Piotrowski agreed: “Yes, your honor, that’s right. We open the courthouse doors.”

At the same time, Piotrowski also conceded that Congress could expressly preclude a preemption suit if it spoke clearly. The key, he argued, is that Congress’s decision not to create a statutory cause of action was not the same as a congressional decision to prohibit a cause of action that came from other background legal principles. Justice Kennedy did not ask Piotrowski any questions.

Lest this abbreviated summary make it seem like argument followed a clear path, I should say that there were also plenty of side points raised throughout. There were questions about how the state’s reimbursement rates related to its formula, a question from Justice Elena Kagan about why nobody from the federal Department of Health and Human Services had signed the federal government’s amicus brief, a response from Chief Justice Roberts about whether DHS was just trying to help the health-care sector “get a bigger chunk of the federal budget,” and a series of questions from Justice Stephen Breyer about the doctrine of “primary jurisdiction,” including a nostalgic reminiscence about the Civil Aeronautics Board “of blessed memory.” But the Justices also constantly reminded one another that the question was whether the suit could be brought, not whether it should prevail.

Four Justices have already answered that question in their dissent three years ago in Douglas v. Independent Living Center. Over the next few months, we will see if they have persuaded any of their colleagues to join them.

NCTracks’ One-Year Anniversary Is Celebrated with a Newly-Released, NCTracks, Congratulatory, SUCCESS Video! You agree?

Happy Anniversary, NCTracks!!!!  Tomorrow is the one-year anniversary of NCTracks going live.

DHHS TV released a video touting the wonderful success of NCTracks, despite its, admittedly, rocky start (The video admits a rocky start).  In the video, health care providers gush over how wonderful NCTracks is and its success.  I have no comment due to the current pending litigation. Therefore, I am merely reporting the release of the video and asking whether you agree.

See the DHHS TV video here: .

DHHS Presents Medicaid Reform Plan to the General Assembly

Press Release

DHHS Presents Medicaid Reform Plan to the General Assembly


Monday, March 17, 2014


Raleigh, N.C. – The North Carolina Department of Health and Human Services (DHHS) today presented its Medicaid reform plan to the General Assembly. This realistic and achievable plan puts patients first, improves whole person care, ensures a more predictable Medicaid budget, and builds on what already works for North Carolina.

“We have an obligation – an obligation we have willingly accepted as a state – to help those in need. And we must, at the same time, be good stewards of taxpayer resources,” said DHHS Secretary Aldona Z. Wos, M.D. “We believe this Medicaid reform plan is responsive to both those obligations.”

The plan proposes that providers collaborate through accountable care organizations (ACOs), a model that allows physicians and other providers who care for patients to take control of improving quality and healthy outcomes.

“When ACOs share in the savings or losses based on quality measures, everyone has a vested interest in making Medicaid a success,” said Secretary Wos. “We expect the ACO model to bend the cost curve by approximately 2-3 percent, which would mean hundreds of millions of dollars in savings for the state.”

The reform plan is based on input received during nearly 15 months of discussions with stakeholders throughout the state, including beneficiaries, caregivers, providers, health care organizations and the work of the Medicaid Reform Advisory Group.

“The reform proposal being submitted today to the General Assembly is a good and thoughtful plan,” said Dennis Barry, advisory group chair and CEO emeritus of Cone Health. “Importantly, it builds on the existing strengths of the current care systems operating in North Carolina.”

DHHS is taking a dual approach to Medicaid reform as efforts also are under way to improve the Division of Medical Assistance (DMA) operations to support Medicaid reform.

Secretary Wos recently named Deputy Secretary of Health Services and Acting State Health Director Robin Gary Cummings, M.D., to lead the DMA transformation. He is overseeing efforts to improve existing operating processes to increase forecasting accuracy and deliver Medicaid services more efficiently and effectively.

Since its inception in 1970, the N.C. Medicaid program has evolved into an essential component of the state’s health care system. It currently serves about 1.8 million low-income parents, children, seniors and people with disabilities and requires $13.5 billion a year to operate.

Medicaid Advisory Group members include Dennis Barry of Greensboro, chair, CEO emeritus of Cone Health; Peggy Terhune, Ph.D., of Randolph County, executive director and CEO of Monarch; Richard Gilbert, M.D., of Mecklenburg County, former chief of staff for Carolinas Medical Center; state Rep. Nelson Dollar of Wake County and state Sen. Louis Pate, who represents Lenoir, Pitt and Wayne counties.

For a copy of the Medicaid reform plan, click here


NC Awarded $18 Million in Medicaid Bonus

North Carolina is one of 23 states recognized by the federal government as going above and beyond just the normal mandatory national standard of EPSDT (see below for definition) to improve access to children’s health coverage.  The Centers for Medicare & Medicaid Services (CMS) announced that North Carolina, along with 22 other states, will receive bonuses for improving access to children’s health coverage and successfully enrolling eligible children.  The point of the bonus is to offset the costs for enrolling additional children.  States that implement rules that make it easier for children to receive services are the states that receive the annual bonus.  The bonus began in 2009; this is the 4th year in effect.

All states slacken the medical necessity requirement in prior authorization for children under the Medicaid rules through the Early Periodic, Screening, Diagnosis and Testing (“EPSDT”) Program. Although EPSDT is only a start. EPSDT is a national law and required by all states.  So North Carolina must go beyond EPSDT to receive the bonus from the feds.

EPSDT is the child health component of Medicaid.  All children under 21 years of age reap the benefits of EPSDT.  According to Department of Medical Assistant‘s “EPSDT Policy Instructions Update,” “EPSDT services include any medical or remedial care that is medically necessary to correct or ameliorate a defect, physical or mental illness, or condition [health problem]. This means that EPSDT covers most of the treatments a recipient under 21 years of age needs to stay as healthy as possible, and North Carolina Medicaid must provide for arranging for (directly or through referral to appropriate agencies, organizations, or individuals) corrective treatment the need for which is disclosed by such child health screening services. “Ameliorate” means to improve or maintain the recipient’s health in the best condition possible, compensate for a health problem, prevent it from worsening, or prevent the development of additional health problems. Even if the service will not cure the recipient’s condition, it must be covered if the service is medically necessary to improve or maintain the recipient’s overall health.”

States qualify for Medicaid bonuses based on measurements of how well they simplify enrollment and renewal, and how they ensure eligible children have easier access to coverage under Medicaid and the Children’s Health Insurance Program.  Specifically, to qualify for a performance bonus, states must implement at least five out of eight specific program features aimed at streamlining their enrollment procedures to improve children’s health coverage programs and must increase children’s enrollment in Medicaid above a baseline level for the fiscal year.  On December 19, 2012, the Centers for Medicare & Medicaid Services (“CMS”) awarded nearly $306 million in Performance Bonuses to 23 states.

The eight specific program features include:

  • o 12-month continuous eligibility (Allows full-year enrollment regardless of income or other changes.)
  • Elimination or reduced verification of asset requirements
  • No requirement for an in-person interview
  • Same application and renewal forms for Medicaid and CHIP
  • Automatic/administrative renewal (pre-populated form; electronic verification used to streamline renewal)
  • Presumptive eligibility (allows health care providers and other entities to screen and presumptively enroll children; children have access to needed benefits while the full eligibility process is being completed)
  • Express Lane Eligibility (States can use eligibility findings from other public benefit programs, such as the Supplemental Nutrition Assistance Program (SNAP) to determine eligibility for Medicaid and CHIP.)
  • Premium Assistance-

The amount of a state’s bonus correlates with the increase in Medicaid enrollment: the more children enrolled, the higher the bonus. States that increase enrollment more than 10 percent above their baseline receive a larger (Tier 2) bonus.  North Carolina reached the Tier 2 bonus this year and last year.

This year, Colorado was the big winner with $42.9 million. (I’m not really sure if “won” is the correct word, but I’m sticking with it for the purposes of this blog).  Maryland won $36.4 million. Georgia won $1.9 million.  Wisconsin won $23.3 million. Oklahoma, which won a small $481,452, in 2011, won nada in 2012, 2009, and 2010. New Jersey won $22.2 million.  Of states actually winning any amount of Performance Bonus, Indiana was the big loser with $1.42 million (not bad for the lowest).

In 2009, North Carolina received zero from the Performance Bonus. Again, in 2010, North Carolina received a big goose egg. In 2011, North Carolina received $11,567,319.  Now this year, we received $17.9 million (rounding it to $18 million). Not bad improvement from 2009 and 2010!!! This year, we were the 8th largest winner.  Let’s go, North Carolina!!