Category Archives: NC DHHS

NC’s DHHS’ Secretary’s Handling of COVID-19: Yay or Nay?

I posted/wrote the below blog in 2017. I re-read my February 10, 2017, blog, which was entitled “NC DHHS’ New Secretary – Yay or Nay?” with the new perspective of COVID-19 being such a hot potato topic and sparking so much controversy. Interestingly, at least to me, I still stand by what I wrote. You have to remember that viruses are not political. Viruses spread despite your bank account, age, or location. Sure, variables matter. For example, I am statistically safer from COVID because I live on a small, horse farm in North Carolina rather than an apartment in Manhattan.

The facts are the facts. Viruses and facts are not political.

I was surprised that more people did not react to my February 10, 2017, blog, which is re-posted below – exactly as it was first posted. For some reason (COVID-19), people are re-reading it.

___________________________________

Our newly appointed DHHS Secretary comes with a fancy and distinguished curriculum vitae. Dr. Mandy Cohen, DHHS’ newly appointed Secretary by Gov. Roy Cooper, is trained as an internal medicine physician. She is 38 (younger than I am) and has no known ties to North Carolina. She grew up in New York; her mother was a nurse practitioner. She is also a sharp contrast from our former, appointed, DHHS Secretary Aldona Wos. See blog.

cohen

Prior to the appointment as our DHHS Secretary, Dr. Cohen was the Chief Operating Officer (COO) and Chief of Staff at the Centers for Medicare and Medicaid Services (CMS). Prior to acting as the COO of CMS, she was Principal Deputy Director of the Center for Consumer Information and Insurance Oversight (CCIIO) at CMS where she oversaw the Health Insurance Marketplace and private insurance market regulation. Prior to her work at CCIIO, she served as a Senior Advisor to the Administrator coordinating Affordable Care Act implementation activities.

Did she ever practice medicine?

Prior to acting as Senior Advisor to the Administrator, Dr. Cohen was the Director of Stakeholder Engagement for the CMS Innovation Center, where she investigated new payment and care delivery models.

Dr. Cohen received her Bachelor’s degree in policy analysis and management from Cornell University, 2000. She obtained her Master’s degree in health administration from Harvard University School of Public Health, 2004, and her Medical degree from Yale University School of Medicine, 2005.

She started as a resident physician at Massachusetts General Hospital from 2005 through 2008, then was deputy director for comprehensive women’s health services at the Department of Veterans Affairs from July 2008 through July 2009. From 2009 through 2011, she was executive director of the Doctors for America, a group that promoted the idea that any federal health reform proposal ought to include a government-run “public option” health insurance program for the uninsured.

Again, I was perplexed. Did she ever practice medicine? Does she even have a current medical license?

This is what I found:

physicianprofile

It appears that Dr. Cohen was issued a medical license in 2007, but allowed it to expire in 2012 – most likely, because she was no longer providing medical services and was climbing the regulatory and political ladder.

From what I could find, Dr. Cohen practiced medicine (with a fully-certified license) from June 20, 2007, through July 2009 (assuming that she practiced medicine while acting as the deputy director for comprehensive women’s health services at the Department of Veterans Affairs).

Let me be crystal clear: It is not my contention that Dr. Cohen is not qualified to act as our Secretary to DHHS because she seemingly only practiced medicine (fully-licensed) for two years. Her political and policy experience is impressive. I am only saying that, to the extent that Dr. Cohen is being touted as a perfect fit for our new Secretary because of her medical experience, let’s not make much ado of her practicing medicine for two years.

That said, regardless Dr. Cohen’s practical medical experience, anyone who has been the COO of CMS must have intricate knowledge of Medicare and Medicaid and the essential understanding of the relationship between NC DHHS and the federal government. In this regard, Cooper hit a homerun with this appointment.

Herein lies the conundrum with Dr. Cohen’s appointment as DHHS Secretary:

Is there a conflict of interest?

During Cooper’s first week in office, our new Governor sought permission, unilaterally, from the federal government to expand Medicaid as outlined in the Affordable Care Act. This was on January 6, 2017.

To which agency does Gov. Cooper’s request to expand Medicaid go? Answer: CMS. Who was the COO of CMS on January 6, 2017? Answer: Cohen. When did Cohen resign from CMS? January 12, 2017.

On January 14, 2017, a federal judge stayed any action to expand Medicaid pending a determination of Cooper’s legal authority to do so. But Gov. Cooper had already announced his appointment of Dr. Cohen as Secretary of DHHS, who is and has been a strong proponent of the ACA. You can read one of Dr. Cohen’s statements on the ACA here.

In fact, regardless your political stance on Medicaid expansion, Gov. Cooper’s unilateral request to expand Medicaid without the General Assembly is a violation of NC S.L. 2013-5, which states:

SECTION 3. The State will not expand the State’s Medicaid eligibility under the Medicaid expansion provided in the Affordable Care Act, P.L. 111-148, as amended, for which the enforcement was ruled unconstitutional by the U.S. Supreme Court in National Federation of Independent Business, et al. v. Sebelius, Secretary of Health and Human Services, et al., 132 S. Ct. 2566 (2012). No department, agency, or institution of this State shall attempt to expand the Medicaid eligibility standards provided in S.L. 2011-145, as amended, or elsewhere in State law, unless directed to do so by the General Assembly.

Obviously, if Gov. Cooper’s tactic were to somehow circumvent S.L. 2013-5 and reach CMS before January 20, 2017, when the Trump administration took over, the federal judge blockaded that from happening with its stay on  January 14, 2017.

But is it a bit sticky that Gov. Cooper appointed the COO of CMS, while she was still COO of CMS, to act as our Secretary of DHHS, and requested CMS for Medicaid expansion (in violation of NC law) while Cohen was acting COO?

You tell me.

I did find an uplifting quotation from Dr. Cohen from a 2009 interview with a National Journal reporter:

“There’s a lot of uncompensated work going on, so there has to be a component that goes beyond just fee-for service… But you don’t want a situation where doctors have to be the one to take on all the risk of taking care of a patient. Asking someone to take on financial risk in a small practice is very concerning.” -Dr. Mandy Cohen

Why Auditors Can’t be Unbiased

Last week on Monitor Mondays, Knicole Emanuel, Esq. reported on the case of Commonwealth v. Pediatric Specialist, PLLC, wherein the Recovery Audit Contractors’ (RACs’) experts were prohibited from testifying because they were paid on contingency. This means that the auditor (or the company for which they work) is paid some percentage of the overpayment findings it reports.

In this case, as in most nowadays, the overpayment estimate was based upon extrapolation, which means that the auditor extended the overpayment amount found in the sample to that of all claims within the universe from which the sample was drawn. I have written about this process before, but basically, it can turn a $1,500 overpayment on the sample into a $1.5 million overpayment demand.

The key to an effective extrapolation is that the statistical process is appropriate, proper, and accurate. In many audits, this is not the case, and so what happens is, if the provider believes that the extrapolation is not appropriate, they may choose to challenge the results in their appeal. Many times, this is when they will hire a statistician, like me, to review the statistical sampling and overpayment estimate (SSOE), including data and documentation to assist with the appeal. I have worked on hundreds of these post-audit extrapolation mitigation appeals over the years, and even though I am employed by the provider, I maintain a position as an independent fact-finder.  My reports are based on facts and figures, and my opinion is based on those findings. Period.

So, what is it that allows me to remain independent? To perform my job without undue influence or bias? Is it my incredibly high ethical standards? Check! My commitment to upholding the standards of my industry? Check!  Maybe my good looks? Well, not check! It is the fact that my fees are fixed, and are not contingent on the outcome. I mean, it would be great if I could do what the RACs do and cash in on the outcomes of a case, but alas, no such luck.

In one large class-action case in which I was the statistical expert, the defendant settled for $122 million. The law firm got something like a quarter or a third of that, and the class members all received some remuneration as well. Me? I got my hourly rate, and after the case was done, a bottle of Maker’s Mark whiskey as a thank you. And I’m not even sure that was appropriate, so I sent it back. I would love to be paid a percentage of what I am able to save a client in this type of appeal. I worked on a case a couple of years ago for which we were able to get the extrapolation thrown out, which reduced the payment demand from $5.9 million to $3,300. Imagine if I got paid even 2 percent of that; it would be nearly $120,000. But that can’t happen, because the moment my work product is tied to the results, I am no longer independent, nor unbiased. I don’t care how honest or ethical you are, contingency deals change the landscape – and that is as true for me, as an expert, as it is for the auditor.

In the pediatric case referenced above, the RAC that performed the audit is paid on a contingency, although I like to refer to it as a “bounty.” As such, the judge ruled, as Ms. Emanuel reported, that their experts could not testify on behalf of the RAC. Why not? Because the judge, unlike the RAC, is an independent arbiter, and having no skin in the game, is unbiased in their adjudication. But you can’t say that about the RAC. If they are being paid a “bounty” (something like 10 percent), then how in the world could they be considered independent and unbiased?

The short answer is, they can’t. And this isn’t just based on standards of statistical practice; it is steeped in common sense. Look at the appeal statistics; some 50 percent of all RAC findings are eventually reversed in favor of the provider. If that isn’t evidence of an overzealous, biased, bounty-hunting process, I don’t know what is. Basically, as Knicole reported, having their experts prohibited from testifying, the RAC was unable to contest the provider’s arguments, and the judge ruled in favor of the provider.

But, in my opinion, it should not stop here. This is one of those cases that exemplifies the “fruit of the poisonous tree” defense, meaning that if this case passes muster, then every other case for which the RAC did testify and the extrapolation held should be challenged and overturned. Heck, I wouldn’t be surprised if there was a class-action lawsuit filed on behalf of all of those affected by RAC extrapolated audits. And if there is one, I would love to be the statistical expert – but for a flat fee, of course, and not contingent upon the outcome.

And that’s the world according to Frank.

Frank Cohen is a frequent panelist with me on RACMonitor. I love his perspective on expert statistician witnesses. He drafted based off a Monitor Monday report of mine. Do not miss both Frank and me on RACMonitor, every Monday.

Medicare TPE Audits: A Wolf in Sheep’s Clothing (Part II)

Let’s talk targeted probe-and-educate (“TPE”) audits – again.

I received quite a bit of feedback on my RACMonitor article regarding Medicare TPE audits being a “Wolf in Sheep’s Clothing.” So, I decided to delve into more depth by contacting providers who reached out to me to discuss specific issues. My intent is to shed the sheep’s clothing and show the big, pointy ears, big, round eyes, and big, sharp teeth that the MACs will hear, see, and eat you through the Medicare TPE audits. So, call the Woodsman, arm yourself with a hatchet, and get ready to be prepared for TPE audits. I cannot stress enough the importance of being proactive.

The very first way to rebut a TPE audit is to challenge the reason you were selected, which includes challenging the data supporting the reason that you were chosen. A poor TPE audit can easily result in termination of your Medicare contract, so it is imperative that you are prepared and appeal adverse results. 42 C.F.R. § 424.535, “Revocation of enrollment in the Medicare program” outlines the reasons for termination. Failing the audit process – even if the results are incorrect – can result in termination of your Medicare contract. Be prepared and appeal.

In 2014, the Center for Medicare and Medicaid Services (“CMS”) began the TPE program that combines a review of a sample of claims with “education” to allegedly reduce errors in the Medicare claims submission process; however, it took years to get the program off the ground. But off the ground it is. It seems, however, that CMS pushed the TPE program off the ground and then allowed the MACs to dictate the terms. CMS claims that the results of the TPE program are favorable, basing its determination of success on the decrease in the number of claim errors after providers receive education. But providers undergoing the TPE audit process face tedious and burdensome deadlines to submit documents and to undergo the “education” process. These 45-day deadlines to submit documents are not supported by federal law or regulation; they are arbitrary deadlines. Yet, these deadlines must be met by the providers or the MACs will aver a 0% accuracy. Private payors may create and enforce arbitrary deadlines; they don’t have to follow federal Medicare regulations. But Medicare and Medicaid auditors must obey federal regulations. A quick search on Westlaw confirms that no provider has challenged the MACs’ TPE rules, at least, litigiously.

The TPE process begins by the MAC selecting a CPT/HCPC code and a provider. This selection process is a mystery. How the MACs decide to audit sleep studies versus chemotherapy administration or a 93675 versus a 93674 remains to be seen. According to one health care provider, which has undergone multiple TPE audits and has Noridian Healthcare Solutions as its MAC informed me that, at times, they may have 4 -5 TPE audits ongoing at the same time. CMS has touted that TPE audits do not overlap claims or cause the providers to undergo redundant audits. But if a provider bills numerous CPT codes, the provider can undergo multiple TPE audits concurrently, which is clearly not the intent of the TPE audits, in general. The provider has questioned ad nauseam the data analysis that alerted Noridian to assign the TPE to them in the first place. Supposedly, MACs target providers with claim activity that contractors deem as unusual. The usual TPE notification letter contains a six-month comparison table purportedly demonstrating the paid amount and number of claims for a particular CPT/HCPC code, but its accuracy is questionable. See below.

2019-06-07 -- TPE

This particular provider ran its own internal reports, and regardless of how many different ways this provider re-calculated the numbers, the provider could not figure out the numbers the TPE letter was alleging they were billing. But, because of the short turnaround deadlines and harsh penalties for failing to adhere to these deadlines, this provider has been unable to challenge the MAC’s comparison table. The MACs have yet to share its algorithm or computer program used to govern (a) which provider to target; (b) what CPT code to target; and (c) how it determines the paid amount and number of claims.

Pushing back on the original data on which the MACs supposedly relied upon to initially target you is an important way to defend yourself against a TPE audit. Unmask the wolf from the beginning. If you can debunk the reason for the TPE audit in the first place, the rest of the findings of the TPE audit cannot be valid. It is the classic “fruit of the poisonous tree” argument. Yet according to a quick search on Westlaw, no provider has appealed the reason for selection yet. For example, in the above image, the MAC compared one CPT code (78452) for this particular provider for dates of services January 1, 2017, through June 30, 2017, and then compared those claims to dates July 1, 2017, through December 31, 2017. Why? How is a comparison of the first half of a year to a second end of a year even relevant to your billing compliance? Before an independent tribunal, this chart, as supposed evidence of wrongdoing, would be thrown out as ridiculous. The point is – the MACs are using similar, yet irrelevant charts as proof of alleged, aberrant billing practices.

Another way to defend yourself is to contest the auditors/surveyors background knowledge. Challenging the knowledge of the nurse reviewer(s) and questioning the denial rate in relation to your TPE denials can also be successful. I had a dentist-client who was audited by a dental hygienist. Not to undermine the intelligence of a dental hygienist, but you can understand the awkwardness of a dental hygienist questioning a dentist’s opinion of the medical necessity of a service. If the auditor/surveyor lacks the same level of education of the health care provider, an independent tribunal will defer to the more educated and experienced decisions. This same provider kept a detailed timeline of their interactions with the hygienist reviewer(s), which included a summary of the conversations. Significantly, notes of conversations with the auditor/surveyor would normally not be allowed as evidence in a Court of law due to the hearsay rules. However, contemporaneous notes of conversations written in close time proximity of the conversation fall within a hearsay exception and can be admitted.

Pushing back on the MACs and/or formally appealing the MAC’s decisions are/is extremely important in getting the correct denial rate.  If your appeal is favorable, the MACs will take into your appeal results into account and will factor the appeal decision into the denial rate.

The upshot is – do not accept the sheep’s clothing. Understand that you are under target during this TPE “educational” audit. Understand how to defend yourself and do so. Call the Woodsman. Get the hatchet.

Another NCTracks Debacle? Enter NC HealthConnex – A Whole New Computer System To Potentially Screw Up

North Carolina is mandating that health care providers link with all other health care providers. HIPAA be damned! Just another hoop to jump through in order to get paid by Medicaid – as if it isn’t hard enough!

If you do not comply and link your health care practice to NC HealthConnex by June 1, 2019, you could lose your Medicaid contract.

“As North Carolina moves into data-driven, value-based health care, the NC HIEA is working to modernize the state-designated health information exchange, now called NC HealthConnex.” About NC HealthConnex website.

NC HIEA = NC Health Information Exchange Authority (NC HIEA) and created by N.C. Gen. Stat. § 90-414.7. “North Carolina Health Information Exchange Authority.”

North Carolina state law mandates that all health care providers who receive any State funds, which would include Medicaid, HealthChoice and the State Health Plan, must connect and submit patient demographic and clinical data to NC HealthConnex by June 1, 2019. The process could take 12 to 18 months. So you better get going. Move it or lose it, literally. If you do not comply, you can lose your license to participate in state-funded programs, including Medicaid.

If you go to the NC Health Information Exchange Authority (NC HIEA) website article, entitled, “NC HealthConnex Participant Base Continues to Grow,” you will see the following:

Screen Shot 2018-11-29 at 3.21.53 PM

I highlighted the Session Law that, according to the above, requires that health care providers who receive state funds must connect to NC HealthConnex. See above. However, when you actually read Session Law 2017-57, it is untrue that Session Law 2017-57 mandates that health care providers who receive state funds must connect to NC HealthConnex.

If you follow the citation by NC HIEA (above), you will see that buried in Session Law 2017-57, the 2017 Appropriations Bill, is a clause that states:

“SECTION 11A.8.(e)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Central Management and Support, Office of Rural Health, for the Community Health Grant Program, the sum of up to one hundred fifty thousand dollars ($150,000) in recurring funds for each fiscal year of the 2017‑2019 fiscal biennium shall be used to match federal funds to provide to safety net providers eligible to participate in the Community Health Grant Program, through the Rural Health Technology Team, ongoing training and technical assistance with respect to health information technology, the adoption of electronic health records, and the establishment of connectivity to the State’s health information exchange network known as NC HealthConnex.”

As you can plainly read, this clause only allots funds to provide training and assistance to providers eligible to participate in the Community Health Grant Program. The above clause certainly does not mandate that Healthcare providers who receive state funds connect to NC HealthConnex.

Session Law 2017-57, only mandates $150,000 for training and assistance for HealthConnex.

So what is the legal statute that mandates health care providers who receive state funds must connect to NC HealthConnex?

Ok, bear with me. Here’s where it gets complex.

A law was passed in 2015, which created the North Carolina Health Information Exchange Authority (NC HIEA). NC HIEA is a sub agency of the North Carolina Department of Information Technology (NC DIT) Government Data Analytic Center. NC HIEA operates the NC HealthConnex. The State CIO maintains the responsibility if the NC HealthConnex.

Supposedly, that 2015 law mandates that health care providers who receive state funds must connect to NC HealthConnex…

I read it. You can click on the link here. This subsection is the only section that I would deem apropos to health care providers accepting State funding:

“In consultation with the Advisory Board, develop a strategic plan for achieving statewide participation in the HIE Network by all hospitals and health care providers licensed in this State.”

What part of the above clause states that health care providers are MANDATED to participate? So, please, if any of my readers actually know which law mandates provider participation, please forward to me. Because my question is – Is participation REALLY mandated? Will providers seriously lose their reimbursement rights for services rendered for failing to participate in NC HealthConnex?? Because I see multiple violations of federal law with this requirement, including HIPAA and due process.

HealthConnex can link your practice to it if you use the following EHR programs:

  • Ace Health Solutions
  • Allscripts
  • Amazing Charts/Harris Healthcare Company
  • Aprima
  • Athena Health
  • AYM Technologies
  • Casehandler
  • Centricity
  • Cerner
  • CureMD
  • DAS Health/Aprima
  • eClinicalWorks
  • eMD
  • eMed Solutions, LLC
  • EPIC
  • Evident- Thrive
  • Greenway
  • ICANotes Behavioral Health EHR
  • ICAN Solutions, Inc
  • Integrity/Checkpoint
  • Kaleidacare
  • Lauris Online
  • McKesson Practice Partners
  • Medical Transcription Billing Corporation
  • Medinformatix
  • Meditab Software, Inc.
  • Meditech
  • Mediware-Alphaflex
  • MTBC
  • MicroMD
  • Netsmart
  • NextGen
  • Office Ally
  • Office Practicum
  • Oncelogix Sharenote
  • Patagonia Health
  • Physician’s Computer Company (PCC)
  • PIMSY
  • Practice Fusion Cloud
  • Praxis
  • PrognoCIS
  • PsyTech Solutions, Inc.
  • Qualifacts – Carelogic
  • Radysans
  • Reli Med Solutions
  • SET-Works
  • SRS
  • The Echo Group
  • Therap
  • Trimed Tech
  • Valant
  • Waiting Room Solutions

The law also requires:

  • Hospitals as defined by G.S. 131E-176(13), physicians licensed to practice under Article 1 of Chapter 90 of the General Statutes, physician assistants as defined in 21 NCAC 32S .0201, and nurse practitioners as defined in 21 NCAC 36 .0801 who provide Medicaid services and who have an electronic health record system shall connect by June 1, 2018.
  • All other providers of Medicaid and state-funded services shall connect by June 1, 2019. See changes in 2018 Session Law below.
  • Prepaid Health Plans (PHPs), as defined in S.L. 2015-245, will be required to connect to the HIE per their contracts with the NC Division of Health Benefits (DHB). Clarifies that PHPs are required to submit encounter and claims data by the commencement of the contract with NC DHB.
  • Clarifies that Local Management Entities/Managed Care Organizations (LMEs/MCOs) are required to submit encounter and claims data by June 1, 2020.

New from the 2018 Legislative Short Session, NCSL 2018-41: 

  • Dentists and ambulatory surgical centers are required to submit clinical and demographic data by June 1, 2021.
  • Pharmacies are required to submit claims data pertaining to State services once per day by June 1, 2021, using pharmacy industry standardized formats.

To meet the state’s mandate, a Medicaid provider is “connected” when its clinical and demographic information pertaining to services paid for by Medicaid and other State-funded health care funds are being sent to NC HealthConnex, at least twice daily—either through a direct connection or via a hub (i.e., a larger system with which it participates, another regional HIE with which it participates or an EHR vendor). Participation agreements signed with the designated entity would need to list all affiliate connections.

Let’s just wait and see how this computer system turns out. Hopefully we don’t have a second rendition of NCTracks. We all know how well that turned out. See blog and blog.

Medicaid participation continues to get more and more complicated. Remember the day when you could write a service note with a pen? That was so much cheaper than investing in computers and software. When did it get so expensive to provide health care to the most needy?

Medicaid Incidents: To Report or Not To Report?

The answer resides in the injury, not the quality of the care.

A consumer trips and falls at your long term care facility. It is during her personal care services (PCS). Dorothy, a longtime LPN and one of your most trusted employees, is on duty. According to Dorothy, she was aiding Ms. Brown (the consumer who fell) from the restroom when Ms. Brown sneezed multiple times resulting in a need for a tissue. Dorothy goes to the restroom (only a few feet away) when Ms. Brown’s fourth sneeze sends her reeling backward and falling on her hip.

To report or not to report? That is the question. 

Whether ’tis nobler in the mind to suffer
The slings and arrows of outrageous fortune,
Or to take arms against a sea of troubles
And by opposing end them.

What is your answer?

Is Ms. Brown’s fall a Level I, Level II, or a Level III incident? What are your reporting duties?

  • If you answered Level II and no requirement to report – you would be correct.
  • If you answered Level III and that you must report the incident within 24 hours, you would be correct.

Wait, what? How could both answers be correct? Which is it? A Level II and no reporting it or a Level III and a report due within 24 hours?

It depends on Ms. Brown’s injuries, which is what I find fascinating and a little… how should I put it… wrong?! Think about it…the level of incident and the reporting requirement is not based on whether Dorothy properly provided services to Ms.Brown. No…the answer resides in Ms. Brown’s injuries. Whether Dorothy acted appropriately or not appropriately or rendered sub-par services has no bearing on the level of incident or reporting standards.

According to the Department of Health and Human Services’ (DHHS) Incident Response and Reporting Manual, Ms. Brown’s fall would fall (no pun intended) within a Level II of response if Ms. Brown’s injuries were not a permanent or psychological impairment. She bruised her hip, but there was no major injury.

However, if Ms. Brown’s fall led to a broken hip, surgery, and a replacement of her hip, then her fall would fall within a Level III response that needs to be reported within 24 hours. Furthermore, even at a Level III response, no reporting would be required except that, in my hypothetical, the fall occurred while Dorothy was rendering PCS, which is a billable Medicaid service. Assuming that Ms. Brown is on Medicaid and Medicare (and qualifies for PCS), Dorothy’s employer can be reimbursed for PCS; therefore, the reporting requirement within 24 hours is activated.

In each scenario, Dorothy’s actions remain the same. It is the extent of Ms. Brown’s injury that changes.

See the below tables for further explanation:

INCIDENT RESPONSE AND REPORTING MANUAL

Screen Shot 2018-11-08 at 12.49.35 PM

Screen Shot 2018-11-08 at 12.54.44 PM

These tables are not exhaustive, so please click on the link above to review the entire Incident Response and Reporting Manual.

Other important points:

  • Use the federal Occupational Safety and Health Administration’s (OSHA) guidelines to distinguish between injuries requiring first aid and those requiring treatment by a health professional. 
  • A visit to an emergency room (in and of itself) is not considered an incident. 
  • Level I incidents of suspected or alleged cases of abuse, neglect or
    exploitation of a child (age 17 or under) or disabled adult must still be reported
    pursuant to G.S. 108A Article 6, G.S. 7B Article 3 and 10A NCAC 27G .0610.

Providing residential services to anyone is, inevitably, more highly regulated than providing outpatient services. The chance of injury, no matter the cause, is exponentially greater if the consumer is in your care 24-hours a day. That’s life. But if you do provide residential services, know your reporting mandates or you could suffer penalties, fines, and possible closure.

Lastly, understand that these penalties for not reporting can be subjective, not objective. If Ms. Brown’s fall led to a broken hip that repaired without surgery or without replacement of the hip, is that hip injury considered “permanent?” 

In cases of reporting guidelines, it is prudent to keep your attorney on speed dial.

 

NC Medicaid: Waiver v. Non -Waiver Services – What’s the Difference?

There is a 4.9 year waiting list to receive a spot on the Innovations Waiver. The waiting list is unhelpful when you have a child or adult with severe developmental disabilities who needs Waiver services NOW. What services are available for the disabled who qualify for Waiver services, but have not received a spot on the Innovations Waiver yet?

For children (up to age 20), the alternative to the Innovations Waivers is the Community Alternatives Program for Children (CAP/C) 1915(c) Home and Community-Based Services (HCBS) waiver was approved by the Centers for Medicare & Medicaid Services (CMS). The waiver took effect March 1, 2017.

Here is a breakdown of services offered for the Innovations Waiver versus CAP/C:

Category CAP/C Waiver [1] NC Innovations Waiver [2]
Cost limit under waiver $129,000

(Section 5.7.3)

$135,000

(Attachment F)

Case Management 80 hours (320 units) per calendar year

(Appendix B)

Respite 720 hours/fiscal year

Each day of institutional respite counts as 24 hours towards the annual limit.

(Appendix B)

The cost of respite care for 24 hours cannot exceed the per diem rate for the average community ICF-IID Facility
Pediatric Nurse Aide Type, frequency, tasks and number of hours per day are authorized by the case management entity based on medical necessity.

(Appendix B)

In-Home Aide Type, frequency, tasks and number of hours per day are authorized by the case management entity based on medical necessity.

(Appendix B)

Financial Management Service Consumer-directed initiation fee must be assessed the first month of enrollment and shall not exceed 4 units (1 hour).  Monthly management fees shall be assessed each month and shall not exceed 4 units (1 hour) per month.

(Appendix B)

Financial Support Services are available and provider directed.
Assistive Technology Included in a combined home and vehicle modification budget of $28,000 per beneficiary per the cycle of the CAP, which is renewed every 5 years.

(Appendix B)

Limited to $50,000 (ATES and Home Modifications) over the life of the waiver period, 5 years

(Attachment C)

Community Transition Services To transition CAP beneficiaries from 90-day or more institutional setting;

 

One-time expenses, not to exceed $2,500 over the cycle of the CAP, 5 years.

(Appendix B)

To provide initial set-up expense for adults to facilitate transition from community living;

 

Life of the waiver limit of $5,000 per beneficiary.

(Attachment C)

Home Accessibility and Adaptation/Home Modifications Included in a combined home and vehicle modification budget of $28,000 per beneficiary per the cycle of the CAP, which is renewed every 5 years.

(Appendix B)

Home modifications are limited to expenditures of $50,000 of supports (ATES, Home Modifications) over the duration of the waiver, 5 years.
Goods and Services Not to exceed $800 annually (July-June)

(Appendix B)

Not to exceed $2,000 annually

(Attachment C)

Training, Education, and Consultative Services/Natural Supports Education Limited to $500 per fiscal year (July 1-June30)

(Appendix B)

Reimbursement for class and conferences limited to $1,000 per year

(Attachment C)

Vehicle Modification Included in a combined home and vehicle modification budget of $28,000 per beneficiary per the cycle of the CAP, which is renewed every 5 years.

(Appendix B)

Limited to $20,000 over the life of the waiver

(Attachment C)

Community Living and Support (allowing for a paraprofessional) Subject to limits on sets of services

(Attachment C)

 

For adult beneficiaries who live in a private home[3], no more than 84 hours per week for any combination of community networking, day supports, supported employment, personal care, in-home skill-building and/or Community Living and Supports

(Attachment D)

Community Navigator Provider directed service
Community Networking Payment for attendance at classes and conferences cannot exceed $1,000 per beneficiary per plan year.

(Attachment C)

Crisis Services Crisis Intervention and stabilization Supports may be authorized for periods of up to 14 calendar day increments per event.

 

Out-of-home Crisis services may be authorized in increments of up to 30 calendar days.

(Attachment C)

 

Day Supports (A group, facility-based service that provides assistance to the individual with acquisition, retention or improvement in socialization and daily living skills.)

 

Subject to limits on sets of services

(Attachment C)

 

For adult beneficiaries who live in a private home, no more than 84 hours per week for any combination of community networking, day supports, supported employment, personal care, in-home skill-building and/or Community Living and Supports

(Attachment D)

Residential Supports (for Group Home or Alternative Family Living) Subject to limits on sets of services

(Attachment C)

 

For adult beneficiaries who receive residential supports, no more than 40 hours per week for any combination of community networking, day supports and supported employment services.  For child beneficiaries who receive residential supports, during the school year, no more than 20 hours per week for any combination of community networking, day supports and supported employment services.

(Attachment D)

Supported Employment Services (provide assistance with choosing, acquiring, and maintaining a job for beneficiaries 16 and older) Subject to limits on sets of services

(Attachment C)

 

For adult beneficiaries who live in a private home, no more than 84 hours per week for any combination of community networking, day supports, supported employment, personal care, in-home skill-building and/or Community Living and Supports

(Attachment D)

Supported Living (flexible partnership that enables a person to live in his own home with support from an agency that provides individualized assistance in a home that is under the control and responsibility of the person Subject to limits on sets of services

 

For adult beneficiaries who live in a private home, no more than 84 hours per week for any combination of community networking, day supports, supported employment, personal care, in-home skill-building and/or Community Living and Supports

(Attachment D)

 

Person receiving Supported Living may not also receive Community Living and Supports, Respite Services or Personal Care Services

[1] See NC Division of Medical Assistance, Clinical Coverage Policy No: 3K-1, Amended Date: March 1, 2018.  The CAP/C waiver was renewed by CMS effective March 1, 2017-February 28, 2022.

[2] See NC Division of Medical Assistance, Clinical Coverage Policy No: 8-P, Amended Date: November 1, 2016.

A Federal Regulation Violates the U.S. Constitution and Ruins Careers; Yet It Sits…Vaguely

There is a federal regulation that is putting health care providers out of business. It is my legal opinion that the regulation violates the U.S. Constitution. Yet, the regulation still exists and continues to put health care providers out of business.

Why?

Because so far, no one has litigated the validity of the regulation, and I believe it could be legally wiped from existence with the right legal arguments.

How is this important?

Currently, the state and federal government are legally authorized to immediately suspend your Medicare or Medicaid reimbursements upon a credible allegation of fraud. This immense authority has put many a provider out of business. Could you survive without any Medicare or Medicaid reimbursements?

The federal regulation to which I allude is 42 CFR 455.23. It is a federal regulation, and it applies to every single health care provider, despite the service type allowed by Medicare or Medicaid. Home care agencies are just as susceptible to an accusation of health care fraud as a hospital. Durable medical equipment agencies are as susceptible as dentists. Yet the standard for a “credible allegation of fraud” is low. The standard for which the government can implement an immediate withhold of Medicaid/care reimbursements is lower than for an accused murderer to be arrested. At least when you are accused of murder, you have the right to an attorney. When you are accused to health care fraud on the civil level, you do not receive the right to an attorney. You must pay 100% out of pocket, unless your insurance happens to cover the expense for attorneys. But, even if your insurance does cover legal fees, you can believe that you will be appointed a general litigator with little to no knowledge of Medicare or Medicaid regulatory compliance litigation.

42 USC 455.23 states that:

The State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud for which an investigation is pending under the Medicaid program against an individual or entity unless the agency has good cause to not suspend payments or to suspend payment only in part.

(2) The State Medicaid agency may suspend payments without first notifying the provider of its intention to suspend such payments.

(3) A provider may request, and must be granted, administrative review where State law so requires.”

In the very first sentence, which I highlighted in red, is the word “must.” Prior to the Affordable Care Act, this text read “may.” From my years of experience, every single state in America has used this revision from “may” to “must” for governmental advantage over providers. When asked for good cause, the state and or federal government protest that they have no authority to make a decision that good cause exists to suspend any reimbursement freeze during an investigation. But this protest is a pile of hooey.

In reality, if anyone could afford to litigate the constitutionality of the regulation, I believe that the regulation would be stricken an unconstitutional.

Here is one reason why: Due Process

The Fifth and Fourteenth Amendments to the Bill of Rights provide us our due process rights. Here is the 5th Amendment:

“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

There have been a long and rich history of interpretation of the due process clause. The Supreme Court has interpreted the due process clauses to provide four protections:  (1) procedural due process (in civil and criminal proceedings), (2) substantive due process, (3) a prohibition against vague laws, and (4) as the vehicle for the incorporation of the Bill of Rights.

42 CFR 455.23 violates procedural due process.

Procedural due process requires that a person be allowed notice and an opportunity to be heard before a government official takes a person’s life, liberty, or property.

Yet, 42 CFR 455.23 allows the government to immediately withhold reimbursements for services rendered based on an allegation without due process and taking a provider’s property; i.e., money owed for services rendered. Isn’t this exactly what procedural due process was created to prevent???? Where is the fundamental fairness?

42 CFR 455.23 violates substantive due process.

The Court usually looks first to see if there is a fundamental right, by examining if the right can be found deeply rooted in American history and traditions.

Fundamental rights include the right to vote, right for protection from pirates on the high seas (seriously – you have that right), and the right to constitutional remedies. Courts have held that our right to property is a fundamental right, but to my knowledge, not in the context of Medicare/caid reimbursements owed; however, I see a strong argument.

If the court establishes that the right being violated is a fundamental right, it applies strict scrutiny. This test inquires into whether there is a compelling state interest being furthered by the violation of the right, and whether the law in question is narrowly tailored to address the state interest.

Where the right is not a fundamental right, the court applies a rational basis test: if the violation of the right can be rationally related to a legitimate government purpose, then the law is held valid.

Taking away property of a Medicare/caid provider without due process violates substantive due process. The great thing about writing your own blog is that no one can argue with you. Playing Devil’s advocate, I would anticipate that the government would argue that a suspension or withhold of reimbursements is not a “taking” because the withhold or suspension is temporary and the government has a compelling reason to deter health care fraud. To which, I would say, yes, catching health care fraud is important – I am in no way advocating for fraud. But important also is the right to be innocent until proven guilty, and in civil cases, our deeply-rooted belief in the presumption of innocence is upheld by the action at issue not taking place until a hearing is held.

For example, if I sue my neighbor and declare that he is encroaching on my property, the property line is not moved until a decision is in my favor.

Another example, if I sue my business partner for breach of contract because she embezzled $1 million from me, I do not get the $1 million from her until it is decided that she actually took $1 million from me.

So to should be – if a provider is accused of fraud, property legally owned by said provider cannot just be taken away. That is a violation of substantive due process.

42 CFR 455.23 violates the prohibition against vague laws

A law is void for vagueness if an average citizen cannot understand it. The vagueness doctrine is my favorite. According to census data, there are 209.3 million people in the US who are over 24-years. Of those over 24-years-old, 66.9 million have a college degree. 68% do not.

Although here is a quick anecdote: Not so sure that a college degree is indicative of intelligence. A recent poll of law students at Columbia University showed that over 60% of the students, who were polled, could not name what rights are protected by the 1st Amendment. Once they responded “speech,” many forgot the others. In case you need a refresher for the off-chance that you are asked this question in an impromptu interview, see here.

My point is – who is to determine what the average person may or may not understand?

Back to why 42 CFR 455.23 violates the vagueness doctrine…

Remember the language of the regulations: “The State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud…”

“Credible allegation of fraud” is defined as an allegation, which has been verified by the State, from any source, including but not limited to the following:

  • Fraud hotline complaints.
  • Claims data mining.
  • Patterns identified through provider audits, civil false claims cases, and law enforcement investigations. Allegations are considered to be credible when they have indicia of reliability and the State Medicaid agency has reviewed all allegations, facts, and evidence carefully and acts judiciously on a case-by-case basis.”

With a bit of research, I was able to find a written podcast published by CMS. It appears to be a Q and A between two workers at CMS discussing whether they should suspend a home health care agency’s reimbursements, similar to a playbook. I assume that it was an internal workshop to educate the CMS employees considering that the beginning of the screenplay begins with a “canned narrator” saying “This is a Medicaid program integrity podcast.”

2018-08-07 -- pic of cms podcast

The weird thing is that when you pull up the website – here – you get a glimpse of the podcast, but, at least on my computer, the image disappears in seconds and does not allow you to read it. I encourage you to determine whether this happens you as well.

While the podcast shimmered for a few seconds, I hit print and was able to read the disappearing podcast. As you can see, it is a staged conversation between “Patrick” and “Jim” regarding suspicion of a home health agency falsifying certificates of medical necessity.

On page 3, “Jim” says, “Remember the provider has the right to know why we are taking such serious action.”

But if your Medicare/caid reimbursements were suddenly suspended and you were told the suspension was based upon “credible allegations of fraud,” wouldn’t you find that reasoning vague?

42 CFR 455.23 violates the right to apply the Bill of Rights to me, as a citizen

This esoteric doctrine only means that the Bill of Rights apply to State governments. [Why do lawyers make everything so hard to understand?]

Medicaid Reform: As Addictive as Fortnite

Do you have a kid addicted to Fortnite? The numbers are rising…

For those of you who have been living under a rock for the past year, this is how Fortnite is explained on the internet:

“In short, it’s a mass online brawl where 100 players leap out of a plane on to a small island and then fight each other until only one is left. Hidden around the island are weapons and items, including rifles, traps and grenade launchers, and players must arm themselves while exploring the landscape and buildings. It’s also possible to collect resources that allow you to build structures where you can hide or defend yourself. As the match progresses, the playable area of land is continually reduced, so participants are forced closer and closer together. The last survivor is the winner.”

More than 40 million people play Fortnite. According to the May 2018 Medicaid Enrollment Report, 73,633,050 Americans are enrolled in Medicaid or CHIP, so government-assisted health insurance definitely trumps Fortnite on participation.

Recently, the General Assembly passed and the Governor signed two Bills into law pertaining to Medicaid reform: (1) HB 403 (Session Law 2018-48); and (2) HB 156 (Session Law 2018-49). Notice that the Session Laws are one digit separate from each other. That is because Governor Cooper signed these two bills consecutively and on the same day. But did he read them? I do not know the answer, but I do know this: Medicaid reform in NC has become a Fortnite. The MCOs, provider-led entities, ACOs, auditors, DHHS…everyone is vying for a piece of the very large Medicaid budget, approximately $3.6 billion – or 16% of NC’s total budget. It is literally a firehose of money if you can manage to be a player in the Medicaid Fortnite – a fight to eliminate everyone but you. Unlike Fortnite, the pay-off for winning Medicaid Fortnite is financially lucrative. But it is a fight with few winners.

Session Law 2018-48 is entitled, “An Act to Modify the Medicaid Transformation Legislation.”

Session Law 2018-49 is entitled, “An Act to Require Medicaid Prepaid Health Plans to Obtain a License from the Department of Insurance and to Make Other Changes Pertaining to Medicaid Transformation and the Department of Insurance.”

Don’t you like how the House decided to use the term “transformation” instead of “reform?” The term “reform” had been over-utilized.

Recently, the North Carolina Medical Society announced that it is throwing its metaphoric hat in the ring to become “Carolina Complete Health,” a provider-led patient-care center.

The New Laws

Session Law 2018-48

Session Law 2018-48 defines provider-led entity (PLE) as an entity that meets the following criteria: (1) A majority of the entity’s ownership is held by an individual or entity that has its primary business purpose the operation of a capitated contract for Medicaid; (2) A majority of the entity’s governing body is composed of licensed physicians, physician assistants, nurse practitioners, or psychologist and have experience treating Medicaid beneficiaries; (3) Holds a PHP license issued by the Department of Insurance (see Session Law 2018-49).

Services covered by PHP’s will include physical health services, prescription drugs, long-term services and supports, and behavioral health care services for North Carolina Health Choice recipients. The PHP’s will not cover services currently covered by the managed care organizations (MCOs).

Session Law 2018-48 allows for 4 contracts with PHPs to provide services for Medicaid and NC Health Choice (statewide contracts). Plus, it allows up to 12 regional contracts.

What is the future of behavioral health and the MCO system?

For now, they will still exist. The double negative wording of the new Session Law makes it seem like the MCOs will have less authority, but the MCOs will continue to cover for services described in subdivisions a, d, e, f, g, j, k, and l of this subdivision.

Session Law 2018-48 also creates new entities called BH IDD Tailored Plans. Session Law 2018-48 carves out developmentally disabled services (or IDD). It mandates that DHHS create a detailed plan for implementation of a new IDD program under the 1115 Waiver. Services provided by the new Tailored Plans shall pay for and manage services currently offered under the 1915(b)(c) Waiver.

Here’s the catch for providers: “Entities operating BH IDD Tailored Plans shall maintain closed provider networks for behavioral health, intellectual and developmental disability, and traumatic brain injury services and shall ensure network adequacy.” (emphasis added). Fortnite continues with providers jockeying to be included in the networks.

For the next four years only an MCO may operate a BH IDD Tailored Plan. This tells me that the MCOs have sufficiently lawyered up with lobbyists. After the term of the initial contracts, the Tailored Plans will be the result of RFPs issued by DHHS and the submission of competitive bids from nonprofit PHPs.

DHHS was to report to the Joint Legislative Oversight Committee with a plan for the implementation of the Tailored Plans by June 22, 2018. – Sure would’ve loved to be a fly on that wall.

Starting August 31, 2018, DHHS is authorized to take any actions necessary to implement the BH IDD Tailored Plans in accordance with all the requirements in this Act.

Session Law 2018-49

A provider-led entity must meet all the following criteria: (1) A majority of the entity’s ownership is held by an individual or entity that has as its primary business purpose operating a capitated contract with with Medicaid providers; and (2) A majority of the governing body is composed of individuals who are licensed as physicians, physician assistants, nurse practitioners, or psychologists and all of whom have experienced treating Medicaid beneficiaries.

Session Law 2018-49 requires that all PHPs apply for a license with the Commissioner of Insurance. With the application, all entities would need to provide proof of financial stability and other corporate documents. This new law definitely increases the authority of the Commissioner of Insurance (Mike Causey).

The remaining portion of the law pertains to protection against insolvency, continuation of healthcare services in case of insolvency, suspension or revocation of licenses, administrative procedures, penalties and enforcement, confidentiality of information, and that sort.

Session Law 2018-49 also applies to the current opioid crisis. It allows a “lock-in programs” for those consumers who use multiple pharmacies and multiple doctors to “lock them in” to one pharmacy and one doctor.

Besides the “lock-in” program, Session Law 2018-49 is basically a law that brings the Department of Insurance into the Medicaid arena.

Let Fortnite begin!

Former Cardinal CEO files countersuit to retain severance

Here are our tax dollars continuing to be used for such great purposes!!! I completely understand Cardinal’s desire to recoup our tax dollars that went into Topping’s pocket – noble, indeed. But I am stumped as how, supposedly, Topping had the executive authority to unilaterally name his salary?? Did he have such authority – or, like many companies, was Topping’s exorbitant salary a Board decision? And – if Topping’s salary were a Board decision – is Cardinal suing itself for past poor decisions???? Curiouser and curiouser.

Regardless, let’s give a “hat’s off” and a “thank you” to Richard Craver staying on top of this important and upsetting issue. #icantwaituntilwererich (see below for context).

By Richard Craver Winston-Salem Journal

The fired chief executive of Cardinal Innovations, Richard Topping Jr., filed Tuesday his countersuit to thwart the agency’s attempt to recover $1.68 million in paid severance.

A reconstituted board of directors for Cardinal, the state’s largest behavioral health managed care organization, has alleged that Topping used his post to enrich himself and three other executives. That board filed its lawsuit March 29.

Both lawsuits were filed in Mecklenburg Superior Court.

The agency oversees providers of mental, substance abuse and development disabilities services for 20 counties, including Forsyth County. It has responsibility for more than 850,000 Medicaid recipients and more than $675 million in federal and state Medicaid funding.

According to an investigation done by former federal prosecutor Kurt Meyers at the new board’s request, Topping convinced the former board leadership to pay him the severance before he was removed by state health Secretary Mandy Cohen on Nov. 27 as part of a N.C. Department of Health and Human Services takeover of Cardinal.

The current Cardinal board not only wants to recoup $3.8 million in overall executive severance, but also at least $125,000 in damages. The complaint called Topping’s severance “excessive and unlawful payments.”

Topping faces seven claims in the Cardinal lawsuit: breach of contract; breach of fiduciary duties; breach of implied duty of good faith and fair dealing (in his role as CEO); conversion (deleting data from Cardinal-owned devices and not returning Cardinal electronic property); unjust enrichment; constructive trust (knowingly accepting overpayments in severance); and constructive fraud (taking without permission highly confidential Cardinal financial and operational data).

“He inflated his salary without regard to the reputational, regulatory and legal damages it was going to cause,” Meyers said.

Topping claims his reputation has been “severely damaged” in the healthcare sector by the Cardinal lawsuit and investigation.

Topping called claims made in Meyers’ detailed presentation “misleading and false” even though it contained email and text exchanges between Topping, former Cardinal executives and former board chairwoman Lucy Drake about his post-Cardinal plans.

“Topping took these steps acknowledging he would never get another contract with Cardinal, nor likely with any other North Carolina healthcare provider,” Trey Sutten said March 29. Sutten was named as interim CEO by Cohen on Nov. 27 and full-time CEO on March 29.

The Charlotte Observer said among those named by Topping as defendants were Cardinal general counsel Chuck Hollowell, deputy general counsel Stephen Martin and board vice chairwoman Carmen Hooker Odom. DHHS said Tuesday it had no comment about Topping’s countersuit.

Topping was paid as much as $635,000 in annual salary, about 3½ times the maximum allowed under state law.

Topping has claimed the salary, which was raised twice by the former board during his term, was justified based on an independent market survey of Charlotte-area healthcare executives. The Charlotte Observer said Topping claims he and the other former executives were paid at the 50th percentile of market rates.

According to Meyers’ investigation, Topping pressured the former board not to fire him for several months by saying that if he was terminated, his entire management team would also leave with him. According to Meyers, Topping told the board that if that action occurred, it would “end Cardinal as they knew it.”

Topping claimed he did not create the severance platform in dispute.

“Cardinal Innovations Healthcare, Carmen Hooker Odom, Chuck Hollowell and Stephen Martin deny the false claims and baseless allegations brought by former CEO Richard Topping,” Cardinal spokeswoman Ashley Conger said in a statement.

Texts and emails between Topping and Pete Murphy, former chief information officer, epitomized their self-enrichment thinking, Meyers said.

The former board paid $1.7 million in severance to Topping, along with $740,000 to Murphy; $690,000 to Will Woodell, chief operating officer; and $684,000 to Dr. Ranota Hall, chief medical officer.

One exchange— sent Nov. 17 before Topping was fired by the former board — involved Murphy and Topping discussing Topping’s securing 1.5-gigabytes of highly confidential Cardinal management files, including personnel files, before leaving his post.

Murphy wrote that Topping “was smart to take files now.” Topping ended the text with an emoji with a finger over the lips. Meyers said he interpreted that emoji as saying “Shhh. Be quiet, and don’t tell anyone what I’m doing.”

An email exchange between the former executives took place after Topping’s termination by the former board. The board agreed to allow Topping to remain as CEO through Nov. 30.

The context, according to Meyers, was Topping’s work to secure venture capital or private equity for a private startup business, potentially to compete against Cardinal in the planned Medicaid reform marketplace with Cardinal’s confidential financial and operational information in hand.

“I can’t wait until we’re rich,” Murphy wrote. Topping answered, “I’ve made great progress on that front.” (emphasis added).

Topping’s lawsuit claims he was gathering information to create a healthcare smartphone app.

_________________________________

For background, see blog and blog.

$1.68 million. That’s what company controlling millions in taxpayer dollars wants back from fired CEO

Article in the Winston Salem Journal today:

Cardinal Innovations filed a lawsuit Monday in Mecklenburg Superior Court against fired chief executive Richard Topping.

The state’s largest managed care organization – which controls hundreds of millions in taxpayer dollars – is suing to recoup $1.68 million in severance from Topping, as well as prevent him from collecting any further payments approved by the former board that was disbanded Nov. 27.

The lawsuit says Topping’s severance represents “excessive and unlawful payments.”

Cardinal oversees providers of services for mental health, developmental disabilities and substance abuse for more than 850,000 Medicaid enrollees in 20 counties, including Forsyth and five others in the Triad. It handles more than $675 million in annual federal and state Medicaid money.

shhhhtoppings

An investigation by McGuireWoods LLP was requested by a reconstituted board, formed in January and approved by state health Secretary Mandy Cohen, along with interim chief executive Trey Sutten. It was conducted by McGuireWoods partner Kurt Meyers, a former federal prosecutor.

The lawsuit represents a new action by Cardinal, and is not in response to the previous board’s lawsuit against the state to allow for executive salaries, including for Topping, that exceeded those permitted by state law.

However, it does represent a follow-up on the temporary restraining order and then preliminary injunction won against Topping and the former board filed in the same court.

The injunction prevents Topping and the former board from interfering with N.C. Department of Health and Human Services’ regulatory actions versus Cardinal that began when Cohen ordered the takeover of the organization on Nov. 27.

The former board took action against Topping’s employment at its Nov. 17 meeting by terminating his contract without cause. The board, at Topping’s request, would have been allowed to stay on through Dec. 1.

Cardinal said in the lawsuit that “Topping’s motive in asking the board to allow him to remain CEO was so that he could use his position as CEO to ensure that Cardinal Innovations paid him the lump-sum severance before his departure.”

_______________________________________________________________________________

Now to my opinion:

Disclosure: I have not read the Complaint and would love someone to send it to me. But, on the face of this article, my experience in the legal world, and my limited knowledge about the whole Topping debacle:

While we can all agree that Topping’s salary, plus bonuses and perks, was absolutely repugnant and offensive to taxpayers (like me), Topping did not get there all by himself. The Board of Directors met, discussed Topping’s salary, and voted to give him that salary. The Board of Directors, essentially, is the heart and the brain of Cardinal Innovations.

Is Cardinal Innovations going to sue itself for bestowing such an outrageous salary, plus benefits, to Topping?

Because if I am Topping and I get sued for having a high salary, I am going to point at the Board of Directors and say, “I couldn’t have gotten paid without your votes, Board. So have fun and sue yourself.”

BTW: Isn’t this lawsuit a conflict of interest?? It was only last year that Cardinal filed a lawsuit asking the court to ALLOW TOPPING TO CONTINUE TO RECEIVE SUCH OUTRAGEOUS SALARY THAT NOW – SAME COMPANY – IS SUING BECAUSE IT GAVE THIS SALARY TO IT CEO…which is it, Cardinal? Or is it just a matter of following the wind of public opinion? 

Not to mention – HOW IS CARDINAL FUNDING THE LAWSUIT (ATTORNEYS’ FEES) – WITH OUR TAX DOLLARS!!!!!!! I mean, good for Womble Carlyle, the law firm hired with our tax dollars to spend more money on a losing case (my opinion) because Cardinal mismanaged our tax dollars! Winner, winner, chicken dinner! Last year it got paid to file a lawsuit to keep Topping’s salary and perks. Five months later it’s hired to sue for giving Topping’s salary and perks. See blog.

Does anyone else not see how screwed up this is?????