Category Archives: CSC

NCTracks developer CSC faces health care fraud lawsuit in NY

Jason DeBruyn of the Triangle Business Journal wrote:

Jason DeBruyn

Computer Sciences Corporation, the company that designed, developed and is operating the Medicaid claims payment system in North Carolina, is facing a health care fraud lawsuit brought by the U.S. attorney’s office in New York.

That lawsuit has no immediate impact in North Carolina, though Computer Sciences Corp. (CSC) built the system in this state – called NCTracks – using 32 percent of the code used in New York City. Initially, CSC had hoped to duplicate as much as 73 percent of the New York City code in North Carolina.
NCTracks has been the target of several attacks from health care providers who say they have not been paid on time. The N.C. Department of Health and Human Services, where NCTracks is housed, faces a lawsuit that could incorporate 70,000 health care providers and end up with damages exceeding $100 million. NCTracks has been the target of at least three searing audits.

The New York lawsuit, brought by Preet Bharara, the U.S. Attorney for the Southern District of New York, alleges billing fraud schemes that used computer programs to automatically alter billing data, including the use of a defaulting program to systematically falsify diagnosis codes submitted to Medicaid.
“As alleged, CSC and the City created computer programs that systematically, and fraudulently, altered billing data in order to get paid by Medicaid as quickly as possible and as much as possible,” Bharara said through a statement. “Billing frauds like those alleged undermine the integrity of public healthcare programs like Medicaid.”

Although this lawsuit makes no mention of activity in North Carolina, Knicole Emanuel, an attorney with Williams Mullen in Raleigh who represents providers in the lawsuit against DHHS, says it “will almost certainly cause the federal government to peer a bit closer at all CSC’s billing software systems in other states (including North Carolina).”

Representatives from DHHS did not immediately comment on the New York lawsuit.

CSC Sued in NY: Accused of Multi-Million Dollar Healthcare Fraud Scheme!!

Remember the NCTracks lawsuit?  NCTracks Derailed: Class Action Lawsuit Filed!!  Computer Sciences Corporation (CSC) is one of the Defendants in that action here in NC.

Well, Monday CSC was hit with another enormous lawsuit.  This one is filed in New York, and the Plaintiff is the U.S. Federal Government.

The feds are accusing CSC of a multi-million dollar Medicaid fraud scheme through its Medicaid billing software CSC implemented in NY.

Here is the press release.

From the complaint: “[T]hese fraud schemes were far from isolated events; instead, they were part and parcel of a general practice at CSC and the City to blatantly disregard their obligations to comply with Medicaid billing requirements.” (Compl. par. 8.)

The feds are seeking treble damages, which permits a court to triple the amount of the actual/compensatory damages to be awarded to a prevailing plaintiff.

According to the lawsuit, CSC has received millions of taxpayer dollars (budgeted for Medicaid) unlawfully and in direct violation of federal billing requirements.

If I were a taxpayer in NY, I would be incensed!!!! If I were a Medicaid recipient of parent of a child receiving Medicaid services, I would be furious!!

Now, take a step back…who is administering our Medicaid billing system here in NC?

Answer: CSC

This will almost certainly cause the federal government to peer a bit closer at all CSC’s billing software systems in other states…

NC State Auditor Releases New NCTracks Audit: Unresolved Risks Could Delay Federal Certification

This just in!!!!

Our State Auditor Beth Wood just released a new audit entitled, “Department of Health and Human Services-NCTRACKS-Federal Government Certification Status.”

NCTracks audit

 

More to come…

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: .

NC Health Agency Mapping Medicaid Overhaul Plan

By EMERY P. DALESIO, Associated Press

RALEIGH, N.C. (AP) — Gov. Pat McCrory’s health agency on Wednesday planned to unveil its latest version of ideas on how to change North Carolina’s $13 billion Medicaid health care system for about 1.7 million poor and disabled people.

The state Department of Health and Human Services was scheduled to present its framework for revamping Medicaid to an advisory group set up by McCrory. The plan could get some touch-ups before it’s presented to state lawmakers next month. The Legislature is expected to take up the proposed changes beginning in May.

It’s been almost a year since McCrory and state health Secretary Aldona Wos proposed largely privatizing management of Medicaid while keeping ultimate responsibility in state hands. About $3.5 billion of the shared state and federal program’s cost is paid by state taxpayers.

McCrory and Republican legislative leaders have blamed spiraling Medicaid costs left by preceding Democratic administrations for not providing teachers and state workers with raises last year. But Medicaid has also proved tough to manage under the GOP’s watch.

McCrory has said overhauling Medicaid is at the top of his legislative agenda and “may be the toughest battle” with lawmakers cool to earlier ideas to pay managed-care organizations a set fee and force them to work out how to deliver care within that budget.

The North Carolina Medical Society — which represents about 12,500 physicians and physician assistants in the state — the North Carolina Hospital Association, and other advocates for medical professionals and consumers have proposed a more conservative shifting of the risk for cost overruns.

The groups proposed expanding the more than 20 accountable care organizations already operating across North Carolina. The small networks of physicians or hospitals are paid by Medicaid for each procedure they perform. Organizations that meet savings and treatment goals get to keep a portion of the savings generated. If patient costs exceed standards, it must share losses with the state.

Problems in North Carolina’s Medicaid program have persisted for years and haven’t quit since McCrory took office last year and installed Wos as DHHS secretary.

A decision by the agency to delay recalculating Medicaid patient eligibility for three months could cost the state up to $2.8 million. Lawmakers have criticized the agency for not reporting those costs while they were developing the state budget last summer.

A group of North Carolina doctors filed a class-action lawsuit last month after flawed computer programs severely delayed payments they were due for treating Medicaid patients. The lawsuit alleges that managers at DHHS and its contractors were negligent in launching NCTracks, a nearly $500 million computer system intended to streamline the process of filing Medicaid claims and issuing payments.

The lawsuit alleged NCTracks’s software was riddled with thousands of errors that led to delays of weeks and sometimes months before doctors and hospitals received payment. That forced some medical practices to borrow money to meet payroll and others to stop treating Medicaid patients, the lawsuit said.

Earlier this month, DHHS announced it would spend up to $3.7 million on no-bid, personal service contracts with two firms that would advise the agency on running the Medicaid program. Internal McCrory administration memos released to The News & Observer of Raleigh describe understaffed and underskilled workers in the Medicaid division needing emergency help.

NCTracks Derailed: Class Action Lawsuit Filed!

My law partner Camden Webb and I filed a class action lawsuit today alleging on behalf of medical providers who accept Medicaid in North Carolina.

Williams Mullen Medicaid Litigation Team Files Class Action Lawsuit Against NCTracks

Raleigh, NC. (Jan. 16, 2013) – This morning, Williams Mullen attorneys Knicole Emanuel and Camden Webb filed a class action lawsuit on behalf of Medicaid providers in North Carolina against NCTracks, the system that processes Medicaid claims.

 

The suit alleges that NCTracks was launched before it was ready to be implemented, and its poor design has resulted in catastrophic losses for health care providers. NCTracks had over 3,200 software errors in the first few months of operation, and payments to Medicaid providers were delayed, unpaid, or “shorted” by over half a billion dollars in the first 90 days. In some instances, providers have decided not to accept Medicaid patients or have even closed their practices, and some of North Carolina’s most needy citizens have suffered a reduction in the health care resources available to them.   

“We’re filing on behalf of health care providers, but we’re also serving the low-income Medicaid recipients of North Carolina that rely on these providers to receive care,” said Knicole Emanuel, a Litigation Partner with the firm who handles Medicaid matters. “Since these providers have experienced financial hardship due to NCTracks, many of them are no longer able to serve the state’s most vulnerable population of health care consumers.”  

 

 

About Williams Mullen

Williams Mullen is an AmLaw 200 law firm that blends the law, government relations and economic development to help grow the business of our clients and the economy of our region across North Carolina, Virginia and Washington, D.C.  Our attorneys and consultants strive to help connect clients to opportunities and solutions they need.  Putting our clients’ needs first has been the foundation of our approach since the firm was founded 103 years ago. Visit us at www.williamsmullen.com.

 

Hello, 2014! And Hello 3% Decrease in Medicaid Reimbursements (But Call the Decrease “Shared Savings”)

Tomorrow is the first Medicaid checkwrite for 2014 (and its my birthday too).  Happy New Year! Happy birthday!! (I’m turning 29 for the 10th year).  For New Years, my husband and I had a very quiet evening eating crab legs at home. Yum! I am sure many of you made New Years resolutions…work harder…lose weight…get paid 3% less….WHAT?

With the first Medicaid checkwrite tomorrow, due to Session Law 2013-360, many health care providers will receive 3% less in Medicaid reimbursements.  You will receive a 3% cut if you are the following types of providers:

  • Inpatient hospital.
  • Physician, excluding primary care until January 1, 2015.
  • Dental.
  • Optical services and supplies.
  • Podiatry.
  • Chiropractors.
  • Hearing aids.
  • Personal care services.
  • Nursing homes.
  • Adult care homes.
  • Dispensing drugs.

(This is the exact list as found in Session Law 2013-360.  I am well aware that the list is grammatically-challenged, but I did not write it).  Both the federal government and NC are calling this 3% withholding “Shared Savings Plan with Provider.” 

How is this “shared savings with providers” when the government is withholding money from providers??? Sure, supposedly, there will  be a “pay for performance payment” to some providers, but most providers will just be reimbursed 3% less.

How is this fair?  How is this “shared savings?” 

Here’s an example:

Say I work at Harris Teeter and my manager comes up to me and says, “Hey, Knicole, Harris Teeter is really concerned with our overhead costs.  Salaries seem to be a big cost, and we want to “share the savings” with you.  So we are going to cut your pay by 3%.  If we, subjectively, determine, at the end of the year, that you are working hard and saving us money, then we will give you a performance reward.  It will not be all the money we retained, but it will be some amount.  This way Harris Teeter profits off the interest of the 3% we retain all year, plus the amount we never give you.”

Folks, the above example is called a decrease in pay and a swift kick in the bottom.  It is not “shared savings.”

In DHHS’ shared savings scheme, the money will go to:

“The Department of Health and Human Services shall use funds withheld from payments for drugs to develop with Community Care of North Carolina (CCNC) a program for Medicaid and Health Choice recipients based on the ChecKmeds NC program. The program shall include the following:

  1. At least 50 community pharmacies by June 30, 2015.
  2. At least 500 community pharmacies in at least 70 counties by June 30, 2016.
  3. A per member per month (PMPM) payment for care coordination and population health services provided in conjunction with CCNC.
  4. A pay for performance payment.”

Session Law 2013-360.

According to the Centers for Medicare and Medicaid Services (CMS), “[a] shared savings methodology typically comprises four important concepts: a total cost of care benchmark, provider payment incentives to improve care quality and lower total cost of care, a performance period that tests the changes, and an evaluation to determine the program cost savings during the performance period compared to the benchmark cost of care and to identify the improvements in care quality.”

Employers chop salaries all the time in order to maximize profit.  Back in 2011, Sony proposed 11% salary cuts for executives due to such a terrible fiscal year.  But guess what is different between Sony’s 11% cut and Medicaid’s 3%?  I know…I know…a lot….but what difference am I thinking about?

Sony sought shareholder approval.

I guess you can make the argument that the General Assembly sought voter approval because our citizens voted for all the legislators in the General Assembly.  But I think that argument is weak.  No legislator ran his or her campaign on: “Vote for Me! If you are a Medicaid provider, I plan to decrease your salary by 3%!”

Better yet, with the Sony salary cut, executives had the option to seek employment elsewhere.  What is a Medicaid provider’s option? Move?  Not take Medicaid? (Sadly, I see this as a more viable option).

On a legal note, I question the constitutionality of our new shared savings plan.  Wouldn’t the decrease of 3% in Medicaid reimbursements be considered an unlawful taking without due process.  In essence, could one argue that the decrease of 3% in Medicaid reimbursements is just a way for the State to decrease Medicaid reimbursements without going through the proper lawful process?

Then again, maybe we won’t need to worry about the 3% decrease at all…given NCTracks’ track record, it is plausible that NCTracks will not be able to adjust the Medicaid reimbursements by 3%.

Medicaid Providers: Do Not Omit Information on Your Medicaid Application or NC Ct of Appeals Says, “You Can Lose Your Medicaid Contract Without Notice.”

We’ve all told our share of little, white lies, right?  “Yes, honey, you look fantastic in that dress!” Or… “I never think about my ex-boyfriend!”  But omissions are also lies.  People have told me in the past that omissions are not lies, but they are, obviously, wrong.  Even in the court of law, a nonverbal action (or omission) can be used against you.

For example, if your neighbor comes up to you and accuses you of killing his cat and you say nothing except shut the door, you better believe that when your neighbor testifies in court that your “nonassertion” or “non- dispution” (I know, not a word) his allegation will be admitted into the court, or at least the attempt will be made.  Even though the “nonassertion” would be considered hearsay.

Hearsay is an out of court statement made by someone other than the testifying witness to be admitted to prove the truth of the matter asserted.  For example,  if I were on the stand and I said, “My neighbor told me that he killed my cat.”  If, in fact, I was testifying in a trial in which I was trying to prove that my neighbor killed my cat, then my statement would be hearsay and not admitted into evidence.  The same would be true if I were testifying that I accused my neighbor of killing my cat and he said nothing.  His nonadmission would be hearsay as well…because a normal person would protest to killing the cat if accused and innocent.

However, in the law, there are always grey areas.  Sometimes when the “statement” is nonverbal, the hearsay objection will be overlooked. Attorneys argue that the hearsay rule is almost always, in the abstract, phrased in terms of “statements” or “utterances” and the possible application of the rule to “conduct” may not be immediately apparent.

However, CAVEAT, In the world of Medicaid, omissions can cost you your Medicaid contract.

In a recent North Carolina Court of Appeals decision, Powell’s Medical Facility v. NC DHHS, the NC Court of Appeals upheld the trial court’s decision to uphold the Division of Medical Assistance’s (DMA) termination of Dr. Eddie N. Powell’s (I know, really? Who’s name is legally Eddie and not Edward?) Medicaid contract based on Dr. Powell’s omission on his Medicaid verification packet to Computer Sciences Corporation (CSC).

In 2009, CSC began to re-verify Medicaid providers in an effort to determine that all Medicaid providers met criteria as a Medicaid provider (yes, folks, this is the very same CSC that has catastrophically rolled-out NCTracks).

In Dr. Powell’s case, DMA informed him, in the termination letter, that if a provider were convicted of a criminal offense or made “any mistatement…or omission while submitting the provider application” that DMA had the authority to terminate a provider without notice.

Dr. Powell’s attorneys argued that the termination was erroneous because “the sole basis for DMA’s decision to terminate Dr. Powell’s participation in Medicaid is the mere existence of Dr. Powell’s criminal conviction.”  (emphasis in the original)(Notice, people, that I have not told you what the criminal offense was…that is on purpose.  Once I read the criminal conviction, I was tainted for the remainder of the Court’s opinion.  So you will find out the criminal conviction at the end.  Those of you impatient readers, can scroll down.  But, for now, imagine that the criminal conviction is for stealing a loaf of bread for his family.  See “Les Miserables” by Victor Hugo.)

The Court, however, disagreed.

A witness for the Respondent  (DMA) testified on recross that Dr. Powell’s termination was based on (1) the conviction (of stealing bread); and (2) the OMISSION to disclose his conviction (of stealing bread) on his application.

Supposedly, the result of the this opinion is that if you were convicted of a criminal offense and it does not involve something really, really, bad (such as stealing bread) and you DO disclose it on the Medicaid application that you would not be terminated. 

Moral of the story? Disclose everything!

If you were convicted of littering when you were 18, disclose it.

The problem with Dr. Powell? He was not convicted of littering when he was 18.  He also was not convicted of stealing bread for his starving family like Jean Valjean.

He was convicted of the felonies of incest and taking liberties with a minor, who is his stepdaughter.  (To which my husband, asked, “Is it incest if it was his stepdaughter?”  To which, I said, “Hmmmmm. I don’t know.  I am not a criminal attorney.”)

Regardless, Dr. Powell is a convicted sex offender.

Interestingly, one issue before the NC Court of Appeals was whether a Medicaid contract is a “property right” to a provider.  That is a HUGE issue for NC Medicaid providers!!! This issue goes back to the whole “is a Medicaid contract terminable at will?”  Obviously, DMA and the managed care organizations want the Medicaid contracts to be terminable at will so they can terminate a contract without due process. 

But the NC Court of Appeals did not rule as to this very important issue.  The Court ruled that “even assuming, arguendo, that Dr. Powell’s enrollment was not terminable at will, DMA had substantial evidence to terminate the contract.

However, the moral is obvious. We don’t need Aesop to tell us the moral.  If you are a Medicaid provider and have been convicted of a criminal offense in the past, disclose the conviction on all Medicaid applications.  Period.

If Men Are From Mars and Women Are From Venus, Then DHHS Is From Dune!

Without question, men and women see things differently.  We process things differently.  Which, of course, is why John Gray, Ph.D’s book “Men Are From Mars, Women Are From Venus” was such a huge success.  Men and women are so different that we can see (or read) the same thing and have two completely different ideas about what happened.

An example of the difference in male and female perception is how men and women view their bodies.  Men, generally, think of themselves as much better looking than they acually are in reality…

Whereas women, generally, think they are fatter or uglier than they are…

Then here comes DHHS…

Yesterday (Tuesday) at the  Joint Legislative Oversight Committee on Health and Human Services meeting, Chief Information Officer Joe Cooper said the state staffers overseeing the NCTracks system should be “congratulated on seeing this project through a successful launch.”

Congratulated??

For seeing NCTracks through a SUCCESSFUL launch??

Men may be from Mars.  Women may be from Venus.  But DHHS is from Dune and just as fictional.

The Assassination of Caesar, the Utter Ineptness of NCTracks, and Ignored Warnings

“If we do not learn from history, we are doomed to repeat it.”  George Santayana.

In William Shakespeare’s “Julius Caesar,” Caesar is warned to “Beware the Ides of March.”  See Act 1, Scene 2.  The “ides” of March is the fifteenth.  Back when Caesar established the Julian calendar, he also instituted the “ides” of a month.  Months have different “ides.”  The ides of January, for example, is the thirteenth; the ides of March, May, July and October is the fifteenth.

Caesar:
Who is it in the press that calls on me?
I hear a tongue shriller than all the music
Cry “Caesar!” Speak, Caesar is turn’d to hear.
 
Soothsayer:
Beware the ides of March.
 
Caesar:
What man is that?
 
Brutus:
A soothsayer bids you beware the ides of March

Not really sure what the point of the “ides” was, but, regardless, in 44 B.C., March 15th was the “ides” of March.

When Caesar was warned to “Beware the Ides of March,” Caesar would have known that the soothsayer was warning him about March 15th…a date certain.

Similarly, the Department of Health and Human Services (DHHS) was warned that NCTracks was not ready for its July 1, 2013, “go live”date.  Who was the soothsayer? The Office of State Auditor…Beth Wood.

In May 2013, prior to NCTracks going live, State Auditor Beth Wood published a Performance Audit that found hundreds of untested issues.  The audit warned DHHS that NCTracks was not ready to go live.  The May 2013 Performance Audit may as well have said, “DHHS, beware the first of July!”

Late in the day on March 15, 44 B.C., Caesar walked to the Theatre of Pompey, where he would be assassinated by more than 60 conspirators led by Brutus, his close ally…”Et tu, Brutus?” (Meaning…how could you, my closest friend, conspire against me?)

On his way to the theatre, Caesar sees the same soothsayer who had warned him of the ides of March.  Caesar joked, “The ides of March have come,” meaning to say that the prophecy had not been fulfilled, to which the seer replied “Aye, Caesar; but not gone.”  See Plutarch’s “Parallel Lives.”

I can only imagine the chill that ran down Caesar’s back when the soothsayer warned that the day was not over yet.

Yet, Caesar still walked to the theatre…despite the warning….

Despite the warnings in the May 2013, Performance Audit, DHHS still went live  on July 1, 2013.

Since going live, NCTracks has run into a large number of system defects. Providers in NC have been in uproar.  From not getting paid, to getting paid the wrong amount, to Medicaid/Medicare crossover issues, to taxonomy issues…the failures and defects of NCTracks have been felt by all Medicaid providers, despite the speciality.

About a month ago, NC General Assembly began demanding answers of DHHS and Computer Sciences Corporation (CSC), the entity that created NCTracks based on a $484 million contract.  On October 8, 2013, DHHS and CSC appeared before the Joint Legislative Oversight Committees on Health and Human Services and Information Technology to answer questions about NCTracks issues.

Remember, Sec. Aldona Wos stated, during the committee meeting, that DHHS was not warned by an entity of the risk to go live with NCTracks.  To which, Auditor Wood stated, “For the secretary to say there was no independent or anybody else that had given them a look at their risk readiness for going live on July 1 was not a true statement to the committee, and we felt like that the committee needed to know that information.”

State Auditor Wood is the soothsayer.  “Beware the first of July!”

Just as the soothsayer did for Caesar, prior to NCTracks going live, Wood warned DHHS that NCTracks was not ready.  Just like Caesar, DHHS did not stop NCTracks from going live (he went to the theatre anyway).  Just like Caesar’s death, the failure and ineptness of NCTracks was forewarned and could have been prevented.  Both DHHS and Caesar ignored the warnings.

So how bad is NCTracks?

According to the December 2013 Performance Audit, “the NCTracks system has encountered more than 3,200 defects.”

Here are the Audit’s findings:

FINDING #1: THE DEPARTMENT HAS AN INADEQUATE FRAMEWORK FOR THE TIMELY RESOLUTION OF NCTRACKS DEFECTS

Since going live, the NCTracks system has encountered more than 3,200 defects. More than 600 defects remain unresolved at the time of the audit.

FINDING #2: THE DEPARTMENT LACKS A COMPREHENSIVE MASTER ACTION PLAN TO ADDRESS NCTRACKS ISSUES

The Department does not have a comprehensive and cohesive master action plan to direct the remediation of technical and operational NCTracks issues.

FINDING #3: NCTRACKS GOVERNANCE CHANGES PRESENT BUDGETARY AND SYSTEM CAPABILITY RISKS TO THE STATE

Since July 1, 2013, there have been major updates to the approach the Department will take to implement required capabilities. These changes present budgetary and system functionality risks to the State.

FINDING #4: STATE GOVERNMENTS ‘REVOLVING DOOR’ CREATES A PERCEPTION OF BIAS OR CONFLICT OF INTEREST

A former DHHS employee who served for more than four years as the NCTracks Senior Program Manager and Associate Program Director now works for the NCTracks vendor, CSC, as the NCTracks Executive Account Director.

From Finding #4, it appears that CSC, like Brutus, is working hand in hand with DHHS.

If we do not learn from history, we are doomed to repeat it.  “Beware the ides of March!”

“Et tu, Brutus?”