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A Court Case in the Time of COVID: The Judge Forgot to Swear in the Witnesses

Since COVID-19, courts across the country have been closed. Judges have been relaxing at home.

As an attorney, I have not been able to relax. No sunbathing for me. Work has increased since COVID-19 (me being a healthcare attorney). I never thought of myself as an essential worker. I still don’t think that I am essential.

On Friday, May 8, my legal team had to appear in court.

“How in the world are we going to do this?” I thought.

My law partner lives in Philadelphia. Our client lives in Charlotte, N.C. I live on a horse farm in Apex, N.C. Who knows where the judge lives, or opposing counsel or their witnesses? How were we going to question a witness? Or exchange documents?

Despite COVID-19, we had to have court, so I needed to buck up, stop whining, and figure it out. “Pull up your bootstraps, girl,” I thought.

First, we practiced on Microsoft Teams. Multiple times. It is not a user-friendly interface. This Microsoft Team app was the judge’s choice, not mine. I had never heard of it. It turns out that it does have some cool features. For example, my paralegal had 100-percent control of the documents. If we needed a document up on the screen, then he made it pop up, at my direction. If I wanted “control” of the document, I simply placed my mouse cursor over it. But then my paralegal did not have control. In other words, two people cannot fight over a document on this new “TV Court.”

The judge forgot to swear in the witnesses. That was the first mess-up “on the record.” I didn’t want to call her out in front of people, so I went with it. She remembered later and did swear everyone in. These are new times.

Then we had to discuss HIPAA, because this was a health care provider asking for immediate relief because of COVID-19. We were sharing personal health information (PHI) over all of our computers and in space. We asked the judge to seal the record before we even got started. All of a sudden, our court case made us all “essentials.” Besides my client, the healthcare provider, no one else involved in this court case was an “essential.” We were all on the computer trying to get this provider back to work during COVID-19. That is what made us essentials!

Interestingly, we had 10 people participating on the Microsoft Team “TV Court” case. The person that I kept forgetting was there was Mr. Carr (because Mr. Carr works at the courthouse and I have never seen him). Also, another woman stepped in for a while, so even though the “name” of the masked attendee was Mr. Carr, for a while Patricia was in charge. A.K.A. Mr. Carr.

You cannot see all 10 people on the Team app. We discovered that whomever spoke, their face would pop up on the screen. I could only see three people at a time on the screen. Automatically, the app chose the three people to be visible based on who had spoken most recently. We were able to hold this hearing because of the mysterious Mr. Carr.

The witnesses stayed on the application the whole time. In real life, witnesses listen to others’ testimony all the time, but with this, you had to remember that everyone could hear everything. You can elect to not video-record yourself and mute yourself. When I asked my client to step away and have a private conversation, my paralegal, my partner, and the client would log off the link and log back on an 8 a.m. link that we used to practice earlier that day. That was our private chat room.

The judge wore no robe. She looked like she was sitting on the back porch of her house. Birds were whistling in the background. It was a pretty day, and there was a bright blue sky…wherever she was. No one wore suits except for me. I wore a nice suit. I wore no shoes, but a nice suit. Everyone one else wore jeans and a shirt.

I didn’t have to drive to the courthouse and find parking. I didn’t even have to wear high heels and walk around in them all day. I didn’t have to tell my paralegal to carry all 1,500 pages of exhibits to the courthouse, or bring him Advil for when he complains that his job is making his back ache.

Whenever I wanted to get a refill of sweet tea or go to the bathroom, I did so quietly. I turned off my video and muted myself and carried my laptop to the bathroom. Although, now, I completely understand why the Supreme Court had its “Supreme Flush.”

All in all, it went as smoothly as one could hope in such an awkward platform.

Oh, and happily, we won the injunction, and now a home healthcare provider can go back to work during COVID-19. All of her aides have PPE. All of her aides want to go to work to earn money. They are willing to take the risk. My client should get back-paid for all her services rendered prior to the injunction. She hadn’t been getting paid for months. However, this provider is still on prepayment review due to N.C. Gen. Stat. 108C-7(e), which legislators should really review. This statute does not work. Especially in the time of COVID. See blog.

I may be among the first civil attorneys to go to court in the time of COVID-19. If I’m honest, I kind of liked it better. I can go to the bathroom whenever I need to, as long as I turn off my audio. Interestingly, Monday, Texas began holding its first jury trial – virtually. I cannot wait to see that cluster! It is streaming live.

Being on RACMonitor for so long definitely helped me prepare for my first remote lawsuit. My next lawsuit will be in New York City, where adult day care centers are not getting properly reimbursed.

RACMonitor Programming Note:

Healthcare attorney Knicole Emanuel is a permanent panelist on Monitor Monday and you can hear her reporting every Monday, 10-10:30 a.m. EST.

Are ALJ Appointed Properly, per the Constitution?

A sneaky and under-publicized matter, which will affect every one of you reading this, slid into common law last year with a very recent case, dated Jan. 9, 2020, upholding and expanding the findings of a 2018 case, Lucia v. SEC, 138 S. Ct. 2044 (U.S. 2018). In Lucia, the Supreme Court upheld the plain language of the U.S. Constitution’s Appointments Clause.

The Appointments Clause prescribes the exclusive means of appointing “officers.” Only the President, a court of law, or a head of department can do so. See Art. II, § 2, cl. 2.

In Lucia, the sole issue was whether an administrative law judge (ALJ) can be appointed by someone other than the President or a department head under Article II, §2, cl. 2 of the U.S. Constitution, or whether ALJs simply federal employees. The Lucia court held that ALJs must be appointed by the President or the department head; this is a non-delegable duty. The most recent case, Sara White Dove-Ridgeway v. Nancy Berrryhill, 2020 WL 109034, (D.Ct.DE, Jan. 9, 2020), upheld and expanded Lucia.

ALJs are appointed. In many states, ALJs are direct employees of a single state agency. In other words, in many states, about half, the payroll check that an ALJ receives bears the emblem of the department of health for that state. I have litigated in administrative courts in approximately 33 states, and have seen my share of surprises. In one case, many years ago, LinkedIn informed me that my appointed ALJ was actually a professional photographer by trade.

Lucia, however, determined that ALJs at the Securities and Exchange Commission (SEC) were “officers of the United States,” subject to the Appointment Clause of the Constitution, which requires officers to be appointed by the president, the heads of departments, or the courts. The court’s decision raised concern at the U.S. Department of Health and Human Services (HHS) because its ALJs had not been appointed by the secretary, but rather by lower agency officials.

The court also held that relief should be granted to “one who makes a timely challenge to the constitutional validity of the appointment of an officer who adjudicates his case.” Whether that relief is monetary, in the form of attorneys’ fees reimbursed or out-of-pocket costs, it is unclear.

In July 2018, President Trump’s Executive Order 13843 excepted ALJs from the competitive service, so agency heads, like HHS Secretary Alex Azar, could directly select the best candidates through a process that would ensure the merit-based appointment of individuals with the specific experience and expertise needed by the selecting agencies.

The executive order also accepted all previously appointed ALJs. So there became a pre-July 16, 2018, challenge and a post-July 16, 2018, based on Trump’s Executive Order. Post-July 16, 2018, appointees had to be appointed by the President or department head. But the argument could be made that ALJs appointed pre-July 16, 2018, were grandfathered into the more lax standards. In Dove-Ridgway, Social Security benefits were at issue. On July 5, 2017, ALJ Jack S. Pena found a plaintiff not disabled. On Jan. 7, 2019, the plaintiff filed an appeal of the ALJ’s decision, seeking judicial review from the district court. In what seems to be the fastest decision ever to emerge from a court of law, two days later, a ruling was rendered. The District Court found that even though at the time of the administrative decision, Lucia and Trump’s Executive Order had not been issued, the court still held that the ALJ needed to have been appointed constitutionally. It ordered a remand for a rehearing before a different, constitutionally appointed ALJ, despite the fact that Trump had accepted all previously appointed ALJs.

In this firsthand, post-Jan. 9, 2020, era, we have an additional defense against Medicare or Medicaid audits or alleged overpayments in our arsenal: was the ALJ appointed properly, per the U.S. Constitution?

Programming Note: Listen to Knicole Emanuel’s live reports on Monitor Monday, 10-10:30 a.m. EST.

As seen on RACMonitor.

New Mexico Settlement…Six Years Later!

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For the full press release.

This New Mexico settlement…What a long strange trip it’s been!

The litigation started in 2013 (six years ago). I was a partner at another Raleigh, NC law firm. Out of the blue, a woman called me from New Mexico and asked whether I would be willing to fly to New Mexico to testify before the General Assembly regarding Public Consulting Group (PCG) and the company’s extrapolation and audit history.

See blog, blog, and blog.

I did. I testified before the NM General Assembly’s subcommittee for behavioral health care. Sitting next to me was a gentleman from PCG. He happened to be the team leader (not sure what his exact title was) for PCG’s audits in NM and NC. In his defense, he graciously sat there and testified against me while I told some horror stories of PCG audits. See blog.

I met the 15 behavioral health care providers’ CEOs who were accused of credible allegations of fraud. Their stories were so emotional and heart-tugging. These people had dedicated their lives and careers to New Mexico’s most needy population – those on Medicaid and suffering from mental health, substance abuse, and/or developmental disabilities – not for money, but because they cared. Then June 24, 2013, the State of New Mexico accused them all of credible allegations of fraud. NM’s proof? A PCG audit that found no credible allegations of fraud. But Human Services Department (HSD) instructed PCG to remove “no credible allegations of fraud,” and HSD referred the audits to the Attorney General (AG) claiming that credible allegations of fraud existed. Sound like a movie? It could be; it is a conspiracy theory story along the lines of Area 51. Is it a coincidence that Area 51 and the NM behavioral health care debacle both occurred in NM?

I’d like to get some sleep before I travel
But if you got a warrant, I guess you’re gonna come in.” – Grateful Dead

A timeline of the events, starting in 2013, has been memorialized by multiple news organizations. See Timeline.

“June 24 — An audit paid for by the New Mexico Human Services Department and conducted by Public Consulting Group (PCG) finds that nearly $33.8 million in Medicaid overpayments were made to 15 behavioral health providers in the state.

June 24 — New Mexico Human Services Department notifies the 15 behavioral health providers that there is a “credible allegation of fraud for which an investigation is pending,” and immediately suspends all Medicaid payments.

June 25 — Officials with the New Mexico Human Services Department send initial contracts to five Arizona companies: Agave Health Inc.Valle Del SolLa Frontera Inc.Southwest Network Inc., and Turqouise Health and Wellness, Inc., to temporarily take over New Mexico behavioral health organizations for a combined price tag of $17.85 million. It’s estimated the move will impact about 30,000 patients. From a July 18 email: “I am following up on the proposed contract between HSD and Open Skies Healthcare (affiliated with Southwest Network, located in Phoenix). On July 3, 2013, I responded to Larry’s [Heyeck, Deputy General Counsel for HSD] June 25 email concerning the contract…”

July 17 – Eight agencies go to U.S. District Court to restore funding.

July 25 – A memo generated by one of the 15 affected providers, TeamBuilders, indicates it will stop taking new clients.

July 25 – A state district judge turns the PCG audit over to New Mexico State Auditor Hector Balderas, and orders the audit protected from public disclosure.

Aug. 21 – In a 15-1 vote New Mexico’s Legislative Finance Committee objects to the Human Services Department moving $10 million from it’s budget to pay Arizona agencies to take over New Mexico providers due to concerns over secrecy surrounding the process.

Aug. 27 – New Mexico In Depth and the Las Cruces Sun-Newsfile a lawsuit demanding the public release of the PCG audit.

Aug. 28 – Federal officials hold conference call to hear about widespread disruptions to clients of behavioral health providers in transition.

Aug. 29 – An Inspection of Public Records Act request filed by KUNM reveals contract communications between New Mexico Human Services Department officials and Arizona providers as early as May 29, a full month before the audit was released by Public Consulting Group.

Sept. 3 – Public Consulting Group representative Thomas Aldridge tells the New Mexico Legislative Behavioral Health Subcommittee that he helped state officials vet at least one Arizona firm before it even began its audit of agencies in the state.

Sept. 3 — Lawyer Knicole Emanuel testifies to ongoing problems with PCG audits conducted in North Carolina as well as lawsuits triggered by PCG activities. “In some of the PCG audits that I have encountered, PCG has said the Medicaid provider owes $700,000, $800,000, $1.5 million, these exorbitant amounts, and at the end of the day when they look at all the documents, it goes down to like $200 or $300.”

Sept. 10 – The Santa Fe New Mexican reports that political ads defending Gov. Susana Martinez have begun rolling out, framing the behavioral health takeover as a crackdown on Medicaid fraud.”

I litigated 4 administrative appeals. Even after the NM AG came out and stated that there was no fraud, HSD accused the providers of owing alleged overpayments, some upwards of $12 million. These amounts were extrapolated.

In the very first administrative appeal, for The Counseling Center, the extrapolation expert was one of HSD’s attorneys. Upon questions regarding his extrapolation and statistical experience and the foundation for his expertise, he testified that took a class on statistics in college. I guess I could be a bowling expert.

PCG only testified in the first two administrative appeals. I guess after PCG testified that they were never given the opportunity to finish their audit due to HSD and that PCG found no fraud, but HSD removed that language from the report, HSD smartened up and stopped calling PCG as a witness. PCG certainly was not bolstering HSD’s position.

For three of the administrative appeals, we had the same administrative law judge (ALJ), who appeared to have some experience as an ALJ. For one of the appeals, we had a younger gentleman as the ALJ, who, according to LINKEDIN, was a professional photographer.

About 5 years after the accusations of fraud, the AG came out and exonerated all the providers. Apparently, there never was any fraud. Only accusations. These exonerations, however, did not stop the allegations of overpayments to HSD. The exonerations also did not stop these companies from going out of business, being tried as fraudsters in the eyes of the public, losing their companies, firing staff, closing their doors, and losing everything.

This was all done under the administration of Susana Martinez – not saying that politics played a huge role in the act of overthrowing these providers.

The providers all appealed their alleged overpayments and filed a lawsuit against HSD and the State for damages suffered from the original allegation of fraud that was found to be meritless.

After an election and a new administration took control, the State of New Mexico settled with the providers, as you can see from the above press release.

FYI building in Las Cruces, NM.

During the long journey over the past 6 years, one of the CEOs, Jose Frietz, passed away. He had started his company Families & Youth, Inc. in 1977. A month before he died on March 2, 2016, the AG exonerated FYI.

In 2013, Larry Heyeck was one of the attorneys for HSD. Multiple times during the witch hunt for Medicaid fraud, it appeared that Heyeck had some sort of personal vendetta against the 15 providers. According to one article, “Heyeck singled out Roque Garcia, former acting CEO of Southwest Counseling Services (Las Cruces), who was a recipient of the payments and asked legislators, “What does this mean? How can this money be accounted for to ensure that it isn’t used for private benefit?” Heyeck then asserted that Garcia had abused agency travel funds largely paid for by Medicaid through lavish travel to resort destinations in a private aircraft.”

Garcia wasn’t the only provider accused of misappropriating Medicaid funds. Shannon Freedle and his wife Lorraine were ostracized for having their abode in Hawaii.

Larry Heyeck, had an article published in the December 2012’s American Bar Association’s “The Health Lawyer” discussing the effect of 42 CFR 455.23 on Medicaid fraud and suspensions of Medicaid reimbursements. It was entitled, “Medicaid Payment Holds Due to Credible Allegations of Fraud.” Seem apropos?

By 2016, all 15 providers were cleared of allegations of fraud, but most were out of business.

Now – December 4, 2019 – a press release is disseminated to show that the last of the providers settled with the State of New Mexico. What the press release fails to express is the struggle, the financial and non-financial damages, the emotional turmoil, and the devastation these companies have endured over the past 6 years. No amount of money could ever right their catastrophic, past 6-years or the complete demise of their companies based on erroneous allegations of fraud.

Sometimes the light’s all shinin’ on me; Other times, I can barely see; Lately, it occurs to me; What a long, strange trip it’s been.” – Grateful Dead

CMS Initiates Process to Decrease the Medicare Appeal Backlog: But You May Have to Beg!

Last week, (May 22nd) the Center for Medicare and Medicaid Services (CMS) unveiled a new, streamlined appeal process aimed at decreasing the massive Medicare appeal backlog. CMS is hopeful that providers, like you, will choose to settle your Medicare appeal cases instead continuing the litigious dispute. Remember, currently, the backlog at the third level of Medicare appeals, the administrative law judge (ALJ) level, is approximately 5 – 8 years (I will use 8 years for the purpose of this blog). Recoupment can legally begin after level two, so many providers go out of business waiting to be heard at the third level. See blog.

The new “settlement conference facilitation” (SCF) process will allow CMS to make a settlement offer and providers have seven days to accept or proceed with the longer-lasting route. I have a strong sense that, if litigated, a judge would find forcing the decision between accepting a quick settlement versus enduring an 8-year waiting-period to present before an ALJ, coercion. But, for now, it is A choice other than the 8-year wait-period (as long as the provider met the eligibility requirements, see below).

To initiate said SCF process, a provider would have to submit a request in writing to CMS. CMS would then have 15 days to reply. If the agency chooses to take part, a settlement conference would occur within four weeks. Like that underlined part? I read the SCF process as saying, even if the provider qualifies for such process, CMS still has the authority to refuse to participate. Which begs the question, why have a process that does not have to be followed?

The SCF process is directed toward sizable providers with older and more substantial, alleged overpayments. In order to play, you must meet the criteria to enter the game. Here are the eligibility requirements:

2018-05-29 -- Pic of eligibility

The Backlog

In fiscal year (FY) 2016, more than 1.2 billion Medicare fee-for-service claims were processed. Over 119 million claims (or 9.7%) were denied. Of the denied claims, 3.5 million (2.9% of all Medicare denied claims) were appealed. That seems surprisingly low to me. But many claims are denied to Medicare recipients, who would be less inclined to appeal. For example, my grandma would not hire an attorney to appeal a denied claim; it would be fiscally illogical. However, a hospital that is accused of $10 million in alleged overpayments will hire an attorney.

In recent years, the Office of Medicare Hearings and Appeals (OMHA) and the Council have received more appeals than they can process within the statutorily-defined time frames. From FY 2010 through FY 2015, OMHA experienced an overall 442% increase in the number of appeals received annually. As a result, as of the end of FY 2016, 658,307 appeals were waiting to be adjudicated by OMHA. Under current resource levels (and without any additional appeals), it would take eight years for OMHA and ten years for the Council to process their respective backlogs.

The SCF “Fix”

While I do not believe that the creation of the SCF process is a fix, it is a concerted step in the right direction. Being that it was just enacted, we do not have any trial results. So many things on paper look good, but when implemented in real life end so poorly. For example, the Titanic.

Considering that there is a court case that found Health and Human Services (HHS) in violation of federal regulations that require level three Medicare appeals to be adjudicated in 90 days, instead of 8 years and HHS failed to follow the Order, claiming impossibility, at least HHS is making baby steps. See blog. At some point, Congress is going to have to increase funding to hire additional ALJs. I can only assume that the Hospital Association and American Medical Association are lobbying to get this action, but you know what they say about assuming…

As broached above, I do not like the fact that – if you do not accept whatever amount CMS proposes as settlement – BOOM – negotiation is over and you suffer the 8-year backlog time, undergo recoupments (that may not be appropriate), and incur tens of thousands of attorneys’ fees to continue litigation. Literally, CMS has no incentive to settle and you have every reason to settle. The only incentive for CMS to settle that I can fathom is that CMS wants this SCF program to be a success for the jury of public opinion, therefore, will try to get a high rate of success. But do not fool yourself.

You are the beggar and CMS is the King.

 

Premature Recoupment of Medicare or Medicaid Funds Can Feel Like Getting Mauled by Dodgeballs: But Is It Constitutional?

State and federal governments contract with many private vendors to manage Medicare and Medicaid. And regulatory audits are fair game for all these contracted vendors and, even more – the government also contracts with private companies that are specifically hired to audit health care providers. Not even counting the contracted vendors that manage Medicaid or Medicare (the companies to which you bill and get paid), we have Recovery Act Contractors (RAC), Zone Program Integrity Contractors (ZPICs), Medicare Administrative Contractors (MACs), and Comprehensive Error Rate Testing (CERT) auditors. See blog for explanation. ZPICs, RACs, and MACs conduct pre-payment audits. ZPICs, RACs, MACs, and CERTs conduct post-payment audits.

It can seem that audits can hit you from every side.

dodgeball.jpg

“Remember the 5 D’s of dodgeball: Dodge, duck, dip, dive and dodge.”

Remember the 5 A’s of audits: Appeal, argue, apply, attest, and appeal.”

Medicare providers can contest payment denials (whether pre-payment or post-payment) through a five-level appeal process. See blog.

On the other hand, Medicaid provider appeals vary depending on which state law applies. For example, in NC, the general process is an informal reconsideration review (which has .008% because, essentially you are appealing to the very entity that decided you owed an overpayment), then you file a Petition for Contested Case at the Office of Administrative Hearings (OAH). Your likelihood of success greatly increases at the OAH level because these hearings are conducted by an impartial judge. Unlike in New Mexico, where the administrative law judges are hired by Human Services Department, which is the agency that decided you owe an overpayment. In NM, your chance of success increases greatly on judicial review.

In Tx, providers may use three methods to appeal Medicaid fee-for-service and carve-out service claims to Texas Medicaid & Healthcare Partnership (TMHP): electronic, Automated Inquiry System (AIS), or paper within 120 days.

In Il, you have 60-days to identify the total amount of all undisputed and disputed audit
overpayment. You must report, explain and repay any overpayment, pursuant to 42 U.S.C.A. Section 1320a-7k(d) and Illinois Public Aid Code 305 ILCS 5/12-4.25(L). The OIG will forward the appeal request pertaining to all disputed audit overpayments to the Office of Counsel to the Inspector General for resolution. The provider will have the opportunity to appeal the Final Audit Determination, pursuant to the hearing process established by 89 Illinois Adm. Code, Sections 104 and 140.1 et. seq.

You get the point.”Nobody makes me bleed my own blood. Nobody!” – White Goodman

Recoupment During Appeals

Regardless whether you are appealing a Medicare or Medicaid alleged overpayment, the appeals process takes time. Years in some circumstances. While the time gently passes during the appeal process, can the government or one of its minions recoup funds while your appeal is pending?

The answer is: It depends.

soapbox

Before I explain, I hear my soapbox calling, so I will jump right on it. It is my legal opinion (and I am usually right) that recoupment prior to the appeal process is complete is a violation of due process. People are always shocked how many laws and regulations, both on the federal and state level, are unconstitutional. People think, well, that’s the law…it must be legal. Incorrect. Because something is allowed or not allowed by law does not mean the law is constitutional. If Congress passed a law that made it illegal to travel between states via car, that would be unconstitutional. In instances that the government is allowed to recoup Medicaid/care prior to the appeal is complete, in my (educated) opinion. However, until a provider will fund a lawsuit to strike these allowances, the rules are what they are. Soapbox – off.

Going back to whether recoupment may occur before your appeal is complete…

For Medicare audit appeals, there can be no recoupment at levels one and two. After level two, however, the dodgeballs can fly, according to the regulations. Remember, the time between levels two and three can be 3 – 5 years, maybe longer. See blog. There are legal options for a Medicare provider to stop recoupments during the 3rd through 5th levels of appeal and many are successful. But according to the black letter of the law, Medicare reimbursements can be recouped during the appeal process.

Medicaid recoupment prior to the appeal process varies depending on the state. Recoupment is not allowed in NC while the appeal process is ongoing. Even if you reside in a state that allows recoupment while the appeal process is ongoing – that does not mean that the recoupment is legal and constitutional. You do have legal rights! You do not need to be the last kid in the middle of a dodgeball game.

Don’t be this guy:

stock-vector-cartoon-boy-getting-pelted-by-dodge-balls-189985841

 

RAC Audits: How to Deal with Concurrent, Overpayment Accusations in Multiple Jurisdictions

You are a Medicare health care provider. You perform health care services across the country. Maybe you are a durable medical equipment (DME) provider with a website that allows patients to order physician-prescribed, DME supplies from all 50 states. Maybe you perform telemedicine to multiple states. Maybe you are a large health care provider with offices in multiple states.

Regardless, imagine that you receive 25, 35, or 45 notifications of alleged overpayments from 5 separate “jurisdictions” (the 5th being Region 5 (DME/HHH – Performant Recovery, Inc.). You get one notice dated January 1, 2018, for $65,000 from Region 1. January 2, 2018, you receive a notice of alleged overpayment from Region 2 in the amount of $210.35. January 3, 2018, is a big day. You receive notices of alleged overpayments in the amounts of $5 million from Region 4, $120,000 from Region 3, and two other Region 1 notices in the amount of $345.00 and $65,000. This continues for three weeks. In the end, you have 20 different notices of alleged overpayments from 5 different regions, and you are terrified and confused. But you know you need legal representation.

 

Screen Shot 2018-01-22 at 5.19.57 PM

Do you appeal all the notices? Even the notice for $345.00? Obviously, the cost of attorneys’ fees to appeal the $345.00 will way outweigh the amount of the alleged overpayment.

Here are my two cents:

Appeal everything – and this is why – it is a compelling argument of harassment/undue burden/complete confusion to a judge to demonstrate the fact that you received 20 different notices of overpayment from 5 different MACs. I mean, you need a freaking XL spreadsheet to keep track of your notices. Never mind that an appeal in Medicare takes 5 levels and each appeal will be at a separate and distinct status than the others. Judges are humans, and humans understand chaos and the fact that humans have a hard time with chaos. For example, I have contractors in my house. It is chaos. I cannot handle it.

While 20 distinct notices of alleged overpayment is tedious, it is worth it once you get to the third level, before an unbiased administrative law judge (ALJ), when you can consolidate the separate appeals to show the judge the madness.

Legally, the MACs cannot withhold or recoup funds while you appeal, although this is not always followed. In the case that the MACs recoup/withhold during your appeal, if it will cause irreparable harm to your company, then you need to get an injunction in court to suspend the recoupment/withhold.

According to multiple sources, the appeal success rate at the first and second levels are low, approximately 20%. This is to be expected since the first level is before the entity that determined that you owe money and the second level is not much better. The third level, however, is before an impartial ALJ. The success rate at that level is upwards of 75-80%. In the gambling game of life, those are good odds.

 

Suspension of Medicare Reimbursements – Not Over 180 Days! Medicaid – Indefinite?!

When you get accused of Medicare or Medicaid fraud or of an alleged overpayment, the federal and state governments have the authority to suspend your reimbursements. If you rely heavily on Medicaid or Medicare, this suspension can be financially devastating. If your Medicare or Medicaid reimbursements are suspended, you have to hire an attorney. And, somehow, you have to be able to afford such legal representation without reimbursements. Sadly, this is why many providers simply go out of business when their reimbursements are suspended.

But, legally, how long can the state or federal government suspend your Medicare or Medicaid payments without due process?

According to 42 C.F.R. 405.371, the federal government may suspend your Medicare reimbursements upon ” reliable information that an overpayment exists or that the payments to be made may not be correct, although additional information may be needed for a determination.” However, for Medicare, there is a general rule that the suspension may not last more than 180 days. MedPro Health Providers, LLC v. Hargan, 2017 U.S. Dist. LEXIS 173441 *2.

There are also procedural safeguards. A Medicare provider must be provided notice prior to a suspension and given the opportunity to submit a rebuttal statement explaining why the suspension should not be implemented. Medicare must, within 15 days, consider the rebuttal, including any material submitted. The Medicare Integrity Manual states that the material provided by the provider must be reviewed carefully.

Juxtapose Medicaid:

42 CFR 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.”

Notice the differences…

Number one: In the Medicare regulation, the word used is “may” suspend.  In the Medicaid regulation, the word used is “must” suspend. This difference between may and must may not resonate as a huge difference, but, in the legal world, it is. You see, “must” denotes that there is no discretion (even though there is discretion in the good cause exception). On the other hand, “may” suggests more discretionary power in the decision.

Number two: In the Medicare regulation, notice is required. It reads, “Except as provided in paragraphs (d) and (e) of this section, CMS or the Medicare contractor suspends payments only after it has complied with the procedural requirements set forth at § 405.372.” 405.372 reads the Medicare contractor must notify the provider or supplier of the intention to suspend payments, in whole or in part, and the reasons for making the suspension. In the Medicaid regulation, no notice is required. 455.23 reads “The State Medicaid agency may  suspend payments without first notifying the provider of its intention to suspend such payments.”

Number three: In the Medicare regulation, a general limit of the reimbursement suspension is imposed, which is 180 days. In the Medicaid regulation, the regulations states that the suspension is “temporary” and must be lifted after either of the following (1) there is a determination of no credible allegations of fraud or (2) the legal proceedings regarding the alleged fraud are complete.

Yet I have seen States blatantly violate the “temporary” requirement. Consider the New Mexico situation. All the behavioral health care providers who were accused of Medicaid fraud have been cleared by the Attorney General. The regulation states that the suspension must be lifted upon either of the following – meaning, if one situation is met, the suspension must be lifted. Well, the Attorney General has cleared all the New Mexico behavioral health care providers of fraud. Criterion is met. But the suspension has not been lifted. The Health Services Department (HSD) has not lifted the suspension. This suspension has continued for 4 1/2 years. It began June 24, 2013. See blog, blog, and blog. Here is a timeline of events.

Why is there such a disparity in treatment with Medicare providers versus Medicaid providers?

The first thing that comes to mind is that Medicare is a fully federal program, while Medicaid is state-run. Although a portion of the funds for Medicaid comes from the federal government.

Secondly, Medicare patients pay part of costs through deductibles for hospital and other costs. Small monthly premiums are required for non-hospital coverage. Whereas, Medicaid patients pay nothing.

Thirdly, Medicare is for the elderly, and Medicaid is for the impoverished.

But should these differences between the two programs create such a disparity in due process and the length of reimbursement suspensions for health care providers? Why is a Medicare provider generally only susceptible to a 180 day suspension, while a Medicaid provider can be a victim of a 4 1/2 year suspension?

Parity, as it relates to mental health and substance abuse, prohibits insurers or health care service plans from discriminating between coverage offered for mental illness, serious mental illness, substance abuse, and other physical disorders and diseases. In short, parity requires insurers to provide the same level of benefits for mental illness, serious mental illness or substance abuse as for other physical disorders and diseases.

Does parity apply to Medicare and Medicaid providers?

Most of Medicare and Medicaid law is interpreted by administrative law judges. Most of the time, a health care provider, who is not receiving reimbursements cannot fund an appeal to Superior Court, the Court of Appeals, and, finally the Supreme Court. Going to the Supreme Court costs so much that most normal people will never present before the Supreme Court…it takes hundreds and hundreds upon thousands of dollars.

In January 1962, a man held in a Florida prison cell wrote a note to the United States Supreme Court. He’d been charged with breaking into a pool hall, stealing some Cokes, beer, and change, and was handed a five-year sentence after he represented himself because he couldn’t pay for a lawyer. Clarence Earl Gideon’s penciled message eventually led to the Supreme Court’s historic 1963 Gideon v. Wainwright ruling, reaffirming the right to a criminal defense and requiring states to provide a defense attorney to those who can’t afford one. But it does not apply to civil cases.

Furthermore, pro bono attorneys and legal aid attorneys, although much-needed for recipients, will not represent a provider.

So, until a health care provider, who is a gaga-zillionaire, pushes a lawsuit to the Supreme Court, our Medicare and Medicaid law will continue to be interpreted by administrative law judges and, perhaps, occasionally, by Superior Court. Do not take this message and interpret that I think that administrative law judges and Superior Court judges are incapable of interpreting the laws and fairly applying them to certain cases. That is the opposite of what I think. The point is that if the case law never gets to the Supreme Court, we will never have consistency in Medicare and Medicaid law. A District Court in New Mexico could define “temporary” in suspensions of Medicare and/or Medicaid reimbursements as 1 year. Another District Court in New York could define “temporary” as 1 month. Consistency in interpreting laws only happens once the Supreme Court weighs in.

Until then, stay thirsty, my friend.

Accused of a Medicare or Medicaid Overpayment? Remember That You May Fall Into an Exception That Makes You NOT Liable to Pay!!

In today’s health care world, post-payment review audits on health care providers who accept Medicare and/or Medicaid have skyrocketed. Part of the reason is the enhanced fraud, waste, and abuse detections that were implanted under ObamaCare. Then the snowball effect occurred. The Centers for Medicare and Medicaid Systems (CMS), which is the single federal agency designated by the Secretary of Health and Human Services (HHS), via authority from Congress, to manage Medicare and Medicaid nationwide, started having positive statistics to show Congress.

Without question, the recovery audit contractors (RACs) have recouped millions upon millions of money since 2011, when implemented. Every financial report presented to Congress shows that the program more than pays for itself, because the RACs are paid on contingency.

Which pushed the snowball down the hill to get bigger and bigger and bigger…

However, I was reading recent, nationwide case law on Medicare and Medicaid provider overpayments reviews (I know, I am such a dork), and I realized that many attorneys that providers hire to defend their alleged overpayments have no idea about the exceptions found in Sections 1870 and 1879 of the Social Security Act (SSA). Why is this important? Good question. Glad you asked. Because of this legal jargon called stare decisis (let the decision stand). Like it or not, in American law, stare decisis is the legal doctrine that dictates once a Court has answered a question,the same question in other cases must elicit the same response from the same court or lower courts in that jurisdiction. In other words, if “Attorney Uneducated” argues on behalf of a health care provider and does a crappy job, that decision, if it is against the provider, must be applied similarly to other providers. In complete, unabashed, English – if a not-so-smart attorney is hired to defend a health care provider in the Medicare and/or Medicaid world, and yields a bad result, that bad result will be applied to all health care providers subsequently. That is scary! Bad laws are easily created through poor litigation.

A recent decision in the Central District of California (shocker), remanded the Medicare overpayment lawsuit back to the Administrative Law Judge (ALJ) level because the ALJ (or the provider’s attorney) failed to adequately assess whether the exceptions found in Sections 1870 and 1879 of the SSA applied to this individual provider. Prime Healthcare Servs.-Huntington Beach, LLC v. Hargan, 2017 U.S. Dist. LEXIS 205159 (Dec., 13, 2017).

The provider, in this case, was a California hospital. The overpayment was a whopping total of $5,380.30. I know, a small amount to fight in the court of law and expend hundreds of thousands of attorneys’ fees. But the hospital (I believe) wanted to make legal precedent. The issue is extremely important to hospitals across the county – if a patient is admitted as inpatient and a contractor of CMS determines in a post payment review that the patient should have been admitted as an outpatient – is the hospital liable for the difference between the outpatient reimbursement rate and the inpatient reimbursement rate? To those who do not know, the inpatient hospital rates are higher than outpatient. Because the issue was so important and would have affected the hospital’s reimbursement rates (and bottom line) in the future, the hospital appealed the alleged overpayment of $5,380.30. The hospital went through the five levels of Medicare appeals. See blog. It disagreed with the ALJ’s decision that upheld the alleged overpayment and requested judicial review.

Judicial review (in the health care context): When a health care providers presents evidence before an ALJ and the ALJ ruled against the provider.The provider appeals the ALJ decision to Superior Court, which stands in as if it is the Court of Appeals. What that means is – that at the judicial review level, providers cannot present new evidence or new testimony. The provider’s attorney must rely on the   official record or transcript from the ALJ level. This is why it is imperative that, at the ALJ level, you put forth your best evidence and testimony and have the best attorney, because the evidence and transcript created from the ALJ level is the only evidence allowed from judicial review.

The exceptions found in Sections 1870 and 1879 of the SSA allow for a provider to NOT pay back an alleged overpayment, even if medical necessity does not exist. It is considered a waiver of the provider’s overpayment. If a Court determines that services were not medically necessary, it must consider whether the overpayment should be waived under Sections 1870 and 1879.

Section 1879 limits a provider’s liability for services that are not medically necessary when it has been determined that the provider “did not know, and could not reasonably have been expected to know, that payment would not be made for such services.” 42 U.S.C. 1395pp(a). A provider is deemed to have actual or constructive knowledge of non-coverage based on its receipt of CMS notices, the Medicare manual, bulletins, and other written directives from CMS. In other words, if CMS published guidance on the issue, then you are out of luck with Section 1879. The Courts always hold that providers are responsible for keeping up-to-date on rules, regulations, and guidance from CMS. “Ignorance of the law is no defense.”

Section 1870 of the SSA permits providers to essentially be forgiven for overpayments discovered after a certain period of time so long as the provider is “without fault” in causing the overpayment. Basically, no intent is a valid defense.

Sections 1879 and 1870 are extraordinary, strong, legal defenses. Imagine, if your attorney is unfamiliar with these legal defenses.

In Prime Healthcare, the Court in the Central District of California held that the ALJ’s decision did not clearly apply the facts to the exceptions of Sections 1870 and 1879. I find this case extremely uplifting. The Judge, who was Judge Percy Anderson, wanted the provider to have a fair shake. Hey, even if the services were not medically necessary, the Judge wanted the ALJ to, at the least, determine whether an exception applied. I feel like these exceptions found in Sections 1870 and 1879 are wholly underutilized.

If you are accused of an overpayment…remember these exceptions!!!

Appeal! Appeal! Appeal!

Knicole Emanuel Featured on Hospital Finance Podcast – Medicare Appeal Backlog (Legal Update)

On September 6, 2017, I appeared on the Besler Hospital Finance Podcast regarding:

Update on the Medicare appeals backlog [PODCAST]

Feel free to listen to the podcast, download it, and share with others!

 

“Ought Implies Can” – Court Reverses Decision Forcing HHS to Eliminate Medicare Appeal Backlog

But all is not lost… it all lies in the possibility…

A few weeks ago I blogged about Health and Human Services (HHS) possibly being held in contempt of court for violating an Order handed down on Dec. 5, 2016, by U.S. District Judge James Boasberg. See blog.

The District Court Judge granted a motion for summary judgment in favor of the American Hospital Association in AHA v. Burwell. He ordered HHS to incrementally reduce the backlog of 657,955 appeals pending before the agency’s Office of Medicare Hearings and Appeals over the next four years, reducing the backlog by 30% by the end of 2017; 60% by the end of 2018; 90% by the end of 2019; and to completely eliminate the backlog by Dec. 31, 2020.

This was a huge win for AHA – and Medicare providers across the country. Currently, when a provider appeals an adverse decision regarding Medicare, it costs an inordinate amount of attorneys’ fees, and the provider will not receive legal relief for upwards of 6 – 10 years, which can cause financial hardship, especially if the adverse action is in place during the appeal process. Yet the administrative appeal process was designed (poorly) to conclude within 1 year.

With the first deadline (the end of 2017) fast approaching and HHS publicly announcing that the reduction of 30% by the end of 2017 is impossible, questions were posed – how could the District Court hold HHS, a federal agency, in contempt?

We got the answer.

On August 11, 2017, the U.S. Appeals Court for the District of Columbia overturned the District Court; thereby lifting the requirement to reduce the Medicare appeal backlog.

deflatedWiping tear from face.

The first paragraph of the Ruling, indicates the Court’s philosophic reasoning, starting with a quote from Immanuel Kant (not to be confused with Knicole Emanuel), CRITIQUE OF PURE REASON 548 (Norman Kemp Smith trans., Macmillan 1953) (1781) (“The action to which the ‘ought’ applies must indeed be possible under natural conditions.”)

First paragraph of the decision:

“”Ought implies can.” That is, in order for law – man-made or otherwise – to command the performance of an act, that act must be possible to perform. This lofty philosophical maxim, ordinarily relevant only to bright-eyed college freshmen, sums up our reasoning in this case.”

The Appeals Court determined that the District Court commanded the Secretary to perform an act – clear the backlog by certain deadlines – without evaluating whether performance was possible.

The Medicare backlog skyrocketed in 2011 due to the federally-required Medicare Recovery Audit Program (RAC). With the implementation of the RAC program, the number of appeals filed ballooned from 59,600 in fiscal year 2011 to more than 384,000 in fiscal year 2013. These appeals bottlenecked to the third level of appeal, which is before an administrative law judge (ALJ). As of June 2, 2017, there was a backlog of 607,402 appeals awaiting review at this level. On its current course, the backlog is projected to grow to 950,520 by the end of fiscal year 2021.

There is a way for a provider to “skip” the ALJ level and “escalate” the claim, but it comes at a cost. Several procedural rights must be forfeited.

It is important to note that the appellate decision does not state that the District Court does not have the authority to Order HHS to eliminate the appeals backlog.

It only holds that, because HHS claims that compliance is impossible, the District Court must rule on whether compliance is possible before mandating the compliance. In other words, the Appeals Court wants the lower court to make a fact-finding decision as to whether HHS is able to eliminate the backlog before ordering it to do so. The Appeals Court is instructing the lower court to put the horse in front of the cart.

The Appeals Court explicitly states that it is suspect that the Secretary of HHS has done all things possible to decrease the backlog. (“We also share the District Court’s skepticism of the Secretary’s assertion that he has done all he can to reduce RAC-related appeals.”) So do not take the Appeals Court’s reversal as a sign that HHS will win the war.

I only hope that AHA presents every possible legal argument once the case is remanded to District Court. It is imperative that AHA’s attorneys think of every possible legal misstep in this remand in order to win. Not winning could potentially create bad law, basically, asserting that the Secretary has no duty to fix this appeals backlog. Obviously, the Secretary is exactly the person who should fix the backlog in his own agency. To hold otherwise, would thwart the very reason we have a Secretary of HHS. Through its rhetoric, the Appeals Court made it clear that it, too, has severe reservations about HHS’ claim of impossibility. However, without question, AHA’s suggestion to the District Court that a timeframe be implemented to reduce the backlog is not the answer. AHA needs to brainstorm and come up with several detailed proposals. For example, does the court need to include a requirement that the Secretary devote funds to hire additional ALJs? Or mandate that the ALJs work a half day on Saturday? Or order that the appeal process be revised to make the process more efficient? Clearly, the mere demand that HHS eliminate the backlog within a certain timeframe was too vague.

From here, the case will be remanded back to the District Court with instructions to the Judge to determine whether the elimination of the Medicare appeal backlog is possible. So, for now, HHS is safe from being held in contempt. But the Secretary should take heed from the original ruling and begin taking steps in fixing this mess. It is highly likely that HHS will be facing similar deadlines again – once the District Court determines it is possible.