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Medicare and Medicaid Providers: Administrative Law 101 and Hiring an Attorney from Out-of-State

What in the world is administrative law???? If you are a Medicare or Medicaid provider, you better know!

Most of my blogs are about Medicare and Medicaid providers and the tangled web of regulatory rules and regulations that they must abide by in order to continue providing medically necessary services to our most-needy and elderly populations. This time, however, I am going to blog about (1) administrative law 101 (which I am coming to the realization that few providers understand); and (2) out-of-state attorneys – and why you may need to seek out an attorney from another state from which you live (and why it is possible). Attorneys are licensed state-by-state and, lately, I’ve gotten a lot of questions about “how can you represent me in Nevada when you are in NC?” and when I Googled this topic – I found that there is very little information out there. I am here to teach and teach I will. Read on if you want to learn; close this browser if you do not. The other goal of this blog is to educate you on administrative law. Because administrative law is vastly different than normal law, yet it pertains to Medicare and Medicaid providers, such as you. My last goal with this blog is to educate you on the expense of hiring an attorney and why, in some instances, it may be more costly than others. Whew! We have a lot to go through!

Let’s get started…

A lot of potential clients often ask me how are you able to represent me in Nebraska when you live in North Carolina? Or Alaska? (yes, I have a client in Alaska). I figured I should clear up the confusion. (The “administrative law class” portion of this blog is interwoven throughout the blog – not my best blog, organizational-wise; but we cannot all be perfect).

There are three ways in which an attorney can represent an out-of-state client if that attorney does not have the State’s Bar license for the State in which you reside. Just in case you didn’t know, attorneys get licensed on a state-by-state basis. For example, I have my Bar licenses in North Carolina and Georgia. It is similar to how physicians have to get State licenses. However, I represent healthcare providers in approximately 30 states. I don’t have a client in Iowa yet, so any healthcare providers in Iowa – Hello!! Now we need to understand – how is this possible?

Let’s take a step back, in case there are those who are wondering what a Bar license is; it is a license to practice law and, literally, means that you can go past the bar in a courtroom.

courtroom.jpg

Number One

The first way in which in attorney can represent an out-of-state client is because most Medicaid and Medicare provider appeals must be brought before Administrative Court. In North Carolina, our Administrative Court is called the Office of Administrative Hearings (OAH). OAH is the administrative agency for the Judicial Branch. An Administrative Court is the type of court specializing in administrative law, particularly in disputes concerning the exercise of public power. Their role is to ascertain that official/governmental acts are consistent with the law. Such courts are considered separate from general courts. For most state’s Administrative Courts, attorneys do not have to be licensed in that state. Most people don’t know the difference between Administrative Courts versus normal civil courts, like Superior and District courts. Or Magistrate Courts, for example, where Judge Judy would be. I certainly didn’t know what administrative law was even after I graduated law school. Quite frankly, I didn’t take the administrative law class in law school because I had no idea that I would be doing 89.125% administrative law in my real, adult life (I still file federal and state injunctions and sue the government in civil court, but the majority of my practice is administrative).

Administrative laws, which are applicable to Medicare and Medicaid providers, are laws pertaining to administrative agencies (seems self-defining). Administrative court is defined as a court that specializes in dealing with cases relating to the way in which government bodies exercise their powers.

There are literally hundreds of federal administrative agencies, including the Environmental Protection Agency, known as the EPA. If I have a pollution complaint, I contact the EPA. Another example is the Equal Employment Opportunity Commission, known as the EEOC. This agency is responsible for enforcing federal laws that make it illegal to discriminate a job applicant or employee. If I have a discrimination complaint, I contact the EEOC. Another example is the Consumer Product Safety Commission, known as CPSC, which is the independent agency that oversees the safety of products sold in the United States. If I have a problem with the safety of the product that I bought, I contact the CPSC. Complaints to government agencies, such as the EPA, do not go to normal, civil court. These complaints, otherwise known as petitions for contested case hearings, go to Administrative Court and are overseen by Administrative Law Judges (“ALJs”). Same is true for Medicare and Medicaid provider disputes. You cannot go to Superior Court until you have gone through Administrative Court otherwise your case will be kicked out because of an esoteric legal doctrine known as “exhaustion of administrative remedies.” See blog.

Here is a picture of North Carolina’s Raleigh OAH. You can see, from the picture below, that it does not look like a normal courthouse. It’s a beautiful building – don’t get me wrong. But it does not look like a courthouse.

OAH

Our OAH is located at 1711 New Hope Church Road, Raleigh NC, 27609. OAH used to be downtown Raleigh and one of the historic houses, but that got a little cramped.

Complaints about Medicare and Medicaid regulatory compliance issues go to Administrative Court because these complaints are against a government agency known as the Health Service Department or the Department of Health and Human Services, depending on which state within you live – the names may differ, but the responsibility does not.

Bringing a lawsuit in Administrative Court with an out-of-state attorney is the cheapest method. There is no need to pay local counsel to file pleadings. There is no need to pay to be pro hac-ed in (see below). Sure, you have to pay for travel expenses, but as we all know, you get what you pay for. If you don’t have an expert in Medicare or Medicaid in your state you need to look elsewhere. [Disclaimer – I am not saying you have to hire me. Just hire an expert].

Number Two

Very few states require administrative attorneys to have the State Bar license in which they are practicing. For those few States that do require a State Bar license, even for administrative actions, the second alternative to hire an attorney out-of-state is for the attorney to pro hac into that State. Pro hace vice is a fancy Latin phrase which means, literally, “for on this occasion only.” It allows out-of-state attorneys a way to ask the court to allow them to represent a client in a state in which they do not have a license. Again, the reason why this is important is that in a extremely, niche practices, there may not be an attorney with the expertise you need in your state. I know there are not that many attorneys that do the kind of law that I do, [possibly because it is emotionally-draining (because all your clients are financial and emotional distress), extremely esoteric, yet highly-rewarding (when you keep someone in business to continue to provide medically necessary services), but, at times, overwhelming and, without question, time-consuming]. Did someone say, “Vacation?” “Pro hac-ing in” (defined as the attorney asking the court to allow them to represent a client in a state for which they do not have a license for one-time only) is also helpful when I appear in state or federal courts.

Most states have a limit of how many times an attorney can pro hac. For example, in New Mexico, out-of-state attorneys can only pro hac into New Mexico State courts four times a year. The fee for an attorney to pro hac into a state court varies state-by-state, but the amount is nominal when you compare the fee against how much it would cost to hire local counsel.

Number Three

Thirdly, is by hiring local counsel. Some cases need to be escalated to federal or state court, and, in these instances, a Bar license in the state in which the case is being pursued is necessary. An example of why you would want to bring a lawsuit in federal or state court instead of an Administrative Court would be if you are asking for monetary damages. An Administrative Court does not have the jurisdiction to award such damages.

This is the scenario that I dislike the most because the client has to pay for another attorney only because their warm body possesses a State Bar license. Generally, local counsel does not do much heavy lifting. As in, they don’t normally contribute to the merits of the case. Because they have the State Bar license, they are used to file and sign-off on pleadings.

Cost

The first scenario – in which I represent a out-of-state client in Administrative Court, and do not need to hire local counsel or to get my pro hac, is the cheapest method for clients. As an aside, I spoke with an attorney from a bigger city yesterday and was amazed at his or her billable rates. Apparently, I’m steal.

The second most inexpensive way to hire an attorney from out-of-state is to have them get pro hac-ed in. There is a filing fee of, usually, a few hundred dollars in order to get pro hac-ed in. But, in some states, you don’t have to hire local counsel when you are pro hac-ed in.

The most expensive way to hire an out-of-state attorney is needing to hire local counsel as well. Let’s be honest – attorneys are expensive. Adding another into the pot just ups the ante, regardless how little they do. When attorneys charge $300, $400, or $500 an hour, very few hours add up to a lot of money (or $860/hour….what…zombies?).

If you do not agree with the decision that the Administrative Law Judge renders, then you can appeal to, depending in which state you reside, Superior Court or District Court. If you do not agree with the decision you receive in District Court or Superior Court, you then appeal to the Court of Appeals. On the appellate level, out-of-state attorneys would need to either be pro hac-ed on or hire local counsel.

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.