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Another Win for the Good Guys! Gordon & Rees Succeeds in Overturning Yet Another Medicaid Contract Termination!

Getting placed on prepayment review is normally a death sentence for most health care providers. However, our health care team here at Gordon Rees has been successful at overturning the consequences of prepayment review. Special Counsel, Robert Shaw, and team recently won another case for a health care provider, we will call her Provider A. She had been placed on prepayment review for 17 months, informed that her accuracy ratings were all in the single digits, and had her Medicaid contract terminated.

We got her termination overturned!! Provider A is still in business!

(The first thing we did was request the judge to immediately remove her off prepayment review; thereby releasing some funds to her during litigation.  The state is only allowed to maintain a provider on prepayment review for 12 months).

Prepayment review is allowed per N.C. Gen. Stat. 108C-7.  See my past blogs on my opinion as to prepayment review. “NC Medicaid: CCME’s Comedy of Errors of Prepayment Review“NC Medicaid and Constitutional Due Process.

108C-7 states, “a provider may be required to undergo prepayment claims review by the Department. Grounds for being placed on prepayment claims review shall include, but shall not be limited to, receipt by the Department of credible allegations of fraud, identification of aberrant billing practices as a result of investigations or data analysis performed by the Department or other grounds as defined by the Department in rule.”

Being placed on prepayment review results in the immediate withhold of all Medicaid reimbursements pending the Department of Health and Human Services’ (DHHS) contracted entity’s review of all submitted claims and its determination that the claims meet criteria for all rules and regulations.

In Provider A’s situation, the Carolinas Center for Medical Excellence (CCME) conducted her prepayment review. Throughout the prepayment process, CCME found Provider A almost wholly noncompliant. Her monthly accuracy ratings were 1.5%, 7%, and 3%. In order to get off prepayment review, a provider must demonstrate 70% accuracy ratings for 3 consecutive months. Obviously, according to CCME, Provider A was not even close.

We reviewed the same records that CCME reviewed and came to a much different conclusion. Not only did we believe that Provider A met the 70% accuracy ratings for 3 consecutive months, we opined that the records were well over 70% accurate.

Provider A is an in-home care provider agency for adults. Her aides provide personal care services (PCS). Here are a few examples of what CCME claimed were inaccurate:

1. Provider A serves two double amputees. The independent assessments state that the pateint needs help in putting on and taking off shoes. CCME found that there was no indication on the service note that the in-home aide put on or took off the patients’ shoes, so CCME found the dates of service (DOS) noncompliant. But the consumers were double amputees! They did not require shoes!

2. Provider A has a number of consumers who require 6 days of services per week based on the independent assessments. However, many of the consumers do not wish for an in-home aide to come to their homes on days on which their families are visiting. Many patients inform the aides that “if you come on Tuesday, I will not let you in the house.” Therefore, there no service note would be present for Tuesday. CCME found claims inaccurate because the assessment stated services were needed 6 days a week, but the aide only provided services on 5 days.  CCME never inquired as to the reason for the discrepancy.

3. CCME found every claim noncompliant because the files did not contain the service authorizations. Provider A had service authorizations for every client and could view the service authorizations on her computer queue. But, because the service authorization was not physically in the file, CCME found noncompliance.

Oh, and here is the best part about #3…CCME was the entity that was authorizing the PCS (providing the service authorizations) and, then, subsequently, finding the claim noncompliant based on no service authorization.

Judge Craig Croom at the Office of Administrative Hearings (OAH) found in our favor that DHHS via CCME terminated Provider A’s Medicaid contract arbitrarily, capriciously, erroneously, exceeded its authority or jurisdiction, and failed to act as accordingly to the law. He ruled that DHHS’ placement of Provider A on prepayment review was random

Because of Judge Croom’s Order, Provider A remains in business. Plus, she can retroactively bill all the unpaid claims over the course of the last year.

Great job, Robert!!! Congratulations, Provider A!!!

You Received a Tentative Notice of Overpayment: Now What?

You are a health care provider that accepts Medicaid.  You received a Tentative Notice of Overpayment from North Carolina Department of Health and Human Services (DHHS), Division of Medical Assistance(DMA), Program Integrity (PI). You owe a million dollars (or whatever amount…it may as well be a million, right?) to DHHS and it must be paid within 30 days. First, you cry (“Why me?”), then you get angry (“Why do they say I owe this?” or “My documents are compliant!”), then you get scared (“What am I going to do?”).

So what do you do after getting this Notice?

Obviously, my official advice is to immediately call a lawyer; however, if for some reason, obtaining a lawyer is not an option, do you opt to appeal:

Formally or informally?

In DHHS or the Office of Administrative Hearings (OAH)?

Challenging the extrapolation or the decision?


If you can obtain a lawyer, do so. (Not necessarily me. Just someone).

If a lawyer is out of the question, for whatever reason, and you do not have the millions (or whatever amount DHHS claims you owe) sitting under your mattress, appeal. Appeal whatever. Appeal however. Just appeal.

An appeal maintains status quo. An appeal allows you to by time to figure out your options. An appeal makes you keep your money for a longer period of time before turning any amount over to DHHS.

What not to do:

  • Do not pay the entire amount.
  • Do not agree to set up a payment plan.
  • Do not think, “Oh, DHHS is right. My documents are out of compliance.”

If you appeal the amount supposedly owed will decrease. If you agree to pay, the amount will not decrease.

Now, what to appeal?

Personally, I prefer to appeal the decision, not the extrapolation. If you appeal the extrapolation, first, you have to do a lot of math. And who wants to do a lot of math? Secondly, you end up dealing with PI  in an informal and amorphous proceeding.  Dealing with PI during this amorphous proceeding is a bit like playing dodge ball…alone.  Thirdly, by appealing the extrapolation you are only delaying getting an Attorney General (AG) involved and any sort of formal proceedings.  Surprisingly enough, the whole process becomes easier when an AG is assigned.  They actually know how to maneuver through this system.

So, you appeal the decision…

Formal appeal or informal appeal?

In DHHS (informally) or OAH (formally)? I, myself, have pondered this for hours.  I’ve never received a decision from a DHHS Hearing Officer that I have not appealed.  So, my first instinct is, go straight to OAH.  In fact, I’ve blogged about that before.  But after more consideration, I actually think it is a good decision to go through the reconsideration review.

(1) It provides time to get to know the documents. If you go straight to OAH you will have to learn all the documents faster and in a more formal setting.

(2) There  may be an argument that providers MUST exhaust the LME-MCO Appeal Process (“Reconsideration”) before accessing the State Fair Hearing (or Appeal to OAH).

While I am unsure whether the issue of whether providers must exhaust informal remedies before attempting formal remedies has been decided by a court of law, because a Medicaid recipient is required to go through an informal appeal first, I would think the same would apply to a provider. Plus, because clients pay me good money, I have been unwilling to “take a risk” with my clients’ money. I’d hate to go that route and be told I did it wrong. Besides, it’s been working this way.

So, there you go.

The moral of the story? Appeal, appeal, appeal.