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Our Medicaid Budget Does More Than Allocate Money; It Places the Burden of Proof on Medicaid Providers!!!

Are you a health care provider in NC? Are you wonderful enough to help Medicaid patients but accept low Medicaid reimbursements? Are you dedicated to helping our most needy? Well, guess what???? YOU now have the burden of proof if you disagree with an adverse determination by the State.

That’s right. The newly-enacted state budget quietly changes the statutes and shifts the burden of proof from the Department to YOU. I am reminded of my Grandpa Carson. Whenever he couldn’t believe what he just heard, he would bellow, “Wooooo weee.” Growing up in the south, we have certain sayings, such as “Bless your heart,” “Y’all come back now, ya hear?” and “That food is so good I could slap my momma.” My Grandpa Carson, God rest his soul, was as southern as southern can get. If he were here and heard about the burden shift onto the providers, he would say, “Wooo weeeee.”

Last week while I was on my first week-long vacation in 2 years, the North Carolina state budget, known as Session Law 2014-100, was signed into law by Governor McCrory.  (Which is why I missed a week of blogging…my vacation, not McCrory’s signature).  Since I was at my family reunion started by my Grandpa, I am dedicating this blog to my grandpa, Nat Carson, who created a family tradition that has lasted for over 40 years. Our (huge) extended family vacation together once a year at Emerald Isle for a family reunion. FOUR generations attend!

Going back to the budget…

An “adverse determination” in this case includes decisions by North Carolina’s Department of Health and Human Services (DHHS) under the Medicaid program such as the Department’s termination of a contract with the provider, a Managed Care Organization’s (MCO) termination of a provider contract, or the Department or one its many vendors determines that the providers owes an overpayment back to the state.

Not only does the state budget shift the burden of proof onto providers when they contest an adverse determination by the State, which we will discuss more below, but it also takes a lot of DHHS decision-making power away. It is apparent that the General Assembly does NOT think DHHS can do its job of managing Medicaid and creating Medicaid reform competently. The General Assembly (GA) has decided that, for whatever reason, it will be more hands-on regarding Medicaid decisions in the future.

Here are a few examples of the GA’s hands-on attitude found in the Session Law 2014-100 (with some emphasis I have made by putting some words in bold-faced type)

  • “Until the General Assembly enacts legislation authorizing a plan to reform Medicaid, the Department of Health and Human Services (i) shall continue to consult with stakeholder groups, study, and recommend options for Medicaid reform that will provide greater budget predictability for the Medicaid program and (ii) shall not commit the State to any particular course on Medicaid reform and shall not submit any reform-related State plan amendments, waivers, or grant applications nor enter into any contracts related to implementing Medicaid reform.”
  • “The Department may submit drafts of the waiver to the Centers for Medicare and Medicaid Services (CMS) to solicit feedback but shall not submit the waiver for CMS approval until authorized by the General Assembly.”
  • “The Department of Health and Human Services shall make payments to the contractor hired by the Joint Legislative Oversight Committee on Health and Human Services from funds appropriated elsewhere in this budget for this contract…”
  • “The Department of Health and Human Services shall not make any other modifications to the portion of the Medicaid State Plan referenced in this section, except as provided herein.”
  • “The Department may submit drafts of the waivers to the Centers for Medicare and Medicaid Services (CMS) to solicit feedback but shall not submit the waivers for CMS approval until authorized by the General Assembly.
  • “[T]he Division of Medical Assistance shall ensure that any Medicaid-related or NC Health Choice-related State contract entered into after the effective date of this section contains a clause that allows the Department or the Division to terminate the contract without cause upon 30 days’ notice.”
  • “No fewer than 10 days prior to submitting an amendment to the State Plan to the federal government, the Department shall post the amendment on its Web site and notify the members of the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division that the amendment has been posted.”

Basically, the GA has estopped DHHS from reforming Medicaid without the consent of the General Assembly.

Then, stuck in the middle of the state budget is the amendment to N.C. Gen. Stat. 108C…. “Woooo weeee!”

MODIFY MEDICAID APPEALS SECTION 12H.27.

(a) G.S. 108C-12(d) reads as rewritten: “(d) Burden of Proof. – The Department petitioner shall have the burden of proof in appeals of Medicaid providers or applicants concerning an adverse determination.”

Does anyone else understand what this teeny, tiny clause within Session Law 2014-100 means????

What is the importance of burden of proof? Enormous! And this clause changes the playing field for Medicaid providers. It may not have been a level field prior to Session Law 2014-100, but now it’s even more slanted.

The easiest way to explain “burden of proof” is that when a petitioning Medicaid provider challenges some adverse determination by DHHS, for example, the Department’s termination of a contract with the provider, the “burden of proof” decides which party must persuade the reviewing tribunal that the party’s assertions are correct. Up until this amendment of G.S.108C-12(d), the Department has had the burden to present evidence showing that its adverse determination was correct. The petitioner could then respond to that evidence, to try to show the contrary, but the burden of proving the correctness of the adverse determination still rested on the Department in cases filed by Medicaid providers under Chapter 108C.

In court, one of the first questions a judge will ask is, “Who carries the burden of proof?” Because the legal burden of proof is just that…a burden…that must be satisfactorily carried in order to win.

Health care providers who accept Medicaid have notoriously been given the short-end of the stick, i.e., low reimbursement rates, undergoing burdensome audits, but, at least, in NC, historically, the Department has had to prove the correctness of its allegations, whether it be an alleged overpayment, a termination of a Medicaid contract, or other allegations.

But now? DHHS’ allegations against a health care provider are true…unless the provider can prove DHHS wrong. The uphill fight of a provider seeking to correct a DHHS adverse determination, just became much steeper, and it was done with little or no fanfare.

“Woooooooo weeeeeee!”

So can you do? Only options as far as I see it:

  1. Call and email your state representatives.
  2. Hire a lobbyist.
  3. Bring a lawsuit to change it.
  4. Do nothing.

Per L. Warren’s comment, I am adding #5.

5. Stop taking Medicaid clients.

Starting Monday, Without a Veto, the Legal Burden of Proof Will ALWAYS Be on the Medicaid Recipients

I am not sure whether you have noticed, but Medicaid recipients have very little pull in North Carolina government.  Medicaid recipients have very little voice in our society.  Obviously, Medicaid recipients are indigent, so they do not have the money to hire lawyers and lobbyists. 

Politicians (while they are campaigning) always protest that they believe that Medicaid recipients are important…that Medicaid is important…but, most importantly, that it is important that Medicaid recipients receive quality health care….right?

We’ve heard the rhetoric over and over.

But then what happens when the politician takes office?

I can tell you what does NOT happen. Medicaid recipients do not band together, hire a lobbyist and begin influencing government policies.

Per norm, the Medicaid recipients remain invisible.  And mute.

I have a client with a daughter.  This daughter, we will call her Jennifer, is in her 30s, but with mentality of an 18-month old.  Jennifer is diagnosed with Tuberous Sclerosis Complex (“TSC”), a rare, multi-system genetic disease.  She is nonverbal and requires 24 hours/day supervision for health and safety and total care for activities of daily living and incidental activities of daily living, just as an 18-month old would require.

The Managed Care Organization (MCO), where Jennifer resides, is Smokey Mountain Center (SMC).  For the last 4 years in North Carolina (five years ago Jennifer resided in California), Jennifer has received 16 hours/day Medicaid. Once SMC went live and Jennifer’s yearly authorization was up for renewal, SMC reduced Jennifer’s services to 12 hours/day, thereby leaving a 4-hour gap in which Jennifer would be  unsupervised. (Shocking that the MCO did not want to foot the bill for the extra 4 hours, right?)

I will spare you the details of the legal arguments on both sides, as, today, my husband made a comment that my blogs were “too long.”

So, we are in the administrative hearing in front of an Administrative Law Judge (ALJ) with the attorneys for SMC and the Department of Health and Human Services (DHHS) present.  The ALJ asks me, “Counselor, who has the burden of proof, the Petitioner [us] or the Respondents [them]?”

To which I had to think back to my days during which I worked as an Assistant Attorney General (AG) for NC  (yes, I used to work on the other side…where do you think I learned this stuff?? At law school?)

For those of you without law degrees, the burden of proof (onus probandi, in Latin) is the obligation (hence the Latin word “onus“) on the party in a trial, who must prove [something] in court in order for the burden to shift to the other party to dispute.

Sometimes people will explain the burden of proof as “the necessity of proof always lies with the person who lays charges.”  As in, if you claim that I stole your watch, you must prove I stole it.  I do not have to prove that I did NOT steal it.

This may seem like ridiculous semantics to you, but, legally, who bears the burden of proof is huge.

In Jennifer’s example, the ALJ was asking me whether we (Jennifer) had to prove that she medically needed 16 hours/day Medicaid services or whether the State had to prove why Jennifer did NOT need the 16-hours/day Medicaid services.

If we (Jennifer) put on compelling evidence that she needed 16-hours/day services, and Respondents SMC and DHHS put on equally, compelling evidence that she did NOT need 16-hours/day services, then the Judge would have to rule against the party bearing the legal burden of proof.

As of today, here is the law as to burden of proof for Medicaid recipients:

(d) Burden of Proof. – The recipient has the burden of proof to show entitlement to a requested benefit or the propriety of requested agency action when the agency has denied the benefit or refused to take the particular action. The agency has the burden of proof when the appeal is from an agency determination to impose a penalty or to reduce, terminate, or suspend a previously granted benefit. The party with the burden of proof on any issue has the burden of going forward, and the administrative law judge shall not make any ruling on the preponderance of evidence until the close of all evidence.

(emphasis added). 

Senate Bill 553 will change all this.

Senate Bill 553 states that, “The enrollee has the burden of proof on all issues submitted to OAH for a contested case hearing under this section and has the burden of going forward. The administrative law judge shall not make any ruling on the preponderance of evidence until the close of all evidence in the case.”

The enrollee = the Medicaid recipient.

Therefore, even if the MCO terminates an enrollee’s services (and even if the termination is arbitrary and without merit), the Medicaid RECIPIENT bears the legal burden to prove this.

Really?  Let’s make it even harder for Medicaid recipients to appeal denials or reductions in services.  They can handle it!  They can hire a lawyer!  Right?

Who does this change benefit? Who benefits from the Medicaid recipients bearing the burden of proof in a legal action?

Answer? The MCOs.  And guess what?  The MCOs have lobbyists.  The MCOs have lawyers.

Senate Bill 553 was ratified July 26, 2013.  Which means that SB 553 will be law beginning Monday unless Governor McCrory vetoes the bill by Sunday.  On Sunday (August 25, 2013), McCrory can choose to sign SB 553, allow SB 553 to pass without his signature, or veto the bill.

If McCrory does NOT veto the bill, Medicaid recipients will bear the burden of proof in all contested cases. 

I ask you, why would we as a society place the legal burden of proof on the party LEAST likely to be able to afford a lawyer?

Send Gov. McCrory an email. Veto SB 553!!!