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Safety-Net Hospitals Penalized for Too Many Readmissions – Fair or Not Fair?

Since 2012, Medicare has penalized hospitals for having too many patients end up back in their care within a month. Mind you, these re-admissions are not the hospitals’ fault. Many of the re-admissions are uninsured patients and who are without primary care. Without an alternative, they present back at the hospitals within 30 days. This penalty on hospitals is called the Hospital Readmissions Reduction Program (HRRP) and is not without controversy.

For example, if hospitals are not allowed to turn away patients for their lack of ability to pay, then penalizing the hospital for a readmission (who the hospital cannot turn away) seems fundamentally unfair. Imagine someone at the Center for  Medicare and Medicaid Services (CMS) yelling at you: “You cannot turn away any patients by law! But if you accept a patient for readmission, then you will be penalized!!” The logic is incongruous. The hospital is found in a Catch-22. Damned if they do; damned if they don’t.

The Emergency Medical and Treatment Labor Act (EMTLA) passed by Congress in 1986 explicitly forbids the denial of care to indigent or uninsured patients based on a lack of ability to pay. It also prohibits “patient dumping” a practice in which a hospital orders unnecessary transfers while care is being administered and prohibits the suspension of care once it is initiated.

Even non-emergent care is generally required, depending on the hospital. Public hospitals may not deny patient care based on ability to pay (or lack thereof). Private hospitals may, in non-emergency situations, deny or discontinue care.

The most recent HRRP report, which concentrated on Connecticut hospitals, which will penalize CT hospitals for too many readmissions starting October 1, 2018, shows: 27 of the 29 hospitals evaluated — or 93% — will be penalized in the 2019 fiscal year (Oct. 1, 2018 – Oct. 1, 2019) that began Oct. 1, according to a Kaiser Health News analysis of CMS data. $566 million in total penalties will be required, depending on the severity of the violations.

Here is the formula used to determine penalties for readmission within 30 days to a hospital:

Screen Shot 2018-10-11 at 2.13.52 PM

No hospital that was audited received the maximum penalty of 3%, but 9 CT hospitals will have their Medicare reimbursements reduced by 1% or more. They are: Waterbury Hospital at 2.19%, Bridgeport Hospital at 2.01%, Bristol Hospital at 1.91%, Manchester Memorial Hospital at 1.74%, Johnson Memorial Hospital in Stafford Springs at 1.71%, Midstate Medical Center in Meriden at 1.37%, St. Vincent’s Medical Center in Bridgeport at 1.21%, Griffin Hospital in Derby at 1.17%, and Yale New Haven Hospital at 1.03%.

There is controversy over the HRRP.

Observation status does not count.

Interestingly, what is not evaluated in the Hospital Readmission Reduction Program may be just as important, or more so, than what it is evaluated. -And what is not evaluated in the HRRP has morphed our health care system into a plethora of observation only admissions.

Patients who are admitted under observation status are excluded from the readmission measure. What, pray tell, do you think the result has been because of the observation status being excluded??

  • More in-patient admissions?
  • More observation status admissions?
  • No change?

If you guessed more observation status admissions, then you would be correct.

Most hospitals have developed clinical decision units, which are typically short-stay observation areas designed to care for patients in less than 24-hours. The difference between inpatient and observation status is important because Medicare pays different rates according to each status. Patients admitted under observation status are considered outpatients, even though they may stay in the hospital for several days and receive treatment in a hospital bed. Medicare requires a three-day hospital inpatient stay minimum before it will cover the cost of rehabilitative care in a skilled nursing care center. However, observation stays, regardless of length, do not count toward Medicare’s requirement.

30-Day readmission period is arbitrary.

Why 30-days? If a patient is readmitted on the 30th day, the hospital is penalized. But if the patient is readmitted on Day 31, the hospital is not penalized. There just isn’t a lucid, common sense reason except that 30 is a nice, round number.

The HRRP disproportionately discriminates against hospitals that have high volume of uninsured.

HRRP does not adjust for socioeconomic status. This means that the HRRP may be penalizing hospitals, such as safety-net hospitals, that care for disadvantaged populations.

When other laws, unintentionally or intentionally, discriminate between socioeconomic status, often an association or group brings a class action lawsuit in federal court asking the judge to declare the law unconstitutional due to discrimination. Discrimination can be proven in court by how the law of supply or how the law is written.

Here, the 27 hospitals, which will be receiving penalties for fiscal year 2019, serve a high population of low income patients. The result of which hospitals are getting penalized is an indication of a discriminatory practice, even if it is unintentional.

The Upshot from Knicole:

These hospitals should challenge the HRRP legally. Reimbursements for services render constitute a property right. Usurping this property right without due process may be a violation of our Constitution. For $566 million…there should be a fair fight.

 

NC is #1 in USA!! (For Highest Percentage Increase in Total Medicaid Spending)…and What About the Rest of the USA?

On October 21, 2013, the magazine Modern Healthcare published an article, “Medicaid budgets By State,” which showed each state’s total Medicaid spent in 2012, total number of Medicaid enrollees in 2012, and average spending per enrollee in 2012.

Where does North Carolina rank in terms of our Medicaid budget versus other states?  We hear constantly that we spend all this needless money on administrative costs of Medicaid.  But, in terms of our Medicaid budget, where do we rank?  And my next question…do we simply have more Medicaid recipients in NC in relation to other states?  Is NC’s average spending per Medicaid enrollee grossly higher or lower than the national average?

Inquiring minds want to know!

Surprisingly, at least to me, Alaska has the highest average spending per Medicaid enrollee: $13,073, on average, per enrollee.  But then I thought about, much of Alaska is rural…not only rural , but almost impossible to navigate due to the snow and ice.  I don’t know for sure, but I would imagine that getting to and from Medicaid recipients or getting recipients to services (while not always reimbursed by Medicaid) must impact some of the costs.

[Important to note: The average spending per enrollee, to my knowledge, does not mean actual money spent per enrollee.  I believe the authors took the total budget and divided it by the number of enrollees.  So the average spent per enrollee includes built-in, administrative costs.]

Or…Maybe Alaska has a low number of Medicaid recipients and that is why Alaska spends the most per enrollee…maybe Alaska has a huge Medicaid budget without many recipients on which to spend it…few people, big pie…

I looked.

Alaska had, in 2012, 109,000 Medicaid recipients.

The fewer people you have at Thanksgiving, the bigger the pie pieces.  However, interestingly enough, Alaska spent $1.425 million total in Medicaid in 2012.  Delaware spent $1.421 in Medicaid in 2012. (Close enough, right?).  Yet, Delaware spent $6831, on average, per enrollee.  Maybe the pie analogy doesn’t work.  Maybe sometimes, even with a big pie and few people, too many rats and ants nibble at the pie.

Out of 50 states, where do you think NC falls?  Top 10 highest spender?  Bottom 10?  Right in the middle?

Drum roll……..

#9.

The only 8 states that spend more than NC per Medicaid recipient are:

1. Alaska

2.  New Jersey (somehow that did not surprise me) ($11,433/recipient)

3. Rhode Island (that did surprise me…I mean, look how little RI is…how big a Medicaid budget can it have?) ($11,080/recipient)

4.  North Dakota (a less populous state (less tax dollars), I believe) ($10,969/recipient)

5.  Pennsylvania ($10,835/recipient)

6.  Minnesota (there are big cities there (more tax dollars), no surprise) ($10,080/recipient)

7.  Missouri  (I went to law school in Missouri. This number surprised me a bit).  ($10,022/recipient)

8.  Connecticut ($9883/recipient)

9.  NC ($9,430/recipient)

Crazy! What about Illinois? With the hugely populous, Windy City and it being Obama’s home state, surely, Medicaid spending per recipient is, at least, in the middle, right?

Wrong.  Illinois is dead last with only $5229, on average, per recipient being spent.

Probably because too many people were invited to Thanksgiving…in 2012, Illinois had 2.626 million Medicaid recipients enrolled….or too many rats and ants.

Compare to NC in 2012 – 1.471 million Medicaid recipients.

What was Alaska’s Medicaid budget/spending in 2012 that the average spending per enrollee was $13,073?

$1.425 million spent.  Up 10.3% from 2011.  And 109,000 Medicaid enrollees.

Here is NC:

Spending: $13.872 million. Up 22.8% from 2011. And 1.471 million recipients.

Here is a crazy one..Nevada:

In 2012, Nevada had 301,000 Medicaid enrollees.  A little under 3x Alaska.  Nevada spent $1.692 million on Medicaid (only 200,000-ish over Alaska), but Nevada’s average spending per enrollee was $5,621 (less than half of Alaska and the third lowest amount spent per enrollee).  Where did all Nevada’s Medicaid money go?? Rats and ants eating away the pie?

North Dakota has the very least number of Medicaid enrollees in 2012…66,000.  Wyoming is a close second with only 67,000 Medicaid enrollees in 2012.

North Dakota was the 4th highest state as to spending per enrollee with an average of $10,969/enrollee.

Wyoming was the 16th highest state as to spending per enrollee with an average of $8537/enrollee.

Guess which state had the highest total spending on Medicaid in 2012?

Drum roll…..

California. (Shocker!). California spent $47.726 million on Medicaid, up 4.2% from 2011.  California also had the highest number of enrollees on 2012 with 2.624 million enrollees (over a million more than NC).  California also spent the 5th lowest on average per enrollee, $6,065.

Having a high number of enrollees did not always have a direct correlation with spending the least, on average, per enrollee.  Oregon only had 569,000 Medicaid enrollees in 2012 and spent the 4th lowest amount, on average, per enrollee, $6,007.

New York is the closest state to spending and number of recipients to California, but New York succeeded in a much higher average spending per enrollee than California.

New York spent $39.257 million total on Medicaid (less than $8 million difference from California) in 2012.  New York had 5.004 million enrollees (2.8 million Medicaid enrollees less than California) and spent, on average, $7845/enrollee (absolute, dead-on-middle as compared to all states).

Georgia is, perhaps, the most comparable to North Carolina in terms of number of Medicaid enrollees in 2012.  NC = 1.471 million enrollees in 2012.  GA = 1.529 enrollees in 2012.

NC spent $13.872 million, while Georgia spent $8.497 million in 2012.  So, Georgia had MORE Medicaid enrollees and spent over $5 million less……

Is that good or bad?  Is Georgia more efficient?  Did Georgia spend less in administration costs?

Actually (albeit there may be other factors), Georgia spent significantly less, on average, on each Medicaid enrollee.

Georgia spent 2nd lowest, on average, per Medicaid enrollee.  Only Illinois surpassed Georgia in lowest spending, on average, per enrollee.  Georgia spent, on average, $5,229 per enrollee.

NC spent $9430, on average, per enrollee. (Which, BTW, is more than enough for my “A Modest Proposal”).

That is a huge difference!

One other number jumped out at me when I reviewed Modern Healthcare‘s article, “Medicaid Budgets By State.”  Remember I told you that NC spent $13.872 million on Medicaid in 2012…and that the amount spent was a 22.8% increase from 2011?

22.8% is a high percentage to increase in only one year!

I looked at the increases/decreases of the states.  North Carolina gets the award for the highest percentage growth in spending on Medicaid in the entire nation.  NC was the only state whose percentage “increase of Medicaid spending” percentage from 2011 to 2012 was in the 20s.

NC is #1 in the nation for percentage increase as to total Medicaid spending!!!! (Proud?)

The next state with the highest increase in spending on Medicaid is Mississippi with a 17.4% increase in spending from 2011.  Next in line is Alabama with a 14.7% increase in Medicaid spending.

Guess which states decreased its Medicaid spending the most from 2011 to 2012?

Drum roll…

Oregon (decrease of 23.2% spending) and Illinois (decrease of 15% spending).  Is it coincidental that Illinois spent the absolute least, on average, per Medicaid recipient and that Oregon spent the 4th lowest, on average, per Medicaid recipient?

Regardless the size of the pie, the number of guests, and the number of rats and ants, we need to make sure that the guests (Medicaid recipients) are benefitting most from the pie.

Sometimes a decrease in spending equals a decrease in services to Medicaid recipients…sometimes not…I guess it depends on the number of rats and ants.

Medicaid Recipients Under 21: Not Allowed to Self-Refer Selves to Mental Health Services

In the wake of the killings in Connecticut and with all the recent discussions nationally about mental health, I realized something yesterday that floored me:

In North Carolina, an 18-year-old Medicaid recipient is not allowed to self-refer him or herself to a therapist.

According to DMA Clinical Policy 8C, a Medicaid recipient,  under the age of 21, who wants to seek mental health services by a therapist (Outpatient Behavioral Health services) is required to have an “individual, verbal or written referral, based on the beneficiary’s treatment needs by a Community Care of North Carolina/Carolina Access (CCNC/CA) primary care provider, the LME-MCO or a Medicaid-enrolled psychiatrist.”

Medicaid recipients over the age of 21 can self-refer him or herself to mental health services.

Adam Lanza, the boy who shot so many innocent children and teachers in Connecticut, was 20-years-old at the time of the horrible event.

Yet, if he lived in North Carolina, he could not have self-referred himself to receive therapy.  He would have needed to see a doctor first.

I understand that Medicaid recipients under the age of 21 CAN see a therapist. But, by placing another hoop for them to jump through (seeing another doctor first), just makes it that much harder to receive therapy. If access to mental  health services is that important, why make it more difficult for Medicaid recipients under 21?

Surely, a 20-year-old Medicaid recipient has the capability to determine whether he or she is in need of therapy.

 

Tip #6: Avoiding Medicaid Recoupments

This tip, Tip #6, is devoted to Outpatient Behavioral Health providers.

Outpatient Behavioral Health providers are licensed psychologists or psychologists who provide mental health counseling to Medicaid recipients.In light of the recent mass murder in Connecticut, I believe that most people would agree that the ability for anyone to receive mental health services is of utmost importance. In my opinion, mental health services are the most needed and most under-used health care service.  In the debate between guns and violent video games, I say that mental health issues and mental health care services trump both.  Create a society in which mental illnesses are (not necessarily accepted) but not stigmatized, people are comfortable asking for help regarding mental illnesses, people can identify others who are in need of counseling, and all people, no matter their insurance coverage,  have access to mental health care services.  Create this society and this society equals violent crimes under control.  A society in which a gun is merely a gun. For hunting, protection of family, or sport…not a weapon of mass destruction.  Mental health awareness is the key.

Ok, enough of my soap box.

In North Carolina, Outpatient Behavioral Health providers are bound by NC DMA Clinical Coverage Policy No. 8C.  Policy No. 8C is much shorter in length than most clinical policies. It’s terseness is a thing of beauty for the Outpatient Behavioral Health providers.

Herein lies tip #6:

Because 8C is so short, so terse, all Outpatient Behavioral Health providers should print off Policy No. 8C and fasten it onto the walls of the office (at least the meaty portions…not the beginning and ending fluff).

Outpatient Behavioral Health providers should have Policy 8C memorized.  Outpatient Behavioral Health providers should dream about Policy 8C.  Outpatient Behavioral Health providers should be able to regurgitate the meat of Policy 8C   …..I mean, come on, people, Policy 8C is 31 pages.  Without the fluff (just the meat) Policy 8C is only, in my opinion, 10 pages of meat…10 pages (pages 7-17)!!!! If the Outpatient Behavioral Health providers memorize a mere 10 pages, the Outpatient Behavioral Health providers will be able to thwart potential reconsideration reviews. Even if the State threatens or begins a reconsideration review, if the Outpatient Behavioral Health providers have memorized these 10 meaty pages, the Outpatient Behavioral Health providers will easily be able to defend the reconsideration review based on documentation and, thus, avoid any alleged overpayments. (After page 17 is important to follow in practice: it consists of billing codes and revisions to past policies, but 17-31 is not the “meat” regulating Outpatient Behavioral Health providers).

For this blog, I am concentrating on Section 7.3.3.  Section 7.3.3 is, by far, the biggest reason Outpatient Behavioral Health providers get dinged in Medicaid audits….BY FAR.  Service notes….really? YES.

Service notes are detail-oriented. Tedious. And one mistake on a service note…I mean a SMALL mistake…will cause the State to attempt to recoup the Medicaid payment bestowed for the entire service rendered. For example, an Outpatient Behavioral Health provider gets prior authorization from the correct state-contracted entity , a valid referral by a Carolina ACCESS primary care physician, a signed consent by the Medicaid recipient, a regulatory-correct Comprehension Clinical Assessment, a valid Treatment Plan and Service Plan… BUT….on the service note for one day…one couseling session….forgets to describe the Medicaid recipient’s reaction to the counseling. Or forgets to put the duration of the session (writes 6pm, but forgets to write that the session ended at 7pm). Or forgets to describe the nonverbal journal-writing session and bills for the play treatment (a higher-reimbursable code). What happens? A Medicaid audit.

According to Policy 8C, there must be a progress note for each treatment encounter that includes the following information (And, people, this is NOT difficult. This is the minimum and easy to meet):

  1. Date of service;
  2. Name of the service provided (e.g., Outpatient Therapy – Individual/Family Tx);
  3. Type of contact (face-to-face, phone call, collateral); non-face-to-face services are not covered and not reimbursable;
  4. Purpose of the contact (tied to the specific goals in the  Tx plan);
  5. Description of the treatment or interventions performed. Treatment and interventions must include active engagement of the individual and relate to the goals and strategies outlined on the individual’s plan;
  6. Effectiveness of the intervention(s) and the beneficiary’s response or progress toward goal(s);
  7. The duration of the service (e.g., length of the assessment or treatment in minutes; Pharmacological Management does not require documentation of the duration of service); and
  8. Signature, with credentials, degree, and licensure of clinician who provided the service. Electronic signatures must adhere to DMA guidelines. A handwritten note requires a handwritten signature; however, the credentials, degree, and licensure may be typed, printed, or stamped.
  9. Service notes must be written in such a way that there is substance, efficacy, and value. Interventions, treatment, and supports must all address the goal(s) listed in the plan. They must be written in a meaningful way so that the notes collectively outline the beneficiary’s response to treatment, interventions, and supports in a sequential, logical, and easy-to-follow manner over the course of service.

Is this difficult? No. Not rocket science.  I suggest creating a template. The template should have a space for every required component of the service note. Print off hundreds…no thousands.  Keep the print-offs in a location that all employees, if present, know of and make them understand that every service note must adhere to the template. Completely. No short-cuts.  No…”I forgot.”  Follow the template.

The result?  The Department of Health and Human Services (DHHS) or any of its entities or contracted companies will be able to audit any service note, written by any employee or you, and say, “This Outpatient Behavioral Health provider has met the minimum requirements of Policy 8C; therefore, there is no reason to try to recoup Medicaid funds from this provider. This provider has followed the rules.”

Wow. Shock and awe. Could that happen? Yes: MEMORIZE THE MEATY 10 PAGES OF POLICY 8C!!!!! And you too could avoid Medicaid recoupments.

 

How Medicaid Handles Mental Illness

Mental health in this country is not handled well. That is an understatement!!! Look at the atrocity in Connecticut last week. An young man, supposedly suffering from Asberger’s, a mild type of autism, shot his way into an elementary school and proceeded to slaughter young children and women. Our country does not handle mental health. However, mental health issues exist, are common, and are not treated appropriately. We cannot act like an ostrich and poke our heads in the sand.

The horrifying events of last week’s elementary school slaughter should make us realize that something must be done with how this country handles mental illness.  Folks, it’s not the guns that need control. Gun cannot act on their own. The people holding the guns need to be reasonable and sane. People who suffer mental illness in this country need real services. Real help.

How North Carolina handles mental illness is about to change drastically. The entire Medicaid mental health system is changing. This may be the biggest re-vamping of mental health we have undergone. If it doesn’t work, it will cost billions to change the system back. How will it change? See below.

The sad truth is mental illness is a very under-treated health condition. The stigma that attaches to it is one reason.  But poverty is also a factor.

The N.C. Interagency Council for Coordinating Homeless Programs (ICCHP) conducts an annual survey of homeless people.  In 2008, the statistics were as follows:

  • 12,371 people identified as homeless, including
  • 3,643 people in families, 2,216 of whom were children.
  • 1,054 identified themselves as veterans of military service.
  • 1,961 identified themselves as having a serious mental illness.
  • 4,206 identified themselves as having a substance use disorder.
  • 1,108 identified themselves as being a victim of domestic violence.
  • 6.5 percent of people identified themselves as having been released from the criminal justice system.
  • 6 percent of people identified themselves as having been released from a mental health hospital or drug treatment program.

Half of the homeless identified themselves as suffering from a mental illness or suffering substance abuse! Half! How many homeless suffer a mental illness without a diagnosis?

These are people who should be receiving Medicaid. In order to receive mental health services covered by Medicaid, the mental health services must be determined to be medically necessary to treat the mental illness.

So what is “medical necessity?”

Medicaid covers procedures, products, and services when they are medically necessary. With all the Medicaid rules and regulations, somewhere, medical necessity must be defined. It is not. In North Carolina Clinical Policy 8A, medical necessity is described as: “All Medicaid services are based upon a finding of medical necessity, which is determined by generally accepted North Carolina community practice standards as verified by independent Medicaid consultants. There must be a current diagnosis reflecting the need for treatment.”  What?  Basically, an independent consultant, as of now, VO, must decide whether a health care service is medically necessary. Despite the amorphous definition, medical necessity has been somewhat uniform because all the prior authorizations went through VO. It did not matter in which county you lived. VO was state-wide.

Not for long. In upcoming changes to NC Medicaid, VO will no longer be the independent consultant for North Carolina’s mental health.  The State is creating Managed Care Organizations (“MCOs”).  Suffice it to say, if you are a health care provider in North Carolina, you have heard the term “MCO.” What is an MCO? I guess the correct question is what will be an MCO?

The best way to describe the new Medicaid system in North Carolina, I think, is to explain the process for getting prior approval now and explain how it will change in the upcoming 6-7 months.

To obtain prior authorization now for mental health services, the provider sends documents, usually a Person-Centered Plan (“PCP”) with a Service Order, among other papers, to ValueOptions.  Since 2006, VO has provided North Carolina with utilization management. Meaning health care professionals at VO would review the documents and determine whether the Medicaid recipient met “medical necessity” in order to receive the services requested.

When the MCOs take over, there will be no state-wide definition for medical necessity.  There will be no state contract with VO. Basically, the State will disperse all the Medicaid funds to the MCOs.  No one really knows how many MCOs there will be in North Carolina.  As of now, it appears there will be 12 or so. Alliance Behavioral Health will be one. Wake County could not get qualified on its own, so Wake County partnered up with Durham County.

The thought process was this: The State is too big to understand the needs of local regions. So let the localities decide what services are needed in Medicaid’s mental health. On paper, I think it sounds good. Trying to focus locally is a good thing. The problem I foresee is the lack of a uniform, well-defined criteria for medical necessity in mental health.

It is foreseeable that each different MCO will have different opinions as to what services are medically necessary or not. In Charlotte, Medicaid may cover hyperbolic oxygen treatment for autism. But Raleigh may not. In Raleigh, Medicaid may limit psychiatrist visits for people with violent tendencies, and, in Wilmington, the psych visits may be unlimited. A Medicaid recipient may be denied in Roxsboro for mental health services that would be covered if that Medicaid recipient lived in a different MCOs region.

Mental health is such an important topic. In the wake of the killings in Connecticut, we, as a country, need to learn to better provide services to those with mental illnesses. Medicaid recipients need solid mental health services. With the MCOs provide better mental health services? Maybe. But I think a good start would be to provide a state-wide definition for medical necessity.