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CSC Sued in NY: Accused of Multi-Million Dollar Healthcare Fraud Scheme!!
Remember the NCTracks lawsuit? NCTracks Derailed: Class Action Lawsuit Filed!! Computer Sciences Corporation (CSC) is one of the Defendants in that action here in NC.
Well, Monday CSC was hit with another enormous lawsuit. This one is filed in New York, and the Plaintiff is the U.S. Federal Government.
The feds are accusing CSC of a multi-million dollar Medicaid fraud scheme through its Medicaid billing software CSC implemented in NY.
Here is the press release.
From the complaint: “[T]hese fraud schemes were far from isolated events; instead, they were part and parcel of a general practice at CSC and the City to blatantly disregard their obligations to comply with Medicaid billing requirements.” (Compl. par. 8.)
The feds are seeking treble damages, which permits a court to triple the amount of the actual/compensatory damages to be awarded to a prevailing plaintiff.
According to the lawsuit, CSC has received millions of taxpayer dollars (budgeted for Medicaid) unlawfully and in direct violation of federal billing requirements.
If I were a taxpayer in NY, I would be incensed!!!! If I were a Medicaid recipient of parent of a child receiving Medicaid services, I would be furious!!
Now, take a step back…who is administering our Medicaid billing system here in NC?
Answer: CSC
This will almost certainly cause the federal government to peer a bit closer at all CSC’s billing software systems in other states…
NC State Auditor Releases New NCTracks Audit: Unresolved Risks Could Delay Federal Certification
This just in!!!!
Our State Auditor Beth Wood just released a new audit entitled, “Department of Health and Human Services-NCTRACKS-Federal Government Certification Status.”
More to come…
NCTracks Derailed: Class Action Lawsuit Filed!
My law partner Camden Webb and I filed a class action lawsuit today alleging on behalf of medical providers who accept Medicaid in North Carolina.
Williams Mullen Medicaid Litigation Team Files Class Action Lawsuit Against NCTracks
Raleigh, NC. (Jan. 16, 2013) – This morning, Williams Mullen attorneys Knicole Emanuel and Camden Webb filed a class action lawsuit on behalf of Medicaid providers in North Carolina against NCTracks, the system that processes Medicaid claims.
The suit alleges that NCTracks was launched before it was ready to be implemented, and its poor design has resulted in catastrophic losses for health care providers. NCTracks had over 3,200 software errors in the first few months of operation, and payments to Medicaid providers were delayed, unpaid, or “shorted” by over half a billion dollars in the first 90 days. In some instances, providers have decided not to accept Medicaid patients or have even closed their practices, and some of North Carolina’s most needy citizens have suffered a reduction in the health care resources available to them.
“We’re filing on behalf of health care providers, but we’re also serving the low-income Medicaid recipients of North Carolina that rely on these providers to receive care,” said Knicole Emanuel, a Litigation Partner with the firm who handles Medicaid matters. “Since these providers have experienced financial hardship due to NCTracks, many of them are no longer able to serve the state’s most vulnerable population of health care consumers.”
About Williams Mullen
Williams Mullen is an AmLaw 200 law firm that blends the law, government relations and economic development to help grow the business of our clients and the economy of our region across North Carolina, Virginia and Washington, D.C. Our attorneys and consultants strive to help connect clients to opportunities and solutions they need. Putting our clients’ needs first has been the foundation of our approach since the firm was founded 103 years ago. Visit us at www.williamsmullen.com.
NC Medicaid: With Diaz Gone, Who Will Provide the Cheery Soundbites About NC DHHS?
You know you know someone like this! No matter how horrible the circumstance, they just say positive things. You know, like a Disney character…oblvious to reality. Think about Snow White…her step-mother wants to kill her, she is run into the deep forest by a huntsman who was supposed to kill her, she is told to NEVER return home, she finds 7, extremely, short men with whom she has to live (smelly) and become their maid (dirty), yet she whistles while she works!
So to was Ricky Diaz, the communications director for the North Carolina Department of Health and Human Services (DHHS). In the face of NCTracks’ catastrophic roll out, Diaz says, “While we’re pleased with the success of the new system…”
And
“Although NC Tracks has processed more claims than it has denied…”
And
NC Tracks has now processed more than 15 million claims that paid health care providers more than $1.1 billion, according to Diaz.
And
Diaz said he does not feel as though the state rushed into this transition. “We processed more than 15 million claims and paid health care providers more than $750 million during July,” he emphasized.
And (my personal favorite, in a DHHS News Release after the go-live date)
“NCTracks is on track.”
“Whistle while you work…” Well this cheery, optimistic communications director resigned. His resignation came on the heels of providing reporters false information about the Medicaid debacle. See my blog: “DHHS Blunder Could Cost Millions! “Oops I Did It Again.””
Ricky Diaz announced his resignation today (Wednesday, January 8, 2014) on Twitter, saying he is proud to be joining a small public affairs and media relations firm in Washington, D.C.
“Proud to be joining…” That’s our Ricky…upbeat and positive…”Whistle while you work…”
But now who will provide us with the positive soundbites for the media?
Hello, 2014! And Hello 3% Decrease in Medicaid Reimbursements (But Call the Decrease “Shared Savings”)
Tomorrow is the first Medicaid checkwrite for 2014 (and its my birthday too). Happy New Year! Happy birthday!! (I’m turning 29 for the 10th year). For New Years, my husband and I had a very quiet evening eating crab legs at home. Yum! I am sure many of you made New Years resolutions…work harder…lose weight…get paid 3% less….WHAT?
With the first Medicaid checkwrite tomorrow, due to Session Law 2013-360, many health care providers will receive 3% less in Medicaid reimbursements. You will receive a 3% cut if you are the following types of providers:
- Inpatient hospital.
- Physician, excluding primary care until January 1, 2015.
- Dental.
- Optical services and supplies.
- Podiatry.
- Chiropractors.
- Hearing aids.
- Personal care services.
- Nursing homes.
- Adult care homes.
- Dispensing drugs.
(This is the exact list as found in Session Law 2013-360. I am well aware that the list is grammatically-challenged, but I did not write it). Both the federal government and NC are calling this 3% withholding “Shared Savings Plan with Provider.”
How is this “shared savings with providers” when the government is withholding money from providers??? Sure, supposedly, there will be a “pay for performance payment” to some providers, but most providers will just be reimbursed 3% less.
How is this fair? How is this “shared savings?”
Here’s an example:
Say I work at Harris Teeter and my manager comes up to me and says, “Hey, Knicole, Harris Teeter is really concerned with our overhead costs. Salaries seem to be a big cost, and we want to “share the savings” with you. So we are going to cut your pay by 3%. If we, subjectively, determine, at the end of the year, that you are working hard and saving us money, then we will give you a performance reward. It will not be all the money we retained, but it will be some amount. This way Harris Teeter profits off the interest of the 3% we retain all year, plus the amount we never give you.”
Folks, the above example is called a decrease in pay and a swift kick in the bottom. It is not “shared savings.”
In DHHS’ shared savings scheme, the money will go to:
“The Department of Health and Human Services shall use funds withheld from payments for drugs to develop with Community Care of North Carolina (CCNC) a program for Medicaid and Health Choice recipients based on the ChecKmeds NC program. The program shall include the following:
- At least 50 community pharmacies by June 30, 2015.
- At least 500 community pharmacies in at least 70 counties by June 30, 2016.
- A per member per month (PMPM) payment for care coordination and population health services provided in conjunction with CCNC.
- A pay for performance payment.”
According to the Centers for Medicare and Medicaid Services (CMS), “[a] shared savings methodology typically comprises four important concepts: a total cost of care benchmark, provider payment incentives to improve care quality and lower total cost of care, a performance period that tests the changes, and an evaluation to determine the program cost savings during the performance period compared to the benchmark cost of care and to identify the improvements in care quality.”
Employers chop salaries all the time in order to maximize profit. Back in 2011, Sony proposed 11% salary cuts for executives due to such a terrible fiscal year. But guess what is different between Sony’s 11% cut and Medicaid’s 3%? I know…I know…a lot….but what difference am I thinking about?
Sony sought shareholder approval.
I guess you can make the argument that the General Assembly sought voter approval because our citizens voted for all the legislators in the General Assembly. But I think that argument is weak. No legislator ran his or her campaign on: “Vote for Me! If you are a Medicaid provider, I plan to decrease your salary by 3%!”
Better yet, with the Sony salary cut, executives had the option to seek employment elsewhere. What is a Medicaid provider’s option? Move? Not take Medicaid? (Sadly, I see this as a more viable option).
On a legal note, I question the constitutionality of our new shared savings plan. Wouldn’t the decrease of 3% in Medicaid reimbursements be considered an unlawful taking without due process. In essence, could one argue that the decrease of 3% in Medicaid reimbursements is just a way for the State to decrease Medicaid reimbursements without going through the proper lawful process?
Then again, maybe we won’t need to worry about the 3% decrease at all…given NCTracks’ track record, it is plausible that NCTracks will not be able to adjust the Medicaid reimbursements by 3%.
If Men Are From Mars and Women Are From Venus, Then DHHS Is From Dune!
Without question, men and women see things differently. We process things differently. Which, of course, is why John Gray, Ph.D’s book “Men Are From Mars, Women Are From Venus” was such a huge success. Men and women are so different that we can see (or read) the same thing and have two completely different ideas about what happened.
An example of the difference in male and female perception is how men and women view their bodies. Men, generally, think of themselves as much better looking than they acually are in reality…
Whereas women, generally, think they are fatter or uglier than they are…
Then here comes DHHS…
Yesterday (Tuesday) at the Joint Legislative Oversight Committee on Health and Human Services meeting, Chief Information Officer Joe Cooper said the state staffers overseeing the NCTracks system should be “congratulated on seeing this project through a successful launch.”
Congratulated??
For seeing NCTracks through a SUCCESSFUL launch??
Men may be from Mars. Women may be from Venus. But DHHS is from Dune and just as fictional.
December 2013 Performance Audit Finds NCTracks Has Encountered More Than 3200 DEFECTS!
Today State Auditor Beth Wood published the December 2013 “NCTracks Post-Implementation Performance Audit.” One of the key findings is that, since NCTracks went live, the NCTracks system has encountered more than 3,200 defects.
3200!!!
This is the second audit that Wood has conducted on NCTracks. The first audit was May 22, 2013, and expressly warned the Department of Health and Human Services (DHHS) that NCTracks was not ready to go live.
More to come in another blog…
Former DHHS staffer takes jobs with Medicaid contractor
I cannot take credit for this blog. I cut and pasted the test from WRAL. But…WOW!!!!
Raleigh, N.C. — A state employee who helped oversee the construction and rollout of the NCTracks Medicaid billing system now works for Computer Sciences Corp., the contractor responsible for the troubled project. Paul Guthery was an IT manager at the Department of Health and Human Services, where he had worked since January 2010. At a hearing Wednesday, State Auditor Beth Wood described him as the agency’s “point person” for CSC, responsible for certifying NCTracks’ testing process. At least one good-government watchdog says his jump from supervising the company to working for it raises the appearance of a potential conflict of interest, one that the state should try to avoid in the future.
According to public records, Guthery began working for the state on Jan. 1, 2010. His last salary was $126,500 per year. He stopped working for the state Aug. 27 and soon after began working for CSC as an executive account executive. Doctors, hospitals and others who render care for patients covered by Medicaid, the state-federal health insurance program for the poor and disabled, must use the CSC-built NCTracks system to get paid for those services. The system went live July 1 and soon after become the focus of controversy, with providers saying it was nearly impossible to submit claims and that payments were delayed by months. The delays threatened to drive some providers out of business and complicated care for thousands of patients.
Since then, the state and CSC have struggled to right the program. It was in late August, as providers bombarded lawmakers and the governor’s office with complaints about the system, that Guthery made the jump to the private sector.
Guthery declined via email to speak with WRAL News, deferring to his company’s corporate communications department. Michelle Sicola Herd, a spokeswoman for CSC, declined a request for an interview and was not willing to speak on the record about the circumstances of Guthery’s hiring.
Officials with DHHS downplayed Guthery’s part in the rollout of NCTracks, saying Thursday that he never occupied a position in which he would give the final word on the program going live. “One of the key things is that Paul was one of many people involved in this project, a very large project going on for a very long period of time,” said Ricky Diaz, a spkesman for the department. Diaz emphasized that an outside testing group reviewed the stability of the NCTracks system before state officials turned it on July 1.
But Wood blasted the role of that third-party overseer, saying the company hired for independent verification and validation of system testing had not actually conducted any independent verification. Rather, they merely collected information from DHHS and CSC and summarized it in a report.
During a hearing Wednesday, Sen. Jeff Tarte, R-Mecklenburg, asked Wood who was responsible for signing off on reports that system testing had been completed and was successful.
“The agency,” Wood answered, adding, “The point person that was at the agency is now working for CSC.” That person was Guthery.
Diaz said state personnel laws prevent him from talking about what, if any, steps were taken to try to keep Guthery as an employee. But he emphasized that the state had taken strides to get the system on track, pointing out that it has been under construction for more than 10 years.
“There have no doubt been challenges. This is a very large transition for the state of North Carolina,” he said. “The NCTracks project has, to date, paid $3.8 billion to North Carolina health care providers, as well as processing more than 78 million claims.” With regard to Guthery, Diaz said state law does not currently prohibit employees who work with a contractor from taking a job with that contractor. By contrast, had Guthery taken a job as a lobbyist, he would have needed to wait six months before working with the legislature or his old employer. No such cooling-off period applies to employees in other lines of work.
Jane Pinsky, with the North Carolina Coalition for Lobbying and Government Reform, says lawmakers should consider changing that. “If I’m a skeptical, cynical citizen, the question is, did he (Guthery) give them a pass and then they gave him a job?” Pinsky said. Earlier this year, another high-ranking DHHS staffer left for a private-sector job. Former state Medicaid director Carol Steckel was recruited to overhaul North Carolina’s system but left abruptly for a position with Wellpoint, a managed-care company based in Florida.
Pinsky pointed out that Wellpoint could end up bidding to run some or all of North Carolina’s Medicaid services under the McCrory administration’s planned reforms.
“In state government, and in DHHS, it is not unprecedented for employees to go work for vendors,” Diaz said.
Asked if he thought the Guthery situation could be viewed as a conflict of interest, Diaz said DHHS was being “very transparent” with regard to the situation. Asked if the agency would put any policy changes in place, Diaz referred to DHHS Secretary Aldona Wos’ efforts to improve contracting practices more broadly. “I think what you’ve seen is this secretary has placed a heavy emphasis on contract oversight and compliance,” he said. But Pinsky says the problem could be addressed in other ways. “One thing you can do is tell the contractor that, as a condition of the contract, they can’t hire anybody” in the agency, she said. She also suggested the possibility of a non-compete clause for employees hired to administer contracts.
In the meantime, she says, lawmakers should consider instituting a cooling-off period for high-level staffers. “Anybody who oversees a contract or supervises an industry shouldn’t be able to go to work for them the next day,” she said. “Does that affect any decisions they’re going to make in how they administer the contract?”
Lawmakers Demand Accountability as to NCTracks Debacle (Finally) and the Action of Nonaction
Yesterday (11/20/13), State Auditor Beth Wood appeared before the Joint Program Evaluation Oversight Committee meeting. Lawmakers and Wood criticized NCTracks, its rollout, and the lack of accountability on the part of the administration. Sen. Stan Bingham, R-Davidson, even asked whether criminal charges could be filed against whomever was in charge of the NCTracks rollout.
Criminal charges!!
There is little disagreement that the rollout of NCTracks has been a complete CATASTROPHE. NCTracks went live July 1, 2013, and the past 143 days have been nothing short of a hair-pulling-out, feet-stomping, spit-wielding debacle for most providers. So lawmakers, as the health care providers have been asking for the past 143 days, ask, “Who is to blame?”
Who is to blame?
- The Department of Health and Human Services (DHHS)?
- Computer Sciences Corporation (CSC) (the company who designed NCTracks)?
- Independent Verification and Validation (IV&V) Contractor? (the third-party contractor hired for independent verification and validation of NCTracks)?
- Governor Pat McCrory?
- Secretary Aldona Wos?
No one in the administration is stepping up to accept accountability. The vendors are not accepting responsibility. It is as if the Department of Health and Human Services (DHHS) is just standing there…watching the debacle…doing nothing. I am reminded of Dr. T.J. Eckleburg. Anyone remember who Dr. Eckleburg is?
Dr. T.J. Eckleburg’s spectacled eyes are a powerful symbol in The Great Gatsby, one of my favorite novels of all time, written by F. Scott Fitzgerald.
Originally, the billboard was erected to promote Dr. Eckleburg’s optometry practice. The eyes are supposed to symbolize commercialism and the greed of America, but the billboard is neglected and the eyes remain throughout the story to symbolize God watching over Nick Carraway and the other characters. The eyes seem to be an all-knowing and all-powerful figure over the characters. The eyes frown down on the characters and judge their actions.
Wilson equates T.J.’s eyes to the eyes of God. He recounts to Michaelis what he says to Myrtle after discovering his affair, “‘and I said “God knows what you’ve been doing, everything you’ve been doing. You may fool me, but you can’t fool God!”” However, Michaelis tries to point out to him that “It’s just a billboard.”
Maybe it is not just a billboard.
Throughout The Great Gatsby, Eckleburg’s eyes watch. Yet, in the novel, God, symbolized by Dr. T.J. Eckleburg’s spectacles, seems to have abandoned America, leaving only Dr. T.J. Eckleburg behind to stare down with his empty eyes. Dr. T.J. Eckleburg never moves…never speaks. Yet, Fitzgerald creates this looming, unmoving billboard and characterizes the billboard as God. And who is more in charge than God?
Similarly, (not as to God, but as to Dr. T.J. Eckleburg), DHHS is supposed to be the all-knowing and all-powerful head of North Carolina Medicaid.
42 C.F.R. 1396a(5) requires the State Plan to “either provide for the establishment or designation of a single State agency to administer or to supervise the administration of the plan; or provide for the establishment or designation of a single State agency to administer or to supervise the administration of the plan.”
That single state entity is DHHS.
DHHS is charged with watching over all things Medicaid. DHHS is our Medicaid Dr. T.J. Eckleburg.
When State Auditor Wood was asked by legislators who is to blame, she answered, “The agency.” As in, DHHS. “Accountability comes at the secretary level, those that report to the secretary, and the governor.”
If DHHS is in charge and Secretary Wos is in charge of DHHS, then (going back to Logic 101) Wos is to blame for the NCTracks debacle. Right?
Before jumping up and down and blaming Secretary Wos for NCTracks, remember that it was the prior administration that began the whole NCTracks idea in the first place. Wos did not come to NC and say, “Hey, let’s change the Medicaid billing system. There is this company CSC that will be so perfect for the job. Let’s pay them a ton of money to revamp the entire system.” No, Wos came to NC with NCTracks already begun. The past administration started this little ball rolling. Wos stepped in when the ball was huge and its inertia kept it going…or should we say Wos did not stop the rolling ball.
Does that exonerate Sec. Wos from any accountability and/or blame for the current state of mess Medicaid is now in due to NCTracks? Absolutely not. It is without question that Sec. Wos is charged with managing DHHS. It is without question that Sec. Wos has not accepted the accountability of the NCTracks debacle. Shoot, she hasn’t even admitted there is a problem!! Isn’t admitting there is a problem the first step?
Someone at DHHS made a fatal flaw in implementing NCTracks. Someone told HP Enterprises to take a hike without ensuring that NCTracks would work. That is like walking a tight rope with no net! And that fatal decision is on this administration.
Like Dr. T.J. Eckleburg, DHHS is watching over Medicaid. And like Dr. T.J. Eckleburg, DHHS is unmoving and silent.
DHHS cannot be a billboard. Nonaction is not an option.
Senator Bingham asked whether we could fire anybody (whomever was in cgarge of the debacle). To which, Wood stated, in her normal, no-nonsense manner, “I don’t have a problem firing anybody.”
One News and Observor editorial wrote, “What Wos should have told lawmakers wasn’t that she’s pressing DHHS staff and its computer vendor to pay people who are owed. She should have said, “We thought we were being frugal and instead we were reckless and it has cost everyone a great deal. I take responsibility. I apologize. And I’m determined to keep learning from my mistakes to fulfill the mission of my department.” Instead, she told the committee, “I assure you that where necessary, I will hold people accountable.” Excepting herself, of course.”
Right now DHHS is just a billboard.
In fact, maybe the most important nonactions to note are what Sec. Wos is NOT doing. She has has NOT blamed CSC. She has NOT condemned CSC. She has NOT had heads rolling at CSC. Sec. Wos has NOT publicly spoken disparagingly about CSC’s implementation of NCTracks. She has NOT terminated CSC’s contract. To my knowledge, she has NOT asked for help from HP Enterprises. Right now, DHHS is nothing more than a billboard, a symbol of Medicaid, but doing nothing.
In fact, on Tuesday, DHHS representatives tried to tell the Joint Program Evaluation Oversight Committee that NCTracks was improving and its “trajectory is good.” Doing nothing…just watching…
In The Great Gatsby, Dr. T.J. Eckleburg’s eyes never change. They continue to watch. Unlike Dr. T.J. Eckleburg, Sec. Wos can move. She needs to move.
Yet, whereas Wood said that she doesn’t have a problem firing anybody, Wos stated on Tuesday “that, where necessary, I will hold people accountable.”
Where necessary??
Aren’t we to “where necessary” yet? 143 days after the catastrophic implementation of NCTracks and the mess is not fixed….don’t you think it is necessary to hold someone accountable??
Oh, and by the way, during these past 143 days since NCTracks’ implementation, who is getting harmed? The doctors, the dentists, the in-home health care providers who are not receiving proper Medicaid reimbursements. And then who suffers? The Medicaid recipients because providers stop accepting Medicaid. In a Medicaid system that already discourages providers from accepting Medicaid, NCTracks is certainly not helping. Counting business damages, loss of clinical time, and unpaid claims, can you imagine the invoice that the harmed providers should serve on DHHS?? Maybe the invoice sent to DHHS should give DHHS 15 days to request a reconsideration review.
One thing is for certain, DHHS (whether or not through Wos) must stop merely being a symbol of Medicaid, a billboard, and start acting… and be accountable.
Because after 143 days of this hair-pulling-out, feet-stomping, spit-wielding debacle for most providers, there aren’t many more hairs, stomps, or spit.
