Blog Archives

Expansion of NC Medicaid Recoupments

Medicaid recoupments actions have skyrocketed in the past year.  But, in the upcoming year, a new group of health care providers will be targeted for recoupment actions.  According to the February 2013 Medicaid Bulletin, health care providers that  serve the Medicaid population with inpatient and outpatient hospital care, long-term care, laboratory services, x-ray services, and specialized outpatient therapy claims.

DMA has partnered with HMS to become the 2nd RAC vendor for North Carolina.

What is a RAC?

In the most simple terms: A RAC is an entity hired by the State to review Medicaid payments to health care providers and, subsequently, recoup the Medicaid overpayents for the State.

This past year hundreds of health care providers in the mental health fields, personal care services, and outpatient behavioral health services have received Tentative Notices of Overpayment. Some Notices claim repayment amounts in the millions.

Well, now, on to the hospitals…Imagine how large hospital recoupments will be….


Tips #9 and 10 for Avoiding Medicaid Recoupment

The most common statements I hear from health care providers when they are going through Medicaid audits is “I did not know THAT was required,” or “No one told us that we had to do THAT,” or, my personal favorite, “I called DMA and they told me we were doing THAT correctly.”

Tip #9:

First, if you call DMA, document the conversation in writing.   Get the DMA representative’s name, title, and summarize the phone call in a safe place.  Then write a letter to DMA summarizing the information you received.

Write something like this: “Per our phone conversation [DATE], you stated that [insert explanation, i.e., you stated that electronic signatures complied with NC Medicaid policy, if I take the following steps…]”

If you take this precaution, filing a note of the conversation and following-up with a letter, the you ensure that DMA cannot, later, deny the conversation.  Remember, with oral conversations, no one remembers the conversation exactly the same.

Tip #10:

All health care providers, I venture to guess, at some point, needs to call DMA and ask a question.  If so, follow Tip #9.  But if you find that you or your employees often have questions, BE PROACTIVE.

Do not wait until the Medicaid audit to say, “I did not know THAT was required.”

How to be proactive? EDUCATE! Yourself and all your employees!

One of two ways:

1. Go on the DHHS website and find out when the State is giving educational seminars on Medicaid rules. And go to as many seminars as possible. While there, ask numerous questions;


2. Contact a Medicaid attorney (This is not an advertisement for myself, although I have done this for providers, but, please, research other Medicaid attorneys.) and have the Medicaid attorney come to your main office and give a presentation on Medicaid rules.  If you go this route, make sure the Medicaid attorney understands what type of Medicaid services you provide, even better, tell the Medicaid attorney your specific concerns regarding your practice.

The upside about attending DHHS seminars is that the seminars are free.  The upside of hiring a Medicaid attorney to come to your office, he or she can physically review some of your practices’ documentation for possible common mistakes.

Regardless, whatever you decide, do not do nothing until you received the Tentative Notice of Overpayment. It’s too late then. Be proactive in education.

Medicaid EXPANSION Put on Hold; Medicaid REFORM Imminent

North Carolina spends $36 million dollars a day on Medicaid!!!! Therefore, last year the General Assembly requested the State Auditor’s department conduct an audit on Medicaid spending.

The Office of the State Auditor (OSA) published a 75-page, January 2013 Performance Audit (Audit) for the Division of Medical Assistance (DMA). Apparently the OSA is less than pleased with DMA’s budgeting ability, use of Medicaid funds, and general bookkeeping practices.

With phrases, such as “DMA’s inability,” “insufficient monitoring of contracted administrative services,” and “indicative of its inadequate oversight,” it is clear that DMA flunked the Audit.

The purpose of the Audit was four-fold:

1. to determine if the DMA administrative functions complied withe the Medicaid State Plan and federal requirements;

2. to evaluate DMA’s process for preparing annual budgets and monitoring expenditures to determine whether DMA is accurately predicting costs;

3. to review the process by which DMA made State Amendments from beginning until approval by Centers of Medicare and Medicaid Services (CMS) for compliance with federal requirements;

4. to assess the timeliness, completeness and flow of budget and expenditure information from DMA to stakeholders (Secretary, Governor, etc.)

Interestingly, the Audit determined that, in 2011, of the $10.3 billion medical assistance spending (MAP) (basically, how much money Medicaid spent), $648.8 million went to administrative costs.

In other words, in 2011, Medicaid recipients, physicians providing Medicaid services, and other health care providers did not receive $648.8 million of Medicaid funds because the State of North Carolina (or…DMA) spent the money on itself.

Compared to 9 states with similar Medicaid budgets, North Carolina spent 38% MORE than the average of those 9 states.  Or, in other words, $180 million more.

Just think…if we lowered admin costs, and raised Medicaid reimbursement for physicians accepting Medicaid…..hmmmm…one can dream….

According to the Audit, 46.7% of the admin costs ($648.8 million) went to pay private contractor payments.  Like ValueOptions, Public Consulting Group, Carolinas Center for Medical Excellence, etc. Those contracts with the State make up almost 50% of admin costs.  Yet, when the conductors of the Audit requested copies of all private contractor contracts to review the contracts, DMA was unable to produce the copies. DMA is spending almost 50% of the Medicaid money on contractors, yet DMA can’t find the contracts??

As the Audit put it:

“DMA’s inability to provide this information is indicative of its inadequate oversight of contractual expenditures.”

Here are some other goodies:

“DMA does not appropriately manage Medicaid costs that are subject to agency control.”

“Finding #1: The Division has consistently exceeded budgeted amounts for contracted administrative costs and interagency transfers due to an apparent lack of oversight.”

A few hours ago, Governor McCrory, DHHS Sec. Wos, and State Auditor Beth Wood spoke on NC Medicaid funding.

Wos stated that DHHS has a duty to the taxpayers and has not been upholding its duty.  Wood stated that DMA and its sub departments have “no cost accountability.”

In response to  the Audit, McCrory (or the State) hired Medicaid expert Carol Steckel to revamp the Medicaid program.

McCrory said that NC cannot expand Medicaid without fixing the Medicaid system!

Finally! Let’s fix the Medicaid system. Let’s stop the useless spending and make sure that Medicaid dollars go to the recipients in need, not government fat!!

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.