What if, right before your wedding day, you discover a secret about your betrothed that changes the very fabric of your relationship. For example, you find out your spouse-to-be is actually gay or a heroin addict. Not that there is anything bad about being gay or a heroin addict, but these are important facts to know and accept [or reject] about your future mate prior to the ringing of the wedding bells. The same is true with two companies that are merging to become one. The merged entity will be liable for any secrets either company is keeping. In this hypothetical, Eastpointe just found out that Cardinal has been cheating – and the wedding is set for July 1!
Cardinal Innovations and Eastpointe, two of our managed care organizations (MCO) charged with managing Medicaid behavioral health care funds plan to merge, effective July 1, 2017. Together the monstrous entity would manage Medicaid behavioral funds for 32 counties.
Last week the State Auditor published a scathing Performance Audit on Cardinal. State Auditor Beth Wood found more than $400,000 in “unreasonable” expenses, including corporate retreats at a luxury hotel in Charleston, S.C.; chartering planes to fly to Greenville, Rocky Mount and Smithfield; providing monthly detailing service for the CEO’s car; and purchasing alcohol, private and first-class airline tickets and other items with company credit cards.
Cardinal’s most significant funding is provided by Medicaid. Funding from Medicaid totaled $567 million and $587 million for state fiscal years 2015 and 2016, respectively. In other words, the State Auditor found that Cardinal is using our tax dollars – public money obtained by you and me – for entertainment, while concurrently, denying behavioral health care services and terminating providers from its catchment area. Over 30% of my salary goes to taxes. I do not accept Cardinal mismanaging my hard earned money – or anyone else’s. It is unacceptable!
“The unreasonable spending on board retreats, meetings, Christmas parties and travel goes against legislative intent for Cardinal’s operations, potentially resulting in the erosion of public trust,” the audit states.
Eastpointe, however, is not squeaky clean.
A June 2015 Performance Audit by the State Auditor found that its former chief financial officer Bob Canupp was alleged to have received kickbacks worth a combined $547,595. It was also alleged that he spent $143,041 on three agency vehicles without a documented business purpose. Canupp, chief executive Ken Jones and other employees also were determined to have used Eastpointe credit cards to make $157,565 in “questionable purchases.” There has not been an audit, thus far, on Eastpointe’s management of public funds. One can only hope that the results of the Cardinal audit spurs on Beth Wood to metaphorically lift the skirts of all the MCOs.
Given the recent audit on Cardinal, I would like to think that Eastpointe is hesitant to merge with such an entity. If a provider had mismanaged Medicaid funds like the State Auditor found that Cardinal did, without question, the authorities would be investigating the provider for Medicaid fraud, waste, and abuse. Will Eastpointe continue with the merger despite the potential liability that may arise from Cardinal’s mismanagement of funds? Remember, according to our State Auditor, “Cardinal could be required to reimburse the State for any payroll expenditures that are later disallowed because they were unauthorized.” – Post-payment review!!
Essentially, this is a question of contract.
We learned about the potential merger of Cardinal and Eastpointe back in January 2017, when Sarah Stroud, Eastpointe’s chief executive, announced in a statement that the agency plans to negotiate a binding agreement within weeks. The question is – how binding is binding?
Every contract is breakable, but there will be a penalty involved in breaching the contract, usually monetary. So – fantastic – if Eastpointe does back out of the merger, maybe our tax dollars that are earmarked for behavioral health care services for Medicaid recipients can pay the penalty for breaching the contract.
Another extremely troubling finding in Cardinal’s State Audit Report is that Cardinal is sitting on over $70 million in its savings account. The audit states that “[b]ased on Cardinal’s accumulated savings, the Department of Health and Human Services (DHHS) should consider whether Cardinal is overcompensated. For FY 2015 and 2016, Cardinal accumulated approximately $30 million and $40 million, respectively, in Medicaid savings. According to the Center for Medicaid and Medicare Services (CMS), Cardinal can use the Medicaid savings as they see fit.”
As Cardinal sees fit??!!?! These are our tax dollars. Cardinal is not Blue Cross Blue Shield. Cardinal is not a private company. Who in the world thought it a good idea to allow any MCO to use saved money (money not spent on behavioral health care services for Medicaid recipients) to use as it sees fit. It is unconscionable!
Because of my blog, I receive emails almost daily from mothers and fathers of developmentally disabled or mentally handicapped children complaining about Cardinal’s denials or reductions in services. I am also told that there are not enough providers within the catchment area. One mother’s child was approved to receive 16 hours of service, but received zero services because there was no available provider. Another family was told by an MCO that the family’s limit on the amount of services was drastically lower than the actual limit. Families contact me about reduced services when the recipient’s condition has not changed. Providers contact me about MCO recoupments and low reimbursement rates.
Cardinal, and all the MCOs, should be required to use our tax dollars to ensure that enough providers are within the catchment areas to provide the medically necessary services. Increase the reimbursement rates. Increase necessary services.
According to the report, “Cardinal paid about $1.9 million in FY 2015 employee bonuses and $2.4 million in FY 2016 employee bonuses. The average bonus per employee was about $3,000 in FY 2015, and $4,000 in FY 2016. The bonuses were coded to Cardinal’s administrative portion of Medicaid funding source in both years.” Cardinal employs approximately 635 employees.
Good to know that Cardinal is thriving. Employees are overpaid and receive hefty bonuses. Executives are buying alcohol, private and first-class airline tickets and other items with company credit cards. It hosts lavish Christmas parties and retreats. It sits on a $70 million savings account. While I receive reports from families and providers that Medicaid recipients are not receiving medically necessary services, that there are not enough providers within the catchment area to render the approved services, that the reimbursement rates for the services are too low to attract quality providers, that more expensive services are denied for incorrect reasons, and that all the MCOs are recouping money from providers that should not be recouped.
If I were Eastpointe, I would run, regardless the cost.
Recently, Eastpointe Human Services’ board voted unanimously to consolidate with Cardinal Innovations Healthcare, which would make the merged entity the managed care organization (MCO) overseeing 1/3 of NC’s Medicaid, behavioral health services – 32 counties, in all.
The Board’s decision is subject to the approval of the Secretary, but Eastpointe hopes to consolidate by July 1st.
Whether a consolidation between Eastpointe and Cardinal is good for Medicaid recipients and/or our community, I have no opinion.
But the reason that I have no opinion is because the negotiations, which all deal with public funds, have occurred behind closed doors.
Generally, it is our public policy that public bodies’ actions are to be conducted openly. This is why you can stroll on over to our courthouse and watch, virtually, any case be conducted. There are rare cases in which the court will “seal” or close the record, such as to protect privileged health information or the identity of children. Our public policy that strongly encourages open sessions for public entities exists for good reason. As tax payers, we expect full disclosure and transparency as to how our tax dollars are being used. In a way, all tax paying NC residents are shareholders of NC. Those who spend our tax dollars owe us a fiduciary duty to manage our tax dollars in a reasonable and responsible manner, and we should be able to attend all board meetings and review all meeting minutes. The MCOs are the agents of the single state entity, Department of Health and Human Services (DHHS), charged with managing behavioral health care for the Medicaid and state-funded population suffering with mental health/developmentally disabled /substance abuse (MR/DD/SA) issues. As an agent of the state, MCOs are public entities.
But, as I am researching the internet in search of Eastpointe and Cardinal board meeting minutes, I realize that the MCOs are initiating closed meetings and quoting N.C. Gen. Stat. § 143-318.11, ” Closed sessions” as the basis for being able to conduct closed sessions. And the number of closed sessions that I notice is not a small number.
The deliberations of a merger between two MCOs are highly important to the public. The public needs to know whether the board members are concerned about improving quality and quantity of care. Whether the deliberations surround a more inclusive provider network and providing more services to those in need. Whether the deliberations consider using public funds to create playgrounds or to fund more services for the developmentally disabled. Or are the board members more concerned with which executives will remain employed and what salaried are to be compensated?
You’ve heard of the saying, “Give him an inch and he’ll take a mile?” This is what is going through my mind as I review the statute allowing public bodies to hold closed sessions. Is the statute too open-ended? Is the closed session statute a legal mishandling that unintentionally, and against public policy, allows public meetings to act privately? Or are the MCOs misusing the closed session statute?
So I ask myself the following:
1. Is N.C. Gen. Stat. § 143-318.11 applicable to MCOs, or, in other words, can the MCOs conduct closed sessions? and, if the answer to #1 is yes, then
2. Are the MCOs overusing or misusing its ability to hold closed sessions? If the answer to #3 is yes, then
3. What can be done?
These are the three questions I will address in this blog.
Is N.C. Gen. Stat. § 143-318.11 applicable to MCOs, or, in other words, can the MCOs conduct closed sessions?
According to the statute, “”public body” means any elected or appointed authority, board, commission, committee, council, or other body of the State, or of one or more counties, cities, school administrative units, constituent institutions of The University of North Carolina, or other political subdivisions or public corporations in the State that (i) is composed of two or more members and (ii) exercises or is authorized to exercise a legislative, policy-making, quasi-judicial, administrative, or advisory function.”
The MCOs are bodies or agents of the state that are composed of more than 2 members and exercises or is authorized to exercise administrative or advisory functions to the extent allowed by the Waivers.
I determine that, in my opinion, N.C. Gen. Stat. § 143-318.11 is applicable to the MCOs, so I move on to my next question…
Are the MCOs overusing or misusing its ability to hold closed sessions?
As public policy dictates that public bodies act openly, there are enumerated, statutory reasons that a public body may hold a closed session.
A public body may hold a closed session only when a closed session is required:
- “To prevent the disclosure of information that is privileged or confidential pursuant to the law of this State or of the United States, or not considered a public record within the meaning of Chapter 132 of the General Statutes.
- To prevent the premature disclosure of an honorary degree, scholarship, prize, or similar award.
- To consult with an attorney employed or retained by the public body in order to preserve the attorney-client privilege between the attorney and the public body, which privilege is hereby acknowledged. General policy matters may not be discussed in a closed session and nothing herein shall be construed to permit a public body to close a meeting that otherwise would be open merely because an attorney employed or retained by the public body is a participant. The public body may consider and give instructions to an attorney concerning the handling or settlement of a claim, judicial action, mediation, arbitration, or administrative procedure. If the public body has approved or considered a settlement, other than a malpractice settlement by or on behalf of a hospital, in closed session, the terms of that settlement shall be reported to the public body and entered into its minutes as soon as possible within a reasonable time after the settlement is concluded.
- To discuss matters relating to the location or expansion of industries or other businesses in the area served by the public body, including agreement on a tentative list of economic development incentives that may be offered by the public body in negotiations, or to discuss matters relating to military installation closure or realignment. Any action approving the signing of an economic development contract or commitment, or the action authorizing the payment of economic development expenditures, shall be taken in an open session.
- To establish, or to instruct the public body’s staff or negotiating agents concerning the position to be taken by or on behalf of the public body in negotiating (i) the price and other material terms of a contract or proposed contract for the acquisition of real property by purchase, option, exchange, or lease; or (ii) the amount of compensation and other material terms of an employment contract or proposed employment contract.
- To consider the qualifications, competence, performance, character, fitness, conditions of appointment, or conditions of initial employment of an individual public officer or employee or prospective public officer or employee; or to hear or investigate a complaint, charge, or grievance by or against an individual public officer or employee. General personnel policy issues may not be considered in a closed session. A public body may not consider the qualifications, competence, performance, character, fitness, appointment, or removal of a member of the public body or another body and may not consider or fill a vacancy among its own membership except in an open meeting. Final action making an appointment or discharge or removal by a public body having final authority for the appointment or discharge or removal shall be taken in an open meeting.
- To plan, conduct, or hear reports concerning investigations of alleged criminal misconduct.
- To formulate plans by a local board of education relating to emergency response to incidents of school violence or to formulate and adopt the school safety components of school improvement plans by a local board of education or a school improvement team.
- To discuss and take action regarding plans to protect public safety as it relates to existing or potential terrorist activity and to receive briefings by staff members, legal counsel, or law enforcement or emergency service officials concerning actions taken or to be taken to respond to such activity.”
Option 1 clearly applies, in part, to privileged health information (PHI) and such. So I would not expect that little Jimmy’s Medicaid ID would be part of the board meeting issues, and, thus, not included in the minutes, unless his Medicaid ID was discussed in a closed session.
I cannot fathom that Option 2 would ever be applicable, but who knows? Maybe Alliance will start giving out prizes…
I would assume that Option 3 is used most frequently. But notice:
“General policy matters may not be discussed in a closed session and nothing herein shall be construed to permit a public body to close a meeting that otherwise would be open merely because an attorney employed or retained by the public body is a participant.”
Which means that: (1) the closed session may only be used to talk about specific legal strategies and not general policies. For example, arguably, an MCO could hold a closed session to consult with its attorney whether to appeal a specific case, but not to discuss whether, generally, the MCO intends to appeal all unsuccessful cases.
(2) the MCO cannot call for a closed session “on the fly” and only because its attorney happens to be participating in the board meeting.
As I am rifling through random board meeting minutes, I notice the MCO’s attorney is always present. Now, I say “always,” but did not review all MCO meeting minutes. There may very well be board meetings at which the attorneys don’t attend. However, the attorney is present for the minutes that I reviewed.
Which begs the question…Are the MCOs properly using the closed sessions?
Then I look at Options 4, and 5, and 6, and 7, and 8, and 9…and I realize, Geez, according to one’s interpretation, the statute may or may not allow almost everything behind closed doors. (Well, maybe not 9). But, seriously, depending on the way in which each Option is interpreted, there is an argument that almost anything can be a closed session.
Want to hold a closed session to discuss why the CEO should receive a salary of $400,000? N.C. Gen. Stat. § 143-318.11(5)(ii).
Want hold a closed session to discuss the anonymous tip claim that provider X is committing Medicaid fraud? N.C. Gen. Stat. § 143-318.11(7).
Want to hold a closed session to discuss how an MCO can position itself to take over the world? N.C. Gen. Stat. § 143-318.11(4).
In an atmosphere in which there is little to no supervision of the actions of the MCOs, who is monitoring whether the MCOs are overusing or misusing closed sessions?
What can you do if you think that an MCO is holding closed sessions over and above what is allowed by N.C. Gen. Stat. § 143-318.11?
According to N.C. Gen. Stat. § 143-318.16A, “[a]ny person may institute a suit in the superior court requesting the entry of a judgment declaring that any action of a public body was taken, considered, discussed, or deliberated in violation of this Article. Upon such a finding, the court may declare any such action null and void. Any person may seek such a declaratory judgment, and the plaintiff need not allege or prove special damage different from that suffered by the public at large.”
Plus, according to N.C. Gen. Stat. § 143-318.16A, “[w]hen an action is brought pursuant to G.S. 143-318.16 or G.S. 143-318.16A, the court may make written findings specifying the prevailing party or parties, and may award the prevailing party or parties a reasonable attorney’s fee, to be taxed against the losing party or parties as part of the costs. The court may order that all or any portion of any fee as assessed be paid personally by any individual member or members of the public body found by the court to have knowingly or intentionally committed the violation; provided, that no order against any individual member shall issue in any case where the public body or that individual member seeks the advice of an attorney, and such advice is followed.”
In sum, if you believe that an MCO is conducting a closed session for a reason not enumerated above, then you can institute a lawsuit and request attorneys’ fees if you are successful in showing that the MCO knowingly or intentionally committed the violation.
We should also appeal to the General Assembly to revise, statutorily, more narrowly drafted closed session exceptions.
When it comes to the managed care organizations (MCOs) in NC, something smells rancid, like pre-minced garlic. When I first met my husband, Scott, I cooked with pre-minced garlic that comes in a jar. I figured it was easier than buying fresh garlic and dicing it myself. Scott bought fresh garlic and diced it. Then he asked me to smell the fresh garlic versus the pre-minced garlic. There was no contest. Next to the fresh garlic, the pre-minced garlic smelled rancid. That is the same odor I smell when I read information about the MCOs – pre-minced garlic in a jar.
In NC, MCOs are charged with managing Medicaid funds for behavioral health care, developmentally disabled, and substance abuse services. When the MCOs were initially created, we had 13. These are geographically situated, so providers and recipients have no choice with which MCO to interact. If you live in Sandhills’ catchment area, then you must go through Sandhills. If you provide services in Cardinal’s catchment area, then you must contract with Cardinal – even though you already have a provider participation agreement with the State of NC to provide Medicaid services in the State of NC.
Over the years, there has been consolidation, and now we have 7 MCOs.
From left to right: Smoky Mountain (Duke blue); Partners Behavioral Health (Wake Forest gold); Cardinal Innovations Healthcare (ECU purple); Sandhills (UNCC green); Alliance Behavioral Healthcare (mint green); Eastpointe (Gap Khaki); and Trillium (highlighter yellow/green).
Recently, Cardinal (ECU purple) and Eastpointe (Gap khaki) announced they will consolidate, pending authorization from the Secretary of DHHS. The 20-county Cardinal will morph into a 32-county, MCO giant.
Here is the source of the rancid, pre-minced, garlic smell (in my opinion):
One – MCOs are not private entities. MCOs are prepaid with our tax dollars. Therefore, unlike Blue Cross Blue Shield, the MCOs must answer to NC taxpayers. The MCOs owe a duty of financial responsibility to taxpayers, just like the state government, cities, and towns.
Two – Cardinal CEO, Richard Topping, is paid $635,000, plus he has a 0 to 30 percent bonus potential which could be roughly another $250,000, plus he has some sort of annuity or long-term package of $412,000 (with our tax dollars).
Three – Cardinal is selling or has sold the 26 properties it owns or owned (with our tax dollars) to lease office space in the NASCAR Plaza office tower in uptown Charlotte for $300 to $400 per square foot plus employee parking (with our tax dollars).
Four – Cardinal charges 8% of public funds for its administrative costs. (Does that include Topping’s salary and bonuses?) How many employees are salaried by Cardinal? (with our tax dollars).
Five – The MCOs are prepaid. Once the MCOs receive the funds, the funds are public funds and subject to fiscal scrutiny. However, the MCOs keep whatever funds that it has at the end of the fiscal year. In other words, the MCOs pocket any money that was NOT used to reimburse a provider for a service rendered to a Medicaid recipient. Cardinal – alone – handles around $2.8 billion in Medicaid funding per year for behavioral health services. The financial incentive for MCOs? Terminate providers and reduce/deny services.
Six – MCOs are terminating providers and limiting access to care. In my law practice, I am constantly defending behavioral health care providers that are terminated from an MCO catchment area without cause or with erroneous cause. For example, an agency was terminated from their MCO because the agency had switched administrative offices without telling the MCO. The agency continued to provide quality services to those in need. But, because of a technicality, not informing the MCO that the agency moved administrative offices, the MCO terminated the contract. Which,in turn, puts more money in the MCO’s pocket; one less provider to pay. Is a change of address really a material breach of a contract? Regardless – it is an excuse.
Seven – Medicaid recipients are not receiving medically necessary services. Either the catchment areas do not have enough providers, the MCOs are denying and reducing medically necessary services, or both. Cardinal cut 11 of its state-funded services. Parents of disabled, adult children write to me, complaining that their services from their MCO have been slashed for no reason….But the MCOs are saving NC money!
Eight – The MCOs ended 2015 with a collective $842 million in the bank. Wonder how much money the MCOs have now…(with our tax dollars).
Rancid, I say. Rancid!
How many times have I blogged about the unsupervised, unharnessed actions of the managed care organizations (MCOs) in our State, which happen to be managing billions of our tax dollars for Medicaid behavioral health care? These MCOs, which are in the process of consolidating to create even larger MCOs and to handle even more tax dollar money, are running rampant and unsupervised by the Department of Health and Human Services (DHHS). See blog. And blog.
DHHS is the single state agency charged with managing Medicaid for NC. According to federal law, the single state agency may not delegate certain duties. Our 1915 b/c Waiver allows DHHS to waive some duties related to behavioral health, but not all. For example, it is, ultimately, DHHS’ duty to ensure that our Medicaid recipients have access to care.
It is, ultimately, DHHS’ duty to ensure that the MCOs are following the law.
However, recently, that duty was picked up by the State Bureau of Investigation (SBI). Thank goodness someone is reviewing the MCO’s books!
SBI arrested former Eastpointe CFO William Robert Canupp on December 16, 2015, for nine charges of financial fraud and embezzlement. Eastpointe is one of our MCOs and manages behavioral health care for Medicaid and state-funded programs in 12 counties. These allegations of fraud and embezzlement are from when Canupp worked at Eastpointe.
This recent arrest demonstrates a real need for accountability at the MCOs. While Eastpointe and the other MCOs are terminating health provider contracts and denying/reducing services, who is reviewing these decisions. Apparently, not DHHS.
What can you do?
As you should know, the MCOs are not private entities. They are agents of the state and receive funding from county, state, and federal funds. In other words, the MCOs manage and spend our tax dollars. Therefore, these entities are liable to us for all expenditures and are subject to the Freedom of Information Act or FOIA. The FOIA allows any one of you to request any financial record, any document showing access to care, any document showing monies spent on actual care versus administrative costs, or any other information you desire and the MCOs must provide it to you.
Here is a link to a sample public records request.
The MCOs are bound by NC General Statute, Chapter 132 and must allow you to examine any requested documents within a reasonable time.
Use the FOIA to get answers!
Last week I traveled to Houston, Dallas, and Denver to meet with other health care attorneys of Gordon & Rees. It was a great trip and I met some wonderful colleagues. But I was happy to get home to my family, including our new addition of 9 peacock eggs.
Yes, 9 peacock eggs!!
Here is a pic:
(I know that there are 10 eggs in the picture, but we will not talk about the 10th. Just know that we have high hopes that the other 9 are viable and survive!! As of today, at 1:00 pm, all 9 eggs are chirping, but no cracks yet!!)
Oh, and, before I forget…Watch ABC news tonight. I was interviewed for a story about one of my clients.
Anyway, while I was gone, I was unable to post a blog regarding the State Auditor’s most recent audit report regarding Eastpointe. So here it is…
As the managed care organizations (MCOs) continue to accuse health care providers of fraud, waste, and abuse (FWA), it seems from a recent State Auditor report that, at least, one of the MCOs itself is guilty of the very accusation that they are alleging against providers. See blog. And blog.
There is an old story:
A wolf, passing by, saw some shepherds in a hut eating for their dinner a haunch of mutton. Approaching them, he said: What a clamor you would raise, if I were to do as you are doing!
Men are too apt to condemn in others the very things they practice themselves
The audit findings beg the questions…Is it only Eastpointe? Or all 9 MCOs? How much Medicaid money is lining the pockets of MCO executives, instead of paying for medically necessary services for Medicaid recipients? Beth Wood only audited Eastpointe. Is this only the tip of the iceberg?
According to our State Auditor, Eastpointe former executive has lined his pockets with $547,595+…
Here are the key findings from the NC State Auditor’s report regarding Eastpointe:
- Former CFO facilitated apparent kickbacks totaling $547,595 from two Eastpointe contractors
- Former CFO purchased three vehicles totaling $143,041 without a documented business purpose
- Former CFO purchased $18,600 of equipment for personal use
- Former CFO, Chief Executive Officer (CEO), and other employees used Eastpointe credit cards to make $157,565 of questionable purchases
- Inadequate CEO and area board oversight contributed to operational failures
Eastpointe is one of 9 MCOs in NC charged with managing and supervising Medicaid behavioral health care services. So what do we do when the entity IN CHARGE of managing Medicaid money is mismanaging tax dollars???
Where is the supervision??
Over the last few years, since the MCOs went live across the state, I have seen the MCOs terminate Medicaid providers for no cause, claim providers owed money, penalties, plans of corrections (POC), and/or refuse to contract with providers for reasons as silly as:
- Failing to put shoes on a paraplegic (no feet), because the assessment included that the patient required help dressing;
- Using green ink (a personal favorite) on a service note;
- Having signatures on service notes that are difficult to read (so the auditors assume that the person doesn’t have the correct licenses).
Here, we have the State Auditor finding that Eastpointe’s former CFO unilaterally hired two contractors to improve Eastpointe’s building (paid for with Eastpointe’s funding), but the former CFO accepting over half a million dollars. This is no green ink! This is no insignificant finding!!
What is Eastpointe’s funding?
As you can see, 72.7% of Eastpointe’s funding is pure Medicaid money. When Eastpointe’s former CFO received $547,595 in kickbacks, 72%, or $394,268.40, should have been used to provide Medicaid behavioral health care services.
These are our tax dollars, people!! These are our tax dollars budgeted to aid our most needy population with behavioral health care services!! These are our tax dollars budgeted to provide psychiatric services, substance abuse services, and services for those with developmental disabilities!!!!
Our State Auditor states in her report, “The former CFO may have violated several state laws including fraud, misrepresentation, and obtaining property by false pretenses.”
Let’s look at a couple of those statutes that may have been violated:
42 U.S. Code § 1320a–7b imposes criminal penalties for acts involving Federal health care programs, and federal dollars pay a portion of our Medicaid program.
North Carolina General Statute § 14-234 states: “No public officer or employee who is involved in making or administering a contract on behalf of a public agency may derive a direct benefit from the contract except as provided in this section, or as otherwise allowed by law.”
The question becomes was the former CFO of Eastpointe, at the time of the receipt of kickbacks a “public officer” or “employee who is involved in making or administrating a contract on behalf of a public agency?” I believe the answer is yes, at least as to the latter.
Here is the point in this blog that my personal views will be aired. I find the former CFO’s behavior significantly opprobrious and reprehensible.
Here we have an MCO which is in charge of behavioral health care for our most vulnerable and needy populations…not just those in poverty, but those in poverty suffering from mental illness, substance abuse, and/or developmental disabilities (MH/SA/DD). Obviously, those Medicaid recipients suffering from MH/SA/DD will not have the means to hire a private attorney to defend their interests. When they receive denials for authorizations or reductions in services, they are defenseless. Sure, some children have strong advocate parents, but, on the whole, those suffering from MH/SA/DD have little to no advocates.
Juxtapose someone sitting in the role of a CFO…a chief financial officer of a company. Think he or she can hire a private attorney?? Think he or she has advocates or means to hire advocates??
How can someone in power abuse that power to the detriment of the under-privileged and sleep at night? I find the State Auditor’s audit findings repugnant beyond comprehension.
We are left with a former CFO who may or may not have committed criminal activity, but, who, at least according to the State Auditor, has received kickbacks. We are left with questions.
Is it only Eastpointe? Or all 9 MCOs? How much Medicaid money is lining the pockets of MCO executives, instead of paying for medically necessary services for Medicaid recipients? Will there be justice?
We can only hope that this audit is a catalyst to consequences.
Knicole Emanuel: Panel Discussion – David Is To Goliath As NC Behavioral Health Care Providers Are To MCOs
Isn’t that analogy apropos? (And it’s not mine…its Benchmarks’)
I will be sitting on a panel today in Raleigh, NC. See below.
A wonderful association, Benchmarks, is hosting a panel discussion for behavioral health care providers. While it is meant for smaller providers, in my own humble opinion, all behavioral health care providers would benefit from this panel discussion.
Senior Counsel, Robert Shaw, and I will be sitting on the panel…with managed care organizations (MCO) representatives. It is without question that I have not been a big fan of the MCOs. If I were to suggest otherwise, I believe that my blog followers would scoff. However, I am interested in hearing these MCO representatives’ side of the argument.
Will these MCO reps merely parrot? Or will they truly engage in worthwhile conversations to understand what it is like for a behavioral health care provider in NC today?
Feel free to join the discussion at 12:30-2:30. Below is the Evite: 3801 Hillsborough St.
In the 1968 Presidential campaign, Richard Nixon stated that “new leadership will end the war” in Vietnam. Also, in a 1968 interview, Nixon said he had “no magic formula” or “gimmick” for ending the Vietnam War. Then, in his memoirs, Nixon stated he never claimed to have such a plan. This is called a broken election promise.
Sadly, Richard Nixon’s broken election promise was not the first, nor would it be the last. We have become used to politicians making election promises and breaking those same promises which got them elected once they are in office.
“If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”
“Read my lips: no new taxes.”
Over the last few years, I have written ad nausem about accountability and proper supervision when it comes to the Managed Care Organizations (MCOs) in North Carolina. The other day, I was reviewing some pertinent federal regulations and came across this:
§ 438.52 Choice of MCOs, PIHPs, PAHPs, and PCCMs.
• General rule. Except as specified in paragraphs (b) and (c) of this section, a State that requires Medicaid beneficiaries to enroll in an MCO, PIHP, PAHP, or PCCM must give those beneficiaries a choice of at least two entities.
Obviously, North Carolina is not adhering to the above-referenced requirement.
Pull up the Waiver. In order to offer Medicaid enrollees only one MCO or other such entity, North Carolina would have had to request a waiver of 42 CFR § 438.52.If you rely on Medicaid for behavioral health care and live in Wake County, you have no choice but to rely on the provider network of only entity, Alliance Behavioral Health (Alliance), to receive services. For example, you do not get to choose between Alliance’s provider network and Eastpointe Behavioral Healthcare’s (Eastpointe) provider network. Staying with the same theoretical hypothesis, if your provider was not anointed with the gift of being in Alliance’s network, then you do not get to stay with your provider.
“If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”
Similar to President Barack Obama’s contention quoted above, we made similar promises to the Center for Medicare and Medicaid Services (CMS). Our promises are found within our Waivers. We have two Waivers, one for the developmentally disabled population and one for the mentally ill/substance abuse population. Each Waiver waives certain federal exceptions. However, in lieu of the federal requirements, we make certain promises to CMS. In order to waive 42 CFR § 438.52, we made certain promises to CMS in order to circumvent the necessary provisions of 42 CFR § 438.52.
The State sought a waiver of section 1902(a)(4) of the Act:
“The State seeks a waiver of section 1902(a)(4) of the Act, which requires States to offer a choice of more than one PIHP or PAHP per 42 CFR 438.52. Please describe how the State will ensure this lack of choice of PIHP or PAHP is not detrimental to beneficiaries’ ability to access services.”
Here are our promises:
“Under these circumstances, the State does not believe that making only one plan available in each geographic area of the State will negatively impact recipients’ access to care.”
“The LMEs have decades of experience locating and developing services for consumers with MH/IDD/SAS needs, and over the years, have built strong and collaborative working relationships with the providers of these services.”
“These providers support this initiative and consumers have at least as much choice in individual providers as they had in the non-managed care environment.”
“Enrollees will have free choice of providers within the PIHP serving their respective geographic area and may change providers as often as desired. If an individual joins the PIHP and is already established with a provider who is not a member of the network, the PIHP will make every effort to arrange for the consumer to continue with the same provider if the consumer so desires.”
“If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”
My two personal favorites among the State’s promises to CMS are: (1) “consumers have at least as much choice in individual providers as they had in the non-managed care environment;” and (2) the PIHP will make every effort to arrange for the consumer to continue with the same provider if the consumer so desires.”
These promises, in reality, are utter horsefeathers.
Over and over my provider clients come to me because one of the MCOs has terminated their Medicaid contract, usually for absolutely no valid reason. Over and over my provider clients tell me that their consumers are devastated by the news that they may lose their provider. I have had consumers contact me to beg me to help the provider. I have had consumers appear in court stating how much they want that particular provider. I have had provider clients cry in my office because their consumers are so upset and regressing because of the news that they may have to find another provider.
Yet, we have promised CMS that consumers have just as much choice in providers than when there was no managed care.
In the words of Dorothy from the Wizard of OZ, “You ought to be ashamed of yourself. Frightening him like that when he came to you for help.”
Similarly, our Medicaid recipients go to their providers for help. They create relationships…trust…bonds. And the MCOs are terminating these very providers, most for invalid and erroneous reasons, and, certainly, without the consideration of our promise to CMS.
But, remember, we are told the PIHPs will make every effort to keep the consumer with the chosen provider…
It would be interesting to do a public records request as to how many providers have been terminated by the MCOs in the last 2 years. Because, even if only 1 provider were terminated in the past 2 years and its consumers still wanted to go to that particular provider, then our State has broken its promise.
Apparently, due to my outspoken positions, DHHS will no longer honor my public records requests, which I think is absolutely preposterous. I am, still, a paying taxpayer last time I checked, which is every pay-day when I only get 60% of my wages. If any of you would submit this public records request, please forward it to me. I would be grateful for the information.