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The “Single State Agency” Medicaid Requirement: The Buck Stops With Whom?????

What is THE most important law? I’m sure most people would have a differing opinion.  Maybe you think the most important law is that it is against the law to murder a person. Or to not drive drunk.

Personally, I think the most important law of the United States begins, “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”  The Constitution of the United States.

Well, in the Medicaid arena, in my opinion, the most important law is the “single state entity” requirement.

Why is the “single state entity” requirement so important? 

Have any of you tried to read Title XIX of the Social Security Act? Or the 1915(b)(c) Innovations Waiver? The State Plan?

If you have, then you know how difficult Medicaid laws, rules and regulations are to read, much less understand.  It’s a bit like reading Chaucer in its original language, Middle English, in kindergarten…not impossible, you can sound out all the words…but, in the end, you have no idea what it was you just read.  Wife of whom?

What if we allowed 10 different companies, each with different employees, to implement/interpret Medicaid laws, rules, and regulations?

Each of the 10 companies would read the Medicaid laws, rules and regulations differently.

We would not have a statewide consistent Medicaid system.

Medicaid is tough enough, we, at least, need one agency to implement and interpret all of Medicaid.

Another example is if, suddenly, we had no president or federal government.  And all 50 states’ governors tried to run the country, as a country and not 50 independent states.  We would, obviously, have 50 different “leaders” trying to run one country with 50 different ideas as to how the country should be run.  There would be no nationwide uniformity.

Hence, the “single state agency” requirement.  DHHS must implement/administer/interpret all Medicaid decision for the sake of uniformity.

Not only is the “single state agency” requirement logical, it is federal law.

42 U.S.C. 1396 a(a)(5) requires states participating in the Medicaid program to designate a “single state entity” to operate the Medicaid program.  

In North Carolina, that “single state entity” is the Department of Health and Human Services (DHHS).

Remember the sign on Harry Truman’s desk? “The Buck Stops Here!” Meaning, as a president, President Truman understood that anything that went wrong in any federal department was on his shoulders.  He was the captain of the ship.  He was the big cheese. The buck stopped with Truman.

In NC Medicaid, the buck stops with DHHS.

According to federal law, the “single state entity” may contract with entities, such as Managed Care Organizations (MCOs), Recovery Audit Contractors (RACs), etc. to assist with certain functions of the Medicaid program.  But…that “single state entity” CANNOT delegate its authority to “issue policies, rules, and regulations on program matters.”  42 C.F.R. 431.10.

Moreover, the “single state entity” MUST NOT allow a contracted company to have authority to change or disapprove an administrative decision of the “single state entity.”  42 U.S.C. 1396a(a)(5) states that “either provide for the establishment or designation of a single State agency to administer or to supervise the administration of the plan.”

Similarly, in K.C. v. Shipman, the 4th Circuit Court of Appeals states that:

“If other State or local agencies or offices perform services for the Medicaid agency, they must not have the authority to change or disapprove any administrative decision of that agency, or otherwise substitute their judgment for that of the Medicaid agency with respect to the application of policies, rules, and regulations issued by the Medicaid agency.  42 C.F.R. § 431.10(e)(3).” (emphasis added).

Ok, pretty clear, right?

Then how can an MCO determine that a provider’s Medicaid contract should be terminated without DHHS’ authorization (which, I believe, is a substitute of judgment in applying policies)? How can an MCO determine that a Medicaid recipient’s services should be reduced (another substitution of judgment in applying policies) without DHHS’ authorization?

If you ask me, the MCOs cannot terminate a provider’s Medicaid contract or reduce services without DHHS’ authorization.  Substituting an MCO’s judgment in applying Medicaid policies is a violation of the “single state entity” requirement.

Yet….the MCOs are doing just that.

Even more scary is the recent MCO Communication Bulletin #55, dated August 2, 2013, which states:

MCO Communication Bulletin #55

Date:                August 2, 2013                                                            

To:                   LME-MCO CEOs

From:               Courtney Cantrell, Assistant Director, Behavioral Health Section

Subject:         Provider Appeals

Currently DMA is reviewing LME-MCO contract terminations and service denials when appealed due to LME-MCO manuals stating that appeals of denials should come to DMA prior to Office of Administrative Hearings (OAH).  DMA should not be a part of the LME-MCO appeals process.  We ask that you please correct your manuals by August 7, 2013, and share with your contract managers so that these appeals can be appropriately routed.

Yes, I agree, the author could have written this Communication Bulletin is a way that would have been easier to read. But, maybe that is the point.

I interpret this bulletin to say:

Right now, the MCO manuals instruct MCOs to send DMA all contract terminations and service denials prior to going to the OAH (litigation).  But, DMA does not want to be a part of the appeal process anymore.  Therefore, revise all MCO manuals to reflect that MCOs no longer need to send DMA contract terminations and service denials, even if those denials and terminations are appealed.

I also infer from this language that, since the inception of MCOs, DMA has not reviewed any contract terminations or service denials unless these denials and terminations are appealed.

 DMA does not review prior to the MCO terminating or denying services???? Where is the supervision? Where is the “single state agency?”

And then, even scarier, Bulletin #55 seems to say that DMA wants to be involved even LESS.

In essence, we have 10 MCOs, 10 jurisdictions, 10 interpretations of Medicaid laws, rules and regulations.  And no statewide uniformity.

I guess the buck stops with East Carolina Behavioral Health (ECBH)…and MeckLINK…and Alliance…and Smoky Mountain Center…and Cardinal Innovations…and Centerpoint Human Services…and CoastalCare…and EastPointe…and Partners Behavioral Health Management…and Sandhills…and (at least for a short time) Western Highlands…

That is a lot of bucks.

Proposed NC Medicaid Bill: Circumventing the State Plan?

Proposed House Bill 320 will be heard in committee on Tuesday, May 14, 2013.

For those of you who do not know what House Bill 320-2013 is, let me explain:

As of now, when a health care provider’s Medicaid contract is terminated or suspended by a Managed Care Organization (MCO), the Office of Administrative Hearings (OAH), not superior court, has jurisdiction over the grievance.  OAH is the administrative court set up to hear grievances against a state agency. 

When North Carolina ceased DHHS’ issuance of a Final Agency Decision after the OAH decision back toward the end of 2012, North Carolina, in essence, was handing OAH a decision-making role in Medicaid.  The reason that any entity getting a decision-making role in Medicaid is so important is because the federal statutes specifically state that Medicaid must be run by a single state entity.  The fact that OAH had a decision-making role in Medicaid would violate the single state entity requirement.

So what did NC do in order to ensure compliance with the single state entity requirement set forth by the federal government?

NC asked the federal government for a Waiver.  Or, in other words, an exception.  NC asked the federal government, “Can we have permission to allow OAH to have a decision-making role and not be in violation of the single state entity requirement?”

The federal government authorized our request, which can be found as the State Plan, Attachment 1.1D.

Our State Plan, Attachment 1.1B states:

“OAH acknowledges and also agrees that the issue to be determined at final hearings conducted in accordance with this waiver is whether the single state Medicaid agency or one of its contractors or agents exceeded its authority or jurisdiction, acted erroneously, failed to use proper procedure, acted arbitrarily or capriciously, and/or failed to act as required by law or rule; that it will conduct de novo reviews in beneficiary.”

Therefore, according to our State Plan and the federal government’s authorization, OAH hears cases involving DMA and its contractors or agents.

Yet proposed House Bill 320 states, in pertinent part (at 108D-18(d), “Notwithstanding any other law, OAH does not have jurisdiction over any dispute between an LME/MCO and a provider or applicant.”

Obviously the State Plan and the legislature are at odds.  After receiving the authorization to do something by the federal government, can NC legislate around what the feds told us to do? Seems pretty hairy.  Personally, I would go with that whole Supremacy Clause stuff.

Proposed House Bill 320 would take the decision-making role regarding Medicaid away from OAH and simply hand the superior court the authority…with zero authority from the federal government.  This is like a teenage boy asking for permission to go to Billy Bob’s house, but really sneaking out to go see Betty Lou.

Well, Betty Lou, here we come…