Blog Archives

Exhaustion of Administrative Remedies: Futile as the Caucus-Race?

Answer – Sometimes.

How many of you have received Remittance Advices from NCTracks that are impossible to understand, include denials without appeal rights, or, simply, are erroneous denials with no guidance as to the next steps?  While these were most prevalent in the first couple years after NCTracks was rolled out (back in July 2013), these burdensome errors still exist.

You are allowed to re-submit a claim to NCTracks for 18 months. How many times do you have to receive the denial in order for that denial to be considered a “final decision?” And, why is it important whether a denial is considered a final decision?

  1. Why is it important that a denial be considered a “final decision?”

As a health care provider, your right to challenge the Department of Health and Human Services’ (via CSC or NCTracks’) denial instantly becomes ripe (or appealable) only after the denial is a final decision.

Yet, with the current NCTracks system, you can receive a denial for one claim over and over and over and over without ever receiving a “final decision.”

It reminds me of the Causus-race in Alice and Wonderlandalice“There was no ‘One, two, three, and away,’ but they began running when they liked, and left off when they liked, so that it was not easy to know when the race was over. However, when they had been running half an hour or so, and were quite dry again, the Dodo suddenly called out ‘The race is over!’ and they all crowded round it, panting, and asking, ‘But who has won?'” – Alice in Wonderland.

On behalf of all health care providers who accept Medicaid in North Carolina and suffered hardship because of NCTracks, at my former firm, I helped file the NCTracks class action lawsuit, Abrons Family Practice, et al., v. NCDHHS, et al., No. COA15-1197, which was heard before the NC Court of Appeals on June 12, 2015. The Opinion of the Court of Appeals was published today (October 18, 2016).

The Court of Appeals held that the plaintiffs were not required to “exhaust their administrative remedies” by informal methods and the Office of Administrative Hearings (OAH) prior to bringing a lawsuit in the State Court for damages because doing to would be futile – like the Caucus-race. “But who has won?” asked Alice.

Plaintiffs argued that, without a “final decision” by DHHS as to the submitted claims, it is impossible for them to pursue the denials before the OAH.

And the Court of Appeals, in a 2-1 decision, agrees.

The Abrons decision solidifies my contention over the past 4-5 years that a reconsideration review is NOT required by law prior to filing a Petition for Contested Case at OAH…. Boom! Bye, Felicia!

Years ago, I informed a client, who was terminated by an managed care organization (MCO), that she should file Petition for Contested Case at OAH without going through the informal reconsideration review. One – the informal reconsideration review was before the very agency that terminated her (futile); and two – going through two processes instead of one costs more in attorneys’ fees (burdensome).

We filed in OAH, and the judge dismissed the case, stating that we failed to exhaust our administrative remedies.

I have disagreed with that ruling for years (Psssst – judges do not always get it right, although we truly hope they do. But, in judges’ defenses, the law is an ever-changing, morphing creature that bends and yields to the community pressures and legal interpretations. Remember, judges are human, and to be human is to err).

However, years later, the Court of Appeals agreed with me, relying on the same argument I made years ago before OAH.

N.C. Gen. Stat. 150B-22 states that it is the policy of the State that disputes between the State and a party should be resolved through informal means. However, neither 150B-22 nor any other statute or regulation requires that a provider pursue the informal remedy of a reconsideration review. See my blog from 2013.

I love it when I am right. – And, according to my husband, it is a rarity.

Here is another gem from the Abrons opinion:

“DHHS is the only entity that has the authority to render a final decision on a contested medicaid claim. It is DHHS’ responsibility to make the final decision and to furnish the provider with written notification of the decision and of the provider’s appeal rights, as required by N.C. Gen. Stat. 150B-23(f).”

N.C. Gen. Stat. 150B-23(f) states, ” Unless another statute or a federal statute or regulation sets a time limitation for the filing of a petition in contested cases against a specified agency, the general limitation for the filing of a petition in a contested case is 60 days. The time limitation, whether established by another statute, federal statute, or federal regulation, or this section, shall commence when notice is given of the agency decision to all persons aggrieved who are known to the agency by personal delivery or by the placing of the notice in an official depository of the United States Postal Service wrapped in a wrapper addressed to the person at the latest address given by the person to the agency. The notice shall be in writing, and shall set forth the agency action, and shall inform the persons of the right, the procedure, and the time limit to file a contested case petition. When no informal settlement request has been received by the agency prior to issuance of the notice, any subsequent informal settlement request shall not suspend the time limitation for the filing of a petition for a contested case hearing.”

2. How many times do you have to receive the denial in order for that denial to be considered a “final decision”?

There is no magic number. But the Court of Appeals in Abrons makes it clear that the “final decision” must be rendered by DHHS, not a contracted party.

So which we ask – What about terminations by MCOs? Do MCOs have the authority to terminate providers and render final decisions regarding Medicaid providers?

I would argue – no.

Our 1915b/c Waiver waives certain federal laws, not state laws. Our 1915 b/c Waiver does not waive N.C. Gen. Stat. 150B.

“But who has won?” asked Alice.

“At last the Dodo said, ‘everybody has won, and all must have prizes.'” – Only in Wonderland!

Sometimes, you just need to stop running and dry off.

NCTracks: There’s a Hole in My Bucket !!

My mom taught me a song when I was young called, “A Hole in the Bucket.” It is a maddening song about a lazy husband named Henry who begins the song telling his wife Liza that “There’s a hole in the bucket, dear Liza, dear Liza….” To which Liza sings, “Then fix it, dear Henry, dear Henry…”

The song continues with Henry singing excuses and impediments to his ability to fix the hole in the bucket and Liza explaining to Henry how to overcome these excuses. The song goes around and around until, in order to fix the bucket, Henry would have to sharpen an ax on a stone that “is too dry,” and the only way to wet the stone is with the bucket that has a hole. “There’s a hole in the bucket…” And the songs starts anew and can be sung continuously, never-ending.

My husband and daughter audibly groan when I begin such song.

And you can’t blame them! It is discouraging and frustrating when something is caught in a never-ending circle with no end and no conclusion.  It is human nature to try to resolve issues; it is also ingrained in Americans’ minds that hard work yields results. When hard work yields nothing but a big, fat goose-egg, it is exacerbating.

Kind of like claims in NCTracks…

When NCTracks went live on July 1, 2013, providers immediately began to complain the claims were being erroneously denied and they were receiving no reimbursements. Folks with whom I spoke with were at their wits-ends, spending hours upon hours trying to discern why claims were being denied and what process they could undertake to fix “the hole in the bucket.”

The problem persisted so long and I was contacted by so many providers that I instigated the NCTracks class action lawsuit, which is still pending on appeal, to the best of my knowledge, at my former firm.  Although it was dismissed at the Business Court level, I believe it is on appeal. See blog.

Providers complained that, when they contacted CSC’s Help Desk regarding denied claims, the customer service representatives would have little to no understanding of the claims process and instruct them to re-file the denied claims, which created a perpetual cycle of unadjudicated claims.

“It was infuriating!” One provider explained. “It was as if we were caught in the spin cycle with no hope of stopping. I wanted to yell, ‘I’m dry all ready!!'”

“I was spending 20+ a week on NCTracks billing problems,” another said.

To which, I said, “There’s a hole in the bucket, dear Liza, dear Liza.”

Over two years after the “go live” date, the Department has now (finally) informed providers that there is an informal reconsideration review process for denials from CSC.

The September 2015 Medicaid Bulletin states that:

“This article provides a detailed explanation of the N.C. Division of Medical Assistance (DMA)  procedures for Informal Reconsideration Review of adverse claim actions (denials, disallowances and adjustments) made by its fiscal agent, CSC.”

The Bulletin provides a 30 day time period during which a provider can appeal a denied claim:

“Time Limit for Submission of Request

  • A provider may request a reconsideration review within 30 calendar days from receipt of final notification of payment, payment denial, disallowances, payment adjustment, notice of program reimbursement and adjustments. If no request is received within the respective 30 calendar day period, DMA’s action will become final.”

(emphasis in original).

You must request reconsideration review within 30 calendar days of the final notification.  BUT what exactly is “final notification?” The initial denial? The second denial after re-submitting? The third? Or, what if, your claim is pending…for months…is that a denial?  When CSC tells you to re-submit, does the time frame in which to file a reconsideration review start over? Or do you have to appeal every single denial for every single claim, even if the claim is re-submitted and re-denied 10 times?

This new informal appeal process is as clear as mud.

Notice the penalty for NOT appealing within 30 days…”DMA’s action will become final.”

This means that, if you fail to appeal a denial within 30 days, then the claim is denied and you cannot request a reconsideration review. Theoretically, there is a legal argument that, once the “final decision” is rendered, even if it were rendered due to you failing to request a reconsideration review, you would have 60 days to appeal such final decision to the Office of Administrative Hearings (OAH). Although, acting as the Devil’s advocate, there is an argument that your failure to request a reconsideration review and taking the appeal straight to OAH is “failing to exhaust your administrative remedies.” See blog. Which could result in your appeal being dismissed for lack of jurisdiction. This goes to show you the importance of having your attorney involved at the earliest juncture, otherwise you could risk losing appeal rights.

Let’s think about the “time limit for submission of request” in a real-life hypothetical.

You keep receiving denials for dialysis claims for no apparent reason. You received 20 denials on September 4, 2015. You contact a CSC customer service representative on September 8, 2015, four days later, due to Labor Day weekend. The customer service representative instructs you to re-file the claims because you must include the initial date of treatment in order to have the claims processed and paid (which was not required with HP Enterprises’ system). Is this the “final notification?” It does not seem so, since you are allowed to re-submit…

You revise all 20 claims to include the first treatment date on the claim and re-submit them on September 9, 2015. Since you re-submitted prior to the September 10th cutoff, you expect payment by September 16, 2015, 12 days after the initial denial.

You receive your explanation of benefits (EOBs) and 5 claims were adjudicated and paid, while 15 were denied again.

You contact CSC customer service and the representative instructs you to re-submit the 15 claims.  The rep does not know why the claims were denied, but she/he suggests that you review the claims and re-submit. After hours of investigative work, you believe that the claims were denied because the NPI number was wrong…or the incorrect address was processed…or…

You miss the September 17th cut-off because you were trying to figure out why these claims were denied.  you submit them for payment for the September 29th checkwrite date (25 days after the initial denial).

At this point, if any claims are denied, you wouldn’t know until October 6th, 32 days after the initial denial.

In my scenario, when is the final adjudication?

If the answer is that the final adjudication is at the point that the provider tries all possible revisions to the claims and continues to re-submit the claims until he/she cannot come up with another way to re-submit, then there is never final adjudication. As in, the provider could continue various changes to the billing ad nauseam and re-submit…and re-submit…and re-submit…”There’s a hole in the bucket!”

If the answer is that the final adjudication is the initial denial, then, in my scenario, the provider would be required to appeal every single denial, even for the same claim and every time it is denied.

You can imagine the burden to the provider if my second scenario is correct. You may as well hire a full-time person whose only task is to appeal denied claims.

Regardless, this new “Informal Reconsideration Review” purports to create many more questions than answers.

So may rules are enacted with good intentions, but without the “real life” analysis. How will this actually affect providers?

“There’s a hole in the bucket, dear Liza, dear Liza.”

Then fix it.”

Judge Orders State’s Termination of Provider’s Medicaid Contract To Be REVERSED, Despite the Unilateral Termination!!

THE CASES LISTED BELOW ARE ILLUSTRATIVE OF THE MATTERS HANDLED BY THE FIRM. CASE RESULTS DEPEND UPON A VARIETY OF FACTORS UNIQUE TO EACH CASE. NOT ALL CASE RESULTS ARE PROVIDED. CASE RESULTS DO NOT GUARANTEE OR PREDICT A SIMILAR RESULT IN ANY FUTURE CASE UNDERTAKEN BY THE LAWYER.

[The names and services involved have been changed to protect the innocent. Lawyers have so many rules to follow…probably due to litigation].

Imagine that the State of North Carolina knocks on your office door and informs you that you are no longer allowed to accept Medicaid and/or Medicare reimbursement rates. That for whatever reason, you are no longer allowed to bill for Medicaid and/or Medicare services. You would expect a reason, right? You would expect the reason to be correct, right?

But what if the reason is invalid?

A North Carolina administrative judge recently held that the State’s reason for terminating a Medicaid provider’s contract must be accurate, and REVERSED the State’s decision to terminate its Medicaid contract with my client.  Here’s the story:

The State terminated my client’s contract to provide chiropractic services.

In this case it was a bit of a duress contract (as are most Medicaid contracts) – a “take or leave it” offer to the local service provider.  If you are a provider and want to continue to serve Medicaid recipients, you have no choice but to sign whatever contract the State gives you. You cannot negotiate. You’d be told to sign the contract “as is,” or you do not provide services. I know of a provider who, before he signed a contract with the State, crossed out a number of clauses. The State just sent him a clean, un-altered contract, same as the original, and told him sign it, no changes allowed.

Going back to my case…

My client is a provider that provides chiropractic services. In this case, the State inaccurately claimed that my client provided services without a proper license.

Upon the State’s termination of my client’s contract for chiropractic services, we filed a petition to the Office of Administrative Hearings in 2013 and asked the administrative law judge for a temporary restraining order, a motion to stay the termination, and a Preliminary Injunction to enjoin the State from terminating my client’s Medicaid provider contract.

The administrative law judge (ALJ) issued the temporary restraining order in May 2013. According to judge, we demonstrated a likelihood of success on the merits and that any failure to award the injunction would cause irreparable harm.

Obtaining an injunction, however, was not a complete victory. We had won an opening battle, but not the war.

A temporary injunction is exactly that…temporary. We had two additional hurdles to overcome: (1) a hearing at which we would have to prove to the judge that we were likely to succeed and the irreparable harm would be so irreparable that the judge should award us a longer injunction, at least until we could have a full hearing on the merits; and (2) a final hearing on the merits.

We received the Final Decision from the ALJ last week. The judge found that my client performed its contractual and legal obligations and that the State acted erroneously in determining that my client had breached its contract. The judge found the weight of the evidence sufficient to prove that my client provided services with a proper license.

If you think a 2 year injunction is pretty long, from May 2013 to now, you are right.

But think about this…from May 2013, through today and into the foreseeable future, as long as the contract is in effect, my client has been and will be able to provide medically necessary chiropractic services to those in need and receive reimbursements for those medically necessary services. This case shows why it is important for providers to assert their rights when those are violated.

And it shows also that the State is not allowed to arbitrarily violate those provider rights.