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CMS Ramps Up Medicare Audits: A Pig and Pony Show?

Monday, February 22, 2016, The Centers for Medicare and Medicaid Services (CMS) announced that it plans to increase onsite visits and monitoring of health care providers. One of the top priorities for CMS is to verify that provider enrollment and address are correct…

Because, as you know, providers with correct addresses on file are less likely to commit Medicare fraud. Medicare Fraud 101 – Give CMS the wrong address. Really? (While I applaud their valiant effort, the fraud that I have witnessed has not been a health care provider using a fake address to provide fake services…that is too Ponzi, too shallow in thought…too easily detected. Oh no, the fraud I have encountered were providers with actual practices with correct addresses, but embellishing on the amount of services provided to an actual Medicare enrollee to cushion their pockets. This is much more difficult to detect.

But CMS has its reasons for sniffing out fake addresses. CMS’ address hunt-down comes on the heels of a report from June 2015 out of the Government Accountability Office (GAO), which determined that approximately 22% of Medicare provider addresses are “potentially ineligible.” Additionally, last March (2015) CMS decreased the amount of audits conducted by Medicare Administrative Contractors (MACs), which are one of the entities that investigate Medicare provider eligibility.

Whenever the GAO finds potential errors, CMS usually puts on the whole dog and pony show…or, maybe, for a change, a pig and pony show…

With all these political talks about donkeys and elephants, I would like to take a moment and blog about a pig. Some of you know that I own a pet pig. She is 4 1/2 years old and about 30 pounds. See below.

oink

Isn’t she cute?! Some of you will remember my last blog about Oink was “Our Medicaid Budget: Are We Just Putting Lipstick on a Pig?

The reason I bring up Oink is that she is the smartest, most animated animal I have ever encountered. She is also the best “sniffer-outer” I have ever encountered. Her keen sense of smell is well beyond any human’s sense of smell. If you liken Oink to CMS and Medicare fraud to a Skittle, the Skittle would have no chance.

These upcoming and increased number of audits is CMS’ way of sniffing out fraud. However, CMS’ sense of smell is not up to snuff like Oink’s sense of smell.

Searching for erroneous addresses in order to detect fraud, waste, and abuse (FWA) will, inevitably, be over-inclusive. Meaning, many of the erroneous addresses will not be committing Medicare fraud. Some erroneous addresses exist because providers simply moved to another location and either failed to inform CMS or CMS’ database was not updated with the new address. Other erroneous addresses exist because health care providers went out of business and never informed CMS. A new company leases the property and it appears to CMS that fraudulent billing was occurring a couple years ago out of, for example, what is now a Jimmy John’s.

Searching for erroneous addresses in order to detect FWA will, inevitably, be under-inclusive. Meaning, that many providers committing Medicare fraud do so with accurate office addresses.

My contention is that if you want to find FWA, you need to dig deeper than an incorrect address. Sniffing out Medicare fraud is a bit more in depth than finding improper addresses. That would be like tossing handfuls of Skittles on the ground and expecting Oink to only find the green ones.

In fiscal year 2014, Medicare paid $554 billion for health care and related services. CMS estimates that $60 billion (about 10 percent) of that total was paid improperly (not only because of incorrect addresses).

CMS is responsible for developing provider and supplier enrollment procedures to help safeguard the program from FWA. CMS contracts with Medicare Administrative Contractors (MACs) and the National Supplier Clearinghouse (NSCs) to manage the enrollment process. MACs are responsible for verifying provider and supplier application information in Provider Enrollment, Chain and Ownership System (PECOS) before the providers and suppliers are permitted to enroll into Medicare. CMS currently contracts with 12 MACs, each of which is responsible for its own geographic region, known as a “jurisdiction.

As you can see, we live in Jurisdiction 11. These MACs act as the “sniffer-outers” for CMS.

According to the GAO June 2015 report, about 23,400 (22 percent) of the 105,234 addresses that GAO initially identified as a Commercial Mail Receiving Agency (CMRA), vacant, or invalid address are potentially ineligible for Medicare providers and suppliers. “About 300 of the addresses were CMRAs, 3,200 were vacant properties, and 19,900 were invalid. Of the 23,400 potentially ineligible addresses, [GAO] estimates that, from 2005 to 2013, about 17,900 had no claims associated with the address, 2,900 were associated with providers that had claims that were less than $500,000, and 2,600 were associated with providers that had claims that were $500,000 or more per address.”

In other words, out of 105,234 addresses, only 2,600 actively billed Medicare for over $500,000 from 2005 through 2013 (8 years). Had CMS narrowed the scope and looked at practices that billed over $500,000 since 2010, I fancy the the number would have been much lower, because, as discussed above, many of these providers either moved or went out-of-business.

Now, 2,600 is not a nominal number. I am in no way undermining CMS’ efforts to determine the accuracy of providers’ addresses; I am not insinuating that these efforts are unnecessary or a complete waste of time. I think verification of health care providers’ addresses is an important aspect of detecting FWA. Instead, I believe that, as discussed above, verifying providers’ addresses is a poor, under and over-inclusive attempt at searching for FWA. Because, as I stated at the beginning of this blog, the people who are intentionally trying to defraud the system, are not going to intentionally give an erroneous address. It is just too easy for the government to discover the error. No, the people who are intentionally defrauding the state will have a legitimate office.

For example, in my opinion, it is unlikely that anyone intentionally trying to defraud the system will inform the government that they provide health care services from the following places:

UPS2demolished2

fast food2

Again, if I liken CMS’ search for FWA by detecting inaccurate addresses to Oink, it would be like tossing a handful of Skittles on the ground and expecting Oink to only find the green ones.

If CMS audits are to Oink as fraud is to Skittles, then I think there is a less intrusive, less inclusive way to detect FWA rather than throwing out packets of Skittles for Oink. All that does is make Oink eat too much.

If you are one of the Medicare providers that get caught into CMS’ widely  thrown net, be sure to know your rights! Know the appeal steps!

The Feds Criminally Investigating DHHS! Is Its Scope Too Narrow and What Are Possible Consequences?

DHHS is under criminal investigation by the federal government for allegedly overpaying employees without a bid process, and, simply, mismanaging and overspending our Medicaid tax dollars. See blog.

When I first started writing this blog, I opined that the federal investigation should be broadened. While I still believe so, the results of broadening the scope of a federal investigation could be catastrophic for our Medicaid providers and recipients. So I am metaphorically torn between wanting to shine light on tax payer waste and wanting to shield NC Medicaid providers and recipients from the consequences of penalties and sanctions on NC DHHS. Because, think about it, who would be harmed if NC lost federal funding for Medicaid?

[BTW, of note: These subpoenas were received July 28, 2015. Aldona Wos announced her resignation on August 5, 2015, after receipt of subpoenas. The Subpoenas demand an appearance on August 18, 2015, which, obviously, has already passed, yet we have no intel as to the occurrences on August 18, 2015. If anyone has information, let me know.]

Let’s explore:

Does this criminal investigation go far enough? Should the feds investigate more Medicaid mismanagement over and above the salaries of DHHS employees? What are the potential consequences if NC is sanctioned for violating Medicaid regulations? How could a sanction affect providers and recipients?

DHHS’ employees are not the only highly compensated parties when it comes to our Medicaid dollars! It is without question that the contracts with vendors with whom DHHS contracts contain astronomically high figures. For example, DHHS hired Computer Sciences Corporation (CSC) to implement the NCTracks software for $265 million. Furthermore, there is no mention of the lack of supervision of the managed care organizations (MCOs) and the compensation for executives of MCOs being equal to that of the President of the United States in the Subpoenas.

The subpoenas are limited in scope as to documents related to hiring and the employment terms surrounding DHHS employees. As I just said, there is no mention of violations of bid processes for vendors or contractors, except as to Alvarez & Marsal, and nothing as to the MCOs.

Specifically, the subpoena is requesting documents germane to the following:

  • Les Merritt, a former state auditor who stepped down from the North Carolina State Ethics Commission after WRAL News raised questions about potential conflicts of interest created by his service contract with DHHS;
  • Thomas Adams, a former chief of staff who received more than $37,000 as “severance” after he served just one month on the job;
  • Angie Sligh, the former director of the state’s upgraded Medicaid payment system who faced allegations of nepotism and the waste of $1.6 million in payments to under-qualified workers for wages, unjustified overtime and holiday pay in a 2015 state audit;
  • Joe Hauck, an employee of Wos’ husband who landed a lucrative contract that put him among the highest-paid workers at DHHS;
  • Alvarez & Marsal, a consulting firm overseeing agency budget forecasting under a no-bid contract that has nearly tripled in value, to at least $8 million;

See WRAL.com.

Possible penalties:

Most likely, the penalties imposed would be more civil in nature and encompass suspensions, recoupments, and/or reductions to the federal matching. Possibly a complete termination of all federal matching funds, at the worst.

42 CFR Part 430, Subpart C – of the Code of Federal Regulations (CFR) covers “Grants; Reviews and Audits; Withholding for Failure To Comply; Deferral and Disallowance of Claims; Reduction of Federal Medicaid Payments”

The Center for Medicare and Medicaid Services (CMS) is charged with the oversight of all 50 states’ management of Medicaid, which makes CMS very busy and with solid job security.

“The Department’s Office of Inspector General (OIG) periodically audits State operations in order to determine whether—(1) The program is being operated in a cost-efficient manner; and
(2) Funds are being properly expended for the purposes for which they were appropriated under Federal and State law and regulations.” 42 CFR 430.33.

CMS may withhold federal funding, although reasonable notice and opportunity for a hearing is required (unlike the reimbursement suspensions from providers upon “credible” (or not) allegations of fraud).

If the Administrator of a hearing finds North Carolina non compliant with federal regulations, CMS may withhold, in whole or in part, our reimbursements until we remedy such deficiency. Similar to health care providers’ appeals, if the State of North Carolina is dissatisfied with the result of the hearing, NC may file for Judicial Review. Theoretically, NC could go all the way to the U.S. Supreme Court.

Other penalties could include reductions of (1) the Federal Medical Assistance Percentage; (2) the amount of State expenditures subject to FFP; (3) the rates of FFP; and/or (4) the amount otherwise payable to the state.

As a reminder, the penalties listed above are civil penalties, and NC is under criminal investigation; however, I could not fathom that the criminal penalties would differ far from the civil allowable penalties. What are the feds going to do? Throw Wos in jail? Highly unlikely.

The subpoena was addressed to:

subpoena

NC DHHS, attention the Custodian of Records. In NC, public records requests go to Kevin V. Howell, Legal Communications Coordinator, DHHS.

But is the federal government’s criminal investigation of DHHS too narrow in scope?

If we are investigating DHHS employees’ salaries and bid processes, should we not also look into the salaries of DHHS’ agents, such as the salaries for employees of MCOs? And the contracts’ price tags for DHHS vendors?

Turning to the MCOs, who are the managers of a fire hose of Medicaid funds with little to no supervision, I liken the MCOs’ current stance on the tax dollars provided to the MCOs as the Lion, who hunted with the Fox and the Jackal from Aesop’s Fables.

The Lion went once a-hunting along with the Fox, the Jackal, and the Wolf. They hunted and they hunted till at last they surprised a Stag, and soon took its life. Then came the question how the spoil should be divided. “Quarter me this Stag,” roared the Lion; so the other animals skinned it and cut it into four parts. Then the Lion took his stand in front of the carcass and pronounced judgment: The first quarter is for me in my capacity as King of Beasts; the second is mine as arbiter; another share comes to me for my part in the chase; and as for the fourth quarter, well, as for that, I should like to see which of you will dare to lay a paw upon it.”

“Humph,” grumbled the Fox as he walked away with his tail between his legs; but he spoke in a low growl:

Moral of Aesop’s Fable: “You may share the labours of the great, but you will not share the spoil.”

At least as to DHHS employees’ salaries, the federal government is investigating any potential mismanagement of Medicaid funds due to exorbitant salaries, which were compensated with tax dollars.

Maybe this investigation is only the beginning of more forced accountability as to mismanaging tax dollars with Medicaid administrative costs.

One can hope…(but you do not always want what you wish for…because the consequences to our state could be dire if the investigation were broadened and non compliance found).

Possible Ramifications:

Let us quickly contemplate the possible consequences of any of the above-mentioned penalties, whether civil or criminal in nature, on Medicaid recipients.

To the extent that you believe that the reimbursement rates are already too low, that medically necessary services are not being authorized, that limitations to the amount services are being unduly enforced…Imagine that NC lost our federal funding completely. We would lose approximately 60% of our Medicaid budget.

All our “voluntary” Medicaid-covered services would, most likely, be terminated. Personal care services (PCS) is an optional Medicaid-covered service.

With only 40% of our Medicaid budget, I could not imagine that we would have much money left to pay providers for services rendered to Medicaid recipients after paying our hefty administrative costs, including overhead,payroll, vendor contracts, MCO disbursements, etc. We may even be forced to breach our contracts with our vendors for lack of funds, which would cause us to incur additional expenses.

All Medicaid providers could not be paid. Without payments to providers, Medicaid recipients would not receive medically necessary services.

Basically, it would be the next episode of “Fear the Walking Dead.”

Hopefully, because the ramifications of such penalties would be so drastic, the federal government will not impose such sanctions lightly. Sanctions of such magnitude would be a last resort if we simply refused to remedy whatever deficiencies are found.

Otherwise, it could be the zombie apocalypse, but the Lion’s would be forced to share.

Feds launch investigation into DHHS contracts, hiring!!!

WRAL ARTICLE:

By Tyler Dukes, Mark Binker & Laura Leslie

RALEIGH, N.C. — The U.S. Attorney’s Office has launched an investigation into high-dollar consulting contracts and salary payments at the North Carolina Department of Health and Human Services.

According to documents provided by DHHS on Friday afternoon, U.S. Attorney Thomas Walker subpoenaed the department for information on more than 30 employees, as well as bidding and payment information for administrative contracts, as part of a criminal investigation. The subpoenas came in late July, about a week before the resignation of former DHHS Secretary Aldona Wos in early August.

The investigation was first reported by The News & Observer.

DHHS spokeswoman Kendra Gerlach said Wos decided to resign before the subpoenas.

“The current secretary had been selected prior to any knowledge of this government inquiry,” Gerlach said.

Walker’s office did not return phone calls seeking comment.

Gerlach said the department is cooperating with the federal government, but she declined to comment further about the investigation.

“We will continue to respect the confidentiality of the process by the federal government to protect the integrity and fairness of this review,” she said in an emailed statement.

The Governor’s Office has not responded to requests for comment.

Among the targets of the subpoena are the records of state employees and contractors who have come under fire in the past, both by North Carolina legislators and the State Auditor’s Office.

That includes:

  • Les Merritt, a former state auditor who stepped down from the North Carolina State Ethics Commission after WRAL News raised questions about potential conflicts of interest created by his service contract with DHHS
  • Thomas Adams, a former chief of staff who received more than $37,000 as “severance” after he served just one month on the job
  • Angie Sligh, the former director of the state’s upgraded Medicaid payment system who faced allegations of nepotism and the waste of $1.6 million in payments to under-qualified workers for wages, unjustified overtime and holiday pay in a 2015 state audit
  • Joe Hauck, an employee of Wos’ husband who landed a lucrative contract that put him among the highest-paid workers at DHHS
  • Alvarez & Marsal, a consulting firm overseeing agency budget forecasting under a no-bid contract that has nearly tripled in value, to at least $8 million

State lawmakers have grilled DHHS leadership in the past in response to the contracts and audits, often publicly in legislative oversight meetings.

Rep. Justin Burr, co-chairman of the Joint Legislative Oversight Committee on DHHS, said Friday that he was recently made aware of the federal investigation into DHHS.

“It’s a concern, but it covers several areas that our oversight committee has expressed concerns about,” Burr, R-Stanly, said.

Oversight hearings during Wos’ tenure questioned the qualifications of contractors hired by DHHS, as well as the size of those contracts.

“Depending on which one you’re talking about, there was no sort of bid or effort to find the most qualified person,” Burr said. “They were just hand-picking individuals.”

This is a copy of the WRAL article. MORE TO COME FROM ME!!!!

New Mexico AG clears third agency of Medicaid billing fraud!!!

BREAKING NEWS

Here is the article (my opinions will be forthcoming):

SANTA FE – The Attorney General’s Office has cleared a third behavioral health agency of Medicaid fraud, and it’s reaching out to audit firms for help in investigating the remaining dozen referred by the Human Services Department two years ago.

Attorney General Hector Balderas said Wednesday that he has issued requests for proposals from audit firms to help with the investigations, to speed up the process.

A spokesman for Balderas, meanwhile, said the AG’s Office has completed its investigation into Raton-based Service Organization for Youth and found no Medicaid fraud on the part of the agency, although there was overbilling.

The AG’s Office referred the case back to the Human Services Department to pursue the overbilling, according to spokesman James Hallinan. The alleged amount was not immediately available.

As an outgrowth of the SOY investigation, a former therapist for the agency was charged six weeks ago by the AG’s Office with Medicaid fraud. She allegedly provided false billing information to SOY.

The Human Services Department in 2013 referred to the attorney general 15 nonprofits that provided services to the mentally ill and addicted, saying an audit it commissioned had found $36 million in overbilling, mismanagement and possible fraud.

Two of the providers – The Counseling Center of Alamogordo and Santa Fe-based Easter Seals El Mirador – had previously been cleared of fraud by the AG’s Office and are in disputes with HSD about what, if anything, they owe for alleged overbilling.

Former Attorney General Gary King, who left office at the end of December, had said it could take up to six years to complete the probes. Balderas said that was too long and got approval from the Legislature during the regular session to shift $1.8 million out of a consumer protection fund to hire extra help.

The request for proposals “is a critical infusion of resources to expedite the behavioral health Medicaid fraud investigations,” Balderas said Wednesday in a statement. He said expanding the pool of experts to work with his staff “will allow our investigation to proceed even more quickly and efficiently, which has always been my priority.”

The request for proposals, issued last week, requires that bidders respond by June 30.

After the Human Services Department cut off Medicaid funding to the providers and referred them to the AG’s Office, it brought in five Arizona companies to take over a dozen of them. SOY, however, had its Medicaid funding restored by HSD and continued to operate, with technical assistance from one of the Arizona firms.

The report on the SOY investigation was not immediately available from Balderas’ office. Hallinan said it was being reviewed before release to ensure that it didn’t affect the criminal proceedings against the former SOY therapist.

State Auditor Finds Taxpayer Waste at OMMISS!!!!

New State Auditor report investigates the Office of Medicaid Management Information Systems Services (OMMISS) within the North Carolina Department of Health and Human Services (DHHS).

With DHHS’ emphasis on detecting health care providers’ fraud, waste, and abuse (FWA) across the state, it seems ironic that its own agency is deemed guilty of wastefulness by our State Auditor.  What’s that about glass houses……??

What exactly does OMMISS do?  Well, for one, OMMISS works with Computer Sciences Corporation (CSC) regarding NCTracks.  We all know how wonderfully NCTracks has operated since inception….See blog. And blog.

State Auditor Beth Wood finds:

KEY FINDINGS

 At least $1.6 million wasted through excessive wages and commissions, unjustified overtime, and
holiday pay to ineligible employees

 OMMISS Director engaged in or allowed nepotism

 OMMISS Director received unauthorized compensatory time that may result in inflated retirement
benefits

 Reports to General Assembly omitted at least $260,000 of overtime and compensatory time

 Lack of adequate oversight of OMMISS despite findings in prior audit reports

 

Knicole Emanuel Speaks About CSC Fraud Investigation on ABC

I was interviewed by Heather Waliga, ABC News, last Friday about the U.S. Attorney’s lawsuit against Computer Sciences Corporation (CSC) accusing CSC of hundreds of millions of dollars of Medicaid fraud.

To watch the video, please click here.

But, beware! Do not make the video full screen unless you are prepared to see a very, large, close-up picture of my head.  The camera man zoomed in to, literally, just my head.

 

 

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’s Findings May Cause Overzealous Oversight

Ok, so it took me a couple of days to free up some time to discuss the most recent Performance Audit by our State Auditor. This time of year is CRAZY! We had to get our daughter ready for the 4th grade, which entails buying an absurd amount of school supplies. Thank goodness we don’t have to do “back to school” clothes shopping, because she wears uniforms. Yesterday was her first day of school and, apparently, everything went well.

Now, I want to discuss the recent Performance Audit published by Beth Wood, our NC State Auditor, regarding provider eligibility. Prior to going any further, let me voice my opinion that Beth Wood as our State Auditor rocks. She is smart, courageous, and a force of nature. Any comment that may be negative in nature as to the most recent audit is NOT negative as to the audit itself, but to the possible consequences of such an audit. In other words, I do not believe that the Performance Audit as to Medicaid Provider Eligibility is incorrect; I am only concerned as to the possible consequences of such an audit on the Department of Health and Human Services (DHHS) and health care providers.

The Medicaid Provider Eligibility Performance Audit found that “deficiencies in the enrollment process increase the risk of unqualified providers participating in the Medicaid Program.”

And DHHS’ “enrollment review procedures do not provide reasonable assurance that only qualified providers are approved to participate in the NC Medicaid program.”

And “quality assurance reviews were not conducted or were ineffective.”

Basically, the Performance Audit (in layman’s terms) says that DHHS, again, has little to no oversight, lacks supervision over providers, has program deficiencies, and lacks the ability to manage Medicaid provider eligibility requirements adequately. Considering that DHHS is the single agency charged with managing Medicaid in North Carolina, the Performance Audit is yet another blow to the ability of DHHS to do its job.

Gov. McCrory appointed Sec. Aldona Wos as the head of DHHS, effective January 5, 2013. With Sec. Wos at its helm, DHHS has been riddled by the media with stories of management difficulties, high-level resignations, and mismanaged tax dollars. With the amount of media attention shining on DHHS, it is amazing that Sec. Wos has only been there almost a year and a half. Oh, how time flies.

While, again, I do not discount the accuracy of the Medicaid Provider Eligibility Performance Audit, I am fearful that it will spur DHHS to almost another “Salem witch hunt” extravaganza by pushing the already far-swung pendulum of attacks on providers, in the direction of more attacks. DHHS, through its contractors, agents and vendors, has increased its regulatory audits and heightened its standards to be compliant as a provider for a number of reasons:

1. The U. S. Supreme Court’s Olmstead case;
2. The DOJ settlement as to ACTT providers;
3. More oversight by CMS;
4. The ACA’s push for recovery audit contractors (RACs);
5. General need to decrease the Medicaid budget;
6. Increased fraud, waste, and abuse detection standards in the ACA;
7. Monetary incentives on managed care organizations (MCOs) to decrease the number of providers;
8. Etc.

Imagine a pendulum swinging…or, better yet, imagine a child swinging on a swing. Before the child reaches the highest point of the swing, an adult runs behind the child and pushes the child even higher, in order to get a little more “umphf” on the swing. And the child goes even higher and squeals even more in excitement. But that’s not always a great idea. Sometimes the child goes flying off.

I am afraid that the Performance Audit will be that adult pushing the child on the swing. The extra little push…the extra little “umphf” to make the pendulum swing even higher.

As with any Performance Audit, DHHS is allowed to respond to Ms. Wood’s findings. One response is as follows:

“In September 2013, DMA established and implemented Management Monitoring Quality Controls (Monitoring Plan) for reviewing approval and denial decisions related to provider applications referred to it by the Contractor due to a potential concern. The Monitoring Plan established standardized policies and procedures and ensures that staff adheres to them in making enrollment determinations.”

In other words, recently DHHS has put forth a more aggressive oversight program as to health care providers and it will only get more aggressive.

In the last year or so, we have seen more aggressive oversight measures on health care provider that accept Medicaid. More audits, more desk reviews, more fraud investigation…and most (that I have seen) are overzealous and incorrect.

Believe me, I would be fine with increased oversight on health care providers, if the increased oversight was conducted correctly and in compliance with federal and state rules and regulations. But the audits and oversight to which I have been privy are over-bearing on providers, incorrect in the findings, and lacking much of due process for, much less respect to the providers.

I am concerned that the extra little “umphf” by this Performance Audit will impact health care providers’ decisions to accept or not to accept Medicaid patients. See my past blogs on the shortage of health care providers accepting Medicaid.  “Shortage of Dentists Who Accept Medicaid: The Shortage Continues.” “Provider Shortage for Medicaid Recipients.” And “Prisons and Emergency Rooms: Our New Medicaid Mental Health Care Providers.

Instead of increasing overzealous audits on health care providers, maybe we should require DHHS, through its contractors, agents, and vendors, to conduct compliant, considerate, and constitutionally-correct audits and oversight. Maybe the “umphf” should be applied more toward DHHS.

Personal Care Services: Will the Fear of the “F” Word (Medicaid Fraud) Cause PCS in the Home to Be Eradicated???

In my career, I call it the “F” word:

Fraud.

Its existence and fear of existence drives Medicare and Medicaid policies.

It is without question that Medicare and Medicaid fraud needs to be eliminated.  In fact, for true Medicare and Medicaid fraud, I propose harsher penalties.  Think about what the fraudulent provider is doing…taking health care dollars from the elderly and poor without providing services.  Medicare and Medicaid recipients receive less medically necessary services because of fraudulent providers.

Just recently, in Charlotte, on April 9, 2014, V.F. Brewton, of Shelby, N.C., was sentenced to 111 months in prison, three years of supervised release and ordered to pay $7,070,426 in restitution to Medicaid and $573,392 to IRS. On April 8, 2014, co-defendant, R. S. Cannon, of Charlotte, was sentenced to 102 months in prison, three years court supervised release and ordered to pay $2,541,306 in restitution.  See press release.  Ouch!

On November 21, 2013, in Miami, Fla., Roberto Marrero, who ran Trust Care, was sentenced 120 months in prison.  From approximately March 2007 through at least October 2010, Trust Care submitted more than $20 million in claims for home health services. Medicare paid Trust Care more than $15 million for these fraudulent claims. Marrero and his co-conspirators have also acknowledged their involvement in similar fraudulent schemes at several other Miami health care agencies with estimated total losses of approximately $50 million. See article.  Ouch!

However, there are never the stories in the newspapers and media about all the services actually rendered to Medicare and Medicaid recipients by upstanding providers who do not commit fraud, but, instead, work very hard every day to stay up-to-date on regulations and policies and who do not reap much profit for the services provided.  I guess that doesn’t make good journalism.

I recently attended the Association for Home and Hospice Care (AHHC) conference in RTP, NC.  I met wonderful and non-fraudulent providers.  Each provider I met was passionate and compassionate about their job.  The only time money was brought up was to discuss the low reimbursement rates and the low profit margin for these providers.

In fact, one of the speakers even opined that, because of the alleged prevalence of fraud in home health care, the federal and state governments will continue to cut reimbursement rates for home health and hospice until over 50% of the agencies operate at a loss by 2017.  That is a dismal thought!  What happened to our right to pursue a career without intervention?

One provider informed me that, upon his or her information and belief, there is a chance that PCS, which is an optional program under Medicaid, may be wiped out in the near future by the General Assembly (PCS for home health and assisted living facilities, not the recipients covered by the Waiver).

What are personal care services (PCS)?

In the world of Medicaid and Medicare, there are a number of different types of PCS.  No, actually, I think it is more apropos to say there are a number of different PCS recipients in the world of Medicaid and Medicare.

First, the definition/eligibility requirements:

Personal Care Services (PCS) are available to individuals who have a medical condition, disability, or cognitive impairment and demonstrate unmet needs for, at a minimum three of the five qualifying activities of daily living (ADLs) with limited hands-on assistance; two ADLs, one of which requires extensive assistance; or two ADLs, one of which requires assistance at the full dependence level. The five qualifying ADLs are eating, dressing, bathing, toileting, and mobility.  See DMA website.

PCS are provided to developmentally disabled people under the 1915 b/c Waivers, people who reside in nursing homes and long-term assisted living facilities, and people who qualify to receive PCS in their homes.  For purposes of this blog, I am writing about the latter three types of recipients.  All 50 states allow PCS for qualified individuals, but the qualifications differ among the states.

In this day and age, the “F” word drives Medicaid and Medicare policies.  Without question Medicaid fraud exists.  Whether Medicaid fraud is as prevalent as some may believe, I am not sure.  I have certainly witnessed honest providers accused of Medicaid fraud.

And home health care providers are viewed by some, generally, as the providers who can most easily commit Medicaid fraud (with which I do not agree, but must concede that home health care is more difficult to monitor).  For example, a home health care provider goes to a person’s home and provides services.  Who would know whether the home health care provider was billing for services on days he or she did not go to the recipient’s house? Not the recipient, because the recipient has no idea for what dates the provider is billing.  Unlike an assisted living facility or nursing home that is easier to monitor and would have the documentation to show that the recipient actually lived in the facility.

Because of the alleged prevalence of fraud in home health care, apparently, (and with no independent verification on my part) some in North Carolina are questioning whether we should continue to reimburse PCS with Medicaid dollars, particularly as to home health.  But if we stopped reimbursing for PCS in the homes, what would be the alternative?  How would it affect North Carolinians? Would eliminating PCS save tax dollar money? Stop fraud?

When we evaluate the effects of whether to continue to reimburse for PCS with Medicaid dollars, we aren’t only talking about those served by PCS, but also the companies and all employees providing the home health.  In 2012 in NC, approximately 40,000 were employed in home health.

Why is home health care important (or is it?)? Should we allow the “F” word to erase PCS  in home health?

What is the alternative to home health?  Answer: (1) Assisted living facilities?  (2) Nursing homes? (3) A dedicated, family caregiver?  (4) Nothing?

While there are, I am sure, many reasons that PCS in home health care is vital to our community, for the purposes of this blog, I am going to concentrate on cost savings to the taxpayers.  Home health costs us (taxpayers) less money than other alternatives to home health.

Also, understand please that I am not advocating that everyone should receive home health instead of entering nursing homes or assisted living facilities.  Quite the contrary, as both nursing homes and assisted living facilities are essential to NC.  I am merely pointing out that all the services (home health, nursing homes, and assisted living facilities) are important.

What is the difference between assisted living and nursing homes?

An assisted living community provides communal living, usually with social activities, a cafeteria, laundry service, etc.  I always think of my grandma at Glenaire in Cary, NC.  She plays bridge, attends a book club, and even takes a computer course!  She actually joined Facebook a couple of years ago!

A nursing home, on the other hand, provides 24-hour supervision by a licensed or registered nursing staff.  Generally, the folks eligible to be admitted into an assisted living facility will be eligible to receive PCS (see the above definition/eligibility requirements).  So, logically, the clientele in an assisted living facility receiving PCS could, in some cases, also be eligible to receive PCS in their home.  Obviously a number of factors come into play to determine whether a person goes into an assisted living facility versus staying at home and receiving home health care: eligibility, family issues, money, condition of your home, money, desire for independence, money, health issues, and money.

Because of the level of supervision and skill required in a nursing home, a nursing home will be much more expensive than an assisted living facility.  Insomuch as the assisted living facility will be less expensive than a nursing home, home health care, because you are paying for your own room and board, will be cheaper than both.

The average national cost for an assisted living facility in 2012 was $3,550/month.  That’s $42,600/year.  The average cost for an assisted living facility in 2012 in NC was $2900/month.

The average cost for a nursing home in NC for a semi-private room is $73,913 and $82,125 for a private room.  That’s $225/day for a private room.  For that price, you could get a room at a Ritz Carlton! (albeit not in a touristy area).

You think nursing homes are expensive in NC? Don’t move to NY!! In NY, for a semi-private room it costs $124,100/year and $130,670/year for a private room ($358/day!). Florida is a bit more expensive that NC too.  In Florida, on average, a semi-private room in a nursing home costs $83,950 and a private room is approximately $91,615.

On the flip side, the average cost for a homemaker is $38,896.  A home health aide costs, on average, $40,040.

If, in fact, NC ceases to reimburse PCS in home health, many of the people residing in their homes and relying on Medicaid-covered PCS will be forced to leave their homes for, in some case, more expensive alternatives.

Though the odd contrast may not be easily seen, there is an argument that erasing PCS in the home may actually cost the tax payers more.  Not to mention that erasing PCS in home health would drive agencies bankrupt and staff jobless.

Remember, I have no verification that our General Assembly would or would not eradicate PCS in the home environment.  It was mere speculation in a conversation.  But the conversation got me thinking about the delicate balance of Medicaid services in NC.  And how one abrupt and drastic change could change our health care system and capitalist ideas so quickly.

And, arguably, all because of the speculative “F” word.  What is that political phrase we heard so much in the last elections? Oh, yes, maybe we should use a scalpel, not an ax?

NC Medicaid: To Revise or Not to Revise, That Is the Question!

We  think too much; thus we fail to act.  That’s what Hamlet was saying during his “To be or not to be” soliloquy, right?  To live or not to live?  Should you bear the painful burden of life or to refuse the burden by killing yourself?

Or does the fear of the unknown (death) make us bear our painful lives? (Although Shakespeare was much more eloquent).

Medicaid providers, how many times have you reviewed your own documentation only to find accidental scrivener’s errors?  The service note failed to denote the correct date of service (DOS)…the Physician’s Authorization and Certification for Treatment (PACT) form cited an incorrect Medicaid number…or the CPT code on a service incorrectly indicated an individual treatment when the service was clearly a group treatment.  (People, we are NOT talking about forgery or altering dates of a physician’s signature…these things would be considered FRAUD.  We are merely talking about scrivener’s or clerical errors).

To revise or not to revise…that is the question!

And what an important question it is.  Because, so easily, innocent documentation corrections could transmute into documentation fraud. Medicaid fraud.  Criminal investigations.  Bad!

A recent Office of Administrative Hearings (OAH) decision gives us some guidance on when to revise or when not to revise.

St. Mary’s Home Care Services, Inc. v. NC Division of Medical Assistance (DMA) Finance Management Section Audit Unit NC DHHS was signed January 8, 2014, by Administrative Law Judge Beecher Gray, who was recently appointed as a Special Superior Court Judge.  Believe me, we will miss Judge Gray at OAH. His Order in St. Mary’s Home Care was his parting good-bye.

In St. Mary’s Home Care, the Department was seeking a recoupment of $4,334,056.09.  One of the reasons for the recoupment was that the Department contended that St. Mary’s had violated “best practices” in the way it had amended PACT forms and service notes.

A witness for the Department testified that “best practices” required St. Mary’s to either create a new document or to strike through the corrected portion, enter the correction, sign the name of the individual making the correction, and append an explanation for the correction to the document.

Judge Gray disagrees.

“The Agency’s misunderstanding of the policy and use of unpublished “best practices” as a justification for its decision is erroneous, in violation of rule and law, exceeds the Agency’s authority, and is arbitrary and capricious.”

“The Agency failed to meet its burden of proving St. Mary’s violated clinical coverage policy when it made changes or corrections to PACT form plans of care.”

So when should you NOT revise?

Obviously, do not commit fraud.  But, according to St. Mary’s Home Care, slight revisions to PACT forms and service notes will not be enough to warrant an overpayment.

“Go, bid the soldiers shoot.”