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Medicaid/care Fraud: You Are Guilty Until Proven Innocent!

Don’t we have due process in America? Isn’t due process something that our founding fathers thought important, essential even? Due process is in our Constitution.

The Fourteenth (governing state governments) and the Fifth Amendment (governing federal government) state that no person shall be “deprived of life, liberty, or property without due process of law.”

Yet, apparently, if you accept Medicaid or Medicare, due process is thrown out the window. Bye, Felicia!

How is it possible that criminals (burglars, murderers, rapists) are afforded due process but a health care provider who accepts Medicaid/care does not?

Surely, that is not true! Let’s look at some examples.

In Tulsa, a 61-year-old man was arrested for killing his Lebanese neighbor. He pled not guilty. In news articles, the word “allegedly” is rampant. He allegedly killed his neighbor. Authorities believe that he may have killed his neighbor.

And prior to getting his liberty usurped and getting thrown in jail, a trial ensues. Because before we take a person’s liberty away, we want a fair trial. Doesn’t the same go for life and property?

Example A: I recently received a phone call from a health care provider in New Jersey. She ran a pediatric medical daycare. In 2012, it closed its doors when the State of New Jersey accused it of an overpayment of over $12 million and suspended its funds. With its funds suspended, it could no longer pay staff or render services to its clients.

Now, in 2016, MORE THAN FOUR YEARS LATER, she calls to ask advice on a closing statement for an administrative hearing. This tells me (from my amazing Murdoch Mysteries (my daughter’s favorite show) sense of intuition): (1) she was not provided a trial for FOUR YEARS; (2) the state has withheld her money, kept it, and gained interest on it for over FOUR YEARS; (3) in the beginning, she did have an attorney to file an injunction and a declaratory judgment; and (4) in the end, she could not afford such representation (she was filing her closing argument pro se).

Examples B-P: 15 New Mexico behavioral health care agencies. On June 23, 2013, the State of New Mexico accuses 15 behavioral health care agencies of Medicaid fraud, which comprised 87.5% of the behavioral health care in New Mexico. The state immediately suspends all reimbursements and puts most of the companies out of business. Now, MORE THAN THREE YEARS LATER, 11 of the agencies still have not undergone a “Fair Hearing.” Could you imagine the outrage if an alleged criminal were held in jail for THREE YEARS before a trial?

Example Q: Child psychiatrist in rural area is accused of Medicaid fraud. In reality, he is not guilty. The person he hired as his biller is guilty. But the state immediately suspends all reimbursements. This Example has a happy ending. Child psychiatrist hired us and we obtained an injunction, which lifted the suspension. He did not go out of business.

Example R: A man runs a company that provides non-emergency medical transportation (NEMT). One day, the government comes and seizes all his property and freezes all his bank accounts with no notice. They even seize his fiance’s wedding ring. More than TWO YEARS LATER – He has not stood trial. He has not been able to defend himself. He still has no assets. He cannot pay for a legal defense, much less groceries.

Apparently the right to speedy trial and due process only applies to alleged burglars, rapists, and murderers, not physicians and health care providers who render medically necessary services to our most fragile and vulnerable population. Due process??? Bye, Felicia!

What can you, as a health care provider, do if you are accused of fraud and your reimbursements are immediately suspended?

  1. Prepare. If you accept Medicare/caid, open an account and contribute to it generously. This is your CYA account. It is for your legal defense. And do not be stupid. If you accept Medicaid/care, it is not a matter of if; it is a matter of when.
  2. Have your attorney on speed dial. And I am not talking about your brother’s best friend from college who practices general trial law and defends DUIs. I am talking about a Medicaid/care litigation expert.
  3. File an injunction. Suspension of your reimbursements is a death sentence. The two prongs for an injunction are (a) likelihood of success on the merits; and (b) irreparable harm. Losing your company is irreparable harm. Likelihood of success on the merits is on you. If your documents are good – you are good.

Medicare/caid Contracts Terminatations: “With” or “Without Cause. You May Need an Injunction

How is it already the second month of 2016? My how the time flies. As you can see below, I have started 2016 with my “best foot forward.”

image

Here’s the story (and why it’s been so long since I’ve blogged):

Santa Claus, whom I love, brought our 10-year-old daughter a zip line for Christmas. (She’s wanted one forever). My wonderful, exceedingly brilliant husband Scott miscalculated the amount of brakes needed for an adult of my weight for a 300-foot zip line. The brakes stopped, albeit suddenly, but adequately, for our 10-year-old.

However, for me…well…I went a bit faster than my 45-pound daughter. The two spring brakes were not adequate to stop my zip line experience and my out-thrown feet broke my crash…into the tree. (It was a miscalculation of basic physics).

On the bright side, apparently, my right leg is longer than my left, so only my right foot was injured.  Or my right foot is overly dominate than my left, which could also be the case.

Also, on the bright side, the zip line ride was AWESOME until the end.

On the down side, I tore the tendon on the bottom of my foot which, according to the ER doctor, is very difficult to tear. Embarrassingly, I had to undergo a psych evaluation because my ER doctor said that the only time he had seen someone tear that bottom tendon on their foot was by jumping off a building. So I have that going for me. I informed him that one could tear such tendon by going on zip line with inadequate brakes. (I passed the psych evaluation, BTW).

Then, while on crutches, I had a 5-day, federal trial in Fort Wayne, Indiana, the week of Martin Luther King, Jr., Tuesday through the next Monday. Thankfully, the judge did not make me stand to conduct direct and cross examinations.

But, up there, in the beautiful State of Indiana, I thought of my next blog (and lamented that I had not blogged in so long…still on crutches; I had not graduated to the gorgeous boot you saw in the picture above).

As I was up in Indiana, I thought, what if someone at the State Medicaid agency doesn’t like you, personally, and terminates your Medicaid contract “without cause?” Or refuses to contract with you? Or refuses to renew your contract?

Maybe you wouldn’t find it important whether your termination is “for cause” or “without cause,” but, in Indiana, and a lot of other states, if your termination is for “without cause,” you have no substantive appeal right, only a procedural appeal right. As in, if you are terminated “without cause,” the government never has to explain the reason for termination to you or a judge. If the government gave you the legally, proper amount of notice, the government can simply say, “I just do not want to do business with you.”

Many jurisdictions have opined that a Medicaid provider has a property right to their Medicaid contract. A health care provider does not have a property right to a Medicaid contract, but, once the state has approved that provider as a Medicaid provider, that provider has a reasonable expectation to continue to provide services to the Medicaid population. While we all know that providing services to the Medicaid population is not going to make you Richy Rich, in some jurisdictions, accepting Medicaid is necessary to stay solvent (despite the awful reimbursement rates).

Here in NC, our Administrative Law Judges (ALJs) have held a property right in maintaining a Medicaid contract once issued and relied upon, which, BTW, is the correct determination, in my opinion. Other jurisdictions concur with our NC ALJs, including the 7th Circuit.

Many times, when a provider is terminated (or not re-credentialed) “without cause,” there is an underlying and hidden cause, which makes a difference on the appeal of such purported “without cause” termination.

Because as I stated above, a “without cause” termination may not allow a substantive appeal, only procedural. In normal-day-speak, for a “without cause,” you cannot argue that the termination or refusal to credential isn’t “fair” or is based on an incorrect assumption that there is a quality of care concern that really does not exist. You can only argue that the agency did not provide the proper procedure, i.e., you didn’t get 60 days notice. Juxtapose, a “for cause” termination, you can argue that the basis for which the termination relies is incorrect, i.e., you are accusing me that my staff member is not credentialed, but you are wrong; she/he is actually credentialed.

So, what do you do if you are terminated “without cause?” What do you do if you are terminated “for cause?”

For both scenarios, you need an injunction.

But how do you prove your case for an injunction?

Proving you need an injunction entails you proving to a judge that: (a) likelihood of success on the merits; (b) irreparable harm; (c) balance of equities; and (d) impact on the community.

The hardest prongs to meet are the first two. Usually, in my experience, irreparable harm is the hardest prong to meet. Most clients, if they are willing to hire my team and me, can prove likelihood of success.  Think about it, if a client knows he/she has horrible documentation, he/she will not spring for an expensive attorney to defend themselves against a termination.

Irreparable harm, however, is difficult to demonstrate and the circumstances surrounding proving irreparable harm creates quite a quandary.

Irreparable, according to case law, cannot only be monetary damages. If you are just out of money and your company is in financial distress, it will not equate to irreparable harm.

Irreparable harm differs slightly from state to state.

Although, most jurisdictions agree that irreparable harm does equate to an imminent threat of your business closing, terminating staff, loss of goodwill, harm to reputation, patients not receiving medically necessary services, unfathamable emotional distress, the weights of loans and credit, understanding that you’ve depleting all savings and checkings, and understanding that you’ve exhausted all possible assets or loans.

The Catch-22 of it all is by the time you meet the prongs of irreparable harm, generally, you do not have the cash to hire an attorney. I suggest to all Medicare and Medicaid health care providers that you need to maintain an emergency fund account for unforeseen situations, such as audits, suspensions, terminations, etc. Put aside money every week, as much as you can. Hope that you never need to use it.

But you will be covered, just in case.

Knicole Emanuel Interviewed by ABC: SOME MEDICAID PROVIDERS OWE DHHS BIG BUCKS

pic of my interview

Jon Camp, journalist for ABC11, interviewed me yesterday about a durable medical equipment client.  In case you missed it, here is the link:

http://abc11.com/video/embed/?pid=773639

NCTracks

New Mexico Senator Proposes Forefront State Legislation to Provide Due Process to Providers Accused of Fraud (Oh, And Here Are Some NC Election Results)

Whew…the election is over.  No more political ads, emails, and other propaganda… Ok, so we have our new elected officials, now our new elected officials need to pass some new legislation protecting providers when it comes to “noncredible allegations of fraud.”

Due Process…It’s such a fundamental part of our society that we rarely think about due process on a day-to-day basis. Not until due process is violated, do we usually contemplate it.

However, when it comes to credible allegations of fraud against a health care provider who accepts Medicaid or Medicare, the federal government, arguably, dropped the ball. The federal regulations instruct the states to “afford due process,” but fail to instruct how. 42 CFR 455.23. Which leaves the due process component in the states’ hands.

To begin with, the standard for a credible allegation of fraud is excruciatingly low. I mean, LOW. The bar has been set so low that an ant would probably climb over the bar rather than walk beneath it. See my past blogs: “New Mexico Affords No Due Process Based on a PCG Audit.”and   “NC Medicaid Providers: “Credible Allegations of Fraud?” YOU ARE GUILTY UNTIL PROVEN INNOCENT!!”  For example, a disgruntled employee or a competitor can draft an anonymous letter without a signature and without a return address, send it to the single state entity, and all your reimbursements could be suspended without any notice to you.

Senator Mary Kay Papen of New Mexico and her team have drafted a fantastic proposed state bill which would provide safeguards for health care providers’ due process while still allowing the state to investigate Medicaid fraud. I mean, let’s face it, we want to catch Medicaid fraud, but we don’t all live in Florida…or New York. 🙂 Fraud is much more infrequent than people imagine compared to the overreaching ability of the single state agencies to suspend innocent providers’ reimbursements.

I had the privilege of flying out to New Mexico a week or so ago to testify before a subcommittee of the legislature about my opinion of Senator Papen’s proposed bill.

Little known fact about New Mexico: The New Mexico legislature is the only unpaid legislature in the country. I had no idea. To which, I said, which I believed was a logical statement, “why doesn’t the legislature pass a bill that creates salaries for members of the legislature?” I was told that no bill providing salaries to members of legislature would ever be signed by the governor (no specific governor, I believe, but, any governor) because the status of governor is so important/powerful in New Mexico due to the less powerful legislature. In other words, supposedly, no governor would sign a bill instituting salaries for members of legislature because the governor would be fearful to lose power. (I do not know the validity of this conjecture, but I do find it interesting).

Going back to the proposed bill…

For starters, the proposed bill re-defines “credible allegation of fraud.” Instead of the current federal statute, which holds an allegation credible if it is merely uttered aloud, the proposed bill states that a credible allegation of fraud is credible only after the single state entity:

1. Considers the totality of the facts and circumstances;
2. Conducts a careful review of the facts, evidence, and facts; and
3. Determines that sufficient indicia of reliability exist to justify a reason to refer the provider to the Attorney General (AG) for further investigation.

The proposed bill also forbids extrapolation as to alleged overpayments.

Further, the proposed bill forbids the state agency from suspending payments until certain safety procedures are met. For example, all appeals and administrative remedies must be exhausted, and the bill allows the provider to post a bond in order to keep receiving reimbursements.

It also allows a provider to receive injunctive relief against the agency in order to continue receiving reimbursements.

And, my favorite part, states that a judge may award attorney’s fees if it shown that the agency substantially prejudiced the provider’s rights and acted arbitrarily and capriciously. Obviously, the attorneys’ fees are not a given; the provider would need to show that the state, somehow, acted, for example, without enough evidence or failed to provide due process.

Senator Papen’s proposed bill is just that…a proposed bill.  But, it is a start in the right direction.  If, in fact, the federal government placed the burden on the states to implement due process in situations in which there are allegations of fraud, then the states need to act.  Because, right now, when there is noncredible allegation of fraud, the state has the ability, and is using this ability in many states, to completely shut down providers.  In essence, an allegation of fraud becomes the death of a company…no reimbursements, no income, no payroll, terminate staff, cease paying bills, file for bankruptcy.

The End.

I encourage more states to review Senator Papen’s proposed bill and propose similar bills in other states.

And for you politicians…the best part? At least, in New Mexico, the bill appeared to be supported by a non-partisan group.

BTW, in case you are interested, here are the changes to our General Assembly and Congress after Tuesday’s election: (brought to you by Tracy Colvard, Vice President of Government Relations and Public Policy for AHHC).

The Numbers

North Carolina Legislature

  • Republicans in N.C. House (2015-16): 74
  • Number needed for supermajority: 72
  • Democrats in N.C. House (2015-16): 46
  • Change from 2013-2014: +3 DEM
  • New faces in House: 15
  • Incumbents defeated: 4
  • Republicans in N.C. Senate (2015-16): 34
  • Number needed for supermajority: 30
  • Democrats in N.C. Senate (2015-16): 16
  • Change from 2013-2014: +1 GOP
  • New faces in Senate: 6
  • Incumbents defeated: 1

N.C. Congressional Delegation

  • Republicans in U.S. House: 10
  • Democrats in U.S. House: 3
  • Change from 2013-2014: +1 GOP
  • Republicans in U.S. Senate: 2
  • Democrats in U.S. Senate: 0
  • Change from 2013-2014: +1 (GOP)

Thanks, Tracy, for those demographics.

Now, let’s get some due process safeguards for health care providers!!!!