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CEO of Cardinal Gets a Raise – With Our Tax Dollars!

You could hear the outrage in the voices of some of the NC legislators (finally, for the love of God – our General Assembly has taken the blinders off their eyes regarding the MCOs) at the Joint Legislative Oversight Committee on Medicaid and NC Health Choice on Tuesday, December 6, 2016, when Cardinal Innovations‘, a NC managed care organization (MCO) that manages our Medicaid behavioral health care in its catchment area, CEO, Richard Topping, stated that his salary was raised this year from $400,000 to $635,000with our tax dollars. (Whoa – totally understand if you have to read that sentence multiple times; it was extraordinarily complex).

Senator Tommy Tucker (R-Waxhaw) was especially incensed. He said, “I received minutes from your board, Sept. 16 of 2016, they made that motion, that your 2017 comp package, they raised your salary from $400,000 to $635,000, they gave you a 0 to 30 percent bonus potential which could be roughly another $250,000 and also you have some sort of annuity or long-term package of $412,000,” said Sen. Tommy Tucker.

FINALLY!!! Not the first time that I have blogged about the mismanagement (my word) of our tax dollars. See blog. And blog.

Sen. Tucker was not alone.

Representative Dollar was also concerned. But even more surprising than our legislators stepping up to the plate and holding an MCO accountable (MCOs have expensive lobbyists – with our tax dollars), the State’s Department of Health and Human Services (DHHS) Secretary Rick Brajer was visibly infuriated. He spoke sharply and interrogated Topping as to his acute income increase, as well as the benefits attached.

As a health care blogger, I receive so many emails from blog readers, including parents of disabled children, who are not receiving the medically necessary Medicaid behavioral health care services for their developmentally disabled children. MCOs are denying medically necessary services. MCOs are terminating qualified health care providers. MCOs are putting access to care at issue. BTW – even if the MCOs only terminated 1 provider and stopped 1 Medicaid recipient from receiving behavioral health care services from their provider of choice, that MCO would be in violation of federal law access to care regulations.  But, MCOs are terminating multiple – maybe hundreds – of health care providers. MCOs are nickeling and diming health care providers. Yet, CEO Topping will reap $635,000+ as a salary.

The MCOs, including Cardinal, do not have assets except for our tax dollars. They are not incorporated. They are not private entities. They are extensions of our “single state agency” DHHS. The MCOs step into the shoes of DHHS. The MCOs are state agencies. The MCOs are paid with our tax dollars. Our tax dollars should be used (and are budgeted) to provide Medicaid behavioral health care services for our most needy and to be paid to those health care providers, who still accept Medicaid and provide services to our most vulnerable population. News alert – These providers who render behavioral health care services to Medicaid recipients do not make $635,000/year, or anywhere even close. The reimbursement rates for Medicaid is paltry, at best. Toppings should be embarrassed for even accepting a $635,000 salary. The money, instead, should go to increasing the reimbursements rates – or maintaining a provider network without terminating providers ad nauseum. Or providing medically necessary services to Medicaid recipients.

Rest assured, Cardinal is not the only MCO lining the pockets of its executives. While both Trillium and Alliance, other MCOs, pay their CEOs under $200,000 (still nothing to sneeze at). Alliance, however, throws its tax dollars at private, legal counsel. No in-house counsel for Alliance! Oh, no! Alliance hires expensive, private counsel to defend its actions. Another way our tax dollars are at work. And – my question – why in the world does Alliance, or any other MCO, need to hire legal counsel? Our State has perfectly competent attorneys at our Attorney General’s office, who are on salary to defend the state, and its agencies, for any issue. The MCOs stand in the shoes of the State when it comes to Medicaid for behavioral health. The MCOs should utilize the attorneys the State already employs – not a high-dollar, private law firm. These are our tax dollars!

There have been few times that I have praised DHHS in my blogs. I will readily admit that I am harsh on DHHS’ actions/nonactions with our tax dollars. And I am now not recanting any of my prior opinions. But, last Tuesday, Sec. Brajer held Toppings feet to the fire. Thank you, Brajer, for realizing the horror of an MCO CEO earning $635,000/year while our most needy population goes under-served, and, sometimes not served at all, with medically necessary behavioral health care services.

What is deeply concerning is that if Sec. Brajer is this troubled by actions by the MCOs, or, at least, Cardinal, why can he not DO SOMETHING?? Where is the supervision of the MCOs by DHHS? I’ve read the contracts between the MCOs and DHHS. DHHS is the supervising entity over the MCOs. Our Waiver to the federal government promises that DHHS will supervise the MCOs.

If the Secretary of DHHS cannot control the MCOs, who can?

North Carolina Medicaid Reform Update – Round and Round She Goes

Given how long the Medicaid reform discussions have been going on at the legislature, you may be glazed over by now. Give me the memo when they pass something, right? Fair enough, let’s keep it brief. Where do things stand right now?

Last Wednesday, the Senate staked out its position in the ongoing debate between the House and the McCrory administration.

The Senate’s newest proposal is an unusual mix of different systems and new ideas. Not willing to commit to one model for the whole Medicaid program, the latest version of the bill includes something new called Provider Led Entities, or “PLEs.” PLEs are yet the latest in the alphabet soup of different alternatives to straight fee-for-service billing for Medicare/Medicaid. You’ve all heard of HMOs, PPOs, MCOs, and ACOs. PLEs appear to be similar to ACOs, but perhaps for political reasons the Senate bill sponsors saw the need to call the idea something different.  See Knicole Emanuel’s blog.

In any event, as the name suggests, such organizations would be provider-led and would be operated through a capitated system for managing the costs of the Medicaid program. The Senate bill would result in up to twelve PLEs being awarded contracts on a regional basis.

PLEs are not the only addition to the Medicaid alphabet soup that the Senate is proposing in its version of HB 372. The Senate has also renewed its interest in taking Medicaid out of the hands of the N.C. Department of Health and Human Services entirely and creating a new state agency, the Department of Medicaid (“DOM”).

(One wonders whether the continual interest in creating a new Department of Medicaid independent of the N.C. Department of Health and Human Services had anything to do with embattled DHHS Secretary Wos stepping down recently.)

The Senate also proposes creating a Joint Legislative Oversight Committee on Medicaid (“LOC on Medicaid”).

But creating the DOM and using new PLEs to handle the provision of Medicaid services is not the whole story. Perhaps unwilling to jump entirely into a new delivery system managed by a wholly new state agency, the Senate bill would keep LME/MCOs for mental health services in place for at least another five years. Private contractor MCOs would also operate alongside the PLEs. The North Carolina Medicaid Choice coalition, a group which represents commercial MCOs in connection with the Medicaid reform process, is pleased.

One very interesting item that the Senate has included in its proposed legislation is the following requirement: “Small providers shall have an equal opportunity to participate in the provider networks established by commercial insurers and PLEs, and commercial insurers and PLEs shall apply economic and quality standards equally regardless of provider size or ownership.” You can thank Senator Joel Ford of Mecklenburg County for having sponsored this amendment to the Senate version of House Bill 372.

By pulling the Medicaid reform proposal out of the budget bill, the matter appears headed for further negotiation between the House and the Senate to see if the two can agree this year, unlike last year.

By legislative standards, that counts as forward progress… Here come the legislative discussion committees to hash it out more between the two chambers. We will keep a close eye on the proposals as they continue to evolve.

By Robert Shaw

Lawyer photo

 

Our Medicaid Budget: Are We Just Putting Lipstick on an 800 lbs. Pig?

Too often, I have heard an analogy about the Medicaid budget and a pig wearing lipstick. Normally it goes like this: “Are we just putting lipstick on an 800 lb. pig?”…and the Medicaid budget is the 800 lbs. pig, not the lipstick.

For those of you who do not know, I own a pet pig. She is a micro pig. Not a pot belly pig; those get to be 150 lbs. Oh, no. A micro pig; those stay very small. Our Oink is only 21 pounds.

Here is a picture:

Kissing Oink

Notice she does not have lipstick on. So when someone says, “Are we just putting lipstick on an 800 lbs. pig?” I think, “Is that so bad?”

I understand that saying to put “lipstick on a pig” is a rhetorical expression. An expression used to demonstrate that making a superficial or cosmetic change is a futile attempt to disguise the true nature of a product. However, Oink and I take offense, because she is so much more beautiful than the Medicaid budget (and much smaller).

Although my Oinky-Oink is only 21 pounds. The expression that I have heard most often involves an 800 lbs. pig. If our Medicaid budget were Oink’s size, the General Assembly would probably be home.

Seriously, here is my question on my “Pigs and Medicaid” blog:

How can we expect the General Assembly to create a “knowable” and “concrete” Medicaid budget when the Department of Health and Human Services (DHHS) cannot provide the General Assembly with accurate data?

Literally, DHHS cannot tell the General Assembly how many people are enrolled in Medicaid. Legislatures are being told to guesstimate. Guesstimate???

Between 2009-2012, North Carolina exceeded its approved Medicaid budget by 5.4 billion. In the last decade, our Medicaid spending has increased by more than 90%.

Not to mention DHHS has difficulty filling and retaining employees. Attrition is prominent. As of June 1, 2014, a quarter of the division’s 332 jobs were vacant; the average unfilled job had been open for 347 days, or nearly a year. In November, DHHS’ chief financial officer sent out a cry for help. The Medicaid office “does not have adequate staff with the necessary experience and skills to properly manage the … program,” Rod Davis wrote to the state budget office.

To compensate for too few employees, DHHS gave a no-bid contract to Alvarez & Marsal to help create a Medicaid budget. We all know how that turned out.

With the help of Alvarez & Marsal, DHHS proposed to tax the then-10 managed-care organizations (MCOs) that manage Medicaid services for mental health, developmentally disabled, and substance abuse. But we needed approval by the feds.

It was DHHS’ hope that the extra funds would be the catalyst for a federal match twice that size. Once we got the federal match, DHHS would refund the taxed dollars to the MCOs and use the federal money to pay for programs. Maybe I’m wrong, but the idea sounds like a “bait and switch.” Analogously, I have a client pay me $50,000 on January 31, 2015, the end of our fiscal year, only to refund it February 1, 2015. I would get credit for collecting the $50,000 in fiscal year 2014, but it was not a real collection. It was fake.

And the feds knew it. The answer was, “No.”

Sen. Bob Rucho, R-Mecklenburg, said the information presented Wednesday should have been made available months ago, and he noted that it’s still not detailed enough for a forecast.

“When will we get the numbers that we need to have so that we can have a good budget number?” asked Rucho. And his question is not an anomaly. He is not alone.

“I’ve asked them every time I’ve had the opportunity, and I’m astounded that a $13 billion organization does not have budget numbers,” said Sen. Tommy Tucker (R-Waxhaw), one of the more outspoken members of the Joint Legislative Oversight Committee on Health and Human Services.

Medicaid Chief Financial Officer Rod Davis told Senator Ralph Hise that his department has an idea of how much they’ve paid to providers, but that they can’t forecast what’s to come.

“Would it be like saying we know what checks we wrote, we just don’t know what we’ve paid for,” Hise asked.

Going back to my question:

How can we expect the General Assembly to create a “knowable” and “concrete” Medicaid budget when the Department of Health and Human Services (DHHS) cannot provide the General Assembly with accurate data?

Are we putting too much pressure on the General Assembly and not on DHHS?

The General Assembly is responsible for creating a Medicaid budget. But how can we hold the General Assembly to create an accurate Medicaid budget if the “single state agency,” DHHS, charged with managing Medicaid cannot provide the General Assembly with accurate data???

Here is my political soapbox: We have a Republican General Assembly and we have a Republican governor. Shouldn’t the General Assembly and the governor be on the same side???? Perhaps it’s more than politics. Perhaps it’s more than a donkey and an elephant.

Otherwise with a Republican General Assembly and a Republican Governor, there should be no tension between the “balance of the powers.” Yet there is.

Let’s put lipstick on a pig:

Lipstick pig

By the way, whoever created the saying “Are we just putting lipstick on an 800 lbs. pig?” obviously did not own a pig. Because Oink did NOT enjoy getting lipstick on her snout. In fact, she squealed like a pig.

North Carolina Has a New Medicaid Director!!! Careful, It’s a Hot Seat!

Dr. Robin Gary Cummings was named the new state Medicaid director today.

Dr. Cummings, a former cardiovascular surgeon, had been serving as the Acting State Health Director.  He ceased pursuing surgery in 2004.

Interestingly, if you go the NC American Indian Health Board (found here), according to the website, Dr. Cummings is currently serving as the Medical Director for Community Care of the Sandhills. Obviously, Community Care of the Sandhills (CCS) is one of 14 non-profit organizations participating in the Community Care of NC (CCNC).   CCS is covers Medicaid for Harnett, Hoke, Lee, Montgomery, Moore, Richmond, and Scotland counties. 

However, when you go to CCS’ website, and click on “staff,” then, using the drop-down box, click on “leadership,” the Medical Director is Dr. William Stewart.  So, obviously, Dr. Cummings has served in the past as the Medical Director for CCS.

After a bit more research, it appears that Dr. Cummings left CCS this past July 2013, when Sec. Wos appointed Dr. Cummings as the Acting State Health Director in lieu of Dr. Laura Gerald’s resignation.  If you remember, Dr. Gerald’s resignation was unexpected and Sec. Wos gave no reason for Dr. Gerald’s resignation.  Sec. Wos announced that Dr. Cummings would be taking Dr. Gerald’s place the very same day that Sec. Wos announced the resignation of Dr. Gerald.

So my question is this:

Why was Dr. Gerald replaced immediately by Dr. Cummings as the Acting State Health Director, while Carol Steckel resigned back in September 2013 and is being replaced by Dr. Cummings 4 1/2 months after Steckel’s resignation?

We haven’t had a State Medicaid Director (officially) for 4 1/2 months.  Sandy Terrell stepped up as the temporary Medicaid Director.  And we know Sec. Wos and team has been actively searching for new Medicaid Director.

In fact, the February 11, 2014, agenda (today) for the Joint Legislative Oversight Committee on Health and Human Services shows as its 11th topic, “Ideas to Address Staffing Concerns and Update on Medicaid Director Search.”  Which tells me that there was little to no forewarning as to the appointment of Dr. Cummings.

Why?

It would be one thing if, after 4 1/2 months, Sec. Wos announced that the new State Medicaid Director was ____, someone from outside NC with excellent experience.  She didn’t want to announce that _____ was coming to NC prematurely because it was confidential and ____ did not want the public to know prior to a final decision.

But Cummings?

He has been working in NC Medicaid since 2004.  He has served as the Acting State Health Director.  Obviously, he was not hard to find.  Obviously, Sec. Wos had contact with Dr. Cummings way back in September 2013.  So why not appoint Dr. Cummings as the State Medicaid Director back in September 2013?  Why wait 4 1/2 months?  And announce his appointment the same day as the February 11, 2014, Joint Legislative Oversight Committee on Health and Human Services meeting?  It just seems odd…

Maybe he refused the appointment back in September 2013.  Maybe it took Sec. Wos 4 1/2  months to convince him to take the challenge.  Because, come on, folks, Dr. Cummings has just elected to place himself in one of the hottest public seats in the state…and I mean scorching!  Remember my blog: “Wanted: North Carolina Medical Director: Transparent and Open!”

Regardless the reason for the delay, it is encouraging that we have a new State Medicaid Director.  I am sure Dr. Cummings is fully aware of the current disarray of the NC Medicaid system.  So, even knowing the turmoil of our current Medicaid system and how daunting his task will be, Dr. Cummings still chose to accept the appointment to the State Medicaid Director position.  And, for that, I say “Bravo!”  And “Good luck!”  And “We really hope you are successful!”

But, gracious, that seat will be hot!

If Men Are From Mars and Women Are From Venus, Then DHHS Is From Dune!

Without question, men and women see things differently.  We process things differently.  Which, of course, is why John Gray, Ph.D’s book “Men Are From Mars, Women Are From Venus” was such a huge success.  Men and women are so different that we can see (or read) the same thing and have two completely different ideas about what happened.

An example of the difference in male and female perception is how men and women view their bodies.  Men, generally, think of themselves as much better looking than they acually are in reality…

Whereas women, generally, think they are fatter or uglier than they are…

Then here comes DHHS…

Yesterday (Tuesday) at the  Joint Legislative Oversight Committee on Health and Human Services meeting, Chief Information Officer Joe Cooper said the state staffers overseeing the NCTracks system should be “congratulated on seeing this project through a successful launch.”

Congratulated??

For seeing NCTracks through a SUCCESSFUL launch??

Men may be from Mars.  Women may be from Venus.  But DHHS is from Dune and just as fictional.

DHHS Still Claims NCTracks on Track?? CSC Doing Its Best?

Today  the Joint Legislative Oversight Committee on Health and Human Services met at noon. Mr. Joe Cooper, DHHS’ Chief Information Officer, spoke on behalf of DHHS.  He began by explaining that NCTracks is not NC Fast, which I believe we already knew.

Most interestingly, it was stated that DHHS has assessed approximately a quarter of a million dollars in penalties against CSC since NCTracks going live.  These assessments are paid to the state.  To which I ask, “Why does CSC pay penalties to the state? Why not pay the people actually damaged by CSC’s ineptness..the unpaid providers?”  It makes no sense that, while providers are not getting paid, CSC pays the state.  That’s like a robber paying restitution to the insurance company that never covered the losses of the victim.

Another interesting comment was when asked exactly how much has been spent on NCTracks, Mr. Cooper deferred to DHHS’ CFO, Rod Davis who answered that he does not have that information.  To which Senator Tarte stated, “That doesn’t make me feel comfortable.”

Mr. Cooper described CSC’s monumental effort to try to get providers paid.  According to Mr. Cooper the “backlog” will be nonexistent by the end of the year.  But when asked, “What is the number of remaining backlogs?” Mr. Cooper answered, “Senator, I don’t have that number.  I can get it to you.” 

When asked a follow-up question about whether the number of backlogs was similar to a previous number of approximately 43,000, Mr. Cooper noted that there are two types of backlogs.  One backlog addresses prior authorizations, and, according to Mr. Cooper there is no more backlog as to prior authorizations.  NCTracks is absolutely current. The non-current backlog is regarding returning calls and responding to emails.

Providers, Is it true? Is NCTracks current as to prior authorizations?

Mr. Cooper further stated that calls to the Call Center are now answered within seconds. Last week CSC implemented a new process for answering phone calls that when providers call the Call Center, CSC estimates when it will call back the providers in order to stop the providers from staying on the phone too long.  That’s great, but getting an estimated time for a callback doesn’t really resolve the problem, right?

Mr. Cooper also showed a graph depicting total Medicaid claims payments from State fiscal year 2012 through October 2012 (the graph on the left) and payments from State fiscal year 2013 through October 2013. 

NCTracks Payouts

Obviously the point of this graph is to demonstrate that CSC is approximately right on track with what HP Enterprises paid last year.  And, I agree, when looking at this graph, it appears that both CSC and HP paid out similar amounts for the different years.  But the graph does not explain whether the volume of claims increased from 2012 to 2013.  One would think that the number of claims increased in 2013, as our population grew.  So is the comparability of the graph deceiving?

Senator Nesbitt pointed out that another graph, the graph depicting claims adjudication, does not appear to demonstrate positive progress.  He said, “It doesn’t look like we are fixing the problem.  We are generating more and more bills that aren’t being paid.”

Here is the chart Senator Nesbitt was talking about:

Chart

Senator Nesbitt pointed out that, according to the chart, it looks like claim adjudication is declining.  He sais that he heard someone mention that 70% is the goal, but he doesn’t think that 70% is a good goal.  Why not 100%?

After Senator Nesbitt made his comments, the meeting adjourned until 2:00.  If you want to listen to the committee meeting, click on: http://ncleg.net/Audio/Audio.html.  and select “Appropriations Committee Room (Rm 643).”