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House Bill 403: A Potential Upheaval of Medicaid!

Is this the end of the managed care organizations (MCOs)?

If the Senate’s proposed committee substitute (PCS) to House Bill 403 (HB 403) passes the answer is yes. The Senate’s PCS to House Bill 403 was just favorably reported out of the Senate Health Care Committee on June 15, 2017. The next step for the bill to advance will be approval by the Senate Rules Committee. Click here to watch its progress.

As my readers are well aware, I am not a proponent for the MCOs. I think the MCOs are run by overpaid executives, who pay themselves too high of bonuses, hire charter flights, throw fancy holiday parties, and send themselves and their families on expensive retreats – to the detriment of Medicaid recipients’ services and Medicaid providers’ reimbursement rates. See blog. And blog.

Over the last couple days, my email has been inundated by people abhorred with HB 403 – urging the Senators to retain the original HB 403, instead of the PCS version. As with all legislation, there are good and bad components. I went back and re-read these emails, and I realized multiple authors sat on an MCO Board. Of course MCO Board members will be against HB 403! Instead of hopping up and down “for” or “against” HB 403, I propose a (somewhat) objective review of the proposed legislation in this blog.

While I do not agree with everything found in HB 403, I certainly believe it is a step in the right direction. The MCOs have not been successful. Medically necessary behavioral health care services have been reduced or terminated, quality health care providers have been terminated from catchment areas, and our tax dollars have been misused.

However, I do have concern about how quickly the MCOs would be dissolved and the new PHPs would be put into effect. There is no real transition period, which could provide safety nets to ensure continuity of services. We all remember when NCTracks was implemented in 2013 and MMIS was removed on the same day. There was no overlap – and the results were catastrophic.

The following bullet points are the main issues found in HB 403, as currently written.

  • Effective date – MCOs dissolve immediately (This could be dangerous if not done properly)

Past legislation enacted a transition time to dissolve the MCOs. Session Law 2015-245, as amended by Session Law 2016-121, provided that the MCOs would be dissolved in four years, allowing the State to implement a new system slowly instead of yanking the tablecloth from the table with hopes of the plates, glasses, and silverware not tumbling to the ground.

According to HB 403, “on the date when Medicaid capitated contracts with Prepaid Health Plans (PHPs) begin, as required by S.L. 2015-245, all of the following shall occur:…(2) The LME/MCOs shall be dissolved.”

Session Law 2015-245 states the following timeline: “LME/MCOs shall continue to manage the behavioral health services currently covered for their enrollees under all existing waivers, including the 1915(b) and (c) waivers, for four years after the date capitated PHP contracts begin. During this four-year period, the Division of Health Benefits shall continue to negotiate actuarially sound capitation rates directly
with the LME/MCOs in the same manner as currently utilized.”

HB 403 revises Session Law 2015-245’s timeline by the following: “LME/MCOs shall continue to manage the behavioral health services currently covered for their enrollees under all existing waivers, including the 1915(b) and (c) waivers, for four years after the date capitated PHP contracts begin. During this four-year period, the Division of Health Benefits shall continue to negotiate actuarially sound capitation rates directly with the LME/MCOs in the same manner as currently utilized.

Instead of a 4-year transition period, the day the PHP contracts are effective, the MCOs no longer exist. Poof!! Maybe Edward Bulwer-Lytton was right when he stated, “The pen is mightier than the sword.”

Again, I am not opposed to dissolving the MCOs for behavioral health care; I just want whatever transition to be reasonable and safe for Medicaid recipients and providers.

With the MCOs erased from existence, what system will be put in place? According to HB 403, PHPs shall manage all behavioral health care now managed by MCOs and all the remaining assets (i.e., all those millions sitting in the savings accounts of the MCOs) will be transferred to DHHS in order to fund the contracts with the PHPs and any liabilities of the MCOs. (And what prevents or does not prevent an MCO simply saying, “Well, now we will act as a PHP?”).

What is a PHP? HB 403 defines PHPs as an entity, which may be a commercial plan or provider-led entity with a PHP license from the Department of Insurance and will operate a capitated contract for the delivery of services. “Services covered by PHP:

  1. Physical health services
  2. Prescription drugs
  3. Long-term care services
  4. Behavioral health services

The capitated contracts shall not cover:

  1. Behavioral health
  2. Dentist services
  3. The fabrication of eyeglasses…”

It would appear that dentists will also be managed by PHPs. As currently written, HB 403 also sets no less than three and no more than five contracts between DHHS and the PHPs should be implemented.

Don’t we need a Waiver from the Center for Medicare and Medicaid Services (CMS)?

Yes. We need a Waiver. 42 CFR 410.10(e) states that “[t]he Medicaid agency may not delegate, to other than its own officials, the authority to supervise the plan or to develop or issue policies, rules, and regulations on program matters.” In order to “Waive” this clause, we must get permission from CMS. We had to get permission from CMS when we created the MCO model. The same is true for a new PHP model.

Technically, HB 403 is mandating DHHS to implement a PHP model before we have permission from the federal government. HB 403 does instruct DHHS to submit a demonstration waiver application. Still, there is always concern and hesitancy surrounding implementation of a Medicaid program without the blessing of CMS.

  • The provider network (This is awesome)

HB 403 requires that all contracts between PHPs and DHHS have a clause that requires PHPs to not exclude providers from their networks except for failure to meet objective quality standards or refusal to accept network rates.

  • PHPs use of money (Also good)

Clearly, the General Assembly drafted HB 403 out of anger toward the MCOs. HB 403 implements more supervision over the new entities. It also disallows use of money on alcohol, first-class airfare, charter flights, holiday parties or similar social gatherings, and retreats, which, we all know these are precisely the activities that State Auditor Beth Wood found occurring, at least, at Cardinal. See Audit Report.

HB 403 also mandates that the Office of State Human Resources revise and update the job descriptions for the area directors and set limitations on salaries. No more “$1.2 million in CEO salaries paid without proper authorization.”

  • Provider contracts with the PHPs (No choice is never good)

It appears that HB 403 will not allow providers to choose which PHP to join. DHHS is to create the regions for the PHPs and every county must be assigned to a PHP. Depending on how these PHPs are created, we could be looking at a similar situation that we have now with the MCOs. If the State is going to force you to contract with a PHP to provide Medicaid services, I would want the ability to choose the PHP.

In conclusion, HB 403 will re-shape our entire Medicaid program, if passed. It will abolish the MCO system, apply to almost all Medicaid services (both physical and mental), open the provider network, limit spending on inappropriate items, and assign counties to a PHP.

Boy, what I would give to be a fly on the wall in all the MCO’s boardrooms (during the closed sessions).

Going to the Dentist? You May Need to Take a Pregnancy Test!

I go to the dentist for teeth cleaning. I go to an ob/gyn for my lady parts. They each are not entwined.

Recently, a number of dentists have contacted me they are receiving Tentative Notices of Overpayment (TNOs) stating that they owe money back to the state for dental services completed on women who had already given birth.

What?

First, what is Medicaid for Pregnant Women?

Basically, Medicaid for Pregnant Women (MPW) is a self-defining type of Medicaid coverage.  It is Medicaid coverage for pregnant women.

According to DHHS, “Medicaid for Pregnant Women (MPW) only covers services related to pregnancy:

  • Prenatal care, delivery and 60 days postpartum care
  • Services to treat medical conditions which may complicate the pregnancy (some services require prior approval)
  • Childbirth classes
  • Family planning services

A pregnant woman may apply for this program before or after she delivers. A woman who has experienced a recent pregnancy loss may also be eligible.”

And routine dental services are covered for MPW recipients through the date of delivery.

But, the day after the child is born…BOOM…no routine dental visits.

Here is a hypothetical example of this new issue that I have recently been made aware:

Mary is pregnant and is covered by MPW.  She makes a dental appointment for August 1, 2015.  She is due September 1, 2015.  She gives birth to a bouncing, baby boy, whom she names Paul on July 28, 2015.  Even though Paul is early, he is healthy (this is a happy hypothetical).  She shows up for her dental appointment with Dr. Peter on August 1, 2015.

Herein lies a delicate subject…due to its sensitive nature, I will now revert the hypothetical to myself, personally, and only for this narrow topic.

I had my beautiful 10-year old daughter at 28 weeks.  She came three months early. Despite the early delivery, I had expanded in the stomach area at least as much as a normal pregnant woman, if not more so.  Chalk it up to Harris Teeter birthday cakes. After my daughter was born, the insensitive, yet rule-following nurse actually had the audacity to place me on a scale (while I was conscious and alert!).  I was horrified to discover that after all that I went through that I had lost a mere 4 pounds.  She must have seen my look because she quickly explained that I had been pumped with so much fluid during the procedure that my weight was inflated. Likely story, I thought.  The point of this short anecdote is that I looked the same after giving birth that I did prior to giving birth.  Embarrassingly, my transition back to a normal, un-pregnant body extended for a much longer than expected period of time. Chalk it up to Harris Teeter birthday cakes.

Ok, going back to our hypothetical…

Mary really wants her teeth cleaned because, once she gives birth, she knows full well that she will not be able to undergo a teeth cleaning.  So when she presents herself at Dr. Peter’s  office and Dr. Peter asks whether she is still pregnant, she answers, “Yes, sir.”

Dr. Peter, undergoing all the due diligence that a dentist can be expected, has his assistant log on to NCTracks.  According to NCTracks, Mary is eligible for MPW. No changes are noted on her eligibility.  Satisfied with his due diligence, Dr. Peter cleans Mary’s teeth.

Two years later, Dr. Peter receives a TNO stating that he owes $10,000 back for services rendered to women after they gave birth.

Dr. Peter conducted his due diligence.  Dr. Peter inquired as to the pregnancy status to the patient.  Dr. Peter checked eligibility status with NCTracks.

What more would the state expect Dr. Peter do to determine whether his dental patients are indeed still pregnant? Ask them to pee in a cup? Hire a onsite ob/gyn?

You can imagine the consequences of each.

Yet, according to a number of dentists who have communicated with me, the state is placing the burden of knowing whether the dental patient is still pregnant on the dentist.

Talk about accountability! If NCTracks shows that the patient is eligible for MPW, shouldn’t NCTracks be held liable instead of the dentist?

Call me crazy, but I may or may not be extremely angry if my dentist asks me to pee in cup.