“No person shall be held to answer for a capital or otherwise infamous crime unless on presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property without due process of law; nor shall private property be taken for public use without just compensation.” U.S. Constitution, 5th Amendment (emphasis added).
The first ten amendments to the U.S. Constitution, or, the Bill of Rights, were written by James Madison (for whom my daughter Madison was named).
Our managed care organizations (MCOs) and the government take the irritating position that providers have no right to be a Medicaid provider. And, often they quote the NC Administrative Code, which states that “All provider contracts with the North Carolina State Medicaid Agency are terminable at will. Nothing in these Regulations creates in the provider a property right or liberty right in continued participation in the Medicaid program.” 10A NCAC 22F .0605. However, as every attorney knows, when there is a rule, there is an exception. And when there is a rule, case law overrides it.
Despite 10A NCAC 22F .0605, a intelligent judge found that “Alliance contends that [the provider] has no right to be a Medicaid provider and therefore this Court cannot find that [the provider]’s rights have been substantially violated by its decision. Alliance also argues that [the provider]’s rights are solely contractual in nature and once the contract expired, the [provider] had no rights.
This contested case is not merely a contract case as Alliance contends. This contested case is about Alliance’s almost total disregard for Federal and State laws and regulations and its own policies. Based on the evidence, the process for the RFP seems almost like it began on a whim—ostensibly to fix problems that had no basis in fact. The result was a flawed RFP in which providers which might otherwise be comparable were treated differently, based in significant part on a subjective review.” Carolina Comm. Support Serv., Inc. v. Alliance Behavioral Healthcare, 14 DHR 1500, April 2, 2015.
So how can you have a property right in a Medicaid contract when the NCAC states that the contracts are terminable at will?
“In determining whether a property interest exists a Court must first determine that there is an entitlement to that property. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (1985). Unlike liberty interests, property interests and entitlements are not created by the Constitution. Instead, property interests are created by federal or state law and can arise from statute, administrative regulations, or contract. Bowens v. N.C. Dept. of Human Res., 710 F.2d 1015, 1018 (4th Cir. 1983). Under North Carolina case law, the Fourth Circuit Court of Appeals has determined that North Carolina Medicaid providers have a property interest in continued provider status. Bowens, 710 F.2d 1018. In Bowens, the Fourth Circuit recognized that North Carolina provider appeals process created a due process property interest in a Medicaid provider’s continued provision of services, and could not be terminated “at the will of the state.” The court determined that these safeguards, which included a hearing and standards for review, indicated that the provider’s participation was not “terminable at will.” Id. The court held that these safeguards created an entitlement for the provider, because it limits the grounds for his termination such that the contract was not terminable “at will” but only for cause, and that such cause was reviewable. The Fourth Circuit reached the same result in Ram v. Heckler, 792 F.2d 444 (4th Cir. 1986) two years later. Since the Court’s decision in Bowen, a North Carolina Medicaid provider’s right to continued participation has been strengthened through the passage of Chapter 108C. Chapter 108C expressly creates a right for existing Medicaid providers to challenge a decision to terminate participation in the Medicaid program in the Office of Administrative Hearings. It also makes such reviews subject to the standards of Article 3 of the APA. Therefore, North Carolina law now contains a statutory process that confers an entitlement to Medicaid providers. Chapter 108C sets forth the procedure and substantive standards for which OAH is to operate and gives rise to the property right recognized in Bowens and Ram. Under Chapter 108C, providers have a statutory expectation that a decision to terminate participation will not violate the standards of Article 3 of the APA. The enactment of Chapter 108C gives a providers a right to not be terminated in a manner that (1) violates the law; (2) is in excess of the Department’s authority; (3) is erroneous; (4) is made without using proper procedures; or (5) is arbitrary and capricious. To conclude otherwise would nullify the General Assembly’s will by disregarding the rights conferred on providers by Chapter 108C. This expectation cannot be diminished by a regulation promulgated by the DMA which states that provider’s do not have a right to continued participation in the Medicaid program because under the analysis in Bowen the General Assembly created the property right through statutory enactment.” Carolina Comm. Support Serv, Inc., at 22.
Again – how can you have a property right in a Medicaid contract when the NCAC states that the contracts are terminable at will? The answer is – You have a property right in your Medicaid contract. The state or MCOs cannot arbitrarily terminate your contract – regardless what they say. Know your rights!!
Judge Orders State’s Termination of Provider’s Medicaid Contract To Be REVERSED, Despite the Unilateral Termination!!
THE CASES LISTED BELOW ARE ILLUSTRATIVE OF THE MATTERS HANDLED BY THE FIRM. CASE RESULTS DEPEND UPON A VARIETY OF FACTORS UNIQUE TO EACH CASE. NOT ALL CASE RESULTS ARE PROVIDED. CASE RESULTS DO NOT GUARANTEE OR PREDICT A SIMILAR RESULT IN ANY FUTURE CASE UNDERTAKEN BY THE LAWYER.
[The names and services involved have been changed to protect the innocent. Lawyers have so many rules to follow…probably due to litigation].
Imagine that the State of North Carolina knocks on your office door and informs you that you are no longer allowed to accept Medicaid and/or Medicare reimbursement rates. That for whatever reason, you are no longer allowed to bill for Medicaid and/or Medicare services. You would expect a reason, right? You would expect the reason to be correct, right?
But what if the reason is invalid?
A North Carolina administrative judge recently held that the State’s reason for terminating a Medicaid provider’s contract must be accurate, and REVERSED the State’s decision to terminate its Medicaid contract with my client. Here’s the story:
The State terminated my client’s contract to provide chiropractic services.
In this case it was a bit of a duress contract (as are most Medicaid contracts) – a “take or leave it” offer to the local service provider. If you are a provider and want to continue to serve Medicaid recipients, you have no choice but to sign whatever contract the State gives you. You cannot negotiate. You’d be told to sign the contract “as is,” or you do not provide services. I know of a provider who, before he signed a contract with the State, crossed out a number of clauses. The State just sent him a clean, un-altered contract, same as the original, and told him sign it, no changes allowed.
Going back to my case…
My client is a provider that provides chiropractic services. In this case, the State inaccurately claimed that my client provided services without a proper license.
Upon the State’s termination of my client’s contract for chiropractic services, we filed a petition to the Office of Administrative Hearings in 2013 and asked the administrative law judge for a temporary restraining order, a motion to stay the termination, and a Preliminary Injunction to enjoin the State from terminating my client’s Medicaid provider contract.
The administrative law judge (ALJ) issued the temporary restraining order in May 2013. According to judge, we demonstrated a likelihood of success on the merits and that any failure to award the injunction would cause irreparable harm.
Obtaining an injunction, however, was not a complete victory. We had won an opening battle, but not the war.
A temporary injunction is exactly that…temporary. We had two additional hurdles to overcome: (1) a hearing at which we would have to prove to the judge that we were likely to succeed and the irreparable harm would be so irreparable that the judge should award us a longer injunction, at least until we could have a full hearing on the merits; and (2) a final hearing on the merits.
We received the Final Decision from the ALJ last week. The judge found that my client performed its contractual and legal obligations and that the State acted erroneously in determining that my client had breached its contract. The judge found the weight of the evidence sufficient to prove that my client provided services with a proper license.
If you think a 2 year injunction is pretty long, from May 2013 to now, you are right.
But think about this…from May 2013, through today and into the foreseeable future, as long as the contract is in effect, my client has been and will be able to provide medically necessary chiropractic services to those in need and receive reimbursements for those medically necessary services. This case shows why it is important for providers to assert their rights when those are violated.
And it shows also that the State is not allowed to arbitrarily violate those provider rights.
NC Medicaid: Are New Mexico and NC Medicaid Providers Fraternal Twins? At Least, When It Comes to PCG!
North Carolina and New Mexico? Fraternal twins? Remember Arnold Schwarzenegger and Danny Devito?
I don’t know about you, but I imagine New Mexico is as identical to North Carolina as chicharrones are to grits. And I can only imagine what New Mexicans think of us. The words “redneck,” “chewing tobacco,” and “backward” come to mind, although being born and raised in NC, I would take vehement objection to those stereotypes. Regardless, as polar opposite as New Mexico and North Carolina may or may not be, we have at least one commonality. Public Consulting Group (PCG).
Since I posted my blog: “Even New Mexico Identifies PCG Audits as “Unreliable!”” I have had the pleasure of speaking to a number of New Mexicans (although one sounded, surprisingly, British).
Here is what I have learned:
1. PCG is equally as inept in New Mexico as here. No explanation needed.
2. NM has no administrative remedy for providers. Whereas, we can request a reconsideration review with the Department of Health and Human Services (DHHS) when providers receive an outrageous Tentative Notice of Overpayment (TNO) from PCG, and, ultimately, appeal the DHHS decision to the Office of Administrative Hearings (OAH), apparently (remember I have never taken the Bar in NM, so if a NM lawyer would like to explain, I would be much obliged) there is no administrative process in NM. So, it seems, that the NM providers have to file an injunction in state or federal court to cease PCG’s erroneous auditing. Ugh!
3. In NM, PCG is freezing funding. So, in NM, PCG is acting similar to what may occur if you squished PCG and CCME together. Could you imagine? PCG and CCME merging? I shudder at the thought.
4. The suffering of Medicaid providers is not limited to state lines. New Mexican providers who accept Medicaid are suffering as much as NC providers who accept Medicaid are suffering.
As I informed my blog readers a couple of days ago, 15 behavioral health providers in NM filed an injunction against the State and PCG staying the providers’ frozen Medicaid funds. Now the NM State Auditor (our Beth Wood) will be reviewing the “special audit” that, supposedly, contains evidence of alleged overcharging, etc. by the 15 providers. (The special audit is the basis for the providers’ frozen funds….kinda like being on prepayment review, huh?).
Here is the article:
[New Mexico] State Human Services Secretary Sidonie Squier has refused to give State Auditor Hector Balderas a copy of the special audit that she says found evidence of alleged overcharging and possible fraud on the part of 15 behavioral-health providers. But on Tuesday, Balderas got a state district judge to subpoena the audit.
Meanwhile, on Wednesday a federal judge in Albuquerque heard arguments by lawyers for Human Services and eight of the providers whose Medicaid funding was frozen because of the special audit. The eight firms are seeking an injunction to force Human Services to resume payments to the providers. However, U.S. District Judge Christina Armijo took no immediate action on the request.
“It is necessary that my auditors fully review the report issued by Public Consulting Group Inc. in order to assess the risks to public funds and the potential impact on the Human Services Department’s financial affairs,” Balderas said in a written statement. “I formally requested the report from Secretary Squier pursuant to state law, but unfortunately the Department refused to comply with my lawful request. I am disappointed that I have been forced to take legal action to prevent the obstruction of a thorough audit of these taxpayer dollars.”
Public Consulting Group, a Boston company, was paid more than $3 million to audit the providers.
In a July 11 letter to Squier, James Noel, lawyer for the State Auditor’s Office, said the State Audit Act requires his office to “thoroughly examine and audit the financial affairs of every state agency.”
Noting that Human Services has said the special audit showed credible evidence of fraud, Noel said the department is required to “report immediately, in writing, to the state auditor any violation of a criminal statute in connection with financial affairs.”
Squier on July 12 responded in a letter to Balderas saying she was declining to release the audit to him.
“At this time no determination has been made that any individual or entity violated federal or state criminal statue, nor does [Human Services] have the authority to make such a determination,” the letter states.
Of the federal laws and regulations that require the department to turn “credible evidence of fraud” over to the state attorney general for investigation, Squier said, “Such a referral is not a finding of fraud by this agency.” She said she had to decline Balderas’ request because it could jeopardize the state attorney general’s investigation.
State District Judge Sarah Singleton of Santa Fe on Tuesday signed a subpoena requiring Squier to permit the state auditor to inspect the Public Consulting Group audit at 10 a.m. Monday.
Department spokesman Matt Kennicott said Wednesday that Squier and department lawyers will have to look over the subpoena before deciding on their course of action.
Earlier in the week, Rep. Stephen Easley, D-Santa Fe, and Sen. Benny Shendo, D-Jemez Pueblo, chairmen of a legislative subcommittee on behavioral health, delivered a five-page letter to Balderas requesting his office examine the Public Consulting Group audit. The letter raised issues including the role of OptumHealth, the company in charge of overseeing the behavioral health providers, and how the five Arizona companies — with which the state is contracting to take up the slack of the providers under investigation — were chosen.
On Tuesday, Gov. Susana Martinez told reporters that the Arizona companies were chosen because they have done similar work before. “They’ve been able to pick up services when there have been problems in other states, where there have been other allegations of fraud or misuse or mismanagement,” she said. “We want to make sure those patients have quick access.”
Does it matter to you, my reader, that all this hullaballoo is occurring on taxpayer money? And Medicaid state and federal money. Our tax dollars are paying PCG.