Blog Archives

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).

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?

Medicaid Auditors, Nitpicky Nonsense, and Journalistic Mistakes

In my experience with regulatory audits of health care providers, which is substantial, the auditors have zero incentive to perform audits conservatively…or even properly, if I am being completely honest. The audit companies themselves are for-profit entities with Boards of Directors, sometimes with shareholders, and definitely with executives who are concerned with the corporate bottom lines. The actual auditors are salaried employees (or contractors) who are given an audit checklist, which may or may not be correct) and instructions as to which companies to audit.

Think about it – you are hired as an auditor…what happens if you come back to your boss, saying, “Nope. I found no documentation errors.”I liken it to me hiring a housekeeper and that housekeeper showing up at my house and saying, “Your house is so clean. There is nothing for me to clean.” First of all, for those who know me, you know that no housekeeper would ever say that my house did not to be cleaned, but that is neither here nor there. The analogy remains. No employee or hired contractor will tell you that you do not need to hire him or her because he or she is not needed. It is only human nature and logic. Will a dog trainer tell you that your dog is fully trained? Will a personal trainer tell you are perfectly fit? Will a rug maker tell you that you don’t need a rug? Will an auditor tell you that your documents are perfect? If so, they would render themselves obsolete.

Disagree with my opinions on this blog all you want, but if you disagree with the principle that an employee will not argue himself or herself out of a job, then you are living in a fantasy land made up of rainbows and gummy bears.

So let’s begin with the basic logical principles: 2+2=4 and auditors have incentives to find errors.

Now, knowing the basic, underlying fact that auditors have incentives to locate documentation errors, an article was recently published entitled, “Audit says home health care companies overbilled Mass. Medicaid by $23m.” While I am not in a position to critique a journalist’s writing, I disagree with the broad, overreaching statements found in this article. While the article claims that 9 home health companies owe the State of Massachusetts $23 million, my guess is that (if the companies hire a competent attorney) the companies do not owe such a large amount. In my experience, there are many legal defenses to safeguard against allegations in an audit.

The follow-up article may be entitled, “Audit of Home Health Agencies Found to Be Erroneous.”

Here is the first paragraph of that article claiming home care agencies overbilled Medicaid for $23 million:

“The state’s Medicaid program was routinely billed for home health care services that were never provided or were not medically necessary. Providers submitted documents with missing dates and signatures. Sometimes basic information like a patient’s medical history was nowhere to be found.”

Let’s dissect.

First sentence: “The state’s Medicaid program was routinely billed for home health care services that were never provided or were not medically necessary.”

I call bull feces on this one. First, the audit, which is the topic of this article, only audited 9 home health agencies. Unless only 10 home health agencies exist in Massachusetts, an audit of 9 agencies can hardly be considered “routinely billing” Medicaid.

Second, who is making these determinations that the home health services are not medically necessary??? Considering that, in order to render home health services, the provider must obtain prior authorization that the services are medically necessary, I find it a hard pill to swallow that the rendered services are not medically necessary. These are prior authorized services!!

Third, providing home health services is anything but routine. Life happens. The assertion that home health care services were never provided fails to take into consideration – life. For example, a home health aide could present at the client’s home at the regularly scheduled time, but the consumer’s son is present. The son brought McDonald’s, in which case, the aide may render all services, but does not prepare a meal for the client. Or, perhaps, the consumer’s plan states that the aide must bathe the consumer. But the consumer recently had surgery and cannot take a bath or shower for a certain amount of time. In the above examples, services were not rendered, that is true, but did some sort of aberrant billing or fraud occur? I would argue, no.

Second sentence: “Providers submitted documents with missing dates and signatures.”

This sentence is also troubling. Let’s say that a consumer requires home health services and receives prior authorization. The home health aide renders the services. In the subsequent documentation, the home health aide forgets to date the service note. There is no question that the home health services were needed. There is no question that the services were rendered. There is only a missing date written on the service note. Does this circumstance warrant a 100% recoupment for a minor documentation error? If you answer, yes, you may have a fulfilling career as a Medicaid auditor in your future. You also may believe that a documentation error as egregious as a missing date should warrant tearing up the provider’s Medicaid contract and burning it. You may also hate puppy dogs and ice cream.

My answer is no. There are less drastic measures to be implemented other than a 100% recoupment – for example, a plan of correction could be required.

Third sentence: “Sometimes basic information like a patient’s medical history was nowhere to be found.”

I have major issues with this sentence. Ever hear of the saying, “You only get what you ask for?” All health care providers, including home health care providers, maintain massive amounts of documentation, whether it be electronic or paper. Furthermore, one client file could have years and years of documentation. When an auditor comes to an agency, the auditor normally presents with a list of consumer names and dates of service.

For example, the auditor wants to review the documentation for Barack Obama, date of service 11/8/12. The provider hands over the service note, the plan of care, the prior authorization, etc. Information not found on the documents provided to the auditor: place of birth, past drug use, including, marijuana and cocaine, smoking history, exercise regimen, marital status, immunizations, list of surgical procedures…you get the picture.

The article goes on to state, “Executives at all of the companies reached by the Globe said they are appealing the audit findings and chalked up most of the violations to minor paperwork issues that were overblown by state auditors.”

“There’s mistakes here, I understand that,” said Debra Walsh, administrator at Able Home Care. “[But] how did a missing address escalate to a sanction? That doesn’t make any sense.”

She’s right. It doesn’t make logical, reasonable, human sense. But it does make sense when you remember that the auditors are sent to the agencies with an audit checklist and a list of consumers with dates of service. If the checklist requires an address of the provider and the consumer to be present on the service note, regardless whether the regulations, rules or law require an address to be present on a service note, and there is no address present on the service note, then the auditor will find noncompliance. Strict adherence to the “Stepford Auditors’ Handbook” is required, not strict adherence to the law.

Looking at the sunny side – Most audit findings are easy-greasy to defend with legal arguments. Have you seen the TV show, “What Not To Wear?” The first, initial meeting of the targeted person on “What Not To Wear” is the original audit results “before a good legal defense.” It’s exaggerated, ugly, and quite shocking.

Then Stacy and Clinton come to the rescue and teach the scraggly, poorly-dressed individual fashion tips and the former frumpy individual is transformed into a fashionable chichi – or a much more palatable overpayment amount.

(In this analogy, my team and I are Stacy and Clinton. I will be Stacy).

One of my favorite examples of a “before” and “after” audit results is the following:

Before (frumpy individual):

""before2
After (fashionable chichi):
photo (3)
""

Next time you see an article claiming that a health care provider overbilled the government for Medicare or Medicaid reimbursements, check and see whether the determination was appealed by the provider(s).

The appeal may demonstrate an entirely new perspective on such alleged overpayments than the original audit, because, remember, an auditor would not maintain a job if he or she found compliance.

Medicare/Caid Audits: Urine Testing Under Fire!!

I have blogged about peeing in a cup before…but we will not be talking about dentists in this blog. Instead we will be discussing pain management physicians and peeing in a cup.

Pain management physicians are under intense scrutiny on the federal and state level due to increased urine testing. But is it the pain management doctors’ fault?

When I was little, my dad and I would play catch with bouncy balls. He would always play a dirty little trick, and I fell for it every time. He would toss one ball high in the air. While I was concentrating on catching that ball, he would hurl another ball straight at me, which, every time, smacked into me – leaving me disoriented as to what was happening. He would laugh and  laugh. I was his Charlie Brown, and he was my Lucy. (Yes, I have done this to my child).

The point is that it is difficult to concentrate on more than one thing. When the Affordable Care Act (ACA) came out, it was as if the federal government wielded 500, metaphoric, bouncy balls at every health care provider. You couldn’t comprehend it in its entirety. There were different deadlines for multiple changes, provider requirements, employer requirements, consumer requirements…it was a bloodbath! [If you haven’t seen the brothers who trick their sister into thinking it’s a zombie apocalypse, you have to watch it!!]

A similar “metaphoric ball frenzy” is occurring now with urine testing, and pain management physicians make up the bulk of prescribed urine testing. The urine testing industry has boomed in the past 4-5 years. This could be caused by a number of factors:

  • increase use of drugs (especially heroine and opioids),
  • the tightening of regulations requiring physicians to monitor whether patients are abusing drugs,
  • increase of pain management doctors purchasing mass-spectrometry machines and becoming their own lab,
  • simply more people are complaining of pain, and
  • the pharmaceutical industry’s direct-to-consumer advertising (DTCA).

Medicare’s spending on 22 high-tech tests for drugs of abuse hit $445 million in 2012, up 1,423% in five years. “In 2012, 259 million prescriptions were written for opioids, which is more than enough to give every American adult their own bottle of pills.” See article.

According to the American Association of Pain Management, pain affects more Americans than diabetes, heart disease and cancer combined. The chart below depicts the number of chronic pain sufferers compared to other major health conditions.

pain

In the world of Medicare and Medicaid, where there is profit being made, the government comes a-knockin’.

But should we blame the pain management doctors if recent years brought more patients due to increase of drug use? The flip side is that we do not want doctors ordering urine tests unnecessarily. But aren’t the doctors supposed to the experts on medical necessity??? How can an auditor, who is not a physician and never seen the patient opine to medical necessity of a urine test?

The metaphoric ball frenzy:

There are so many investigations into urine testing going on right now.

Ball #1: The machine manufacturers. A couple of years ago, Carolina Liquid Chemistries (CLC) was raided by the federal government. See article. One of the allegations was that CLC was misrepresenting their product, a urinalysis machine, which caused doctors to overbill Medicare and Medicaid. According to a source, the federal government is still investigating CLC and all the physicians who purchased the urinalysis machine from CLC.

Ball #2: The federal government. Concurrently, the federal government is investigating urine testing billed to Medicare. In 2015, Millennium Health paid $256 million to resolve alleged violations of the False Claims Act for billing Medicare and Medicaid for medically unnecessary urine drug and genetic testing. I wonder if Millennium bought a urinalysis machine from CLC…

Ball #3: The state governments. Many state governments are investigating urine testing billed to Medicaid.  Here are a few examples:

New Jersey: July 12, 2016, a couple and their diagnostic imaging companies were ordered to pay more than $7.75 million for knowingly submitting false claims to Medicare for thousands of falsified diagnostic test reports and the underlying tests.

Oklahoma: July 10, 2016, the Oklahoma attorney general’s office announced that it is investigating a group of laboratories involved in the state’s booming urine testing industry.

Tennessee: April 2016, two lab professionals from Bristol, Tenn., were convicted of health care fraud in a scheme involving urine tests for substance abuse treatments.

If you are a pain management physician, here are a few recommendations to, not necessarily avoid an audit (because that may be impossible), but recommendations on how to “win” an audit:

  1. Document, document, document. Explain why the urine test is medically necessary in your documents. An auditor is less likely to question something you wrote at the time of the testing, instead of well after the fact.
  2. Double check the CPT codes. These change often.
  3. Check your urinalysis machine. Who manufactured it? Is it performing accurately?
  4. Self-audit
  5. Have an experienced, knowledgeable, health care attorney. Do not wait for the results of the audit to contact an attorney.

And, perhaps, the most important – Do NOT just accept the results of an audit. Especially with allegations involving medical necessity…there are so many legal defenses built into regulations!! You turn around and throw a bouncy ball really high – and then…wallop them!!

 

The False Claims Act: Are You Just Shaking a Magic 8 Ball?

Often we read in the news stories of hospitals or health care providers paying inordinate amounts to settle cases in which credible allegations of fraud or allegations of false claims preside. Many times the providers actually committed fraud, waste, or abuse. Maybe medical records were falsified, or maybe the documents were created for Medicaid/care recipients that do not exist. Maybe the services claimed to have been rendered were not. In these cases, the provider can be held liable criminally (fraud) and/or civilly (false claims). And these providers should be held accountable to the government and the taxpayers.

It appears that this is not the case for an Ohio hospital that settled a False Claims Act case for $4.1 million last month. Do not get me wrong: The False Claims Act is no joke. Possible penalties imposed by the False Claims Act can be up to $10,000 per claim “plus 3 times the amount of damages which the Government sustains because of the act of that person.” 37 USC §3729. See blog for more explanation.

In the Ohio hospital’s case, the penalty derived from Dr. Abubakar Atiq Durrani, a spinal surgeon, performing spinal surgeries that, allegedly, were not medically necessary.

According to what I’ve read, there is no question that Dr. Durrani actually performed these surgeries. He did. On actual people who exist. Instead, the allegation is that the surgeries were not medically necessary.

I have blogged about medical necessity in the past. Medical necessity is a subjective standard. Medical necessity is defined as reasonable, necessary, and/or appropriate, based on evidence-based clinical standards of care.

But it is still a subjective standard. When you receive news that you suffer from a debilitating disease, what do you do? You get a second opinion. If one doctor recommends brain surgery, what do you do? You get a second opinion.

After that, you grab a handy, dandy Magic 8 Ball and give it a shake. Kidding. Kinda.

replyhazy

My point is that 2 physicians can recommend two different courses of treatment. One physician may practice more defensive medicine, while another may be more cautious. Surgeons will, generally, recommend surgery, more than non-surgeons; it’s what they do.

Going back to Dr. Durrani, who was arrested in 2013 for allegedly “convinc[ing] [patients] they needed spine and neck surgery. However, other doctors later determined those surgeries as unnecessary and damaging to the patient’s health.”

I find two points striking about this case: (1) The allegation that this physician “convinced” people to undergo spine surgery; and (2) The fact that the hospital settled for $4.1 million when no fraud existed or was alleged, only questions as to medical necessity, which is subjective.

As to the first, I am imagining my doctor. I am imagining that I have horrible, chronic back pain. My doctor recommends spinal surgery. There is no way, at all, ever, in this universe, that any doctor would be able to convince me to undergo surgery if I did not want surgery. Period. Who allows themselves to be peer pressured into surgery? Not to knock on my own profession, but I have a sneaky suspicion that this allegation was concocted by the  plaintiffs’ attorney(s) and the plaintiffs responded, “Oh, you are right. I was persuaded.”

As to the second…Why did the hospital settle for such a high amount? Couldn’t the hospital have gone to trial and convinced a jury that Dr. Durrani’s surgeries were, in fact, reasonable and/or appropriate, based on evidence-based clinical standards of care?

signspointtoyes

According to the Magic 8 Ball, “signs point to yes.” Why cave at such a large number where no fraud was alleged?

Whatever happened to Dr. Durrani because of this whole mess? “Following his arraignment, Durrani allegedly fled the United States and remains a fugitive.”

In sum, based on allegations of questionable medical necessity, not fraud, a hospital paid $4.1 million and a U.S. physician fled into hiding…allegedly.

I question this outcome. I even question whether these types of allegations fall within the False Claims Act.

The False Claims Act holds providers liable for (abridged version):

  • knowingly presenting a fraudulent claim to the Government;
  • knowingly making a fraudulent record or statement to the Government;
  • conspiring to do any of the referenced bullet points;
  • having possession of Government money and knowingly delivering less than the amount;
  • delivering a certified document intending to defraud the Government without completely knowing whether the information was true;
  • knowingly buying or receiving as a pledge of debt, public property from the an employee of the Government who does not have the right to pledge that property;
  • knowingly making, using, or causing to be made or used, a false record material to an obligation to pay the Government, or knowingly concealing or decreasing an obligation to pay the Government.

I see nothing in the False Claims Act punishing a provider for rendering services that, perhaps, may not be medically necessary.

I actually find questions of medical necessity to be easily defensible. After all, who do we look to for determinations of what are reasonable and/or appropriate services, based on evidence-based clinical standards of care?

Our physicians.

Sure, some physicians may have conflicting views as to what is medically necessary. I see it all the time in court. One expert witness physician testifies that the service was medically necessary and another, equally as qualified, physician testifies to the contrary.

Unless I’m missing something (here, folks, is my “CYA”), I just do not understand why allegations of questionable medical necessity caused an U.S. physician to become a fugitive and a hospital to settle for $4.1 million.

It’s as if the hospital shook the Magic 8 Ball and asked whether it would be able to defend itself and received:

outlooknotsogoos

MCO CEO Compensated $400,000 Plus Bonuses with Our Tax Dollars!

On July 1, 2014, Cardinal Innovations, one of NC’s managed care organizations (MCOs) granted its former CEO, Ms. Pam Shipman, a 53% salary increase, raising her salary to $400,000/year. In addition to the raise, Cardinal issued Ms. Shipman a $65,000 bonus based on 2013-2014 performance.

$400,000 a year, plus bonuses.  Apparently, I got into the wrong career; the public sector seems to pay substantially more.

Then in July 2015, according to the article in the Charlotte Observer, Cardinals paid Ms. Shipman an additional $424,975, as severance. Within one year, Ms. Shipman was paid by Cardinal a whopping $889,975. Almost one million dollars!!!! To manage 16 counties’ behavioral health care services for Medicaid recipients.

For comparison purposes, the President of the United States earns $400,000/year (to run the entire country). Does the CEO of Cardinal equate to the President of the United States? Like the President, the CEO of Cardinal, along with all the other MCOs’ CEOs, are compensated with tax dollars.

Remember that the entire purpose of the MCO system is to decrease the risk of Medicaid budget overspending by placing the financial risk of overspending on the MCO instead of the State. In theory, the MCOs would be apt to conservatively spend funds and more carefully monitor the behavioral health care services provided to consumers within its catchment area to ensure medically necessity and not wasteful, unnecessary services.

Also, in theory, if the mission of the MCOs were to provide top-quality, medically necessary, behavioral health care services for all Medicaid recipients in need within its catchment area, as the MCOs often tout, then, theoretically, the MCOs would decrease administrative costs in order to provide higher quality, beefier services, increase reimbursement rates to incentivize health care providers to accept Medicaid, and maybe, even, not build a brand, new, stand-alone facility with top-notch technology and a cafeteria that looks how I would imagine Googles’ to look.

Here is how Cardinal’s building was described in 2010:

This new three-story, 79,000-square-foot facility is divided into two separate structures joined by a connecting bridge.  The 69,000-square-foot building houses the regional headquarters and includes Class A office space with conference rooms on each floor and a fully equipped corporate board room.  This building also houses a consumer gallery and a staff cafe offering an outdoor dining area on a cantilevered balcony overlooking a landscaped ravine.  The 10,000-square-foot connecting building houses a corporate training center. Computer access flooring is installed throughout the facility and is supported by a large server room to maintain redundancy of information flow.

The MCOs are not private companies. They do not sell products or services. Our tax dollars comprise the MCOs’ budget. Here is a breakdown of Cardinal’s budgetary sources from last year.

Cardinals budget

The so-called “revenues” are not revenues; they are tax dollars…our tax dollars.

78.1% of Cardinal’s budget, in 2014, came from our Medicaid budget. The remaining 21.7% came from state, federal, and county tax dollars, leaving .2% in the “other” category.

Because Cardinal’s budget is created with tax dollars, Cardinal is a public company working for all of us, tax paying, NC, residents.

When we hear that Tim Cook, Apple’s CEO, received $9.22 million in compensation last year, we only contributed to his salary if we bought Apple products. If I never bought an Apple product, then his extraordinarily high salary is irrelevant to me. If I did buy an Apple product, then my purchase was a voluntary choice to increase Apple’s profits, or revenues.

When we hear that Cardinal Innovations paid $424,975 to ousted CEO, Pam Shipman, over and above her normal salary of $400,000 a year, we all contributed to Shipman’s compensation involuntarily. Similarly, the new CEO, Richard Toppings, received a raise when he became CEO to increase his salary to $400,000 a year. Again, we contributed to his salary.

A private company must answer to its Board of Directors. But an MCO, such as Cardinal, must answer to tax payers.

I work very hard, and I expect that my dollars be used intelligently and for the betterment of society as a whole. Isn’t that the purpose of taxes? I do not pay taxes in order for Cardinal to pay its CEO $400,000.

For better or for worse, a large percentage of our tax dollars, here in NC, go to the Medicaid budget. I would venture that most people would agree that, as a society, we have a moral responsibility to ensure that our most vulnerable population…our poorest citizens…have adequate health care. No one should be denied medical coverage and our physicians cannot be expected to dole out charity beyond their means.

Hence, Medicaid.

We know that Medicaid recipients have a difficult time finding physicians who will accept Medicaid. We know that a Medicaid card is inferior to a private payor card and limits provider choice and allowable services. We know that certain services for which our private insurances pay, simply, are not covered by Medicaid. Why should a Medicaid-insured person receive sub-par medical services or have more difficulty finding willing providers, while privately insured persons receive high quality medical care with little effort?  See blog or blog.

Part of the trouble with Medicaid is the low reimbursements given to health care providers. Health-care consulting firm Merritt Hawkins conducted a study of Medicaid acceptance rates which found that just 45.7 percent of physicians are now accepting Medicaid patients in the U.S.’s largest 15 cities and the numbers worsen when you look at sub-specialties.

The reimbursement rates are so low for health care providers; the Medicaid services are inadequate, at best; and people in need of care have difficulty finding Medicaid physicians. Yet the CEO of Cardinal Innovations is compensated $400,000 per year.

Cardinal has 635 employees. Its five, top-paid executives are compensated $284,000-$400,000 with bonuses ranging $56,500-$122,000.

Richard Topping, Cardinal’s new CEO, told the Charlotte Observer that “it doesn’t cut into Medicaid services.”

He was also quoted as saying, “It’s a lot of money. It is. You’ve just got to look at the size and the scope and the scale.”

In contrast, Governor McCrory is compensated approximately $128,000.  Is McCrory’s “size, scope, and scale” smaller than the CEO’s of Cardinal?  Is the CEO of Cardinal “size and scope and scale,” more akin to the President of the US?

“We are a public entity that acts like a private company for a public purpose,” Toppings says.  Each MCO’s Board of Directors approve salaries and bonuses.

Cardinal is not the only MCO in NC compensating its CEO very well.  However, according to the Charlotte Observer, Cardinal’s CEO’s compensation takes the cake.

Smokey Mountain Center (SMC) pays its Chief Medical Officer Craig Martin $284,000 with a $6,789 longevity bonus.

Four years ago, before the initial 11 MCOs, the administrative cost of the MCOs was nonexistent (except for the pilot program, Piedmont Behavioral Health, which is Cardinal now).  Implementing the MCO system increased administrative costs, without question.  But by how much?  How much additional administrative costs are acceptable?

Is it acceptable to pay $400,000+ for a CEO of a public entity with our tax dollars?

Dealer Has an Ace: Do You Take the “Insurance?” CMS Incentivizes Hospitals to Drop Appeals

Medicare appeals are at an all-time high. Back in January 2014, the Office of Medicare Hearings and Appeals (OMHA) stated that a health care provider with a Medicare appeal, may not have the case assigned to a judge for at least two years, and may wait even longer for the appeal to be heard.

Since the beginning of 2014, the Medicare appeal backlog has only grown. With the passing of the Affordable Care Act (ACA), which increased the amount of regulatory audits on providers in an attempt to partially fund the Act, more and more providers are finding themselves audited and in disagreement with the overzealous results. More and more providers are fighting the audit results and filing Medicare appeals at OMHA.

Now, because in large part of the massive backlog, the Center for Medicare and Medicaid Services (CMS) is offering hospitals an “administrative agreement mechanism.” In other words, if the hospitals agree to dismiss the appeal, CMS will agree to partial repayment for the claims at issue. Specifically, the hospital will be reimbursed for 68% of the disputed claims.
Notice the offer from CMS only pertains to hospitals. CMS has made no such offer to long-term care facilities (LTCF), which have been vocal when it comes to aggravation resulting from the Medicare appeal backlog.

For CMS’s offer, if a hospital is owed $1 million, then CMS will agree to reimburse the hospital $680,000 if the hospital dismisses the appeal.

What if the hospital has multiple appeals? CMS will only offer this meagre, olive branch if no other appeals are pending. As in, you must dismiss all lawsuits in order to receive the partial payout.

Personally, I call this a raw deal.

Think of blackjack. The purpose of blackjack is to have two cards’ sums equal 21. Only with 2 cards equaling 21 does the player receive more than the bet. You bet $100 and hit 21 with an ace and a king? You get paid $150.

“Insurance” is a side bet which you can take when the dealer’s face up card shows an ace and only pays 2:1. You bet half your bet for insurance; so if you placed a $100 blackjack bet, your insurance bet should be $50. If the dealer hits blackjack, you lose your $100 bet but get paid on the insurance. On a $50-insurance bet, you’d win $100, and lose your $100 bet. If the dealer doesn’t have a blackjack, your insurance bet is forfeited. Either way, by making an insurance bet, you lose money.. You do not have the chance to win 100% of a blackjack payout.

This is essentially what CMS is offering. You are holding an ace and CMS is holding an ace. Will you take the partial payout?

Many of these pending appeals by hospitals are a result of auditors’ determinations that a Medicare recipient was received as an inpatient instead of (as the auditor believes proper) an outpatient.

One of the reasons that I believe the 68% payout from CMS is a raw deal is because the auditors are not always right. Why take 68% when you are owed 100%?

My question is: Are these auditors M.D.s?

When I present myself at a hospital emergency room, I hope that the decision for me to be admitted as inpatient or outpatient hospital admission is a complex medical decision contemplated by my doctor based on medical necessity, not an insurance auditor. After the physician determines that a patient needs to be admitted, an auditor is second guessing a physician’s decision that was made in “real time” with multiple variables at issue.

The Social Security Act (SSA) provides numerous defenses for a provider to assert against an auditor challenging the medical necessity of a service, in this case whether the patient is admitted into the hospital as inpatient. The rendering physician’s medical decision should be upheld absent clear and convincing evidence to the contrary.

Some people suggest that the auditors’ emphasis on inpatient stays versus outpatient stays will cause hospitals to err on the side of caution and just keep patients in observation status to avoid inpatient status.

We need to prevent the hospitals from fearing to admit patients as inpatient due to overzealous audits and mistaken determinations from non-M.D.s who believe the patient should have been outpatient. I say, go all in. Do not take the “insurance.” Do not take the 68%, if you deserve 100%.

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?

$12 Million of Illinois Medicaid Dollars Paid for Services Rendered to the Deceased

Who would want state Medicaid dollars paying for services that are not medically necessary?  What about services getting paid out for services rendered to dead people?

I mean, I am no doctor, but I fail to see why someone who is deceased would need dentures, dialysis, or a wheelchair.

Yet, the state of Illinois recently identified that it paid overpayments for Medicaid services to roughly 2,900 people after the date of their deaths, equaling approximately $12 million.  See AP story.

How do state agencies verify eligibility for the multi-million number of Medicaid recipients within a state? Or, for that matter, how does the federal government determines eligibility for the nation’s Medicare population?  Determining eligibility for Medicaid and Medicare is a large-scale, daunting task for both the federal government and the state government.

A key component of Medicaid and Medicare eligibility is that the person receiving the services is alive.  Yet Illinois failed to check on the status of Medicaid recipients’ lives.

Improper payments of $12 million for Medicaid services delivered to the deceased are, obviously, disconcerting for taxpayers.  We want Medicaid services to be provided to those people who need the services, and I cannot fathom what Medicaid services a deceased person would need.

Apparently, who determines Medicaid eligibility in Illinois has been a hotly, disputed and ideologically polarized debate.  Illinois had hired Maximus Health Services, a private company, to verify Medicaid eligibility, including determining which recipients passed away. The company was said to be achieving a Medicaid eligibility-removal rate of 40 percent.  Last year the contract between the state of Illinois and Maximus ended and the work was transferred into the hands of state employees.

The question remains in my mind, however, who has the duty to inform the state that a Medicaid recipient has passed away?  Is the burden on the state employees to discover the deaths, as it appears to be in Illinois? Are Medicaid providers continuing to bill for deceased recipients?  Obviously the deceased person does not have the burden to inform the state of his or her passing.  Where should the responsibility lie? And where does it lie?

Illinois Governor Pat Quinn blamed the managed care companies.  He stated that, in most of the cases that managed care insurance companies incorrectly billed for Medicaid services for deceased people.

This brings up another entity on which the burden of discovering the deaths of Medicaid recipients may lie.

We, in North Carolina, have a messy, unsupervised managed care organization (MCO) system for those suffering with mental health issues, are developmentally disabled and suffer from substance abuse.  We currently have 10 MCOs, which are all in the process of merging to form only 3-4.  Are the MCOs responsible for knowing when Medicaid recipients die?

Our State Auditor, Beth Wood, has not conducted a similar audit in North Carolina, to my knowledge, but it would not surprise me if NC is also providing Medicaid services to the deceased.

To my knowledge, the federal government has not conducted an audit of the Medicare services to determine whether Medicare funds are being spent on the deceased.  Again, I would not be surprised to discover that Medicare funding is being spent on those whom have passed.

This is yet again another example of how the failure of the state government to supervise itself and its contractors costs taxpayers money.

 

How EPSDT Allows Medicaid Recipients Under the Age of 21 To Receive More Services Than Covered By NC State Plan

EPSDT. What in the heck is EPSDT?

EPSDT is an acronym for the “Early and Periodic Screening, Diagnosis, and Treatment (EPSDT).” It only applies to Medicaid beneficiaries under the age of 21. As in, if you are 21, EPSDT does not apply to you. The point of EPSDT is to allow beneficiaries under the age of 21 to receive medically necessary services not normally allowed by the NC Medicaid State Plan. (These beneficiaries under the age of 21 I will call “children” for the sake of this blog, despite 18+ being a legal adult).

The definition of each part of the acronym is below:

Early:……. Assessing and identifying problems early
Periodic:…… Checking children’s health at periodic, age-appropriate intervals
Screening:…. Providing physical, mental, developmental, dental, hearing, vision, and other screening tests to detect potential problems
Diagnostic:…. Performing diagnostic tests to follow-up when a risk is identified, and
Treatment:…. Control, correct or reduce health problems found.

Federal Medicaid law at 42 U.S.C.§ 1396d(r) [1905(r) of the Social Security Act] requires state Medicaid programs to provide EPSDT for beneficiaries under 21 years of age. Within the scope of EPSDT benefits under the federal Medicaid law, states are required to cover any service that is medically necessary “to correct or ameliorate a defect, physical or mental illness, or a condition identified by screening,” whether or not the service is covered under the North Carolina State Medicaid Plan.

The services covered under EPSDT are limited to those within the scope of the category of services listed in the federal law at 42 U.S.C. § 1396d (a) [1905(a) of the Social Security Act].

For example, EPSDT will not cover, nor is it required to cover, purely cosmetic or experimental treatments.

Again, EPSDT allows for exceptions to Medicaid policies for beneficiaries under the age of 21. For example, if the DMA clinical policy for dental procedures does not cover a certain procedure, if the dentist determines that the procedure is medically necessary for a beneficiary under the age of 21, then the dentist can request prior approval under EPSDT simply by filling out a “non-covered services form” along with the other supporting documentation to establish medical necessity. More likely than not, the “non-covered procedure” would be approved.

Medical necessity is an interesting term. Medical necessity is not defined by statute. The American Medical Association (AMA) defines medical necessity as:

“Health care services or products that a prudent physician would provide to a patient for the purpose of preventing, diagnosing, treating or rehabilitating an illness, injury, disease or its associated symptoms, impairments or functional limitations in a manner that is: (1) in accordance with generally accepted standards of medical practice; (2) clinically appropriate in terms of type, frequency, extent, site and duration; and (3) not primarily for the convenience of the patient, physician, or other health care provider.”

But, legally, the courts have construed medical necessity broadly when it comes to EPSDT. As in, generally speaking, if a doctor will testify that a procedure or service is medically necessary, then, generally speaking, a judge will accept the medical necessity of the procedure or service.

It seems as though I am degrading the intelligence of the judges that take the face value testimony of the doctors. But I am not.

Judges, like I, are not doctors. We do not have the benefit of a medical education. I say benefit because any education is a benefit, in my opinion.

It would be difficult for anyone who is not a doctor to disagree with the testimony of a physician testifying to medical necessity. I mean, unless the person stayed in a Holiday Inn Express the night before. (I know…bad joke).

Some courts, however, have ruled that the decision as to whether a procedure is medically necessary must be a joint effort by the state and the treating physician. Obviously, for courts that follow the “joint decision for medical necessity” holdings, less procedures would be allowed under EPSDT because, more likely than not, the state will disagree with a treating physician (I say this only from my own experience representing the state when the state disagreed with EPSDT treatments despite the treating physician testifying that the procedure was medically necessary).

For example, the 11th Circuit has held that both the state and the treating physician have a role in determining whether a procedure or treatment is medically necessary to correct or ameliorate a medical condition. The 11th circuit disagreed with the Northern District of Georgia’s determination that the state MUST provide the amount of services which the treating physician dreamed necessary. Moore v. Medows, No. 08-13926, 2009 WL 1099133 (11th Cir. Apr. 24, 2009).

Regardless, in practice, EPSDT is interpreted broadly. A long, long time ago, I worked at the Attorneys’ Generals office. A mother requested hyperbaric oxygen therapy (HBOT) for her autistic children (and I had to oppose her request because that was my job).

For those of you who do not know what HBOT is (I sure didn’t know what HBOT is prior to this particular case)…

“Hyperbaric Oxygen Therapy (HBOT) is the use of high pressure oxygen as a drug to treat basic pathophysiologic processes and their diseases. HBOT has acute and chronic drug effects. Acutely, HBOT has been proven to be the most powerful inhibitor of reperfusion injury, which is the injury that occurs to tissue deprived of blood supply when blood flow is resumed. This is thought to be one of the primary mechanisms of hyperbaric oxygen therapy effects in acute global ischemia, anoxia, and coma. Chronically, HBOT acts as a signal inducer of DNA to effect trophic (growth) tissue changes.” See http://www.hbot.com/hbot.

I went and saw a hyperbaric oxygen treatment chamber in preparation of my case. It’s pretty intimidating. It is a large chamber made of thick metal. It looks like you could get inside, have it submerged under the ocean, and explore. It appears similar to a submarine. And, interestingly, it is most often used for divers who get the bends.

It is highly controversial as to whether HBOT cures, remedies or ameliorates autistic symptoms. I had two experts testifying that HBOT was experimental, and, therefore, not covered by Medicaid, even with EPSDT. (Remember, back then I was at the AG’s office).

Yet, despite the fact that HBOT was still controversial as to whether it ameliorates the symptoms of autism, the Administrative Law Judge (ALJ) used the EPSDT doctrine to rule that the mother’s children could receive HBOT and Medicaid must pay for the services.

That is the power of EPSDT. HBOT was clearly not covered by Medicaid for the purpose of ameliorating symptoms of autism. But, for the children named in the Petition who were under 21, Medicaid paid nonetheless.

HBOT allows beneficiaries under the age of 21 to receive medically necessary services that would not normally be allowed under the North Carolina Medicaid State Plan.

Importantly, EPSDT provides for private rights of action under 1983. At least all the federal circuit court of appeals have held such.

Oh, and, BTW, NCTracks will soon also be in charge of EPSDT determinations.