This data note reviews the Medicaid estimates included in the American Health Care Act prepared by the Congressional Budget Office (CBO) and staff at the Joint Committee on Taxation (JCT).
Dr. Isaac Kojo Anakwah Thompson, a Florida primary care physician, was sentenced in July 2016 to 4 years in prison and a subsequent two years of supervised release. Dr. Thompson pled guilty to health care fraud. He was further ordered to pay restitution in the amount of $2,114,332.33. Ouch!! What did he do?
According to the Department of Justice, Dr. Thompson falsely reported that 387 of his clients suffered from ankylosing spondylitis when they did not.
Question: How does faking a patient’s disease make a physician money???
Answer: Hierarchal condition category (HCC) coding. Wait, what?
Basically, Medicare Advantage assigns HCC coding to each patient depending on the severity of their illnesses. Higher HCC scores equals substantially higher monthly capitation payments from Medicare to the managed care organization (MCO). In turn, the MCO will pay physicians more who have more extremely sick patients (higher HCC codes).
Ankylosing spondylitis is a form of arthritis that causes inflammation and damage at the joints; eventually, the inflamed spinal joints can become fused, or joined together so they can’t move independently. It’s a rare disease, affecting 1 in 1000 people. And, importantly, it sports a high HCC code.
In this case, the Office of Inspector General (OIG) found it odd that, between 2006-2010, Dr. Thompson diagnosed 387 Medicare Advantage beneficiaries with ankylosing spondylitis and treated them with such rare disease. To which, I say, if you’re going to defraud the Medicare system, choose common, fabricated diseases (kidding – it’s called sarcasm – I always have to add a disclaimer for people with no humor).
According to the Department of Justice, none or very few of Dr. Thompson’s 387 consumers actually had ankylosing spondylitis.
My issue is as follows: Doesn’t the managed care organization (MCO) share in some of the punishment? Shouldn’t the MCO have to repay the financial benefit it reaped from Dr. Thompson?? Shouldn’t the MCO have a duty to report such oddities?
Let me explain:
In Florida, Humana acted as the MCO. Every dollar that Dr. Thompson received was funneled through Humana. Humana would pay Dr. Thompson a monthly capitation fee from Medicare Advantage based on his patient’s hierarchal condition category (HCC) coding. Increasing even just one patient’s HCC code means more bucks for Dr. Thompson. Remember, according to the DOJ, he increased 387 patients’ HCC codes.
Dr. Thompson reported these diagnoses to Humana, which in turn reported them to Medicare. Consequently, Medicare paid approximately $2.1 million in excess capitation fees to Humana, approximately 80% of which went to Dr. Thompson.
In this case, it is reasonable to expect that Humana had knowledge that Dr. Thompson reported abnormally high HCCs for his patients. For comparison, ankylosing spondylitis has an HCC score of 0.364, which is more than an aortic aneurysm and three times as high as diabetes. Plus, look at the amount of money that the MCO paid Dr. Thompson. Surely, it appeared irregular.
What, if anything, is the MCO’s duty to report physicians with an abnormally high number of high HCC codes? If you have knowledge of someone committing a crime and you do nothing, isn’t that called aiding and abetting?
With the publication of the Yates memo, I expect to see CMS holding MCOs and other state agencies accountable for the actions of its providers. Not to say that the MCOs should actively, independently investigate Medicare/caid fraud, but to notify the Human Services Department (HSD) if abnormalities exist, especially if as blatant as one doctor with 387 patients suffering from ankylosing spondylitis.
When you are accused of a $12 million dollar overpayment by Medicare, obviously, you appeal it.But do you expect that appeal to take ten years or longer? Are such long, wait periods allowed by law? That is what Cumberland Community Hospital System, Inc. (Cape Fear) discovered in a 4th Circuit Court of Appeals Decision, on March 7, 2016, denying a Writ of Mandamus from the Court and refusing to order the Secretary of Health and Human Services (HHS) Burwell to immediately adjudicate Cape Fear’s Medicare appeals to be heard within the Congressional requirement that appeals be heard and decided by Administrative Law Judges (ALJs) within 90 days.
According to the Center for Medicare and Medicaid Services‘ (CMS) website, an “ALJ will generally issue a decision within 90 days of receipt of the hearing request. Again, according to CMS’ website, this time frame may be extended for a variety of reasons including, but not limited to:
- The case being escalated from the reconsideration level
- The submission of additional evidence not included with the hearing request
- The request for an in-person hearing
- The appellant’s failure to send a notice of the hearing request to other parties
- The initiation of discovery if CMS is a party.”
In Cape Fear’s case, the Secretary admitted that the Medicare appeal backlog equates to more than 800,000 claims and would, likely, take over 10 years to adjudicate all the claims. Even the 4th Circuit Court, which, ultimately, dismissed Cape Fear’s complaint, agrees with Cape Fear and calls the Medicare appeal backlog “incontrovertibly grotesque.”
Generally, the rule is that if the ALJ does not render a decision after 180 days of the filing of the case, then the provider has the right to escalate the case to the Medicare Appeals Council, which is the 4th step of a Medicare appeal. See blog for more details on the appeal process.
What about after 3,650 days? Get a big pie in the face?
The United States Code is even less vague than CMS’ website. Without question 42 U.S.C. states that for a:
“(1)Hearing by administrative law judge; (A)In general
Except as provided in subparagraph (B), an administrative law judge shall conduct and conclude a hearing on a decision of a qualified independent contractor under subsection (c) of this section and render a decision on such hearing by not later than the end of the 90-day period beginning on the date a request for hearing has been timely filed.”
(emphasis added). And, BTW, subsection (B) is irrelevant here. It contemplates when a party moves for or stipulates to an extension past the 90-day period.
So why did Cape Fear lose? How could the hospital lose when federal administrative code specifically spells out mandatory 90-day limit for a decision by an ALJ? Ever heard of a statute with no teeth? [i.e., HIPAA].
No one will be surprised to read that I have my opinions. First, a writ of mandamus was not the legal weapon to wield. It is an antiquated legal theory that rarely makes itself useful in modern law. I remember the one and only time I filed a writ of mandamus in state court in an attempt to hold a State Agency liable for willfully violating a Court’s Order. I appeared before the judge, who asked me, “Do you know how long I have been on this bench?” To which I responded, “Yes, Your Honor, you have been on the bench for X number of years.” He said, “Do you know how many times I have granted a writ of mandamus?” I said, “No, Your Honor.” “Zero,” he said, “Zero.” The point is that writs of mandamus are rare. A party must prove to the court that he/she has a clear and indisputable right to what is being asked of the court.
Secondly, in my mind, Cape Fear made a disastrous mistake in arguing that it has a clear right for its Medicare appeals to be adjudicated immediately. Think about it…there are 800,000+ Medicare appeals pending before the ALJs. What judge would ever order the administrative court to immediately drop all other 799,250 pended claims (Cape Fear had 750 claims pending) and to adjudicate only Cape Fear’s claims? It is the classic slippery slope…if you do this for Cape Fear, then you need to order the same for the rest of the pended claims.
In this instance, it appears that Cape Fear requested too drastic a measure for a federal judge to order. The claims were doomed from the beginning.
However, I cannot fault Cape Fear for trying since the code is crystal clear in requiring a 90-day turnaround time. The question becomes…what is the proper remedy for a gross disregard, even if unwillful, of the 90-day turnaround period?
This would have taken thinking outside the box.
Medicare providers have some rights. I discuss those rights frequently on this blog. But the population that the courts inevitably want to insulate from “David and Goliath situations” are the recipients. Unlike the perceived, “big, strong, and well-attorneyed” hospital, recipients often find themselves lacking legal representation to defend their statutorily-given right to choose their provider and exercise their right to access to care.
Had Cape Fear approached the same problem from a different perspective and argued violations of law on behalf of the beneficiaries of Cape Fear’s quality health care services, a different result may have occurred.
Another way Cape Fear could have approached the same problem, could have been a request for the Court to Cape Fear’s funds owed for service rendered to be released pending the litigation.
As always, there is more than one way to skin a cat. I humbly suggest that when you have such an important case to bring…BRING IT ALL!!
I have always believed in the concept to think first, act second. I rarely react; I try to act. In politics, generally, this mantra is not followed. If a public poll states that the public is in favor of X, then the leaders need to consider X. If it is an election year, then the politicians will do X.
I’m reminded of an awful book I read a couple of years ago. I can’t remember the name of it, but it began with a young teen-age couple at a lake. The boyfriend dives off of a dock into the lake and dies because his head hit a rock underneath the water. (I do not suggest reading the book). But I remember thinking… “How tragic,” then… “Why in the world would this guy dive head-first into a lake without knowing the depth or pitfalls? This was a preventable death.”
This is a perfect example of why we should think first, act second.
However, in politics, the polarization of the two parties, Republican and Democrat, sometimes causes politicians to RE-act according to the party lines. Nowhere is this polarization more prevalent than the concept of Medicaid expansion. See my blog: “To Expand, Or Not To Expand, A Nationwide Draw?” It seems that if a state has a Republican governor, without question, that state will refuse to expand (I know there are few exceptions, but there are few). If a state elected a Democratic governor, then the state has elected to expand Medicaid.
Are these issues so black and white? Or have we become so politically polarized that true intellect and research no longer matters? Doesn’t that actual state of the state matter in deciding to expand?
For example, according to a 50-state survey by USA Today, North Dakota is the best run state. North Dakota has zero budget deficit, and an unemployment rate of 3.1%, the lowest of all 50 states. North Dakota has opted to expand Medicaid.
On the other hand, according to the same study, North Carolina has an unemployment rate of 9.5%, which is the 4th highest in the nation. What does high unemployment mean? A large number of Medicaid recipients.
North Dakota has approximately 82,762 Medicaid recipients, according to the Kaiser Foundation for FYE 2010. Conversely, North Carolina, for the same year, had 1,813,298 Medicaid recipients.
So my question is: Can, or should, a state with 1.8 million Medicaid recipients adopt the same Medicaid eligibility rules as a state with 82,000 Medicaid recipients?
And how can we know the consequences of expansion prior to deciding to expand? Because, after all, shouldn’t we think first, act second? Who wants to dive into an unknown lake?
But issues that apparently no one had contemplated are cropping up…
States across America are seeing unexpected Medicaid costs increase. According to the Associated Press, prior to Medicaid expansion there were millions of Americans who were eligible for Medicaid but who, for whatever reason, had never signed up. Now that there has been so much publicity about health care, those former un-insured but Medicaid-eligible people are signing up in droves.
In California, State officials say about 300,000 more already-eligible Californians are expected to enroll than was estimated last fall. See article.
Rhode Island has enrolled 5000-6000 more than its officials expected. In Washington State, people who were previously eligible represent about one-third of new Medicaid enrollments, roughly 165,000 out of a total of nearly 483,000.
While the Feds are picking up the costs for Medicaid recipients now eligible because of the expansion (at least for a few years), state budgets have to cover these new Medicaid recipients signing up who had been eligible in the past.
For states blue or red, the burden of these unanticipated increased costs will be on the shoulders of the states (with federal contribution).
Going back to the extremely polarized view of Medicaid expansion (Democrats expanding and Republicans not expanding)…maybe it’s not all black and white. Maybe we should shed our elephant or donkey skins and actually research our own states. How many Medicaid recipients do we have? What does our budget cover now?
Maybe we should research the consequences before diving in the lake.