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Exhaustion of Administrative Remedies: Futile as the Caucus-Race?
Answer – Sometimes.
How many of you have received Remittance Advices from NCTracks that are impossible to understand, include denials without appeal rights, or, simply, are erroneous denials with no guidance as to the next steps? While these were most prevalent in the first couple years after NCTracks was rolled out (back in July 2013), these burdensome errors still exist.
You are allowed to re-submit a claim to NCTracks for 18 months. How many times do you have to receive the denial in order for that denial to be considered a “final decision?” And, why is it important whether a denial is considered a final decision?
- Why is it important that a denial be considered a “final decision?”
As a health care provider, your right to challenge the Department of Health and Human Services’ (via CSC or NCTracks’) denial instantly becomes ripe (or appealable) only after the denial is a final decision.
Yet, with the current NCTracks system, you can receive a denial for one claim over and over and over and over without ever receiving a “final decision.”
It reminds me of the Causus-race in Alice and Wonderland. 
“There was no ‘One, two, three, and away,’ but they began running when they liked, and left off when they liked, so that it was not easy to know when the race was over. However, when they had been running half an hour or so, and were quite dry again, the Dodo suddenly called out ‘The race is over!’ and they all crowded round it, panting, and asking, ‘But who has won?'” – Alice in Wonderland.
On behalf of all health care providers who accept Medicaid in North Carolina and suffered hardship because of NCTracks, at my former firm, I helped file the NCTracks class action lawsuit, Abrons Family Practice, et al., v. NCDHHS, et al., No. COA15-1197, which was heard before the NC Court of Appeals on June 12, 2015. The Opinion of the Court of Appeals was published today (October 18, 2016).
The Court of Appeals held that the plaintiffs were not required to “exhaust their administrative remedies” by informal methods and the Office of Administrative Hearings (OAH) prior to bringing a lawsuit in the State Court for damages because doing to would be futile – like the Caucus-race. “But who has won?” asked Alice.
Plaintiffs argued that, without a “final decision” by DHHS as to the submitted claims, it is impossible for them to pursue the denials before the OAH.
And the Court of Appeals, in a 2-1 decision, agrees.
The Abrons decision solidifies my contention over the past 4-5 years that a reconsideration review is NOT required by law prior to filing a Petition for Contested Case at OAH…. Boom! Bye, Felicia!
Years ago, I informed a client, who was terminated by an managed care organization (MCO), that she should file Petition for Contested Case at OAH without going through the informal reconsideration review. One – the informal reconsideration review was before the very agency that terminated her (futile); and two – going through two processes instead of one costs more in attorneys’ fees (burdensome).
We filed in OAH, and the judge dismissed the case, stating that we failed to exhaust our administrative remedies.
I have disagreed with that ruling for years (Psssst – judges do not always get it right, although we truly hope they do. But, in judges’ defenses, the law is an ever-changing, morphing creature that bends and yields to the community pressures and legal interpretations. Remember, judges are human, and to be human is to err).
However, years later, the Court of Appeals agreed with me, relying on the same argument I made years ago before OAH.
N.C. Gen. Stat. 150B-22 states that it is the policy of the State that disputes between the State and a party should be resolved through informal means. However, neither 150B-22 nor any other statute or regulation requires that a provider pursue the informal remedy of a reconsideration review. See my blog from 2013.
I love it when I am right. – And, according to my husband, it is a rarity.
Here is another gem from the Abrons opinion:
“DHHS is the only entity that has the authority to render a final decision on a contested medicaid claim. It is DHHS’ responsibility to make the final decision and to furnish the provider with written notification of the decision and of the provider’s appeal rights, as required by N.C. Gen. Stat. 150B-23(f).”
N.C. Gen. Stat. 150B-23(f) states, ” Unless another statute or a federal statute or regulation sets a time limitation for the filing of a petition in contested cases against a specified agency, the general limitation for the filing of a petition in a contested case is 60 days. The time limitation, whether established by another statute, federal statute, or federal regulation, or this section, shall commence when notice is given of the agency decision to all persons aggrieved who are known to the agency by personal delivery or by the placing of the notice in an official depository of the United States Postal Service wrapped in a wrapper addressed to the person at the latest address given by the person to the agency. The notice shall be in writing, and shall set forth the agency action, and shall inform the persons of the right, the procedure, and the time limit to file a contested case petition. When no informal settlement request has been received by the agency prior to issuance of the notice, any subsequent informal settlement request shall not suspend the time limitation for the filing of a petition for a contested case hearing.”
2. How many times do you have to receive the denial in order for that denial to be considered a “final decision”?
There is no magic number. But the Court of Appeals in Abrons makes it clear that the “final decision” must be rendered by DHHS, not a contracted party.
So which we ask – What about terminations by MCOs? Do MCOs have the authority to terminate providers and render final decisions regarding Medicaid providers?
I would argue – no.
Our 1915b/c Waiver waives certain federal laws, not state laws. Our 1915 b/c Waiver does not waive N.C. Gen. Stat. 150B.
“But who has won?” asked Alice.
“At last the Dodo said, ‘everybody has won, and all must have prizes.'” – Only in Wonderland!
Sometimes, you just need to stop running and dry off.
NCTracks, MPW, and Eligibility: The Three Billy Goats Gruff
The story of The Three Billy Goats Gruff tells a tale of 3 billy goats, one puny, one small, and one HUGE. The first two billy goats (the puny and small) independently try to cross the bridge to a green pasture. They are blocked by a mean troll, who wants to eat the billy goats. Both billy goats tell the troll that a bigger billy-goat is coming that would satisfy the troll’s hunger more than the puny and small goats. The troll waits for the HUGE billy-goat, which easily attacks the troll to his death.
The moral: “Don’t be greedy.”
My moral: “You don’t always have to be HUGE, the puny and small are equally as smart.” – (They didn’t even have to fight).
The majority of Medicaid cards do not have expiration dates. Though we have expiration dates on many of our other cards. For example, my drivers’ license expires January 7, 2018. My VISA expires April 18, 2018.
Most Medicaid cards are annually renewed, as well. Someone who is eligible for Medicaid one year may not be eligible the next.
Our Medicaid cards, generally, have an issuance date, but not an expiration date. The thought is that requiring people to “re-enroll” yearly is sufficient for eligibility status.
Similar to my CostCo card. My Costco card expires annually, and I have to renew it every 12 months. But my CostCo card is not given to me based on my personal circumstances. I pay for the card every year, which means that I can use the card all year, regardless whether I move, get promoted, or decide that I never want to shop at CostCo again.
Medicaid cards, on the other hand, are based on a person’s or family’s personal circumstances.
A lot can happen in a year causing someone to no longer be eligible for Medicaid.
For example, a Medicaid recipient, Susan, could qualify for Medicaid on January 1, 2015, because Susan is a jobless and a single mother going through a divorce. She has a NC Medicaid card issued on January 1, 2015. She presents herself to your office on March 1, 2015. Unbeknownst to you, she obtained a job at a law office in February (Susan is a licensed attorney, but she was staying home with the kids when she was married. Now that she is divorced, she quickly obtained employment for $70,000/year, but does not contact Medicaid. Her firm offers health insurance, but only after she is employed over 60 days. Thus, Susan presents herself to you with her Medicaid card).
If Susan presents to your office on March 1, 2015, with a Medicaid card issued January 1, 2015, how many of you would double-check the patients eligibility in the NCTracks portal?
How many would rely on the existence of the Medicaid card as proof of eligibility?
How many of you would check eligibility in the NCTRacks portal and print screen shot showing eligibility for proof in the future.
The next question is who is liable for Susan receiving Medicaid services in March when she was no longer eligible for Medicaid, but held a Medicaid card and, according to the NCTracks portal, was Medicaid eligible??
- Susan?
- You, the provider?
- DHHS?
- NCTracks?
Do you really have to be the HUGE billy goat to avoid troll-ish recoupments?
Susan’s example is similar to dental services for pregnant women on Medicaid for Pregnant Women (MPW). MPW expires when the woman gives birth. However, the dentists do not report the birth of the child, the ob/gyn does. Dentists have no knowledge of whether a woman has or has not given birth. See blog.
MPW expires upon the birth of the child, and that due date is not printed on the MPW card.
I daresay that the dentists with whom I have spoken have assured me that every time a pregnant woman presents at the dental or orthodontic offices that an employee ensures that the consumer is eligible for dental services under MPW by checking the NCTracks portal. (Small billy-goat). Some dentists go so far to print out the screenshot on the NCTracks portal demonstrating MPW eligibility (HUGE billy-goat), but such overkill is not required by the DMA Clinical Coverage Policies.
If the clinical policies, rules, and regulations do not require such HUGE billy-goat nonsense, how can providers be held up to the HUGE billy-goat standard? Even the puny billy-goat is, arguably, reasonably compliant with rules, regulations, and policies.
NCTracks is not current; it is not “live time.” Apparently, even if the woman has delivered her baby, the NCTracks portal may still show that the woman is eligible for MPW. Maybe even for months…
Is the eligibility fallacy that is confirmed by NCTracks, the dentists’ fault?
Well, over three (3) years from its go-live date, July 1, 2013, NCTracks may have finally fixed this error.
In the October 2015 Medicaid Bulletin, DHHS published the following:
Attention: Dental Providers
New NCTracks Edits to Limit Dental and Orthodontic Services for Medicaid for Pregnant Women (MPW) Beneficiaries
On Aug. 2, 2015, NCTracks began to deny/recoup payment of dental and orthodontic services for beneficiaries covered under the Medicaid for Pregnant Women (MPW) program if the date of service is after the baby was delivered. This is a longstanding N.C. Medicaid policy that was previously monitored through post-payment review.
According to N.C. Division of Medical Assistance (DMA) clinical coverage policy 4A, Dental Services:
For pregnant Medicaid-eligible beneficiaries covered under the Medicaid for Pregnant Women program class ‘MPW,’ dental services as described in this policy are covered through the day of delivery.
Therefore, claims for dental services rendered after the date of delivery for beneficiaries under MPW eligibility are outside the policy limitation and are subject to denial/recoupment.
According to DMA clinical coverage policy 4B,Orthodontic Services:
Pregnant Medicaid-eligible beneficiaries covered under the Medicaid for Pregnant Women program class ‘MPW’ are not eligible for orthodontic services as described in this policy.
Therefore, claims for orthodontic records (D0150, D0330, D0340, and D0470) or orthodontic banding (D8070 or D8080) rendered for beneficiaries under MPW eligibility are outside of policy limitation and are subject to denial/recoupment.
Periodic orthodontic treatment visits (D8670) and orthodontic retention (D8680) will continue to be reimbursed regardless of the beneficiary’s eligibility status at the time of the visit so long as the beneficiary was eligible on the date of banding.
Seriously? “Now I’m coming to gobble you up!!”
August 2, 2015, is over two years after NCTracks went live.
In essence, what DHHS is saying is that NCTracks was inept at catching whether a female Medicaid recipient gave birth. Either the computer system did not have a way for the ob/gyn to inform NCTracks that the baby was delivered, the ob/gyn did not timely submit such information, or NCTracks simply kept women as being eligible for MPW until, months later, someone caught the mistake. And, because of NCTracks’ folly, the dentists must pay.
How about, if the portal for NCTracks state that someone is eligible for MPW, then providers can actually believe that the portal is correct??? How about a little accountability, DHHS???
If you take MPW and want to avoid potential recoupments, you may need some pregnancy tests in your bathrooms.
DHHS is expecting all dentists to be the HUGE bill goat. Are these unreasonable expectations? I see no law, rules, regulations, or policies that require dentists to be the HUGE billy goat. In fact, the small and puny may also be compliant.
“You don’t always have to be HUGE, the puny and small are equally as smart.”
NCTracks: There’s a Hole in My Bucket !!
My mom taught me a song when I was young called, “A Hole in the Bucket.” It is a maddening song about a lazy husband named Henry who begins the song telling his wife Liza that “There’s a hole in the bucket, dear Liza, dear Liza….” To which Liza sings, “Then fix it, dear Henry, dear Henry…”
The song continues with Henry singing excuses and impediments to his ability to fix the hole in the bucket and Liza explaining to Henry how to overcome these excuses. The song goes around and around until, in order to fix the bucket, Henry would have to sharpen an ax on a stone that “is too dry,” and the only way to wet the stone is with the bucket that has a hole. “There’s a hole in the bucket…” And the songs starts anew and can be sung continuously, never-ending.
My husband and daughter audibly groan when I begin such song.
And you can’t blame them! It is discouraging and frustrating when something is caught in a never-ending circle with no end and no conclusion. It is human nature to try to resolve issues; it is also ingrained in Americans’ minds that hard work yields results. When hard work yields nothing but a big, fat goose-egg, it is exacerbating.
Kind of like claims in NCTracks…
When NCTracks went live on July 1, 2013, providers immediately began to complain the claims were being erroneously denied and they were receiving no reimbursements. Folks with whom I spoke with were at their wits-ends, spending hours upon hours trying to discern why claims were being denied and what process they could undertake to fix “the hole in the bucket.”
The problem persisted so long and I was contacted by so many providers that I instigated the NCTracks class action lawsuit, which is still pending on appeal, to the best of my knowledge, at my former firm. Although it was dismissed at the Business Court level, I believe it is on appeal. See blog.
Providers complained that, when they contacted CSC’s Help Desk regarding denied claims, the customer service representatives would have little to no understanding of the claims process and instruct them to re-file the denied claims, which created a perpetual cycle of unadjudicated claims.
“It was infuriating!” One provider explained. “It was as if we were caught in the spin cycle with no hope of stopping. I wanted to yell, ‘I’m dry all ready!!'”
“I was spending 20+ a week on NCTracks billing problems,” another said.
To which, I said, “There’s a hole in the bucket, dear Liza, dear Liza.”
Over two years after the “go live” date, the Department has now (finally) informed providers that there is an informal reconsideration review process for denials from CSC.
The September 2015 Medicaid Bulletin states that:
“This article provides a detailed explanation of the N.C. Division of Medical Assistance (DMA) procedures for Informal Reconsideration Review of adverse claim actions (denials, disallowances and adjustments) made by its fiscal agent, CSC.”
The Bulletin provides a 30 day time period during which a provider can appeal a denied claim:
“Time Limit for Submission of Request
- A provider may request a reconsideration review within 30 calendar days from receipt of final notification of payment, payment denial, disallowances, payment adjustment, notice of program reimbursement and adjustments. If no request is received within the respective 30 calendar day period, DMA’s action will become final.”
(emphasis in original).
You must request reconsideration review within 30 calendar days of the final notification. BUT what exactly is “final notification?” The initial denial? The second denial after re-submitting? The third? Or, what if, your claim is pending…for months…is that a denial? When CSC tells you to re-submit, does the time frame in which to file a reconsideration review start over? Or do you have to appeal every single denial for every single claim, even if the claim is re-submitted and re-denied 10 times?
This new informal appeal process is as clear as mud.
Notice the penalty for NOT appealing within 30 days…”DMA’s action will become final.”
This means that, if you fail to appeal a denial within 30 days, then the claim is denied and you cannot request a reconsideration review. Theoretically, there is a legal argument that, once the “final decision” is rendered, even if it were rendered due to you failing to request a reconsideration review, you would have 60 days to appeal such final decision to the Office of Administrative Hearings (OAH). Although, acting as the Devil’s advocate, there is an argument that your failure to request a reconsideration review and taking the appeal straight to OAH is “failing to exhaust your administrative remedies.” See blog. Which could result in your appeal being dismissed for lack of jurisdiction. This goes to show you the importance of having your attorney involved at the earliest juncture, otherwise you could risk losing appeal rights.
Let’s think about the “time limit for submission of request” in a real-life hypothetical.
You keep receiving denials for dialysis claims for no apparent reason. You received 20 denials on September 4, 2015. You contact a CSC customer service representative on September 8, 2015, four days later, due to Labor Day weekend. The customer service representative instructs you to re-file the claims because you must include the initial date of treatment in order to have the claims processed and paid (which was not required with HP Enterprises’ system). Is this the “final notification?” It does not seem so, since you are allowed to re-submit…
You revise all 20 claims to include the first treatment date on the claim and re-submit them on September 9, 2015. Since you re-submitted prior to the September 10th cutoff, you expect payment by September 16, 2015, 12 days after the initial denial.
You receive your explanation of benefits (EOBs) and 5 claims were adjudicated and paid, while 15 were denied again.
You contact CSC customer service and the representative instructs you to re-submit the 15 claims. The rep does not know why the claims were denied, but she/he suggests that you review the claims and re-submit. After hours of investigative work, you believe that the claims were denied because the NPI number was wrong…or the incorrect address was processed…or…
You miss the September 17th cut-off because you were trying to figure out why these claims were denied. you submit them for payment for the September 29th checkwrite date (25 days after the initial denial).
At this point, if any claims are denied, you wouldn’t know until October 6th, 32 days after the initial denial.
In my scenario, when is the final adjudication?
If the answer is that the final adjudication is at the point that the provider tries all possible revisions to the claims and continues to re-submit the claims until he/she cannot come up with another way to re-submit, then there is never final adjudication. As in, the provider could continue various changes to the billing ad nauseam and re-submit…and re-submit…and re-submit…”There’s a hole in the bucket!”
If the answer is that the final adjudication is the initial denial, then, in my scenario, the provider would be required to appeal every single denial, even for the same claim and every time it is denied.
You can imagine the burden to the provider if my second scenario is correct. You may as well hire a full-time person whose only task is to appeal denied claims.
Regardless, this new “Informal Reconsideration Review” purports to create many more questions than answers.
So may rules are enacted with good intentions, but without the “real life” analysis. How will this actually affect providers?
“There’s a hole in the bucket, dear Liza, dear Liza.”
“Then fix it.”
