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Contract Law Versus Executive Orders: Which Wins in the Wake of a Worldwide Pandemic?
How much power does an Executive Order signed by your State’s Governor actually wield? Governors, all of whom are elected, serve as the CEOs of the 50 states, five commonwealths, and territories of the U.S.
As CEO of their particular State, Governors are responsible for ensuring that each State is adequately prepared for emergencies and disasters of all types and sizes. Most emergencies and disasters are handled at the local level, and few require a presidential disaster declaration or attract worldwide media attention. Yet here we are. A global pandemic affecting every single person on the planet.
This is not a tornado. It’s not Sept. 11 or giant killer hornets, which are also apparently a new thing. This virus has uprooted the world in a way that no one has ever witnessed.
Not everyone is following Governors’ Executive Orders. For example, multiple adult day care centers contacted me recently from New York. Governor Cuomo has issued multiple Executive Orders regarding telehealth, basically relaxing the rules and forcing higher reimbursement rates and allowing for more telehealth, when in the past, it would not have been allowed. However, private insurance companies are refusing to obey the governor’s executive orders. The private companies argue that the providers signed a binding contract that does not include telehealth. The private payors argue that contract law trumps a governor’s executive order, even though the governor has ordered it because of the pandemic. Governor Cuomo has suspended New York State Public Health Law §2999-cc, as well as numerous others.
These adult day centers have followed the governor’s executive orders and are providing telehealth to maintain elderly socialization. The mental health aspect is their main concern right now.
There is no consistency in how the private companies are complying or not complying. Some private payors have issued amendments to the providers’ contracts, allowing telehealth, but at a serious financial decrease. Where the visit would have been reimbursed at $100-200, the new contract amendments allow for reimbursement rates of $25.
Others stick to the contracts and refuse to reimburse telehealth for these adult day care centers at all.
According to one of the companies that spoke with me, the adult day care centers in New York are losing approximately $56,000 per month. Now, I know that most health care providers are losing money in this pandemic. My friend who is an ER nurse says she has never seen the ER so empty. We cannot have our hospitals close. But in the case of the adult day care centers, we can point to a legal reason that providers should be reimbursed during this pandemic. The private payors are blatantly not following the Governor’s Executive Order.
Here, in North Carolina, the reimbursement rates for health care providers are increasing, sometimes doubling, as in the case of home health due to the shortage of health care providers willing to go onto someone’s home. From about $15 to $33 per hour. Thank you to all you home health workers! It is a scary time, and you are essential.
The providers want to sue to get the reimbursements that they are owed.
This is just one example of how discombobulated COVID-19 has made everyone.
Then add in the next variable of New Yorkers re-entering society and the “stay at home” Orders being lifted. I do not think that the problem with private payors not following a Governor’s Executive Order will just vanish when the state reopens. These providers have lost their higher reimbursable rates and cannot get that money unless they sue.
If I were a betting woman, I would bet that there are hundreds of intricate ways that insurance companies have not followed their particular states’ executive orders. Think about this: even if the companies were truly trying to abide by all executive orders, those companies in multiple states may get opposing orders from different states. So then a nationwide private payor is expected to follow 50 different executive orders. I can see why it would be difficult to comply with everything.
We have to ask ourselves – does an Executive Order, in a time of crisis, trump normal laws, including basic contract law? If the answer is yes, then how do we make private payer insurance companies comply?
Programming Note:
Knicole Emanuel is a permanent panelist on Monitor Monday. Listen to her live reporting every Monday at 10-10:30 a.m. EST.
Do You Pay Your Billing Agent a Percentage of Claims? You May Be in Violation of Federal law!
The Office of Inspector General (OIG) recently disseminated hundreds of recoupment letters to providers in New York who had percentage-based contracts with billing agents. OIG is seeking recoupment for services spanning a five-year period, plus 9% interest. See example redacted letter from OIG.
42 CFR 447.10 prohibits the re-assignment of provider claims and applies only to Medicaid. It is recommended that you pay your billing agent a flat fee or on a time basis.
North Carolina Medical Society also discourages fee splitting. On the NCMS website, the Society warns that “Except in instances permitted by law (N.C. Gen. Stat. § 55B-14(c)), it is the position of the Board that a licensee cannot share revenue on a percentage basis with a non-licensee. To do so is fee splitting and is grounds for disciplinary action.”
Not all States prohibit fee splitting, and if Medicare or Medicaid is not involved, then we look to state law. But if Medicare or Medicaid is involved, then federal law matters. Some States prohibit fee splitting for doctors, chiropractors, and hospitals, while other states do not prohibit fee splitting for massage therapists. So it is important to know your State’s laws.
Lawyers also have fee-splitting prohibitions. To split fees with a nonlawyer constitutes the practice of law without a license (and probably multiple other ethical concerns).
Physicians, group practices and management services organizations should continue to carefully examine their current and proposed arrangements to ensure compliance with the fee-splitting prohibition applicable to your State. If you are unsure, consult an attorney.
OIG may have started these audits in New York, but, as New York State says “Excelsior” – ever upward – we can be sure that OIG will continue across the country.
Knicole Emanuel Speaks About CSC Fraud Investigation on ABC
I was interviewed by Heather Waliga, ABC News, last Friday about the U.S. Attorney’s lawsuit against Computer Sciences Corporation (CSC) accusing CSC of hundreds of millions of dollars of Medicaid fraud.
To watch the video, please click here.
But, beware! Do not make the video full screen unless you are prepared to see a very, large, close-up picture of my head. The camera man zoomed in to, literally, just my head.
CSC Sued in NY: Accused of Multi-Million Dollar Healthcare Fraud Scheme!!
Remember the NCTracks lawsuit? NCTracks Derailed: Class Action Lawsuit Filed!! Computer Sciences Corporation (CSC) is one of the Defendants in that action here in NC.
Well, Monday CSC was hit with another enormous lawsuit. This one is filed in New York, and the Plaintiff is the U.S. Federal Government.
The feds are accusing CSC of a multi-million dollar Medicaid fraud scheme through its Medicaid billing software CSC implemented in NY.
Here is the press release.
From the complaint: “[T]hese fraud schemes were far from isolated events; instead, they were part and parcel of a general practice at CSC and the City to blatantly disregard their obligations to comply with Medicaid billing requirements.” (Compl. par. 8.)
The feds are seeking treble damages, which permits a court to triple the amount of the actual/compensatory damages to be awarded to a prevailing plaintiff.
According to the lawsuit, CSC has received millions of taxpayer dollars (budgeted for Medicaid) unlawfully and in direct violation of federal billing requirements.
If I were a taxpayer in NY, I would be incensed!!!! If I were a Medicaid recipient of parent of a child receiving Medicaid services, I would be furious!!
Now, take a step back…who is administering our Medicaid billing system here in NC?
Answer: CSC
This will almost certainly cause the federal government to peer a bit closer at all CSC’s billing software systems in other states…
NC is #1 in USA!! (For Highest Percentage Increase in Total Medicaid Spending)…and What About the Rest of the USA?
On October 21, 2013, the magazine Modern Healthcare published an article, “Medicaid budgets By State,” which showed each state’s total Medicaid spent in 2012, total number of Medicaid enrollees in 2012, and average spending per enrollee in 2012.
Where does North Carolina rank in terms of our Medicaid budget versus other states? We hear constantly that we spend all this needless money on administrative costs of Medicaid. But, in terms of our Medicaid budget, where do we rank? And my next question…do we simply have more Medicaid recipients in NC in relation to other states? Is NC’s average spending per Medicaid enrollee grossly higher or lower than the national average?
Inquiring minds want to know!
Surprisingly, at least to me, Alaska has the highest average spending per Medicaid enrollee: $13,073, on average, per enrollee. But then I thought about, much of Alaska is rural…not only rural , but almost impossible to navigate due to the snow and ice. I don’t know for sure, but I would imagine that getting to and from Medicaid recipients or getting recipients to services (while not always reimbursed by Medicaid) must impact some of the costs.
[Important to note: The average spending per enrollee, to my knowledge, does not mean actual money spent per enrollee. I believe the authors took the total budget and divided it by the number of enrollees. So the average spent per enrollee includes built-in, administrative costs.]
Or…Maybe Alaska has a low number of Medicaid recipients and that is why Alaska spends the most per enrollee…maybe Alaska has a huge Medicaid budget without many recipients on which to spend it…few people, big pie…
I looked.
Alaska had, in 2012, 109,000 Medicaid recipients.
The fewer people you have at Thanksgiving, the bigger the pie pieces. However, interestingly enough, Alaska spent $1.425 million total in Medicaid in 2012. Delaware spent $1.421 in Medicaid in 2012. (Close enough, right?). Yet, Delaware spent $6831, on average, per enrollee. Maybe the pie analogy doesn’t work. Maybe sometimes, even with a big pie and few people, too many rats and ants nibble at the pie.
Out of 50 states, where do you think NC falls? Top 10 highest spender? Bottom 10? Right in the middle?
Drum roll……..
#9.
The only 8 states that spend more than NC per Medicaid recipient are:
1. Alaska
2. New Jersey (somehow that did not surprise me) ($11,433/recipient)
3. Rhode Island (that did surprise me…I mean, look how little RI is…how big a Medicaid budget can it have?) ($11,080/recipient)
4. North Dakota (a less populous state (less tax dollars), I believe) ($10,969/recipient)
5. Pennsylvania ($10,835/recipient)
6. Minnesota (there are big cities there (more tax dollars), no surprise) ($10,080/recipient)
7. Missouri (I went to law school in Missouri. This number surprised me a bit). ($10,022/recipient)
8. Connecticut ($9883/recipient)
9. NC ($9,430/recipient)
Crazy! What about Illinois? With the hugely populous, Windy City and it being Obama’s home state, surely, Medicaid spending per recipient is, at least, in the middle, right?
Wrong. Illinois is dead last with only $5229, on average, per recipient being spent.
Probably because too many people were invited to Thanksgiving…in 2012, Illinois had 2.626 million Medicaid recipients enrolled….or too many rats and ants.
Compare to NC in 2012 – 1.471 million Medicaid recipients.
What was Alaska’s Medicaid budget/spending in 2012 that the average spending per enrollee was $13,073?
$1.425 million spent. Up 10.3% from 2011. And 109,000 Medicaid enrollees.
Here is NC:
Spending: $13.872 million. Up 22.8% from 2011. And 1.471 million recipients.
Here is a crazy one..Nevada:
In 2012, Nevada had 301,000 Medicaid enrollees. A little under 3x Alaska. Nevada spent $1.692 million on Medicaid (only 200,000-ish over Alaska), but Nevada’s average spending per enrollee was $5,621 (less than half of Alaska and the third lowest amount spent per enrollee). Where did all Nevada’s Medicaid money go?? Rats and ants eating away the pie?
North Dakota has the very least number of Medicaid enrollees in 2012…66,000. Wyoming is a close second with only 67,000 Medicaid enrollees in 2012.
North Dakota was the 4th highest state as to spending per enrollee with an average of $10,969/enrollee.
Wyoming was the 16th highest state as to spending per enrollee with an average of $8537/enrollee.
Guess which state had the highest total spending on Medicaid in 2012?
Drum roll…..
California. (Shocker!). California spent $47.726 million on Medicaid, up 4.2% from 2011. California also had the highest number of enrollees on 2012 with 2.624 million enrollees (over a million more than NC). California also spent the 5th lowest on average per enrollee, $6,065.
Having a high number of enrollees did not always have a direct correlation with spending the least, on average, per enrollee. Oregon only had 569,000 Medicaid enrollees in 2012 and spent the 4th lowest amount, on average, per enrollee, $6,007.
New York is the closest state to spending and number of recipients to California, but New York succeeded in a much higher average spending per enrollee than California.
New York spent $39.257 million total on Medicaid (less than $8 million difference from California) in 2012. New York had 5.004 million enrollees (2.8 million Medicaid enrollees less than California) and spent, on average, $7845/enrollee (absolute, dead-on-middle as compared to all states).
Georgia is, perhaps, the most comparable to North Carolina in terms of number of Medicaid enrollees in 2012. NC = 1.471 million enrollees in 2012. GA = 1.529 enrollees in 2012.
NC spent $13.872 million, while Georgia spent $8.497 million in 2012. So, Georgia had MORE Medicaid enrollees and spent over $5 million less……
Is that good or bad? Is Georgia more efficient? Did Georgia spend less in administration costs?
Actually (albeit there may be other factors), Georgia spent significantly less, on average, on each Medicaid enrollee.
Georgia spent 2nd lowest, on average, per Medicaid enrollee. Only Illinois surpassed Georgia in lowest spending, on average, per enrollee. Georgia spent, on average, $5,229 per enrollee.
NC spent $9430, on average, per enrollee. (Which, BTW, is more than enough for my “A Modest Proposal”).
That is a huge difference!
One other number jumped out at me when I reviewed Modern Healthcare‘s article, “Medicaid Budgets By State.” Remember I told you that NC spent $13.872 million on Medicaid in 2012…and that the amount spent was a 22.8% increase from 2011?
22.8% is a high percentage to increase in only one year!
I looked at the increases/decreases of the states. North Carolina gets the award for the highest percentage growth in spending on Medicaid in the entire nation. NC was the only state whose percentage “increase of Medicaid spending” percentage from 2011 to 2012 was in the 20s.
NC is #1 in the nation for percentage increase as to total Medicaid spending!!!! (Proud?)
The next state with the highest increase in spending on Medicaid is Mississippi with a 17.4% increase in spending from 2011. Next in line is Alabama with a 14.7% increase in Medicaid spending.
Guess which states decreased its Medicaid spending the most from 2011 to 2012?
Drum roll…
Oregon (decrease of 23.2% spending) and Illinois (decrease of 15% spending). Is it coincidental that Illinois spent the absolute least, on average, per Medicaid recipient and that Oregon spent the 4th lowest, on average, per Medicaid recipient?
Regardless the size of the pie, the number of guests, and the number of rats and ants, we need to make sure that the guests (Medicaid recipients) are benefitting most from the pie.
Sometimes a decrease in spending equals a decrease in services to Medicaid recipients…sometimes not…I guess it depends on the number of rats and ants.
