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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.

NCTracks developer CSC faces health care fraud lawsuit in NY

Jason DeBruyn of the Triangle Business Journal wrote:

Jason DeBruyn

Computer Sciences Corporation, the company that designed, developed and is operating the Medicaid claims payment system in North Carolina, is facing a health care fraud lawsuit brought by the U.S. attorney’s office in New York.

That lawsuit has no immediate impact in North Carolina, though Computer Sciences Corp. (CSC) built the system in this state – called NCTracks – using 32 percent of the code used in New York City. Initially, CSC had hoped to duplicate as much as 73 percent of the New York City code in North Carolina.
NCTracks has been the target of several attacks from health care providers who say they have not been paid on time. The N.C. Department of Health and Human Services, where NCTracks is housed, faces a lawsuit that could incorporate 70,000 health care providers and end up with damages exceeding $100 million. NCTracks has been the target of at least three searing audits.

The New York lawsuit, brought by Preet Bharara, the U.S. Attorney for the Southern District of New York, alleges billing fraud schemes that used computer programs to automatically alter billing data, including the use of a defaulting program to systematically falsify diagnosis codes submitted to Medicaid.
“As alleged, CSC and the City created computer programs that systematically, and fraudulently, altered billing data in order to get paid by Medicaid as quickly as possible and as much as possible,” Bharara said through a statement. “Billing frauds like those alleged undermine the integrity of public healthcare programs like Medicaid.”

Although this lawsuit makes no mention of activity in North Carolina, Knicole Emanuel, an attorney with Williams Mullen in Raleigh who represents providers in the lawsuit against DHHS, says it “will almost certainly cause the federal government to peer a bit closer at all CSC’s billing software systems in other states (including North Carolina).”

Representatives from DHHS did not immediately comment on the New York lawsuit.

Effects of Sandy Spreads to the South: Delays in Medicaid Crossover Claims

A Medicaid crossover claim is when a Medicare recipient, who is also covered by Medicaid, visits a health care professional, and the provider submits the medical claims to Medicare. After Medicare processes the claims, the claims automatically crossover to Medicaid.  A crossover claim lifts some of the paperwork burden off the Medicare/Medicaid recipient.

Crossover claim files in NC are all sent to the Centers for Medicare and Medicaid Services‘ (CMS) Coordination of Benefits Contractor (COBC), which has a New York data center. The New York data center used by the COBC to produce and transmit crossover claim files experienced flooding due to Hurricane Sandy.  As a result of this flooding and the need for the COBC to switch over to a disaster recovery site, there have been delays in sending out crossover claim files to the NC Division of Medical Assistance (DMA) and its fiscal agent.  CMS is sending regular updates on its recovery process.

While this delay is concerning for our North Carolina Medicare/Medicaid recipients, let’s remember the disaster and devastation that many people in New York are still facing. We can take the delay. But it is nice to know the reason.