In RAC news, on June 1, 2021, Cotiviti acquired HMS RAC region 4. Don’t be surprised if you see Cotiviti’s logo on RAC audits where you would have seen HMS. This change will have no impact in the day-to-day contract administration and audit timelines under CMS’ guidance. You will continue to follow the guidance in the alleged, improper payment notification letter for submission of medical documentation and discussion period request. In March 2021, CMS awarded Performant an 8.5 year contract to serve as the Region 1 RAC.
There really cannot be any deviations regardless the name of the RAC Auditor because this area is so regulated. Providers always have appeal rights regardless Medicare/caid RAC audits. Or any other type of audit. Medicaid RAC provider appeals are found in 42 CFR 455.512. Whereas Medicare provider redeterminations and the 5 levels of appeal are found in 42 CFR Subpart I. The reason that RAC audits are spoken about so often is that the Code of Federal Regulations applies different rules for RAC audits versus MAC, TPE, UPIC, or other audits. The biggest difference is that RAC auditors are limited to a 3 year look back period according to 42 CFR 455.508. Other auditors do not have that same limitation and can look back for longer periods of time. Of course, whenever “credible allegations of fraud” is involved, the lookback period can be for 10 years.
The federal regulations also allow States to request exceptions from the Medicaid RAC program. CMS mandates every State to participate in the RAC program. But there is a federal reg §455.516 that allows exceptions. To my knowledge, no State has requested exceptions out of the RAC Audit program.
RAC auditors have announced a renewed focus on the two-midnight rule for hospitals. Again. This may seem like a rerun and it is. You recall around 2012, RACs began noticing high rates of error with respect to patient status in certain short-stay Medicare claims submitted for inpatient hospital services. CMS and the RACs indicated the inpatient care setting was medically unnecessary, and the claims should have been billed as outpatient instead. Remember, for stays under 2 midnights, inpatient status may be used in rare and unusual exceptions and may be payable under Medicare Part A on a case-by-case basis.
Since COVID-19, courts across the country have been closed. Judges have been relaxing at home.
As an attorney, I have not been able to relax. No sunbathing for me. Work has increased since COVID-19 (me being a healthcare attorney). I never thought of myself as an essential worker. I still don’t think that I am essential.
On Friday, May 8, my legal team had to appear in court.
“How in the world are we going to do this?” I thought.
My law partner lives in Philadelphia. Our client lives in Charlotte, N.C. I live on a horse farm in Apex, N.C. Who knows where the judge lives, or opposing counsel or their witnesses? How were we going to question a witness? Or exchange documents?
Despite COVID-19, we had to have court, so I needed to buck up, stop whining, and figure it out. “Pull up your bootstraps, girl,” I thought.
First, we practiced on Microsoft Teams. Multiple times. It is not a user-friendly interface. This Microsoft Team app was the judge’s choice, not mine. I had never heard of it. It turns out that it does have some cool features. For example, my paralegal had 100-percent control of the documents. If we needed a document up on the screen, then he made it pop up, at my direction. If I wanted “control” of the document, I simply placed my mouse cursor over it. But then my paralegal did not have control. In other words, two people cannot fight over a document on this new “TV Court.”
The judge forgot to swear in the witnesses. That was the first mess-up “on the record.” I didn’t want to call her out in front of people, so I went with it. She remembered later and did swear everyone in. These are new times.
Then we had to discuss HIPAA, because this was a health care provider asking for immediate relief because of COVID-19. We were sharing personal health information (PHI) over all of our computers and in space. We asked the judge to seal the record before we even got started. All of a sudden, our court case made us all “essentials.” Besides my client, the healthcare provider, no one else involved in this court case was an “essential.” We were all on the computer trying to get this provider back to work during COVID-19. That is what made us essentials!
Interestingly, we had 10 people participating on the Microsoft Team “TV Court” case. The person that I kept forgetting was there was Mr. Carr (because Mr. Carr works at the courthouse and I have never seen him). Also, another woman stepped in for a while, so even though the “name” of the masked attendee was Mr. Carr, for a while Patricia was in charge. A.K.A. Mr. Carr.
You cannot see all 10 people on the Team app. We discovered that whomever spoke, their face would pop up on the screen. I could only see three people at a time on the screen. Automatically, the app chose the three people to be visible based on who had spoken most recently. We were able to hold this hearing because of the mysterious Mr. Carr.
The witnesses stayed on the application the whole time. In real life, witnesses listen to others’ testimony all the time, but with this, you had to remember that everyone could hear everything. You can elect to not video-record yourself and mute yourself. When I asked my client to step away and have a private conversation, my paralegal, my partner, and the client would log off the link and log back on an 8 a.m. link that we used to practice earlier that day. That was our private chat room.
The judge wore no robe. She looked like she was sitting on the back porch of her house. Birds were whistling in the background. It was a pretty day, and there was a bright blue sky…wherever she was. No one wore suits except for me. I wore a nice suit. I wore no shoes, but a nice suit. Everyone one else wore jeans and a shirt.
I didn’t have to drive to the courthouse and find parking. I didn’t even have to wear high heels and walk around in them all day. I didn’t have to tell my paralegal to carry all 1,500 pages of exhibits to the courthouse, or bring him Advil for when he complains that his job is making his back ache.
Whenever I wanted to get a refill of sweet tea or go to the bathroom, I did so quietly. I turned off my video and muted myself and carried my laptop to the bathroom. Although, now, I completely understand why the Supreme Court had its “Supreme Flush.”
All in all, it went as smoothly as one could hope in such an awkward platform.
Oh, and happily, we won the injunction, and now a home healthcare provider can go back to work during COVID-19. All of her aides have PPE. All of her aides want to go to work to earn money. They are willing to take the risk. My client should get back-paid for all her services rendered prior to the injunction. She hadn’t been getting paid for months. However, this provider is still on prepayment review due to N.C. Gen. Stat. 108C-7(e), which legislators should really review. This statute does not work. Especially in the time of COVID. See blog.
I may be among the first civil attorneys to go to court in the time of COVID-19. If I’m honest, I kind of liked it better. I can go to the bathroom whenever I need to, as long as I turn off my audio. Interestingly, Monday, Texas began holding its first jury trial – virtually. I cannot wait to see that cluster! It is streaming live.
Being on RACMonitor for so long definitely helped me prepare for my first remote lawsuit. My next lawsuit will be in New York City, where adult day care centers are not getting properly reimbursed.
RACMonitor Programming Note:
Healthcare attorney Knicole Emanuel is a permanent panelist on Monitor Monday and you can hear her reporting every Monday, 10-10:30 a.m. EST.
I posted/wrote the below blog in 2017. I re-read my February 10, 2017, blog, which was entitled “NC DHHS’ New Secretary – Yay or Nay?” with the new perspective of COVID-19 being such a hot potato topic and sparking so much controversy. Interestingly, at least to me, I still stand by what I wrote. You have to remember that viruses are not political. Viruses spread despite your bank account, age, or location. Sure, variables matter. For example, I am statistically safer from COVID because I live on a small, horse farm in North Carolina rather than an apartment in Manhattan.
The facts are the facts. Viruses and facts are not political.
I was surprised that more people did not react to my February 10, 2017, blog, which is re-posted below – exactly as it was first posted. For some reason (COVID-19), people are re-reading it.
Our newly appointed DHHS Secretary comes with a fancy and distinguished curriculum vitae. Dr. Mandy Cohen, DHHS’ newly appointed Secretary by Gov. Roy Cooper, is trained as an internal medicine physician. She is 38 (younger than I am) and has no known ties to North Carolina. She grew up in New York; her mother was a nurse practitioner. She is also a sharp contrast from our former, appointed, DHHS Secretary Aldona Wos. See blog.
Prior to the appointment as our DHHS Secretary, Dr. Cohen was the Chief Operating Officer (COO) and Chief of Staff at the Centers for Medicare and Medicaid Services (CMS). Prior to acting as the COO of CMS, she was Principal Deputy Director of the Center for Consumer Information and Insurance Oversight (CCIIO) at CMS where she oversaw the Health Insurance Marketplace and private insurance market regulation. Prior to her work at CCIIO, she served as a Senior Advisor to the Administrator coordinating Affordable Care Act implementation activities.
Did she ever practice medicine?
Prior to acting as Senior Advisor to the Administrator, Dr. Cohen was the Director of Stakeholder Engagement for the CMS Innovation Center, where she investigated new payment and care delivery models.
Dr. Cohen received her Bachelor’s degree in policy analysis and management from Cornell University, 2000. She obtained her Master’s degree in health administration from Harvard University School of Public Health, 2004, and her Medical degree from Yale University School of Medicine, 2005.
She started as a resident physician at Massachusetts General Hospital from 2005 through 2008, then was deputy director for comprehensive women’s health services at the Department of Veterans Affairs from July 2008 through July 2009. From 2009 through 2011, she was executive director of the Doctors for America, a group that promoted the idea that any federal health reform proposal ought to include a government-run “public option” health insurance program for the uninsured.
Again, I was perplexed. Did she ever practice medicine? Does she even have a current medical license?
This is what I found:
It appears that Dr. Cohen was issued a medical license in 2007, but allowed it to expire in 2012 – most likely, because she was no longer providing medical services and was climbing the regulatory and political ladder.
From what I could find, Dr. Cohen practiced medicine (with a fully-certified license) from June 20, 2007, through July 2009 (assuming that she practiced medicine while acting as the deputy director for comprehensive women’s health services at the Department of Veterans Affairs).
Let me be crystal clear: It is not my contention that Dr. Cohen is not qualified to act as our Secretary to DHHS because she seemingly only practiced medicine (fully-licensed) for two years. Her political and policy experience is impressive. I am only saying that, to the extent that Dr. Cohen is being touted as a perfect fit for our new Secretary because of her medical experience, let’s not make much ado of her practicing medicine for two years.
That said, regardless Dr. Cohen’s practical medical experience, anyone who has been the COO of CMS must have intricate knowledge of Medicare and Medicaid and the essential understanding of the relationship between NC DHHS and the federal government. In this regard, Cooper hit a homerun with this appointment.
Herein lies the conundrum with Dr. Cohen’s appointment as DHHS Secretary:
Is there a conflict of interest?
During Cooper’s first week in office, our new Governor sought permission, unilaterally, from the federal government to expand Medicaid as outlined in the Affordable Care Act. This was on January 6, 2017.
To which agency does Gov. Cooper’s request to expand Medicaid go? Answer: CMS. Who was the COO of CMS on January 6, 2017? Answer: Cohen. When did Cohen resign from CMS? January 12, 2017.
On January 14, 2017, a federal judge stayed any action to expand Medicaid pending a determination of Cooper’s legal authority to do so. But Gov. Cooper had already announced his appointment of Dr. Cohen as Secretary of DHHS, who is and has been a strong proponent of the ACA. You can read one of Dr. Cohen’s statements on the ACA here.
In fact, regardless your political stance on Medicaid expansion, Gov. Cooper’s unilateral request to expand Medicaid without the General Assembly is a violation of NC S.L. 2013-5, which states:
SECTION 3. The State will not expand the State’s Medicaid eligibility under the Medicaid expansion provided in the Affordable Care Act, P.L. 111-148, as amended, for which the enforcement was ruled unconstitutional by the U.S. Supreme Court in National Federation of Independent Business, et al. v. Sebelius, Secretary of Health and Human Services, et al., 132 S. Ct. 2566 (2012). No department, agency, or institution of this State shall attempt to expand the Medicaid eligibility standards provided in S.L. 2011-145, as amended, or elsewhere in State law, unless directed to do so by the General Assembly.
Obviously, if Gov. Cooper’s tactic were to somehow circumvent S.L. 2013-5 and reach CMS before January 20, 2017, when the Trump administration took over, the federal judge blockaded that from happening with its stay on January 14, 2017.
But is it a bit sticky that Gov. Cooper appointed the COO of CMS, while she was still COO of CMS, to act as our Secretary of DHHS, and requested CMS for Medicaid expansion (in violation of NC law) while Cohen was acting COO?
You tell me.
I did find an uplifting quotation from Dr. Cohen from a 2009 interview with a National Journal reporter:
“There’s a lot of uncompensated work going on, so there has to be a component that goes beyond just fee-for service… But you don’t want a situation where doctors have to be the one to take on all the risk of taking care of a patient. Asking someone to take on financial risk in a small practice is very concerning.” -Dr. Mandy Cohen
Effective March 10, 2020, the Division of Health Benefits (DHB) implemented a 5% rate increase for the Medicaid provider groups listed below. See DHHS Update. (This update was published April 3, 2020, but retroactively effective).
DHB will systematically reprocess claims submitted with dates of service beginning March 10, 2020, through the implementation date of the rate increase.
Claims reprocessing for Skilled Nursing Facility providers will be reflected in the April 7, 2020, checkwrite. All other provider groups claim reprocessing will be included in subsequent checkwrites beginning April 14, 2020.
Providers receiving a 5% increase in fee-for-service reimbursement rates:
- Skilled Nursing Facilities
- Hospice Facilities
- Local Health Departments
- Private Duty Nursing
- Home Health
- Fee for Service Personal Care Services
- Physical, Occupational, Respiratory, Speech and Audiology Therapies
- Community Alternatives for Children (CAP/C) Personal Care Services (PCS)
- Community Alternatives for Disabled Adults (CAP/DA) Personal Care Services (PCS)
- Children’s Developmental Service Agency (CDSA)
[Notice that none of the increased rates include Medicaid services managed by managed care organizations (“MCOs”). No mental health, substance abuse, or developmentally disabled services’ rates are included].
Reprocessed claims will be displayed in a separate section of the paper Remittance Advice (RA) with the unique Explanation of Benefits (EOB) codes 10316 and 10317 – CLAIMS REPROCESSED AS A RESULT OF 5% RATE INCREASE EFFECTIVE MARCH 10, 2020 ASSOCIATED WITH THE COVID-19 PANDEMIC. The 835 electronic transactions will include the reprocessed claims along with other claims submitted for the checkwrite (there is no separate 835). Please note that depending on the number of affected claims you have in the identified checkwrite, you could see an increase in the size of the RA.
Reprocessing does not guarantee payment of the claims. Affected claims will be reprocessed. While some edits may be bypassed as part of the claim reprocessing, changes made to the system since the claims were originally adjudicated may apply to the reprocessed claims. Therefore, the reprocessed claims could deny.
This Medicaid rate increase could not come faster! While it is a small, itsy-bitsy, tiny, minuscule semblance of a “bright side”…a bright side it still is.
Coronavirus shuts down Courts across North Carolina. As of now, Superior and District Courts remain open…for now.
*My next blog will explore the new budget and emergency measures implemented for Medicare and Medicaid. More money will be funded to both during this crisis…TBD. How is the Coronavirus impacting health care?
The following emergency directive was initiated, effective TODAY.
On 10 March 2020, Governor Roy Cooper declared a state of emergency in North Carolina in response to the emerging public health threat posed by COVID-19. Since that time, the World Health Organization has designated the COVID-19 outbreak as a global pandemic, and the North Carolina Department of Health and Human Services has urged all North Carolinians to take steps to reduce the spread of infection. Accordingly, I hereby determine and declare under N.C.G.S. § 7A-39(b)(2) that catastrophic conditions resulting from the public health threat posed by COVID-19 exist in all counties of this state. Although the superior courts and district courts remain open, two emergency directives are necessary to reduce the spread of infection.
Emergency Directive 1
I order that all superior court and district court proceedings be scheduled or rescheduled for a date no sooner than 30 days from the issuance of this order, unless: 1. the proceeding will be conducted remotely; 2. the proceeding is necessary to preserve the right to due process of law (e.g., a first appearance or bond hearing, the appointment of counsel for an indigent defendant, a probation hearing, a probable cause hearing, etc.); 3. the proceeding is for the purpose of obtaining emergency relief (e.g., a domestic violence protection order, temporary restraining order, juvenile custody order, judicial consent to juvenile medical treatment order, civil commitment order, etc.); or 4. the senior resident superior court judge, chief business court judge, or chief district court judge determines that the proceeding can be conducted under conditions that protect the health and safety of all participants. This emergency directive does not apply to any proceeding in which a jury has already been empaneled. This emergency directive does not apply to grand juries which have already been empaneled. This emergency directive does not prohibit a judge or other judicial officer from exercising any in chambers or ex parte jurisdiction conferred by law upon that judge or judicial officer, as provided by law. Additionally, I encourage the superior courts and district courts to liberally grant additional accommodations to parties, witnesses, attorneys, and others with business before the courts who are at a high risk of severe illness from COVID-19.
Emergency Directive 2
I further order that the clerks of superior court shall post a notice at the entrance to every court facility in their county directing that any person who has likely been exposed to COVID-19 should not enter the courthouse. A person who has likely been exposed to COVID-19 who has business before the courts shall contact the clerk of superior court’s office by telephone or other remote means, inform court personnel of the nature of his or her business before the court, and receive further instruction. For purposes of this order, a person who has likely been exposed to COVID-19 is defined as any person who: 1. has traveled to China, South Korea, Japan, Italy, or Iran within the previous 14 days; 2. has been directed to quarantine, isolate, or self-monitor; 3. has been diagnosed with COVID-19; or 4. resides with or has been in close contact with any person in the above mentioned categories.
* * * The directives contained in this order will take effect Monday, 16 March 2020.
This order may be extended in whole or in part for additional 30-day periods if necessary.
Issued this the 13th day of March, 2020. Cheri Beasley, Chief Justice Supreme Court of North Carolina
DHHS has ousted and taken over Cardinal Innovations!
And may I just say – Finally! Thank you, Sec. Cohen.
Cardinal is/was the largest of seven managed care organizations (MCOs) that was given the task to manage Medicaid funds for behavioral health care recipients. These are Medicaid recipients suffering from developmental disabilities, mental health issues, and substance abuse; these are our population’s most needy. These MCOs are given a firehose of Medicaid money; i.e., tax dollars, and were entrusted by the State of North Carolina, each individual taxpayer, Medicaid recipients, and the recipients’ families to maintain an adequate network of health care providers and authorize medically necessary behavioral health care services. Cardinal’s budget was just over $682 million in 2016. Instead, I have witnessed, as a Medicaid and Medicare regulatory compliance litigator, and have legally defended hundreds of health care providers who were unlawfully terminated from the MCOs’ catchment areas, refused a contract with the MCOs, accused of owing overpayments to the MCOs for services that were appropriately rendered. To the point that the provider catchment areas are woefully underrepresented (especially in Minority-owned companies), recipients are not receiving medically necessary services, and the MCOs are denying medically necessary services. The MCOs do so under the guise of their police power. For years, I have been blogging that this police power is overzealous, unsupervised, unchecked, and in violation of legal authority. I have blogged that the MCOs act as the judge, jury, and executioner. I have also stated that the actions of the MCOs are financially driven. Because when providers are terminated and services are not rendered, money is not spent, at least, on the Medicaid recipients’ services.
But, apparently, the money is spent on executives. This past May, State Auditor Beth Wood wrote a scathing performance audit regarding Cardinal’s lavish spending on CEO pay as well as on expensive Christmas parties and board retreats, charter flights for executives and “questionable” credit card purchases, including alcohol. All of that, her report said, threatened to “erode public trust.” Cardinal’s former CEO Richard Topping made more than $635,000 in salary this year. On Monday (November 21, 2017), DHHS escorted Topping and three other executives out the door. But they did not walk away empty handed. Topping walked away with a $1.7 million severance while three associates left with packages as high as $740,000 – of taxpayer money!
This overspending on salaries and administration is not new. Cardinal has been excessively spending on itself since inception. This has been a long term concern, and I congratulate Sec. Cohen for having the “cojones” to do something about it. (I know. Bad joke. I apologize for the French/Spanish).
In 2011, Cardinal spent millions of dollars constructing its administrative facility.
According to Edifice, the company that built Cardinal Innovations’ grand headquarters, starting in 2011, Cardinal’s building is described as:
“[T[his 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.” How much did that cost the Medicaid recipients in Cardinal’s catchment area? Seem appropriate for an agent of the government spending tax money for luxurious office space? Shoot, my legal office is not even that nice. And I don’t get funded by tax dollars!
In 2015, I wrote:
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.
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!!!!
Now, finally, DHHS says Cardinal Innovations “acted unlawfully” in giving its ousted CEO $1.7 million in severance, and DHHS took over the Charlotte-based agency. It was a complete oust. One journalist quoted Cardinal as saying, “DHHS officials arrived at Cardinal “unexpectedly and informed the executive leadership team that the department is assuming control of Cardinal’s governance.”” Unexpected they say? Cardinal conducted unexpected audits all the time on their providers. But, the shoe hurts when it’s on the other foot.
The MCOs are charged with the HUGE fiscal and moral responsibility, on behalf of the taxpayers, to manage North Carolina and federal tax dollars and authorize medically necessary behavioral health care services for Medicaid recipients, our population’s most needy. The MCOs in NC are as follows:
- Vaya Health
- Partners Behavioral Health Management
- Cardinal Innovations (formerly)
- Trillium Health Resources
- Alliance Behavioral Health Care
- Sandhills Center
The 1915 (b)(c) Waiver Program was initially implemented at one pilot site in 2005 and evaluated for several years. Two expansion sites were then added in 2012. The State declared it an immediate success and requested and received the authority from CMS to implement the MCO project statewide. Full statewide implementation is expected by July 1, 2013. The MCO project was intended to save money in the Medicaid program. The thought was that if these MCO entities were prepaid on a capitated basis that the MCOs would have the incentive to be fiscally responsible, provide the medically necessary services to those in need, and reduce the dollars spent on prisons and hospitals for mentally ill.
Sadly, as we have seen, fire hoses of tax dollars catalyze greed.
Presumably, in the goal of financial wealth, Cardinal Innovations, and, maybe, expectantly the other MCOs, have sacrificed quality providers being in network and medically necessary services for Medicaid recipients, Cardinal has terminated provider contracts. And for what? Luxurious office space, high salaries, private jets, and a fat savings account.
I remember a former client from over 5 years ago, who owned and ran multiple residential facilities for at-risk, teen-age boys with violent tendencies and who suffered severe mental illness. Without cause, Alliance terminated the client’s Medicaid contract. There were no alternatives for the residents except for the street. We were able to secure a preliminary injunction preventing the termination. But for every one of those stories, there are providers who did not have the money to fight the terminations
Are there legal recourses for health care providers who suffered from Cardinal’s actions?
The million dollar question.
In light of the State Auditor’s report and DHHS’ actions and public comments that it was usurping Cardinal’s leadership based on “recent unlawful actions, including serious financial mismanagement by the leadership and Board of Directors at Cardinal Innovations,” I believe that the arrows point to yes, with a glaring caveat. It would be a massive and costly undertaking. David and Goliath does not even begin to express the undertaking. At one point, someone told me that Cardinal had $271 million in its bank account. I have no way to corroborate this, but I would not be surprised. In the past, Cardinal has hired private, steeply-priced attorney regardless that its funds are tax dollars. Granted, now DHHS may run things differently, but without question, any legal course of action against any MCO would be epically expensive.
Putting aside the money issue, potential claims could include (Disclaimer: this list is nonexhaustive and based on a cursory investigation for the purpose of my blog. Furthermore, research has not been conducted on possible bars to claims, such as immunity and/or exhaustion of administrative remedies.):
- Breach of fiduciary duty. Provider would need to demonstrate that a duty existed between providers and MCO (contractual or otherwise), that said MCO breached such duty, and that damages exist. Damages can include actual loss and if intent is proven, punitive damages may be sought.
- Unfair and Deceptive Trade Practices. Providers would have to prove three elements: (1) an unfair or deceptive act or practice; (2) in or affecting commerce; (3) which proximately caused the injury to the claimant. A court will first determine if the act or practice was “in or affecting commerce” before determining if the act or practice was unfair or deceptive. Damages allowed are actual damages, plus treble damages (three times the actual damages).
- Negligence. Providers would have to show (1) duty; (2) breach; (3) cause in fact; (4) proximate cause; and (5) damages. Actual damages are allowed for a negligence claim.
- Breach of Contract. The providers would have to demonstrate that there was a valid contract; that the providers performed as specified by the contract; that the said MCO failed to perform as specified by the contract; and that the providers suffered an economic loss as a result of the defendant’s breach of contract. Actual damages are recoverable in a breach of action claim.
- Declaratory Judgment. This would be a request to the Court to make a legal finding that the MCO failed to follow certain Medicaid procedures and regulations.
- Violation of Article I, NC Constitution (legal and contractual right to receive payments for reimbursement claims due and payable under the Medicaid regulations.
To name a few…
In the wake of bad press, Cardinal Innovation’s Board of Directors finally acted and cut Richard Topping’s, the CEO, obnoxiously high salary, which is paid with Medicaid fund tax dollars. It seems he received a salary decrease of over $400,000! According to the below article, Topping did not take the news well and stated that he cannot accept the massive decrease in salary. See blog.
Will Topping quit? Who will manage Cardinal?
See article below written by Richard Craver of the Winston Salem Journal:
The salary for the chief executive of Cardinal Innovations Healthcare Solutions has been cut by two-thirds — from $617,526 a year to $204,195 — reducing it to the maximum allowed by North Carolina law. Cardinal’s embattled board of directors passed a resolution on CEO Richard Topping’s salary after a four-hour closed special session that ended about 11 p.m. Tuesday, according to Charlotte radio station WFAE.
The vote was 5-3 in favor of the resolution with two members abstaining and two members absent. The eight members represented a quorum.
Bryan Thompson serves on the Cardinal board as the lone representative from Davie, Forsyth, Rockingham and Stokes counties. He was the chairman of CenterPoint Human Services of Winston-Salem until it was taken over by Cardinal in June 2016. Thompson confirmed Wednesday that he introduced the motion for the resolution. “I am very proud of the work Cardinal Innovations does and the seriousness I observed in the board members last night,” Thompson said. “I fully support the resolution adopted to bring the salary into range as provided by the state.” Ashley Conger, Cardinal’s vice president of communications and marketing, on Wednesday confirmed the board’s salary-reduction resolution. “Richard is still leading the company, and his priority is to ensure stability and continuity for our employees, members and communities as we continue work with the state to address their concerns,” Conger said.
Cardinal’s board chairwoman, Lucy Drake, voted against the resolution. “We brought him in and we offered (the reduced salary) to him. And he has said he cannot accept that,” Drake told WFAE.
It’s unclear if Topping qualifies for a severance package should he choose to resign because of the salary cut. “We have got to find out who on the team is going to stay,” Drake said. “We’ve got to find out who will be running Cardinal. Because this just completely overwhelmed me. I didn’t know this was going this way tonight.” Attending the meeting was Dave Richard, the state’s deputy health secretary for medical assistance and head of its Medicaid program. After the second of two scathing state audits, the N.C. Department of Health and Human Services issued a statement Oct. 2 saying, “Cardinal should immediately bring its salary/compensation package for its CEO in line with the other MCOs, and shed its excessive severance offerings. DHHS will continue to monitor Cardinal’s performance.” Richard told legislators on Oct. 11 that he would present to the Cardinal board a list of state compliance requirements for Cardinal, the largest of the state’s seven behavioral-health managed care organizations, or MCOs. On Wednesday, Richard said through a spokesman that Cardinal’s board is taking steps to comply with state law, “and we look forward to continuing to work with Cardinal to ensure North Carolinians receive excellent care and state resources are handled appropriately.”
The board’s decision represents a stunning about-face for the MCO. On Sept. 18, Cardinal sued the state to maintain what it claims is the authority to pay Topping up to 3½ times more than his peers. Drake issued a statement supporting the lawsuit, which challenges the state’s authority to set executive-compensation limits. Cardinal filed the lawsuit against the Office of State Human Resources with the State Office of Administrative Hearings. Cardinal’s predecessor was formed in part as a legislative experiment for using private sector methods to lower the cost of caring for Medicaid enrollees without sacrificing the quality of care.
Cardinal and Topping have viewed the agency as an independent contractor as part of state Medicaid reform, gaining financial and business flexibility beyond those of other MCOs. That included being able to retain about $70 million in Medicaid savings from fiscal years 2014-15 and 2015-16. Topping has said Cardinal is performing in accord with what legislators have asked it to do. However, Cardinal is considered a political subdivision of the state, with oversight contracts subject to approval by the state health secretary and executive compensation subject to Office of State Human Resources guidelines. Cardinal argues in its complaint that not being allowed to pay Topping up to $635,000 in annual salary could convince him to resign, thereby putting Cardinal “at a significant market disadvantage” recruiting a top executive in the Mecklenburg County business market. “This would result in immediate and irreparable harm to Cardinal Innovations and reduce the organization’s ability to fulfill its mission,” Cardinal said. Topping’s current three-year contract provides severance payments “for a broad range of reasons” beyond termination of employment without just cause. They include:
- If Cardinal is taken over or ceases to be an independent entity.
- If a majority of the board is replaced without the board’s approval.
- If the agency is “materially” affected by statutory or regulatory changes to its services, revenue, governance or employment practices.
About 96,300 Triad Medicaid enrollees may be along for the ride if a day of reckoning arrives for Cardinal. That’s how many individuals could be affected in Davie, Forsyth, Rockingham and Stokes counties involving services for mental health, developmental disorders and substance abuse. Cardinal oversees providers of those services and handles more than $675 million in annual federal and state Medicaid money.
The main issue at hand is executive compensation and severance packages that Cardinal has committed to Topping and 10 other executives, which legislators have called excessive and unacceptable. The Cardinal board approved two raises for Topping since he became chief executive in July 2015. Cardinal’s board minutes are not available on its website, and Cardinal officials have a pattern of responding slowly to public and media requests for those minutes, including a request made Friday that it referred to its legal team.
An internal DHHS audit, released Oct. 1, determined that the salary and severance packages Cardinal’s board approved “pose a substantial risk (to Cardinal) and may not be in the best interest of Cardinal, beneficiaries and/or the state.” “This is excessive and raises concerns about the entity’s solvency and ability to continue to provide services in the event of a significant change in its leadership team,” DHHS said in a statement. In May, the state auditor’s office cited in its audit of Cardinal unauthorized executive compensation and a combined $490,756 in high-end board retreats and “unreasonable spending (that) could erode public trust.”
N.C. Auditor Beth Wood said in May that Cardinal “is not independent of the state … and it is definitely responsible to the General Assembly.” “Its whole independent contractor claims have been taken out of context, and they are being misleading when they say they are,” Wood said. Wood also blamed the Office of State Human Resources for not doing a better job of monitoring Cardinal’s executive-compensation packages.
A bipartisan group of state legislators is urging the state health secretary, Dr. Mandy Cohen, to replace Topping and the board, and/or terminate Cardinal’s state Medicaid contracts, for noncompliance with state laws. State health officials and legislators say they are not ready to predict what steps Cohen might take, which could include splintering Cardinal’s 20-county territory and assigning parts to one or more of the state’s other six MCOs. Cardinal also covers Alamance and Davidson counties. “All of the options are possible,” state Sen. Joyce Krawiec, R-Forsyth, said last week. Krawiec is a member of the Joint Legislative Oversight Committee on Health and Human Services. However, it is not likely that Cohen would approve resurrecting CenterPoint. Since taking office, Cohen has tightened core performance requirements for the MCOs, including adding financial penalties for noncompliance. “These new contracts hold each organization accountable to meeting key performance measures to ensure high-quality care,” Cohen said.
State Rep. Donny Lambeth, R-Forsyth, a co-chairman of the health-care oversight committee, said last week that while it would be cumbersome to divvy up the Cardinal counties “to other MCO who would absorb these services … it can be done.” Counties can request, during a relatively brief period each year, to switch MCOs with the state health secretary’s permission. Three county managers — Dudley Watts of Forsyth, Lance Metzler of Rockingham and Rick Morris of Stokes — said last week that their respective boards of commissioner have not discussed contingency plans in preparation for any action by Cohen on Cardinal. Krawiec said the executive-compensation information about Cardinal is “very disappointing and disturbing.” “While Cardinal has obviously shown us how health services can be delivered at a cost savings, those savings have led to lavish expenditures by Cardinal,” she said. “Instead of returning the savings back into improving the system and providing for those in need, the funds have been spent in a very irresponsible manner.”
Oh, to have been a fly on the wall, during Tuesday’s Board of Directors meeting at Cardinal… We will definitely need to request the meeting minutes!
Eastpointe Sues DHHS, Former Sec. Brajer, Nash County, and Trillium Claiming Conspiracy! (What It Means for Providers)
In HBO’s Game of Thrones, nine, noble, family houses of Westeros fight for the Iron Throne – either vying to claim the throne or fighting for independence from the throne.
Similarly, when NC moved to the managed care organizations for Medicaid behavioral health care services, we began with 12 MCOs (We actually started with 23 (39 if you count area authorities) LME/MCOs, but they quickly whittled down to 11). “The General Assembly enacted House Bill 916 (S.L. 2011-264) (“H.B. 916) to be effective June 23, 2011, which required the statewide expansion of the 1915(b)/(c) Medicaid Waiver Program to be completed within the State by July 1, 2013.” Compl. at 25. Now the General Assembly is pushing for more consolidation.
Now we have seven (7) MCOs remaining, and the future is uncertain. With a firehose of money at issue and the General Assembly’s push for consolidation, it has become a bloody battle to remain standing in the end, because, after all, only one may claim the Iron Throne. And we all know that “Winter is coming.”
Seemingly, as an attempt to remain financially viable, last week, on Thursday, June 8, 2017, Eastpointe, one of our current MCOs, sued the Department of Health and Human Services (DHHS), Nash County, Trillium Health Resources, another MCO, and former secretary Richard Brajer in his individual and former official capacity. Since the Complaint is a public record, you can find the Complaint filed in the Eastern District of NC, Western Division, Civil Action 5:17-CV-275. My citations within this blog correspond with the paragraphs in the Complaint, not page numbers.
Eastpointe’s Complaint wields a complex web of conspiracy, government interference, and questionable relationships that would even intrigue George R. R. Martin.
The core grievance in the lawsuit is Eastpointe alleges that DHHS, Trillium, Nash County, and Brajer unlawfully conspired and interfered with Eastpointe’s contract to manage behavioral health care services for its twelve (12) county catchment area, including Nash County. In 2012, Nash County, as part of the The Beacon Center, signed a contract and became part of a merger with Eastpointe being the sole survivor (Beacon Center and Southeastern Regional Mental Health were swallowed by Eastpointe). At the heart of Eastpointe’s Complaint, Eastpointe is alleging that Nash County, Trillium, DHHS, and Brajer conspired to breach the contract between Eastpointe and Nash County and unlawfully allowed Nash County to join Trillium’s catchment area.
In June 2013, the General Assembly, pursuant to Senate Bill 208 (S.L. 2013-85 s. 4.(b)), appended N.C.G.S. § 122C-115 to include subparagraph (a3), permitting a county to disengage from one LME/MCO and align with another with the approval of the Secretary of the NCDHHS, who was required by law to promulgate “rules to establish a process for county disengagement.” N.C.G.S. § 122C-115(a3) (“Rules”) (10A N.C.A.C. 26C .0701-03).
Why does it matter whether Medicaid recipients receive behavioral health care services from providers within Trillium or Eastpointe’s catchment area?? As long as the medically necessary services are rendered – that should be what is important – right?
Wrong. First, I give my reason as a cynic (realist), then as a philanthropist (wishful thinker).
Cynical answer – The MCOs are prepaid. In general and giving a purposely abbreviated explanation, the way in which the amount is determined to pre-pay an MCO is based on how many Medicaid recipients reside within the catchment area who need behavioral health care services. The more people in need of Medicaid behavioral health care services in a catchment area, the more money the MCO receives to manage such services. With the removal of Nash County from Eastpointe’s catchment area, Eastpointe will lose approximately $4 million annually and Trillium will gain approximately $4 million annually, according to the Complaint. This lawsuit is a brawl over the capitated amount of money that Nash County represents, but it also is about the Iron Throne. If Eastpointe becomes less financially secure and Trillium becomes more financially secure, then it is more likely that Eastpointe would be chewed up and swallowed in any merger.
Philanthropic answer – Allowing Nash County to disengage from Eastpointe’s catchment area would inevitably disrupt behavioral health care services to our most fragile and needy population. Medicaid recipients would be denied access to their chosen providers…providers that may have been treating them for years and created established trust. Allowing Nash County to disembark from Eastpointe would cause chaos for those least fortunate and in need of behavioral health care services.
Eastpointe also alleges that DHHS refused to approve a merger between Eastpointe and Cardinal purposefully and with the intent to sabotage Eastpointe’s financial viability.
Also in its Complaint, Eastpointe alleges a statewide, power-hungry, money-grubbing conspiracy in which Brajer and DHHS and Trillium are conspiring to pose Trillium as the final winner in the “MCO Scramble to Consolidate,” “Get Big or Die” MCO mentality arising out of the legislative push for MCO consolidation. Because, as with any consolidation, duplicate executives are cut.
Over the last couple years, Eastpointe has discussed merging with Cardinal, Trillium, and Sandhills – none of which occurred. Comparably, Joffrey Lannister and Sansa Stark discussed merging. As did Viserys and Illyrio wed Daenerys to Khal Drogo to form an alliance between the Targaryens.
Some of the most noteworthy and scandalous accusations:
Leza Wainwright, CEO of Trillium and director of the NC Council of Community MH/DD/SA Programs (“NCCCP”) (now I know why I’ve never been invited to speak at NCCCP). Wainwright “brazenly took actions adverse to the interest of Eastpointe in violation of the NCCCP mission, conflicts of interest policy of the organization, and her fiduciary duty to the NCCCP and its members.” Compl. at 44.
Robinson, Governing Board Chair of Trillium, “further informed Brajer that he intended for Trillium to be the surviving entity in any merger with Eastpointe and that “any plan predicated on Trillium and Eastpointe being coequal is fundamentally flawed.”” Compl. at 61.
“On or about May 11, 2016, Denauvo Robinson (“Robinson”), Governing Board Chair of Trillium wrote Brajer, without copying Eastpointe, defaming Eastpointe’s reputation in such a way that undermined the potential merger of Eastpointe and Trillium.” Compl. at 59.
“Robinson, among other false statements, alleged the failure to consummate a merger between Eastpointe, CoastalCare, and East Carolina Behavioral Health LMEs was the result of Eastpointe’s steadfast desire to maintain control, and Eastpointe’s actions led those entities to break discussions with Eastpointe and instead merge to form Trillium.” Compl. at 60.
“Trillium, not Nash County, wrote Brajer on November 28, 2016 requesting approval to disengage from Eastpointe and to align with Trillium.” Compl. at 69.
Dave Richards, Deputy Secretary for Medical Assistance, maintains a “strong relationship with Wainwright” and “displayed unusual personal animus toward Kenneth Jones, Eastpointe’s former CEO.” Compl. at 47.
Brajer made numerous statements to Eastpointe staff regarding his animus toward Jones and Eastpointe. “Brajer continued to push for a merger between Eastpointe and Trillium.” Compl. at 53.
“On December 5, 2016, the same day that former Governor McCrory conceded the election to Governor Cooper, Brajer wrote a letter to Trillium indicating that he approved the disengagement and realignment of Nash County.” Compl. at 72.
“On March 17, 2016, however, Brajer released a memorandum containing a plan for consolidation of the LME/MCOs, in which NCDHHS proposed Eastpointe being merged with Trillium.” Compl. at 55.
Brajer’s actions were “deliberately premature, arbitrary, and capricious and not in compliance with statute and Rule, and with the intent to destabilize Eastpointe as an LME/MCO).” Compl. at 73.
“Brajer conspired with Nash County to cause Nash County to breach the Merger Agreement.” Compl. at 86.
Brajer “deliberately sought to block any merger between Eastpointe and other LME/MCOs except Trillium.” Compl. at 96.
“Brajer and NCDHHS’s ultra vires and unilateral approval of the Nash County disengagement request effective April 1, 2017 materially breached the contract between Eastpointe and NCDHHS. Equally brazen was Brajer’s calculated failure to give Eastpointe proper notice of the agency action taken or provide Eastpointe with any rights of appeal.” Compl. at 101.
Against Nash County
“To date, Nash County is Six Hundred Fifty Three Thousand Nine Hundred Fifty Nine Thousand and 16/100 ($653,959.16) in arrears on its Maintenance of Efforts to Eastpointe.” Compl. at 84.
“While serving on Eastpointe’s area board, Nash County Commissioner Lisa Barnes, in her capacity as a member of the Nash County Board of Commissioners, voted to adopt a resolution requesting permission for Nash County to disengage from Eastpointe and realign with Trillium. In so doing, Barnes violated her sworn oath to the determent of Eastpointe.” Compl. at 85.
What Eastpointe’s lawsuit could potentially mean to providers:
Eastpointe is asking the Judge in the federal court of our eastern district for a Temporary Restraining Order and Preliminary Injunction prohibiting Nash County from withdrawing from Eastpointe’s catchment area and joining Trillium’s catchment area. It is important to note that the behavioral health care providers in Eastpointe’s catchment area may not be the same behavioral health care providers in Trillium’s catchment area. There may be some overlap, but without question there are behavioral health care providers in Trillium’s catchment area that are not in Eastpointe’s catchment area and vice versa.
If Eastpointe is not successful in stopping Nash County from switching to Trillium’s catchment area, those providers who provide services in Nash County need to inquire – if you do not currently have a contract with Trillium, will Trillium accept you into its catchment area, because Trillium runs a closed network?!?! If Trillium refuses to include Nash County’s behavioral health care providers in its catchment area, those Nash County providers risk no longer being able to provide services to their consumers. If this is the case, these Nash County, non-Trillium providers may want to consider joining Eastpointe’s lawsuit as a third-party intervenor, as an interested, aggrieved person. Obviously, you would, legally, be on Eastpointe’s side, hoping to stay Nash County’s jump from Eastpointe to Trillium.
Even if Eastpointe is successful in stopping Nash County’s Benedict Arnold, then, as a provider in Eastpointe’s catchment area, you need to think ahead. How viable is Eastpointe? Eastpointe’s lawsuit is a powerful indication that Eastpointe itself is concerned about the future, although this lawsuit could be its saving grace. How fair (yet realistic) is it that whichever providers happen to have a contract with the biggest, most powerful MCO in the end get to continue to provide services and those providers with contracts with smaller, less viable MCOs are put out of business based on closed networks?
If Nash County is allowed to defect from Eastpointe and unite with Trillium, all providers need to stress. Allowing a county to abscond from its MCO on the whim of county leadership could create absolute havoc. Switching MCOs effects health care providers and Medicaid recipients. Each time a county decides to choose a new MCO the provider network is upended. Recipients are wrenched from the provider of their choice and forced to re-invent the psychological wheel to their detriment. Imagine Cherokee County being managed by Eastpointe…Brunswick County being managed by Vaya Health…or Randolph County being managed by Partners. Location-wise, it would be an administrative mess. Every election of a county leadership could determine the fate of a county’s Medicaid recipients.
Here is a map of the current 7 MCOs:
All behavioral health care providers should be keeping a close watch on the MCO consolidations and this lawsuit. There is nothing that requires the merged entity to maintain or retain the swallowed up entities provider network. Make your alliances because…
“Winter is coming.”
Buried within the Senate Appropriations Act of 2017 (on pages 189-191 of 361 pages) is a new and improved method to terminate Medicaid providers. Remember prepayment review? Well, if SB 257 passes, then prepayment review just…
Prepayment review is allowed per N.C. Gen. Stat. 108C-7. See my past blogs on my opinion as to prepayment review. “NC Medicaid: CCME’s Comedy of Errors of Prepayment Review” “NC Medicaid and Constitutional Due Process.”
N.C. Gen. Stat. 108C-7 states, “a provider may be required to undergo prepayment claims review by the Department. Grounds for being placed on prepayment claims review shall include, but shall not be limited to, receipt by the Department of credible allegations of fraud, identification of aberrant billing practices as a result of investigations or data analysis performed by the Department or other grounds as defined by the Department in rule.” Getting placed on prepayment review is not appealable. Relief can be attainable. See blog. (With a lawyer and a lot of money).
Even without the proposals found within SB 257, being placed on prepayment review is being placed in a torture chamber for providers.
With or without SB 257, being placed on prepayment review results in the immediate withhold of all Medicaid reimbursements pending the Department of Health and Human Services’ (DHHS) contracted entity’s review of all submitted claims and its determination that the claims meet criteria for all rules and regulations. If the majority of your reimbursements come from Medicaid, then an immediate suspension of Medicaid funds can easily put you out of business.
With or without SB 257, in order to get off prepayment review, you must achieve 70% accuracy (or clean claims) for three consecutive months. Think about that statement – The mere placement of you on prepayment review means that, according to the standard for being removed from prepayment review, you will not receive your reimbursements for, at least, three months. How many of you could survive without getting paid for three months. But that’s not the worst of it, the timing and process of prepayment review – meaning the submission of claims, the review of the claims, the requests for more documentation, submission of more documents, and the final decision – dictates that you won’t even get an accuracy rating the first, maybe even the second month. If you go through the prepayment review process, you can count on no funding for four to five months, if you are over 70% accurate the first three months. How many of you can sustain your company without getting paid for five months? How about 24 months, which is how long prepayment review can last?
The prepayment review process: (legally, which does not mean in reality)
Despite your Medicaid funds getting cut off, you continue to provide Medicaid services to your recipients (You also continue to pay your staff and your overhead with gummy bears, rainbows, and smiles). – And, according to SB 257, if your claims submissions decrease to under 50% of the prior three months before prepayment review – you automatically lose. In other words, you are placed on prepayment review. Your funding is suspended (with or without SB 257). You must continue to provide services without any money (with or without SB 257) and you must continue to provide the same volume of services (if SB 257 passes).
So, you submit your claims.
The Department of Health and Human Services (DHHS) or its contracted vendor shall process all clean claims submitted for prepayment review within 20 calendar days of submission by the provider. “To be considered by the Department, the documentation submitted must be complete, legible, and clearly identify the provider to which the documentation applies. If the provider failed to provide any of the specifically requested supporting documentation necessary to process a claim pursuant to this section, the Department shall send to the provider written notification of the lacking or deficient documentation within 15 calendar days of receipt of such claim the due date of requested supporting documentation. The Department shall have an additional 20 days to process a claim upon receipt of the documentation.”
Let’s look at an example:
You file your claim on June 1, 2017.
DHHS (or contractor) determines that it needs additional documentation. On June 16, 2017, DHHS sends a request for documentation, due by July 6, 2017 (20 days later).
But you are on the ball. You do not need 20 days to submit the additional documents (most likely, because you already submitted the records being requested). You submit additional records on June 26, 2017 (within 10 days).
DHHS has until July 16, 2017, to determine whether the claim is clean. A month and a half after you submit your claim, you will be told whether or not you will be paid, and that’s if you are on the ball.
Now imagine that you submit 100 claims per week, every week. Imagine the circular, exponential effect of the continual, month-and-a-half review for all the claims and the amount of documents that you are required to submit – all the while maintaining the volume of claims of, at least over 50% of your average from the three prior months before prepayment review.
Maintaining at least 50% of the volume of claims that you submitted prior to being placed on prepayment review is a new addition to the prepayment review torture game and proposed in SB 257.
If SB 257 does not pass, then when you are placed on prepayment review and your funding is immediately frozen, you can decrease the volume of claims you submit. It becomes necessary to decrease the volume of claims for many reasons. First, you have no money to pay staff and many staff will quit; thus decreasing the volume of claims you are able to provide. Second, your time will be consumed with submitting documents for prepayment review, receiving additional requests, and responding to the additional requests. I have had a client on prepayment review receive over 100 requests for additional documents per day, for months. Maintaining organization and a record of what you have or have not submitted for which Medicaid recipient for which date of service becomes a full-time job. With your new full-time job as document submitter, your volume of services decreases.
Let’s delve into the details of SB 257 – what’s proposed?
SB 257’s Proposed Torture Tactics
The first Catherine’s Wheel found in SB 257 is over 50% volume. Or you will be terminated.
As discussed, SB 257 requires to maintain at least 50% of the volume of services you had before being placed on prepayment review. Or you will be terminated.
Another heretics fork that SB 257 places in the prepayment review torture chamber is punishment for appeal.
SB 257 proposes that you are punished for appealing a termination. If you fail to meet the 70% accuracy for three consecutive months, then you will be terminated from the Medicaid program. However, with SB 257, if you appeal that termination decision, then “the provider shall remain on prepayment review until the final disposition of the Department’s termination or other sanction of the provider.” Normally when you appeal an adverse determination, the adverse determination is “stayed” until the litigation is over.
Another Iron Maiden that SB 257 proposes is exclusion.
SB 257 proposes that if you are terminated “the termination shall reflect the provider’s failure to successfully complete prepayment claims review and shall result in the exclusion of the provider from future participation in the Medicaid program.” Even if you voluntarily terminate. No mulligan. No education to improve yourself. You never get to provide Medicaid services again. The conical frame has closed.
Another Guillotine that SB 257 proposes is no withhold of claims.
SB 257 proposes that if you withhold claims while you are on prepayment review. “any claims for services provided during the period of prepayment review may still be subject to review prior to payment regardless of the date the claims are submitted and regardless of whether the provider has been taken off prepayment review.”
Another Judas Chair that SB 257 proposes is no new evidence.
SB 257 proposes that “[i]f a provider elects to appeal the Department’s decision to impose sanctions on the provider as a result of the prepayment review process to the Office of Administrative Hearings, then the provider shall have 45 days from the date that the appeal is filed to submit any documentation or records that address or challenge the findings of the prepayment review. The Department shall not review, and the administrative law judge shall not admit into evidence, any documentation or records submitted by the provider after the 45-day deadline. In order for a provider to meet its burden of proof under G.S. 108C-12(d) that a prior claim denial should be overturned, the provider must prove that (i) all required documentation was provided at the time the claim was submitted and was available for review by the prepayment review vendor and (ii) the claim should not have been denied at the time of the vendor’s initial review.”
The prepayment review section of SB 257, if passed, will take effect October 1, 2017. SB 257 has passed the Senate and now is in the House.
The NC State Auditor Beth Wood released an audit report on Cardinal Innovations yesterday, May 17, 2017. Here are the key findings. For the full report click here.
Cardinal is a Local Management Entity/Managed Care Organization (LME/MCO) created by North Carolina General Statute 122C. Cardinal is responsible for managing, coordinating, facilitating and monitoring the provision of mental health, developmental disabilities, and substance abuse services in 20 counties across North Carolina. Cardinal is the largest of the state’s seven LME/MCOs, serving more than 850,000 members. Cardinal has contracted with DHHS to operate the managed behavioral healthcare services under the Medicaid waiver through a network of licensed practitioners and provider agencies.
• Cardinal spent money exploring strategic opportunities outside of its core mission
• $1.2 million in CEO salaries paid without proper authorization
• Cardinal’s unreasonable spending could erode public trust
• Cardinal should consult and collaborate with members of the General Assembly before taking any actions outside of its statutory boundaries
• The Office of State Human Resources should immediately begin reviewing and approving Cardinal CEO salary adjustments
• The Department of Health and Human Services should determine whether any Cardinal CEO salary expenditures should be disallowed and request reimbursement as appropriate
• Cardinal should implement procedures consistent with other LME/MCOs, state laws, and federal reimbursement policy to ensure its spending is appropriate for a local government entity
My favorite? Recoup CEO salaries. Maybe we should extrapolate.