Throughout my career I have seen more people confuse Medicare and Medicaid than any other two items in my line of work. If I am about to give a presentation on Medicaid, without question, someone will comment, “Oh, that’s important! We will all be on Medicaid someday.” Hmmmm? Really? (I hope not).
It’s confusing. I get it. They sound the same and both are heavily regulated with esoteric rules and regulations.
For the record, MediCARE covers those who qualify for Medicare and are 65 years of age or older. MediCAID serves low-income parents, children, seniors, and people with disabilities.
By providers, I am asked frequently, “What is the difference between a Medicaid audit appeal and a Medicare audit appeal?”
The easy “Audit 101” answer is that Medicaid audit appeals are quicker (although in the legal world, nothing is truly fast) than Medicare audits and that the Medicaid administrative appeal process is easier (or has fewer steps) than the Medicare appeal process.
In Medicaid you have an informal appeal, an appeal to the Office of Administrative Hearings (OAH), and, if you are so inclined, judicial review to the Superior Courts. Obviously you can appeal the judicial review, but most appeals stop at the OAH level.
So, with Medicaid audit appeals, you have 2 levels…maybe 3.
In Medicare audits appeals, there are 5 levels. You have more of a Dante-ish order of events.
In the “Divine Comedy,” Dante writes of three levels of afterlife: (1) Inferno (2) Purgatorio; and (3) Paradiso.
If Dante stopped at those 3 levels, the “Divine Comedy” would be more similar to Medicaid audit appeals, not Medicare audit appeals. But Dante does not stop at 3 levels.
Purgatory, which is the place that the human soul must purge its sins and climb up to be worthy of Heaven, is divided into three sections: (1) Antepurgatory; (2) Purgatory proper; and (3) the Earthly Paradise. (I am giving the Cliff’s Notes version for the purpose of this blog. Obviously, there were other mountains symbolizing the 7 deadly sins and other layers, but I will leave that for English class).
In recent times, Purgatory has come to mean a state of suffering or torment that is meant to be temporary.
Regardless, the “Divine Comedy” and its multi-layers to achieve Paradiso is more akin to the Medicare appeal audit process.
Here are the levels in a Medicare audit appeal process:
3. Hearing before an Administrative Law Judge (ALJ)
4. Review by the Appeals Council
5. Judicial Review
Nowadays many providers undergoing Medicare audits are getting stuck waiting for #3 to occur. Purgatory.
So long is the hold up before step #3 that Congressman Jim McDermott, 7th District, Washington, wrote a letter to Secretary Kathleen Sebelius expressing concerns.
In a letter dated March 18, 2014, Congressman McDermott writes that he is concerned with the backlog of appeals pending in the Office of Medicare Hearings and Appeals (OMHA).
According to Congressman McDermott, 357,000 Medicare appeals are pending at OMHA. If OMHA decided to set a one-year deadline to hear the pending actions and not counting new actions that would be filed, OMHA would have to preside over 1,027.4 hearings a day, including weekends and holidays.
For as long as I know, OMHA has expedited Medicare recipients appeals. However, while Congressman McDermott commends OMHA for the expeditions, he states that the expeditions are not fast enough, even for Medicare recipients.
Congressman McDermott makes several suggestions as to how to decrease the current workload on OMHA.
First, he asks that the “two midnights policy” not be implemented. Instead, he suggests to revamp the recovery audit contractor (RAC) program. Congressman McDermott states that too many issues are still not resolved for the Policy to be implemented and that the implementation will only add to OMHA’s workload.
Second, Congressman McDermott suggests more accountability for the RACs. He states that there is no associated penalty if a RAC collects money from a provider and the decision is overturned on appeal.
To this suggestion, I say, “Bravo, Congressman McDermott!” My suggestion is that the RACs to pay the provider’s attorneys’ fees if overturned on appeal. It seems only fair that the provider not have to pay legal fees if the provider shows that the RAC was incorrect in its assessment.
Thirdly, Congressman McDermott suggests to ensure the newly instated pause on document requests corrects the problems. CMS has recognized inherent problems with the RAC program and has issued a pause of document requests. Well, Congressman McDermott says make sure you fix the problem before lifting the pause. Logical.
Without question, the backlog at OMHA needs to be addressed. Some Medicare providers have complained of not having their cases heard for years. Imagine waiting to be heard in front of a judge for years….not knowing…
It is hard enough for providers to go through a Medicare audit. Much less appeal and then…………………………………………….wait in Purgatory.
At a preliminary injunction hearing today, I realized that NC Division of Medical Assistance (DMA), like the Titanic, has difficulty changing its course.
It is my contention (and, I argue, the 4th Circuit’s position, as well) that a Managed Care Organization (MCO) does not have the authority, without DMA’s express authorization, to terminate, suspend or refuse to contract with any provider. PERIOD. I don’t care if the provider has phantom clients and is billing Medicaid 34/hr/day. (People, I am obviously against Medicaid fraud. I am trying to make a point).
An MCO cannot, without express authorization from DMA, terminate, suspend, or refuse to contract with any provider.
Why do I think this? (besides the fact that this is a better position for my clients). And why do I think DMA is Titanic-like?
On or about May 10, 2013, the 4th Circuit published K.C. v. Shipman (“Shipman”). The second sentence of Shipman says it all, “PBH [the MCO at-issue in this particular case], a local subdivision of the state that manages the delivery of plaintiffs’ Medicaid services pursuant to a contract with NCDHHS.” Hmmmm…too legalese-like?
FYI: NCDHHS = NC Dept. of Health and Human Services (DHHS), which is the state agency that manages DMA, which is the division that manages Medicaid. For a complete list of DHHS’ divisions, click here.
Shipman goes on to say, “states should enjoy both an administrative benefit (the ability to designate a single state agency to make final decisions in the interest of efficiency) but also a corresponding burden (an accountability regime in which an agency cannot evade federal requirements by deferring to the actions of other entities).” (emphasis added). Accountability, People!!! That’s what I am talking about!
In other words, DMA, as the single state entity, cannot contract with a third-party and NOT carry the burden of supervising that third-party and insuring that the third-party follows federal law. Or even simpler, the single state entity cannot contract out of (or divorce itself from) federal laws and hide behind a contract. Or even simpler, a teacher at a school cannot suspend a student without the authorization of the principal/school.
Yet, despite Shipman, MCOs are still contending that, “DMA cannot tell us what to do.”
Yet, despite Shipman, MCOs are still terminating, suspending and refusing to contract with providers without the express authority of DMA.
Yet, despite Shipman, TODAY, in my preliminary injunction hearing (the transcript of which will be a public record), the MCO’s attorney argued that (per case law from 1941) the MCO is an independent contractor (hence DMA having no control over the MCO). The DMA attorney piggy-backed the MCO argument and pointed out that DMA had taken no action in this case (i.e., the provider’s Medicaid contract was NOT terminated according to DMA). In other words, the teacher tried to expel a student from school without the school/principal authorizing the expulsion…or even backing it up.
It is as if Shipman came out May 10, 2013, and, here on now May 28, DMA (or its agents the MCOs) is struggling to change its course. But, like the Titanic, DMA is too big, too heavy and too dinosaur-ish to move quickly adapt or change to comply with new federal law (although, even prior to Shipman, I argued it is absolutely obvious that an MCO is the agent of the state…it’s just nice to have some “auth-or-i-TIE” to back my argument).
At the moment that someone yelled, “Iceberg,” what did the Titanic do?
1. Some say the officer in charge had a 30 second delay in giving the order to change the ship’s course after the spotting of the iceberg. Apparently, he was dumbfounded for 30 seconds. Can’t say I blame him. Pretty scary stuff! But, some say, that 30 second delay sunk the Titanic.
2. Some say when the iceberg was spotted, the steersman, Robert Hitchins, went into a panic and turned the Titanic the wrong way. Remember, the Titanic was launched back when sailors were more used to sailing ships. They learned on “Tiller Orders.” If you want to go one way, you push the tiller the other way. So it is not surprising that, in a panic, Hitchins would have resorted to Tillers Orders.
3. Some say the Titanic sank because it was the largest ship afloat. The Titanic was only the second of three Olympic class ocean liners operated by White Star Line. It carried 2,224 passengers. Because of the Titanic’s massive size, the hull plates buckled inward along her starboard side and opened 5 of 16 watertight compartments to the sea.
4. Some say (this has nothing to do with sinking, but with loss of life), the Titanic lacked enough lifeboats. The Titanic had enough lifeboats for 1,178 people, slightly more than 1/2 of the passengers. Supposedly, the reason the Titanic had insufficient lifeboats was because of outdated maritime safety regulations.
Similarly, DMA, like the Titanic, has made some “sink-able” errors, but with administration committed to change, let’s hope we can correct the “sink-able” errors before the Medicaid behavioral health system sinks. Because, instead of 2,224 passengers, Medicaid carries 1.5 million passengers.
Let’s review the Titanic-like errors of DMA. For the sake of this blog, the “Iceberg!” moment was the publication of K.C. v. Shipman.
1. K.C. v. Shipman was published May 10, 2013. It is now May 28, and DMA and the MCOs are still arguing in court that MCOs are not agents of DMA. An 18 day delay is a bit more than a 30 second delay, but the similarity is there nonetheless.
2. A panicked turn the wrong way…Shipman came out and legal advocates for DMA and the MCOs instantly begin to argue, “Yeah, but…” Yeah, but Shipman does not apply to providers…Yeah, but Shipman only applies to managed care, not fee-for-services…Yeah, but just because PBH is an agent of the state, it does not mean that all MCOS are agents. Folks, an agent is an agent is an agent. A panicked turn the wrong way is merely a way of denial (and I am not talking about the river De-Nile). And, some say, the panicked turn the wrong way sunk the Titanic.
3. Largest ship afloat; large bureaucratic agency. I do not have the data, but I am willing to bet that DHHS/DMA is one of the biggest NC governmental agencies. In January, the State Auditor released a Medicaid audit. According to the January audit, “[i]n SFY 2011, North Carolina Medicaid incurred administrative expenses of approximately $648.8 million which when compared to MAP spending of $10.3 billion produced an ADM/MAP percentage of 6.3 percent. This percentage was significantly greater than the ratio for states with comparable spending.” With that much spending on administration, the agency can’t be small! Like the Titanic, big things are hard to maneuver or change course. The hull plates begin to buckle. Imagine an elephant going through an obstacle course at top speed…it just isn’t pretty.
4. Like too few lifeboats, Medicaid’s mental health system has too few providers and too many wanting for a seat on the lifeboat. Not to mention, the MCOs seem to have taken it upon themselves to insure there are too few providers by terminating Medicaid contracts, suspending Medicaid contracts and refusing to enroll providers. Today, my client informed me (and, folks, this is not verified; it is hearsay) that during the time in which this provider’s certain Medicaid contracts were terminated by this one MCO, that this one MCO also terminated 27 other providers’ Medicaid contracts. It’s as if, prior to setting sail, a person brought the captain an extra few thousand lifeboats, and, instead of putting the lifeboats on the ship, the captain said, “No thanks. We don’t have room.” But as to Medicaid behavioral health, we have too many in need and not enough providers providing services. (Again, this does not go to the reason of the sink-age (I know that is not a word) of the Titanic, but rather to the number of deaths/recipients not receiving medically necessary mental health services.
In sum, today I decided that DMA is like the Titanic. So big that both were/are very difficult to change its course. Since Shipman, DMA has had an 18 day delay digesting the decision (and counting). Since Shipman, DMA has panicked and turned the wrong way. Since Shipman, DMA has shown it is just too big to move quickly (and it’s hulls may be buckling). Since Shipman, DMA has proven too little providers and too many Medicaid recipients in-need is not a healthy combination.
Remember the saying, “[T]hose that do not learn from history are doomed to repeat it?”
People, the Titanic sank!
Jurisdiction…ugh…what a dry, boring topic. But wait!! Legal jurisdiction is imperative information for all my health care provider readers. Let me explain:
- Say you disagree with a Medicaid denial of services for one of your patients; or
- Say you disagree with the denial of your Critical Access Behavioral Health Agencies (CABHA) certification; or
- Say you disagree with being placed on prepayment review or undergoing a post-payment audit.
In what venue do you have to legally pursue the claim? Right now, some DMA-contracted companies are claiming that OAH does not have jurisdiction over them. In fact, I even have an Order signed by a Judge directing the contracted company to act, yet the company argues that OAH has no control over it. However, the State Plan states differently….
The Office of Administrative Hearings (OAH) has jurisdiction (meaning OAH can hear lawsuits against) state agencies. “Agency” is statutory defined as an agency or an officer in the executive branch of the government of this State and includes the Council of State, the Governor’s Office, a board, a commission, a department, a division, a council, and any other unit of government in the executive branch. A local unit of government is not an agency.
The state court system, instead is for civil actions. The district court division is the proper division for the trial of all civil actions in which the amount in controversy is ten thousand dollars ($10,000) or less; and the superior court division is the proper division for the trial of all civil actions in which the amount in controversy exceeds ten thousand dollars ($10,000).
Whether you are required to proceed legally at OAH or state court will impact your claim A TON!
The OAH Mission Statement is:
To serve the citizens of North Carolina, with quality and efficiency, by providing an independent forum for prompt and impartial resolution of administrative law contested cases involving citizens and state agencies; investigating alleged acts of unlawful employment practices in state government; functioning as the State’s codifier and publisher of all administrative rules; and reviewing rules before the Rules Review Commission.
Daily, OAH decides cases against the state government. Therefore, the judges at OAH are intimately involved in state legislation and the state governments limits. Also, OAH is a much faster process. A Contested Case Hearing filed in OAH will be heard in months (a preliminary injunction, even quicker); whereas a complaint filed in Wake County Superior Court may not be heard for years (it may be faster or slower in rural areas. I just don’t know).
From my cursory explanation of OAH, it would appear that any Medicaid issue against the state government would automatically be heard at OAH, right? Well, recently, I have encountered a number of Division of Medical Assistance’s agents arguing that (1) these agents are not agents, they are independent contractors; and (2) that OAH does not have jurisdiction over the agents.
Specifically, DMA contracts with companies to manage Medicaid, conduct audits, conduct investigations, etc. The Managed Care Organizations have been contracted with DMA to manage Medicaid behavioral health. Remember, since Western Highlands was consumed by Smokey Mountain, North Carolina now has 10 MCOs. They are, in no particular order:
- Coastal Care
- East Carolina Behavioral Health
- Alliance Behavioral Health
- Cardinal Innovations HealthCare Solutions
- CenterPointe Human Services
- Smokey Mountain Center
- Partners Behavioral Health Management
- MeckLink Behavioral Healthcare
So what if you have a legal disagreement with an MCO? State court or OAH? So far, all MCOs have declared themselves to be out of OAH jurisdiction.
However, remember my blog, “Final Agency Decision No Longer Needed in Appeals” from March 5, 2013? If not, feel free to go back and read it.
The point is, unless North Carolina receives a specific Waiver from the federal government, NC must follow federal law which requires a single state agency to administer Medicaid. If OAH is allowed a final decision, then, in essence, another entity is deciding a Medicaid issue.
So, is NC in violation of federal law? Well, yes, as to other federal laws, but not in this case. NC submitted a State Plan Waiver, which was granted on December 27, 2012.
The Waiver states, in pertinent part, OAH acknowledges and also agrees that the issue to be determined at final hearings conducted in accordance with this waiver is whether a single state Medicaid agency or one of its contractors or agents exceeded its authority or jurisdiction, acted erroneously, failed to use proper procedure, acted arbitrarily or capriciously, and/or failed to act as required by law or rule…”
According to the Waiver, it does not matter if the MCO is a contractor or agent. Either way, OAH has jurisdiction.