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Step Right Up! CMS Announces New Medicare-Medicaid ACO Model

Come one! Come all! Step right up to be one of the first 6 states to test the new Medicare-Medicaid Affordable Care Act (ACO) pilot program.

experiment

Let your elderly population be the guinea pigs for the Center for Medicare and Medicaid Services (CMS). Let your most needy population be the lab rats for CMS.

On December 15, 2016, CMS announced its intent to create Medicare/caid ACOs. Currently, Medicare ACOs exist, and if your physician has opted to participate in a Medicare ACO, then, most likely, you understand Medicare ACOs. Medicare ACOs are basically groups of physicians – of different service types – who voluntarily decide (but only after intense scrutiny by their lawyers of the ACO contract) to collaborate care with the intent of higher quality and lower cost care.  For example, if your primary care physician participates in a Medicare ACO and you suffer intestinal issues, your primary care doctor would coordinate with a GI specialist within the Medicare ACO to get you an appointment. Then the GI specialist and your physician would share medical records, including test results and medication management. The thought is that the coordination of care will decrease duplicative tests, ensure appointments are made and kept, and prevent losing medical records or reviewing older, moot records.

Importantly, the Medicare beneficiary retains all benefits of “normal” Medicare and can choose to see any physician who accepts Medicare. The ACO model is a shift from “fee-for-service” to a risk-based, capitated amount in which quality of care is rewarded.

On the federal level, there have not been ACOs specially created for dual-eligible recipients; i.e., those who qualify for both Medicare and Medicaid…until now.

The CMS is requesting states to volunteer to participate in a pilot program instituting Medicare/Medicaid ACOs. CMS is looking for 6 brave states to participate. States may choose from three options for when the first 12-month performance period for the Medicare-Medicaid ACO Model will begin for ACOs in the state: January 1, 2018; January 1, 2019; or January 1, 2020.

Any state is eligible to apply, including the District of Columbia. But if the state wants to participate in the first round of pilot programs, intended to begin 2018, then that state must submit its letter of intent to participate by tomorrow by 11:59pm. See below.

dual-acos

I tried to research which states have applied, but was unsuccessful. If anyone has the information, I would appreciate it if you could forward it to me.

Participating in an ACO, whether it is only Medicare and Medicare/caid, can create a increase in revenue for your practices. Since you bear some risk, you also reap some benefit if you able to control costs. But, the decision to participate in an ACO should not be taken lightly. Federal law yields harsh penalties for violations of Anti-Kickback and Stark laws (which, on a very general level, prohibits referrals among physicians for any benefit). However, there are safe harbor laws and regulations specific to ACOs that allow exceptions. Regardless, do not ever sign a contract to participate in an ACO without an attorney reviewing it. 

Food for thought – CMS’ Medicare/caid ACO Model may exist only “here in this [Obama] world. Here may be the last ever to be seen of [healthcare.gov] and their [employee mandates]. Look for it only in [history] books, for it may be no more than a [Obamacare] remembered, a [health care policy] gone with the wind…”

As, tomorrow (January 20, 2017) is the presidential inauguration. The winds may be a’changing…

Key Medicaid Questions Post-Election

Disclosure: This is the opinion/facts from the Kaiser Family Foundation, not me. But I found this interesting. My opinion will be forthcoming.

Kaiser Family Foundation article:

Medicaid covers about 73 million people nationwide.  Jointly financed by the federal and state governments, states have substantial flexibility to administer the program under existing law.  Medicaid provides health insurance for low-income children and adults, financing for the safety net, and is the largest payer for long-term care services in the community and nursing homes for seniors and people with disabilities.  President-elect Trump supports repeal and replacement of the Affordable Care Act (ACA) and a Medicaid block grant. The GOP plan would allow states to choose between block grant and a per capita cap financing for Medicaid. The new Administration could also make changes to Medicaid without new legislation.

1. HOW WOULD ACA REPEAL AFFECT MEDICAID?

A repeal of the ACA’s coverage expansion provisions would remove the new eligibility pathway created for adults, increase the number of uninsured and reduce the amount of federal Medicaid funds available to states. The Supreme Court’s 2012 ruling on the ACA effectively made the Medicaid expansion optional for states. As of November 2016, 32 states (including the District of Columbia) are implementing the expansion.  The full implications of repeal will depend on whether the ACA is repealed in whole or in part, whether there is an alternative to the ACA put in place and what other simultaneous changes to Medicaid occur. However, examining the effects of the ACA on Medicaid provide insight into what might be at stake under a repeal.

What happened to coverage? The ACA expanded Medicaid eligibility to nearly all non-elderly adults with income at or below 138% of the federal poverty level (FPL) – about $16,396 per year for an individual in 2016. Since summer of 2013, just before implementation of the ACA expansions, through August 2016 about 16 million people have been added to Medicaid and the Children’s Health Insurance Program.  While not all of this increase is due to those made newly eligible under the ACA, expansion states account for a much greater share of growth. States that expanded Medicaid have had large gains in coverage, although ACA related enrollment has tapered.  From 2013 to 2016 the rate of uninsured non-elderly adults fell by 9.2% in expansion states compared to 6% in non-expansion states.

What happened to financing? The law provided for 100% federal funding of the expansion through 2016, declining gradually to 90% in 2020 and beyond. Expansion states have experienced large increases in federal dollars for Medicaid and have claimed $79 billion in federal dollars for the new expansion group from January 2014 through June 2015.  Studies also show that states expanding Medicaid under the ACA have realized net fiscal gains despite Medicaid enrollment growth initially exceeding projections in many states.

What other Medicaid provisions were in the ACA? The ACA required states to implement major transformations to modernize and streamline eligibility and enrollment processes and systems.  The ACA also included an array of new opportunities related to delivery system reforms for complex populations, those dually eligible for Medicare and Medicaid and new options to expand community-based long-term care services.

2. WHAT WOULD CHANGES IN THE FINANCING STRUCTURE MEAN FOR MEDICAID?

A Medicaid block grant or per capita cap policy would fundamentally change the current structure of the program. These policies are typically designed to reduce federal spending and fix rates of growth to make federal spending more predictable, but could eliminate the guarantee of coverage for all who are eligible and the guarantee to states for matching funds.  States would gain additional flexibility to administer their programs but reduced federal funding could shift costs and risk to beneficiaries, states, and providers.

How would it work? Block grants or per capita caps could be structured in multiple ways. Key policy decisions would determine levels of federal financing as well as federal and state requirements around eligibility, benefits, state matching requirements, and beneficiary protections. Previous block grant proposals have determined a base year financing amount for each state and then specified a fixed rate of growth for federal spending. Under a Medicaid per capita cap, the federal government would set a limit on how much to reimburse states per enrollee.  Payments to states would be based on per enrollee spending multiplied by enrollees. Spending under per capita cap proposals fluctuate based on changes in enrollment, but would not account for changes in the costs per enrollee beyond the growth limit.  To achieve federal savings, the per capita growth amounts would be set below the projected rates of growth under current law.

What are the key policy questions? Key questions in designing these proposals include: what new flexibility would be granted to states, what federal requirements would remain in place, what requirements would be in place for state matching funds, what is the base year and growth rates, and how would a potential repeal of the ACA work with a block grant proposal?  Given the lack of recent administrative data, setting a base year could be challenging.  These financing designs could lock in historic spending patterns and variation in Medicaid spending across states, resulting in states deemed “winners” or “losers.”

What are the implications? Capping and reducing federal financing for Medicaid could have implications for beneficiaries, states, and providers including: declines in Medicaid coverage or new financial barriers to care; limited funding for children (the majority of Medicaid enrollees) as well as the elderly and those with disabilities (populations that represent the majority of Medicaid spending); reduced funding for nursing homes and community-based long-term care (Medicaid is the largest payer of these services); reductions in federal revenues to states and Medicaid revenues for safety-net providers.  A block grant would not adjust to increased coverage needs during a recession.  Block grants or per capita caps would not adjust to changes in health care or drug costs or emergencies.  Recently Medicaid costs have increased due to high cost specialty drugs and Medicaid has been used to help combat the growing opioid crisis.

3. HOW COULD MEDICAID BE CHANGED THROUGH ADMINISTRATIVE ACTIONS?

The Administration could make changes to Medicaid without changes in legislation.

How can changes be made through guidance? A new administration can reinterpret existing laws through new regulations and new sub-regulatory guidance. While there are rules that govern how to change regulations, a new administration has more flexibility to issue or amend sub-regulatory guidance, such as state Medicaid director letters. Rules promulgated by the Obama administration could be rolled back or changed.

How can changes be made through waivers? Throughout the history of the Medicaid program, Section 1115 waivers have provided states an avenue to test and implement demonstrations that, in the view of the Health and Human Services Secretary, advance program objectives but do not meet federal program rules. Longstanding federal policy has required waivers to be budget neutral for the federal government.

What kind of waivers may be considered?  Seven states are using waivers to implement the ACA Medicaid expansion, including Indiana.  The Indiana waiver, implemented under then Governor Pence, includes provisions to impose: premiums on most Medicaid beneficiaries; a coverage lock-out period for individuals with incomes above the poverty level who fail to pay premiums; health savings accounts; and healthy behavior incentives.  The Obama administration has not approved waivers that would require work as a condition of Medicaid eligibility.  It also has denied Ohio’s waiver request to impose premiums regardless of income and exclude individuals from coverage until all arrears are paid on the basis that this would restrict or undermine coverage from existing levels.  Many other states are using waivers to implement payment and delivery system reforms.  The incoming administration could decide whether or not to renew existing waivers and can approve a new set of waivers to promote its own program goals.

All Medicare/Caid Health Care Professionals: Start Contracting with Qualified Translators to Comply with Section 1557 of the ACA!!

Being a health care professional who accepts Medicare and/ or Medicaid can sometimes feel like you are Sisyphus pushing the massive boulder up a hill, only to watch it roll down, over and over, with the same sequence continuing for eternity. Similarly, sometimes it can feel as though the government is the princess sleeping on 20 mattresses and you are the pea that is so small and insignificant, yet so annoying and disruptive to her sleep.

Well, effective immediately – that boulder has enlarged. And the princess has become even more sensitive.

boulder

On May 18, 2016, the Department of Health and Human Services (HHS) published a Final Rule to implement Section 1557 of the Affordable Care Act (ACA). Section 1557 of the ACA has been on the books since the ACA’s inception in 2010. However, not until 6 years later, did HSD finally implement regulations regarding Section 1557. 81 Fed. Reg. 31376.

The Final Rule became effective July 18, 2016. You are expected to be compliant with the rule’s notice requirements, specifically the posting of a nondiscrimination notice and statement and taglines within 90 days of the Final Rule – October 16, 2016. So you better giddy-up!!

First, what is Section 1557?

Section 1557 of the ACA provides that an individual shall not, on the basis of race, color, national origin, sex, age, or disability, be

  • excluded from participation in,
  • denied the benefits of, or
  • subjected to discrimination under

all health programs and activities that receive federal financial assistance through HHS, including Medicaid, most Medicare, student health plans, Basic Health Program, and CHIP funds; meaningful use payments (which sunset in 2018); the advance premium tax credits; and many other programs.

Section 1557 is extremely broad in scope. Because it is a federal regulation, it applies to all states and health care providers in all specialties, regardless the size of the practice and regardless the percentage of Medicare/caid the agency accepts.

HHS estimates that Section 1557 applies to approximately 900,000 physicians. HHS also estimates that the rule will cover 133,343 facilities, such as hospitals, home health agencies and nursing homes; 445,657 clinical laboratories; 1300 community health centers; 40 health professional training programs; Medicaid agencies in each state; and, at least, 180 insurers that offer qualified health plans.

So now that we understand Section 1557 is already effective and that it applies to almost all health care providers who accept Medicare/caid, what exactly is the burden placed on the providers? Not discriminating does not seem so hard a burden.

Section 1557 requires much more than simply not discriminating against your clients.

Section 1557 mandates that you will provide appropriate aids and services without charge and in a timely manner, including qualified interpreters, for people with disabilities and that you will provide language assistance including translated documents and oral interpretation free of charge and in a timely manner.

In other words, you have to provide written materials to your clients in their spoken language. To ease the burden of translating materials, you can find a sample notice and taglines for 64 languages on HHS’ website. See here. The other requirement is that you provide, for no cost to the client, a translator in a timely manner for your client’s spoken language.

In other words, you must have qualified translators “on call” for the most common 15, non-English languages in your state. You cannot rely on friends, family, or staff. You also cannot allow the child of your client to act as the interpreter. The clients in need of the interpreters are not expected to provide their own translators – the burden is on the provider. The language assistance must be provided in a “timely  manner. “Further, these “on call” translators must be “qualified,” as defined by the ACA.

I remember an English teacher in high school telling the class that there were two languages in North Carolina: English and bad English. Even if that were true back in 19XX, it is not true now.

Here is a chart depicting the number of non-English speakers in North Carolina in 1980 versus 2009-2011:

languages

As you can see, North Carolina has become infinitely more diverse in the last three decades.

And translators aren’t free. According to Costhelper Small Business,

Typical costs:
  • Interpreting may take place in person, over the phone or via video phone.
  • In-person interpreters typically cost $50-$145 per hour. For example, American Language Services offers interpreters starting at $100 per hour (or $125 for sign language) and a two-hour minimum is required.
  • Phone interpreters typically cost $1.25-$3 per minute. Language Translation, Inc. offers a flat fee of $1.88 per minute for phone interpreting, for example.
  • Video interpreters typically range from $1.75 to $7 per minute. For instance, LifeLinks offers video interpreting from $2.25 per minute for any language and $2.95 for sign language. A 15-minute minimum is common for phone or video interpreting.

It seems likely that telehealth may be the best option for health care providers considering the cost of in-person translations. Of course, you need to calculate the cost of the telehealth equipment and the savings you project over time to determine whether the investment in telehealth equipment is financially smart.

In addition to agencies having access to qualified translators, agencies with over 15 employees must designate a single employee who will be responsible for Section 1557 compliance and to adopt a grievance procedure for clients. Sometimes this may mean hiring a new employee to comply.

The Office of Civil Rights (“OCR”) at HHS is the enforcer of Section 1557. OCR has been enforcing Section 1557 since its inception in 2010 – to an extent.

However, expect a whole new policing of Section 1557 now that we have the Final Rule from HHS.

Have an Inkling of a Possible Overpayment, You Must Repay Within 60 Days, Says U.S. District Court!

You are a health care provider.  You own an agency.  An employee has a “hunch” that…

maybe…

perhaps….

your agency was overpaid for Medicare/caid reimbursements over the past two years to the tune of $1 million!

This employee has been your billing manager for years and you trust her…but…she’s not an attorney and doesn’t have knowledge of pertinent legal defenses. You are concerned about the possibility of overpayments, BUT….$1 million? What if she is wrong?  That’s a lot of money!

According to a recent U.S. District Court in New York, you have 60 days to notify and refund the government of this alleged $1 million overpayment, despite not having a concrete number or understanding whether, in fact, you actually owe the money.

Seem a bit harsh? It is.

With the passage of the Affordable Care Act (ACA) on March 23, 2010, many new regulations were implemented with burdensome requirements to which health care providers are required to adhere.  At first, the true magnitude of the ACA was unknown, as very few people actually read the voluminous Act and, even fewer, sat to contemplate the unintentional consequences the Act would present to providers. For example, I daresay that few, if any, legislators foresaw the Draconian effect from changing the word “may” in 42 CFR 455.23 to “must.” See blog and blog and blog.

Another boiling frog in the muck of the ACA is the 60-Day Refund Rule (informally the 60-day rule).

What is the 60-Day Refund Rule?

In 2012, CMS proposed the “60-day Refund Rule,” requiring Medicare providers and suppliers to repay Medicare overpayments within 60 days of the provider or supplier identifying the overpayment.  Meaning, if you perform a self audit and determine that you think that you were overpaid, then you must repay the amount within 60 days or face penalties.

If I had a nickel for each time a clients calls me and says, “Well, I THINK I may have been overpaid, but I’m not really sure,” and, subsequently, I explained how they did not owe the money, I’d be Kardashian rich.

It is easy to get confused. Some overpayment issues are esoteric, involving complex eligibility issues, questionable duplicity issues, and issues involving “grey areas” of “non”-covered services.  Sometimes a provider may think he/she owes an overpayment until he/she speaks to me and realizes that, by another interpretation of the same Clinical Coverage Policy that, in fact, no overpayment is owed. To know you owe an overpayment, generally, means that you hired someone like me to perform the self audit.  From my experience, billing folks are all too quick to believe an overpayment is owed without thinking of the legal defenses that could prevent repayment, and this “quick to find an overpayment without thinking of legal defenses” is represented in Kane ex rel. United States et al. v. Healthfirst et al., the lawsuit that I will be discussing in this blog.  And to the billings folks’ credit, you cannot blame them.  They don’t want to be accused of fraud. They would rather “do the right thing” and repay an overpayment, rather than try to argue that it is not due.  This “quick to find an overpayment without thinking of legal defenses” is merely the billing folks trying to conduct all work “above-board,” but can hurt the provider agency financially.

Nonetheless, the 60-day Refund Rule is apathetic as to whether you know what you owe or whether you hire someone like me.  The 60-Day Refund Rule demands repayment to the federal government upon 60-days after your “identification” of said alleged overpayment.

Section 1128(d)(2) of the Social Security Act states that:

“An overpayment must be reported and returned under paragraph (1) by the later of— (A) the date which is 60 days after the date on which the overpayment was identified; or (B) the date any corresponding cost report is due, if applicable.”

A recent case in the U.S. District Court of New York has forged new ground by denying a health care providers’ Motion to Dismiss the U.S. government’s and New York State’s complaints in intervention under the False Claims Act (FCA).  The providers argued that the 60-day rule cannot start without a precise understanding as to the actual amount of the overpayment. Surely, the 60-day rule does not begin to run on the day someone accuses the provider of a possible overpayment!

My colleague, Jennifer Forsyth, recently blogged about this very issue.  See Jennifer’s blog.

Basically, in Kane ex rel. United States et al. v. Healthfirst et al., three hospitals provided care to Medicaid patients. Due to a software glitch [cough, cough, NCTracks] and due to no fault of the hospitals, the hospitals received possible overpayments.  The single state entity for Medicaid in New York questioned the hospitals in 2010, and the hospitals took the proactive step of tasking an employee, Kane, who eventually became the whistleblower, to determine whether, if, in fact, the hospital did receive overpayments.

At this point, arguably, the hospitals were on notice of the possibility of overpayments, but had not “identified” such overpayments per the 60-day rule.  It was not until Kane made preliminary conclusions that the hospitals were held to have “identified” the alleged overpayments.  But very important is the fact that the Court held the hospitals liable for having “identified” the alleged overpayments prior to actually knowing the veracity of the preliminary findings.

Five months after being tasked with the job of determining any overpayment, Kane emails the hospital staff her findings that, in her opinion, the hospitals had received overpayments totaling over $1 million for over 900 claims.  In reality, Kane’s findings were largely inaccurate, as approximately one-half of her alleged findings of overpayments were actually paid accurately.  Despite the inaccurate findings, the Complaint that Kane filed as the whistleblower (she had been previously fired, which may or may not have contributed to her willingness to bring a whistleblower suit), alleged that the hospitals had a duty under the 60-day rule to report and refund the overpayments, even though there was no certainty as to whether the findings were accurate. And the Court agreed with Kane!

Even more astounding, Kane’s email to the hospitals’ management that contained the inaccurate findings contained phrases that would lead one to believe that the findings were only preliminary:

  • “further analysis would be needed to confirm his findings;” and
  • the spreadsheet provided “some insight to the magnitude of the problem” (emphasis added).

The above-mentioned comments would further the argument that the hospitals were not required to notify the Department and return the money 60 days from Kanes’ email because Kane’s own language within the email was so wishy-washy. Her language in her email certainly does not instill confidence that her findings are accurate and conclusive.

But…

The 60-day rule requires notification and return of the overpayments within 60 days of identification.  The definition of “identification” is the crux of Kane ex rel. United States et al. v. Healthfirst et al. [it depends on what the definition of “is” is].

The Complaint reads, that the hospitals “fraudulently delay[ed] its repayments for up to two years after the Health System knew” the extent of the overpayments” (emphasis added). According to the Complaint, the date that the hospitals “knew” of the overpayment was the date Kane emailed the inaccurate findings.

The hospitals filed a Motion to Dismiss based on the fact that Kane’s email and findings did not conclusively identify overpayments, instead, only provided a preliminary finding to which the hospitals would have needed to verify.

The issue in Kane ex rel. United States et al. v. Healthfirst et al. is the definition of “identify” under the 60-day rule. Does “identify” mean “possibly, maybe?” Or “I know I owe it?” Or somewhere in between?

The hospitals filed a Motion to Dismiss, claiming that the 60-day rule did not begin to run on the date that Kane sent his “preliminary findings.”  The U.S. District Court in New York denied the hospitals’ Motion to Dismiss and stated in the Order, “there is an established duty to pay money to the government, even if the precise amount due is yet to be determined.” (emphasis added).

Yet another heavy burden tossed upon health care providers in the ever-deepening, regulatory muck involved in the ACA.  As health care providers carry heavier burdens, they begin to sink into the muck.

Important take aways:

  • Caveat: Take precautions to avoid creating disgruntled, former employees.
  • Have an experienced attorney on speed dial.
  • Self audit, but self audit with someone highly experienced and knowledgeable.
  • Understand the ACA. If you do not, read it. Or hire someone to teach you.

Supreme Court Upholds Obamacare! Three Judges Dissent, Calling the Decision Absurd!

Mark this day, June 25,2015 (also my daughter’s 10th birthday) as also the birth of a new state.  Our country, according to the Supreme Court’s decision in King v. Burwell, now consists of 51 states.  The Health and Human Services (HHS) is now our 51st state.

Today the Supreme Court decided the King v. Burwell case.

If you recall, this case was to determine whether the plain language of the Affordable Care Act (ACA) should be upheld.  According to the ACA, people were to receive tax subsidies or “premium tax credits” to subsidize certain purchases of health insurance made on Exchanges, but only those enrolled in through an Exchange established by the State under [§18031]. §36B(c)(2)(A).

See blog.

“Specifically, the question presented is whether the Act’s tax credits are available in States that have a Federal Exchange.”

“At this point, 16 States and the District of Columbia have established their own Exchanges; the other 34 States have elected to have HHS do so.”

In Justice Scalia’s words, “This case requires us to decide whether someone who buys insurance on an Exchange established by the Secretary gets tax credits. You would think the answer would be obvious—so obvious there would hardly be a need for the Supreme Court to hear a case about it. In order to receive any money under §36B, an individual must enroll in an insurance plan through an “Exchange established by the State.” The Secretary of Health and Human Services is not a State. So an Exchange established by the Secretary is not an Exchange established by the State—which means people who buy health insurance through such an Exchange get no money under §36B.”

However, the majority disagrees.

Apparently, HHS is now our 51st state.

The upshot of the Decision is that the majority found that, despite our country’s deep-rooted, case law precedent that when a statute is unambiguous that the plain meaning of the statute prevails.  Despite hundreds of years of the Supreme Court upholding statutes’ clear meanings, the Supreme Court, in this case, decided that “[i]n extraordinary cases, however, there may be reason to hesitate before concluding that Congress has intended such an implicit delegation.”

Therefore, when the ACA became law, and the word “state” was used, surely, Congress meant “state and/or federal government.”  Or, on the other hand, let’s just call HHS a state for the purpose of the ACA.

In Justices Scalia, Thomas, and Alito’s opinions, the decision is absurd.  In the dissent they write, “The Court holds that when the Patient Protection and Affordable Care Act says “Exchange established by the State” it means “Exchange established by the State or the Federal Government.” That is of course quite absurd, and the Court’s 21 pages of explanation make it no less so.”

Low Medicaid Reimbursement Rates Violate the Supremacy Clause?! …The Supreme Court to Weigh In!

Tomorrow is a big day.  Not only will most of us return to work after a long weekend, but the Supreme Court will hear oral arguments on a very important issue.

On January 20, 2015, (tomorrow) the Supreme Court of the United States will hear oral arguments on a very important issue that will affect every health care provider in America who accepts Medicaid, and, yet, there has been very little media coverage over this lawsuit.

Legal Issue: Does a Medicaid provider have a private right of action under the Medicaid Act to bring a lawsuit against states under the Supremacy clause.

The Issue Translated from Legalese to English: Can a Medicaid provider sue the state in which the provider does business if the provider believes that the Medicaid reimbursement rate for a particular service or product is too low? For example, can a dentist sue NC for a higher Medicaid reimbursement rate for tooth extractions? Can a long-term care facility and/or a home care agency sue due to low Medicaid personal care services (PCS) rates?

It is my opinion that Medicaid providers across the country have not brought enough lawsuits demanding higher Medicaid reimbursement rates. It is without question that Medicaid reimbursement rates across the country are too low. Low reimbursement rates cause health care providers to refuse to accept Medicaid recipients. See my blog NC Health Care Providers Who Accept Medicaid: Thank you!.

If you hold a Medicaid card, you do not automatically have access to good quality health care. You are segregated from the privately insured and the care you receive is not equal. You are limited in your choice of doctors. If you are an adult, you can forget any dental procedures. Even if you aren’t an adult, you require prior approval for almost all services (regardless of whether you are suffering from pain), which will often be denied (or reduced…or require a significant waiting period). You want mental health care? You better get the very least amount of help possible until you prove you need more help. See my blog NC Medicaid Expansion: Bad for the Poor.

And why won’t more health care providers accept Medicaid? The Medicaid reimbursement rates are too low!! The Medicaid reimbursement rates are too low for health care providers to yield a profit…or, in many instances, even cover the overhead. In fact, providers tell me that when they do accept Medicaid, they are forced to accept more privately insured patients to offset the losses from accepting the finite number of Medicaid patients. In many states, the states refuse to cover psychology costs for Medicaid recipients, and other states refuse to cover the costs for PCS.

So, I say, bring on the lawsuits!!! Force states to increase Medicaid reimbursement rates!!

For example, in obstetrics, if the national Medicaid reimbursement rate for ob/gyn visits is $1.00, here, in NC, we reimburse ob/gyns 88¢. Which is why only 34% of North Carolina ob/gyns accept Medicaid.  See Kaiser.

So far, across the country, federal courts have held that Medicaid providers do have a private right of action to sue states for low reimbursement rates. In fact, in most cases, the providers have PREVAILED and the states have been forced to pay higher rates!!!

Providers of all types have filed lawsuits across the country disputing the states’ Medicaid reimbursement rates as being too low. For example, in California, between April 2008 and April 2009, five lawsuits were filed against the state of California to stop scheduled reductions in reimbursement rates (on behalf of rehabilitation providers, nonemergency medical transportation providers, pharmacies, physicians, and emergency physicians).

A Florida lawsuit that was settled in December 2014 revolved around a young boy on Medicaid who was suffering from a painful sinus infection. His mother contacted multiple physicians and was denied appointments because the mother and her son were on Medicaid. He was forced to wait almost a week for an appointment. The judge in the case wrote, “I conclude that Florida’s Medicaid program has not compensated primary physicians or specialists at a competitive rate as compared with either that of Medicare or private insurance payers….I further conclude that Florida’s structure for setting physician reimbursement fails to account for statutorily mandated factors in the Medicaid Act, including the level of compensation needed to assure an adequate supply of physicians.”

Over the years, the Supreme Court has vacillated over even determining whether a Medicaid provider has a private right of action under the Medicaid Act to bring a lawsuit against states under the Supremacy clause.

In 2002, the Supreme Court denied certiorari (refused to hear the argument) on this very issue. Coming out of the 9th Circuit (which includes California), a Circuit which has been especially busy with lawsuits arguing Medicaid reimbursement rates are too low, the case of Independent Living Center of California v. Shewry would have squarely addressed this issue. But the Supreme Court denied certiorari and did not hear arguments.

In 2012, the Supreme Court decided to hear arguments on this issue. In Douglas v. Independent Living Center, Medicaid beneficiaries and providers sued the California state Medicaid agency, seeking to enjoin a number of proposed provider payment rate cuts. After the Supreme Court heard oral argument, but before it had issued its decision, the Centers of Medicare and Medicaid Services (CMS) approved California’s state plan amendment containing the rate cuts. Consequently, the Douglas majority held that the case should be sent back to the lower courts to consider the effect of CMS’s approval of the state plan amendment, without deciding whether the beneficiaries and providers had a right to sue.

Now the case Armstrong v. Exceptional Child Center will be heard by the Supreme Court on January 20, 2015.

How did this case come about?

In 2005, the Idaho state legislature passed a law requiring the state Medicaid agency to implement a new methodology to determine provider reimbursement rates, and in 2009, the state Medicaid agency published new, higher rates based, in part, on a study of provider costs. CMS approved the state’s new methodology. However, the new rates never were implemented because the state legislature failed to appropriate sufficient funding, making the refusal to increase the reimbursment rate a budgetary issue.  A group of Idaho residential habilitation providers that accept Medicaid sued the Idaho state Medicaid agency and alleged that the state’s failure to implement the new rates conflicted with federal law (the Supremacy Clause).

Section (30)(A) of the Medicaid Act requires state Medicaid agencies to take provider costs into account when setting reimbursement rates. Under case law precedent, the rate must “bear a reasonable relationship to efficient and economical . . . costs of providing quality services.” To deviate from this standard of reasonableness, a state must justify its decisions with more than budgetary reasons.

The argument is that the state’s low reimbursement rate for X service, is too low to provide good quality services and that the low rates were set for purely budgetary reasons.

Once you prove that the reimbursement rates are too low to expect good quality care (which would be fairly easy for almost all Medicaid services in NC), then you argue that the state’s reimbursement rates violate the Supremacy Clause because the federal law requires good quality care.

What is the Supremacy Clause?

The Supremacy Clause can be found in Article VI, Paragraph 2 of the U. S. Constitution. Basically, it establishes that federal law trumps conflicting state laws , even state constitutional provisions, on matters within the Constitution’s grant of powers to the federal government – such as Medicaid..

In this case, we are talking about a state’s Medicaid reimbursement rate violating the federal law requiring that the rate must bear a reasonable relationship to quality of care.

This is not a small matter.

After all is said and done, the Armstrong case, which will be heard by the Supreme Court tomorrow, will be extraordinarily important for Medicaid health care providers. I believe it is obvious which way I hope the Supreme Court decides…in favor of providers!! In favor of a ruling that states are not allowed to underpay health care providers only because the patient holds a Medicaid card.

My wish is that Medicaid providers across the country bring lawsuits against their state to increase Medicaid reimbursement rates…that the providers prevail…that more health care providers accept Medicaid…and that more Medicaid recipients receive quality health care.

Is that too much to ask?

The Supreme Court will most likely publish its opinion this summer.

Its decision could have an extreme impact on both Medicaid providers and recipients.  Higher Medicaid reimbursement rates would increase the number of physicians willing to accept Mediaid, which, in turn, would provide more access to care for Medicaid recipients.

Keep in mind, however, the issue before the Supreme Court in Armstrong is narrow.  If, for whatever reason, the Supreme Court decides that Medicaid providers do not have a private right to sue under the Supremacy Clause…all is not lost!!! There is more than one way to skin a cat.

Medicare chief Tavenner stepping down; oversaw rocky health care rollout

News Alert: Medicare Chief Tavenner stepping down!!!! 

Here is the article:

WASHINGTON — Medicare chief Marilyn Tavenner — who oversaw the rocky rollout of the president’s health care law — says she’s stepping down at the end of February.
In an email Friday to staff at the Centers for Medicare and Medicaid Services, Tavenner, a former Virginia health secretary and hospital executive, said she’s leaving with “sadness and mixed emotions.”

Tavenner survived the 2013 technology meltdown of HealthCare.gov, but was embarrassed last fall when she testified to Congress that 7.3 million people were enrolled for coverage. That turned out to be an overcount that exaggerated the total by about 400,000.

Calling Tavenner “one of our most esteemed and accomplished colleagues,” Health and Human Services Secrerary Sylvia M. Burwell said the decision to leave was Tavenner’s.
Principal deputy administrator Andy Slavitt will take over as acting administrator.

AZ Supreme Court Holds AZ Legislators Have Standing to Challenge AZ Law, But Media Mischaracterizing the Lawsuit

You know the old adage, “Believe none of what you hear, and only half of what you see?” –Benjamin Franklin.

Well the old adage still holds true, especially when it comes to journalists and the media interpreting and reporting on lawsuits that deal with Medicaid laws, and which, perhaps, only an infinitesimal, ancillary aspect may touch the issue of Medicaid expansion.

Even if the lawsuit will not impact Medicaid expansion, journalists and the media hype the lawsuits as “conservatives challenging Obamacare yet again,” which mischaracterizes the actual lawsuit.

It seems that the media have become so accustomed to polarizing the topic of Medicaid expansion that reporters seem incapable of truly assessing the issues objectively and reporting accordingly.  This has happened recently when the AZ Supreme Court rendered a decision December 31, 2014, regarding legal standing, not the constitutionality of Medicaid expansion as many journalists report.  Biggs, et al. v. Hon. Cooper, et al.

The Arizona Supreme Court only decided that 36 legislators have the legal standing to challenge the passage of House Bill 2010, which was signed into law as A.R.S. § 36-2901.08.

What is A.R.S. § 36-2901.08?

For starters, A.R.S. stands for Arizona Revised Statutes (ARS). For those of you who missed “Schoolhouse Rock” as a child, a statute is a law that is enacted by the legislative body and which governs the state. Statutes are considered “black letter law” and should be interpreted on their face value and plain meaning.

The content of 36-2901.08 allows the State of Arizona to expand Medicaid.  In addition to expanding Medicaid, 35-2901.08 assesses a levy on hospitals to aid in funding the expansion of Medicaid.

36 Arizona legislators voted against 36-2901.08. It passed by a simple majority and was signed into law. The 36 legislators, who voted against the bill, brought a lawsuit to enjoin the statute from being applied or enacted. The State of Arizona’s position is that the 36 legislators lack the legal standing to bring the lawsuit.

Here are the issues in the legislators’ case, BIGGS ET AL. v. HON. COOPER ET AL.:

1. Do the 36 legislators have the standing to bring an injunctive action enjoining Arizona from carrying out 36-2901.08?

2. If the answer to #1 is yes, then have the 36 legislators proven that 36-2901.08 was passed in violation of the AZ Constitution?

I’ve read a number of articles from journalists covering this matter who mischaracterize the Biggs lawsuit as a lawsuit brought by the Arizona legislators, predominantly Republicans, asking the Arizona Supreme Court to strike statute 36-2901.08 because the expansion of Medicaid is unconstitutional, or “challenging Governor Jan Brewer’s Medicaid expansion plan,” or “challenging the legality of the state’s Medicaid expansion…”

These journalists are mischaracterizing the Arizona Supreme Court’s opinion.  And I am not talking about journalists for small, local papers are making these mistakes…the above quotations are from “The New York Times” and “The Associated Press.”

So, let’s discuss the true, correct ramifications of the Arizona Supreme Court opinion in Biggs

First, the Biggs opinion does not hold that Medicaid expansion in Arizona or elsewhere is unconstitutional…nor does it decide whether Medicaid expansion in Arizona is invalid on its face.

The opinion, rendered December 31, 2014, only holds that the 36 legislators have the legal standing to bring the lawsuit…there is no holding as to constitutionality of Medicaid expansion, despite so many journalists across America stating it so.

What is standing?

Standing, or locus standi, is the capacity of a party to bring suit in court.  This is not a question of whether a person is physically capable of bringing a lawsuit, but whether the person prove that he or she has sustained or will sustain a direct injury or harm and that the harm is redressable (or can be fixed or set right by the lawsuit).

The issue on the Supreme Court level in Arizona is only the narrow issue of whether the 36 legislators have standing. Period.

The Arizona Supreme Court held that the 36 legislators do possess the requisite legal standing in order to bring the lawsuit.

Now, the case will be remanded (sent to a lower court), in this instance, to the Superior Court, for a new fact-finding trial now that the issue of standing has been resolved.  In other words, at the lower superior court level, the ref (judge) made a call that the football players on the team (36 legislators) were ineligible to play NCAA football (poor grades, were red-shirted last year), and the alleged ineligible players appealed the decision all the way up.  Now the NCAA (AZ Supreme Court) has determined that the players are eligible and the game will resume.

Again, despite the rhetoric put forth by numerous widespread journalists, the 36 legislators are not merely challenging Arizona Medicaid expansion on its face.

Instead, the Arizona Constitution requires that certain Acts that increase state revenues must pass the legislature by a supermajority vote. See Ariz. Const. art. 9, § 22(A).

Remember from the beginning of this blog that 36-2901.08 was passed by a simple majority.

The 36 legislators argue that the assessment of a levy on Arizona hospitals constitute an Act that requires a supermajority vote, which, obviously would require more than a straight 50% approval.

So the 36 legislators’ lawsuit in AZ is about whether 36-2901.08 needs a supermajority or simple majority to vote it into law.

Not whether Medicaid expansion is constitutional.

Believe none of what you hear, and only half of what you see…especially when it comes to journalists and media reporting on lawsuits regarding Medicaid rules and regulations.

Obama’s Executive Order, Its Impact on Health Care Costs, and the Constitutionality of Executive Orders

Pres. Barack Obama will address the nation tonight at 8 pm (Thursday, November, 20, 2014). He is expected to discuss his executive order that will delay deportations of up to 5 million migrants.

What does an executive order on immigration have to do with Medicaid? Well, you can bank on the fact that almost none of the 5 million people has private health care coverage….which means, there is a high likelihood that most, if not all, the people would qualify for Medicaid.

With the expansion of Medicaid in many states, adding another 5 million people to the Medicaid program would be drastic.  Think about it…in NC, approximately 1.8 million people rely on Medicaid as their insurance.  5 million additional Medicaid recipients would be like adding 3 more North Carolinas to the country.

So I looked into it…

The Kaiser Family Foundation website states that even immigrants who have been in America over 5 years are sometimes still barred from getting Medicaid and those people would remain uninsured.  The Kaiser website states that under current law “some lawfully present immigrants who are authorized to work in the United States cannot enroll in Medicaid, even if they have been in the country for five or more years.”

By law, only immigrants who have green cards are entitled to enroll in Medicaid or purchase subsidized health care coverage through the ACA. Usually those immigrants with green cards are on the course to become citizens.

Regardless of whether Obama’s executive order tonight will or will not allow the 5 million people Medicaid coverage (which it will not), the executive order absolutely will greatly increase health care costs

The truth is that, with or without Obama’s executive order, the government already funds some health care for undocumented immigrants. We have an “emergency Medicaid” program and it pays hospitals to provide emergency and maternity care to immigrants if: 1) he or she otherwise would be Medicaid eligible if they weren’t in the country illegally or 2) he or she are legally present in this country for less than 5 years.  (Which is the reason that ER wait times are so long…if you have no health insurance and you get sick, the ER is precisely where you go).

However, with the additional 5 million people living within the borders of USA, it is without question that the “emergency Medicaid” funds will sharply escalate as hospitals provide more emergency care. ER waits times will, inevitably, increase. Health care costs, in general, surge as the population increases.  And the addition of 5 million folks in America is not a “natural” increase in population.  It will be like we added additional states.  Overnight and with the stroke of a pen, our population will grow immensely.  I guess we will see whether we get “growing pains.”

An act of Congress will still be required before the undocumented immigrants impacted by the executive order would be allowed to participate in the Medicaid programs and the Children’s Health Insurance Program (CHIP) coverage.

As to the Constitutionality of executive orders…

Executive orders are not specifically mentioned in the Constitution.  Many people interpret the nonexistence of executive orders in the Constitution as barring executive orders.

Article I Section I of the Constitution clearly states that all legislative powers reside in Congress. However, an executive order is not legislation. Technically, an executive order is a policy or procedure issued by the President that is a regulation that applies only to employees of the executive branch of government.

Nonetheless, our country has a vast history of president’s issuing executive orders. Abraham Lincoln issued an executive order to engage military in the Civil War, Woodrow Wilson issued an executive order arming the military before we entered World War I, and Franklin Roosevelt approved Japanese internment camps during World War II with an executive order.

Regardless of your political affiliation, in my opinion, it is very interesting that Obama would initiate an executive order regarding immigration given his past statements over the years complaining about past presidents’ executive orders being unconstitutional.

In 2008 campaign speeches, Obama regularly emphasized the importance of civil liberties and the sanctity of the Constitution.

In fact, in speeches, Obama stated, “most of the problems that we have had in civil liberties were not done through the Patriot Act, they were done through executive order by George W. Bush. And that’s why the first thing I will do when I am president is to call in my attorney general and have he or she review every executive order to determine which of those have undermined civil liberties, which are unconstitutional, and I will reverse them with the stroke of a pen.”

Whether or not people believe that executive orders are constitutional, it is indisputable that presidents on both sides of the aisle have issued executive orders.

Reagan and Bush issued executive orders. Although there is an argument that those executive orders came on the heels of congressional bills, as adjustments. Neither Reagan nor Bush simply circumvented Congress.

Going back to tonight’s anticipated executive order allowing 5 million migrants to remain in America…

While the executive order will not allow the 5 million people immediate access to Medicaid and other subsidized health care, it will allow 5 million more uninsured people to exist in America, which will, undoubtedly, increase health care costs and ER visits. And, eventually, the additional 5 million people will be eligible for Medicaid, subsidized health care, and all other benefits of living in America.

Supreme Court Will Decide Whether Citizens in NC and 26 Other States Can Receive Tax Credits for Health Care Premiums!!

With a decision that, I can only imagine, ricocheted against the White House walls, the Supreme Court granted certiorari to hear King v. Burwell this past Friday, November 7, 2014, despite Obama’s administration’s request for the Supreme Court to postpone granting certiorari in order to wait for a D.C. circuit to re-visit an opinion, the Halbig ruling.

The Supreme Court’s decision in King could, potentially, have devastating consequences on the Affordable Care Act (ACA). However, I write that last sentence with an asterisk. Journalists across the country are entitling articles, “Obamacare Is Doomed! Everybody Panic!”, “The Supreme Court Might Gut Obamacare. Your State Could Save It,” and “Obamacare vs. Supreme Court.” These titles to articles are misleading, at best, and factually incorrect, at worst. King v. Burwell is actually not an attack on the ACA. But I will explain later…

First of all, what the heck is certiorari…or “cert”, as many attorneys call it?

A writ of certiorari is actually an order from a higher court to a lower court demanding a record in a case so that the higher court may review the lower court’s decision. A writ of certiorari is the instrument most used by the Supreme Court to review cases. The Supreme Court hears such a small, minute fraction of lawsuits that when the Supreme Court “grants cert,” it is a big deal.

I have written in the past about these same two appellate court cases, which were both published July 22, 2014, within hours of one another, regarding the Health Care Premium Subsidies Section of the Affordable Care Act. These two cases yield polar opposite holdings. In Halbig v. Burwell, the D.C. Circuit Court found that the clear language of the ACA only allows the health care premium subsidies in states that created their own state-run health care exchanges, i.e, residents in NC along with 35 other states would not be eligible for the subsidies. See my blog: Halbig: Court Holds Clear Language of the ACA Prohibits Health Care Subsidies in Federally-Run Exchanges.

Juxtapose the 4th Circuit Court’s decision in King v. Burwell, which held that “For reasons explained below, we find that the applicable statutory language is ambiguous and subject to multiple interpretations. Applying deference to the IRS’s determination, however, we uphold the rule as a permissible exercise of the agency’s discretion.”

So the two cases came to two entirely different conclusions. Halbig: ACA is clear; King: ACA is ambiguous.

Well, for everyone else, that is as clear….as mud.

When the D.C. court decided Halbig, it was not an en banc decision. In English, this means that the entire bench of judges in the D. C. Circuit did not hear the case, only a panel of three (which is the usual way for a case to be heard on appeal to a federal circuit). The Obama administration, along with other proponents of the ACA, hoped that the U.S. Supreme Court would deny cert to King until the D.C. court could re-visit its decision, this time en banc.

Yet, this past Friday, the Supreme Court opted to consider King v. Burwell.

The sole issue to be decided is: Whether the Internal Revenue Service may permissibly promulgate regulations to extend tax-credit subsidies to coverage purchased through exchanges established by the federal government under Section 1321 of the Patient Protection and Affordable Care Act.

How is King v. Burwell NOT an attack on the ACA?

The plaintiffs in King are not asking the Supreme Court to strike down the ACA, even, in part. They are asking the Court to uphold the plain language of the ACA by holding that the IRS’s interpretation of the ACA is erroneous. Let me explain…

Section 1311 directs states to establish exchanges, and Section 1321 directs the federal government to establish exchanges “within” any state that opts to not set up its own state-run exchange, e.g., NC.

Section 1401 authorizes subsidies for people whose household income falls between 100 and 400% of the federal poverty level, who are not eligible for qualified employer coverage or other government programs, and who enroll in coverage “through an Exchange established by the State.” (emphasis added). These 3 criteria are crystal clear based on the plain language of the statute.

The statute makes no provision for subsidies in states that opt not to create their own exchange but, instead, allow the federal government to create an exchange within its state.

The ACA was intended to create penalties if the states do not establish their own exchanges. For example, the subsidies are not allowed to citizens of states without state-created exchanges.

In August 2011, the IRS issued a proposed rule [add link] announcing it would provide tax credits (and implement the resulting penalties) in states with federal exchanges, too. IRS officials later admitted to Congress that they knew the statute did not authorize them to issue tax credits through federal exchanges…Oops…

The proposed rule received much negative feedback based on the fact that the IRS appeared to have no statutory basis for the rule. Nonetheless, the proposed rule was finalized in May 2012, and lawsuits ensued…

Oklahoma began the litigation with Pruitt v. Burwell in September 2012. In September 2014, a federal district court held that the plain language of the ACA does not allow subsidies in states with federally-run exchanges. In May 2013, Halbig v. Burwell was filed, and in September 2013, King v. Burwell was filed.

So, much to the contrary of popular belief, these lawsuits are not “against the ACA” or “proving the unconstitutionality of the ACA.” Instead, these lawsuits are “against” the IRS interpreting the ACA to allow tax credits for all states, even if the state has a federally-run exchange.

Will it negatively impact the ACA if the plaintiffs win? That would be a resounding yes.

Oral argument could be as soon as March 2015.