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.
PCS Medicaid Reimbursement Rates Are TOO LOW to Maintain Adequate Quality of Care, in Violation of the Code of Federal Regulations!
I recently spoke at the Association for Hospice and Home Care (AHHC) and the NC Association for Long Term Care Facilities (NCLTCF) conferences. At issue at both conferences was the reimbursement rate for personal care services (PCS), which is extremely important to both home health agencies (HHAs) and long-term care facilities (LTCFs).
Both AHHC and NCLTCF, as associations, are vital to the HHAs and LTCFs across the state. Associations provide a network of peers, up-to-date information, and lobbying efforts. The old saying, “United we stand, divided we fall,” comes to mind.
The saying, “United we stand, divided we fall,” was originally coined by Aesop, one of my favorite storytellers of all time, in the story “The Four Oxen and the Lion,” which goes like this:
“A lion used to prowl about a field in which four oxen used to dwell. Many a time he tried to attack them; but whenever he came near they turned their tails to one another, so that whichever way he approached them he was met by the horns of one of them. At last, however, they fell a-quarrelling among themselves, and each went off to pasture alone in a separate corner of the field. Then the lion attacked them one by one and soon made an end of all four.”
“UNITED WE STAND, DIVIDED WE FALL.”
I think “The Four Oxen and the Lion” is indicative as to the importance of an association, generally. An association is truly essential when it comes to lobbying. There are two times during which we have a potential impact as to the wording of statutes: (1) During the forefront, by lobbying efforts; and (2) At the backend, through litigation. Obviously, if the forefront is successful, then there becomes no need for the backend.
Much to my chagrin, in my explanation above, I am the “backend.” Hmmmm.
Because I am a litigator and not a lobbyist, I am only called upon if the forefront fails.
In the last session, the General Assembly enacted Session Law 2014-100, which reduced the Medicaid reimbursement rates for all services by 3%.
“SECTION 12H.18.(b). During the 2013-2015 fiscal biennium, the Department of Health and Human Services shall withhold reduce by three percent (3%) of the payments … on or after January 1, 2014” (emphasis added).”
The PCS reimbursement rate became $13.88. Session Law 2014-100 was signed into law August 7, 2014; however, Session Law 2014-100 purports to be effective retroactively as of October 2013. (This brings into question these possible recoupments for services already rendered, which, in my opinion, would violate federal and state law, but such possible violations (or probable or currently occurring violations are a topic for another blog).
It is without question that the Medicaid reimbursement rate for PCS is too low. In NC, the PCS reimbursement rate is currently set at $13.88/hour (or $3.47/15 minutes). It is also without question that there is a direct correlation between reimbursement rates and quality of care.
Because Medicaid pays for approximately 67% of all nursing home residents and recipients of home health care in USA, the Medicaid reimbursement rates and methods are central to understanding the quality of care received by PCS services and the level of staffing criteria expected.
PCS for adults are not a required Medicaid service. As in, a state may opt to provide PCS services or not. As of 2012, 31 states/provinces provided PCS services for adults and 25 did not. Most notably, Florida, Virginia, and South Carolina did not provide PCS services for adults. See Kaiser Family Foundation website.
According to Kaiser Family Foundation, “For the personal care services state plan option, the average rate paid to provider agencies [across the nation] was $18.19 per hour in 2012, a slight increase from $17.91 per hour in 2011. In states where personal care services providers were paid directly by the state or where reimbursement rates were determined by the state, the average reimbursement rate was $16.31 per hour in 2012. Medicaid provider reimbursement rates are often set by state legislatures as part of the budget process.”
See the below chart for a state by state comparison:
Why should we care about the Medicaid PCS reimbursement rates?
1. Low reimbursement rates directly, and negatively, impact quality of care.
2. The aides who provide the PCS services, whether in someone’s home or at a LTCF, are often, him or herself on Medicaid.
3. It is in our best interest as a public for home health care agencies and LTCF to continue to accept Medicaid recipients.
4. It is in our best interest as a public for home health agencies and LTCF to stay in business.
#1: Low reimbursement rates directly, and negatively, impact quality of care.
42 U.S.C.A §1396a requires that a state provide Medicaid reimbursement rates at a level to “assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population…”
In an article entitled “Nurse Staffing Levels and Medicaid Reimbursement Rates in Nursing Facilities,” written by Charlene Harrington, James H Swan, and Helen Carrillo, the authors found that the Medicaid nursing home reimbursement rates were linked to quality of care, as to both RN hours and total nursing hours.
“Resident case mix was a positive predictor of RN hours and a negative predictor of total nursing hours. Higher state minimum RN staffing standards was a positive predictor of RN and total nursing hours while for-profit facilities and the percent of Medicaid residents were negative predictors.”
Numerous other articles have been published in the last few years that cite the direct correlation between reimbursement rates and quality of care.
The argument can be made that $13.88 is too low a reimbursement rate to ensure adequate quality of care. However, again, because this rate was not prevented at the forefront, it would entail a “backend” act of litigation to adjust the current reimbursement rate. (It is important to note that beginning next year, there will be an additional reduction of rate by another 1%).
#2: The aides who provide the PCS services, whether in someone’s home or at a LTCF, is often, him or herself on Medicaid.
According to the Paraprofessional Healthcare Institute, an advocacy group for home care workers, 1 in 4 home health workers has a household income below the federal poverty line and more than 1 in 3 do not have health insurance.
Think about this…home care workers provide PCS to the elderly, disabled, and needy, many of which are on Medicaid and Medicare. Home care workers work full-time changing diapers, assisting with ambulation, dressing, and grooming for the elderly, yet 1 in 4 home care workers are eligible for Medicaid themselves.
Currently, federal minimum wage is $7.25/hour. 18 states have minimum wage equal to the federal minimum wage, including North Carolina. 23 states set minimum wage higher than the federal level. Washington D.C. pays the highest minimum wage at $9.50/hour.
PCS reimbursement rates in NC are $3.47/15 minutes, or $13.88/hour. $13.88 is above the federal and NC minimum wage of $7.25. However, just because the PCS reimbursement rate is $13.88/hour does not mean that the PCS workers are receiving $13.88/hour. The owners of HHAs and LTCFs pay their workers much less than $13.88/hour; they have overhead, insurance, taxes, salaries, etc. to pay…not to mention a percentage of the $13.88/hour needs to be allocated to profit (albeit, however, small).
According to the Bureau of Labor Statistics, in 2013, the average PCS worker’s salary in NC is $19,392/year, or $1,660/month. Working 40 hours a week, a salary of $17,280 equates to approximately $10.10/hour. Obviously, $10.10 is well-above our $7.25 minimum wage, although difficult to make ends meet.
The average fast food worker’s hourly wage is $7.73.
In order for an increase of hourly pay, of any amount, for home health workers, the Medicaid PCS reimbursement rate would need to be increased.
With the current PCS rate at $13.88/hour, home health workers are getting paid between $8.00-11.00/hour. In order for PCS workers to receive $15.00/hour, the PCS rate would need to be increased by $2.00-5.00/hour.
#3: It is in our best interest as a public for HHAs and LTCFs to continue to accept Medicaid recipients.
What if HHA and LTCF refused to accept Medicaid recipients because the reimbursement rates are simply too low?
With the number of people dependent on Medicaid, if HHAs and LTCFs refused Medicaid recipients, our elderly and disabled would suffer.
Perhaps the average length of life would decrease. Perhaps we would implement legal euthanasia. Perhaps the suicide rate would increase. Perhaps the homelessness percentage would reach an all-time high. Is this the world in which you want to live?? Is this the world in which you want to age??
In my opinion, the way we treat our elderly, disabled and needy population is a direct reflection on the level of civilization or educated sophistication.
Here is an excerpt of an article published in 2013 when China passed its new Elderly Rights Law:
“Korea: Celebrating old age
Not only do Koreans respect the elderly, but they also celebrate them. For Koreans, the 60th and 70th birthdays are prominent life events, which are commemorated with large-scale family parties and feasts. As in Chinese culture, the universal expectation in Korea is that roles reverse once parents age, and that it is an adult child’s duty — and an honorable one at that — to care for his or her parents.
The U.S. and U.K.: Protestantism at play
Western cultures tend to be youth-centric, emphasizing attributes like individualism and independence. This relates back to the Protestant work ethic, which ties an individual’s value to his or her ability to work — something that diminishes in old age. Anthropologist Jared Diamond, who has studied the treatment of the elderly across cultures, has said the geriatric in countries like the U.K. and U.S. live “lonely lives separated from their children and lifelong friends.” As their health deteriorates, the elderly in these cultures often move to retirement communities, assisted living facilities, and nursing homes.”
#4: It is in our best interest as a public for HHAs and LTCFs to stay in business.
Or we can become more like the Koreans. At least, in this one respect, would emulating the Korean attitude be so bad?
Obviously, we cannot shift the American attitude toward the elderly, disabled and needy within one generation.
But we CAN increase the PCS reimbursement rate.
Here, the forefront was not as effective as needed. Maybe there is a need for a “backend” act of litigation…
The (Recent) History of PCS Rates and Why There Is Parity of Rates Between Home Health and Long Term Care Facilities
Think of this blog as a history lesson…
As I was preparing my Power Point for speaking at the NC Association of Long Term Care Facilities (NCALTCF), I ran across a number of interesting issues on which I could blog. If you are attending the annual NCALTCF conference September 8-10, this will be a prelude to a portion of my presentation. I will be speaking on September 8th.
I am reviewing the history of personal care services (PCS) rates, and I realize that a few years ago, the parity of PCS rates for home health care providers and long-term care facilities (LTCF) occurred. The issue? Why the parity? I am curious. I remember vividly the parity change in 2012. But, I wonder, why did it occur?
Home health care companies provide PCS to people within their own homes (obviously a much-needed and growing service). Long term care facilities (LTCF) provide PCS within a facility.
But LTCFs have higher overhead due to mortgage/rent, 24-hour staff, monthly bills, more regulatory compliance issues, a cafeteria or kitchen, etc. Whereas, a home health care company does not incur these expenses. Why NOT pay LTCF a higher PCS reimbursement rate?
The answer is…we did, in North Carolina. And the federal government found that we violated the Americans with Disabilities Act (ADA).
Here is the percentage breakdown of people receiving home health, assisted living, nursing homes, hospice, and day service centers, on a national basis in 2013, according to the Centers for Disease Control (CDC).
Notice the green, home health section. Home health has grown at a very rapid rate since 2000. But assisted living (blue) is still predominant.
Back before 2010 and in an attempt to help adult care homes that provide assistance with dementia patients, the General Assembly provided an enhanced Medicaid rate for those facilities.
For decades, the Centers for Medicare and Medicaid (CMS) warned us that the ADA requires that Medicaid reimbursements apply equally to all, including those living in institutional facilities and those who live with family. CMS informed us that we were in violation of Olmstead v. L.C., a Supreme Court decision decided in 1999. In Olmstead, the Supreme Court decided mental illness is a form of disability and that institutional isolation of a person with a disability is a form of discrimination under Title II of the ADA. See Olmstead v. L.C., 527 U.S. 581 (1999) (Remember the Prince song?)
In 2010, Disability Rights filed a complaint with the federal government complaining about NC’s disparate PCS rates between LTCF and home health. In 2011, the US Department of Justice investigated and agreed with Disability Rights. NC was violating Olmstead by providing two different reimbursement rates.
The General Assembly (GA) tackled the issue in 2012. The GA decreased the LTCF’s enhanced PCS rate to the home health’s rate in order to comply with federal law. Although there was a limit as to the number of hours of PCS per month, the GA wrote in an extra 50 hours per month for people suffering from dementia.
Disability Rights originally made the 2010 complaint to the federal government with honest, well-meaning intentions. Disability Rights wanted better care for the mentally ill. And Olmstead had wonderful results for the mentally ill. Now people suffering from mental illness can remain in their homes, if desired (although sometimes a legal battle is required).
But the unknown, unintentional consequence of Olmstead for the owners of LTCFs is that the PCS rate became paired with the home health PCS rate, which keeps declining. For example, prior to October 1, 2013, the PCS rate was $15.52 (now it is $13.88).
The federal minimal wage is $7.25. People who are paid minimum wage, generally, are not licensed professionals.
Most members of a LTCF staff are licensed. Many are certified nurse assistants (CNAs). Most are required to attend yearly continuing education classes. Should these CNAs and licensed professionals make only $6.00 more than minimum wage? Are not professional licensees worth more?
Not to mention…let’s talk about what LTCF staff actually does on a day-to-day basis. My Grandma Carson resides in a LTCF. Thankfully, she still lives in her own independent living house on the LTCF grounds because she can maintain her independent living, but many residents of LTCF cannot. LTCF staff assists in activities of daily living (ADLs), such as toileting, eating, ambulating, and grooming. When my great-grandmother could no longer feed herself, the wonderful staff at Glenaire in Cary, NC fed her. Should a person feeding an elderly person (and bathing and helping go to the bathroom) NOT be paid well-over minimum wage?
Well…the reimbursement rate may be $13.88 (a tad over $6.00 above minimum wage), but a PCS worker for a home health agency AND a LTCF does not earn $13.88/hour, they earn less. Companies are created to earn a profit. There is nothing wrong with earning a profit.
In fact, starting January 1, 2014, PCS workers in home health are now eligible for minimum wage. “ARE NOW ELIGIBLE.” As in, last year, PCS workers could have earned LESS than minimal wage.
In the future, I hope that health care providers who provide PCS services are paid more; I also hope that, in the future, the PCS rate increases. Someday, I will be the recipient of a PCS worker.
Medicaid, Medicare, Nursing Facilities, and Death and Taxes: Our Uncertain Future for Our Aged Population
There are few “knowns” in life. In 1789, Benjamin franklin penned a correspondence to Jean-Baptiste Leroy, in which he wrote, “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”
Certainly the phrase “death and taxes” had existed prior to Franklin’s 1789 usage, but considering how famous Franklin became in history for our country, many people attribute the phrase to Franklin.
Think about it. Nothing is certain, but death and taxes. It is a rather bleak view of the world. Why not “nothing is certain except happiness and sadness?” Or “nothing is certain but you being alive and dying?” Why do both “certain” items have to be bleak?
For purposes of this blog, I am using my own phrase:
“Nothing is certain except old age, unless you die early.”
For one day, we will all be old (unless we die early). And when we age, as much as we would love to ignore the fact, the fact is that most of us will be placed in an assisted living facility (ALF) or a nursing home of some sort.
But what will the world of ALFs look like 20…30…40 years from now? With the low Medicare and Medicaid reimbursement rates for personal care services (PCS), how many nursing homes will exist in the future?
Already, in Massachusetts, nursing homes are dropping like flies due to low reimbursement rates. What does this mean to the aged population?
In NC, our PCS reimbursement rate continues to be slashed. What will this mean for our aged population?
In the past few years, with approval from the Center for Medicare and Medicaid Services (CMS), NC Department of Health and Human Services (DHHS) has lowered the reimbursement rates for non-medical PCS provided both in the home and in a facility.
In October 2013, DHHS officials proposed to CMS a cut in the Medicaid PCS hourly rate by $2.40 per hour, down to $13.12 per hour, retroactive to July 1 (At the time, the PCS hourly rate was $15.52 and allowed up to 130 hours of care per month or, roughly, 4 hours a day).
Interestingly, DHHS has the PCS reimbursement rate for facilities and for home health care providers the same. Yet, facilities face much higher overhead, staffing costs, and building and equipment costs than does a home care provider. So why do both different types of providers receive the same reimbursement rate?
Prior to 2010, DHHS had two separate PCS rates, one for facilities and one for home health care providers. Obviously, the reimbursement rate in facilities was higher than the PCS rate for home health care providers to account for the additional overhead costs.
However, Disability Rights of NC warned DHHS that paying lower reimbursement rates for people living in the home versus a facility violated the Americans with Disabilities Act (ADA). The U.S. Department of Justice (DOJ) agreed, and, in 2012, the General Assembly (GA) had to make a decision: (1) lower the reimbursement rate for PCS in facilities; (2) increase the reimbursement rates for PCS in the home; (3) or come up with some innovative way to not violate the ADA.
Feeling pinched, the GA passed legislation that made it more difficult for recipients to qualify for PCS and decreased the number of allowable hours of PCS to from 130 to 80 hours per month, although if a person suffered from dementia, the PCS provider could get an extra 50 hours/week.
Plus, starting January 1, 2014, the shared savings plan went into effect, which decreased reimbursement rates by 3% across the board.
What does all this mean? It points to a couple of things.
Nursing facilities are facing financial distress.
In Massachusetts nursing facilities have already begun to close down. As of May 19, 2014, within 5 months, 4 nursing homes have gone out of business. According to The Boston Globe, the 4 nursing homes closed because they were “unable to make ends meet with the money they get from Medicaid because reimbursement rates have not increased in nearly a decade, according to the Massachusetts Senior Care Association, the industry trade group. Scores more are on the edge of shutting down.”
Scores more are on the verge of shutting down? For those of you who do not recall Lincoln’s speech, “Four scores and seven years ago…,” a score equals 20. According to the Boston Globe scores are on the verge of shutting down??? 40? 60?
With our aged population growing by the day, what does the future look like for nursing homes and the aged population?
Nothing may be certain except death and taxes, but I think it is certain that you will grow old, unless you die early.
Personal Care Services: Will the Fear of the “F” Word (Medicaid Fraud) Cause PCS in the Home to Be Eradicated???
In my career, I call it the “F” word:
Its existence and fear of existence drives Medicare and Medicaid policies.
It is without question that Medicare and Medicaid fraud needs to be eliminated. In fact, for true Medicare and Medicaid fraud, I propose harsher penalties. Think about what the fraudulent provider is doing…taking health care dollars from the elderly and poor without providing services. Medicare and Medicaid recipients receive less medically necessary services because of fraudulent providers.
Just recently, in Charlotte, on April 9, 2014, V.F. Brewton, of Shelby, N.C., was sentenced to 111 months in prison, three years of supervised release and ordered to pay $7,070,426 in restitution to Medicaid and $573,392 to IRS. On April 8, 2014, co-defendant, R. S. Cannon, of Charlotte, was sentenced to 102 months in prison, three years court supervised release and ordered to pay $2,541,306 in restitution. See press release. Ouch!
On November 21, 2013, in Miami, Fla., Roberto Marrero, who ran Trust Care, was sentenced 120 months in prison. From approximately March 2007 through at least October 2010, Trust Care submitted more than $20 million in claims for home health services. Medicare paid Trust Care more than $15 million for these fraudulent claims. Marrero and his co-conspirators have also acknowledged their involvement in similar fraudulent schemes at several other Miami health care agencies with estimated total losses of approximately $50 million. See article. Ouch!
However, there are never the stories in the newspapers and media about all the services actually rendered to Medicare and Medicaid recipients by upstanding providers who do not commit fraud, but, instead, work very hard every day to stay up-to-date on regulations and policies and who do not reap much profit for the services provided. I guess that doesn’t make good journalism.
I recently attended the Association for Home and Hospice Care (AHHC) conference in RTP, NC. I met wonderful and non-fraudulent providers. Each provider I met was passionate and compassionate about their job. The only time money was brought up was to discuss the low reimbursement rates and the low profit margin for these providers.
In fact, one of the speakers even opined that, because of the alleged prevalence of fraud in home health care, the federal and state governments will continue to cut reimbursement rates for home health and hospice until over 50% of the agencies operate at a loss by 2017. That is a dismal thought! What happened to our right to pursue a career without intervention?
One provider informed me that, upon his or her information and belief, there is a chance that PCS, which is an optional program under Medicaid, may be wiped out in the near future by the General Assembly (PCS for home health and assisted living facilities, not the recipients covered by the Waiver).
What are personal care services (PCS)?
In the world of Medicaid and Medicare, there are a number of different types of PCS. No, actually, I think it is more apropos to say there are a number of different PCS recipients in the world of Medicaid and Medicare.
First, the definition/eligibility requirements:
Personal Care Services (PCS) are available to individuals who have a medical condition, disability, or cognitive impairment and demonstrate unmet needs for, at a minimum three of the five qualifying activities of daily living (ADLs) with limited hands-on assistance; two ADLs, one of which requires extensive assistance; or two ADLs, one of which requires assistance at the full dependence level. The five qualifying ADLs are eating, dressing, bathing, toileting, and mobility. See DMA website.
PCS are provided to developmentally disabled people under the 1915 b/c Waivers, people who reside in nursing homes and long-term assisted living facilities, and people who qualify to receive PCS in their homes. For purposes of this blog, I am writing about the latter three types of recipients. All 50 states allow PCS for qualified individuals, but the qualifications differ among the states.
In this day and age, the “F” word drives Medicaid and Medicare policies. Without question Medicaid fraud exists. Whether Medicaid fraud is as prevalent as some may believe, I am not sure. I have certainly witnessed honest providers accused of Medicaid fraud.
And home health care providers are viewed by some, generally, as the providers who can most easily commit Medicaid fraud (with which I do not agree, but must concede that home health care is more difficult to monitor). For example, a home health care provider goes to a person’s home and provides services. Who would know whether the home health care provider was billing for services on days he or she did not go to the recipient’s house? Not the recipient, because the recipient has no idea for what dates the provider is billing. Unlike an assisted living facility or nursing home that is easier to monitor and would have the documentation to show that the recipient actually lived in the facility.
Because of the alleged prevalence of fraud in home health care, apparently, (and with no independent verification on my part) some in North Carolina are questioning whether we should continue to reimburse PCS with Medicaid dollars, particularly as to home health. But if we stopped reimbursing for PCS in the homes, what would be the alternative? How would it affect North Carolinians? Would eliminating PCS save tax dollar money? Stop fraud?
When we evaluate the effects of whether to continue to reimburse for PCS with Medicaid dollars, we aren’t only talking about those served by PCS, but also the companies and all employees providing the home health. In 2012 in NC, approximately 40,000 were employed in home health.
Why is home health care important (or is it?)? Should we allow the “F” word to erase PCS in home health?
What is the alternative to home health? Answer: (1) Assisted living facilities? (2) Nursing homes? (3) A dedicated, family caregiver? (4) Nothing?
While there are, I am sure, many reasons that PCS in home health care is vital to our community, for the purposes of this blog, I am going to concentrate on cost savings to the taxpayers. Home health costs us (taxpayers) less money than other alternatives to home health.
Also, understand please that I am not advocating that everyone should receive home health instead of entering nursing homes or assisted living facilities. Quite the contrary, as both nursing homes and assisted living facilities are essential to NC. I am merely pointing out that all the services (home health, nursing homes, and assisted living facilities) are important.
What is the difference between assisted living and nursing homes?
An assisted living community provides communal living, usually with social activities, a cafeteria, laundry service, etc. I always think of my grandma at Glenaire in Cary, NC. She plays bridge, attends a book club, and even takes a computer course! She actually joined Facebook a couple of years ago!
A nursing home, on the other hand, provides 24-hour supervision by a licensed or registered nursing staff. Generally, the folks eligible to be admitted into an assisted living facility will be eligible to receive PCS (see the above definition/eligibility requirements). So, logically, the clientele in an assisted living facility receiving PCS could, in some cases, also be eligible to receive PCS in their home. Obviously a number of factors come into play to determine whether a person goes into an assisted living facility versus staying at home and receiving home health care: eligibility, family issues, money, condition of your home, money, desire for independence, money, health issues, and money.
Because of the level of supervision and skill required in a nursing home, a nursing home will be much more expensive than an assisted living facility. Insomuch as the assisted living facility will be less expensive than a nursing home, home health care, because you are paying for your own room and board, will be cheaper than both.
The average national cost for an assisted living facility in 2012 was $3,550/month. That’s $42,600/year. The average cost for an assisted living facility in 2012 in NC was $2900/month.
The average cost for a nursing home in NC for a semi-private room is $73,913 and $82,125 for a private room. That’s $225/day for a private room. For that price, you could get a room at a Ritz Carlton! (albeit not in a touristy area).
You think nursing homes are expensive in NC? Don’t move to NY!! In NY, for a semi-private room it costs $124,100/year and $130,670/year for a private room ($358/day!). Florida is a bit more expensive that NC too. In Florida, on average, a semi-private room in a nursing home costs $83,950 and a private room is approximately $91,615.
On the flip side, the average cost for a homemaker is $38,896. A home health aide costs, on average, $40,040.
If, in fact, NC ceases to reimburse PCS in home health, many of the people residing in their homes and relying on Medicaid-covered PCS will be forced to leave their homes for, in some case, more expensive alternatives.
Though the odd contrast may not be easily seen, there is an argument that erasing PCS in the home may actually cost the tax payers more. Not to mention that erasing PCS in home health would drive agencies bankrupt and staff jobless.
Remember, I have no verification that our General Assembly would or would not eradicate PCS in the home environment. It was mere speculation in a conversation. But the conversation got me thinking about the delicate balance of Medicaid services in NC. And how one abrupt and drastic change could change our health care system and capitalist ideas so quickly.
And, arguably, all because of the speculative “F” word. What is that political phrase we heard so much in the last elections? Oh, yes, maybe we should use a scalpel, not an ax?
The North Carolina State Medicaid Plan (State Plan) is constantly revised. The result of its constant revisions make for an 1800+ page, jumbled mess of plans, rules, amendments, and effective dates that make the State Plan as much fun to read as reading every volume of the Encyclopedia Britannica in Japanese with the aid of a Japanese translation dictionary.
First of all, what the heck is the State Plan? Basically, a State Plan is a contract between a state and the Federal Government describing how that state administers its Medicaid program. It “assures” the federal government that we, here in NC, will follow the State Plan because the federal government has “blessed” our State Plan. Whenever we need to change the State Plan, we file an amendment. In circumstances that call for much greater deviation from the State Plan, we can apply for a Waiver…or an exception.
On or about August 15, 2013, the Department of Health and Human Services (DHHS) issued a Public Notice “providing notice of its intent to amend the Medicaid State Plan for the purpose of defining the reimbursement methodology of Personal Care Services as directed by Section 10.9F of Session Law 2013-306 (House Bill 492). “
Personal Care Services (PCS) are Medicaid-covered, in-home services to recipients “who have a medical condition, disability, or cognitive impairment and demonstrates unmet needs for, at a minimum three of the five qualifying activities of daily living (ADLs) with limited hands-on assistance; two ADLs, one of which requires extensive assistance; or two ADLs, one of which requires assistance at the full dependence level. The five qualifying ADLs are eating, dressing, bathing, toileting, and mobility.” See DHHS Website.
In a letter dated September 30, 2013, and signed by Sec. Aldona Wos, DHHS sent what is called a SPA or a State Plan Amendment to the Centers for Medicare and Medicaid Services (CMS), in part, asking to be allowed to change the PCS unit rate from $3.88 to $3.28.
$3.88 to $3.28…
It may not sound like a huge decrease in pay to you, but a 60 cent drop per unit will be extremely harmful to providers who provide PCS services and, ultimately Medicaid recipients because less providers will be willing to serve the population.
One PCS unit is 15 minutes. There are 4 units in an hour. A 60 cent/unit cut to the rate will result in a $2.40 hourly cut.
Providers who employ staff who provide PCS are not paying staff upwards of $20/hour. Oh, no, most PCS providers make, maybe, $7-9.
Think about it…a small business provider of PCS (Let’s call it ABC Provider) employs 5-10 staff to provide PCS to recipients. ABC Provider has to pay its overhead (lease, office supplies, salaries of execs) plus pay the hourly wages of the PCS staff, and, supposedly, still make a profit…otherwise why even work?
For one hour of PCS, prior to a rate reduction, ABC Provider grosses $15.52/hour. Obviously, a portion of the $15.52 must go to overhead. ABC Provider pays her staff $9.00/hour. So ABC Provider nets $6.52/hour to pay for overhead. After 1000 man-hours, maybe ABC Provider can pays its rent and its utility bill. BTW: In order to reach 1000 man hours, it would take a person to work 41.66 days, 24 hours/day. Or it could take 10 staff working 10 hours/day for 2 weeks…just for the provider to make $6520 to pay bills…we aren’t even talking about profit…
After the rate reduction?
$2.40 has to be recouped somehow. Does the provider’s profit margin shrink or does the employee’s hourly rate decrease? Maybe a little of both.
According to the September 30, 2013, Sec. Wos letter, NC DHHS requested a retroactive date for the PCS rate reduction to July 1, 2013, or, in the alternative, October 1, 2013.
What? Retroactive reduced rates? Would DHHS recoup payments already made?
As of the day of this blog, I have not found out whether CMS approved the SPA sent to CMS September 30, 2013. I looked on CMS’ website. So if anyone reading has information as to whether CMS approved, is approving, denied, or is denying the rate reduction, I, as well as other people, would be much obliged for the information.
In the wake of such tragedies such as the Colorado movie theatre last July, the Sikh temple in Wisconsin in August, Minneapolis in September, then the unthinkable massacre at the Connecticut elementary school in December, and, of course, the Boston bombing in April, you would think that mental health would be a top priority.
Instead, politicians across America are advocating gun laws. Without commenting on gun control (as this is a Medicaid blog), mental health seems to be getting placed on the back-burner.
In the North Carolina budget passed by the Senate last week, mental health, in particular, group homes for adults with severe mental illnesses, again, was forgotten. Whether on purpose or by accident, I have no idea. But the fact remains a large part of metal health simply was not contemplated in the budget.
I am sure most of you remember the comedy of errors that occurred at the beginning of the year when the criteria for personal care services (PCS) was revised. Basically in January 2013, the criteria to receive PCS became more stringent.
According to DMA, effective January 1, 2013, PCS “is available to individuals who has a medical condition, disability, or cognitive impairment and demonstrates unmet needs for, at a minimum three of the five qualifying activities of daily living (ADLs) with limited hands-on assistance; two ADLs, one of which requires extensive assistance; or two ADLs, one of which requires assistance at the full dependence level. The five qualifying ADLs are eating, dressing, bathing, toileting, and mobility.”
Prior to January 1, 2013, individuals who qualified for Medicaid special room and board assistance were automatically granted approval to receive PCS funding regardless of need. This applied for both in-home and facility-based services.
Due to the more stringent 2013 criteria, thousands of adults in group homes in NC who depended on Medicaid were no longer eligible. Former Gov. Perdue was forced to shimmy around funds in order to keep these disabled adults from losing their homes. The whole debacle created terror and stress for those disabled adults whose residences were threatened, for the families of the threatened disabled adults, for the group home executives who did not want to evict these disabled adults, and for any mental health advocate or person with empathy toward the mentally ill.
The trainwreck of the adult PCS group homes only occurred 4-ish months ago.
Yet, lawmakers, seemingly, failed to address the recurrent problem of funding for group homes for adults with severe mental illnesses, who are no longer eligible for PCS, in last week’s budget passed by Senate.
Wednesday afternoon (if you work downtown, then you know what I am talking about) a group of protesters rallied outside the General Assembly clad in blue shirts, holding signs saying, “Save Group Homes!” and “Disaster Relief! Save my Home!,” and some simply said, “Help!”
The Senate’s budget failed to provide funds for approximately 1,450 people living in 6-person group homes. Each group home resident currently receives $16.14 a day, or about $6,000 a year, from the state program. The fear is that group homes are so underfunded as it is that any amount, no matter how small, of decreased funds would drive the group homes out of business, forcing residents onto the street.
In general, group homes are not huge money-makers for the owners. The workers at a group home make approximately $9-10/hour. Group homes must be staffed 24/hours/day and 365/days/year. The group homes must use the state-funded money to staff the home, keep up the maintenance of the home, feed all the residents and care for all the residents, plus all overhead (i.e., electricity, heat/air conditioning, any extras for the residents, such as TVs or cable, blankets, etc.). Plus group homes must provide a small, monthly stipend for the residents in order for the residents purchase medicine (co-pays) and personal hygiene products.
Logically there must be SOME profit in group homes in order for anyone to want to run a group home. But the profit is minimal.
Similar to the low Medicaid reimbursement rates to physicians, causing physicians to not accept Medicaid, any sort of cut to group home funding (including the residents not qualifying for PCS due to the new criteria and without special funding to cover the difference), group homes will inevitably close. You simply cannot expect a person to keep a group home open when no profit is made. Just as if you cannot expect a doctor to accept Medicaid patients if no profit is made.
So, is the State of North Carolina saving money by not providing additional funding to those PCS recipients who no longer qualify for PCS? Hey, the Medicaid budget goes down, right? But what happens to those adults with severe mental illnesses when, because of the lack of PCS funds, the group homes either close or turn out those residents who no longer qualify for PCS?
In a perfect world, I guess the families of the adult Medicaid recipients would take them in and all would be fine. But I gather there is a reason that these recipients are in a group home and not with family.
No, since this is not a perfect world, most of these adults with severe mental illnesses, without a group home, would be homeless and, eventually, if not immediately, would be hospitalized at a much higher price that a group home.
So these adult Medicaid recipients are stable in a group home. Well-cared for. Most likely, have relationships with the staff and other residents. But because of the new PCS criteria and the fact that the NC budget does not provide funding for Medicaid residents that no longer qualify for the PCS funding, we will uproot the adults with severe mental illness, send them into the world, expect them to be ok, and, then, later, pay much more money to the hospitals that are forced to take in these Medicaid recipients due to whatever issues caused the hospitalization.
Hmmmm….at least the Medicaid budget is lower.