Blog Archives

EHR: What’s In YOUR Contract? Legal Issues You Need to Know.

Electronic health records or EHR have metamorphosed health care. Choosing a vendor can be daunting and the prices fluctuate greatly. As a provider, you probably determine your EHR platform on which vendor’s program creates the best service notes… or which creates the most foolproof way of tracking time… or which program is the cheapest.

But…what’s in YOUR contract can be legally deadly.

Regardless how you choose your EHR vendor, you need to keep the following legal issues in mind when it comes to EHR and the law:

Regulatory and Clinical Coverage Policy Compliance

Most likely, your EHR vendor does not have a legal degree. Yet, you are buying a product and assuming that the EHR program complies with applicable regulations, rules, and clinical coverage policies – whichever are applicable to your type of service. Well, guess what? These regulations, rules, and clinical coverage policies are not stagnant. They are amended, revised, and re-written more than my chickens lay eggs, but a little less often, because my chickens lay eggs every day.

Think about it – The Division of Medical Assistance (DMA) publishes a monthly Medicaid Bulletin. Every month DMA provides more insight, more explanations, more rules that providers will be held accountable to follow.

Does your EHR program update every month?

You need to review your contract and determine whether the vendor is responsible for regulatory compliance or whether you are. If you are, should you put so much faith in the EHR program?

Document Accessibility

You are required to maintain your records (depending on your type of service) anywhere from 5-10 years. Let’s say that you sign a four year contract with EHR Vendor X. The four years expires, and you hire a new EHR vendor. You are audited. But Vendor X does not allow you access to the records because you no longer have a contract with them – not their problem!

You need to ensure that your EHR contract allows you access to your documents (because they are your documents) even in the event of the contract expiring or getting terminated. The excuse that “I don’t have access to that” does not equal a legal defense.

Indemnification

This is otherwise known as the “Blame Game.” If there is a problem with regulatory compliance, as in, the EHR records do not follow the regulations, then you need to know whether the EHR vendor will take responsibility and pay, or help pay, for attorneys’ fees to defend yourself.

Like it or not, the EHR vendor does not undergo audits by the state and federal government. The EHR vendor does not undergo post and pre-payment reviews for regulatory compliance. You do. It is your NPI number that is held accountable for regulatory compliance.

You need to check whether there is an indemnification clause in the EHR contract. In other words, if you are accused of an overpayment because of a mistake on the part of the vendor, will the vendor cover your defense? My guess is that there is no indemnification clause.

HIPAA Compliance

HIPAA laws require that you minimize the access to private health information (PHI) and prevent dissemination. With hard copies, this was easy. You could just lock up the documents. With EHR, it becomes trickier. Obviously, you have access to the PHI as the provider. But who can access your EHR on the vendor-side? Assuming that the vendor has an IT team in case of computer issues, you have to consider to what exactly does that team have access.

I recently attended a legal continuing education class on data breach and HIPAA compliance for health care. One of the speakers was a Special Agent with the FBI. This gentleman prosecutes data breaches for a living. He said that hackers will pay over $500 per private medical document. Health care companies experienced a 72% increase in cyberattacks between 2013 and 2014. Stolen health care information is 10 times more valuable than your credit card information.

Zombie Apocalypse

Obviously, I am exaggerating here. I do not believe that The Walking Dead is real and in our future. But here is my point – You are held accountable for maintaining your medical records, even in the face of an act of God or terrorism.

Example: It was 1996. Provider Dentist did not have EHR; he had hard copies. Hurricane Fran flooded Provider Dentist’s office, ruining all medical records. When Provider Dentist was audited, the government did not accept the whole “there was a hurricane” excuse. Dentist was liable for sever penalties and recoupments.

Fast forward to 2017 and EHR – Think a mass computer shutdown won’t happen? Just ask Delta about its August 2016 computer shutdown that took four days and cancelled over 2000 flights. Or Medstar Health, which operates 10 hospitals and more than 250 outpatient facilities, when in March 2016, a computer virus shut down its emails and…you guessed it…its EHR database.

So, what’s in YOUR contract?

Look into My Crystal Ball: Who Is Going to Be Audited by the Government in 2017?

Happy New Year, readers!!! A whole new year means a whole new investigation plan for the government…

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) publishes what is called a “Work Plan” every year, usually around November of each year. 2017 was no different. These Work Plans offer rare insight into the upcoming plans of Medicare investigations, which is important to all health care providers who accept Medicare and Medicaid.

For those of you who do not know, OIG is an agency of the federal government that is charged with protecting the integrity of HHS, basically, investigating Medicare and Medicaid fraud, waste, and abuse.

So let me look into my crystal ball and let you know which health care professionals may be audited by the federal government…

crystal-ball

The 2017 Work Plan contains a multitude of new and revised topics related to durable medical equipment (DME), hospitals, nursing homes, hospice, laboratories.

For providers who accept Medicare Parts A and B, the following are areas of interest for 2017:

  • Hyperbaric oxygen therapy services: provider reimbursement
  • Inpatient psychiatric facilities: outlier payments
  • Skilled nursing facilities: reimbursements
  • Inpatient rehabilitation hospital patients not suited for intensive therapy
  • Skilled nursing facilities: adverse event planning
  • Skilled nursing facilities: unreported incidents of abuse and neglect
  • Hospice: Medicare compliance
  • DME at nursing facilities
  • Hospice home care: frequency of on-site nurse visits to assess quality of care and services
  • Clinical Diagnostic Laboratories: Medicare payments
  • Chronic pain management: Medicare payments
  • Ambulance services: Compliance with Medicare

For providers who accept Medicare Parts C and D, the following are areas of interest for 2017:

  • Medicare Part C payments for individuals after the date of death
  • Denied care in Medicare Advantage
  • Compounded topical drugs: questionable billing
  • Rebates related to drugs dispensed by 340B pharmacies

For providers who accept Medicaid, the following are areas of interest for 2017:

  • States’ MCO Medicaid drug claims
  • Personal Care Services: compliance with Medicaid
  • Medicaid managed care organizations (MCO): compliance with hold harmless requirement
  • Hospice: compliance with Medicaid
  • Medicaid overpayment reporting and collections: all providers
  • Medicaid-only provider types: states’ risk assignments
  • Accountable care

Caveat: The above-referenced areas of interest represent the published list. Do not think that if your service type is not included on the list that you are safe from government audits. If we have learned nothing else over the past years, we do know that the government can audit anyone anytime.

If you are audited, contact an attorney as soon as you receive notice of the audit. Because regardless the outcome of an audit – you have appeal rights!!! And remember, government auditors are more wrong than right (in my experience).

The Doctrine of Exhaustion of Administrative Remedies and Medicare/caid Providers

medicaidlaw-nc

What is the doctrine of exhaustion of administrative remedies?  And why is it important?

If you are a Medicaid or Medicare provider (which, most likely, you are if you are reading this blog), then knowing your administrative remedies is vital.  Specifically, you need to know your administrative remedies if you receive an “adverse determination” by the “Department.”  I have placed “adverse determination” and the “Department” in quotation marks because these are defined terms in the North Carolina statutes and federal regulations.

What are administrative remedies? If you have been damaged by a decision by a state agency then you have rights to recoup for the damages.

However, just like in the game of Chess, there are rules…procedures to follow…you cannot bring your castle out until the pawn in front of it has moved.

Similarly, you cannot jump to NC Supreme Court without beginning at the lowest court.

What is an adverse determination?

In Medicaid…

View original post 1,119 more words

Federal Audit Spurs NC to Recoup from Dentists Who Accept MPW!!

When providers receive Tentative Notices of Overpayment (TNOs), we appeal the findings. And, for the most part, we are successful. Does our State of NC simply roll over when the federal government audits it??

A recent audit by Health and Human Services (HHS) Office of Inspector General (OIG) finds that:

“We recommend that the State agency:

  • refund $1,038,735 to the Federal Government for unallowable dental services provided to MPW beneficiaries after the day of delivery; and
  • increase postpayment reviews of dental claims, including claims for MPW beneficiaries, to help ensure the proper and efficient payment of claims and ensure compliance with
    Federal and State laws, regulations, and program guidance.”

MPW is Medicaid for Pregnant Women.  Recently, I had noticed that a high number of dentists were receiving TNOs.  See blog.  I hear through the grapevine that a very high number of dentists recently received TNOs claiming that the dentists had rendered dental services to women who had delivered their babies.

Now we know why…

However, my question is: Does NC simply accept the findings of HHS OIG without requesting a reconsideration review and/or appeal?

It seems that if NC appealed the findings, then NC would not be forced to seek recoupments from health care providers.  We already have a shortage of dentists for Medicaid recipients.  See blog and blog.

And if the federal auditors audit in similar fashion to our NC auditors, then the appeal would, most likely, be successful. Or, in the very least, reduce the recouped amount, which would benefit health care providers and taxpayers.

Whenever NC receives a federal audit with an alleged recoupment, NC should fight for NC Medicaid providers and taxpayers!!  Not simply roll over and pay itself back with recoupments!

This audit was published March 2015.  It is September.  I will look into whether there is an appeal on record.

Medicare Appeals to OMHA Reaches 15,000 Per Week, Yet Decisions Take Years; Hospital Association Sues Over Medicare Backlog

When you are a health care provider and make the business determination to accept Medicare or Medicaid, you are agreeing to deal with certain headaches.  Low reimbursement rates and more regulations than you can possibly count make accepting Medicare and Medicaid a daunting experience.  Throw in some pre- and post-payment review audits, some inept contractors, and dealing with the government, in general, and you have a trifecta of terrible to-dos.

But having to “pay back” (by reimbursement withholding) an alleged overpayment before an appeal decision is rendered is not a headache which hospitals have agreed to take, says the American Hospital Association.  And it said so very definitively, in the form of a Complaint in the U. S. District Court for the District of Columbia

In both Medicaid and Medicare audits, if you get audited and are told to pay back XX dollars, you have a right to appeal that determination.  Obviously, with Medicare, you appeal on the federal level and with Medicaid, you appeal to the state level.  But the two roads to appeal (the state and federal) are not identical.  Robert Frost once said, “Two roads diverged in a wood, and I, I took the one less traveled by, And that has made all the difference.”  However,the Medicare appeal route is NOT the route less traveled by.

As of February 12, 2014, over 480,000 Medicare appeals were pending for assignment to an Administrative Law Judge (ALJ), with 15,000 new appeals filed each week.  In December 2013, HHS Office of Medicare Hearings and Appeals (OMHA) announced a moratorium on assignment of provider appeals to ALJs for at least the next two years, and possibly longer.  The average wait-time for a hearing is approximately 24 months, but will undoubtedly increase quickly due to the moratorium.  A decision would not come until later.  And all the while the parties are waiting, the provider’s reimbursements will be withheld until the alleged overpayment amount is met.  Literally, a Medicare appeal could take 3-5 years.

The American Hospital Association is fed up. And who can blame them?  On May 22, 2014, the American Hospital Association (AHA) filed a Complaint in the United States District Court in the District of Columbia against Kathleen Selebius, in her official capacity as Secretary of Health and Human Services (HHS), complaining that HHS is noncompliant with federal statutory law because of the Medicare appeal backlog.  I am not surprised by AHA’s Complaint; I am only surprised that it took this long for a lawsuit.  I am also surprised that more providers, other than hospitals, are not taking action.

AHA is requesting relief under the Mandamus Act, 28 U.S.C. § 1361.  The Mandamus Act allows a court to compel an officer or employee of the United States or any agency thereof to perform a duty owed.  In this case, the AHA is saying that HHS has a statutory duty to resolve Medicare appeals within 90 days.  So, AHA is asking the district court to compel HHS to resolve Medicare appeals by not later than the end of the 90-day period beginning on the date a request for hearing has been timely filed.

And, here, I am obliged to insert a quick, two thumbs-up for our very own Office of Administrative Hearings (OAH)  in NC for its handling of Medicaid appeals.  If you file a contested case at OAH, it will not take 3-5 years.

AHA’s lawsuit is significant because AHA does not restrict the relief requested to only hospital Medicare appeals.  AHA requests that the District Court “enter a declaratory judgment that HHS’s delay in adjudication of Medicare appeals violates federal law.”  If granted, I would assume that this declaratory judgment would impact all Medicare providers.  The only way to ensure all providers are covered by this decision is for all providers to either (1) file a separate action (to include damages, which is not included in AHA’s action for some reason); or (2) to join AHA’s action (and forego damages), but its impact will be broad.  I am not sure why AHA did not seek damages; the time value of money is a real damage…the non-ability for the hospitals to invest in more beds because their money is stuck at HHS is a real damage…the loss of the interest on the withheld money, which is obviously benefiting the feds, is a real damage.

AHA’s request is not dissimilar to an arrested individual’s right to a speedy trial.  During a criminal trial, the defendant remains incarcerated.  Therefore, because we believe our liberty is so important, the defendant has a right to a speedy trial.  That way, if he or she is innocent, the defendant would have spent the least number of days imprisoned.

With a Medicare audit appeal, HHS begins immediately withholding reimbursements until the alleged overpayment amount is met, even though through the appeal, that overpayment will most likely be decreased quite substantially.  Apparently, across the nation, the percent of overturned Medicare audits through appeal is around 72%,  but I could not find out whether the 72% represents ANY amount overturned or the entire 100% of the audit being overturned.  Because, in my personal experience, 99.9% of Medicare appeals have SOME reduction in the alleged amount (I would have said 100%, but we are taught not to use definitive remarks as attorneys).

Because the provider’s Medicare money is withheld based on an allegation of an overpayment, the fact that the cases are backlogged at the ALJ level is financially distressing for any provider.Even without the backlog, Medicare appeals take longer than Medicaid appeals.  In Medicare, there is four-step appeal process.  Going before the ALJ is the 3rd level.

First, a Medicare appeal begins with the Medicare Administrative Contractor (MAC) for redetermination.  The MAC must render a redetermination decision within sixty days.

If unsuccessful, a provider can appeal the MAC’s decision to a Qualified Independent Contractor (“QIC”) for reconsideration. QICs must render a decision within sixty days.

Provided that the amount in controversy is greater than $140 (for calendar year 2014), the next level, and where the backlog begins, is at the level of appeal to an ALJ. The ALJ is required both to hold a hearing and to render a decision within ninety days, which is not happening.

Hence, AHA’s lawsuit.  Hopefully AHA will be successful, because a backlog of Medicare appeals at the ALJ level doesn’t help anyone.  And audits are not going away.

An Extreme Uptick in NC Medicaid Overpayments for June 2013, But Not in Collections! Something Faulty With the System???

Have you ever heard the phrase:

“If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck?”

Similarly, if something looks odd, it generally is.  So when North Carolina overpayments go from $10 million to $80 million from one month to another, I think, “Something is fishy.”  Especially when the A/R, or accounts receivable does not increase.

Now digressing….Humans are, generally, creatures of habit.

In my life, during my week days, I wake up early in the morning, go for a run with my dog, take a shower, go to work, at some point in the day, blog, go home and eat a family dinner, wind-down in front of the TV with my husband, and then go to bed. Repeat…Monday, Tuesday, Wednesday, Thursday, and Friday.

In order for me to change my routine (during the week days), it would take a substantial catalyst.  For example, if, tomorrow, I won $1 million from a lottery, I would guess that my work day would differ, in that I would, most likely, work less. (Although, in my case, that may not be true, since I enjoy my work so much…but you get the point).  Or if my husband were injured or to become sick…my work day would change because I would need to be by his side.

But, generally, my work day schedules are habitually identical.

Generally speaking, the same is for a corporation or a “corporate life.”  As in, corporations are run by management (people, who are creatures of habit) so a corporate entity, generally, conducts its business daily in a like-manner…until some substantial catalyst occurs.

For example, a pharmaceutical company would run normally day-to-day, but when a new drug is approved by the FDA and inserted in the market, the company business may change to adapt to the new product.

Recently, I found a graph of activity with overpayments in Medicaid in North Carolina. The graph was created by Program Integrity (PI), part of the Division of Medical Assistance (DMA).

Apparently, in June 2013, the amount of overpayments identified by the State or third-party contractors significantly rose from the months prior.   See the below graph:

Uptick photo

I understand that the picture quality may not be great.  But the title of this graph is, “Original notice of overpayment versus account receivable setup amount for same case.”

This is a graph taken off the Division of Medical Assistance (DMA), Program Integrity (PI) website.  The whole report can be found here.

The blue-ish-purple line denotes the original amount of overpayment that was sent to the provider by the auditing entity (whether the audit is conducted by Public Consulting Group (PCG), HMS, DMA or another entity)…or the original amount the provider is told they are expected to pay to the State for Medicaid document noncompliance.

Notice that from July 2012 through May 2013, generally, the blue-ish-purple line is consistent. There is a small spike in January 2013, but for the most part, the blue-ish-purple lines are under $20 million in overpayments identified.

Then we get to June 2013. Holy crap, right??? The blue-ish-purple line went from under $10 million in overpayments found in May 2013 to almost $80 million.

A jump of over $70 million!!! (What kind of catalyst caused that activity?)

A jump of more than the 5 preceding months added together!

What I also find very interesting in this graph is the green line.

The green line demonstrates the amount of money actually owed to the State once the appeals are exhausted and someone, whether it be a judge or a DHHS hearing officer, decides is ACTUALLY owed…or ACTUALLY received.

In June 2013, while $80 million in overpayments were found, less than $5 million was actually recouped by the state.  In other words, for whatever reason, over $75 million  in overpayments was found to NOT be owed to the State, despite the original contention that the money was owed to the State.

Is the method used by the State (or whatever 3rd-party contractor) to determine the Medicaid overpayments SO FLAWED and SO INACCURATE that almost all the recoupments are wrong?

I get it. No method is perfect. But I would expect to see a method of recoupment that 10-15% of the overpayments were overturned. BUT ALMOST ALL RECOUPMENTS ARE OVERTURNED? (Or found to not be owed to the State).

I would seriously begin to question the method used to determine these faulty overpayments. Or, if not the method, the implementation.

But, be it the method or the implementation…something is seriously wrong here!!!

It may look like a duck, swim like a duck, and quack like a duck…but it, most definitely, is NOT a duck!

NC Medicaid Extrapolation Audits: How Does $100 Become $100,000? Check for Clusters!

Extrapolation.  If you are a Medicaid provider and have either received a Tentative Notice of Overpayment (TNO) or heard horror stories about TNOs, then the word, ‘extrapolation,’ most likely, will cause you to grimace.

So many providers come to me asking, “The audit amount was only for $1,500. How did that $1,500 become $850,000?” Or $1.5 million. Or $400,000? It does not seem to make sense.

But wouldn’t it be a beautiful thing if extrapolations worked in the opposite way? You put $1,500 in your bank account and the bank extrapolated the $1,500 to $850,000?  Or $1.5 million?  Or $400,000?  If opposite extrapolation existed, then maybe I would like extrapolation. Why? Because I would have a monetary incentive to like, accept, even agree with extrapolation.

Similarly, the Recovery Audit Contractors (RACs) have the monetary incentive to like, accept, even agree with extrapolation.  Approximately a 12.3%-contingency-fee incentive.

What exactly is an extrapolation?

Extrapolation is a statistical procedure in which the auditor takes findings from a small sample of Medicaid-paid claims and, using a mathematical formula, projects those results over a much larger “universe” of claims producing, in many cases, large dollar audit overpayments…sometimes even producing a overpayment amount over the amount the provider was actually paid.

Seem fair? No, at least, when these extrapolations are erroneously conducted.

But, sadly, I believe extrapolations are here to stay.  Even if I do not think Public Consulting Group (PCG) is here to stay in North Carolina, another RAC will take PCG’s place.

“Medical Practice Compliance Alert” agrees with me.  The July 8, 2013, issue of “Medical Practice Compliance Alert,” states “Like it or not, extrapolation audits are becoming the norm…”  See Volume 25, Issue 13 (by Lauren C. Williams).

Ms Williams also wrote that in one case she reviewed the overpayment was for only $10,000+, but the overpayment was extrapolated to $10 million.

Extrapolation is allowed by statute.  N.C. Gen. Stat. 108C-5 allows the RAC to extrapolate. But limits the audit period to 36 months from the date of payment of a provider’s claim.

“Except as required by federal agency, law, or regulation, or instances of credible allegation of fraud, the provider shall be subject to audits which result in the extrapolation of results for a time period of up to 36 months from date of payment of a provider’s claim.”

The North Carolina Administrative Code (NCAC) specifically sets forth the technique for such extrapolations.

 10A NCAC 22F .0606 TECHNIQUE FOR PROJECTING MEDICAID OVERPAYMENTS

(a) The Medicaid agency will seek restitution of overpayments made to providers by the Medicaid program.

(b) The agency may use a Disproportionate Stratified Random Sampling Technique in establishing provider overpayments.

(c) This technique is an extrapolation of a statistical sampling of claims used to determine the total overpayment for recoupment.

(emphasis added).

Disproportionate Stratified Random Sampling Technique.

What????

“Disproportionate” is defined as, “being out of proportion.”

“Stratified” is defined as, “the process of dividing members of the population into homogeneous subgroups before sampling. The strata should be mutually exclusive: every element in the population must be assigned to only one stratum. The strata should also be collectively exhaustive: no population element can be excluded.”

“Random” is defined as, “having no specific pattern, purpose, or objective.”

The definition of “Stratified Random Sampling” is, “a method of sampling that involves the division of a population into smaller groups known as strata. In stratified random sampling, the strata are formed based on members’ shared attributes or characteristics. A random sample from each stratum is taken in a number proportional to the stratum’s size when compared to the population. These subsets of the strata are then pooled to form a random sample.”

I had a tough time, as a double-major in English and Poli-Sci, with the whole “stratified” definition until I spoke, at length, with a statistician expert.  According to (we will call him Bill) Bill, two of the most important factors in a Disproportionate Stratified Random Sampling Technique are randomness and strata being mutually exclusive.  Meaning, each date of service (DOS) and each Medicaid recipient must be independent of one another, i.e. if Medicaid recipient X on DOS 1/1/10 is found to be incorrectly found noncompliant, then no other recipient and no other DOS should be contingent on finding of noncompliance from recipient X, DOS 1/1/10.  (As I explained to Bill, I had heard of strata before…plural for a layer of sedimentary rock or soil…but, apparently, this was a different strata).

Here’s a more specific and concrete example:

PCG audited 100 claims of my client, Samantha, the Medicaid provider.  Of the 100 claims, PCG audited 5 DOS for Medicaid recipient A: 2/3/10, 2/17/10, 3/1/10, 3/12/10, and 3/19/10.  The reason that PCG cited all 5 claims as noncompliant was that the auditor found no consent for services by the recipient.  In actuality, there was a consent for services.  The Medicaid recipient was only 10, so his mother signed the consent.  Problem? Mother’s last name was different from child’s last name? So PCG did not know that the signator was the mother. (Really, I say? Really?? In 2013? FYI: My last name is different from my daughter’s last name. But no private insurance has ever questioned the connection between my daughter and me).  Anyway, once the issue with the consent was cleared up (by explaining the child’s mother signed the consent), all 5 DOS were found compliant.

My statistician expert called this “a cluster.”  The importance of a cluster is that the strata is all messed-up.  A strata must be independent, one-element-affects-one-claim, otherwise the entire extrapolation is compromised.

Bill gave me this example:

If you want the statistics of flipping a coin and you flip a coin one time, then hit heads and just assume that heads would have been hit every time you flipped the coin…that’s a cluster.  No independent probability.

Or…tape 5 coins on a piece of paper, all showing heads. Flip the paper and determine, if it lands with all heads facing-up,  that, if independently thrown, all coins would have landed on heads.  Again, no independent probability.

Think about it…PCG (or whatever RAC) reviews 100 claims.  From those 100 claims, it extrapolates. But, what if, 5 or 10 or 20 claims are contingently dependent upon one another? Then the extrapolation is invalid.  Because, for an extrapolation to be valid, each claim must be independent; each element must affect one claim.

So, PCG (or whatever RAC) says you owe $1 million? Check for clusters!!!

Even New Mexico Identifies PCG Audits as “Unreliable!”

The below article was published in New Mexico on July 13, 2013. New Mexico!! Think about it…Public Consulting Group (PCG) is doing such a poor job of auditing that a journalist in New Mexico is writing about PCG in North Carolina. Folks, for those of you who thought that PCG is only mucking-up the audits in NC…think again…the muck-ups are cross-country.

Yet, PCG is still conducting Medicaid audits. Every day that PCG performs Medicaid audits, providers who accept Medicaid are unreasonably harassed.

For the sake of demonstrating some of the muck-ups, I have listed below a sample of three “muck-ups” of which I have a part, as well as the outcome of the muck-up.

PCG Audit Findings (est)

Outcome (est)

$706,365.00

$336.00

$1,239,256.00

$1,072.00

$456,322.00

0

Here’s the article…

North Carolina: Provider Auditing Firm ‘Unreliable’

The Boston-based company that found $36 million in Medicaid overpayments to 15 New Mexico behavioral health providers — and claimed evidence of fraud by the companies — did a similar study with similar results in North Carolina.

However, the North Carolina state auditor last year found some of the findings against those providers were overstated, and the figures reported by Public Consulting Group were “not proven to be reliable.”

One North Carolina provider that allegedly overcharged the state by more than $1.3 million actually had overcharged by less than 2 percent of that amount, the North Carolina state auditor said.

No spokesman for Public Consulting Group could be reached for comment Friday. But a spokesman for the New Mexico Human Services Department on Friday defended the company’s work in North Carolina.

In New Mexico last month, based on the audit performed by Public Consulting Group, the state Human Services Department froze funding for 15 behavioral health providers and referred the audit to the Attorney General’s Office for possible criminal prosecution.

Three of the 15 providers have had their funding fully or partly restored. But eight of the providers filed a federal lawsuit against Human Services Secretary Sidonie Squier. In the suit, the providers claim the action has been financially devastating. Some of the behavioral health companies have begun furloughing employees and shutting down services.

New Mexico’s Human Services Department is in the process of contracting with five Arizona companies — at a cost of up to $17.8 million — to be “on stand-by” to provide help with behavioral health services.

In addition, the providers’ lawsuit claims Squier’s public statements saying there is evidence of fraud has damaged the reputations of the providers. They have demanded “a meaningful name-clearing hearing, as required by the due process clause of the Constitution.”

State Auditor Hector Balderas said Friday that his office has received complaints about the behavior health provider issue and that his auditors and investigators are currently making “formal inquiries” to decide what course of action to take. Balderas said he’s already reached out to the North Carolina state auditor concerning the PCG Medicaid audit in that state.

The providers’ lawsuit brings up Public Consulting Group’s work in North Carolina, saying the company made auditing errors in New Mexico similar to mistakes made in North Carolina.

The company was hired by that state’s Health and Human Services Department to help identify Medicaid fraud. The contract was based on how much potential overpayments to providers they could identify. PCG reported $38.5 million in Medicaid overpayments and was paid $3.2 million.

However, in a July 2012 report, North Carolina State Auditor Beth Wood found that of the $38.5 million overpayments cited, the Health and Human Services Department had only been able to collect $3.7 million — less than 10 percent.

Wood’s report said “recoupments identified by PCG have not proven to be reliable, so the actual benefit derived from the contract is unclear.”

The report found at least one example in which the initial overpayment claimed by PCB turned out to be drastically less.

According to Wood’s report, her office began receiving a number of complaints about PCG’s review process. They decided to re-review one of the companies, which PCG said had overpayments totaling $1.34 million. “As a result of the providers submitting additional documentation and re-reviews … the recoupment amount was revised downward to only $22,093. It was unclear whether this was the result of the additional documentation provided or PCG’s policy interpretations during the review process.”

Similar to the situation in New Mexico, Wood told WRAL TV in Raleigh, N.C., last year, “We’ve had some complaints from providers that they’re about to be put out of business because of all the time they’ve had to spend to prove that they really haven’t committed fraud.”

Wood told the station that the way the contract was written was an incentive to PCG to inflate its findings.

Matt Kennicott, external affairs director for New Mexico’s Human Services Department, said the company’s New Mexico contract was not based on how much potential overpayments it identified. “There is zero financial incentive for them to produce findings,” he said.

A spokeswoman for the North Carolina Department of Health and Human Services told WRAL last year, “The auditor’s report does not emphasize one crucial piece of information — the value of identifying fraudulent providers and stopping them from ever operating again. Even if we don’t recoup all the money lost, it’s impossible to put a price tag on the deterrent effect of our efforts. We may never know just how many millions we will prevent from ever going out the door.”

Kennicott said North Carolina benefited from PCG’s work there and has seen a 23 percent improvement in provider compliance in the past two years because of the audits.

“The vast majority of PCG’s clinical findings have been upheld by the [North Carolina] Department of Health and Human Services during their due process hearings,” Kennicott said. “More than 85 percent of their audit findings have been upheld during hearings upon appeal” in North Carolina, he said.

Dear NC Medicaid Providers, You Are Guilty Until Proven Innocent. From, DMA

How many times have you heard, on TV, the phrase “alleged” suspect?  Or the phrase “innocent until proven guilty?”  Or “presumed innocent?”  In Latin, ei incumbit probatio qui dicit, non qui negat means the burden of proof lies with the one who declares, not who denies.

Most people do not know that this fundamental presumption, innocent until proven guilty (or, presumption of innocence), is not found in our Constitution…at least not explicitly.  The presumption of innocence is widely held to come from the 5th, 6th and 14th amendments.

However, in common law, the presumption of innocence has been upheld.  In Coffin v. U.S., 156 U.S. 432 (1895), the Supreme Court held that “[t]he principle that there is a presumption of innocence in favor of the accused is the undoubted law, axiomatic and elementary, and its enforcement lies at the foundation of the administration of our criminal law.”

Yes, I understand that, back in 1895, the Supreme Court held the presumption exists in criminal law.  Obviously, this is a Medicaid blog and I have averred, and will continue to aver, that my clients are not guilty of any criminal Medicaid fraud. But, even in the civil arena, a similar presumption of innocence exists and, as pertaining to Medicaid audits, is not being followed.  The civil audits being conducted on health care providers that accept Medicaid are: post-payment reviews, prepayment reviews, and Recovery Audit Contractor (RAC) audits.

I am defining post-payment reviews as audits that are supposed to be used to assure that payments are made for services delivered to beneficiaries.

I am defining prepayment review as a 6 month audit/review (initially…it can be longer or you can have your Medicaid contract terminated after 6 months) conducted on a provider’s records before reimbursement for services rendered due to “credible allegations of fraud,” “identification of aberrant billing practices, “data analysis,” or “other grounds.”

I am defining a RAC audit as an audit of past claims (up to 3 years ago) by another DMA agent either Public Consulting  Group (PCG) or HMS, which determines that, based on its own subjective determination, the providers’ documents are noncompliant and the provider owes the State a monetary amount of $____.  The provider receives a Tentative Notice of Overpayment (TNO).  It is important to note that these TNO amounts are extrapolated.  Which means if the DMA agent finds $1,000 worth of “alleged” overpayments, the agent can extrapolate the amount to be $1 million (This example is merely for the sake of this blog).

Going back to the presumption of innocence in criminal law, as I said, civil law has a similar presumption.  It is called the burden of proof.  In Latin,”semper necessitas probandi incumbit ei qui agit,” means, in the best translation of what I have found, “the necessity of proof always lies with the person who lays charges.”

Similar to: “The burden lies with the one who declares, not denies?”  I think so.  In essence, the person that accuses another bears the “burden of proof,” not the accused.  But what does that mean?  In simple terms, it means that the person who accuses another must prove every element of the crime/tort/wrongdoing in a court of law.  If that accuser fails to prove every element, then the accusee (the person accused) does not even have to defend him or herself.  Since the burden lies on the accuser, the accuser must prove all elements before the accusee even has to defend him or herself.  If the accuser fails, the case is dismissed.

The weight of the “presumption of innocence” and the “burden of proof” resting on the accuser is the heart of our judicial system, both criminal and civil.

So what happens if we take both the presumption and the burden away?

Johnny could tell the NC Bar that Susie, a local lawyer, has committed unethical acts. The NC Bar would immediately either punish Susie, suspend her bar license or terminate her Bar license without the Bar questioning Johnny, Susie, or even give Susie a chance to defend herself.

Tommy could be shopping at his local Harris Teeter, looking for Super Double coupon deals, and a policeman could arrest him for shoplifting without any evidence, except that Ms. Doe, the little old lady that lives next to Tommy and hates his my dog told the policeman that she saw Tommy shoplift.

Or, even worse, a nearby small pet store could call the IRS, contending its competitor down the road  has committed tax fraud.  IRS, without an investigation, closes the competitor’s shop and forbids any customer to pay it until the full investigation.

How are the above examples any different from these?

You receive a Notice of Prepayment Review.  The Review states that “based on credible allegations of fraud” (you do not get to know who accused you), we are suspending all Medicaid reimbursements to you, effective [DATE].  For the next 6 months you have to prove your innocence.  You cannot appeal this decision. 

Guilty until proven innocent.

Or: You receive a Tentative Notice of Overpayment (TNO) that, based on a review of 10 clients, you owe $500,000 (extrapolated), and the provider has 15 days in which to send the funds.  BTW: you can appeal. But the decision has already been made that you owe the money without hearing your defense.

Guilty until proven innocent.

Or, even better, you have been, for months, trying your hardest to keep up with all the over-inclusive records requests from the Carolinas Center of Medical Excellence (CCME), all the final requests, and all the nebulous denials (for reasons other than what was requested in the final requests).  You get to a hearing or a mediation and discover that, if you provide 5 service notes, that you will have passed prepayment review.  So you tell CCME that you will get the service notes.  And you are told that, most likely, the service notes will be considered invalid, because you will, most likely, re-created the notes, since you didn’t provide the notes earlier.

Hmmmm…How does one prove that is service note is NOT fraudulent?

Guilty until proven innocent.

“It is better to save a guilty man than condemn an innocent one.” Voltaire

Medicaid Dental Post-Payment Audits Gone Awry: A Hypothetical Example

A dental practice was audited by Public Consultant Group (PCG). Here is their story: (Insert a Dum, Dum, Dum).

For those of you who do not know who PCG is: CONGRATULATIONS!

But there are those of us who know that PCG is a hired contractor by the state or the Division of Medical Assistance (DMA) to investigate providers who accept Medicaid in North Carolina to detect clinically suspect behaviors or administrative billing patterns, which could indicate potentially abusive or fraudulent activities.

Whew!! Sounds serious!!

I am SURE that, for such a serious mission, PCG employs only the most-highly competent employees who are super, duper knowledgeable about the esoteric idiosyncrasies of the Medicaid system, the appropriate policy(ies),and  federal and state rules and regulations, right?

Hmmmm…out of sheer curiosity I googled employment opportunities at PCG.  I found a position in Albany, NY for an “Instructional Trainer.”  Duties include:

“Coaches agencies and providers on programs and information to ensure compliance with departmental, state, and federal laws, rules, regulations, guidelines, processes, and procedures.”

Dag on!!! Shut the front door! This person will be coaching agencies and providers, ensuring compliance with laws, rules, regulations, guidelines….SURELY this person must be a lawyer, right????

So then I looked at the “required experience:”

Required Experience:

  • BS degree in a related field preferred
  • Experience in development and delivery of instructional materials or training
  • Experience in health & human services is desirable
  • Experience working in a team-oriented, collaborative environment
  • Advanced Knowledge of Curriculum Design and Training Delivery
  • Advanced Knowledge of Office Skills such as Word Processing and Data Collection
  • Advanced Knowledge of the Principles for Providing Customer Service

A BS degree is a related field preferred??

First, what is a related field for regulations and compliance? Political Science?

Folks, I double-majored in English and Political Science and I can promise you that after graduating from NCSU with a double major in English and “Poli Sci” I was NOWHERE competent enough to handle a Medicaid audit of a provider.  I may have been able to draft a darn good essay or quote the U.S. Senators and their bipartisan affiliations, but a Medicaid expert, I was not.  And this position was for an “Instructional Trainer!” A TRAINER!! As in, one who trains.  Implicit in the job title is “One who has been trained” or “One who has the knowledge to train.”

I give this background to set the stage:

The Characters:

On one side: Dentists who have been managing a successful dental practice for years and years after attending college and dental school.

And on the other side:  A college Political Science major who is able to recite all the states and its capitols and all the governors of each state (This is not to say that all employees at PCG are inept…or not qualified for  their particular position.  I actually know a couple of PCG employees of whom I think highly (this is not directed toward you, my fine two friends).  This is merely a generalization and stage-setting for the all-too-common errors I see committed by the “entry-level” auditors).

The stage:

A well-established dental practice.  All the walls are wooden (painted white) and there are 200+ handprints on the lobby wall with all the little pediatric customers’ names on them.  There is a waiting room with toys and books.

The script:

Act 1: A few entry-level PCG auditors knock on the door of the dental practice (They don’t actually knock, because it is a dental practice, not a home, but you get the drift).

Receptionist: How may we help you?

Auditor 1: We are here to conduct a Medicaid post-payment audit.

Receptionist: Huh? (With an open, gape-jawed expression)

Auditor 2: A post-payment Medicaid audit.

Auditor 1: We need to see all the documents of your Medicaid clients from February 2011 through May 2011.

Receptionist: Huh?

All right, folks, I am sure you get the point.  So the audit occurs and a few months later, the dental practice receives a Tentative Notice of Overpayment for $300,000.00.  The #1 main reason PCG found noncompliance was:

“The attending provider number billed does not match the individual dentist who rendered the service and does not support service billed.  Citation: Clinical Coverage Policy No. 4A: January 1, 2011 Attachment A.1 Instructions for filing a Dental Claim 53-56…”

Now, mind you, in the DMA Clinical Policy No. 4A, revised March 1, 2013, the policy states “Enter the attending provider’s NPI for the individual dentist rendering service. (This number must correspond to the signature in field 53.)”

In 2013, it is quite clear that the attending provider and the provider rendering the services must be identical.  But this audit was a post-payment review, meaning that the documents audited were from 2011, not 2013.

In 2011, the DMA Clinical Policy No. 4A, revised January 1, 2011, states “Enter the attending provider’s NPI for the individual dentist rendering service. (This number should correspond to the signature in field 53.)”

 See the difference? (One of these things is not  like the others).

Must v. Should

Must equals no other choice.  Should denotes guidance; simply a suggestion.

However, think of this, if you were a college graduate who majored in Political Science and were now auditing Medicaid providers, would you think to distinguish the difference between “should” and “must?”