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Can Medicare/caid Auditors Double-Dip?

The issue today is whether health care auditors can double-dip. In other words, if a provider has two concurrent audits, can the audits overlap? Can two audits scrutinize one date of service (“DOS”) for the same consumer. It certainly doesn’t seem fair. Five years ago, CMS first compiled a list of services that the newly implemented RAC program was to audit. It’s been 5 years with the RAC program. What is it about the RAC program that stands out from the other auditor abbreviations?

We’re talking about Cotiviti and Performant Recovery; you know the players. The Recovery Audit Program’s mission is to reduce Medicare improper payments through the efficient detection and collection of overpayments, the identification of underpayments and the implementation of actions that will prevent future improper payments.

RACs review claims on a post-payment basis. The RACs detect and correct past improper payments so that CMS and Carriers, and MACs can implement actions that will prevent future improper payments.

RACs are also held to different regulations than the other audit abbreviations. 42 CFR Subpart F dictates the Medicaid RACs. Whereas the Medicare program is run by 42 CFR Subchapter B.

The auditors themselves are usually certified coders or LPNs.

As most of you know, I present on RACMonitor every week with a distinguished panel of experts. Last week, a listener asked whether 2 separate auditors could audit the same record. Dr. Ronald Hirsh’s response was: yes, a CERT can audit a chart that another reviewer is auditing if it is part of a random sample. I agree with Dr. Hirsh. When a random sample is taken, then the auditors, by definition, have no idea what claims will be pulled, nor would the CERT have any knowledge of other contemporaneous and overlapping audits. But what about multiple RAC audits? I do believe that the RACs should not overlap its own audits. Personally, I don’t like the idea of one claim being audited more than once. What if the two auditing companies make differing determinations? What if CERT calls a claim compliant and the RAC denies the claim? The provider surely should not pay back a claim twice.

I believe Ed Roche presented on this issue a few weeks ago, and he called it double-dipping.

This doesn’t seem fair. What Dr. Hirsh did not address in his response to the listener was that, even if a CERT is allowed to double-dip via the rules or policies, there could be case law saying otherwise.

I did a quick search on Westlaw to see if there were any cases where the auditor was accused of double-dipping. It was not a comprehensive search by any means, but I did not see any cases where auditors were accused of double-dipping. I did see a few cases where hospitals were accused of double-dipping by collecting DSH payments to cover costs that had already been reimbursed, which seems like a topic for another day.

NC Medicaid OVERHAULED!

NC Medicaid is getting a complete overhaul. Politically, everyone is lost and has no idea how this will work. Back in 2010-ish, when NC went to the MCO model, which we have now, hundreds of providers were not paid or had trouble getting paid until the “dust” settled, and the MCOs were familiar with their jobs. Providers continue to suffer nonpayment from MCOs.

The new model consists of two, separate models: (1) the Standard Plan; and (2) the Tailored Plan models.

What’s the difference?

The Tailored Plan

Applies to:

  • People who get Innovations Waiver services
  • People who get Traumatic Brain Injury (TBI) Waiver services
  • People who may have a mental health disorder,substance use disorder, intellectual /developmental disability (I/DD) or traumatic brain injury (TBI).

The Standard Plan

Applies to everyone else. It is normal, physical Medicaid.

December 1, 2022, is the “go-live” date for the Tailored Plans.

Unlike the MCO model, the Tailored Plan offers physical health, pharmacy, care management and behavioral health services. It is for members who may have significant mental health needs, severe substance use disorders, intellectual/developmental disabilities (I/DDs) or traumatic brain injuries (TBIs). Tailored Plans offer added services for members who qualify. DHHS is trying to distance itself from any Medicaid administration by hiring all these private companies to manage Medicaid for DHHS. DHHS has to get federal Waivers to do this.

The MCOs are taking on a new function. Starting December 1, 2022, the MCOs will be managing physical care, as well as mental health and substance abuse.

I see this HUGE change as good and bad (isn’t everything?). The good side effect of this transition is that Medicaid recipients who suffer mental health and/or substance abuse will have their physical health taken care of by the same MCO that manage their mental health and/or substance abuse services. Despite, this positive side effect, we all know that whenever NC Medicaid is OVERHAULED, consumers fall between cracks on a large scale. Let’s just hope that this transition will be easier than past transitions.

Dave Richard, Deputy Secretary NC Medicaid, NCDHHS, gave a presentation today for the NCSHCA. He said that the transition to MCOs was rocky. What does he think will happen when we transfer to the Tailored Plan?

I think I may ask him whether he thinks whether the MCOs are doing a good job, presently.

He’s a great presenter.

He said that the hospitals have come together in the last 4 weeks. He said that we will see something in the media on Monday.

He wants to expand Medicaid because his agency DHHS would be awarded $1.5 Billion over the course of 2 years. Of course, he wants to expand. He has no idea that the MCOs are “terminating at will” providers within the catchment areas in a disproportionate and discriminatory way.

We are close to expansion, he said. 80%, he guessed. “Expansion is really important.”

Not if there are not enough providers.

I did not ask him my question.

Today Mr. Richard had to get a bunch of data from the “new plans.” We are 2 1/2 months away, and he said they are not prepared yet, but hopes to be prepared by December 1, 2022. They still have the discretion to “pull the plug.” He’s worried about a lot of providers who have invested a lot of money to get compliant and ready for the transformation – that they won’t get paid.

“We have 5 really, strong Standard Plans,” he said. Most Medicaid recipients will choose the 5 Standard Plans,

Attorney from the audience: “We have to raise reimbursement rates.” There is a staffing crisis, the attorney, emphasized.

Mr. Richard stated that there will be a raise, but no indication of how much.

Finally, I did ask him his opinion as to whether he thinks the MCOs are doing better now than when the transformation happened (back in 2010-ish).

He said, that nothing is perfect. And that other Medicaid Deputy Secretaries think very highly of NC’s program. I wonder if he’ll run for office. He would win.

The guy next to me asked, “What is the future of the Tailored Plans when they go out of business in 4 years?”

Mr. Richards said that there needed to be competition for being the “big dogs.”

NC Medicaid: Are MCOs Biased?

Since the inception of the Medicaid MCOs in North Carolina, we have discussed that the MCO terminations of providers’ Medicaid contracts have consistently and disproportionately been African American-owned, behavioral health care providers. Normally the MCOs terminate for “purported various reasons,” which was usually in error. However, these provider companies had one thing in common; they were all African American-owned. On this blog, I have generally reported that MCO terminations were just based on inaccurate allegations against the providers. The truth may be more bias. – Knicole Emanuel

George Floyd; Breyonna Taylor; Eric Garner; Tamir Rice; Jordan Davis, these are all names that we know, all-too-well, for such horrendous reasons.  Not for the brilliance, that these young African-American men and women possessed; nor for the accolades they had accumulated throughout their short-lived experiences on this earth.  We recognize these names through a disastrous realization that brought communities and our nation together for a singular purpose; to fight racism. 

A global non-profit organization, United Way, recognizes four types of racism.

  1. Internalized Racism—a set of privately held beliefs, prejudices, and ideas about the superiority of whites and the inferiority of people of color.
  2. Interpersonal Racism—the expression of racism between individuals.  Occurring when individuals interact and their private beliefs affecting their interactions.
  3. Institutional Racism—the discriminatory treatment, unfair policies and practices, and inequitable opportunities and impacts within organizations and institutions, all based on race, that routinely produce racially inequitable outcomes for people of color and advantages for white people.
  4. Structural Racism—a system in which public policies, institutional practices, cultural representations and other norms work in various, often reinforcing, ways to perpetuate racial group inequality.

These various types of racism can be witnessed in every state, city, county, suburb, and community, although it isn’t always facially obvious. Racism can even be witnessed in the health care community.  Recently in 2020, NC Governor Roy Cooper signed executive order 143 to address the social,  environmental, economic, and health disparities in communities of color that have been exacerbated by the COVID-19 Pandemic. Machelle Sanders, NC Department of Administration Secretary,  was quoted stating that “Health inequities are the result of more than one individual choice or random occurrence—they are the result of the historic and ongoing interplay of inequitable structures, policies, and norms that shape lives.”  Governor Cooper went on to include that there is a scarcity of African-American healthcare providers, namely behavioral healthcare providers, available to the public. 

Noting this statement from the Governor of our great state, its troublesome to know that entities that provide federal funding to these healthcare providers have been doing their absolute best to rid the remaining African-American behavioral healthcare providers.  For years, Managed Care Organizations (“MCOs”) have contracted with these providers to fund the expenses pursuant Medicaid billing.  MCOs have repeatedly attempted to terminate these contracts with African-American providers without cause, unsuccessfully; until recently.  In the past few years, Federal Administrative Law Judges (“ALJ’s”) have been upholding “termination without cause” contracts between MCOs and providers.  This is nothing less of an escape route for MCOs, allowing them to keep the federal funds, that they receive each year based upon the number of contracts they have with providers, as profit.  This is an obvious incentive to terminate contracts after receiving these funds. Some may refer to this as a business loophole, while most Americans would label this an unconstitutional form of structural racism.  It has been estimated that 99% of behavioral healthcare providers in NC that have been terminated have ONE thing in common.  You guessed it.  They are African-American owned. Once terminated, most healthcare providers cannot operate without these Federal Medicaid Funds and, ultimately, are forced to close their respective practices.

Why is this not talked about? The answer is simple.  Most Americans who are on Medicaid don’t even understand the processes and intricate considerations that go into Medicaid, let alone the general public.  And what’s the craziest thing? The craziest thing is the fact that these Americans on Medicaid don’t know that the acts of racism instituted against their providers, trickle down and limit their ability to obtain healthcare services.  Think about it.  If I live in a rural town and have a healthcare provider that I know and love is terminated and forced to close, I lose access to said healthcare provider and must potentially go to an out-of-town provider.  The unfortunate fact is that most healthcare providers who operate with a “specific” specialty, such as autistic therapy, can have waitlists up to 12 months! The ramifications of these financially-greedy, racist acts of the MCOs ultimately affect the general population. 

A Medicare Mistake: Your Missing Contract

-written by Todd Yoho, my paralegal, who has worked closely with me for over a decade. He knows more about Medicare and Medicaid than he probably cares to, but no one could contest that he doesn’t know his stuff!

There is a film almost everyone in the legal field has seen at least once. A comedic drama from 1973 titled, The Paper Chase. It follows the journey of a first year law student at Harvard Law School, and his particular frustrations with his Contracts course and professor. Contracts are one of the first things a law student studies, and some attorneys spend their career reviewing, drafting, revising, and negotiating contracts. They are that important.

In the health care, provider world, contracts are the lifeblood of your company. Contracts are how you secure work, ensure rates for revenue, and contain vital information should someone act contrary to the contract. If you have a dispute with an entity, your first act should be to consult an attorney and provide them with a copy of your contract. There should be a section about dispute resolution, which you should carefully scrutinize before signing any contract. It may be mandatory arbitration, it may stipulate a particular venue, or it may cite specific rules and statutes that, if you are not an attorney, may read like obtuse, dense, “word salad” put together by people who do not have to live and operate under the very laws they enact.

But, what if you don’t have a copy of your contract? You signed it years ago, your business has moved several times, or it just disappeared in the hectic daily life of daily operations. Your recourse is that you have to ask the very entity you have a dispute with to provide you with a copy. We’ve seen providers in situations like this, and sometimes the other entity complies immediately. Other times they say it will take 30 days, or 60 days, and you are already on your heels. Without a copy of that contract, you and your attorney may not know what your first step towards resolution will be. Worse if you are on a time limit you don’t know exists.

So, what do you do to avoid this kind of situation? You need to have a document retention policy. Know how long you are required to keep documents, Create an important document archive in a secure location that you update every time you execute a business related document. And make a copy to be kept in a separate, secure location. Then make another copy. It used to be this could be a notebook, a folder, or a file box in your CEO’s office, manager’s office, or with another person trusted with corporate responsibility. A copy could be kept at the CEO’s home in a locked file cabinet. And it still could be. There’s nothing wrong with keeping a hard copy archive, but this is the digital era.

Because we are in the digital era, you should absolutely keep your archive backed up to the cloud. Cloud data services can be cheap, and will pay enormous dividends if you suffer a catastrophic document loss. But, you have to preserve them first. Don’t let them get misplaced. Much like your important family documents, your important business documents are vital pieces of information. You may not need them every day, but the day you do need them, you want to have them quickly and easily available. They are that important. You don’t want to find yourself at an inopportune moment chasing paper.  

Some helpful links include the following:

https://www.uschamber.com/co/start/strategy/how-long-to-keep-business-document

https://www.uschamber.com/co/run/technology/cloud-storage-security

Knicole here. Sorry for the duplicative links. I don’t know how to delete them.

Medicare Provider Appeals: The Ghost Auditor

In litigation, there are two opposing sides, like football. It wouldn’t be much of a game if one side didn’t show up. In Medicare provider appeals, only one side shows up and I am asking – how is that fair? Let me explain:

You, as a provider receive a notice of Medicare overpayment in the mail. NGS or Palmetto or whoever claims you owe $4 million dollars. Of course the amount is extrapolated.

You decide to appeal. The first level is a redetermination at the Medicare Administrative Contractor. It is a desk review; you do not have the opportunity to question the other side. It’s just a 2nd look at the audit. The second level is the same as the first but performed by a QIC, and it’s called a reconsideration. The third level you finally get before an administrative law judge. Here, you envision the auditor presenting its evidence in support of why you owe $4 million dollars, and you presenting evidence and support that you don’t owe the money.

You would be wrong.

The auditors may participate in an ALJ Hearing. However, in my experience, the auditors never show up. They don’t provide evidence that their extrapolation was accurate or that their clinical findings are precise. No one substantiates the allegation that you owe $4 million. Instead, you get a soliloquy of why you don’t owe the money. The Judge may ask you questions, but you won’t be cross examined nor will you have the opportunity to cross examine the auditor.

The Medicare provider appeal process flies in the face of America’s judicial system. Our rules allow the accused to confront the accuser. At no time during your Medicare appeal do you get to challenge the auditor nor does the auditor have to back up his or her work. The audits are accepted as true without any verification.

This process needs to be amended. Medicare auditors should have to prove that their audits are accurate. They should have to prove that the documents didn’t support the claim billed and why. They should not be allowed to hide behind generic, cut-and-pasted denials without having to explain their reasoning, if there were any.

This nonsensical, three-ring-circle is why providers refuse to accept Medicare.

In 2020, one percent of non-pediatric physicians formally opted out of Medicare. Most of those opting out were psychiatrists – 42%.

This just goes to show you, qualifying for Medicare doesn’t guarantee that providers will accept you. It’s only going to get worse unless we change the appeal process for providers.

A New Associate Joins Practus’ Health Care Team: Ryan Hargrave!!

Attorney Ryan Hargrave joined the Practus Health Care Litigation team on June 1, 2022.  Ryan comes from a career of litigation in the State of North Carolina.  He began his career in 2016 as a Prosecutor for the State of North Carolina, Guilford County.  There he gained valuable experience from which he used as he moved to defending clients.  He served as the Lead Trial Attorney at Triad Legal Group before joining Graystar Legal as the Senior Associate Attorney.  

Ryan obtained his undergraduate degree at Presbyterian College in Clinton, SC., where he received a B.A. in Political Science and a minor in Biology.  Ryan has always had a keen interest in health care which has followed him throughout his career.  He is locally known as the “Drug Lawyer” for his focus in the defense of drug-related crimes.  He has a reputable proficiency in Cannabis Law, Criminal Law, and Civil Law across State and Federal Courts.  Ryan has extensive trial experience that he brings to the Health Care Litigation team at Practus.  

Ryan lives in North Carolina with his family, spending his time working out, making financial investments, and beginning his non-profit business, “Colored Money”.  His non-profit will focus on teaching young boys and girls the value of money as a vehicle to achieve wealth, making smart investments, and how to achieve financial freedom.  He is a big Georgia football fan and even has an English Bulldog that could serve as the team’s mascot.

Note from me:

I expect Ryan to dovetail and expand my Medicare and Medicaid regulatory compliance practice because his litigation experience will directly help me in litigation natters, but, also, his criminal litigation experience will also allow us to represent more White Collar Crime clients, including Medicare and Medicaid fraud accusations, False Claims Act, Stark, and Anti-Kickback alleged violations.

We are happy that he is here!

The Medicare Provider Appeals Backlog and LCDs May Not Be As Important as One Would Think!

It’s a miracle! HHS has reduced the Medicare appeals backlog at the Administrative Law Judge (“ALJ”) level[1] by 75 %, which puts the department on track to clear the backlog by the end of the 2022 fiscal year. The department had 426,594 appeals bottlenecked on backlog. An audit from 2016 could get heard by an ALJ in 2021. However, movement has occurred.

According to the latest status report, HHS has 86,063 pending appeals remaining at the Office of Medicare Hearing and Appeals (“OMHA”).

In 2018, a federal Judge ruled in favor of the American Hospital Association (“AHA”) and its hospital Plaintiffs and Ordered HHS to eliminate the backlog of appeals by the end of FY 2022 and provided the department with a number of goals. According to the ruling, HHS had to reduce the backlog by 19 percent by the end of FY 2019, 49 percent by the end of FY 2020, and 75 percent by the end of FY 2021. Originally, the Order scheduled the timeframe for disseminating the backlog much shorter, but CMS claimed impossibility.

On another note, lately, I’ve seen a lot of supposed audit results based on local coverage determinations (“LCDs”) or policy manuals. This is unacceptable. In a January 4, 2022, decision from the NC Court of Appeals, the Court held that when a State agency implements an unpromulgated rule, the rule may not be enforced. Hendrixson v. Div. of Soc. Servs., 2022-NCCOA-10, ¶ 9. The Hendrixson case piggybacks the Supreme Court, which held that LCDs are unenforceable against providers. Azar v. Allina Health Services, 139 S. Ct. 1804, 204 L. Ed. 2d 139 (2019).

In Hendrixson v. Division of Social Services, the Court held that people eligible for Medicare Part B must apply and enroll and that if the applicant fails to enroll, Medicaid pays no portion of the costs for medical services that would have been covered by Medicare Part B, as you know Medicare Part B provides coverage for certain hospital outpatient services, physician services, and services not covered by Part A. See Bruton, 134 N.C. App. at 42, 516 S.E.2d at 635; 42 U.S.C. § 1395k (2019); 42 C.F.R. § 407.2 (2020). Enrollment in Medicare Part B is generally not automatic, see 42 C.F.R. §§ 407.4-407.40 (2020), and requires the patient to pay insurance premiums to enroll, after which the federal government pays most of the reasonable costs, with patients paying the remaining cost and an annual deductible. See Bruton, 134 N.C. App. at 42, 516 S.E.2d at 635; 42 U.S.C. §§ 1395l, 1395r-1395s (2019); 42 C.F.R. § 407.2 (2020). “Together, the part B premiums, deductibles and coinsurance are generally referred to as ‘Part B cost-sharing.’” Bruton, 134 N.C. App. at 42, 516 S.E.2d at 635. At your hospital or health care entity, do you have someone dedicated to properly enrolling consumers into Medicare Part B? If not, you may want to consider as a financial investment. Additionally, while you do not want to ignore the LCDs, the LCDs or Manuals cannot be a basis for any alleged recoupment or other sanction. As a general canon, any unpromulgated rule cannot be the basis of any penalty.


[1] The ALJ level is the third level in Medicare provider audits, but the first time that providers are allowed to present evidence to an independent tribunal.

Defenses Against Medicare/caid Audits: Arm Yourself!

Auditors are overzealous. I am not telling you anything you don’t know. Auditors cast wide nets to catch a few minnows. Occasionally, they catch a bass. But, for the most part, innocent, health care providers get caught in the overzealous, metaphoric net. What auditors and judges and basically the human population doesn’t understand is that accusing providers of “credible allegations of fraud” and alleged overpayments, when unfounded, has a profound and negative impact. First, the providers are forced to hire legal counsel at an extremely high cost. Their reputations and names get dragged through the mud because providers are guilty until they are proved innocent. Then, once they prove that there is no fraud or noncompliant documents, the wrongly accused providers are left with no recourse.

            The audits generally result in similar reasoning for denials. For instance,

  1. Lacks medical necessity. Defense: The treating physician rule. Deference must be given to the treating physician, not the desk reviewer who has never seen the patient.
  2. Canned notes: Defense: While canned notes are not desirable, it is not against the law. There is no statute, regulation, or rule against canned notes. Canned notes are just not best practices. But, in reality, when you serve a certain population, the notes are going to be similar.
  3. X-rays tend to be denied for the sole reason that there are no identifying notes on the X-ray. Or the printed copy of the X-ray you submit to the auditors is unreadable. Defense/Proactive measure: When you submit an X-ray, include a brief note as to the DOS and consumer.
  4. Signature illegible; therefore, no proof of provider being properly trained and qualified. Defense: This one is easy; you just show proof of trainings, but to head off the issue, print your name under your signature or have it embedded into your EHR.
  5. Documentation nitpicking. The time, date, or other small omissions result in many a denial. Defense: There is no requirement for documents to be perfect. The SSA provides defenses for providers, such as “waiver of liability” and “providers without fault.” The “waiver of liability” defense provides that even if payment for claims is deemed not reasonable and necessary, payment may be rendered if the provider did not know and could not have been reasonably expected to know that payment would not be made.

Whenever a client tells me – let’s concede these claims because he/she believes the auditors to be right, I say, let me review it. With so many defenses, I rarely concede any claims. See blog for more details.

Medicare Appeals: When It Comes To Appealing, Beneficiaries May Be Key!

Today I want to discuss the Medicare appeal process and its faults. Upon undergoing a Medicare audit by Safeguard or whichever auditor contracted by CMS, a provider usually receives a notice of overpayment. The 5-level appeal process is flawed as the first two levels rubber-stamp the findings. After the second level of appeal – the QIC level to the ALJ – recoupment occurs unless the provider set up an extended repayment schedule (ERS) or files for an injunction in federal court based on a taking of a property right; i.e., the right to reimbursement for services rendered.

Everyone deserves to be paid for medically necessary services rendered. The conundrum here is that the circuit courts are split as to the protections a provider deserves.

Whenever a federal injunction is filed, the Defendant auditor files a Motion to Dismiss based on (1) failure to exhaust administrative remedies and that the Medicare Act requires the administrative process; therefore, the federal court has no jurisdiction. The provider will argue that the federal action is ancillary to the substantive issue of whether the overpayment was in error and that its protected property right is being taken without due process.

A new case rendered October 1, 2021, Integrity Social Work Services, LCSW, LLC. V. Azar, 2021 WL 4502620 (E.D.N.Y 2021) straddles the fence on the issues. The EDNY falls within the 2nd circuit, which is undecidedly split. The 5th Circuit is, as well, split. District courts across the country are split on whether Medicare providers have a protected property interest in Medicare payments subject to recoupment. Several courts have found that the Medicare Act does create such a property right, including NC, 4th Circuit, Texas, Florida, Ohio, and Illinois, to name a few.

This provider was accused of an alleged overpayment of about 1 million. It argued that because it will not receive a prompt ALJ hearing that it will be driven out of business. This is a harsh and unacceptable outcome that readily occurs in about half the states. Providers should be aware of which State in which it resides and whether that State upholds a providers’ property interest in reimbursements for services rendered.

The Integrity Social Work Court found that, yes, jurisdiction in federal court was proper because the claims were ancillary to the substantive claims that would be heard by the ALJ. The provider was asking for a temporary stay of the recoupments until an ALJ hearing was concluded. As you read the case, you get false hope on the ruling. In the end, Judge Peggy Kuo found “Nor is the process to contest an overpayment or a recoupment decision arbitrary, outrageous, or even inadequate.”

Respectfully, I disagree. As does half the other courts. See, e.g.Accident, Injury & Rehab., PC v. Azar, No. 4:18-CV-2173 (DCC), 2018 WL 4625791, at *7 (D.S.C. Sept. 27, 2018); Adams EMS, Inc. v. Azar, No. H-18-1443, 2018 WL 3377787, at *4 (S.D. Tex. July 11, 2018); Family Rehab., Inc. v. Azar, No. 3:17-CV-3008-K, 2018 WL 3155911, at *4-5 (N.D. Tex. June 28, 2018). Juxtapose other courts have found that no such property interest exists. See, e.g.Alpha Home Health Solutions, LLC v. Sec’y of United States Dep’t of Health & Human Servs., 340 F. Supp. 3d 1291, 1303 (M.D. Fla. 2018); Sahara Health Care, Inc. v. Azar, 349 F. Supp. 3d 555, 572 (S.D. Tex. 2018); PHHC, LLC v. Azar, No. 1:18-CV-1824, 2018 WL 5754393, at *10 (N.D. Ohio Nov. 2, 2018); In Touch Home Health Agency, Inc. v. Azar, 414 F. Supp. 3d 1177, 1189-90 (N.D. Ill. 2019).

Providers – If you bring a claim to cease the recoupment, also sue on behalf of your Medicare beneficiaries’ property rights to freedom of choice of provider and access to care. Their rights are even stronger than the providers’ rights. I did this in Bader in Indiana and won based on the recipients’ rights.

Managed Care Ruins Medicaid and Terminates Providers at Whim!

If you receive a letter from CMS or your State Department terminating your Medicare or Medicaid contract, would that affect you financially? I ask this rhetorical question because providers’ rights to a Medicare or Medicaid contract or to reimbursements for services rendered is a split in the Circuit Courts. Thankfully, I reside in the 4th Circuit, which has unambiguously held that providers and recipients have a property right in reimbursements for services rendered, a Medicare/caid contract and the right to the freedom of choice of provider. If you live in the 8th Circuit Court of Appeals, I am sorry. You have no rights.

Usually when there is split decision among the Circuit Courts, the Supreme Court weighs in. But, it has not. In fact, it declined to opine. Timing is everything. A 4th Circuit court of Decision giving providers property rights requested the Supreme Court to weigh in and finally end this rift amongst the Circuits. But, sadly, Justice Ginsburg died on September 18, 2020. The Supreme Court declined to review the Fourth Circuit decision on October 13, 2020.  Justice Barrett was confirmed by the Senate on October 26, 2020 and was sworn in on October 27, 2020. So, the certiorari was denied – I assume – due to the vacant seat at the time.

In 40 States, managed care manages Medicaid. The contracts they write are Draconian, saying that either party may terminate at will for no cause but for convenience. Termination at will is all fine and good in the private sector. However, Medicare and Medicaid are highly regulated, and when tax dollars and access to care are at issue, property rights are created.

In NC State Court, against the judgment of the 4th Circuit, a November 5, 2021, unpublished case determined that providers have no property rights to a Medicaid contract and an MCO can terminate at whim. Family Innovations v. Cardinal Innovations Healthcare Solutions, No. COA20-681 (June 1, 2021). Unpublished decisions are supposed to carry no weight. Unpublished decisions are not supposed to be controlling. Citation is disfavored.

Yet, in a strange turn of events, our State administrative courts have rendered, in the last week and in violation of 4th Circuit and administrative case law, that the termination-at-will clause in the MCO contract that a provider is forced to sign stands and is enforceable. These were new Judges and obviously were not well-versed in Medicaid law. Both came from employment law backgrounds, which is completely different than the health care world. But their rash and uneducated decisions bankrupt companies and shut down access to care for medically necessary behavioral health care services.

The upshot? If you have managed care companies in charge of your Medicaid or Medicare contracts, review your contracts now. Is there a termination-at-will clause? Because if there is, you too could lose your contract at any time. Depending on where you reside, you may or may not have property rights in the Medicare Medicaid contract. This is an issue that the Supreme Court must decide. Too many providers are getting erroneously and discriminatorily terminated for no reason and given no due process.

We must bring litigation to thwart the Courts that uphold termination-at-will clauses. Especially, in the era of COVID, we need our health care providers. We certainly do not need the MCOs, which kill access to care.