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Medicaid Forecast: Cloudy with 100% Chance of Trump

Regardless how you voted, regardless whether you “accept” Trump as your president, and regardless with which party you are affiliated, we have a new President. And with a new President comes a new administration. Republicans have been vocal about repealing Obamacare, and, now, with a Republican majority in Congress and President, changes appear inevitable. But what changes?

What are Trump’s and our legislature’s stance on Medicaid? What could our future health care be? (BTW: if you do not believe that Medicaid funding and costs impact all healthcare, then please read blog – and understand that your hard-working tax dollars are the source of our Medicaid funding).

WHAT IS OUR HEALTHCARE’S FORECAST?

The following are my forecasted amendments for Medicaid:

  1. Medicaid block grants to states

Trump has indicated multiple times that he wants to put a cap on Medicaid expenses flowing from the federal government to the states. I foresee either a block grant (a fixed annual amount per state) or a per capita cap (fixed dollar per beneficiary) being implemented.

What would this mean to Medicaid?

First, remember that Medicaid is an entitlement program, which means that anyone who qualifies for Medicaid has a right to Medicaid. Currently, the federal government pays a percentage of a state’s cost of Medicaid, usually between 60-70%. North Carolina, for example, receives 66.2% of its Medicaid spending from Uncle Sam, which equals $8,922,363,531.

While California receives only 62.5% of its Medicaid spending from the federal government, the amount that it receives far surpasses NC’s share – $53,436,580,402.

The federal funding is open-ended (not a fixed a mount) and can inflate throughout the year, but, in return, the states are required to cover certain health care services for certain demographics; e.g., pregnant women who meet income criteria, children, etc. With a block grant or per capita cap, the states would have authority to decide who qualifies and for what services. In other words, the money would not be entwined with a duty that the state cover certain individuals or services.

Opponents to block grants claim that states may opt to cap Medicaid enrollment, which would cause some eligible Medicaid recipients to not get coverage.

On the other hand, proponents of per capita caps, opine that this could result in more money for a state, depending on the number of Medicaid eligible residents.

2. Medicaid Waivers

The past administration was relatively conservative when it came to Medicaid Waivers through CMS. States that want to contract with private entities to manage Medicaid, such as managed care organizations (MCOs), are required to obtain a Waiver from CMS, which waives the “single state entity” requirement. 42 CFR 431.10. See blog.

This administration has indicated that it is more open to granting Waivers to allow private entities to participate in Medicaid.

There has also been foreshadowing of possible beneficiary work requirements and premiums.Montana has already implemented job training components for Medicaid beneficiaries. However, federal officials from the past administration instructed Montana that the work component could not  be mandatory, so it is voluntary. Montana also expanded its Medicaid in 2015, under a Republican governor. At least for one Medicaid recipient, Ruth McCafferty, 53, the voluntary job training was Godsend. She was unemployed with three children at home. The Medicaid job program paid for her to participate in “a free online training to become a mortgage broker. The State even paid for her 400-mile roundtrip to Helena to take the certification exam. And now they’re paying part of her salary at a local business as part of an apprenticeship to make her easier to hire.” See article.

The current administration may be more apt to allow mandatory work requirements or job training for Medicaid recipients.

3. Disproportionate Share Hospital

When the ACA was implemented, hospitals were at the negotiating table. With promises from the past administration, hospitals agreed to take a cut on DSH payments, which are paid to hospitals to help offset the care of uninsured and Medicaid patients. The ACA’s DSH cut is scheduled to go into effect FY 2018 with a $2 billion reduction. It is scheduled to continue to reduce until FY 2025 with a $8 billion reduction. The reason for this deduction was that the ACA would create health coverage for more people and with Medicaid expansion there would be less uninsured.

If the ACA is repealed, our lawmakers need to remember that DSH payments are scheduled to decrease next year. This could have a dramatic impact on our hospitals. Last year, approximately 1/2 of our hospitals received DSH. In 2014, Medicaid paid approximately $18 billion for DSH payments, so the proposed reductions make up a high percentage of DSH payments.

4. Physician payment predictability

Unlike the hospitals, physicians got the metaphoric shaft when the ACA was implemented. Many doctors were forced to provide services to patients, even when those patients were not covered by a health plan. Many physicians had to  increase the types of insurance they would accept, which increased their administrative costs and the burden.

This go-around, physicians may have the ear of the HHS Secretary-nominee, Tom Price, who is an orthopedic surgeon. Dr. Price has argued for higher reimbursement rates for doctors and more autonomy. Regardless, reimburse rate predictability may stabilize.

CEO of Cardinal Gets a Raise – With Our Tax Dollars!

You could hear the outrage in the voices of some of the NC legislators (finally, for the love of God – our General Assembly has taken the blinders off their eyes regarding the MCOs) at the Joint Legislative Oversight Committee on Medicaid and NC Health Choice on Tuesday, December 6, 2016, when Cardinal Innovations‘, a NC managed care organization (MCO) that manages our Medicaid behavioral health care in its catchment area, CEO, Richard Topping, stated that his salary was raised this year from $400,000 to $635,000with our tax dollars. (Whoa – totally understand if you have to read that sentence multiple times; it was extraordinarily complex).

Senator Tommy Tucker (R-Waxhaw) was especially incensed. He said, “I received minutes from your board, Sept. 16 of 2016, they made that motion, that your 2017 comp package, they raised your salary from $400,000 to $635,000, they gave you a 0 to 30 percent bonus potential which could be roughly another $250,000 and also you have some sort of annuity or long-term package of $412,000,” said Sen. Tommy Tucker.

FINALLY!!! Not the first time that I have blogged about the mismanagement (my word) of our tax dollars. See blog. And blog.

Sen. Tucker was not alone.

Representative Dollar was also concerned. But even more surprising than our legislators stepping up to the plate and holding an MCO accountable (MCOs have expensive lobbyists – with our tax dollars), the State’s Department of Health and Human Services (DHHS) Secretary Rick Brajer was visibly infuriated. He spoke sharply and interrogated Topping as to his acute income increase, as well as the benefits attached.

As a health care blogger, I receive so many emails from blog readers, including parents of disabled children, who are not receiving the medically necessary Medicaid behavioral health care services for their developmentally disabled children. MCOs are denying medically necessary services. MCOs are terminating qualified health care providers. MCOs are putting access to care at issue. BTW – even if the MCOs only terminated 1 provider and stopped 1 Medicaid recipient from receiving behavioral health care services from their provider of choice, that MCO would be in violation of federal law access to care regulations.  But, MCOs are terminating multiple – maybe hundreds – of health care providers. MCOs are nickeling and diming health care providers. Yet, CEO Topping will reap $635,000+ as a salary.

The MCOs, including Cardinal, do not have assets except for our tax dollars. They are not incorporated. They are not private entities. They are extensions of our “single state agency” DHHS. The MCOs step into the shoes of DHHS. The MCOs are state agencies. The MCOs are paid with our tax dollars. Our tax dollars should be used (and are budgeted) to provide Medicaid behavioral health care services for our most needy and to be paid to those health care providers, who still accept Medicaid and provide services to our most vulnerable population. News alert – These providers who render behavioral health care services to Medicaid recipients do not make $635,000/year, or anywhere even close. The reimbursement rates for Medicaid is paltry, at best. Toppings should be embarrassed for even accepting a $635,000 salary. The money, instead, should go to increasing the reimbursements rates – or maintaining a provider network without terminating providers ad nauseum. Or providing medically necessary services to Medicaid recipients.

Rest assured, Cardinal is not the only MCO lining the pockets of its executives. While both Trillium and Alliance, other MCOs, pay their CEOs under $200,000 (still nothing to sneeze at). Alliance, however, throws its tax dollars at private, legal counsel. No in-house counsel for Alliance! Oh, no! Alliance hires expensive, private counsel to defend its actions. Another way our tax dollars are at work. And – my question – why in the world does Alliance, or any other MCO, need to hire legal counsel? Our State has perfectly competent attorneys at our Attorney General’s office, who are on salary to defend the state, and its agencies, for any issue. The MCOs stand in the shoes of the State when it comes to Medicaid for behavioral health. The MCOs should utilize the attorneys the State already employs – not a high-dollar, private law firm. These are our tax dollars!

There have been few times that I have praised DHHS in my blogs. I will readily admit that I am harsh on DHHS’ actions/nonactions with our tax dollars. And I am now not recanting any of my prior opinions. But, last Tuesday, Sec. Brajer held Toppings feet to the fire. Thank you, Brajer, for realizing the horror of an MCO CEO earning $635,000/year while our most needy population goes under-served, and, sometimes not served at all, with medically necessary behavioral health care services.

What is deeply concerning is that if Sec. Brajer is this troubled by actions by the MCOs, or, at least, Cardinal, why can he not DO SOMETHING?? Where is the supervision of the MCOs by DHHS? I’ve read the contracts between the MCOs and DHHS. DHHS is the supervising entity over the MCOs. Our Waiver to the federal government promises that DHHS will supervise the MCOs.

If the Secretary of DHHS cannot control the MCOs, who can?

Another Win! 12 Million Dollar Recoupment Reduced to $896 – But There is a Twist

One of our clients in New Mexico had an alleged Medicaid recoupment of over $12 million!! Actually, $12,015,850.00 – to be exact. (See below). After we presented our evidence and testimony, the Judge found that we owe $896.35. I call that a win!

In this case, the Human Services Department (HSD) in New Mexico had reviewed 150 random claims. Initially, HSD claimed that 41 claims out of 150 were noncompliant.

fullsizerender-jpg

But, prior to the hearing, we saved over $10 million by pointing out HSD’s errors and/or by providing additional documentation.

And then the ALJ’s decision after we presented our evidence and testimony –

penultimatefullsizerender-jpg-3

Boom! Drop the mike…

…………………………….not so fast…

……………………………………………..picking the mike back up…

You see, in New Mexico, the administrative law judges (ALJs) cannot render decisions. Look in the above picture. You see where it reads, “Recommendation?” That is because the ALJs in New Mexico can only render recommendations.

Because Medicaid has a “single state agency” rule; i.e., that only one agency may render discretionary decisions regarding Medicaid, and HSD is the single state agency in New Mexico charged with managing Medicaid, only HSD may render a discretionary decision. So in NM, the ALJ makes a recommendation and then the Secretary of HSD has the choice to either accept or reject the decision.

Guess whether HSD accepted or rejected the ALJ’s recommendation?

reject

Now we will have to appeal the Agency’s Decision to overturn the ALJ recommendation.

Here, in NC, we obtained a waiver from the Centers of Medicare and Medicaid Services (CMS) to allow our ALJs to render Decisions. See blog.

I still consider this a win.

Another Win for Gordon & Rees! Judge Finds NM HSD Arbitrary, Capricious, and Not Otherwise in Accordance of Law! And JUSTICE PREVAILS!

For those of you who have followed my blog for a while, you understand the injustices that occurred in New Mexico against 15 behavioral health care providers in 2013. For those of you who do not recall, for background, see blog, and blog and blog. These 15 agencies comprised 87% of NM behavioral health care services. And they were all shut down by immediate suspensions of reimbursements on June 23, 2013, collectively.

My team (Robert Shaw, Special Counsel, and Todd Yoho, Master Paralegal) and I worked our “behinds off” in these two New Mexico administrative hearings that have so far been held. The first was for The Counseling Center (TCC) headed up by Jim Kerlin (seen below). And our decision was finally rendered this past Friday!

jimkerlin

BTW: It is officially Jim Kerlin day in Otero county, NM, on June 11th.

The second hearing, which appeal is still pending, was for Easter Seals El Mirador, headed up by Mark Johnson and Patsy Romero. Both companies are outstanding entities and we have been blessed to work with both. Over the last 20-30 years, both companies have served the New Mexican Medicaid population by providing mental health, developmentally disabled, and substance abuse services to those most in need.

After both companies were accused of committing Medicaid fraud, and, while, subsequently, the Attorney General’s office in NM found no indications of fraud, both companies were told that they owed overpayments to HSD. We filed Petitions for Contested Cases. We disagreed.

NM HSD based its decision that all 15 behavioral health care companies were guilty of credible allegations of fraud based on an audit conducted by Public Consultant Group (PCG). While I have seen the imperfections of PCG’s auditing skills, in this case, PCG found no credible allegations of fraud. HSD, nonetheless, took it upon itself to discard PCG’s audit and find credible allegations of fraud.

These cases were brought in administrative court. For those who do not know, administrative court is a quasi-judicial court, which is specially carved out from our state and federal civil courts. In NC, our Office of Administrative Hearings (OAH) is the administrative court in which health care providers and Medicaid recipients seek relief from adverse agency actions. Similarly, NM also has an administrative court system. The administrative court system is actually a part of the executive branch; the Governor of the State appoints the administrative law judges (ALJs).

However, 42 CFR 431.10 mandates that each state designate a single state entity to manage Medicaid. In NM, that single state agency is Human Services Department (HSD); in NC, it is the Department of Health and Human Services (DHHS) (for now).

42 CFR 431.10 states that if the single state agency delegates authority to another entity, that other entity cannot “have the authority to change or disapprove any administrative decision of that agency, or otherwise substitute their judgment for that of the Medicaid agency with respect to the application of policies, rules, and regulations issued by the Medicaid agency.”

If an ALJ is deciding an issue with Medicaid, then her or she would be substituting his or her judgment for that of the Medicaid agency with respect to the application of policies, rules, and regulations issued by the Medicaid agency.

This is why, in NC, prior to 2013, our ALJs could only make a Recommendation, not an Order or Decision. See blog. In 2013, NC was granted a Waiver to the single state agency mandate allowing ALJs to render decisions on behalf of Medicaid.

In New Mexico, however, there has been no such Waiver. Thus, the ALJ only recommends a decision. In NC, our ALJs are appointed and are independent of DHHS. Juxtapose, in NM, the ALJ answers to the single state entity AND only issues a recommendation, which the agency may accept or reject.

Needless to say, in TCC v. HSD, the ALJ ruled against us. And HSD accepted the recommended decision. We appealed to Superior Court with a Petition for Judicial Review.

Judges in Superior Courts are not employed by their single state agencies. I have found, generally, that Superior Court judges truly try to follow the law. (In my opinion, so do ALJs who do not have to answer to the single state agency, like in NC).

This past Friday, October 23, 2015, Judge Francis Matthew, issued a Decision REVERSING HSD’s decision that TCC owed any money and ordered all funds being withheld to be released. Here are a couple quotes:

arbitrary

reversed

Special Counsel, Robert Shaw, our paralegal, Todd Yoho, our local counsel Bryan Davis, and I are beyond ecstatic with the result. Robert and I worked weeks upon weeks of 12-16 hour days for this case.

I remember the night before the 1st day of trial, local counsel encountered an unexpected printing problem. I had just flown into New Mexico and Robert Shaw was on his way, but his flight was delayed. Robert got to the hotel in Santa Fe at approximately 7 pm New Mexico time, which was 10 pm eastern time.

It’s 7:00 pm the evening before the trial…and we have no exhibits.

Robert went to the nearby Kinko’s and printed off all the exhibits and organized the binders until 2:00 am, 5:00 am eastern time. During which time I was preparing opening statement, direct examinations, and cross examinations (although I went to bed way before 2:00 am).

Regardless, Robert was dressed, clean-shaven, and ready to go the next day at 9:00 am with the exhibits (of which there were approximately 10 bankers’ boxes filled).

The trial lasted all week. Every day we would attend trial 9:00-5:00. After each day concluded, our evenings of preparation for the next day began.

I am not telling you all this for admiration, consternation, or any other reason except to shed some light as to our absolutely unbridled joy when, on Friday, October 23, 2015, Bryan Davis emailed us the Order that says that HSD’s decision “is REVERSED in its entirety…”

See the article in The Santa Fe New Mexican.

We hope this sets good precedent for Easter Seals El Mirador and the other 13 behavioral health care agencies harmed by HSD’s allegations of fraud in 2013.

42 CFR 455.23 mandates a state to suspend reimbursements for a provider upon “credible allegations of fraud.” Obviously, this is an extreme measure that will undoubtedly put that accused provider out of business without due process. BTW: the “credible” allegation can be non-credible. It does not matter. See blog. 42 CFR 455.23 is the modern day guillotine for health care providers.

Which leads me to say…It is my sincere hope, that, going forward, state agencies realize the magnitude of implementing measures mandated by 42 CFR 455.23. Instead of wielding the power willy-nilly, it is imperative to conduct a good faith investigation prior to the accusation.

And, certainly, do not conduct an investigation, discard the results, and accuse 87% of your behavioral health care providers in your state. Think of the recipients!! The employees!! And all the families affected!!

Williams Mullen and Local Counsel, Bryan Davis, Win Declaratory Action Against HSD in New Mexico!!

For those of you who follow my blog, you know that the single state agency in New Mexico, Human Services Department (HSD), accused 15 behavioral health care providers, which made up 87% of the mental health care in NM, of credible allegations of fraud back in June 2013.  HSD immediately ceased paying all companies’ Medicaid and non-Medicaid reimbursements causing most of the companies to go out of business.

See my blogs: “New Mexico Offers No Due Process Based on a PCG Audit!, and “Documentary on New Mexico Provider: Breaking Bonds: The Shutdown of NM’s Behavioral Health Care Providers.”

Easter Seals El Mirador is one of those companies accused of fraud.

Then, a year later, May 2014, the Attorney General’s office clears Easter Seals El Mirador (ESEM) of any fraud.  ESEM is the second company cleared of fraud.  In other words, HSD accused 15 companies of fraud, and the first two reviewed by the AG were determined to have committed no fraud.  Oops.  Sorry.  We were mistaken.

But you can’t fix a broken egg.  The best you can do is clean it up.

But, no, HSD does not accept the AG’s determination that ESEM committed no fraud, and on or about June 25, 2014, HSD re-referred ESEM to the AG for credible allegations of fraud again.

Instead of me going on a rampage as to the violations committed (and alleged in our complaint), let me just explain that through the first referral and re-referral of credible allegations of fraud, HSD is withholding all ESEM’s reimbursements.

After the re-referral, in June 2014, we, on behalf of ESEM, and with the help of local counsel, Bryan Davis, filed a Complaint requesting declaratory judgment followed by a Motion for Summary Judgment.

Last Friday, January 23, 2015, the New Mexico judge agreed with us holding that HSD’s “temporary” withhold of reimbursements violates due process and that ESEM has a right to a fair hearing.

Here is an article from the Santa Fe New Mexican written by Patrick Malone:

Judge: State Human Services Department violated due process law

In a harsh rebuke of the 2013 behavioral health shake-up that thrust mental health care for indigent New Mexicans into disarray, a Santa Fe judge on Friday ruled that the state Human Services Department had denied due process to one of the providers accused of fraud.

State District Judge Francis Mathew ordered the department to hold a hearing that would allow Santa Fe-based Easter Seals El Mirador to hear the specific allegations against it for the first time — and give the provider a chance to respond to those claims. The ruling could open the door for other providers affected by the shake-up to do the same, according to the nonprofit’s lawyer.

In the 19 months since audit findings spurred Gov. Susana Martinez’s administration to cut off Medicaid funds to Easter Seals El Mirador and other providers in the state who treat Medicaid patients, the nonprofit has not been shown the audit findings that outline exactly what it is accused of doing wrong. Nor has the agency been afforded the chance to refute any of the findings. Meanwhile, the Human Services Department has withheld more than $600,000 in Medicaid funds that were owed to Easter Seals El Mirador at the time of its termination, citing federal guidelines that allow temporary withholding of funds from agencies that are suspected of Medicaid fraud.

“I don’t believe that 19 months is temporary,” Mathew said, particularly since the Human Services Department has prolonged the investigation by referring Easter Seals El Mirador’s case back to the Attorney General’s Office after the nonprofit already had been cleared once.

The judge blasted the department’s process from the outset of the shake-up.

“I think it’s a due-process violation,” he said.

In June 2013, Human Services halted Medicaid funding to 15 organizations that provided mental health and substance abuse services to low-income patients. The state pointed to audit findings that indicated the agencies had overbilled Medicaid by an estimated $36 million as grounds for the decision. The Martinez administration brought in five Arizona providers as replacements and paid them $24 million to set up shop in New Mexico.

This month, one of the replacement providers informed the state that it is financially failing and plans to pull out of New Mexico at the end of March, bringing new disruptions to a fragile population still reeling from the earlier provider changes.

“We have an obligation to protect taxpayer dollars and to help ensure that New Mexicans most in need receive vital behavioral health services,” said Matt Kennicott, a spokesman for Human Services. “We will provide a hearing on the credible allegations of fraud.”

He said the department has not yet decided whether it will appeal the judge’s ruling. Easter Seals El Mirador’s lawyer, Bryan Davis, said he expects the department to do so.

When Judge Mathew issues a written ruling in the days ahead, the Human Services Department will have 90 days to set a hearing date. Within 30 days, the department will be required to share with Easter Seals El Mirador the evidence it plans to present at the hearing. That could yield the agency’s first glimpse at the state’s basis for accusing it of fraud. The behavioral health audit that led to the shake-up has been largely shielded from public view while the Attorney General’s Office conducts a criminal investigation.

On Friday, Attorney General Hector Balderas, who just took office this month, informally asked lawmakers for an additional $1 million in hopes of speeding up the probe to complete it within the next six to eight months. Balderas inherited the investigation from his predecessor, Gary King, whose office has faced criticisms from lawmakers and the ousted providers for its slow pace. To date, three investigations have been completed, four are actively being investigated and eight have not yet begun, Balderas’ spokesman said.

Easter Seals El Mirador and the Counseling Center of Alamogordo have been cleared of fraud by the Attorney General’s Office, but Human Services referred Easter Seals El Mirador back to the attorney general for a follow-up investigation.

Mark Johnson, chief executive officer of Easter Seals El Mirador, said he is confident that the organization would be cleared of any wrongdoing in a fair hearing.

With at least one of the replacement providers from Arizona already leaving the state and the New Mexico providers financially hobbled or already out of business because of the shake-up, Johnson said, he fears the most serious consequences of the Martinez administration’s abrupt actions lie ahead.

“There is no safety net. There is no New Mexico company that can fill the systemic void for services for the poor people who need them,” Johnson said. “It’s catastrophic.”

Our Medicaid Budget: Are We Just Putting Lipstick on an 800 lbs. Pig?

Too often, I have heard an analogy about the Medicaid budget and a pig wearing lipstick. Normally it goes like this: “Are we just putting lipstick on an 800 lb. pig?”…and the Medicaid budget is the 800 lbs. pig, not the lipstick.

For those of you who do not know, I own a pet pig. She is a micro pig. Not a pot belly pig; those get to be 150 lbs. Oh, no. A micro pig; those stay very small. Our Oink is only 21 pounds.

Here is a picture:

Kissing Oink

Notice she does not have lipstick on. So when someone says, “Are we just putting lipstick on an 800 lbs. pig?” I think, “Is that so bad?”

I understand that saying to put “lipstick on a pig” is a rhetorical expression. An expression used to demonstrate that making a superficial or cosmetic change is a futile attempt to disguise the true nature of a product. However, Oink and I take offense, because she is so much more beautiful than the Medicaid budget (and much smaller).

Although my Oinky-Oink is only 21 pounds. The expression that I have heard most often involves an 800 lbs. pig. If our Medicaid budget were Oink’s size, the General Assembly would probably be home.

Seriously, here is my question on my “Pigs and Medicaid” blog:

How can we expect the General Assembly to create a “knowable” and “concrete” Medicaid budget when the Department of Health and Human Services (DHHS) cannot provide the General Assembly with accurate data?

Literally, DHHS cannot tell the General Assembly how many people are enrolled in Medicaid. Legislatures are being told to guesstimate. Guesstimate???

Between 2009-2012, North Carolina exceeded its approved Medicaid budget by 5.4 billion. In the last decade, our Medicaid spending has increased by more than 90%.

Not to mention DHHS has difficulty filling and retaining employees. Attrition is prominent. As of June 1, 2014, a quarter of the division’s 332 jobs were vacant; the average unfilled job had been open for 347 days, or nearly a year. In November, DHHS’ chief financial officer sent out a cry for help. The Medicaid office “does not have adequate staff with the necessary experience and skills to properly manage the … program,” Rod Davis wrote to the state budget office.

To compensate for too few employees, DHHS gave a no-bid contract to Alvarez & Marsal to help create a Medicaid budget. We all know how that turned out.

With the help of Alvarez & Marsal, DHHS proposed to tax the then-10 managed-care organizations (MCOs) that manage Medicaid services for mental health, developmentally disabled, and substance abuse. But we needed approval by the feds.

It was DHHS’ hope that the extra funds would be the catalyst for a federal match twice that size. Once we got the federal match, DHHS would refund the taxed dollars to the MCOs and use the federal money to pay for programs. Maybe I’m wrong, but the idea sounds like a “bait and switch.” Analogously, I have a client pay me $50,000 on January 31, 2015, the end of our fiscal year, only to refund it February 1, 2015. I would get credit for collecting the $50,000 in fiscal year 2014, but it was not a real collection. It was fake.

And the feds knew it. The answer was, “No.”

Sen. Bob Rucho, R-Mecklenburg, said the information presented Wednesday should have been made available months ago, and he noted that it’s still not detailed enough for a forecast.

“When will we get the numbers that we need to have so that we can have a good budget number?” asked Rucho. And his question is not an anomaly. He is not alone.

“I’ve asked them every time I’ve had the opportunity, and I’m astounded that a $13 billion organization does not have budget numbers,” said Sen. Tommy Tucker (R-Waxhaw), one of the more outspoken members of the Joint Legislative Oversight Committee on Health and Human Services.

Medicaid Chief Financial Officer Rod Davis told Senator Ralph Hise that his department has an idea of how much they’ve paid to providers, but that they can’t forecast what’s to come.

“Would it be like saying we know what checks we wrote, we just don’t know what we’ve paid for,” Hise asked.

Going back to my question:

How can we expect the General Assembly to create a “knowable” and “concrete” Medicaid budget when the Department of Health and Human Services (DHHS) cannot provide the General Assembly with accurate data?

Are we putting too much pressure on the General Assembly and not on DHHS?

The General Assembly is responsible for creating a Medicaid budget. But how can we hold the General Assembly to create an accurate Medicaid budget if the “single state agency,” DHHS, charged with managing Medicaid cannot provide the General Assembly with accurate data???

Here is my political soapbox: We have a Republican General Assembly and we have a Republican governor. Shouldn’t the General Assembly and the governor be on the same side???? Perhaps it’s more than politics. Perhaps it’s more than a donkey and an elephant.

Otherwise with a Republican General Assembly and a Republican Governor, there should be no tension between the “balance of the powers.” Yet there is.

Let’s put lipstick on a pig:

Lipstick pig

By the way, whoever created the saying “Are we just putting lipstick on an 800 lbs. pig?” obviously did not own a pig. Because Oink did NOT enjoy getting lipstick on her snout. In fact, she squealed like a pig.

The “Single State Agency” Medicaid Requirement: The Buck Stops With Whom?????

What is THE most important law? I’m sure most people would have a differing opinion.  Maybe you think the most important law is that it is against the law to murder a person. Or to not drive drunk.

Personally, I think the most important law of the United States begins, “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”  The Constitution of the United States.

Well, in the Medicaid arena, in my opinion, the most important law is the “single state entity” requirement.

Why is the “single state entity” requirement so important? 

Have any of you tried to read Title XIX of the Social Security Act? Or the 1915(b)(c) Innovations Waiver? The State Plan?

If you have, then you know how difficult Medicaid laws, rules and regulations are to read, much less understand.  It’s a bit like reading Chaucer in its original language, Middle English, in kindergarten…not impossible, you can sound out all the words…but, in the end, you have no idea what it was you just read.  Wife of whom?

What if we allowed 10 different companies, each with different employees, to implement/interpret Medicaid laws, rules, and regulations?

Each of the 10 companies would read the Medicaid laws, rules and regulations differently.

We would not have a statewide consistent Medicaid system.

Medicaid is tough enough, we, at least, need one agency to implement and interpret all of Medicaid.

Another example is if, suddenly, we had no president or federal government.  And all 50 states’ governors tried to run the country, as a country and not 50 independent states.  We would, obviously, have 50 different “leaders” trying to run one country with 50 different ideas as to how the country should be run.  There would be no nationwide uniformity.

Hence, the “single state agency” requirement.  DHHS must implement/administer/interpret all Medicaid decision for the sake of uniformity.

Not only is the “single state agency” requirement logical, it is federal law.

42 U.S.C. 1396 a(a)(5) requires states participating in the Medicaid program to designate a “single state entity” to operate the Medicaid program.  

In North Carolina, that “single state entity” is the Department of Health and Human Services (DHHS).

Remember the sign on Harry Truman’s desk? “The Buck Stops Here!” Meaning, as a president, President Truman understood that anything that went wrong in any federal department was on his shoulders.  He was the captain of the ship.  He was the big cheese. The buck stopped with Truman.

In NC Medicaid, the buck stops with DHHS.

According to federal law, the “single state entity” may contract with entities, such as Managed Care Organizations (MCOs), Recovery Audit Contractors (RACs), etc. to assist with certain functions of the Medicaid program.  But…that “single state entity” CANNOT delegate its authority to “issue policies, rules, and regulations on program matters.”  42 C.F.R. 431.10.

Moreover, the “single state entity” MUST NOT allow a contracted company to have authority to change or disapprove an administrative decision of the “single state entity.”  42 U.S.C. 1396a(a)(5) states that “either provide for the establishment or designation of a single State agency to administer or to supervise the administration of the plan.”

Similarly, in K.C. v. Shipman, the 4th Circuit Court of Appeals states that:

“If other State or local agencies or offices perform services for the Medicaid agency, they must not have the authority to change or disapprove any administrative decision of that agency, or otherwise substitute their judgment for that of the Medicaid agency with respect to the application of policies, rules, and regulations issued by the Medicaid agency.  42 C.F.R. § 431.10(e)(3).” (emphasis added).

Ok, pretty clear, right?

Then how can an MCO determine that a provider’s Medicaid contract should be terminated without DHHS’ authorization (which, I believe, is a substitute of judgment in applying policies)? How can an MCO determine that a Medicaid recipient’s services should be reduced (another substitution of judgment in applying policies) without DHHS’ authorization?

If you ask me, the MCOs cannot terminate a provider’s Medicaid contract or reduce services without DHHS’ authorization.  Substituting an MCO’s judgment in applying Medicaid policies is a violation of the “single state entity” requirement.

Yet….the MCOs are doing just that.

Even more scary is the recent MCO Communication Bulletin #55, dated August 2, 2013, which states:

MCO Communication Bulletin #55

Date:                August 2, 2013                                                            

To:                   LME-MCO CEOs

From:               Courtney Cantrell, Assistant Director, Behavioral Health Section

Subject:         Provider Appeals

Currently DMA is reviewing LME-MCO contract terminations and service denials when appealed due to LME-MCO manuals stating that appeals of denials should come to DMA prior to Office of Administrative Hearings (OAH).  DMA should not be a part of the LME-MCO appeals process.  We ask that you please correct your manuals by August 7, 2013, and share with your contract managers so that these appeals can be appropriately routed.

Yes, I agree, the author could have written this Communication Bulletin is a way that would have been easier to read. But, maybe that is the point.

I interpret this bulletin to say:

Right now, the MCO manuals instruct MCOs to send DMA all contract terminations and service denials prior to going to the OAH (litigation).  But, DMA does not want to be a part of the appeal process anymore.  Therefore, revise all MCO manuals to reflect that MCOs no longer need to send DMA contract terminations and service denials, even if those denials and terminations are appealed.

I also infer from this language that, since the inception of MCOs, DMA has not reviewed any contract terminations or service denials unless these denials and terminations are appealed.

 DMA does not review prior to the MCO terminating or denying services???? Where is the supervision? Where is the “single state agency?”

And then, even scarier, Bulletin #55 seems to say that DMA wants to be involved even LESS.

In essence, we have 10 MCOs, 10 jurisdictions, 10 interpretations of Medicaid laws, rules and regulations.  And no statewide uniformity.

I guess the buck stops with East Carolina Behavioral Health (ECBH)…and MeckLINK…and Alliance…and Smoky Mountain Center…and Cardinal Innovations…and Centerpoint Human Services…and CoastalCare…and EastPointe…and Partners Behavioral Health Management…and Sandhills…and (at least for a short time) Western Highlands…

That is a lot of bucks.