Many of my clients come to me because a managed care organization (MCO) terminated or refused to renew their Medicaid contracts. These actions by the MCOs cause great financial distress and, most of the time, put the health care provider out of business. My team and I file preliminary injunctions in order to maintain status quo (i.e., allow the provider to continue to bill for and receive reimbursement for services rendered) until an administrative law judge (ALJ) can determine whether the termination (or refusal to contract with) was arbitrary, capricious, or, even, authorized by law.
With so many behavioral health care providers receiving terminations, I wondered…Do Medicaid recipients have adequate access to care? Are there enough behavioral health care providers to meet the need? I only know of one person who could feed hundreds with one loaf of bread and one fish – and He never worked for the MCOs!
On April 25, 2016, the Centers for Medicare and Medicaid Services released its massive Medicaid and Children’s Health Insurance Program (CHIP) managed care final rule (“Final Rule”).
Network adequacy is addressed. States are required to develop and make publicly available time and distance network adequacy standards for primary care (adult and pediatric), OB/GYN, behavioral health, adult and pediatric specialist, hospital, pharmacy, and pediatric dental providers, and for additional provider types as determined by CMS.
Currently, 39 states and the District of Columbia contract with private managed care plans to furnish services to Medicaid beneficiaries, and almost two thirds of the 72 million Medicaid beneficiaries are enrolled in managed care.
However, Section 30A of the Social Security Act, while important, delineates no repercussions for violating such access requirements. You could say that the section “has no teeth,” meaning there is no defined penalty for a violation. Even more “toothless” is Section 30A’s lack of definition of what IS an adequate network? There is no publication that states what ratio of provider to recipient is acceptable.
Enter stage right: Final Rule.
The Final Rule requires states to consider certain criteria when determining adequacy of networks in managed care. Notice – I did not write the MCOs are to consider certain criteria in determining network adequacy. I have high hopes that the Final Rule will instill accountability and responsibility on our single state entity to maintain constant supervision on the MCOs [insert sarcastic laughter].
The regulation lists factors states are to consider in setting standards, including the ability of providers to communicate with limited English proficient enrollees, accommodation of disabilities, and “the availability of triage lines or screening systems, as well as the use of telemedicine, e-visits, and/or other evolving and innovative technological solutions.” If states create exceptions from network adequacy standards, they must monitor enrollee access on an ongoing basis.
The Final Rule marks the first major overhaul of the Medicaid and CHIP programs in more than a decade. It requires states to establish network adequacy standards in Medicaid and CHIP managed care for providers. § 457.1230(a) states that “[t]he State must ensure that the services are available and accessible to enrollees as provided in § 438.206 of this chapter.” (emphasis added).
Perhaps now the MCOs will be audited! Amen!
Posted in "Single State Agency", Access to Care, Accountability, Affordable Care Act, Alliance, Behavioral health, Cardinal Innovations, CenterPoint, CMS, CMS Proposal, DHHS, EastPointe, ECBH, Federal Government, Final Rulings, Knicole Emanuel, Managed Care, MCO, Medicaid, Medicaid Advocate, Medicaid Appeals, Medicaid Attorney, Medicaid Contracts, Medicaid Providers, Medicaid Services, Mental Health Problems, Mental Illness, NC, North Carolina, Partners, Sandhills
Tags: Access to Care, Administrative Law Judge, § 457.1230, Behavioral health, Behavioral Health Care Providers, Centers for Medicare and Medicaid Services, CMS, CMS final rule, Code of Federal Regulations, DHHS, Division of Medical Assistance, DMA, Gordon & Rees, Health care, Health care provider, health care providers, Knicole Emanuel, Managed care, Managed Care Organizations, MCO, MCO provider networks, Medicaid, Medicaid Contracts, Medicaid recipients, Medicaid Services, NC Medicaid, North Carolina, Social Security Act
You are a health care provider. You own an agency. An employee has a “hunch” that…
your agency was overpaid for Medicare/caid reimbursements over the past two years to the tune of $1 million!
This employee has been your billing manager for years and you trust her…but…she’s not an attorney and doesn’t have knowledge of pertinent legal defenses. You are concerned about the possibility of overpayments, BUT….$1 million? What if she is wrong? That’s a lot of money!
According to a recent U.S. District Court in New York, you have 60 days to notify and refund the government of this alleged $1 million overpayment, despite not having a concrete number or understanding whether, in fact, you actually owe the money.
Seem a bit harsh? It is.
With the passage of the Affordable Care Act (ACA) on March 23, 2010, many new regulations were implemented with burdensome requirements to which health care providers are required to adhere. At first, the true magnitude of the ACA was unknown, as very few people actually read the voluminous Act and, even fewer, sat to contemplate the unintentional consequences the Act would present to providers. For example, I daresay that few, if any, legislators foresaw the Draconian effect from changing the word “may” in 42 CFR 455.23 to “must.” See blog and blog and blog.
Another boiling frog in the muck of the ACA is the 60-Day Refund Rule (informally the 60-day rule).
What is the 60-Day Refund Rule?
In 2012, CMS proposed the “60-day Refund Rule,” requiring Medicare providers and suppliers to repay Medicare overpayments within 60 days of the provider or supplier identifying the overpayment. Meaning, if you perform a self audit and determine that you think that you were overpaid, then you must repay the amount within 60 days or face penalties.
If I had a nickel for each time a clients calls me and says, “Well, I THINK I may have been overpaid, but I’m not really sure,” and, subsequently, I explained how they did not owe the money, I’d be Kardashian rich.
It is easy to get confused. Some overpayment issues are esoteric, involving complex eligibility issues, questionable duplicity issues, and issues involving “grey areas” of “non”-covered services. Sometimes a provider may think he/she owes an overpayment until he/she speaks to me and realizes that, by another interpretation of the same Clinical Coverage Policy that, in fact, no overpayment is owed. To know you owe an overpayment, generally, means that you hired someone like me to perform the self audit. From my experience, billing folks are all too quick to believe an overpayment is owed without thinking of the legal defenses that could prevent repayment, and this “quick to find an overpayment without thinking of legal defenses” is represented in Kane ex rel. United States et al. v. Healthfirst et al., the lawsuit that I will be discussing in this blog. And to the billings folks’ credit, you cannot blame them. They don’t want to be accused of fraud. They would rather “do the right thing” and repay an overpayment, rather than try to argue that it is not due. This “quick to find an overpayment without thinking of legal defenses” is merely the billing folks trying to conduct all work “above-board,” but can hurt the provider agency financially.
Nonetheless, the 60-day Refund Rule is apathetic as to whether you know what you owe or whether you hire someone like me. The 60-Day Refund Rule demands repayment to the federal government upon 60-days after your “identification” of said alleged overpayment.
Section 1128(d)(2) of the Social Security Act states that:
“An overpayment must be reported and returned under paragraph (1) by the later of— (A) the date which is 60 days after the date on which the overpayment was identified; or (B) the date any corresponding cost report is due, if applicable.”
A recent case in the U.S. District Court of New York has forged new ground by denying a health care providers’ Motion to Dismiss the U.S. government’s and New York State’s complaints in intervention under the False Claims Act (FCA). The providers argued that the 60-day rule cannot start without a precise understanding as to the actual amount of the overpayment. Surely, the 60-day rule does not begin to run on the day someone accuses the provider of a possible overpayment!
Basically, in Kane ex rel. United States et al. v. Healthfirst et al., three hospitals provided care to Medicaid patients. Due to a software glitch [cough, cough, NCTracks] and due to no fault of the hospitals, the hospitals received possible overpayments. The single state entity for Medicaid in New York questioned the hospitals in 2010, and the hospitals took the proactive step of tasking an employee, Kane, who eventually became the whistleblower, to determine whether, if, in fact, the hospital did receive overpayments.
At this point, arguably, the hospitals were on notice of the possibility of overpayments, but had not “identified” such overpayments per the 60-day rule. It was not until Kane made preliminary conclusions that the hospitals were held to have “identified” the alleged overpayments. But very important is the fact that the Court held the hospitals liable for having “identified” the alleged overpayments prior to actually knowing the veracity of the preliminary findings.
Five months after being tasked with the job of determining any overpayment, Kane emails the hospital staff her findings that, in her opinion, the hospitals had received overpayments totaling over $1 million for over 900 claims. In reality, Kane’s findings were largely inaccurate, as approximately one-half of her alleged findings of overpayments were actually paid accurately. Despite the inaccurate findings, the Complaint that Kane filed as the whistleblower (she had been previously fired, which may or may not have contributed to her willingness to bring a whistleblower suit), alleged that the hospitals had a duty under the 60-day rule to report and refund the overpayments, even though there was no certainty as to whether the findings were accurate. And the Court agreed with Kane!
Even more astounding, Kane’s email to the hospitals’ management that contained the inaccurate findings contained phrases that would lead one to believe that the findings were only preliminary:
- “further analysis would be needed to confirm his findings;” and
- the spreadsheet provided “some insight to the magnitude of the problem” (emphasis added).
The above-mentioned comments would further the argument that the hospitals were not required to notify the Department and return the money 60 days from Kanes’ email because Kane’s own language within the email was so wishy-washy. Her language in her email certainly does not instill confidence that her findings are accurate and conclusive.
The 60-day rule requires notification and return of the overpayments within 60 days of identification. The definition of “identification” is the crux of Kane ex rel. United States et al. v. Healthfirst et al. [it depends on what the definition of “is” is].
The Complaint reads, that the hospitals “fraudulently delay[ed] its repayments for up to two years after the Health System “knew” the extent of the overpayments” (emphasis added). According to the Complaint, the date that the hospitals “knew” of the overpayment was the date Kane emailed the inaccurate findings.
The hospitals filed a Motion to Dismiss based on the fact that Kane’s email and findings did not conclusively identify overpayments, instead, only provided a preliminary finding to which the hospitals would have needed to verify.
The issue in Kane ex rel. United States et al. v. Healthfirst et al. is the definition of “identify” under the 60-day rule. Does “identify” mean “possibly, maybe?” Or “I know I owe it?” Or somewhere in between?
The hospitals filed a Motion to Dismiss, claiming that the 60-day rule did not begin to run on the date that Kane sent his “preliminary findings.” The U.S. District Court in New York denied the hospitals’ Motion to Dismiss and stated in the Order, “there is an established duty to pay money to the government, even if the precise amount due is yet to be determined.” (emphasis added).
Yet another heavy burden tossed upon health care providers in the ever-deepening, regulatory muck involved in the ACA. As health care providers carry heavier burdens, they begin to sink into the muck.
Important take aways:
- Caveat: Take precautions to avoid creating disgruntled, former employees.
- Have an experienced attorney on speed dial.
- Self audit, but self audit with someone highly experienced and knowledgeable.
- Understand the ACA. If you do not, read it. Or hire someone to teach you.
Posted in "Single State Agency", Administrative Law Judge, Administrative Remedies, Affordable Care Act, Agency, Alleged Overpayment, Appeal Rights, Audits, Burden of Proof, DHHS, Division of Medical Assistance, DMA Clinical Policies, Due process, Eligibilty, False Claims, False Claims Act, Federal Government, Federal Law, Fraud, Gordon & Rees, Health Care Providers and Services, Knicole Emanuel, Lawsuit, Legal Analysis, Legal Remedies for Medicaid Providers, Legislation, Medicaid, Medicaid Attorney, Medicaid Audits, Medicaid Eligibility, Medicaid Fraud, Medicaid Providers, Medicaid Recoupment, Medicaid Reimbursements, Medicaid Services, Medicare, Medicare Appeal Process, Medicare Attorney, Medicare Audits, NC, NCTrack Glitches, NCTracks, NCTracks Billing Issues, New York Medicaid, North Carolina, Obamacare, Post-Payment Reviews, Provider Medicaid Contracts
Tags: 42 CFR 455.23, 60-day rule, ACA, Affordable Care Act, Audit, Centers for Medicare and Medicaid Services, CMS, DHHS, District Court, Division of Medical Assistance, DMA, DMA Clincial Policies, DMA clinical coverage policies, DMA Clinical Policies, False Claims, False Claims Act, Gordon & Rees, Health care, Health care provider, Health Care Providers and Services, Identification, Jennifer Forsyth, Kane v. United States, Knicole Emanuel, legal defenses, Medicaid, Medicaid Audits, Medicaid Reimbursements, Medicaid Self-Audits, Medicaid Services, Medicare, Medicare 60 day rule, Medicare Appeals, Medicare Lawyer; Medicare Attorney, Medicare overpayments, Medicare providers, Medicare Recoupments, Medicare Reimbursements, Medicare whistleblower, NC Medicaid, NCTracks, NCTracks Billing Issues, NCTracks Problems, North Carolina, North Carolina Department of Health and Human Services, Obamacare, Patient Protection and Affordable Care Act, Qui Tam, Recoupments, Section 1128(d)(2), Self audit, Social Security Act, Whistleblower
Medicare appeals are at an all-time high. Back in January 2014, the Office of Medicare Hearings and Appeals (OMHA) stated that a health care provider with a Medicare appeal, may not have the case assigned to a judge for at least two years, and may wait even longer for the appeal to be heard.
Since the beginning of 2014, the Medicare appeal backlog has only grown. With the passing of the Affordable Care Act (ACA), which increased the amount of regulatory audits on providers in an attempt to partially fund the Act, more and more providers are finding themselves audited and in disagreement with the overzealous results. More and more providers are fighting the audit results and filing Medicare appeals at OMHA.
Now, because in large part of the massive backlog, the Center for Medicare and Medicaid Services (CMS) is offering hospitals an “administrative agreement mechanism.” In other words, if the hospitals agree to dismiss the appeal, CMS will agree to partial repayment for the claims at issue. Specifically, the hospital will be reimbursed for 68% of the disputed claims.
Notice the offer from CMS only pertains to hospitals. CMS has made no such offer to long-term care facilities (LTCF), which have been vocal when it comes to aggravation resulting from the Medicare appeal backlog.
For CMS’s offer, if a hospital is owed $1 million, then CMS will agree to reimburse the hospital $680,000 if the hospital dismisses the appeal.
What if the hospital has multiple appeals? CMS will only offer this meagre, olive branch if no other appeals are pending. As in, you must dismiss all lawsuits in order to receive the partial payout.
Personally, I call this a raw deal.
Think of blackjack. The purpose of blackjack is to have two cards’ sums equal 21. Only with 2 cards equaling 21 does the player receive more than the bet. You bet $100 and hit 21 with an ace and a king? You get paid $150.
“Insurance” is a side bet which you can take when the dealer’s face up card shows an ace and only pays 2:1. You bet half your bet for insurance; so if you placed a $100 blackjack bet, your insurance bet should be $50. If the dealer hits blackjack, you lose your $100 bet but get paid on the insurance. On a $50-insurance bet, you’d win $100, and lose your $100 bet. If the dealer doesn’t have a blackjack, your insurance bet is forfeited. Either way, by making an insurance bet, you lose money.. You do not have the chance to win 100% of a blackjack payout.
This is essentially what CMS is offering. You are holding an ace and CMS is holding an ace. Will you take the partial payout?
Many of these pending appeals by hospitals are a result of auditors’ determinations that a Medicare recipient was received as an inpatient instead of (as the auditor believes proper) an outpatient.
One of the reasons that I believe the 68% payout from CMS is a raw deal is because the auditors are not always right. Why take 68% when you are owed 100%?
My question is: Are these auditors M.D.s?
When I present myself at a hospital emergency room, I hope that the decision for me to be admitted as inpatient or outpatient hospital admission is a complex medical decision contemplated by my doctor based on medical necessity, not an insurance auditor. After the physician determines that a patient needs to be admitted, an auditor is second guessing a physician’s decision that was made in “real time” with multiple variables at issue.
The Social Security Act (SSA) provides numerous defenses for a provider to assert against an auditor challenging the medical necessity of a service, in this case whether the patient is admitted into the hospital as inpatient. The rendering physician’s medical decision should be upheld absent clear and convincing evidence to the contrary.
Some people suggest that the auditors’ emphasis on inpatient stays versus outpatient stays will cause hospitals to err on the side of caution and just keep patients in observation status to avoid inpatient status.
We need to prevent the hospitals from fearing to admit patients as inpatient due to overzealous audits and mistaken determinations from non-M.D.s who believe the patient should have been outpatient. I say, go all in. Do not take the “insurance.” Do not take the 68%, if you deserve 100%.
Posted in Administrative Remedies, Affordable Care Act, Appeal Rights, CMS, Extrapolations, Federal Government, Federal Law, Health Care Providers and Services, Hospital Medicaid Providers, Hospitals, Lawsuit, Legal Analysis, Legal Remedies for Medicaid Providers, Medicaid Attorney, Medical Necessity, Medicare, Medicare Appeal Process, Medicare Attorney, Medicare Audits, Medicare RAC, NC, North Carolina, Office of Medicare Hearings and Appeals, Petitions for Contested Cases, Regulatory Audits, Tentative Notices of Overpayment
Tags: ACA, Administrative Law Judge, Administrative Remedies, Centers for Medicare and Medicaid Services, CMS, Health care, Health care provider, hospital, Hospitals, Hospitals and Medicaid, Inpatient Hospital Stays, Medicaid, Medicaid Attorney, Medical Necessity, Medicare, Medicare Appeal Backlog, Medicare Appeals, Medicare Attorney, Medicare Recipient, NC Hospitals, Outpatient Hospital Claims, Social Security Act, Tentative Notice of Overpayment
How EPSDT Allows Medicaid Recipients Under the Age of 21 To Receive More Services Than Covered By NC State Plan
EPSDT. What in the heck is EPSDT?
EPSDT is an acronym for the “Early and Periodic Screening, Diagnosis, and Treatment (EPSDT).” It only applies to Medicaid beneficiaries under the age of 21. As in, if you are 21, EPSDT does not apply to you. The point of EPSDT is to allow beneficiaries under the age of 21 to receive medically necessary services not normally allowed by the NC Medicaid State Plan. (These beneficiaries under the age of 21 I will call “children” for the sake of this blog, despite 18+ being a legal adult).
The definition of each part of the acronym is below:
Early:……. Assessing and identifying problems early
Periodic:…… Checking children’s health at periodic, age-appropriate intervals
Screening:…. Providing physical, mental, developmental, dental, hearing, vision, and other screening tests to detect potential problems
Diagnostic:…. Performing diagnostic tests to follow-up when a risk is identified, and
Treatment:…. Control, correct or reduce health problems found.
Federal Medicaid law at 42 U.S.C.§ 1396d(r) [1905(r) of the Social Security Act] requires state Medicaid programs to provide EPSDT for beneficiaries under 21 years of age. Within the scope of EPSDT benefits under the federal Medicaid law, states are required to cover any service that is medically necessary “to correct or ameliorate a defect, physical or mental illness, or a condition identified by screening,” whether or not the service is covered under the North Carolina State Medicaid Plan.
The services covered under EPSDT are limited to those within the scope of the category of services listed in the federal law at 42 U.S.C. § 1396d (a) [1905(a) of the Social Security Act].
For example, EPSDT will not cover, nor is it required to cover, purely cosmetic or experimental treatments.
Again, EPSDT allows for exceptions to Medicaid policies for beneficiaries under the age of 21. For example, if the DMA clinical policy for dental procedures does not cover a certain procedure, if the dentist determines that the procedure is medically necessary for a beneficiary under the age of 21, then the dentist can request prior approval under EPSDT simply by filling out a “non-covered services form” along with the other supporting documentation to establish medical necessity. More likely than not, the “non-covered procedure” would be approved.
Medical necessity is an interesting term. Medical necessity is not defined by statute. The American Medical Association (AMA) defines medical necessity as:
“Health care services or products that a prudent physician would provide to a patient for the purpose of preventing, diagnosing, treating or rehabilitating an illness, injury, disease or its associated symptoms, impairments or functional limitations in a manner that is: (1) in accordance with generally accepted standards of medical practice; (2) clinically appropriate in terms of type, frequency, extent, site and duration; and (3) not primarily for the convenience of the patient, physician, or other health care provider.”
But, legally, the courts have construed medical necessity broadly when it comes to EPSDT. As in, generally speaking, if a doctor will testify that a procedure or service is medically necessary, then, generally speaking, a judge will accept the medical necessity of the procedure or service.
It seems as though I am degrading the intelligence of the judges that take the face value testimony of the doctors. But I am not.
Judges, like I, are not doctors. We do not have the benefit of a medical education. I say benefit because any education is a benefit, in my opinion.
It would be difficult for anyone who is not a doctor to disagree with the testimony of a physician testifying to medical necessity. I mean, unless the person stayed in a Holiday Inn Express the night before. (I know…bad joke).
Some courts, however, have ruled that the decision as to whether a procedure is medically necessary must be a joint effort by the state and the treating physician. Obviously, for courts that follow the “joint decision for medical necessity” holdings, less procedures would be allowed under EPSDT because, more likely than not, the state will disagree with a treating physician (I say this only from my own experience representing the state when the state disagreed with EPSDT treatments despite the treating physician testifying that the procedure was medically necessary).
For example, the 11th Circuit has held that both the state and the treating physician have a role in determining whether a procedure or treatment is medically necessary to correct or ameliorate a medical condition. The 11th circuit disagreed with the Northern District of Georgia’s determination that the state MUST provide the amount of services which the treating physician dreamed necessary. Moore v. Medows, No. 08-13926, 2009 WL 1099133 (11th Cir. Apr. 24, 2009).
Regardless, in practice, EPSDT is interpreted broadly. A long, long time ago, I worked at the Attorneys’ Generals office. A mother requested hyperbaric oxygen therapy (HBOT) for her autistic children (and I had to oppose her request because that was my job).
For those of you who do not know what HBOT is (I sure didn’t know what HBOT is prior to this particular case)…
“Hyperbaric Oxygen Therapy (HBOT) is the use of high pressure oxygen as a drug to treat basic pathophysiologic processes and their diseases. HBOT has acute and chronic drug effects. Acutely, HBOT has been proven to be the most powerful inhibitor of reperfusion injury, which is the injury that occurs to tissue deprived of blood supply when blood flow is resumed. This is thought to be one of the primary mechanisms of hyperbaric oxygen therapy effects in acute global ischemia, anoxia, and coma. Chronically, HBOT acts as a signal inducer of DNA to effect trophic (growth) tissue changes.” See http://www.hbot.com/hbot.
I went and saw a hyperbaric oxygen treatment chamber in preparation of my case. It’s pretty intimidating. It is a large chamber made of thick metal. It looks like you could get inside, have it submerged under the ocean, and explore. It appears similar to a submarine. And, interestingly, it is most often used for divers who get the bends.
It is highly controversial as to whether HBOT cures, remedies or ameliorates autistic symptoms. I had two experts testifying that HBOT was experimental, and, therefore, not covered by Medicaid, even with EPSDT. (Remember, back then I was at the AG’s office).
Yet, despite the fact that HBOT was still controversial as to whether it ameliorates the symptoms of autism, the Administrative Law Judge (ALJ) used the EPSDT doctrine to rule that the mother’s children could receive HBOT and Medicaid must pay for the services.
That is the power of EPSDT. HBOT was clearly not covered by Medicaid for the purpose of ameliorating symptoms of autism. But, for the children named in the Petition who were under 21, Medicaid paid nonetheless.
HBOT allows beneficiaries under the age of 21 to receive medically necessary services that would not normally be allowed under the North Carolina Medicaid State Plan.
Importantly, EPSDT provides for private rights of action under 1983. At least all the federal circuit court of appeals have held such.
Oh, and, BTW, NCTracks will soon also be in charge of EPSDT determinations.
Posted in Administrative Law Judge, Clinical Policy 4A, CMS, Denials of Medicaid Services, Dental Medicaid Providers, DHHS, Division of Medical Assistance, DMA Clinical Policies, EPSDT, Federal Law, Health Care Providers and Services, Lawsuit, Legal Analysis, Medicaid, Medicaid Appeals, Medicaid Recipient Appeals, Medicaid Recipients, Medicaid Recipients Under 21, Medical Necessity, NC, NCTrack Glitches, NCTracks, North Carolina, Prior Authorization, State Plan
Tags: Administrative Law Judge, ALJ, EPSDT, Federal law, HBOT, Medicaid, Medicaid recipients, Medical Necessity, NCTracks, Non-Covered Medicaid Services, North Carolina, Prior Authorization, Recipients under 21, Social Security Act, State Plan
“Credible allegations of fraud.” What does that mean???
As it pertains to Medicaid, “credible allegations of fraud” was first introduced into law by the Affordable Care Act (ACA) in 2010. The Centers for Medicare and Medicaid (CMS) issued its Final Rule February, 2, 2011, and the Informational Bulletin in March 2011.
As you can see, “credible allegations of fraud,” as pertaining to Medicaid, is a relatively new concept. But what does it mean? The ACA does not define “credible allegations of fraud.”
I know what “allegation” means. I also know allegations are not always true. I also know allegations can change your life.
When I was a senior in high school, I had been dating my high school sweetheart for 2 years. An acquaintance, and an apparently, mean-spirited girl, alleged that my boyfriend cheated on me with another girl. I was so angered and so hurt that I called up my boyfriend immediately and broke up with him. For weeks, my boyfriend hounded me, professing his innocence. But I was not to be swayed. I refused phone calls, avoided seeing him, and publicly disparaged him to my friends. 20 years later I saw him. I asked him whether he had really cheated on me, knowing that he had no reason to lie now (he is married with 4 children; I am happily married with one child). But I was just curious because that allegation that he had cheated changed both our lives. I am not saying that had it not been for the allegation that he and I would be together…not at all…in fact, I am sure we would have eventually broken up. The point is that the allegation that he cheated, for good or for bad, changed our lives. And, to me, he was guilty based on the allegation.
20 years later I found out that the allegation was false. He never cheated. But his innocence did not change the consequences of the accusation. He was guilty until proven innocent.
Similarly (and more importantly), a mere accusation that a Medicaid provider is undergoing abhorrent billing practices or committing Medicaid fraud, and without any proof, can change a provider’s life. A mere allegation of fraud suspends a Medicaid provider’s reimbursements. The consequence of which can be dire…You are guilty until proven innocent. Just like my boyfriend. The accusation alone made him guilty.
According to 42 C.F.R. 447.90, “This section implements section 1903(i)(2)(C) of the Act which prohibits payment of FFP with respect to items or services furnished by an individual or entity with respect to which there is pending an investigation of a credible allegation of fraud except under specified circumstances.” FYI: FFP stands for Federal Financial Participation (or Medicaid reimbursements in the vernacular).
Section 1903(i)(2)(C) of the Social Security Act (SSA) states that no payments shall be paid to “any individual or entity to whom the State has failed to suspend payments under the plan during any period when there is pending an investigation of a credible allegation of fraud against the individual or entity, as determined by the State in accordance with regulations promulgated by the Secretary for purposes of section 1862(o) and this subparagraph, unless the State determines in accordance with such regulations there is good cause not to suspend such payment.”
But what does “credible allegation of fraud” mean? Where is the definition? Not in the SSA.
On March 25, 2011, CMS issued an Informational Bulletin in which “credible allegations of fraud” is defined…sort of…
The Informational Bulletin states, “In the final rule, CMS provides certain bounds around the definition of “credible allegation of fraud” at 42 C.F.R. § 455.2. Generally, a “credible allegation of fraud” may be an allegation that has been verified by a State and that has indicia of reliability that comes from any source. Further, CMS recognizes that different States may have different considerations in determining what may be a “credible allegation of fraud.” Accordingly, CMS believes States should have the flexibility to determine what constitutes a “credible allegation of fraud” consistent with individual State law. However, a credible allegation of fraud, for example, could be a complaint made by an employee of a physician alleging that the physician is engaged in fraudulent billing practices, i.e., the physician repeatedly bills for services at a higher level than is actually justified by the services rendered to beneficiaries. Upon State review of the physician’s billings, the State may determine that the allegation has indicia of reliability and is, in fact, credible. “
1. An allegation
An allegation by its very definition is “a claim or assertion that someone has done something illegal or wrong, typically one made without proof.” See Wikipedia. Without proof!!! Why without proof? Because an allegation is preliminary…an accusation…not a conclusion. Girl alleges my boyfriend cheated on me.
2. Verified by a State
Makes sense to need to be verified…
2. Indicia of reliability
Indicia? Indicia means “distinctive marks: indication.” See Dictionary.com. Not quite sure what that means, but indicia of reliability does not sound like a very high threshold. Nothing like preponderance of the evidence or beyond a reasonable doubt. Could be as low a threshold as I applied when the girl alleged my boyfriend cheated on me.
3. Comes from any source
Are you kidding me?? So, if I were a Medicaid provider, my ex-husband, out of spite and hatred, could call up Patrick Piggott over at Program Integrity (PI) and accuse me of Medicaid fraud…or the disgruntled employee I fired….or my next door neighbor who is angry about the bush I planted on his property…you get the point.
Why is it important what the definition is of “credible allegation of fraud?”
As a Medicaid attorney, I represent Medicaid providers (duh). The point is that I have seen the dire consequences, first-hand, to many, many a Medicaid provider accused of “credible allegations of fraud.” Here are a few, real-life examples (names have been changed to protect the innocent):
- Provider Leroy is accused of “credible allegations of fraud.” Leroy is placed on prepayment review and all Medicaid reimbursements are suspended. Leroy provides residential services (the people he serves actually live in his home because of severe mental illnesses). Without Medicaid reimbursements, Leroy cannot pay the mortgage, his staff’s hourly wages, or anything else. He acquires a $200,000 loan to help him through, and the interest is high. He truly thinks that he will get off prepayment review and save his company and his Medicaid recipients from not having a home or Medicaid mental health services. After 6 months of barely sliding by, Leroy receives a Notice of Termination terminating his Medicaid contract with the State. (It is important to note that the termination was based of a faulty audit by an inept contractor). He declares bankruptcy and all the Medicaid recipients are discharged to the homes that could not care for them in the first place. The “credible allegation of fraud?” It came from a disgruntled employee.
- Provider Lacey receives a Tentative Notice of Overpayment (TNO) in the amount of over $2 million based on “credible allegations of fraud.” Provider Lacey (after her initial heart attack) hires Attorney Clueless. Clueless appeals the TNO and gets the overpayment amount reduced to $1.5 million. Lacey does not have $1.5 million and asks Clueless to appeal again. Clueless fails to appeal the overpayment by the appeal deadline, and Lacey gets a judgment entered against her and her company. Lacey’s husband is sick and tired of hearing about the Medicaid audit and abandons her and her two children. Lacey declares bankruptcy. Lacey used to support herself and her family. Now North Carolina does. The “credible allegation of fraud?” Lacey’s husband (apparently he had issues WAY before he left).
- Provider Larry receives notice from a managed care organization (MCO) terminating his Medicaid contract based on “credible allegations of fraud” and demanding a $700,000 recoupment. Larry also hires Clueless. Clueless files a lawsuit against the Department of Health and Human Services (DHHS) and the MCO. Clueless did some homework and actually makes a good argument in court. But by the time Clueless gets to court, 4 months has passed and Larry racked up $50,000 in legal fees. Larry can’t pay the attorney fees. Clueless withdraws as counsel. Larry goes bankrupt. The 400 Medicaid recipients that his company serviced do not receive the health care needed. The “credible allegation of fraud?” One of his own recipients receiving substance abuse services in a state of incoherence while on crack cocaine.
- Provider Lucy receives notice from the Medicaid Investigative Department (MID) that she is under criminal investigation based on a “credible allegation of fraud.” Lucy does not have enough money to hire an attorney, so she opts for the public defender, who knows nothing about Medicaid and is also named Clueless. The public defender did not even review Lucy documentation because she did not understand the complex system of Medicaid. Clueless provided poor representation, and Lucy was sentenced to 5 years in prison. Lucy said, “I was the first in my family to get a PhD and the first to go to jail.” The “credible allegation of fraud?” Her local competitor.
- 15 providers in New Mexico, based on “credible allegations of fraud,” have their Medicaid reimbursements suspended. The 15 providers cannot pay staff, rent on buildings, and other bills. The State of New Mexico brings in Arizona providers to replace the 15 Medicaid providers. The Arizona provider takes over the 15 providers’ buildings, most staff and all consumers. The 15 providers are out of business. Without a trial. Without even reviewing the evidence against them. Based on a mere allegation of fraud, 15 providers go bankrupt…lose their careers…are unemployed… The “credible allegation of fraud?” Unknown.
Remember “credible allegation of fraud” is preliminary, and, at times, without any proof, yet the consequences are dire.
Innocent until proven guilty is a bedrock principle in the American justice system. Yet, innocent until proven guilty does not apply to Medicaid providers. Our founding fathers created the concept of innocent until proven guilty. While innocent until proven guilty is not explicitly codified in the Bill of Rights, the presumption of innocence is widely held to follow from the 5th, 6th, and 14th amendments. See also Coffin v. United States and In re Winship.
Here’s the problem….presumption of innocence only applies to criminal law. Even when the consequences of a civil action is so monumental, so dire, so irreparable, the presumption of innocence does not apply.
So “credible allegation of fraud?” It does not matter what the definition is. The fact is that if ANYBODY alleges a “credible allegation of fraud” against you, you are guilty. You are my boyfriend who never cheated on me, but a girl alleged that he did cheat.
No evidence…You are GUILTY based on the ALLEGATION of fraud!
Posted in Affordable Care Act, CMS, Credible Allegations of Fraud, DHHS, Division of Medical Assistance, Due process, Extrapolations, Federal Government, Federal Law, Health Care Providers and Services, Injunctions, Innocent Until Proven Guilty, Legal Analysis, Legal Remedies for Medicaid Providers, Legislation, MCO, Medicaid, Medicaid Audits, Medicaid Contracts, Medicaid Recipients, Medicaid Recoupment, Medicaid Reimbursements, Medicaid Services, Mental Health, Mental Illness, NC, New Mexico, North Carolina, Obamacare, Post-Payment Reviews, Prepayment Review, Program Integrity, Provider Medicaid Contracts, Tentative Notices of Overpayment, Termination of Medicaid Contract, Washington D.C.
Tags: ACA, Affordable Care Act, Centers for Medicare and Medicaid Services, CMS, Credible Allegations of Fraud, DHHS, Division of Medical Assistance, Health care provider, Innocent Until Proven Guilty, Managed care, Managed Care Organizations, MCO, Medicaid, Medicaid Audits, Medicaid Payment Suspension, Medicaid recipients, Medicaid Reimbursments, Medicaid Services, New Mexico, New Mexico Behavioral Health Providers, North Carolina, North Carolina Department of Health and Human Services, Patient Protection and Affordable Care Act, Post-Payment Review, Prepayment, Social Security Act, SSA, Tentative Notice of Overpayment, termination of Medicaid contracts
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.
Posted in "Single State Agency", Accountability, Alliance, Behavioral health, CenterPoint, DHHS, Division of Medical Assistance, DMA Clinical Policies, ECBH, Federal Law, Health Care Providers and Services, Jurisdiction, KC v. Shipman, Legal Analysis, Legislation, Local Management Entity, MCO, MCO Communication Bulletin, Medicaid, Medicaid Services, Mental Health, Mental Health Problems, Mental Illness, North Carolina, OAH, Provider Medicaid Contracts, Termination of Medicaid Contract
Tags: Behavioral health, DHHS, Division of Medical Assistance, DMA, Federal law, Federal Medicaid law, Health care provider, Innovations Waiver, KC v. Shipman, Managed Care Organizations, MCO, MCO Communication Bulletin, Medicaid, Medicaid Services, North Carolina, North Carolina Department of Health and Human Services, Single state agency, Social Security Act, termination of Medicaid contracts