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“Thank You, Providers Who Accept Medicaid!” From: Me

During this holiday time of giving and family time, I would like to take a moment to say, “Thank you!” to all you health care providers who accept Medicaid. 

Thank you!!

It’s not easy to be a Medicaid provider, especially in our current Medicaid landscape.  It’s also not immensely profitable.  But, there are still approximately 70,000 of you in NC continue to accept and serve Medicaid recipients despite the rocky terrain.  And, I, for one, would like to say, “Thank you!”

More so than private insurances, and, I daresay even more than Medicare, accepting Medicaid patients places a large burden on the Medicaid providers. At least in Medicare, the reimbursement rates are higher.  Because the number one complaint I hear from health care providers is the Medicaid reimbursement rates SUCK! And they do!

For example, for CDT code D0120, which is a periodic oral exam, a dentist is reimbursed $25.27.  For a physician, an office visit emergency care is reimbursed at $18.20. Home health care medical supplies are also reimbursed at a law rate.  For 10 mL of sterile water Medicaid reimburses 41 cents.  (I didn’t realize that my computer does not have a symbols for “cents.”) An intermittent urinary catheter; straight tip, with or without coating (Teflon, silicone, silicone elastomer, or hydrophilic, etc.) is reimbursed at $1.59.

My point is that, no matter what type of provider you are, a dentist, a physician, and a home health provider, if you accept Medicaid, you also have overhead costs (rent, electricity, perhaps cable), plus staff costs (salaries, taxes), plus other incidentals (office furniture, decoration, supplies) and you hope to make a profit.  Therefore, many health care providers simply do not accept Medicaid because the reimbursement rates are so much higher if they only accept private insurance, or even Medicare.

 Not to mention the federal and state regulations that you have to follow if you choose to accept Medicaid….Oh, and, by the way, if you fail to follow any regulation, you may be subject to an audit.

Oh, and, by the way, even if you DO follow all applicable rules and regulations, you are still subject to audits.

Instead of sending a Tentative Notice of Overpayment (TNO), a notice of an upcoming audit, some crappy reimbursements during this holiday season, I would like to send a big “Thank You!” to all the health care providers in NC that accept Medicaid.

Thank you!!

Could NC Hospitals Be the Surprising and Much Needed Advocate for Mentally Ill Medicaid Recipients?

North Carolina has created the perfect storm when it comes to mentally ill…the perfect scenario for disaster.  10…9….8…..7……6…….5……..4………3………..2…………..

From 2001 to 2012, the total population of North Carolina increased from 8,203,734 people to 9,781,022.  Over 1 and a half million more people live here now than twelve years ago.  Which is understandable when you think about all the people relocating here.

The number of NC residents in need of mental health services has increased from 517,447 in 2001 to 613,379 in 2012 (not sure how many are on Medicaid).  However, since 2001, the number of inpatient psychiatric beds has DECREASED by fifty percent (50%), from approximately 1,750 beds to approximately 850 beds.  850 beds!!  Not even enough beds to serve 1/10 of the population in need!!

In the past, it was understandable to decrease the number of psychiatric beds.  NC was doing a fairly decent, not perfect, by any means, but a decent job of providing community-based mental health services to those in need. 

Those days of decent care for mentally ill Medicaid recipients are over.  Instead, we have the perfect storm for utter disaster.

Enter main ingredient of the perfect storm…the managed care organizations (MCOs).  In NC, we moved only behavioral health care to the MCOs.  Basically, if you are on Medicaid and need any type of health care services, besides behavioral health services, you will never come into contact with an MCO.  However, if you suffer from a mental illness, a developmental disability, or a substance abuse problem and rely on Medicaid for insurance, you have encountered the MCOs.

Prior to 2013 (except for the experimental 1st MCO, which was called Piedmont Behavioral Health, but now called Cardinal Innovations), the MCOs did not exist.  Literally, the MCOs have gone “live” this year.  The MCOs are new to being the gatekeepers of mental health services for Medicaid recipients in NC.

Not only do we have these new, inexperienced companies deciding which Medicaid recipients may receive mental health services, but we, in our great wisdom, gave them the monetary incentive to DENY services to recipients and to DENY providers Medicaid contracts, which is the 2nd ingredient for the perfect storm.  Oh yes, we did all that!  The MCOs are prepaid.  So, in theory, the MCOs are taking the burden of risk (i.e., going over budget) off the State and onto themselves.  If the MCOs go over budget, it is on the MCOs to come up with the money.  However, in reality, the MCOs, to save on money and increase profit, are denying medically necessary services and terminating (or not enrolling) quality health care providers.  See my blog “The NC Medicaid Mental Health 10-Ring Circus: How 10 Mini Jurisdictions Will Be the Downfall of Mental Health.”

Enter the 3rd ingredient to the perfect storm…the Department of Health and Human Services (DHHS), Division of Medical Assistance (DMA)’s complete absence of supervision of the MCOs.

The MCOs have full reign and uninhibited authority to deny mental health care services, to terminate Medicaid provider contracts, or to refuse to contract with Medicaid providers with absolutely ZERO repercussions (unless you hire an attorney (not necessarily me) and obtain an injunction) from DMA, from the federal government, from anyone.  See my blog “The MCOs: Judge, Jury, and Executioner.”

[The equation for the perfect storm = the decreased number of psychiatric beds + increase in population + the increase of mentally ill residents + the MCOs + the monetary incentive for MCOs to deny services and not enroll providers + DMA’s complete lack of supervision]

As I am sure you are aware, a week or so ago, Virginia state Senator Creigh Deeds was stabbed multiple times by his son.  Deeds was hospitalized for three days, but his son took his own life after stabbing his father.  According to the media, Deeds’ son, Gus Deeds, suffered from severe mental problems and the day prior to the stabbing, an emergency custody order was sought.  However, a psychiatric bed, reportedly, could not be found.

Sadly, the tragic story of Gus Deeds is too common.  In Modern Healthcare this week, the feature story is called, “No Room for the Mentally Ill.”

The article discusses how the hospitals “are trying to collaborate with other hospitals  to place psychiatric patients in open beds, using separate psychiatric EDs, setting up crisis triage centers, and referring patients to residential treatment centers.” See Modern Healthcare, dated November 18, 2013.

The hospitals may be acting in a self-serving manner.  Most mentally ill patients, who are admitted to the ERs are not paying clients.  The hospitals cannot turn a profit if too many non-paying clients are admitted to the ER.  However, whatever the motivation, I say, thank goodness, and God bless the hospitals’ efforts!

Mentally ill, Medicaid recipients may be the demographic with the LEAST voice of all demographics in existence. 

Sadly, few care about poor people, and even fewer care about poor people suffering with MH/DD/SA. (When I say “care,” I mean will devote time, resources, and energy to them.  I mean hire lobbyists for them, hire attorneys.)

Here, in NC, we are staring into the face of a perfect storm.  If the hospitals can make headway with a bigger voice than those depending on Medicaid with behavioral health issues, God bless the hospitals, whatever the reason for their advocacy.

Because, perhaps, without the hospitals, we could be seeing:


To Decrease Medicaid Spending (Without Decreasing Medicaid Recipients’ Services), Drastic Administrative Cuts Are Needed

It is indisputable that reigning in Medicaid costs is one of this administration’s top priorities.

And, I agree, reigning in Medicaid costs should be a top priority.  In fiscal year 2011, it is estimated that Medicaid comprised 23.6 percent of total state expenditures (average of all states).  My only concern is reigning in the appropriate Medicaid costs without interfering with Medicaid recipients’ medically necessary services.  A Medicaid budget cut (or reigning in Medicaid spending) should not be painfully felt by the Medicaid recipients by increased denials of services or by their providers being terminated from the Medicaid program without cause.  Instead a Medicaid cut should be felt by the administration. 

The Medicaid budget exists in order to provide medically necessary services to the most needy, not to create jobs at the Department of Health and Human Services (DHHS).

“About $36 million a day we spend on Medicaid, and the numbers grow by the second. It is a non-sustainable system,” Wos said to members of the Medical Care Commission this past Friday.  For the article, please click here.  The Medical Care Commission is a governor-appointed medical advisory group made-up of 16 North Carolinians and charged with the responsibility of recommending Medicaid cost control and budget predictability. (Actually, it is interesting that when you look at the NC DHSR website (click on Medical Care Commission) that the website states that the commission is composed of 17 individuals.  But when you count the individuals, only 16 are listed.  I assume that Gov. McCrory or Sec. Wos is the 17th member, but I am not 100% sure).

While I agree with Sec. Wos that continuing to spend $36 million a day and, perhaps, more in the future, is a non-sustainable system, I also believe that we could decrease Medicaid spending without decreasing services to recipients. 

The Medical Care Commission’s chairperson, Ms. Lucy Hancock Bode “served as the Deputy Secretary of the North Carolina Department of Human Resources from 1982 to 1984. She has been an Independent Trustee of Tamarack Funds Trust and various Portfolios in the fund complex of Tamarack Funds since January 2004. She served as a Director of BioSignia, Inc.”  See BusinessWeek.

The Vice-Chairperson, Joseph D. Crocker, “is Director of the Poor and Needy Division at Kate B. Reynolds Charitable Trust in Winston-Salem, North Carolina, where he has served in such capacity since May 2010. Mr. Crocker served as Assistant Secretary for Community Development at the North Carolina Department of Commerce in Raleigh, North Carolina, from 2009 to 2010.  See Forbes.

Well, goodness, the appointees can be found in BusinessWeek and Forbes!! Who else is on the Medical Care Commission? The grandson of the founder of the Biltmore Estates, 6 MD’s, the ex-CEO of FirstHealth of the Carolinas, the Vice President and Director of the Health Care Program for The Duke Endowment, the President and CEO of Coastal Horizons.  My guess is that not one of the appointees to the Medical Care Commission has ever depended on Medicaid for insurance nor been personally acquainted with those dependent on Medicaid. How will these elite (which I am defining as making a salary well-over poverty level for years and years) help “adopt, recommend or rescind rules for regulation of most health care facilities,” and help “[b]e able to provide the proper care to the proper people at the proper time and at the proper price?”  How does the person making $13.8 million truly understand the troubles and turmoil of someone making $9.00/hour?

I recently read an article about McDonald’s and its low wages it pays to its employees.  The article pointed out that most McDonald’s employees received minimum wage, the median hourly wage is $9.00/hour.  McDonald’s also recommends that its employees file for food stamps and welfare.  Then I read that the CEO of McDonald’s is paid $13.8 million/year.  That’s over $1 million/month!!! That is stupid money!! What in the world does Donald Thompson do with that much money?  When Mr. Thompson encourages his employees to file for food stamps and welfare programs, how can he, making $13.8 million/year, have an inkling as to the daily troubles of an employee making $9.00/hour…how difficult it can be to maneuver government beaurocracy…to even get authorization to receive the food stamps…only to discover that the legislature suspended the distribution of food stamps this week…

(A quick aside, for those of you thinking right now, “What about you, Knicole? You are a partner at a big law firm? How can you protest to know anything about the $9.00/hour employee? Without getting too personal, I have not always been employed at a law firm.)

Had I been in McCrory’s position of appointing the folks onto the Medical Care Commission, I would have wanted at least one appointee to have either been personally dependent on Medicaid, been a case manager exclusively for Medicaid recipients, or, in some way, dealt with Medicaid recipients on a close, personal level.  In other words, I would have wanted at least one appointee to understand the real-life difficulties actually suffered by Medicaid recipients.  If I were a CEO of a company for 20 years, how would I know that medically necessary services are being denied to Medicaid recipients?  How would I know that when a mother calls to make a dental appointment for her child that it can take months to be seen by a dentist if you are on Medicaid? How can the social elite understand the frustrations of Medicaid recipients? They have never been turned down by a doctor because of the insurance they have.

I called a few of the offices of the 6 MDs appointed on the Medical Care Commission and learned that those offices I called accept Medicaid, which relieved me.  But I would be interested in knowing what percentage Medicaid clients each office accepts.  And how closely the MDs work with Medicaid recipients (do the MDs appeal denials for their clients’ services and appear and testify on their behalf in court?)

A funny thing happens when you’ve made a lot of money over a number of years…you forget how important $20 can be to a single mom with rent to pay and a kid with a tooth ache.  I would also assume the same thing happens when you are Governor or Secretary…you forget how debilitating a service denial is and how scary the prospect of an appeal can be.

Going back to reigning in Medicaid costs:

Is there a way to decrease spending on Medicaid without compromising medical services.  Is there even a way to decrease Medicaid spending while providing better medical services to Medicaid recipients…? Could it be possible?? I believe so.

How many times have you heard the administration state that the Medicaid system is broken and the money spent on Medicaid is non-sustainable? And what about the Performance Audit conducted by the Office of the State Auditor?  The January 2013 Performance Audit revealed that almost 1/2 of the Medicaid administrative expenditures in the 2012 fiscal  year went to private contractors…such as the managed care organizations (MCOs), Public Consulting Group (PCG), and the Carolinas Center for Medical Excellence (CCME).  Another huge expenditure is the administrative costs for the Department of Health and Human Services (DHHS)…think about it…DHHS employs approximately 70,000 people at an average salary of $42,000.  Add up the costs associated with private contractors and the administrative costs of DHHS, and the sad truth is that not even a quarter of the Medicaid budget goes to paying Medicaid recipients’ actual services.

Remember my blog: “How Dare They! That Money Could Have Been Used on a Medicaid Recipient!”

Remember the January 2013 Performance Audit of DHHS

Another contributing factor to the high amount of North Carolina’s administrative spending is insufficient monitoring of administrative services that are contracted out by DMA. Private contractor payments represent about $120 million (46.7%) of DMA’s $257 million in administration expenditures for SFY 2012. It is always important for a state government to even more critical when almost half of the administrative expense is made up of contract payments. Although contract payments represent a high percentage of its administrative budget, DMA was not able to provide a listing of contracts and the related expenditures in each SFY under review for this audit. DMA’s inability to provide this information is indicative of its inadequate oversight of contractual expenditures. The initial list DMA provided only included amounts expended to date per contract. However, we were able to eventually obtain contracted service expenditures for FY12 and compile this information.”

Inadequate oversight of contractors…Hmmmm…

In order to decrease Medicaid spending, how about a little thing I like to call: ACCOUNTABILITY!?

As in, if DHHS contracts with an entity that spends too much Medicaid money on “extras,” then DHHS must instruct the entity to cease the “extra” spending.  This is our tax money, remember!! For example, everyone knows that attorneys are not cheap, right? At hearings, the MCOs usually have in-house counsel  or retain the county attorney.  But two MCOs, Cardinal and MeckLINK (yes, MeckLINK, despite MeckLINK’s solvency issues) have hired an expensive and prestigious law firm.  There is no question that the law firm has experienced, excellent attorneys.  But who is paying for the expensive attorneys’ fees? Medicaid dollars? You? Me? I thought about these questions when, at a recent hearing three attorneys appeared on behalf of the MCO.  Let’s see…$450/hour + $350/hour + $275/hour = $1075/hour?  And who is paying?  (Obviously, I made these numbers up, but I dare say they are close estimates).

By the same token, DHHS needs to monitor its own expenses.  I can only imagine how difficult it is to monitor 70,000 employees.  At any given time, thousands may be on Facebook, cell phones, or surfing the web.  I am not suggesting that Sec. Wos turn DHHS into a sweat shop, by any means.  No, I am merely suggesting that a way to decrease money spent on Medicaid is to conduct a self-audit and determine that if 3 people are doing the job that 1 person could do, only employ the one person.  Just like, DHHS would be accountable if PCG used Medicaid dollars to pay for in-office massages for employees.  Medicaid dollars should be spent on Medicaid recipients.  DHHS should be accountable for superfluous spending.

With all these newly- contracted entities working for DHHS (and getting paid by DHHS), where is the savings in Medicaid spending?? To my knowledge, there has not been a huge slash in jobs at DHHS…the salaries and administrative costs at DHHS have not decreased drastically…no, instead, we’ve hired MORE companies and we are paying MORE salaries!! How will hiring more contractors decrease Medicaid costs if we are not decreasing our administration overseeing Medicaid?  We all know that no one wants to be the administration who cut government jobs, but if you truly want to decrease administrative costs, you have to decrease the cost of the administration, especially if you are hiring companies to do what the administration used to do.

Going to McDonald’s low wages and ridiculously, high-paid CEO, obviously, McDonald’s is a private company and is entitled to pay its CEO $13.8 million/year and its employees an hourly median wage of $9.00/hour.  McDonald’s only has to answer to its shareholders.

DHHS, on the other hand, is not a private company.  DHHS is funded by tax dollars and is accountable to every taxpaying citizen of North Carolina.

Want to decrease Medicaid spending while providing the medically necessary services to our most needy?  Cut the administrative costs…eliminate unnecessary staff (no matter how unpopular the idea is)…actively monitor the expenses of all contracted entities…provide the medically necessary services to Medicaid recipients (thereby decreasing the need for the more expensive ER visits and incarcerations)…

Cease all unnecessary administrative costs!  Be accountable!  Self-audit! Closely monitor all contracted entities’ expenditures!!

And, remember, hiring a third-party company costs money…real money…tax payer’s money!  If the hiring of the company is not offset by a reduction in spending elsewhere, the result is increased overall spending.  It isn’t hard, people…this is Logic 101.  So when DHHS hired PCG or CCME or HMS, the administration should have decreased Medicaid spending elsewhere just to break even (as in, just to continue our high Medicaid spending).  To decrease spending along with hiring third-party contractors, we have to severely and drastically decrease Medicaid spending.  In order to avoid reducing Medicaid recipients’ services, a decrease in Medicaid spending calls for the drastic action of slashing administrative costs.

It isn’t fun, but it is necessary.

NC Medicaid Providers: Believe only half of what you see and nothing that you hear

Edgar Allan Poe said, “Believe only half of what you see and nothing that you hear.”

Not only do I think that Poe’s quote is accurate in every day life, but even more accurate as applied to dealing with the Division of Medical Assistance (DMA).

A client told me a story: (This is a synopsis. This may not be a true story.)

“I called DMA Program Integrity (PI).  The person there told me that my documents were fine and that I should not worry.  Two days later, DMA sent me a letter terminating my Medicaid contract.  And guess who signed it? The exact person who reassured me over the phone!”

Obviously, this client was flabbergasted when the letter of termination was delivered.  I try to logically understand how “client” could be reassured one day by DMA and two days later be terminated from Medicaid by DMA.

My question is: Is there a lack of communication between or within departments at DMA?

Logically, I see two options. I have not come up with any other options, but feel free to suggest any.

Option A: Perhaps the signator does not actually sign the documents; instead, maybe there is a stamped-signature for the signator. So, if a stamped-signature is used, perhaps the signator was unaware of the Termination Notice being mailed. But if the signator was unaware of something as important as a Termination Notice, then there is HUGE breakdown in communication, either between departments or within departments at DMA.

Option B:  So, if there is NOT a lack of communication between departments or within departments at DMA, then I am left to logically ascertain that the signator knew that the Termination Notice was being mailed or was going to be mailed at the time of the reassurance to client.

 Both Option A and B are bothersome.  I actually cannot decide which one is worse.

However, despite the reason behind both: (1) the verbal reassurance; and (2) the termination notice, the moral of the story is obvious: “Believe only half of what you see and nothing that you hear.”

Furthermore, despite the reason behind both, the action to be taken from the moral is: Document everything.

It reminds me of Aesop’s Fable, “The Man and the Satyr.”

A man and a satyr once poured out libations together in token of a bond of alliance being formed between them. One very cold wintry day, as they talked together, the man put his fingers to his mouth and blew on them. On the satyr inquiring the reason of this, he told him that he did it to warm his hands, they were so cold. Later on in the day they sat down to eat, the food prepared being quite scalding. The man raised one of the dishes a little towards his mouth and blew in it. On the satyr again inquiring the reason of this, he said that he did it to cool the meat, it was so hot.

“I can no longer consider you as a friend,” said the Satyr, “a fellow who with the same breath blows hot and cold.”

NC Medicaid and Constitutional Due Process

Due process.  What is due process? We hear the phrase due process constantly in the media, in movies, in everyday vernacular…but what is “due process?” And is due process germane to Medicaid contracts?

Due process is part of our Constitution’s fabric.  Thomas Jefferson, one of our founding fathers, drafted the passage in the Declaration of Independence that states “all men are created equal…” there are “unalienable rights…” including “life, liberty and the pursuit of happiness.”  He influenced the Due Process Clauses of the Fifth and Fourteenth Amendments, which provide that no person shall be deprived of “life, liberty, or property without due process of law.”

For a definition of due process, I am going to utilize the wonderful website of “Wikipedia.” Few websites have such a broad-defining ability and its definition of due process and the importance thereof is great:

“The Fifth and Fourteenth Amendments to the United States Constitution each contain a Due Process Clause. Due process deals with the administration of justice and thus the Due Process Clause acts as a safeguard from arbitrary denial of life, liberty, or property by the Government outside the sanction of law.[1] The Supreme Court of the United States interprets the Clauses however more broadly because these clauses provide four protections: procedural due process (in civil and criminal proceedings), substantive due process, a prohibition against vague laws, and as the vehicle for the incorporation of the Bill of Rights.”

Legally, the key components to due process is “denial of life, liberty or property.”  In order to trigger due process, you have to prove that whatever is being taken from you is a denial of “life” “liberty” or “property.”  For example, if you argue that a policeman cannot take your license from you without due process, the answer is, yes he or she can because driving is a privilege, not a right.

So is a Medicaid contract a right? Or a property right? A property right that requires due process prior to termination?

There are a number of ways to argue this.  Of course, one argument is, no, a Medicaid contract is a privilege not a right. I’m sure that the Division of Medical Assistance (DMA) would argue the former.  However, I disagree.  I also think that federal law would disagree (if it could speak).

In order to receive federal funding for Medicaid, North Carolina is required to submit a State Plan under Title XIX of the Social Security Act.  The State Plan defines the scope of Medicaid and presents “promises” to which NC agrees to adhere.  Part of the State Plan is adhering to all pertinent federal statutes, regulations, as well as  including adherence to the Constitution of the United States.

Our State Plan states, in pertinent part, that it promises that “The State has an adequate appeal process in place for entities to appeal any adverse determination by the Medicaid RACs.”

Yet, N.C. Gen. Stat. 108C-7 states, in pertinent part, “[t]he decision to place or maintain a provider on prepayment claims review does not constitute a contested case under Chapter 150B of the General Statutes. A provider may not appeal or otherwise contest a decision of the Department to place a provider on prepayment review.”

How does our State Plan promise an appeal process while the NC Gen. Stat. states no appeal is allowed? It would appear to me that the State Plan and NC Gen. Stat. 108C-7 are at odds.

Let’s set the stage:

The RACs are the Recovery Audit Contractors that manage the audits and exploration of prepayment reviews for a health care provider. In North Carolina, the RACs are the Carolinas Center for Medical Excellence (CCME), Public Consulting Group (PCG, and HP Enterprises (HP).

Prepayment reviews are reviews on certain types of claims that historically result in high rates of improper payments. These reviews will focus on seven states with high populations of fraud- and error-prone providers (FL, CA, MI, TX, NY, LA, IL) and four states with high claims volumes of short inpatient hospital stays (PA, OH, NC, MO) for a total of 11 states.

While on prepayment review, the health care provider may not be reimbursed for Medicaid services rendered until “the provider achieves three consecutive months with a minimum seventy percent (70%) clean claims rate.” (See N.C. Gen. Stat. 108C-7(f)).

Those withholdings of Medicaid reimbursements, I argue, meet the standard of “property.” I would also argue that the withholding of Medicaid funds without due process constitutes “illegal state action” (see below) if the provider can prove that the prepayment review is conducted erroneously.

Theoretically prepayment reviews are designed to catch Medicaid fraud.  In reality, the prepayment reviews are overbroad and threatening the very existence of quality health care providers.

So, are the RACs’ withholding of Medicaid reimbursements for services rendered a deprivation of “life, liberty or property?”

In the Supreme Court case, Wilder v. Virginia Hospital Association, in 1990, the Supreme Court held that providers also had a private cause of action under Section 1983 against illegal state action.

Arguably, North Carolina’s implementation and enforcement of N.C. Gen. Stat. 108C-7 that refuses providers a right to appeal would be an illegal state action according to federal law.

Agree? Just haven’t had a chance to challenge 108C-7 yet.  There are so many arguments against its constitutionality.  But due process is one argument.

DMA’s Vague Clinical Policies: What’s Good for the Goose is NOT Good for the Gander

North Carolina Medicaid rules/regulations/policies require health care providers to maintain stringent documentation standards. An “I” is not dotted, then the provider must pay back a reimbursement.  So, obviously, what is good for the goose is good for the gander, right?  Nope.  The gander can be vague in documentation, just not the goose.

While casually reading some updated DMA Clinical Policies today, I realized how vague these policies are.  Understand, these Clinical Policies are doctrines in the Medicaid arena.  In the Medicaid arena, these policies are to providers as a recipe is to a perfectionist-chef.  If any ingredient is missing, the entire meal will fail. Or a child’s dot-to-dot worksheet; if any number is missed, the picture is incorrect.  In the Medicaid arena, if a provider fails any part of the policy, the provider fails; the picture is incorrect.  The service reimbursement must be returned…even if the service was rendered wonderfully and greatly serviced the Medicaid recipient.  Documentation is everything.

My question is: If documentation is everything, why are the policies that instruct the provider how to document so vague?

For example, in DMA Clinical Policy 4A, it states that, “Medicaid and NCHC shall not cover the following:…certain periodontal surgeries”

Really? “Certain periodontal surgeries?” What the heck? Certain? Hmmmmm…could you be a little more specific?

Another example: Clinical Policy 8A states, for Peer Support Services (PSS), that the eligibility criteria, in part, is, as follows:

“B. The individual has documented identified needs due to his or her mental health or substance abuse diagnosis in at least three of the following areas:

  •  Limited ability to self-manage symptoms and behaviors
  • Has recently experienced a crisis episode requiring intervention through Mobile Crisis Management, Facility-Based Crisis, hospitalization, or detoxification services
  • History of difficulty using traditional services (missing office appointments, difficulty maintaining medication schedules, etc.)
  • Limited ability to develop and utilize self-advocacy skills in order to increase independence
  • Limited ability to identify and utilize community services and supports without assistance
  • Limited ability to develop and maintain relationships, including natural supports
  • Limited ability to maintain in residence, physical health, community, school, job, or volunteer activity.”

Ok, let’s talk about the vagueness. “Limited ability?” Limited as compared to what?  Who determines “limited ability?”  Obviously, this is a subjective determination.  When I say it’s a windy Saturday, the wind may be 13-17 mph or 25-30 mph. Who is to say what is windy?

If I were to suffer from hypersomnia, would I qualify as having “limited ability?” If I had hypersomnia and I didn’t take my medicine, then I would fall asleep if I thought too hard.  If I didn’t take my medicine, I would have a limited ability to maintain a job, a limited ability to maintain relationships, and a limited ability to utilize self-advocacy skills. So would I qualify?

I believe identified needs of an individual, as written by DMA, would qualify under the definition of vagueness.

So, you, as a health care provider, believe that your client meets eligibility criteria for whatever Medicaid service. But eligibility is subjective. You may get prior approval from one entity but get a recoupment audit from another entity claiming no medical necessity.

The audits that are going on now subject the provider to stringent documentation rules. But why can DMA draft such vague policies that do not adhere to any stringent documentation rules?

What’s good for the goose is good for the gander, right?

Not in this case. The gander can be vague.  The goose must adhere to stringent documentation rules.

Audits, Audits, Everywhere, But Not Much Fraud In Sight…

Now that we have 3 Recovery Audit Companies (RACs) going strong in North Carolina, expect exponentially more Medicaid audits. And across the spectrum of types of health care providers.  Already RACs are auditing behavioral health, dental providers (although this is only the beginning of dental audits), and neurological centers.

But, as reported in the January 2013 Medicaid bulletin, inpatient hospital medical audits and outpatient lab services should be undergoing RAC audits now. So this means that Duke, UNC, Rex Health Care, and LabCorp are, most likely, busy gathering documents for audits.

If a small dental provider or health care provider receives a Tentative Notice of Overpayment for $400,000-2 million, I can only imagine the staggering number that the RACs are claiming the hospitals and laboratory companies owe.  My guess is, since the RACs receive a percentage from the recoupments, that Duke’s bill may be in the billions.

Then, if these RAC audits of behavioral health and dental practices are indicative of the quality of RAC audits on the hospitals, 99% of the claimed overpayments will be incorrect. I guess the RACs hope that the hospitals are so big that they will just hand over the money.  But, instead, I foresee a fight.

The good news? I will have so much material that I can continue to blog for years to come.

The bad news? With all these audits and legal fees, let’s hope the Medicaid recipients do not become lost.  Let’s hope that too many health care providers do NOT go out of business due to these audits.  Let’s hope too many health care providers do NOT decide to give up accepting Medicaid. Because if too many providers leave the Medicaid arena, recipients will have nowhere to go.

Already, I’ve heard so many providers tell me, “Once I get through this mess (meaning appealing the audit results) I will never take Medicaid again.” While I understand the reason for providers saying this, it saddens me to think of the quality health care providers that Medicaid is losing because of ineptness of RACs.

Perhaps the RACs have just thrown the nets extra-wide hoping to undercover some fraud, but, so far in my practice, there has been zero under-covering of fraud, but lots and lots of paperwork nitpicking.

Medicaid MCOs: And then there were 10

BREAKING: DHHS Terminates Western Highlands Contract

April 6, 2013 by Taylor Sisk
State Medicaid director Carol Steckel informs the managed care organization for eight Western N.C. counties that its contract will not be renewed.

By Taylor Sisk

State Medicaid director Carol Steckel sent a letter yesterday to the Western Highlands Network board of directors informing them that the mental health agency’s contract with the state will be terminated on July 31.

Western Highlands is the managed care organization (MCO) that serves Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey counties.

In a bulletin posted on the state Department of Health and Human Services website, Steckel said that the Division of Medical Assistance “will work closely with Western Highlands Network to move management of the waiver operations with the goal of a smooth and successful transition with no interruption in services.”

The MCOs, formerly called local management entities, are the regionally based agencies that receive a set monthly payment from the state to provide both state- and Medicaid-funded mental health, intellectual and developmental disability and substance abuse services around the state. With that money, the MCOs must allot services for everyone under their care.

There are presently 11 MCOs.

Western Highlands began operating as an MCO in January 2012. In July, its board of directors fired CEO Arthur Carder Jr., saying that he had failed to inform them that the agency had fallen $3 million in debt. The agency has been attempting to gain stability since.

Former Western Highlands CEO Arthur Carder Jr. was fired after his board learned the agency was losing half a million dollars a month. Carder is shown here addressing his board earlier this year. Photo credit, Lydia Wilson

In March, Sen. Tommy Tucker (R-Waxhaw), a member of the state Joint Legislative Oversight Committee on Health and Human Services, told North Carolina Health News: “We have two or three [managed care organizations] that are operating very well and would be able to absorb MCOs that are … out there on the outer limits of not being able to operate up to standards. So we’ll move forward with that.”

According to a report released in March by government consultant Mercer, which contracts with the state’s Medicaid agency to review services, vacancies in key positions and issues with its client information system had created a “significant risk” of Western Highlands being unable to operate properly.

“To remain a viable and sustainable managed care organization, WHN will be required to systemically address and resolve each of these challenges within a consolidated timeframe,” the Mercer report read.

Last Wednesday, Gov. Pat McCrory announced his plan to overhaul the state’s Medicaid program. Called “Partnership for a Healthy North Carolina,” the plan would open up Medicaid to competitive bidding by companies and MCOs from inside and outside the state.

At least three organizations, called comprehensive care entities, would win contracts to administer and coordinate the care funded by Medicaid and be paid for the task. They would be required to coordinate both physical and mental health care for their patients.

Once established, those organizations would compete against one another for beneficiaries. Some of them could be for-profit entities.

The state legislature must vote on the plan.

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MCO Rebuffs ALJ Order That Expressly States “Binding on [MCO];” Don’t Fret; This is Not the End!

Can an Managed Care Organization (MCO) refuse to comply with a Judge’s Order? Are MCOs above such Orders? Are MCOs, which handle federal and state Medicaid funds, beyond the supervision or reach of the very entities of which contract them? If Division of Medical Assistance (DMA) contracts out to a private company, does that allow DMA to say, “Hey, if you have a complaint, take it to the private company. Even though we supposedly manage the North Carolina Medicaid system, since we gave authority to a private company, we are no longer liable for the Medicaid’s system’s problems?”

This is the question that I am encountering. My answer? Heck No! (I didn’t want to use an explicative). DMA manages Medicaid. Period. Any entity acting on DMA’s behalf is an agent of the State. Until proven otherwise (and maybe even then), I refuse to accept lack of accountability between DMA and the MCOs.

Yet, a couple weeks ago, we were successful in arguing to an Administrative Law Judge (ALJ) that, by contract, an MCO acted as an agent of the DMA when the MCO rescinded or refused to offer a health care provider a contract with the MCO to provide Medicaid services to Medicaid recipients.

In fact, the Order explicitly states (I am removing the MCO’s name), “[The MCO] contracts with the Respondent’s Division of Medical Assistance (DMA) to act on Respondent’s behalf as a Medicaid managed care organization (“MCO”) for mental health, intellectual/developmental disability and substance abuse services in Durham county and other surrounding counties.”

Can it get any clearer? Remember when John Hancock signed the Declaration of Independence large enough for the King to read his signature without his glasses? Maybe the Judge, when drafting this Order, should have used larger font.

The Judge explicitly Ordered that the MCO acts as an agent of DMA. The Judge explicitly Ordered this in a signed, executed Preliminary Injunction Order.

Thus, I forwarded this signed and executed Order to the MCO.  This is what I received (in an email with all names removed, except mine:) ):

“Knicole:  Thank you for your email.  [MCO] was not a party to this litigation and the Office of Administrative Hearings does not have the authority (or jurisdiction) to direct us to enroll a provider into our Network.”

What? Double-take. Jaw dropping.

Ok, well, I disagree. Anyone else?

I know the Judge agrees with me. The Order also states, “Such STAY is binding on Respondent’s officers, agents, servants, employees, and attorneys pending on the decision of this pending litigation, including [the MCOs] refusal to contract with Petitioner to provide Medicaid funded services through [the MCO].”

Don’t worry, we are planning to pursue the MCOs’ email refusing to abide the Order. 🙂

But, meanwhile, this whole argument of mine (the agency relationship between DMA and the MCOs) is at issue in the General Assembly in House Bill 320.  House Bill 320 states, in part, “Jurisdiction of OAH. – The Office of Administrative Hearings does not have jurisdiction over a dispute concerning a grievance or managed care action, except as expressly set forth in this Chapter.”

First, this House Bill has NOT been passed into law. (Which obviously begets the logical response: If a statute is needed to determine that the MCOs are NOT agents of DMA, obviously, as of now, MCOs are agents of DMA).

If this House Bill is passed, the fact that this proposed statute states that OAH does not have jurisdiction over the MCOs, the statute is indirectly stating that the MCOs are NOT agents of DMA.  (Because OAH only has jurisdiction over state agencies and its agents).

Guess who proposed this statute?


Biting your nails?

Holding your breath?

An MCO.  Shocker.


NC Medicaid RACs Paid to Find Errors By Providers, No Incentive to Find Errors By DMA

I’ve always known that the Recovery Audit Contractors (RACs) in North Carolina are conducting these Medicaid audits inappropriately and without complying with NC Medicaid rules and regulations. But are the RACs compensated in a way that encourages the RACs to find overpayments to providers and not underpayments. (Did you even know that RACs are instructed to find underpayments too???? I mean, what a joke!! Please, providers, let me know if any of y’all have received a Tentative Notice of Underpayment!).

Anyway, what is a RAC?

RAC’s are private companies that have contracted with the State purpose is to reduce improper Medicare payments and implement actions to prevent future improper payments.

In North Carolina, the RACs are Public Consulting Group (PCG), Carolinas Centers for Medical Excellence (CCME), and, new to the RAC system, HP Enterprises (HP).

According to the federal agency Center for Medicare and Medicaid Services (CMS), the RACs receive MORE compensation if the RACs find noncompliance and LESS compensation for finding instances in which the State  UNDER-paid a health care provider.

If the RAC finds noncompliance (as in the provider owes money back to the State), the RAC is paid on contingency. Now every state does not pay the same contingency rate to the RACs. The federal government allows some variation.  But the chart below represents the percentage of the money recouped by the health care provider that the RAC receives as payment.

Contingency Fee Percentages – Overpayments: Data Table

State Percentage
Alabama1 12.5
Arizona 12.5
Colorado 11
Connecticut 9.3
Georgia 12.5
Indiana 10.5
Iowa2 12.5
Kansas3 17
Kentucky 12.5
Mississippi 9.49
Missouri 12
MEAN 10.94
Nevada 8.75
New Hampshire4 11.5
New Jersey 11.5
New Mexico 10.5
New York 5.25
North Carolina 11.5
North Dakota 9.95
Ohio 10
Oregon 9.4
Pennsylvania5 11.57
South Carolina 11.9
Tennessee 12
Virginia 9.3
Washington 9.9

So North Carolina is paying the RACs 11.5% of all money recouped by health care providers for “noncompliant documents.”  For example, if PCG determines that Provider X owes $500,000.00 to DMA  because of noncompliant paperwork, PCG is paid $57,500.00. Nice to know that we pay over the mean.

Now, what about these alleged UNDER-payments? As in, the RAC determines that the State did not pay the providers enough…

Again, this varies state to state. North Carolina pays the RACs a flat fee of $100.00 for finding underpayments. One hundred dollars.

I find myself almost at a loss of words.

Imagine you are the CEO of PCG. As CEO, you are concerned about the profit of the company. Would you tell your employees to investigate OVER-payments? Or UNDER-payments?
I still would LOVE to hear from any provider who has received a Tentative Notice of Underpayment.