Nursing Home Emergency Preparedness: New CMS Checklist and Proposed Regulations

By on May 14, 2014

Following recent natural and man-made disasters such as 9/11, Hurricane Katrina, and other floods and fires, the federal government has increased its focus on emergency preparedness.  Federal regulations – 42 C.F.R. § 483.75(m) – require that Medicare- and Medicaid-certified nursing homes have written emergency plans and provide employees with emergency preparedness training.

The Centers for Medicare & Medicaid Services (CMS) provided information to health care providers, including nursing homes, about emergency preparedness in Survey and Certification Letter S&C-08-01, issued on October 24, 2007.  This guidance provides answers to frequently asked questions and resources on emergency preparedness planning resources.

In a 2012 report, the Office of Inspector General (OIG) reviewed state survey data for emergency preparedness in nursing homes.  Although most long-term care facilities had emergency plans, the majority of the plans were wholly inadequate.  Half of the sampled plans contained only 50 percent of the CMS-recommended checklist items, according to the OIG’s “Gaps Continue to Exist in Nursing Home Emergency Preparedness and Response During Disasters: 2007-2010.”

On February 28, 2014, CMS issued Survey and Certification Letter S&C-14-12, a revised emergency preparedness checklist.  Some of the key items in the checklist are the following:

  • Collaborate with local emergency management agency: Work with local emergency management agencies to ensure the development of an effective emergency management plan.
  • Analyze each hazard: Analyze the specific vulnerabilities of the facility and determine actions for each identified hazard.
  • Decision criteria for executing plan: Include factors to consider when deciding whether to evacuate and shelter in place. Determine decision-maker, and chain of command.
  • Develop shelter-in-place plan: Provide for various emergency measures, such as assessing whether the facility can withstand the threat, measures to secure the building, at least seven days worth of resources such as food and power, and security plan.
  • Develop evacuation plan: Consider factors such as pre-determined evacuation locations, evacuation routes, and adequate food supply and logistical support.
  • Communication infrastructure contingency: Develop communication plan in the event of telephone failures, such as walkie-talkies and ham radios.

Concluding that current emergency preparedness regulatory requirements are not comprehensive enough to address the complexities of actual emergencies, CMS issued a proposed rule that 17 different providers and suppliers must meet to participate in the Medicare and Medicaid programs.  “Medicare and Medicaid Programs; Emergency Preparedness Requirements for Medicare and Medicaid Participating Providers and Suppliers,” 78 Fed. Reg. 79081 (Dec. 27, 2013).  The proposed rule addresses the following gaps that CMS believes exist in the current regulations: (1) communication to coordinate with other systems of care with local jurisdictions; (2) contingency planning; and (3) personnel training.

Because long-term care facilities are unique among other health care providers as many of the residents can be expected to have long-term or extended stays, the proposed rule also requires these facilities to develop an emergency preparedness communication plan.  The emergency preparedness communication plan would include a means of providing information about the general condition and location of residents under the facility’s care.

Finally, the proposed rule for long-term care facilities also requires emergency plans to utilize an “all-hazards” approach, which, in an emergency situation, would include a directive to account for missing residents.

In light of the new checklist and CMS’ recent focus on emergency preparedness, health care providers, including nursing homes, should evaluate their emergency preparedness plans.  In addition, facilities should look out for new emergency preparedness regulations.

Filed under Emergency Preparedness, Medicaid, Medicare, Nursing Home Regulations

When a Child Is Eligible for Medicaid But the Parent Isn’t

By on January 30, 2014

I saw this story over the weekend.  It discusses an unfortunate loophole in the Affordable Care Act whereby a child is eligible for Medicaid (and therefore ineligible for premium support on a state exchange), but the parents aren’t, oftentimes meaning that the family can’t go to the same doctors.  I was curious as to whether this was a problem in Colorado, so I pulled up the eligibility chart.

HC BLOG_parentHere it is.  And yes, this could be a problem, but probably only at the margins.  Children will be eligible for Medicaid if they come from a household with a modified adjusted gross income (MAGI) 142 percent of the poverty line or less.  (Note: There is a 5 percent income disregard when determining MAGI, so the child eligibility limit effectively is 147 percent.)  The exact amount depends on the size of the household, but for a family of four, it’s $2,787 a month.  Adults, in contrast, must have an MAGI less than 133 percent of the poverty line (effectively 138 percent because of the disregard).  For that same family of four, that’s a household MAGI of $2,611.  That means that if the household’s annual income is more than $32,981 and less than $35,204 (those figures add back in the income disregard), it’s going to fall in the hole where the kids have to get health coverage from Medicaid and the adults have to go on Connect for Health Colorado.

Some may object, arguing that it may be inconvenient to have different doctors, but the kids on Medicaid will get free health care.  Sure, but it’s not as big of a benefit as one might imagine.  It’s actually no benefit at all.  According to this really awesome subsidy calculator by the Kaiser Foundation, the average silver plan policy for the hypothetical four-person family in Colorado making $34,000 a year would run $1,248 in out-of-pocket costs (i.e., after the premium support subsidies) if it covered just the parents.  That same average policy would be – you guessed it – $1,248 if you add the kids.  This should make sense, because the subsidies are intended to cap out-of-pocket costs at a percentage of income, which goes up as the income increases and, in both of my examples, the family makes the same $34,000.  The actual premiums for the hypothetical family are substantially higher covering the kids – $8,324 vs. $5,338 – but the family doesn’t see them.

Here’s the craziest part of this.  Adding those two kids to their parents’ policy costs $2,986, even though the parents won’t see the increase.  But that’s still money going into the insurance company’s pocket – and for two insureds who are unlikely to cost much (kids tend to be healthy) – so the insurer will be happy to take the additional business.  And how much will it cost Medicaid to have them enroll?  According to this report from the Centers for Medicare & Medicaid Services, in 2011, the average child on Medicaid cost $2,851.  So you have a situation where the parents would prefer their children to be on their policy, the insurance company would prefer for the kids to be on the policy, and it costs the state and federal governments almost twice as much for the government to put them on Medicaid and not have them on the policy.  I can think of a few choice words to describe this mess.

This needs to be fixed ASAP.  Yes, the number of Colorado households in the couple-thousand-dollar sweet spot probably won’t be enormous, but everyone would benefit if we could avoid this fiasco.

Image courtesy of Flickr by Spirit-Fire

Filed under Medicaid

CMS Nursing Home Regulatory Guidance — 2013 Developments

By on January 15, 2014

The Centers for Medicare & Medicaid Services (CMS) periodically issues guidance on federal nursing home regulations in the form of a memorandum to state survey agency directors.  The survey and certification memos can assist nursing homes in survey preparation and other regulatory compliance efforts.  Some of the important 2013 CMS guidance is summarized below. 

HC BLOG_nursing homeCardiopulmonary Resuscitation (CPR): Nursing homes should examine their CPR policy for compliance with recent CMS guidance.  S&C Memorandum, No. 14-01-NH.  According to CMS, nursing homes cannot implement facilitywide no-CPR policies.  Facility policy should specifically direct staff to initiate CPR when cardiac arrest occurs for residents who have requested CPR in their advance directives; who have not formulated an advance directive; who do not have a valid do not resuscitate (DNR) order; or who do not show American Heart Association (AHA) signs of clinical death as defined in the AHA Guidelines for CPR and Emergency Cardiovascular Care.  In addition, facility policy should not limit staff to calling 911 when cardiac arrest occurs.  Before emergency medical services arrive, nursing homes must provide basic life support, including CPR, to a resident experiencing cardiac arrest in accordance with an advance directive, or if there is no advance directive or DNR order.

Although CMS acknowledges that CPR is ineffective in the elderly nursing home population, CMS notes the changing demographics in nursing homes.  In 2011, approximately one in seven nursing home residents were under age 65, many of whom were short-stay residents.  In addition, nursing home residents have become more ethnically diverse, which emphasizes the need for full implementation of advance directives and individualized care, CMS says.

The guidance states that nursing homes must ensure that CPR-certified staff is available at all times to provide CPR when needed.  However, CMS does not address which agencies can certify nursing home staff in CPR.  Because CMS refers to the AHA’s standards, it is likely that CMS would deem AHA CPR certification acceptable.

Access and Visitation Rights: CMS has issued a reminder concerning the right of nursing home residents to receive visitors.  S&C Memorandum No. 13-42-NH.  Nursing homes must provide 24-hour access to all individuals visiting with the resident’s consent.  However, certain visitors can be subject to reasonable restrictions designed to protect the security of all residents in the facility, such as denying access to individuals who engage in disruptive behavior.  Because CMS is reminding surveyors to ask during resident and family interviews if they understand that visitors are allowed 24 hours per day, nursing homes should review their visitation policies, as well as the implementation of these policies, to ensure that visits are not being limited or restricted against residents’ wishes, unless there is a reasonable restriction.

Naso-Gastric Tubes: CMS has revised surveyor guidance relating to naso-gastric tubes by expanding and clarifying the definition of naso-gastric tubes.  S&C Memorandum No. 13-17-NH.  Since CMS issued the regulation relating to naso-gastric tubes, found at 42 C.F.R. § 483.25(g), their use has become extremely rare, while the use of other types of enteral feeding tubes has become prominent.  The surveyor guidance expands the definition of naso-gastric tubes to include any feeding tube used to provide enteral nutrition to a resident by bypassing oral intake, such as a gastrostomy tube, jejunostomy tube, and a transgastric jejunal feeding tube.  Nursing homes should review their policies and procedures to ensure compliance with 42 C.F.R. § 483.25(g) for all residents who receive nutrition other than through oral intake.

Dementia Care: CMS has issued surveyor guidance relating to nursing home residents with dementia.  S&C Memorandum No. 13-35-NH.  The guidance expresses concern about the practice of using psychopharmacological medications to try to address behaviors without first determining whether there is a medical, physical, functional, psychological, emotional, psychiatric, social, or environmental cause.  CMS has created surveyor training about behavioral health and dementia care and updated the interpretative guidance in Appendix PP.  Based on the increased scrutiny of residents with dementia and the use of medications, nursing homes should review dementia care practices, including ensuring that medications, such as antipsychotics, are being used with adequate rationale.

Apparently nursing homes are doing a good job decreasing the use of antipsychotic drugs.  Several months after CMS issued its surveyor guidance on dementia care and drug use, it issued a press release stating that new data show that antipsychotic drug use is down in nursing homes nationwide.  The data show that nursing homes are using antipsychotic drugs less and pursuing more patient-centered treatment for residents with dementia and other behavioral health issues.

Image courtesy of Flickr by Sima Dimitric

Filed under Medicaid, Medicare, Nursing Home Regulations

Another Day, Another “Temporary” Medicaid Suspension Post

By on December 10, 2013

This isn’t that recent, but I was reading something else that reminded me of the ongoing proceedings involving alleged Medicaid fraud in the New Mexico behavioral services industry.  Knicole Emanuel has written and presented on this.  Just as we saw with (alleged) orthodontic fraud in Texas in 2012, and as we are seeing with the substance abuse treatment industry in California, last summer New Mexico Medicaid regulators became aware of possible fraud in a particular field, and they responded with a large-scale effort to shut down many or most of the providers in the industry.  This campaign had the added wrinkle that New Mexico apparently decided to go the extra mile and bring in a new company to take over management of the target facilities.  So there wasn’t even a pretense of “temporarily” suspending payments or licenses – New Mexico Medicaid just wanted the people running the operations out of the business, and the sooner the better.

This reminded me that I owe everyone a proposal on how to address the problems inherent in using temporary suspensions as de facto Medicaid provider exclusions (but with a lower burden of proof, and without many of the due process protections afforded to providers before they can be excluded).  If you recall, the problem is that it’s very hard to reconcile two fundamental principles. First, we don’t want to let shady providers continue to bilk Medicaid out of taxpayer dollars by running a fraudulent operation, and we certainly don’t want to keep paying them for services we suspect might be fraudulent.  And second, it is wildly unfair to use temporary suspensions as an easier-to-prove substitute for provider exclusion from the Medicaid program.

This actually isn’t all that novel of a dilemma.  There are many situations where we want to make sure that an entity suspected of wrongdoing doesn’t continue to engage in it or profit from it, but at the same time, we don’t want to see the entity cease to exist as a viable operation, at least without a manageable wind-down.  In the health care context, the most obvious example is a nursing home or other long-term care facility that is tagged with an unacceptable number of deficiencies during a survey.  On the one hand, the state licensing agency is usually unwilling to let the facility try to fix the problems itself.  On the other hand, shutting down a nursing home can be an enormously difficult and painful process.  It’s not like you can just turn the sign on the door to “CLOSED” – you usually have to find beds for hundreds of hard-to-transport patients, which can be a nightmare for them and their families.  In those cases, the licensing agency often will bring in an outside consultant to prepare and implement a plan of correction.  Here is an example of one such company providing those sorts of services.  The independent consultant will sometimes even stay at the company for some set period of time to monitor compliance.  And this is just an industry-specific example of the broad corporate compliance monitor trend that has emerged over the past decade or so.

So why can’t we do that in the context of a Medicaid temporary suspension?  If there is “reliable evidence” or “credible allegation” of fraud – though not necessarily enough to support an immediate provider exclusion sanction absent further investigation – why not give the provider subject to the suspension the option of paying for an independent consultant or compliance monitor to come in and oversee operations until the investigation is resolved?  This monitor could make sure that the provider is conducting a legitimate business, and it could make sure the provider reserves enough money to satisfy any penalty or sanction that might be assessed.  This solution even would have the added benefit of signaling the providers most likely to be committing fraud – obviously, they won’t want an independent observer coming in and having full access to their books.

Now, a few caveats.  First, in cases where the suspected fraud is particularly egregious and/or uncontroverted, this shouldn’t affect the ability of Medicaid regulators to come in and shut down blatant criminals.  But they can do that under the existing provider exclusion framework; if that’s too difficult or onerous for regulators, it’s a problem, but one that should be addressed directly by changing that framework.  Second, there is no dispute that it will be tough to strike the balance between releasing enough withheld claims to give the provider the funds they need to maintain operations, while at the same time, making sure there is enough money held back to account for any fraudulent claims (or even just to reimburse Medicaid for any nonfraudulent overpayments, which in my experience, often is really what’s going on).  The devil is in the details on that score, and it’s going to have to be figured out on a case-by-case basis by the state, the company under investigation, and the independent consultant/monitor.

Finally, even under this sort of regime, the temporary suspension power should still be used judiciously.  It’s expensive to hire a skilled professional to come in and basically run a health care provider for months or (potentially) years at a time.  Some smaller – though ultimately innocent – providers no doubt will be driven out of the business, just as they are now.  But that’s the best compromise I can think of, at least for now.

Filed under Medicaid

Why State Medicaid Agencies Shouldn’t Use “Temporary” Withholding Actions as a Substitute for Terminating a Provider Agreement (a Follow-Up).

By on November 20, 2013

Here’s a quick follow-up to the last post.  I wrote:

(Note:  I’m not saying that the agency intends to use temporary suspension or withholding as a weapon to close down providers, just that it’s the way it works out sometimes.  I’m also not saying that it would be a bad thing to give state agencies the ability to come in and shut down providers altogether when there is sufficient evidence of fraud, just that it’s not or shouldn’t be the purpose of temporary suspension.)

I probably should say a little more about this.  I’m sure some of you are probably thinking “but if there’s reliable evidence or a credible allegation that a provider is defrauding the state Medicaid agency, why shouldn’t the agency shut them down during the pendency of the investigation?”.

My answer may surprise you.  I agree!  There should be a mechanism to terminate or revoke a provider’s Medicaid participation agreement when we have solid evidence of fraud.  But there already is.  Federal law provides that regulators can exclude providers from Medicaid for (among many other things) fraud.  Turning to Colorado specifically, Section 8.076.5 of the Department of Health Care Policy and Financing’s regulations allow it to terminate a provider’s participation agreement for “good cause,” which includes (also among other things) false representation and/or fraud.  Section 8.076.5.D(3) even says that HCPF can terminate immediately without notice where “[t]he termination is imperatively necessary for the preservation of the public health, safety, or welfare and observance of the requirements of notice would be contrary to the public interest.”

But there’s a big difference between the provider exclusion sanction and a temporary suspension remedy.  Perhaps paradoxically, providers facing a fraud-related termination have significantly more protection, both from a procedural standpoint as well as a substantive one.  Section 8.050 of HCPF’s regulations sets forth a detailed procedural regime governing provider appeals of adverse agency actions, specifically including the termination of a provider agreement.  It also includes notice and hearing requirements before the Office of Administrative Courts, as well as a provision contemplating that the presiding ALJ can stay the adverse action (termination) pending the appeal.

Section 8.076.4, on the other hand, has none of these due process protections.  It merely contemplates that notice of withholding or suspension must advise the provider that it can submit written evidence to the department.  (Which, incidentally, is all that is required by 42 CFR § 455.23.)

To be sure, Section 8.076.4.A provides that providers will have appeal rights upon request, and at least as of a few years ago (when I was representing it), it was HCPF’s practice to refer withholding appeals to an ALJ – which is substantially more due process than required by federal law or provided by many states, I should add.  But what the agency has to prove in a suspension withholding action is entirely different than what it must prove in a termination proceeding.  Under the state APA (specifically C.R.S. § 24-4-105), HCPF has the burden of proof to show that its action (whether that’s withholding or termination) is warranted.  So in the termination context, it must show that the provider committed false representation or fraud.  In the temporary withholding context, though, it only needs to show that there is reliable evidence of fraud (or a credible allegation of fraud under the current version of 42 CFR § 455.23).

Do you see the distinction?  Let’s say that HCPF (or any other state Medicaid agency – virtually all of them have similar provisions, though some use the old “reliable evidence of fraud” language, whereas others have switched to the more expansive “credible allegation of fraud terminology)) comes in and investigates a provider and notices that half of the patient files are missing.  It’s hard to dispute that this meets the “reliable evidence” or “credible allegation” standards, regardless of which one applies in the particular state.  But what if the files are missing because the provider keeps the N through Z files in a different file cabinet, and the temporary receptionist who let the investigators in didn’t realize it at the time?  It seems clear in that case, when the ALJ actually makes a factual finding, he or she almost certainly will conclude that there is no fraud (at least based on the missing files).  So you have a case where there clearly is some reliable evidence or credible allegation of fraud, though ultimately, the evidence taken on the whole should end up exonerating the provider.

Obviously, that’s an extreme case, and if there really was a perfectly innocuous – and uncontroverted – explanation for the otherwise “reliable evidence” or “credible allegation” of fraud, any state Medicaid agency would immediately rescind the temporary suspension or withholding, or the ALJ would stay it.  But there certainly are a lot of hypotheticals where it’s a closer call, or where the provider might be able to convince an ALJ – but not Medicaid investigators and regulators – that it didn’t commit fraud, reliable evidence and/or credible allegation aside.  In those cases, the distinction between proving fraud and proving that you have reliable evidence (or credible allegation) of fraud can be enormous.

So that’s why – in my opinion – it’s problematic for state Medicaid agencies to use temporary suspension withholding actions as a substitute for provider termination.  They often afford the provider less procedural protection, and they always have a much lower effective burden of proof.  Stay tuned for a future post on what I’d suggest to correct this issue.

Filed under Medicaid

Why Do Colorado Insurance Exchange Applicants Need to Disclose Asset Information?

By on October 28, 2013

There have been a couple of recent articles about Colorado’s experience enrolling people in expanded Medicaid and qualifying them for subsidies on the state-run insurance exchange.  One problem is a lengthy application form asking for all sorts of personal and financial data, including the applicant’s assets. If there are errors entering the data, the computer system freezes the application, and approval can take weeks.

And why do people who want to access the exchange need to apply for Medicaid first?  There are two main reasons.  The first is that Section 1413 of the Affordable Care Act (ACA) requires there to be a single, streamlined application to allow people to access all health financing options (Medicaid, exchange subsidies, etc.) under the law, although it permits the federal Department of Health and Human Services or various states to do this).  For those who make less than the Medicaid expansion cutoff (138 percent of the poverty line, or about $15,900 per year), the ACA originally assumed they would be eligible for Medicaid and thus eliminated any insurance subsidies.  Since the U.S. Supreme Court’s opinion in National Federation of Independent Business v. Sebelius made Medicaid expansion optional for the states, people in opt-out states making less than that amount are in a really bad position – too wealthy for Medicaid, but not wealthy enough for exchange subsidies.  The point is that before people are deemed eligible for the exchanges, whoever considers their applications must conclude they are not eligible for Medicaid.

That brings us to the second reason why the Department of Health Care Policy and Financing wants to know about applicants’ assets, even though it’s not really pertinent for Medicaid eligibility (and it’s certainly not pertinent for exchange subsidy eligibility).  Colorado has long used a horizontally integrated public benefits admissions process to determine eligibility for public assistance programs.  When people apply for Medicaid, they are automatically considered for the Children’s Health Insurance Program, the Supplemental Nutrition Assistance Program and a number of other welfare programs.  Sound like a potential mess?  You could say that.

Mess or not, the system remains in place to this day.  Before a Colorado resident qualifies for exchange subsidies, he or she must submit an application that it used for Medicaid and all public assistance programs.  It’s called the Program Eligibility and Application Kit (PEAK).  One of the programs for which PEAK determines eligibility is the Medicaid Long-Term Care Program, which pays for nursing facility care for recipients over age 65.  Unlike traditional Medicaid, the eligibility test for that does include a maximum asset component – generally, an applicant won’t be eligible if he or she has more than a couple thousand dollars of qualifying assets (under the theory that those with valuable assets should sell them to pay for their own nursing care before making taxpayers do it).

And there you have it.  That’s why people applying for subsidies on the Colorado health insurance exchange need to disclose various assets, and (indirectly) why the applications of many people are frozen and sent to weeks-long limbo.  Funny thing is, the whole single application and horizontal integration was supposed to make it easier for public assistance applicants, not harder.

Filed under Affordable Care Act, Federal Exchange Subsidies, Medicaid

The Future of Medicaid Secondary Payer Reporting Regimes (Part III) – Medicare Secondary Payer Reporting and Medicaid Liens

By on October 22, 2013

Let’s do a three-sentence recap of the first two posts on this subject.  Medicaid is a federal-state partnership that pays for health care for poor people with a combination of federal and state dollars.  The Affordable Care Act recently expanded the recipient population to any persons making 133 percent or less of the federal poverty line, and it changed the makeup of the federal-state funding for this group so that all of the dollars until 2016 – and at least 90 percent after that – are from the federal government.  Finally, to the extent that a third party caused an injury that requires medical care paid for by Medicaid, the state Medicaid agency will have a lien against any judgment or settlement against that third party – but it will have to pay the federal government back its share.

See the problem?  The state is the one that needs to spend the time and resources chasing judgments or settlements that it may have some claim against.  But if it has to repay all (or nearly all) of the federal portion of that amount, what incentive will it have to go after liens against the Medicaid expansion population?  It’s all pain and no gain!

If you can see that, and I can see that, you can be pretty sure CMS can see that as well.  That’s one of Mary Re Knack and David Farber’s main points – this dynamic whereby states have the obligation but not the incentive to recover Medicaid lien funds is unsustainable, and we should expect to see some efforts by the federal government to correct this flaw.

What might those be?

(1)  The federal government could take over the job of pursuing Medicaid lien funds.  I’m not going to talk about that, because it’s wildly unrealistic, but more importantly, because there’s just not much I can say about it.

(2) Remember how CMS pays state Medicaid agencies?  The state provides a quarterly estimate of how much it thinks it’s going to spend over the next three months, and the federal government fronts its share of that – but only after it adjusts for any overpayment (or underpayment) from the prior quarter.  CMS could just deduct an amount corresponding to the lien funds from the quarterly advance, and if the state wanted to make up that deficiency, it would have to take action itself.  But there are three problems with this.  First, it seems draconian for the federal government to deduct a lien amount up front, when the state Medicaid agency might be able to recover it at some undetermined point in the future.  Second, states currently forego pursuing reimbursement actions for the vast majority of settlements and judgments – they are just too small to make it worth the Medicaid agency’s time to pursue them.  That discretion would vanish if CMS started deducting all potential lien amounts from its quarterly payments.  Third, and perhaps most importantly, how would CMS even know about settlements or judgments potentially subject to a Medicaid lien?  More on this in a second.

(3) There is one final way that the federal government could incentivize states to pursue settlements and judgments.  It could reimburse state governments for any costs associated with an attempt to recover Medicaid liens, by paying directly for those costs or (more likely) by paying a percentage of the recovery.  This is more promising, but it begs an important question – would a reasonable fee in successful lien cases be adequate to reimburse the state for monitoring and enforcement costs, which typically are incurred in all cases?  In other words, a state must pay for some sort of monitoring system to flag settlements and judgments; this will (presumably) identify a subset of settlements or judgments potentially subject to a Medicaid lien; the state will go after some smaller percentage of those settlements and judgments that are sufficiently large (and have sufficiently high prospects of success) to justify the effort; and the state will succeed in some smaller percentage of those reimbursement actions.  Any contingency fee paid off of recoveries in that last, smallest group of cases must be large enough to pay for all monitoring and enforcement costs.

What should be apparent from the last couple of points is that monitoring costs are hugely important.  While the Section 111 program has been more or less successful, it’s probably impracticable for states – or at least many of them – to duplicate it.  But it’s not realistic to operate under a beneficiary self-reporting system, like most states (including Colorado) do today.  As I mentioned before, the incentive for plaintiffs to report settlements or judgments that they then would have to give back is just too great for that sort of system to function.

I have an idea of a different sort of reporting system.  I know I said three posts on this topic, but we’re going to have to make it four.

Filed under Medicaid, Medicare

The Future of Medicaid Secondary Payer Reporting Regimes (Part II) – Medicare Secondary Payer Reporting and Medicaid Liens

By on October 12, 2013

In my last post, I offered a general overview of the federal-state Medicaid partnership and the impact of the Affordable Care Act (ACA).  So now we know about the broad framework of Medicaid and how it’s funded.

Let’s switch gears and talk about a new subject – secondary payer issues.  Oftentimes, when someone requires medical care for an accident, some third party is legally responsible for the injury.  Some good examples are an employer being responsible for a workplace injury, or a toxic tortfeasor being held responsible for injuries it causes.  In that scenario, if Medicare or Medicaid pays for care related to the injury, the agency will have a statutory lien against any judgment or settlement obtained from the third party.

But a lien is worthless if no one knows about the settlement or judgment, right?  Historically, the Centers for Medicare and Medicaid Services (CMS) tried to overcome that obstacle by requiring Medicaid beneficiaries to refund any judgment or settlement owed to Medicare within 60 days.  The problem is that sort of “honor system” approach left a lot of secondary payment dollars on the table.  So, since 2007, CMS has used the Section 111 program (called that because it was enacted as Section 111 of the Medicare, Medicaid and SCHIP Extension Act) to require reporting of certain entities (mostly insurers) that are likely to pay money subject to a Medicare lien.  In other words, Section 111 effectively puts the burden on the payer – as well as the beneficiary – to report any settlement or judgment.  (There’s actually a lot of academic and practice-based criticism over Section 111, but since these posts are mostly about Medicaid, I’ll refrain from getting into them.)

As I mentioned above, state Medicaid programs have a similar requirement that the state agency must have a lien over any settlement or judgment intended to pay for medical treatment that was already paid for by Medicaid.  I should note – although it’s not directly relevant to my point – that in its 2006 Arkansas Department of Health and Social Services v. Ahlborn decision, the U.S. Supreme Court interpreted  the federal anti-lien statute to restrict the amount of the lien to the portion of the settlement attributable to health care costs.  Colorado’s, for example, is at C.R.S. 25.5-4-301 (I can’t link to the specific statute, but interested readers can click through here).  It allows:

When the state department has furnished medical assistance to or on behalf of a recipient pursuant to the provisions of this article, and articles 5 and 6 of this title, for which a third party is liable, the state department shall have an automatic statutory lien for all such medical assistance. The state department’s lien shall be against any judgment, award, or settlement in a suit or claim against such third party and shall be in an amount that shall be the fullest extent allowed by federal law as applicable in this state, but not to exceed the amount of the medical assistance provided.

Note:  The italicized phrase is what makes the statute consistent with Ahlborn, as the U.S. District Court for the District of Colorado recently observed (click through for a Word version of the decision).  Disclosure:  This case was litigated by my friend and former boss while I worked at the Colorado AG’s office, though I had no involvement with it.

So what’s the difference between the Medicare and Medicaid lien programs?  It’s Section 111 and the absence of anything remotely resembling it in virtually every state (with the notable exception of Rhode Island).  Most states have some sort of reporting requirement – Colorado, for example, requires Medicaid recipients and their representatives and attorneys to report any settlement or judgment that might be subject to a Medicaid lien.  But anything that relies on a beneficiary doing something that might take significant dollars out of his or her pocket is problematic at best.

One last thing:  Remember how Medicaid funding is structured from Part I?  It’s not all state money, not even close; instead, the federal government provides at least 50 percent and (depending on the state) as much as 75 percent of Medicaid dollars.  When a state Medicaid agency collects on a Medicaid lien, the feds want their share back as well.  Still, getting a quarter-to-half of a judgment or settlement back is better than nothing, right?  Discerning readers should see where I’m going with this.  Stay tuned.

Filed under Affordable Care Act, Medicaid

Medicaid Maintenance of Effort and Program Cuts – How Is It Supposed to Work?

By on October 11, 2013

This is interesting.  In 1996, the federal government passed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), which, among other things, eliminated Medicaid eligibility for a large swath of noncitizens.  PRWORA did, however, allow states to use state dollars to pay for these noncitizens’ health care if they so desired.  Maine did desire; Colorado didn’t.  Fast forward to 2012, when Maine passed a massive Medicaid overhaul, cutting eligibility for thousands.  (Maine actually sued in the First U.S. Circuit Court of Appeals to expedite the Centers for Medicare and Medicaid Services’ review of the cuts, but that lawsuit was summarily dismissed).  In January 2013, CMS approved some of these cuts, which included slashing noncitizen eligibility, and advocacy groups filed a class action challenging the measure on equal protection grounds.  In March 2013, the federal court denied the plaintiffs’ motion for a preliminary injunction, and they appealed to the First Circuit.

Since I’m a health lawyer, I’m not really interested in the merits of the equal protection claim.  But reading about the case and the background of the Maine Medicaid cuts brought to mind another issue that I’ve been thinking about a lot over the past few years – the so-called Medicaid maintenance of effort (MOE) requirement.  This is a provision included in the Affordable Care Act (ACA) that prohibits states from cutting Medicaid eligibility as it existed when the law was passed in 2010 until 2014 (for adults) or 2019 (for kids).  The purpose of the measure, which was an extension of a similar MOE requirement in the 2009 stimulus law, was twofold.  First, it was intended to ensure that states did not respond to the economic hardship in 2009 and subsequent years by cutting Medicaid eligibility, and second, it was meant to preserve eligibility for the near-poor until the subsidized state exchanges opened in 2014.

But here’s the thing.  There’s a lot of uncertainty surrounding the MOE requirement.  As a threshold matter, it’s unclear whether the provision – which was included in the Medicaid expansion part of the ACA – survived the Supreme Court’s 2013 decision in National Federation of Independent Business v. Sebelius, specifically the part that allowed states to opt out of that expansion.  The general consensus is that it did because NFIB didn’t actually invalidate the expansion – it just allowed states to opt out of it.  That’s never been tested, though (it would have been if the First Circuit had heard Maine’s lawsuit), so we just don’t know.

There’s another area of uncertainty surrounding the ACA’s MOE provision: What type of eligibility cuts does it encompass?  Something like Maine’s proposed plan to slash eligibility for a vast number of previously covered populations is a no-brainer.  Indeed, that seems to be pretty much what the MOE requirement was meant to address.  But what about the sort of judicial and administrative tweaking of in-place eligibility requirements that goes on all the time?  For example, in a case I was involved in, the dispositive issue was whether children with (solely) mental or behavioral disabilities were eligible for a program designed to assist children with medical disabilities severe enough to put them at risk for institutionalization in a nursing facility.  The court of appeals said they weren’t, but let’s pretend the decision came out the other way.  I don’t know for sure, but it’s possible that the state Medicaid agency would have wanted to amend its regulations to clarify that these kids weren’t eligible (unless anyone thinks the Colorado Department of Health Care Policy and Financing is heartless, the children were eligible for another program, albeit one with a waiting list).  Would the ACA MOE requirement have prevented the agency from doing that?  If so, you really have to ask if Congress intended the MOE provision to be used as a one-way ratchet, essentially locking in recipient-favorable state judicial determinations regarding eligibility.  It’s hard to believe that’s true.

I may revisit this issue, but for now let’s conclude by turning back to the Maine noncitizen eligibility case pending in the First Circuit.  I’m curious about one thing.  The plaintiffs’ position is that the noncitizen Medicaid program is part and parcel of the broader state Medicaid program (called MaineCare).  For reasons too complicated to address here (but read the district court’s preliminary injunction and 12(b)(6) decisions for the gory details), if it is, then the plaintiffs probably have a cognizable claim, but if it isn’t, they don’t.  Given that, why didn’t the plaintiffs’ attorneys raise the MOE requirement as separate grounds to invalidate the cuts?  It would seem to follow from their argument – cutting eligibility for an entire previously covered population appears to be what the ACA was meant to stop.  For that matter, why didn’t the state raise the fact that Maine didn’t see the need to submit the noncitizen eligibility cut to CMS for approval in 2012, and CMS didn’t see the need to address it when considering the other proposed Medicaid cuts in January?  Isn’t this prima facie evidence that the state and the feds see noncitizen coverage as something that’s separate and distinct from the traditional Medicaid program?  It makes me wonder if I’m missing something.

Filed under Affordable Care Act, Medicaid

The Future of Medicaid Secondary Payer Reporting Regimes (Part I) – The Federal-State Medicaid Partnership and the ACA

By on October 3, 2013

From the outset, I need to credit Mary Re Knack and David Farber for an excellent webcast they did on this subject on Oct. 1, 2013.  I subscribed to it even though I’ve got all of my general CLEs for the reporting period (though if anyone knows of any interesting ethics CLEs, I’d appreciate the heads-up).  I wasn’t disappointed.  It was hugely informative, and in main part, it’s the impetus for this series of posts.

So what is the federal-state Medicaid partnership and how has that arrangement been affected by the Affordable Care Act (which everyone calls the ACA)?

Medicaid is a program designed to help poor families and individuals.  It has federal and state components.  But how does that work?  The federal government (through the Centers for Medicare and Medicaid Services, which everyone calls CMS) tells the states the minimum groups that they must cover if they want to participate in Medicaid, and it identifies certain other groups that the states can elect to cover if they want to.  CMS also sets the mandatory and optional benefits that must (or may) be provided to eligible beneficiaries.  In exchange, the federal government provides a good chunk of the funding for the state Medicaid programs – anywhere from 50 percent up to 75 percent depending on the state.  Although a state theoretically could opt out of Medicaid, in practice, none have.

Each state that participates in Medicaid (again, all of them) is required to establish a “single State agency” to administer and supervise the state Medicaid plan.  In Colorado, that’s the Department of Health Care Policy and Financing.

The precise mechanics of the Medicaid reimbursement process are a bit complicated, but in general, a state will file a statement once a quarter that estimates its total Medicaid costs and certifies that it will be able to come up with its share of those expenses. Then the federal government hands over the matching funds.  At the beginning of the next quarter, the state files a reconciliation statement detailing what it actually spent.  CMS will adjust its payment of the matching funds for that period based on whether it owes (or is owed) additional money.  Trust me, you’ll see why this is important a couple of posts from now.

In addition to the traditional Medicaid-eligible populations and covered services, states are allowed and encouraged to experiment with test programs, called “waiver” programs (because states must get a waiver from CMS before implementing them).  For example, one typical waiver program is Colorado’s Children’s Waiver, which is designed to provide home-based care for physically disabled (but not mentally or behaviorally disabled, as the Colorado Court of Appeals has said) children who would otherwise be at risk of institutionalization in a nursing facility or hospital.

Enter the Affordable Care Act, aka Obamacare.  Among its many moving parts, it included an expansion of Medicaid eligibility to anyone under age 65 making less than 133 percent of the poverty level, regardless of whether they have children or a disability (in most states, childless, nondisabled adults were flat-out ineligible for Medicaid).  This is a pretty drastic expansion of the program, increasing the state rolls by more than 20 million, or about a third of the pre-expansion population.  In return, the federal government will pay 100 percent of the increased Medicaid costs until 2016, with the state share increasing to no more than 10 percent by 2020.

Originally, participation in the Medicaid expansion program was tied to a state’s ability to offer Medicaid in any form.  This means that if a state declined to expand Medicaid eligibility as contemplated by the ACA, it would lose all Medicaid funding.  However, the U.S. Supreme Court put a stop to that in its monumental 2013 National Federation of Independent Business v. Sebelius decision.  There, the court held that conditioning all federal Medicaid funds on a state’s decision to accept the ACA expansion was too coercive to pass constitutional muster, and it required the federal government to permit states to opt out if they so chose.  To date, more than half of the states have chosen to do just that.

Where does that leave us?  State-federal Medicaid partnership, check.  Federal matching funds, check.  ACA Medicaid expansion, check.  But what does that have to do with the Medicaid secondary payer reporting regime?  Stay tuned.

Filed under Affordable Care Act, Medicaid

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