Medicaid and the Risks to Providers Ivan J. Punchatz, Esq. - - PowerPoint PPT Presentation

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Medicaid and the Risks to Providers Ivan J. Punchatz, Esq. - - PowerPoint PPT Presentation

Medicaid and the Risks to Providers Ivan J. Punchatz, Esq. Shareholder, Healthcare Section Buchanan Ingersoll & Rooney Rich Skorupski, CIC, CRM, CPCU Senior Vice President Meeker Sharkey & Hurley Medicaid Background Medicaid


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Ivan J. Punchatz, Esq. Shareholder, Healthcare Section Buchanan Ingersoll & Rooney Rich Skorupski, CIC, CRM, CPCU Senior Vice President Meeker Sharkey & Hurley

Medicaid and the Risks to Providers

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Medicaid Background

  • Medicaid (Title XIX of the Social Security Act, 42 U.S.C. § 1396 et

seq.) enacted at same time as Medicare (Title XVIII, 42 U.S.C. § 1395 et seq.). Social Security Act Amendments of 1965, P.L. 89-97 (July 30, 1965).

  • Unlike Medicare, which is 100 percent federally funded and

administered, Medicaid is a cooperative federal-state program, voluntary and jointly funded by the federal government and participating states. – United States Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) – Single State Medicaid Agencies

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Medicaid Background (cont.)

  • States must comply with federal Medicaid standards,

including requirements as to the contents of their state plans, to qualify for federal financial participation (FFP).

  • There are significant variations in state Medicaid programs in

terms of: – Eligibility for benefits; – Covered services; and – Program administration (e.g., reimbursement).

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Medicaid Background (cont.)

  • Some contrasts with Medicare:

– Eligibility:

  • Elderly (Medicare)
  • Indigent, Disabled, Special Needs population (Medicaid)

– Funding and administration:

  • 100% federal (Medicare) via insurance
  • Federal-state collaboration (Medicaid) via public benefits

– Coverage:

  • Broader post-acute coverage in Medicaid (long-term care

services)

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Medicaid Background (cont.)

  • Mandatory

– Physician services – Lab and x-ray services – Inpatient hospital – Outpatient hospital – EPSDT for individuals under 21 – Family planning – Rural and federally qualified health care (FXHS) services – Nurse midwife services – Nursing facility (NF) services for individuals 21 and over – Home health for certain populations

  • Expansion Medical

– Essential Health Benefits (“Benchmark Coverage” and “Benchmark Equivalent Coverage”)

  • Optional

– Prescription drugs – Clinic services – Dental services, dentures – Physical therapy and rehab – Prosthetic devices, eyeglasses – Primary care case management – Institutions for individuals with intellectual disabilities, formerly intermediate care facilities for the mentally retard (ICF/MR) services – Inpatient psychiatric care for individuals under 21 – Personal care services – Alcohol and drug treatment

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Medicaid Background Eligibility

  • Different types of Medicaid include different

eligibility criteria and benefit coverage.

  • Mandatory Coverage Populations.
  • Optional Coverage Populations.
  • Medicaid Expansion Coverage (Optional with

states under Supreme Court’s decision in National Federation of Independent Business v. Sebelius –- NFIB, 132 S.Ct. 2566 (2012)).

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Medicaid Background

  • Medicaid covers 9.3 million non-elderly people with disabilities,

including 1.5 million children. Medicaid provides health and long-term care coverage for people with severe physical and mental health conditions and disabilities (e.g., cerebral palsy, Down Syndrome, autism). Often, these individuals cannot obtain coverage in the private market or the coverage available to them falls short of their health care needs. Medicaid provides people with disabilities access to a fuller range of the services they need, helping to maximize their independence and, in the case of some disabled adults, supporting their participation in the workforce. Medicaid covers a large majority of all poor children with disabilities.

Source: The Kaiser Commission on Medicaid and the Uninsured: Medicaid A Primer 2013

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Medicaid Background (cont.)

  • Medicaid Beneficiaries – 69.7 million (2014) (more than
  • ne in five Americans; Medicare enrollment was about

52.7 million at that time, though the numbers overlap because some individuals are dually eligible).

  • Medicaid Spending - $449.4 billion (2013) (about 15

percent of total national health expenditures; Medicare spending was approximately $585.7 billion or 20 percent

  • f total national health expenditures).

Source: The Kaiser Commission on Medicaid and the Uninsured: Medicaid A Primer 2013

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Single State Agency

  • The Division of Medical Assistance and Health Services

(DMAHS), under the Department of Human Services, is designated the single State agency for the administration of the New Jersey Medicaid Program.

  • New Jersey State Plan may be found at:

http://www.state.nj.us/humanservices/dmahs/info/state_plan.html

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State Plan

  • A submission by the State to the Federal Government to

enable the State to claim federal funds for health benefits provided to eligible beneficiaries.

  • Subject to review and approval by Secretary of Health

and Human Services (HHS) acting through the Centers for Medicare and Medicaid Services (CMS).

  • Must meet federal statutory and regulatory standards
  • State may obtain 1115 Waivers such as New Jersey’s,

which includes services for seniors, disabled and behavioral health services.

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§ 10:49-1.4 Overview of provider manuals

  • The Administration Manual is found at NJAC 10:49-1.1 et seq

and is applicable to all providers: a) The Medicaid Fiscal Agent and the Division of Medical Assistance and Health Services maintain New Jersey Medicaid and NJ FamilyCare provider manuals. Each is designed for use by a specific type of provider that provides services to Medicaid and/or NJ FamilyCare

  • beneficiaries. Each manual is written in accordance with

Federal and State laws, rules, and regulations, with the intent to ensure that such laws, rules and regulations are uniformly applied.

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§ 10:49-1.4 Overview of provider manuals

b) Each provider manual consists of two chapters, broken down into subchapters. The first chapter is referred to as N.J.A.C. 10:49, Administration Manual, and outlines the general administrative policies of the New Jersey Medicaid program and

  • ther special programs including NJ FamilyCare.

The second chapter of each manual specifies the rules and regulations relevant to the specific provider-type and the services provided. Following the second chapter of the manuals is the Fiscal Agent Billing Supplement.

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Enrollment

  • Pursuant to NJAC 10:49-3.1(b) following are permitted to

participate as providers:

  • 16. Mental health rehabilitation providers:

i. Residential child care facilities (see N.J.A.C. 10:77 and 10:127);

  • ii. Children's group homes (see N.J.A.C. 10:77 and 10:128);
  • iii. Psychiatric community residences for youth (see N.J.A.C.

10:37B and 10:77);

  • iv. Providers of behavioral assistance services for

children/youth or young adults (see N.J.A.C. 10:77-4);

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Enrollment (cont.)

v. Mobile response agencies (see N.J.A.C. 10:77-6); vi. Providers of intensive in-community mental health rehabilitation services (see N.J.A.C. 10:77-5);

  • vii. Programs for Assertive Community Treatment (PACT)

Agencies/Teams (see N.J.A.C. 10:37J and 10:76); and

  • viii. Community residences for mentally ill adults (see

N.J.A.C. 10:37A and 10:77A).

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New Supports Waiver

Allows DDD to continue in an administration and consulting role to DMAHS in the administration of benefits to adults eligible for DDD services and Medicaid benefits. Supports Program Policies and Procedures Manual included at: http://www.state.nj.us/humanservices/ddd/programs/ff s_implementation.html

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Payment for Services

  • Fiscal Agent Molina.
  • New Jersey Medicaid Management

Information System (NJMMIS) http://www.njmmis.com/.

  • Medicaid Managed Care Organizations.
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Additional Recordkeeping May Be Necessary

  • Medicaid requires appropriate certifications and

sign offs regarding prior authorization, services rendered, staff qualifications, etc.

  • Medicaid payment is subject to audit and

verification that all documentation requirements have been met.

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Submitting Claims

  • Each Provider Services Manual has information relevant to the basis of payment for services and items
  • f payment provided that is usually found in the second chapter of each manual.
  • A Fiscal Agent Billing Supplement is included following each Provider Services Manual. Included in the

Supplement are: – Prior authorization forms and instructions – Information for the proper completion and submission of claim forms – Procedure to follow when claims are rejected and returned to the provider by the Fiscal Agent during the adjudication process – Third-party liability verification – Procedure for submitting crossover claims and examples of timely submission of claims – Electronic media claims (EMC) submission – Remittance Advice Statements – Procedures for Electronic Funds Transfer (EFT) – Adjustments for overpayment of claims and adjustments by Medicare – Procedure to follow when a claim is paid in error (voids) – Procedure for inquiries about claims – Procedure for ordering forms – Information about provider services – Item-by-item instructions for completing the claim form and other forms.

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Submitting Claims (cont.)

  • The Fiscal Agent Billing Supplement is not published in

the New Jersey Administrative Code (N.J.A.C.) but is referenced as an appendix and is, thus, not a legal description of the New Jersey Medicaid program's rules. Should there be any conflict between the Fiscal Agent Billing Supplement and the pertinent laws or rules governing the Medicaid program or the charity care program, the laws and rules of the Medicaid program and the charity care program, as appropriate, take precedence.

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Timeliness of Claims

  • Must be received by Fiscal Agent within
  • ne year of the date of service.
  • One year of earliest date of service

entered on the claim if the claim carries more than one date of service.

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Support Program Policies & Procedures Manual

  • 12.1 Service Provider Responsibilities

– Maintain and follow standards, qualifications, regulations, policies, procedures, etc. – Develop strategies in collaboration with the individual receiving services to assist the individual in reaching his/her outcomes. – Complete and maintain documentation as required. – Claim for services according to Medicaid (Molina) standards and guidance. – Provide services and supports within the parameters indicated in the ISP. – Become familiar with the individual’s vision, outcomes, needs, etc. and provide services and supports accordingly. – Participate as a member of the Planning Team when identified in that role by the individual. – Complete and submit reporting documents as required. – Comply with monitoring, auditing, quality assurance measures conducted by DDD and/or Medicaid/Molina. – Comply with policies, standards, and procedures specific to the service being provided as described for each service in Section 17.

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Support Program Policies & Procedures Manual

  • 12.3 Claim Submission
  • The following factors must be in place in order to submit a claim for a Medicaid service:

– The delivery of service must be properly documented along with any deliverable documents necessary to substantiate the claim in the case of an audit. Services may have specific deliverable documents (such as strategies, time sheets, behavior plans) relevant to delivery of that service. Details about these documents are provided in Section 17. – The service that was provided must have a valid prior authorization, – The claim must include participant information and service information (such as Medicaid ID, diagnosis, procedure code, rate etc.) which can be found within the service plan and service detail report,

  • Service providers may submit claims for payment through the NJMMIS site

(www.njmmis.com) or through a software solution which can perform bulk electronic claim submission.

  • Training on how to submit claims and track their status through the NJMMIS site can be

provided by Molina Health Care. Molina provider services can be reached by calling 800.776.6334 or on the NJMMIS website through the option “Contact Provider Services.”

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Documentation Issues

  • Failure to complete the requirements of the manual for service.
  • Cookie cutter entries and lack of individual assessment.
  • Failure to document medical necessity.
  • Failure to have supporting documentation in the medical record.
  • Failure to sign and date.
  • Illegible entries/Timeliness of entries.
  • No prior authorization.
  • Lack of communication between clinicians and billers.
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Effects of Medicaid Provider Status

  • Agencies with Jurisdiction:

– DMHAS/DDD/DCF/DOH – DMAHS – CMS – Office of the Inspector General (OIG) HHS – Medicaid Fraud Division (MFD) of Office of State Comptroller, Department of Treasury – Medicaid Fraud Unit of Division of Criminal Justice (AG) – United States Attorney

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Support Program Policies & Procedures Manual

  • 15.1.2 Mandated Background & Exclusion Checks

– Service providers are required to check that staff hired, Board of Directors and contracted vendors utilized are not excluded from working with individuals with developmental disabilities or within a Medicaid provider agency. These checks include, but are not limited to:

  • Federal Databases – These databases must be checked upon hire and no less

frequently than ongoing monthly checks.

  • Office of Inspector General List of Excluded Individuals/Entities (OIG LEIE) – The

OIG has the authority to exclude individuals and entities from Federally funded health care programs and maintains a list of all currently excluded individuals and entities called the List of Excluded Individuals and Entities (LEIE). Anyone who hires an individual or entity on the LEIE may be subject to civil monetary

  • penalties. http://exclusions.oig.hhs.gov/.
  • System for Award Management (SAM) [Formerly the General Services

Administration Excluded Parties List System (GSA EPLS)] - The Excluded Parties List System is an electronic, web-based system that identifies those parties excluded from receiving Federal contracts, certain subcontracts, and certain types of Federal financial and non-financial assistance and benefits. http://www.sam.gov.

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Support Program Policies & Procedures Manual (Cont’d)

  • 15.2.1 Auditing

– Ongoing evaluation of service providers will occur to ensure compliance with Division standards and Medicaid claiming either via routine audits or other

  • methods. Methods of monitoring may include on-site visits, interviews with staff
  • r contractors, questionnaires, DHS/DDD Licensing and Certification

inspections, reviews of policies and procedures, trend analysis or other methods as deemed appropriate by the Division’s Quality Improvement Office. All service providers will be subject to both fiscal and programmatic reviews and audits on a regular basis by both Medicaid and the Division. – Day Habilitation programs must be certified, which will require formal reviews and on-site inspections. See Section 17.7.3 for detailed information. – Residential programs will continue to be licensed and subject to published licensing regulations. Current requirements can be found at: http://www.state.nj.us/humanservices/ool/licensing/.

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Overpayments

  • Duplicate payments of the

same services.

  • Payment for non-covered,

non-medically necessary services.

  • Services not actually

rendered.

  • Payment made by a primary

insurance.

  • No order for service.
  • Incorrect Coding.
  • Excluded ordering or

servicing person.

  • Service by unenrolled

provider.

  • Service by person lacking

required license or certification.

  • Service inconsistent with

physician order or treatment plan.

  • Service not documented as

required by regulation.

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10:49-9.10 Withholding of provider payments

  • When DMAHS, receives reliable evidence of fraud or

willful misrepresentation by a provider Molina or DMAHS shall withhold Program payments, in whole or in part, upon approval by the Division Director or the Assistant Director, Office of Program Integrity Administration, or their designee.

  • An entity participating in an HMO's network subject to a

withholding action under this section shall have any payments for services rendered to Medicaid and NJ FamilyCare beneficiaries withheld by the HMO.

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Withholding

  • Withholding is for a period initially not to exceed six

months, after which the withholding action shall be reviewed to determine if an additional period of withholding is warranted. Withholding shall be terminated when the Division determines there is insufficient evidence of fraud or willful misrepresentation,

  • r legal proceedings relating to the fraud or willful

misrepresentation are completed.

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Provider Exclusion

  • Suspension, debarment and disqualification are used by DMAHS to exclude
  • r render ineligible certain persons from participation in contracts and

subcontracts with the New Jersey Medicaid or NJ FamilyCare program on the basis of a lack of responsibility.

  • These measures shall be used for the purpose of protecting the interests of

the New Jersey Medicaid and/or NJ FamilyCare programs and not for punishment.

  • To assure the New Jersey Medicaid and/or NJ FamilyCare programs, the

benefits to be derived from the full and free competition between and among such persons and to maximize the opportunity for honest competition and performance, these measures shall not be invoked for any time longer than deemed necessary to protect the interests of the New Jersey Medicaid and/or NJ FamilyCare programs.

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Overpayments

  • Overpayments from the Medicare and Medicaid

programs must be reported and returned within 60 days

  • f the later of:

– the identification of the overpayment; OR – the date any corresponding cost report is due.

  • The overpayment must be reported and returned to

either CMS, Medicaid, the intermediary, carrier or contractor, with a written explanation of the reason for the overpayment.

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Overpayments (cont.)

  • Penalties for Retention of Overpayments:

– Retention of overpayment → "obligation" for the purposes

  • f FCA

– PPACA also amended the Civil Monetary Penalty (CMP) Statute to increase CMPs for retention of overpayments.

  • May subject the Facility to CMPs of not more than

$10,000 for each item or service, plus not more than three times the amount claimed for each such item or service. – The Facility may be excluded from participation in Medicare/Medicaid. – Potential liability under Federal and State False Claims Acts.

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Overpayments (cont.)

  • In New Jersey, the New Jersey Office of the State Comptroller - Medicaid

Fraud Division (MFD) has developed a self-disclosure protocol to include (but not limited to) the reporting, explanation and return of overpayments within 60 calendar days of identification. – Available at http://nj.gov/njomig/disclosure. – Recommends use of Provider Self-Disclosure Form.

  • Per the MFD, the benefits to providers who, in good-faith, participate in a

self-disclosure, include: – Avoidance of FCA penalties if reported within 60 days of identification; – Forgiveness or reduction of interest payments (for up to two years); – Extended repayment terms; – Waiver of penalties and/or sanctions; – Timely resolution of the overpayment; and – Decrease in the likelihood of imposition of an MFD Corporate Integrity Program.

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Corporate Compliance Program

  • Currently, New Jersey does not require Medicaid providers to have

a compliance program, yet encourages Medicaid providers to have such a program in place especially if payments from the Medicaid program exceed $100,000 per year.

  • Providers are best served to have compliance and ethics program in

place that meet existing OIG guidance and that may be modified to meet the new requirements once issues.

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Corporate Compliance Program (cont.)

  • Fundamental Elements of a Compliance Program:

– Written policies and procedures. – Compliance professionals (i.e., Chief Compliance Officer & Committee).

  • Must use due care not to delegate substantial discretionary authority to

individuals whom the facility knew, or should have known through the exercise of due diligence, had a propensity to engage in criminal, civil, and administrative violations. – Effective training of all executives and employees. – Effective communication process/mechanism for reporting (allowing for anonymous and good faith reporting of potential compliance issues as they are identified). – Internal monitoring (internal/external audits). – Enforcement of standards/disciplinary policies for failing to report suspected problems; engaging in non-compliant behavior; encouraging, directing, facilitating or permitting either actively or passively non-compliant behavior. – Prompt response/corrective actions.

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Recovery Audit Contractor (RAC)

  • Audit Facts:

– Auditors are paid on a contingent fee (9 - 12 percent). Whistle Blower (qui tam) claims (25 percent fee). – Appeals process can be expected to take 12 - 24 months for each claim. – The defense success on appeals (as of 2013 per carrier) is 80 percent vs. individual appeals by practice (56 percent) and hospital association (77 percent). – Coverage applied to actual or “alleged” billing errors. – Shadow audit costs can range from $500 - $550/hour. – Average legal costs can approximate $100,000. – Fines and penalties can reach $500,000.

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MEDEFENSE™ Plus (Claims Made)

Eligibility: Organizations delivering direct medical or medically-related services. Classes include, but are not limited to, the following:

  • Allied Health

Facilities

  • Billing Entities
  • Hospitals
  • Nursing Homes
  • Mental Health

Facilities

  • Physician Groups
  • Solo Physicians

Limits Available: Up to $10,000,000 each claim/$10,000,000 aggregate when combined with e-MD™ coverage.

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MEDEFENSE™ Plus (Claims Made) (cont.)

  • Special Features:

– MEDEFENSE™ PLUS – Defense costs and civil fines and penalties coverage for Billing Errors, HIPAA, EMTALA and Stark proceedings. – Standalone HIPAA Protector – Defense costs and civil fines and penalties coverage for governmental HIPAA proceedings. – Full Prior Acts available. – Broad definition of Insured. – Broad definition of Billing Errors Proceedings to include both governmental and commercial payer audits and investigations, qui tam plaintiffs or voluntary self- disclosure. – Selection of counsel available. – Sub-limit available for Medical Board Proceeding defense cost reimbursement. – Payment for shadow audits.

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Questions? Thank you!

Ivan J. Punchatz Shareholder, Healthcare Section Buchanan Ingersoll & Rooney Princeton, N.J. Ivan.punchatz@bipc.com 609.987.6806 Rich Skorupski, CIC, CRM, CPCU Senior Vice President Meeker Sharkey & Hurley Princeton, N.J. rskorupski@meekersharkey.com 908.272.3330 ext.23