Schweiker v. Gray Panthers, 453 U.S. 34, 43 (1981).

Transcription

1 American Health Lawyers Association Medicaid Evolution into the Affordable Care Act March 26, 2014 Jennifer L. Evans Polsinelli Craig H. Smith Hogan Lovells Schweiker v. Gray Panthers, 453 U.S. 34, 43 (1981). 1

2 Lamore v. Ives, 977 F.2d 713, 716 (5th Cir. 1992) Friedman v. Berger, 409 F.Supp. 1225, 1226 (S.D.N.Y. 1976) 2

3 AGENDA History of Medicaid Overview of Current Program Patient Protection and Affordable Care Act (ACA) Medicaid in 2014 Long Term Care Medicaid Program Integrity State Medicaid Director Letters Advisory Opinion Representing Clients with Medicaid Program Issues Goals & Point of View Introduction to Medicaid and the Issues Presented by Clients Providers Beneficiaries Distinction between Medicaid and Medicare Administration: How this will Impact Your Ability to Advise Your Clients Why is this Important? (i.e, Why do we Care?) Practical Ideas to Help Navigate Medicaid Issues What else should we worry about? (a/k/a Arguments that Work) Fraud and Abuse, Quality, Rising Costs bending the cost curve 3

4 History and Overview of Medicaid History Services & Benefits Long Term Care Eligibility & Enrollment Reimbursement Administration & Funding Coordination with Medicare & Other Insurance History of Medicaid Signed into law by President Johnson July 30, 1965 Effective January 1, 1966 Title XIX of the Social Security Act Provided financing to states to pay for care for very poor receiving financial assistance and disabled Federal State Partnership 4

5 Medicaid Today Health Insurance Coverage 31 million children & 16 million adults in low-income families; 16 million elderly and persons with disabilities Assistance to Medicare Beneficiaries 9.4 million aged and disabled 20% of Medicare beneficiaries Long-Term Care Assistance 1.6 million nursing home residents; 2.8 million community-based residents MEDICAID Support for Health Care System and Safety-net 16% of national health spending; 35% of long-term care services State Capacity for Health Coverage FY 2013 FMAP ranges: 50% to 73.4 SOURCE: Kaiser Commission on Medicaid and the Uninsured, March 2013 Single-State Agency & The State Plan To qualify for FFP, states must operate their Medicaid program under a State Plan. Each state must designate a single-state agency that is responsible for administering that state s Medicaid program. State Plan is the governing document for Medicaid programs, and it describes how the state will administer its Medicaid program, including eligibility categories, covered services, reimbursement methodologies and other beneficiary protections. States must receive approval from CMS for their State Plans and any amendments to the Plan. 10 5

6 Participation by States All states, the District of Columbia and territories participate. Within broad federal guidelines, each state designs its own program, which has resulted in many differences among the various state Medicaid programs with respect to program elements such as: Covered populations. Benefit packages. Medicaid recipient cost sharing obligations. Payment rates. Delivery systems e.g., fee-for-service vs. managed care. 11 Medicaid Benefits Covered Services Mandatory Physician services Lab and x-ray services Inpatient hospital Outpatient Hospital EPSDT for individuals under 21 Family planning Rural and federally qualified health center (FQHC) services Nurse midwife services Nursing facility (NF) services for individuals 21 and over Home health for certain populations * For the categorically needy Optional Prescription drugs Clinic services Dental services, dentures Physical therapy and rehab Prosthetic devices, eyeglasses Primary care case management Intermediate care facilities for the mentally retarded (ICF/MR) services Inpatient psychiatric care for individuals under 21 Personal care services Hospice services Alcohol and Drug Treatment 12 6

7 Medicaid Services and Benefits after ACA Coverage for services provided in Freestanding Birth Centers and professionals furnishing services in such settings Expanded Children s Hospice Benefit available for last six months of life to include curative and palliative care Benchmark packages expanded to include mental health services, prescription drug coverage and family planning services Waivers of Medicaid Requirements Federal Medicaid law provides HHS with the authority to grant waivers of otherwise applicable Medicaid requirements in certain circumstances. Waivers give state Medicaid programs additional flexibility in designing coverage options for Medicaid recipients. Under waivers of federal Medicaid requirements such as 1115 demonstration projects, 1915(b) waivers and 1915(c) waivers. The Deficit Reduction Act of 2005 (DRA) gave states even more flexibility to design their programs. 14 7

8 Waivers of Medicaid Requirements (contd.) Section 1115 demonstration projects HHS may approve waivers of any requirement of SSA 1902 and authorize Medicaid expenditures under SSA 1903 if reforms are likely to promote the objectives of the Medicaid program. HHS also requires, by policy, that the projects are budget neutral. Section 1915(b) freedom of choice waivers HHS may approve waivers of certain SSA 1902 requirements for certain programs, including Medicaid managed care. Section 1915(c), (d), (e) home and community based services waivers Under these waivers, HHS may allow states to cover home-based services for certain Medicaid recipients who would otherwise require institutionalization when services may not be covered under the State Plan for other recipients. 15 Medicaid Services and Benefits: Benchmark/Alternative Benefit Plans State Plan Amendment Option DRA 2005 Insurance equivalent to FEHBP Benchmark Equivalent Basic Services: Inpatient/Outpatient Hospital Services, Physician, Surgical and Medical Services, Lab, x-ray, well-baby and well-child with other preventive services; AND Aggregate actuarial value same as benchmark Children also receive EPSDT AKA Alternative Benefit Plans (Coordinate with EHB for newly eligible 8

9 Long Term Care/HCBS Medicaid pays for over 40% of all long term care in US HCBS includes case management, home health aide, adult day, respite care, and day treatment Examples of Certain HCBS Waiver Populations: 1.Would be Medicaid eligible if they were institutionalized in a hospital, nursing facility or ICF/MR and require institutionalization w/o HCBS 2.Individuals 65 and older who would need SNF or ICF w/o HCBS 3.Children under 5 who have AIDS, or are drug dependent at birth Long Term Care/HCBS: ACA Extended spousal impoverishment protections temporarily to HCBS spouses. Effective 1/1/14 through 12/31/19. Incentives to states with less than 50% LTC HCBS to move more patients to HCBS. Community First Choice Option for home attendant services and additional supports to maintain a home (e.g. rent deposit) with additional 6% FFP. Money Follows the Person to encourage and fund transition from nursing facility into community and HCBS. Demonstration grants: 31,000 (44/D.C.) 9

10 Medicaid Enrollees and Expenditures by Enrollment Group, FY 2009 Elderly 10% Disabled 15% Adults 26% Elderly 23% Disabled 42% Children 49% Adults 14% Children 20% Total = 62.7 million Total = $346.5 billion SOURCE: Kaiser Commission Medicaid & Uninsured/Urban Institute estimates based on data from FY 2009 MSIS and CMS-64, Medicaid Payments Per Enrollee 10

11 Growth in Medicaid Long-Term Care Expenditures, In Billions: $75 $92 32% $100 37% $109 41% $54 30% $32 13% 87% 20% 80% 70% 68% 63% 59% Note: Home and community-based care includes home health, personal care services and home and community-based service waivers. SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute analysis of HCFA/CMS-64 data. Medicaid Eligibility: Non-Expansion Mandatory Categorically Needy Before ACA/Non-Expansion Pregnant Women and Children up to age 6 at 138% FP Guidelines $32,913/year family of four* $21,707/year family of two* Children ages 6 to 19 below 100% FP Guidelines $23,850/year family of four* $15,730/year family of two* Parents at state s 1996 AFDC levels (likely less than 50% FP Guidelines) Elderly and Disabled persons receiving SSI *2014 Poverty Guidelines Optional Categorically Needy: higher income, resources Optional Medically Needy Varies: parents of covered children, disabled, blind, aged individuals Legal Immigrants five year waiting period 11

12 Certain States Challenge Medicaid Eligibility Expansion NFIB v. Sebelius, 132 S.Ct (2012). 26 States alleged that Congress exceeded its authority under the Spending Clause of the U.S. Constitution (Art. I, 8, cl.1) by requiring states to expand their Medicaid programs or risk losing certain federal matching funds. For example, ACA increases federal funding to cover the States cost in expanding Medicaid coverage, but if a State does not comply with the Act s new coverage requirements, ACA provides that the State may lose not only the increased federal funding but all of its federal funding. 42 U.S.C. 1396c. Supreme Court s Medicaid Expansion Decision Holding: 7-2 decision that the Medicaid Expansion under ACA is unconstitutional as written. Chief Justice Roberts opinion (joined by Justices Breyer and Kagan) plus the joint dissent s opinion (Justices Scalia, Kennedy, Thomas, Alito) reaching the same conclusion. Justices Ginsburg and Sotomayor would have found it constitutional. Remedy: 5-4 decision essentially that Congress can only threaten to take away new Medicaid funding. Chief Justice s opinion (three votes) plus the dissenting opinion of Justice Ginsburg (joined by Justice Sotomayor), who disagreed with holding but stated that they entirely agree with the Chief Justice as to the appropriate remedy. Joint Dissent (four votes) disagreed would have stricken expansion entirely. 12

13 The Court focused on: Implications: What is Medicaid Expansion? Requirement to cover all adults, including childless adults, with incomes up to 133/138% of federal poverty level (FPL). Requirement to provide essential health benefits package to all new Medicaid recipients. The federal share of the cost to cover this expansion population of 100% for FY , decreasing gradually to 90% in 2020 and beyond. State s failure to cover the expansion population would have cost it all of its federal Medicaid funds. Consequently States not forced to expand Medicaid. But there is no definition in the opinions of Medicaid Expansion. Elements of the ACA Which Apply to Everyone, Regardless of NFIB Expansion of prescription drug rebates States to update eligibility systems Prohibiting funding to services related to provider-preventable conditions Extension of time for states to return FFP collected from an overpayment Increase Medicaid primary care rates Changes to determining income for purposes of eligibility 26 13

14 Elements of the ACA Which Apply to Everyone, Regardless of NFIB Freestanding birth centers Expanded children s hospice benefit Expanded eligibility for family planning Prescription drug coverage: rebates Expansion of presumptive eligibility sites Medicaid coverage for former foster care children to track college age children eligibility to stay with parents difficult implementation for movement over state lines Maintenance of effort (MOE) Reduction in Disproportionate Share (DSH) payments (delayed) 27 Medicaid Enrollment & Eligibility 2014 States may expand to all non-elderly individuals with income up to 133% (+ 5 effectively 138%) FP Guidelines. FFP for newly eligible will be 100% from FFP for newly eligible will phase down to 90% in 2020 and thereafter New Coverage for Childless Adults effective 2014 (133/138%), States may begin to offer such coverage in States must maintain existing income eligibility levels until state exchanges fully operational States must maintain existing income eligibility levels for CHIP and Medicaid until

15 Medicaid Enrollment & Eligibility Statistics Total federal and state combined Medicaid outlays in 2011 were $432.4 billion (64% federal / 36% state) 55.7 million people on average were covered by Medicaid in 2011; however, 70.4 million people were enrolled at least one month during million people = 1 in 5 persons in the U.S. Source: 2012 CMS Office of the Actuary Medicaid Report Medicaid Enrollment & Eligibility Statistics Total projected annual spending by 2021: $795 billion Medicaid expansion expected to add 8.7 million new Medicaid members by 2014 and 18.3 million by 2021 Post NFIB: Assumes 55% in 2014, 65% in Americans will live in a Medicaid expansion state. 15

16 Medicaid Update from the States Because SCOTUS gave states the option to adopt ACA Medicaid Expansion, we have seen a great deal of action on the part of Governors, State Legislators and Health Care Advocates for and against expanding Medicaid to the ACA Medicaid Expansion population 31 Medicaid Update from the States Arizona Arkansas California Colorado Connecticut Delaware Hawaii Illinois Iowa Kentucky Maryland Massachusetts Michigan Minnesota Nevada New Jersey New Mexico New York North Dakota Ohio Oregon Rhode Island Vermont Washington West Virginia District of Columbia g Potential Expansion Indiana Missouri New Hampshire Pennsylvania Utah Virginia 32 16

17 Kaiser Expansion Map: March, 2014 WA OR NV CA ID AZ UT MT WY CO NM ND MN WI* SD IA* NE IL KS MO OK AR* MS VT NY MI* PA* OH IN* WV VA KY NC TN SC AL GA ME NH MA CT RI NJ DE MD DC AK HI TX LA FL Implementing Expansion in 2014 (26 States including DC) Open Debate (6 States) Not Moving Forward at this Time (19 States) NOTES: Data are as of January 28, *AR and IA have approved waivers for Medicaid expansion; MI has an approved waiver for expansion and plans to implement in Apr. 2014; IN and PA have pending waivers for alternative Medicaid expansions; WI amended its Medicaidstate plan and existing waiver to cover adults up to 100% FPL, but did not adopt the expansion. SOURCES: States implementing in 2014 and not moving forward at this time are based on data from CMS herestates noted as Open Debate are based on KCMU analysis of State of the State Addresses, recent public statements made by the Governor, issuance of waiverproposals or passage of a Medicaid expansion bill in at least one chamber of the legislature. 33 Medicaid Update from the States Impact of Waiting to Decide: Fewer federal dollars for states that wait to adopt ACA Medicaid Expansion : Federal gov t will pay 100% of the cost of medical assistance to ACA Medicaid Expansion population. For these years the Federal Medical Assistance Percentage (FMAP) for this population will be 100% as opposed to the FMAP for other populations groups that varies depending on State s per capita income. 2017: 95% FMAP 2018: 94% FMAP 2019: 93% FMAP 2020 and Beyond: Federal government will pay 90% of the cost of providing medical services to ACA Medicaid Expansion Population.» Newly eligible FMAP. CMS indicates there is no deadline for states to decide to adopt ACA Medicaid Expansion Use of State Plan Amendment indicates that States can update their decisions to Expand Medicaid to the newly eligible population and receive Newly Eligible FMAP at any time 34 17

18 Medicaid Update from the States FMAP percentage does not impact administrative costs. The percentage of Federal Financial Participation ( FFP ) for costs that are not directly medical assistance do not adjust between the states based upon a State s per capita income. With some exceptions, administrative costs are generally reimbursed by CMS to the States at 50%. CMS has increased FFP to 90% (10% cost to states) for new or improved eligibility systems to accommodate new Modified Adjusted Gross Income rules and to coordinate coverage with health insurance marketplaces. This increased FFP is not contingent on a State s Medicaid Expansion decision for newly eligible low-income adults, but is only available through Dec. 31, Medicaid Reimbursement Diverse reimbursement schemes Managed care, fee for service, cost based Provider Rates Controversial Balancing Budgets Rates must be consistent with efficiency, economy and quality of care; Adequate definition of policy and method used in rate setting Assure appropriate audits for cost based payments Rates must be high enough to enlist enough providers so that services are reasonably available under the plan Increased Primary Care Physician Reimbursement 2010 HCR Pediatricians, Family Med, General Internal Med reimbursement of 100% Medicare Part B for 2013 and Increased rate 100% FFP. 18

19 Medicaid Administration & Funding Medicaid administered by a Single State Agency following federal guidelines and contract with HHS (State Plan) Federal Financial Participation (FFP) varies depending on average gross income of state residents Administration FFP 50% Service Related FFP varies 50% to 73.4% FFP in FY 2013 ARRA increased FFP to states for services significant impact 61.6% to 84.9% FFP in FFY 2010 $1.60 to $5.61 sent to states for every $1 of state funding Enhanced FFP phased down 12/31/10, ended 6/30/11 Changes to Medicaid Reimbursement Primary Care Service Rate Increase Section 1202 of Affordable Care Act, requires states to pay certain physicians Medicaid fees in 2013 and 2014 at rates that are at least equal to Medicare s then-effective rates for many primary care services. CMS has stated that federal funds will cover 100% of the rate increase for 2013 and See 77 Fed. Reg (Nov. 6, 2012) (Final Rule). Rate increase available for following services: Evaluation & Management codes ; and CPT vaccine administration codes 90460, 90461, 90471, 90472, and Id., (c)

20 Changes to Medicaid Reimbursement Primary Care Service Rate Increase To qualify, physicians must self-attest that they are Board certified in an eligible specialty/subspecialty or that 60 percent of the claims that they submit are for eligible E&M codes. Each year the States are required to audit a statistically valid sample of physicians who received the enhanced rates to verify that they meet the requirement represented in their attestations. Caution: Potential FCA liability 39 Changes to Medicaid Reimbursement Disproportionate Share Funding (DSH) Traditionally, States are required to make additional payments to hospitals that serve a disproportionate share of low-income patients with special needs. SSA 1902(a)(13)(A)(iv), Because Congress anticipated that the ACA would significantly reduce the number of uninsured, it required big cuts to DSH payments to be phased in between 2014 and The HHS Secretary must (i) make the largest cuts in federal DSH funding to states with the lowest percentages of uninsured people and that do not make payments to hospitals with high volumes of Medicaid or uninsured patients; and (ii) make smaller cuts to low-dsh states. But, the NFIB decision made Medicaid expansion option, and as a result the CBO projects at least 3 million fewer people will be covered by Medicaid in 2022 than what Congress originally estimated when it passed the ACA. According to the National Association of Public Hospitals and Health Systems, hospitals across the country will not receive payment for approximately $53.3 billion in uncompensated care beyond what was estimated in the ACA. President Obama s Budget proposal for FY 2014 seeks a delay in the implementation of the DSH cuts to 2015 instead of

21 Changes to Medicaid Reimbursement Preventable Conditions The ACA prohibits States from reimbursing services that (1) were not in the best interests of the recipients and (2) were preventable as determined by current medical literature. ACA 1902 and Examples include: Inpatient Hospital Settings Foreign Object Retained After Surgery Air Embolism Blood Incompatibility Stage III and IV Pressure Ulcers Wrong Surgical Other Health Care Settings Wrong surgical or other invasive procedure Surgical or other invasive procedure on wrong patient Surgical or other invasive procedure on wrong body part 41 Dual Eligibles 21

22 Coordination with Medicare & Other Insurance Significant numbers of Medicare beneficiaries also receive Medicaid pays for Part B premiums, Long Term Care and outpatient prescription drugs (Part D created Claw back) In 2010, one in four Medicare Beneficiaries were also Medicaid Beneficiaries million DRA required states to implement data matching requirements with third party payors to identify additional coverage PARIS system identifies multiple state program enrollment Medicaid is the Payer of Last Resort -- Always Medicaid Program Integrity: Fraud & Abuse Any entity with $5 million or more Medicaid claims must establish written policies for employees regarding civil false claims act and whistleblower protections Medicaid Integrity Program -- $75 million year Medicaid Integrity Contractors (now RACs) State Program Integrity Reviews Medicaid Integrity Institute Medicaid Fraud Control Units (75% FFP) Supervised by OIG (49 states & DC) FY2013: 1,341 criminal convictions Recovered $2.5 Billion 22

23 Medicaid Program Integrity: Fraud & Abuse State False Claims Acts In order to receive enhanced FCA recoveries, state FCAs must be at least as effective as federal FCA. OIG performs comparative reviews of state FCA provisions. Examples: Prohibited Acts (false claim, false statement, conspiracy, reverse false claim) Definition of Claim Retaliation Provision Civil Penalty Range Relation Back Provision Original Source Exception First to File Provision Allegations in Gov t. Proceedings Statute of Limitations Public Employee Suits Government Knowledge Bar Public Disclosure Bar Medicaid Program Integrity: Fraud and Abuse Recent court decisions: Medicaid & the Stark Law Exclusion Screening Requirements: SMD letter advising programs to require providers to screen employees and contractors on a monthly basis against HHS-OIG List of Excluded Individuals and Entities (LEIE) as a condition of Medicaid participation. January 16,

24 Medicaid Program Integrity: ACA Provider Enrollment and Screening: licensure and background checks, provisional enrollment, NPI required on all claims, potential to freeze enrollment Expansion of RACs to Medicaid contract by 12/31/10, implement 4/1/11. (Delayed.) Extension of Overpayment return from states 60 days -> 1 year Correct Coding Initiative Expansion of Program Integrity Authority Buckle Up Termination of Enrollment if terminated by another program Medicaid Program Integrity: ACA Medicaid Payment Suspension Credible Allegation of Fraud 42 C.F.R : State Medicaid agency must suspend all Medicaid payments to a provider after determining that there is a credible allegation of fraud unless the agency has good cause not to suspend or to suspend only in part. Can be done without advance notice Written notice must be given within five days of imposing the suspension, unless law enforcement requests in writing a temporary withhold States are authorized but not required to offer administrative due process rights to providers whose payments are suspended 42 C.F.R 455.2: A credible allegation of fraud may be an allegation, which has been verified by the State, from any source, including but not limited to the following: (1) Fraud hotline complaints; (2) Claims data mining; and (3) Patterns identified through provider audits, civil false claims cases, and law enforcement investigations. 24

25 Medicaid Program Integrity: ACA Medicaid Payment Suspension Credible Allegation of Fraud cont. Allegations are considered to be credible when they have indicia of reliability and the State Medicaid agency has reviewed all allegations, facts and evidence carefully and acts judiciously on a case-by-case basis. Good cause reasons not to suspend all payments include: Law enforcement request due to a pending investigation Other available remedies are more effective to protect Medicaid funds The State determines, upon reviewing a submission by the provider, that the suspension should be removed Recipient access could be jeopardized because the provider is the sole provider in the community or the entity serves a large number of recipients in a HRSA-designated medically underserved area. Recent CMS State Medicaid Director Letters & Informational Bulletins February 19, 2014: Long Term Care Asset and Income Rules August 20, 2013 : Shared Savings Methodologies Feb. 2, 2013: ACA Questions and Answers Feb. 1, 2013: Preventive Services under the ACA Jan. 15, 2013: Health Home Core Quality Measures Nov. 11, 2012: Essential Health Benefits July 10, 2012: Integrated Care Models May 18, 2011: HIE and HER Incentive Programs April 22, 2011: National Correct Coding Initiative October 1, 2010: Recovery Audit Contractors September 28, 2010: Medicaid Prescription Drugs 25

26 Advisory Opinion October, 2013 Explicitly permits entity to furnish Medicaid covered services to Medicaid beneficiaries and bill Medicaid Simultaneously furnish same services to financially needy individuals without charge No Kickback No Exclusion based upon lower-of charges for free services to financially needy Consider individual State law that may prohibit same outcome Federal / State Tension Medicaid Recoveries Initially, CMS had declared that states had only 60 days to return the federal share of any identified overpayment. Under Health Care Reform, states have one year from the date of identification of an overpayment to repay FFP unless recovered sooner. ACA Medicaid providers may be able to convince their state Medicaid program that the federal Medicaid Integrity Group s interpretation of the applicable Medicaid rule or policy is erroneous; therefore, is no overpayment. This can be a battle 26

27 Medicaid Sources of Authority Note Hierarchy Federal Authority Title XIX Social Security Act: 42 U.S.C. 1396a 42 C.F.R. Subchapter C, Parts State Plan Contract Between State & Feds -- CMS State Authority Statutes Regulations -- Provider Agreement Federal Extra-Regulatory authority CMS State Medicaid Director & Survey Letters OIG Audits and Investigations of Medicaid Programs State Extra-Regulatory authority Manuals & Provider Bulletins State Website Don t Forget About This One Print It! Special Medicaid Arguments Medicaid Programs Need Providers & Access Must Pay Sufficient Reimbursement to Ensure Access Statewideness: Covered services must be available throughout the State Freedom of Provider Choice who want to participate Unique benefits to promote access to care (e.g. transportation) 27

28 Special Medicaid Arguments Medicaid Needs Benefit Coverage Comparability: Benefit Package for Medically and Categorically Needy Reasonableness: Sufficient in amount, duration and scope of services Nondiscriminatory Protections from Beneficiary Cost Sharing and Requirements to Bill Program Special Medicaid Arguments And Don t Forget The Administrative Procedure Act State Federal Payor of Last Resort Trust Me 28

29 Medicaid Case Study #1 Client has been working through a disclosure and repayment for violation of a technical Medicare billing rule using formal Medicare disclosure and repayment protocols. The Compliance Officer and General Counsel are concerned that Medicaid was billed in the same fashion and asks for help identifying the appropriate disclosure and repayment protocol to the State Medicaid Agency. What can you do to help? Medicaid Case Study #2 Your client, General Hospital, recently received a letter from its state Medicaid agency seeking the return of a significant alleged overpayment amount based on an audit of the hospital s emergency department billings to Medicaid. The audit was performed by a RAC auditing firm. The letter indicates that your client has 30 days to repay the money or file a petition to challenge the audit findings. Your client s CEO is irate and claims that the hospital lost money serving Medicaid patients, and this audit only makes matters worse. This is their first Medicaid audit, and they are looking to you for guidance on how to challenge the findings. What should General Hospital do? 29