APPEALS & ADMINISTRATIVE HEARINGS FOR TENNCARE ACTIONS AGAINST HOSPITALS

APPEALS & ADMINISTRATIVE HEARINGS FORTENNCARE ACTIONS AGAINST HOSPITALS Presented by William B. Hubbard and Robyn E. Smith Hubbard, Berry & Harris, PLLC June 24, 2011

Overview A. Appeal & Hearing Process B. Five Particular Actions That May Be Appealed C. Additional Actions Subject to Sanctions D. Key Points

A. APPEAL & HEARING PROCESS

A. APPEAL & HEARING PROCESS Chronology of Appeal & Hearing Process: 1. Appealable Action Occurs (Example: Medicaid Integrity Audit) 2. TennCare Bureau Issues Notice of Action 3. Hospital Submits Appeal & Request for Hearing 4. TennCare Issues Notice of Hearing 5. Hearing With Administrative Judge (Trial-like Proceeding) 6. Administrative Judge Issues Initial Order 7. TennCare Final Order 8. Appeal to Court

B. FIVE PARTICULAR ACTIONS THAT MAY BE APPEALED TennCare Rules 1200-13-18

B. FIVE PARTICULAR ACTIONS THATMAY BE APPEALED 1. CMS or TennCare Audit – Action by the Bureau to Recover or Withhold Payments (Example: Medicaid Integrity Audit) 2. Credible Allegation of Fraud + Investigation Pending 3. Electronic Health Record Incentive Program (EHR-IP) 4. Exclusion from Participation in TennCare 5. Tennessee Medicaid False Claims Act

B. PARTICULAR APPEALABLE ACTIONS 1. CMS or TennCare Audit • Action by TennCare (not MCO) to Recover or Withhold Payments • Opportunity to Present Evidence to the Bureau Prior to Hearing – Notice of Action should include: • Identity of Person at Bureau Who Hospital May Contact • Describe How Hospital May Submit Additional Information • Submit Appeal & Request for Hearing within 35 days of Notice of Action

B. PARTICULAR APPEALABLE ACTIONS 1. CMS or TennCare Audit 2. Credible Allegation of Fraud + Investigation Pending 3. Electronic Health Record Incentive Program (EHR-IP) 4. Exclusion from Participation in TennCare 5. Tennessee Medicaid False Claims Act

B. PARTICULAR APPEALABLE ACTIONS 2. Credible Allegation of Fraud + Investigation Pending • Federal regulations prohibit federal payments to states for providers against whom there is a pending investigation of a credible allegation of fraud, unless there is: • Good cause not to suspend the payment or • Good cause to suspend the payment only in part

B. PARTICULAR APPEALABLE ACTIONS 2. Credible Allegation of Fraud + Investigation PendingWhat Is A Credible Allegation of Fraud? Factors/Indicia of Reliability The Bureau Examines To Determine Whether Credible Allegation of Fraud Exists: • Firsthand knowledge • Corroborating witness • Witness conflict (disgruntled employee) • Prior bad acts • Pattern of bad acts • Documentary proof • Admission by provider • Expert Opinion • Indictment by court

B. PARTICULAR APPEALABLE ACTIONS 2. Credible Allegation of Fraud + Investigation PendingSuspension of Payment In Whole or In Part • Good Cause To Suspend Payment In Part Or Not At All: • Additional evidence submitted by Hospital • Best interest of TennCare Program • Jeopardize enrollees’ access to services • Apply only to particular type of claims or particular business unit • Law enforcement requests no suspension because it does not want Hospital to know the Hospital is being investigated

B. PARTICULAR APPEALABLE ACTIONS 2. Credible Allegation of Fraud + Investigation PendingNotice of Action • Opportunity to Present Evidence to the Bureau Prior to Hearing – • Notice of Action should state that hospital may submit additional information for the Bureau’s consideration • Submit Appeal & Request for Hearing within 35 days of Notice of Action

B. PARTICULAR APPEALABLE ACTIONS 3. Electronic Health Record Incentive Program (EHR-IP) • Incentive payments to Medicaid providers for adopting, implementing or upgrading electronic health record technology or for meaningful use of such technology. • Authorized by the American Reinvestment and Recovery Act of 2009. • Enhanced federal financial participation. • Events that May Be Appealed Are: • Hospital Eligibility for Incentives • EHR-IP Incentive Payment Amounts • Whether Hospital Qualifies as Acute Care or Children’s Hospital • Demonstration of Implementing and Meaningfully Using EHR-IP Technology

B. PARTICULAR APPEALABLE ACTIONS 3. Electronic Health Record Incentive Program (EHR-IP)Notice of Action • Opportunity to Present Evidence to the Bureau Prior to Hearing – Notice of Action should include: • Identity of Person at Bureau Who Hospital May Contact • Describe How Hospital May Submit Additional Information • Submit Appeal & Request for Hearing within 35 days of Notice of Action

B. PARTICULAR APPEALABLE ACTIONS 4. Exclusion from Participation in TennCare • Mandatory Exclusion – no appeal • Permissive Exclusion – appeal rights

B. PARTICULAR APPEALABLE ACTIONS 4. Exclusion from Participation in TennCareMandatory Exclusion • Mandatory exclusion when HHS or CMS notifies the Bureau that any of the following apply to the provider: • Conviction of Medicaid-related crimes • Conviction relating to patient abuse • Felony conviction relating to health care fraud • Felony conviction relating to controlled substance • Notice of Action will be issued stating that provider has no appeal rights.

B. PARTICULAR APPEALABLE ACTIONS 4. Exclusion from Participation in TennCarePermissive Exclusion • Conviction related to fraud or to obstruction of an investigation or audit • Misdemeanor conviction related to controlled substance • License revocation or suspension • Exclusion or suspension under federal or state health care program • Claims for excessive charges or unnecessary services and failure of certain organizations to furnish medically necessary services • Fraud, kickbacks, and other prohibited activities Continued…

B. PARTICULAR APPEALABLE ACTIONS 4. Exclusion from Participation in TennCarePermissive Exclusion (Continued) • Entity controlled by a sanctioned individual • Individual controlling a sanctioned entity • Failure to disclose required information • Failure to supply requested information on subcontractors and suppliers • Failure to take corrective action • Making false statements or misrepresentation of material facts • Default on health education loan or scholarship obligations

B. PARTICULAR APPEALABLE ACTIONS 4. Exclusion from Participation in TennCarePermissive Exclusion - Notice of Action • TennCare Rules DO NOT Require that the Notice of Action give the Hospital information about how to present evidence to the Bureau prior to hearing. • Try anyway. • Submit Appeal & Request for Hearing within 35 days of Notice of Action.

B. PARTICULAR APPEALABLE ACTIONS 5. Tennessee Medicaid False Claims Act • Actions Under the Tennessee Medicaid False Claims Act May Be Brought 3 Ways: • Attorney General brings the action in court • The Attorney General refers the action to the Bureau for the Bureau to initiate an administrative hearing • A person (whistleblower) brings the action in court (for the person and the State)

B. PARTICULAR APPEALABLE ACTIONS 5. Tennessee Medicaid False Claims ActDamages, Penalties & Costs • Bureau May Recover: • Damages: 3 times actual damages • Actual damages are limited to $10,000 (no limit in court actions) • Actual damages may be based upon a statistical random sample utilizing software that is used to evaluate audit results. (This provision is in the TennCare Rules, but not in the Tennessee Medicaid False Claims Act.) • Costsof bringing the action: attorneys fees, expenses, etc. • Civil penalties: $1,000 minimum to $5,000 maximum for each claim that violates the False Claims Act ($5,000 to $25,000 in court actions)

B. PARTICULAR APPEALABLE ACTIONS 5. Tennessee Medicaid False Claims ActWho Makes The Assessment? Who Assesses Damages, Civil Penalties and Costs? • Law– Administrative Judge assesses damages, etc. • TennCare seeksdamages, civil penalties and costs in administrative proceeding • TennCare has no authority to assess damages, etc. • TennCare Rules– TennCare assesses damages, etc. in the Notice of Action • TennCare should not assess damages in Notice of Action • TennCare should seek damages, etc. in Notice of Hearing

B. PARTICULAR APPEALABLE ACTIONS 5. Tennessee Medicaid False Claims ActTennCare Final Order – When Is It Final? TennCare Rules Overlook Hospital’s Right to Appeal Final TennCare Order • Law – • Hospital has 60 days to appeal TennCare Final Order • TennCare Final Order cannot be enforced until all appeals are completed • TennCare Rules – • Bureau may file TennCare Final Order with Davidson County Chancery Court • TennCare Final Order filed with Chancery Court treated as agreed upon final and enforceable judgment

C. ADDITIONAL ACTIONS SUBJECT TO SANCTIONS, INCLUDING RECOVERY OF FUNDS

C. ADDITIONAL ACTIONS SUBJECT TO SANCTIONS, INCLUDING RECOVERY OF PAYMENTS • Noncompliance with contractual terms • Medical assistance of a quality below recognized standards • Fraud, willful misrepresentation, or flagrant noncompliance • Hospital fails to reimburse enrollee for covered service paid by enrollee within 30 days of being ordered by TennCare to do so – Hospital may be excluded from TennCare if it knowingly bills enrollee for covered service • Overbilling – service not provided, billed to enrollee, not medically necessary, not documented, exceeds usual and customary • Claims – unbundling • Drugs – improper prescribing or dispensing of drugs, partial or total loss of DEA certification

D. KEY POINTS • Negotiation. TennCare Notice of Action should identify contact-person and provide instructions for submitting additional information • Representation. Corporation cannot represent itself in administrative hearing – get an attorney experienced in these kinds of proceedings • Timing. 35 days to submit Appeal and Request for Hearing • Appeal. If Hospital attempts to work out the matter with TennCare before the hearing, appeal the Notice of Action, too • Evidence. Present all evidence at administrative hearing • MCO. Appeals of MCO actions not affected by these Rules

APPEALS & ADMINISTRATIVE HEARINGS FOR TENNCARE ACTIONS AGAINST HOSPITALS