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  2. Introduction • Subjects to be covered: • Washington v. DPW – Block Grants • Smith Case -- ADA and the Waiting List • Workforce Innovation and Opportunity Act • Compliance Plans under PPACA • Search And Seizure By Staff Of Child Residential And Day Treatment Facilities • Healthy PA • Affordable Care Act – Are subsidies available on federal exchanges • Affordable Care Act – Hobby Lobby .

  3. Washington v. DPW • BACKGROUND: • Act 80 of 2012 changed the way the Commonwealth gives funding to the counties for certain human services.   • The human services affected are: • (1) community-based mental health services, (2) intellectual disability services, (3) child welfare services, (4) drug and alcohol treatment and prevention, services, (5) homeless assistance services and (6) behavioral health services. • Under Act 80, participating counties will receive part of the money as a block grant to be used in whichever area the county finds appropriate.   • The amount, which is subject to the county’s discretion, starts at 20% in the first year of the program, progressing to 100% by the fifth year. However, DPW can waive the limitation on the county’s discretion. .

  4. Washington v. DPW • RELIEF SOUGHT: • The fear is that spending of the block grant money will favor some groups and harm others as counties shift money from one service area to another.  • Low-income Pennsylvanians with disabilities and several statewide organizations, including PCPA (now RCPA), filed a lawsuit in Commonwealth Court seeking to block the implementation of Act 80. • We were unsuccessful in blocking implementation but the case is continuing on the very difficult to prove theory that as money is moved from one category of services to another, money is expended in excess of the amounts appropriated by the Legislature in violation of the Pennsylvania Constitution. .

  5. Washington v. DPW • POSITIVE RESULT: • Corbett Administration sought to expand the block grant beyond the 20 counties presently allowed to participate. That did not happen. • While legislation was pending, the Administration distributed a document which it claimed demonstrated that many more people were receiving services under the block grant program than had the year before. • During a deposition, we discovered that the numbers being utilized were comparable.  The 2011-12 numbers were unduplicated – a person was only counted once in a category such as MH no matter how many different MH services she received.  The 2012-13 numbers count each person multiple times if they received multiple services within a category such as MH.  They also include federally funded services.  The 2011-12 numbers did not. • Important in opposing the legislation. .

  6. Smith CaseADA and the Waiting List • BACKGROUND: • The Plaintiff and the putative class (“Plaintiffs”) allege that the Pennsylvania Department of Public Welfare (“DPW”) unnecessarily places them at serious risk of institutionalization in nursing facilities by failing to provide them with attendant care services in the community. • DPW has already determined that Plaintiffs are in need of, and eligible for, its existing community-based attendant care program. • Plaintiffs allege that, even though it is less expensive to provide attendant care services in the community, DPW places them at risk of institutionalization in nursing facilities by limiting their access to attendant care services in the community. .

  7. Smith CaseADA and the Waiting List • RELIEF SOUGHT: • Plaintiffs request that DPW provide them with community-based attendant care services that DPW already provides to individuals with similar disabilities; and they claim that otherwise, they may suffer from a serious decline in health that would likely necessitate nursing facility admission. .

  8. Smith CaseADA and the Waiting List • DPW’s POSITION: • DPW denies that it has placed Plaintiffs at serious risk of institutionalization and argues that, even if Plaintiffs were at risk, any change it could make to address the violation would fundamentally alter the nature of its attendant care services. .

  9. Smith CaseADA and the Waiting List • DOJ STATEMENT OF INTEREST: • United States Department of Justice submitted a Statement of Interest stating its view supporting the Plaintiffs. • According to DOJ: • Individuals who are at risk of entering an institution because of a state policy need not wait until they enter the institution in order to assert an ADA integration claim. • Serious risk of institutionalization may be established by evidence that the lack of sufficient state-sponsored community-based services will likely cause a decline in a plaintiff’s health, safety, or welfare that would lead to her eventual placement in an institution. • The plaintiff’s prima facie burden in articulating a reasonable accommodation is “not a heavy one.” .

  10. Smith CaseADA and the Waiting List • It is enough for the plaintiff to suggest the existence of a plausible accommodation, the costs of which, facially, do not clearly exceed its benefits” • Once the plaintiff has done this, she has made out a prima facie showing that a reasonable accommodation is available, and the risk of non-persuasion falls on the defendant. • DPW has not violated the ADA simply because it has a waitlist for Act 150 services, nor does the ADA require the Commonwealth to provide a certain level of benefits to nursing facility eligible individuals;however, as noted above, the ADA does require public entities to avoid placing individuals at serious risk of unnecessary state sponsored institutionalization. .

  11. Smith CaseADA and the Waiting List • FUNDAMENTAL ALTERATION DEFENSE: • Moreover, where individuals are placed at serious risk of such institutionalization and an accommodation is available to prevent such institutionalization, the public entity bears the burden of showing that accommodating those individuals will fundamentally alter its provision of services. • DPW argues that any change to its current approach to attendant care services would constitute a fundamental alteration. • A public entity can establish a fundamental alteration defense if, “in the allocation of available resources, immediate relief would be inequitable, given the responsibility the State has undertaken for the care and treatment of a large and diverse population of persons with . . . disabilities.” .

  12. Smith CaseADA and the Waiting List • DPW argues that any accommodations that would require it to change its attendant care system would impermissibly interfere with its discretion to administer its Medicaid program. • This is legally incorrect. A state’s obligations under the ADA are not defined by the scope of the federal-state Medicaid program—Title II of the ADA is an independent legal obligation on states to operate programs, services, and activities in ways that do not discriminate on the basis of disability. Therefore, complying with the Medicaid Act does not equate to complying with the ADA. • DPW’s assertion that budget constraints prevent it from providing community based services does not square with the fact that the cost of providing community-based attendant care services to Plaintiffs is slightly less than the cost of providing these services in a nursing facility. .

  13. Smith CaseADA and the Waiting List • BOTTOM LINE: • When asked or interested, DOJ is taking a very aggressive position on the obligation of states to provide home and community based programs when necessary to avoid the serious risk of institutionalization. • Not sure why their position would vary with regard for the provision of home and community based services for the mentally ill and intellectually disabled. • Present posture – it turns out that DPW now claims it has money to provide the relevant attendant services. The case has been put into a suspended status while the parties are discussing settlement. .

  14. Workforce Innovation and Opportunity Act • A recent federal law, known as the Workforce Innovation and Opportunity Act, significantly limits placements at sheltered workshops and other work environments where people with disabilities earn less than minimum wage. • Under the new law, individuals with disabilities age 24 and younger will no longer be allowed to work for less than the federal minimum of $7.25 per hour unless they first receive pre-employment transition services at school and try vocational rehabilitation services. .

  15. Workforce Innovation and Opportunity Act • The measure also mandates that state vocational rehabilitation agencies work with schools to provide transition services to all students with disabilities and requires that the agencies allocate at least 15 percent of their federal funding toward such transition efforts. • While the law mandates that most young people try competitive employment before they could work for less than minimum wage, there are exceptions for those deemed ineligible for vocational rehabilitation and to allow individuals already earning so-called subminimum wage to continue to do so. .

  16. Compliance Plans under PPACA • NEW PPACA RULES: • Multiple fraud & abuse provisions enhanced, strengthened, broadened • Created increased penalty provisions for fraud & abuse, overpayments returned by providers • Mandatory Effective Compliance Programs and “all other providers/suppliers” .

  17. Compliance Plans under PPACA • OIG/HHS COMPLIANCE PLANS PRIOR TO PPACA: • Compliance Plan Guidance in existence for 12 years • “Voluntary” except for Medicare Advantage Plans • OIG enforcement frequently included mandatory compliance plan as element of settlement agreements • Initial Focus: billing, documentation, coding to support billing practices • Seven elements linked to Federal Sentencing Guidelines

  18. Compliance Plans under PPACA • OIG/HHS COMPLIANCE PLANS PRIOR TO PPACA: • OIG issued Compliance Guidance for multiple providers: • Hospitals (1998/2005) • Home Care (1998) – 63 Fed. Reg. 42410 • Billing Companies (1998) • Hospice (1999) – 64 Fed. Reg. 54031 • DME Suppliers (1999) • Small Physician Practices (2000) • SNFs (2000/2008)

  19. Compliance Plans under PPACA • No new guidance or regulations under PPACA but statutory requirement imposed .

  20. Compliance Plans under PPACA PPACA now requires providers’ compliance/ethics programs to be reasonably designed, implemented, and enforced, so that it will generally be effective in preventing and detecting administrative violations.

  21. Compliance Plans under PPACA THE SEVEN ELEMENTS: • Written policies, procedures and standards of conduct; • Designation of a compliance officer and compliance committee; • Effective training and education; • Development of effective lines of communication; • Enforcing standards through well-publicized disciplinary guidelines; • Conducting internal monitoring and auditing; and • Responding promptly to detected offenses and developing corrective action.

  22. Compliance Plans under PPACA • THE NEW 8TH ELEMENT- EVALUATING THE EFFECTIVENESS OF THE PLAN • Did appear in the original guidance but not as a core element of the program. • Internal effectiveness measures • Compliance reporting utilization via the hotline and direct access to the compliance officer • Annual risk assessment • Staff surveys • Exit interview questions • External effectiveness measures • Staff and management surveys • External audit findings • External assessment of the compliance program • Regulatory and legal activity

  23. Compliance Plans under PPACA • SELF-REPORTING: • Program Integrity PPACA §6402 • ‘‘(d) REPORTING AND RETURNING OF OVERPAYMENTS • ‘‘(1) IN GENERAL — If a person has received and overpayment, the person shall – • ‘‘(A) report and return the overpayment to the Secretary, the State, an intermediary, a carrier, or a contractor, as appropriate, at the correct address; and • ‘‘(B) notify the Secretary, State, intermediary, carrier, or contractor, to whom the overpayment was returned in writing of the reason for the overpayment.

  24. Compliance Plans under PPACA LEGAL ENVIRONMENT: WHO ARE THE MAJOR PLAYERS? • DEPARTMENT OF JUSTICE (DOJ) • U.S. Attorneys • FBI • Enforce Criminal Laws; False Claims Act • DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS) • HHS AND CARRIERS • Coding/Documentation/Reimbursement • Medicare+ Choice Compliance • Stark

  25. Compliance Plans under PPACA LEGAL ENVIRONMENT: WHO ARE THE MAJOR PLAYERS? • HHS (con't.) • OIG • Civil Money Penalties • Anti-Kickback Statute • Exclusion Authority • PENNSYLVANIA MEDICAID FRAUD CONTROL UNITS (MFCU) • PENNSYLVANIA ATTORNEY GENERAL'S OFFICE • DPW: BUREAU OF PROGRAM INTEGRITY • Civil Actions: Double Damages • Exclusion from Medicaid • Restitution • Pre-Payment Review

  26. Compliance Plans under PPACA BOTTOM LINE: • With all these agencies trying to recover money, a written compliance plan can help you avoid liability or significantly mitigate any liability you may have .

  27. Search And Seizure By Staff Of Child Residential And Day Treatment Facilities • In February of 2014, the Office of Children, Youth and Families (“OCYF”) issued a bulletin regarding the search and seizure of youths by staff of child residential and day treatment facilities. • While only binding on facilities regulated by OCYF, guidelines are helpful to any provider of services in residential and day treatment facilities. • The Bulletin points out correctly that are few cases dealing with the issues but points to school cases as being analogous. .

  28. Search And Seizure By Staff Of Child Residential And Day Treatment Facilities • The Bulletin suggests the following Best Practice Considerations: • Searches should be conducted to minimize their intrusive effect. The factors that should be considered in determining the appropriateness of a search include the following: • Reasonable suspicion or grounds for the search; • The potential threat to the child or youth or others for which the search is considered; • Age and sex of the child or youth; • Nature of the infraction; • Type and extent of the search; and • History of the child or youth. .

  29. Search And Seizure By Staff Of Child Residential And Day Treatment Facilities • The program should also develop and document, in writing, an internal review processfor formal debriefing after each search incident, to learn what caused the event, what could have been done differently and to proactively attempt to mitigate future events. • Depending upon the situation, debriefing may need to occur separately for the staff involved and the child or youth. In this case, the staff debriefing should be led by the on-duty supervisor and should allow staff the opportunity to express their feelings regarding the incident. • The debriefing process will aid staff, children, youth, family members and other involved persons in determining ways to decrease the need for searches, to identify staff training needs and to enhance program policy and procedure. .

  30. Healthy PA • APPROVAL & ELIGIBILITY: • In August, CMS approved Pennsylvania for a waiver of certain Medicaid requirements. • The plan is to begin coverage January 1, 2014 • To summarize – all Pennsylvania residents over age 20 with household incomes up to 138% the federal poverty levels will have access to healthcare benefits. • The devil is in the details • Some of the details are still to come .

  31. Healthy PA • COVERAGE: • Healthy individuals will enroll in approved Medicaid Managed Care Organizations • This is not what the Corbett administration sought • It wanted to provide these individuals a subsidy sufficient to obtain private insurance on the exchange. • So called “frail individuals” will enroll in traditional Medicaid .

  32. Healthy PA • BENEFITS: • Two Alternative Benefit Plans will be designed, one for healthy individuals and a second for “frail” individuals. • Both must comply with federal coverage and benefit rules. • One waiver – in year one only, the Commonwealth is not required to provide non-emergency transportation It is expected that the benefit packages will be significantly less robust (expensive) than the existing packages. .

  33. Health PA • PREMIUMS: • As of January 1, 2016, healthy individuals will have to pay premiums equal to as much as 2% of their incomes. • Those who fail to pay 3 months in a row will be dis-enrolled BUT can immediately apply for re-enrollment and will be reinstated without having to pay past due benefits. • Past due benefits will become a debt but not bar reinstatement. .

  34. Healthy PA • CO-PAYMENTS: • All healthy individuals will be required to make co-payments required by federal law. • As of January 1, 2016, those who are paying premiums will not have to pay co-payments except the $8 payment for non-emergency use of emergency rooms. • To be decided – how to collect co-payments .

  35. Healthy PA • HEALTHY BEHAVIOR INCENTIVES: • Individuals who satisfy certain criteria – paying co-payments and (after second year) premium payments in a timely manner, obtaining an annual wellness exam. • Details such as wellness criteria and premium process (both payment and collection) to follow .

  36. Healthy PA • WHAT WAS NOT APPROVED: • Job and job search requirements • Purchase of Insurance on the exchanges • Discontinue • Three month retroactive coverage • Coverage from date of enrollment to date eligibility confirmed .

  37. Healthy PA • THE FUTURE: • Corbett administration plans roll-out January 1, 2014 • Very difficult – Will need to; • Develop the missing details such benefit packages, payment/collection of co-payments • Hire hundreds, if not thousands, of caseworkers • Modify and replace software • Train caseworkers – both new and old • Enroll individuals Change of Administration .

  38. Affordable Care Act – subsidies on federal exchanges • The Affordable Care Act’s individual mandate is based largely on the assumption that individuals whose household income is between 138% and 400% will receive federal subsidies when purchasing insurance on the exchanges – both state and federal exchanges. • Unfortunately, the language of the Act is ambiguous on this point raising the issue whether subsidies are available on the federal exchanges. .

  39. Affordable Care Act – subsidies on federal exchanges • 26 U.S.C. § 36B provides that the premium assistance amount is the sum of the monthly premium assistance amounts for all “coverage months” for which the taxpayer is covered during a year. A “coverage month” is one in which “the taxpayer . . . is covered by a qualified health plan . . . enrolled in through an Exchange established by the State under [§] 1311 of the [Act].” 26 U.S.C. 17 • § 36B(b)(2)(A) calculates an individual’s tax credit by totaling the “premium assistance amounts” for all “coverage months” in a given year. Id. §36B(b)(1). The “premium assistance amount” is based in part on the cost of the monthly premium for the health plan that the taxpayer purchased “through an Exchange established by the State under [§] 1311.” Id. § 36B(b)(2). .

  40. Affordable Care Act – subsidies on federal exchanges • Two Courts of Appeals have addressed the issue – two different results. • Fourth Circuit found that subsidies are available on federal exchanges • The D.C. Circuit found, by a 2-1 majority that they are not. .

  41. Affordable Care Act – subsidies on federal exchanges • According to the Fourth Circuit, the statute is ambiguous because to read the sections cited above literally would essentially make the federal exchanges meaningless – an absurd result which Congress did not likely intend. As a result, the Court deferred to an IRS interpretation that in creating federal exchanges, CMS was acting in the place of the states and satisfied the statutory language. • The D.C. Circuit majority read the language literally. • The D.C. case will be heard by the Court en banc, which is expected to reverse the panel decision. .

  42. Affordable Care Act – subsidies on federal exchanges • Effects if D.C. Circuit affirmed: • First, it would nullify the so-called “employer mandate” in states using the federal marketplace. • There are two penalties under the employer requirement. The first – which equals $2,000 per employee – is assessed against employers that do not offer coverage at all. However, it only kicks in if at least one of the employer’s workers gets a subsidy in an exchange. No subsidy=no penalty. • The other penalty applies when an employer offers coverage but that coverage is not affordable for some workers. Any worker who only has access to unaffordable employer-offered coverage is eligible for subsidies in an exchange, and if she gets a subsidy the employer owes a $3,000 penalty. Again, no subsidy=no penalty. (It’s a little trickier with multi-state employers, who still might face penalties even if they operate in a state using the federal marketplace.) .

  43. Affordable Care Act – subsidies on federal exchanges • Second, it would make the individual insurance market unstable and potentially unworkable in federal marketplace states. • The ACA’s insurance market rules would still be in place, so people with pre-existing conditions would be guaranteed access to insurance and could not be charged higher premiums than healthy individuals of the same age. And, the “individual mandate” would still apply, theoretically providing an incentive for healthy people to buy insurance. • However, without subsidies many if not most uninsured people could not afford coverage. And, the effect of the individual mandate would, in fact, be significantly muted because most of the uninsured end up being exempt from its penalties. .

  44. Affordable Care Act – subsidies on federal exchanges • The ACA exempts someone from the individual mandate if the lowest-cost insurance available would cost in excess of 8% of income. • With subsidies available, less than 3% of uninsured people eligible for subsidies in the 36 federal marketplace states would be exempt. • However, if the subsidies are invalidated in federal marketplace states, as many as 8.1 million (or 83%) of those formerly subsidy-eligible uninsured people would end up being exempt from the individual mandate. • With the subsidies unavailable and the individual mandate rendered partially ineffective, it might be difficult to attract healthy people into the individual market and premiums could rise significantly in these states. .

  45. Hobby Lobby • In a decision issued on the last day of its term, the Supreme Court by a five-to-four vote gave businesses formed as “closely held corporations” a new exemption from the requirement that most businesses must provide a variety of pregnancy-preventive health care coverage for their female workers, if the firm’s owners have religious objections to those services. • On its face, a very limited opinion • Applied only to “closely held corporations” • Hobby Lobby objected to a very limited group of contraceptives • Seemed to approve government exemption programs for certain non-profits which require only notification to insurance company that non-profit has religious objections to contraceptive coverage – after which insurance company provides coverage without cost to employer. .

  46. Hobby Lobby • After decision, the Court raised some questions about the adequacy of the exemption process for non-profits by granting an injunction pending appeal to a religious related college – Wheaton College. • Much more to come, including federal regulations extending exemptions to closely held for-profit corporations. .

  47. QUESTIONS? .