1. APPEALS & ADMINISTRATIVE HEARINGS FOR TENNCARE ACTIONS AGAINST HOSPITALS Presented by William B. Hubbard and Robyn E. Smith Hubbard, Berry & Harris, PLLC June 24, 2011 1

2. O VERVIEW 2 A. Appeal & Hearing Process B. Five Particular Actions That May Be Appealed C. Additional Actions Subject to Sanctions D. Key Points

3. 3 A. APPEAL & HEARING PROCESS

4. 4 C HRONOLOGY OF A PPEAL & H EARING P ROCESS : 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

5. 5 B. FIVE PARTICULAR ACTIONS THAT MAY BE APPEALED TennCare Rules 1200-13-18

6. B. FIVE PARTICULAR ACTIONS THAT MAY BE APPEALED 6 1.CMS OR T ENN C ARE A UDIT – Action by the Bureau to Recover or Withhold Payments (Example: Medicaid Integrity Audit) 2.C REDIBLE A LLEGATION OF F RAUD + I NVESTIGATION P ENDING 3.E LECTRONIC H EALTH R ECORD I NCENTIVE P ROGRAM (EHR-IP) 4.E XCLUSION FROM P ARTICIPATION IN T ENN C ARE 5.T ENNESSEE M EDICAID F ALSE C LAIMS A CT

7. B. PARTICULAR APPEALABLE ACTIONS 1. CMS OR T ENN C ARE A UDIT 7  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

8. B. PARTICULAR APPEALABLE ACTIONS 8 1.CMS OR T ENN C ARE A UDIT 2.C REDIBLE A LLEGATION OF F RAUD + I NVESTIGATION P ENDING 3.E LECTRONIC H EALTH R ECORD I NCENTIVE P ROGRAM (EHR-IP) 4.E XCLUSION FROM P ARTICIPATION IN T ENN C ARE 5.T ENNESSEE M EDICAID F ALSE C LAIMS A CT

9. B. PARTICULAR APPEALABLE ACTIONS 2. C REDIBLE A LLEGATION OF F RAUD + I NVESTIGATION P ENDING 9  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

10. B. PARTICULAR APPEALABLE ACTIONS 2. C REDIBLE A LLEGATION OF F RAUD + I NVESTIGATION P ENDING W HAT I S A C REDIBLE A LLEGATION OF F RAUD ? 10 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

11. B. PARTICULAR APPEALABLE ACTIONS 2. C REDIBLE A LLEGATION OF F RAUD + I NVESTIGATION P ENDING S USPENSION OF P AYMENT I N W HOLE OR I N P ART 11  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

12. 12  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 2. C REDIBLE A LLEGATION OF F RAUD + I NVESTIGATION P ENDING N OTICE OF A CTION

13. B. PARTICULAR APPEALABLE ACTIONS 13 1.CMS OR T ENN C ARE A UDIT 2.C REDIBLE A LLEGATION OF F RAUD + I NVESTIGATION P ENDING 3.E LECTRONIC H EALTH R ECORD I NCENTIVE P ROGRAM (EHR-IP) 4.E XCLUSION FROM P ARTICIPATION IN T ENN C ARE 5.T ENNESSEE M EDICAID F ALSE C LAIMS A CT

14. 14  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. E LECTRONIC H EALTH R ECORD I NCENTIVE P ROGRAM (EHR-IP)

15. 15  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 3. E LECTRONIC H EALTH R ECORD I NCENTIVE P ROGRAM (EHR-IP) N OTICE OF A CTION

16. B. PARTICULAR APPEALABLE ACTIONS 16 1.CMS OR T ENN C ARE A UDIT 2.C REDIBLE A LLEGATION OF F RAUD + I NVESTIGATION P ENDING 3.E LECTRONIC H EALTH R ECORD I NCENTIVE P ROGRAM (EHR-IP) 4.E XCLUSION FROM P ARTICIPATION IN T ENN C ARE 5.T ENNESSEE M EDICAID F ALSE C LAIMS A CT

17. 17  Mandatory Exclusion – no appeal  Permissive Exclusion – appeal rights B. PARTICULAR APPEALABLE ACTIONS 4. E XCLUSION FROM P ARTICIPATION IN T ENN C ARE

18. 18  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. E XCLUSION FROM P ARTICIPATION IN T ENN C ARE M ANDATORY E XCLUSION

19. 19  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. E XCLUSION FROM P ARTICIPATION IN T ENN C ARE P ERMISSIVE E XCLUSION

20. 20  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. E XCLUSION FROM P ARTICIPATION IN T ENN C ARE P ERMISSIVE E XCLUSION (C ONTINUED )

21. 21  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 4. E XCLUSION FROM P ARTICIPATION IN T ENN C ARE P ERMISSIVE E XCLUSION - N OTICE OF A CTION

22. B. PARTICULAR APPEALABLE ACTIONS 22 1.CMS OR T ENN C ARE A UDIT 2.C REDIBLE A LLEGATION OF F RAUD + I NVESTIGATION P ENDING 3.E LECTRONIC H EALTH R ECORD I NCENTIVE P ROGRAM (EHR-IP) 4.E XCLUSION FROM P ARTICIPATION IN T ENN C ARE 5.T ENNESSEE M EDICAID F ALSE C LAIMS A CT

23. 23  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. T ENNESSEE M EDICAID F ALSE C LAIMS A CT

24. 24  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.)  Costs of 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. T ENNESSEE M EDICAID F ALSE C LAIMS A CT D AMAGES, P ENALTIES & C OSTS

25. 25 Who Assesses Damages, Civil Penalties and Costs?  L AW – Administrative Judge assesses damages, etc.  TennCare seeks damages, civil penalties and costs in administrative proceeding  TennCare has no authority to assess damages, etc.  T ENN C ARE R ULES – 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. T ENNESSEE M EDICAID F ALSE C LAIMS A CT W HO M AKES T HE A SSESSMENT ?

26. 26 T ENN C ARE R ULES O VERLOOK H OSPITAL ’ S R IGHT TO A PPEAL F INAL T ENN C ARE O RDER  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 B. PARTICULAR APPEALABLE ACTIONS 5. T ENNESSEE M EDICAID F ALSE C LAIMS A CT T ENN C ARE F INAL O RDER – W HEN I S I T F INAL ?

27. 27 C. ADDITIONAL ACTIONS SUBJECT TO SANCTIONS, INCLUDING RECOVERY OF FUNDS

28. C. ADDITIONAL ACTIONS SUBJECT TO SANCTIONS, INCLUDING RECOVERY OF PAYMENTS 28  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

29. D. KEY POINTS 29  N EGOTIATION. TennCare Notice of Action should identify contact-person and provide instructions for submitting additional information  R EPRESENTATION. Corporation cannot represent itself in administrative hearing – get an attorney experienced in these kinds of proceedings  T IMING. 35 days to submit Appeal and Request for Hearing  A PPEAL. If Hospital attempts to work out the matter with TennCare before the hearing, appeal the Notice of Action, too  E VIDENCE. Present all evidence at administrative hearing  MCO. Appeals of MCO actions not affected by these Rules