According to the N.C. Division of Medical Assistance, the state agency that provides Medicaid oversight and reimbursements, at an Oct. 19 reconsideration review by the Hearing Office of the North Carolina Department of Health and Human Services found that DMA did not err in determining that a credible allegation of fraud existed at NRBH.
“In this case, the DMA received allegations of fraud from a variety of sources,” read the DMA letter. “Which, when combined, amounted to verification that the allegations had indicia (showed indications) of reliability. Therefore, the decision by DMA to suspend all Medicaid payments to New River Behavioral Healthcare is upheld.”
The “credible allegation of fraud” led the N.C. Division of Medical Assistance to suspend the service agency’s Medicaid reimbursements on Sept. 22, which was the first public hint NRBH was embroiled in a financial crisis.
According to the DMA letter, “The state Medicaid agency has reviewed all allegations, facts, and evidence carefully prior to taking this action (suspending Medicaid payments).”
The DMA letter dated Sept. 22 to Pam Andrews, then director of NRBH, from Section Chief Patrick Piggott of the N.C. Department of Health and Human Services Division of Medical Assistance Behavioral Health Review Section Program Integrity, detailed the steps the state would take to address the allegation.
“Pursuant to (NC General Statutes), the Division of Medical Assistance (DMA) MUST suspend all Medicaid payment to a provider after the agency determines there is a credible allegation of fraud for which an investigation is pending under the NC Medicaid Program. DMA has received a credible allegation of fraud against New River Behavioral Healthcare,” read the letter from Piggott.
According to the DMA letter, the general allegations include:
* Failure to produce documentaion for services billed including clinical assessments, PCPs, and service notes,
* Failure to transition recipients to appropriate level of care prior to closing agency and rendering proper notification to local and state authorities,
* Failure to present qualified staff to deliver clinical services and
* Failure to provide services to recipients including schedule outpatient appointments (i.e Medication Management) resulting in poor quality of care.
The source of the fraud allegation has not been released by the DMA.
Tracy Hayes, N.C. Assistant Attorney General said, “I want to make clear that pursuant to 10A NCAC 22f .0106, all investigations by DMA are confidential regarding those investigations, including the source of the complaint, cannot be disclosed.”
Hayes cleared up a misunderstanding during the Oct. 19 reconsideration review when she claimed Smoky Mountain Center, the LME (Local Management Entity) with oversight over NRBH, was the source of the “credible allegation of fraud” that led to the suspension of NRBH’s Medicaid reimbursements.
During the review, Hayes said, “Regulation requires the allegation to be credible, not substantiated, and that since the allegation had come from the Smoky Mountain LME, a governmental entity, it was de facto a credible allegation.”
The following day, Oct. 20, Hayes clarified those statements. “It is my understanding that DMA received a credible allegation of fraud concerning New River from a variety of sources, including information obtained from the Department’s monitoring of New River’s status as a Critical Access Behavioral Health Agency (CABHA), which resulted in de-certification of CABHA status,” said Hayes. “Those allegations, which included allegations that New River had billed for services that were not provided and/or that New River was unable to produce documentation in support of its Medicaid billings, were deemed to be credible because they contained indicia of reliability such as confirmation from multiple sources.”
The documents I was reviewing and discussed yesterday when I referenced Smoky Mountain LME as a “credible source” were provided to DMA by Smoky Mountain in response to DMA’s request for information concerning the transition and public news reports about the agency concerning possible embezzlement and financial losses experienced by New River. However, it is my understanding that Smoky Mountain LME did not allege that New River was engaged in fraud but instead simply provided information in accordance with its statutory provider oversight responsibility and the LME’s contract with DHHS (Department of Health and Human Services).”
Present on behalf of DMA during the reconsideration review on Oct. 19 was Patrick Piggott, Chief, Behavioral Health Section; Ella Peebles, an investigator with DMA Program Integrity’s Behavioral Health Review Section; Tracy Hayes, Assistant Attorney General; and Iain Stauffer, Assistant Attorney General.
Sharon Wilcox, Interim NRBH CEO; Murray Hawkinson, NRBH Clinical Director; Martha Moretz, NRBH Business Office Manager; Peggy Wallace, NRBH Director of Human Resources; Stephen McNeil, NRBH Medical Director; Jodi Deal, NRBH Area Medical Records Manager; and Bruce Kaplan, NRBH Attorney, were also present to present NRBH’s side of the story.
Information presented at the Reconsideration Review
During the review, Hayes said, “State statutes contained specific fraud and abuse provisions, including 42 CFR 455.21 that requires the state Medicaid agency to suspend payments to a provider upon receipt of what the agency determines to be a credible allegation that the provider in question has committed fraud against the Medicaid program.”
A “credible allegation of fraud”, according to the DMA letter, is defined as “an allegation that has been verified by the state from any source, including fraud hot-line complaints, claims data mining, law enforcement investigations, etc. Allegations are considered to be credible when they have ‘indicia (indications) of reliability.”
According to the letter, Hayes said, “In this case, the state, after carefully reviewing the information received, acted judiciously to protect Medicaid funds in accordance with the regulations promulgated by the Federal Government. The payment suspension is to remain in effect throughout the investigation into the allegations.”
Deal, addressing the allegation that New River “failed to provide documentation” said that a new electronic medical records system went online for the provider in early 2009. “Under this new system, the provider cannot bill Medicaid unless a service note is entered corresponding to a date of service, and if all documentation is not in order for a service that is billed, the provider would adjust the billing and return the money to Medicaid,” said Deal.
Attention was also focused on New River’s discontinuation of services in Alexander, Caldwell, and McDowell counties on Sept. 9 of this year. DMA alleged that “New River failed to transition recipients to appropriate levels of care prior to closing the agency.”
Murray Hawkinson, NRBH’s Clinical Director, said “an extensive effort was made to transition recipients from NRBH to RHA, who was the new provider for these recipients. This effort continued after the provider ceased providing services to the recipients, and was continuing as of the date of the reconsideration review. Stephen McNeil, NRBH’s Medical Director, confirmed Hawkinson statement and said the transition effort on the part of the provider was “extensive and ongoing.”
Wilcox, said “the transition arrangements put into place by the provider (NRBH) and state that recipients were given a high level of care during the transition period.”
New River’s Wallace, answered the allegations that “New River failed to present qualified staff to deliver clinical services.
“(I am) unaware of any staff that were unqualified for the task they were performing and that the provider was waiting to receive from DMA a list of allegedly unqualified staff,” said Wallace.
Deal further said “that the provider (NRBH) had experienced difficulty in sending electronic patient records to RHA, some of which were seemingly caused by RHA’s lack of experience regarding electronic records, but the provider had worked with the new provider (RHA) to overcome these issues.”
Kaplan, NRBH’s attorney, said, “the allegations were not substantiated, especially regarding the transition issues and that, therefore, the suspension should be overturned, stayed, or limited to the counties directly affected by the transition.”
The DMA letter read, “Mr. Piggot stated that should the investigation begun on Oct. 6 conclude the allegations of fraud was not substantiated the payment of suspension would be ended. This investigation was not limited to just one region of the state as some of the complaints covered a broader area.”
According to the letter, Piggott further said, “Although the transition issue only dealt with the three counties where the provider withdrew service (Alexander, Caldwell, McDowell) the other allegations were broader, which was why DMA decided to suspend payment to the provider across the board.”
New River Behavioral Healthcare provided mental health services in the five counties for nearly four decades. In 2006, Ashe, Alleghany, Avery, Watauga, and Wilkes counties signed a 160A agreement that made NRBH the sole mental health provider in the five counties. New River provided services for 13,000 patients in the five counties, 1,000 in Ashe County alone, and employed 300.
On Sept. 22, NRBH CEO Pam Andrews received a letter from the N.C. Division of Medical Assistance (the organization that handles Medicaid reimbursements) that Medicaid payments would be suspended due to “a credible allegation of fraud,” until an investigation could be completed.
The five counties then passed an amended 160A agreement that replaced NRBH’s 13 member board of directors on Oct. 7; the new 10 member board met for the first time on Oct. 12. During that meeting, the board accepted former CEO Pam Andrews’ resignation and Smoky Center announced Daymark as the new service provider in the five counties; Daymark began operations Nov. 1.
On Oct. 15, the Ashe County Board of Commissioners provided $115,000 of previously appropriated funding to ensure NRBH’s September payroll was met and employees continued to provide service. On Oct. 17, the Ashe County Board of Commissioners was forced to pass a budget amendment to fund immediate NRBH operating expenses. The county will spend an additional $181,998 this year on mental health services, on top of the $188,566 appropriated during the 2011-2012 budget passage; this brings the total FY 2011-2012 spending on mental health services to $370,564.
Interim Ashe County Manager Dr. Patricia Mitchell said an additional budget amendment would be necessary to fund NRBH’s full October payroll; that amendment will be submitted by Mitchell to the Ashe County Board of Commissioners on Monday, Nov. 7 for a potential vote. Mitchell has indicated the amendment will be roughly equivalent to the $181,998 amendment commissioners approved on Oct. 17.
The full text of the DMA letter is available for download at JeffersonPost.com.