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
OVERVIEW
A. Appeal & Hearing Process
B. Five Particular Actions That May Be Appealed
C. Additional Actions Subject to Sanctions
D. Key Points
2
A. APPEAL & HEARING PROCESS
3
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
4
B. FIVE PARTICULAR ACTIONS
THAT MAY BE APPEALED
TennCare Rules 1200-13-18
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B. FIVE PARTICULAR ACTIONS THAT
MAY 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
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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

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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
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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:
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
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 PENDING
WHAT 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

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B. PARTICULAR APPEALABLE ACTIONS
2. CREDIBLE ALLEGATION OF FRAUD + INVESTIGATION PENDING
SUSPENSION 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
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B. PARTICULAR APPEALABLE ACTIONS
2. CREDIBLE ALLEGATION OF FRAUD + INVESTIGATION PENDING
NOTICE 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
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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
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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
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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
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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.
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TENNESSEE MEDICAID FALSE CLAIMS ACT
B. PARTICULAR APPEALABLE ACTIONS
4. EXCLUSION FROM PARTICIPATION IN TENNCARE

Mandatory Exclusion – no appeal

Permissive Exclusion – appeal rights
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B. PARTICULAR APPEALABLE ACTIONS
4. EXCLUSION FROM PARTICIPATION IN TENNCARE
MANDATORY 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.
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B. PARTICULAR APPEALABLE ACTIONS
4. EXCLUSION FROM PARTICIPATION IN TENNCARE
PERMISSIVE 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…
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B. PARTICULAR APPEALABLE ACTIONS
4. EXCLUSION FROM PARTICIPATION IN TENNCARE
PERMISSIVE 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
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B. PARTICULAR APPEALABLE ACTIONS
4. EXCLUSION FROM PARTICIPATION IN TENNCARE
PERMISSIVE 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.
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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
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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)
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B. PARTICULAR APPEALABLE ACTIONS
5. TENNESSEE MEDICAID FALSE CLAIMS ACT
DAMAGES, 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.)

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)
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B. PARTICULAR APPEALABLE ACTIONS
5. TENNESSEE MEDICAID FALSE CLAIMS ACT
WHO MAKES THE ASSESSMENT?
Who Assesses Damages, Civil Penalties and Costs?


LAW – Administrative Judge assesses damages, etc.

TennCare seeks damages, 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
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B. PARTICULAR APPEALABLE ACTIONS
5. TENNESSEE MEDICAID FALSE CLAIMS ACT
TENNCARE 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
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C. ADDITIONAL ACTIONS
SUBJECT TO SANCTIONS,
INCLUDING RECOVERY OF
FUNDS
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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
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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
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