In Hot Pursuit: Retro Reimbursement Rate Relief

We all know that Medicare and Medicaid reimbursements rates are awful. We also know that the states’ audit processes of healthcare providers causes damages to all such providers nationwide.

Through the years, people have lamented to me, but done nothing. Well, a group of oral surgeons, orthodontists, and dentists in North Carolina has now stepped up. Twelve facilities have hired me to litigate higher reimbursement rates for the doctors.

Obviously, we have to exhaust our administrative remedies, so our first line of attack will be a formal demand letter to the Centers for Medicare & Medicaid Services (CMS) and the North Carolina Department of Health and Human Services. But we aren’t only suing for higher Medicaid dental reimbursement rates. We are also demanding retroactively higher Medicaid dental reimbursement rates and damages arising from North Carolina’s broken audit system.

This will not be a class-action filing. It is a multi-party lawsuit. Without question, every dentist, oral surgeon, and orthodontist in North Carolina will benefit from the higher Medicaid dental reimbursement rates. But only the named plaintiffs will reap the rewards of the retroactively higher Medicaid dental reimbursement rates and the damages from poor auditing.

The company that North Carolina (and many other states) contracted with to conduct dental audits is Public Consulting Group (PCG).

The most glaring faux pas that PCG commits is that it hires a dental hygienist to conduct its dental audits in North Carolina, and has for a long time. A dental hygienist is determining medical necessity for dentists, orthodontists, and oral surgeons, which I believe any reasonable person can attest is ridiculous. I am not taking away the importance of dental hygienists; however, hygienists cannot read X-rays. Yet X-rays are part of the medical record, and tell a story about someone’s mouth and what is medically necessary.

Also, with deference to an agency perhaps dissolving, we will have even more ammunition. Obviously, that depends on the Supreme Court overturning Chevron.

On average, North Carolina Medicaid General Dental reimbursement rates fall 340.06 percent below the national 50-percent average fee charged for the same procedures (range of 190.66 to 928.75 percent below the 50-percent fee). The existing rates would need to see, on average, a 255.05-percent increase in order to meet the maximum permitted threshold allowed by the North Carolina State Medicaid Plan (75 percent of the 50-percent average).

Under §1902(a)(30)(A) of the Social Security Act, this data helps our argument that the payments are not “consistent with efficiency, economy, and quality of care and are [not] sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.”

As noted, we have also been researching the availability of retroactive damages. The 11th Amendment poses certain obstacles to seeking retroactive monetary awards out of state funds.

The 11th Amendment generally deprives the federal courts of jurisdiction to hear actions for money damages brought against a state by its own citizens. This means that absent a showing that the state has expressly waived its 11th Amendment sovereign immunity, or that Congress has abrogated that immunity, parties are generally barred from seeking retroactive relief paid from public funds of a state’s treasury, even for past harm suffered.

However, there are a few exceptions. We are continuing to research those exceptions to obtain retroactive relief. For example, there are certain circumstances where the state may waive its sovereign immunity protections under the 11th Amendment and allow retroactive damages to be sought.

The lawyers are exploring those circumstances, which involve strategic filing in certain venues and/or seeking an explicit waiver from the state through the pre-suit negotiations/demand. Further, our research establishes that we can still seek prospective relief without bar from the 11th Amendment, even if it seeks payment of state funds, as long as we can show that the payment is a necessary consequence of compliance in the future with a substantive federal issue/determination of law.

We are continuing our research on these issues, including research of administrative law decisions and other relevant authority that will allow us to be successful in obtaining the reimbursement awards.

The other research issues assigned to the associates are ongoing, with no critical updates at this time. We will continue to keep you apprised of developments in our research.