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2005 Testimony

Testimony Before The House Human Services Committee

Clara Sue Price, Chairman

Provider appeals of medical assistance reimbursement denials

January 12, 2005

Chairman Price and members of the Committee, I am Melissa Hauer. I am an attorney for the Department of Human Services which is the agency that administers the Medicaid program in North Dakota. I am here today to testify regarding House Bill 1206 and to point out some concerns that the Department has regarding this bill. I will be brief in addressing these concerns because David Zentner, the Department's Medicaid Director, and I met with Representative Porter to discuss these concerns and we hope to work together to resolve them.

The language of the bill provides an appeal right to any Medicaid provider for “any adverse action taken by the department with respect to a medical assistance claim...”. This language is very broad and could be interpreted to allow any Medicaid provider to appeal not only denials of payment but also any payment made by Medicaid. For instance, if Medicaid provides $5,000 reimbursement to a provider but the provider feels it should be paid $6,000 instead, the language of the bill could be interpreted to allow such an appeal. Or it could allow a nursing facility to appeal a County Social Services' determination of Medicaid ineligibility of a resident of that facility. The amount of appeals that have to be handled by the Department, the Office of Administrative Hearings, and the Attorney General's office could increase substantially.

It is also unclear whether the intent is to provide an appeal right under chapter 28-32 (the Administrative Practices Act) or whether the intent is that this be some other, more informal, type of review to be done internally by the Department. If the intent is to provide an Administrative Practices Act hearing, the costs reflected in the fiscal note would be incurred for payment to the Office of Administrative Hearings and the Attorney General. A less formal, internal review could be performed by the Department instead. The record would be developed in the Department for the internal review process which would reduce the costs not only to the Department but also to providers. Providers that are unsatisfied with the Department's internal review of a denial, could then be given the ability to appeal that determination to a district court and to the state supreme court.

The bill also provides that in order for a provider to be awarded attorneys' fees and costs, “... the provider must be successful on more than fifty percent of the dollar amount involved in the issues identified in the provider's notice of appeal.” It is somewhat unclear as to what this means. For example, if a provider appeals multiple denials of reimbursement, must it successfully prevail on fifty percent of each claim or in the aggregate on all claims decided by the appeal? In addition, notices of appeals do not usually contain a dollar amount in question. They merely summarize the issue to be decided, for example, whether payment for a certain service was properly denied. If a provider fails to identify the amount in dispute, can it never recover attorneys' fees and costs? In addition, current state law allows a court to assess attorneys' fees and costs against an agency if the agency acted without substantial justification. (See N.D.C.C. § 28-32-50).

The Department would like to work with Representative Porter and any others who are interested to try to address these concerns. This concludes my testimony. I would be happy to try to answer any questions the committee members may have. Thank you.


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