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THE NORTH CAROLINA STATE BAR SUMMER JOURNAL2010 IN THIS ISSUE Addressing the Advocacy Gap page 8 Recent Developments in North Carolina Animal Law page 10 Bad Faith in North Carolina Insurance Contracts page 23 Addressing the Advocacy Gap— Medicaid Recipients Filing for Medicaid Benefits B Y A NN S HY First the good news… recipient, the administrative law There are several particularly good things judge's decisions are reviewed by about Medicaid in North Carolina. For one, the Department of Health and we have traditionally had some of the highest Human Services (DHHS), home reimbursement rates in the country for health- to the Medicaid Agency. This is care providers serving Medicaid recipients.1 analogous to courtroom defen- That translates into more providers and better dants having the power to over- access to services for recipients. Another high- turn judges who rule against light is that the state has implemented a medi- them. Technically, the Medicaid ation program2 whereby roughly 80% of all Agency can only reject the claims brought for Medicaid benefits by recip- administrative law judge's ruling ients are resolved through mediation, eliminat- if the findings of fact are clearly ing the need for an administrative hearing contrary to the evidence present- before an administrative law judge.3 ed in the hearing. This may seem Approximately ten percent of claims are dis- like a limitation on the Medicaid missed, either because of post-mediation set- Agency's power to overturn deci- tlement or because the party dropped the case sions; however, 81% of all deci- (for reasons not examined here). For those sions that favor the recipient have recipients who proceed to a hearing, due been overturned pursuant to Bruno Budrovic/Images.com process procedures were improved in 2009 Medicaid's power to render the which greatly increase efficiency for all par- final agency decision, and no ties.4 Protracted litigation is not the model decisions favoring Medicaid have been over- to a screeching halt due to extremely over- here. Finally, because our state has a large num- turned. This suggests that either administrative crowded dockets. Of note, Medicaid stops ber of Medicaid recipients, many are well- law judges are prone to error in their decisions paying for the disputed benefit once it renders served by these advantages.5 These benefits for recipients while correct at all times in their its final agency decision unless the superior aren't just nice, they're significant. decisions for Medicaid,8 or that pro se litigants court grants a stay. I was recently told that a are rarely capable of navigating the hearing in Medicaid case filed for appeal in mid-July The not-sso-ggood news… a way that will survive final agency review. The 2009, and fully briefed back in September, was What happens to Medicaid recipients former explanation is unlikely, thus highlight- not argued until early February 2010. The whose problems aren't resolved in mediation? ing the critical need for advocacy for recipients wait time between that final agency decision Fortunately, the process is efficient thanks to during the hearing. A more detailed record and the appeal in superior court (seven the recent legislation that condenses the time- from the hearing could offer greater protection months) was longer than the five month lifes- lines.6 Resolving problems quickly is beneficial of recipients' cases during final agency review. pan of a Medicaid denial running the full for all. The petitioner's time is no longer tied This simple fact to the legal profession may be gamut of mediation, hearing, agency review, up in the dispute, and Medicaid, which must entirely lost upon others, including Medicaid and filing an appeal. continue paying for disputed services through- recipients claiming benefits rights. Children can become Medicaid ineligible out the hearing process, can stop paying an After the Medicaid Agency overturns the by turning 18 or 19 years old. A stalled appeal invalid claim if that's the case.7 An expedited administrative law judge's decision, the recipi- could render a claim moot if the petitioner process reduces expenses from all sides. ent can appeal in superior court for de novo becomes ineligible for the benefit due to age However, recipients rarely have legal represen- review, again underscoring the need for a thor- while waiting for the appeal process to run its tation at the hearing, so the pro se litigant faces ough record from the administrative hearing. course.9 Worse still, the long-term effects of off with the Attorney General's Office. To fur- In practice, recipients rarely have the resources untreated and under-treated physical and ther complicate matters for the pro se Medicaid to appeal. For those that do, the process comes mental health problems can extend and exac- 8 SUMMER 2010 erbate long into adulthood. Put bluntly, there final agency decisions overturn the vast majori- offices as are willing to participate, the burden is bigger bang for the buck in healthcare dol- ty of administrative law judge decisions favor- does not fall on a single institution to build a lars spent on children, and worse outcomes for ing recipients. Without adequate legal repre- clinic or secure a niche, and the educational longer periods when services are denied to sentation, this routine practice may continue, opportunity is spread to each participating young patients in need. This result underscores creating an unfortunate appearance of bias. institution. According to 2009 statistics, as how the burden is not only on the individual Further, the hearing record is often insufficient many as 300 hearing claims are filed each family, but also eventually escalates into a bur- for adequate de novo review in superior court month. That represents substantial opportu- den on the state as a whole. for those few petitioners who pursue an appeal. nity to get lawyers-in-training involved in pre- 3. Clinical Opportunity for Law Students: mediation preparation (in the interest of keep- The best news yet… Students would have the opportunity to han- ing the mediations straightforward, attorneys One solution has been identified that could dle actual cases with attorney guidance and do not participate in the mediations). About foster improvement beyond what's already in supervision. A single case can span alternative 20% of claims are not resolved in media- place. A group of legal professionals from law dispute resolution, an administrative hearing, tion—that's about 60 cases a month where schools, from the judiciary, and practitioners and superior court review. With teleconferenc- negotiations might be appropriate. Roughly recently discussed how post-mediation ing, these future lawyers would get early expo- 30 of those claims are set for hearing, and claimants fall through the cracks. The group sure to bringing geographically distant parties decisions that favor the recipient (about one crafted a fresh approach to expand the already together through technology. Students would third) would be overturned if the trend con- notable success of North Carolina's response be exposed to public interest practice, health tinues, leaving about ten cases a month to be to handling claims against Medicaid. law, discovery with the Attorney General's briefed for superior court if appropriate. Office, advocacy before administrative law These numbers will grow as more families Here's how it could work… judges and potentially in superior court. qualify for Medicaid. North Carolina is home to seven law 4. Economic Benefit for Medicaid Agency: It would be unreasonable to pursue bene- schools and 24 Legal Aid of NC offices. Rather A coordinated network that manages claims fits for everyone with a claim. The good news than a single law school developing a Medicaid for Medicaid benefits would further decrease is that the goal discussed here is to secure ben- law clinic, the group envisioned a network the financial burden on Medicaid to continue efits for those who rightly qualify but lack the model that coordinates existing resources. Each paying for disputed services throughout the legal resources to work their way through the law school would work on an ongoing basis mediation, hearing, and review process by system that lies beyond mediation. This is not with a particular set of Legal Aid offices in enhanced efficiency of process. Additional cost a proposal to increase Medicaid spending. It is which the school's externship coordinator savings could occur for Medicaid if a formal a proposal to accurately spend according to would place its externs. For example, if all network of legal expertise could eliminate the recipients' benefit rights. seven schools participated in the network, each burden on Medicaid to train recipients (over Disputes around claims and benefits are school would develop a placement relationship 1.5 million in NC) on the hearing process. often the result of miscommunication, mis- with three or four Legal Aid offices. First, The October 2009 DHHS legislative report placed paperwork, or inattention to detail externs would undergo a one-week substantive describes Medicaid's intent to provide due between the parties. Mediation has proved to training on Medicaid procedure and appeals, process training for providers and recipients, be the right remedy to address these problems. then take those Medicaid-specific skills to the and its inability as of 2009 to provide that The result is increased assurance that services Legal Aid office. Externs would be assigned training to recipients.10 are being correctly delivered or correctly clients at whatever stage in the continuum 5. Benefit to Attorney General's Office: The denied, as the case may be. Unfortunately, for claimants are in (i.e., pre-mediation, negotia- Attorney General's Office could streamline its those who pursue a claim against Medicaid, tion, hearing, appeal).

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