I have found that the Medicaid system in North Carolina does not support its providers of services and wishes to “hush” any wrongdoings by their managed care organizations. As my story may get silenced, I wanted to put out this information for the use of others in hopes that the system can change.
I am a pediatric occupational therapist and own a medium sized occupational therapy group in North Carolina called Learning Charms. I have a master’s degree and have been practicing since 1998. My group employs around twenty seven occupational therapy practitioners and we work mainly in Mecklenburg, Gaston, Rowan, Guilford and Randolph counties of NC. We are only in network with North Carolina Medicaid and therefore we work with the most economically fragile children. Occupational therapists help children improve skills in areas of fine motor, gross motor, visual perceptual (precursor to reading), visual motor (precursor to writing), self help, and sensory processing skills. Basically, it’s all of the skills that enable a child to be successful at being a person.
Fee Schedule- As a provider group that is enrolled with NC Medicaid, I abide by their fee schedule. There is no negotiation. A fee schedule is the payment that a provider receives for certain services. The fee schedule for occupational therapy has remained at the same rate from 1999. Although our profession has tried to get the fee schedule increased, this has not happened to date. Therefore, running an occupational therapy business is extremely tight and often I find that I am losing money with many services. Occupational therapists must be licensed by the state board of occupational therapy which means that they also have to graduate from either a 2 year specialized program for occupational therapy assistant or a masters level occupational therapy program. The depressed fee schedule prevents an acceptable living wage to be given to occupational therapy practitioners.
Administrative hassles-In July 2021, NC Medicaid transitioned to a managed care organization in order to save money for the state. At this point, providers went from dealing with one entity (NC Tracks/NC Medicaid) to dealing with five additional managed care organizations (Wellcare, Amerihealth, HealthyBlue, United HealthCare, and Carolina Complete). Each managed care organization has its own portals for checking patient eligibility, patient billing/claims and patient prior authorizations. Most of the managed care organizations have 3rd party vendors that handle their prior authorization department. Prior authorizations are required for occupational therapy services, which means that we must submit paperwork for their review so they can determine if our services are warranted. The authorization department has no visibility to the claims/billing department and so often there is a mismatch between the two which leaves the providers doing much of the work and not getting payment for services already rendered. The managed care organizations like to change their 3rd party vendors often which requires providers to once again learn a new portal, navigate a new system and try to negotiate with the billing department to pay us for a service previously authorized by their past vendor. In July of 2024, NC Medicaid added three more managed care organizations to the list – called “Tailored Health Plans”. Each has their own portals and rules. Previous to 2021, I was able to manage the administrative part of my company with one part time person. After July 2021, I had to add an additional full time employee that just handles claims and prior authorizations. It’s not uncommon to have to be on the phone with a managed care representative for hours at a time to resolve something that should take 10 minutes. I conducted a survey of therapy owners throughout North Carolina in December of 2023. The responses can be found here. At that time, Carolina Complete was considering switching to “bundled payments” and so many practice owners wanted to give their opinions re: that possible change.
Given that the fee schedule for our services is unchanged since 1999, the additional work force only reduces the bottom line of the business. It prevents a livable wage for occupational therapy practitioners.
Audits- As a Medicaid provider, we are subjected to audits from the managed care organizations. To date, I have been through three audits with a fourth one in progress. The auditing departments are typically 3rd party vendors who know very little about the state rules. A past auditing team didn’t even know what occupational therapy was and had never done an audit on an occupational therapy group. Each state has its own policies for Medicaid and each state has its own professional licensing rules. Typically the auditors are unaware of either. I’ve been told that I have been audited so much because my revenue increased in 2021 as compared to 2020. In 2020 my business practically shut down due to Covid restrictions so revenue was minimal. Requests for occupational therapy for children have dramatically increased since Covid (as well as for other therapy professions), so this “formula” to select my organization for an audit is flawed. When a managed company audits a company, this is how things go down. First, a call and email is received and instructions are made about the patients and date ranges they want clinical notes for. In addition, auditors request copies of patient consent, prior authorization approvals, physician orders, evaluation documents, plan of care documents and therapy notes. The audit date range is usually 3 years previous to today’s date. They work by a “sample” method in which they propose to audit a certain number of your claims/paperwork that is a percentage of your total claims in that period. If they find that they “overpaid” you for any of those claims then they use their “formula” to determine what they believe is owed to them. They refer to this as “overpayment”. For instance, if a provider billed $100,000 for a year, they may sample 2% of that. If they find that there were “mistakes” or “errors” on $500 worth of claims then they multiply that amount by their formula and demand payment based on that. In one audit , they found $5,000 in “errors” and demanded $133,000 in overpayment (of which I didn’t pay…keep reading) . The auditors give a provider 30 days to give them records that typically will take at least 25+ hours to compile. The auditors will take 6-9 months to review the records. I’ve been flagged for “overpayment” for things such as: using the school location code when working in a school setting, therapist name changing after getting married, therapist not being supervised, therapist not being licensed at time of service, and various erroneous issues. None of this was ever factual and I was able to prove that all of the therapists were indeed licensed and valid, etc, but these are the bogus things that the auditors will spend their time flagging as “overpayment”.
Recent wrongful audit- In March of 2023, I was selected for an audit by Wellcare/Centene. I had 30 days to produce records for 88 claims. The claims went back to July 2021. It took them until November of 2023 to review the claims and come back with their results. They rejected most of the claims and demanded an overpayment of $133,000. Their reasoning for 98% of their allegations of overpayment was for “incorrect billing provider and supervision provided by non-approved supervisor”. According to their 3rd party vendor/auditing company, they asserted that since I co-signed treatment notes that I must therefore be the supervisor of those rendering assistants. I have always cosigned treatment notes as a way of billing compliance. In North Carolina, Medicaid rules say that only the rendering provider must sign a note. Our Board does not have any rules on this except that the signature of an occupational therapist on notes from an assistant does not constitute supervision. Numerous times I sent the auditors both of the clinical coverage policies and NC OT Board policies that state this fact. Numerous times they rejected what I sent to them and held fast to their findings. Wellcare’s auditors went a step further and began to do an extensive search of supervisory records on the NC OT Board’s public facing website. When they couldn’t find the information, they further assumed that these therapists were not properly licensed at the time. Wellcare’s auditors never contacted the OT Board to ask for any clarification. This fact was supported later by the NC OT Board when they filed an affidavit on my behalf. I spent countless numerous hours attempting for them to understand and tried to give them any additional supervisory records that I had. However, many supervisory records contained HIPAA protected information about patients that were enrolled in other health plans– therefore that information could not be shared with the auditors. Based on some of the documents that I was able to share, the auditors re-reviewed the claims and came back in February of 2024 with a new overpayment amount of $75,000. They continued to maintain that my co-signature on assistant’s notes guaranteed that I was their supervisor. I requested to speak to the auditors in a meeting but they responded that the auditors did not have meetings. They agreed for their supervisor to meet with me, however, she did not have inside knowledge on the case and would not be able to speak to the misinformation. Communication with the auditing group via email did no good and they seemed to be incapable of understanding the clinical coverage policy nor the NC OT Board’s policies. They were surely auditing occupational therapy supervision, which is outside of an auditors scope of practice. I was unwilling to pay them for claims that were correctly submitted and performed as written by qualified and supervised therapists. I reached out for legal counsel as that was the only option other than paying them. Once legal counsel was retained she was able to communicate with Wellcare’s legal counsel. Their legal counsel simply asked for us to make an offer for settlement. Giving that my attorney was $575 an hour and I was already $5,000 in, I offered $2,500. That was denied by Wellcare. They asked for us to make them “any offer” at a later time and I offered $10,000 and that was also denied by Wellcare. The offer I made was of financial economy because I knew if the case went to trial that I would be paying an additional $30,000-$50,000 for legal support. Wellcare has numerous in-house legal counsel (as well as outside counsel) so legal fees must not be burdensome to them. Once Wellcare refused my second offer, they served me with a summary judgment in which they basically asked the judge to rule in their favor. Their summary judgment used words such as “fraudulent” claims and other hurtful and erroneous statements about my practice and my therapists. I then had to pay my legal counsel to write a return opposition summary judgment stating my case to the judge. I also spent countless hours gathering more information. My legal counsel obtained an affidavit from the North Carolina Board of Occupational Therapy in which she restated that I had not broken any rules and that the public facing side of their website would only give information about supervisor status on the present day. The judge decided that the case would continue to court. However, days later, the Wellcare attorney sent us a letter that they wanted a settlement with me. They proposed that I pay them $437.00 and that I agree to sit in on an “educational meeting” with their audits so that they could tell me what I did wrong. In addition, they want me to sign that I will keep all of this confidential. This is all due to Wellcare’s inability or unwillingness to have oversight to their auditing team. Remember that the original amount of overpayment was $133,000. They want to settle for $437.00. That is 0.003% of what they originally said that I owed due to “FRAUD”. The information that was given to them in the summary judgment was exactly the same other than the affidavit from our OT Board. There was no apology for their misunderstanding of the rules, for their financial harassment, nor of their continuous practice of overstepping their authority. Meanwhile, my out of pocket expense for legal fees is close to $30,000 on this day. This is financial harassment. This shouldn’t be allowed, right? Well, it is allowed. This is about the same course of action involved in each of my audits so far. They come back with a huge number for “overpayment” and just hope I’ll pay. After countless hours of admin time to give them the same documents multiple times, they slowly reduce what is owed using their “formula”. I reached out to the NC Medicaid Ombudsman and they offer zero help. Their course of action is just to pass along the message to the insurance plan.
Meanwhile Medicaid is begging providers to go in network with them. There are so many children that desperately need occupational therapy but there is a real shortage of occupational therapy providers. These are a few reasons that occupational therapy groups and occupational therapy providers are going out of network with North Carolina Medicaid :
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The fee schedule (our reimbursement ) being unchanged since 1999
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Increased administrative burdens
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Audits (and auditors) that have zero oversight