ACA Medicaid Primary Care Rate Bump Audit

Since August 2015, the TMA has been advocating with state and federal legislators, TennCare representatives, and directly with CMS, regarding a federally-mandated audit of primary care providers who received enhanced Medicaid payments in 2013 and 2014 under a provision of the ACA. The program created a rate bump that reimbursed primary care physicians at a rate of 100 percent of Medicare for select primary care Medicaid services. TennCare conducted an audit in 2015 based on federal regulations implementing the program, and as a result planned to recoup $7.5 million from some PCPs in Tennessee due to arbitrary criteria stipulated in the regulations. The regulations required providers to be either board certified in a primary care specialty or attest they were eligible for those payments because 60 percent or more of their total Medicaid codes paid for the year were for specific primary care services.

Thanks to TMA advocacy and a federal class action lawsuit filed by several physicians impacted by the audit, TennCare is no longer allowed to recoup the enhanced payments paid to PCPs in 2013 and 2014. Additionally, the problematic CMS regulations that led to the audit have been deemed unlawful. This means that no other state Medicaid agency will be allowed to audit Medicaid providers using the criteria in the regulations and recoup money from PCPs. TMA is hopeful that the federal government will accept this outcome and not appeal the court’s decision, but if not, we will continue to advocate on physicians’ behalf.

TMA Advocacy Efforts:

  • Shortly after the TennCare MCOs sent recoupment letters to impacted physicians in August, TMA staff discovered that roughly 130 board certified physicians had been erroneously audited based on the 60% threshold criteria. TennCare subsequently removed them from the recoupment list.

  • On August 28, 2015, TMA submitted a letter to CMS protesting the audits and the manner in which they were conducted, copying the Tennessee congressional delegation. The letter urged CMS to delay the recoupment until it could implement fairer audit criteria.

  • On September 28, 2015, CMS responded and essentially said no, it would not retroactively change the audit criteria because that would require CMS to change federal regulations that were promulgated in 2012.

  • Members of the Consolidated Medical Assembly of West Tennessee, the Memphis Medical Society, and the Bluff City Medical Society met with and engaged in a letter writing campaign to Tennessee’s congressional delegation and West Tennessee legislators, urging them to put pressure on CMS to invalidate the current recoupments and re-audit using fairer methodology for primary care physicians.

  • Due to pressure from TMA physicians, in November TennCare reconsidered some of the data used in auditing the providers and adjusted the audit methodology as much as possible while staying within the parameters laid out in the CMS’s regulations. The result was another 120 providers removed from the recoupment list.

  • TMA presented before the Senate Health and Welfare Committee of the General Assembly on the rate bump audit in December. As a result, the committee members agreed to sign a letter to CMS urging it to delay the recoupment and reconsider the audit criteria.

  • In December, TMA alerted physicians to the deadline for submitting a request for an appeal hearing before the TennCare Bureau in order to contest the recoupment.

  • On December 21, 2015, TMA sent a second letter to CMS in response to its refusal to change its methodology found in federal regulations. It outlined reasons why CMS’s current interpretation of the regulations is arbitrary, and it provided an alternative interpretation that would more fairly identify non-board certified PCPs. 

  • On January 19, 2016 CMS again responded that it would not change its federal regulations and guidance in order to allow TennCare to re-conduct the audit using different criteria. 

  • In February, TMA staff and Memphis Medical Society physicians met with members of the general assembly and TennCare representatives about the audit twice. As a result, a two senators agreed to send letters to CMS about the issue and urged their colleagues to do likewise.

  • On March 3, 2016, the entire Tennessee congressional delegation in Washington DC signed a letter to CMS urging it to re-evaluate its audit criteria and delay the recoupments until all state Medicaid agencies have finished their audits.

  • On April 7, 2016, CMS responded to the Tennessee congressional delegation, stating it will not change its regulations and is not considering alternative interpretations of the regulations or planning to issue new guidance to state Medicaid agencies regarding how to conduct their audits.

  • TMA Legal staff have engaged in discussions with Bureau of TennCare officials to try to broker a global settlement for all affected providers or help organize a consolidated case hearing in order to reduce attorneys’ fees.  On May 17, 2016 TMA staff sent letters to the 31 providers who requested appeal hearings describing how the consolidated case hearing process would work if implemented.

  • TMA has collaborated with attorneys at Bass, Berry & Sims law firm in Nashville to jointly represent several of the providers who appealed the Medicaid PCP rate bump recoupment. On Sept. 12, 2016, the administrative law judge granted the attorneys’ order to consolidate administrative hearings for 23 primary care providers in Tennessee. Next, they will request to stay the administrative hearing and file a lawsuit in the federal district court against the US Department of Health and Human Services, directly challenging the federal regulations implementing the rate bump program. If the district court agrees to hear the case, TMA will file an amicus curiae brief in support of the plaintiffs.

  • On October 15, 2016, at its quarterly meeting, the TMA Board of Trustees voted to contribute $5,000 to the legal fees of the physician plaintiffs involved in the lawsuit against CMS to be filed in federal court.

  • On October 31, 2016, the 21 plaintiffs in the consolidated case hearing filed a complaint in the federal district court of Middle Tennessee alleging that the federal regulation CMS passed to implement the enhanced Medicaid PCP payment program is arbitrary and unfairly impacts certain primary care providers.

  • On November 16, 2016, at the request of the TMA, the American Medical Association’s Litigation Center agreed to contribute $10,000 to the legal fees associated with the lawsuit pending in federal court.

  • On February 2, 2017, the federal government responded to the plaintiffs’ initial complaint, arguing that the plaintiffs have no standing and defending CMS’s regulations.

  • On May 19, 2017, the plaintiffs filed a motion for summary judgment in district court, detailing their arguments for why the federal regulations implementing the 60 percent threshold are contrary to the ACA and therefore invalid. On July 7th, the federal government filed its response in opposition (030 Response in Opposition re Motion for Summary Judgment, attached) to the plaintiffs’ motion.

  • On July 17, 2017, TMA sent a letter to newly appointed Secretary Price of HHS and Administrator Verma of CMS, asking that they waive the state audit requirements for the 2013-2014 Medicaid PCP enhanced payment program and stop the pending TennCare recoupments. 

  • On August 17, 2017, the US Department of Health and Human Services responded to TMA's July 17 letter, stating that TennCare appropriately conducted its audit in compliance with federal regulations and that it would not consider waiving the audit requirement. 

  • On January 24, 2018, the federal judge for the Middle District Court of Tennessee ruled in favor of the plaintiff physicians, granting their motion for summary judgment. In short, the judge ruled that CMS’s regulation was unlawful and TennCare is prohibited from recouping the enhanced payments made to PCPs.