3. Who is in charge?

3. Who is in charge?
A handful of lawsuit seek to clarify the law for the new system.

With money originating from and passing through so many hands, consumers, their families and advocates, as well as the Local Management Entities and the state are all asking who, exactly, is responsible for what?

One of those voices is advocate Vicki Smith. As director of the non-profit Disability Rights N.C., she has been listening to stories of pbH consumers since 2007 who say that services they need to thrive have been denied.

“In the managed care model,” said Smith, “once a consumer is stabilized, you start withdrawing support. You can destabilize the individual and that is what is happening with many of our clients.”

In February 2010, Disability Rights N.C. filed a lawsuit, arguing that low rate pbH paid for some services would force so many providers to quit that consumers would have to leave home and live in institutions.

The stakes are high.

The U.S. Attorney General weighed in, saying that the charges were “of interest” to the federal government. If the allegations were true, he said, the state of North Carolina would be in violation of the Americans with Disabilities Act for not providing care in the least institutional setting possible.

That lawsuit is still pending. But, a federal judge has already ruled in favor of Disability Rights N.C. on the second lawsuit that it filed in July 2011.

On March 29, 2012, a federal judge agreed that the state was letting pbH cut consumers’ services without a proper appeal process.

As a managed care organization, pbH regularly reviews consumers’ health needs and sets a budget for their treatment. In a recent review, pbH cut one consumer’s budget by more than $25,000.

pbH said it has to make hard decisions so that it can be fair to the whole Medicaid population. In July 2011 statement, pbH said, “at this time, approximately 25 percent of individuals served are receiving more services than they need and 75 percent are receiving the appropriate amount or fewer services than they need.”

But Disability Rights N.C. said that when pbH made those hard decisions, it did not explain to consumers how to appeal.

Disability Rights argued that the Constitution requires adequate notice of the government’s decisions and a hearing to appeal a decision before a neutral judge.

When the case made it to court for an expedited temporary decision, a federal judge agreed. Louise Flanagan wrote that expense alone is not enough justification for pbH or the state to circumvent a constitutional appeals process.

“Fiscal concerns cannot be held to outweigh harm to plaintiffs’ safety, health, and well-being,” wrote Flanagan.

Until a final decision is reached through a full trial, pbH was required to restore services to 130 consumers, and it said did so immediately.

Who are we competing against?”

Rep. Nelson Dollar leads a General Assembly committee on the authority of the LME-MCOs.

The appeals process is one bullet point on a long list of rules that some lawmakers, advocates and LME staff have been discussing in Raleigh every month during 2012. The group said that the statutes that govern LME operation have become outdated since they were written in 1985.

The discussion routinely got sticky around big questions, like how involved counties should be in overseeing the agencies and whether LME-MCOs should be able to borrow money alone.

“It seems like this is getting kind of big and amoebic,” said an advocate on the legislative subcommittee, Laurie Coker, of N.C. Consumer Advocacy, Networking and Support Organization. “Who is ultimately accountable for this system?”

The state is responsible ultimately, because of its contracts with the federal government to manage Medicaid.

Who will oversee the LME-MCOs as they manage that money and how is what is being debated in the monthly subcommittee meetings.

One recommendation at the April 2012 meeting got a lot of attention: to grant LME-MCOs ability to protect “intellectual property and other competitive health care information.”

“Who are we competing against?” asked Coker. “How is openness an impediment?”

documents.”pbH CEO Pamela Shipman said that her agency wrote the contract because consultants approached her, offering to resell the pbH business model for profit. She said she didn’t want her agency — or any other — to do that.But citizens around the state have cried foul, adamantly arguing that a public agency shouldn’t bind another with a contract to not share information developed with tax dollars.David S. Levine, Elon University School of Law”]Elon University legal scholar David S. Levine sees broader national context for pbH’s actions, however.

His research shows that other state and local governments have also tried to protect their revenue-generating processes, saying they are “trade secrets” protected by exemptions in the public records law. And in some states, they win.

Levine says there is “very little case law” on this issue in North Carolina.

The appeal, Levine wrote in a 2011 article for the Michigan Telecommunications and Technology Law Review, is that governments want to maximize revenues and reduce costs, which could benefit the people.

Levine wrote that he is not unsympathetic to that argument. “But, is it worth the price paid in muddling trade secrecy law and obscuring the operations of government in a time where cynicism towards and suspicion of government is widespread and getting worse?”

pbH is not known to have denied anyone access to its records on grounds that they contain trade secrets.

If they ever do, the claim would have to be tested judicially. North Carolina statute says trade secrets must be owned by a “private ‘person,’” but the law is always open to interpretation.

If pbH and the other LME-MCOs get their way in the upcoming legislative session, the court then have to interpret the phrase “competitive health information.”

Either prospect scares some advocates, consumers and family members who don’t want to have to hire attorneys to know the decisions the LME-MCOs are making and why.

As LME-MCOs grow more sophisticated in function, so do the legal questions. The pressure prompted several LMEs to decline the challenge to transition to the new model.

There were 28 LMEs in 2009. The state projects that only 11 will be operating as LME-MCOs when the plan is fully implemented by July 1, 2013.

“There are private companies hovering around the state like vultures who would like to come in and run the waiver model for North Carolina,” said Botts.

If the state’s public agencies cannot figure out how to become LME-MCOs while still adhering to state and federal law, those private corporations just may get their wish.

<– Chapter 2 – ‘pbh: From idea to reform’

Chapter 4 – ‘Everyone is watching’ –>