Case Studies

Epstein Becker Green Convinces Plan Review Committee to Overturn Termination of Participating Physician Group Services Agreement

On April 29, 2013, Epstein Becker Green achieved a major victory when the Plan Review Committee of L.A. Care Health Plan ("L.A. Care") found that L.A. Care's termination of the Participating Physician Group Services Agreement ("Agreement") with Epstein Becker Green client Accountable Health Care ("AHC") was procedurally unfair.

L.A. Care terminated the Agreement under a "without cause" provision and did not contend that AHC was in breach of the Agreement. Under Potvin v. Metropolitan Life Ins. Co., 22 Cal.4th 1060 (2000), California provides a common law fair hearing right to health care providers even in the event of a "without cause" termination. Arbitrary decisions and the denial of fair procedure are prohibited by Potvin. Contractual provisions allowing termination "without cause" are unenforceable to the extent that they do not provide fair procedure. Under Potvin, the termination of a provider's agreement must be both substantively rational and procedurally fair.

Epstein Becker Green argued on behalf of AHC that L.A. Care acted contrary to its own Fair Hearing Procedure and the legal principles of Potvin by issuing a notice of termination of the Agreement prior to the fair hearing and a decision by the Plan Review Committee, even though, at the hearing, L.A. Care argued that its decision was based on a cease-and-desist order against AHC that was filed by the California Department of Managed Health Care. Although the Fair Hearing Procedure provides that the hearing process must precede any issuance of a notice of termination under a provider contract, the termination notice and related correspondence made clear that L.A. Care had already reached a decision to terminate the Agreement at the time that the notice was provided to AHC. In addition, the notice failed to include the specific reasons for the termination, a description of any policies and procedures, or any other criteria used in making the determination, as required by the Fair Hearing Procedure.

The Plan Review Committee voted unanimously in finding that the L.A. Care termination notice was procedurally unfair because it was inconsistent with the requirements of the Fair Hearing Procedure and had been issued prior to the completion of the fair hearing process.

The Epstein Becker Green team representing AHC included Los Angeles attorneys David Jacobs, Paul C. Burkholder, and J. Susan Graham.

Epstein Becker Green Successfully Negotiates Medicaid Managed Care Program Contract for Client Based in Puerto Rico

In October 2011, Epstein Becker Green represented Triple-S Management Corp. ("Triple-S") in the negotiation of a contract with the Puerto Rico Health Administration ("ASES") to administer the Medicaid managed care ("Mi Salud") program in five out of nine regions in Puerto Rico. Failure to reach an agreement on the terms of the contract would have left over 800,000 people without coverage, beginning November 1, 2011. Triple-S agreed to step in and assume these regions of the Mi Salud program after contractual issues between ASES and the current MCO contractor could not be resolved.

The Epstein Becker Green team representing Triple-S included Philip D. Mitchell of the Newark office and Jane L. Kuesel and Joseph J. Kempf, Jr., of the New York office.

Formulating Financing Schemes to Achieve Innovative Improvements in Community Health

Historically, the health care financing system has ignored the impact of what are currently called “social determinants of health” on health outcomes and health care costs in the United States. Now, forward-looking states, such as New York, are urging health care payors, particularly those serving low-income populations, to incorporate community-based social services organizations into their networks. Epstein Becker Green has experience providing comprehensive strategic and legal advice regarding how a collective of organizations traditionally outside the health care system can avail itself of health care (insurance) and other available funds in a legally compliant and effective manner.

For example, our firm is currently representing a diverse group of community-based organizations (“CBOs”) in New York State coalescing to address the social determinants of health care through capacity building and collective action. Using a novel “pathways hub” model, Epstein Becker Green’s client is raising funds and organizing CBOs to design and implement a model for improving community health by identifying the need for, and targeting delivery of, social services that have proven to have a significant impact on health outcomes and can result in dramatic reductions in health care costs.

The Epstein Becker Green team is providing strategic advice and the legal services necessary to establish and operationalize the CBOs’ new collective organizational structure. Specifically, we provide advice and services relating to the CBOs’ corporate, governance, and committee structure, membership rights and responsibilities, policies and procedures, compliance activities, funds flow, IT and data management, privacy and security, managed care agreements, and payment methodologies. Successful navigation of the complex health care regulatory environment is, of course, essential to the client’s ability to achieve its mission.

Epstein Becker Green is also working with the designers of the “pathways hub” model on how the initiative should be organized in other states around the United States. Epstein Becker Green and its clients are trailblazing here—adapting health care organizational structures and devising novel financing schemes to hopefully achieve groundbreaking improvements in community health.

The Epstein Becker Green team is led by Arthur J. Fried and includes Alison M. Wolf and Jonathan Salm.

Securing Double Bonus for Star Ratings for Health Plan in Puerto Rico

Epstein Becker Green (EBG) achieved a victory for a long-time health plan client, Medical Card Systems (MCS) of Puerto Rico, in the Announcement of 2018 Medicare Advantage Rates and Final Call Letter. Under the Affordable Care Act, Centers for Medicare & Medicaid Services (CMS) payments to Medicare Advantage (MA) plans would be adjusted based on the MA plan contract’s quality score under the Star Rating System. Bonuses were to be awarded for contracts receiving four or more stars, increasing the plan reimbursement benchmark payment by 5 percent. Congress additionally added a provision to grant a double bonus to plans achieving four stars or more in counties with high population, high MA penetration, and low Medicare fee-for-service costs.  For several years, CMS took the position that otherwise eligible counties in Puerto Rico were ineligible for the double bonus provision. In 2016, a separate Puerto Rico health plan offered comments to the annual MA Rate Advanced Notice and Draft Call Letter, suggesting to CMS that MA plans serving otherwise eligible counties in Puerto Rico should receive the double bonus. CMS declined to act upon these comments, stating that it lacked the statutory authority to make the requested change.

In 2017, EBG assisted MCS in making its own arguments to CMS on this issue. Working closely with the client’s executives, EBG conducted the programmatic research and statutory and regulatory analysis to clearly demonstrate to CMS that (i) MA plans serving Puerto Rico counties were eligible under the statute for the double bonus provision and (ii) a significant number of Puerto Rico counties satisfied the specific criteria. EBG’s analysis was submitted by the client to CMS in response to the annual MA Rate Advanced Notice and Draft Call Letter. The client shared EBG’s analysis with another Puerto Rico health plan to be submitted to CMS as well.

In the April 3, 2017, Announcement of 2018 Medicare Advantage Rates and Final Call Letter, CMS announced that it was changing its interpretation of the double bonus provision to include all Puerto Rico counties if they satisfy the enumerated criteria. CMS stated that it “appreciated” the “detailed analysis” drafted by EBG and used by CMS in reaching its decision. This CMS policy change, directly attributable to EBG performance, increased MA reimbursements to the client by 4%-5%, representing tens of millions of dollars in revenue impact in 2018. Total reimbursement to all MA plans in Puerto Rico was estimated to increase by nearly 3 percent, in 2018. The EBG team on this issue included Philo D. Hall, Thomas E. Hutchinson, and Kevin J. Malone.

This victory demonstrates the value of EBG’s distinctive multi-perspective approach combining (i) historical knowledge of the MA program from both the CMS and plan perspective and (ii) familiarity with the Puerto Rico heath care system and its distinctive demographic factors, with a thorough regulatory and statutory analysis.