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By Deborah J. Juneau

On September 20, 2014, the Department of Health and Hospitals (“DHH”) published its notice of intent to promulgate a rule to continue the provisions of a March 20, 2014 Emergency Rule regarding the prohibition on provider steering of Medicaid recipients to select a particular health plan. DHH had previously promulgated an Emergency Rule on this issue in December, 2013 and then promulgated amendments to the Emergency Rule in March 2014 to clarify the provisions and sanctions and to incorporate provisions for provider appeals. No additional amendments to the March 2014 Emergency Rule are proposed in the notice of intent. The Emergency Rules, and the proposed Rule, were issued by DHH to avoid federal sanctions by the Centers for Medicare and Medicaid, by ensuring the integrity of Medicaid recipients’ freedom of choice in choosing a health care provider and ensuring compliance with federal regulations applicable to contract requirements.

Under the March 2014 Emergency Rule and the proposed Rule, a health plan is defined to include any managed care organization, prepaid inpatient health plan, prepaid ambulatory health plan, or primary care case management entity contracted with the Medicaid program. A provider is defined as any Medicaid service provider contracted with a health plan and/or enrolled in the Louisiana Medicaid Program. Provider steering is defined to mean “unsolicited advice or mass-marketing directed at Medicaid recipients by health plans, including any of the entity’s employees, affiliated providers, agents, or contractors, that is intended to influence or can reasonably be concluded to influence the Medicaid recipient to enroll in, not enroll in, or disenroll from a particular health plan(s).”

Both providers and health plans are subject to significant sanctions for steering Medicaid recipients. For a first offense of steering of Medicaid recipients, a provider may be subject to recoupment of all payments to the provider for services rendered to the Medicaid recipient for the time period the recipient’s care was coordinated by the managed care health plan to which the recipient was steered. If the recipient was steered to Medicaid fee-for-service, the provider may be subject to recoupment of payments for services rendered to the recipient for the time period the recipient’s care was paid for by Medicaid fee-for-service. A provider may also be subject to monetary sanctions of up to $1,000.00 for each recipient steered to join a particular Medicaid plan, up to a maximum of $10,000.00. Additionally, the provider may be required to send a letter to the particular Medicaid recipient notifying the patient of the sanctions imposed and the patient’s freedom of choice right to freely choose another participating managed care health plan or, if eligible, to participate in Medicaid fee-for-service. If the provider is found to have a second violation of patient steering, the provider may be subject to disenrollment from the Medicaid program.

A provider who receives a notice of sanction related to prohibited Medicaid recipient steering is entitled to appeal rights, including an informal hearing and/or an administrative appeal. The provider must make a written request for the informal hearing and administrative appeal within the deadlines provided in the notice.

If a health plan is found to violate the Medicaid recipient steering prohibition, DHH may impose the following sanctions: 1) disenrollment of the member(s) from the health plan; 2) recoupment of up to 100% of the monthly capitation payment or care management fee for the month(s) the member(s) was enrolled in the health plan; and 3) assessment of a monetary penalty of up to $5,000.00 per member. The health plan may also be required to submit a letter to each member providing notice of the sanctions imposed and the member’s right to choose another health plan.