Operators Have More Power Than They Think in Fight Against Medicaid Pressures

The old adage says that you can’t fight City Hall — and if you’re a nursing home trying to survive amid insufficient Medicaid funding, you have more than just local officials to fight.

Medicaid exists in a bureaucratic grey zone between the federal and state governments, requiring a coordinated pitch to state lawmakers and federal officials in order to effect true change. And with low Medicaid rates causing nursing home closures from Washington state to Massachusetts, operators have little choice but to fight for their very survival.

Though it may seem daunting, Chad Bogar has made a career out of helping operators and residents in their quest for sufficient reimbursements from state-level Medicaid programs. As founder and CEO of law firm sb2 Inc., Bogar advises clients on Medicaid approval issues, as well as legal actions lodged against states for failing to meet their federal funding requirements.


Central to Bogar’s thesis is the idea that providers have more paths and protections when pursuing Medicaid relief than they may initially believe. And among his more notable achievements was a March court victory in Illinois, advancing a lawsuit brought by operators against the state over insufficient Medicaid reimbursements — which haven’t been substantially updated since the mid-1990s.

Skilled Nursing News invited Bogar to appear on the most recent episode of our podcast series, “Rethink,” resulting in a wide-ranging conversation about the state of Medicaid reimbursements and what providers can do to receive their fair share — and keep their doors open.

What are some of the nationwide Medicaid trends that people need to watch out for?

It’s kind of a systemic approach, or a linear approach. I’ll give you an example. Today, I received a call from one of our other attorneys who had a phone call with a prospective client. And right now, at one facility, this particular organization has $1 million in outstanding Medicaid pending. So there is the upfront Medicaid issue, which is getting folks qualified.


Then there is the back end. I woke up to e-mails this morning dealing with a state, and I won’t name the state … sitting on massive amounts of claims. And what I mean by that: Medicaid benefits that have been approved but not paid. So the facility submits their claims after the approval, and some of these are going on a year old, with no end in sight. Then you have other issues in between: You have recoupments, where states come in years later, and try to take money back.

A lot of states don’t recognize — or a lot of providers don’t recognize — that states have an obligation to make sure that their Medicaid rate is approved by CMS. That’s our position.

When you boil it all down, Medicare’s great. I understand that. But it only pays for a certain period of time — and yes, it pays a lot of money, and providers don’t make a lot of money on Medicaid. But I’ve seen facilities with Medicaid residents with $300,000, $400,000 balances with no end in sight.

How does a building even survive with that level of pending reimbursements?

I don’t know. That’s a great question. If that’s just one resident, what happens when you put them all together? The interesting thing is, there’s a fix to this. I know a lot of folks aren’t fans of CMS for whatever reason — from a survey enforcement side, or what have you. I’m a big fan of CMS in regard to what we do. The rules and regulations that have been set up to help get people on Medicaid — they’re tremendous.

The problem is, it’s an issue of education, and I talk about this every time I do a presentation. Education is the key to this. It’s learning what CMS has set up — and when I say “this,” I mean avoiding these huge cases, avoiding having a facility with $2 million in Medicaid pending.

The key to all of this is education, and knowing what CMS has set up for our benefit — knowing that the federal courts have said that all this federal stuff trumps all this state stuff. And then we come in, we educate the client, and then we have to educate the case workers, then we have to educate the administrative law judges or hearing officers, and it goes all the way up the line.

And yes, that’ll take years sometimes. But that’s kind of the approach that we take in terms of: How are our clients going to stay in business? And my response is: We have to change the way we do things through education.

That’s one of the big takeaways I got from a presentation I saw you make — that there really are protections for operators and individuals with getting on Medicaid.

I don’t know if it’s my nature or what, but I’m incredibly hopeful when I look at these things, and especially having done it for as long as we’ve done it.

A client sent an e-mail and said: “Hey, I used one of the things that you said to use, and we struck out three or four times before that, and we appealed it, and we fought it out, and now they’re using it, and people are agreeing.” In other words, there isn’t pushback anymore.

One of the greatest regulations that CMS, I feel, has given our clients on the ground level to qualify residents is what we call the assistance regulation. If you ask for assistance from your county — and this CMS saying it — if you ask for assistance, you’re entitled to assistance. Assistance in doing what? Obtaining documents, spending down excess resources.

We have been pushing that particular regulation for years. When you go into a new state, of course, that state has never seen it. They don’t know what you’re talking about. They say: “No, no, no, it’s your responsibility. You have to do it.” That regulation, now, in states where we’ve been pushing it, is a regular, accommodated fact. It’s standard practice now. Whereas three or four years ago, no one believed us. Everyone said we were crazy, that you couldn’t do that.

CMS goes on and talks about other things: How applications can pend for no longer than 45 days. The states have to be doing things to push these applications along, and if you’re asking for assistance, the states have to do other things — for example, asset verification searches to help show that these people are qualified or not qualified. When you put all those regulations together, it really is amazing what’s out there and what can be done. But when you go into a new state like Massachusetts, where they’ve never seen this, where no one’s ever litigated it — it’s hard. It’s hard at first, but then you just have to keep moving, keep pushing.

I think the states have pressures too, and so their biggest pressure is this … CMS will come in and do an audit and they will say: “You shouldn’t have granted Medicaid benefits for X, Y, and Z.” And sometimes the numbers are substantial. I’ve seen $30 million, $49 million — sometimes, when you’re on the acute side, you’re talking $100 million. It’s a lot of money.

I think the states push back, because if they let that money out the door, the fed dollars out the door — the fed match on the Medicaid — then there’s a big problem. CMS is going to come in and take it back. That’s what I feel is really going on. I don’t feel that it’s this intentional thwarting. And maybe I’m wrong … but I don’t really feel that. I think there’s this fear that if we spend these dollars and we get caught, CMS just comes in and takes it back.

How does an operator with a presence in multiple states really wrap their heads around Medicaid?

Medicaid is incredibly complicated. It’s not just level of care versus financial need. There is a lot more that goes into it than just those two things. I think the reason why Medicaid is looked at the way that it’s looked at is because no one’s ever pulled back the layers and said: “What does CMS say about this? What really are the resident’s rights? What protections has CMS created for these residents?” They are substantial.

For some reason, the state decides that they’re going to discontinue benefits. File an appeal. If you timely file an appeal, those residents stay on Medicaid.

I remember when I first came up with the litigation theory that was used in Illinois, years ago, people thought I had no chance. There was no way, because it had never been done before. Thankfully, one client let me try it in a particular state. It was with 20-some residents, if I recall correctly, 23 or 25. All of those residents were approved. That was the first time a client had ever let me file anything in federal court. And I had been begging for that for years. I was saying: “We have to try this, we have to try this.” And so it happened.

What does a large provider do? A large operator? That’s not so bad, because why? Well, because the federal courts have told us that CMS and their regulations — they trump everything on the state level that’s contrary to what CMS has said, that conflicts with whatever CMS has said. You have great regulations in some states: Pennsylvania, Ohio, even Illinois. There are some great regulations that go above and beyond what CMS has given us, even in New Jersey.

But for the most part, there are regulations that conflict with [CMS] — they’re policies. Lots of times, they’re not even regulations. They’re just policies in a policy manual that someone has put together at the department level and said: “Okay, here’s how we’re going to do things.” And we come in and we say: “No, you can’t do that.” We did that in North Carolina when it came to resident-patient liability, and how that’s counted, and how you can handle that when it’s being misappropriated.

You have to know what your rights are on the federal level. What has CMS granted to us? CMS, I feel, has created these rights because … we, as a group, in my opinion take care of the second-most vulnerable population group in our society, behind infants and toddlers. What we do is substantial.

We hear about states that don’t update their Medicaid rates for nursing homes for decades or longer. How does that happen?

I don’t know. I don’t think it’s intentional. I just think it’s providers not knowing fully what their rights are. And if the providers don’t get together and do something, then it won’t typically happen. That’s what has to happen. And that’s why Illinois has been unique compared to the other states that we operate in. You have a group that says: “Listen, we need to fix this.”

It’s just like the Medicaid regulations we were talking about. The reason that happens is because no one takes those regulations and enforces them. If a county is just sitting on applications for a year, a year and half, where they’re not processing approved applications for sometimes two or three years — that’s only because we don’t know what we can do.

The provider has a right, the resident has a right to have his or her claims paid. So until someone brings that up and enforces that right, it just remains stagnant. That’s what I feel happens. I have no idea if it has anything to do with fiscal issues, or any intent. I don’t think so. I think it’s more about us knowing, through education, what we have a right to do, what we have at our disposal.

What’s the game plan for operators to fight while continuing to survive?

On the day-to-day application side, let’s do the training, let’s bring in folks that can do the training, and get that taken care of. On the bigger issues, let’s get together as a group.

Skilled facilities don’t have the revenue stream — it’s just a reality — of an acute provider. If they can bring several providers together and say: “Okay, here’s what it’s going to cost us to litigate this, or to do the things that we need to do, let’s all chip in.” That’s how I think it works.

Everyone’s in it together. There’s less of this idea of possible retaliation. That’s my recommendation: It has to start with the education, and then getting together and saying, “Okay, we’re going to do something as a group, and here’s what we’re going to do.”

This interview has been condensed and edited.

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