[ Abstract: Louisiana’s Medical Assistance Programs Provider Agreement Law creates a complex contractual relationship between the state and every person provider care, items or services to the Louisiana Medicaid Program. In privately funded healthcare, it is called a “network contract.” This law gives the Department of Health and Hospitals at least 12 express reasons to cancel a person’s contract to provide care to Medicaid beneficiaries. The law also, however, gives a right to either party – either the provider or the state – to cancel the contract at will, and even without cause, by the mere giving of a 30-day advance written notice, and thus this new law might be said by some to stretch the notion that “any willing provider” may participate in Medicaid to near the breaking point. There are many new rules and conditions, some of which have not yet even found their way into privately funded healthcare. ]

A 1997 statute by the Louisiana legislature places a physician's relationship with Medicaid in a much more formal setting than existed in the past. The law is divided into four major parts: provider agreements; mandatory terms and conditions of provider agreements; powers and duties of the Department of Health and Hospitals; and, grounds for denial, and for revocation, of enrollment. Before exploring some of the new law, a physician should first pause and study the definition of "agreement" in the phrase "provider agreement," which is given this specific meaning by the legislature:

"[A] document which is required as a condition of enrollment or participation as a health care provider under the medical assistance programs."

The legislature named the new law the Medical Assistance Programs Provider Agreement Law ("MAPsPAL"), and made some of the terms of MAPsPAL discretionary on the part of the Secretary of the Department of Health and Hospitals (DHH), but many of the conditions are mandatory. As of this time, it is not yet known whether or not DHH will go to the fullest extent with this law that it is allowed or permitted to go.

Provider Agreements

This part of MAPsPAL begins with the mandate by the legislature that the Department of Health and Hospitals (DHH) " ... shall make payments ... to any person who has a provider agreement in effect with the department." Looking again at the definition of provider agreement, one is reminded that a provider agreement is required of a person who wants to be a provider. Thus, what the legislature is actually saying is that DHH shall not make payments to any Medicaid provider who does not sign a contract with it. Physicians wanting to enroll, or to continue to participate, in the Medicaid Program, must therefore be prepared to sign, and to be subject to the terms and conditions of, a "document" (contract) with DHH — what in privately funded health care has come to be called a "network contract."

In the second paragraph of this part, the legislature declares that a person providing services in the Medicaid Program must contractually obligate himself to provide services only if medically necessary, to comply with all federal and state laws and to comply with all licensure laws.

Each agreement shall be what the legislature calls a "voluntary contract" between DHH and the physician, in which a physician will agree to comply with all of the contract's terms, and DHH will agree to pay for the items or services rendered to the Medicaid recipient. This part of the statute states that " ... a health care provider agreement ... shall be renewable by mutual agreement," and must also have a clause stating that the network contract may be terminated by either party (either the physician or DHH) thirty days after receipt of written notice — what some would call "a thirty-day get out clause." Since it is not required that there be "cause" of any kind, this is a unilateral right of termination on the part of either DHH or a physician. This sort of provision certainly strains to near the breaking point the notion that Louisiana Medicaid is an "any willing provider" program. A physician could find himself willing, but DHH not. One must also wonder what happens to the patient whose physician is terminated? It would seen the patient will have just lost some of his freedom too, some of his freedom of choice.

Mandatory Terms and Conditions of Provider Agreements

There are fourteen points DHH must include in the contract, such as: maintenance of records in an orderly manner and preserving records for five years, treating patient information confidentially, billing other insurers/third parties before DHH, indemnifying and holding DHH harmless in any suit arising out of the provider's negligence, and providing DHH with proof of liability insurance. The contract must stipulate that any sale of the provider "shall be subject to any and all outstanding debts or liabilities owed ... to the department," so a buyer who, for example, does not perform a due diligence investigation could find that he has bought a bunch of Medicaid debt he really did not plan for or intend.

This new Medicaid network contract must also stipulate that "if the department withholds or is entitled to recovery, such withhold or assessment may be imposed on any and all provider numbers in which the health care provider has an interest ... ." There is no limitation as to the amount or nature of this ownership interest. At first blush, this new contract right given to DHH would thus seem to apply even against a health care business in which an errant physician who owes repayment to Medicaid has an ownership interest but does not practice. Medicaid would be able to withhold an assessment owed it by this physician from sums Medicaid might owe the other entity if it is one that has signed a network contract with DHH.

Powers and Duties of DHH

This section gives additional authority to DHH with respect to the provider contracts, including the power to revoke a contract as a result of a change of ownership of the provider; to require a provider to give a sixty-day advance written notice before making any change of ownership; to, in specified circumstances, require a provider to obtain a letter of credit or bond; and, to require the submission to DHH of professional, business and personal information concerning the provider, and any person with an ownership interest in, and any agent of, the provider, including information as to any violation of regulations of any private insuror or payor.

This section of MAPsPAL requires that the provider must certify in the contract that he will not bill more than his usual and customary charge, and states that the legislature's own dictates about the content and terms and conditions of the provider network contract are not the only terms the contract may have. According to this section of the new law, DHH " ... may ... adopt, and include in the provider agreement, such other requirements and stipulations on either party as the department finds necessary to properly and efficiently administer the medical assistance programs."

Grounds for Denial, or Revocation, of Enrollment

The last section of MAPsPAL authorizes DHH to deny an initial application for enrollment as a provider to Medicaid, or revoke a person's or entity's status as a provider, if any of 12 reasons (some of which are listed below) are found to be applicable to the provider, to his agent (which includes employees), to a provider's managing employee (which is given a special definition in the statute), or to any person who has an ownership interest of five percent or more in the provider:

• Misrepresentation and Fraud;

• Past or current exclusion, suspension or termination from Medicaid, Medicare or any private or other publicly funded health plan or health insurance program [e.g., FEHBA, CHAMPUS/TRI-CARE, State Employees Group, as well as private pay and employer funded health plans and programs];

• Conviction under state or federal law of a criminal offense relating to goods or services, including the performance of management or administrative services, under Medicaid, Medicare or any private, or other publicly funded, health plan or program;

• Conviction of a state or federal crime relating to neglect or abuse of a patient;

• Conviction of a state or federal crime relating to controlled substances;

• Sanction for violation of federal or state laws or rules relative to Medical Assistance Programs, the Medicaid program of any other state, Medicare, or any other publicly funded heath care or health insurance program.

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The more formal and detailed legal relationship between DHH and physicians created by MAPsPAL, as well as the very serious and potentially devastating fines and penalties of Louisiana's new Medicaid Anti Fraud and Abuse Law (officially named "Medical Assistance Programs Integrity Law," or MAPIL), have direct effect not only on physicians, but also their agents and employees, and even those who are only passive investors in a physician entity. Its fines and sanctions can even reach health care entities or practices in which a contracting physician does not practice but has an ownership interest.

It is thus advisable for all who continue to participate in Louisiana's Medicaid Program to be aware of and familiar with the full reach of all the tentacles of the Medical Assistance Programs Provider Agreement Law and the new contract terms to which they must now submit so that they can, among other things, avoid the serious consequences imposed on those who breach the contract terms or who may otherwise unwittingly become out of compliance.