Medicaid transportation: Wheels still spinning

By Chris Berendt Staff Writer

March 5, 2014

In the issue that seems to never run out of gas, more “authoritative” federal input on Medicaid transportation contractual matters will now be sought by the county.

An advisory letter recently received from the Attorney General’s Office stated that the county had fulfilled its obligation and it was not required to accept a lower bid or amend its current contracts, despite a low bid from Enroute Transportation Inc. currently on the table.

“There is no authority to support a contention that a county may or should even consider a subsequent bid after the bidding process is over, so there is no support for a requirement that the county must enter into a new contract every time a provider approaches with a lower rate,” Neal McHenry, assistant Attorney General representing the Division of Medical Assistance, stated in his Feb. 11 letter.

McHenry noted that his response was an advisory letter, and not an official Advisory Opinion of the Attorney General, which gave county attorney Joel Starling pause. He recommended the county seek a more official federal opinion regarding the issue.

The matter was brought earlier this week to the Board of Commissioners, which subsequently voted 3-2 to defer action on Enroute’s request in favor of seeking more information.

Starling said, in order to provide the county with greater protection against a potential Medicaid transportation charge-back — a withheld reimbursement — and to resolve any future issues that may arise when the county’s current contracts expire, his office requested a formal advisory opinion, as opposed to an advisory letter.

“We want whatever document that is going to most insulate and protect the county from the possibility of a Medicaid charge-back,” said Starling.

Starling said he has since been informed, however, that the Attorney General’s Office does not issues formal advisory opinions regarding Medicaid policies or manuals, contrary to what his office was told months before.

“That’s somewhat concerning because it, in my own mind, calls into question how authoritative that advisory letter may be,” the attorney stated. “This raises some doubt as to whether the county should rely on the advisory letter or seek additional clarification from the federal government.”

The county board waited for a response from the state for four months concerning Enroute’s bid. Now it will wait a little longer.

There is currently a primary contract for Van-Go Transportation Inc. at $1.85 per mile and a secondary contract for Enroute Transportation Inc. at $1.95 per mile, signed in August 2013. Just weeks later, Enroute president Ricky Moore submitted a reduced bid of $1.54 — $1.62 with fuel surcharges factored in — undercutting even Van-Go’s initial bid of $1.65 and a full $1 lower than Enroute’s initial bid of $2.55 submitted as part of the original bidding process before the contract was rebid.

With Enroute’s low bid received in September, it prompted separate letters by the county attorney and Commissioner Albert Kirby to state officials inquiring about the county’s legal footing. The matter was referred to McHenry, who sent his response to Kirby.

McHenry addressed two main questions, including whether the Medicaid manual provision requires the county to amend its contracts and shift primary transportation duties to a provider each time that provider submits a new, lower per mile rate; and whether a lower bid required the county to enter into a new contract with that new bidder.

The answer in both cases was no, McHenry stated.

Sampson’s dual contracts were to extend from Aug. 1 through June 30, 2015 at Van-Go’s $1.85 and Enroute’s $1.95 rate, with all transportation referrals routed to the lowest cost provider meeting all N.C. Medicaid Transportation policy requirements.

“The county is not required to consider a new bid until the contract ends and the county solicits new bids using its bidding process,” McHenry stated.

Those conclusions, Starling noted, seem to conflict with information that N.C. Medicaid representatives have previously given to Sampson Department of Social Services officials. The county may be subject to charge-backs for its failure to utilize a lower cost provider who has offered to contract with the county for a lower per mile rate, those state officials in charge of reimbursing the county said.

“We are concerned that (the) advisory letter Commissioner Kirby received from the Attorney General’s Office may not provide adequate protection for the county, particularly in light of the fact that the Attorney General’s Office does not issue formal advisory opinions, which are authoritative as to Medicaid policies or the Medicaid manual,” Starling said.

The attorney said he was not saying the letter was wrong or that he was disagreeing with it, but wanted to act “out of an abundance of caution” on the matter.

“The board may decide this is sufficient, and that’s well within your right to do. After all, we have requested the state Attorney General’s Office to provide an advisory letter, they’ve looked at this issue and they’ve responded to both of these questions,” said Starling. “I still have some concern about whether this (letter) would have any influence on the federal government or any federal audit, and we might want to make additional inquiries before we put the matter to bed.”

He said the board had a few options.

The board could deny Enroute’s request to amend its current contract and continue using Van-Go based on the original bids, which the attorney said presents some risk of a charge-back. The board could also grant Enroute’s request even though the county may not be required to do so, making them the primary provider. Starling similar warned against taking that action.

“Although this option removes the risk of a charge-back, it may create a precedent and prove unworkable in practice, with primary provider responsibility shifting back and forth between different entities as they seek to outbid one another and thereby win primary provider designation,” Starling stated.

A third option would be to defer action on Enroute’s request until the county receives further guidance from the federal government.

Commissioner Jarvis McLamb made a motion to that effect, deferring action, seconded by Commissioner Billy Lockamy. More discussion followed.

Echoing Starling’s recap, Kirby pointed out that the county sought clarification from the Medicaid Assistance Compliance Office, which referred the matter to the Attorney General’s Office, whose advisory letter was then sent back to Kirby stating that the county was in compliance. He also noted that Sampson County, nor any other, has been assessed a charge-back.

All that said, Kirby found it hard to believe Medicaid would punish the county with all steps having been taken.

“There has never been a charge-back in the history of the county, and you’re saying they’re concerned about the possibility of charge-backs,” said Kirby. “The thought of an advisory letter, even though it’s not formal, not having insulated effect, I just can’t see how they can punish us, especially when they’ve never done (charge-backs) anyway.”

Starling said he just wanted to make sure the county covered its basis.

“If our county attorney sees the question has not completely been answered, I’ll go along with him,” said Lockamy. “Then we’ll know for the future.”

The vote came 3-2, with Kirby and Commissioner Harry Parker dissenting.

Chris Berendt can be reached at 910-592-8137 ext. 121 or via email at