TCM Audit Appeals - Part II
As promised, here’s our follow up blog on TCM audits and appeals. Previously in Part I of this series, we noted that every year the Targeted Case Management (TCM) programs and their cost reports are audited in California. The appeals process begins with the informal hearing. If the county does not prevail at this level, it can appeal at the formal level.
Formal Hearing
A formal appeal requires attorney involvement on both sides; for the Department of Health Care Services (DHCS) as well as for the county. Formal appeal hearings can last days or even weeks, depending on the number of audit findings and the size of the county. Formal hearings are argued in front of an actual judge who works for DHCS. Since attorneys are required to be involved, and preparing for the hearing is time-consuming, and requires significant resources, it is often beneficial for counties to attempt to settle their cases rather than taking them to a formal hearing to dispute.
Settlement Hearing
A settlement hearing is conducted at the request of either DHCS or the county. If the parties agree to a settlement hearing, then a settlement hearing judge will be assigned to the case. The settlement judge also works for DHCS. The format and setting of a settlement conference are less formal than regular hearing (informal and formal). Both parties discuss the issues, with a settlement judge there to keep the parties focused on the goal, which is settlement rather than one party prevailing while the other loses. In a settlement hearing typical no party is ecstatic about the result, since both parties must concede something and compromise must be reached.
Still, it is important to ensure you are aware of the regulations surrounding the TCM program so that you can relay your perspective convincingly to DHCS. Be prepared to answer questions raised by DHCS and its attorney, but also be prepared to question DHCS about their findings and their justification for those findings. It is therefore very important to be familiar with the following publications:
1. 2 CFR Part 200 regarding indirect costs
2. Medicaid reimbursement manual
3. DHCS publications for TCM: TCM cost report instructions and SPA 10-010.
It is also important that you review and understand the audit report and audit working papers, even if you disagree with the auditor’s findings. You will not be able to make cogent arguments if you do not understand the audit papers.
A good settlement judge will make sure both parties compromise. You should enter a settlement hearing with an idea of how much you want to settle for and on what you are willing to compromise. Compromise is expected, even if you disagree with all audit findings. Once you’ve settled on specific items in theory, DHCS will crunch the numbers and provide you a rough draft of the agreed upon items with dollar amounts attached. It is imperative that you understand how those numbers were reached before agreeing to the settlement. Once agreement has been reached, the settlement conference (which typically can be completed within one day), both parties agree with a hand shake.
Usually, within the next 30 to 60 days, DHCS will provide the county with its settlement document based on the agreements reached at the hearing. Review the document to make sure there are no surprises and to ensure that there is no language that indicates the county concurs with DHCS’ adjustments. Neither DHCS nor the county admit fault in a settlement hearing, so the document shouldn’t seek to place blame on the county. You will have the opportunity to make any corrections or language changes before finalizing the settlement agreement.
Stayed tuned for our next blog in this series, Part III, related to TCM program audits.