Here's the last memo from GH previously posted. Everything is proceeding according to The Plan. Oh ye' of such little faith. Chill.
Good Afternoon Colleagues:
Last week I received notice from Cahaba Safeguard Administrators out of Milwaukee, WI that the Centers for Medicare and Medicaid Services, CMS, has decided to suspend all Medicare payments due to the Department of Justice lawsuit, until such time as CMS decides if we have been on the right side of the law all this time.
The suspension of our Medicare payments, while directly not a good thing, indirectly is a very, very good thing. I’ll explain both of these situations.
The suspension of Medicare payments will have very little impact on the cash coming in the door on which the business depends to operate. You may recall by the layoff of August 6th, we lowered our overhead by 70%. That’s why we depend on 30% of our billings to result in cash in the door to fund the operations of the business today. Medicare represents 25% of the total cash the company receives, but essentially none of that comes in the door. Nearly 100% of the Medicare money is paid by electronic funds transfer directly to BB&T. While the payment of the Medicare funds set us on the course to have BB&T paid off by the end of October, if we don’t receive another dime from Medicare, the bank will be paid off by the middle to the end of December. Ironically, before the Medicare suspension of payments was known, my lawyers and accountant submitted a repayment plan to BB&T giving us until December 31, 2013 to have them paid in full. That wiggle room may now be useful.
That’s the bad news –we can live with it until CMS makes their ruling.
The good news is that by CMS taking this action, they requested a rebuttal from me to demonstrate why the Department of Justice lawsuit has no merit. I sent that rebuttal to CMS two days ago. It is a strong rebuttal and defends our position with a good sensible argument using their own rules, regulations and guidance to defend how we have operated for the past 20 years.
I believe they will have this resolved within the next 30-60 days. Whichever way CMS rules on our business practices over the past 20 years, we will follow their mandate. The DOJ lawsuit will then most probably quickly settle. Either I will give them the money they are seeking (if CMS rules against us) or the DOJ will drop the case because they won’t have any case. Their argument will dissipate. If CMS rules against us, we can still appeal the outcome. I doubt this will be needed. Incidentally, keep filling the orders we receive including Medicare Beneficiaries properly qualified in nursing facilities. However, until CMS rules on this issue, hopefully within 60 days, we will cease submitting claims to Medicare for payment for nursing facility Part B patients. This constitutes less than 5% of our Medicare claims anyway. All sales consultants will continue to receive credit for all other Medicare work despite the suspension of payments.
So here is the thought I am going to leave you with. Both the banking problem and the False Claims Act lawsuit are looking to be resolved before the end of the year. The bank will be paid to zero. When CMS reads the overwhelming level of support we sent to them two days ago backing our business practices over the past 20 years, I am highly confident they will, at the minimum, restore Medicare payments and express to the DOJ the absence of any false claim wrongdoing on our part. They may change the rules to keep us out of NFs, but that would not be the end of the world for us, but would hurt those desperate patients needing our services—that alone would be painful and I hope they do not rule in that fashion to deny those beneficiaries the services Part B insurance was intended to give. At best, they will sanctify what we have been doing and clarify that we can continue to do our work in nursing facilities. Whatever they decide, I’m going to follow their direction once given.
Keep working and praying for the right outcome. I am. And I have not lost any hope whatsoever. I feel this is moving to a better outcome and will come to resolution so much quicker than I feared would result from the continuing presence of the DOJ suit.
Thanks for getting August to close and let’s work to make September a very good month.
George R. Hepburn, P.T.
President