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LeadingAge NY Comments on Proposed OMIG Regulations

LeadingAge NY submitted formal written comments expressing serious concerns about proposed regulations from the New York State Office of the Medicaid Inspector General (OMIG) that would broaden the application of monetary penalties to providers and managed care plans for overpayments and failures to provide access to records/facilities and to have effective compliance programs. The rule stems from provisions in the final budget for State Fiscal Year (SFY) 2020-21 [Chapter 56 of the Laws of 2020].

The proposed rule would repeal and replace current regulations at 18 NYCRR Part 516 governing imposition of monetary penalties for Medicaid overpayments. Chapter 56 of the Laws of 2020 authorizes OMIG to impose monetary penalties on Medicaid providers, Medicaid Managed Care Organizations (MMCOs), or Managed Long Term Care plans (MLTCs) for:

  • Failure to grant timely access to facilities and records, upon a reasonable notice, for the purpose of audits, investigations, or reviews;
  • Instances when the entity knew of, or should have performed due diligence to identify, an overpayment and fails to report the overpayment to OMIG; and
  • Intentional or unintentional establishment of arrangements or contracts with any individual or entity that is known or should be known to be suspended or excluded from participating in the Medicaid program.

In its comments, LeadingAge NY raised concerns about how “timely access” to records will be defined, the 5 percent claims threshold for defining when penalties may be assessed, directives other than regulations that providers and plans may be audited on, and how penalty amounts are determined.

Chapter 56 of the Laws of 2020 and these regulations also ratchet up the potential consequences of failing to implement and maintain an effective compliance program:

  • Effective April 1, 2020, implementation of a provider compliance program is now “a condition of payment from the medical assistance program,” which means that OMIG can recoup all Medicaid payments to a provider during a period when the provider did not have an effective compliance program in place.
  • OMIG may impose a monetary penalty of $5,000 per month, for up to 12 months, for the failure to adopt and implement a compliance program meeting statutory requirements. The penalty increases to $10,000 per month, for up to 12 months, if a penalty was previously imposed within the past five years. These penalties can be imposed for compliance program reviews conducted on or after Jan. 1, 2021.

The proposed regulation also authorizes imposition of monetary penalties in cases when an MMCO or MLTC submits a cost report to the Department of Health (DOH) that contains a misstatement of fact. A memorandum from LeadingAge NY counsel Hinman Straub summarizes the proposed regulations and the underlying changes in law.

Contact: Dan Heim, dheim@leadingageny.org, 518-461-2934