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LeadingAge NY Seeks Delay in Implementation and Added Flexibility in Comments on Proposed OMIG Regs

LeadingAge NY submitted comments this week on proposed regulations issued by the State Office of the Medicaid Inspector General (OMIG), seeking a delay in implementation of the new regulations until at least one year following the end of the federal Public Health Emergency (PHE). The comments also objected to the proscriptive nature of certain elements of the proposed regulations and requested that Programs of All-Inclusive Care for the Elderly (PACE programs) be exempt from burdensome managed care program regulations.

The proposed regulations, which were published on July 13, 2022 in response to legislation enacted in 2021, are intended to strengthen the required elements of a Medicaid fraud, waste, and abuse compliance program; to expand the regulatory requirements applicable to Medicaid managed care organizations; and to strengthen OMIG's self-disclosure process for overpayments. The proposed regulations expand upon the existing elements of the Medicaid compliance program and impose new requirements to ensure that every affected contractor of a "Required Provider," as well as its employees, is trained on and adheres to the Required Provider's compliance program. "Required Providers" include not only providers, but also managed care and managed long term care (MLTC) plans.

LeadingAge NY highlighted, in its comments, the ongoing challenges faced by long term care providers and MLTC plans as a result of the pandemic, including severe staffing shortages that affect administrative as well as direct care staff. Since these regulations would require the investment of significant resources in developing new policies and procedures and training staff, we asked that implementation be delayed until one year after the termination of the federal PHE.

LeadingAge NY also requested that the definition of "Affected Individuals" subject to the Required Provider's compliance program be narrowed. We noted that the inclusion of contractors in this category would be infeasible. For example, every Medicaid provider that contracts with a managed care plan would be subject to the compliance program of each of its plans, as well as its own compliance program, and its staff would have to be trained on each program. Instead, we requested that contractors be permitted to rely on their own compliance programs to satisfy the requirements of the regulation.

LeadingAge NY further sought an exemption from the managed care provisions of the proposed regulations for PACE programs, which are both providers and MLTC plans and are subject to extensive PACE-specific federal regulations, including regulations governing fraud, waste, and abuse. We noted that PACE programs tend to be much smaller entities than other MLTC plans and that they deliver much of their services directly or through affiliated entities, which reduces the likelihood of many types of managed care fraud, waste, and abuse.

We noted that many of the staffing and governance requirements of the proposed regulations are overly proscriptive and urged OMIG to allow providers and plans the flexibility to structure their programs based on their organization's risk areas and needs. In particular, LeadingAge NY pointed to certain special investigation unit (SIU) provisions applicable to MLTC plans, which are more rigorous than the SIU requirements applicable to other plans.

Finally, LeadingAge NY questioned the appropriateness of certain elements of the Self-Disclosure Program provisions. Specifically, we noted that the requirement to submit a Self-Disclosure Statement upon discovering an overpayment, even if the “person” is under investigation or audit by OMIG or under criminal investigation pertaining to their participation in Medicaid, raises constitutional issues. In addition, we objected to the requirement that all disclosing persons not only repay the overpayment, but also enter into a Self-Disclosure and Compliance Agreement. We noted that a requirement that every self-disclosing entity execute a compliance agreement with prospective obligations may have a chilling effect on self-disclosures.

We will keep members updated on the progress of these regulations. If the regulations are adopted, Required Providers will need to carefully review and revise their compliance programs to comply with the new requirements.

Contact: Karen Lipson, klipson@leadingageny.org