OMIG Regulations Adopted
The New York State Office of the Medicaid Inspector General (OMIG) recently adopted regulations that will impose stronger monetary penalties and other actions on Medicaid managed care plans and providers. The regulations – which became effective Oct. 21, 2020 – stem from provisions in the final budget for State Fiscal Year 2020-21 [Chapter 56 of the Laws of 2020].
The final rule repeals and replaces previous regulations at 18 NYCRR Part 516 governing imposition of monetary penalties for Medicaid overpayments, incorporating the authority granted to OMIG in conjunction with the Department of Health (DOH), pursuant to Chapter 56. The law authorizes OMIG to impose monetary penalties on Medicaid providers, Medicaid Managed Care Organizations (MMCOs), or Managed Long Term Care plans (MLTCs) for:
- Failing 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;
- 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.
The regulation also outlines the procedures for imposing and collecting monetary penalties and allows for due process protections for providers, MMCOs, and MLTCs as the law allows.
Chapter 56 and these regulations also magnify 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.” As a result, 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, 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 new regulations also authorize imposition of monetary penalties in cases when an MMCO or MLTC submits a cost report to DOH that contains a misstatement of fact. A memorandum from Hinman Straub summarizes the proposed regulations (which were adopted without revisions) and the underlying changes in law.
LeadingAge NY had submitted formal comments expressing serious concerns about the proposed regulations. In the Oct. 21st State Register Notice of Adoption, OMIG responded specifically to our 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. While some helpful clarifications were provided, OMIG did not agree to make any revisions to the regulations in response to our comments.
Contact: Dan Heim, dheim@leadingageny.org, 518-461-2934