OMIG Releases Work Plan for 2017- 2018

May 15, 2017
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The New York State Office of Inspector General (“OMIG”) has released its Work Plan for its new fiscal year, April 1, 2017 – March 31, 2018. The Work Plan summarizes new and ongoing activities OMIG will prioritize in the upcoming year, all of which aim to achieve three over-arching objectives: (i) enhance provider compliance; (ii) prevent fraud, waste and abuse within the Medicaid Program; and (iii) promote innovative analytics to expand the integrity of the Medicaid Program and promote cost-efficient and high-quality care for patients. Some of the highlights from the Work Plan are summarized below.

Goal 1: Provider Compliance

With respect to OMIG’s first goal of enhancing provider compliance, OMIG will continue to review compliance programs to ensure providers, including managed care organizations, are implementing and operating their compliance programs as required by the Social Services Law and related regulations. It will also review whether providers are properly certifying their compliance program with OMIG at the end of each calendar year.

OMIG’s provider compliance review will include review of provider’s corporate integrity contracts and establishing corrective action where a breach of a provider’s corporate integrity contract is discovered.

Goal 2: Prevention of Fraud, Waste and Abuse

Much of OMIG’s activities for the upcoming year, however, will fall under its second goal of identifying and preventing fraud, waste and abuse within the Medicaid program. These activities will focus on five priority areas: (i) prescription drug and opioid abuse; (ii) home health and community-based care; (iii) long term care; (iv) transportation; and (v) managed care.

OMIG will continue to work towards reducing misuse and abuse of prescription drugs and opioids by issuing guidance on best practices and reviewing prescriptions billed under Medicaid. OMIG will focus on identifying trends where patients are “doctor shopping” in order to obtain prescription drugs and where providers are prescribing drugs in excessive amounts or providing services that may not be medically necessary.

OMIG is also mindful that home health and community-based services are expanding as the baby boomer generation ages. To oversee such services, the 2017-2018 Work Plan includes efforts to review the payment structures and billing patterns for long-term home health care, certified home health agency services, and private duty nurses, as well as incidences of duplicative billing when home health patients receive inpatient hospital services.

Similarly, with respect to long-term care services, OMIG will work towards identifying and preventing incidents of overbilling by auditing the billing and reimbursement system for assisted living programs, nursing homes and adult day care centers, as well as eligibility of enrolled patients with respect to such services.

OMIG will also conduct audits of the Medicaid managed care program, which includes participation of several types of managed care plans such as health maintenance organizations, prepaid health service plans and HIV special needs plans. As the amount of services that are rolled into managed care increases, OMIG intends to enhance the detection of fraud, waste and abuse in the managed care industry and implement corrective action plans where necessary. As part of this objective, OMIG will review compliance with recent new rules established by the Centers for Medicare and Medicaid for managed care organizations which include changes to compliance program requirements, self-disclosure programs, payment suspensions for credible fraud allegations, and record retention and audit periods for managed care organizations.

Within the managed care industry, OMIG will also analyze managed care network pharmacies. In particular, OMIG will review pricing arrangements between the pharmacies and the managed care plans, and verify prescriptions are ordered by qualified practitioners and supported by proper documentation.

In addition to the focus areas summarized above, in its effort to reduce fraud, waste and abuse in the Medicaid program, OMIG will audit transportation services (including providers of Medicaid ambulette and taxi services) and fee-for-service providers (including diagnostic and treatment centers, hospices, alcohol and substance abuse services and other mental health service providers). OMIG will also continue to assess overall provider participation in Medicaid and investigate providers involved in suspected or alleged fraud, waste or abuse.

Goal 3: Development of Analytics to Detect Fraud and Abuse

Finally, OMIG’s Work Plan includes efforts to develop innovative analytics from various data sources to better detect fraudulent and wasteful practices. OMIG plans to use the analytical tools it develops to review and identify improper Medicaid claims more efficiently. OMIG will also seek to recover any overpayment amounts that may be identified through this process.

For more information on Medicaid compliance, the entire Work Plan can be viewed at https://omig.ny.gov/images/stories/work_plan/SFY_2018_OMIG_Work_Plan_FINAL.pdf.

New York State Senate Budget Supports OMIG Work Plan

Concurrent with OMIG’s release of its new Work Plan, the New York State Senate passed a budget for the 2017-2018 fiscal year supporting OMIG’s objectives. The $153.1 billion budget passed in April 2017 includes funding for the Medicaid program that is on track with the OMIG Work Plan.

For example, in order to continue controlling the use and cost of prescription drugs, the budget includes a cap on prescription drugs, with a target savings of at least $55 million. The legislature also approved funding of $214 million to combat heroin and opioid abuse by expanding prevention, treatment, recovery and education services. $14 million will be spent to increase the salary of direct care workers who work with patients with developmental disabilities, mental health diagnosis and substance abuse disorders. The average salary of such workers is projected to increase by about 3.25% with the new budget.

With respect to managed care plans, the legislature restored $2.75 million in funding for managed long term care eligibility as well as $3.98 million for managed long term care transportation services.

Overall, the OMIG Work Plan and approved Senate budget offer an outline of the types of initiatives and actions that the New York legislature and government agencies will focus on in the next year. Providers and organizations can also expect additional guidance to be released with respect to these focus areas throughout the year.

By Jeffrey P. Rust, Esq. and Ada Kozicz, Esq.©2017 Rivkin Radler LLP. All rights reserved.