Relates to fair procedures, practices, and standards for actions by the office of medicaid inspector general and social services districts

Summary of specific provisions

Provider due process:

* Recovery of payments only after notice and opportunity for a hearing.

* Recovery limited to a rate of not more than 10% of a provider's Medicaid income in any period, except for fraud.

* OMIG may not re-audit something audited by another agency unless for good cause.

* Audits limited to a period of 3 years, except for fraud.

* Protects providers from penalty if they complied with agency policies or interpretations, which may not be changed retroactively.

* Where a provider is subject to professional discipline, their suspension from Medicaid may not be for a longer period. This does not limit expulsion from Medicaid based on OMIG finding fraud.

* OMIG must follow other agency determinations of an issue unless clearly wrong.

* Pre-hearing mutual disclosure of evidence and witnesses, including OMIG disclosure of exculpatory evidence.

* Provider not penalized for another provider's action, unless the first provider knew/reasonably should have known.

* Where a recovery is claimed for a technical or administrative error, the provider must have a chance to re-submit, and the penalty cannot exceed 10% of the amount properly claimed.

* For "extrapolation" based on a sample of claims, there must be notice of the methodology, which must be statistically valid, and a 5% threshold error rate.

* Where there was wrongful withholding or recovery, the provider gets repayment with interest.

* If recovery is greater than 10% of a provider's Medicaid income or the provider is to be suspended from Medicaid, OMIG must determine that this will not unduly harm health care to Medicaid recipients.

* OMIG must use trained qualified auditors.

* Rebuttable presumption that a provider's clinical judgments are valid.

* OMIG must consider documentation provided by the provider.

* Notice of records to be examined or seized.

* Where OMIG finds a provider's "compliance program" is inadequate, the provider must receive a list of deficiencies and have an opportunity to correct.

* Medicaid claims may be filed within 2 years, not 90 days.

Recipient due process:

* Notice of rights, including right to counsel and a fair hearing.

* Investigation period limited to 3 years, except for fraud.

* If recovery of payments would mean financial hardship, it is limited to a rate of 10% of the recipient's income, unless the recipient agrees to another amount.

* Notice of findings and right to a fair hearing before any recovery can be made.

* Where a recovery is because of incorrect or missing information from the recipient, the recipient must have known/reasonably should have known and had notice of the requirement for the information, except for intentional misconduct.

Justification

When the OMIG was created in 2007, the emphasis of the legislature and the concern of the public was on fraud and waste in the Medicaid system. Experience with the new law has made it clear that the original statute is missing key provisions that are necessary to assure fairness and procedural clarity for all the parties involved, including the personnel of the OMIG.

The bill would provide basic due process protections comparable to what would be commonly available in administrative investigative or enforcement proceedings, including, for example, professional discipline proceedings.

Prior legislative history

New Bill.

Fiscal implications

None.

Effective date

The ninetieth day after it has became law, and apply to any matter commenced or pending on or after that date. However, with respect to any matter pending on or after such date, this act shall not invalidate any actions or steps taken or commenced prior to such date

and shall only apply to actions or steps commenced on or after such date.