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 Medi- caid 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 suspen- sion 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 clear- ly 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% thresh- old error rate.

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

* 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

In 2006 the Legislature created The Office of the Medicaid Inspector General to coordinate anti-fraud efforts within the Medicaid program. The Legislative Intent of the enacting statute states that OMIG was intended to "create a more efficient and accountable structure, dramat- ically reorganize and streamline the state's process of detecting and combating Medicaid fraud and abuse and maximize the recoupment of improper Medicaid payments. At the time of passage, there was nearly unanimous support for an institution to crack down on fraud within the Medicaid system.

There is no longer the confidence that the OMIG is doing its job proper- ly. There is also a general sense that the OMIG feels it is above the laws, rules, and regulations that guide health care policy decisions in New York State.

Health care providers are heavily regulated entities in New York state. This is not surprising given the sensitive nature of the business, one in which lives are at stake. Nobody is arguing that the rules, regu- lations and statutes governing the health care industry need to be weak- ened or overlooked. What needs to occur, however, is a consistency in which those rules and regulations are implemented and enforced. Medicaid fraud is a serious offense and a drain on the states resources. The state needs to make sure the agency charged with combating this fraud operates properly.

The Senate Committee on Investigations and Government Operations convened a hearing on January 7, 2010 in order to look at the operations of The Office of the Medicaid Inspector General (OMIG). A follow up hearing was conducted on March 1st, 2010. This legislation is the prod- uct of these hearings as well as extensive meetings with many members of the health care provider community.

Fiscal implications for state and local government

Not applicable.

Effective date

The ninetieth day after it has become 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.