OMIG Issues New Compliance Alert for NY Medicaid Program

October 13, 2017 | Compliance Investigations & White Collar | Health Services

A recent Compliance Alert published by the New York State Office of Medicaid Inspector General (OMIG) underscores the need for Medicaid providers to re-evaluate their compliance programs in light of a shift toward new payment methodologies.

On August 31, OMIG published its first Compliance Alert of 2017, entitled “Mandatory Compliance Programs’ Risk Assessments: Changes in Medicaid Reimbursement System.”

The alert highlights the need for “Required Providers” – which include, but are not limited to, hospitals, nursing homes and providers that bill Medicaid at least $500,000 annually – to consider the manner in which new Medicaid payment methodologies may impact the risk assessment factors, processes and outcomes of their compliance programs.

Medicaid regulations mandate that compliance programs of Required Providers apply to and address:

  1. Billings
  2. Payments
  3. Medical necessity and quality of care
  4. Governance
  5. Mandatory reporting
  6. Credentialing and
  7. Other risk areas that are or should with due diligence be identified by the provider.

Historically, most Medicaid providers were paid on a fee-for-service basis, which meant their compliance program likely featured assessment activities aimed at determining whether covered, medically necessary services were delivered, coded correctly, billed accurately and timely, and met established quality-of-care standards.

More recently, however, Medicaid has been utilizing new and developing payment methodologies, including capitation, risk-sharing arrangements and value-based payments, among others. As the Medicaid program transitions from a fee-for-service environment, Required Providers need to evaluate whether these new payment methodologies create additional and unique program integrity concerns to be addressed by their compliance programs.

OMIG acknowledged in the alert that the new payment methodologies vary based upon provider type and factors associated with the actual services being delivered to Medicaid recipients. As a result, OMIG did not identify specific risk assessment activities to be undertaken, but it did recommend that providers “closely review reimbursement methodologies so they can identify where they might need to update risk-assessment activities.”

OMIG also suggested that “[r]isk assessments may need to expand beyond the integrity of the billing and payment process to include an assessment of the processes involved in the delivery of Medicaid reimbursable services.”

Overall, OMIG’s alert is far from specific on the changes that Required Providers should implement to ensure that their compliance programs account for the shift away from fee-for-service payments. However, with the advent of the new and developing payment methodologies, it is likely that OMIG will be sharpening its focus on the adequacy and appropriateness of the compliance programs of those Required Providers participating in such payment systems.

Accordingly, Required Providers are encouraged to review their compliance programs with experienced counsel to ensure that they properly account for the unique features of the current and developing Medicaid payment systems.

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