OMIG Releases Revised Guidelines for PPS Compliance Training

September 8, 2015 | Health Services

The Office of the Medicaid Inspector General (OMIG) released supplemental guidance in April 2015 for performing provider system (PPS) lead entities (PPS Leads) on special factors that must be taken into account, in addition to the compliance program requirements of New York Social Services Law Section 363-d and Title 18 of the New York Codes Rules and Regulations at Part 521, with respect to compliance under the Delivery System Reform Incentive Payment (DSRIP) program.  On September 3rd, the OMIG released revised guidance which replaces the previous guidance and provides further detail on how PPS leads may monitor providers within their PPS.  As further described below, the OMIG requires additional considerations for PPS Leads which directly impact not only their compliance obligations, but the obligations of any providers participating in a PPS.

Follow the Money

During the DSRIP program, PPS Leads will make Medicaid payments to providers within their PPS in connection with DSRIP project implementation and performance.  As such, OMIG requires that PPS Leads dedicate resources towards implementing an effective compliance program which ensures that Medicaid funds distributed as part of the DSRIP program are not connected to fraud, waste or abuse.  The key concept for such compliance programs has consistently been to “follow the money,” making it imperative for such PPS Leads to have mechanisms in place to monitor funds flow to providers within the PPS.  To address ambiguity on whether PPS Leads are obligated to monitor how providers in the PPS use their DSRIP distributions, OMIG revised the guidance clarifying that PPS leads cannot be responsible for how provider’s in the PPS use their DSRIP funds.  It should be noted, however, that the revised guidance also states that PPS Leads must have adequate processes in place to identify when providers with the PPS have obtained “DSRIP distributions in a way that is inconsistent with the approved DSRIP project plans.”  Therefore, providers participating in a PPS must be cognizant that truthful and accurate data reporting with respect to their involvement in any DSRIP projects is of the utmost importance and will be subject to monitoring and auditing by their PPS Lead.

Special Considerations by Element

In acting as Medicaid providers, as required by the New York State Department of Health (DOH), PPS Leads must comply with and implement compliance policies and procedures in regards to the 8 elements as promulgated by the rules and regulations referenced above.  Additionally, OMIG has highlighted special considerations per element:

Element 1: PPS Leads must have written policies and procedures that describe compliance expectations involving DSRIP funds, including communication and reporting of compliance issues, as embodied in a code of conduct or code of ethics.  Providers participating in a PPS will likely be required to review and comply with such a code by their PPS Lead.

Element 2: PPS Leads must designate a compliance officer who is an employee vested with the responsibility for the day-to-day operation of the compliance program, reporting directly to the PPS Lead’s chief executive or other senior administrator and periodically reporting directly to the PPS Lead’s governing body.

Element 3: PPS Leads are responsible for the training and education of all affected employees, persons associated with the PPS Lead (including providers in the PPS who are or may be eligible to receive DSRIP funds), its executives and its governing body members on compliance issues and expectations.  PPS Leads have the option to either provide the training and education itself, or supply training and education materials and have a process in place to confirm that the training and education was given at each provider in the PPS.  Providers in the PPS must be aware that such materials will likely be specific to the DSRIP program and are supplemental to the compliance program they may be required to have in place by law.

Element 4: PPS Leads must establish lines of communication to the PPS Lead compliance officer which provides all affected individuals an anonymous and confidential method of reporting compliance issues.

Element 5: PPS Leads must have disciplinary policies and procedures to encourage good faith participation in the compliance program by all affected individuals.  OMIG has recommended that such policies and procedures should be communicated through training and education and PPS Leads will likely coordinate with providers in the PPS to support implementation of such policies and procedures throughout the PPS.

Element 6: PPS Leads must develop and implement a system for routine identification of compliance risk areas specific to their entity.  In its revisions to the guidance, OMIG included “partners’ performance and progress towards DSRIP milestones” as a risk area for PPS Leads. In order to identify this and other compliance risks, PPS leads will likely implement a comprehensive plan for auditing and monitoring providers in their PPS.

Element 7: PPS Leads must develop and implement a system for responding to compliance issues.  OMIG previously stated that PPS Leads “should consider misuse of DSRIP funds and false representation to obtain DSRIP funds.”  The revised guidance, however, provides a more detailed recommendation by OMIG which states that the PPS Lead “should consider its own willful misuse of DSRIP funds, or false statements made by a PPS Lead or its network providers to obtain DSRIP funds.”  OMIG has provided definitions for both “misuse” and “false statements” stating that “misuse” includes the use of DSRIP funds for purposes other than those described in the PPS Lead’s project plan, implementation plan, or as committed in any performance report; and “false statements” include making, or causing to be made any false, fictitious or fraudulent statement or misrepresentation of fact.  Program integrity, is therefore, a crucial element in the distribution of DSRIP funds and must remain as a core consideration for both PPS Leads and providers participating in a PPS.  As PPS Leads must also have a method for prompt corrective action and refunding overpayments and must work with providers in the PPS to support compliance with this requirement, the OMIG has also defined “overpayments” in the revised guidance to include DSRIP payments that are issued based upon data that DOH and the DSRIP Independent Assessor subsequently determine to be incorrect or falsified, regardless of the reason.

Element 8: PPS Leads must develop a policy of non-intimidation and non-retaliation for good faith participation in the compliance program and PPS Leads will likely coordinate with providers in the PPS to support implementation of such policies and procedures throughout the PPS.

Given that up to $6.42 billion dollars have been allocated to the DSRIP program, it is imperative for PPS Leads to implement a comprehensive compliance program that will prevent and identify Medicaid payment discrepancies related to the DSRIP program.  PPS Leads are dependent upon providers to ensure complete implementation and effectiveness of the compliance program.  Providers in the PPS should expect compliance program requirements to be incorporated in any agreements they have with the PPS Lead and should be aware that they will likely be subject to auditing and monitoring, particularly in regards to how they obtain DSRIP funds.  In light of the fact that DSRIP is expected to develop as a program, PPS Leads and providers participating in a PPS should anticipate additional considerations and compliance-related obligations in the coming future.

Further guidance regarding compliance related to the DSRIP program can be found on OMIG’s website at  You may also contact Benjamin Malerba at


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