Acting Medicaid IG Frank Walsh Shares Agency’s Priorities

On May 13, 2021, Rivkin Radler Partner, and former OMIG First Deputy, Robert Hussar kicked off Rivkin Radler’s new Healthcare Compliance Lunch and Learn Series. He interviewed Frank T. Walsh, Jr., who offered his first public comments since assuming his role as Acting NYS Medicaid Inspector General (pending State Senate confirmation).

Mr. Walsh provided health care providers and other stakeholders a glimpse into his perspective in his new role. The Medicaid Inspector General shared interesting insight regarding some of OMIG’s top priorities and key initiatives.

Summary

• In the short-term OMIG will continue remote audits except in limited circumstances
• The 2020 Budget included new requirements for self-disclosures including a formal disclosure program and a “compliance agreement”
• The Budget also modified the requirements of mandatory compliance programs and made having an effective program a “condition of payment”
• Regulations and guidance on self-disclosures and mandatory compliance programs are forthcoming
• OMIG will continue to use audit protocols but their findings are not limited by them and
• Corporate Integrity Agreements are an important tool and OMIG is examining how to utilize them going forward.

Regarding OMIG’s upcoming agenda, Mr. Walsh stated that OMIG’s goal is to move forward and continue their “in-flight activities.” In the short term, OMIG is looking to focus on its Medicaid Redesign Team II (MRT II) initiatives, which, due to the pandemic, have taken longer than previously expected. In the long term, the agency is looking for feedback from providers and stakeholders about what it can do better.

Compliance Programs

Mr. Walsh addressed the recent changes to the compliance program requirements found at NY Social Services Law 363-d. The recent changes to SSL 363-d, which became effective April 1, 2020, addressed three main issues:

• The changes incorporated clarify the long-standing interpretation that Medicaid managed care monies are included in the calculation to determine whether a provider must have a compliance program under the law;
• Federal and NYS requirements were misaligned, and efforts were made to align them to achieve the mutual objectives without duplicating requirements; and
• The changes establish an intermediate set of remedies and sanctions for failing to adopt an effective compliance program. OMIG recognized that they didn’t have a good set of incentives to calibrate for some more minimal concerns and only a “nuclear option” of stopping all payment and kicking a provider out of the program.

Recognizing that OMIG’s existing regulation and guidance are sometimes at odds with the updated statute, a key agency initiative is to implement changes that will reconcile the differences between the updated statute and the regulations. Initially, the changes will be published in draft form. Mr. Walsh expects the regulations to come out “fairly soon,” but stated several factors influence the timing of the publication.

Noting that the updated legislation clarifies that an effective compliance program is a condition of payment, Mr. Hussar asked whether OMIG would claw back claims from providers without such a program. Mr. Walsh stated that OMIG wants to make sure the penalties imposed are reflective of the violation identified but that OMIG wants to preserve its discretion to impose penalties on a continuum, allowing circumstances to dictate the result. Although Mr. Walsh indicated that he anticipates providers will put in place effective compliance programs, recouping claims could be a potential outcome for providers who fail to do so.

On the topic of compliance programs, OMIG is implementing new requirements to conduct regular compliance effectiveness reviews. These reviews not only look at deficiencies, but also identify where providers are doing things correctly to establish best practices, and to determine where Medicaid can do things better.

Audits

Mr. Hussar noted that given New York State’s fiscal pressures, some providers are concerned about OMIG’s program integrity recovery efforts. Unlike the Federal State Health Reform Plan years 2006-2011, when the State was required to collect $1.6 billion in recoveries, Mr. Walsh said the focus is no longer on establishing targets but spending efficiently — establishing policies, procedures, and activities to conduct and reinvest in health care.

Regarding the short- and long-term view of audit recovery, Mr. Walsh stated that in the short-term not much change will be made with respect to remote audits, which are conducted in accordance with OMIG’s processes and procedures regarding safety standards. The exceptions are emergency situations or public safety concerns where an on-site visit may be more appropriate. In the long term, OMIG is evaluating whether to redesign the manner of conducting audits, and whether they will reinstitute on-site audits or continue with some procedures remotely.

Mr. Walsh stated that he plans to maintain the use of audit protocols, as he sees them as a valuable tool and an opportunity to collaborate with the provider community. He added that OMIG goes to significant lengths to develop and improve audit protocols, and they are useful to ensure OMIG and providers are talking the same language. He noted, however, findings can be made outside of the audit protocol, and that it is also important to follow the State statutes and regulations.

A focus of OMIG will be on managed care reviews and oversight because that is where the “business of the Medicaid program is residing.” Since 75 percent of Medicaid services are delivered through some managed care arrangement, it is important for OMIG to modify/migrate to reflect the new environment. Managed care organizations always had a responsibility to conduct audits since they were stepping in the shoes of the State to carry out the program’s objectives. OMIG wants to ensure both managed care organizations and OMIG can support one another and make sure payments are made in support of the Medicaid program.

Self-Disclosures

Mr. Walsh discussed the recent statutory changes to the self-disclosure requirements under the NYS Medicaid program, whose impetus was alignment with federal standards and improvement to State program standards. The new statutory language references a new “Self-Disclosure Program” and “a Compliance Agreement,” the details of which will first be released in draft format for public comment.

The intent of the Self-Disclosure Program is to match State standards with the existing Medicare 60-day requirement to identify and return overpayments. Details such as tolling requirements, installment payments, waiver of interest, submission and termination requirements will be spelled out in the regulations as they move forward. With respect, specifically, to waiving interest, Mr. Walsh thinks that this practice will continue, as OMIG would like to keep “everything” on the table for a case-by-case review of circumstances for a fair process moving forward.

Corporate Integrity Agreements

While OMIG uses Corporate Integrity Agreements (CIAs) in limited circumstances, such as when the Medicaid Fraud Control Unit is involved, OMIG is examining how to best utilize them moving forward. Mr. Walsh said that he views them as another important tool for the Medicaid program.

In summary, while the conversation offered a largely positive message from OMIG’s new leader, it also included a number of areas of potential concern for providers to process. It clearly highlighted that all providers should continue to regularly evaluate the effectiveness of their Compliance Programs and program integrity activities. Providers should monitor future pronouncements of OMIG and revise their Programs to reflect updated requirements and guidance.

Rivkin Radler’s Lunch and Learn Series will be held on the second Thursday of every month and will present information important to compliance professionals in the healthcare industry.

Rivkin Radler’s Compliance, Investigations & White Collar Practice is happy to assist providers with questions related to their compliance programs and initiatives. Please contact Robert Hussar at (518) 487-8258 or [email protected] or Ashley Algazi at (516) 357-3528 or [email protected].