Special New York Edition: Summary of the 2014-2015 Work Plan of the New York State Office of the Medicaid Inspector General

by Manatt, Phelps & Phillips, LLP

On April 2, 2014, the New York State Office of the Medicaid Inspector General (OMIG or the Agency) released its Medicaid Work Plan (the Work Plan) for federal fiscal year 2014. OMIG’s core function is to prevent, detect, and investigate Medicaid fraud and abuse. In calendar year 2013, preliminary OMIG recoveries topped $851 million—a new record for OMIG, and the highest ever recovered in a single year by any state, according to the Agency.

The Work Plan serves as a road map for OMIG’s investigative and enforcement activity for the upcoming year. As in the past two years, it is organized according to the Agency’s internal Business Line Teams (BLTs). The area on which OMIG appears to intend to place the most focus is managed care. However, OMIG will expand its activities in other areas as well, including certified home health agencies, personal care services, and supported employment services, among others. OMIG also will work with local governments to increase recoveries in the County Demonstration program. OMIG’s plans for each BLT are summarized below.

Over the course of the last year, OMIG—along with the state’s Medicaid program—has been the subject of some sustained criticism, both in the general media (see, e.g., N. Bernstein, “Two Firms Accused of Using Political Ties to Bilk Medicaid,” New York Times, August 9, 2013, and J. Odato, “Medicaid police lacking detectives,” Albany Times-Union, March 25, 2013) and from Congressman Darrell Issa, Chair of the House of Representatives Committee on Oversight and Government Reform (“Billions of Federal Tax Dollars Misspent on New York’s Medicaid Program,” Report, Committee on Oversight and Government Reform, March 5, 2013). In this context, the Agency has been placed under unprecedented pressure to demonstrate its capacity to oversee the largest Medicaid program in the country—pressure that inevitably may result in a more aggressive stance in auditing and recovering Medicaid funds from healthcare providers.

I. Home and Community Care Services

The Home and Community Care Services BLT will engage in the following initiatives:

  • Review certified home health agency (CHHA), long-term home health care program (LTHHCP), personal care agency, traumatic brain injury and private duty nursing for appropriate provision of services, consistency with patient care/service plans, compliance with consumer spend down rules, home health and personal care billing for inpatients and nursing facility residents, and home health aide overlapping payments for dual eligibles under Medicare and Medicaid.
  • Evaluate data from verification organizations used by CHHA, LTHHCP and personal care providers, which incorporate automated controls to verify the actual services provided, etc.
  • Review LTHHCP and CHHA rates.

II. Hospital and Outpatient Services

The Hospital and Outpatient Services BLT will engage in the following initiatives:

  • Review appropriateness of payments for Diagnostic and Treatment Center services, focusing on physical, speech and occupational therapy services, and HIV primary care services.
  • Ensure federally qualified health center (FQHC) payment rates were not paid when services were provided at a non-FQHC approved location.
  • Review claims to detect billings for emergency visits, clinic visits and related ancillary services during a hospital inpatient stay.
  • Review provision of non emergency services to non-US residents.
  • Review various outpatient department services, including underlying physician orders and test results.

III. Managed Care

The Managed Care BLT will engage in the following initiatives:

  • Identify duplicate payments consisting of out-of-network claims made to Medicaid for family planning and reproductive health services that were included in the capitated payment.
  • Review fee for service (FFS) payments for duplicate billing.
  • Examine claims for managed care consumers who had a date of service after their date of death, or during a period of incarceration or institutionalization.
  • Work with the Department of Health (DOH) to examine managed care organization (MCO) coding policies for completing patient encounter forms.
  • Review various aspects of MCO cost reports.
  • Determine if the managed long-term care (MLTC) plans properly determined eligibility for enrollment and provided proper care management to selected members.
  • Review managed care edits that validate encounter records, and work with MCOs to strengthen systems controls, as well as share best practice edits.
  • Review Medicaid payments made for the same consumer with multiple client identification numbers.
  • Provide contractual, administrative, and medical utilization review oversight to MCOs’ recipient restriction program.
  • Determine whether MCOs are returning monthly capitation payments based on local districts’ retroactive disenrollment of consumers.
  • Investigate social adult day care centers for overcrowding, inappropriate solicitation of Medicaid clients and the enrollment of unqualified clients in the MLTC program.
  • Coordinate with special investigative units of MCOs.
  • Review supplemental capitation payments made in relation to the delivery of a newborn.

IV. Medical Services in an Educational Setting

The Medical Services in an Educational Setting BLT will engage in the following initiatives:

  • Review School Supportive Health Services program claims billed by school districts for possible duplicate payments with claims also billed by the Office for People with Developmental Disabilities intermediate care facilities.
  • Review preschool programs, school districts, and other schools receiving Medicaid reimbursement for services provided to special education students between the ages of 3 and 21 to ensure the services are provided in accordance with the child’s individualized education program.

V. Mental Health, Chemical Dependence and Developmental Disabilities

The Mental Health, Chemical Dependence and Developmental Disabilities BLT will review providers whose comprehensive outpatient program reimbursements exceeded threshold amounts. In addition, the BLT will review the following to determine whether services were provided in accordance with Medicaid requirements:

  • Chemical dependence inpatient rehabilitation services
  • Community residence rehabilitation services
  • Day habilitation
  • Day treatment
  • Medicaid service coordination
  • Outpatient chemical dependence services
  • Outpatient mental health services
  • Prevocational services
  • Residential habilitation
  • Supported employment services

VI. Pharmacy and Durable Medical Equipment

The Pharmacy and Durable Medical Equipment BLT will engage in the following initiatives:

  • Review complicit and non-complicit overprescribing of drugs as well as intentional and unintentional overuse; investigate the resale of drugs and the proper authorization of written prescriptions.
  • Determine whether durable medical equipment (DME) equipment and supplies were authorized by a licensed practitioner, were rendered for the dates billed, and that appropriate procedure codes were used in the billing process; conduct prepayment reviews of selected DME providers dispensing orthopedic shoes; provide oversight of DME reviews that are conducted by the County Demonstration Program, which was created to further the state’s efforts to combat fraud and abuse in the Medicaid program by allowing authorized local districts to act as agents of OMIG, thus assisting OMIG in assessing provider Medicaid program integrity.
  • Compare payments made for prescriptions and/or DME items claimed with pharmacy inventory purchases to determine whether the pharmacy had ordered at least the volume of drugs or DMEs necessary to fill the prescriptions that were claimed.
  • Identify pharmacy services billed to both Medicare Part D and NY Medicaid.
  • Conduct pharmacy reviews to ensure provider adherence with applicable federal and state laws, regulations, rules and policies.

VII. Physicians, Dentists and Laboratories

The Physicians, Dentists and Laboratories BLT will engage in the following initiatives:

  • Review situations where clinical psychologists and social workers inappropriately billed both Medicare and Medicaid for similar services for the same consumer on the same date of service.
  • Review orthodontic dental services for exceeding age limits and maximum number of treatment quarters. Excessive preventive services provided by private dentists exceeding the frequency limits to the same consumer within a certain time period will also be reviewed for possible recovery of overpayments.
  • Identify services ordered or referred by an excluded provider.
  • Review controlled substance prescribing patterns to determine if the ordering was medically necessary.

VIII. Residential Healthcare Facilities

The Residential Healthcare Facilities BLT will engage in the following initiatives:

  • Conduct reviews of the documentation of care given to assisted living program (ALP) residents.
  • Review new base year rates approved by DOH; focus on inappropriate and unallowable costs included in the new residential health care facility (RHCF) rates and review add-ons to determine whether they were appropriately calculated.
  • Review nursing facilities reserved bed payments to determine whether facilities are qualified to receive such payments.
  • Audit underlining costs included within the capital component of the RHCF Medicaid rate and, if necessary, make appropriate adjustments to the rates.
  • Identify goods and services delivered to ALP residents by other providers and billed to the Medicaid program, which were also included in the ALP payment rates.
  • Conduct risk assessments and perform reviews of the Medicare Part B offset for facilities that are rated as high-risk; review any appeals processed by DOH.
  • Review minimum data set submissions from nursing facilities.
  • Carry forward base year operating cost audit findings and adjust rates accordingly.
  • Review rate appeals that have been approved by DOH and, where indicated, audit underlying costs associated with those appeals to determine the appropriateness of each appeal issue.

IX. Transportation

The Transportation BLT will engage in the following initiatives:

  • Work to identify high-ordering Medicaid transportation providers for field review under the 19-A Stop Project.
  • Review claims for transportation services to identify whether they were provided or if they were provided at a threshold of service beyond that which was deemed medically necessary.
  • Review providers using inactive National Provider Identifiers as the prescribing provider, or failing to document the driver’s license of the driver and/or plate number of the vehicle.
  • Continue to review transportation providers who use disqualified drivers.

X. Activities Relating to Multiple Business Lines

In addition, the Work Plan describes several activities that relate to multiple business lines:

  • AIDS-Related Issues
  • Medicaid Consumer Investigations
  • Ambulatory Payment Groups
  • Medicaid EHR Incentive Payment Program
  • Collaborative Efforts with Law Enforcement/Medicare Fraud Strike Force
  • Medicaid Integrity Contract Audits
  • Collaborative Managed Care Surveys
  • Medicaid Recovery Audit Contractor
  • Compliance Program General Guidance, Assistance and Reviews
  • Medicare COB with Provider-Submitted Claims
  • Corporate Integrity Agreement Enforcement
  • Patient Protection from Disqualified Providers
  • County Demonstration Program
  • Payment Error Rate Measurement Project
  • Enrollment and Reinstatement
  • Pre enrollment Review
  • Estate and Casualty Recovery
  • Prepayment Insurance Verification
  • FFS Third-Party Retroactive Recovery Projects
  • Prepayment Review
  • Kickbacks and Inducements
  • Prior Audit Findings by Other Agencies
  • Location of Services Unknown to NY State DOH
  • Self-Disclosure Efforts
  • Managed Care Third-Party Retroactive Recovery Projects
  • Third-Party Liability and Commercial Direct Billing


  • Undercover Operations

New York Medicaid providers should closely review the Work Plan for insight into OMIG’s perceived areas of risk and enforcement goals.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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