1. The Office of the Medicaid Inspector General and Other Friends
OMG! OMIG!
The Office of the Medicaid Inspector General and Other Friends
Hermes Fernandez Bond, Schoeneck & King, PLLC (518)

2. The Office of Medicaid Inspector General
Created by Statute (Chapter 442 of the Laws of 2006, Public Health Law sections 30-36)
Independent office to detect, prevent and recover Medicaid fraud, abuse and illegal acts
Approximately 700 employees

3. The Medicaid Inspector General
Jim Sheehan, appointed by Eliot Spitzer
Formerly Deputy US Attorney in Philadelphia
Brought a number of high profile cases against health care providers across the nation

4. OMIG’s Principle Powers
Audit
Sanctions
Exclusions
Investigations

5. OMIG Audits Commenced by a notification letter
Audit can cover six years from date of notification letter
If fraud, no time limit
Audit must begin within 60 days, although OMIG can extend for another 60 days

6. OMIG Audits Take the notification letter seriously
Start gathering records
Do not alter or correct records

7. OMIG Audits Notification Letter may ask for more than case records
Corporate Compliance Plan
Minutes
Survey Results
Financial Statements

8. OMIG Audits Audit begins with an entrance conference
Pay attention
Provide the records requested
Keep looking
On-site audit includes a closing (exit) conference
Desk audit – no closing conference

9. OMIG Audits Usually done by a statistical sample
100 samples, spread over four years
Sample and time can be different
Results are extrapolated
Findings are usually to a 90% confidence level
This creates a range of potential overpayments
Low point and midpoint are important

10. OMIG Audits Exit Conference Preliminary Audit Report Very important
Not required by regulations
Very important
Respond, keep lines open
Best chance to shape the Draft Audit Report

11. OMIG Audits Draft audit report Provider response is a legal response
Findings and conclusions
Provider response is a legal response
This is close to OMIG’s final recoupment demand

12. OMIG Audit Provider response to draft audit due in 30 days
Extensions usually granted
Provider must state all grounds for objection, e.g.:
Statistical method improper
Services were properly provided and recorded
Audit period improper

13. OMIG Audits Final audit report Hobson’s choice
Comes with letter demanding recoupment
Provider has right to evidentiary hearing before DOH ALJ
Hobson’s choice
If no hearing, OMIG will accept low point estimate
If hearing, OMIG will seek mid-point estimate
At hearing, provider bears burden of proof

14. OMIG Audit OMIG will usually recoup through a withhold
Can be total
Can be reduced to 5% for undue hardship
Recoupments paid over time include interest

15. OMIG Audit
Recoupment continues through the hearing before the Administrative Law Judge
Can be reviewed through Article 78 process
Recoupment continues through judicial process
Narrow window for success in Article 78

16. OMIG Audit Common bases of recoupment Missing records No notes
Note inadequately describes service
Lapsed or untimely treatment plan
Service does not tie to treatment plan
Lack of credentials
Missing signature or date

17. OMIG Sanctions Could follow audit, could come separately
Investigation will look similar to audit
Notice of proposed agency action
30 days to respond
Extensions are not automatic
Notice of agency action
May not include a right to administrative hearing

18. OMIG Sanctions Unacceptable practices False claims Care not provided
Care excessive
Care inadequate
Bills excessive
Inadequate records
Employing an excluded person

19. Immediate Sanctions
Determination of imminent danger due to provider’s continued participation
Exclusion first, hearing second
Indictment or conviction for false billings
State or federal exclusion
Immediate withholds

20. OMIG Sanctions Program exclusion Censure Prior authorization
Recoupment
With interest

21. Self-Disclosure Necessary when overpayments have been identified
Cannot be deliberately ignorant
Neither should you hunt for unknown problems
Ties into corporate compliance program

22. Self-Disclosure Make a complete disclosure OMIG web-site has protocol
Identify:
Nature of Problem
How Discovered
Claims covered
Corrective action
Can be done through an intermediary
Good idea

23. PPACA, FERA, and NY False Claims Act
PPACA = Patient Protection and Affordable Care Act, signed by President Obama on March 23, 2010
FERA = Fraud Enforcement and Recovery Act, signed by the President in May, 2009
NY False Claims Act

24. PPACA SECTION 6402(d) – REPORTING AND RETURNING OVERPAYMENTS
‘‘(1) IN GENERAL — If a person has received an overpayment, the person shall—
‘‘(A) report and return the overpayment to the Secretary, the State, an intermediary, a carrier, or a contractor, as appropriate, at the correct address; and
‘‘(B) notify the Secretary, State, intermediary, carrier, or contractor to whom the overpayment was returned in writing of the reason for the overpayment

25. WHAT IS AN “OVERPAYMENT”?
PPACA: ‘‘(B) OVERPAYMENT—The term ‘‘overpayment’’ means any funds that a person receives or retains under title XVIII (Medicare) or XIX (Medicaid) to which the person, after applicable reconciliation, is not entitled under such title”
NEW YORK: “An overpayment includes any amount not authorized to be paid under the medical assistance program, whether paid as the result of inaccurate or improper cost reporting, improper claiming, unacceptable practices, fraud, abuse or mistake.” 18 NYCRR § 518.1(c).

26. UNACCEPTABLE PRACTICES
18 NYCRR 515.2
Conduct contrary to the rules and regulations of DSS, DOH, NYSED, OPWDD, OMH, OASAS, U.S. HHS, and specifically includes:
False or fraudulent claims
Bribes and kickbacks
Failing to meet the standard of care
Employment of sanctioned persons
Unacceptable recordkeeping

27. WHEN MUST AN OVERPAYMENT BE RETURNED?
An overpayment must be reported and returned . . .by the later of –
(A) the date which is 60 days after the date on which the overpayment was identified; or
(B) the date on which any corresponding cost report is due, if applicable

28. WHEN IS AN OVERPAYMENT “IDENTIFIED”?
OMIG: “identified” means learning of the fact that an overpayment has been received, not the amount of the overpayment
When do providers learn of the fact of an overpayment?

29. WHEN IS AN OVERPAYMENT “IDENTIFIED”?
PPACA: overpayments are funds received and retained “after applicable reconciliation”
suggests that provider has an opportunity to “reconcile” whether an overpayment occurred
Interview employees
Assess circumstances
Consult with counsel

30. WHAT IF OVERPAYMENT MISIDENTIFIED?
No obligation to report if your investigation concludes no overpayment was made
Risk is on provider who decides not to report

31. DOCUMENT EFFORTS TO IDENTIFY OVERPAYMENTS
Create a record of your organization’s efforts to address allegations of overpayments
Develop form to document employee’s internal disclosure
Document interviews
Document evidence
Record of employees involved in determination
Timely repayment as an element of an effective compliance program

32. RETURNING OVERPAYMENTS TO NY MEDICAID
Overpayments should be returned, reported, and explained to OMIG
Self-Disclosure Protocol
Providers may use void process through CSC for smaller or routine claims - $5,000 or less
Billing errors
Late reimbursement
Documentation anomalies

33. STATE THE REASON FOR THE OVERPAYMENTS
Duplicate payments
Services not actually rendered
Payment already made by primary insurance
Payment for services rendered during a period of non-entitlement (patient's responsibility)
Excluded provider
Patient deceased
Provider lacked required license or certification

34. MORE REASONS FOR OVERPAYMENTS
Service inconsistent with physician order or treatment plan
Service not ordered or authorized
Order or service not sufficiently documented as required by regulation or policy
Prescriptions, Treatment Plans, Progress Notes
Missing signatures

35. ENFORCEMENT
PPACA 6402(d)(3) “ENFORCEMENT” — Any overpayment retained by a person after the deadline for reporting and returning the overpayment under paragraph (2) is an obligation (as defined in section 3729(b)(3) of title 31, United States Code) for purposes of section 3729 of such title. (False Claims Act)

36. CONSEQUENCES
False Claims Act imposes liability for a person who “knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government” new 31 U.S.C. 3729(a)(1) (G) added by FERA
“knowingly” includes reckless disregard, deliberate ignorance
PPACA makes clear that claims made for items or services resulting from a violation of the anti-kickback statute are false claims
OMIG View: an overpayment which is timely reported and explained will not give rise to FCA liability even if the provider is unable to repay it within 60 days, unless there is evidence of improper “avoidance”

37. CIVIL MONETARY PENALTIES
Knowing of an overpayment and failing to report and return within 60 days: $10,000 for each item or service overpaid
Knowingly making a false record or statement material to a false or fraudulent claim: $50,000 for each false record or statement
False statements, or omissions or misrepresentations on an application for enrollment: $50,000
Failure to grant timely access for purposes of audit, investigation or evaluation: $15,000 per day
Treble damages

38. INCENTIVE TO SUSPEND PAYMENTS
Where “the State has failed to suspend payments under the plan during any period when there is pending an investigation of a credible allegation of fraud as determined by the State unless the State determines in accordance with [HHS] regulations there is good cause not to suspend such payments” CMS may recover payments from State

39. CMS WITHHOLD REGULATION (42 C.F.R. 455.23)
State Medicaid agencies may withhold payments based on “reliable evidence” of fraud or willful misrepresentation
Notice must state that payments are being withheld in accordance with this section
New York has further authority

40. OMIG WITHHOLD REGULATION (18 NYCRR 518.7)
OMIG just needs “reliable information” that a provider is involved in fraud, abuse or an unacceptable practice
Reliable Information
Audit
Utilization review identifies unacceptable practice or significant overpayments
State licensing board or agency
Prosecutorial agency (MFCU)

41. Excluded Persons
Cannot work in a program funded by Medicaid (overstatement, but best guide)
Fee or cost report
Crime by the excluded person
Could be crime by the employer
Billing for services delivered by excluded person subject to recoupment
OMIG maintains list on website
Check every thirty days

42. CMS EXCLUSION REGULATION
“No payment will be made by Medicare, Medicaid or any of the other federal health care programs for any item or service furnished by an excluded individual or entity, or at the medical direction or on the prescription of a physician or other authorized individual who is excluded when the person furnishing such item or service knew or had reason to know of the exclusion.” 42 CFR (b)

43. NY EXCLUSION REGULATION
18 NYCRR Sanctions effect (continued):
(b) No payment will be made for medical care, services or supplies ordered or prescribed by any person while that person is excluded, nor for any medical care, services or supplies ordered or prescribed in violation of any condition of participation in the program.
(c) A person who is excluded from the program cannot be involved in any activity relating to furnishing medical care, services or supplies to recipients of medical assistance for which claims are submitted to the program, or relating to claiming or receiving payment for medical care, services or supplies during the period. (d) Providers reimbursed on a cost-related basis may not claim as allowable costs any amounts paid or credited to any person who is excluded from the program or who is in violation of any condition of participation in the program. (e) Providers reimbursed on a fee-for-services basis may not submit any claim and cannot be reimbursed for any medical care, services or supplies furnished by any person who is excluded from the program or which are furnished in violation of any condition of participation in the program.

44. SCREENING DOH Medicaid Update April 2010 Vol. 26, No. 6
Providers have an obligation to screen employees, prospective employees, and contractors, both individuals and entities, to determine if they have been excluded or terminated from participation in federal health care programs or New York Medicaid

45. SCREENING LISTS List of Excluded Individuals/Entities (LEIE) (OIG)
List of Parties Excluded From Federal Procurement and Nonprocurement Programs
Restricted, Terminated or Excluded Individuals or Entities

46. IMPACT ON EMPLOYERS
Potential Liability for Employing or Contracting with Excluded Individuals/Entities
$10,000 civil monetary penalty for each item/service claimed
Plus treble damages = amount claimed for each item/service
Possible exclusion for the provider-employer
Must apply for reinstatement
“Knows or Should Know” of the Employee’s Exclusion
Check the Exclusion Lists!
OMIG: potentially amounts to a false claim under FCA
Separate basis for administrative sanctions or exclusion

47. OMIG COMPLIANCE EXPECTATIONS
Check 3 exclusion lists for each new hire
Check 3 exclusion lists for contractors
Check 3 exclusion lists for referral sources
Check 3 exclusion lists once each month for updates
Require contractors to conduct similar checks on their employees and contractors
Report each verified hit on current employees and current contractors from any of three exclusion lists to OMIG through disclosure protocol

48. COMPLIANCE PROGRAMS YOUR BEST DEFENSE NEW YORK REQUIRES . . .
MEDICAID - $500,000+
An effective plan
PPACA WILL REQUIRE . . .

49. COMPLIANCE PROGRAMS
An effective compliance program in New York will satisfy PPACA
OMIG Compliance Program
8 Elements (18 NYCRR Part 521)

50. COMPLIANCE PROGRAMS
Written policies and procedures that describe compliance expectations, as embodied in a code of conduct, implement the operation of the Program, and provide guidance on dealing with potential compliance issues.
2) Designation of a compliance officer as the person vested with day-to-day operation of the Program.

51. COMPLIANCE PROGRAMS
3) Training and education on compliance issues, expectations, and Program operation.
4) Establishment of communication lines to the compliance officer that are accessible to allow compliance issues to be reported.

52. COMPLIANCE PROGRAMS
5) Fair and firmly enforced disciplinary policies, to encourage good faith participation in the Program, and to outline sanctions for:
Failing to report suspected problems;
Participating in, encouraging, directing, facilitating, or permitting non-compliant behavior.

53. COMPLIANCE PROGRAMS
6) Systems for routine identification of compliance risk areas for self-evaluation of such risk areas, including internal audits and, as appropriate, external audits.
7) Implementation of systems for responding to, investigating and correcting compliance issues, and for reporting and refunding overpayments.

54. COMPLIANCE PROGRAMS
8) Non-intimidation and non-retaliation for good faith participation in the Program
Reporting and investigating potential compliance issues
Participating in self-evaluations, audits, and remedial actions

55. Medicaid Fraud Control Unit
Part of the Attorney General’s office
Similar, but different authorities to OMIG
Has civil and criminal authorities
Can exercise OMIG audit authorities
Makes referrals to OMIG for withholds, sanctions and penalties

56. Medicaid Fraud Control Unit
Executive Law § 63(12)
Powerful enforcement tool
“Repeated fraudulent or illegal acts”
“Persistent fraud or illegality”
Injunctions, restitution, damages
Civil subpoena authority – forced testimony
Doesn’t preclude criminal prosecution

57. Medicaid Fraud Control Unit
Criminal Charges
Grand Larceny
Civil Recovery
Either or both
Conduct during investigation can tip the balance

58. Self-incrimination Right to remain silent
Everything you say can be used against you
Medicaid providers have a duty to cooperate

59. Stop talking The investigator is not your friend Call your attorney
Only speak with your attorney present
Everyone you speak to is a potential witness
The walls have ears

60. Record Preservation Records must be preserved Electronic records, too
Don’t alter records
Don’t recreate missing records

61. The Office of the Medicaid Inspector General and Other Friends
OMG! OMIG!
The Office of the Medicaid Inspector General and Other Friends
Hermes Fernandez Bond, Schoeneck & King, PLLC (518)