On August 17, 2021, the Office of the New York State Comptroller (the comptroller) released an audit report that found more than $1.5 billion in improperly paid Medicaid claims relating to ordering, prescribing, referring, and attending (OPRA) health care providers, stemming largely from improper system controls in the eMedNY system. The report, “Improper Medicaid Payments for Claims Not in Compliance With Ordering, Prescribing, Referring, and Attending Requirements,” is likely to lead to more audits of providers by the Office of the Medicaid Inspector General (OMIG).

The purpose of the comptroller’s audit was to determine whether the Department of Health (DOH) paid for claims in violation of federal and New York State regulations that require providers to include the National Provider Identifier (NPI) of the OPRA provider when billing claims. Beginning on January 1, 2014, New York’s Medicaid State Plan, pursuant to the mandates of the Affordable Care Act, began requiring physicians and other health care professionals who provide certain Medicaid services to be appropriately screened and enrolled in Medicaid and use their assigned NPI identifier.

The audit included review of certain claims paid by Medicaid from January 1, 2014, through December 31, 2018, including clinic, dental practitioner, eye care, pharmacy, durable medical equipment, referred ambulatory, laboratory, and Medicare crossover claims.

Audit Findings

The comptroller’s audit identified system processing weaknesses in eMedNY and determined that these weaknesses allowed the improper payment of Medicaid claims that did not contain an appropriate NPI in the OPRA field on claims. The improper payments found by the comptroller included:
$1.5 billion in payments for clinic and professional claims that did not contain an appropriate referring or attending NPI$57.3 million in payments for pharmacy claims that failed to include an appropriate prescriber NPI$194 million in payments for claims that included OPRA NPIs that, based on the relevant regulations, should not have been included due to past misconduct

The audit findings were separated into four main categories, each discussing a separate area of system weaknesses and improper payment of claims. The most significant category was allegedly improper payments for clinic and professional services. The comptroller’s audit report found inadequacies in the various controls, or “edits,” in the eMedNY system that are used to determine whether claims are initially eligible for reimbursement. The DOH previously advised providers that, beginning on January 1, 2014, system claim edits would be implemented to enforce the OPRA enrollment requirements. Despite these edits having been implemented, the comptroller’s audit found that claims lacking a proper OPRA NPI were not rejected and were accepted and paid. In some cases, the comptroller found the system edits were intentionally circumvented by the DOH. In fact, the report indicates that more than $1.5 billion in payments where eMedNY processed claims that either did not contain an enrolled or affiliated OPRA NPI or where the OPRA NPI was improperly adjudicated and paid by the DOH. The claims the comptroller found improper included payments for clinic and professional services, including early intervention services, behavioral health services, referred ambulatory and professional services, dental services, and school supportive health services.

In addition to the finding of improper payments for clinic and professional services, the report also addressed Medicaid payments for Medicare crossover claims. The report found that eMedNY system edits that were intended to deny claims that failed to contain the NPI of an enrolled referring provider were not applied to Medicare crossover claims, and as such, the claims for these services were paid. According to the report, these claims should have been denied by system edits if they had been submitted to Medicaid directly. The denials of the claims would have given notice to the providers and an opportunity to cure any deficiencies in the claims.

The report also addressed improper payments for pharmaceutical services and misuse of the pharmacy override option, which excuses the failure to include an NPI identifier, allowing unenrolled providers to prescribe and fill prescriptions.

Lastly, the comptroller found claims that, according to federal and state regulations, should not have been paid due to the presence of OPRA provider NPIs that were excluded from the Medicaid program or that should have been subject to further review by the DOH due to past misconduct. Additionally, the audit also found that the eMedNY system lacked system controls to ensure that billing facilities correctly submit the NPI and corresponding license information of unenrolled affiliated attending practitioners.

Audit Recommendations

The audit report included three main recommendations for the DOH. These recommendations were to:
Review the Medicaid payments for claims that did not contain an appropriate OPRA NPI, as identified by the audit, and determine an appropriate course of action, including recovery of improper payments as appropriateRemind providers to follow all established billing procedures, including the requirement to include an enrolled OPRA NPI on claimsEnhance eMedNY’s system controls to prevent improper Medicaid payments for claims that do not contain an appropriate OPRA NPI

In an ominous response to the comptroller’s audit, the DOH has advised that OMIG will seek to identify and make appropriate recoveries for claims that do not meet the OPRA provider NPI requirements. Moreover, the DOH intends to collaborate with the Office of Mental Health, the NYS Office of Addiction Services and Supports, OMIG, the Office for People With Developmental Disabilities, and the Office of Children and Family Services to perform a full analysis of all OPRA edits currently being utilized within eMedNY. These edits will be modified as necessary to ensure compliance with OPRA requirements, and the DOH anticipates that this review and any corresponding modifications will be completed by the fourth quarter of 2021.

Impact on Providers

As many providers are acutely aware, OMIG has already begun auditing and seeking recoupment of claims that do not include an OPRA provider NPI or that include an inappropriate OPRA provider NPI. Given OMIG’s reaction to prior audit criticisms from the comptroller, we anticipate these OPRA audits to become a focus of the state’s auditing programs. Additionally, providers may soon encounter changes in the edits or overrides to the eMedNY system for OPRA claims.

As always, it is critical that providers review Medicaid Program guidance, ensure that they are meeting program requirements for claim submission, and consider correcting claims omitting required OPRA provider submissions before the claims are the subject of an OMIG audit. In the event of an audit, the provider’s ability to provide contemporaneous documentation demonstrating the provider’s Medicaid enrollment at the time of service will be critical.

Members of Barclay Damon’s Health Care & Human Services and Health Care Controversies Practice Areas will continue to monitor any future developments regarding OPRA provider requirements and audits.