CHP on OMIG Recoveries in 2021

October 4, 2022

The NYS Council has learned that a second OMH Article 31 Outpatient Clinic provider organization has received notice of an upcoming audit by OMIG.

As you know, the NYS Council and COMPA are leading an effort to ensure Governor Hochul signs our OMIG Audit Reform bill.  This article should serve as a reminder of the importance of that ongoing effort.  OMIG rationalizes to justify audit tactics that are actually threatening the safety net OMIG contends it is saving.

We strongly disagree with Bill Schwartz, OMIG spokesman, who says OMIG does not impose punitive fines on providers.  Extrapolation is punitive.  Allowing providers to correct clerical and technical errors is fair, balanced and allows for human beings to make mistakes that did not jeopardize the provision or quality of the care provided.

This is why we fight!


Crain’s Health Pulse, 10/4/2022

The Office of the Medicaid Inspector General racked up nearly $3.2 billion worth of recoveries and cost-avoidance measures for the state’s Medicaid program last year, it announced Monday.

That was nearly $153 million more in cost savings and recoveries than the office yielded in 2020, or a 5% increase, as OMIG employees resumed field operations and re-initiated almost all the projects paused due to the pandemic. 

The office recovered nearly $714 million in Medicaid payments that stemmed from provider audits and investigations. Prepayment claims reviews, prepayment insurance verification and other cost-avoidance initiatives generated more than $2.4 billion in savings, the report said. 

It referred 350 cases to other agencies, including 35 credible allegations of fraud sent to the state Office of the Attorney General’s Medicaid Fraud Control Unit.

“OMIG’s recoveries and cost-savings efforts play a critical role in sustaining and providing access to the State’s high-quality health care delivery system,” Bill Schwarz, an OMIG spokesman, said.

OMIG’s headcount has been steadily growing over the last few years and is slated for further growth. The office now has 436 staff members across seven locations statewide, up from just under 400 recorded in its 2020 annual report and about 410 pre-pandemic. According to the state’s fiscal 2023 financial plan, the office is budgeted for 515 staff members.

Its investigatory work has ramped up in the meanwhile. The office completed more than 2,900 investigations in 2021, up from about 2,000 in the previous year, according to the annual report. It processed 31% more allegations in 2021 compared to 2020. 

However, investigators opened fewer cases in 2021 than they did the year before—just over 2,400 versus almost 2,500 in 2020. More than a third of almost 3,700 allegations that the office received in 2021 were closed after an initial review, because there was insufficient information.

The office also conducted fewer audits last year than it did the prior year. It initiated less than 1,400 audits and finalized about 900, compared to about 1,500 audits initiated in 2020 and more than 1,200 finalized.

“Given the ongoing response to the pandemic, OMIG continued to adjust its operations to perform its essential program integrity functions while avoiding imposing unnecessary burdens on health care providers, which helped ensure their ability to deliver much-needed services,” Acting Medicaid Inspector General Frank Walsh said in the report’s introduction.

Medicaid providers have long protested the office’s auditing practice of assessing a sampling of their claims, then extrapolating the findings and imposing exorbitant fines. A bill that passed the Senate and Assembly earlier this year would limit the Office of the Medicaid Inspector General’s powers to do that for administrative or technical issues discovered during an audit.

The office implemented an enhanced financial hardship process in July. Last year it received 38 applications from health care organizations seeking relief from an audit’s effects on their finances, all of which were granted.

Schwarz, the spokesman, said the office does not impose punitive fines; rather, it recovers inappropriate Medicaid payments.

“A provider that fails to comply with federal requirements puts the State at risk for significant findings when audited by the federal Health and Human Services Office of the Inspector General,” he said. “This creates the potential for the State to have to repay the federal financial participation for noncompliant claims, which jeopardizes the ability to provide funding to support these critical programs and services.”

Schwarz said the office’s key focus areas going forward are oversight of such services as home care, transportation, managed care and compliance. 

The office has proposed regulations that would require Medicaid managed care plans to beef up their special investigations units for rooting out fraud and abuse, a change that stems from the state’s enacted fiscal 2021 budget and the Medicaid Redesign Team II, Health Pulse previously reported.

OMIG was established as an independent office in 2006 and is required under state law to publish annual reports summarizing its activities. —Maya Kaufman