October 3, 2023

Yesterday, we sent you the just released 2022 OMIG Annual Report.  It is linked in this email, in case you missed it. 

Last session the NYS Council co-led statewide efforts to draft an updated OMIG Reform bill that was later introduced by Assemblywoman Amy Paulin and Senator Pete Harckham (OMIG Reform bill sponsors).   Unfortunately, and despite considerable advocacy efforts and many difficult conversations, the Assembly failed to move the bill to the floor for a vote.  (The Senate passed the bill by unanimous consent.)

CPNYS, COMPA, the Federation of Mental Health Services and the NYS Council are once again leading statewide efforts to ensure that this year OMIG Reform will have a different fate.  The plan is for advocates across the state to press for the inclusion of executive budget language in the Governor’s upcoming budget proposal that includes the elements of our bill.  Stand by for more on our strategy and subsequent requests for grassroots advocacy.

The Medicaid inspector general saved New York $3.4B in 2022, report shows

10/3/23
JACQUELINE NEBER AMANDA D’AMBROSIO 

The state’s Office of the Medicaid Inspector General racked up $3.4 billion in recoveries and cost avoidance measures for New York’s Medicaid program in 2022, according to an annual report the office posted Monday.

That represents a 6% increase over 2021, when the office’s measures yielded about $3.2 billion, as OMIG introduced new initiatives and streamlined agency processes in the wake of the Covid-19 pandemic.

Acting Medicaid inspector general Frank Walsh told Crain’s the increase can be attributed to the office returning to pre-pandemic levels of activity and improving investigations–and the increasing price of health care delivery throughout the state.

“The trends in the program are reflective of how those services are being delivered and the cost of those services,” he said.

The strategies the office uses to recoup costs include audit recoveries, which accounted for about a third of OMIG’s total recoveries in 2022, the report said: more than $274 million from over 1,100 audits. The office analyzes Medicaid expenditures for all provider and payer types–including managed care organizations, hospitals, clinics, home health agencies and assisted living providers–and assesses whether they comply with the program, identifies deficiencies and takes back overpayments.

The city saw the highest number of audits, at 624, and represented the largest percentage of recoveries–about $195 million.

The office also finalized 301 overpayments self-disclosures from providers that amounted to almost $11 million. Providers in the city encompassed more than $4 million of that total.

Prevention efforts also accounted for a large chunk of savings in 2022. Since Medicaid is intended as a last resort to cover patients’ health care when other forms of insurance are exhausted, OMIG uses pre-payment insurance verification cost avoidance measures to deny claims that have been submitted to Medicaid if other insurers are liable. This process allowed the program to avoid spending about $2.5 billion last year, according to the report.

Walsh said insurance verification is advantageous to the Medicaid program because it allows the state to get the benefit of those dollars up front rather than waiting for costs to be recouped.

However, while OMIG’s efforts generated more savings in 2022 than 2021, the office’s investigative work declined. The number of investigations into suspected fraud, waste and abuse within the Medicaid program dropped by almost 19%, to 2,385. Meanwhile, the office received 3,863 allegations, about 200 more than in 2021.

Walsh noted that the office finds a significant number of allegations it receives to be unfounded, which could contribute to the drop, and many cases take a long time to look into. Additionally, he said, OMIG referred more than 1,000 cases of suspected fraud to other agencies, such as the state Attorney General’s Medicaid Fraud Control Unit, where OMIG sent 199 cases, or local law enforcement. That number is on par with 2021, Walsh added.

Of the instances OMIG investigated and completed, almost 900 involved subjects in the city, with the rest of the allegations spread among the Mid-Hudson region, Western New York, Long Island, the Finger Lakes and other parts of the state.

Going forward, Walsh said, OMIG plans to continue improving the number of Medicaid resources it can protect from waste and abuse. The office began several new initiatives, including improving the process by which the state’s Justice Center for the Protection of People with Special Needs reports abuse and neglect allegations to OMIG, reviewing Medicaid managed care operating reports and auditing controlled substance claims.

In 2023, the office has been similarly vigilant in overseeing managed care and controlled substances, Walsh said, to continue those efforts. In addition, OMIG reinstated compliance reviews for providers this summer and has been working to educate physicians and organizations on the new guidelines.

“Our next step now that we have this report out is to look at and develop our work plan,” Walsh said. “One of the aspects that we’ve heard back from the provider community is the importance of understanding what that work plan is, and we’re in the process of developing that and getting that out. We look forward to continuing to produce the same results going forward.” —Jacqueline Neber