Renewed focus on managed care, program compliance in the OMIG's newly released 2016–17 work plan



May 12, 2016

Health Care Alert

Author(s): Philip Rosenberg, Peter Armstrong Egan, Rebecca Simone

The New York State Office of the Medicaid Inspector General (“OMIG”) released last month its 2016–17 Work Plan (the “2016–17 Work Plan”), highlighting the OMIG’s education focus areas and program integrity audit agenda for the current fiscal year. The 2016–17 Work Plan builds on work plans for prior years and includes an emphasis on compliance efforts specific to the transition to managed care in the Medicaid program.

The OMIG conducts and coordinates fraud, waste and abuse control activities for all state agencies responsible for Medicaid services. As in recent years, the OMIG Work Plan addresses compliance issues within certain focus areas, or Business Line Teams (“BLTs”). In the 2016–17 Work Plan, the OMIG continues to emphasize provider outreach and education and support for proactive compliance program development among Medicaid program participants. The 2016–17 Work Plan focuses initiatives according to the following service areas:

  • Delivery System Reform Incentive Payment Program (“DSRIP”)
  • Home and Community Care Services
  • Hospital and Outpatient Services
  • Managed Care
  • Managed Long-Term Care
  • Medical Services in an Educational Setting
  • Mental Health, Chemical Dependence and Developmental Disabilities Services
  • Pharmacy and Durable Medical Equipment
  • Physicians, Dentists and Laboratories
  • Residential Health Care Facilities
  • Transportation

Medicaid Managed Care Project Teams

The 2016–17 Work Plan includes additional focus on program integrity activities specific to managed care initiatives within the Medicaid program. Specifically, the OMIG developed five project teams to oversee the following focus areas: data, plan review, network provider review, pharmacy and contract and policy/relationship management. Throughout the current fiscal year, team leaders will focus on enhancing program integrity efforts within their specific practice areas, employing heightened review of certain managed care initiatives.

The Data Review Project Team will evaluate the completeness and accuracy of encounter data submitted by Managed Care Organizations (“MCOs”), and will focus on data source repositories to ensure the availability and usability of data from sources important to Medicaid program integrity, such as the DMV and State Department of Taxation and Finance (“DTF”). The Managed Care Plan Review Project Team will audit operating reports, assess clinical risk groups and analyze annual fraud and abuse prevention plan reports submitted by MCOs. The Network Provider Review Project Team will conduct audits of network providers in MCOs, adapting the OMIG’s audit protocols to include methodologies for auditing managed care network providers. The Pharmacy Review Project Team’s efforts will include reviews of Pharmacy Benefit Manager (“PBM”) contracts, with a focus on accurate formulary and benefit administration as well as financial and pricing arrangements. Finally, the Contracts Review Project Team will work to develop amendments to MCO contracts (mainstream Medicaid managed care and managed long-term care model contracts) to address current and future Medicaid program integrity challenges.

In addition to the above, the 2016–17 Work Plan reflects a stronger focus on the Managed Care service line in the OMIG’s efforts to recover overpayments to MCOs. This year’s Work Plan also contains a renewed emphasis on initiatives such as managed care enrollment and eligibility reviews and evaluating cost reporting and encounter data. It also speaks to collaborating with MCO special investigative units in their pursuit of fraud, waste and abuse.

Home and Community Care Services

As compared to prior year work plans, the 2016–17 Work Plan includes expanded emphasis on Home and Community Care Services, with more attention on hospice payments to ascertain whether: (i) patients and/or family members voluntarily elected hospice care, (ii) a certification of terminal illness was obtained, and (iii) all required documentation supporting continued hospice care was in the patient file.

Pharmacy and Durable Medical Equipment Services

Under the Pharmacy and Durable Medical Equipment Services line, the OMIG intends to deploy resources to reduce drug misuse and diversion of high-cost medications. In particular, the 2016–17 Work Plan states that the OMIG intends to review proper authorization of written prescriptions and complicit and non-complicit overprescribing of drugs, as well as the resale of drugs. The Work Plan also contains a new focus on Durable Medical Equipment (“DME”) dual-eligible claims, and recites the OMIG’s plans to conduct audits of a variety of pharmacy types in order to determine whether pharmacy claims for Medicaid reimbursement complied with applicable federal and state laws and regulations.

As always, the 2016–17 Work Plan has important implications for health plans and providers participating in New York’s Medicaid program. Nixon Peabody attorneys will be discussing the entire Work Plan at its Health Care Compliance Forum on June 2, with registration available here.

The 2016–17 Work Plan can be reviewed in its entirety here: https://www.omig.ny.gov/images/stories/work_plan/2016-17_work_plan.pdf

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

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