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On July 26, 2022, we published a blog post detailing part one of three of proposed regulations published by the New York State Office of Medicaid Inspector General (OMIG). The proposed regulations would repeal the current Part 521 - Provider Compliance Programs of Title 18 of the New York Codes, Rules and Regulations (NYCRR) in its entirety and establish new requirements for providers to detect and prevent fraud, waste, and abuse in the Medicaid Program under a new Part 521: Fraud, Waste, and Abuse Prevention (Part 521). If enacted, the proposed rules would implement changes related to Medicaid provider compliance programs, Medicaid managed care organization (MMCO) fraud, waste, and abuse prevention, and Medicaid providers' "obligation to report, return, and explain Medicaid overpayments through OMIG's Self-Disclosure Program."

In this post, we summarize the second subpart of Part 521 covering proposed regulations that would require MMCOs to develop and implement programs to detect and prevent fraud, waste, and abuse in the Medicaid program.

The regulation defines "abuse" to include practices that are inconsistent with sound fiscal, business, medical or professional practices. These practices could result in the following:

The definition of "fraud" includes the following:

The below requirements will serve as a minimum standard of a MMCO's fraud, waste, and abuse prevention program, and as such, a MMCO's prevention program may go above and beyond the below requirements:

As detailed in our previous post, MMCOs (among other entities) must implement and maintain a compliance program in accordance with Subpart 521-1. Under this Subpart 521-2, MMCOs must ensure that its fraud, waste, and abuse prevention programs are incorporated into its compliance program and otherwise satisfies the requirements of Section 521-1.4(a) related to written policies and procedures, compliance officer duties, and training requirements.

MMCOs with an enrolled population in excess of 1,000 persons or more in any given year, must establish a full-time Special Investigation Unit (SIU). SIUs must identify and investigate cases of potential fraud, waste, and abuse, and in turn, report such cases to OMIG and report potential fraud to the Medicaid Fraud Control Unit (MFCU). An MMCO's SIU must operate as a separate and distinct unit from any other function or unit of the MMCO.

Through its respective SIUs and in coordination with the MMCOs' compliance officers, MMCOs must audit, investigate, or review fraud, waste, and abuse cases related to its participation in the Medicaid Program. Such audits, investigations, and review must involve at least one percent or more of the aggregate of the Medicaid Program claims it pays to providers and subcontractors and must be of the MMCO's clinical and billing records.

MMCOs must develop and submit to OMIG a fraud, waste, and abuse prevention plan within 90 calendar days of the effective date of this Subpart or of signing a new contract with the Department of Social Services to begin participation as an MMCO. MMCOs must implement a fraud, waste, and abuse prevention plan within 180 calendar days from the date the MMCO executes its contract with the Department of Social Services to participate as a MMCO and develops its plan pursuant to this section. Such fraud, waste, and abuse prevention plans must include the following:

After January 31 of each calendar year, each MMCO must file an annual report (on a form to be developed by the Department of Social Services) for the preceding year that must include at least the following:

If enacted, Part 521-2 will compel MMCOs to examine and, potentially, restructure their fraud, waste, and abuse prevention plans. OMIG is accepting public comment on these proposed regulations through September 11, 2022. You may submit written comment via email to Michael T. D'Allaird at rulemaking@omig.ny.gov.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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