New York’s Medicaid Provider Compliance Program

The New York State Social Service Law and its implementing regulations require that Medicaid providers develop, adopt and implement effective compliance programs aimed at detecting fraud, waste, and abuse in the Medicaid program. These programs are mandatory for those providers operating under Article 28 or 36 of the Public Health Law and Articles 16 or 31 of the Mental Hygiene Law. Additionally, upon enrollment in the Medicaid program, a provider is required to certify that he or she has satisfied the requirements of the compliance program.

Furthermore, those providers of care, services and supplies for which the New York Medicaid program “constitutes a substantial portion of business operations,” are required to have an effective compliance program.

The regulations define “substantial portion” to mean not only that a provider receives or reasonably expects to receive $500,000 in any consecutive 12-month period, but also those providers claiming, ordering or reasonably expecting to claim or order at least $500,000 in any consecutive 12-month period.

Important for providers to know is that during a recent presentation by the Office of the Medicaid Inspector General (OMIG), its Bureau of Compliance clarified that ordering services, such as lab work, films, home care services, etc., is also counted towards the $500,000 threshold.

Many providers may also not be aware that the $500,000 amount applies not only to reimbursement directly billed or received from the Medicaid funds but it also refers to payment from Medicaid Managed Care plans.

The regulations set the minimum standards of an effective compliance program which must include the following core requirements:

  1. written policies and procedure,
  2. the designation of a compliance officer,
  3. training and education on compliance and detection of fraud, waste, and abuse,
  4. communication lines to the provider’s compliance officer,
  5. disciplinary policies to encourage good faith participation in the compliance program,
  6. identification of compliance risk areas specific to the provider and self-evaluation,
  7. responding to compliance issues as they are raised, and
  8. a policy of non-intimidation and non-retaliation for good faith participation in the compliance program.

The scope of the law and the regulations are broad enough to capture small group practices and individual providers who satisfy the threshold requirement. Both the federal and state regulatory agencies, however, encourage every provider, irrespective of size, to establish a compliance program. For example, the Office of Inspector General within the Department of Health and Human Services published guidelines more than a decade ago recommending that small physician practices and individual providers voluntarily establish a compliance program to demonstrate a commitment to compliance.

Similarly, the New York State Medicaid Program, General Policy Manual, updated 10/20/2011, states that OMIG:

strongly encourages all providers in the Medicaid program to develop and implement a compliance program aimed at detecting fraud, waste, and abuse, even if not required to under the New York State Social Services Law (NYS SSL) or regulation, 18 NYCRR Part 521. (emphasis in the original)

Those providers who are required to have a compliance plan are also required to submit annually a “Certification of Compliance” to OMIG each December. OMIG’s Bureau of Compliance regularly tests providers’ compliance programs for effectiveness by conducting Effective Reviews.

Providers should be aware that failure to develop, adopt and implement an effective compliance program may result in sanctions or penalties, including, but not limited to, the revocation of the provider’s agreement to participate in the Medicaid program. Failure to submit the Certification of Compliance may result in withhold of Medicaid payments.

For more information, see the New York State Social Services Law (NYS SSL) § 363-d and the corresponding regulations at 18 NYCRR Part 521.