New York OMIG’s Focus In 2013-2014

Every year the New York State Office of the Medicaid Inspector General (OMIG) publishes a work plan that outlines the agency’s focus in the coming year. As in previous years, the targets of agency’s audits and investigations this work plan cycle remain physicians, dentists, laboratories, transportation providers, pharmacies and DMEs, as well as hospitals and home and community health service providers. Below we discuss some of OMIG’s planned integrity activity.

Physicians, Dentists and Labs

Qualifying physicians who submit an attestation form for enhanced billing (up to the Medicare fee schedule price in 2013-2014) may be subject to an OMIG audit.  The agency is required to conduct random audits of fee-f0r-service and managed care participating physicians to ensure that requirements for payment enhancements are met.

OMIG will also conduct audits of physician’s evaluation and management codes.

Dentists continue to be on OMIG’s radar as the agency reviews providers’ billings, verifies that documentation supports claimed services, and that claims were submitted in compliance with other program rules, regulations and policies.

Similar to other providers, laboratories will continue to be audited for their compliance with Medicaid rules, regulations and policies, including their proper billings procedures and documentation.

OMIG has also increased its efforts in ensuring that providers excluded from the Medicare program do not provide services to Medicaid beneficiaries. Pursuant to this goal, OMIG will match excluded providers on the federal exclusion lists with claims and encounters on the Medicaid Data Warehouse.

Additionally, and dovetailing with OMIG’s review of pharmacies, is the agency’s focus on providers with unusually high prescription rate of controlled substances as compared with their peers. OMIG will review flagged providers to determine if the ordering was medically necessary.

Pharmacies & DMEs

OMIG notes that this work plan cycle it is implementing a new review of pharmacies which will compare pharmacy inventory to billings to determine if “the pharmacy had ordered at least the volume of drugs or DMEs necessary to fill the prescriptions that were claimed.”

Pharmacies will also get audited on prescription formats. Additionally, the agency will verify that prescriptions were ordered by a qualified practitioner, the pharmacy has sufficient documentation to substantiate billed services, that pharmacies used appropriate billing codes, maintained proper patient-related documentation, and that the pharmacy providers met other Medicaid rules, regulations and policies.

OMIG’s focus is also on drug diversion. To that end, the agency works with other law enforcement agencies, DOH’s Bureau of Narcotics, and others, to identify not only providers, but also pharmacists who may be participating in diversion activities.

As in the past, newly enrolling pharmacies will be subjected to pre-enrollment reviews by the agency before being admitted into the program. Such scrutiny means that providers will face a pre-enrollment on-site visit, as well as “collateral contacts with businesses and individuals associated with the business.”


Transportation providers continue to be heavily scrutinized by OMIG who works closely with the NYS DMV, New York’s Attorney General’s Medicaid Fraud Control Unit and the DOH to determine whether Medicaid services were provided in accordance with Medicaid rules, regulations and policies.

OMIG will continue its match initiative which involves comparing DMV’s 19-A database of qualified drivers to Medicaid transportation claims to identify drivers who are not 19-A qualified on the date of service. The project also looks at transportation claims while a beneficiary was in a hospital.

Furthermore, certain transportation providers will be put on a pre-payment review to identify whether providers are using an inactive NPI as the prescribing provider, failing to document the driver’s license and/or license plate of the the vehicle. Certain transportation providers will be evaluated to identify whether services were actually provided, medically necessarily, properly documented, and whether the vehicles have passed all the required inspections.

Other Agency Work

OMIG has had a self-disclosure process since 2009 and it continues to enhance the process. OMIG encourages providers to conduct internal investigations and report matters that involve possible fraud, waste, abuse, or inappropriate payment of funds involving Medicaid funds. Prior to making a self-disclosure providers are encouraged to consult with an attorney experienced in such matters.

At a time when providers seem to be suffering from audit exhaustion, there is yet another auditing entity that can scrutinize providers’ billings — Medicaid RACs (recovery audit contractors), which were created to supplement OMIG’s existing integrity efforts. HMS, the Medicaid RAC that performs audits on behalf of OMIG, among other things, conducts automated payment integrity reviews of provider patient or financial accounts to identify and recover overpayments. New York is paying HMS 5.25% (increasing to 6.75% after first 120M in recoveries) of monies recouped from healthcare providers.

Providers enrolled to receive Electronic Health Records Incentive Program payments should also be wary of the watchful eye of OMIG. The agency will audit providers’ to ensure that providers meet their eligibility requirements for the Medicaid EHR incentive program as required by CMS guidelines.

OMIG will also conduct desk and onsite compliance program reviews of those providers who fail to meet the annual certification requirement, investigate providers who offer kickbacks and/or inducements, identify providers who fail to disclose to DOH new service locations, and continue to focus on enrollment as an integrity tool. To that end, the agency will carefully scrutinize enrollment applications of providers to determine whether applicants should be allowed to participate in the program, analyze ownership changes to identify whether the previously excluded individual are purchasing businesses or if excluded providers or providers undergoing an audit or an investigation are selling their business to affiliated individuals.

If you have questions about New York State OMIG audits, documentation requirements or need other legal assistance, please contact us.