Significant Changes to NYS Mandatory Compliance Program Requirement

Last year, as part of the 2020-2021 budget, the New York State Legislature made significant changes to the NYS Mandatory Compliance Program requirement. Providers required to adopt and implement an effective compliance program should be aware of the changes to avoid the imposition of penalties or other sanctions.

While dealing with the fall-out of the Pandemic in 2020, many providers may not have noticed that effective April 1, 2020, the Social Service Law 363-d underwent significant changes.

The first significant change was the specification that meeting the requirements of New York Social Services Law (“SSL”) § 363-d is now a “condition of payment from the medical assistance program,” for those providers mandated to adopt and implement an effective compliance program. This legislative change now provides the Medicaid Inspector General (“OMIG”) with the direct authority to recoup Medicaid payments made to a provider during a period when OMIG determines that a provider was non-compliant with the compliance program requirement.

In addition to recoupment, the amended law now gives OMIG the power to impose penalties on those providers that fail to adopt and implement an effective compliance program. OMIG may impose a penalty of $5,000.00 per month for up to twelve months. If OMIG imposed penalties on a provider for failing to adopt and implement an effective compliance program within the past five years, then OMIG is authorized to impose penalties of $10,000.00 per month for up to twelve months.

The third significant amendment entails OMIG’s authority to impose penalties on a provider for failing to report and return an overpayment within 60 days after the date on which the overpayment was identified (or the date a cost report is due, if applicable). The language of the amended statute gives OMIG broad powers to sanction a provider if the agency determines that a provider should have, but did not, exercise reasonable diligence to identify an overpayment. Specifically, it states that “[a] person has identified an overpayment when the person has or should have through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.” (emphasis added). Furthermore, “[a] person should have determined that the person received an overpayment and quantified the amount of the overpayment if the person fails to exercise reasonable diligence and the person in fact received an overpayment.”

In furtherance of the requirement to report and return an overpayment within 60 days, the law now has adopted a formal self-disclosure program which mainly tracks the self-disclosure protocol that OMIG has already implemented prior to the legislative amendment.

Other changes include a requirement that compliance programs not only prevent waste, fraud and abuse but also prevent, detect and correct non-compliance with NYS Medicaid requirements.

Separately from the legislative action, OMIG made changes to the annual December certification requirement for providers. Specifically, providers no longer need to complete the annual “SSL Certification,” on OMIG’s website. Instead, a provider adopting and maintaining an effective compliance program will now record (attest to) this as part of their annual “Certification Statement for Provider Billing Medicaid.” This annual certification occurs on the anniversary date of the provider’s enrollment in Medicaid.

If you have questions regarding the new compliance program requirement under New York Social Services Law (“SSL”) § 363-d and the implementing regulations at 18 NYCRR Part 521, the annual provider certification requirement, or have other health law related questions, please contact our office.