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HFMA METRO NY ANNUAL
INSTITUTE: OMIG
DEVELOPMENTS-2010
JAMES G. SHEEHAN
MEDICAID INSPECTOR GENERAL
518 473-3782
[email protected]
2010-11 WILL BE THE MOST
DIFFICULT BUDGET YEAR FOR
NEW YORK AND OMIG-AND 20112012 MAY BE WORSE
• Administration has addressed budget, cash, and taxpayer
accountability issues since the summer of 2008 – priorities
include cutting unnecessary costs, “eliminating wasteful
spending, and fighting fraud and abuse.”
• state departments, school districts, health care providers, state
parks, have all taken cuts-and will undoubtedly take more
• Enrollment in Medicaid has risen substantially as result of
recession
• Increase in budget expectation for OMIG-recoveries and savings
of $1.2 billion for FY 2010-2011 (more than double level in 20082009)NOTE: includes substantial third party cost avoidance.
• High expectations and support for OMIG mission - Governor,
Legislature, public, CMS
OMIG CHALLENGES
• Budget and program integrity objectives for OMIG:
– are we identifying improper payments?
– What are we doing to prevent them?
– How are we recovering improper payments?
• Fairness and transparency- the basis for and the process
•
for OMIG actions. How can health providers understand
and plan for OMIG audits, reviews, matches of their
activities?
Compliance mandates-every provider must have
“effective” compliance program, including reporting of
overpayments
OMIG CHALLENGES
• LEGISLATIVE CONCERNS:
– REPUBLICAN TASK FORCE STATEMENT, JANUARY
2010-OMIG NEEDS TO INCREASE RECOVERIES
FROM FRAUD, WASTE, AND ABUSE “It’s time for a
bare-knuckles effort to repossess the
potentially billions of state dollars being lost
to abuse, fraud, and waste,” Senator George
Winner, Elmira.
– SENATOR Craig Johnson, Glen Cove- Proposes
Legislative Commission on Medicaid Fraud Waste and
Abuse “to review operations of OMIG.”
– Assembly bills on sampling
OMIG CHALLENGES
• OUTSIDE PERCEPTIONS OF NEW YORK MEDICAID HAVE
TRAILED THE FACTS:
– “You know, there are estimates that there’s $15 billion worth of
fraud in Medicaid a year in New York City alone.” Senator Tom
Coburn at yesterday’s Obama Health Summit
– FACT:Actual CMS estimate: 1.5% improper payments to New
York Medicaid providers in 2008.(Payment Error Rate
Measurement program “PERM”)
– “The biggest thing on fraud is to have undercover patients so
that people know we’re checking on whether or not this is a
legitimate bill.” Senator Tom Coburn at Obama Health Summit
– FACT: New York has used investigators posing as undercover
patients since at least the 1990’s
WHY CAN’T NEW YORK GO BACK
TO THOSE DAYS BEFORE OMIG
WAS CREATED?
• AUDITS FOR EDUCATIONAL PURPOSES
• NO AUDITS FOR MOST MEDICAID
PROVIDERS-HOME HEALTH, PERSONAL
CARE, MENTAL HEALTH AND OMRDD
PROVIDERS, TBI
• LIMITED AUDITS OF CLINICS AND
HOSPITALS
WHY CAN’T WE GO BACK TO THE
GOOD OLD DAYS BEFORE OMIG?
• “In an audit released last month, the
(HHS) inspector general revealed that in
New York City schools, 86 percent of the
Medicaid claims that were paid from 1993
to 2001 lacked any explanation for why
the services had been ordered... In Buffalo
and other upstate schools, the auditors
concluded that the figure was 56 percent
for the same period.”*
*- Source: New York Times article 2005
WHY CAN’T WE GO BACK TO THE
GOOD OLD DAYS BEFORE OMIG:
2005 New York Times Series
• “NEW YORK'S MEDICAID PROGRAM,
ONCE A BEACON OF THE GREAT SOCIETY
ERA, HAS BECOME SO HUGE, SO
COMPLEX AND SO LIGHTLY POLICED
THAT IT IS EASILY EXPLOITED”
WHY DID THE LEGISLATURE
CREATE OMIG?
• 2005 New York Times Series
• “The investigation found audits on Medicaid spending that were
brushed aside, and reports on waste that appear to have been
shelved.”
• According to the Times, when “asked repeatedly to provide an in-depth
explanation of their claim of major savings or for any state records or
other documentation to back up the figures, department officials would
not supply any.”
• Fraud and abuse recoveries as percentage of Medicaid budget– 2000=.5 %
– 2003=.3%
– 2004 <.2% (all as calculated by New York Times)
WHY DID THE LEGISLATURE
CREATE OMIG?
• CONSEQUENCES OF OLD MODEL:
Spotlight by the Federal Government-2006 REPORT
• “As the largest single Medicaid program in the nation, New York’s anti-
fraud efforts over the last several years have not been proportionate to
its vulnerability.”
• “New York must do more to meet its program integrity obligations.”
• “The Health Department's shift away from enforcing Medicaid antifraud
rules and toward greater emphasis on educating providers on how to
do things right [was] a shift it found troubling.” (New York Times
summary)
OMIG – A Legislative Solution to
Address Identified Issues
• After a Joint, Bi-Partisan Legislative Conference Committee, in July 2006
Office of Medicaid Inspector General created as an independent entity
separate from Department of Health. New law took effect in November
2006.
• Legislative Intent of Enabling Statute:1
– To create a more efficient and accountable structure;
– To reorganize and streamline the state's process of detecting and combating
Medicaid fraud and abuse; and
– To maximize the recoupment of improper Medicaid payments.
• Requirement for Providers to Adopt Effective Compliance Programs:2
– “The legislature determines that there are key components that must be
included in every compliance program and such components should be
required if a provider is to be a medical assistance program participant.”
12006
N.Y. Laws, Chapter 442; N.Y. Public Health Law § 30.
2 N.Y. Social Services Law § 363-d.
OMIG – A Solution with Broad
based Support from government
and the health care industry
• Support for the Creation of OMIG:
– Unanimous Support of Members of the Senate
(58-0) and Assembly (117-0)
– New York City
– New York Association of Counties (NYSAC)
– New York State Association of Health Care
Providers
– New York State Health Plan Association
Source: Bill Jacket Chapter 442 of the Laws of 2006
OMIG’s Mission
Our mission is to preserve the integrity of
the New York State Medicaid program by
preventing and detecting fraudulent,
abusive and wasteful practices within the
Medicaid program and recovering improperly
expended Medicaid funds.1
1
N.Y. Public Health Law § 31.
“Abuse” & “Improper Payments”
• Abuse
– “Abuse means practices that are inconsistent with sound . . . medical or
professional practices and which result in unnecessary costs . . ., payment for
services which were not medically necessary, or payments for services which fail
to meet recognized standards for health care.”1
– Similar provisions in other states.
• Improper Payments
– An improper payment is “any payment that should not have been made or that
was made in an incorrect amount (including overpayments and underpayments)
under . . . legally applicable requirements.”2
• 1-18 NYCRR § 515.1(b)(1).
• 2 Federal Improper Payments Information Act of 2002; Improper
Payments – Progress Made But Challenges Remain In Estimating
and Reducing Improper Payments, GAO-09-628T (U.S. Government
Accountability Office, April 22, 2009).
The Work of OMIG
• Audit and Review Payments
– 1300 final audits since October 1, 2008 (completed and
posted on website)
• Investigate Improper Payments
– Causes, intent, extent
• Educate Providers on Requirements and Compliance
Methods, and Audit Results
• Prevent Improper Payments
• Refer and/or Assist Fraudulent Provider Prosecutions
(by Medicaid Fraud Unit, US Attorneys)
THE WORK OF OMIG-AUDIT
• FIELD REVIEWS-IMPROVEMENTS
• At entrance conference, PPT lays out scope, purpose of
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•
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audit, authority for audit
During audit, auditors expected to communicate what
they are finding
At exit conference, summary sheet lays out reasons for
disallowance of sampled claims
Provider has opportunity during audit, after exit
conference, after draft audit to provide more information
or rebut findings
New work plan will lay out sampling methodology in
greater detail
THE WORK OF OMIG-AUDIT
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FOCUS ON MEDICAL RECORDS AND ORDERS
IF SERVICE IS NOT DOCUMENTED, CANNOT BE BILLED
AUDIT TO REGULATION AND STATE PLAN
BUT-IF YOU HAVE WRITTEN STATEMENT BY DOH
AUTHORIZING BILLING, OR WRITTEN RECORD OF
ORAL STATEMENT,WE WILL GIVE THE BENEFIT OF
DOUBT TO PROVIDER
• IT IS NOT ENOUGH TO SAY “WE ALWAYS BILLED THIS
WAY AND THEY ALWAYS PAID US.”
THE WORK OF OMIG-AUDIT
• NURSING FACILITY REBASING SCHEMES
• PERSONAL CARS ON COST REPORT
• NO PHYSICIAN ORDERS FOR SERVICES,
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•
•
DRUGS, OR SUPPLIES
FORGED PHYSICIAN ORDERS
8 HOURS OF WALKING FOR HOMEBOUND
HOME HEALTH PATIENT
NO RECORD OF THRESHOLD SERVICE IN
CLINIC
OMIG IS A PROGRAM INTEGRITY
AGENCY
• Focus on business processes, self-
regulation
• Deter and discourage improper payments
on front end
– Compliance
– Clear, auditable rules
– Program edits
– Audit plan
– Data mining
– Communicate efforts and results
OMIG CORE PRINCIPLE: SOCIAL
SERVICES LAW 363-d REQUIRES OF
ALL MEDICAID PROVIDERS OVER
$500,000
• 18 NYCRR 521-Regulation-”effective
compliance program” with eight
elemements
• Frequently Asked Questions
• www.omig.state.ny.us
Core OMIG Principle:
Collaborate with Providers to
Enhance Compliance
• Program Integrity on Front-End (four “R”s)
– Require, Recommend, Review and Reward effective
compliance programs
• “Effective” Compliance Program Requirements
– Disclosure to state of overpayments received, when
identified (over 80 disclosures in 2009)
– Risk assessment, audit and data analysis, remedial
measures
– Response to issues raised through hotlines, employee
issues
Core OMIG Principle:
Communicate, Promote Transparency
and Fairness
• Annual work plan posted on website each April
• List of excluded persons on website
• Each final audit report on website
(approximately 1400 to date)
• Established audit protocols made available to
trade associations and providers
• Audit survey to auditees
• Over 80 presentations to trade and professional
groups each year
Core OMIG Principles
• Promote High Quality of Care
– OMIG will protect the health and welfare of NYS
Medicaid enrollees by promoting Medicaid
program integrity at all levels of health care.
• Promote Accountability and Measurement
– OMIG will be a good steward of the taxpayer’s
dollar and use the resources it has been given to
efficiently and effectively accomplish its mission.
• Achieve and Exceed Goals
– OMIG will achieve or exceed externally defined
financial goals consistent with our legal standards
and audit rules, as demonstrated by complete,
timely and accurate data.
Core OMIG Principle:
Listen
• Recognize that every human institution can make
mistakes, and every administrative process can be
improved, particularly at an agency which is only
three years old.
• Take seriously the concerns raised by provider
groups about the extent and nature of our audits
and reviews, the training and performance of our
staff, and techniques to improve our performance
• Take seriously concerns raised by beneficiaries and
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beneficiary groups about the care received from
providers
Core OMIG Principle:
Develop and Use Innovative Data
Mining Capabilities
The Future of Medicaid Program Integrity
Through Data Mining
• $200 Billion in claims in data warehouse
• End-to-end integration
• Using new databases and analytic tools
• Identify and communicate compliance data
analysis processes which will identify problem
at source
• Identify and communicate issues discovered
THE CHANGING LANDSCAPE OF DATA
MINING AND PROVIDER RECOVERIES BY
GOVERNMENT
• Driven by the Improper Payments Act of 2002, and Deficit
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Reduction Act of 2005
What improper payments occur? Who gets them?
What systems and controls were in place (at payor, provider, and
enrollee) to prevent and detect improper payments?
What improvements are required to systems and controls to
prevent recurrence?
Measurement of systems errors
Using same systems approach to billing “errors” and never events
that has been developed for medical errors and never events
Data Mining
• We need to balance sensitivity (ability to detect
improper payments) vs. reliability (risk of false
positives)
• Fair treatment, due process, prompt resolution
• Ultimate goal - providers should be able to build data
mining systems in on front end, not wait for
government detection of improper claims
• Ultimate goal-disclosures by providers of identified
errors
DATA MINING IN HEALTH CARETRADITIONAL FOCUS ON CLAIM,
NOT PROVIDER
• CMS-National Correct Coding Initiative Coding
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Policy Manual for Medicare Services .
Claimcheck (McKesson product)-how does this claim
pass two million edits
NY EMEDNY system-several thousand edits (refill too
soon, subject to prior approval, deceased patient)
Ingenix Claims editing Knowledgebase
Claims Clearinghouse reviews
IPRO observation bed and DRG reviews
DATA MINING IN HEALTH CAREMOVING BEYOND FOCUS ON
CLAIM
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Disease states (ICD-9)
Claims history (this provider)
Claims history (all providers)
Encounter data-this provider
Demographic data from external sources
Regression analysis-run patients or providers
with this result backwards
Attempts by this provider
OMIG DATA MINING INITIATIVES
• IDENTIFYING CAUSES OF IMPROPER
PAYMENTS: THE DECEASED PATIENTS
PROJECT
• Billing by Medicaid providers for month of
October 2009
• 300 deceased patients billed for month
THE DECEASED PATIENTS
PROJECT
• “NOT DEAD”
• BILLING ERROR
• SILENCE-two months
• BORN AGAIN (OR AT LEAST
REENROLLED)
• RULES ALLOW BILLING
PAYMENTS FOR DECEASED
PATIENTS PROJECT
• PATIENT’S BODY TRANSFERRED TO TEACHING
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HOSPITAL AFTER DEATH FOR ORGAN
HARVESTING-CODED AS ADMISSION
PATIENT’S MEDICAID NUMBER VISITED THREE
DENTAL CLINICS IN WEEK AFTER DEATH
PICKUP OF CONTROLLED SUBSTANCES BY
PARTNER AFTER PATIENT DEATH
DELIVERY OF BED AFTER PATIENT DEATH
ROSTER BILLING
DATA MINING: CREDENTIALING
AND EXCLUSION
• WHERE ARE THEY NOW? PROBLEM DOCTORS ,
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NURSES, PHARMACISTS, THERAPISTS, AND
PROVIDERS-STRAIGHTFORWARD FALSE CLAIM
ACTION-CMS, OIG CITE 1999 STANDARD
KEEPING BAD AND EXCLUDED PROVIDERS
OUT OF HEALTH CARE- USING AUTOMATED
BACKGROUND CHECKS, PRIOR LICENSE
ACTIONS, PRIOR EXCLUSIONS(state and
federal)
EXCLUSIONS
• section 1932(d)(1) of the Social Security Act prohibits
•
organizations:
from having an employment, consulting, or other
agreement with an individual or entity for the provision
of items and services that are significant and material to
the entity’s obligations under its contract with the State
where the individual or entity is debarred,suspended, or
excluded.
Effect of Exclusion From
Participation in Medicaid
• September 1999 OIG bulletin
• No excluded person can receive any
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compensation from federal health care programs
In effect, this bars even janitors if their
compensation is derived in any part from
Medicaid
http://www.oig.hhs.gov/fraud/docs/alertsandbull
etins/effected.htm
Provider Exclusions –
State Medicaid Directors Letter 08003 and 09-001 (available on CMS
website)
• Issued on June 12, 2008 and January
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2009
Reminds States of their duty to report to
HHS-OIG about excluded persons
Reminds States of the consequences of
paying excluded providers
Recommends that providers screen
employees and contractors for excluded
individuals both prior to hiring and
contracting and periodically thereafter
Data Mining
Payment Controls & Monitoring
• POS card swipe machines to ensure member is
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present when service allegedly was performedreal time reporting.
Selection of providers with high improper
payment rates for prepayment review of claims
Home health worker call in on arrival or
departure from patient home
GPS on ambulettes
Medicaid
Data Matches/Demographics-What
Projects Tell Us About Provider
Systems?
• Men having babies
• Fillings in crowns
• Deceased enrollees
• Children under 10 years old having babies
• Women giving birth every 5 months
• Women over 50 years old having babies
without infertility treatments
Conclusion
• COMMITMENT TO FAIR PROCESS AND TRANSPARENCY
• COMMITMENT TO LISTEN TO AND ADDRESS CONCERNS RAISED
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BY PROVIDERS AND BENEFICIARIES
IDENTIFY, MEASURE AND ADDRESS SYSTEMS CAUSES OF
IMPROPER PAYMENTS
FOCUS ON PROVIDERS AND NETWORKS, NOT JUST CLAIMS
GOVERNMENT NEEDS TO FIND WAYS TO GET RESULTS OF DATA
MINING AND AUDIT INTO HANDS OF PROVIDERS AND
ASSOCIATIONS
PROVIDERS NEED TO RESPOND THROUGH SYSTEMATIC
COMPLIANCE EFFORTS TO INFORMATION FROM DATA MINING
AND AUDIT
FREE STUFF
• OMIG website-WWW.OMIG.State.ny.us
• Mandatory compliance program-hospitals,
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managed care, all providers over $500,000/year
Over 1200 provider audit reports, detailing
findings in specific industry
66 page work plan issued 4/20/09-shared with
other states and CMS, OIG (new one coming in
April)
Listserv (put your name in, get emailed updates)
New York excluded provider list