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Medicaid compliance big issue for New York

By: Todd Etshman//July 28, 2011

Medicaid compliance big issue for New York

By: Todd Etshman//July 28, 2011//

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Rick Marchese

Protecting the state from Medicaid fraud, abuse or just plain mistakes is an important aspect of the work of the New York State Office of the Medicaid Inspector General (OMIG) since the state spends more for Medicaid than any other state in the country.

“Our job in compliance is to try to focus providers on mandatory compliance programs under the law,” said Matthew Babcock, OMIG’s assistant deputy Medicaid inspector general for compliance.

Babcock said OMIG has audited approximately 15 providers since December and found five with serious compliance issues.

As Woods Oviatt Gilman LLP attorney Rick Marchese pointed out, the office is one of the most aggressive government oversight agencies of healthcare providers servicing Medicaid patients in the country.

New York is the only state to have mandatory compliance regulations for providers. OMIG asked New York counties to be partners in combating Medicaid fraud and abuse and Monroe County agreed.

Marchese said a Rochester pharmacy recently put the same doctor in countless prescriptions he had not written — and this is an example of the type of violation OMIG’s compliance bureau is looking for.

Created in 2006, OMIG representatives stress the fact that they want to work in collaboration with providers. The office provides a steady stream of compliance forms, best practices and information on its website,, and through its office.

“The message from the top down is [OMIG is] really concerned that Medicaid compliance be taken seriously,” Marchese explained. “Our goal is to prevent an audit. They will not countenance a cavalier attitude but if [providers] have a solid plan in place, have regular meetings and show you take compliance seriously it diminishes the chances of an audit. The old adage that an ounce of prevention is worth a pound of cure really applies here.”

“When you think about it, if every provider has control of their operation they’ll find [violations such as overpayment] first. That’s what we want to get them to do,” Babcock explained.

Although most Medicaid service providers choose to comply, Babcock said there is still a cadre of providers that are doing it wrong.

“It’s a daunting and scary proposition if OMIG decides to conduct an audit and they reserve the right to do so at any time,” Marchese said.

Finding and preventing fraud is important but so is stopping the pattern of smaller dollar waste and abuse or what Marchese calls “death by 1,000 paper cuts.” Initially the compliance unit of OMIG scrutinized pharmacies but has expanded their examination to include such services as Medicaid transportation providers as well.

Beginning next year, nursing homes will also be subject to compliance requirements. OMIG works with the federal Centers for Medicare and Medicaid in overseeing providers.

Perhaps the most important tool in combating waste, mistakes, abuse and fraud came to OMIG recently in the form of software from Salient Management Co. in Horseheads.

“It allows data miners to look for anomalies or for something that is way out of whack,” said Tim Davis, Salient’s director of global communications.

Salient trained over 170 OMIG employees in the use of the software that allows the office to easily look at extensive Medicaid provider or recipient information on a single transaction or a history of claims and all the information that goes with it.

“They didn’t have this ability before. Now if they see something amiss they can come in with solid data,” Marchese said.

“It’s a tremendous tool for our staff here and makes every aspect of our work easier,” said OMIG spokesman Wanda Fischer in Albany.

Babcock said the office expects to present a series of assistance tools for provider compliance officers in the near future to help them ensure they have an effective program.

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