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January 26, 2018

OMIG Flexes Its Data-Mining Muscle to Recoup Overpayments Through Numerous "Data-Match" Desk Audits

Medicaid providers, especially transportation providers, were recently targeted with a substantial number of “desk” audits seeking recoupment of overpayments based solely on the review of electronically submitted claims. OMIG’s effort purports to identify missing or incorrect information in electronically submitted claims without the usual due process requirements of a traditional audit that would include consideration of a provider’s supporting documentation and explanation of the supporting documentation.

OMIG’s desk audit process capitalizes on what may be minor software deficiencies or data-entry problems to calculate large overpayments based solely on conflicts in submitted data fields. In some cases, the desk audits fail to recognize properly submitted data that is ignored or misinterpreted by OMIG’s data-collections systems. Notably, these audits are not sample audits that are extrapolated; rather each claim is identified as an individual overpayment based on the defined audit criteria. Accordingly, the amount of the disallowance is not the product of a statistical extrapolation, but represents actual amounts paid to the provider.

The recently issued desk audits review claims for services that providers submitted for payment between January 1, 2012, and December 31, 2015. These desk audits seek to recover alleged overpayments relating to several categories of claims, including but not limited to 1) transportation claims billed for fee-for-service during an inpatient stay, 2) claims for ambulette services with an unqualified or disqualified driver for the date of service, 3) transportation claims for ambulette services with an incorrect or missing driver’s license number for the date of service, and 4) claims for ambulette services with an incorrect or missing vehicle license plate for the date of service.

Providers have 30 days to respond to an audit, plus five additional days when the draft audit report (DAR) has been sent by mail, and submit a response to OMIG containing all supporting documentation and objections. The pertinent regulations related to hearings, 18 NYCRR Section 519.18, provide that a provider will be limited to the issues and documentation raised in its response to the DAR when challenging OMIG in administrative proceedings. Therefore, it is vital that the provider thoroughly respond with all of the information and defenses it wishes to make with the benefit of experienced counsel, or it will be precluded from making those arguments at a later date. After reviewing a provider’s response to the DAR, OMIG will issue a final audit report. OMIG may then initiate a withholding against the provider’s Medicaid checks and even those of corporate affiliates, such as other providers with common ownership. Providers have the right to request a hearing within 60 days of the issuance of a final audit report, but this does not prevent OMIG from withholding Medicaid payments before completion of the administrative appeals process and, if necessary, judicial review.

Recently litigated transportation cases, such as one involving Statewide Ambulette Services, and other decisions call into question the validity of OMIG’s process and procedures in seeking full recoupment without consideration of a provider’s supporting documentation and without considering evidence of proper claims submission (see our recent case study ”Barclay Damon Defends Large Medicaid Transportation Provider From OMIG Sanctions”). More recently, some providers have alleged that OMIG’s own claims-processing software could be at fault for mismatches identified as the basis for recoupment in final audit reports.

Barclay Damon’s Health Care Controversies Practice Area has extensive experience handling a wide array of provider audits, including pharmacy, transportation, DME, home health, OASAS, and other type of providers. In our experience, early involvement of counsel before a response is submitted is vital to establishing and marshaling critical defenses, as providers may be precluded from making additional arguments at later stages of the audit process (see our recent alert “A Rule of Reason Emerging From OMIG?”). Feel free to contact our office for a consultation to see if we may be of assistance.

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