The New York State Office of the Medicaid Inspector General (“OMIG”) recently finalized regulatory changes to New York State law which relate to the withholding of payments to Medicaid providers when there is a “credible allegation of fraud.” A credible allegation of fraud is defined as an “allegation that has indicia of reliability and has been verified by the [OMIG], or the Medicaid fraud control unit, or another State agency, or law enforcement organization.”
The changes, which will modify portions of 18 NYCRR 518.7 and 18 NYCRR 518.9, were required as a result of New York’s participation in the Medicaid program under the Affordable Care Act.
Mirror of Federal Requirements
The changes finalized by the OMIG will mirror federal requirements and will now state that the OMIG “must withhold payments under the program, in whole or in part, when it has determined or has been notified that a provider is the subject of a pending investigation of a credible allegation of fraud unless the [OMIG] finds good cause not to withhold payments” in accordance with applicable federal regulations.
Prior to the finalization of these changes the determination by the OMIG to implement a withhold was discretionary and the OMIG could withhold amounts where it had “reliable information that a provider is involved in fraud or willful misrepresentation involving claims…or has abused the program or has committed an unacceptable practices.”
A Provider’s Rights to Appeal Withholds
The changes also provide a method for providers that are the subject of the withholding to appeal the OMIG’s decision. Although not entitled to an administrative hearing, the affected provider may, within 30 days of the notice, submit written arguments and documentation that the withhold should be removed. The OMIG will provide a response to the provider no later than 60 days after receiving such written arguments or documentation. The OMIG will, in its response, inform the provider of its determination to either affirm, reverse or modify the withhold, either in whole or in part.
Any provider that is affected by the withholding of Medicaid payments by the OMIG should consult with its counsel to determine an appropriate response to the OMIG.