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As New Yorkers are preparing for Thanksgiving and the official start to the holiday season (although some could argue it started a month ago), required Medicaid providers should also be reviewing their Compliance Programs in preparation to submit their Annual Provider Compliance Program Certification to the New York State Office of the Medicaid Inspector General (“OMIG”).  Required providers must submit a certification at the time of their enrollment and each December thereafter.

As defined by Social Services Law Section 363-d (“Section 363-d”) and Part 521 of Title 18 of the New York Code of Rules and Regulations (“Part 521”), required providers are considered any provider that can answer “Yes” to one of the following questions and therefore must implement a comprehensive Compliance Program:

  1. Is the provider organization subject to Article 28 or Article 36 of the NYS Public Health Law?
  2. Is the provider organization subject to Article 16 or Article 31 of the NYS Mental Hygiene Law?
  3. Does the provider organization claim or order, or can be reasonably expected to claim or order, Medicaid services or supplies of at least $500,000 in any consecutive 12-month period?
  4. Does the provider organization receive Medicaid payments, or can be reasonably expected to receive payments, either directly or indirectly, of at least $500,000 in any consecutive 12-month period?
  5. Does the provider organization submit Medicaid claims of at least $500,000 in any consecutive 12-month period on behalf of another person or persons?

There are two important concepts to be aware of when answering these questions.  First, as defined by the OMIG, Indirect Medicaid Reimbursement is any payment that a provider receives for the delivery of Medicaid care, services, or supplies that comes from a source other than the State of New York.  An example of this is when a provider provides covered services to a Medicaid beneficiary who is enrolled in a Medicaid Managed Care Plan, any payment from the Managed Care Organization is considered an indirect payment.

The second important concept is that the OMIG considers any consecutive 12-month period to be exactly that, any twelve consecutive months.  This determination should not be considered solely on a calendar year.  For example, if a provider established her practice on April 1, 2018 and will not reach $500,000 in either claims or payments by December 31, 2018 but can reasonably expect to hit that mark by March 2019, then that provider should have a Compliance Program in place and be prepared to certify to its implementation by December 31, 2018.

To assist providers, the OMIG’s website identifies seven compliance areas that a provider’s Compliance Program must apply to, as well as eight elements that should be included in all Compliance Programs, regardless of provider type.

The Seven Compliance Areas are:

  1. Billings;
  2. Payments;
  3. Medical necessity and quality of care;
  4. Governance;
  5. Mandatory reporting;
  6. Credentialing; and
  7. Other risk areas that are or should with due diligence be identified by the provider.

The Eight Elements required in every Compliance Program are:

Element 1: Establish written policies and procedures that clearly describe and implement compliance expectations, as well as provide guidance to employees and others on dealing with potential compliance issues.  The written policies and procedures must also identify how to communicate compliance issues to appropriate compliance personnel and describe how potential compliance problems are investigated and resolved.

Element 2: Designate a Compliance Officer who is responsible for the day-to-day operation of the Compliance Program.

Element 3: Establish an effective training and education program for all affected employees and persons associated with the provider, including executives and governing body members (“affected persons”).

Element 4: Establish clear lines of communication to the Compliance Officer that allow all affected persons report compliance issues.  Providers must also establish anonymous and confidential reporting systems.

Element 5: Establish disciplinary policies that are fairly and firmly enforced to encourage good faith participation in the Compliance Program by all affected persons.  The policies must include clear expectations for the reporting or and assistance in resolving compliance issues.  The policies must also include defined sanctions for:

  • failing to report suspected problems;
  • participating in non-compliant behavior; or
  • encouraging, directing, facilitating or permitting either actively or passively non-compliant behavior.

Element 6: Conduct routine compliance assessments for those risk areas specific to the individual provider type, including but not limited to self-audits. These self-audits can be conducted internally or a provider may choose to have an external party conduct the audit.

Element 7: Establish a system for responding to and investigating potential compliance problems as the Compliance Officer becomes aware of them, either by a report received from an affected person or as the result of an internal assessment.  Compliance Program must also establish systems for the provider to report compliance issues the OMIG, as well as repay any related overpayments.

Element 8: Establish a policy of non-intimidation and non-retaliation for good faith participation in the Compliance Program, including but not limited to reporting potential issues, investigating issues, self-evaluations, audits and remedial actions, and reporting to appropriate officials as provided in sections 740 and 741 of the New York State Labor Law.

As mentioned above, each December, required providers must submit a Provider Compliance Program Certification, attesting that they have a Compliance Plan in place and that Compliance Plan satisfies each of the OMIG’s Eight Elements.  If a provider is unable to unequivocally state that their plan meets these requirements then a certification should not be submitted and immediate steps must be taken to all necessary modifications to establish a satisfactory Compliance Plan.  Any provider who submits a false certification may be subject to sanctions, including monetary fines or provider enrollment termination.

If you are unsure whether your Compliance Plan would satisfy the OMIG’s Eight Elements, or if you are a provider who believes you are required to implement a Compliance Plan and have not done so, please do not hesitate to contact Farrell Fritz’s Regulatory & Government Relations Practice Group at 518.313.1450 or NYSRGR@FarrellFritz.com.

New York State Court of Appeals, Albany, New York

Earlier this Summer, the Court of Appeals overturned the Appellate Division Third Department’s (the “Third Department”) unanimous decision in The Matter of Anonymous v. Molik, where it ruled that the New York State Justice Center for the Protection of People with Special Needs (“Justice Center”) exceeded its authority by substantiating a report against a facility or provider agency based upon a “concurrent finding” of neglect.[i]  With its decision, the Court of Appeals has not only clarified the Justice Center’s scope of authority, but also reopened the floodgates to a large number of investigations and appeals that have been existing in a state of limbo since the Third Department’s June 2, 2016 decision.[ii]

Pursuant to Executive Law §§ 551-562 and Social Services Law §§ 488-497, the Justice Center was established in 2013 to protect “vulnerable persons who receive care from New York State’s human services agencies.”[iii] It was created to protect all vulnerable persons, or those “who, due to physical or cognitive disabilities, or the need for services or placement, [are] receiving services from a facility or provider agency.”[iv]

All reportable incidents, including any allegation of neglect,[v] must be reported by a facility to the Statewide Vulnerable Persons’ Central Register (“VPCR”)[vi], whereby the Justice Center is mandated to investigate the allegation(s) and submit its findings to the VPCR.[vii]  The Justice Center’s findings are “based on a preponderance of the evidence and indicate whether the alleged abuse or neglect is substantiated in that it is determined the incident occurred and the subject of the report, facility or provider agency are responsible; or the allegation is found to be unsubstantiated because the event did not occur, or the subject of the report was found not responsible.”[viii] Additionally, the Justice Center may make “a concurrent finding . . . that a systemic problem [at the provider agency or facility] caused or contributed to the occurrence of the incident.”[ix]

In Molik, a male resident engaged in inappropriate sexual conduct with a female resident after two staff members momentarily left a common room at the Petitioner’s facility.[x] This assault was the third incident in a six month period, with the previous two assaults being known to the Petitioner.[xi]  The Justice Center investigated the incident, but did not substantiate a report of neglect against the two individuals because “there were no policies or requirements in place prohibiting staff from leaving the room unattended while residents were gathered there.”[xii] However, since the male resident had previously engaged in similar conduct, the Justice Center substantiated a concurrent finding of neglect against the Petitioner, the operator of the residential facility, “for failing to implement clear staff supervision protocols and for failing to modify [the male resident’s] care plan to increase his level of supervision after the first two attacks.”[xiii]

The Petitioner requested that the Justice Center amend its finding to unsubstantiated, which was denied, leading to the Petitioner’s Article 78 action where it received unanimous support from the Third Department.[xiv]  In its decision, the Third Department overturned the Justice Center’s concurrent finding, stating that it did not have to “defer to the Justice Center’s interpretation of the statutory provisions in question . . . [but rather defer to the] pure statutory interpretation dependent only on accurate apprehension of legislative intent.”[xv] “[T]he only circumstance under which the Justice Center could substantiate a report of neglect against a facility or provider agency is where an incident of neglect has occurred but the subject cannot be identified — a situation that is plainly not present here.”[xvi] The Third Department continued by saying, while the Justice Center does, in fact, have the authority to make a concurrent finding, “the only concurrent finding that may be made is that a systemic problem caused or contributed to the occurrence of the incident.”[xvii] Accordingly, since the controlling statute did not provide the Justice Center with the clear ability to categorize a concurrent finding it necessarily followed that such a finding could not constitute neglect on the part of a provider agency.[xviii]

The Court of Appeals, however, did not share in the Third Department’s view, stating that courts may look beyond the literal text of a statute when “the plain intent and purpose of the statute would otherwise be defeated.”[xix] Consequently, the Court viewed the Petitioner’s, and the Third Department’s, narrow interpretation of the law as “leav[ing] the Justice Center powerless to address many systemic issues, defeating the purpose of the Act and preventing the Justice Center from protecting vulnerable persons where it is most critical to do so.”[xx]  The Court, in light of the particular underlying events in Molik, ruled that to uphold this construction “would perversely allow this dangerous cycle to continue: employee conduct could not be substantiated because it does not violate facility policies, but facility policies would remain ineffective because the Justice Center lacks authority to implement change.”[xxi]

In her dissenting opinion, Judge Rivera stated that she agreed with the majority that “[i]t would lead to absurd results if [N.Y. Soc. Serv. Law § 493(3)(a) were interpreted] to permit a facility or provider agency to be found responsible in those situations where an incident occurs and no subject can be identified, but not where an identified subject is found not responsible for a confirmed incident of abuse or neglect.”[xxii]  However, Judge Rivera points out that a ‘concurrent’ finding should be viewed as an ‘adjunct’, requiring that an initial finding of neglect must be made before a provider agency could be found to have concurrently committed neglect, even if the initial subject is ultimately found not responsible.[xxiii]  In Molik, as reasoned by Judge Rivera, the initial step of establishing a finding of abuse or neglect was never reached because the allegation of neglect against the two identified subjects was declared unsubstantiated; therefore, a ‘concurrent’ finding could not be made.[xxiv]

In a post-Molik world, it is imperative that all provider agencies subject to Justice Center oversight review their internal policies, procedures, and processes, understanding that they too are now clearly within the Justice Center’s reach.  Provider agencies should evaluate previous incidents that occurred within the facility to determine whether the necessary corrective actions have been taken or if further steps are needed.  Furthermore, staff training curriculum should be reevaluated to determine whether opportunities for improvement exist.

If you have any questions or would like additional information regarding the Justice Center, or would be interested in assistance reviewing, developing or revising your policies, processes, and training programs, please do not hesitate to contact Farrell Fritz’s Regulatory & Government Relations Practice Group at 518.313.1450 or NYSRGR@FarrellFritz.com

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[i] Anonymous v. Molik, 2018 WL 3147607 (N.Y. Jun. 28, 2018).

[ii] Matter of Anonymous v. Molik, 141 A.D.3d 162, (App. Div. 3 Dep’t, June 2, 2016)

[iii] 14 N.Y.C.R.R. § 700.1(a).

[iv] N.Y. Soc. Servs. Law § 488(14).

[v] 14 N.Y.C.R.R § 624.3(b)(8).

[vi] N.Y. Soc. Serv. Law § 492(1)(a).

[vii] Id. at (3)(c)(i); Id. at (3)(c)(viii); N.Y. Soc. Serv. Law § 493(1).

[viii] N.Y. Soc. Serv. Law § 492(3)(a).

[ix] Id. at (3)(b).

[x] Molik, 2018 WL 3147607 at *1.

[xi] Id.

[xii] Id.

[xiii] Id.

[xiv] Id. at *2.

[xv] Molik, 141 A.D.3d. at 166 (internal citations omitted).

[xvi] Id. at 167 (citing N.Y. Soc. Serv. Law § 492(3)(a)).

[xvii] Id. at 167–168 (internal citations and quotations omitted).

[xviii] Id.

[xix] Id. at *4.

[xx] Molik, 2018 WL 3147607 at *5.

[xxi] Id.

[xxii] Id. at 8

[xxiii] Id. at 9.

[xxiv] Id. at 10.