Health Law Blog

New York State implements another cut: a 2% across the board Medicaid payment reduction.

The final 2011-12 state budget, Chapter 59 of the Laws of 2011, requires a 2% across the board reduction to most Medicaid payments. Such payment reductions will apply for dates of service on or after April 1, 2011. The reduction will remain in effect for dates of service through March 31, 2013. These provisions were enacted to meet the target of the Medicaid Redesign initiative authorized by the Governor.

Healthcare providers, physicians and pharmacies in particular, must be warned: A provider may be subject to sanctions and penalties, including revocation of enrollment in the NYS Medicaid Program, for failing to implement an adequate compliance program.

Every healthcare provider claiming $500,000 per year or more from the NYS Medicaid program is required to adopt and implement an effective compliance program. Providers should be aware that the $500,000 in billings requirement includes claims submitted to the Medicaid program, whether billed directly or through various third-party managed care organizations. The Compliance Program applies to billings, payments, medical necessary and quality of care, governance, mandatory reporting, credentialing, and other risk areas that are or should with due diligence be identified by every healthcare provider. Putting together a Compliance Program that meets the requirements of the NYS Department of Health and the Office of Medicaid Inspector General involves a comprehensive professional review of your operations and compiling an extensive set of requisite documentation.

The NYS Medicaid Compliance Program must satisfy specific requirements set forth in relevant NYS codes and regulations. When applying for initial provider enrollment in the NYS Medicaid program, in transfer of ownership applications and once per year thereafter, during the month of December, every NYS healthcare provider must demonstrate that an adequate and effective Compliance Program has been implemented, which includes properly drafted policies and procedures that describe compliance expectations. The Compliance Program shall provide guidance to owners and employees on dealing with potential compliance issues, identify how to communicate these issues and describe how these problems are investigated and resolved. The Compliance Program must designate and employee responsible for its daily operations and it should provide for training & education of all affected employees on compliance issues, expectations, and the operation of the Compliance Program.

It is important for every NYS healthcare provider to remember that upon applying for enrollment in the NYS Medicaid Program and every December thereafter, a provider claiming over $500,000 per year must to the Department that an adequate Program is in place!

The Commissioner of Health and the Medicaid Inspector General will determine the adequacy of a provider's compliance program. In the event that the Commissioner or OMIG finds that a provider's compliance program is unsatisfactory or inadequate, the provider may face serious consequences.

 

The HIPAA Privacy Rule provides federal protections for personal health information held by health care providers and other covered entities. The rule places constraints on disclosure fo private patient data, and sets limits on the uses and disclosures that may be made of such information. HIPAA Privace Rule is balanced so that to permit the disclosure of PIH when necessary for patient care and other important purposes.

For an average health care provider, the HIPAA Privacy Rule mandates compliance in several specific areas such as notifying patients about their privacy rights and how their information may be used, adopting and implementing privacy procedures, training employees in privacy procedures, designating an individual responsible for ensuring that the proper privacy procedures are followed and securing patient records containing identifiable PHI.

Typically, a HIPAA violation involves a doctor or other health care practitioner improperly divulging medical history or other protected patient information. While compliance with HIPAA may seem fairly straightforward at first glance, many situations involving possible violations can be multi-faceted and ambiguous. Since violations can result in various serious sanctions and even criminal proceedings, health care providers are advised to carefully review and evaluate the propriety of all requests to release PHI received by their practices.

We would like to remind all providers that, under current New York and Federal laws and regulations, they are obligated to report, explain and repay overpayments within calendar 60 days of identification. Those that fail to disclose, explain and repay the overpayment in a timely manner may be subject to liability under the New York and Federal False Claims Act.

Identifying and reporting compliance issues and refunding overpayments is also an essential component of a provider’s obligation to adopt and implement effective compliance programs that are mandatory in New York for certain Medicaid providers. In most circumstances, self-disclosure will result in a better outcome than if New York Office of Medicaid Inspector General ("OMIG") staff had discovered the matter independently. Potential benefits may include:

• Forgiveness or reduction of interest payments (for up to two years) 
• Extended repayment terms
• Waiver of penalties and/or sanctions 
• Timely resolution of the overpayment 

Recognition of the effectiveness of the provider’s compliance and decrease the likelihood of imposition of an OMIG corporate integrity agreement (CIA).  We have drafted numerous effective compliance programs that have met the criteria set forth by the NY Department of Health and OMIG.  For more information concerning Medicaid and other compliance programs, contact our healthcare attorneys at 718-787-9500 or at This email address is being protected from spambots. You need JavaScript enabled to view it.

New York State implements another cut: a 2% across the board Medicaid payment reduction.

The final 2011-12 state budget, Chapter 59 of the Laws of 2011, requires a 2% across the board reduction to most Medicaid payments. Such payment reductions will apply for dates of service on or after April 1, 2011. The reduction will remain in effect for dates of service through March 31, 2013. These provisions were enacted to meet the target of the Medicaid Redesign initiative authorized by the Governor.