Health care providers are urging the state to overhaul how it audits the Medicaid program, claiming that current protocols for administrative errors threaten to put them out of business.
The Office of the Medicaid Inspector General oversees spending in the state’s $100 billion health program, identifying fraud and clawing back money that’s been inappropriately spent. In 2022 the inspector general saved the state $3.4 billion in improper Medicaid payments.
But some of the tactics used by the Medicaid oversight agency are “unnecessarily punitive” and threaten to close providers’ doors, health care groups say. Among the tactics is a process that allows the inspector general to extrapolate fines for small administrative errors like mistyping a provider identification number to large swaths of claims — and as a result, charge providers millions in fines, they added.
Nearly 50 health organizations sent a letter to Gov. Kathy Hochul and the legislature Wednesday to include a bill to reform the audit process in the final budget, which is due on April 1.
Assemblywoman Amy Paulin, chair of the health committee and sponsor of the bill, said she is pushing to include the bill in the final budget because the current audit process fines providers unfairly and threatens to erode necessary care.
“It’s bureaucracy on steroids,” Paulin said.
It’s not the first time in recent years that providers have pushed for reforms to the Medicaid audit process. The state Senate and Assembly passed legislation to reform the process in 2022, but the governor vetoed it that December. Hochul said in a veto memo that she thought the bill would hinder the inspector general’s ability to root out fraud and abuse in the Medicaid program.
But Paulin said that the bill never threatened to jeopardize the state’s ability to crack down on Medicaid fraud. Rather, she said the bill was vetoed because it was a budget issue, as preventing auditors from going after technical errors could produce a loss in state funding.
The new bill would prevent the inspector general from extrapolating fines for technical or human errors to large batches of claims. It would also give providers more time to appeal Medicaid audits, and prevent the state from taking back any funding before the appeal is complete.
The governor’s office did not respond to a request for comment about Hochul’s stance on the legislation.
“It doesn’t make sense to use tactics that are so aggressive,” said Lauri Cole, executive director of the New York State Council of Community Behavioral Healthcare, which signed the letter. Cole added that New York’s Medicaid audits are stricter than the federal government’s.
Exorbitant fines have led some programs to shut down. In 2020 Mount Sinai Beth Israel in Lower Manhattan shuttered an opioid treatment program after racking up a $7.7 million fine, Crain’s previously reported. The large penalty stemmed from 12 claims errors that produced a $400 fine.
Allegra Schorr, president of the Coalition of Medication-Assisted Treatment Providers and Advocates, which represents addiction providers in New York, said that many providers live in fear of getting a Medicaid audit that forces them to go out of business. Providers can challenge the Office of the Medicaid Inspector General, but it’s less risky to settle, she added. Many providers with little legal resources end up taking huge settlements.
“The system is not designed to produce a fair, truthful audit experience,” Schorr said. “It’s designed to extort funds from providers.”
Amanda D'Ambrosio , 2024-03-28 10:33:04
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