The New York State Office of Medicaid Inspector General (“OMIG”) on August 31, 2017 issued its first Compliance Alert this year: “Mandatory Compliance Programs’ Risk Assessments: Changes in Medicaid Reimbursement Systems.”  While sounding the alarm for providers, the alert is unfortunately a missed opportunity to offer providers more concrete compliance guidance, in that it does not identify the specific risk areas associated with the new and emerging payment models and particular steps providers should be taking to mitigate those risks.  Instead, OMIG leaves it to the providers, along with their compliance counsel, to sort out the issues themselves.

As OMIG notes, New York State’s Medicaid program, much like Medicare and other state Medicaid program initiatives, is moving away from fee-for-service reimbursement to “new payment methodologies, including capitation, risk-sharing arrangements, and value-based payments, among others.”  OMIG continues: “in a fee-for-service environment, a provider’s compliance program should be focused on whether a covered-medically necessary service was: delivered, correctly coded, billed accurately and timely, and met established quality of care standards.”  In light of the sea change in health care delivery and payment systems, OMIG cautions that, to comply with mandatory compliance-program requirements, providers should “closely review reimbursement methodologies so they can identify where they may need to update risk-assessment activities” – beyond billing and payment processes associated with fee-for-service – to include the “processes involved in the delivery of Medicaid reimbursable services.”

While noting that new payment models “create the potential for additional program integrity concerns regarding Medicaid billing and payment,” the compliance alert does not identify those concerns nor recommend any risk assessment activities to address them.  For instance, the alert does not discuss the compliance measures OMIG expects of providers, when a managed care organization (“MCO”) is coordinating care and contracting with network providers, and alone is getting paid a capitated amount by the government.

Hopefully, with the encouragement of the provider associations, OMIG will promulgate more specific provider guidance surrounding managed care, risk-sharing arrangements, bundled payments, and other value-based payment models.  Until such time, providers will need to lean on compliance staff and counsel as well as collateral guidance resources to help navigate the shoals of the new reimbursement systems.