New York Codes, Rules and Regulations, Subpart 521-2, Section 521-2.4 - Fraud, waste and abuse prevention program requirements | New York Codes, Rules and Regulations

(a) Compliance program. The MMCO shall adopt, implement and maintain a compliance program that satisfies the requirements of SubPart 521-1 of this Part. The MMCO shall be responsible for ensuring that the requirements of its fraud, waste and abuse prevention program are incorporated into its compliance program. Specifically, the MMCO shall:

(1) incorporate into the written policies and procedures required by subdivision (a) of section 521-1.4 of this Part, the MMCO's policies and procedures for preventing, detecting and investigating fraudulent, wasteful or abusive activities by its participating providers, nonparticipating providers, contractors, agents, subcontractors, independent contractors, and any other person the MMCO or its subcontractors pay for ordering, providing, furnishing or arranging for a service to a MA program recipient. The MMCO shall also incorporate any other policies and procedures related to its obligations under this SubPart;

(2) require its designated compliance officer, as required by subdivision (b) of section 521-1.4 of this Part, to be responsible, except where noted, for implementing the requirements of this SubPart, and shall be responsible for coordinating with the MMCO's SIU director, where applicable;

(3) include, as part of the training required by subdivision (d) of section 521-1.4 of this Part, training of all personnel involved in identifying and evaluating instances of potential fraud, waste and abuse; and

(4) include, as part of its auditing and monitoring activities as required by subdivision (g) of section 521-1.4 of this Part, the requirements of subdivision (c) of this section.

(b) Special investigation unit (SIU). If the MMCO has an enrolled population of one thousand (1,000) or more persons in the aggregate in any given year, the MMCO shall establish a full-time SIU to identify risk and to detect and investigate cases of potential fraud, waste and abuse, report such cases to OMIG, and electively report potential fraud to MFCU, in accordance with the provisions of this SubPart and the terms of the MMCO's contract with the department to participate as an MMCO. The SIU must be separate and distinct from any other unit or function of the MMCO. In establishing its SIU, the MMCO shall meet the following requirements:

(1) Staffing requirements. The MMCO shall dedicate sufficient staff and resources to the SIU to effectively detect and prevent fraud, waste and abuse in the New York State MA program.

(i) The MMCO shall employ at least one full-time lead investigator and one SIU director who shall be based in the State of New York and be responsible for communicating and coordinating with OMIG or MFCU with respect to:

(a) conducting fraud, waste and abuse investigations;

(b) making fraud, waste and abuse referrals;

(c) preparing investigatory reports;

(d) investigating and remediating conflicts of interest;

(e) identifying and recovering overpayments;

(f) conducting provider terminations, education or re-education, and other related actions;

(g) implementing the fraud, waste and abuse prevention program required by this SubPart;

(h) participating in any meetings required by OMIG; and

(i) participating in any meetings required by MFCU

(ii) The MMCO shall employ at least one (1) full-time investigator per sixty thousand (60,000) enrollees, except in the case of an MLTCP, which shall employ at least one (1) full-time investigator per six thousand (6,000) enrollees. The MMCO shall employ investigators dedicated to servicing a particular county when that county on its own meets the designated investigator-to-enrollee ratio required by this paragraph. An MMCO may propose for OMIG's consideration alternative minimum staffing levels, provided the MMCO demonstrates to OMIG's satisfaction that its proposal would be no less effective than those required by this subparagraph and that the requirements of this SubPart can be fully met. The MMCO must apply for and receive written approval from OMIG of any alternative staffing levels prior to the implementation of any alternative minimum staffing levels. The approval or denial of any alternative staffing level proposal is at the discretion of the Medicaid Inspector General or their designee, and such approval may be rescinded by the Medicaid Inspector General or their designee with ninety 90 days' notice.

(iii) In addition to investigators, the MMCO shall also employ or utilize existing employees who are certified coders, clinicians, data analysts, or pharmacists to support the work of the SIU.

(2) SIU investigator qualifications. Persons employed by the SIU as investigators shall be qualified by education or experience, which shall include:

(i) a minimum of five years in the healthcare field working in fraud, waste, and abuse investigations and audits, or five years of insurance claims investigation experience or professional investigation experience with law enforcement agencies, or seven years of professional investigation experience involving economic or insurance related matters;

(ii) an associate's or bachelor's degree in criminal justice or a related field; or

(iii) employment as an investigator in the MMCO's SIU on or before the effective date of this SubPart.

(3) SIU work plan. No less frequently than annually, the SIU shall prepare a work plan outlining the activities that it plans to complete in the coming year. The SIU shall consider the MMCO's risk areas, as specified in SubPart 521-1 of this Part, and organizational experience in developing the work plan. The SIU work plan may be a standalone document, or a component of its larger compliance work plan required by SubPart 521-1 of this Part.

(4) Delegation. The MMCO may delegate all or part of the functions of the SIU under this subdivision, provided, however, that it shall be no defense to enforcement of this SubPart that a subcontractor failed to provide effective service enabling the MMCO to comply with its obligations. The MMCO is ultimately responsible for meeting the requirements of this SubPart.

(i) The MMCO shall require that the subcontractor to whom it delegates the SIU function comply with all the requirements of this subdivision, and any other relevant requirements under this SubPart. The MMCO shall also require that the subcontractor cooperate fully with OMIG in any examination of the implementation of the fraud, waste and abuse prevention program required by this SubPart and provide any and all assistance requested by OMIG, the department, MFCU and any other law enforcement agency or any prosecutorial agency in the investigation of fraud, waste and abuse, and the prosecution of fraud and abuse and related crimes.

(ii) The MMCO shall review any contract for SIU functions to determine if it delegates any management authority. An MMCO shall not enter into any agreement delegating management authority except pursuant to a management contract which complies with the requirements of subdivisions (h) through (s) of section 98-1.11 of Title 10 and section 98-1.18 of Title 10.

(iii) If the MMCO enters into a management contract for all or part of its SIU function, the management contract shall be submitted to the department and OMIG, and included as part of the fraud, waste and abuse prevention plan required by subdivision (i) of this section.

(c) MMCO audits and investigations. In addition to the auditing and monitoring requirements of subdivision (g) of section 521-1.4 of this Part, the MMCO shall audit, investigate, or review cases of fraud, waste or abuse specific to its participation in the MA program, and the MMCO's risk areas as specified in SubPart 521-1 of this Part. The MMCO shall conduct such audits, investigations or reviews in accordance with the following requirements and as specified in the contract between the MMCO and the department to participate as an MMCO:

(1) The MMCO's SIU, if applicable, shall be primarily responsible for performing, or collaborating with and monitoring those individuals performing, such audits, investigations and reviews, and shall coordinate with the MMCO's designated compliance officer.

(2) Such audits, investigations and reviews must involve at least one percent (1%) or more of the aggregate of MA program claims it pays to providers and subcontractors, based on the total prior year's claims paid by the MMCO. Such audits, investigations and reviews may review claims consistent with any lookback period established in the MMCO's contract with the Department to participate as an MMCO.

(3) Such audits, investigations and reviews must be of clinical and billing records to verify that no duplicate payments were made, appropriate services were rendered and billed, appropriate procedure codes were utilized, and accurate encounter data was reported to the department.

(d) Reporting cases of fraud, waste and abuse. The MMCO and its subcontractors shall report all cases of potential fraud, waste and abuse to OMIG. The MMCO may also report cases of potential fraud to the MFCU. In reporting such cases, the MMCO shall comply with the terms of its contract with the department to participate as an MMCO. The reports shall be reviewed and signed by an executive officer of the MMCO responsible for the operations of the SIU. In addition, the MMCO shall include the following information when reporting potential fraud, waste and abuse to OMIG:

(1) Information about the subject of the report, including:

(i) the name of the person or provider;

(ii) the provider's Medicaid provider ID, if applicable;

(iii) the person's or provider's national provider ID, if applicable;

(iv) the person's or provider's address;

(v) the type of provider; and

(vi) any other information requested by OMIG.

(2) The source and origin of the allegation;

(3) The date the allegation was first reported to the MMCO, or the MMCO first became aware of the allegation;

(4) A summary of the investigation, which shall be in a form and format approved by OMIG;

(5) A description of the suspected misconduct, with specific details including:

(i) the category of service;

(ii) a factual explanation of the allegation;

(iii) the specific MA program statutes, rules, regulations, and/or policies violated; and (iv) the date(s) of the conduct.

(6) The amount the MMCO paid to the person or provider during the past three (3) years or during the period of the alleged misconduct, whichever is greater;

(7) All communications between the MMCO and the provider or person concerning the conduct at issue;

(8) The contact information for the MMCO SIU director, lead investigator, investigator(s) and staff with knowledge of the case;

(9) An estimate of the overpayment, when available; and

(10) Copies of the investigation file and related material.

(e) The MMCO and its subcontractors shall immediately refer reasonably suspected criminal activity to OMIG and MFCU in accordance with the requirements specified in the MMCO's contract with the department to participate as an MMCO.

(f) Report, return and explain. The MMCO shall establish policies and procedures in accordance with the requirements of section 363-d of the Social Services Law for its participating providers and other subcontractors to report, return and explain overpayments to the MMCO within sixty (60) days of identification. The MMCO shall promptly report all recoveries, including recoveries which result from a provider or subcontractor reporting, returning and explaining an overpayment under this subdivision:

(1) in its cost reports to the department, and in accordance with the instructions and directives of the department; and

(2) in a monthly report to OMIG in a form and format to be determined by OMIG, or as otherwise specified in its contract with the department to participate as an MMCO.

(g) The MMCO shall develop a fraud, waste and abuse detection procedures manual for use by officers, directors, managers, personnel, and subcontractors performing claims underwriting, member services, utilization management, complaint, investigative and/or SIU services.

(h) Other program integrity requirements.

(1) The MMCO shall develop a fraud, waste and abuse public awareness program focused on the cost and frequency of MA program fraud, and the methods by which the MMCO's enrollees, providers, and other contractors, agents, subcontractors, or independent contractors can prevent it. The MMCO shall make information regarding the public awareness program available on its website.

(2) The MMCO shall make available on its website information on how and where to report, return and explain overpayments to the MMCO, in accordance with the requirements of subdivision (f) of this section.

(i) Fraud, waste and abuse prevention plan.

(1) Within ninety (90) calendar days of the effective date of this SubPart or of signing a new contract with the department to begin participation as an MMCO, the MMCO shall develop a fraud, waste and abuse prevention plan and shall submit such plan to OMIG.

(2) The MMCO shall review and update such plan no less frequently than annually.

(3) The plan shall include:

(i) a description of the MMCO's program for preventing and detecting fraud, waste and abuse;

(ii) a description, if applicable, of the organization of the SIU, including:

(a) titles and job descriptions of the investigators, investigative supervisors and other staff;

(b) the minimum qualifications for employment in these positions in addition to those qualifications required by this section;

(c) the geographical location and assigned territory of each investigator and investigative supervisor;

(d) the support staff and other physical resources, including database access available to the SIU; and

(e) the supervisory and reporting structure within the SIU and between the SIU and senior management of the MMCO.

(iii) If investigators employed by the unit will be responsible for investigating cases in more than one state, the plan must apportion that percentage of the investigators' efforts that will be devoted to New York cases;

(iv) the rationale, if applicable and different from the minimum staffing levels required by subdivision (b) of this section, for the level of staffing and resources of the SIU which may include, but is not limited to, objective criteria such as the number of claims received with respect to the MMCO's participation in the New York State MA program on an annual basis, volume of potential fraud, waste and abuse for the MMCO's New York MA claims currently being detected, other factors relating to the vulnerability of the MMCO to fraud, waste and abuse, and an assessment of optimal caseload which can be handled by an investigator on an annual basis;

(v) a description of the roles, responsibilities and interaction between the MMCO's:

(a) designated compliance officer responsible for carrying out the provisions of the fraud, waste and abuse prevention program and the SIU;

(b) SIU and the claims, quality, member services, utilization review, complaint procedures and underwriting functions of the MMCO for the purpose of enhancing the ability of the MMCO to detect fraud, waste and abuse and to increase the likelihood of its successful prosecution, and for the initiation of civil action when appropriate;

(c) SIU and the MMCO's legal department; and

(d) SIU and OMIG, the department, MFCU, or other law enforcement agencies and prosecutors;

(vi) the MMCO's policies and procedures required by paragraph (1) of subdivision (a) of this section;

(vii) the criteria the MMCO uses for the internal referral of a case to the SIU for evaluation, and the criteria the SIU utilizes for reporting cases of potential fraud, waste and abuse to the department and OMIG in accordance with subdivision (d) of this section;

(viii) a description of the specific controls in place for the prevention and detection of potential fraud, waste and abuse, including a list of any automated pre-payment claims edits and a list of any automated post-payment review of claims;

(ix) a description of the training required by paragraph (3) of subdivision (a) of this section;

(x) the timetable for the implementation of the fraud, waste and abuse prevention plan, provided however, that the period preceding implementation shall not exceed one hundred and eighty (180) calendar days from the date the MMCO executes its contract with the department to participate as an MMCO and develops its fraud, waste and abuse prevention plan pursuant to paragraph (1) of this subdivision.

(4) A fraud and abuse prevention plan developed in accordance with the provisions of section 98-1.21 of Title 10 or section 86.6 of Title 11 will satisfy the requirements of this subdivision, provided that the MMCO includes any additional information required by this subdivision.

(j) Annual report. The MMCO shall on or before a date specified by OMIG, which shall be no sooner than January 31 of each calendar year, file with OMIG, in a form and format approved by OMIG, an annual report for the preceding calendar year, demonstrating that it has satisfied the requirements of this SubPart. Such report shall, at a minimum, include:

(1) a description of the MMCO's experience, performance and cost effectiveness in implementing the fraud, waste and abuse prevention program;

(2) the MMCO's proposals for modifications to its fraud, waste and abuse prevention program and plan, to amend its operations, to improve performance or to remedy observed deficiencies;

(3) a summary of the MMCO's SIU staffing;

(4) a summary of the activities of the MMCO's subcontractors or vendors who perform audit, investigation or review functions for the MMCO;

(5) the total number of reported cases of potential fraud, waste or abuse identified by the MMCO, its subcontractor(s) or vendor(s);

(6) the MMCO's SIU work plan for the next calendar year;

(7) results of service verification reviews as specified in the MMCO's contract with the department to participate as an MMCO; and

(8) any other information or data that OMIG may require relevant to the requirements of this SubPart or related requirements under the MMCO's contract with the department to participate as an MMCO.

(k) Notwithstanding any requirement to report using forms or formats approved by OMIG under this SubPart or under the MMCO's contract with the department to participate as an MMCO, in the event that such form or format has not been promulgated, the MMCO shall report the substantive information required by this SubPart or the contract.