New York Healthcare Law Blog

The Office of Medicaid Inspector General (OMIG) has recently drastically increased the number of audits targeting physicians and other Medicaid providers.  The OMIG audit, typically initiated by a seemingly innocous notice or a letter received by mail, can cause a provider much aggravation and will frequently result in witholdings of Medicaid payments due to provider.  A letter or notice from OMIG must always be taken very seriously.  In addition to possibly large sums of money at stake (keep in mind that the amount that OMIG will seek to recoup from these audits will not equal the value of the claims in question because OMIG is allowed to "extrapolate" the amount of its findings), OMIG may seek to exclude the provider from participation in the New York State Medicaid Program and in some cases a referral to the Medicaid Fraud Control Unit may be made for criminal prosecution. 

The Medicaid Audit generally commences with an Entrance Conference, usually scheduled within 60 days of the receipt of the initial letter notifying the provider of OMIG's intent to conduct the audit.  After the nature and extent of the audit is outlined, OMIG investigators will conduct an audit at the physician's office or facility.  At the time of this on-site investigation the provider has an opportunity to provide relevant documents to the auditors.  Once the on-site audit is completed, OMIG issues a written Exit Conference Summary, setting forth its preliminary findings and the amount of repayment that will be sought.  Then a formal, on-site Exit Conference is conducted and at this stage, provider has another opportunite to provide pertinent documents.  Next, OMIG issues a Draft Audit Report taking into account additional information provided by the provider.  At this point, provider has only thirty days to respond to the Draft Audit Report challenging OMIG's findings.  It is critical that the response to the report includes all factual and legal arguments that the provider may wish to raise because if an issue is not raised in response to the Draft Audit Report, the provider will not be able to raise it at a hearing or in court if such proceedings are later pursued. After the provider's response is considered, OMIG will issue a Final Audit Report, upon receipt of which a provider has only twenty days to arrange for payment or be subjected to partial witholdings of its Medicaid payments due.

Due to the complexity of the Medicaid Audit process, severity of possible consequences and the various mechanisms available to providers to challenge OMIG's procedure and findings, all physicians and other healthcare providers faced with a notice of Medicaid's intent to conduct an audit should consult qualified legal counsel as early in the process as possible.