The Office of the Medicaid Inspector General (OMIG) is currently auditing numerous dental offices and is seeking recovery of between tens and hundreds of thousands of dollars. Last year, OMIG formed the Dental Unit comprised of a dentist, hygienists, investigators and auditors within its Provider Investigations Unit to focus exclusively on dental investigations. OMIG is dedicating significant resources to identifying dental providers delivering quality of care which fails to meet recognized professional standards, unnecessary services, or who are defrauding the Medicaid program. Like it has for other providers, OMIG is conducting audits to also identify what it believes to be overpayments. As a dental provider, you should be aware of your rights. This alert provides you with a summary of the Medicaid audit process and information on related issues.
I. The Audit Process
The regulations governing OMIG activity are set forth in 18 NYCRR Parts 515 (unacceptable practices), 516 (penalties), 517 (audits) and 519 (the hearing process). These regulations are extremely complex and can create pitfalls if not followed properly.
It appears that the current audits of dental offices are being conducted as "desk audits" and therefore dentists may not be advised of the audit until it receives a Draft Audit Report. In these cases, there may have been a preliminary "probe" audit of a few of the dentists' files. The desk audits then consist of review of billings alone relating to certain procedures, as set more fully below.
- The Medicaid Audit Process in these cases involves the following components:
- The Office of the Medicaid Inspector General (OMIG) or a contractor hired by the OMIG conducts a desk audit relating to the dentists' billings relating to certain procedures and patients.
- A Draft Audit Report is issued detailing the findings and the alleged overpayment. The dentist has 30 days to respond to the Report with any and all information or legal arguments the dentist wants to raise. In actuality, since the OMIG presumes the Draft Audit Report is received within five days of its date (allowing for mailing), the dentist has 35 days from the date on the letter.
- After the submission of the dentist's response to the Draft Audit Report, the OMIG considers the response and issues its Final Audit Report. Upon receipt of a Final Audit Report, a dentist has 20 days to arrange for payment or face a partial withholding of its Medicaid payments due and has 60 days to decide whether to request a hearing.
II. Issues Regarding Dental Audits
A. Findings
The OMIG initially focused on certain dental specialties, but has broadened its scope. OMIG has issued letters with the following standard findings for dental audits. These include:
- Inappropriate Billings for Edentulous Patients (that is for prophylaxis, restorations and certain other procedures for patients who have both upper and lower dentures)
- Inappropriate Billing After Complete Upper or Lower Dentures (for instance placement of complete dentures, tooth location matches, and restorative procedures)
- Partial Upper Dentures Billed after Complete Upper Dentures or Partial Lower Dentures Billed after Complete Lower Dentures
- Dental Service Billed Fee for Services for Recipients in a Skilled Nursing Facility
- Rebase, Reline or Repair Service within Six Months after the Delivery of New Dentures
- Dental Consultation Claims with no Referring Information
- Dental Consultation Claims in which the Billing Provider Matches the Referring Provider
- Multiple Single Surface Restoration Claims with Surface Codes I and O or F and B Billed for the Same Patient, Same Tooth and Same Surface
III. Corporate Compliance, Self Disclosure, Voided Claims
OMIG is also very interested in the effectiveness of a provider's corporate compliance program and may wish to sit with a provider's compliance officer. OMIG reviews its data for providers that void a substantial number of claims, reviews what claims are being voided and continuously looks for patterns of voids. According to the OMIG, a voided claim would not be included in the audit universe. When a provider self-discloses, OMIG will usually only seek restitution and may agree to a repayment plan. OMIG has advised that "it prefers self- disclosure" and that it is the mark of a working compliance plan. Self-disclosures, according to OMIG's guidance, should be done with the advice of health care counsel.
OMIG regulations requiring a compliance plan for all Medicaid providers who bill over $500,000 in a 12-month period became final in 2009. OMIG has stated that it will seek to audit the effectiveness of these plans, for which certification is required at the end of each year.
IV. Conclusion
If you are audited and believe you need counsel, engage counsel as early as possible in the audit process.
Gather as much documentation as possible to refute claims. Do not fabricate or intentionally destroy records or obstruct the audit. Electronic records accurately reproduced in a hard copy format are acceptable. Patient-specific documentation is vital to respond to these desk audits as the files have not been examined by OMIG.
Raise all objections and provide documentation to refute audit findings as early in the audit process as possible. You must raise objections to findings in the Draft Audit Report (and respond in writing within 35 days from the date of the draft audit report) to preserve your right to challenge the findings. Any objection not made in response to a Draft Audit Report may not be raised later in the process.
Consider developing a compliance plan, if you do not have one in place, and using the OMIG tool referenced in our prior legal alert to determine its effectiveness.
Please contact Margaret Rossi (518-429-4295; mrossi@hblaw.com), David Glasel (518-429-4250; dglasel@hblaw.com), Robert Tengeler (518-429-4289; rtengeler@hblaw.com), or Melissa Zambri (518-429-4229; mzambri@hblaw.com) or any member of the Practice Area, should you have any questions regarding the issues raised in this Alert.