Governor, Planning and Budget, Inspector General of Medicaid Services (Office of)

Rule R367-1

Office of Inspector General of Medicaid Services

Notice of Proposed Rule

(Amendment)

DAR File No.: 36307
Filed: 06/01/2012 10:45:44 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

These amendments are made in response to public comment received by the Office of Inspector General (OIG).

Summary of the rule or change:

This amendment removes certain provisos for fines and assessments, provider agreements, and certain incorporation by reference statutes.

State statutory or constitutional authorization for this rule:

• Section 63J-4a-201
• Section 63J-4a-101

This rule or change incorporates by reference the following material:

• Removes Utah Administrative Procedure Act, Utah Code 63G-4-202 through 209, 302, 401, 402, 403, 405, 501, 502, 503, and 601, published by Office of Legislative Research and General Council, 2012

Anticipated cost or savings to:

the state budget:

The amendment of Rule R367-1 will not have any aggregate cost to the state budget. The rule further clarifies the duties and procedures of the OIG outlined in Sections 63J-4a-101 through 63J-4a-602. There will be savings to the state budget, this rule will further assist the OIG to recoup and recover misappropriated Medicaid funds. This amount will vary year to year based upon the results of the audits.

local governments:

The amendment of this rule will not result in direct and measurable costs for local governments. Local governments are not involved in the Medicaid Program. Additionally, the OIG will be collecting wrongfully acquired Medicaid funds. These are funds that the local governments were not originally entitled to; any funds paid by the local government, if any, would be a reimbursement of state and federal money.

small businesses:

The amendment of this rule will not result in direct and measurable costs for small businesses. The OIG will be collecting wrongfully acquired Medicaid funds from small and solo practice medical providers. These are funds that the providers were not originally entitled to; any monies paid by the providers to the OIG, if any, would be a reimbursement of state monies. Therefore there would be no additional costs to small businesses, just a reimbursement to the state.

persons other than small businesses, businesses, or local governmental entities:

The amendment of this rule will not result in direct and measurable costs for other entities. The OIG will be collecting wrongfully acquired Medicaid funds from hospitals, large provider groups, pharmacies. These are funds that the providers were not originally entitled to; any monies paid by the providers to the OIG, if any, would be a reimbursement of state monies. Therefore there would be no additional costs to other entities, just a reimbursement to the state.

Compliance costs for affected persons:

The amendment does not create new compliance costs for any local government or business. There are no regulatory mandates created by this rule. This change is made after public comment; the changes will remove assessment of civil fines, provider agreement language and incorporation by reference. There are no costs associated.

Comments by the department head on the fiscal impact the rule may have on businesses:

Following public comment, Rule R367-1 has been amended. It addresses several concerns raised by various interested parties in the health care field. I have reviewed this rule and I concur with the changes that have been made.

Ron Bigelow, Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Governor
Planning and Budget, Inspector General of Medicaid Services (Office of)
288 N 1460 W
Salt Lake City, UT 84116

Direct questions regarding this rule to:

• Michael Green at the above address, by phone at 801-538-6123, by FAX at 801-538-6382, or by Internet E-mail at mkgreen@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

07/16/2012

This rule may become effective on:

07/23/2012

Authorized by:

Michael Green, Policy and Training Coordinator

R367. Governor, Planning and Budget, Inspector General of Medicaid Services (Office of).

R367-1. Office of Inspector General of Medicaid Services.

R367-1-1. Introduction and Authority.

(1) This rule generally characterizes the scope of the Office of Inspector General of Medicaid Services in Utah, and defines all of the provisions necessary to administer the Office.

(2) The rule is authorized under Section 63J-4a-602 pursuant to Title 63G, Chapter 3, Utah Administrative Rulemaking Act.

[(3) If any policy conflict arises between providers and or any party with regard to the Medicaid Program the Utah State Plan under Title XIX of the Social Security Act Medical Assistance Program shall be supreme and govern.

](3) If any provider manual or policy guide is inconsistent with Administrative Rule, the Administrative Rule shall be supreme.

 

R367-1-2. Definitions.

(1) The terms used in this rule are defined in Section 63J-4a-102.

 

R367-1-3. The Office of Inspector General.

(1) The Utah Department of Health is the Single State Agency designated to administer or supervise the administration of the Medicaid program under Title XIX of the federal Social Security Act, The Office of Inspector General must ensure that the Medicaid Program is managed in an efficient and effective manner to minimize fraud, waste, and abuse, in the Medicaid program as outlined in Section 63J-4a-202. The Office of Inspector General has entered into a Memorandum of Understanding (MOU) with the Department outlining the delegation of duties from the Department to the Office and as required by federal and state statutes.

 

R367-1-4. Office Duties.

(1) The Office of the Inspector General shall perform the following duties:

(a) Adhere to appropriate standards as outlined in the Government Accounting Office's Government Auditing Standards.

(b) The Office will receive reports of potential fraud, waste, or abuse in the state Medicaid program through phone, website, or other electronic means open to the public:

(i) establish a 24-hour, toll free hotline monitored by staff, or voicemail as appropriate.

(ii) establish a separate identifiable email to report fraud, waste or abuse of Medicaid funds.

(c) The Office will investigate and identify potential or actual fraud, waste, or abuse in the state Medicaid program by post payment review of claims paid under fee-for service, managed care, capitation, waiver, contracts or other payment methods where funds are expended by the Department for Medicaid related services or programs.

(d) The Office will obtain, develop, and utilize computer algorithms to identify fraud, waste, or abuse in the state Medicaid program by either developing an in-house program, by contract with private vendors, or other suitable methods as agreed upon with the Department. The Office may also develop in-house programs in consultation with the Department.

(e) The Office will establish an MOU with the Medicaid Fraud Control Unit to identify and recover improperly or fraudulently expended Medicaid funds.

(f) The Office will determine appropriate methodology for identifying risk associated with the Division and its programs under Medicaid funding.

(g) The Office will regularly report to the Department regarding all identified cases of fraud, waste or abuse. The Office will report how the Department can reduce cost or improve performance through changes in policies or claims payment systems. The Office will operate the program integrity function and audit function to the extent possible and as described under a MOU with the Department to be established each state fiscal year beginning in July and ending In June of the following year. The MOU must be renewed each year by both the DOH and OIG.

(h) The Office will establish a means for providers to return payments to the Office. The Office will return all collected overpayments to the Department, except to pay Recovery Audit Contractors.

(i) The Office will provide training to agencies, providers and employees on identifying potential fraud, waste, or abuse of Medicaid funds regularly. All training materials and curriculum will be developed in consultation with the Department and may include Department representation.

 

R367-1-5. Incorporations by Reference.

(1) All rules, regulations, and laws below are incorporated by reference.

(a) 42 CFR 431.107(b)(2)

(b) 42 CFR 456, Subpart B

(c) 42 CFR 455.13

(d) 42 CFR 455.21

(e) 42 CFR 1007

(f) Title 63G, Chapter 2

(g) Title 26-1-17.5

(h) Section 26-1-24

(i) Section 63G-4-102

([f]j) 42 USC 139a(a)(3)

([g]k) 42 CFR 431, Subpart E

[ (l) Utah Administrative Procedure Act, Utah Code 63G-4-202 through 209, 302, 401, 402, 403, 405, 501, 502, 503, and 601

]

R367-1-6. Discrimination Prohibited.

(1) In accordance with Title VI of the Civil Rights Act of 1964 (42 USC 2000d et seq.), Section 504 of the Rehabilitation Act of 1973 (29 USC 70b), and the regulations at 45 CFR Parts 80 and 84, the Office assures that no individual shall be subjected to discrimination under the plan on the grounds of race, color, gender, national origin, or handicap.

 

R367-1-7. Utilization Review and Medicaid Services Provided under the Utah Medicaid Program.

(1) The Office may request records that support provider claims for payment under programs funded through the Department. These requests shall be in writing and identify the records to be reviewed. Written responses to requests must be returned within 30 days of the date of the written request. Responses must include the complete record of all services and supporting services for which reimbursement is claimed. If the provider is unable to produce the documents on request, the provider shall be granted 24 hours to provide all necessary and appropriate information supporting and documenting the need for services. However, if there is no response within the 30 day period, the Office will close the record and will evaluate the payment based on the records available.

(2) The Office may conduct announced or unannounced onsite reviews and visits. On-site reviews require that the provider submit records on request based on 42 CFR 431.107(b)(2). All announced visits will receive reasonable notice from the Office.

(3) The Office shall conduct hospital utilization reviews as outlined in the Department's Superior System Waiver in effect at the time service was rendered.

(a) The Office shall determine medical necessity and appropriateness of inpatient admissions during utilization review by use of InterQual criteria, published by McKesson Corporation[, or another suitable industry standard substitute].

(b) The standards in the InterQual criteria, or other suitable industry standard substitute, shall not apply to services in which a determination has been made to utilize criteria customized by the Department or that are excluded as a Medicaid benefit by rule or contract.

(c) Where InterQual or other suitable industry standard substitute criteria are silent, the Office shall approve or deny services based upon appropriate administrative rules or the Department's criteria as incorporated in the Medicaid provider manuals.

(4) Providers shall refund payments to the Office upon written request if any of the following occur:

(a) the Department pays for a service which is later determined not to be a benefit of the Utah Medicaid program; or

(b) does not comply with state or federal policies and regulations.

(c) If services cannot be properly verified or when a provider refuses to provide or grant access to records.

(d) Unless appealed, all refunds must be made to the Office within 30 days of written notification. An appeal of this determination must be filed within 30 days of written notification as specified in Rule R367-1-14.

(e) A provider shall reimburse the Office for all overpayments regardless of the reason for the overpayment. Including, but not limited to agency errors, inadvertent errors, or other program errors. The Office may make a request to the Department to deduct an equal amount from future reimbursements.

[( 5) The Office may include monetary penalties, fees for auditing, interest including any applicable and reasonable fees that do not exceed 10% of the total cost of the recovery or identified overpayment.

]

 

[R367-1-8. Provider and Client Agreements.

(1) The Department contracts with each provider who furnishes services under the Utah Medicaid Program.

(2) By signing a provider agreement with the Department, the provider agrees to follow the terms incorporated into the provider agreements, including policies and procedures, provider manuals, Medicaid Information Bulletins, and provider letters.

(3) By signing an application for Medicaid coverage, the client agrees that the Department's obligation to reimburse for services is governed by contract between the Department and the provider.

(4) The Office will adhere to the agreements between the provider and the Department as long as there is no violation of state and or federal regulations.

 

]R367-1-9. Medicaid Fraud.

(1) The Office establishes and maintains methods, criteria, and procedures that meet all federal and state requirements for prevention, control of program fraud and abuse; and provider sanctioning and termination.

(2) The Office will enter into an MOU with The Medicaid Fraud Control Unit and the Department to ensure appropriate measures are established to reduce and prevent fraud and abuse in the Medicaid program.

 

R367-1-10. Confidentiality.

(1) Title 63G, Chapter 2, and Section 26-1-17.5 impose legal sanctions and provide safeguards that restrict the use or disclosure of information concerning providers, applicants, clients, and recipients to purposes directly connected with the administration of the plan. The Office will adopt those principles through incorporation of the references note.

 

R367-1-11. Right to Contract with Recovery Audit Organizations.

(1) The Office may contract for the investigation, notification and recovery of overpayments under any funds paid by the Department through the Medicaid program, Title XIX of the Social Security Act, under a contingency fee arrangement not to exceed the maximum amount set by CMS of the state's share actually recovered from overpayments according to federal regulations.

 

R367-1-12. Auditing of the Department of Health.

12.1. Audit Responsibilities.

(1) Audits will be conducted under the regular supervision of the Inspector General.

(2) The audit reports will then be released to the Director of the Governor's Office of Planning and Budget to which the Inspector General reports administratively.

(3) Audits will primarily be determined through a risk assessment approved by the Office.

(4) All activities of the Office will remain free of influence from any Department, Division, private or contracted entities.

(5) The Office audit group will follow the Generally Accepted Government AuditingStandards (GAGAS) as it relates to audit standards and training.

(6) The auditors will immediately notify the Inspector General of any serious deficiency or the suspicion of significant fraud during its review.

(7) Pursuant to Utah Code 63J-4a-301 the Office will have unrestricted access to all records of state executive branch entities, all local government entities, and all providers relating directly or indirectly to the state Medicaid program.

12.2. Audit Plan.

(1) An audit plan will be prepared by the Office at least annually and shall:

(a) Identify the audits to be performed, based on audit risk assessment reviewed annually;

(b) Identify resources to be devoted to audits in plan;

(c) Ensure that audits evaluate the efficiency and effectiveness of tax payer dollars in the Medicaid program;

(d) Determine adequacy of Medicaid's controls over federal and state compliance.

(2) An OIG audit shall:

(a) Issue regular audit reports on the effectiveness and efficiency of the defined audits within the Medicaid program in Utah;

(b) Ensure that such audits are conducted within professional standards such as those defined by the Institute of Internal Auditors and Generally Accepted Governmental Auditing Standards (GAGAS);

(c) Report annually to the Governor's office on or before October 1, and to the Utah Legislature before November 30 as stated in Section 63J-4a-502.

12.3. Access to Records and Employees.

(1) In order to fulfill the duties described in Section 63J-4a-202, the Office shall have unrestricted access to all records of state executive branch entities, all local government entities, and all providers relating, directly or indirectly, as stated in 63J-4a-301. Access to employees that the inspector general determines may assist in the fulfilling of the duties of the Office shall be granted as stated in 63J-4a-302.

12.4. Subpoena Power.

(1) The Office shall have the power to issue a subpoena to obtain record or interview a person that the Office has the right to access as stated in 63J-4a-401.

 

R367-1-13. Billing Codes.

(1) In submitting claims to the Department, every provider shall use billing codes compliant with Health Insurance Portability and Accountability Act of 1996 (HIPAA), along with other national accredited coding standards as defined under the federal law or other nationally accepted coding standards and as established under the Affordable Care Act of 2010 which requires all Medicaid providers to bill according to National Correct Coding Initiatives (N.C.C.I) that are in effect at the time of submitting claims to the Medicaid Agency for payments.

 

R367-1-14. Provider Communication.

(1) In completing the work as outlined in 63J-4a-202(k), to identify and recoup overpayments, the Office will communicate overpayments information as follows:

(a) Any suspected recoupment or take back against future funds less than $5,000[$50,000] shall be communicated to the provider via email including a verification certificate attached to verify delivery.

(b) Any suspected recoupment or take back against future funds greater than $5,000[$50,000] shall be communicated to the provider through certified mail or similar guaranteed delivery mechanism.

(c) Administrative hearing notice requirements will also comply with (a) and (b) above.

(d) In addition to the methods set forth in this rule, a party may be served as permitted by the Utah Rules of Civil Procedure.

(2) Any request for records or documents will also comply with subsections (a) through (d).

 

R367-1-16. General Rule Format.

(1) The following format is used generally throughout the rules of the Office. Section headings as indicated and the following general definitions are for guidance only. The section headings are not part of the rule content itself. In certain instances, this format may not be appropriate and will not be implemented due to the nature of the subject matter of a specific rule.

(2) Introduction and Authority. A concise statement as to what Medicaid service is covered by the rule, and a listing of specific federal statutes and regulations and state statutes that authorize or require the rule.

(3) Definitions. Definitions that have special meaning to the particular rule.

(4) Other Sections. As necessary under the particular rule, additional sections may be indicated. Other sections include regulatory language that does not fit into sections (1) through (4).

 

KEY: Inspector General, health, Medicaid fraud waste abuse

Date of Enactment or Last Substantive Amendment: [April 23, ]2012

Authorizing, and Implemented or Interpreted Law: 63J-4a-101; 63J-4a-201; 63J-4a-602