DAR File No. 42694

Administrative Services, Inspector General of Medicaid Services (Office of)

Rule R30-1

Office Procedures

Notice of Proposed Rule

(New Rule)

DAR File No.: 42694
Filed: 03/15/2018 02:29:39 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to completely replace the current Rule R30-1 which has been in place since 2012 and does not adequately reflect how Title 63A, Chapter 13, is applied by the Office of Inspector General (OIG) of Medicaid Services. (EDITOR'S NOTE: The proposed repeal of Rule R30-1 is under Filing No. 42658 in this issue, April 1, 2018, of the Bulletin.)

Summary of the rule or change:

Rule R30-1 outlines procedures followed by the OIG of Medicaid Services in carrying out its duties as outlined in Title 63A, Chapter 13. Specifically, Rule R30-1 outlines procedures for conducting audits, requesting records, on-site inspections, and OIG directed self-audits.

Statutory or constitutional authorization for this rule:

• Section 63A-13-603
• Subsection 63G-3-201(2)

Anticipated cost or savings to:

the state budget:

There is no fiscal cost or benefit to state government with this new rule. The OIG under the old rule consulted with and worked closely with state government(s) that had any interaction with Medicaid funds. The OIG does not think that the relationship and/or time spent with these state government(s) will increase or decrease as a result of this new proposed rule.

local governments:

There will be an aggregate savings to local governments of $5,723 annually. The OIG identified two areas of which the rule may have a direct fiscal cost or benefit. The nature of the OIG is such that OIG does not conduct regular business (i.e. reviews) with any one specific local government but does conduct work on an as needed basis. Just because the OIG has worked with a local government in the past is not necessarily an indicator that OIG will work with them in the future. As such, for the analysis, the OIG gathered data from 07/01/2015 through 12/31/2017, and combined services into two groups that have an impact on local governments (mental and behavioral health services). These services are broken into these groups as it would be effective to report them as a group rather than selecting the top local governments. Of the data pulled, local governments accounted for 4.24% of the total Medicaid claims reviewed and less than 1% of the total dollar amount identified on those claims. Cost: There are two pieces with the new rule that may have a direct fiscal costs (on-site inspections and self-audits). They are broken out as follows: on-site visits can be conducted by the OIG when the OIG identifies the provider as a new provider, it has been determined by the Medicaid program to be high risk provider, when the OIG is conducting an investigation and it has been determined that it is easier to conduct work directly on-site, or it may result from a random selection. It is determined that the OIG will conduct 12 on-site visits each year. The fiscal costs of those on-site visits have been broken out as follows: it was determined that the average time of an on-site visit is 5 hours; it is determined that two office staff personnel, at the provider�s location, would assist with the on-site; it was identified that each OIG staff personnel would cost the provider $50 per hour; at $50 per hour for 2 individuals at 5 total hours the total estimated cost of an on-site visit would be $500. With that, the total costs of 12 on-site visits would be $6,000; and multiplied that by the percentage of claims reviewed as identified in our local government section. Self-audits are initiated by the OIG when it has been determined that a problem exists within a medical claims. The OIG researches the problem and identifies the claims that are effected by the problem. The OIG will then write up the problem and request that a provider look into its own claims to see if the problem exists. If the problem does exist, the OIG encourages the provider to submit repayment of funds back to the Medicaid program and/or rebill the claim in the proper manner. The OIG conducts self-audits as a result of determining that is it not cost beneficial for the office to request records and review them individually, that the concern identified is not significant and the provider has better capabilities to review records, or as determined to be the method to have records reviewed. It is determined that the OIG will conduct 4 self-audits during any given year and identify that 2,000 individual claims be reviewed for a total of $8,000 individual claims. The fiscal costs of those self-audits have been broken as follows: it was determined that the average number of claims reviewed on a similar issue would be 10 per hour; based upon that amount it would require 800 total hours; it would cost, on average $50 per hour to review records; the total amount for 4 self-audits and the number of claims would be $40,000; and multiplied that by the percentage of claims reviewed as identified in our local government section. Benefits: In order to properly determine if a Medicaid overpayment has occurred or not, OIG sends a request for records to a provider. The records request historically has required the provider to submit medical records and any other documentation to the OIG within 30 days. If a provider is unable to comply with this 30-day rule, the Office will request that a reimbursement be made to the Medicaid program for the amount identified on the medical claim. Under the new rule, the period of which a provider must submit those records goes from 30 days to 45 days. It is estimated that roughly 5% of the requests for records are unable to comply with the old rule. It is anticipated that this new rule will eliminate almost all non-compliance. The OIG therefore took the following steps: determined the value of 5% of all claims reviewed from July 2015 � December 2017; annualized this to proper determine an estimate; multiplied that by the percentage of claims reviewed as identified in our local government section; and finally multiplied all of this by the average dollar amount as identified on our notice of recovery documents.

small businesses:

There will be an aggregate savings to small businesses of $49,194 annually. Cost: There are two pieces with this new rule that may have a direct fiscal costs: on-site inspections and self-audits. They are broken out as follows: on-site visits can be conducted by the OIG when the OIG identifies the provider as a new provider, it has been determined by the Medicaid program to be high risk provider, when the OIG is conducting an investigation and it has been determined that it is easier to conduct work directly on-site, or may results from a random selection. It is determined that the office will conduct 12 on-site visits each year. The fiscal costs of those on-site visits have been broken out as follows: it was determined that the average time of an on-site visit is 5 hours; it is determined that 2 office staff personnel at the provider's location would assist with the on-site; it was identified that each office staff personnel would cost the provider $50 per hour; at $50 per hour for 2 individuals at 5 total hours the total estimated cost of an on-site visit would be $500. With that, the total costs of 12 on-site visits would be $6,000; multiplied that by the percentage of claims reviewed as identified in our small business section. Self-audits are initiated by the OIG when it has been determined that a problem exists within a medical claims. The OIG researches the problem and identifies the claims that are effected by the problem. The OIG will then write up the problem and request that a provider look into its own claims to see if the problem exists. If the problem does exists, the OIG encourages the provider to submit repayment of funds back to the Medicaid program and/or rebill the claim in the proper manner. The OIG conducts self-audits as a result of determining that is it not cost beneficial for the OIG to request records and review them individually, that the concern identified is not significant and the provider has better capabilities to review records, or as determined to be the method to have records reviewed. It is determined that the office will conduct 4 self-audits during any given year and identify that 2,000 individual claims be reviewed for a total of $8,000 individual claims. The fiscal costs of those self-audits have been broken out as follows: it was determined that the average number of claims reviewed on a similar issue would be 10 per hour; based upon that amount it would require 800 total hours; it would cost, on average $50 per hour to review records; the total amount for 4 self-audits and the number of claims would be $40,000; and multiplied that by the percentage of claims reviewed as identified in our small business section. Benefits: In order to properly determine if a Medicaid overpayment has occurred or not, OIG sends a request for records to a provider. The records request historically has required the provider to submit medical records and any other documentation to the office within 30 days. If a provider is unable to comply with this 30-day rule, the OIG will request that a reimbursement be made to the Medicaid program for the amount identified on the medical claim. Under the new rule, the period of which a provider must submit those records goes from 30 days to 45 days. It is estimated that roughly 5% of the requests for records are unable to comply with the old rule. It is anticipated that this new rule will eliminate almost all non-compliance. The OIG therefore, took the following steps: determined the value of 5% of all claims reviewed from July 2015 � December 2017; annualized this to proper determine an estimate; multiplied that by the percentage of claims reviewed as identified in our local government section; and finally multiplied all of this by the average dollar amount as identified on our notice of recovery documents.

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

The OIG does not believe there is cost or savings to any "person" associated with this new rule.

Compliance costs for affected persons:

The OIG does not anticipate significant compliance costs associated with implementation of this rule. The compliance components of this rule are already adhered to by providers through contracts with Medicaid.

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

This rule will be a net savings to Medicaid providers whom the OIG provides oversight of. These savings are realized primarily in the self-audit procedure as the provider reviews low risk, low return on investment (ROI) claims identified by the OIG that appear to have been billed incorrectly. This process saves the provider the time of copying each claim and then delivering them to the OIG. Self-audits are directed only on low risk claims with small dollar amounts that would be more costly to produce the records for and mail to the OIG. The OIG saves the states time and money by not having to review records that likely have a very small ROI.

Gene Cottrell, Inspector General

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

Administrative Services
Inspector General of Medicaid Services (Office of)
288 N 1460 W
Salt Lake City, UT 84116

Direct questions regarding this rule to:

• Gene Cottrell at the above address, by phone at 801-538-6856, by FAX at 801-538-6382, or by Internet E-mail at gcottrell@utah.gov
• Nathan Johansen at the above address, by phone at 801-538-6455, by FAX at 801-538-6382, or by Internet E-mail at nmjohansen@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:

05/01/2018

This rule may become effective on:

05/15/2018

Authorized by:

Gene Cottrell, Inspector General

Appendix 1: Regulatory Impact Summary Table*

	FY 2018	FY 2019	FY 2020
Fiscal Costs
State Government	$0	$0	$0
Local Government	$1,950	$1,950	$1,950
Small Businesses	$20,999	$20,999	$20,999
Non-Small Businesses	$22,062	$22,062	$22,062
Other Persons	$0	$0	$0
Total Fiscal Costs:	$45,011	$45,011	$45,011
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$7,673	$7,673	$7,673
Small Businesses	$70,193	$70,193	$70,193
Non-Small Businesses	$51,424	$51,424	$51,424
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$129,290	$129,290	$129,290
Net Fiscal Benefits:	$84,279	$84,279	$84,279

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non-Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non-Small Businesses

Aggregate savings to non-small businesses of $29,362. The OIG identified two areas of which the rule may have a direct fiscal cost or benefit. The nature of the OIG is such that the OIG does not conduct regular business (i.e. reviews) with any one specific non-small business but do conduct work on an as needed basis. Just because the office has worked with a large business in the past, is not necessarily an indicator that the OIG will work with them in the future. As such the OIG analysis is that data was gathered from 07/01/2015 through 12/31/2017, and combined services into five groups that have an impact on non-small business (hospitals, psychiatry, behavioral health, hospice, and medical equipment and services). These services are broken into these groups as it would be more effective to report that as a group rather than selecting the five top large businesses. Also note that these groups have been listed in the order of which the OIG identified as higher dollar value verses the number of providers that fall into each category. Of the data pulled from the time period, small businesses accounted for 50.11% of the total Medicaid claims reviewed and 94.98% of the total dollar amount identified on those claims. Cost: there are two pieces with the new rule that may have a direct fiscal costs (on-site inspections and self-audits). They are broken out as follows: on-site visits can be conducted by the OIG when the OIG identifies the provider as a new provider, it has been determined by the Medicaid program to be high risk provider, when the OIG is conducting an investigation and it has been determined that it is easier to conduct work directly on-site, or may results from a random selection. It is determined that the OIG will conduct 12 on-site visits each year. The fiscal costs of those on-site visits have been broken out as follows: it was determined that the average time of an on-site visit is 5 hours; it is determined that 2 office staff personnel at the provider's location would assist with the on-site; it was identified that each OIG staff personnel would cost the provider $50 per hour; at $50 per hour for 2 individuals at 5 total hours the total estimated cost of an on-site visit would be $500. With that, the total costs of 12 on-site visits would be $6,000; and multiplied that by the percentage of claims reviewed as identified in our non-small business section. Self-audits are initiated by the OIG when it has been determined that a problem exists within a medical claims. The OIG researches the problem and identifies the claims that are effected by the problem. The OIG will then write up the problem and request that a provider look into its own claims to see if the problem exists. If the problem does exists, the office encourages the provider to submit repayment of funds back to the Medicaid program and/or rebill the claim in the proper manner. The OIG conducts self-audits as a result of determining that is it not cost beneficial for the OIG to request records and review them individually, that the concern identified is not significant and the provider has better capabilities to review records, or as determined to be the method to have records reviewed. It is determined that the OIG will conduct 4 self-audits during any given year and identify that 2,000 individual claims be reviewed for a total of $8,000 individual claims. The fiscal costs of those self-audits have been broken out as follows: it was determined that the average number of claims reviewed on a similar issue would be 10 per hour; based upon that amount it would require 800 total hours; it would cost, on average $50 per hour to review records; the total amount for 4 self-audits and the number of claims would be $40,000; and multiplied that by the percentage of claims reviewed as identified in our non-small business section. Benefits: in order to properly determine if a Medicaid overpayment has occurred or not, OIG sends a request for records to a provider. The records request historically has required the provider to submit medical records and any other documentation to the OIG within 30 days. If a provider is unable to comply with this 30-day rule, the OIG will request that a reimbursement be made to the Medicaid program for the amount identified on the medical claim. Under the new rule, the period of which a provider must submit those records goes from 30 days to 45 days. It is estimated that roughly 5% of the requests for records are unable to comply with the old rule. It is anticipated that the new rule will eliminate almost all non-compliance. The OIG therefore, took the following steps: determined the value of 5% of all claims reviewed from July 2015 - December 2017; annualized this to proper determine an estimate; multiplied that by the percentage of claims reviewed as identified in our local government section; and finally multiplied all of this by the average dollar amount as identified on our notice of recovery documents.

 

The Inspector General, Gene D. Cottrell, has reviewed and approved this fiscal analysis.

 

R30. Administrative Services, Office of Inspector General of Medicaid Services.

R30-1. Office Procedures.

R30-1-1. Purpose.

The purpose of this rule is to describe the manner in which the office shall execute the requirements of Title 63A, Chapter 13 and the program integrity functions described in the Memorandum of Understanding and Agreement for Services between the department and the office.

 

R30-1-2. Authority.

This rule is authorized by Section 63A-13-602.

 

R30-1-3. Definitions.

Terms used in this rule are defined in Section 63A-13-102, in addition:

(1) "audit" means an independent, objective review of a program or process and associated controls to determine the effectiveness, efficiency and or compliance of the program or process.

 

R30-1-4. Audit Procedures.

(1)(a) When commencing an audit, the office's audit unit shall:

(i) contact the entity to be audited to advise the entity an audit will be performed;

(ii) send a written announcement memorandum to the entity when the audit begins; and

(iii) obtain background information from the entity to be used in determining the parameters of the audit.

(b) In the course of the audit, the audit unit shall:

(i) hold an entrance conference with the entity to discuss the scope, objectives and timeframe of the audit;

(ii) obtain information from the entity to conduct the audit; and

(iii) keep the entity apprised of issues that arise and any proposed audit findings or conclusions.

(c) At the conclusion of the audit, the audit unit shall conduct an exit conference with the entity audited to:

(i) review any recommendations resulting from the audit; and

(ii) provide the entity with a draft of the audit report.

(d) The entity shall have fourteen days to respond to the audit unit regarding the findings in the audit report.

(e) The entity's response shall be included in a final audit report, which will then be made available to the public.

(2) The audit unit shall seek to incorporate the audit standards created by the Council of Inspectors General on Integrity and Efficiency, the Association of Inspector Generals, and the Generally Accepted Government Auditing Standards created by the United States Government Accountability Office.

 

R30-1-5. Requests for Records.

(1) Requests for records sent by the office shall be:

(a) in writing and identify the records to be copied; and

(b) mailed by first class postage to the mailing address on file with the department unless the provider or entity notifies the office in writing of an alternative physical or email address to be used for requests for records.

(2)(a) The records requested shall be returned within thirty calendar days of the date of the written request.

(b) A provider's response to a request for records shall include the complete record of all services and supporting services for which reimbursement is claimed.

(3)(a) If a provider has not provided any records within the first 20 days from the date of a request, the office shall:

(i) verify the request for records was sent to the correct address; and

(ii) attempt to contact the provider before the end of the thirty-day period and remind the provider the records must be provided within 30 days from the date of the original request for records.

(b)(i) If the provider fails to provide any records within the thirty-day period, the office shall notify the provider in writing that the records requested were not received.

(ii) The written notice to the provider shall indicate the provider has an additional 15 days from the date of the notification to submit the records or a credit adjustment on the claim shall be instituted pursuant to Section R414-1-14, the Utah Medicaid General Information Provider Manual, and Section 63G-13-202.

 

R30-1-6. On-site Inspections.

(1)(a) Unless there is a credible allegation of fraud, the office shall contact a provider or entity prior to an on-site inspection.

(b) The notification to the provider or entity shall identify the information sought to be reviewed during the on-site visit.

(2) If a provider is unable to produce records requested by the office during an on-site inspection, the provider shall have fifteen business days to provide a copy of the records to the office.

 

R30-1-7. Self-Audits.

(1) When billing concerns are identified, the office may send out a self-audit packet to a provider, which notifies the provider of:

(a) the type of potential billing errors identified by the office;

(b) a list of claims, which may have been billed incorrectly;

(c) the policy, which describes how the claims should be billed;

(d) instructions on conducting a self-audit;

(e) information about refunding any payments the provider identifies as an overpayment; and

(f) the period for conducting the self-audit and responding to the office.

(2) Once the time for responding to the self-audit has passed, the office shall review any information received from a provider to determine if the provider has fully resolved the issues identified by the office.

(3) If the office is not satisfied the provider fully addressed the concerns identified by the office, the office may:

(a) contact the provider about the issues, which were not fully resolved;

(b) conduct a full investigation and initiate a recovery action if appropriate; or

(c) close the case.

(4) Participation in the self-audit program does not preclude any entity from pursuing any criminal, civil, or administrative remedies or to obtain additional damages, penalties, or fines related to the subject of the self-audit.

 

R30-1-8. Human Resources.

(1) The Department of Human Resource Management rules found in R477 shall apply to all office employees.

(2) All office employees shall comply with the requirements of the office's internal policies and procedures.

 

KEY: Officce of the Inspector General of Medicaid Services, Medicaid fraud, Medicaid waste, Medicaid abuse

Date of Enactment or Last Substantive Amendment: 2018

Authorizing, and Implemented or Interpreted Law: 63A-13