OMIG Legislation Reform

As the economic downturn continues to make federal dollars to not-for-profit agencies serving people with disabilities more and more difficult to attain, federal offices are taking steps to reduce fraud and waste. The Office of the Medicaid Inspector General (OMIG) is the investigation and enforcement arm of Medicaid and is responsible for initiating audits and levying penalties when fraud is uncovered. However, many agencies, not for profit service providers and funding agencies like OPWDD consider OMIG audits to be excessively punitive and over-reaching in their zeal to recover or eliminate funds to said agencies. Advocates for reining in the OMIG have complained that agencies found to be guilty of even the minutest instances of mistaken billing have been too severely reprimanded through the imposing of heavy fines and penalties. While acts of blatant and purposeful fraud need to be uncovered and the guilty punished, the OMIG has been accused of being extremely heavy handed and punitive when meting out judgments for alleged mistakes in billing for reimbursements for delivered services. Additionally, allegations of abusive and dismissive treatment towards staff members, not allowing agencies to repair or correct minor and unintentional episodes of mistaken billing and incomplete explanations of alleged violations, have also been of grave concern to agencies under audit.


Legislation to provide due process protections for providers and recipients of Medicaid who come under the scrutiny of OMIG passed both houses of the Legislature in June. The long awaited measure, also known as OMIG reform, will provide for fair practices, procedures and standards for actions if signed by Governor Cuomo. We will be carefully monitoring this situation and will report any additional developments as they occur.
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