Office of the Medicaid Inspector General

The enacted budget makes no changes to the Executive Budget All Funds, state operations, appropriation proposal; the Office’s SFY 2010-11 All Funds appropriation is a $2.9 million decrease from its SFY 2009-10 enacted budget All Funds appropriation.

The enacted budget does not appear to include the following Article VII language, which was included in the Executive Budget proposal: to enhance the enforcement capabilities of the Medicaid Inspector General by increasing civil penalties to $10,000 for first-time offenders and $25,000 and $50,000 for repeat offenders who commit Medicaid fraud (analysis as of June 29, 2010).

The Assembly Budget resolution took the following actions on the Executive Budget (analysis as of 3/24/10):

• Makes no changes to the Executive Budget’s State Operations appropriations.
• Rejects Article VII legislation to enhance the enforcement capabilities of the Medicaid Inspector General by increasing civil penalties to $10,000 for first-time offenders and $25,000 and $50,000 for repeat offenders who commit Medicaid fraud.

The Senate Resolution recommends the following changes to the Executive Budget (analysis as of 3/22/10):

• Proposes Article VII language to extend due process rights to providers being audited by OMIG, with focus on extrapolation methods and withholding of Medicaid funds.  In addition, the Senate would require the Medicaid Inspector General to obtain and utilize available software to reduce Medicaid spending errors.

The Executive Budget recommends (analysis as of January 19, 2010):

·         A SFY 2010-11 workforce of 728.  This increases the level of FTEs from the adjusted FTE level for FY 2009-10 by 69.  The 69 FTE reductions will be achieved through the attrition of 63 FTEs, which are offset by 132 new fills.  The Office of Mental Retardation and Developmental Disabilities will be transferring 10 FTEs responsible for conducting Medicaid compliance reviews for not for profit providers to the OMIG.

The following chart identifies adjustments in the current fiscal year’s FTEs along with the recommended differences in FY 2010-11 FTEs by program (if the FTE’s are the same the program is not listed):

• The difference between the estimated FTEs for SFY 2009-10 and the adjusted level of 2009-10 FTEs is -101. 10 of these FTEs are associated with the rejected executive proposal to merge the Office of Welfare Inspector General with OMIG.  The additional current year changes should be addressed at statewide labor management.

• An All Funds appropriation of $88.16 million, a decrease of $2.9 million (-3.2%) from the enacted appropriation for SFY 2009-10.  This includes a $15,000 (-0.1%) decrease in Personal Service and a $704,000 (-6.9%) decrease in Contractual Service funding, which was a decrease in the Medicaid Audit and Fraud Prevention Program.

• The Personal Service decrease reflects a $22,000 decrease in the Medicaid Audit and Fraud Prevention program, offset by a $7,000 increase in that program’s Quality Assurance and Audit Revenue Activities, SRO account. 

• The Agency Presentation indicates that beginning in 2010-11, the Office of Welfare Inspector General will share administrative services with OMIG.

• The Office of the Medicaid Inspector General (OMIG) employed an estimated 69 employees under consultant contracts in SFY 2009-10 at a cost of $5.15 million.  It is estimated that $5.58 million will be spent on consultant contracts in SFY 2010-11 for 70 employees. 

• Article VII legislation contains provisions to enhance the enforcement capabilities of the Medicaid Inspector General by increasing civil penalties to $10,000 for first-time offenders and $25,000 and $50,000 for repeat offenders who commit Medicaid fraud.