Field Audit Penalty

In late May 2012, the Office of Medicaid Policy and Planning (OMPP) released an Emergency Rule to implement changes to the State Plan Amendment resulting from the increase in the Quality Assessment Fee (QAF).   Most of the changes found in the Emergency Rule were expected as the IHCA has been constantly engaged with the State to ensure that the benefits promised to the long term care profession and its residents were carried through.  One provision that came as a surprise, however, was language instituting a 10% penalty on a providers per diem Medicaid rate if the provider failed to comply with certain documentation requests during a field audit of the provider’s books and records.  IHCA engaged OMPP on this issue recently.

Although the State was not willing to reduce or eliminate the 10% penalty they put in place in the Emergency Rule, the IHCA  was successful on a number of items within the details and implementation of the new rule.  The State explained that only a very small number of providers would be subject to the penalty because of the State’s internal documentation request procedures.  Those procedures provide for at least 135 days, and 165 days when a 30 day extension is requested, to respond prior to a 10% penalty being imposed.  IHCA requested that these procedures be published and the State appeared willing to publish these procedures either on Myers & Stauffer’s website or as a Provider Bulletin.

Aside from the penalty amount itself, if a penalty is put in place OMPP will limit the duration of that penalty to no longer than 12 months.  Before IHCA’s engagement on this issue, a penalty could last indefinitely.  In addition, OMPP will consider shortening the duration of the penalty to less than 1 month if the provider responds with adequate documentation within that period.  Furthermore, OMPP will automatically grant a 30 day extension for time, will subject all documentation requests during a field audit to a materiality standard, and will require OMPP review of Myers & Stauffer’s documentation requests.  Each of the above issues will be addressed by the IHCA in written comments once the permanent rule, which replaces the Emergency Rule, is published for comment.

Please contact Zach Cattell at 317-616-9001 or zcattell@ihca.org with any questions.