New York State Amends Compliance Program Law


Post By: Paul Mayer, Executive Vice President, Compliance Solutions Division of The Bonadio Group

During the New York State budget process in early 2020, changes were made to the New York State Social Service Law section 363d, which mandates compliance programs for many Medicaid providers. The budget was passed amid the coronavirus (COVID-19) pandemic, and therefore these updates (some significant) went mostly unnoticed in the provider community around New York State. It is of the utmost importance that healthcare organizations are aware of these changes, which will require the Office of Medicaid Inspector General to revise/update the current Compliance Program Regulations, NYCRR Title 18 Part 521, to be consistent with the State Law.

Additionally, PART QQ, Section 1. Subdivision 4 of section 145-b of the New York State Social Services Law, as amended by section 51 of part C of chapter 58 of the laws of 2007, has some significant updates from 13 years ago. These amendments, depending on how the Office of the Medicaid Inspector General updates the NYCRR Title 18 Part 521 Regulations, present additional risk to those organizations that are required to maintain an effective Compliance Program as well as to those that need to update their Compliance Programs. These changes also present an opportunity for organizations that are looking to fulfill the Compliance Officer roles and responsibilities.

The new laws took effect on April 1, 2020. Some of the key considerations that organizations will need to keep in mind while adjusting policies and processes to remain in compliance with the laws of 2020 include:

  1. Fines and Penalties Resulting from a Lack of Compliance.

First-time offenders will have to pay $5,000 per month (up to 12 months) for being out of compliance with the law. The penalty increases to $10,000 per month (up to 12 months) for repeat offenders. Fines and penalties for non-compliance are effective January 1, 2021.

2. Update requirements regarding the Compliance Officer function, Compliance Committee, and confidential communications among these parties. 

The ‘employment’ requirement of the Compliance Officer has been removed from the Law and the Officer must report directly to the organization’s CEO or another member of the Senior Management Team. Additionally, it is now required for organizations to have a Compliance Committee that reports directly to the CEO or another member of the Senior Management Team. Organizations must establish effective, confidential lines of communication between the Compliance Officer, Compliance Committee, employees, managers, governing body, and related entities.

3. Formal protocols of self-disclosure.

Within the updated New York State laws, there are more formal protocols related to self-disclosure of identified overpayments.

4. Increased responsibility around monitoring and assessing risk.

Compliance programs must include internal monitoring and audits, external auditing (as appropriate), and an evaluation of overall effectiveness of the compliance program.

Organizations must stay abreast of this changing situation or align with a trusted advisor who can monitor for and share relevant updates. Updates for public comment to Title 18 Part 521 are expected sometime in the Fall of 2020. Once the law is finalized, organizations must ensure that their Compliance Program is updated accordingly and consistently assess the Program for effectiveness.