Medicaid Inspector General

Office of Medicaid Inspector General

The enacted budget makes the following changes to the Executive Budget (analysis as of 3/30/09):

Rejects the proposed merger of the Office of Welfare Inspector General (OWIG) with OMIG (-$1.66 million). The proposal would have also transferred 10 positions from OWIG to OMIG for the prevention and investigation of welfare fraud and abuse.

Without the merger, OMIG has a SFY 2009-10:

All Funds appropriation of $91.09 million, which is a $1.3 million increase (or 1.4%) from the SFY 2008-09 enacted budget.
Personal service appropriation of $23.7 million, which is a $2.5 million increase, or 11.5% increase from the SFY 2008-09 enacted budget.
Contractual services appropriation of $10.2 million, which is a decrease of $2.4 million or 19.1% from the SFY 2008-09 enacted budget.

According to the 30-Day Amendments (analysis as of January 20, 2009):

OMIG will be reduced by $4 million. This reduction includes: $1 million in other state funds and $3 million in federal funds due to a “workforce correction.” Though this amendment appears in the 30-day Amendment Financial Plan Projections Report, it does not appear in the 30-day Amendment Appropriation document. Clarification on how this reduction will impact the workforce should be sought at statewide labor management.

According to the Assembly Yellow Book, (analysis as of December 31, 2008):

The personal service increase is related to the consolidation of the OWIG and the OMIG, and the transfer of 10 FTEs.

Contracts will be decreased by: -$1.3 million which is related to contracts that are no longer necessary due to increased staffing levels; and -$500,000, which is related to ending outside contracts for expert witness and forensic consultants that are no longer necessary due to increased staffing levels.

The Executive Budget recommends (analysis as of December 16, 2008):

A SFY 2009-10 workforce of 760. This increases the level of FTEs from the adjusted FTE level for FY 2008-09 by 71. However, the Workforce Impact Summary Report indicates an increase of 81; it includes the 10 FTEs that will transfer from the Office of the Welfare Inspector General (OWIG). The following chart identifies adjustments, according to the Agency Presentation, in the current fiscal year’s FTEs along with the recommended differences in FY 2009-10 FTEs by program (if the FTE’s are the same the program is not listed):

Program	FY 2008-09 Adjustment	FY 2009-10 Difference
Medicaid Audit and Fraud Prevention	-74	71

The difference between the estimated FTEs for SFY 2008-09 and the adjusted level of 2008-09 FTEs is -74. This should be addressed at statewide labor management.

The Executive Budget proposal recommends the merger of the OWIG with OMIG, and transfers 10 positions and funding from that Office for the prevention and investigation of welfare fraud and abuse. There is no change in the level of FTEs for OWIG from the prior SFY.

The total appropriation for Personal Service is $24.7 million, a $2.5 million or 11.3% increase from SFY 2008-09. However the Executive Budget Agency Presentation narrative for the OMIG shows a total personal service appropriation for SFY 2009-10 of $48.4 million, a net increase of $3.4 million. It is unclear why there is a discrepancy between what the appropriation bill reports and what the Agency Presentation indicates as total personal service funding, this should be addressed at statewide labor management. The difference in the amount of the increase reflects adjustments due to the Special Pay Bill, which contained negotiated union raises and due to the agency-wide reductions made during the fiscal year.

An All Funds increase of $1.3 million (1.4%) from SFY 2008-09. However, the Executive Budget Agency Presentation indicates that All Funds decreases by $1.6 million due to adjustments that were made to the agency’s SFY 2008-09 appropriations. This reflects the negotiated union raises and agency-wide reductions made during the fiscal year.

The following programs had a decrease in personal service funding that is not associated with a decrease in FTEs. These funding and position changes should be clarified with management.

1. Services and Expenditures for outside experts for litigation, MU account within the Medicaid Audit & Fraud Prevention Program (-$1.3 million). This entire account appears to have been eliminated (which also included $288,000 for contractual services). This change may be related to what the agency presentation refers to as the elimination of funding suballocated to the Department of Law.

2. Quality Assurance and Audit Revenue activities account, SRO account within the Medicaid Audit & Fraud Prevention Program (-$748,000).

The Office of the Medicaid Inspector General (OMIG) employed an estimated 100 employees under consultant contracts in SFY 2008-09 at a cost of $8.3 million or an average cost of $82,835 per consultant contract employee. It is estimated that $9.3 million will be allocated for consultant contracts in SFY 2009-10 for 105 employees, at a cost of $88,597 per consultant contract employee.

The following program had a substantial increase in the proposed contractual services appropriation when compared to SFY 2008-09:

1. Medicaid Audit and Fraud Program (+$3.1 million), a 48.1% increase. This increase may be related to the elimination of consultant funds appropriated to an MU account within this program.

The following programs had substantial decreases in the proposed contractual services appropriation when compared to SFY 2008-09:

1. Medicaid Audit and Fraud Contracts, MU account within the Medicaid Audit and Fraud Program (-$4.7 million). Eliminated the appropriation for contracts or other expenditures supporting Medicaid audit and fraud activities. The agency presentation indicates that certain contractual service expenditures were eliminated due to being able to use OMIG staff to perform those functions.

2. Medical Assistance Program, MU account within the Medicaid Audit and Fraud Program (-$500,000). This account is for transfer to SUNY and its subsidiaries or to contract without competition for services with SUNY Research Foundation, to provide support for the medical assistance program.

Article VII legislation contains provisions to merge OWIG with OMIG. It provides civil service “transfer of function” language that governs the transfer of employees from OWIG agencies to OMIG.

Office of Medicaid Inspector General
Program Details-State Operations
	Enacted	Proposed	Enacted	Change in	Percent
Program	2008-09 Budget	2009-10 Budget	2009-10 Budget	Appropriation	Change
All Funds	$89,839,000	$91,090,000	$91,090,000	$1,251,000	1.4%
General Fund	$34,044,000	$34,742,000	$34,742,000	$698,000	2.1%
Special Revenue - Federal	$50,610,000	$52,284,000	$52,284,000	$1,674,000	3.3%
Special Revenue - Other	$5,185,000	$4,064,000	$4,064,000	($1,121,000)	-21.6%

Personal Services	$21,298,000	$23,751,000	$23,751,000	$2,453,000	11.5%
Contractual Services	$12,551,500	$10,153,000	$10,153,000	($2,398,500)	-19.1%

MA Audit and Fraud Prevention	$89,839,000	$91,090,000	$91,090,000	$1,251,000	1.4%
Personal Service	$19,000,000	$23,506,000	$23,506,000	$4,506,000	23.7%
Regular	$18,900,000	$23,363,000	$23,363,000	$4,463,000	23.6%
Temporary Service	$0	$23,000	$23,000	$23,000	100.0%
Holiday/overtime compensation	$100,000	$120,000	$120,000	$20,000	20.0%
Nonpersonal Service	$10,545,000	$14,436,000	$14,436,000	$3,891,000	36.9%
Supplies and materials	$973,250	$984,000	$984,000	$10,750	1.1%
Travel	$288,500	$299,000	$299,000	$10,500	3.6%
Contractual services	$6,516,000	$9,653,000	$9,653,000	$3,137,000	48.1%
Equipment	$2,767,250	$3,500,000	$3,500,000	$732,750	26.5%
Maintenance Undistributed - (MU)	$8,199,000	$500,000	$500,000	($7,699,000)	-93.9%
Special Rev. -Fed (SRF)	$50,610,000	$52,284,000	$52,284,000	$1,674,000	3.3%
Special Rev. -Other (SRO)	$1,485,000	$364,000	$364,000	($1,121,000)	-75.5%

Medicaid Audit & Fraud Contracts - (MU)	$5,500,000	$0	$0	($5,500,000)	-100.0%
Nonpersonal Service	$5,500,000	$0	$0	($5,500,000)	-100.0%
Supplies and materials	$10,000	$0	$0	($10,000)	-100.0%
Travel	$10,000	$0	$0	($10,000)	-100.0%
Contractual services	$4,747,500	$0	$0	($4,747,500)	-100.0%
Equipment	$732,500	$0	$0	($732,500)	-100.0%

Medical Asstnc Prg - Transfer to SUNY - (MU)	$1,000,000	$500,000	$500,000	($500,000)	-50.0%
Nonpersonal Service	$1,000,000	$500,000	$500,000	($500,000)	-50.0%
Contractual services	$1,000,000	$500,000	$500,000	($500,000)	-50.0%

Svcs & Exp for Outside experts for Litigation - (MU)	$1,699,000	$0	$0	($1,699,000)	-100.0%
Personal Service	$1,305,000	$0	$0	($1,305,000)	-100.0%
Regular	$1,270,000	$0	$0	($1,270,000)	-100.0%
Holiday/overtime compensation	$35,000	$0	$0	($35,000)	-100.0%
Nonpersonal Service	$394,000	$0	$0	($394,000)	-100.0%
Supplies and materials	$6,000	$0	$0	($6,000)	-100.0%
Travel	$30,000	$0	$0	($30,000)	-100.0%
Contractual services	$288,000	$0	$0	($288,000)	-100.0%
Equipment	$70,000	$0	$0	($70,000)	-100.0%

Fed Health & Human Svcs - (SRF)	$50,610,000	$52,284,000	$52,284,000	$1,674,000	3.3%

Quality Assurance & Audit Rev activities - (SRO)	$1,485,000	$364,000	$364,000	($1,121,000)	-75.5%
Personal Service	$993,000	$245,000	$245,000	($748,000)	-75.3%
Regular	$993,000	$245,000	$245,000	($748,000)	-75.3%
Nonpersonal Service	$492,000	$119,000	$119,000	($373,000)	-75.8%
Fringe benefits	$453,000	$109,000	$109,000	($344,000)	-75.9%
Indirect costs	$39,000	$10,000	$10,000	($29,000)	-74.4%

Maintenance Undistributed	$0	$0	$0	$0
General Fund Offset	($3,700,000)	($3,700,000)	($3,700,000)	$0	0.0%
Special Revenue - Other (SRO)	$3,700,000	$3,700,000	$3,700,000	$0	0.0%