Medicaid providers press Hochul to sign bill limiting auditors' 'punitive' fines – Crain's New York Business

Medicaid providers are calling on Gov. Kathy Hochul to sign legislation that would limit the Office of the Medicaid Inspector General’s powers to impose exorbitant fines for administrative or technical issues discovered during an audit.
The bill, S.4486B/A.7889A, passed the state Senate and Assembly unanimously in May and now heads to Hochul’s desk for her signature or a veto. It would require the Office of the Medicaid Inspector General to notify providers if their compliance program is unsatisfactory and allow them 60 days to submit a proposal to make it satisfactory. In addition, it would prohibit repeat reviews or audits of the same records within three years, unless the office has good reason to believe the previous audit was erroneous.
A coalition of 45 organizations and advocacy groups signaled support for the bill in a letter sent to the governor’s office last week, calling the legislation necessary to make the medical assistance audit program fairer and more transparent.
The bill’s supporters primarily take issue with OMIG’s practice of assessing a sample of a provider’s claims, then extrapolating the findings. 
To illustrate the consequences, they point to one of Mount Sinai Beth Israel’s opioid treatment programs, which shuttered after OMIG auditors fined it $7.7 million in 2020, Crain’s Health Pulse reported at the time. The audit had identified 12 clerical errors among a random sample of 100 claims, adding up to roughly $408 in alleged Medicaid overpayments.
”For too long, audits conducted by the OMIG have included the use of tactics that fail to take a transparent, or fair and balanced approach to the audit and recovery process,” the letter said. “As a result, providers who have operated in good faith and delivered high-quality care to clients, but who may have made human errors in the process, have been punished as if they had intentionally and maliciously defrauded the state.”
Asked for comment on the governor’s stance, spokesman Avi Small said only that Hochul is reviewing the legislation.
OMIG was created in 2007 to serve as a watchdog, sniffing out waste and fraud in the state’s Medicaid program. Allegra Schorr, president of the Coalition of Medication-assisted Treatment Providers and Advocates of New York State, said she supports the office’s mission, but the “enormous” fines do not further its mandate to root out fraud and abuse.
Schorr, whose coalition of 45 member providers treats more than 41,000 New Yorkers statewide, compared OMIG’s fines to parking tickets. In both cases, she said, authorities are trying to make sure that people are following the law, but they also generate substantial revenue by doing so.
The practice jeopardizes the already precarious financial state of Medicaid providers, Schorr said, and may discourage health care organizations from serving Medicaid patients. 
“It has a chilling effect,” she said.
State Sen. Pete Harckham, who sponsored the bill in his chamber, said the state cannot afford to lose more drug treatment providers like the Beth Israel program.
“Let’s not lose sight that these programs save lives,” he said in a statement, “so regulatory efforts should be in line with supporting and improving services, not crippling them.” —Maya Kaufman
The New York City Economic Development Corp. has awarded the Mount Sinai Health System $11.6 million to build a medical device prototyping facility in Midtown.
The funding, which was announced Wednesday, comes from the city’s $1 billion LifeSci initiative to bolster the local life-science industry.
Mount Sinai will use the money to build the Comprehensive Center for Surgical Innovation, a 7,000-square-foot research facility for the development and commercialization of new medical devices. It will be equipped with technology for imaging and rapid prototyping of new medical devices, including 11 operating stations to practice procedures, 3D printers and a freezer for cadavers and animal parts. 
The center is expected to open in 2025 and support as many as 12 startups, 60 prototypes and 12 medical devices each year.
It will be housed in an 11-story building on the Mount Sinai West hospital campus near Columbus Circle, a larger project that will also include outpatient surgical services. 
Dr. Evan Flatow, Mount Sinai West’s president, will become the center’s director. Flatow, who has a background as an orthopedic surgeon, said the center would shorten the process to create a new medical device by enabling surgeons to build and test innovations on site.
The center will complement and collaborate with Mount Sinai’s med-tech innovation hub, Sinai BioDesign, based at the system’s main hospital campus on the Upper East Side. Its spinouts have included Monogram Orthopedics.
Dr. Joshua Bederson, Mount Sinai Health System’s chair of neurosurgery and a clinical collaborator for Sinai BioDesign, said the “secret sauce” is that the experts who come up with innovations are embedded in the health system’s clinical work, so they can quickly respond to problems that arise in the operating room or at the hospital, then tweak their inventions as necessary.
Former Mayor Bill de Blasio launched the 10-year LifeSci NYC initiative in 2016 with a $500 million funding commitment. He doubled the investment in 2021. —M.K.
A civil judge has dismissed an Upper East Side condo board’s lawsuit challenging the city’s decision to allow the New York Blood Center to erect a roughly 16-story life-science hub next to their apartment building, according to court records filed Tuesday. 
The 301 East 66th St. Condominium Corp. sued the Department of City Planning, City Planning Commission, City Council and the Blood Center in March over the nonprofit’s rezoning application and the city’s decision last fall to approve it.
The Blood Center partnered with developer Longfellow to build the $750 million life-science tower as a replacement for its outdated research facility on East 67th Street. Companies in the life sciences would lease the space not occupied by the Blood Center.
The condo board argued that the city mishandled its environmental review of the project by not properly considering the impact of a dangerous substance escaping from a lab, but the judge noted that the Blood Center’s existing facility already has a secure lab certified to handle such pathogens. The board also characterized the rezoning as illegal spot zoning, which is when a specific parcel of land is given a special zoning that is at odds with surrounding properties.
Arlene Bluth, a New York County Supreme Court judge, said the condo board’s claims were not enough to annul the rezoning approval.
“There is no doubt that this project will be annoying to neighbors during the four years of construction and, because it is going from three to sixteen stories, it may negatively impact neighbors’ views,” Bluth wrote in the decision. “But there is also no doubt that the facility, once finished, will benefit the community.”
Mikhail Sheynker, the condo board’s lawyer, said the court failed to consider many of the legal arguments presented. He said the board is considering “all of its legal options” in response to the decision.
“Sadly, this decision may mark an inflection date in the history of our city,” he said in a statement, “but I believe that the facts and the legal arguments we set before the court will ultimately lead to a reversal of this most unfortunate and ill-advised determination.” —M.K.
The Crain’s Notable Health Care Leaders list recognizes 86 individuals who have helped people lead healthier lives. The honorees are notable for their consummate leadership, pioneering accomplishments and ability to adjust to crises. Moreover, all of them have demonstrated a commitment to mentoring.
To be eligible, nominees were required to live in New York City or its environs, work for a health care or health insurance organization, have at least 10 years of experience in the field and hold a leadership role. They also had to have a willingness to share their expertise with others in the field.
Dowling leads Northwell, the largest health care provider and private employer in New York, an enterprise that encompasses clinical, academic and research functions. He has led innovative efforts through Northwell’s venture arm, including research trials of Fitbits. Dowling oversaw the creation of screening for the social determinants of health, a self-reported questionnaire through which patients identify external issues they believe are affecting their well-being. Under his supervision, Northwell was chosen to vaccinate the first American against Covid-19. Dowling chairs the Institute for Healthcare Improvement and sits on the board of the National Center for Healthcare Leadership.
Promontory is a clinical-stage pharmaceutical company that develops small-molecule immunotherapies for cancer. Fallon sets the company’s strategic direction and manages its resources and relationships. He mentors staff members and promotes diverse and inclusive hiring practices. Before founding Promontory, he was an international banker in Asia for more than three decades, and he was in the Peace Corps for four years. Fallon previously chaired the Council on International Educational Exchange. Recently he was honored as alumnus of the year by Boston Latin School, his alma mater.
Fox is tasked with managing daily operations at White Plains Hospital, leading strategic initiatives, growing operating revenue and recruiting physicians. Under her direction, the hospital has become a leading health care provider in Westchester County, offering more programs and advanced services. Fox’s diversity-and-inclusion efforts, which encourage training staff in LGBTQ+ patient-centered care and promoting the use of inclusive language, earned her a “top performer” rating this year on the Human Rights Campaign’s LGBTQ+ Healthcare Equality Index. She sits on the board of the Healthcare Association of New York State.
In addition to her duties as dean, Fried, a leader in the fields of geriatric medicine and epidemiology, is senior vice president of the Mailman School’s medical center. Fried, who has built her career around the science of aging, is director of the Butler Columbia Aging Center. As co-chair of the National Academy of Medicine’s international commission on healthy longevity, she strives to set standards of education, social infrastructure and long-term care that will foster better, longer lives worldwide by 2050. Fried is a member and a former president of the Association of American Physicians.
Gianelli works closely with Mount Sinai staff to transform organizational culture, implement best practices and ensure patient satisfaction. His accomplish­ments include launching learning academies and spreading lean-process methodologies throughout the organization. Under his leadership, Mount Sinai Morningside was recognized as one of the world’s “smartest” hospitals by Newsweek. He teaches classes in health care leadership and public health programs at the Icahn School of Medicine at Mount Sinai. Gianelli sits on the boards of the Greater New York Hospital Association and Health Leads, a national nonprofit organization.
With more than a decade of experience as CEO, Gorevic has led Teladoc through a period of growth—in revenue, membership, telehealth utilization and improved outcomes. He launched Primary 360, a high-quality, evidence-based, consumer-centered primary care model; and myStrength Complete, an integrated service that provides personalized, comprehensive mental health care. Involved in company business resource groups, he recently created a leadership training program with a cognitive and behavioral specialist that focuses on interpersonal effectiveness and emotion regulation. Gorevic sits on the Teladoc board of directors as well as the boards of social networking concern Doximity and insurance company Kemper.
The Healthcare Association represents nonprofit and public hospitals, nursing homes and home care agencies, among other organizations. Grause, a registered nurse, leads its advocacy and efforts in areas that include managed care, behavioral health, workforce and compliance. Grause has helped facilities and policymakers navigate the pandemic and has educated them on social issues such as gun violence, health equity and workplace diversity. Under her leadership, the association offers scholarships to future health care leaders and runs a health equity committee. In addition, it has partnered with the State University of New York at Albany to create a health-equity educational series for member providers.
At health care platform Clearing, Hascalovici is responsible for developing clinical protocols, managing medical budgets, recruiting and training physicians, ensuring staff safety and delivering quality care. Hascalovici, who has more than a decade of experience as a neurologist and interventional pain specialist, has mentored pain medicine professionals and lectured for product managers, engineers and marketers on topics across the medicine and pain-care industry. He raised $20 million in seed funding to launch the first direct-to-consumer telehealth platform for people with chronic pain. Hascalovici is a member of the American Academy of Neurology and the American Society of Interventional Pain Physicians.
LUPUS RESEARCH: The Feinstein Institutes for Medical Research, part of Northwell Health, has been awarded $3 million by the Lupus Research Alliance to study patients who have the autoimmune disease and are in drug-free remission, it announced Wednesday. The researchers’ goals are to identify new signs of lupus flare-ups and potential new drug targets.
LABORATORY DEAL: Labcorp, a North Carolina laboratory services company, has closed on the acquisition of RWJBarnabas Health’s outreach laboratory business and related assets, it announced Wednesday. Under its relationship with Labcorp, the New Jersey health system’s physicians and patients will have access to an expanded test menu and health plan coverage.
OPIOID RESPONSE: The Foundation for Opioid Response Efforts issued a request for proposals Wednesday for projects that support community-based organizations in addressing opioid use disorder and reducing overdose deaths. Applications may apply for grants of up to $75,000 per year for up to two years. Applications are due by Oct. 21.
WHO’S NEWS: The “Who’s News” portion of “At a Glance” is available online at this link and in the Health Pulse newsletter. “Who’s News” is a daily update of career transitions in the local health care industry. For more information on submitting a listing, reach out to Debora Stein: [email protected].
CONTACT US: Have a tip about news happening in the local health care industry? Want to provide feedback about our coverage? Contact the Health Pulse team at [email protected]
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