New York's Office of the Medicaid Inspector General (OMIG) audits pharmacies, physicians, and other providers enrolled in the state Medicaid program for billing accuracy and documentation compliance. An OMIG audit moves through defined stages, a records request or on-site review, a draft audit report, and a final audit report, each carrying its own deadline. A provider has only 30 days to respond to a draft audit report, and only 60 days after a final audit report to request an administrative hearing. Missing either deadline can turn a contestable finding into a fixed recoupment with no further avenue for review.
How an OMIG Audit Begins
OMIG opens most matters as either a desk audit or a field audit. A desk audit is conducted by mail or electronic submission and does not include an entrance or exit conference, in some cases a provider does not learn a review is underway until the draft audit report arrives. A field audit includes an on-site visit to the provider's location and always includes both an entrance conference, where OMIG explains the scope of review, and an exit conference, where preliminary findings are discussed before the draft report issues. Either type can be opened from a documentation gap, a billing pattern OMIG's claims analytics flag as unusual, or a referral from another program integrity unit.
The Draft Audit Report and the 30-Day Response Window
When OMIG identifies a potential overpayment, it issues a Draft Audit Report (DAR) describing the disallowed claims and the basis for each finding. Under 18 NYCRR 517.5, the provider has 30 days to object in writing, with receipt of the DAR presumed five days after its date. A timely response should address every contested claim individually, attach the documentation OMIG requested, such as prescriptions, delivery records, or medical charts, and state plainly which findings the provider disputes and why. A provider that needs more time can request an extension for OMIG's review before the 30 days runs out. A provider that does not respond risks having the disallowed claims become final agency action without further review.
The Final Audit Report and the 60-Day Appeal Deadline
OMIG reviews the provider's response, and any non-response, before issuing a Final Audit Report (FAR) that sets the confirmed overpayment, calculated with interest, and states the provider's hearing rights. A provider that disagrees may request an audit appeal through an administrative hearing, but the written request must reach OMIG within 60 days of the FAR date under 18 NYCRR 519.7, a limit that traces to New York Social Services Law 22(4)(a). If OMIG's findings suggest a knowing or repeated pattern rather than an isolated documentation error, the matter can be referred beyond recoupment, including to the Medicaid Fraud Control Unit, raising exposure under New York's false claims act and, in the most serious matters, federal OIG exclusion from Medicare and Medicaid.
The 60-day deadline to request an OMIG administrative hearing is jurisdictional. Neither OMIG nor the hearing officer can extend it, regardless of the strength of the underlying defense.
Because the hearing request deadline cannot be revived once it passes, providers should treat the draft audit report, not the final audit report, as the point to retain counsel and begin building the record against a recoupment demand. Health Law Alliance's overview of the broader process, State Medicaid OMIG Audits: Process and Defense, walks through how extrapolated sampling can affect the size of a demand once a case moves past the draft stage.
Why Early Legal Counsel Is Critical
It is critical that New York Medicaid providers promptly retain experienced healthcare defense counsel upon receiving an OMIG audit notice, draft audit report, or other government inquiry. Early legal intervention can protect the provider's rights, ensure the written response to the draft audit report is complete and properly documented, avoid inadvertent admissions, preserve the right to an administrative hearing, and allow counsel to communicate with OMIG on the provider's behalf. Delaying legal representation until after the final audit report issues can significantly narrow the options available and expose the provider to unnecessary risk.
How Health Law Alliance Can Help
Health Law Alliance represents Medicaid providers in New York and nationwide through the OMIG audit process, from the draft audit report response through the administrative hearing, drawing on the firm's experience with 2,000+ audits overseen on behalf of healthcare provider clients. The firm's attorneys build the documentary record early, calendar every deadline in the audit cascade, and, where the facts support it, contest overpayment calculations before they become final. Providers that have received an OMIG audit notice or draft audit report may contact Health Law Alliance's Medicaid audit defense team for a free, confidential consultation.
