S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  7889--A
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 28, 2021
                                ___________
 
 Introduced  by  M.  of  A.  GOTTFRIED, L. ROSENTHAL, McDONALD, ABINANTI,
   VANEL -- read once and referred to the Committee on Health  --  recom-
   mitted  to the Committee on Health in accordance with Assembly Rule 3,
   sec. 2 -- reported and referred to the Committee on Ways and Means  --
   committee  discharged,  bill amended, ordered reprinted as amended and
   recommitted to said committee
 
 AN ACT to amend the public health law and the social  services  law,  in
   relation  to  the  functions  of  the  Medicaid inspector general with
   respect to audit and review of medical assistance  program  funds  and
   requiring notice of certain investigations
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 30-a of the public health law is amended by  adding
 four new subdivisions 4, 5, 6 and 7 to read as follows:
   4. "PROVIDER" MEANS ANY PERSON OR ENTITY ENROLLED AS A PROVIDER IN THE
 MEDICAL ASSISTANCE PROGRAM.
   5.  "RECIPIENT"  MEANS  AN  INDIVIDUAL  WHO IS ENROLLED IN THE MEDICAL
 ASSISTANCE PROGRAM, INCLUDING AN INDIVIDUAL WHO WAS PREVIOUSLY A RECIPI-
 ENT AND, IN AN APPROPRIATE CASE, AN INDIVIDUAL WHO IS LEGALLY  RESPONSI-
 BLE FOR THE RECIPIENT.
   6.  "MEDICAL  ASSISTANCE" AND "MEDICAID" MEANS TITLE ELEVEN OF ARTICLE
 FIVE OF THE SOCIAL SERVICES LAW AND THE PROGRAM THEREUNDER.
   7. "DRAFT AUDIT REPORT", "INITIAL AUDIT REPORT", "PROPOSED  NOTICE  OF
 AGENCY ACTION" AND "FINAL NOTICE OF AGENCY ACTION" MEANS THOSE DOCUMENTS
 PREPARED  AND ISSUED BY THE INSPECTOR UNDER THIS TITLE AND CORRESPONDING
 REGULATIONS.
   § 2. Subdivision 20 of section 32 of the public health law,  as  added
 by chapter 442 of the laws of 2006, is amended to read as follows:
   20.  to,  consistent  with  [provisions  of] this title AND APPLICABLE
 FEDERAL AND STATE LAWS, REGULATIONS, POLICIES, GUIDELINES AND STANDARDS,
 implement and amend, as needed, rules and regulations  relating  to  the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11500-02-2
              

 A. 7889--A                          2
 
 prevention,  detection,  investigation  and  referral of fraud and abuse
 within the medical assistance program and  the  recovery  of  improperly
 expended medical assistance program funds;
   §  3.  The  public health law is amended by adding two new sections 37
 and 38 to read as follows:
   § 37. PROCEDURES, PRACTICES AND STANDARDS.  1. SUBJECT TO FEDERAL  LAW
 OR REGULATION, RECOVERY OF AN OVERPAYMENT RESULTING FROM THE ISSUANCE OF
 A  FINAL  AUDIT REPORT OR FINAL NOTICE OF AGENCY ACTION BY THE INSPECTOR
 SHALL COMMENCE NOT LESS THAN SIXTY DAYS AFTER THE ISSUANCE OF THE  FINAL
 AUDIT  REPORT  OR FINAL NOTICE OF AGENCY ACTION. THE INSPECTOR SHALL NOT
 COMMENCE ANY RECOVERY UNDER THIS SUBDIVISION WITHOUT PROVIDING A MINIMUM
 OF TEN DAYS ADVANCE WRITTEN NOTICE TO THE PROVIDER.
   2. CONTRACTS, COST REPORTS, CLAIMS, BILLS OR EXPENDITURES  OF  MEDICAL
 ASSISTANCE  FUNDS  THAT  WERE  THE SUBJECT MATTER OF A PREVIOUS AUDIT OR
 REVIEW BY OR ON BEHALF OF THE INSPECTOR, WITHIN THE  LAST  THREE  YEARS,
 SHALL NOT BE SUBJECT AGAIN TO REVIEW OR AUDIT EXCEPT ON THE BASIS OF NEW
 INFORMATION, FOR GOOD CAUSE TO BELIEVE THAT THE PREVIOUS REVIEW OR AUDIT
 WAS  ERRONEOUS, OR WHERE THE SCOPE OF THE INSPECTOR'S REVIEW OR AUDIT IS
 SIGNIFICANTLY DIFFERENT FROM THE SCOPE OF THE PREVIOUS REVIEW OR AUDIT.
   3. IN CONDUCTING REVIEWS OR AUDITS,  THE  INSPECTOR  SHALL  APPLY  THE
 LAWS,  REGULATIONS,  POLICIES, GUIDELINES, STANDARDS AND INTERPRETATIONS
 OF THE APPROPRIATE AGENCY, INCLUDING TEMPORARY OR EMERGENCY REGULATIONS,
 POLICIES, GUIDELINES, STANDARDS AND INTERPRETATIONS, THAT WERE IN  PLACE
 AT THE TIME THE SUBJECT CLAIM AROSE OR OTHER CONDUCT TOOK PLACE.  DISAL-
 LOWANCES  MAY  BE  IMPOSED OR OTHER ACTION TAKEN ONLY FOR NON-COMPLIANCE
 WITH THOSE LAWS, REGULATIONS, POLICIES,  GUIDELINES  OR  STANDARDS.  FOR
 PURPOSES  OF  THIS  SUBDIVISION,  ANY CHANGE IN THOSE LAWS, REGULATIONS,
 POLICIES, GUIDELINES, STANDARDS OR INTERPRETATIONS SHALL ONLY BE APPLIED
 PROSPECTIVELY AND UPON REASONABLE NOTICE.
   4. (A) THE INSPECTOR SHALL MAKE NO RECOVERY FROM A PROVIDER, BASED  ON
 AN ADMINISTRATIVE OR TECHNICAL DEFECT IN PROCEDURE OR DOCUMENTATION MADE
 WITHOUT  INTENT  TO  FALSIFY  OR  DEFRAUD, IN CONNECTION WITH CLAIMS FOR
 PAYMENT FOR MEDICALLY NECESSARY CARE, SERVICES AND SUPPLIES OR THE  COST
 THEREOF  AS SPECIFIED IN SUBDIVISION TWO OF SECTION THREE HUNDRED SIXTY-
 FIVE-A OF THE SOCIAL SERVICES LAW PROVIDED IN OTHER  RESPECTS  APPROPRI-
 ATELY  TO  A  BENEFICIARY  OF  THE MEDICAL ASSISTANCE PROGRAM, EXCEPT AS
 PROVIDED IN PARAGRAPHS (B) AND (C) OF THIS SUBDIVISION.
   (B) WHERE THERE IS AN ADMINISTRATIVE OR TECHNICAL DEFECT IN  PROCEDURE
 OR  DOCUMENTATION  WITHOUT  INTENT  TO FALSIFY OR DEFRAUD, THE INSPECTOR
 SHALL AFFORD THE PROVIDER AN  OPPORTUNITY  TO  CORRECT  THE  DEFECT  AND
 RESUBMIT THE CLAIM WITHIN THIRTY DAYS OF NOTICE OF THE DEFECT.
   (C) WHERE A CLAIM RELATES TO A SERVICE THAT WAS PROVIDED MORE THAN TWO
 YEARS PRIOR TO THE COMMENCEMENT OF THE AUDIT, THE PROVIDER MAY SUBMIT OR
 RESUBMIT  THE  CLAIM  OR  ACCEPT  THE  DISALLOWANCE OF THE AMOUNT OF THE
 CLAIM.
   5. (A) THE INSPECTOR SHALL FURNISH TO THE PROVIDER AT  AN  AUDIT  EXIT
 CONFERENCE  OR IN ANY DRAFT AUDIT FINDINGS ISSUED OR TO BE ISSUED TO THE
 PROVIDER, A DETAILED WRITTEN EXPLANATION  OF  THE  EXTRAPOLATION  METHOD
 EMPLOYED,  INCLUDING  THE  SIZE OF THE SAMPLE, THE SAMPLING METHODOLOGY,
 THE DEFINED UNIVERSE OF CLAIMS, THE  SPECIFIC  CLAIMS  INCLUDED  IN  THE
 SAMPLE,  THE RESULTS OF THE SAMPLE, THE ASSUMPTIONS MADE ABOUT THE ACCU-
 RACY AND RELIABILITY OF THE SAMPLE AND THE LEVEL OF  CONFIDENCE  IN  THE
 SAMPLE  RESULTS,  AND  THE  STEPS  UNDERTAKEN AND STATISTICS UTILIZED TO
 CALCULATE THE ALLEGED OVERPAYMENT AND ANY APPLICABLE OFFSET BASED ON THE
 SAMPLE RESULTS. THIS WRITTEN INFORMATION SHALL INCLUDE A DESCRIPTION  OF
 THE SAMPLING AND EXTRAPOLATION METHODOLOGY.
 A. 7889--A                          3
 
   (B) THE SAMPLING AND EXTRAPOLATION METHODOLOGIES USED BY THE INSPECTOR
 SHALL  BE  STATISTICALLY REASONABLY VALID FOR THE INTENDED USE AND SHALL
 BE ESTABLISHED IN REGULATIONS OF THE INSPECTOR.
   §  38.  PROCEDURES,  PRACTICES  AND  STANDARDS FOR RECIPIENTS. 1. THIS
 SECTION APPLIES TO ANY ADJUSTMENT OR RECOVERY OF  A  MEDICAL  ASSISTANCE
 PAYMENT  FROM  A  RECIPIENT,  AND  ANY INVESTIGATION OR OTHER PROCEEDING
 RELATING THERETO.
   2. AT LEAST FIVE BUSINESS DAYS PRIOR TO COMMENCEMENT OF ANY  INTERVIEW
 WITH  A  RECIPIENT  AS  PART OF AN INVESTIGATION, THE INSPECTOR OR OTHER
 INVESTIGATING ENTITY SHALL PROVIDE THE RECIPIENT WITH WRITTEN NOTICE  OF
 THE  INVESTIGATION.  THE NOTICE OF THE INVESTIGATION SHALL SET FORTH THE
 BASIS FOR THE INVESTIGATION; THE POTENTIAL  FOR  REFERRAL  FOR  CRIMINAL
 INVESTIGATION;  THE  INDIVIDUAL'S RIGHT TO BE ACCOMPANIED BY A RELATIVE,
 FRIEND, ADVOCATE OR ATTORNEY DURING QUESTIONING; CONTACT INFORMATION FOR
 LOCAL LEGAL SERVICES OFFICES; THE INDIVIDUAL'S RIGHT TO  DECLINE  TO  BE
 INTERVIEWED OR PARTICIPATE IN AN INTERVIEW BUT TERMINATE THE QUESTIONING
 AT ANY TIME WITHOUT LOSS OF BENEFITS; AND THE RIGHT TO A FAIR HEARING IN
 THE EVENT THAT THE INVESTIGATION RESULTS IN A DETERMINATION OF INCORRECT
 PAYMENT.
   3.  FOLLOWING COMPLETION OF THE INVESTIGATION AND AT LEAST THIRTY DAYS
 PRIOR TO COMMENCING A RECOVERY OR ADJUSTMENT ACTION OR REQUESTING VOLUN-
 TARY REPAYMENT,  THE  INSPECTOR  OR  OTHER  INVESTIGATING  ENTITY  SHALL
 PROVIDE THE RECIPIENT WITH WRITTEN NOTICE OF THE DETERMINATION OF INCOR-
 RECT  PAYMENT  TO  BE RECOVERED OR ADJUSTED. THE NOTICE OF DETERMINATION
 SHALL IDENTIFY THE EVIDENCE RELIED UPON, SET FORTH THE  FACTUAL  CONCLU-
 SIONS OF THE INVESTIGATION, AND EXPLAIN THE RECIPIENT'S RIGHT TO REQUEST
 A FAIR HEARING IN ORDER TO CONTEST THE OUTCOME OF THE INVESTIGATION. THE
 EXPLANATION OF THE RIGHT TO A FAIR HEARING SHALL CONFORM TO THE REQUIRE-
 MENTS OF SUBDIVISION TWELVE OF SECTION TWENTY-TWO OF THE SOCIAL SERVICES
 LAW AND REGULATIONS THEREUNDER.
   4.  A FAIR HEARING UNDER SECTION TWENTY-TWO OF THE SOCIAL SERVICES LAW
 SHALL BE AVAILABLE TO ANY RECIPIENT WHO RECEIVES A  NOTICE  OF  DETERMI-
 NATION  UNDER  SUBDIVISION  THREE OF THIS SECTION, REGARDLESS OF WHETHER
 THE RECIPIENT IS STILL ENROLLED IN THE MEDICAL ASSISTANCE PROGRAM.
   § 4. Paragraph (c) of subdivision 3 of section  363-d  of  the  social
 services  law,  as  amended  by section 4 of part V of chapter 57 of the
 laws of 2019, is amended and a new subdivision 8 is  added  to  read  as
 follows:
   (c)  In  the  event  that  the  commissioner of health or the Medicaid
 inspector general finds that the provider does not have  a  satisfactory
 program  [within ninety days after the effective date of the regulations
 issued pursuant to subdivision four of this section],  THE  COMMISSIONER
 OR  MEDICAID  INSPECTOR  GENERAL SHALL SO NOTIFY THE PROVIDER, INCLUDING
 SPECIFICATION OF THE BASIS OF  THE  FINDING  SUFFICIENT  TO  ENABLE  THE
 PROVIDER  TO ADOPT A SATISFACTORY COMPLIANCE PROGRAM. THE PROVIDER SHALL
 SUBMIT TO THE COMMISSIONER OR  MEDICAID  INSPECTOR  GENERAL  A  PROPOSED
 SATISFACTORY  COMPLIANCE  PROGRAM  WITHIN  SIXTY  DAYS OF THE NOTICE AND
 SHALL ADOPT THE PROGRAM AS EXPEDITIOUSLY AS POSSIBLE.  IF  THE  PROVIDER
 DOES  NOT  PROPOSE AND ADOPT A SATISFACTORY PROGRAM IN SUCH TIME PERIOD,
 the provider may be subject to any sanctions or penalties  permitted  by
 federal  or  state  laws  and  regulations,  including revocation of the
 provider's agreement to participate in the medical assistance program.
   8. ANY REGULATION, DETERMINATION OR FINDING OF THE COMMISSIONER OR THE
 MEDICAID INSPECTOR GENERAL RELATING TO A COMPLIANCE PROGRAM  UNDER  THIS
 SECTION  SHALL  BE  SUBJECT  TO AND CONSISTENT WITH SUBDIVISION THREE OF
 THIS SECTION.
 A. 7889--A                          4
 
   § 5. Section 32 of the public health law is amended by  adding  a  new
 subdivision 6-b to read as follows:
   6-B.  TO CONSULT WITH THE COMMISSIONER ON THE PREPARATION OF AN ANNUAL
 REPORT, TO BE MADE AND FILED BY THE COMMISSIONER ON OR BEFORE THE  FIRST
 DAY  OF JULY TO THE GOVERNOR, THE TEMPORARY PRESIDENT OF THE SENATE, THE
 SPEAKER OF THE ASSEMBLY, THE MINORITY LEADER OF THE SENATE, THE MINORITY
 LEADER OF THE ASSEMBLY, THE COMMISSIONER, THE COMMISSIONER OF THE OFFICE
 OF ADDICTION SERVICES AND SUPPORTS, AND THE COMMISSIONER OF  THE  OFFICE
 OF  MENTAL  HEALTH  ON  THE  IMPACTS  THAT  ALL CIVIL AND ADMINISTRATIVE
 ENFORCEMENT ACTIONS TAKEN UNDER SUBDIVISION SIX OF THIS SECTION  IN  THE
 PREVIOUS  CALENDAR YEAR WILL HAVE AND HAVE HAD ON THE QUALITY AND AVAIL-
 ABILITY OF MEDICAL CARE AND SERVICES, THE BEST  INTERESTS  OF  BOTH  THE
 MEDICAL  ASSISTANCE  PROGRAM  AND ITS RECIPIENTS, AND FISCAL SOLVENCY OF
 THE PROVIDERS WHO WERE SUBJECT TO THE CIVIL OR  ADMINISTRATIVE  ENFORCE-
 MENT ACTION;
   § 6. This act shall take effect immediately.