S T A T E O F N E W Y O R K
________________________________________________________________________
4486--B
Cal. No. 1212
2021-2022 Regular Sessions
I N S E N A T E
February 5, 2021
___________
Introduced by Sens. HARCKHAM, KENNEDY -- read twice and ordered printed,
and when printed to be committed to the Committee on Health -- commit-
tee discharged, bill amended, ordered reprinted as amended and recom-
mitted to said committee -- recommitted to the Committee on Health in
accordance with Senate Rule 6, sec. 8 -- reported favorably from said
committee and committed to the Committee on Finance -- reported favor-
ably from said committee, ordered to first and second report, ordered
to a third reading, amended and ordered reprinted, retaining its place
in the order of third reading
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:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06411-03-2
S. 4486--B 2
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
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
S. 4486--B 3
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.
(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.
S. 4486--B 4
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.
§ 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.
