S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6813
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                May 8, 2023
                                ___________
 
 Introduced  by  M.  of  A.  PAULIN, L. ROSENTHAL, VANEL -- read once and
   referred to the Committee on Health
 
 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
 three new subdivisions 4, 5, and 6 to read as follows:
   4.  "MEDICAL  ASSISTANCE,"  "MEDICAID," AND "RECIPIENT" SHALL HAVE THE
 SAME MEANING AS THOSE TERMS IN TITLE  ELEVEN  OF  ARTICLE  FIVE  OF  THE
 SOCIAL  SERVICES  LAW  AND SHALL INCLUDE ANY PAYMENTS TO PROVIDERS UNDER
 ANY MEDICAID MANAGED CARE PROGRAM.
   5. "PROVIDER" MEANS ANY PERSON OR ENTITY ENROLLED AS A PROVIDER IN THE
 MEDICAL ASSISTANCE PROGRAM.
   6. "OVERPAYMENT" SHALL MEAN ANY AMOUNT PAID TO A PROVIDER FOR  MEDICAL
 ASSISTANCE  IN  EXCESS  OF THE AMOUNT ALLOWABLE UNDER THE STATE PLAN FOR
 MEDICAL ASSISTANCE IN EFFECT AT THE TIME OF SUCH SERVICE,  OR  ALLOWABLE
 UNDER  ANY  FEDERALLY  APPROVED  MEDICAID  WAIVER, EXPERIMENT, PILOT, OR
 DEMONSTRATION PROJECT. AN OVERPAYMENT SHALL NOT INCLUDE CIRCUMSTANCES OF
 PROVIDER  NONCOMPLIANCE  WITH  STATE  LAWS,  REGULATIONS  OR  APPLICABLE
 PROMULGATED  STATE  AGENCY POLICIES, GUIDELINES, STANDARDS, PROTOCOLS OR
 INTERPRETATIONS WHICH ARE NOT A CONDITION OF PAYMENT, UNLESS THE PROVID-
 ER OBTAINED PAYMENT BY FRAUD OR DECEIT, OR WHERE THE PROVIDER WAS PREVI-
 OUSLY PROVIDED NOTICE OF ITS FAILURE TO COMPLY AND HAS FAILED TO CORRECT
 SUCH NONCOMPLIANCE.  AN OVERPAYMENT SHALL NOT INCLUDE NONCOMPLIANCE WITH
 ANY APPLICABLE PROMULGATED STATE AGENCY POLICIES, GUIDELINES, STANDARDS,
 PROTOCOLS OR INTERPRETATIONS WHERE  SUCH  POLICY,  GUIDELINE,  STANDARD,
 PROTOCOL  OR  INTERPRETATION  IS  FACIALLY,  OR  AS  APPLIED, REASONABLY
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10461-01-3
 A. 6813                             2
              

 
 SUSCEPTIBLE TO MORE THAN ONE MEANING,  PROVIDED  THE  PROVIDER  COMPLIED
 WITH ONE SUCH REASONABLE MEANING.
   §  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 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. AUDIT AND RECOVERY OF MEDICAL ASSISTANCE PAYMENTS TO PROVIDERS.
 ANY AUDIT OR REVIEW OF ANY PROVIDER  CONTRACTS,  COST  REPORTS,  CLAIMS,
 BILLS,  OR  MEDICAL  ASSISTANCE PAYMENTS BY THE INSPECTOR, ANYONE DESIG-
 NATED BY THE INSPECTOR OR OTHERWISE LAWFULLY AUTHORIZED TO CONDUCT  SUCH
 AUDIT  OR  REVIEW, OR ANY OTHER AGENCY WITH JURISDICTION TO CONDUCT SUCH
 AUDIT OR REVIEW, SHALL COMPLY WITH THE FOLLOWING STANDARDS:
   1. RECOVERY OF ANY OVERPAYMENT RESULTING FROM ANY AUDIT OR  REVIEW  OF
 PROVIDER  CONTRACTS,  COST REPORTS, CLAIMS, BILLS, OR MEDICAL ASSISTANCE
 PAYMENTS SHALL NOT COMMENCE PRIOR TO SIXTY DAYS AFTER  DELIVERY  TO  THE
 PROVIDER  OF  A  FINAL AUDIT REPORT OR FINAL NOTICE OF AGENCY ACTION, OR
 WHERE THE PROVIDER REQUESTS A HEARING OR APPEAL  WITHIN  SIXTY  DAYS  OF
 DELIVERY  OF  THE  FINAL  AUDIT REPORT OR FINAL NOTICE OF AGENCY ACTION,
 UNTIL A FINAL DETERMINATION OF SUCH HEARING OR APPEAL  IS  MADE.    THIS
 SUBDIVISION SHALL NOT APPLY WHERE THE WITHHOLDING IS PURSUANT TO A PEND-
 ING  INVESTIGATION OF A CREDIBLE ALLEGATION OF FRAUD OR WHERE THERE IS A
 FINDING THAT THE PROVIDER HAS ABUSED THE PROGRAM OR COMMITTED  AN  UNAC-
 CEPTABLE PRACTICE.
   2.  PROVIDER CONTRACTS, COST REPORTS, CLAIMS, BILLS OR MEDICAL ASSIST-
 ANCE PAYMENTS THAT WERE THE SUBJECT MATTER OF A PREVIOUS AUDIT OR REVIEW
 WITHIN THE LAST THREE YEARS SHALL NOT BE  SUBJECT  TO  REVIEW  OR  AUDIT
 AGAIN  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. ANY REVIEWS OR AUDITS OF PROVIDER CONTRACTS, COST REPORTS,  CLAIMS,
 BILLS  OR  MEDICAL ASSISTANCE PAYMENTS SHALL APPLY THE STATE LAWS, REGU-
 LATIONS AND THE APPLICABLE, DULY PROMULGATED POLICIES, GUIDELINES, STAN-
 DARDS, PROTOCOLS AND INTERPRETATIONS OF STATE AGENCIES WITH JURISDICTION
 AND IN EFFECT AT THE TIME THE PROVIDER ENGAGED IN THE  APPLICABLE  REGU-
 LATED  CONDUCT OR PROVISION OF SERVICES.  FOR THE PURPOSE OF THIS SUBDI-
 VISION, THE STATE LAW, REGULATION OR THE APPLICABLE  PROMULGATED  AGENCY
 POLICY,  GUIDELINE,  STANDARD,  PROTOCOL  OR INTERPRETATION SHALL NOT BE
 DEEMED IN EFFECT IF FEDERAL GOVERNMENTAL APPROVAL IS PENDING OR DENIED.
   4. (A) IN THE EVENT OF ANY OVERPAYMENT BASED UPON A PROVIDER'S  ADMIN-
 ISTRATIVE  OR  TECHNICAL  ERROR,  THE  PROVIDER SHALL HAVE THE LONGER OF
 SIXTY DAYS FROM NOTICE OF THE MISTAKE OR SIX  YEARS  FROM  THE  DATE  OF
 SERVICE TO SUBMIT A CORRECTED CLAIM PROVIDED (I) THE ERROR WAS A GENUINE
 ERROR WITHOUT INTENT TO FALSIFY OR DEFRAUD, (II) THE PROVIDER MAINTAINED
 CONTEMPORANEOUS  DOCUMENTATION TO SUBSTANTIATE THE CORRECT CLAIMS INFOR-
 MATION, (III) SUCH ERROR IS THE SOLE BASIS FOR THE FINDING OF  AN  OVER-
 PAYMENT,  AND (IV) THERE IS NO FINDING OF ANY OVERPAYMENT FOR SUCH ERROR
 BY A FEDERAL AGENCY OR OFFICIAL.
   (B) NO OVERPAYMENT SHALL BE CALCULATED FOR ANY ADMINISTRATIVE OR TECH-
 NICAL ERROR CORRECTED AS REQUIRED IN PARAGRAPH (A) OF THIS SUBDIVISION.
 A. 6813                             3
 
   5. (A) IN DETERMINING THE AMOUNT OF ANY  OVERPAYMENT  TO  A  PROVIDER,
 EXTRAPOLATION  SHALL  BE PERMITTED ONLY UPON A FINDING OF A SUSTAINED OR
 HIGH LEVEL OF PAYMENT ERROR OR WHERE THE PROVIDER HAS BEEN  THE  SUBJECT
 OF  EDUCATIONAL  INTERVENTION  AND  FAILED  TO CORRECT THE PAYMENT ERROR
 AFTER  A  REASONABLE  OPPORTUNITY  TO DO SO.   THE FINAL AUDIT REPORT OR
 FINAL NOTICE OF AGENCY ACTION SHALL INCLUDE A STATEMENT OF  THE  FACTUAL
 BASIS  FOR UTILIZING EXTRAPOLATION AND THE INAPPROPRIATE USE OF EXTRAPO-
 LATION SHALL BE A BASIS  FOR  APPEAL.  THIS  SUBDIVISION  SHALL  NOT  BE
 CONSTRUED  TO  LIMIT THE RECOUPMENT OF AN OVERPAYMENT IDENTIFIED WITHOUT
 THE USE OF EXTRAPOLATION.
   (B) SUSTAINED OR HIGH LEVEL OF PAYMENT ERROR  SHALL  EXIST  UNDER  THE
 FOLLOWING CIRCUMSTANCES: (I) THE AUDIT OR REVIEW RESULTS IN A FINDING OF
 A  PAYMENT  ERROR  RATE EQUAL TO OR GREATER THAN FIFTY PERCENT, (II) THE
 AUDIT OR REVIEW RESULTS IN A FINDING OF IDENTICAL PAYMENT ERRORS IDENTI-
 FIED IN A PRIOR AUDIT OR REVIEW, (III) THE PROVIDER WAS PREVIOUSLY SANC-
 TIONED OR INVESTIGATED FOR IDENTICAL PAYMENT ERRORS,  (IV)  THERE  IS  A
 PRIOR JUDGMENT AGAINST, OR SETTLEMENT INVOLVING, THE PROVIDER BASED UPON
 A  FINDING  THAT  THE  PROVIDER ENGAGED IN FRAUD AND/OR ABUSE RELATED TO
 FEDERAL OR STATE PAYMENT PROGRAMS, (V) THERE  ARE  PRIOR  COMPLAINTS  BY
 PROVIDER  EMPLOYEES  RELATED TO IDENTICAL PAYMENT ERRORS, AND (VI) THERE
 IS A PRIOR FINDING OF IDENTICAL PAYMENT ERROR BY  A  FEDERAL  AGENCY  OR
 OFFICIAL.
   6. (A) THE PROVIDER SHALL BE PROVIDED AS PART OF THE DRAFT AUDIT FIND-
 INGS   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  STATISTICAL  METHODOLOGY
 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.
   (B)  THE  SAMPLING  AND  EXTRAPOLATION  METHODOLOGIES  UTILIZED BY THE
 INSPECTOR SHALL BE CONSISTENT WITH ACCEPTED STANDARDS OF SOUND  AUDITING
 PRACTICE AND STATISTICAL ANALYSIS.
   7.  THE  REQUIREMENTS  OF THIS SECTION SHALL BE INTERPRETED CONSISTENT
 WITH AND SUBJECT TO ANY APPLICABLE FEDERAL LAW, RULES  AND  REGULATIONS,
 OR BINDING FEDERAL AGENCY GUIDANCE AND DIRECTIVES.
   §  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-
 A. 6813                             4
 
 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.
   §  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.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6813--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                May 8, 2023
                                ___________
 
 Introduced  by  M.  of  A. PAULIN, L. ROSENTHAL, VANEL, SIMON, McDONALD,
   JACOBSON, GUNTHER, SANTABARBARA, KELLES,  McMAHON  --  read  once  and
   referred  to  the  Committee on Health -- reported and referred to the
   Committee on Ways and Means -- recommitted to the  Committee  on  Ways
   and  Means  in  accordance  with  Assembly Rule 3, sec. 2 -- 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, as added by  chapter
 442 of the laws of 2006, is amended to read as follows:
   §  30-a.  Definitions.  For  the purposes of this title, the following
 definitions shall apply:
   1. "ABUSE" MEANS PROVIDER PRACTICES THAT ARE INCONSISTENT  WITH  SOUND
 FISCAL, BUSINESS OR MEDICAL PRACTICES, AND RESULT IN AN UNNECESSARY COST
 TO  THE  MEDICAID PROGRAM, OR IN REIMBURSEMENT FOR SERVICES THAT ARE NOT
 MEDICALLY NECESSARY OR THAT FAIL TO MEET PROFESSIONALLY RECOGNIZED STAN-
 DARDS FOR HEALTH CARE.  IT  ALSO  INCLUDES  BENEFICIARY  PRACTICES  THAT
 RESULT IN UNNECESSARY COST TO THE MEDICAID PROGRAM.
   2.  "CREDITABLE ALLEGATION OF FRAUD" (A) MEANS AN ALLEGATION WHICH HAS
 BEEN VERIFIED BY THE INSPECTOR,  FROM  ANY  SOURCE,  INCLUDING  BUT  NOT
 LIMITED TO THE FOLLOWING:
   I. FRAUD HOTLINES TIPS VERIFIED BY FURTHER EVIDENCE;
   II. CLAIMS DATA MINING; AND
   III.  PATTERNS  IDENTIFIED THROUGH PROVIDER AUDITS, CIVIL FALSE CLAIMS
 CASES, AND LAW ENFORCEMENT INVESTIGATIONS.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10461-02-4
 A. 6813--A                          2
              

 
   (B) ALLEGATIONS ARE CONSIDERED TO BE CREDIBLE WHEN THEY HAVE AN  INDI-
 CIA OF RELIABILITY AND THE INSPECTOR HAS REVIEWED ALL ALLEGATIONS, FACTS
 AND EVIDENCE CAREFULLY AND ACTS JUDICIOUSLY ON A CASE-BY-CASE BASIS.
   3. "FRAUD" MEANS AN INTENTIONAL DECEPTION OR MISREPRESENTATION MADE BY
 A  PERSON  WITH  THE  KNOWLEDGE  THAT THE DECEPTION OR MISREPRESENTATION
 COULD RESULT IN SOME UNAUTHORIZED BENEFIT TO THE PERSON  OR  SOME  OTHER
 PERSON.    IT  INCLUDES  ANY ACT THAT CONSTITUTES FRAUD UNDER APPLICABLE
 FEDERAL OR STATE LAW.
   4. "Inspector" means the Medicaid inspector general  created  by  this
 title.
   [2.] 5. "Investigation" means investigations of fraud, abuse, or ille-
 gal acts perpetrated within the medical assistance program, by providers
 or recipients of medical assistance care, services and supplies.
   6.  "MEDICAL  ASSISTANCE,"  "MEDICAID," AND "RECIPIENT" SHALL HAVE THE
 SAME MEANING AS THOSE TERMS IN TITLE  ELEVEN  OF  ARTICLE  FIVE  OF  THE
 SOCIAL  SERVICES  LAW  AND SHALL INCLUDE ANY PAYMENTS TO PROVIDERS UNDER
 ANY MEDICAID MANAGED CARE PROGRAM.
   [3.] 7. "Office" means the office of the  Medicaid  inspector  general
 created by this title.
   8.  "OVERPAYMENT" SHALL MEAN ANY AMOUNT PAID TO A PROVIDER FOR MEDICAL
 ASSISTANCE IN EXCESS OF THE AMOUNT ALLOWABLE UNDER THE  STATE  PLAN  FOR
 MEDICAL  ASSISTANCE  IN EFFECT AT THE TIME OF SUCH SERVICE, OR ALLOWABLE
 UNDER ANY FEDERALLY APPROVED  MEDICAID  WAIVER,  EXPERIMENT,  PILOT,  OR
 DEMONSTRATION PROJECT. NOTWITHSTANDING ANY STATE LAW TO THE CONTRARY, AN
 OVERPAYMENT  SHALL  NOT  INCLUDE CIRCUMSTANCES OF PROVIDER NONCOMPLIANCE
 WITH STATE LAWS, REGULATIONS  OR  APPLICABLE  PROMULGATED  STATE  AGENCY
 POLICIES,  GUIDELINES, STANDARDS, PROTOCOLS OR INTERPRETATIONS WHICH ARE
 NOT A CONDITION OF PAYMENT, UNLESS  THE  PROVIDER  OBTAINED  PAYMENT  BY
 FRAUD OR DECEIT, OR WHERE THE PROVIDER WAS PREVIOUSLY PROVIDED NOTICE OF
 ITS  FAILURE TO COMPLY AND HAS FAILED TO CORRECT SUCH NONCOMPLIANCE.  AN
 OVERPAYMENT SHALL NOT INCLUDE NONCOMPLIANCE WITH ANY APPLICABLE  PROMUL-
 GATED  STATE AGENCY POLICIES, GUIDELINES, STANDARDS, PROTOCOLS OR INTER-
 PRETATIONS WHERE SUCH POLICY, GUIDELINE, STANDARD, PROTOCOL OR INTERPRE-
 TATION IS FACIALLY, OR AS APPLIED, REASONABLY SUSCEPTIBLE TO  MORE  THAN
 ONE  MEANING,  PROVIDED  THE  PROVIDER COMPLIED WITH ONE SUCH REASONABLE
 MEANING.
   9. "PROVIDER" MEANS ANY PERSON OR ENTITY ENROLLED AS A PROVIDER IN THE
 MEDICAL ASSISTANCE PROGRAM.
   § 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 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. AUDIT AND RECOVERY OF MEDICAL ASSISTANCE PAYMENTS TO  PROVIDERS.
 ANY  AUDIT  OR  REVIEW  OF ANY PROVIDER CONTRACTS, COST REPORTS, CLAIMS,
 BILLS, OR MEDICAL ASSISTANCE PAYMENTS BY THE  INSPECTOR,  ANYONE  DESIG-
 NATED  BY THE INSPECTOR OR OTHERWISE LAWFULLY AUTHORIZED TO CONDUCT SUCH
 AUDIT OR REVIEW, OR ANY OTHER AGENCY WITH JURISDICTION TO  CONDUCT  SUCH
 AUDIT OR REVIEW, SHALL COMPLY WITH THE FOLLOWING STANDARDS:
   1.  RECOVERY  OF ANY OVERPAYMENT RESULTING FROM ANY AUDIT OR REVIEW OF
 PROVIDER CONTRACTS, COST REPORTS, CLAIMS, BILLS, OR  MEDICAL  ASSISTANCE
 A. 6813--A                          3
 
 PAYMENTS  SHALL  NOT  COMMENCE PRIOR TO SIXTY DAYS AFTER DELIVERY TO THE
 PROVIDER OF A FINAL AUDIT REPORT OR FINAL NOTICE OF  AGENCY  ACTION,  OR
 WHERE  THE  PROVIDER  REQUESTS  A HEARING OR APPEAL WITHIN SIXTY DAYS OF
 DELIVERY  OF  THE  FINAL  AUDIT REPORT OR FINAL NOTICE OF AGENCY ACTION,
 UNTIL A FINAL DETERMINATION OF SUCH HEARING OR APPEAL IS MADE.
   2. PROVIDER CONTRACTS, COST REPORTS, CLAIMS, BILLS OR MEDICAL  ASSIST-
 ANCE PAYMENTS THAT WERE THE SUBJECT MATTER OF A PREVIOUS AUDIT OR REVIEW
 WITHIN  THE  LAST  THREE  YEARS  SHALL NOT BE SUBJECT TO REVIEW OR AUDIT
 AGAIN 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.  ANY REVIEWS OR AUDITS OF PROVIDER CONTRACTS, COST REPORTS, CLAIMS,
 BILLS OR MEDICAL ASSISTANCE PAYMENTS SHALL APPLY THE STATE  LAWS,  REGU-
 LATIONS AND THE APPLICABLE, DULY PROMULGATED POLICIES, GUIDELINES, STAN-
 DARDS, PROTOCOLS AND INTERPRETATIONS OF STATE AGENCIES WITH JURISDICTION
 AND  IN  EFFECT AT THE TIME THE PROVIDER ENGAGED IN THE APPLICABLE REGU-
 LATED CONDUCT OR PROVISION OF SERVICES.  FOR THE PURPOSE OF THIS  SUBDI-
 VISION,  THE  STATE LAW, REGULATION OR THE APPLICABLE PROMULGATED AGENCY
 POLICY, GUIDELINE, STANDARD, PROTOCOL OR  INTERPRETATION  SHALL  NOT  BE
 DEEMED  IN EFFECT IF FEDERAL GOVERNMENTAL APPROVAL IS PENDING OR DENIED.
 THE INSPECTOR SHALL PUBLISH PROTOCOLS APPLICABLE TO  AND  GOVERNING  ANY
 AUDIT  OR  REVIEW  OF  A   PROVIDER OR PROVIDER CONTRACTS, COST REPORTS,
 CLAIMS, BILLS OR MEDICAL ASSISTANCE PAYMENTS ON THE OFFICE  OF  MEDICAID
 INSPECTOR GENERAL WEBSITE.
   4.  (A) IN THE EVENT OF ANY OVERPAYMENT BASED UPON A PROVIDER'S ADMIN-
 ISTRATIVE OR TECHNICAL ERROR, THE PROVIDER  SHALL  HAVE  THE  LONGER  OF
 SIXTY  DAYS  FROM  NOTICE  OF  THE MISTAKE OR SIX YEARS FROM THE DATE OF
 SERVICE TO SUBMIT A CORRECTED CLAIM PROVIDED (I) THE ERROR WAS A GENUINE
 ERROR WITHOUT INTENT TO FALSIFY OR DEFRAUD, (II) THE PROVIDER MAINTAINED
 CONTEMPORANEOUS DOCUMENTATION TO SUBSTANTIATE THE CORRECT CLAIMS  INFOR-
 MATION,  (III)  SUCH ERROR IS THE SOLE BASIS FOR THE FINDING OF AN OVER-
 PAYMENT, AND (IV) THERE IS NO FINDING OF ANY OVERPAYMENT FOR SUCH  ERROR
 BY A FEDERAL AGENCY OR OFFICIAL.
   (B) NO OVERPAYMENT SHALL BE CALCULATED FOR ANY ADMINISTRATIVE OR TECH-
 NICAL ERROR CORRECTED AS REQUIRED IN PARAGRAPH (A) OF THIS SUBDIVISION.
   (C)  "ADMINISTRATIVE  OR TECHNICAL ERROR" SHALL INCLUDE ANY ERROR THAT
 CONSTITUTES EITHER A (I) MINOR ERROR OR OMISSION OR  (II)CLERICAL  ERROR
 OR OMISSION UNDER THE MEDICARE MODERNIZATION ACT OR CENTERS FOR MEDICAID
 AND  MEDICAID  SERVICE REGULATIONS, AND SHALL INCLUDE HUMAN AND CLERICAL
 ERRORS THAT RESULT IN ERRORS AS TO FORM OR CONTENT OF A CLAIM.
   5. (A) IN DETERMINING THE AMOUNT OF ANY OVERPAYMENT TO A PROVIDER, THE
 INSPECTOR SHALL  UTILIZE SAMPLING AND EXTRAPOLATION CONSISTENT  WITH THE
 CENTERS FOR MEDICARE AND MEDICAID SERVICES POLICIES AS DESCRIBED IN  THE
 CENTERS FOR MEDICARE AND MEDICAID PROGRAM INTEGRITY MANUAL.
   (B)  THE  FINAL  AUDIT  REPORT  OR FINAL NOTICE OF AGENCY ACTION SHALL
 INCLUDE A STATEMENT OF THE SPECIFIC FACTUAL AND LEGAL BASIS FOR  UTILIZ-
 ING  EXTRAPOLATION AND THE INAPPROPRIATE USE OF EXTRAPOLATION SHALL BE A
 BASIS FOR APPEAL. THIS SUBDIVISION SHALL NOT BE CONSTRUED TO  LIMIT  THE
 RECOUPMENT  OF  AN  OVERPAYMENT  IDENTIFIED  WITHOUT THE USE OF EXTRAPO-
 LATION.
   (C) UNTIL THE PROVIDER HAS WAIVED ITS RIGHT TO  A  HEARING,  OR  IF  A
 PROVIDER  REQUESTS A HEARING, UNTIL THE HEARING DETERMINATION IS ISSUED,
 THE PROVIDER SHALL HAVE THE RIGHT TO PAY THE LOWER CONFIDENCE LIMIT PLUS
 APPLICABLE INTEREST IN FULFILLMENT OF  THIS  PARAGRAPH,  THE  APPLICABLE
 A. 6813--A                          4
 
 LOWER  CONFIDENCE  LIMIT  SHALL  BE  CALCULATED USING AT LEAST A  NINETY
 PERCENT CONFIDENCE LEVEL.
   6. (A) THE PROVIDER SHALL BE PROVIDED AS PART OF THE DRAFT AUDIT FIND-
 INGS   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  STATISTICAL  METHODOLOGY
 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.
   (B)  THE  SAMPLING  AND  EXTRAPOLATION  METHODOLOGIES  UTILIZED BY THE
 INSPECTOR SHALL BE CONSISTENT WITH ACCEPTED STANDARDS OF SOUND  AUDITING
 PRACTICE AND STATISTICAL ANALYSIS.
   7.  THE  REQUIREMENTS  OF THIS SECTION SHALL BE INTERPRETED CONSISTENT
 WITH AND SUBJECT TO ANY APPLICABLE FEDERAL LAW, RULES  AND  REGULATIONS,
 OR BINDING FEDERAL AGENCY GUIDANCE AND DIRECTIVES.  THE  REQUIREMENTS OF
 THIS SECTION SHALL NOT APPLY TO ANY INVESTIGATION BY THE INSPECTOR WHERE
 THERE  IS CREDIBLE ALLEGATIONS OF FRAUD OR WHERE THERE IS A FINDING THAT
 THE PROVIDER HAS ENGAGED IN DELIBERATE ABUSE OF THE  MEDICAL  ASSISTANCE
 PROGRAM.
   §  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
 A. 6813--A                          5

 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.
   § 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 on the thirtieth day after it shall
 have become a law.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6813--B
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                May 8, 2023
                                ___________
 
 Introduced  by  M.  of  A. PAULIN, L. ROSENTHAL, VANEL, SIMON, McDONALD,
   JACOBSON,  GUNTHER,  SANTABARBARA,  KELLES,  McMAHON,  GONZALEZ-ROJAS,
   BURDICK,  ZEBROWSKI,  JENSEN,  BEEPHAN, LUCAS, LUPARDO, STECK, ARDILA,
   SHIMSKY, WEPRIN, HEVESI, SEPTIMO, THIELE, LEVENBERG,  SIMONE,  BLUMEN-
   CRANZ, SEAWRIGHT, RAMOS, LAVINE, SAYEGH, GIBBS, TAPIA -- read once and
   referred  to  the  Committee on Health -- reported and referred to the
   Committee on Ways and Means -- recommitted to the  Committee  on  Ways
   and  Means  in  accordance  with  Assembly Rule 3, sec. 2 -- committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee -- recommitted to the Committee on Ways and Means in
   accordance with Assembly Rule 3, sec. 2 -- committee discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee
 
 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, as added by  chapter
 442 of the laws of 2006, is amended to read as follows:
   §  30-a.  Definitions.  For  the purposes of this title, the following
 definitions shall apply:
   1. "ABUSE" MEANS PROVIDER PRACTICES THAT ARE INCONSISTENT  WITH  SOUND
 FISCAL, BUSINESS OR MEDICAL PRACTICES, AND RESULT IN AN UNNECESSARY COST
 TO  THE  MEDICAID PROGRAM, OR IN REIMBURSEMENT FOR SERVICES THAT ARE NOT
 MEDICALLY NECESSARY OR THAT FAIL TO MEET PROFESSIONALLY RECOGNIZED STAN-
 DARDS FOR HEALTH CARE.  IT  ALSO  INCLUDES  BENEFICIARY  PRACTICES  THAT
 RESULT IN UNNECESSARY COST TO THE MEDICAID PROGRAM.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10461-04-4
 A. 6813--B                          2
 
              

   2.  "CREDITABLE ALLEGATION OF FRAUD" (A) MEANS AN ALLEGATION WHICH HAS
 BEEN VERIFIED BY THE INSPECTOR,  FROM  ANY  SOURCE,  INCLUDING  BUT  NOT
 LIMITED TO THE FOLLOWING:
   I. FRAUD HOTLINES TIPS VERIFIED BY FURTHER EVIDENCE;
   II. CLAIMS DATA MINING; AND
   III.  PATTERNS  IDENTIFIED THROUGH PROVIDER AUDITS, CIVIL FALSE CLAIMS
 CASES, AND LAW ENFORCEMENT INVESTIGATIONS.
   (B) ALLEGATIONS ARE CONSIDERED TO BE CREDIBLE WHEN THEY HAVE AN  INDI-
 CIA OF RELIABILITY AND THE INSPECTOR HAS REVIEWED ALL ALLEGATIONS, FACTS
 AND EVIDENCE CAREFULLY AND ACTS JUDICIOUSLY ON A CASE-BY-CASE BASIS.
   3. "FRAUD" MEANS AN INTENTIONAL DECEPTION OR MISREPRESENTATION MADE BY
 A  PERSON  WITH  THE  KNOWLEDGE  THAT THE DECEPTION OR MISREPRESENTATION
 COULD RESULT IN SOME UNAUTHORIZED BENEFIT TO THE PERSON  OR  SOME  OTHER
 PERSON.    IT  INCLUDES  ANY ACT THAT CONSTITUTES FRAUD UNDER APPLICABLE
 FEDERAL OR STATE LAW.
   4. "Inspector" means the Medicaid inspector general  created  by  this
 title.
   [2.] 5. "Investigation" means investigations of fraud, abuse, or ille-
 gal acts perpetrated within the medical assistance program, by providers
 or recipients of medical assistance care, services and supplies.
   6.  "MEDICAL  ASSISTANCE,"  "MEDICAID," AND "RECIPIENT" SHALL HAVE THE
 SAME MEANING AS THOSE TERMS IN TITLE  ELEVEN  OF  ARTICLE  FIVE  OF  THE
 SOCIAL  SERVICES  LAW  AND SHALL INCLUDE ANY PAYMENTS TO PROVIDERS UNDER
 ANY MEDICAID MANAGED CARE PROGRAM.
   [3.] 7. "Office" means the office of the  Medicaid  inspector  general
 created by this title.
   8.  "OVERPAYMENT" SHALL MEAN ANY AMOUNT PAID TO A PROVIDER FOR MEDICAL
 ASSISTANCE IN EXCESS OF THE  AMOUNT  ALLOWABLE  FOR  SERVICES  FURNISHED
 UNDER  SECTION  NINETEEN  HUNDRED TWO OF THE FEDERAL SOCIAL SECURITY ACT
 AND WHICH IS REQUIRED TO BE  REFUNDED  UNDER  SECTION  NINETEEN  HUNDRED
 THREE OF SUCH ACT.
   9. "PROVIDER" MEANS ANY PERSON OR ENTITY ENROLLED AS A PROVIDER IN THE
 MEDICAL ASSISTANCE PROGRAM.
   §  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 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. AUDIT AND RECOVERY OF MEDICAL ASSISTANCE PAYMENTS TO PROVIDERS.
 ANY AUDIT OR REVIEW OF ANY PROVIDER  CONTRACTS,  COST  REPORTS,  CLAIMS,
 BILLS,  OR  MEDICAL  ASSISTANCE PAYMENTS BY THE INSPECTOR, ANYONE DESIG-
 NATED BY THE INSPECTOR OR OTHERWISE LAWFULLY AUTHORIZED TO CONDUCT  SUCH
 AUDIT  OR  REVIEW, OR ANY OTHER AGENCY WITH JURISDICTION TO CONDUCT SUCH
 AUDIT OR REVIEW, SHALL COMPLY WITH THE FOLLOWING STANDARDS:
   1. RECOVERY OF ANY OVERPAYMENT RESULTING FROM ANY AUDIT OR  REVIEW  OF
 PROVIDER  CONTRACTS,  COST REPORTS, CLAIMS, BILLS, OR MEDICAL ASSISTANCE
 PAYMENTS SHALL NOT COMMENCE PRIOR TO SIXTY DAYS AFTER  DELIVERY  TO  THE
 PROVIDER  OF  A  FINAL AUDIT REPORT OR FINAL NOTICE OF AGENCY ACTION, OR
 WHERE THE PROVIDER REQUESTS A HEARING OR APPEAL  WITHIN  SIXTY  DAYS  OF
 DELIVERY  OF  THE  FINAL  AUDIT REPORT OR FINAL NOTICE OF AGENCY ACTION,
 UNTIL A FINAL DETERMINATION OF SUCH HEARING OR APPEAL IS MADE.
 A. 6813--B                          3
 
   2. PROVIDER CONTRACTS, COST REPORTS, CLAIMS, BILLS OR MEDICAL  ASSIST-
 ANCE PAYMENTS THAT WERE THE SUBJECT MATTER OF A PREVIOUS AUDIT OR REVIEW
 WITHIN  THE  LAST  THREE  YEARS  SHALL NOT BE SUBJECT TO REVIEW OR AUDIT
 AGAIN 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.  ANY REVIEWS OR AUDITS OF PROVIDER CONTRACTS, COST REPORTS, CLAIMS,
 BILLS OR MEDICAL ASSISTANCE PAYMENTS SHALL APPLY THE STATE  LAWS,  REGU-
 LATIONS AND THE APPLICABLE, DULY PROMULGATED POLICIES, GUIDELINES, STAN-
 DARDS, PROTOCOLS AND INTERPRETATIONS OF STATE AGENCIES WITH JURISDICTION
 AND  IN  EFFECT AT THE TIME THE PROVIDER ENGAGED IN THE APPLICABLE REGU-
 LATED CONDUCT OR PROVISION OF SERVICES.  FOR THE PURPOSE OF THIS  SUBDI-
 VISION,  THE  STATE LAW, REGULATION OR THE APPLICABLE PROMULGATED AGENCY
 POLICY, GUIDELINE, STANDARD, PROTOCOL OR  INTERPRETATION  SHALL  NOT  BE
 DEEMED  IN EFFECT IF FEDERAL GOVERNMENTAL APPROVAL IS PENDING OR DENIED.
 THE INSPECTOR SHALL PUBLISH PROTOCOLS APPLICABLE TO  AND  GOVERNING  ANY
 AUDIT  OR  REVIEW  OF  A   PROVIDER OR PROVIDER CONTRACTS, COST REPORTS,
 CLAIMS, BILLS OR MEDICAL ASSISTANCE PAYMENTS ON THE OFFICE  OF  MEDICAID
 INSPECTOR GENERAL WEBSITE.
   4.  (A) IN THE EVENT OF ANY OVERPAYMENT BASED UPON A PROVIDER'S ADMIN-
 ISTRATIVE OR TECHNICAL ERROR, THE PROVIDER  SHALL  HAVE  THE  LONGER  OF
 SIXTY  DAYS  FROM  NOTICE  OF  THE MISTAKE OR SIX YEARS FROM THE DATE OF
 SERVICE TO SUBMIT A CORRECTED CLAIM PROVIDED (I) THE ERROR WAS A GENUINE
 ERROR WITHOUT INTENT TO FALSIFY OR DEFRAUD, (II) THE PROVIDER MAINTAINED
 CONTEMPORANEOUS DOCUMENTATION TO SUBSTANTIATE THE CORRECT CLAIMS  INFOR-
 MATION,  (III)  SUCH ERROR IS THE SOLE BASIS FOR THE FINDING OF AN OVER-
 PAYMENT, AND (IV) THERE IS NO FINDING OF ANY OVERPAYMENT FOR SUCH  ERROR
 BY A FEDERAL AGENCY OR OFFICIAL.
   (B) NO OVERPAYMENT SHALL BE CALCULATED FOR ANY ADMINISTRATIVE OR TECH-
 NICAL ERROR CORRECTED AS REQUIRED IN PARAGRAPH (A) OF THIS SUBDIVISION.
   (C)  "ADMINISTRATIVE  OR TECHNICAL ERROR" SHALL INCLUDE ANY ERROR THAT
 CONSTITUTES EITHER A (I) MINOR ERROR OR OMISSION OR  (II)CLERICAL  ERROR
 OR OMISSION UNDER THE MEDICARE MODERNIZATION ACT OR CENTERS FOR MEDICAID
 AND  MEDICAID  SERVICE REGULATIONS, AND SHALL INCLUDE HUMAN AND CLERICAL
 ERRORS THAT RESULT IN ERRORS AS TO FORM OR CONTENT OF A CLAIM.
   5. (A) IN DETERMINING THE AMOUNT OF ANY OVERPAYMENT TO A PROVIDER, THE
 INSPECTOR SHALL  UTILIZE SAMPLING AND EXTRAPOLATION CONSISTENT  WITH THE
 CENTERS FOR MEDICARE AND MEDICAID SERVICES POLICIES AS DESCRIBED IN  THE
 CENTERS FOR MEDICARE AND MEDICAID PROGRAM INTEGRITY MANUAL.
   (B)  THE  FINAL  AUDIT  REPORT  OR FINAL NOTICE OF AGENCY ACTION SHALL
 INCLUDE A STATEMENT OF THE SPECIFIC FACTUAL AND LEGAL BASIS FOR  UTILIZ-
 ING  EXTRAPOLATION AND THE INAPPROPRIATE USE OF EXTRAPOLATION SHALL BE A
 BASIS FOR APPEAL. THIS SUBDIVISION SHALL NOT BE CONSTRUED TO  LIMIT  THE
 RECOUPMENT  OF  AN  OVERPAYMENT  IDENTIFIED  WITHOUT THE USE OF EXTRAPO-
 LATION.
   (C) IF THE PROVIDER HAS WAIVED ITS RIGHT TO A HEARING, OR IF A PROVID-
 ER REQUESTS A HEARING, UNTIL THE HEARING DETERMINATION  IS  ISSUED,  THE
 PROVIDER  SHALL  HAVE  THE  RIGHT TO PAY THE LOWER CONFIDENCE LIMIT PLUS
 APPLICABLE INTEREST IN FULFILLMENT OF  THIS  PARAGRAPH,  THE  APPLICABLE
 LOWER  CONFIDENCE  LIMIT  SHALL  BE  CALCULATED USING AT LEAST A  NINETY
 PERCENT CONFIDENCE LEVEL.
   6. (A) THE PROVIDER SHALL BE PROVIDED AS PART OF THE DRAFT AUDIT FIND-
 INGS  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
 A. 6813--B                          4
 
 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 STATISTICAL METHODOLOGY
 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.
   (B)  THE  SAMPLING  AND  EXTRAPOLATION  METHODOLOGIES  UTILIZED BY THE
 INSPECTOR SHALL BE CONSISTENT WITH ACCEPTED STANDARDS OF SOUND  AUDITING
 PRACTICE AND STATISTICAL ANALYSIS.
   7.  THE  REQUIREMENTS  OF THIS SECTION SHALL BE INTERPRETED CONSISTENT
 WITH AND SUBJECT TO ANY APPLICABLE FEDERAL LAW, RULES  AND  REGULATIONS,
 OR BINDING FEDERAL AGENCY GUIDANCE AND DIRECTIVES.  THE  REQUIREMENTS OF
 THIS SECTION SHALL NOT APPLY TO ANY INVESTIGATION BY THE INSPECTOR WHERE
 THERE  IS CREDIBLE ALLEGATIONS OF FRAUD OR WHERE THERE IS A FINDING THAT
 THE PROVIDER HAS ENGAGED IN DELIBERATE ABUSE OF THE  MEDICAL  ASSISTANCE
 PROGRAM.
   §  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
 A. 6813--B                          5
 
 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.
   § 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 on the thirtieth day after it shall
 have become a law.