Update on Committee Investigations
From Assemblymember Sam Hoyt
Chair, Committee on Oversight, Analysis and Investigation

Assemblymember Sam Hoyt
Message from the Chair

The Public Eye reviews, from time to time, the activities of the Assembly Standing Committee on Oversight, Analysis and Investigation. This particular issue examines just one topic: the State Department of Health’s management of the prior approval process for durable medical equipment.

This report summarizes the Committee’s investigation which revealed the State’s failure to properly manage this particular Medicaid program, and thereby deny many people with severe, long-term disabilities the equipment they need to sit up, stand, move, and achieve small degrees of independence.

The Committee’s mission is to review how well laws and various government programs work, whether they are implemented as intended, and whether they operate efficiently and effectively. Two other projects we are now pursuing include ways to improve the Upstate economy and how State agencies handle New York residents’ personal information.

As I move forward, I welcome your guidance and suggestions.

Thank you for your attention,
Sam Hoyt, Chair
Committee on Oversight, Analysis and Investigation

Assembly Oversight Report on State’s Management of the Prior Approval Process for Durable Medical Equipment
Report Faults Department of Health;
Calls for Reform

In July 2006, Oversight Committee Chair Sam Hoyt released a report entitled “Delaying Necessities, Denying Needs.” The report was a culmination of a year-long review of the New York State Department of Health’s (DOH) management of the prior approval program for durable medical equipment. Jointly issued with Richard N. Gottfried, Chair of the Committee on Health, Amy Paulin, Chair of the Task Force on People with Disabilities, and James Brennan, former Chair of the Oversight Committee, the report’s major finding was that DOH had been systematically depriving poor people with severe disabilities — many of them children — of wheelchairs and other “durable medical equipment” needed to help reduce their pain, preserve their health, and enable them to live more productive lives.

The report received statewide press:

“. . .The report paints a dysfunctional picture of poor record-keeping; irrelevant or redundant requests for information; unfounded denials, and under-qualified State personnel overruling requests of doctors and specialists for minimal cost savings. . .”

Staten Island Advance

“. . .Through personal anecdotes and data analysis, the Report catalogs how the department frustrated and discouraged Medicaid recipients and their physicians. . .”

Buffalo News

The 48-page report — compiled following two public hearings and a more intensive review of DOH’s “prior approval” process under Medicaid — details the failure of DOH to comply with state regulations and to properly support Medicaid recipients with severe disabilities. According to the lawmakers, DOH’s use and misuse of legal and bureaucratic means to unfairly prevent people with severe disabilities from getting necessary equipment means vulnerable people are hurt and programs face greater spending. Among the problems uncovered in the investigation is that, despite having installed a new, costly computer system ($375 million, with a recently announced $276 million addition), DOH does not track the time it takes to process all prior approval requests even though it is mandated to issue determinations within 21 days. And DOH seems to have been engaging in deliberate measures to “stop the clock” by sending out multiple requests for more information — often irrelevant, redundant and otherwise unreasonable — which can add months onto the process.

The report also charges that:

  • DOH has violated many of the state regulations that guide this process;

  • Clear guidelines are needed to inform applicants about what information to provide when requesting funding to pay for medical equipment or other health-care items;

  • DOH reviewers often overstep their authority and deny medically necessary items, and regularly change requested items to less expensive, inappropriate ones that are ill-suited for the patient;

  • DOH does not know how many prior approval requests come in the door, yet claims to be approving 95 percent of them (which is clearly a misrepresentation);

  • Applicants wait up to a year or more for DOH to reach determinations, and some simply give up;

  • DOH does not do enough to determine whether patients get the equipment for which they were funded, undermining the prevention and detection of fraud and abuse;

  • DOH has not resolved a problem which often precludes people who are dually eligible for both Medicaid and Medicare from getting either insurance, even though several administrative law judges have pointed out remedies.

  • DOH regularly ignores decisions made by Administrative Law Judges, which reverse DOH decisions about 50 percent of the time.

Taken together, these actions prevent Medicaid recipients with severe disabilities from getting what they need to continue living at home and to live independent lives. Federal and state laws, case law, as well as common sense, support the goal of keeping people in their homes and in the community; it is more humane and more cost effective than putting them in nursing homes or other institutional care.

Together with the intensive press scrutiny that contributed to the exposure of DOH’s failures in managing this program, the Committees’ actions have produced some gradual improvement within DOH but much more needs to be done.

The report offers recommendations to improve the durable medical equipment prior- approval system and ensure taxpayer dollars are spent more efficiently. Some of the report’s recommendations include:

  • DOH must comply with its own regulations, especially in regard to the definition of “medically necessary.”

  • DOH must comply with its regulation regarding overruling the opinions of ordering practitioners only if the reviewer is within the same medical profession. (To the extent that the language of the regulation lacks clarity, it should be clarified.)

  • DOH should promulgate clear and concise criteria for prior approval applications.

  • DOH should aggregate and use the data in its system to figure out where the delays are, and take steps to fix the problems identified in this report.

  • DOH should hire appropriate staff with appropriate credentials and experience.

  • DOH must assure that people who are dually eligible for both Medicaid and Medicare are entitled to the same coverage as Medicaid-only recipients.

  • DOH should notify applicants each time a request (in entirety or in part) is pended, denied, rejected, voided, inactivated or omitted, and notify them as to whether the determination applies to all or part of a request so that the applicant is always informed of his or her right to a fair hearing.

  • DOH should conduct post-audits to ensure: 1) recipients get the proper equipment for which they were awarded funding; and, 2) the equipment is working properly and meeting recipients’ needs.

  • Enact legislation requiring DOH to institute a comprehensive, aggressive program of enlisting Medicaid recipients and the public in preventing and uncovering Medicaid fraud, waste, and abuse.

  • DOH should improve the quality of “explanations of medical benefits” (EOMBs) — which DOH sends to recipients to ensure Medicaid payments were accurate — and consider increasing the number sent (since each Medicaid recipient might now receive one every 65 years).

  • DOH should systematically examine the fairness of its “fair hearings,” which are conducted by the New York State Office of Temporary and Disability Assistance.

Albany Office: Room 454, Legislative Office Building
Albany, NY 12248 • 518.455.4886

Committee Office: Agency Building 4, 12th Floor
Albany, NY 12248 • 518.455.3039
PUBLIC EYE #11 (August 2006) is the eleventh in a series of updates from the NYS Assembly Oversight, Analysis and Investigation Committee. Other issues will follow. The Committee is charged with reviewing implementation and adequacy of laws and programs to ensure compliance by the public and government agencies. Through its monitoring and investigative activities, it seeks to determine whether programs are operating as required and whether funds allocated for programs are spent effectively, efficiently and in accordance with legislative intent.

New York State Assembly
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