STATE OF NEW YORK
________________________________________________________________________
3184--A
2011-2012 Regular Sessions
IN SENATE
February 10, 2011
___________
Introduced by Sens. LITTLE, LANZA, ADDABBO, BONACIC, CARLUCCI, DeFRAN-
CISCO, GOLDEN, KLEIN, MARTINS, MAZIARZ, McDONALD, SAVINO -- read twice
and ordered printed, and when printed to be committed to the Committee
on Health -- 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 procedures, practices and standards for actions by the
office of medicaid inspector general and social services districts
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 30 of the public health law, as added by chapter
2 442 of the laws of 2006, is amended to read as follows:
3 § 30. Legislative intent. This title establishes an independent office
4 of Medicaid inspector general within the department to consolidate staff
5 and other Medicaid fraud detection, prevention and recovery functions
6 from the relevant governmental entities into a single office, and grants
7 such office new powers and responsibilities. As such, this title is
8 intended to create a more efficient and accountable structure, dramat-
9 ically reorganize and streamline the state's process of detecting and
10 combating Medicaid fraud and abuse and maximize the recoupment of
11 improper Medicaid payments.
12 The legislature recognizes the need to balance the ability of the
13 state to ensure the integrity of the medical assistance program with the
14 need to afford due process to providers and recipients who are investi-
15 gated, audited or subject to other actions, in order to ensure that such
16 actions are conducted in a fair and consistent manner. The legislature
17 also recognizes the need for established statutory standards regarding
18 the conduct of investigations, audits and recovery of payments and other
19 actions.
20 § 2. Section 30-a of the public health law is amended by adding four
21 new subdivisions 4, 5, 6 and 7 to read as follows:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07895-09-1
S. 3184--A 2
1 4. "Provider" means any person or entity enrolled as a provider in the
2 medical assistance program.
3 5. "Recipient" means an individual who is enrolled in the medical
4 assistance program, including an individual who was previously a recipi-
5 ent and, in an appropriate case, an individual who is legally responsi-
6 ble for the recipient.
7 6. "Medical assistance" and "Medicaid" means title eleven of article
8 five of the social services law and the program thereunder.
9 7. "Draft audit report", "initial audit report", "proposed notice of
10 agency action" and "final notice of agency action" means those documents
11 prepared and issued by the inspector under this title and corresponding
12 regulations.
13 § 3. Subdivision 20 of section 32 of the public health law, as added
14 by chapter 442 of the laws of 2006, is amended to read as follows:
15 20. to, consistent with provisions of this title and other applicable
16 federal and state laws, regulations, policies, guidelines and standards,
17 implement and amend, as needed, rules and regulations relating to the
18 prevention, detection, investigation and referral of fraud and abuse
19 within the medical assistance program and the recovery of improperly
20 expended medical assistance program funds;
21 § 4. The public health law is amended by adding two new sections 37
22 and 38 to read as follows:
23 § 37. Procedures, practices and standards. 1. Subject to federal law
24 or regulation, recovery of an overpayment resulting from the issuance of
25 a final audit report or final notice of agency action relating to a
26 monetary penalty by the inspector shall commence not less than sixty
27 days after the issuance of the final audit report or final notice of
28 agency action. The inspector shall not commence any recovery under this
29 subdivision without providing a minimum of ten days advance written
30 notice to the provider.
31 2. Contracts, cost reports, claims, bills or expenditures of medical
32 assistance program funds that were the subject matter of a previous
33 audit or review by or on behalf of the inspector, within the last three
34 years, shall not be subject to review or audit except on the basis of
35 new information, for good cause to believe that the previous review or
36 audit was erroneous, or where the scope of the inspector's review or
37 audit is significantly different from the scope of the previous review
38 or audit, and shall not be subject to a new audit.
39 3. In conducting audits, the inspector shall apply the laws, regu-
40 lations, policies, guidelines, standards and interpretations of the
41 appropriate agency that were in place at the time the subject claim
42 arose or other conduct took place. Disallowances may be imposed or
43 other action taken only for non-compliance with those laws, regulations,
44 policies, guidelines or standards. For purposes of this subdivision, any
45 change in such laws, regulations, policies, guidelines, standards or
46 interpretations shall only be applied prospectively and upon reasonable
47 notice.
48 4. (a) The inspector shall make no recovery from a provider, based on
49 an administrative or technical defect in procedure or documentation made
50 without intent to falsify or defraud, in connection with claims for
51 payment for medically necessary care, services and supplies or the cost
52 thereof as specified in subdivision two of section three hundred sixty-
53 five-a of the social services law provided in other respects appropri-
54 ately to a beneficiary of the medical assistance program, except as
55 provided in paragraph (b) of this subdivision.
S. 3184--A 3
1 (b) Where the basis for recovery is an administrative or technical
2 defect in procedure or documentation without intent to falsify or
3 defraud, the inspector shall afford the provider an opportunity to
4 correct the defect and resubmit the claim within thirty days of notice
5 of the defect.
6 5. (a) The inspector shall furnish to the provider at an audit exit
7 conference or in any draft audit findings issued or to be issued to the
8 provider, a detailed written explanation of the extrapolation method
9 employed, including the size of the sample, the sampling methodology,
10 the defined universe of claims, the specific claims included in the
11 sample, the results of the sample, the assumptions made about the accu-
12 racy and reliability of the sample and the level of confidence in the
13 sample results, and the steps undertaken and statistics utilized to
14 calculate the alleged overpayment and any applicable offset based on the
15 sample results. This written information shall include a description of
16 the sampling and extrapolation methodology.
17 (b) The sampling and extrapolation methodologies used by the inspector
18 shall be statistically reasonably valid for the intended use and shall
19 be established in regulations of the inspector.
20 § 38. Procedures, practices and standards for recipients. 1. This
21 section applies to any adjustment or recovery of a medical assistance
22 payment from a recipient, and any investigation or other proceeding
23 relating thereto.
24 2. At least five business days prior to commencement of any interview
25 with a recipient as part of an investigation, the inspector or other
26 investigating entity shall provide the recipient with written notice of
27 the investigation. The notice of the investigation shall set forth the
28 basis for the investigation; the potential for referral for criminal
29 investigation; the individual's right to be accompanied by a relative,
30 friend, advocate or attorney during questioning; contact information for
31 local legal services offices; the individual's right to decline to be
32 interviewed or participate in an interview but terminate the questioning
33 at any time without loss of benefits; and the right to a fair hearing in
34 the event that the investigation results in a determination of incorrect
35 payment.
36 3. Following completion of the investigation and at least thirty days
37 prior to commencing a recovery or adjustment action or requesting volun-
38 tary repayment, the inspector or other investigating entity shall
39 provide the recipient with written notice of the determination of incor-
40 rect payment to be recovered or adjusted. The notice of determination
41 shall identify the evidence relied upon, set forth the factual conclu-
42 sions of the investigation, and explain the recipient's right to request
43 a fair hearing in order to contest the outcome of the investigation. The
44 explanation of the right to a fair hearing shall conform to the require-
45 ments of subdivision twelve of section twenty-two of the social services
46 law and regulations thereunder.
47 4. A fair hearing under section twenty-two of the social services law
48 shall be available to any recipient who receives a notice of determi-
49 nation under subdivision three of this section, regardless of whether
50 the recipient is still enrolled in the medical assistance program.
51 § 5. Paragraph (b) of subdivision 3 of section 363-d of the social
52 services law, as amended by section 44 of part C of chapter 58 of the
53 laws of 2007, is amended and a new subdivision 5 is added to read as
54 follows:
55 (b) In the event that the commissioner of health or the Medicaid
56 inspector general finds that the provider does not have a satisfactory
S. 3184--A 4
1 program [within ninety days after the effective date of the regulations
2 issued pursuant to subdivision four of this section, the] under this
3 section, the commissioner or Medicaid inspector general shall so notify
4 the provider, including specification of basis of the finding sufficient
5 to enable the provider to adopt a satisfactory compliance program. The
6 provider shall submit to the commissioner or Medicaid inspector general
7 a proposed satisfactory compliance program within sixty days of the
8 notice and shall adopt the program as expeditiously as possible. If the
9 provider does not propose and adopt a satisfactory program in such time
10 period, the provider may be subject to any sanctions or penalties
11 permitted by federal or state laws and regulations, including revocation
12 of the provider's agreement to participate in the medical assistance
13 program.
14 5. Any regulation, determination or finding of the commissioner or the
15 Medicaid inspector general relating to a compliance program under this
16 section shall be subject to and consistent with subdivision three of
17 this section.
18 § 6. This act shall take effect October 1, 2011 and shall apply to any
19 matter commenced or pending on or after such date. However with respect
20 to any matter pending on or after such date, this act shall not invali-
21 date any actions or steps taken or commenced prior to such date and
22 shall only apply to actions or steps commenced on or after such date.
