STATE OF NEW YORK
________________________________________________________________________
1069--B
2025-2026 Regular Sessions
IN ASSEMBLY
January 8, 2025
___________
Introduced by M. of A. PAULIN, ROSENTHAL, VANEL, SIMON, JACOBSON, SANTA-
BARBARA, KELLES, McMAHON, GONZALEZ-ROJAS, BURDICK, JENSEN, BEEPHAN,
LUCAS, LUPARDO, STECK, SHIMSKY, WEPRIN, HEVESI, SEPTIMO, LEVENBERG,
SIMONE, BLUMENCRANZ, SEAWRIGHT, RAMOS, SAYEGH, GIBBS, TAPIA, BRABENEC,
DINOWITZ, RAGA, MEEKS, DAVILA, WOERNER, DE LOS SANTOS, BOLOGNA, BRON-
SON, CLARK, GALLAGHER, KAY, BICHOTTE HERMELYN, GRIFFIN, LUNSFORD,
ANGELINO, GALLAHAN -- read once and referred to the Committee on
Health -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee -- 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, in relation to the functions of
the Medicaid inspector general with respect to audit and review of
medical assistance program funds
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 30-a of the public health law is amended by adding
2 three new subdivisions 4, 5 and 6 to read as follows:
3 4. "Overpayment" shall mean any amount not authorized to be paid under
4 the medical assistance program, whether paid as the result of inaccurate
5 or improper cost reporting, improper claiming, unacceptable practices,
6 fraud, abuse or mistake.
7 5. "Applicable standards" shall mean the state laws, regulations and
8 duly promulgated policies, guidelines, protocols and interpretations of
9 state agencies with jurisdiction in effect at the time the provider
10 engaged in the regulated conduct or provision of services that the
11 inspector general is auditing or reviewing.
12 6. "Clerical or minor error or omission" shall include mathematical or
13 computational mistakes; transposed procedure or diagnostic codes; inac-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02919-08-6
A. 1069--B 2
1 curate data entry; computer errors; duplicate claims; and incorrect data
2 items, such as provider number, use of a modifier or date of service.
3 § 2. The public health law is amended by adding a new section 37 to
4 read as follows:
5 § 37. Audit and recovery of medical assistance payments to providers.
6 Any audit or review of any provider contracts, cost reports, claims,
7 bills, or medical assistance payments by the inspector, anyone desig-
8 nated by the inspector to conduct such audit or review, shall comply
9 with the following standards:
10 1. Any reviews or audits of provider contracts, cost reports, claims,
11 bills or medical assistance payments shall apply the applicable stand-
12 ard. Prior to commencing an audit or review, the inspector shall provide
13 to the provider access to any applicable standards. For the purpose of
14 this subdivision, an applicable standard shall not be deemed in effect
15 if federal governmental approval was pending or denied at the time the
16 provider engaged in the regulated conduct or provision of services.
17 2. The inspector shall publish the most current version of protocols
18 applicable to and governing any audit or review of a provider or provid-
19 er contracts, cost reports, claims, bills or medical assistance payments
20 on the office of the Medicaid inspector general website in advance of
21 commencing such audit or review, which protocols shall include any and
22 all applicable standards.
23 3. In determining the amount of an overpayment a provider must repay
24 following an audit or review, consistent with subdivision six of section
25 thirty-two of this title, the inspector must consider the following
26 factors:
27 (a) Whether the findings suggest a sustained or high level of payment
28 error;
29 (b) Whether the nature of the error is a clerical or minor error or
30 omission;
31 (c) Impacts to the provider's financial solvency; and
32 (d) The potential for the repayment, if ordered, to negatively impact
33 access to services.
34 4. Any sampling and extrapolation methodologies utilized by the
35 inspector shall be consistent with accepted standards of sound auditing
36 practice and statistical analysis.
37 5. If the inspector determines that the basis of an overpayment is a
38 clerical or minor error or omission, and if the inspector further deter-
39 mines such clerical or minor error or omission are isolated occurrences,
40 limited to three or less, then the inspector shall not apply extrapo-
41 lation in those cases and recoupment will be limited to each such
42 affected audited claim.
43 6. The draft audit report given to the provider shall include the
44 inspector's findings and a detailed written explanation of the extrapo-
45 lation method if used, including the size of the sample, the sampling
46 methodology, the defined universe of claims, the specific claims
47 included in the sample, the results of the sample, the assumptions made
48 about the accuracy and reliability of the sample and the level of confi-
49 dence in the sample results, and the steps undertaken to calculate the
50 alleged overpayment and any applicable offset based on the sample
51 results.
52 7. The inspector shall consider any supporting documentation that the
53 provider submits prior to the issuance of the final audit report that
54 the provider thinks is relevant to the audit, including, but not limited
55 to attestations addressing missing documentation and/or signatures. The
56 inspector shall use the totality of the record to determine if the
A. 1069--B 3
1 documentation or signature requirement, as outlined in statute or regu-
2 lation, is met, and/or consider submitted attestations to resolve the
3 issue. If the inspector rejects such supporting documentation, an expla-
4 nation for such rejection shall be provided in writing.
5 8. The inspector's final audit report or final notice of agency action
6 shall include a specific explanation of the inspector's consideration of
7 the factors described in paragraphs (a) through (d) of subdivision three
8 of this section.
9 9. The inspector shall not foreclose or prohibit the provider from
10 settling through repayment at the lower confidence limit plus applicable
11 interest, even if the provider requests a hearing, up until the hearing
12 determination is issued.
13 10. Neither recoupment by the inspector nor repayment by the provider
14 of overpayments shall commence earlier than sixty days from the issuance
15 date of the final audit report or, if the provider requests a hearing,
16 then sixty days from the issuance date of the hearing determination.
17 11. Nothing in this section shall prevent the inspector from complying
18 with Medicaid audit requirements established by federal law, rules and
19 regulations, or binding federal agency guidance and directives.
20 § 3. The opening paragraph of subdivision 1 of section 35 of the
21 public health law, as added by chapter 442 of the laws of 2006, is
22 amended to read as follows:
23 The inspector shall, no later than October first of each year,
24 [submit] consult with the commissioner on the preparation of an annual
25 report, to be made and filed by the inspector and submitted to the
26 governor, the temporary president of the senate, the speaker of the
27 assembly, the minority leader of the senate, the minority leader of the
28 assembly, the commissioner, the commissioner of the office of addiction
29 services and supports, and the commissioner of the office of mental
30 health, the commissioner of the office of persons with developmental
31 disabilities, the state comptroller and the attorney general[, a report
32 summarizing the activities of the office during the preceding calendar
33 year]. Such report shall include:
34 § 4. Paragraphs (b), (f) and (g) of subdivision 1 of section 35 of the
35 public health law, paragraph (b) as added by chapter 442 of the laws of
36 2006, paragraph (f) as amended and paragraph (g) as added by section 111
37 of part E of chapter 56 of the laws of 2013, are amended and a new para-
38 graph (h) is added to read as follows:
39 (b) the number, subject and other relevant characteristics of audits
40 initiated, and those completed, including but not limited to outcome,
41 region, reason for audit and the total dollar value identified for
42 recovery [and], the actual recovery from such audits and how many audits
43 where overpayments were recovered used extrapolation;
44 (f) a narrative that evaluates the office's performance, describes any
45 specific problems and connection with the procedures and agreements
46 required under this section, discusses any other matters that may have
47 impaired its effectiveness and summarizes the total savings to the
48 state's medical assistance program; [and]
49 (g) a narrative, provided by the department in its annual report
50 pursuant to paragraph (t) of subdivision one of section two hundred six
51 of this chapter that summarizes the department's activities to mitigate
52 fraud, waste and abuse during the preceding calendar year[.]; and
53 (h) a narrative that describes the steps taken by the office in the
54 past year to comply with subdivision six of section thirty-two of this
55 title, which requires consideration of quality and availability of
56 medical and long term care and services and the best interest of both
A. 1069--B 4
1 the medical assistance program and recipients, in the pursuit of civil
2 and administrative enforcement actions.
3 § 5. This act shall take effect on the first of April next succeeding
4 the date on which it shall have become a law.
