STATE OF NEW YORK
________________________________________________________________________
4955--A
2025-2026 Regular Sessions
IN SENATE
February 14, 2025
___________
Introduced by Sens. HARCKHAM, ADDABBO, BORRELLO, FERNANDEZ, GALLIVAN,
MAY, MAYER, ROLISON, SEPULVEDA, WEBB -- read twice and ordered print-
ed, 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, 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-
14 curate data entry; computer errors; duplicate claims; and incorrect data
15 items, such as provider number, use of a modifier or date of service.
16 § 2. The public health law is amended by adding a new section 37 to
17 read as follows:
18 § 37. Audit and recovery of medical assistance payments to providers.
19 Any audit or review of any provider contracts, cost reports, claims,
20 bills, or medical assistance payments by the inspector, anyone desig-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02919-06-5
S. 4955--A 2
1 nated by the inspector to conduct such audit or review, shall comply
2 with the following standards:
3 1. Any reviews or audits of provider contracts, cost reports, claims,
4 bills or medical assistance payments shall apply the applicable stand-
5 ard. Prior to commencing an audit or review, the inspector shall provide
6 to the provider access to any applicable standards. For the purpose of
7 this subdivision, an applicable standard shall not be deemed in effect
8 if federal governmental approval was pending or denied at the time the
9 provider engaged in the regulated conduct or provision of services.
10 2. The inspector shall publish the most current version of protocols
11 applicable to and governing any audit or review of a provider or provid-
12 er contracts, cost reports, claims, bills or medical assistance payments
13 on the office of the Medicaid inspector general website in advance of
14 commencing such audit or review, which protocols shall include any and
15 all applicable standards.
16 3. In determining the amount of an overpayment a provider must repay
17 following an audit or review, consistent with subdivision six of section
18 thirty-two of this title, the inspector must consider the following
19 factors:
20 (a) Whether the findings suggest a sustained or high level of payment
21 error;
22 (b) Whether the nature of the error is a clerical or minor error or
23 omission;
24 (c) Impacts to the provider's financial solvency; and
25 (d) The potential for the repayment, if ordered, to negatively impact
26 access to services.
27 4. Any sampling and extrapolation methodologies utilized by the
28 inspector shall be consistent with accepted standards of sound auditing
29 practice and statistical analysis.
30 5. If the inspector determines that the basis of an overpayment is a
31 clerical or minor error or omission, and if the inspector further deter-
32 mines such clerical or minor error or omission are isolated occurrences,
33 limited to three or less, then the inspector shall not apply extrapo-
34 lation in those cases and recoupment will be limited to each such
35 affected audited claim.
36 6. The draft audit report given to the provider shall include the
37 inspector's findings and a detailed written explanation of the extrapo-
38 lation method if used, including the size of the sample, the sampling
39 methodology, the defined universe of claims, the specific claims
40 included in the sample, the results of the sample, the assumptions made
41 about the accuracy and reliability of the sample and the level of confi-
42 dence in the sample results, and the steps undertaken to calculate the
43 alleged overpayment and any applicable offset based on the sample
44 results.
45 7. The inspector shall consider any supporting documentation that the
46 provider submits prior to the issuance of the final audit report that
47 the provider thinks is relevant to the audit, including, but not limited
48 to attestations addressing missing documentation and/or signatures. The
49 inspector shall use the totality of the record to determine if the
50 documentation or signature requirement, as outlined in statute or regu-
51 lation, is met, and/or consider submitted attestations to resolve the
52 issue. If the inspector rejects such supporting documentation, an expla-
53 nation for such rejection shall be provided in writing.
54 8. The inspector's final audit report or final notice of agency action
55 shall include a specific explanation of the inspector's consideration of
S. 4955--A 3
1 the factors described in paragraphs (a) through (d) of subdivision three
2 of this section.
3 9. The inspector shall not foreclose or prohibit the provider from
4 settling through repayment at the lower confidence limit plus applicable
5 interest, even if the provider requests a hearing, up until the hearing
6 determination is issued.
7 10. Neither recoupment by the inspector nor repayment by the provider
8 of overpayments shall commence earlier than sixty days from the issuance
9 date of the final audit report or, if the provider requests a hearing,
10 then sixty days from the issuance date of the hearing determination.
11 11. Nothing in this section shall prevent the inspector from complying
12 with Medicaid audit requirements established by federal law, rules and
13 regulations, or binding federal agency guidance and directives.
14 § 3. The opening paragraph of subdivision 1 of section 35 of the
15 public health law, as added by chapter 442 of the laws of 2006, is
16 amended to read as follows:
17 The inspector shall, no later than October first of each year,
18 [submit] consult with the commissioner on the preparation of an annual
19 report, to be made and filed by the inspector and submitted to the
20 governor, the temporary president of the senate, the speaker of the
21 assembly, the minority leader of the senate, the minority leader of the
22 assembly, the commissioner, the commissioner of the office of addiction
23 services and supports, and the commissioner of the office of mental
24 health, the commissioner of the office of persons with developmental
25 disabilities, the state comptroller and the attorney general[, a report
26 summarizing the activities of the office during the preceding calendar
27 year]. Such report shall include:
28 § 4. Paragraphs (b), (f) and (g) of subdivision 1 of section 35 of the
29 public health law, paragraph (b) as added by chapter 442 of the laws of
30 2006, paragraph (f) as amended and paragraph (g) as added by section 111
31 of part E of chapter 56 of the laws of 2013, are amended and a new para-
32 graph (h) is added to read as follows:
33 (b) the number, subject and other relevant characteristics of audits
34 initiated, and those completed, including but not limited to outcome,
35 region, reason for audit and the total dollar value identified for
36 recovery [and], the actual recovery from such audits and how many audits
37 where overpayments were recovered used extrapolation;
38 (f) a narrative that evaluates the office's performance, describes any
39 specific problems and connection with the procedures and agreements
40 required under this section, discusses any other matters that may have
41 impaired its effectiveness and summarizes the total savings to the
42 state's medical assistance program; [and]
43 (g) a narrative, provided by the department in its annual report
44 pursuant to paragraph (t) of subdivision one of section two hundred six
45 of this chapter that summarizes the department's activities to mitigate
46 fraud, waste and abuse during the preceding calendar year[.]; and
47 (h) a narrative that describes the steps taken by the office in the
48 past year to comply with subdivision six of section thirty-two of this
49 title, which requires consideration of quality and availability of
50 medical and long term care and services and the best interest of both
51 the medical assistance program and recipients, in the pursuit of civil
52 and administrative enforcement actions.
53 § 5. This act shall take effect April 1, 2026.
