STATE OF NEW YORK ________________________________________________________________________ 6813--A 2023-2024 Regular Sessions IN ASSEMBLY 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: 1 Section 1. Section 30-a of the public health law, as added by chapter 2 442 of the laws of 2006, is amended to read as follows: 3 § 30-a. Definitions. For the purposes of this title, the following 4 definitions shall apply: 5 1. "Abuse" means provider practices that are inconsistent with sound 6 fiscal, business or medical practices, and result in an unnecessary cost 7 to the Medicaid program, or in reimbursement for services that are not 8 medically necessary or that fail to meet professionally recognized stan- 9 dards for health care. It also includes beneficiary practices that 10 result in unnecessary cost to the Medicaid program. 11 2. "Creditable allegation of fraud" (a) means an allegation which has 12 been verified by the inspector, from any source, including but not 13 limited to the following: 14 i. fraud hotlines tips verified by further evidence; 15 ii. claims data mining; and 16 iii. patterns identified through provider audits, civil false claims 17 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 1 (b) Allegations are considered to be credible when they have an indi- 2 cia of reliability and the inspector has reviewed all allegations, facts 3 and evidence carefully and acts judiciously on a case-by-case basis. 4 3. "Fraud" means an intentional deception or misrepresentation made by 5 a person with the knowledge that the deception or misrepresentation 6 could result in some unauthorized benefit to the person or some other 7 person. It includes any act that constitutes fraud under applicable 8 federal or state law. 9 4. "Inspector" means the Medicaid inspector general created by this 10 title. 11 [2.] 5. "Investigation" means investigations of fraud, abuse, or ille- 12 gal acts perpetrated within the medical assistance program, by providers 13 or recipients of medical assistance care, services and supplies. 14 6. "Medical assistance," "Medicaid," and "recipient" shall have the 15 same meaning as those terms in title eleven of article five of the 16 social services law and shall include any payments to providers under 17 any Medicaid managed care program. 18 [3.] 7. "Office" means the office of the Medicaid inspector general 19 created by this title. 20 8. "Overpayment" shall mean any amount paid to a provider for medical 21 assistance in excess of the amount allowable under the state plan for 22 medical assistance in effect at the time of such service, or allowable 23 under any federally approved Medicaid waiver, experiment, pilot, or 24 demonstration project. Notwithstanding any state law to the contrary, an 25 overpayment shall not include circumstances of provider noncompliance 26 with state laws, regulations or applicable promulgated state agency 27 policies, guidelines, standards, protocols or interpretations which are 28 not a condition of payment, unless the provider obtained payment by 29 fraud or deceit, or where the provider was previously provided notice of 30 its failure to comply and has failed to correct such noncompliance. An 31 overpayment shall not include noncompliance with any applicable promul- 32 gated state agency policies, guidelines, standards, protocols or inter- 33 pretations where such policy, guideline, standard, protocol or interpre- 34 tation is facially, or as applied, reasonably susceptible to more than 35 one meaning, provided the provider complied with one such reasonable 36 meaning. 37 9. "Provider" means any person or entity enrolled as a provider in the 38 medical assistance program. 39 § 2. Subdivision 20 of section 32 of the public health law, as added 40 by chapter 442 of the laws of 2006, is amended to read as follows: 41 20. to, consistent with [provisions of] this title and applicable 42 federal laws, regulations, policies, guidelines and standards, implement 43 and amend, as needed, rules and regulations relating to the prevention, 44 detection, investigation and referral of fraud and abuse within the 45 medical assistance program and the recovery of improperly expended 46 medical assistance program funds; 47 § 3. The public health law is amended by adding two new sections 37 48 and 38 to read as follows: 49 § 37. Audit and recovery of medical assistance payments to providers. 50 Any audit or review of any provider contracts, cost reports, claims, 51 bills, or medical assistance payments by the inspector, anyone desig- 52 nated by the inspector or otherwise lawfully authorized to conduct such 53 audit or review, or any other agency with jurisdiction to conduct such 54 audit or review, shall comply with the following standards: 55 1. Recovery of any overpayment resulting from any audit or review of 56 provider contracts, cost reports, claims, bills, or medical assistance
A. 6813--A 3 1 payments shall not commence prior to sixty days after delivery to the 2 provider of a final audit report or final notice of agency action, or 3 where the provider requests a hearing or appeal within sixty days of 4 delivery of the final audit report or final notice of agency action, 5 until a final determination of such hearing or appeal is made. 6 2. Provider contracts, cost reports, claims, bills or medical assist- 7 ance payments that were the subject matter of a previous audit or review 8 within the last three years shall not be subject to review or audit 9 again except on the basis of new information, for good cause to believe 10 that the previous review or audit was erroneous, or where the scope of 11 the inspector's review or audit is significantly different from the 12 scope of the previous review or audit. 13 3. Any reviews or audits of provider contracts, cost reports, claims, 14 bills or medical assistance payments shall apply the state laws, regu- 15 lations and the applicable, duly promulgated policies, guidelines, stan- 16 dards, protocols and interpretations of state agencies with jurisdiction 17 and in effect at the time the provider engaged in the applicable regu- 18 lated conduct or provision of services. For the purpose of this subdi- 19 vision, the state law, regulation or the applicable promulgated agency 20 policy, guideline, standard, protocol or interpretation shall not be 21 deemed in effect if federal governmental approval is pending or denied. 22 The inspector shall publish protocols applicable to and governing any 23 audit or review of a provider or provider contracts, cost reports, 24 claims, bills or medical assistance payments on the office of Medicaid 25 inspector general website. 26 4. (a) In the event of any overpayment based upon a provider's admin- 27 istrative or technical error, the provider shall have the longer of 28 sixty days from notice of the mistake or six years from the date of 29 service to submit a corrected claim provided (i) the error was a genuine 30 error without intent to falsify or defraud, (ii) the provider maintained 31 contemporaneous documentation to substantiate the correct claims infor- 32 mation, (iii) such error is the sole basis for the finding of an over- 33 payment, and (iv) there is no finding of any overpayment for such error 34 by a federal agency or official. 35 (b) No overpayment shall be calculated for any administrative or tech- 36 nical error corrected as required in paragraph (a) of this subdivision. 37 (c) "Administrative or technical error" shall include any error that 38 constitutes either a (i) minor error or omission or (ii)clerical error 39 or omission under the Medicare modernization act or centers for Medicaid 40 and Medicaid service regulations, and shall include human and clerical 41 errors that result in errors as to form or content of a claim. 42 5. (a) In determining the amount of any overpayment to a provider, the 43 inspector shall utilize sampling and extrapolation consistent with the 44 Centers for Medicare and Medicaid services policies as described in the 45 Centers for Medicare and Medicaid program integrity manual. 46 (b) The final audit report or final notice of agency action shall 47 include a statement of the specific factual and legal basis for utiliz- 48 ing extrapolation and the inappropriate use of extrapolation shall be a 49 basis for appeal. This subdivision shall not be construed to limit the 50 recoupment of an overpayment identified without the use of extrapo- 51 lation. 52 (c) Until the provider has waived its right to a hearing, or if a 53 provider requests a hearing, until the hearing determination is issued, 54 the provider shall have the right to pay the lower confidence limit plus 55 applicable interest in fulfillment of this paragraph, the applicable
A. 6813--A 4 1 lower confidence limit shall be calculated using at least a ninety 2 percent confidence level. 3 6. (a) The provider shall be provided as part of the draft audit find- 4 ings a detailed written explanation of the extrapolation method 5 employed, including the size of the sample, the sampling methodology, 6 the defined universe of claims, the specific claims included in the 7 sample, the results of the sample, the assumptions made about the accu- 8 racy and reliability of the sample and the level of confidence in the 9 sample results, and the steps undertaken and statistical methodology 10 utilized to calculate the alleged overpayment and any applicable offset 11 based on the sample results. This written information shall include a 12 description of the sampling and extrapolation methodology. 13 (b) The sampling and extrapolation methodologies utilized by the 14 inspector shall be consistent with accepted standards of sound auditing 15 practice and statistical analysis. 16 7. The requirements of this section shall be interpreted consistent 17 with and subject to any applicable federal law, rules and regulations, 18 or binding federal agency guidance and directives. The requirements of 19 this section shall not apply to any investigation by the inspector where 20 there is credible allegations of fraud or where there is a finding that 21 the provider has engaged in deliberate abuse of the medical assistance 22 program. 23 § 38. Procedures, practices and standards for recipients. 1. This 24 section applies to any adjustment or recovery of a medical assistance 25 payment from a recipient, and any investigation or other proceeding 26 relating thereto. 27 2. At least five business days prior to commencement of any interview 28 with a recipient as part of an investigation, the inspector or other 29 investigating entity shall provide the recipient with written notice of 30 the investigation. The notice of the investigation shall set forth the 31 basis for the investigation; the potential for referral for criminal 32 investigation; the individual's right to be accompanied by a relative, 33 friend, advocate or attorney during questioning; contact information for 34 local legal services offices; the individual's right to decline to be 35 interviewed or participate in an interview but terminate the questioning 36 at any time without loss of benefits; and the right to a fair hearing in 37 the event that the investigation results in a determination of incorrect 38 payment. 39 3. Following completion of the investigation and at least thirty days 40 prior to commencing a recovery or adjustment action or requesting volun- 41 tary repayment, the inspector or other investigating entity shall 42 provide the recipient with written notice of the determination of incor- 43 rect payment to be recovered or adjusted. The notice of determination 44 shall identify the evidence relied upon, set forth the factual conclu- 45 sions of the investigation, and explain the recipient's right to request 46 a fair hearing in order to contest the outcome of the investigation. The 47 explanation of the right to a fair hearing shall conform to the require- 48 ments of subdivision twelve of section twenty-two of the social services 49 law and regulations thereunder. 50 4. A fair hearing under section twenty-two of the social services law 51 shall be available to any recipient who receives a notice of determi- 52 nation under subdivision three of this section, regardless of whether 53 the recipient is still enrolled in the medical assistance program. 54 § 4. Paragraph (c) of subdivision 3 of section 363-d of the social 55 services law, as amended by section 4 of part V of chapter 57 of the
A. 6813--A 5 1 laws of 2019, is amended and a new subdivision 8 is added to read as 2 follows: 3 (c) In the event that the commissioner of health or the Medicaid 4 inspector general finds that the provider does not have a satisfactory 5 program [within ninety days after the effective date of the regulations 6 issued pursuant to subdivision four of this section], the commissioner 7 or Medicaid inspector general shall so notify the provider, including 8 specification of the basis of the finding sufficient to enable the 9 provider to adopt a satisfactory compliance program. The provider shall 10 submit to the commissioner or Medicaid inspector general a proposed 11 satisfactory compliance program within sixty days of the notice and 12 shall adopt the program as expeditiously as possible. If the provider 13 does not propose and adopt a satisfactory program in such time period, 14 the provider may be subject to any sanctions or penalties permitted by 15 federal or state laws and regulations, including revocation of the 16 provider's agreement to participate in the medical assistance program. 17 8. Any regulation, determination or finding of the commissioner or the 18 Medicaid inspector general relating to a compliance program under this 19 section shall be subject to and consistent with subdivision three of 20 this section. 21 § 5. Section 32 of the public health law is amended by adding a new 22 subdivision 6-b to read as follows: 23 6-b. to consult with the commissioner on the preparation of an annual 24 report, to be made and filed by the commissioner on or before the first 25 day of July to the governor, the temporary president of the senate, the 26 speaker of the assembly, the minority leader of the senate, the minority 27 leader of the assembly, the commissioner, the commissioner of the office 28 of addiction services and supports, and the commissioner of the office 29 of mental health on the impacts that all civil and administrative 30 enforcement actions taken under subdivision six of this section in the 31 previous calendar year will have and have had on the quality and avail- 32 ability of medical care and services, the best interests of both the 33 medical assistance program and its recipients, and fiscal solvency of 34 the providers who were subject to the civil or administrative enforce- 35 ment action; 36 § 6. This act shall take effect on the thirtieth day after it shall 37 have become a law.