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.