The New York State Senate

                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3184

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            February 10, 2011
                               ___________

Introduced  by  Sen.  LITTLE -- read twice and ordered printed, and when
  printed to be committed to the Committee on Health

AN ACT to amend the public health law and the social  services  law,  in
  relation  to  fair  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:

  Section  1.  Section  30 of the public health law, as added by chapter
442 of the laws of 2006, is amended to read as follows:
  S 30. Legislative intent. This title establishes an independent office
of Medicaid inspector general within the department to consolidate staff
and other Medicaid fraud detection, prevention  and  recovery  functions
from the relevant governmental entities into a single office, and grants
such  office  new  powers  and  responsibilities. As such, this title is
intended to create a more efficient and accountable  structure,  dramat-
ically  reorganize  and  streamline the state's process of detecting and
combating Medicaid fraud  and  abuse  and  maximize  the  recoupment  of
improper Medicaid payments.
  THE  LEGISLATURE  RECOGNIZES  THE  NEED  TO BALANCE THE ABILITY OF THE
STATE TO ENSURE THE INTEGRITY OF THE MEDICAL ASSISTANCE PROGRAM WITH THE
NEED TO AFFORD DUE PROCESS TO PROVIDERS AND RECIPIENTS WHO ARE  INVESTI-
GATED, AUDITED OR SUBJECT TO OTHER ACTIONS, IN ORDER TO ENSURE THAT SUCH
ACTIONS  ARE  CONDUCTED IN A FAIR AND CONSISTENT MANNER. THE LEGISLATURE
ALSO RECOGNIZES THE NEED FOR ESTABLISHED STATUTORY  STANDARDS  REGARDING
THE CONDUCT OF INVESTIGATIONS, AUDITS AND RECOVERY OF PAYMENTS AND OTHER
ACTIONS.
  S  2.  Section 30-a of the public health law is amended by adding four
new subdivisions 4, 5, 6 and 7 to read as follows:
  4. "PROVIDER" MEANS ANY PERSON OR ENTITY ENROLLED AS A PROVIDER IN THE
MEDICAL ASSISTANCE PROGRAM.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07895-01-1

S. 3184                             2

  5. "RECIPIENT" MEANS AN INDIVIDUAL WHO  IS  ENROLLED  IN  THE  MEDICAL
ASSISTANCE PROGRAM, INCLUDING AN INDIVIDUAL WHO WAS PREVIOUSLY A RECIPI-
ENT  AND, IN AN APPROPRIATE CASE, AN INDIVIDUAL WHO IS LEGALLY RESPONSI-
BLE FOR THE RECIPIENT.
  6.  "MEDICAL  ASSISTANCE" AND "MEDICAID" MEANS TITLE ELEVEN OF ARTICLE
FIVE OF THE SOCIAL SERVICES LAW AND THE PROGRAM THEREUNDER.
  7. "DRAFT AUDIT REPORT", "INITIAL AUDIT REPORT", "PROPOSED  NOTICE  OF
AGENCY ACTION" AND "FINAL NOTICE OF AGENCY ACTION" MEANS THOSE DOCUMENTS
PREPARED  AND ISSUED BY THE INSPECTOR UNDER THIS TITLE AND CORRESPONDING
REGULATIONS.
  S 3. Subdivision 20 of section 32 of the public health law,  as  added
by chapter 442 of the laws of 2006, is amended to read as follows:
  20.  to, consistent with provisions of this title AND OTHER APPLICABLE
FEDERAL AND STATE LAWS, REGULATIONS, POLICIES, GUIDELINES AND STANDARDS,
implement and amend, as needed, rules and regulations  relating  to  the
prevention,  detection,  investigation  and  referral of fraud and abuse
within the medical assistance program and  the  recovery  of  improperly
expended medical assistance program funds;
  S  4.  The  public health law is amended by adding two new sections 37
and 38 to read as follows:
  S 37. FAIR PROCEDURES, PRACTICES AND STANDARDS.  1. NO RECOVERY OF  AN
OVERPAYMENT RESULTING FROM THE ISSUANCE OF A FINAL AUDIT REPORT OR FINAL
NOTICE  OF AGENCY ACTION RELATING TO A MONETARY PENALTY BY THE INSPECTOR
SHALL COMMENCE UNTIL SIXTY DAYS AFTER THE ISSUANCE OF  THE  FINAL  AUDIT
REPORT  OR  FINAL  NOTICE  OF  AGENCY ACTION OR, WHERE AN ADMINISTRATIVE
HEARING HAS BEEN TIMELY REQUESTED BY A PROVIDER, UNTIL AFTER ISSUANCE OF
A DECISION AFTER THE ADMINISTRATIVE HEARING.  THE  INSPECTOR  SHALL  NOT
COMMENCE ANY RECOVERY UNDER THIS SUBDIVISION WITHOUT PROVIDING A MINIMUM
OF THIRTY DAYS ADVANCE WRITTEN NOTICE TO THE PROVIDER.
  2.  A RECOVERY OF AN OVERPAYMENT UNDER SUBDIVISION ONE OF THIS SECTION
SHALL BE MADE AT A RATE NOT  TO  EXCEED  TEN  PERCENT  OF  A  PROVIDER'S
MEDICAL  ASSISTANCE CLAIMS DUE AND PAYABLE FOR EACH BILLING CYCLE DURING
WHICH THE RECOVERY IS SOUGHT, OR SUCH OTHER  AMOUNT  AGREED  ON  BY  THE
INSPECTOR  AND  THE  PROVIDER.  IF ANOTHER EXISTING RECOVERY AGAINST THE
PROVIDER IS CURRENTLY IN EFFECT, THE TOTAL OF ALL  SUCH  RECOVERIES  MAY
NOT EXCEED TEN PERCENT OF A PROVIDER'S MEDICAL ASSISTANCE CLAIMS DUE AND
PAYABLE  FOR  THE  BILLING CYCLE FOR WHICH THE RECOVERIES ARE SOUGHT, OR
SUCH OTHER AMOUNT AGREED ON BY  THE  INSPECTOR  AND  THE  PROVIDER.  THE
INSPECTOR MAY SEEK INTEREST AT A RATE SPECIFIED IN REGULATION THAT SHALL
NOT  EXCEED  NINE  PERCENT  ON ANY OUTSTANDING OVERPAYMENT REMAINING ONE
HUNDRED TWENTY DAYS AFTER THE DATE ON WHICH WRITTEN NOTICE  IS  SENT  TO
THE PROVIDER.  THIS SUBDIVISION SHALL NOT APPLY IN THE CASE OF FRAUD.
  3.  THE  INSPECTOR  SHALL NOT HAVE AUTHORITY TO CONDUCT ANY REVIEWS OR
AUDITS OF CONTRACTS, COST REPORTS,  CLAIMS,  BILLS  OR  EXPENDITURES  OF
MEDICAL  ASSISTANCE  PROGRAM  FUNDS  THAT  WERE  THE SUBJECT MATTER OF A
PREVIOUS AUDIT OR REVIEW BY OR ON BEHALF OF  THE  INSPECTOR,  ANY  OTHER
STATE  OR  LOCAL  GOVERNMENTAL  AGENCY  OR OFFICE OR CONTRACTOR OR AGENT
THEREOF AUTHORIZED TO CONDUCT SUCH REVIEWS OR AUDITS IF  SUCH  AUDIT  OR
REVIEW  WAS  COMPLETED WITHIN THE LAST THREE YEARS, EXCEPT: ON THE BASIS
OF NEW INFORMATION, FOR GOOD CAUSE TO BELIEVE THAT THE  PREVIOUS  REVIEW
OR  AUDIT WAS ERRONEOUS, OR WHERE THE SCOPE OF THE INSPECTOR'S REVIEW OR
AUDIT IS SIGNIFICANTLY DIFFERENT FROM THE SCOPE OF THE  PREVIOUS  REVIEW
OR AUDIT.
  4. THE PERIOD OF ANY AUDIT CONDUCTED BY THE INSPECTOR SHALL NOT EXCEED
THREE  YEARS  UNLESS  A  FINDING  OF  FRAUD OR INTENTIONAL MISCONDUCT IS
ALLEGED IN THE DRAFT AUDIT REPORT OR DRAFT NOTICE OF AGENCY ACTION.

S. 3184                             3

  5. (A) IN CONDUCTING AUDITS OR TAKING OTHER  ACTIONS  BASED  ON  LAWS,
REGULATIONS,  POLICIES,  GUIDELINES, STANDARDS OR INTERPRETATIONS ESTAB-
LISHED OR ENFORCED BY A FEDERAL OR STATE AGENCY, INCLUDING  THE  INSPEC-
TOR,  THE  INSPECTOR SHALL APPLY THE LAWS, REGULATIONS, POLICIES, GUIDE-
LINES,  STANDARDS  AND INTERPRETATIONS OF THAT AGENCY THAT WERE IN PLACE
AT THE TIME THE SUBJECT CLAIM AROSE OR OTHER CONDUCT TOOK PLACE.  DISAL-
LOWANCES MAY BE IMPOSED OR OTHER ACTION TAKEN  ONLY  FOR  NON-COMPLIANCE
WITH  THOSE  LAWS,  REGULATIONS,  POLICIES, GUIDELINES OR STANDARDS. FOR
PURPOSES OF THIS SUBDIVISION, ANY  CHANGE  IN  SUCH  LAWS,  REGULATIONS,
POLICIES, GUIDELINES, STANDARDS OR INTERPRETATIONS SHALL ONLY BE APPLIED
PROSPECTIVELY AND UPON REASONABLE NOTICE.
  (B) TO THE EXTENT THAT THE INSPECTOR SANCTIONS A PROVIDER BASED SOLELY
ON LAWS, REGULATIONS, POLICIES, GUIDELINES, STANDARDS OR INTERPRETATIONS
ENFORCED  BY  A  FEDERAL  OR  STATE AGENCY OTHER THAN THE INSPECTOR, THE
INSPECTOR MAY ONLY IMPOSE A SANCTION CONTEMPORANEOUS WITH, AND NO LONGER
IN DURATION THAN, ANY SUCH SANCTION IMPOSED BY SUCH OTHER  AGENCY.  UPON
THE  EXPIRATION OF ANY SUCH SANCTION BY SUCH OTHER AGENCY, THE INSPECTOR
SHALL IMMEDIATELY REMOVE HIS OR HER SANCTION OF THAT  PROVIDER,  WITHOUT
NEED  BY  THE  PROVIDER  TO REAPPLY TO THE MEDICAL ASSISTANCE PROGRAM TO
BECOME REINSTATED AS A PROVIDER.
  (C) IN ANY ACTION UNDER THIS TITLE, THE  INSPECTOR  SHALL  ACCEPT  ANY
DETERMINATION OF COMPLIANCE MADE BY A GOVERNMENTAL AGENCY WITH JURISDIC-
TION  TO MAKE SUCH A DETERMINATION, UNLESS THE INSPECTOR FINDS THAT SUCH
DETERMINATION OF COMPLIANCE WAS BASED  ON  MISINFORMATION,  WAS  CLEARLY
ERRONEOUS, OR WAS AFFECTED BY FRAUD OR OTHER INTENTIONAL MISCONDUCT.
  6.  AT  LEAST  TEN  DAYS PRIOR TO AN ADMINISTRATIVE HEARING UNDER THIS
TITLE, EACH PARTY TO THE HEARING SHALL  MAKE  A  GOOD  FAITH  EFFORT  TO
DISCLOSE  AT  A PRE-HEARING CONFERENCE THE EVIDENCE IT INTENDS TO INTRO-
DUCE AND A LIST OF WITNESSES IT INTENDS TO PRODUCE AT THE HEARING.  THIS
SUBDIVISION SHALL NOT PROHIBIT EITHER THE INSPECTOR OR THE PROVIDER FROM
INTRODUCING ANY EVIDENCE INCLUDING DOCUMENTARY EVIDENCE OR THE TESTIMONY
FROM A WITNESS THAT WAS NOT DISCLOSED PRIOR TO  OR  AT  THE  PRE-HEARING
CONFERENCE.  THE INSPECTOR SHALL IMMEDIATELY PROVIDE TO THE PROVIDER ANY
EVIDENCE THAT THE INSPECTOR MAY POSSESS OR ACQUIRE  THAT  WOULD  SUPPORT
THE  ALLOWABILITY OR PROPRIETY OF THE PROVIDER'S COST REPORTING, BILLING
OR OTHER PRACTICE OR PRACTICES AT ISSUE IN THE HEARING OR  IS  OTHERWISE
EXCULPATORY. UNLESS ANY EVIDENCE IS DETERMINED BY THE ADMINISTRATIVE LAW
JUDGE  TO  BE  IRRELEVANT  OR IMMATERIAL OR ANY TESTIMONY UNDULY REPETI-
TIOUS, ALL EVIDENCE, INCLUDING BUT NOT LIMITED TO NON  CONTEMPORANEOUSLY
PREPARED  DOCUMENTARY  EVIDENCE, AND ALL TESTIMONY FROM WITNESSES, SHALL
BE ADMITTED BY THE ADMINISTRATIVE LAW JUDGE WHO SHALL GIVE SUCH EVIDENCE
OR TESTIMONY APPROPRIATE WEIGHT IN RENDERING A RECOMMENDATION  OR  DECI-
SION.
  7.  THE  INSPECTOR SHALL MAKE NO RECOVERY FROM A PROVIDER FOR FINDINGS
THAT ARE BASED ON THE ACTIONS OR THE RESPONSIBILITY OF ANOTHER  PROVIDER
OR  GOVERNMENTAL  AGENCY,  UNLESS THE PROVIDER KNEW OR REASONABLY SHOULD
HAVE KNOWN THAT IT WAS CLAIMING PAYMENT TO WHICH IT WAS NOT ENTITLED. IN
ANY RECOVERY SUBJECT TO  THIS  SUBDIVISION,  THE  INSPECTOR  SHALL  SEEK
RECOVERY  PRIMARILY FROM THE PROVIDER BEARING THE PRIMARY RESPONSIBILITY
FOR THE OVERPAYMENT OR IMPROPER PAYMENT.
  8. (A) THE INSPECTOR SHALL MAKE NO RECOVERY FROM A PROVIDER, BASED  ON
AN ADMINISTRATIVE OR TECHNICAL DEFECT IN PROCEDURE OR DOCUMENTATION MADE
WITHOUT  INTENT  TO  FALSIFY  OR  DEFRAUD, IN CONNECTION WITH CLAIMS FOR
PAYMENT FOR MEDICALLY NECESSARY CARE, SERVICES AND SUPPLIES OR THE  COST
THEREOF  AS SPECIFIED IN SUBDIVISION TWO OF SECTION THREE HUNDRED SIXTY-
FIVE-A OF THE SOCIAL SERVICES LAW PROVIDED IN OTHER  RESPECTS  APPROPRI-

S. 3184                             4

ATELY  TO  A  BENEFICIARY  OF  THE MEDICAL ASSISTANCE PROGRAM, EXCEPT AS
PROVIDED IN PARAGRAPH (B) OF THIS SUBDIVISION.
  (B)  WHERE  THE  BASIS  FOR RECOVERY IS AN ADMINISTRATIVE OR TECHNICAL
DEFECT IN PROCEDURE  OR  DOCUMENTATION  WITHOUT  INTENT  TO  FALSIFY  OR
DEFRAUD,  THE  INSPECTOR  SHALL  AFFORD  THE  PROVIDER AN OPPORTUNITY TO
CORRECT THE DEFECT AND RESUBMIT THE CLAIM WITHIN SIXTY DAYS OF NOTICE OF
THE DEFECT. IF A SATISFACTORY CLAIM IS NOT RESUBMITTED UNDER THIS  PARA-
GRAPH, THE INSPECTOR MAY SEEK TO RECOVER UP TO TEN PERCENT OF THE AMOUNT
THAT WOULD OTHERWISE BE RECOVERABLE, EXCEPT THAT WHERE THE DEFECT DETER-
MINED THE QUANTITY OR VALUE OF PAYMENT CLAIMED, THEN THE RECOVERY MAY BE
THE  DIFFERENCE  BETWEEN  THE  AMOUNT  RECEIVED  BY THE PROVIDER AND THE
AMOUNT THAT SHOULD HAVE BEEN RECEIVED IF THE CLAIM  HAD  BEEN  SUBMITTED
PROPERLY.
  9.  (A)  THE  INSPECTOR  SHALL NOT APPLY ANY EXTRAPOLATION METHOD TO A
CATEGORY OF ERROR OR DEFECT WITHIN A SAMPLE UNLESS THE  INSPECTOR  SHALL
FIRST  DETERMINE  THAT THE CATEGORY OF ERROR OR DEFECT IN THE BILLING OR
OTHER PRACTICE IDENTIFIED BY THE  INSPECTOR  IN  THE  SAMPLE  OF  CLAIMS
EXCEEDS  A  RATE  OF FIVE PERCENT WITHIN THE SAMPLE OF CLAIMS, AFTER THE
INSPECTOR AFFORDS THE PROVIDER REASONABLE OPPORTUNITY TO RESPOND TO  THE
INSPECTOR'S  INITIAL  FINDINGS.  HOWEVER,  NOTWITHSTANDING THE PRECEDING
SENTENCE, THE INSPECTOR AND THE PROVIDER MAY AGREE TO THE USE OF EXTRAP-
OLATION.
  (B) THE INSPECTOR SHALL FURNISH TO THE PROVIDER AT AN  AUDIT  ENTRANCE
CONFERENCE  OR IN ANY DRAFT AUDIT FINDINGS ISSUED OR TO BE ISSUED TO THE
PROVIDER, A DETAILED WRITTEN EXPLANATION  OF  THE  EXTRAPOLATION  METHOD
EMPLOYED,  INCLUDING  THE  SIZE OF THE SAMPLE, THE SAMPLING METHODOLOGY,
THE DEFINED UNIVERSE OF CLAIMS, THE  SPECIFIC  CLAIMS  INCLUDED  IN  THE
SAMPLE,  THE RESULTS OF THE SAMPLE, THE ASSUMPTIONS MADE ABOUT THE ACCU-
RACY AND RELIABILITY OF THE SAMPLE AND THE LEVEL OF  CONFIDENCE  IN  THE
SAMPLE  RESULTS,  AND  THE  STEPS  UNDERTAKEN AND STATISTICS UTILIZED TO
CALCULATE THE ALLEGED OVERPAYMENT AND ANY APPLICABLE OFFSET BASED ON THE
SAMPLE RESULTS. THIS WRITTEN INFORMATION SHALL INCLUDE A DESCRIPTION  OF
THE  SAMPLING  AND  EXTRAPOLATION  METHODOLOGY,  IN SUFFICIENT DETAIL TO
PERMIT THE PROVIDER TO TEST AND RECREATE THE  METHODOLOGY  IN  ORDER  TO
PROPERLY  AND  FULLY  DEFEND  ANY  DETERMINATION OF OVERPAYMENT WHICH IS
BASED ON THIS PROCESS.
  (C) THE SAMPLING AND EXTRAPOLATION METHODOLOGIES USED BY THE INSPECTOR
SHALL BE STATISTICALLY REASONABLY VALID FOR THE INTENDED USE  AND  SHALL
BE ESTABLISHED IN REGULATIONS OF THE INSPECTOR.
  10.  ANY  FUNDS  AND INTEREST THEREON DETERMINED BY THE INSPECTOR, THE
COMMISSIONER OR HIS OR HER DESIGNEE, ADMINISTRATIVE PROCEEDING, OR COURT
TO HAVE BEEN IMPROPERLY WITHHELD OR RECOUPED FROM A  PROVIDER  SHALL  BE
REFUNDED TO THE PROVIDER, WITH INTEREST ON THE AMOUNT OF THE WITHHELD OR
RECOUPED  FUNDS  FROM  THE DATE OF WITHHOLDING OR RECOUPMENT THROUGH THE
DATE OF REFUND PAYABLE AT THE SAME RATE AS ANY INTEREST ASSESSED BY  THE
STATE ON RECOUPED FUNDS, TO BE REFUNDED AND PAID TO THE PROVIDER AS SOON
AS  PRACTICABLE BUT IN NO EVENT MORE THAN NINETY DAYS AFTER THE DETERMI-
NATION.
  11. WHERE ANY AUDIT OR  CIVIL  OR  ADMINISTRATIVE  ENFORCEMENT  ACTION
UNDER  THIS  TITLE  WOULD  EITHER (A) RECOUP FROM THE PROVIDER AN AMOUNT
GREATER THAN TEN PERCENT OF THE AMOUNT IT WOULD OTHERWISE  RECEIVE  FROM
THE MEDICAL ASSISTANCE PROGRAM DURING THE PERIOD IN WHICH THE RECOUPMENT
WOULD OCCUR, OR (B) SUSPEND OR TERMINATE THE PROVIDER'S PARTICIPATION IN
THE MEDICAL ASSISTANCE PROGRAM, THE INSPECTOR SHALL DEMONSTRATE THAT THE
ENFORCEMENT ACTION WILL NOT UNDULY JEOPARDIZE THE QUALITY AND AVAILABIL-
ITY  OF  MEDICAL  CARE  AND  SERVICES  IN THE AREA SERVED BY A PROVIDER,

S. 3184                             5

INCLUDING ALTERNATIVES TO THE CARE, SERVICES AND  SUPPLIES  PROVIDED  BY
THE  PROVIDER  AND THE ABILITY OF A PROVIDER TO CONTINUE PROVIDING CARE,
SERVICES AND SUPPLIES AND THE BEST INTEREST OF  THE  MEDICAL  ASSISTANCE
PROGRAM AND MEDICAL ASSISTANCE RECIPIENTS.
  12.  IN CARRYING OUT HIS OR HER DUTIES UNDER THIS TITLE, THE INSPECTOR
SHALL ASSIGN PERSONNEL, AGENTS AND CONTRACTORS WITH  APPROPRIATE  TRAIN-
ING,  EDUCATION,  OR  EXPERTISE  (INCLUDING CLINICAL EXPERTISE WHERE THE
MATTER IN DISPUTE CONCERNS  THE  VALIDITY  OF  THE  PROVIDER'S  CLINICAL
OBSERVATION,  DIAGNOSIS,  TREATMENT,  OR  DOCUMENTATION)  AND  SHALL NOT
ASSIGN ANY PERSON, AGENT OR CONTRACTOR TO CONDUCT,  REVIEW,  OR  PARTIC-
IPATE, DIRECTLY OR INDIRECTLY IN AN AUDIT, REVIEW, EXAMINATION OR INVES-
TIGATION  OF  AN  ENTITY WITH WHICH SUCH PERSON, AGENT OR CONTRACTOR WAS
EMPLOYED OR ASSOCIATED  OR  HAD  A  CONTRACTUAL  RELATIONSHIP  OR  OTHER
ENGAGEMENT  WITH  AT  ANY  TIME PRIOR TO THE COMMENCEMENT OF SUCH AUDIT,
REVIEW, EXAMINATION OR INVESTIGATION.
  13. FOR THE PURPOSES OF  THIS  TITLE,  THERE  SHALL  BE  A  REBUTTABLE
PRESUMPTION  THAT  THE  CLINICAL  OBSERVATION, DIAGNOSIS, TREATMENT, AND
DOCUMENTATION BY A PROVIDER ARE VALID. THE INSPECTOR MAY  NOT  DISALLOW,
RECOVER,  OR  WITHHOLD  A  MEDICAL  ASSISTANCE  PAYMENT  ON THE BASIS OF
MEDICAL NECESSITY OR CLINICAL JUDGMENT OR STANDARDS WITHOUT AFFIRMATIVE-
LY FINDING IN WRITING THAT THE PROVIDER'S CLINICAL OBSERVATION,  DIAGNO-
SIS, TREATMENT, OR DOCUMENTATION IS NOT VALID. SUCH A FINDING MAY NOT BE
RELIED UPON OR USED AS THE BASIS FOR ANY EXTRAPOLATION.
  14. IN CONDUCTING AUDITS, REVIEWS, INVESTIGATIONS, AND CIVIL OR ADMIN-
ISTRATIVE  ACTIONS, THE INSPECTOR SHALL CONSIDER ALL DOCUMENTS AND OTHER
INFORMATION, IN ANY MEDIUM AND IN ANY FORM, SUBMITTED BY A  PROVIDER  OR
SUPPLIER  THAT  ARE  RELEVANT  TO  DETERMINE WHETHER MEDICALLY NECESSARY
COVERED CARE, SERVICES OR SUPPLIES WERE PROVIDED TO AN ELIGIBLE  RECIPI-
ENT.
  15. IN CONDUCTING AUDITS, REVIEWS, INVESTIGATIONS, AND CIVIL OR ADMIN-
ISTRATIVE ACTIONS, THE INSPECTOR SHALL DETERMINE IN WRITING WHICH BOOKS,
PAPERS, RECORDS, AND DOCUMENTS THAT ARE NECESSARY, RELEVANT, AND MATERI-
AL TO A SPECIFIC ACTION THAT THE INSPECTOR MAY SEEK TO INSPECT, COPY, OR
OBTAIN.  THE INSPECTOR SHALL GIVE THE PROVIDER REASONABLE WRITTEN NOTICE
OF THE WRITTEN DETERMINATION PRIOR  TO  SEEKING  TO  INSPECT,  COPY,  OR
OBTAIN THE BOOKS, PAPERS, RECORDS OR DOCUMENTS.
  16. NOTWITHSTANDING ANY LAW OR REGULATION TO THE CONTRARY, THE INSPEC-
TOR  SHALL  MAKE  NO  RECOVERY  BASED  ON THE FAILURE OF THE PROVIDER TO
SUBMIT A CLAIM FOR PAYMENT FOR MEDICAL CARE, SERVICES, OR SUPPLIES WITH-
IN NINETY DAYS OF THE DATE THE MEDICAL CARE, SERVICES, OR SUPPLIES  WERE
FURNISHED, PROVIDED THAT SUCH CLAIM IS SUBMITTED WITHIN TWO YEARS OF THE
DATE FURNISHED.
  S  38.  FAIR  PROCEDURES,  PRACTICES AND STANDARDS FOR RECIPIENTS.  1.
THIS SECTION APPLIES TO ANY ADJUSTMENT OR RECOVERY OF A MEDICAL  ASSIST-
ANCE PAYMENT FROM A RECIPIENT, AND ANY INVESTIGATION OR OTHER PROCEEDING
RELATING  THERETO.  NO  ADJUSTMENT  OR  RECOVERY SUBJECT TO THIS SECTION
SHALL OCCUR UNLESS THE RECIPIENT HAS BEEN AFFORDED  THE  PROTECTIONS  OF
THE  PROCEDURES,  PRACTICES  AND STANDARDS UNDER THIS SECTION, INCLUDING
NOTICE AND HEARING RIGHTS.
  2. AT LEAST TEN DAYS PRIOR TO COMMENCEMENT OF  ANY  INTERVIEW  WITH  A
RECIPIENT  AS  PART OF AN INVESTIGATION, THE INSPECTOR OR OTHER INVESTI-
GATING ENTITY SHALL PROVIDE THE RECIPIENT WITH  WRITTEN  NOTICE  OF  THE
INVESTIGATION. THE NOTICE OF THE INVESTIGATION SHALL SET FORTH THE BASIS
FOR  THE INVESTIGATION; THE POTENTIAL FOR REFERRAL FOR CRIMINAL INVESTI-
GATION; THE INDIVIDUAL'S RIGHT TO BE ACCOMPANIED BY A RELATIVE,  FRIEND,
ADVOCATE  OR  ATTORNEY DURING QUESTIONING; CONTACT INFORMATION FOR LOCAL

S. 3184                             6

LEGAL SERVICES OFFICES; THE INDIVIDUAL'S RIGHT TO DECLINE TO  BE  INTER-
VIEWED  OR  PARTICIPATE IN AN INTERVIEW BUT TERMINATE THE QUESTIONING AT
ANY TIME WITHOUT LOSS OF BENEFITS; AND THE RIGHT TO A  FAIR  HEARING  IN
THE EVENT THAT THE INVESTIGATION RESULTS IN A DETERMINATION OF INCORRECT
PAYMENT.
  3. THE PERIOD THAT IS THE SUBJECT OF AN INVESTIGATION SHALL NOT EXCEED
THREE  YEARS,  UNLESS THE INITIAL NOTICE OF INVESTIGATION UNDER SUBDIVI-
SION TWO OF THIS SECTION INCLUDES ALLEGATIONS OF  FRAUD  OR  INTENTIONAL
MISREPRESENTATION.  DURING  THE  INVESTIGATION,  THE  INSPECTOR OR OTHER
INVESTIGATING ENTITY MAY REQUEST DOCUMENTATION THAT IS RELEVANT  TO  THE
ISSUE OF INELIGIBILITY, AND MAY ENTER INTO AN AGREEMENT WITH THE RECIPI-
ENT  SUBJECT TO THE INVESTIGATION FOR VOLUNTARY REPAYMENTS.  HOWEVER, NO
SUCH AGREEMENT SHALL BE ENTERED  INTO  PRIOR  TO  THE  RECIPIENT  HAVING
ACCESS  TO  PROOF  OF  THE ALLEGATION OF INELIGIBILITY AND THE AMOUNT OF
MEDICAL ASSISTANCE PAYMENT AT ISSUE. IN CASES INVOLVING FINANCIAL  HARD-
SHIP, THE RATE OF REPAYMENT SHALL NOT BE IN EXCESS OF TEN PERCENT OF THE
RECIPIENT'S  HOUSEHOLD  INCOME,  UNLESS  THE  INSPECTOR OR INVESTIGATING
ENTITY AND THE RECIPIENT AGREE TO ANOTHER AMOUNT.
  4. FOLLOWING COMPLETION OF THE INVESTIGATION AND AT LEAST  SIXTY  DAYS
PRIOR TO COMMENCING A RECOVERY OR ADJUSTMENT ACTION OR REQUESTING VOLUN-
TARY  REPAYMENT,  THE  INSPECTOR  OR  OTHER  INVESTIGATING  ENTITY SHALL
PROVIDE THE RECIPIENT WITH WRITTEN NOTICE OF THE DETERMINATION OF INCOR-
RECT PAYMENT TO BE RECOVERED OR ADJUSTED. THE  NOTICE  OF  DETERMINATION
SHALL  IDENTIFY  THE EVIDENCE RELIED UPON, SET FORTH THE FACTUAL CONCLU-
SIONS OF THE INVESTIGATION, AND EXPLAIN THE RECIPIENT'S RIGHT TO REQUEST
A FAIR HEARING IN ORDER TO CONTEST THE OUTCOME OF THE INVESTIGATION. THE
EXPLANATION OF THE RIGHT TO A FAIR HEARING SHALL CONFORM TO THE REQUIRE-
MENTS OF SUBDIVISION TWELVE OF SECTION TWENTY-TWO OF THE SOCIAL SERVICES
LAW AND REGULATIONS THEREUNDER.
  5. A FAIR HEARING UNDER SECTION TWENTY-TWO OF THE SOCIAL SERVICES  LAW
SHALL  BE  AVAILABLE  TO ANY RECIPIENT WHO RECEIVES A NOTICE OF DETERMI-
NATION UNDER SUBDIVISION FOUR OF THIS SECTION, REGARDLESS OF WHETHER THE
RECIPIENT IS STILL ENROLLED IN THE MEDICAL ASSISTANCE PROGRAM. IF A FAIR
HEARING  IS  REQUESTED,  NO  RECOVERY  OR  ADJUSTMENT  ACTION  SHALL  BE
COMMENCED  UNLESS  THE  REQUEST FOR A FAIR HEARING HAS BEEN WITHDRAWN OR
THE FAIR HEARING HAS BEEN HELD AND RESULTED IN AN  UNFAVORABLE  DECISION
TO THE RECIPIENT.
  S  5.  Paragraph  (b)  of subdivision 3 of section 363-d of the social
services law, as amended by section 44 of part C of chapter  58  of  the
laws  of  2007,  is  amended and a new subdivision 5 is added to read as
follows:
  (b) In the event that the  commissioner  of  health  or  the  Medicaid
inspector  general  finds that the provider does not have a satisfactory
program [within ninety days after the effective date of the  regulations
issued  pursuant  to  subdivision  four of this section, the] UNDER THIS
SECTION, THE COMMISSIONER OR MEDICAID INSPECTOR GENERAL SHALL SO  NOTIFY
THE PROVIDER, INCLUDING SPECIFICATION OF BASIS OF THE FINDING SUFFICIENT
TO  ENABLE  THE PROVIDER TO ADOPT A SATISFACTORY COMPLIANCE PROGRAM. THE
provider SHALL SUBMIT TO THE COMMISSIONER OR MEDICAID INSPECTOR  GENERAL
A  PROPOSED  SATISFACTORY  COMPLIANCE  PROGRAM  WITHIN SIXTY DAYS OF THE
NOTICE AND SHALL ADOPT THE PROGRAM AS EXPEDITIOUSLY AS POSSIBLE. IF  THE
PROVIDER  DOES NOT PROPOSE AND ADOPT A SATISFACTORY PROGRAM IN SUCH TIME
PERIOD, THE PROVIDER may  be  subject  to  any  sanctions  or  penalties
permitted by federal or state laws and regulations, including revocation
of  the  provider's  agreement  to participate in the medical assistance
program.

S. 3184                             7

  5. ANY REGULATION, DETERMINATION OR FINDING OF THE COMMISSIONER OR THE
MEDICAID INSPECTOR GENERAL RELATING TO A COMPLIANCE PROGRAM  UNDER  THIS
SECTION  SHALL  BE  SUBJECT  TO AND CONSISTENT WITH SUBDIVISION THREE OF
THIS SECTION.
  S  6.  Subdivision  2  of  section  369  of the social services law is
amended by adding a new paragraph (e) to read as follows:
  (E)(I) MEDICAL ASSISTANCE SHALL BE CONSIDERED INCORRECTLY PAID WHEN AN
INDIVIDUAL HAS RECEIVED AN ADEQUATE EXPLANATION OF HIS OR  HER  DUTY  TO
PROVIDE  OR REPORT INFORMATION RELEVANT TO AN ELIGIBILITY DETERMINATION,
AND, EITHER FAILED TO PROVIDE OR REPORT RELEVANT  INFORMATION  THAT  WAS
KNOWN,  OR UNDER THE CIRCUMSTANCES REASONABLY SHOULD HAVE BEEN KNOWN, BY
THE INDIVIDUAL,  OR  THE  INDIVIDUAL  WAS  RESPONSIBLE  FOR  INTENTIONAL
MISREPRESENTATIONS  OR  FRAUD  DURING THE APPLICATION OR RECERTIFICATION
PROCESS.
  (II) NO ADJUSTMENT OR RECOVERY,  INCLUDING  A  REQUEST  FOR  VOLUNTARY
REPAYMENT, MAY BE MADE AGAINST THE PROPERTY OF ANY INDIVIDUAL ON ACCOUNT
OF  ANY  MEDICAL ASSISTANCE INCORRECTLY PAID TO OR ON BEHALF OF AN INDI-
VIDUAL  UNDER  THIS  TITLE,  EXCEPT  AFTER  AN  INVESTIGATION  HAS  BEEN
COMPLETED  BY  A  SOCIAL  SERVICES DISTRICT OR APPROPRIATE STATE AGENCY,
SUBJECT TO SECTION THIRTY-EIGHT OF THE PUBLIC HEALTH LAW.
  S 7. This act shall take effect on the ninetieth day  after  it  shall
have  become a law and shall apply to any matter commenced or pending on
or after such date.  However with respect to any matter  pending  on  or
after  such  date,  this  act  shall not invalidate any actions or steps
taken or commenced prior to such date and shall only apply to actions or
steps commenced on or after such date.