S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4486
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 5, 2021
                                ___________
 
 Introduced  by Sen. HARCKHAM -- read twice and ordered printed, and when
   printed to be committed to the Committee on Health
 
 AN ACT to amend the public health law,  in  relation  to  providing  the
   Medicaid inspector general coordinate certain audits
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 27 of section 32 of the public  health  law  is
 renumbered  subdivision  28 and a new subdivision 27 is added to read as
 follows:
   27. TO WORK IN A COORDINATED MANNER WITH THE RELEVANT STATE  OVERSIGHT
 AGENCY  FOR  THE PROGRAM THAT IS THE SUBJECT OF THE AUDIT TO ENSURE THAT
 ACCESS TO SERVICES IS NOT ADVERSELY IMPACTED. AUDIT FINDINGS  CONCERNING
 THE  LACK  OF MEDICAL NECESSITY AND AUDIT FINDINGS CONCERNING MISSING OR
 INACCURATE PATIENT CASE OR TREATMENT RECORDS SHALL NOT  BE  EXTRAPOLATED
 UNLESS FRAUD AND/OR ABUSE ARE DETECTED.
   § 2. This act shall take effect immediately.
 
 
 
 
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06411-01-1



              

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4486--A
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 5, 2021
                                ___________
 
 Introduced  by Sen. HARCKHAM -- read twice and ordered printed, 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 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:
 
   Section  1. 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.
   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.
   §  2.  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  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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06411-02-1
              

 S. 4486--A                          2
 
 within  the  medical  assistance  program and the recovery of improperly
 expended medical assistance program funds;
   §  3.  The  public health law is amended by adding two new sections 37
 and 38 to read as follows:
   § 37. PROCEDURES, PRACTICES AND STANDARDS.  1. SUBJECT TO FEDERAL  LAW
 OR REGULATION, RECOVERY OF AN OVERPAYMENT RESULTING FROM THE ISSUANCE OF
 A  FINAL  AUDIT REPORT OR FINAL NOTICE OF AGENCY ACTION BY THE INSPECTOR
 SHALL COMMENCE NOT LESS THAN SIXTY DAYS AFTER THE ISSUANCE OF THE  FINAL
 AUDIT  REPORT  OR FINAL NOTICE OF AGENCY ACTION. THE INSPECTOR SHALL NOT
 COMMENCE ANY RECOVERY UNDER THIS SUBDIVISION WITHOUT PROVIDING A MINIMUM
 OF TEN DAYS ADVANCE WRITTEN NOTICE TO THE PROVIDER.
   2. CONTRACTS, COST REPORTS, CLAIMS, BILLS OR EXPENDITURES  OF  MEDICAL
 ASSISTANCE  FUNDS  THAT  WERE  THE SUBJECT MATTER OF A PREVIOUS AUDIT OR
 REVIEW BY OR ON BEHALF OF THE INSPECTOR, WITHIN THE  LAST  THREE  YEARS,
 SHALL NOT BE SUBJECT AGAIN TO REVIEW OR AUDIT 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.
   3. IN CONDUCTING REVIEWS OR AUDITS,  THE  INSPECTOR  SHALL  APPLY  THE
 LAWS,  REGULATIONS,  POLICIES, GUIDELINES, STANDARDS AND INTERPRETATIONS
 OF THE APPROPRIATE AGENCY, INCLUDING TEMPORARY OR EMERGENCY REGULATIONS,
 POLICIES, GUIDELINES, STANDARDS AND INTERPRETATIONS, 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 THOSE LAWS, REGULATIONS,
 POLICIES, GUIDELINES, STANDARDS OR INTERPRETATIONS SHALL ONLY BE APPLIED
 PROSPECTIVELY AND UPON REASONABLE NOTICE.
   4. (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-
 ATELY  TO  A  BENEFICIARY  OF  THE MEDICAL ASSISTANCE PROGRAM, EXCEPT AS
 PROVIDED IN PARAGRAPHS (B) AND (C) OF THIS SUBDIVISION.
   (B) WHERE THERE 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 THIRTY DAYS OF NOTICE OF THE DEFECT.
   (C) WHERE A CLAIM RELATES TO A SERVICE THAT WAS PROVIDED MORE THAN TWO
 YEARS PRIOR TO THE COMMENCEMENT OF THE AUDIT, THE PROVIDER MAY SUBMIT OR
 RESUBMIT  THE  CLAIM  OR  ACCEPT  THE  DISALLOWANCE OF THE AMOUNT OF THE
 CLAIM.
   (D) THE INSPECTOR SHALL NOT USE EXTRAPOLATION IN RECOVERIES MADE UNDER
 THIS SUBDIVISION.
   5. (A) THE INSPECTOR SHALL FURNISH TO THE PROVIDER AT  AN  AUDIT  EXIT
 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

 S. 4486--A                          3
 
 SAMPLE RESULTS. THIS WRITTEN INFORMATION SHALL INCLUDE A DESCRIPTION  OF
 THE SAMPLING AND EXTRAPOLATION METHODOLOGY.
   (B) 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.
   § 38. PROCEDURES, PRACTICES AND  STANDARDS  FOR  RECIPIENTS.  1.  THIS
 SECTION  APPLIES  TO  ANY ADJUSTMENT OR RECOVERY OF A MEDICAL ASSISTANCE
 PAYMENT FROM A RECIPIENT, AND  ANY  INVESTIGATION  OR  OTHER  PROCEEDING
 RELATING THERETO.
   2.  AT LEAST FIVE BUSINESS DAYS PRIOR TO COMMENCEMENT OF ANY INTERVIEW
 WITH A RECIPIENT AS PART OF AN INVESTIGATION,  THE  INSPECTOR  OR  OTHER
 INVESTIGATING  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
 INVESTIGATION; THE INDIVIDUAL'S RIGHT TO BE ACCOMPANIED BY  A  RELATIVE,
 FRIEND, ADVOCATE OR ATTORNEY DURING QUESTIONING; CONTACT INFORMATION FOR
 LOCAL  LEGAL  SERVICES  OFFICES; THE INDIVIDUAL'S RIGHT TO DECLINE TO BE
 INTERVIEWED 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. FOLLOWING COMPLETION OF THE INVESTIGATION AND AT LEAST THIRTY  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.
   4. 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 THREE OF THIS SECTION,  REGARDLESS  OF  WHETHER
 THE RECIPIENT IS STILL ENROLLED IN THE MEDICAL ASSISTANCE PROGRAM.
   §  4.  Paragraph  (c)  of subdivision 3 of section 363-d of the social
 services law, as amended by section 4 of part V of  chapter  57  of  the
 laws  of  2019,  is  amended and a new subdivision 8 is added to read as
 follows:
   (c) 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 COMMISSIONER
 OR MEDICAID INSPECTOR GENERAL SHALL SO NOTIFY  THE  PROVIDER,  INCLUDING
 SPECIFICATION  OF  THE  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.
   8. ANY REGULATION, DETERMINATION OR FINDING OF THE COMMISSIONER OR THE
 MEDICAID  INSPECTOR  GENERAL RELATING TO A COMPLIANCE PROGRAM UNDER THIS

 S. 4486--A                          4
 
 SECTION SHALL BE SUBJECT TO AND CONSISTENT  WITH  SUBDIVISION  THREE  OF
 THIS SECTION.
   §  5.  Section  32 of the public health law is amended by adding a new
 subdivision 6-b to read as follows:
   6-B. TO FILE AN ANNUAL REPORT ON OR BEFORE THE FIRST DAY  OF  JULY  TO
 THE  GOVERNOR, THE TEMPORARY PRESIDENT OF THE SENATE, THE SPEAKER OF THE
 ASSEMBLY, THE MINORITY LEADER OF THE SENATE, THE MINORITY LEADER OF  THE
 ASSEMBLY,  THE COMMISSIONER, THE COMMISSIONER OF THE OFFICE OF ADDICTION
 SERVICES AND SUPPORTS, AND THE COMMISSIONER  OF  THE  OFFICE  OF  MENTAL
 HEALTH  ON  THE  IMPACTS  THAT  ALL CIVIL AND ADMINISTRATIVE ENFORCEMENT
 ACTIONS TAKEN UNDER SUBDIVISION SIX OF  THIS  SECTION  IN  THE  PREVIOUS
 CALENDAR  YEAR WILL HAVE AND HAVE HAD ON THE QUALITY AND AVAILABILITY OF
 MEDICAL CARE AND SERVICES,  THE  BEST  INTERESTS  OF  BOTH  THE  MEDICAL
 ASSISTANCE  PROGRAM  AND  ITS  RECIPIENTS,  AND  FISCAL  SOLVENCY OF THE
 PROVIDERS WHO WERE SUBJECT TO THE CIVIL  OR  ADMINISTRATIVE  ENFORCEMENT
 ACTION;
   § 6. This act shall take effect immediately.