S T A T E O F N E W Y O R K
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10464
I N A S S E M B L Y
March 6, 2026
___________
Introduced by M. of A. GRAY -- read once and referred to the Committee
on Health
AN ACT to amend the public health law and the social services law, in
relation to Medicaid accountability
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative findings and intent. 1. The legislature finds
that audits and reviews conducted by the state comptroller, the office
of the Medicaid inspector general, and other oversight entities have
repeatedly identified improper Medicaid payments arising from enrollment
inaccuracies, delayed eligibility verification, claims processing weak-
nesses, and inconsistent follow-through after audit findings. Such
improper payments include payments made on behalf of individuals who are
deceased, duplicatively enrolled, not a resident of New York State, no
longer eligible, or otherwise inaccurately reflected in program records.
2. The legislature further finds that improving payment accuracy
requires clear statutory expectations, predictable administrative proc-
esses, and timely corrective action, while maintaining continuity of
care for eligible beneficiaries and operational clarity for managed care
plans and providers.
3. The purpose of this act is to strengthen Medicaid payment account-
ability by requiring routine eligibility verification cross-checks,
mandating audits in defined high-risk areas, establishing structured
payment safeguards with notice and response periods, and authorizing
limited verification tools to confirm service delivery, while preserving
existing eligibility standards, benefits, and due process protections.
§ 2. The public health law is amended by adding three new sections 37,
38 and 39 to read as follows:
§ 37. ROUTINE ELIGIBILITY AND ENROLLMENT VERIFICATION. 1. THE DEPART-
MENT, IN COORDINATION WITH THE OFFICE AND THE OFFICE OF TEMPORARY AND
DISABILITY ASSISTANCE, SHALL CONDUCT CROSS-CHECKS OF MEDICAID ENROLLMENT
DATA NO LESS THAN ONCE ANNUALLY, FOR THE PURPOSE OF VERIFYING ONGOING
ELIGIBILITY AND ENROLLMENT ACCURACY.
2. SUCH CROSS-CHECKS SHALL INCLUDE, BUT NOT BE LIMITED TO:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14878-02-6
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(A) STATE AND FEDERAL DEATH RECORDS;
(B) DUPLICATIVE OR MULTIPLE ACTIVE ENROLLMENTS ACROSS ELIGIBILITY
CATEGORIES OR GEOGRAPHIC JURISDICTIONS;
(C) RESIDENCY INDICATORS RELEVANT TO MEDICAID ELIGIBILITY AND MANAGED
CARE PROGRAM ENROLLMENT PURSUANT TO SECTION THREE HUNDRED SIXTY-FOUR-J
OF THE SOCIAL SERVICES LAW;
(D) LAWFULLY AVAILABLE FEDERAL ELIGIBILITY VERIFICATION DATA, INCLUD-
ING IMMIGRATION-RELATED ELIGIBILITY INFORMATION, TO THE EXTENT PERMITTED
UNDER FEDERAL LAW AND SOLELY FOR THE PURPOSE OF VERIFYING MEDICAID
ELIGIBILITY OR ENROLLMENT CATEGORY; AND
(E) SUCH OTHER DATA SOURCES AS THE COMMISSIONER DETERMINES NECESSARY
TO CONFIRM ELIGIBILITY ACCURACY.
3. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO:
(A) ALTER MEDICAID ELIGIBILITY STANDARDS;
(B) EXPAND THE USE OF IMMIGRATION-RELATED INFORMATION BEYOND ELIGIBIL-
ITY VERIFICATION PURPOSES PERMITTED UNDER FEDERAL LAW; OR
(C) PERMIT THE DENIAL, SUSPENSION OR TERMINATION OF COVERAGE WITHOUT
APPROPRIATE NOTICE, OPPORTUNITY TO RESPOND, AND DUE PROCESS AS OTHERWISE
REQUIRED BY LAW.
4. IMPLEMENTATION OF THE PROVISIONS OF THIS SECTION SHALL OCCUR PURSU-
ANT TO A PHASED SCHEDULE ESTABLISHED BY THE DEPARTMENT TO ENSURE OPERA-
TIONAL READINESS.
§ 38. MEDICAID AUDIT REQUIREMENTS. 1. THE OFFICE, IN CONSULTATION WITH
THE DEPARTMENT, SHALL CONDUCT RECURRING ANNUAL AUDITS OF MEDICAID
PROGRAM AREAS IDENTIFIED AS PRESENTING AN ELEVATED RISK OF IMPROPER
PAYMENTS.
2. AT A MINIMUM, SUCH AUDITS SHALL INCLUDE REVIEWS OF:
(A) MANAGED CARE PROGRAM PREMIUM PAYMENTS MADE PURSUANT TO SECTION
THREE HUNDRED SIXTY-FOUR-J OF THE SOCIAL SERVICES LAW AND ENROLLMENT
ACCURACY;
(B) CLAIMS PROCESSING SYSTEMS, EDITS, AND PAYMENT CONTROLS;
(C) HOSPITAL BILLING CLASSIFICATION, INCLUDING INPATIENT AND OUTPA-
TIENT SITE-OF-SERVICE ACCURACY; AND
(D) SERVICE VERIFICATION AND PROGRAM INTEGRITY CONTROLS, INCLUDING
ELECTRONIC VISIT VERIFICATION WHERE APPLICABLE.
3. AUDITS CONDUCTED PURSUANT TO THIS SECTION SHALL REQUIRE:
(A) WRITTEN CORRECTIVE ACTION PLANS WITH DEFINED IMPLEMENTATION TIME-
LINES PROMULGATED BY THE DEPARTMENT;
(B) RECOVERY OF IMPROPER PAYMENTS WHERE IDENTIFIED, CONSISTENT WITH
STATE AND FEDERAL LAW; AND
(C) ESCALATION MEASURES, INCLUDING SYSTEMS CHANGES OR PAYMENT SAFE-
GUARDS, WHEN THE SAME MATERIAL DEFICIENCIES ARE IDENTIFIED IN SUCCESSIVE
AUDITS.
4. IMPLEMENTATION OF THE PROVISIONS OF THIS SECTION SHALL OCCUR PURSU-
ANT TO A PHASED SCHEDULE ESTABLISHED BY THE DEPARTMENT TO ENSURE OPERA-
TIONAL READINESS.
§ 39. BIOMETRIC VERIFICATION PILOT PROGRAM. 1. THE DEPARTMENT SHALL
ESTABLISH A LIMITED, TIME-BOUND BIOMETRIC VERIFICATION PILOT PROGRAM FOR
THE PURPOSE OF CONFIRMING SERVICE DELIVERY OR BENEFICIARY IDENTITY IN
MEDICAID PROGRAMS OR MANAGED CARE PROGRAM SETTINGS IDENTIFIED AS
PRESENTING A HEIGHTENED RISK OF IMPROPER PAYMENTS.
2. SUCH PILOT PROGRAM SHALL BE SUBJECT TO THE FOLLOWING LIMITATIONS
AND SAFEGUARDS:
(A) USE SHALL BE LIMITED TO POINT-OF-SERVICE OR POINT-OF-DELIVERY
VERIFICATION;
(B) FACIAL RECOGNITION TECHNOLOGY SHALL BE EXPRESSLY PROHIBITED;
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(C) BIOMETRIC DATA, OTHER THAN FACIAL RECOGNITION DATA, SHALL BE
STORED SOLELY AS ENCRYPTED, NON-REVERSIBLE TEMPLATES AND NOT AS IMAGES;
(D) BIOMETRIC DATA, OTHER THAN FACIAL RECOGNITION DATA, SHALL BE USED
EXCLUSIVELY FOR MEDICAID PROGRAM INTEGRITY PURPOSES; AND
(E) DATA RETENTION, ACCESS, AND DESTRUCTION STANDARDS SHALL BE ESTAB-
LISHED BY REGULATION BY THE DEPARTMENT.
3. PARTICIPATION IN VERIFICATION PROCEDURES REQUIRED UNDER THIS
SECTION SHALL BE A CONDITION OF INITIAL AND CONTINUED ELIGIBILITY IN
MEDICAID PROGRAMS AND MANAGED CARE PROGRAMS PURSUANT TO SECTION THREE
HUNDRED SIXTY-FOUR-J OF THE SOCIAL SERVICES LAW. THE DEPARTMENT SHALL
PROVIDE REASONABLE ACCOMMODATIONS AND NON-BIOMETRIC ALTERNATIVES FOR
INDIVIDUALS WITH DISABILITIES OR DOCUMENTED HARDSHIP. NO INDIVIDUAL
SHALL BE TERMINATED OR DENIED MEDICALLY NECESSARY SERVICES WITHOUT PRIOR
WRITTEN NOTICE AND OPPORTUNITY FOR A FAIR HEARING IN ACCORDANCE WITH
EXISTING MEDICAID DUE PROCESS REQUIREMENTS.
4. THE DEPARTMENT SHALL EVALUATE THE EFFECTIVENESS, ADMINISTRATIVE
BURDEN, PRIVACY IMPACTS, AND FISCAL OUTCOMES OF THE PILOT PROGRAM AND
REPORT SUCH FINDINGS TO THE LEGISLATURE.
§ 3. Section 35 of the public health law is amended by adding a new
subdivision 4 to read as follows:
4. THE INSPECTOR AND THE DEPARTMENT SHALL SUBMIT REPORTS TO THE LEGIS-
LATURE, AT LEAST ANNUALLY, SUMMARIZING AUDIT FINDINGS PURSUANT TO
SECTION THIRTY-EIGHT OF THIS ARTICLE, CORRECTIVE ACTIONS TAKEN, AMOUNTS
RECOVERED OR AVOIDED BY SUCH ACTIONS, MANAGED CARE PROGRAM PAYMENT SAFE-
GUARDS APPLIED PURSUANT TO SUBDIVISION FORTY-ONE OF SECTION THREE
HUNDRED SIXTY-FOUR-J OF THE SOCIAL SERVICES LAW, AND THE RESULTS OF THE
BIOMETRIC VERIFICATION PILOT IMPLEMENTED PURSUANT TO SECTION THIRTY-NINE
OF THIS ARTICLE.
§ 4. Section 364-j of the social services law is amended by adding a
new subdivision 41 to read as follows:
41. (A) THE MANAGED CARE PROGRAM SHALL PROVIDE PAYMENT SAFEGUARDS
CONSISTENT WITH THE FOLLOWING PROVISIONS:
(I) WHEN ROUTINE VERIFICATION OR AUDIT ACTIVITY PURSUANT TO SECTIONS
THIRTY-SEVEN AND THIRTY-EIGHT OF THE PUBLIC HEALTH LAW IDENTIFY CREDIBLE
AND DOCUMENTED INDICATORS THAT AN INDIVIDUAL MAY NO LONGER BE ELIGIBLE
FOR MEDICAID OR APPROPRIATELY ENROLLED IN A MANAGED CARE PROGRAM, THE
DEPARTMENT OF HEALTH SHALL NOTIFY THE AFFECTED MANAGED CARE PROGRAM AND
INITIATE A VERIFICATION RESOLUTION PROCESS;
(II) DURING SUCH VERIFICATION RESOLUTION PROCESS, AND CONSISTENT WITH
FEDERAL MANAGED CARE REQUIREMENTS, INCLUDING BUT NOT LIMITED TO ACTUARI-
AL SOUNDNESS STANDARDS, THE DEPARTMENT OF HEALTH SHALL DIRECT MANAGED
CARE PROGRAM PREMIUM PAYMENTS ASSOCIATED WITH SUCH INDIVIDUAL TO BE
PLACED INTO ESCROW PENDING A FINAL DETERMINATION OF ELIGIBILITY;
(III) ESCROWED PAYMENTS SHALL BE RELEASED TO THE MANAGED CARE PROGRAM
IF ELIGIBILITY OR ENROLLMENT ACCURACY IS CONFIRMED OR RETAINED FOR
RECOUPMENT IF SUCH MANAGED CARE PROGRAM PREMIUM PAYMENTS ARE DETERMINED
TO BE IMPROPER;
(IV) SUCH MANAGED CARE PROGRAM PREMIUM PAYMENTS DETERMINED TO BE
IMPROPER SHALL BE SUBJECT TO RECOUPMENT IN ACCORDANCE WITH APPLICABLE
STATE AND FEDERAL LAW; AND
(V) THE DEPARTMENT OF HEALTH SHALL ESTABLISH BY REGULATION REASONABLE
RESPONSE TIMEFRAMES FOR MANAGED CARE PROGRAMS TO SUBMIT DOCUMENTATION OR
CORRECTIVE ACTIONS PRIOR TO FURTHER ESCALATION.
(B) IMPLEMENTATION OF THE PROVISIONS OF THIS SUBDIVISION SHALL OCCUR
PURSUANT TO A PHASED SCHEDULE ESTABLISHED BY THE DEPARTMENT OF HEALTH TO
ENSURE OPERATIONAL READINESS.
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§ 5. This act shall take effect immediately; provided, however, that
the amendments to section 364-j of the social services law made by
section four of this act shall not affect the repeal of such section and
shall be deemed repealed therewith.