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SECTION 367-B
Medical assistance information and payment system
Social Services (SOS) CHAPTER 55, ARTICLE 5, TITLE 11
§ 367-b. Medical assistance information and payment system. 1. The
department shall design and implement a statewide medical assistance
information and payments system for the purpose of providing individual
and aggregate data to social services districts to assist them in making
basic management decisions, to the department and other state agencies
to assist in the administration of the medical assistance program, and
to the governor and the legislature as may be necessary to assist in
making major administrative and policy decisions affecting such program.
Such system shall be designed so as to be capable of the following:

a. receiving and processing information relating to the eligibility of
each person applying for medical assistance and of issuing a medical
assistance identification card to persons determined by a social
services official to be eligible for such assistance;

b. receiving and processing information relating to each qualified
provider of medical assistance furnishing care, services or supplies for
which claims for payment are made pursuant to this title;

c. receiving and processing, in a form and manner prescribed by the
department, all claims for medical care, services and supplies, and
making payments for valid claims to providers of medical care, services
and supplies on behalf of social services districts;

d. maintaining information necessary to allow the department,
consistent with the powers and duties of the department of health, to
review the appropriateness, scope and duration of medical care, services
and supplies provided to any eligible person pursuant to this chapter;
and

e. initiating implementation of such a system for the district
comprising the city of New York, in a manner compatible with expansion
of such system to districts other than the district comprising the city
of New York.

2. Consistent with the capabilities of the system established pursuant
to subdivision one of this section, the department shall assume payment
responsibilities on behalf of social services districts by promulgation
of regulations approved by the director of the budget. Such regulations
shall specify the providers of medical assistance and the medical care,
services and/or supplies for the district or districts for which the
department will assume payment responsibilities and the date on which
such responsibilities shall be assumed. Such regulations shall be
published for comment at least thirty days in advance of their
promulgation and shall be filed with the secretary of state at least
sixty days in advance of the date of assumption of responsibilities;
provided, however, that with respect to a particular district the
requirements for advance publications and/or filing may be waived, or
the time limits reduced, with the written consent of the district to
such waiver or reduction. Providers of medical care and services shall
submit claims to the social services district for all items of care,
services and supplies furnished prior to the date of state assumption of
payment responsibilities and to the state for all such items furnished
subsequent to such date. Such regulations shall also specify a final
transition date after which any claiming submitted shall be enforceable
by such provider only against the state and shall not be enforceable by
such provider against the social services district; provided, however,
that the department and the district may enter into a written agreement
by which the department agrees on the basis of eligibility information
provided by such district to pay claims submitted to such district prior
to the final transition date.

3. Upon notice to a social services district in accordance with
subdivision two, that the department intends to assume payment
responsibilities on behalf of such district, (a) such district shall
promptly submit to the department requested information regarding each
person who applies for or has been determined eligible for medical
assistance and each provider of medical assistance in such district; and
(b) notwithstanding the provisions of paragraph (b) of subdivision three
of section three hundred sixty-six-a of this chapter, the department
shall provide each person found by such district to be eligible for
medical assistance under this title with a medical assistance
identification card.

4. Information relating to persons applying for or receiving medical
assistance shall be considered confidential and shall not be disclosed
to persons or agencies other than those considered entitled to such
information in accordance with section one hundred thirty-six when such
disclosure is necessary for the proper administration of public
assistance programs.

5. By no later than forty-five days following the end of each calendar
quarter after the second quarter of calendar year nineteen hundred
seventy-six, the department shall, until full implementation has been
achieved in all social services districts, report to the governor and
the legislature regarding the current status of the medical assistance
information and payment system, summarizing the progress achieved during
the previous quarter and the anticipated major achievements of the
succeeding two calendar quarters. The report shall include the current
and anticipated overall expenditure and staffing levels for functions
relating to the system, and shall specify each district affected or
anticipated to be affected during the succeeding two calendar quarters
and summarize the manner in which each such district is, or is
anticipated to be, affected. In addition, the department shall prepare
and submit to the governor and the legislature a special report
demonstrating the appropriateness and relative cost-effectiveness of
utilizing a fiscal intermediary.

In addition, for the purpose of insuring the compatability of the
system servicing the district comprising the city of New York with the
system servicing all other social services districts in the state, the
department shall prepare and submit to the governor and the legislature
on or before March first, nineteen hundred seventy-eight, a special
report and recommendation covering the appropriateness and relative cost
effectiveness of utilizing a fiscal intermediary or fiscal agent for all
districts other than the district comprising the city of New York.

6. Each social services district shall be responsible for paying to
the state a share of the state's expenditures for claims of providers of
medical assistance attributable to such district, which shall be equal
to the share of such expenditures such district would have borne after
reimbursement from state and federal funds in accordance with section
three hundred sixty-eight-a of this chapter, had the expenditure been
made by such district; provided, however, that no district shall be
responsible for the state's expenditures for the administrative costs of
developing, maintaining or operating the statewide medical assistance
information and payment system; and provided, further, that no district
shall be responsible for paying to the state any portion of the cost of
medical assistance which the department is responsible for furnishing
pursuant to section three hundred sixty-five of this chapter.

7. In any case in which the department has made payments for medical
assistance on behalf of a social services district pursuant to this
section, the commissioner on behalf of the social services official
shall be empowered to bring actions to recover the cost of such
assistance, pursuant to this subdivision and the provisions of title six
of article three of this chapter.

8. (a) For the purpose of orderly and timely implementation of the
medical assistance information and payment system, the department is
hereby authorized to enter into agreements with fiscal intermediaries or
fiscal agents for the design, development, implementation, operation,
processing, auditing and making of payments, subject to audits being
conducted by the state in accordance with the terms of such agreements,
for medical assistance claims under the system described by this section
in any social services district. Such agreements shall specifically
provide that the state shall have complete oversight responsibility for
the fiscal intermediaries' or fiscal agents' performance and shall be
solely responsible for establishing eligibility requirements for
recipients, provider qualifications, rates of payment, investigation of
suspected fraud and abuse, issuance of identification cards,
establishing and maintaining recipient eligibility files, provider
profiles, and conducting state audits of the fiscal intermediaries' or
agents' at least once annually. The system described in this subdivision
shall be operated by one or more fiscal intermediaries or fiscal agents
in accordance with this subdivision unless the department is otherwise
authorized by a law enacted subsequent to the effective date of this
subdivision to operate the system in another manner. In no event shall
such intermediary or agent be a political subdivision of the state or
any other governmental agency or entity. Notwithstanding the foregoing,
the department may make payments to a provider upon the commissioner's
determination that the provider is temporarily unable to comply with
billing requirements. The department shall consult with the office of
Medicaid inspector general regarding any activities undertaken by the
fiscal intermediaries or fiscal agents regarding investigation of
suspected fraud and abuse.

(b) The department of health, in consultation with the office of
Medicaid inspector general, shall develop, test and implement new
methods to strengthen the capability of the medical assistance
information and payment system to detect and control fraud and improve
expenditure accountability, and is hereby authorized to enter into
further agreements with fiscal and/or information technology agents for
the development, testing and implementation of such new methods. Any
such agreements shall be with agents which have demonstrated expertise
in the areas addressed by the agreement. Such methods shall, at a
minimum, address the following areas:

(1) Prepayment claims review. Develop, test and implement an automated
claims review process which, prior to payment, shall subject medical
assistance program services claims to review for proper coding and such
other review as may be deemed necessary. Services subject to review
shall be based on: the expected cost-effectiveness of reviewing such
service; the capabilities of the automated system for conducting such a
review; and the potential to implement such review with negligible
effect on the turnaround of claims for provider payment or on recipient
access to necessary services. Such initiative shall be designed to
provide for the efficient and effective operation of the medical
assistance program claims payment system by performing functions
including, but not limited to, capturing coding errors, misjudgments,
incorrect or multiple billing for the same service and possible excesses
in billing or service use, whether intentional or unintentional.

(2) Coordination of benefits. Develop, test and implement an automated
process to improve the coordination of benefits between the medical
assistance program and other sources of coverage for medical assistance
recipients. Such initiative shall initially examine the savings
potential to the medical assistance program through retrospective review
of claims paid which shall be completed not later than January
thirty-first, two thousand seven. If, based upon such initial
experience, the Medicaid inspector general deems the automated process
to be capable of including or moving to a prospective review, with
negligible effect on the turnaround of claims for provider payment or on
recipient access to services, then the Medicaid inspector general in
subsequent tests shall examine the savings potential through
prospective, pre-claims payment review.

(3) Comprehensive review of paid claims. Take all reasonable and
necessary actions to intensify the state's current level of monitoring,
analyzing, reporting and responding to medical assistance program claims
data maintained by the state's medical assistance information and
payment system contract agents. Pursuant to this initiative, the
department of health, in collaboration with the office of Medicaid
inspector general, shall make efforts to improve the utilization of such
data in order to better identify fraud and abuse within the medical
assistance program and to identify and implement further program and
patient care reforms for the improvement of such program. In addition,
the department of health, in consultation with such contract agents and
the office of Medicaid inspector general, shall identify additional data
elements that are maintained and otherwise accessible by the state,
directly or through any of its contractors, that would, if coordinated
with medical assistance data, further increase the effectiveness of data
analysis for the management of the medical assistance program. To
further the objectives of this subparagraph, the department of health,
in collaboration with the office of Medicaid inspector general, shall
provide or arrange in-service training for state and county medical
assistance personnel to increase the capability for state and local data
analysis, leading to a more cost-effective operation of the medical
assistance program.

(4) Targeted claims and utilization review. Develop, test and
implement an automated process for the targeted review of claims,
services and/or populations not later than January thirty-first, two
thousand seven. Such review shall be for the purposes of identifying
statistical aberrations in the use or billing of such services and for
assisting in the development and implementation of measures to ensure
that service use and billing are appropriate to recipients' needs.

(c) The commissioner of health shall prepare and submit an interim
report to the governor and legislature on the implementation of the
initiatives specified in paragraph (b) of this subdivision no later than
December first, two thousand seven. Such report shall also include
recommendations for any revisions that would further facilitate the
goals of such paragraph, including recommendations for expansion. In
addition, the commissioner of health shall submit a final report not
later than December first, two thousand eight. In preparing such interim
and final reports, the commissioner of health shall consult with the
Medicaid inspector general, third-party agents, providers and recipients
associated with the implementation of paragraph (b) of this subdivision.

9. (a) In order to accomplish a more orderly transition to the medical
assistance information and payment system authorized by this section,
and to continue for a limited transition period the rate at which
advanced revenues have been made available by local governmental units
to certain hospitals providing services to persons eligible for medical
assistance, the department is authorized to promulgate regulations
establishing a system of accelerated payments to hospitals meeting the
criteria set forth in this section.

(b) Such system of accelerated payments shall only be available to a
general hospital, other than a public general hospital:

(i) which prior to January first, nineteen hundred seventy-eight
received regular, periodic and recurring advanced revenues from a local
governmental unit, the amount of which was based on anticipated medical
assistance claims payments; and

(ii) which has demonstrated that its continued financial viability
depends in substantial part on the rate at which such advanced revenues
were made available by local governmental units prior to the time the
department, pursuant to this section, assumed payment for such hospital
responsibilities on behalf of the social services district in which it
is located, taking into account any funds remaining available from the
local governmental unit under its system of advanced revenues. For
purposes of this subdivision, it shall be presumed that a hospital does
not depend in substantial part on the rate at which advanced revenues
were made available by a local governmental unit if it received such
revenues for a period of less than nine months preceding the month in
which the department assumed payment responsibilities for such hospital;

(iii) for which payment responsibility is initially assumed by the
department pursuant to this section during the period beginning June
first, nineteen hundred seventy-eight and ending November thirtieth,
nineteen hundred seventy-eight; and

(iv) which meets performance criteria established by department
regulation relating to the ratio of acceptable claims for patient days
submitted for medical assistance payment compared to the total patient
days of the hospital and compared to such claims submitted in one or
more previous months, and the time lapse between the date the service
was provided and the date the claim was submitted.

(c) The regulations promulgated by the department pursuant to
paragraph (a) of this subdivision shall provide that the amount of the
accelerated payment for any month shall be determined for each hospital
meeting the criteria set forth in this section on the basis of
acceptable medical assistance claims submitted by the hospital in one or
more previous months and the amount of accelerated revenues made
available to the hospital by a local governmental unit prior to the time
the department assumed payment responsibilities for the hospital. The
amount of the accelerated payment for any given month shall not exceed
the amount of a monthly aggregate claim to be submitted by the hospital
to the department, which claim shall reflect items of care, services and
supplies authorized under the medical assistance program pursuant to
this title which are in fact provided prior to the date of the aggregate
claim to persons who have been determined eligible for medical
assistance, or based on the past performance of the hospital are likely
to be determined eligible for medical assistance, when no other source
of payment including third party health insurance and payments pursuant
to title eighteen of the Federal Social Security Act are available for
such items of care, service and supplies. Such aggregate claims shall be
subject to the audit and warrant of the state comptroller.

(d) Any schedule of accelerated payments established by the department
pursuant to this section shall assure that such payments are made for a
period of no more than six months from the month in which the department
assumes payment responsibility for the hospital, and shall provide for
repayment of any amounts in excess of current audited claims, through
reductions in current claims, at a rate that will assure full repayment
at the earliest time consistent with the purposes of this section, but
in no event more than twenty-four months following the month in which
the department assumes payment responsibilities for the hospital.
However, where the commissioner of health has determined with the
concurrence of the state hospital review and planning council that a
hospital has satisfied the department of health regulations and is or
has been authorized to participate in the emergency hospital
reimbursement program pursuant to which repayment of all or part of any
accelerated payments made by the department have been deferred in
accordance with such regulations, notwithstanding the time limitations
set forth above repayment of such deferred amounts shall be made in
accordance with an orderly schedule of repayment established by the
commissioner of health after consultation with the commissioner. In no
event shall any reduction be made against current claims, grant funds or
any amounts due said hospital in settlement of rate appeals, claims or
lawsuits to satisfy such repayment obligations.

(e) In making accelerated payments pursuant to this subdivision and
department regulations, the department shall utilize federal funds made
available, and local funds, for such purposes or for purposes of payment
by the department of medical assistance payments pursuant to this
section.

* 10. a. For the purpose of timely payment, the department is hereby
authorized to develop a concurrent payment system for general hospitals
which elect to participate in the concurrent payment system and which
are included in the payment component of the medical assistance
information and payment system, and to promulgate regulations to govern
such a system. The department may implement the concurrent payment
system for any general hospital which has elected to participate and for
which the department has chosen to implement the system.

b. For all participating general hospitals the department shall
determine a biweekly concurrent payment which shall equal one
twenty-sixth of the portion of the hospital's imputed or certified
inpatient revenue cap (as defined in section twenty-eight hundred
seven-a of the public health law) allocated for medical assistance
payments. The concurrent payment shall be reviewed at the beginning of
each quarter and adjusted to reflect any changes to the inpatient
revenue cap or portion allocated for medical assistance payments.

c. The department shall promulgate regulations, consistent with
federal requirements for participation, governing the concurrent payment
system. The regulations shall address, among other things, the method
of calculating the concurrent payment, the method of reconciliation, the
adjustment of the concurrent payment for the calculated difference, the
manner of eliminating underpayments or overpayments to hospitals in
exceptional circumstances such as significantly changing utilization,
changes in bed or service capacity, or imminent insolvency. The
department shall promulgate regulations establishing a procedure for
recognizing open cases as of the date of reconciliation. The department
shall also promulgate regulations setting forth standards for the
timeliness and quality of billings and may lower the concurrent payment
calculated in accordance with paragraph b of this subdivision for
noncompliance with such regulations.

d. Any payment claims made to the department for days of inpatient
care provided prior to the effective date of this subdivision shall be
paid or denied in accordance with department regulations in effect when
the care was provided.

e. For any general hospital which is not afforded the opportunity of
participating in the concurrent payment system and which is in
compliance with the billing requirements of the department, the
department shall pay any financing or working capital charge levied by
the hospital as authorized in section twenty-eight hundred seven-a of
the public health law.

f. This subdivision shall be effective only if federal participation
is available.

* NB Expires January 1, 1986

11. a. For the purpose of timely payment, the department is hereby
authorized to develop a concurrent payment system for general hospitals
which elect to participate in the concurrent payment system and which
are included in the payment component of the medical assistance
information and payment system, and to promulgate regulations to govern
such a system. The department may implement the concurrent payment
system for any general hospital which has elected to participate and for
which the department has chosen to implement the system.

b. For all participating general hospitals the department shall
determine a biweekly concurrent payment which shall equal one
twenty-sixth of the hospital's estimated yearly inpatient revenue from
medical assistance payments. The concurrent payment shall be reviewed at
the beginning of each quarter and adjusted to reflect any changes to the
rates for medical assistance payments.

c. The department shall promulgate regulations, consistent with
federal requirements for participation, governing the concurrent payment
system. The regulations shall address, among other things, the method
of calculating the concurrent payment, the method of reconciliation, the
adjustment of the concurrent payment for the calculated difference, the
manner of eliminating underpayments or overpayments to hospitals in
exceptional circumstances such as significantly changing utilization,
changes in bed or service capacity, or imminent insolvency. The
department shall promulgate regulations establishing a procedure for
recognizing open cases as of the date of reconciliation. The department
shall promulgate regulations setting forth standards for the timeliness
and quality of billings and may lower the concurrent payment calculated
in accordance with paragraph b of this subdivision for noncompliance
with such regulations.

d. Any payment claims made to the department for days of inpatient
care provided prior to the effective date of this subdivision shall be
paid or denied in accordance with department regulations in effect when
the care was provided.

e. For any general hospital which is not afforded the opportunity of
participating in the concurrent payment system and which is in
compliance with the billing requirements of the department, the
department shall pay any financing or working capital charge levied by
the hospital as authorized in section twenty-eight hundred seven-a of
the public health law.

f. This subdivision shall be effective only if federal participation
is available.

12. (a) For the purpose of regulating cash flow for general hospitals,
the department shall develop and implement a payment methodology to
provide for timely payments for inpatient hospital services eligible for
case based payments per discharge based on diagnosis-related groups
provided during the period January first, nineteen hundred eighty-eight
through March thirty-first two thousand twenty-three, by such hospitals
which elect to participate in the system.

(b) In developing a payment methodology the department shall consider
a system under which hospitals may be reimbursed on the basis of
inpatient admissions, adjusted to payment on the basis of discharge
data, with reconciliations established at time periods specified by the
department. Under such a system variances between amounts paid on an
admission basis and actual amounts due and to be paid on a discharge
basis may be reflected in the amounts to be paid in a subsequent period.

13. Notwithstanding any inconsistent provision of law, in lieu of
payments authorized by this chapter and/or any of the general fund or
special revenue other appropriations made to the office of temporary and
disability assistance and the office of children and family services,
from funds otherwise due to local social services districts or in lieu
of payments of federal funds otherwise due to local social services
districts for programs provided under the federal social security act or
the federal food stamp act or the low income home energy assistance
program, funds in amounts certified by the commissioner of the office of
temporary and disability assistance or the commissioner of the office of
children and family services or the commissioner of health as due from
local social services districts as their share of payments made pursuant
to this section, may be set-aside by the state comptroller in an
interest-bearing account with such interest accruing to the credit of
the locality, pursuant to an estimate provided by the commissioner of
health of a local social services district's share of medical assistance
payments, except that in the case of the city of New York, such
set-aside shall be subject first to the requirements of a section of the
chapter of the laws of two thousand one which enacted this provision,
and then subject to the requirements of paragraph (i) of subdivision (b)
of section two hundred twenty-two-a of chapter four hundred seventy-four
of the laws of nineteen hundred ninety-six prior to the application of
this subdivision. Should funds otherwise payable to a local social
services district from appropriations made to the office of temporary
and disability assistance, the office of children and family services,
and the department of health be insufficient to fully fund the amounts
identified by the commissioner of health as necessary to liquidate the
local share of payments to be made pursuant to this section on behalf of
the local social services district, the commissioner of health may
identify other state or federal payments payable to that local social
services district or any other county agency including, but not limited
to the county department of health, from appropriations made to the
state department of health, and may authorize the state comptroller,
upon no less than five days written notice to such local social services
district or such other county agency, to set-aside such payments in the
interest-bearing account with such interest accruing to the credit of
the locality. Upon such determination by the commissioner of health that
insufficient funds are payable to a local social services district and
any other county agency receiving payments from the office of temporary
and disability assistance, the office of children and family services,
and the state department of health from appropriations made to these
agencies, the state comptroller shall, upon no less than five days
written notice to such local social services district or such other
county agency, withhold payments from any of the general fund - local
assistance accounts or payments made from any of the special revenue -
federal local assistance accounts, provided, however, that such federal
payments shall be withheld only after such federal funds are properly
credited to the county through vouchers, claims or other warrants
properly received, approved, and paid by the state comptroller, and
set-aside such disbursements in the interest-bearing account with such
interest accruing to the credit of the locality until such time that the
amount withheld from each county is determined by the commissioner of
health to be sufficient to fully liquidate the local share of payments,
as estimated by the commissioner of health, to be made pursuant to this
section on behalf of that local social services district.

14. Notwithstanding any other provision of law, effective on or before
January first, two thousand one, the local social services district
share of medical assistance payments made by the state on behalf of the
local social services district shall be paid to the state by the local
social services district using electronic funds transfer under the
supervision of the state comptroller and pursuant to rules and
regulations of the commissioner of health. The state comptroller shall
deposit such funds in the medicaid management information system
statewide escrow fund to the credit of each local district. In the event
that the state comptroller and commissioner of health determine that
there are insufficient funds available from the local district to
liquidate their local share of medical assistance payments, the
commissioner of health shall issue a repayment schedule to the state
comptroller for purposes of reducing reimbursement from other sources of
payment from the state to the city or county of which the local social
services district is a part in accordance with subdivision thirteen of
this section, until the amounts due from the local district are
recovered in full plus any interest that would have otherwise accrued to
the fund had such fund had sufficient balances from the local district.
Upon determination by the state comptroller that insufficient sources of
payment are available to fully liquidate the local social services
district share of medical assistance payments, the commissioner of
health shall include in such schedule a charge to the county equal to
the amount of interest otherwise earned by the state short-term interest
pool, plus any interest penalty as the commissioner of health may
determine, until such time as the district has fully liquidated its
liability pursuant to the provisions of this chapter.