N.Y. Social Services Law § 367-b: Medical assistance information and payment system

§ 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-nine, 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.