Bill Text: NY S04888 | 2023-2024 | General Assembly | Amended

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Bill Title: Implements additional restrictions on actions to recover overpayment of certain assistance.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Introduced) 2024-06-07 - COMMITTED TO RULES [S04888 Detail]

Download: New_York-2023-S04888-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         4888--A

                               2023-2024 Regular Sessions

                    IN SENATE

                                    February 16, 2023
                                       ___________

        Introduced  by Sens. RIVERA, HOYLMAN-SIGAL, JACKSON, KAVANAGH, SEPULVEDA
          -- read twice and ordered printed, and when printed to be committed to
          the  Committee  on  Social  Services  --  committee  discharged,  bill
          amended,  ordered reprinted as amended and recommitted to said commit-
          tee

        AN ACT to amend the social services law and the civil practice  law  and
          rules,  in  relation to recovery of overpayment of certain assistance;
          and to repeal certain provisions of the social  services  law  related
          thereto

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Section 104 of the social services law,  subdivision  1  as
     2  amended  by chapter 573 of the laws of 1964, subdivision 2 as amended by
     3  chapter 909 of the laws of 1974, subdivision 3 as added by  chapter  433
     4  of  the  laws  of  1993 and subdivision 4 as added by chapter 340 of the
     5  laws of 2003, is amended to read as follows:
     6    § 104. Recovery from a person discovered  to  have  property.  1.  For
     7  purposes of this section:
     8    (a) "Overpayment" shall include erroneous payments made to an eligible
     9  person in excess of the recipient's needs as defined in this chapter and
    10  erroneous payments made to ineligible persons, including but not limited
    11  to, payments made to such persons pending a fair hearing decision.
    12    (b)  "Recipient"  shall mean any individual who is currently receiving
    13  or at one time received assistance or care as pursuant to the provisions
    14  of this title.
    15    2. A public welfare official may bring an action or  proceeding  in  a
    16  court  of  competent  jurisdiction  against  a [person] recipient who is
    17  discovered to have real or personal property, which resulted in an over-
    18  payment to the recipient, or against the estate or the executors, admin-
    19  istrators and successors in interest of a person who dies  leaving  real
    20  or  personal  property, [if such person, or any one for whose support he

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03579-02-3
        S. 4888--A                          2

     1  is or was liable, received assistance and care during the preceding  ten
     2  years,  and]  and  there  has  been an overpayment to the recipient. The
     3  public welfare official shall be entitled to recover up to the value  of
     4  such  property which cause the assistance or care to constitute an over-
     5  payment to the recipient or the cost of such assistance or care,  which-
     6  ever  is  lower.  [Any public assistance or care received by such person
     7  shall constitute an implied contract. No claim of a public welfare offi-
     8  cial against the estate or the executors, administrators and  successors
     9  in  interest  of  a  person  who dies leaving real or personal property,
    10  shall be barred or defeated, in whole or in part, by any lack of  suffi-
    11  ciency  of  ability on the part of such person during the period assist-
    12  ance and care were received.
    13    Nor shall the claim asserted by a public welfare official against  any
    14  person  under  this section be impaired, impeded, barred or defeated, in
    15  whole or in part, on the grounds that another person or persons may also
    16  have been liable to contribute.]
    17    In all claims of the public welfare official made under  this  section
    18  the public welfare official shall be deemed a preferred creditor.
    19    [2.  No]  3.  The public welfare official shall not bring an action or
    20  proceeding under this section if excess payments or payments made to the
    21  person were made due to agency or contractor error,  including  but  not
    22  limited to an error made by a facilitated enroller.
    23    4.  In an action or proceeding under this section, the complaint shall
    24  be accompanied by a certificate, signed by the attorney for  the  public
    25  welfare official, declaring on information and belief, the following:
    26    (a)  the attorney has reviewed the facts of the case and has concluded
    27  that there is a reasonable basis for the action or proceeding;
    28    (b) certification that the continuous coverage protections under para-
    29  graph (c) of subdivision four of section three hundred sixty-six of this
    30  chapter do not apply to the recipient;
    31    (c) the specific eligibility criteria under which  the  recipient  was
    32  allegedly  ineligible  for  benefits; the budgeting methodology that was
    33  applied in making the determination that the  recipient  was  ineligible
    34  for  benefits, including the applicable resource or income limit for the
    35  recipient's household composition  during  the  claim  period,  and  the
    36  recipient's applicable resources and income during the claim period; the
    37  time  period  during  which  the recipient was allegedly ineligible; the
    38  value of the real or personal property which resulted in an overpayment;
    39  and the amount of recovery sought; and
    40    (d) the action or proceeding is supported  by  exhibits  including  an
    41  accounting  of the recovery sought and all expenditures of assistance or
    42  care made on behalf of the recipient during the period of alleged  inel-
    43  igibility.
    44    5. There shall be no right of action [shall accrue against] to recover
    45  an alleged overpayment for assistance or care received by a person under
    46  twenty-one  years of age [by reason of the assistance or care granted to
    47  him unless at the time it was granted the person was possessed of  money
    48  and  property  in  excess  of  his  reasonable requirements, taking into
    49  account his maintenance, education, medical care and any  other  factors
    50  applicable to his condition].
    51    [3.]  6.  To  the  extent  described in section 7-1.12 of the estates,
    52  powers and trusts law, the trustee of a supplemental needs  trust  which
    53  conforms to the provisions of such section 7-1.12 shall not be deemed to
    54  be  holding assets for the benefit of a beneficiary who may otherwise be
    55  the subject of a claim under this section and no  action  or  proceeding
    56  may  be  brought  against either the trust or the trustee to recover the
        S. 4888--A                          3

     1  cost of assistance or care provided to such person, or anyone for  whose
     2  support such person is or was liable.
     3    [4.] 7. Any inconsistent provision of this chapter or of any other law
     4  notwithstanding,  a  social  services  official may not assert any claim
     5  under any provision of  this  chapter  to  recover  payments  of  public
     6  assistance   if   such   payments   were  reimbursed  by  child  support
     7  collections.
     8    8. There shall be no right of action against  a  recipient  who  loses
     9  medical  assistance  eligibility by reason of excess resources or income
    10  because the recipient's medical assistance eligibility group, as  deter-
    11  mined  under  section  three  hundred sixty-six of this chapter, changed
    12  from MAGI, as defined in section three hundred sixty-six of  this  chap-
    13  ter,  to  non-MAGI,  for  the  two years subsequent to their eligibility
    14  change.  A right of action against such a  recipient  begins  to  accrue
    15  only  if  the  recipient remains ineligible for medical assistance after
    16  the two-year grace period.
    17    9. The public welfare official shall not use confession of judgment to
    18  recover an overpayment of public assistance  or  care,  or  supplemental
    19  nutrition assistance benefits.
    20    10.  Any  action  or  proceeding  to recover an overpayment under this
    21  section shall be waived in cases of undue hardship in  which  a  recipi-
    22  ent's  adjusted  gross  income  for the applicable household size is two
    23  hundred fifty percent of the federal poverty line or lower and in  cases
    24  of  other  extenuating circumstances as determined by the public welfare
    25  official.
    26    11. Any action or proceeding under this  section  shall  be  commenced
    27  within  two  years from payment for assistance or care. No determination
    28  of a debt or award of debt shall be based upon payment for assistance or
    29  care that occurred more than two years before the action  or  proceeding
    30  is commenced.
    31    12. Where by law, interest is imposed as a part of a judgment obtained
    32  pursuant  to  this  section, the interest shall be calculated at no more
    33  than the one-year United States treasury  bill  rate.  For  the  purpose
    34  of  this  section, the "one-year United States treasury bill rate" means
    35  the   weekly average  one-year  constant  maturity  treasury  yield,  as
    36  published by the board of governors of the federal reserve  system,  for
    37  the calendar week preceding the date of the entry of the judgment award-
    38  ing  damages.
    39    13.  All settlement and payment agreements under this section in which
    40  the  recipient  has paid fifty percent or more of the debt by the end of
    41  the COVID-19 public health emergency are hereby deemed paid in full.
    42    14. If a recipient subject to a settlement or payment agreement  under
    43  this  section  has not paid fifty percent or more of the debt by the end
    44  of the COVID-19  public  health  emergency,  the  recipient  may  submit
    45  evidence  of  undue  hardship  and  receive waiver of the remaining debt
    46  under subdivision ten of this section or  an  appropriate  reduction  of
    47  debt  based on hardship. Notice regarding the opportunity for the waiver
    48  shall be provided by the public welfare official.
    49    15. Subdivisions five, eight,  ten,  thirteen  and  fourteen  of  this
    50  section shall not apply to any case involving actual fraud.
    51    §  2.  Subdivision  7  of  section  158  of the social services law is
    52  REPEALED.
    53    § 3. The civil practice law and rules  is  amended  by  adding  a  new
    54  section 3012-c to read as follows:
    55    §  3012-c.  Certificate  of merit in certain overpayment of assistance
    56  actions. In any action or proceeding for recovery of an  overpayment  of
        S. 4888--A                          4

     1  assistance or care, as defined in section one hundred four of the social
     2  services  law,  the  complaint  shall  be  accompanied by a certificate,
     3  signed by the attorney for the public welfare official, meeting all  the
     4  requirements of section one hundred four of the social services law.
     5    §  4.  The  civil  practice  law  and rules is amended by adding a new
     6  section 3202 to read as follows:
     7    § 3202. Confession of judgment for recovery of overpayment of  certain
     8  assistance invalid. Notwithstanding the provisions of section thirty-two
     9  hundred  eighteen  of  this  article, no judgment by confession shall be
    10  entered to recover an overpayment, as defined  in  section  one  hundred
    11  four  of  the  social services law. Any judgment entered in violation of
    12  this section is void and unenforceable.
    13    § 5. The civil practice law and rules  is  amended  by  adding  a  new
    14  section 213-e to read as follows:
    15    §  213-e. Actions to be commenced within two years; actions to recover
    16  certain overpayments. An action or proceeding on  an  overpayment  by  a
    17  public  welfare  official  under  section one hundred four of the social
    18  services law shall be  commenced  within  two  years  from  payment  for
    19  assistance  or  care,  and  no  determination of a debt or award of debt
    20  shall be based upon payment for assistance or care  that  occurred  more
    21  than two years before the action or proceeding is commenced.
    22    §  6.  Section 106-b of the social services law, as amended by chapter
    23  81 of the laws of 1995, is amended to read as follows:
    24    § 106-b. Adjustment for incorrect payments. 1. For  purposes  of  this
    25  section:
    26    (a) "Overpayment" shall include erroneous payments made to an eligible
    27  person in excess of the recipient's needs as defined in this chapter and
    28  erroneous payments made to ineligible persons, including but not limited
    29  to, payments made to those persons pending a fair hearing decision.
    30    (b)  "Recipient"  shall mean any individual who is currently receiving
    31  or at one time received assistance or care under this title.
    32    2.  Any  inconsistent  provision  of  law  notwithstanding,  a  social
    33  services  official  shall,  in  accordance  with  the regulations of the
    34  department and consistent with federal law  and  regulations,  take  all
    35  necessary  steps  to correct any overpayment or underpayment to a public
    36  assistance recipient[; provided, however,]. However:
    37    (a) A social services official shall not bring an action or proceeding
    38  under this section:
    39    (i) if excess payments or payments made to an ineligible  person  were
    40  made  due to agency or contractor error, including but not limited to an
    41  error made by a facilitated enroller; or
    42    (ii) to recover an overpayment under this section  for  assistance  or
    43  care received by a person under twenty-one years of age.
    44    (b)  [that a] A social services official [may] shall waive recovery of
    45  a past overpayment, in the case of an individual who is not currently  a
    46  recipient  of  public  assistance, where the cost of recovery is greater
    47  than the cost of collections as determined in accordance with department
    48  regulations consistent with federal law and regulations.  [For  purposes
    49  of  this section, overpayment shall include payments made to an eligible
    50  person in excess of his needs as defined in this  chapter  and  payments
    51  made  to  ineligible  persons  (including  payments made to such persons
    52  pending a fair hearings decision).  The  commissioner  shall  promulgate
    53  regulations  to  implement  procedures  for  correcting overpayments and
    54  underpayments. The]
    55    (c) In any action or proceeding to recover an overpayment  under  this
    56  section,  the  social  services official shall be entitled to recover no
        S. 4888--A                          5

     1  more than the value of the property which resulted in an overpayment  to
     2  the recipient or the cost of the assistance or care, whichever is lower.
     3    (d)  Any  action  or  proceeding  to recover an overpayment under this
     4  section shall be waived in cases of undue hardship in  which  a  recipi-
     5  ent's  adjusted  gross  income  for the applicable household size is two
     6  hundred fifty percent of the federal poverty line or lower and in  cases
     7  of  other extenuating circumstances as determined by the social services
     8  official.
     9    3. The procedures for correcting overpayments shall be designed to and
    10  shall minimize adverse impact on the recipient, and to the extent possi-
    11  ble avoid undue hardship.  [Notwithstanding any other provision  of  law
    12  to  the  contrary,  no underpayment shall be corrected with respect to a
    13  person who is currently not eligible for or in receipt of home relief or
    14  aid to dependent children, except that corrective payments may  be  made
    15  with  respect  to  persons formerly eligible for or in receipt of aid to
    16  dependent children to  the  extent  that  federal  law  and  regulations
    17  require.]
    18    4.  A  social  services official shall follow the following procedures
    19  when correcting any overpayment or underpayment to a  public  assistance
    20  recipient under this section:
    21    (a) When determining whether a recipient may be liable for an overpay-
    22  ment,  the  most  favorable budgeting under the applicable law and rules
    23  shall be used to determine eligibility for assistance or care.
    24    (b) After identification and verification of an overpayment, and prior
    25  to meeting with the recipient  under  investigation,  a  written  notice
    26  containing the following information shall be mailed to the recipient:
    27    (i)  a  statement of the specific eligibility criteria under which the
    28  recipient was allegedly ineligible for benefits;
    29    (ii) the budgeting methodology, under the applicable  law  and  rules,
    30  applied in making the decision to pursue recovery of an alleged overpay-
    31  ment;
    32    (iii)  the time period during which the recipient was allegedly ineli-
    33  gible;
    34    (iv) the value of the real or personal property that  resulted  in  an
    35  overpayment;
    36    (v)  the  amount  of  recovery  sought, including an accounting of the
    37  recovery sought and all expenditures  of  assistance  or  care  made  on
    38  behalf of the recipient during the period of ineligibility;
    39    (vi)  an explanation of the recipient's rights to bring counsel or any
    40  other person to any meeting with social services officials and to  leave
    41  any meeting with social services officials at any time; and
    42    (vii)  an  explanation of the recipient's right to challenge liability
    43  for an overpayment by establishing eligibility for  assistance  or  care
    44  using the most favorable budgeting under the applicable law and rules.
    45    (c)  No  documents may be requested from recipients during an investi-
    46  gation of an alleged overpayment unless it is directly relevant  to  the
    47  eligibility factors and time periods for which the social services offi-
    48  cial has a good faith basis to believe the recipient was ineligible. The
    49  recipient shall be given a reasonable amount of time to respond to docu-
    50  ment  requests  and  meeting  requests, taking into account time periods
    51  necessary for third parties to provide documents.
    52    (d)  In  the  case  of  an  alleged  medical  assistance  overpayment,
    53  districts  shall  contact  recipient's  managed  care plans to ascertain
    54  whether the recipient accessed services  during  the  time  period  when
    55  recovery  is  being  contemplated; the managed care plan shall cooperate
    56  with the district by expeditiously providing information that is reason-
        S. 4888--A                          6

     1  ably necessary for the district to establish its claim, consistent  with
     2  protecting the confidentiality of patient information.
     3    5.  No  settlement agreement or payment plan to recover an overpayment
     4  shall be effective unless a social services official with personal know-
     5  ledge of the claims produces an affidavit attesting to the  validity  of
     6  the claims against the recipient, including but not limited to an attes-
     7  tation that the social services official has determined that the contin-
     8  uous  coverage protections pursuant to paragraph (c) of subdivision four
     9  of section three hundred sixty-six of this chapter do not apply  to  the
    10  recipient.  The  attestation  must  also  state the specific eligibility
    11  criteria under to which the recipient was allegedly ineligible for bene-
    12  fits; the budgeting methodology under the applicable laws and rules that
    13  was applied in making the determination that the recipient was  ineligi-
    14  ble for benefits, including the applicable resource or income limits for
    15  the  recipient's  household composition during the claim period, and the
    16  recipient's applicable resources and income during the claim period; the
    17  time period during which the recipient  was  allegedly  ineligible;  the
    18  value of the real or personal property which resulted in an overpayment;
    19  and  the  amount of recovery sought. The affidavit shall be supported by
    20  exhibits including an accounting of the recovery sought and all expendi-
    21  tures of assistance or care made on behalf of the recipient  during  the
    22  period of ineligibility.
    23    6. The social services official shall not use a confession of judgment
    24  to recover an overpayment.
    25    7.  All  settlement  agreements  and payment plans obtained under this
    26  section in which the recipient has paid fifty percent  or  more  of  the
    27  debt  by  the  end  of  the  COVID-19 public health emergency are hereby
    28  considered paid in full.
    29    8. If a recipient subject to a settlement agreement  or  payment  plan
    30  under this section has not paid fifty percent or more of the debt by the
    31  end  of  the  COVID-19  public  health emergency, the recipient shall be
    32  allowed to submit evidence of undue hardship for waiver of the remaining
    33  debt under paragraph (d) of subdivision two of this section or an appro-
    34  priate reduction of debt based on hardship. Notice regarding the  oppor-
    35  tunity  for such a waiver shall be provided by the social services offi-
    36  cial.
    37    9. Clause (ii) of paragraph (a) and paragraph (b) of subdivision  two,
    38  subdivision seven, and subdivision eight of this section shall not apply
    39  to any case involving actual fraud.
    40    §  6-a.  If  the  implementation  of any provision of this act without
    41  jeopardizing federal financial participation requires a waiver or  waiv-
    42  ers  from  the federal Centers for Medicare and Medicaid Services (CMS),
    43  the commissioner of the department of health shall  expeditiously  apply
    44  for  and  use  the commissioner's best efforts to obtain approval of the
    45  necessary waiver or waivers.
    46    § 6-b. Severability. If any provision of this act, or any  application
    47  of any provision of this act, is held to be invalid, or to violate or be
    48  inconsistent  with  any federal law or regulation, that shall not affect
    49  the validity or effectiveness of any other provision of this act, or  of
    50  any  other  application of any provision of this act, which can be given
    51  effect without that provision or  application;  and  to  that  end,  the
    52  provisions and applications of this act are severable.
    53    § 7. This act shall take effect on the one hundred eightieth day after
    54  it  shall  have  become  a  law and shall apply to any claim, matter, or
    55  administrative or legal action or proceeding pending at  or  after  that
    56  time.  The  commissioner  of  health,  the commissioner of the office of
        S. 4888--A                          7

     1  temporary and disability assistance, and local social services officials
     2  shall make regulations and take other actions  reasonably  necessary  to
     3  implement this act on that date.