Part 516 - MONETARY PENALTIES

This part is not updated by the Regulatory Affairs Unit in the Department of Health. The following may not be current. For information and/or copies please contact:

Office of the Medicaid Inspector General
800 North Pearl Street
Albany, New York 12204
(518) 408-5803

Doc Status: 
Complete
Effective Date: 
Wednesday, February 25, 2009
Statutory Authority: 
Social Services Law, Sections 20(3)(d), 34(3)(f), 368-c

Section 516.1 - Policy, scope and definitions.

516.1 Policy, scope and definitions. (a) Purpose. This Part establishes procedures for imposing monetary penalties against persons who receive or cause to be received by another person payments under the medical assistance program resulting from the commission of certain proscribed acts.

(b) The definitions in Parts 504 and 515 of this Title and the following definitions apply to this Part except as may be provided for herein:

(1) gross and flagrant violation means conduct which substantially impairs the delivery of high quality medical care, services or supplies or which has an adverse effect on the fiscal integrity of the medical assistance (MA) program.

(2) item or service means any and all medical care, services or supplies claimed to have been provided to a recipient of MA and which is listed in an itemized claim for payment.

(3) person means natural person, corporation, partnership, association, clinic, group and other entities, whether or not such person is enrolled in the MA program or is a purveyor of health care.

(4) standards of generally accepted practice means the degree of knowledge, skill and diligence possessed by, or required of, the average member of the profession or specialty which is practiced. Standards of generally accepted practice also include those practices which are accepted as effective and appropriate by the medical and scientific community of this State.

(5) standards of the MA program include but are not limited to the standards set forth in the regulations of the department.

(6) substantial number of cases means five percent or more of those cases identified in any sample of cases which were the subject of an audit or otherwise reviewed by the department and for which claims were submitted by a person for payment under the MA program.

(c) Basis for monetary penalties. The department may require the payment of a monetary penalty to the MA program by:

(1) any person who fails to comply with the standards of either the MA program or of generally accepted medical practice as defined in this section in a substantial number of cases and who receives or causes to be received by another person payment from the MA program when such person knew or had reason to know that:

(i) the payment was a result of the provision of or ordering of care, services or supplies which were medically improper, unnecessary or in excess of the documented medical needs of the person to whom they were furnished; or

(ii) the care, services or supplies were not provided as claimed; or

(iii) the person who ordered or prescribed the care, services or supplies was suspended or excluded from the MA program pursuant to Part 515 of this Title at the time the care, services or supplies were furnished; or

(iv) the care, services or supplies for which payment was received were not, in fact, provided; or

(2) any person who grossly or flagrantly violates the standards set forth in paragraph (1) of this subdivision and who received or caused to be received by another person payment from the MA program when such person knows or had reason to know that:

(i) the payment was a result of the provision of or the ordering of care, services or supplies which were medically improper, unnecessary or in excess of the documented medical needs of the person to whom they were furnished; or

(ii) the care, services or supplies were not provided as claimed; or

(iii) the person who ordered or prescribed the care, services or supplies was suspended or excluded from the MA program pursuant to Part 515 of this Title at the time the care, services or supplies were furnished; or

(iv) the care, services or supplies for which payment was received were not, in fact, provided.

Doc Status: 
Complete
Effective Date: 
Wednesday, February 25, 2009

Section 516.2 - Amount of penalty.

516.2 Amount of penalty.

(a) If a penalty has not been imposed upon the person within the past five years, the department may impose a penalty of not more than $10,000 for each item of care, service or supply that is the subject of a determination under Section 516.1(c) of this Part.

(b) If a penalty has been imposed upon the person within the previous five years, the department may impose a penalty of not more than $30,000 for each item of care, service or supply that is the subject of a determination under Section 516.1(c) of this Part.

Doc Status: 
Complete
Effective Date: 
Wednesday, February 25, 2009

Section 516.3 - Determination of the amount of the penalty.

516.3 Determination of the amount of the penalty. (a) In determining the amount of the penalty to be imposed, the department must take into consideration the following:

(1) the number and total value of the claims for payment from the MA program which were the underlying basis of the determination to impose a monetary penalty;

(2) the effect, if any, on the quality of medical care provided to recipients of MA as a result of the acts of the person;

(3) the degree of culpability of the person in committing the proscribed actions and any mitigating circumstances;

(4) any prior violations committed by the person relating to the MA program, Medicare or other social services programs which resulted in either a criminal or administrative sanction or penalty; and

(5) any other facts relating to the nature and seriousness of the violations including any exculpatory facts.

 

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Section 516.4 - Notification and hearings.

516.4 Notification and hearings. (a) Notice of proposed agency action. (1) When the department determines to impose a penalty under this Part, the department must first send the person a written notice of proposed agency action.

(i) The notice must be mailed to the person's designated payment address or correspondence address or last known address.

(ii) The notice must state the amount of the penalty, the alleged violation, the legal authority for the action, and the facts which support the conclusion that a violation has occurred.

(iii) The notice must afford the person the opportunity to submit documentation or written arguments objecting to the proposed action within 30 days of receipt of the notice. The notice must state that the failure to object within the time provided may result in the adoption of the proposed action as the final action and that, pursuant to section 519.18 of this Title, the issues to be addressed at an administrative hearing will be limited to those matters contained in any objection to the proposed action.

(2) Any documentation or written arguments submitted by a person objecting to the proposed agency action must be mailed within 30 days of receipt of the notice which will be presumed in the absence of evidence to the contrary to be five days after the date on the notice of proposed agency action. The objections must include a written statement detailing the specific items in the notice of proposed agency action to which the person objects.

(b) Notice of agency action. (1) If, after its review, the department determines to impose the monetary penalty, it will send a written notice of agency action advising the person of the final determination at least 20 days before the action becomes effective.

(i) The notice must be mailed to the person's designated payment address or correspondence address or last known address.

(ii) The notice must state the amount of the penalty, the alleged violation, the legal authority for the action and the facts which support the conclusion that a violation has occurred. The notice must also state the effective date of the penalty and provide information concerning the right to a hearing.

(c) Where a person timely requests a hearing to review the imposition of a penalty, such hearing must be conducted pursuant to the provisions of Part 519 of this Title.

 

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Section 516.5 - Effect and enforcement of the penalty.

516.5 Effect and enforcement of the penalty. (a) For each claim the department is authorized to recover any overpayment, unauthorized payment, or otherwise inappropriate payment and if twenty-five percent or more of those claims which are the subject of an audit by the department result in overpayments, unauthorized payments or otherwise inappropriate payments and for which the claims were submitted by a person for payment under the medical assistance program, the department may also impose a monetary penalty against any person, or persons, who received the overpayment, unauthorized payment or otherwise inappropriate payment for such claim. If less than twenty-five percent of identified claims result in overpayments, unauthorized payments or otherwise inappropriate payments then the department may recover such monies or may impose a monetary penalty, but not both.

(b) Despite the imposition of a penalty, the department may exclude a person who is a provider of care, services or supplies from participating in the MA program pursuant to Part 515 of this Title.

(c) The imposition of any penalty under this Part does not preclude the imposition of any other penalty prescribed by either federal or State law or regulation.

(d) Where the person against whom the penalty was imposed does not pay the penalty, the department may recover the amount of the penalty in the same manner as the recovery of an overpayment as set forth in Part 518 of this Title or by any other means available to the department.

(e) Interest will accrue on the amount of the penalty commencing on the 90th day after the date of the department's notice. Interest will accrue at the rate set forth in section 518.4(c) of this Title. (f) The department may not recover overpayments, unauthorized payments or otherwise inappropriate payments from any person, or persons, for a single claim, in an amount that exceeds the amount paid for such claimed. (g) The department is authorized to recover both any overpayment, unauthorized payment or otherwise inappropriate payment and impose a monetary penalty against any person, or persons, other than a recipient of an item or service under MA, who caused the overpayment, unauthorized payment or otherwise inappropriate payment to be received by the other person or persons. These actions, in addition to the other actions under this section, may be taken by the department for the same claim.

Doc Status: 
Complete
Effective Date: 
Wednesday, February 25, 2009