ARTIFICIAL INTELLIGENCE [AI] IS NOT USED, IN WHOLE OR IN PART, IN PREPARING NYPPL SUMMARIES OF JUDICIAL AND QUASI-JUDICIAL DECISIONS

July 11, 2024

New York State Comptroller DiNapoli releases recently completed audits of New York State Departments and agencies

On July 10, 2024, New York State Comptroller Thomas P. DiNapoli announced the following local government and school audits were issued.

Click on the text highlighted in color to access both the summary and the complete audit report

Department of Health – Medicaid Program – Improper Payments for Brand Name Drugs (Follow-Up) (2024-F-9)  New York’s Medicaid program, administered by the Department of Health (DOH), covers medically necessary prescription and non-prescription drugs. State law directs pharmacies to substitute prescribed drugs with less expensive drugs containing the same active ingredients, dosage form and strength. A prior audit, issued in December 2022, found $1,102,823 in Medicaid overpayments for brand name prescription drugs where generic drugs were available. The follow-up found DOH officials instituted a system enhancement that identified certain drugs as generic, but that the system enhancement did not apply to all Food and Drug Administration-approved generics. Further, since the initial audit, Medicaid has paid an additional $6.3 million for drugs that appear to be generic drugs but were paid using brand name drug pricing methods, and the Office of the Medicaid Inspector General has made minimal progress in reviewing and recovering any improper payments identified in the initial report. Of the initial report’s three audit recommendations, two were not implemented and one was partially implemented.


Homes and Community Renewal – Division of Housing and Community Renewal – Physical and Financial Conditions at Selected Mitchell-Lama Developments Located Outside New York City – Sunnyside Manor: Unauthorized Bank Account (2024-S-12)  The Mitchell-Lama Housing program was created to provide affordable rental and cooperative housing to middle-income families. Pursuant to the New York Codes, Rules and Regulations, program developments must open a bank account to deposit all rent receipts and other miscellaneous operating income and use this account to disperse all expenses for operations. Auditors found that the Sunnyside Manor development’s Board of Directors (Board) held a checking account (with an average monthly balance of $14,007 for the 3 fiscal years ended March 31, 2022) separate from the development’s operating accounting that, according to the property manager, included deposits of community room rental income. In addition to these deposits, auditors identified transactions, totaling $51,048, paid from Sunnyside Manor’s operating account to the Board-held account. Bank statements for the Board-held account showed numerous questionable debit card transactions, including Amazon purchases (such as vitamins, a treadmill mat, a cooking apron, and toys) totaling $2,512 and restaurant payments totaling $1,723.


State Education Department (Preschool Special Education Audit Initiative) – UCP of Niagara County dba Empower – Compliance with the Reimbursable Cost Manual (2023-S-3)  United Cerebral Palsy Association (UCP) of Niagara County dba Empower (Empower), a not-for-profit special education provider located in Niagara Falls, is approved by the State Education Department (SED) to provide education services to children with disabilities up to age 5. For the 3 fiscal years ended June 30, 2020, Empower reported approximately $6.6 million in reimbursable costs for the SED preschool cost-based programs. Auditors identified $1,141,685 in reported costs that did not comply with requirements.


Department of Labor – Controls and Management of the Unemployment Insurance System (Follow-Up) (2023-F-41)  One of the Department of Labor’s (DOL) key tasks in assisting the unemployed is administering the State’s Unemployment Insurance (UI) program. A prior audit, issued in November 2022, found deficiencies with DOL’s oversight and management of its UI system. During the pandemic, faced with the high demand for UI benefits and the need to process claims quickly, DOL resorted to stop-gap measures to compensate for system limitations, which resulted in misclassification of claims as State instead of federal liabilities, overpayment of claims, and supplemental spending to maintain the outdated UI system infrastructure while a new system was in development. DOL officials made some progress addressing the issues identified in the initial audit report, including continuing the development of a replacement system and collecting and analyzing data to improve the balance between fraudulent identity protection and streamlining the process for those in need of UI benefits. Of the initial report’s six recommendations, two were implemented, three were partially implemented, and one was not implemented.


Department of Health – Medicaid Program – Managed Care Payments to Unenrolled Providers (2021-S-6)  Medicaid managed care organizations establish provider networks by contracting with physicians, hospitals, and other providers to provide medical care to their members. The 21st Century Cures Act and additional federal guidance mandated that managed care in-network providers enroll as participating providers in the state Medicaid program by January 1, 2018 (with the exception of certain provider types). Through the screening and provider enrollment process, the Department of Health (DOH) gains a level of assurance over a provider’s validity to provide Medicaid services. Auditors found DOH does not monitor encounter claims, which detail member health care services and payments to providers, to identify inappropriate managed care payments to providers who are not enrolled in Medicaid. This and other weaknesses led to over $1.5 billion in improper and questionable payments. 

###

 

CAUTION

Subsequent court and administrative rulings, or changes to laws, rules and regulations may have modified or clarified or vacated or reversed the decisions summarized here. Accordingly, these summaries should be Shepardized® or otherwise checked to make certain that the most recent information is being considered by the reader.
THE MATERIAL ON THIS WEBSITE IS FOR INFORMATION ONLY. AGAIN, CHANGES IN LAWS, RULES, REGULATIONS AND NEW COURT AND ADMINISTRATIVE DECISIONS MAY AFFECT THE ACCURACY OF THE INFORMATION PROVIDED IN THIS LAWBLOG. THE MATERIAL PRESENTED IS NOT LEGAL ADVICE AND THE USE OF ANY MATERIAL POSTED ON THIS WEBSITE, OR CORRESPONDENCE CONCERNING SUCH MATERIAL, DOES NOT CREATE AN ATTORNEY-CLIENT RELATIONSHIP.
NYPPL Blogger Harvey Randall served as Principal Attorney, New York State Department of Civil Service; Director of Personnel, SUNY Central Administration; Director of Research, Governor’s Office of Employee Relations; and Staff Judge Advocate General, New York Guard. Consistent with the Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations, the material posted to this blog is presented with the understanding that neither the publisher nor NYPPL and, or, its staff and contributors are providing legal advice to the reader and in the event legal or other expert assistance is needed, the reader is urged to seek such advice from a knowledgeable professional.
New York Public Personnel Law. Email: publications@nycap.rr.com