State Medicaid paid for erectile dysfunction drugs for sex offenders

Lax oversight over erectile dysfunction drugs for sex offenders was not the only problem. The Comptroller also noted that other Medicaid patients get drugs they shouldn't have otherwise obtained.

The state’s Medicaid program paid more than $60,000 for sexual and erectile dysfunction (ED) drugs and treatments for 47 sex offenders, according to an audit released on June 5, 2019 by State Comptroller Thomas P. DiNapoli. In total, Medicaid made more than $930,000 in payments for ED drugs and treatments for recipients, including sex offenders, that are barred under Medicaid.

“There are clear rules about what conditions Medicaid will cover when it comes to erectile dysfunction drugs. And paying for sex offenders who’ve committed terrible crimes to get these drugs should never be lost in the bureaucratic administration of this program,” DiNapoli said. “Nearly two decades ago this office identified this problem, which led to national and state changes. While the state Department of Health immediately followed up to make corrections during the course of our audit, our auditors found that the problem persisted and needed to be fixed.”

In 2005, a review by the Office of the State Comptroller determined that Medicaid paid for the erectile dysfunction drug Viagra on behalf of 198 recipients who were registered sex offenders classified as level-3 (most likely to reoffend). Given the risk to public safety, the review sparked an overhaul of legislation at the federal and state levels to ensure such drugs are not paid for by Medicaid.

Current federal and state laws prohibit Medicaid from paying for drugs to treat sexual or erectile dysfunction for Medicaid recipients, including registered sex offenders. State law additionally prohibits payment for procedures or supplies to treat ED for registered sex offenders.

In 2011, Medicaid pharmacy benefit management for managed care recipients was transferred from DOH to managed care organizations (MCOs). DOH directed MCOs on how to handle ED drug exclusions and indicated uses. Under managed care, MCOs are expected to police the drugs Medicaid recipients enrolled in their plans can get and to determine their medical necessity.

Auditors found that did not always happen. Since the transition of pharmacy benefit management to MCOs, Medicaid continued, primarily under managed care, to fund drugs, procedures, and supplies that enhance sexual and erectile function for recipients, including registered sex offenders.

DiNapoli’s auditors found that from April 1, 2012 to July 1, 2018, Medicaid made $2.8 million in payments for ED drugs approved to also treat Benign Prostatic Hyperplasia (BPH) or Pulmonary Arterial Hypertension (PAH) on behalf of patients who did not have such diagnoses listed on their medical claims submitted up to six months before receiving the prescriptions. These claims indicate an elevated risk that the drugs may have been abused or sold to others. Among those payments, 411 recipients had a diagnosis of ED (but no BPH or PAH diagnosis) on their claims, totaling $207,256 in Medicaid payments.

Similarly, Medicaid paid $285,641 for ED drugs approved to also treat BPH or PAH for 14 sex offenders (see table 3 in audit), 11 of whom were classified as a level-2 or a level-3 sex offender. Auditors reviewed the medical records of 13 of the 14 sex offenders to determine if the records supported a diagnosis of BPH or PAH and found 31 percent, or four of 13 cases, supported only a diagnosis of ED. One case was indeterminate.

DOH did not monitor the use of ED drugs, procedures, and supplies, including payments by MCOs. The audit and the department’s analyses both indicate a large portion of MCO claims for ED drugs approved to treat other medical conditions lack assurance of medical necessity. MCOs made most of the payments the auditors reported on.

DiNapoli’s auditors found some MCO controls are not designed to effectively prevent sex offenders from obtaining treatment for ED. Specifically, after a recipient obtains ED treatment, if an MCO finds out the recipient is a registered sex offender, the MCO merely does not pay for the services when other steps could be taken to prevent sex offenders from obtaining them.

Auditors further found DOH’s eMedNY computer payment system also incompletely incorporated controls to prevent covering ED procedures and supplies for convicted sex offenders. Consequently, Medicaid fee-for-service inappropriately paid $27,288 for 21 excluded ED procedures and supplies provided to 15 sex offenders (at least 6 of the 15 were classified as level-2 or level-3 sex offenders).

DiNapoli recommended DOH:

• Review the payments identified by auditors and ensure recoveries are made from providers, as appropriate;

• Regularly provide MCOs with detailed lists of all ED drugs, procedures, and supplies that are excluded or have limited Medicaid coverage;

• Periodically monitor coverage, utilization, and payment of ED drugs, procedures, and supplies; and take corrective actions to ensure compliance with laws, policies, and procedures; and

• Improve DOH’s eMedNY computer system controls to apply sex offender status in the processing of certain claims and prevent the processing of incomplete electronic Division of Criminal Justice Services sex offender registry files.

In its response to the audit, DOH indicated the actions it would take to correct the issues found. The department’s complete response is included in the audit.

Click report to read the DOH's response to the Comptroller's audit  or go to https://www.osc.state.ny.us/audits/allaudits/093019/sga-2019-18s16.pdf.

To find out how your government money is being spent go to Open Book New York. 

Judicial review of an arbitration award resulting from compulsory arbitration stricter than judicial review of an award resulting from voluntary arbitration

The Appellate Division unanimously affirmed a Supreme Court's granting the petition of the Board of Education to vacate an arbitration award and the penalty imposed by an arbitrator and remanded the matter to different "appropriate arbitrator" on the panel established to hear cases involving allegations of teacher misconduct.

Ruling that the lower court "correctly vacated the arbitration award in this disciplinary action," which was subject to compulsory arbitration, the Appellate Division explained that judicial review is "stricter (for compulsory arbitration) than for a determination rendered (after) ... voluntary arbitration". Here, said the court, the record supports the Supreme Court's conclusion that the arbitrator's opinion and award was not only irrational, but also arbitrary and capricious.

The Appellate Division noted that the administrative record supported the lower court's determination to sustain all charges and specifications filed against the educator, two of which were based the teacher's conduct and statements, "which threatened physical violence and placed at least one child in fear of his physical safety."

The court also sustained the Supreme Court's upholding the specification of misconduct charging certain students who were the target of the teacher's racist comments "could not have been 'unaffected' by the statements, which were far from 'benign' or 'uplifting,' as characterized by the arbitrator."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_04297.htm

Setting the terms and conditions of a disciplinary probationary period

Pleading nolo contendere* to criminal charges that he had recklessly operated his personal automobile while off-duty, a New York City police officer and the New York City Police Department "settled" the subsequent disciplinary action taken against the officer by entering into a "stipulated agreement." Under the terms of the settlement agreement the officer was placed on "disciplinary probation" for a specified period. This meant that the tenure he previously enjoyed was suspended for the duration of the disciplinary probationary period agreed upon and he could be summarily dismissed at any time during the probationary period by the appointing authority without notice and hearing.

Prior to the expiration of his disciplinary probationary period the police officer arrested on assault charges and later dismissed from his position. Later still, the assault charges were withdrawn. The officer then sued, seeking a court order directing his reinstatement to his former position, an awarded of back pay and an order directing the Police Department to give him a "name-clearing hearing." Supreme Court dismissed his CPLR Article 78  petition and the officer appealed the ruling to the Appellate Division.**

Addressing the police officer's contention that he was unlawfully terminated and therefore should be reinstated to his former position with back salary and benefits, the Appellate Division said that as a probationary employee the officer could be been dismissed without a hearing or a statement of reasons. Only in the event the officer demonstrated that his dismissal was made in bad faith or was for a constitutionally prohibited reason or was prohibited by statutory or case law could the officer claim wrongful discharge.

In contrast, in the event the stipulation establishing the employee's "disciplinary probation period" sets out the acts or omissions that could trigger the individuals termination, the employee may be summarily terminate without notice and hearing only in the event he or she is found to have violated the specified term or condition stipulated in the disciplinary probationary period agreement.

This point is illustrated in ruling by the Appellate Division in Taylor v Cass, 505 NY2d 929.

Under the terms of a disciplinary settlement, Taylor could be terminated without any hearing if, in the opinion of his superior, his job performance was adversely affected by his consumption of alcohol. Taylorwas subsequently terminated from his position for sleeping on the job.

Although the employer claimed that the termination without a hearing was permitted under the terms of the disciplinary settlement agreement, the Appellate Division disagreed and directed the agency to reinstate Taylor to his position with back pay and benefits.

The court pointed out that the reason given for summarily terminating Taylor -- sleeping on the job -- was not authorized by the settlement agreement. The court ruled that Taylor could only be terminated without a hearing if he was found to have violated the specific reason set out in the settlement agreement: the performance of his duties were unsatisfactory because of his consumption of alcohol.

Agreeing with the Supreme Court justice that Green failed to prove the existence of any basis for granting the relief he sought,  the Appellate Division dismissed his appeal.

* A plea by which a defendant in a criminal prosecution accepts conviction as though a guilty plea had been entered but does not admit guilt. A plea of "nolo contendere," has the same primary legal effects as a guilty plea.

** Robert Green, Jr.  v. New York City Police Department et al., 235 AD2d 475.  Rejecting the police officer demand for "a name-clearing hearing," the Appellate Division explained that a former employee is entitled to a name clearing hearing only if he or she can demonstrate that the employer publicly disclosed false and stigmatizing reasons for his or her termination.

The Taylor decision is posted on the Internet at:

https://www.leagle.com/decision/19861007122ad2d8852320

Rejection of an applicant for appointment as a police officer based on a finding that the applicant was psychologically unfit for the position

Supreme Court granted the appointing authority's [Employer] motion to dismiss a CPLR Article 78 petition filed by an applicant [Plaintiff] for appointment as a police officer seeking to annul the Employer's decision not to certify Plaintiff for appointment dismissed the proceeding.

Plaintiff appealed the Supreme Court's ruling, arguing that the Employer's determination to disqualify him for appointment to the position was arbitrary and capricious.

The Appellate Division disagreed and sustained the Supreme Court's decision. In the words of the Appellate Division, the Employer's determination "was not arbitrary and capricious and had a rational basis." Citing Matter of City of New York v New York City Civ. Serv. Commn., 61 AD3d 584, the court explained the Employer "has wide discretion in determining the fitness of candidates[,] . . . particularly . . . in the hiring of law enforcement officers, to whom high standards may be applied," noting that the Employer had "reasonably relied on the findings of two psychologists, both of whom, after interviewing the Plaintiff, concluded that, for a variety of reasons, Plaintiff "was psychologically unfit for the position of police officer."

As Plaintiff had neither demonstrated [a] the existence of a triable issue of fact but only advanced unsubstantiated allegations and speculation concerning the motives of the psychologists who recommended denial of his application nor [b that further discovery was warranted under the circumstances, the Appellate Division unanimously dismissed Plaintiff's appeal.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_03740.htm

Employer's actual investigation of the incident on the date of the event reported to it by the injured party obviates its claim that it lacked timely notice of the event

Plaintiff, a medical technician employed by the New York City Health and Hospitals Corporation [HHC] filed motion seeking approval to file a "late notice of claim" alleging that she was assaulted by an inmate in the custody of Department of Correction [DOC] while that inmate was being treated at Bellevue Hospital. In support of her application, filed about seven months after the 90-day statutory period elapsed, Plaintiff submitted an affidavit averring that on the very same day of the alleged assault, she had two conversations with a DOC employee, a Corrections Captain [Captain], and told the Captain that she intend to pursue legal action." DOC did not submit any evidence to Supreme Court to dispute these factual allegations.

Supreme Court rejected Plaintiff's argument that the investigation provided respondent with actual notice, concluding only that her argument was "unavailing," presumably because agreed with DOC's argument that it lacked notice because Plaintiff never specified that she had told the Captain the manner in which DOC was negligent.

In considering whether to grant leave to file a late notice of claim, explained the Appellate Division, courts consider whether the public entity involved "acquired actual knowledge of the essential facts constituting the claim within [90 days] or within a reasonable time thereafter," and "all other relevant facts and circumstances," including "whether the delay in serving the notice of claim substantially prejudiced the public [entity] in maintaining its defense on the merits," the length of the delay, and whether there was a reasonable excuse for the delay.*

Although the Appellate Division held that while Supreme Court correctly found that Plaintiff failed to establish that DOC had actual knowledge of the essential facts constituting the claim based on the documentation that Plaintiff submitted to the Workers' Compensation Board, it erred in rejecting Plaintiff's argument that the investigation provided respondent with actual notice, concluding only that her argument was "unavailing."

To the extent that Plaintiff did not establish actual notice because she did not specify that her description of the assault included a recitation of who was in the room, the Appellate Division opined that "municipal authorities have an obligation to obtain the missing information if that can be done with a modicum of effort," citing Goodwin v New York City Hous. Auth., 42 AD3d 63. Here, said the court, negligence is the only theory of liability that could be implied by Plaintiff's conversations with Captain and, in any event, Captain could have determined who was in the room during the course of his investigation with "a modicum of effort." In the words of the Appellate Division, "[t]o hold otherwise would turn the statute into a sword, contrary to its remedial purpose."

The Appellate Division also found that Supreme Court erred by applying the incorrect legal standard when evaluating the issue of substantial prejudice. Supreme Court neglected to consider the decision of the Court of Appeals in Matter of Newcomb v Middle Country Cent. Sch. Dist., 28 NY3d 455.

Applying the Newcomb standard, "as we must", the Appellate Division said it was compelled to find that DOC was not substantially prejudiced by the delay.**

Noting that the burden initially rests on the Plaintiff to make a showing that the late notice will not substantially prejudice the respondent and that showing "need not be extensive," the Appellate Division ruled that "Plaintiff easily met her initial burden of providing 'some evidence or plausible argument' regarding the lack of substantial prejudice by pointing to the investigation" by Captain. This shifted the burden of going forward to DOC, which failed to rebut Plaintiff's showing with the particularized evidence  as required by Newcomb nor provided Supreme Court with any evidence to substantiate that it was prejudiced by the mere passage of time.

The bottom line, the Appellate Division said it must bear in mind that "the purpose of the statute is to give the municipality the opportunity to investigate the claim" and here the record indicated that DOC's Captain  "actually investigated [Plaintiff's] claim on the very same day that it arose, thereby fulfilling the statute's purpose."***

* See General Municipal Law §50-e[5].

** The Appellate Division pointed out that Plaintiff failed to demonstrate a reasonable excuse for service of her late notice of claim but concluded that the "lack of excuse" is not fatal here.

*** The Appellate Division also noted that it had simultaneously recalled and vacated its Decision and Order previously entered [see 168 AD3d 481] regarding this matter.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2019/2019_03921.htm