Establishes the Medicaid identification and anti-fraud biometric technology pilot program; appropriation

Section 2 - Amends the Social Services Law to require the Social Services Department to conform its systems with the new Medicaid Identification and Antifraud Biometric Identification Program when available.

Section 3 - Appropriates $300,000 each to the two hospitals chosen to participate in the pilot program to assist in implementing the pilot program.

Section 4 - Provides that this act shall take effect immediately.

Justification

New York spends over $54 billion dollars on Medicaid and experts estimate that as much as 10%, or over $5 billion, is spent on fraudulent services and claims for Medicaid services. New York cannot afford to continue to pay for such improper and fraudulent claims. Rather than reducing payments for vital services for our children and most infirm elderly, we should more aggressively address the billions of dollars lost to fraud by utilizing modern and effective identification technology.

This legislation will require the Department of Health to develop result-oriented guidelines and seek requests for proposals to implement a modern fraud prevention pilot program in two New York hospitals, one in upstate and one in downstate, relying on biometric technology. There are many companies offering various types of biometric identification systems that are already in common use by private industry and governmental agencies.

The request for proposals shall focus on results to be obtained, rather than specific technology, to allow the state to consider the many technologies that have been developed. These technologies can use relatively inexpensive software and hardware that has already been developed and proven to save New York billions of dollars annually in fraud prevention. The request must also specify that any proposal must be revenue neutral from inception, whereby program costs are at least offset by savings from inception, and shall have as a primary goal reduction in Medicaid expenditures through elimination of fraud and abuse.

Biometrics is the science and technology of measuring and analyzing biological data. In information technology, biometrics refers to technologies that measure and analyze human body characteristics, such as DNA, fingerprints, eye retinas and irises, voice patterns, facial patterns and hand measurements, for authentication purposes. The identification issued to Medicaid recipients and providers will contain biometric markers for verification that a recipient is eligible for the service requested, and confirm that the provider actually provides the service. Such identification can be made at the beginning and end of a transaction before payment is ever made, instead of relying on the current system of "pay and chase" where law enforcement and court action is required to recoup improper Medicaid payments after they have been made.

Prior legislative history

2011-2012 - S.4384-B/A.6555-B -- PASSED SENATE/Health 2013-2014 - S.4196/A.6527 - FINANCE/Health 2015 - S.5314/A.751 - FINANCE/Health

Fiscal implications for state and local government

Contains an appropriation of up to $600,000 to assist the participating hospitals to implement the pilot program. Will generate substantial savings, perhaps as much as $55 billion annually once expanded statewide by preventing health care fraud and improper payments.

Effective date

This act shall take effect immediately.