This bill has been amended

Bill S4384-2011

Establishes the Medicaid identification and anti-fraud biometric technology program

Establishes the "Medicaid identification and anti-fraud biometric technology program", requiring the department of health, in consultation with the office of the medicaid inspector general and the office of the attorney general to implement a program requiring the use of biometric technology, as a means of identification and for use as an anti-fraud application in the Medicaid program.

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  • Apr 4, 2011: REFERRED TO HEALTH

Memo

BILL NUMBER:S4384

TITLE OF BILL: An act to amend the public health law, in relation to establishing the Medicaid identification and anti-fraud biometric technology program

PURPOSE OR GENERAL IDEA OF THE BILL: Establishes the Medicaid identification and anti-fraud biometric technology program

SUMMARY OF SPECIFIC PROVISIONS: Section 1: The public health law is amended by adding a new article 2-B to read as follows; the Department of Health shall implement a program requiring the use of biometric technology in the form of scanners to be use by hospitals, clinics and pharmacies for the purpose of patient identification and anti-fraud in the Medicaid program.

Section 2: The department shall provide a report to the Legislature on the cost and implementation of the Medicaid identification and anti-fraud biometric technology program within 6 months of enactment.

JUSTIFICATION: New York will spend over $54 billion dollars this fiscal year (2011-2012) on Medicaid and experts estimate that 10% or over $5 billion is fraudulent charges to the state's health insurance for the poor, disabled and elderly. Before we start cutting billions of dollars in vital services for our children and most infirmed elderly, we need to cut out billions of dollars in fraud. This legislation will implement a modern fraud prevention mechanism in hospitals, clinics and pharmacies all across New York by relying on biometric technology. This is relatively inexpensive software and hardware that can save New York billions of dollars annually in fraud prevention. It is estimated that for every one dollar investment in fraud technology measures, New York will save 300 times that amount. So we need a one-time and immediate investment of $20 million dollars to save the annual stealing of over $5 billion of taxpayer funds. The $20 million dollar one-time investment in the technology needed for this anti-fraud measure can be raised by implementing a one-penny per prescription charge for a 6 month period on each of the $4 billion Medicaid prescriptions written each year (on average each Medicaid recipient fills 100 prescriptions per year and we have over 4 million Medicaid recipients in New York).

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 cards issued to Medicaid recipients will contain coded and encrypted biometric markers for verification. Each card will also contain a computer code that will establish anti-fraud markers to prevent fraud on the front end of a transaction instead of relying on law enforcement and court action to recoup stolen Medicaid funding. Medicaid cards will be issued to

physicians, clinical staff performing service intake and auxiliary medical services and pharmacy staff for the purpose of authenticating patient visit and prescription orders.

A current example of the problems with the current Medicaid identification system and lack of up-front fraud prevention is the following: The previous administration of the New York State Department of Health has failed New York taxpayers in a horrible way. The State's Prescription Drug Monitoring Program requires pharmacists to report the prescriptions issued each month. However, DOH has no mechanism for informing pharmacies of multiple prescriptions to the same patient, identify fraud, or requiring doctors and pharmacists to check the DOH database for misuse of prescription drugs. This is a major source of fraud and illegal drug sales. This legislation will require the implementation ofbiometric palm readers and software in all hospitals, health clinics, and pharmacies. The technology would catch duplicate prescription requests and medical services. Palm readers are considered the most accurate of biometric technology.

PRIOR LEGISLATIVE HISTORY: None.

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENT: Will generate a savings of close to $5 billion annually by preventing health care fraud. Purchase and implementation of technology to prevent fraud can be paid via a one cent per prescription fee for a six month only surcharge on each prescription paid by Medicaid.

EFFECTIVE DATE: This act shall take effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 4384 2011-2012 Regular Sessions IN SENATE April 4, 2011 ___________
Introduced by Sen. RANZENHOFER -- read twice and ordered printed, and when printed to be committed to the Committee on Health AN ACT to amend the public health law, in relation to establishing the Medicaid identification and anti-fraud biometric technology program THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The public health law is amended by adding a new article 2-B to read as follows: ARTICLE 2-B MEDICAID IDENTIFICATION AND ANTI-FRAUD BIOMETRIC TECHNOLOGY PROGRAM SECTION 290. MEDICAID IDENTIFICATION AND ANTI-FRAUD BIOMETRIC TECHNOLOGY PROGRAM. 291. DEFINITIONS. 292. BIOMETRIC TECHNOLOGY USE REQUIREMENT. 293. REPORT. 294. RULES AND REGULATIONS. S 290. MEDICAID IDENTIFICATION AND ANTI-FRAUD BIOMETRIC TECHNOLOGY PROGRAM. THERE IS HEREBY ESTABLISHED IN THE DEPARTMENT THE MEDICAID IDENTIFICATION AND ANTI-FRAUD BIOMETRIC TECHNOLOGY PROGRAM. S 291. DEFINITIONS. AS USED IN THIS ARTICLE: 1. "BIOMETRIC TECHNOLOGY" MEANS TECHNOLOGY THAT MEASURES AND ANALYZES BIOLOGICAL DATA, INCLUDING HUMAN BODY CHARACTERISTICS, SUCH AS DNA, FINGERPRINTS, VASCULAR PATTERNS, EYE RETINAS AND IRISES, VOICE PATTERNS, FACIAL PATTERNS AND HAND MEASUREMENTS, FOR AUTHENTICATION PURPOSES. 2. "PALM SCANNER" MEANS A DEVICE CAPABLE OF USING PALM-VEIN PATTERN RECOGNITION OR VASCULAR RECOGNITION USING NEAR-INFRARED LIGHT TO CAPTURE A PATIENT'S PALM VEIN PATTERN TO GENERATE A BIOMETRIC PATTERN. S 292. BIOMETRIC TECHNOLOGY USE REQUIREMENT. 1. THE DEPARTMENT, IN CONSULTATION WITH THE OFFICE OF THE MEDICAID INSPECTOR GENERAL AND THE OFFICE OF THE ATTORNEY GENERAL, SHALL IMPLEMENT A PROGRAM REQUIRING THE
USE OF BIOMETRIC TECHNOLOGY IN THE FORM OF PALM SCANNERS TO BE USED BY HOSPITALS, CLINICS AND PHARMACIES, FOR THE PURPOSES OF PATIENT IDENTIFI- CATION AND FOR USE AS AN ANTI-FRAUD APPLICATION IN THE MEDICAID PROGRAM. 2. (A) MEDICAID CARDS ISSUED BY THE STATE TO MEDICAID RECIPIENTS SHALL BE ENCODED AND ENCRYPTED WITH THE BIOMETRIC PALM PRINT OF THE CARD HOLD- ER ALONG WITH OTHER INFORMATION DEEMED NECESSARY BY THE COMMISSIONER AND THE OFFICE OF HEALTH INSURANCE PROGRAMS, PROVIDED, HOWEVER, THAT SUCH INFORMATION SHALL NOT INCLUDE SOCIAL SECURITY NUMBERS AND SHALL NOT BE STORED IN A CENTRAL DATA BANK. SUCH CARD HELD BY EACH MEDICAID RECIPIENT WILL BE CAPABLE OF STORING BIOMETRIC MARKERS AND A LOG OF DOCTOR AND PHARMACY VISITS FOR EACH SERVICE BILLED TO THE MEDICAID PROGRAM. (B) MEDICAID CARDS SHALL BE ISSUED TO THE ADMITTING STAFF OF HEALTH CARE FACILITIES, MEDICAL STAFF PROVIDING SERVICE TO MEDICAID RECIPIENTS, AND TO PHARMACY STAFF. HEALTH CARE FACILITY ADMITTING STAFF, HEALTH CARE PROVIDERS AND PHARMACY STAFF SHALL SWIPE THE MEDICAID CARD ISSUED TO THEM PURSUANT TO THIS ARTICLE AND SHALL SCAN HIS OR HER PALM ON A PALM READER, UPON ADMITTING, PROVIDING CARE OR PHARMACY SERVICES TO A MEDI- CAID RECIPIENT, TO VERIFY THE LEGITIMACY OF THE CARE BEING PROVIDED. SUCH CARD SHALL MAINTAIN A LOG IDENTIFYING THE PERSON RESPONSIBLE FOR PROVIDING CARE TO SUCH PERSON. (C) MEDICAID RECIPIENTS SHALL BE REQUIRED TO SWIPE HIS OR HER MEDICAID BENEFIT CARD AT TIME OF EACH VISIT TO A DOCTORS OFFICE OR CLINIC AT THE POINT OF ACTUALLY BEING SEEN BY THE DOCTOR OR CLINICAL STAFF, AND UPON LEAVING THE HEALTH CARE FACILITY. (D) MEDICAID CARDS SHALL BE USED AND PALM READERS SHALL BE PLACED IN PHARMACIES WHERE THE MEDICAID RECIPIENT SHALL SWIPE HIS OR HER CARD AND SHALL HAVE HIS OR HER PALM SCANNED WHEN FILLING A PRESCRIPTION. PHARMACY STAFF REGISTERING THE PRESCRIPTION ORDER SHALL SWIPE AND SCAN HIS OR HER MEDICAID ISSUED CARD AT THE SAME TIME TO VERIFY THE TRANSACTION. (E) THE COMMISSIONER AND THE OFFICE OF HEALTH INSURANCE PROGRAMS SHALL PROMULGATE RULES AND REGULATIONS THAT SHALL BE DIGITIZED AND ENCODED INTO THE MEDICAID CARD TO COMBAT FRAUD. SUCH RULES SHALL INCLUDE BUT ARE NOT LIMITED TO ESTABLISHING A NUMBER OF POSSIBLE PATIENT VISITS PER DOCTOR PER BUSINESS DAY, THE NUMBER OF TIMES A PRESCRIPTION CAN BE FILLED BY EACH MEDICAID RECIPIENT EACH MONTH, THE NUMBER OF MEDICAL EXAMS THAT CAN BE ORDERED FOR EACH PATIENT EACH MONTH IN ORDER TO ELIMI- NATE DUPLICATIVE, REDUNDANT AND UNNECESSARY EXAMS. (F) THE COMMISSIONER AND THE OFFICE OF HEALTH INSURANCE PROGRAMS IN CONSULTATION WITH THE OFFICE OF THE ATTORNEY GENERAL AND THE OFFICE OF THE MEDICAID INSPECTOR GENERAL SHALL DEVELOP ALL OF THE FRAUD PREVENTION MARKERS WHICH SHALL BE ENCODED INTO THE MEDICAID CARDS ISSUED TO BOTH MEDICAID RECIPIENTS AND MEDICAID SERVICE PROVIDERS. (G) FRAUD PREVENTION MARKERS INCORPORATED INTO SOFTWARE WHICH SHALL BE USED TO OPERATE THE HARDWARE COMPONENT OF THE BIOMETRIC SCANNERS SHALL PREVENT AND/OR REJECT THE PAYMENT BY THE MEDICAID PROGRAM AT POINT OF SERVICE IF FRAUD OR POTENTIAL FRAUD IS IDENTIFIED BY THE BIOMETRIC TECH- NOLOGY SYSTEM. (H) THE COMMISSIONER IN CONSULTATION WITH THE OFFICE OF HEALTH INSUR- ANCE PROGRAMS AND THE OFFICE OF THE ATTORNEY GENERAL SHALL BE RESPONSI- BLE FOR PROMULGATING RULES AND REGULATIONS NECESSARY FOR THE OPERATION OF THIS PROGRAM AND ENSURING THAT MEDICAID RECIPIENTS HAVE ACCESS TO EMERGENCY HEALTH SERVICES IN THE CASE OF A BIOMETRIC TECHNOLOGY SYSTEM MALFUNCTION OR FRAUD DETECTION ALARM. 3. (A) SUCH BIOMETRIC TECHNOLOGY USE REQUIREMENT SHALL BE IMPLEMENTED WITHIN TWELVE MONTHS FROM THE EFFECTIVE DATE OF THIS ARTICLE.
(B) IF THE DEPARTMENT FAILS TO MEET THE DEADLINE ESTABLISHED PURSUANT TO PARAGRAPH (A) OF THIS SUBDIVISION, IT SHALL SUBMIT IN WRITING TO EACH MEMBER OF THE LEGISLATURE ITS FAILURE TO MEET SUCH DEADLINE AND A DETAILED EXPLANATION OF WHEN SUCH TECHNOLOGY WILL BE IN PLACE. S 293. REPORT. 1. THE DEPARTMENT SHALL REPORT TO EACH MEMBER OF THE LEGISLATURE WITHIN SIX MONTHS OF THE EFFECTIVE DATE OF THIS ARTICLE, THE ESTIMATED TOTAL NUMBER OF BIOMETRIC SOFTWARE LICENSES REQUIRED TO PLACE BIOMETRIC PALM SCANNERS IN ALL HOSPITALS, CLINICS AND PHARMACIES SERVING MEDICAID RECIPIENTS. 2. SUCH REPORT SHALL INCLUDE: (A) AN ESTIMATED NUMBER OF PALM SCANNERS TO BE PLACED IN ALL HOSPI- TALS, CLINICS AND PHARMACIES SERVING MEDICAID RECIPIENTS; (B) THE ESTIMATED COST OF THE MAIN SERVER THAT SHALL BE USED TO AGGRE- GATE THE BIOMETRIC DATA; AND (C) THE ESTIMATED ANNUAL COST FOR THE MAINTENANCE AND UPGRADES OF HARDWARE AND SOFTWARE REQUIRED FOR THE EFFECTIVE USE OF THIS TECHNOLOGY. S 294. RULES AND REGULATIONS. THE COMMISSIONER IS AUTHORIZED AND DIRECTED TO PROMULGATE SUCH RULES AND REGULATIONS AS HE OR SHE MAY DEEM NECESSARY OR APPROPRIATE TO EFFECTUATE THE PURPOSES OF THIS ARTICLE. S 2. This act shall take effect immediately.

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