Bill Text: NY S03582 | 2025-2026 | General Assembly | Introduced

---

Bill Title: Implements additional restrictions on actions to recover overpayment of certain assistance.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Introduced) 2025-01-28 - REFERRED TO SOCIAL SERVICES [S03582 Detail]

Download: New_York-2025-S03582-Introduced.html

---

                STATE OF NEW YORK
        ________________________________________________________________________

                                          3582

                               2025-2026 Regular Sessions

                    IN SENATE

                                    January 28, 2025
                                       ___________

        Introduced  by Sens. RIVERA, HOYLMAN-SIGAL, JACKSON, KAVANAGH, SEPULVEDA
          -- read twice and ordered printed, and when printed to be committed to
          the Committee on Social Services

        AN ACT to amend the social services law and the civil practice  law  and
          rules,  in  relation to recovery of overpayment of certain assistance;
          and to repeal certain provisions of the social  services  law  related
          thereto

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Section 104 of the social services law,  subdivision  1  as
     2  amended  by chapter 573 of the laws of 1964, subdivision 2 as amended by
     3  chapter 909 of the laws of 1974, subdivision 3 as added by  chapter  433
     4  of  the  laws  of  1993 and subdivision 4 as added by chapter 340 of the
     5  laws of 2003, is amended to read as follows:
     6    § 104. Recovery from a person discovered  to  have  property.  1.  For
     7  purposes of this section:
     8    (a) "Overpayment" shall include erroneous payments made to an eligible
     9  person in excess of the recipient's needs as defined in this chapter and
    10  erroneous payments made to ineligible persons, including but not limited
    11  to, payments made to such persons pending a fair hearing decision.
    12    (b)  "Recipient"  shall mean any individual who is currently receiving
    13  or at one time received assistance or care as pursuant to the provisions
    14  of this title.
    15    2. A public welfare official may bring an action or  proceeding  in  a
    16  court  of  competent  jurisdiction  against  a [person] recipient who is
    17  discovered to have real or personal property, which resulted in an over-
    18  payment to the recipient, or against the estate or the executors, admin-
    19  istrators and successors in interest of a person who dies  leaving  real
    20  or  personal  property, [if such person, or any one for whose support he
    21  is or was liable, received assistance and care during the preceding  ten
    22  years,  and]  and  there  has  been an overpayment to the recipient. The
    23  public welfare official shall be entitled to recover up to the value  of
    24  such  property which cause the assistance or care to constitute an over-
    25  payment to the recipient or the cost of such assistance or care,  which-

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08010-01-5
        S. 3582                             2

     1  ever  is  lower.  [Any public assistance or care received by such person
     2  shall constitute an implied contract. No claim of a public welfare offi-
     3  cial against the estate or the executors, administrators and  successors
     4  in  interest  of  a  person  who dies leaving real or personal property,
     5  shall be barred or defeated, in whole or in part, by any lack of  suffi-
     6  ciency  of  ability on the part of such person during the period assist-
     7  ance and care were received.
     8    Nor shall the claim asserted by a public welfare official against  any
     9  person  under  this section be impaired, impeded, barred or defeated, in
    10  whole or in part, on the grounds that another person or persons may also
    11  have been liable to contribute.]
    12    In all claims of the public welfare official made under  this  section
    13  the public welfare official shall be deemed a preferred creditor.
    14    [2.  No]  3.  The public welfare official shall not bring an action or
    15  proceeding under this section if excess payments or payments made to the
    16  person were made due to agency or contractor error,  including  but  not
    17  limited to an error made by a facilitated enroller.
    18    4.  In an action or proceeding under this section, the complaint shall
    19  be accompanied by a certificate, signed by the attorney for  the  public
    20  welfare official, declaring on information and belief, the following:
    21    (a)  the attorney has reviewed the facts of the case and has concluded
    22  that there is a reasonable basis for the action or proceeding;
    23    (b) certification that the continuous coverage protections under para-
    24  graph (c) of subdivision four of section three hundred sixty-six of this
    25  chapter do not apply to the recipient;
    26    (c) the specific eligibility criteria under which  the  recipient  was
    27  allegedly  ineligible  for  benefits; the budgeting methodology that was
    28  applied in making the determination that the  recipient  was  ineligible
    29  for  benefits, including the applicable resource or income limit for the
    30  recipient's household composition  during  the  claim  period,  and  the
    31  recipient's applicable resources and income during the claim period; the
    32  time  period  during  which  the recipient was allegedly ineligible; the
    33  value of the real or personal property which resulted in an overpayment;
    34  and the amount of recovery sought; and
    35    (d) the action or proceeding is supported  by  exhibits  including  an
    36  accounting  of the recovery sought and all expenditures of assistance or
    37  care made on behalf of the recipient during the period of alleged  inel-
    38  igibility.
    39    5. There shall be no right of action [shall accrue against] to recover
    40  an alleged overpayment for assistance or care received by a person under
    41  twenty-one  years of age [by reason of the assistance or care granted to
    42  him unless at the time it was granted the person was possessed of  money
    43  and  property  in  excess  of  his  reasonable requirements, taking into
    44  account his maintenance, education, medical care and any  other  factors
    45  applicable to his condition].
    46    [3.]  6.  To  the  extent  described in section 7-1.12 of the estates,
    47  powers and trusts law, the trustee of a supplemental needs  trust  which
    48  conforms to the provisions of such section 7-1.12 shall not be deemed to
    49  be  holding assets for the benefit of a beneficiary who may otherwise be
    50  the subject of a claim under this section and no  action  or  proceeding
    51  may  be  brought  against either the trust or the trustee to recover the
    52  cost of assistance or care provided to such person, or anyone for  whose
    53  support such person is or was liable.
    54    [4.] 7. Any inconsistent provision of this chapter or of any other law
    55  notwithstanding,  a  social  services  official may not assert any claim
    56  under any provision of  this  chapter  to  recover  payments  of  public
        S. 3582                             3

     1  assistance   if   such   payments   were  reimbursed  by  child  support
     2  collections.
     3    8.  There  shall  be  no right of action against a recipient who loses
     4  medical assistance eligibility by reason of excess resources  or  income
     5  because  the recipient's medical assistance eligibility group, as deter-
     6  mined under section three hundred sixty-six  of  this  chapter,  changed
     7  from  MAGI,  as defined in section three hundred sixty-six of this chap-
     8  ter, to non-MAGI, for the two  years  subsequent  to  their  eligibility
     9  change.    A  right  of action against such a recipient begins to accrue
    10  only if the recipient remains ineligible for  medical  assistance  after
    11  the two-year grace period.
    12    9. The public welfare official shall not use confession of judgment to
    13  recover  an  overpayment  of  public assistance or care, or supplemental
    14  nutrition assistance benefits.
    15    10. Any action or proceeding to  recover  an  overpayment  under  this
    16  section  shall  be  waived in cases of undue hardship in which a recipi-
    17  ent's adjusted gross income for the applicable  household  size  is  two
    18  hundred  fifty percent of the federal poverty line or lower and in cases
    19  of other extenuating circumstances as determined by the  public  welfare
    20  official.
    21    11.  Any  action  or  proceeding under this section shall be commenced
    22  within two years from payment for assistance or care.  No  determination
    23  of a debt or award of debt shall be based upon payment for assistance or
    24  care  that  occurred more than two years before the action or proceeding
    25  is commenced.
    26    12. Where by law, interest is imposed as a part of a judgment obtained
    27  pursuant to this section, the interest shall be calculated  at  no  more
    28  than  the one-year United States treasury  bill  rate.  For  the purpose
    29  of this section, the "one-year United States treasury bill  rate"  means
    30  the    weekly  average  one-year  constant  maturity  treasury yield, as
    31  published by the board of governors of the federal reserve  system,  for
    32  the calendar week preceding the date of the entry of the judgment award-
    33  ing  damages.
    34    13.  All settlement and payment agreements under this section in which
    35  the recipient has paid fifty percent or more of the debt by the  end  of
    36  the COVID-19 public health emergency are hereby deemed paid in full.
    37    14.  If a recipient subject to a settlement or payment agreement under
    38  this section has not paid fifty percent or more of the debt by  the  end
    39  of  the  COVID-19  public  health  emergency,  the  recipient may submit
    40  evidence of undue hardship and receive  waiver  of  the  remaining  debt
    41  under  subdivision  ten  of  this section or an appropriate reduction of
    42  debt based on hardship. Notice regarding the opportunity for the  waiver
    43  shall be provided by the public welfare official.
    44    15.  Subdivisions  five,  eight,  ten,  thirteen  and fourteen of this
    45  section shall not apply to any case involving actual fraud.
    46    § 2. Subdivision 7 of section  158  of  the  social  services  law  is
    47  REPEALED.
    48    §  3.  The  civil  practice  law  and rules is amended by adding a new
    49  section 3012-c to read as follows:
    50    § 3012-c. Certificate of merit in certain  overpayment  of  assistance
    51  actions.  In  any action or proceeding for recovery of an overpayment of
    52  assistance or care, as defined in section one hundred four of the social
    53  services law, the complaint  shall  be  accompanied  by  a  certificate,
    54  signed  by the attorney for the public welfare official, meeting all the
    55  requirements of section one hundred four of the social services law.
        S. 3582                             4

     1    § 4. The civil practice law and rules  is  amended  by  adding  a  new
     2  section 3202 to read as follows:
     3    §  3202. Confession of judgment for recovery of overpayment of certain
     4  assistance invalid. Notwithstanding the provisions of section thirty-two
     5  hundred eighteen of this article, no judgment  by  confession  shall  be
     6  entered  to  recover  an  overpayment, as defined in section one hundred
     7  four of the social services law. Any judgment entered  in  violation  of
     8  this section is void and unenforceable.
     9    §  5.  The  civil  practice  law  and rules is amended by adding a new
    10  section 213-e to read as follows:
    11    § 213-e. Actions to be commenced within two years; actions to  recover
    12  certain  overpayments.  An  action  or proceeding on an overpayment by a
    13  public welfare official under section one hundred  four  of  the  social
    14  services  law  shall  be  commenced  within  two  years from payment for
    15  assistance or care, and no determination of a  debt  or  award  of  debt
    16  shall  be  based  upon payment for assistance or care that occurred more
    17  than two years before the action or proceeding is commenced.
    18    § 6. Section 106-b of the social services law, as amended  by  chapter
    19  81 of the laws of 1995, is amended to read as follows:
    20    §  106-b.  Adjustment  for incorrect payments. 1. For purposes of this
    21  section:
    22    (a) "Overpayment" shall include erroneous payments made to an eligible
    23  person in excess of the recipient's needs as defined in this chapter and
    24  erroneous payments made to ineligible persons, including but not limited
    25  to, payments made to those persons pending a fair hearing decision.
    26    (b) "Recipient" shall mean any individual who is  currently  receiving
    27  or at one time received assistance or care under this title.
    28    2.  Any  inconsistent  provision  of  law  notwithstanding,  a  social
    29  services official shall, in  accordance  with  the  regulations  of  the
    30  department  and  consistent  with  federal law and regulations, take all
    31  necessary steps to correct any overpayment or underpayment to  a  public
    32  assistance recipient[; provided, however,]. However:
    33    (a) A social services official shall not bring an action or proceeding
    34  under this section:
    35    (i)  if  excess payments or payments made to an ineligible person were
    36  made due to agency or contractor error, including but not limited to  an
    37  error made by a facilitated enroller; or
    38    (ii)  to  recover  an overpayment under this section for assistance or
    39  care received by a person under twenty-one years of age.
    40    [that a] (b) A social services official [may] shall waive recovery  of
    41  a  past overpayment, in the case of an individual who is not currently a
    42  recipient of public assistance, where the cost of  recovery  is  greater
    43  than the cost of collections as determined in accordance with department
    44  regulations  consistent with federal law and regulations.  [For purposes
    45  of this section, overpayment shall include payments made to an  eligible
    46  person  in  excess  of his needs as defined in this chapter and payments
    47  made to ineligible persons (including  payments  made  to  such  persons
    48  pending  a  fair  hearings  decision). The commissioner shall promulgate
    49  regulations to implement  procedures  for  correcting  overpayments  and
    50  underpayments. The]
    51    (c)  In  any action or proceeding to recover an overpayment under this
    52  section, the social services official shall be entitled  to  recover  no
    53  more  than the value of the property which resulted in an overpayment to
    54  the recipient or the cost of the assistance or care, whichever is lower.
    55    (d) Any action or proceeding to  recover  an  overpayment  under  this
    56  section  shall  be  waived in cases of undue hardship in which a recipi-
        S. 3582                             5

     1  ent's adjusted gross income for the applicable  household  size  is  two
     2  hundred  fifty percent of the federal poverty line or lower and in cases
     3  of other extenuating circumstances as determined by the social  services
     4  official.
     5    3. The procedures for correcting overpayments shall be designed to and
     6  shall minimize adverse impact on the recipient, and to the extent possi-
     7  ble  avoid  undue hardship.  [Notwithstanding any other provision of law
     8  to the contrary, no underpayment shall be corrected with  respect  to  a
     9  person who is currently not eligible for or in receipt of home relief or
    10  aid  to  dependent children, except that corrective payments may be made
    11  with respect to persons formerly eligible for or in receipt  of  aid  to
    12  dependent  children  to  the  extent  that  federal  law and regulations
    13  require.]
    14    4. A social services official shall follow  the  following  procedures
    15  when  correcting  any overpayment or underpayment to a public assistance
    16  recipient under this section:
    17    (a) When determining whether a recipient may be liable for an overpay-
    18  ment, the most favorable budgeting under the applicable  law  and  rules
    19  shall be used to determine eligibility for assistance or care.
    20    (b) After identification and verification of an overpayment, and prior
    21  to  meeting  with  the  recipient  under investigation, a written notice
    22  containing the following information shall be mailed to the recipient:
    23    (i) a statement of the specific eligibility criteria under  which  the
    24  recipient was allegedly ineligible for benefits;
    25    (ii)  the  budgeting  methodology, under the applicable law and rules,
    26  applied in making the decision to pursue recovery of an alleged overpay-
    27  ment;
    28    (iii) the time period during which the recipient was allegedly  ineli-
    29  gible;
    30    (iv)  the  value  of the real or personal property that resulted in an
    31  overpayment;
    32    (v) the amount of recovery sought,  including  an  accounting  of  the
    33  recovery  sought  and  all  expenditures  of  assistance or care made on
    34  behalf of the recipient during the period of ineligibility;
    35    (vi) an explanation of the recipient's rights to bring counsel or  any
    36  other  person to any meeting with social services officials and to leave
    37  any meeting with social services officials at any time; and
    38    (vii) an explanation of the recipient's right to  challenge  liability
    39  for  an  overpayment  by establishing eligibility for assistance or care
    40  using the most favorable budgeting under the applicable law and rules.
    41    (c) No documents may be requested from recipients during  an  investi-
    42  gation  of  an alleged overpayment unless it is directly relevant to the
    43  eligibility factors and time periods for which the social services offi-
    44  cial has a good faith basis to believe the recipient was ineligible. The
    45  recipient shall be given a reasonable amount of time to respond to docu-
    46  ment requests and meeting requests, taking  into  account  time  periods
    47  necessary for third parties to provide documents.
    48    (d)  In  the  case  of  an  alleged  medical  assistance  overpayment,
    49  districts shall contact recipient's  managed  care  plans  to  ascertain
    50  whether  the  recipient  accessed  services  during the time period when
    51  recovery is being contemplated; the managed care  plan  shall  cooperate
    52  with the district by expeditiously providing information that is reason-
    53  ably  necessary for the district to establish its claim, consistent with
    54  protecting the confidentiality of patient information.
    55    5. No settlement agreement or payment plan to recover  an  overpayment
    56  shall be effective unless a social services official with personal know-
        S. 3582                             6

     1  ledge  of  the claims produces an affidavit attesting to the validity of
     2  the claims against the recipient, including but not limited to an attes-
     3  tation that the social services official has determined that the contin-
     4  uous  coverage protections pursuant to paragraph (c) of subdivision four
     5  of section three hundred sixty-six of this chapter do not apply  to  the
     6  recipient.  The  attestation  must  also  state the specific eligibility
     7  criteria under to which the recipient was allegedly ineligible for bene-
     8  fits; the budgeting methodology under the applicable laws and rules that
     9  was applied in making the determination that the recipient was  ineligi-
    10  ble for benefits, including the applicable resource or income limits for
    11  the  recipient's  household composition during the claim period, and the
    12  recipient's applicable resources and income during the claim period; the
    13  time period during which the recipient  was  allegedly  ineligible;  the
    14  value of the real or personal property which resulted in an overpayment;
    15  and  the  amount of recovery sought. The affidavit shall be supported by
    16  exhibits including an accounting of the recovery sought and all expendi-
    17  tures of assistance or care made on behalf of the recipient  during  the
    18  period of ineligibility.
    19    6. The social services official shall not use a confession of judgment
    20  to recover an overpayment.
    21    7.  All  settlement  agreements  and payment plans obtained under this
    22  section in which the recipient has paid fifty percent  or  more  of  the
    23  debt  by  the  end  of  the  COVID-19 public health emergency are hereby
    24  considered paid in full.
    25    8. If a recipient subject to a settlement agreement  or  payment  plan
    26  under this section has not paid fifty percent or more of the debt by the
    27  end  of  the  COVID-19  public  health emergency, the recipient shall be
    28  allowed to submit evidence of undue hardship for waiver of the remaining
    29  debt under paragraph (d) of subdivision two of this section or an appro-
    30  priate reduction of debt based on hardship. Notice regarding the  oppor-
    31  tunity  for such a waiver shall be provided by the social services offi-
    32  cial.
    33    9. Clause (ii) of paragraph (a) and paragraph (b) of subdivision  two,
    34  subdivision seven, and subdivision eight of this section shall not apply
    35  to any case involving actual fraud.
    36    §  6-a.  If  the  implementation  of any provision of this act without
    37  jeopardizing federal financial participation requires a waiver or  waiv-
    38  ers  from  the federal Centers for Medicare and Medicaid Services (CMS),
    39  the commissioner of the department of health shall  expeditiously  apply
    40  for  and  use  the commissioner's best efforts to obtain approval of the
    41  necessary waiver or waivers.
    42    § 6-b. Severability. If any provision of this act, or any  application
    43  of any provision of this act, is held to be invalid, or to violate or be
    44  inconsistent  with  any federal law or regulation, that shall not affect
    45  the validity or effectiveness of any other provision of this act, or  of
    46  any  other  application of any provision of this act, which can be given
    47  effect without that provision or  application;  and  to  that  end,  the
    48  provisions and applications of this act are severable.
    49    § 7. This act shall take effect on the one hundred eightieth day after
    50  it  shall  have  become  a  law and shall apply to any claim, matter, or
    51  administrative or legal action or proceeding pending at  or  after  that
    52  time.  The  commissioner  of  health,  the commissioner of the office of
    53  temporary and disability assistance, and local social services officials
    54  shall make regulations and take other actions  reasonably  necessary  to
    55  implement this act on that date.