As we explained in our case summary, the question in this case was whether the New York City Human Resources Administration can audit and recover overpayments of reimbursements to a personal-care provider under the Health Care Reform Act. The Court (mem.) unanimously held that the Administration can conduct such an audit.
This case arises under Medicaid, a joint federal-state program for providing medical assistance to low-income people. In New York, the Department of Health administered Medicaid, in conjunction with local social services districts, including the New York City Human Resources Administration.
The Administration contracted in 2001 with People Care—which provides services such as feeding, bathing, and meal preparation to elderly Medicaid recipients—agreeing to reimburse People Care for its projected expenses. In return, People Care agreed that the Administration could audit People Care annually and recoup the amounts that the Administration’s reimbursements for projected expenses exceeded People Care’s actual expenses.
A year later, the Legislature passed the Health Care Reform Act, which provided funds for the recruitment and retention of personal-care workers, like People Care’s employees. During audits under its contract with People Care, the Administration found that People Care had received $7 million in excess funds under the Act and sought to recoup those funds. People Care challenged that determination, claiming that the Administration lacked the authority to audit funds distributed under the Act, which was passed a year after the contract that granted the Administration audit rights.
The Court rejected that challenge. The Court adopted the view of the dissenting justice in the Appellate Division: that the Administration’s right under the 2001 contract to audit People Care’s receipt of Medicaid funds entitled the Administration to audit People Care’s receipt of funds under the Act. Although that contract was signed before the Act was passed, it allowed the Administration to audit People Care’s receipt of Medicaid funds, and funds distributed under the Act are merely a subset of Medicaid funds.
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