Section 406. Hospitals; refunds, waivers and compromises of bills

1.
  Moneys heretofore or  hereafter  received  by  the  department  for  the
  accounts  of  any of the hospitals or institutions of the department may
  be refunded to the person or party for whose account same were received,
  and within six years thereafter upon satisfactory proof being  submitted
  to the commissioner that:
    a.  such moneys were in excess of the charges imposed upon or incurred
  by the party, pursuant to law; or,
    b. such moneys were received as reimbursement  for  care,  maintenance
  and  treatment of patients, and such care, maintenance and treatment has
  not been rendered or furnished; or,
    c. such moneys were received from the funds of patients not  available
  for payment for the care, maintenance and treatment of patients.
    2. Notwithstanding the provisions of section one hundred twenty-one of
  the  state  finance  law,  such  refunds  shall,  upon  approval  by the
  commissioner and after audit by the comptroller, be paid from any moneys
  in the custody of the department received as reimbursement for the care,
  maintenance and treatment of patients in the several  hospitals  in  the
  department.
    3.  The  commissioner  may  in  his discretion, in proper cases, where
  substantial justice will best be served thereby,  waive  bills  for  the
  maintenance, care and treatment received or furnished to patients in any
  of  the  hospitals  or  institutions of the department or compromise any
  portion of such bills. Such waiver or compromise shall be made only upon
  prior approval of the comptroller and the  attorney  general  when  they
  deem it to be for the best interest of the state.