Senator Fuschillo Supports New Plan To Fight Medicaid Fraud And Save Taxpayers Money

Charles J. Fuschillo Jr.

March 08, 2006

Senator Charles J. Fuschillo, Jr. (8th Senate District), a member of the Senate’s Health Committee, today announced his support of a newly proposed measure, sponsored by Senator Dean Skelos (9th Senate District), that would fight Medicaid fraud and result in an anticipated savings of $2.3 billion each year. The Medicaid Fraud Prevention and Recovery Reform Act of 2006 is a plan that would combat fraud and abuse at every step of the process, from billing and prepayment review to investigation, civil recovery and criminal prosecution of Medicaid thieves.

"There are two major reasons why expanding our efforts to fight Medicaid fraud is so vital. First, Medicaid fraud costs State and local governments billions of dollars each year, which hurts taxpayers. Secondly, it affects both the law abiding people who need the health coverage provided by Medicaid and also the health care professionals who provide medical care," said Senator Fuschillo. "This plan would help root out fraud, increase accountability and save taxpayers money, while at the same time maintaining health care services."

Highlights of the plan include:

- The creation of a new, independent, Office of Medicaid Inspector General, which would consolidate responsibilities and staff from eight agencies into one new office within the Department of Health;

- Referring fraud cases to local district attorneys if a case is refused by the Medicaid Fraud Control Unit in the Attorney General’s office;

- Allowing local governments and district attorney offices to share in Medicaid fraud recoveries if they provide information or evidence of fraud;

- Increasing civil and criminal penalties for people who commit Medicaid fraud;

- Requiring all health care institutions to implement corporate compliance and internal controls programs;

- Requiring the State Insurance Department to submit an annual report of health insurance fraud cases submitted by health plans;

- An appropriation for the New York Prosecutors Training Institute to conduct an educational program on Medicaid fraud for local district attorneys;

- Authorizing the Department of Health to upgrade information technology to detect Medicaid fraud; and

- Adopting a State False Claims Act that would allow the State to collect 10 percent of the federal share of any recoveries made under the Act.

These reforms are similar to ones enacted by the state of Texas, which helped them to increase the amount of money recovered from Medicaid fraud by 30 percent in the first year, without incurring any additional expenses. Texas now annually recoups five percent of its total Medicaid expenditures. If similar results were achieved in New York, the State would recover an estimated $2.3 billion each year, which would help provide tax relief for State and local taxpayers.

This new plan was developed after statewide public hearings held by the Senate Medicaid Reform Task Force. The task force recently held a hearing at Hofstra University, which Senator Fuschillo attended, that solicited input and suggestions from people in the health care industry and the law enforcement community on what could be done to strengthen the state’s efforts to detect and prevent Medicaid fraud.

This plan continues Senator Fuschillo’s support for Medicaid reform. Previously, Senator Fuschillo supported both the State cap on local Medicaid expenses and the State takeover of the local share of the Family Health Plus program, which have resulted in millions of dollars in savings to Nassau and Suffolk Counties.