Skelos Holds Senate Hearing On Medicaid Fraud At Hofstra

Dean G. Skelos

February 03, 2006

New YorkState’s Medicaid system at HofstraUniversity. The hearing was held in conjunction with Senate Health Committee Chairman Kemp Hannon (R-GardenCity) and Senate Social Services, Children and Families Committee Chairman Ray Meier (R-Western).

“Medicaid fraud is stealing billions of dollars from New YorkState’s overburdened taxpayers,” said Senator Skelos. “During the next few weeks, the Senate plans to unveil the nation's most comprehensive approach to fight pervasive fraud, waste and abuse within our Medicaid system. Through this effort, we will make the program more accountable, ensure that health care is available to those in need and provide real tax relief for hardworking New Yorkers.”

By far, New YorkState’s Medicaid Program is the nation’s most expensive, with expenditures exceeding $44 billion in 2005. In addition, Medicaid continues to be the fastest growing component of the State budget with a projected $550 million increase this year. Various studies have concluded that fraud approximately 10% of the state’s Medicaid budget is consumed by fraud, waste and abuse.

During the 2005 legislative session, the Senate introduced and passed legislation (S.3685-B) authored by Senator Skelos to establish an independent Office of Medicaid Inspector General. The purpose of such an office is to integrate, consolidate and coordinate the investigation of Medicaid fraud related activities of state and local governments within the state and, where necessary, to coordinate or contribute to the prosecution of fraud. Unfortunately, this legislation was never voted upon by the State Assembly.

While the Governor issued an Executive Order establishing an Office of Medicaid Inspector General last August, this office lacks the power to aggressively investigate fraud or recovery improper payments.

In addition, Senator Skelos and Congressman John Sweeney (R-SaratogaCounty) requested a federal audit of the Medicaid fraud prevention programs contained within the New York State Department of Health and the Attorney General's office. These federal audits are scheduled for release later this month.

Today’s hearing was the second conducted by the State Senate. At the hearing testimony was given by Brian Flood, Inspector General, Texas Health and Human Services Commission; Mary Kay Owens, President/Consultant Pharmacist, Southeaster Consultants, Inc.; Henry Zwack, General Counsel, New York State Office for Alcoholism and Substance Abuse Services; Gary Miles, former District Attorney, St. Lawrence County, New York; C. Scott Vanderhoef, County Executive, Rockland County, New York; Richard Urra; Litigation Counsel, WellCare Health Plans, Inc.

In his testimony, the Texas Inspector General noted that, through the creation of his office, Texas now recoveries 5% of its total Medicaid budget ($17 billion) in cash from fraudulent or abusive payments. Further, Mr. Flood noted that, during its first year, Texas’ Office of Inspector General operated on the exact same budget as its disparate component offices operated the year before and increased total recoveries by 30%.

Currently, Senator Skelos is developing a comprehensive new plan to fight Medicaid fraud. This new legislation is scheduled for release in two weeks.