Skelos Unveils Plan To Boost Prosecution Of Medicaid Fraud

Dean G. Skelos

August 02, 2005

New York State Senate Deputy Majority Leader Dean G. Skelos (R-Rockville Centre) today announced new legislation designed to increase the prosecution of Medicaid fraud. The Skelos bill will provide local district attorneys with information about Medicaid fraud committed within their county and enable the district attorney’s office and the county to retain a portion of any Medicaid fraud dollars recovered. In the absence of this legislation, the cap on county Medicaid costs enacted through the 2005-06 State Budget limits the ability of counties to receive any recompense from recovered Medicaid fraud dollars.

"Medicaid fraud steals from everyone in New York State. It drives up property taxes, state taxes and federal taxes and deprives the neediest New Yorkers of the quality health care they deserve," said Senator Skelos. "We have the nation’s largest Medicaid program and received the most federal money to fight fraud, but we’ve fallen far behind other states in recovering taxpayers’ money stolen from our Medicaid system. This legislation will provide significant new incentives for local prosecutors to partner in this effort."

According the 2004 Annual Report issued by the Attorney General’s Medicaid Fraud Control Unit ("MFCU"), the Attorney General’s office prosecuted only 122 criminal cases of Medicaid fraud last year—out of over 400 million Medicaid claims that were paid by the state. The federal Government Accountability Office and other experts believe that between 10% and 30% of New York State’s $44.5 billion Medicaid budget is consumed by fraud, waste and abuse.

Under Senator Skelos’ new legislation, if the Attorney General fails to initiate the prosecution process against a suspected perpetrator of Medicaid fraud within 60 days of receiving information and evidence from the Department of Health (or from its development by the Attorney General’s MFCU), the Attorney General’s office must provide this material to the district attorney in the county where the fraud occurred. Subsequently, the district attorney’s office and the county would each receive 20% of the non-federal share of the recovery.

If either the Department of Health or the Attorney General settled a case of Medicaid fraud after receiving evidence developed by a district attorney, the district attorney’s office and the county would each receive 15% of the non-federal share. In addition, Senator Skelos’ bill contains provisions ensuring that these prosecutions do not overburden the district attorneys’ limited resources, promoting future fraud enforcement and providing counties with budget relief.

To fight fraud committed by Medicaid recipients, the Skelos legislation provides the state Office of Welfare Inspector General with a $5 million budget appropriation. Finally, the new Skelos anti-fraud bill contains "whistleblower" protections and allows judges to triple, or treble, any damages awarded in a Medicaid fraud case. This language was contained in Senator Skelos’ Office of Medicaid Inspector General legislation and in the Attorney General’s False Claims Act.

In May, the New York State Senate passed important legislation authored by Senator Skelos creating a new, independent Office of Medicaid Inspector General. Despite the bill’s passage in the Senate with broad bipartisan support, the Attorney General blocked its consideration in the State Assembly. Following a recent New York Times exposé, Governor George Pataki established a similar Medicaid Inspector General by Executive Order.

"With the Assembly leadership unwilling to allow debate on my legislation creating an independent Office of Medicaid Inspector General, Governor Pataki used the power granted to him under the State Constitution to create a similar position," Senator Skelos said. "While I certainly applaud the Governor’s effort, it remains absolutely essential that the Assembly pass my Inspector General legislation because of the sweeping reforms and accountability that can only be accomplished by a new law."

Between the New York State Department of Health’s Office of Medicaid Audit and Fraud Prevention and the Attorney General’s MFCU, the state spends more than $130 million to combat Medicaid fraud, with nearly 800 employees. Of those 800 employees, $93 million in federal grants funded 246 employees at the DOH and 208 positions in the Attorney General’s office. That said, New York State’s MFCU recovered $.72 for every dollar that it received in federal Medicaid fraud funding between 2001 and 2003 and, during this period, California (189 employees), Florida (127 employees) and Texas (43 employees) recovered an average of 200%, 300% and 500%, respectively, of their federal funding level. In 2003, New York State’s recovery-to-federal grant ratio was worse than 37 other states and the District of Columbia.

On Tuesday, July 19th, Senator Skelos and Congressman John E. Sweeney (R-Clifton Park) requested a federal Department of Health and Human Services audit of expenditures of this $93 million federal Medicaid fraud grants by the Attorney General and Department of Health, including a detailed analysis of investigations initiated and claims filed by the state MFCU’s seven regional offices located in Buffalo, Rochester, Syracuse, Albany, Pearl River, New York City and Long Island.