Senator Farley Says New Medicaid Inspector General Law Will Help Taxpayers

Hugh T. Farley

July 31, 2006

State Senator Hugh T. Farley (R,C - Schenectady) said that the new Medicaid Inspector General law approved last week by Governor Pataki makes a "triple" of the State's efforts to reduce the burden of Medicaid costs on local property taxpayers. "It's not a home run yet," Senator Farley commented, "but we are clearly rounding the bases."

The new law, which creates an independent Medicaid Inspector General and establishes a new crime of "health care fraud," is intended to stop Medicaid fraud and waste, which some observers believe costs New York taxpayers billions of dollars a year. The other two initiatives designed to help local taxpayers are the "cap" on the local share of Medicaid costs, enacted last year, and the State takeover of all Family Health Plus costs, made law two years ago.

"The previous two programs reduced the Medicaid cost burden on local property taxpayers, which is good," Senator Farley said, "while the Inspector General's fraud-fighting work should reduce total -- local, State, and federal -- Medicaid costs, which is better, since most of us pay not only property taxes, but also State and federal taxes."

The new law creates a Medicaid Inspector General in the State Health Department, combining investigation and enforcement programs which were previously scattered among different agencies. The new Inspector General will coordinate Medicaid audits, investigations, and programs designed to prevent fraud and abuse. The law also establishes a new crime of "health care fraud," with penalties up to 25 years in jail.

"Although no one knows for sure how much Medicaid fraud costs taxpayers," Senator Farley noted, "given the amount of spending on Medicaid, even a small percentage attributed to fraud can represent millions, if not billions, of dollars a year."

According to the New York State Division of the Budget, the two earlier initiatives -- the "cap" on local Medicaid expenditures and the State takeover of all costs of Family Health Plus -- should reduce local Medicaid costs for the 2006-07 State fiscal year by $1.2 billion Statewide. Savings to property taxpayers in the four-county 44th State Senate District are projected at $17 million.