Senator Dale M. Volker Announces Senate Passage Of Medicaid Fraud Legislation

(Albany, NY) Senator Dale M. Volker (R-I-C, Depew) today announced that the State Senate passed legislation that would overhaul the state’s Medicaid fraud detection effort with the goal of dramatically reducing corruption and waste, and increasing the amounts of money returned to taxpayers.

"The Medicaid program in New York has become a political lightning rod due to its costs, its benefits, and why many county governments are having difficulty with their budgets," said Senator Dale M. Volker. "One way to mitigate costs and still provide high quality health care benefits is to stop fraud from within the system. This can be done in a cost-efficient and cost effective manner. Making sure that the Medicaid program provides for those in need, and only for those in need, will create real savings and allow this program to remain operational."

New York ranks alone among the nation’s 10 most populous states in spending more on anti-fraud efforts than it recovers, according to the most recent reports filed by states with the federal government. The legislation (S.3685B) would create the Office of Medicaid Inspector General to consolidate and coordinate the investigation of Medicaid fraud and contribute to the prosecution of people who commit fraud. The Office, which would have an established working relationship with the Attorney General’s office and the State Department of Health, would be overseen by an eight member board. The Governor, Senate Majority Leader and Speaker of the Assembly would each appoint two board members, the minority leaders of each chamber would each have one appointment.

The office would have a budget of $100 million, which would come from $25 million in Medicaid fraud recoveries, which would leverage over 2 ½ times as much in federal funds. The 2005-06 State budget includes $1 million to initiate creation of the office. New York would continue to qualify for federal anti-fraud funding to defray the cost of the new program. In addition to streamlining, consolidating and coordinating the state’s effort to combat Medicaid fraud, the legislation calls for the new office to obtain a state-of-the-art, computerized Medicaid fraud detection system that could be integrated with other involved systems to routinely survey Medicaid-related billing services to identifying possible incidents of Medicaid fraud.

The new office would also be able to provide funding and staff assistance to local district attorneys and other entities to aid in restitutions and fraud recoveries. The U.S. General Accounting Office estimates that a minimum 10 percent of Medicaid expenses -- and as much as 30 percent -- are diverted through fraud, an amount equal to billions of dollars each year in New York’s $44 billion Medicaid program. But New York’s anti-fraud efforts have recouped only a fraction of that amount, and have lagged those of other states.

The Senate’s legislation would result in additional savings to county and state taxpayers since savings under the program are automatically returned to local governments who paid the bill in the first place.