Senator Flanagan Sponsors Medicaid Inspector General Legislation

John J. Flanagan

July 4, 2006

Senator John Flanagan (2nd Senate District) announced passage of the toughest, most comprehensive plan to combat Medicaid fraud in the United States. The legislation, which Senator Flanagan sponsored, is the product of an agreement by a joint legislative conference committee between both houses of the Legislature. It is designed to fight fraud and abuse at every step of the process, from billing and prepayment review to investigation, civil recovery and criminal prosecution of Medicaid thieves.

"Medicaid fraud forces families to pay more without delivering any of the needed services to our residents need. It affects the health care of our most vulnerable and impacts the financial health of all of us. This act would protect everyone in our state except those who look to defraud this worthwhile health care system," stated Senator Flanagan, a member of the Senate's Medicaid Task Force which led to the Medicaid fraud plan.

At the hearings, the task force received 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.

The Senate Medicaid Reform Task Force, created in 2003, recommended several important measures that have become law, including the State cap on local Medicaid expenses and the State takeover of the local share of the Family Health Plus program, that have saved local property taxpayers billions of dollars.

Senator Flanagan's legislation would further these efforts and address the recommendations of the task force by:

-Creating a new, independent Office of Medicaid Inspector General by consolidating responsibilities and staff from six agencies into the new Office and empowering the Medicaid Inspector General with the ability to detect, investigate and recover improper Medicaid payments;

-Providing county governments with new incentives and access to information to become active partners in the fight against Medicaid fraud;

-Enhancing the capacity of the Department of Health and Office of Medicaid Inspector General to fight fraud with new, state-of-the-art technology;

-Establishing new protocols and procedures to ensure the effective sharing of information and evidence regarding Medicaid fraud between the Office of Medicaid Inspector General, the Attorney General’s Medicaid Fraud Control Unit, county governments and district attorneys;

-Requiring health care institutions to implement corporate compliance programs and allowing providers to request advisory opinions to ensure proper billing practices; and

-Creating new Health Care Fraud offenses to aid in the criminal prosecution of Medicaid fraud.

The Federal Department of Health and Human Services Centers for Medicare and Medicaid Services released a report last month following a comprehensive review of New York’s anti-Medicaid fraud program.

The report concluded that "New York’s overall commitment to program integrity has lagged behind the growth of its program. As the largest single Medicaid program in the nation, New York’s antifraud efforts over the last several years have not been proportionate to its vulnerability. In the final analysis, the Centers for Medicare and Medicaid Services believes that New York must do more to meet its program integrity obligations."

The report also pointed out that "the single most empirical measure of program integrity, actual audit collections, has dropped both in overall collections and the average value of each audit." The federal report recommended that enforcement should be the primary goal of the program.

The federal General Accounting Office estimates that 10 percent of Medicaid expenses are diverted through fraud, an amount equal to billions of dollars spent by New York on the program.

"The creation of the Medicaid Inspector General should save New York taxpayers billions annually by weeding out fraud and abuse. That money can be used for education, for health care and for job creation throughout our state," added Senator Flanagan. "This is a law that is designed to take money away from the crooks and place it in the hands of the taxpayers of this state."

The legislation, which has passed both houses of the New York State Legislature, will be sent to the Governor for approval.