Senate approves legislation O'Mara co-sponsors to bolster local Medicaid fraud investigations

Albany, N.Y., June 2 —The New York State Senate has approved legislation co-sponsored by Senator Tom O’Mara (R,C-Big Flats) to restore the incentive for local governments to combat abuse, fraud and waste in New York’s $60-billion-plus system of Medicaid.

Mayors, county executives and other local officials throughout the Southern Tier and Finger Lakes regions, and statewide, continue to point to Medicaid as their heaviest financial burden.

O’Mara said that reports, including two recent audits by the state comptroller’s office, continue to show that despite years of legislative efforts to rid New York’s Medicaid system of abuse, fraud and waste – efforts that included the creation of the Office of Medicaid Inspector General nearly a decade ago – not enough is being done.  In one prominent case   earlier this year, nine New York doctors were indicted in Brooklyn as part of a $7-million Medicaid fraud scheme which took advantage of thousands of homeless people by luring them into offices for unnecessary medical testing in exchange for free sneakers.   

“We need to restore the financial incentive for local governments to root out Medicaid abuse, fraud and waste.  This legislation would help achieve this important goal and hopefully encourage Medicaid fraud investigations and prosecutions at the local level,” said O’Mara. 

The state’s current Medicaid payment cap that applies to local governments limits the amounts that local governments are reimbursed for successfully prosecuting Medicaid fraud cases.  The legislation O’Mara is co-sponsoring (S.3019/A.5113) would restore the financial incentive for counties to identify and prosecute Medicaid fraud.  It would authorize local governments to keep 100% of the local share of any successful Medicaid fraud prosecution or settlement, or 10% of the total recovery, whichever amount is greater.  Since the local share on some programs may be very small, O’Mara stressed the importance of guaranteeing local governments at least 10% of any recovery, including settlement.  The state would receive the balance of recoveries.

At a legislative budget hearing last February, the state’s then-Medicaid Inspector General, James Cox, highlighted the importance of local efforts to further combat and prevent abuses of the New York’s system of Medicaid.

Earlier this year, Schuyler County officials that taxpayers were saved more than $1 million because of the county's renewed emphasis on benefits fraud investigations. 

The legislation must be approved by the State Assembly and signed by Governor Andrew Cuomo before becoming law. It is currently in the Assembly Health Committee.