Senate Passes Measure to Fight Medicaid Fraud

The New York State Senate today passed legislation (S3019), sponsored by Senator Catharine Young (R-C-I, Olean), that would create a financial incentive for counties to further investigate and prosecute Medicaid fraud. By encouraging localities and rewarding successful Medicaid fraud prosecution efforts, this measure would help eliminate fraud, waste, and abuse.

Senator Young said, “Medicaid fraud hurts taxpayers and increases costs for local governments. The existing payment cap inadvertently reduces the incentive to root out fraud, waste, and abuse. By providing a greater share of the funds recovered from a successful prosecution to our local governments, we encourage prosecution of abusers and provide greater tax relief to homeowners, families, and seniors. Local district attorneys and law enforcement know what is going on in their communities best, so it makes sense that we let them handle these cases.”

Earlier this year nine New York doctors were indicted in Brooklyn for allegedly defrauding Medicaid –  a massive $7 million health-care-fraud scheme which took advantage of thousands of homeless people by luring them into offices for unnecessary medical testing in exchange for free sneakers. 

Under current law, a cap limits the amount that local governments can receive after a successful Medicaid fraud prosecution. This bill would ensure that local governments would recoup 100 percent of the local share upon the successful judgment or settlement of Medicaid fraud, or 10 percent of the total recovery, whichever is greater.

By encouraging more Medicaid fraud prosecutions, the total costs of the system would be reduced and benefit both the state and local governments. The state would be the biggest beneficiary of the reduction in the amount of fraud and abuse because it pays a substantially higher share of Medicaid costs than local governments.

The bill has been sent to the Assembly.