Pataki calls for Medicaid reform to curb fraud
Newspaper says bad claims cost billions
BY JAY GALLAGHER Albany Bureau Chief  Gannett News Service  July 20, 2005

ALBANY -- On the day that a newspaper reported that the state is losing billions to Medicaid fraud, Gov. George E. Pataki proposed a series of steps designed to curb the losses.

"We have to reform to make sure that every dollar we spend on health care in fact goes to health care," Pataki said.

That apparently hasn't been the case in recent years. A New York Times report said that potentially billions of dollars have been siphoned out of the system, which pays the medical bills of poor people.

Much of it has been lost to providers filing fraudulent claims -- including a Brooklyn dentist who claimed to have performed as many as 991 procedures in one day.

But as the program has skyrocketed in cost -- more than $44.5 billion this year -- efforts by the state Health Department to assure the money is being spent honestly have actually diminished, The Times reported.

"It's shocking. It's mind-numbing," Senate Social Services Committee Chairman Raymond Meier, R-Western, Oneida County, said Tuesday.

"The disgusting thing is we fight these huge battles in Albany every year over chicken feed -- should we take away eye glasses or dental coverage -- while the evidence is there is nobody in the Health Department who cares enough to even check on where the money is going," he said.

Pataki announced he was establishing a new office of Medicaid inspector general to better coordinate anti-fraud efforts. Aides said he would make an appointment to the new post shortly.

He also appointed Paul Schectman, his former top law-enforcement adviser and a former prosecutor, to look at longer-term ways to improve fraud detection.

Pataki also wants State University of New York medical schools to review the medical necessity of some Medicaid procedures, a review of computer technology to better catch cheats and entry into a federal program to catch those who are billing the federal and state governments for the same services.

The state's efforts to make sure the Medicaid program -- by far the largest in the country -- spends its money wisely has long been hampered by divided oversight responsibilities.

While the Health Department pays most of the bills and is charged with detecting fraud, the attorney general's office is responsible for prosecutions.

Attorney General Eliot Spitzer has proposed that his office be given the power to examine payments records to look for fraud and also more resources to do more prosecutions.

That's the approach Assembly Speaker Sheldon Silver, D-Manhattan, said Tuesday that he favors.

"We should take the necessary resources and put them in the attorney general's office," he said.

But Spitzer spokesman Darren Dopp said the attorney general welcomed Pataki's proposal.

"It's good that the governor came out with this proposal," he said. "Paul Schectman is a first-rate individual. We look forward to working with him."

The Senate earlier this year passed a bill that would have set up an independent inspector general and toughened penalties for fraud. But it wasn't acted on by the Assembly.

Senate spokesman John McArdle called Pataki's plan "a good and necessary step," but said the Assembly should still pass the Senate proposals.

When the Senate passed the fraud-control measure in May, lawmakers pointed out that the federal General Accounting Office estimated that nationally about 10 percent of Medicaid spending goes to fraud, and that from 2001 to 2003, New York recovered only 72 cents for every dollar it invested in fraud detection.

The federal government pays half the cost of Medicaid in New York, the state about 34 percent and counties 16 percent. Its rapid rise has been frequently cited as the major reason for increases in county sales and property taxes over the last few years.

"Clearly this is a system that is out of control and it leaks billions of dollars a year," Meier said. "This has reached the stage where it is impossible to ignore."