New York Gov. Pataki Unveils Reform Plans for State’s Medicaid Program

New York Gov. George Pataki (R) on Tuesday established an independent office of the inspector general as part of a proposal to improve efforts by the state Department of Health and other agencies to address fraud and abuse in the state Medicaid program, the New York Times reports. Pataki issued the executive order after the Times this week published a two-part series that examined "how billions of dollars in Medicaid spending were being siphoned from the program through fraud, waste and profiteering." Pataki said that the inspector general will have subpoena power and will work with the state Office for Technology to improve analysis of Medicaid claims. The inspector general likely will take some authority from the state health department. In addition, Pataki named Paul Shechtman, a former federal prosecutor, as an unpaid adviser to develop proposals to address Medicaid fraud and reform the state agencies involved with oversight of the state Medicaid program. Shechtman said that such proposals likely will require additional funds and legislation (Levy/Luo, New York Times, 7/20). State University of New York medical schools and teaching hospitals also will analyze services provided to Medicaid beneficiaries to improve efforts to identify fraud, Pataki said.

Other Actions
Rep. John Sweeney (R-N.Y.) and state Sen. Dean Skelos (R) in a letter to HHS Secretary Mike Leavitt said that New York recovered an average of 72 cents for each federal dollar the state has received to address Medicaid fraud between 2001 and 2003. In comparison, Texas recovered $4.96 for each federal dollar spent and California recovered $1.98 for each federal dollar spent, the letter said. Sweeney and Skelos wrote, "Although New York state's Medicaid expenditures exceed that of the nation's second largest program by 33% and its federal fraud prevention funding (and) staffing dramatically eclipses that of other states, New York has failed to achieve commensurate results." The state in 2003 received $93 million in federal funds to address Medicaid fraud, the letter said (Johnson, AP/Albany Times Union, 7/19). On Tuesday, Sweeney and Skelos called for an audit of how the state uses federal funds to address Medicaid fraud. Meanwhile, Sen. Hillary Rodham Clinton (D-N.Y.) on Monday said that she would introduce legislation to address the issue (Cockfield, Long Island Newsday, 7/20).

Reaction
Pataki said, "If there's one dollar -- and I'm sure there's a lot more than one dollar -- that is fraudulent, that hasn't been aggressively pursued, then that's got to change, and it will change" (New York Times, 7/20). He added, "To me it is a very important priority. We've been through probably the most difficult four fiscal years the state has faced since the 1930s, and one of the efforts we've been making is to control the cost of state government, and in particular the cost of Medicaid" (AP/Albany Times Union, 7/19). Shechtman said, "It sounds to me like at the moment, we have made it too easy for people who are embarking on fraud. And that can't be good government." James Mehmet, former chief of investigators for the state health department fraud and abuse office in New York City, praised the order from Pataki, adding, "It takes the politics out of it. It's removing the investigative function from the agency that is concerned about providing the services" (Levy/Luo, New York Times, 7/20). Darren Dopp, a spokesperson for state Attorney General Eliot Spitzer (D), said that Spitzer supports the order (AP/Albany Times Union, 7/19). According to Long Island Newsday, Spitzer has "opposed the concept" of an independent office of inspector general and has said that the state Medicaid Fraud Control Unit requires increased staff. State Assembly Speaker Sheldon Silver (D) also has said that Spitzer should receive additional funds to increase staff for the unit (Long Island Newsday, 7/20).

Editorial
New York Medicaid fraud problems are "a scandal and a disgrace for the government of New York state and those who run it," according to a Times editorial. The editorial states that New York state officials all have "the ability to cower ... before the lobbyists from health unions, nursing homes, hospitals and big pharmaceuticals companies," adding, "It's time for them to stop catering to this powerful shadow government" (New York Times, 7/20).

State Official Defends Medicaid Management Office
In related news, Kathryn Kuhmerker, deputy commissioner of the Office for Medicaid Management in the state health department, on Tuesday at a state Assembly hearing defended the office in response to criticism from physicians and patient advocates about delays in the approval of medical equipment for Medicaid beneficiaries, Newsday reports. Kuhmerker said, "Overall, I believe the durable medical equipment program is a highly successful program that is providing thousands of Medicaid recipients each year with needed medical equipment." State Assembly member James Brennan (D) said that state lawmakers called the hearing to "make the system work," adding, "I think the Department of Health is being sincere but clearly this has not received adequate attention" (Ochs, Long Island Newsday, 7/20).