New York Recovers $851 Million Lost to Medicaid Fraud and Misspending

  • Home
  • News
  • New York Recovers $851 Million Lost to Medicaid Fraud and Misspending
Red White and Yellow Medication Pills, representing addiction treatment

New York, home to one of the nation’s largest Medicaid programs, recovered $851 million in taxpayer funds in 2013. The amount nearly doubled New York’s previous record recovery, $468 million in 2012. The money recovered accounted for dollars lost by the program due to fraud, waste or other misspending. The state did not specifically identify the amount of money recovered through qui tam lawsuits under the New York State False Claims Act or the Federal False Claims Act.

It appears nearly a quarter of the money recovered was from the federal government. According to the press release from the New York Governor’s office, the Office of the Medicaid Inspector General (“OMIG”) identified $496 million in inappropriate Medicare billing. OMIG identified situations where the federal Medicare program should have paid for home health services to consumers with both Medicare and Medicaid. In dual eligibility situations, home health care providers are supposed to bill Medicare first and then bill the state Medicaid program for the remainder. Medicaid improperly reimbursed the health care provider instead. New York recovered $211 million of the mispayments in 2013.

New York also identified two notable incidents of health care fraud in 2013. In the first, a group of individuals living in a gated beachfront community enrolled fraudulently in the Medicaid program. They fabricated information on their applications in order to become eligible. Six individuals were prosecuted by the Brooklyn District Attorney for their role in the fraud. In the second, auditors discovered inadequate and missing documentation at the Abbott House in Irvington, NY. Abbott House received reimbursement for some services that were performed without a rehabilitation plan and billed for more days of services than it had documentation. OMIG recovered more than $254,000.

The announcement of record recoveries in 2012 and 2013 follows controversy over the appointment of Medicaid Inspector General James C. Cox to the position. James G. Sheehan, the state’s first Medicaid inspector and Cox’s predecessor, was dismissed by the Cuomo administration after complaints of aggressive audits and unfair tactics. Sheehan’s office was responsible for recouping $1.5 billion in Medicaid fraud and misspending in four years. Governor Cuomo directed Cox to pursue a more cooperative approach to audits, according to the New York Times.

Waste and abuse in New York’s Medicaid program has been well documented. The Committee on Oversight and Government Reform identified billions of federal tax dollars misspent on the program in a report issued in 2013. The report identified excessive salaries to Medicaid-funded organization executives, abuses of eligibility rules and overpayments to New York development centers. Efforts to reform the program to curb abuse come at the same time as the United States is cracking down on federal tax dollars lost due to health care fraud. The Department of Justice identified $2.6 billion recovered from health care fraud in its 2013 Fiscal Year. The government also recovered $443 million on behalf of state Medicaid programs.

Young Law Group represents whistleblowers reporting fraud to the government through the False Claims Act. For a free confidential consultation, please call Eric L. Young, Esquire at 1-800-590-4116 or complete our online contact form.