New York State’s Medicaid program is the largest in the country. In fiscal year 2010,New York’s $2,700 per resident Medicaid spending exceeded per capita Medicaid spending inthe rest of the country by more than $1,500. When problems have been identified, their cost hasoften been large as well. Poor program oversight by both the State and federal government hascontributed to these problems.This report discusses past findings by Inspectors General, investigative reporters, whistle-blowers and this Committee of waste, fraud, and abuse within New York’s Medicaid program. Italso discusses positive steps taken by Governor Andrew Cuomo to address many of thoseproblems, highlights continuing concerns, and offers several recommendations aimed atprotecting future tax dollars from being misspent. Several of the costly problems discussed inthis report include:
In 2010, the
reported that Medicaid was paying extremely highpayment rates for residents in New York’s State-operated developmental centers. Thehigh payments resulted from a complicated methodology that was initially approvedmore than two decades ago by the federal government. This methodology resulted in
payment rates exceeding $5,000 for each institutional resident by 2011. TheCommittee majority estimates that the federal share of total payments going to the Statethrough these facilities was approximately $15 billion in excess of a reasonable amount.The Centers for Medicare and Medicaid Services (CMS) believes that the developmentalcenter payments exceeded Medicaid upper payment limits established by Congress. Theexcessive rates have remained in place for two-and-a-half years after the federalgovernment began asking the State for information about the developmental centerpayment rates.
Over the past decade, the Office of the Inspector General (OIG) at the Department of Health and Human Services (HHS) has uncovered ten instances in which the State hasimproperly claimed at least $50 million in federal Medicaid dollars. Moreover, in thepast four years, the federal government has successfully sued New York for unlawfulMedicaid expenditures twice, recovering more than $600 million.
In 2009, a whistleblower sued New York City for rampant inappropriate and fraudulentspending in Medicaid’s Personal Care Services (PCS) program.
The Committee has learned that Medicaid estate planning is a long-standing practice andsignificant problem across the nation and in New York State. The Committee has learnedthat relatively affluent people in New York artificially impoverish themselves in order toqualify for Medicaid and have taxpayers pick up the cost of their long-term care servicesand supports. At least in Suffolk County, New York, a relatively affluent part of theState, a legal technique called spousal refusal, which is essentially when one spouseabandons all financial care of a sick or disabled spouse and leaves him or her as a ward of the State, is widely used.