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CMS Comes Down Hard on State Medicaid Fraud Enforcement Efforts

Jun.14.2006

In a recent report, the Centers for Medicare and Medicaid Services (CMS) slammed the State of New York, which administers the largest Medicaid program in the nation, for having an ineffective Medicaid fraud and abuse program. CMS specifically declared the New York State Department of Health (NYDOH) to have inadequately committed itself to combating fraud, as indicated by woefully low amounts of actual audit collections, provider sanctions, and referrals to the state's Medicaid Fraud Control Unit - despite that unit being the country's largest. In addition, CMS recommended that the NYDOH increase its staff level (which, since 1998, had dropped by 40% while the program tripled in size) and shift its focus from education to enforcement.

New York objected to almost each of CMS' findings and recommendations and pointed to Governor Pataki's January, 2006 budget plan, which called for an independent Office of Medicaid Inspector General and $15 million in new funding to hire 81 new staff and additional resources. In response, CMS noted that the addition of 81 staff would still be insufficient. As the New York State Assembly's current legislative session comes to a close, Governor Pataki's plan - and other bills related to New York's Medicaid fraud problem - are being held up by partisan debate over whether to implement whistleblower provisions (akin to those in the federal Civil False Claims Act), as several other states have done.

Providers should take note that CMS' report, which in combination with the July 1, 2006 effective date of the federal Deficit Reduction Act 2005 provisions strengthening Medicaid fraud enforcement capabilities and activities, signals the oncoming, expected swell of Medicaid fraud investigations and prosecutions. High on the Inspector General's list of prophylactics for fraud are the establishment and implementation of a proper compliance program, including a sufficient level of internal auditing, monitoring and, when necessary, corrective action.

CMS Report [PDF]


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