TIMES CONTINUES ITS ATTACK ON MEDICAID FRAUD AND WASTE,
CRITICIZES DEPARTMENT OF HEALTH AND ATTORNEY GENERAL.

By Henry J. Stern
July 19, 2005

 The Times published today the second article in its blockbuster series on Medicaid fraud and waste.

In this installment, the by-lines are reversed, with Michael Luo preceding Clifford J. Levy.  The story begins on A1, above the fold, and jumps to take all of B2.  The page one, column one headline: AS MEDICAID BALLOONS, WATCHDOG FORCE SHRINKS.

The Times' lede begins a devastating indictment of a rotten system.  We can do no better here than to quote Luo and Levy directly, and we hope you have time to link to the full report.:

"New York's Medicaid program pays more than a million claims a day, feeding a $44.5 billion river of checks to radiologists and ambulance drivers, brain surgeons and orderlies, medical centers and corner pharmacies.  Many who get those checks pocket more money than they deserve, and millions of taxpayer dollars are believed to be lost every day to theft and waste.

"Yet the state, charged with protecting those dollars, has done to little to stop them from draining away. 

"A yearlong New York Times investigation found only a thin, overburdened security force standing between this enormous program and the unending attempts to steal from it.  Even as spending by New York Medicaid has more than tripled since the late 1980's, the number of fraud investigators who guard its cash register has fallen by half, and several of their leaders have quit or retired in disillusionment.

"Of the 400 million claims that Medicaid paid last year, Health Department regulators uncovered just 37 cases of suspected fraud, far fewer than their counterparts in any other large state, even though New York's Medicaid budget is by far the largest in the nation.  Many experts say that it is likely that at least 10 per cent and probably more of New York Medicaid dollars are stolen or wasted."

The Times series was praised to the skies today in an unlikely place: the editorial column of the New York Post.  Under the headline, RIP-OFF REVELATIONS, the Post editors wrote: 'Hats off to The New York Times and its fascinating -- to say nothing of politically pregnant -- revelations regarding Medicaid abuse in the Empire State.

"In launching a series on the subject yesterday, the Gray Lady seems to have answered a question that has puzzled students of government in New York for decades: How does Albany, by every objective measure, manage to spend billions more on health care for the poor than any other state without any comparative positive effect on poor people's health.

"The answer: fraud and abuse.  Mega fraud and abuse..."

Bob Hardt, in his NY1tch column this morning, reported on the Times article under the headline, "Going for a Pulitzer."  Assuming the allegations are substantiated, which we think is  extremely likely, the series will deserve the highest honor in journalism, even though Clifford Levy received the Pulitzer for investigative reporting in 2003 for a series called "Broken Homes," that exposed the abuse of mentally ill adults in state-regulated homes.  It would be interesting to know what the state of New York has done to correct the horrible conditions Levy revealed two years ago.

In mid-afternoon the first response to the Levy-Luo series arrived from state officials.  Link here to the statement from U.S. Congressman John E. Sweeney (Republican of Clifton Park - a town of 42,000 souls, 15 miles north of Albany) and New York State Senate Deputy Majority Leader Dean G. Skelos (Republican of Rockville Centre - that's 24,500 on the LIRR in Nassau County).

SWEENEY AND SKELOS CALL FOR AUDIT OF NEW YORK STATE'S USE OF FEDERAL MEDICAID FRAUD PREVENTION FUNDS: New York State Receives Over $93 Million To Fight Fraud But Gets Few Results.

A key sentence: "Between the New York State Department of Health's Office of Medicaid Audit and Fraud Prevention and the Attorney General's Medicaid Fraud Control Unit (MFCU) the state spends more than $130 million to combat Medicaid fraud, with nearly 800 employees.  Of those 800, the $93 million federal share funded 246 employees in the Health Department and 208 positions in the Attorney General's office."

The closer: "Despite bipartisan support in the Senate for legislation to create an Office of Medicaid Inspector General, governed by an independent board of directors, and responsible for maintaining a state of the art computer system to detect Medicaid fraud and providing staffing and other resources for local prosecutors, the Assembly refused to introduce the bill.  Also, the Attorney General refused the Senate's offer to include millions of dollars in the state budget to update its computerized Medicaid fraud detection system."

These charges, made by Republican elected officials, are shocking, and we invite a response from the Attorney General's office.  If you read today's Times article, you will find considerable discussion of the role of the Attorney General, the frustrations it has suffered, and the fact that a great deal of its time and energy has been devoted to high-profile Wall Street cases.  The Department of Health and the Attorney General's office are frequently at odds, each accusing the other of mishandling cases, either in data collection or in prosecution.  It could make sense to centralize responsibility, rather than rely on dueling agencies.

The Times gave no hint today of whether there will be a third article in the series, or, if so, when it will appear.  But there is an enormous amount of meat to chew on in the first two, and we imagine that journalists, politicians and lobbyists will be studying it in order to advance their own interests and those of their clients.

An important circumstance that Luo and Levy examine is that there is a massive health-care industry in New York State.  The combined forces of hospitals, labor unions, big pharma, little pharma, and others who share in the annual $44.5 billion bounty are powerful indeed.  They are not inclined to exert themselves to reduce Medicaid expenditures.  It is the Democratic Party, and Speaker Silver's pliant Assembly, which may be more protective of this set of lobbyists than the State Senate.  Hospital workers leader Dennis Rivera, a sometime horseback riding companion of Senate Majority Leader Bruno, shows the bipartisanship for which labor is noted.  His large union supported Governor Pataki for re-election in 2002.  The Senate may be less concerned with health care for the poor, but it is the Assembly that is less likely to take on Medicaid fraud and waste, as well as trial lawyers, educrats and other pets.