PATAKI MOVES ON MEDICAID FRAUD
ON SECOND DAY OF TIMES' SERIES.
BUT THE PROOF OF THE PUDDING
WILL BE FOUND IN THE EATING. 

By Henry J. Stern
July 20, 2005

Well, the Times gets action.  On the afternoon of the second day of its compelling series on Medicaid fraud and waste, Governor Pataki announced the creation of OMIG (Office of the Medicaid Inspector General) with new powers.  The Times' report of the Governor's action, by the diligent duo of Levy and Luo, starts on A1, col.2:

Their three-deck headline: "GOVERNOR ADDS MUSCLE TO CURB MEDICAID FRAUD-- NEW INSPECTOR GENERAL -- Albany Acts to Reorganize Oversight of the State's Largest Program."

Lede: "Gov. George E. Pataki yesterday ordered a broad overhaul of the state agencies that protect Medicaid from fraud and abuse, creating an independent inspector general's office and bringing in a former federal prosecutor to help reorganize the policing of the program, which is New York State's largest expense.

"The inspector general is expected to take over some authority from the State Department of Health, which administers the overall $44.5 billion program but has fared poorly in detecting Medicaid fraud and waste compared with its counterparts in other states.  The changes will be carried out by executive order, the governor said, and will not require the approval of the Legislature.

"Mr. Pataki said he was also appointing Paul Shechtman, a former federal prosecutor, who led the governor's criminal justice initiatives early in his tenure, as an unpaid adviser to develop new strategies for combating wrongdoing in the program and revamping the agencies.  The current antifraud system was put in place after the nursing home scandals of the 1970's.

"The governor's actions followed articles in The New York Times yesterday and Monday that detailed how billions of dollars in Medicaid spending were being siphoned from the program through fraud, waste and profiteering..."

Buried on the jump page of the Levy-Luo report are three brief paragraphs, which we particularly want to call to your attention.

"In an interview, Mr. Shechtman said he had just begun to examine the problems in the system, but he suspected that additional money and legislation would probably be needed.

"It sounds to me like at the moment we have made it too easy for people who are embarking on fraud," said Mr. Shechtman, who is a private lawyer.  "And that can't be good government."

"While the governor plans to use an executive order to create an inspector general, the Republican-controlled Senate approved legislation in May that created a somewhat similar office.  At the time, Mr. Pataki did not announce support for the measure, and it was opposed by the Democratic majority in the Assembly, which has long allied itself with large health care lobbies and unions."

The Sun covered the news in an article: "PATAKI APPOINTS INSPECTOR GENERAL TO OVERSEE MEDICAID PROGRAM REFORM - Silver Defends Fraud Unit Headed by Spitzer," by Brian McGuire, p4.  "Responding as if on cue to an expose in the New York Times this week on Medicaid fraud in New York, the Pataki administration yesterday reversed its earlier opposition to the creation of an inspector general for the giant entitlement program..." 

A later quote: "The speaker of the state Assembly, Sheldon Silver, was less aggressive in his rhetoric when asked yesterday about the Times report.  The Manhattan Democrat instead defended the Medicaid fraud unit headed by New York's attorney general, Eliot Spitzer, who is running for governor next year.  Mr. Silver suggested that more money and better computers would increase collections within the fraud unit, which was criticized in the Times report."

Newsday's Errol Cockfield, in Albany, wrote a briefer account; GUV LOOKING TO POLICE MEDICAID, which ran on pA20.  The Post and the News did not cover the story, although the Post ran a vigorous editorial on the topic yesterday.

Our comment: Yes, it's late in the day.  We estimate that, over the years, more than $20 billion has been stolen or wasted, which puts New York State Medicaid on a par with the United Nations Oil for Food program.  But Paul Shechtman is both honest and brilliant (his resume, which you can read in the Pataki release, is what we might politely call "very strong").  If Shechtman gets real support for his initiatives from the governor and the Democrats, he can stanch the flow of tax dollars to medical cheats and hypochondriacs.  He will also have to slam his office door to those Medicaid fraudsters who may seek his services to defend them.

Governor Pataki's press release is an interesting exercise in damage control, utilizing a bit of newspeak and doublethink:  The headline on the release: GOVERNOR BUILDS ON STATE'S MEDICAID COST-CONTROL SUCCESS (sic); UNVEILS COMPREHENSIVE 5-POINT PLAN TO FIGHT MEDICAID FRAUD AND ABUSE.
 
Mr. Pataki claims, probably with justification, that additional billions which could have been wasted were saved by the state's not paying claims which were too ungainly to fit through the leaking Health Department sieve.  The other parts of his 5-point plan appear sensible, if overdue.  But when a public official does the right thing, as in this case the governor appears to have done, we should acknowledge that, rather than kvetch about his timing or the reason that he saw the light. But we are kvetsches, aren't we?

We have written, and quoted, a lot of words on Medicaid in the last three days.  That is because 1) we are aware of the enormous magnitude of the fraud and waste in this area, and 2) this is a classic example of serious investigative journalism appearing to get results in changing public policy or its execution. 

But it is far too early to proclaim victory over Medicaid fraud and waste.  We await the next chapter, "The Empire (Not Just Blue Cross) Strikes Back," as the components of the health care colossus wrap their tentacles over the legislators they have pampered, and the governor whom they have supported in the Greater New York Co-Prosperity Sphere.

We hope that Levy and Luo maintain their vigilance.  So much of the struggle to shut the spigot still lies ahead.