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Comptroller finds fraudulent Medicaid claims cost state millions

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The New York State Comptroller has found close to $100 million dollars in Medicaid fraud, through a series of audits. Tom DiNapoli says more needs to be done to combat waste in the system, especially during tight economic times. Karen DeWitt reports.

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Karen DeWitt
NYS Capitol Correspondent


Comptroller DiNapoli says three separate audits uncovered a number of mistakes in Medicaid payments that needlessly cost taxpayers $92 million dollars.

"We're all scrambling for precious resources and very limited dollars," said DiNapoli, who said Medicaid serves a "very important purpose".

"We need to just have a much tighter administration of this program so that no money is wasted," said DiNapoli.

About half of the overpayments came from nearly 26,000 Medicaid recipients who had more than one Medicaid identification number, which resulted in separate providers collecting duplicate payments for health services. Other errors stemmed from improper processing, and one case involved a Poughkeepsie woman who collected $1500 a week for taxi service to and from Albany, for a total of $196,000 to visit her child in a nursing home, a service not deemed medically necessary.

DiNapoli says he is not recommending criminal charges in any of the cases. But the comptroller says he was frustrated when the health department told him that they could only collect 5% of the mistaken payments. DiNapoli says there needs to be better mechanisms in place for reclaiming the fraudulent funds.

"It underscores the need for the department to fix the leaks in the Medicaid system," he said.

In response, the state Health Department says it intends to tighten it's procedures to ensure that fewer recipients get multiple ID numbers, and will offer better guidance to county social service departments on what types of Medicaid charges are and are not appropriate.

Based on his auditors' research, DiNapoli says he thinks there may be even more money wasted in the Medicaid system, he says the Attorney General's office and Medicaid Inspector General have also uncovered millions of dollars in fraud.

DiNapoli's announcement comes as the Comptroller continues to monitor the state's precarious finances on a daily basis. He says, because of Governor David Paterson's decision to withhold some partial payments, the state should squeak by December without going broke.

"The state will not go out of business and we will not be bankrupt," said DiNapoli, who said the money is being managed "very tightly", to keep a positive balance on December 31.

And DiNapoli says the danger doesn't end with this year. He says January tax collections will likely be even lower than expected, and the state could face more cash flow problems in the coming months.

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