Assemblyman David G. McDonough (R,C,I-Merrick) today announced the state Legislature passed a bill creating the Office of Medicaid Inspector General within the Department of Health (DOH). If signed into law by the governor, the office would audit New York’s Medicaid program for cases of fraud and abuse.

“Conservative estimates place fraud and abuse in New York’s Medicaid program at ten percent, but a New York Times article placed that figure closer to 40 percent of total Medicaid claims,” stated McDonough. “Which means nearly $18 billion of New York’s annual $45 billion Medicaid budget is spent on fraudulent or medically unnecessary services and procedures, placing an ever-increasing burden on New Yorkers.”

The legislation would:

• Require development, testing and implementation of new methods to strengthen the capability of the Medicaid payment information system to detect and control fraud, and improve accountability in the areas of prepayment, claims review, coordination of benefits, paid claims, targeted claims and utilization review.
• Mandate that care, service and supply providers certify to the DOH their compliance programs meet department standards.
• Require the state insurance superintendent submit an annual report summarizing DOH fraud investigations.
• Allow local social service districts to share in the proceeds realized through violation settlements.
• Create five crimes related to health care fraud against private or public health plans.
• Prohibit employers from retaliating against their employees for disclosing or threatening to disclose a policy or practice that constitutes health care fraud.