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Mark C. Poloncarz, Comptroller
06/17/09
POLONCARZ RELEASES MAJOR REPORT ON ERIE COUNTY'S MEDICAID ANTI-FRAUD ACTIVITIES

Comptroller Expresses Concern over Lack of Progress in Investigations and Reviews

Erie County Comptroller Mark C. Poloncarz today released a report (the "Report") examining Erie County's ("County") Medicaid anti-fraud initiatives and expressing concern over the County's lack of progress in recovering funds from providers engaging in fraud.

The County's share of Medicaid expense is approximately $200 million, with the State's share just over $200 million and the Federal government's share around $400 million. Medicaid is the County's single-largest expenditure in its 2009 budget.

The Report notes that since 2005, state legislation has allowed county governments to coordinate Medicaid anti-fraud investigations with the New York State Department of Health and Office of the Medicaid Inspector General. Despite the Giambra and Collins Administration's respective hiring of private-sector law and accounting firms to work on such investigations, Erie County has made little-to-no progress or recovered monies from providers. The Collins Administration has stated that the lack of progress is due to State resistance and State concerns about the County's vendors and methods of operation.

Poloncarz stated, "For four decades, county executives, legislators and comptrollers in Erie County and across the state have lamented the growing cost of Medicaid on county governments and complained about this state-mandated burden. Given new state mechanisms allowing counties to conduct systematic and large-scale anti-fraud investigations of Medicaid providers, I strongly believe that the County should be aggressively moving forward on such initiatives. Erie County should be taking the lead into these investigations. Instead, it looks like we have hardly left the starting line. As such, I am recommending that the Collins Administration and Legislature meet to discuss this critical issue so that the County can commence new anti-fraud efforts."

Poloncarz' Report noted that in December 2008, Governor David Paterson and the Office of the Medicaid Inspector General announced that the State had recouped $551 million in improperly paid Medicaid funds in the past year. The comptroller praised anti-fraud measures undertaken by the State and county governments but said much more needs to be done.

Erie County's lack of success contrasts with other counties, especially Monroe County. Monroe County, working with its vendors and the State, has successfully pursued providers and, in just one instance, identified one pharmacy that allegedly over-billed Monroe County and the state $3.3 million. Monroe County and the State are pursuing repayment.

"If Monroe County can successfully partner with private vendors and coordinate with the State on vital Medicaid anti-fraud initiatives, then Erie County can," said Poloncarz. He added "Because of the cost of Medicaid, the County cannot afford to wait any longer. The administration must aggressively pursue any Medicaid providers who are over-charging the County or engaging in other types of fraud."

Finally, the Report noted that only until it was questioned by the Comptroller's Office did the Collins Administration reveal that due to State concerns, the County's private sector vendors have apparently severed their relationship with the County and no work is apparently being done on provider fraud under the State mechanisms. Poloncarz concluded, "We all know there is fraud and abuse in the Medicaid program. The difficulty is in identifying it, though Monroe County and others show that it can be done. For years now, the previous county executive and the current administration have claimed that millions of dollars in savings would materialize from pursuing those who defraud the system, but there is little to show for the efforts. Erie County can and must do more to combat this problem. Doing nothing is not an option."

A copy of the Report can be found at: http://www.erie.gov/comptroller/county_audits.asp under the "reviews" section.