Aggressive Effort to Root Out Provider-Level Waste, Fraud and Abuse from Medicaid Represents Dramatic Departure from Disinterest of Previous Administrations

New Three Person Unit Will Have No Cost to Local Taxpayers Through Cooperation with New York State

ERIE COUNTY, NY— Today, Erie County Executive Mark C. Poloncarz announced the creation of the Erie County (“County”) Medicaid Anti-Fraud Task Force, which will be tasked with rooting out provider-level waste, fraud and abuse in Medicaid.    

“While Medicaid represents the single largest cost to Erie County, at more than $211 million this year alone, prior administrations have failed to take significant action to help reduce this burden on local taxpayers,” said Poloncarz.  “As Comptroller, I have advocated for the County to take advantage of the resources available to us to aggressively investigate the Medicaid program.   Now as County Executive, I am taking action and creating an Erie County Medicaid Anti-Fraud Task Force that’s sole purpose will be to root out the provider-level waste, fraud and abuse that inherently exist within Medicaid.” 

With a new partnership with the New York State Department of Health (“NYSDoH”) and the Office of the Medicaid Inspector General (“OMIG”), Erie County will be the ‘flagship’ of the State’s revamped Demonstration Project process and become the largest municipality outside of New York City to partner with the State on stamping out provider waste and abuse.  As part of their three-party Memorandum of Understanding (“MOU”), signed and executed earlier this week, the State has agreed to fully fund all costs associated with the startup and administration of the County’s efforts. 

Poloncarz added, “This task force will serve as a strong deterrent against local providers’ taking advantage of the system and, in instances when we identify waste, fraud or abuse, we now will have the ability to actually recover improper or illegal payments made to these providers.  Best yet, through a strong cooperative effort with NYSDoH and OMIG, the startup and administration of this task force will be fully funded by New York State and will not require any county share.”

Initially, the task force will be comprised of three people, the Erie County Medicaid Inspector General, a senior investigator and a support staffer, and will utilize the latest data-mining and investigatory tools.  This unit will serve to lower and help contain costs through the active investigation and auditing of Medicaid providers and the subsequent recovery of illegally obtained Medicaid funds.  Additionally, the public presence of the unit will act as a strong deterrent to future waste, fraud and abuse by providers.

On June 18, 2012, Poloncarz submitted a resolution (Comm. 12E-9) to the Erie County Legislature requesting authorization for the creation of the Medicaid Anti-Fraud Unit, which was approved by the Health and Human Services Committee on June 26^th.  Poloncarz fully expects final approval from the Legislature through the adoption of the Committee Report at the Legislature’s next full session scheduled for tomorrow, July 12, 2012.

Poloncarz concluded, “With more than $1 billion on the line every single year it is our responsibility to ensure every dollar is accounted for and spent properly on the provision of health care services to those in need.  I fully expect the Legislature to give its final approval tomorrow and allow this multi-agency initiative to go forward.”

Medicaid is the single largest cost to Erie County costing taxpayers more than $1 billion annually, with a local share of $211.7 million in Fiscal Year 2012.   As such, instead of just pointing the finger at Albany for the costs that are out of local control, Poloncarz has long advocated for working to lower the costs we can control—those associated with the waste, fraud and abuse that invariably exists within Medicaid. 

• In 2009, as Comptroller, Poloncarz issued a report examining Erie County’s Medicaid Anti-Fraud Processes, which found that despite various mechanisms available, the County was not actively engaging in any efforts to control provider fraud.   Poloncarz subsequently called on County Executive Chris Collins to reengage in those efforts, which was ignored;
• In July 2011, as a candidate for Erie County Executive, Poloncarz released a policy paper analyzing the County’s Medicaid program and put forth a plan to reduce the burden on Erie County taxpayers that included the creation of an “Erie County Medicaid Inspector General” to work alongside partners in state government to root out waste, fraud and abuse; and,
• On January 3, 2012, his first day in office as County Executive, Poloncarz issued Executive Order #002—Medicaid Fraud and Abuse Task Force, which required the Commissioner of the Department of Social Services, in conjunction with the County Attorney and Comptroller’s Offices, to recommend the methods and procedures to create a Medicaid Anti-Fraud Task Force.

Eleven (“11”) other counties and New York City have participated in earlier versions of OMIG’s Demonstration Project and some have experienced success in not only deterring but identifying and recovering illegally obtained Medicaid payments to vendors.  Recent successes include Monroe County identifying nearly $12 million in Medicaid claim overpayments made to local providers, with OMIG taking action to successfully recover more than $4 million.   Monroe County’s local share of these collections amounted to $515,745.  New York City was also recently presented with $278,642, which represented their local share of more than $10 million in Medicaid funds recovered over the past three years.

Medicaid, which was enacted in 1965 as part of President Lyndon B. Johnson’s ‘Great Society,’ is a means-tested entitlement program that finances the delivery of primary and acute medical services, as well as long-term care to more than 68 million Americans.  While optional, all states and the District of Columbia currently participate in the program.