Senate Transcript - May 2, 2005

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1 NEW YORK STATE SENATE 2 3 4 THE STENOGRAPHIC RECORD 5 6 7 8 9 ALBANY, NEW YORK 10 May 2, 2005 11 3:08 p.m. 12 13 14 REGULAR SESSION 15 16 17 18 LT. GOVERNOR MARY O. DONOHUE, President 19 STEVEN M. BOGGESS, Secretary 20 21 22 23 24 25

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(518) 371-8910 1 P R O C E E D I N G S 2 THE PRESIDENT: The Senate will 3 please come to order. 4 I ask everyone present to please 5 rise and repeat with me the Pledge of 6 Allegiance. 7 (Whereupon, the assemblage recited 8 the Pledge of Allegiance to the Flag.) 9 THE PRESIDENT: In the absence of 10 clergy, may we bow our heads in a moment of 11 silence, please. 12 (Whereupon, the assemblage 13 respected a moment of silence.) 14 THE PRESIDENT: Reading of the 15 Journal. 16 THE SECRETARY: In Senate, 17 Sunday, May 1, the Senate met pursuant to 18 adjournment. The Journal of Saturday, 19 April 30, was read and approved. On motion, 20 Senate adjourned. 21 THE PRESIDENT: Without 22 objection, the Journal stands approved as 23 read. 24 Presentation of petitions. 25 Messages from the Assembly.

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(518) 371-8910 1 Messages from the Governor. 2 Reports of standing committees. 3 Reports of select committees. 4 Communications and reports from 5 state officers. 6 Motions and resolutions. 7 Senator Farley. 8 SENATOR FARLEY: Thank you, Madam 9 President. 10 On behalf of Senator Balboni, I 11 wish to call up his bill, Print Number 3095, 12 which was recalled from the Assembly, and it's 13 now at the desk. 14 THE PRESIDENT: The Secretary 15 will read. 16 THE SECRETARY: Calendar Number 17 387, by Senator Balboni, Senate Print 3095, an 18 act authorizing the assessor of the County of 19 Nassau. 20 SENATOR FARLEY: Madam President, 21 I now move to reconsider the vote by which 22 this bill was passed. 23 THE PRESIDENT: The Secretary 24 will call the roll upon reconsideration. 25 (The Secretary called the roll.)

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(518) 371-8910 1 THE SECRETARY: Ayes, 48. 2 SENATOR FARLEY: Madam President, 3 I now offer the following amendments. 4 THE PRESIDENT: The amendments 5 are received. 6 SENATOR FARLEY: Madam President, 7 these amendments are offered to the following 8 Third Reading Calendar bills: 9 On behalf of Senator Morahan, page 10 21, Calendar 266, Senate Print 2751; 11 For Senator Skelos, on page 28, 12 Calendar 412, Senate Print 496; 13 Senator Wright, on page 30, 14 Calendar 430, Senate Print 2978; 15 On behalf of Senator Volker, on 16 page 31, Calendar 451, Senate Print 1524; 17 On behalf of myself, Senator 18 Farley, on page 38, Calendar 545, Senate Print 19 3289; 20 And on behalf of Senator LaValle, 21 on page 40, Calendar 573, Senate Print 842. 22 Madam President, I now move that 23 these bills retain their place on the order of 24 third reading. 25 THE PRESIDENT: The amendments

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(518) 371-8910 1 are received, and the bills will retain their 2 place on the Third Reading Calendar. 3 SENATOR FARLEY: Thank you. 4 THE PRESIDENT: Senator Skelos. 5 SENATOR SKELOS: Madam President, 6 if we could return to reports of standing 7 committees, I believe there's a report at the 8 desk. I ask that it be read at this time. 9 THE PRESIDENT: Reports of 10 standing committees. 11 The Secretary will read. 12 THE SECRETARY: Senator Seward, 13 from the Committee on Insurance, reports the 14 following bill direct to third reading: 15 Senate Print 5248, by the Senate 16 Committee on Rules, an act to amend the 17 Insurance Law. 18 THE PRESIDENT: The bill is 19 ordered direct to third reading. 20 Senator Skelos. 21 SENATOR SKELOS: Madam President, 22 if we could now return to motions and 23 resolutions, there's a Resolution 1613, by 24 Senator DeFrancisco. Could we have it read in 25 its entirety and move for its immediate

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(518) 371-8910 1 adoption. 2 THE PRESIDENT: The Secretary 3 will read. 4 THE SECRETARY: By Senator 5 DeFrancisco, Legislative Resolution Number 6 1613, honoring Detective Diane M. Leshinski of 7 the Onondaga County Sheriff's Department upon 8 the occasion of her designation by the 9 New York State Deputies Association as the 10 2004 Deputy of the Year in the law enforcement 11 category. 12 "WHEREAS, It is the sense of this 13 Legislative Body to honor and pay tribute to 14 those singular individuals who devote their 15 purposeful lives to serving others, thereby 16 expressing its highest regard for their 17 unwavering dedication, courage and personal 18 sacrifice in putting the safety and welfare of 19 others before their own; and 20 "WHEREAS, Attendant to such 21 concern, and fully in accord with its 22 long-standing traditions, the New York State 23 Senate is justly proud to recognize and 24 commend Detective Diane Leshinski of the 25 Onondaga County Sheriff's Department upon the

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(518) 371-8910 1 occasion of her designation by the New York 2 State Deputies Association as the 2004 Deputy 3 of the Year in Law Enforcement; and 4 "WHEREAS, This award is presented 5 annually to a deputy sheriff who has displayed 6 outstanding service in the line of duty; and 7 "WHEREAS, Diane Leshinski was one 8 of six children who grew up on a farm in 9 Middleville, New York. She entered the law 10 enforcement field in 1979 as the first female 11 ever to serve in the Village of Mohawk Police 12 Department. After her service to the village, 13 she transferred to the Onondaga County 14 Sheriff's Department in 1985 and joined as a 15 road patrol deputy; and 16 "WHEREAS, For the past 13 years, 17 Diane Leshinski has served as a detective in 18 the Felony Crimes Unit of the Onondaga County 19 Sheriff's Department, Criminal Investigation 20 Division; and 21 "WHEREAS, Detective Leshinski 22 brings to her job an outstanding educational 23 background. She was awarded an Advanced 24 Fellowship Degree by the New York State 25 Sheriff's Association and the Bureau of

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(518) 371-8910 1 Municipal Police, completing a Master's Degree 2 in Criminal Justice at the State University of 3 Albany in 1991. In addition, she completed a 4 second master's degree, in counseling and 5 psychological services, at the State 6 University of New York at Oswego in 1997; and 7 "WHEREAS, While a member of the 8 Onondaga County Sheriff's Department, Diane 9 has served as a field training officer, a 10 background investigator and as a member of the 11 hiring board for the Sheriff's Office; and 12 "WHEREAS, Detective Leshinski has 13 frequently received special recognition for 14 her work with the department. She was honored 15 with five Sheriff's Office commendations and 16 three letters of recognition. In 2004, 17 Detective Leshinski was named Onondaga County 18 Deputy of the Month for heroic service with 19 the Crisis Negotiations Team for her 20 successful intervention with a suicidal 21 individual in 2004; and 22 "WHEREAS, When not on duty, 23 Detective Leshinski volunteers with the 24 InterReligious Council of Central New York, 25 participating in diversity education and

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(518) 371-8910 1 dialogue circles. She has also been a 2 volunteer counselor with C.O.N.T.A.C.T., and 3 for three years she was a volunteer with the 4 Make-A-Wish Foundation; and 5 "WHEREAS, The specific case for 6 which Detective Leshinski has been recognized 7 as the 2004 Deputy of the Year in Law 8 Enforcement is for her investigative efforts 9 that followed the murder of Melissa Flora; and 10 "WHEREAS, On July 1, 2004, the body 11 of Melissa Flora was discovered at her 12 residence in the village of Solvay. Diane 13 Leshinski was assigned to the case as lead 14 detective. The victim's body had been 15 discovered in her apartment several days after 16 she had last been heard from; and 17 "WHEREAS, Many of those who were 18 interviewed in an effort to solve the case 19 were hostile and uncooperative. Those who 20 were asked to help shed light on the case 21 were, in many cases, drug abusers, as was the 22 victim, and many had a history of violence. 23 The investigation was complicated further 24 since the memories of the drug abusers were 25 frequently inaccurate; and

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(518) 371-8910 1 "WHEREAS, Over the next several 2 months, and despite the difficulties she 3 encountered, Diane Leshinski, as lead 4 detective, never lost her focus and dedication 5 as she reviewed evidence, tracked down leads, 6 interviewed witnesses and suspects, and 7 maintained contact with members of the 8 victim's family; and 9 "WHEREAS, As time went by and other 10 detectives were assigned to other cases, the 11 arduous investigation continued under 12 Detective Leshinski's lead. Due to her easy 13 ability to maintain a good rapport with 14 potential witnesses, she was able to maintain 15 contact with those who could help the 16 investigation. Eventually, Detective 17 Leshinski was able to gain the trust of two 18 individuals who later provided critical 19 information which tied a predicate felon to 20 the victim's vehicle just minutes after she 21 was murdered; and 22 "WHEREAS, After months of 23 painstaking investigation, Detective Leshinski 24 was able to provide sufficient witness 25 accounts to the prosecutor which led to an

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(518) 371-8910 1 indictment of a suspect for murder in the 2 second degree. Ten months of hard work had 3 passed prior to the indictment; and 4 "WHEREAS, Detective Leshinski's 5 superiors cited her exceptional ability to 6 communicate with a wide variety of people 7 under difficult circumstances as the reason 8 for her success in this case, as well as 9 throughout her career. It was her persistence 10 and willingness to interview and reinterview 11 people, as she developed leads, that led to 12 solving this case; and 13 "WHEREAS, Diane Leshinski is 14 well-known as an advocate for victims and the 15 families of victims. She maintained close 16 contact with the victim's family throughout 17 the investigation as she worked and reworked 18 various leads; and 19 "WHEREAS, Her outstanding success 20 has led to her recognition as 2004 Deputy of 21 the Year in the law enforcement category. She 22 has justly earned the admiration and respect 23 of her peers, the community and its citizens. 24 This Legislative Body is proud to now add its 25 commendation, paying tribute to Detective

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(518) 371-8910 1 Leshinski for professionalism and commitment 2 to her community; now, therefore, be it 3 "RESOLVED, That this Legislative 4 Body pause in its deliberations to honor 5 Detective Diane Leshinski upon the occasion of 6 her designation by the New York State Deputies 7 Association as its 2004 Deputy of the Year for 8 Law Enforcement, and to express its pride and 9 gratitude to her on behalf of the people of 10 the State of New York; and be it further 11 "RESOLVED, That a copy of this 12 resolution, suitably engrossed, be transmitted 13 to Detective Leshinski at the Annual 14 Legislative Reception to be held by the 15 New York State Deputies Association on May 2, 16 2005, at LoPorto's Sign of the Tree in Albany, 17 New York." 18 THE PRESIDENT: Senator 19 DeFrancisco. 20 SENATOR DeFRANCISCO: Thank you, 21 Madam President. 22 We're very honored to have deputy 23 Diane Leshinski in the chamber today. 24 You know, for the time that I've 25 been in the Senate -- this is my 13th year --

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(518) 371-8910 1 I know all of us take great pride in the 2 legislation we enact to try to do better as 3 far as the crime activities are in this state, 4 to try to provide the tools to the various law 5 enforcement agencies so those who should be 6 behind bars are behind bars. 7 However, those are just the tools. 8 The people that do the work are those in the 9 field. And Detective Leshinski is the best in 10 the field this year for deputy sheriffs or 11 sheriffs, according to the State Deputies 12 Association. She's the 2004 Deputy Sheriff of 13 the Year for Law Enforcement -- to me, the top 14 category of all the awards that they give. 15 So I'm very honored that she's from 16 our district, and I'm honored that she's here 17 today. 18 And on behalf of everyone in the 19 Senate, I want to thank you and all the other 20 law enforcement officials that do such great 21 work for our community. 22 Thank you. 23 THE PRESIDENT: Senator Valesky. 24 SENATOR VALESKY: Thank you, 25 Madam President. I stand today to rise in

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(518) 371-8910 1 support of this resolution with my colleague 2 from Onondaga County, Senator DeFrancisco. 3 As we heard the words of this 4 resolution, some stand out clearly in my mind, 5 and that talks about the commitment and 6 dedication of Detective Leshinski. Those are 7 why we -- those words are why we are honoring 8 her today, her unwavering dedication, courage 9 and personal sacrifice in putting the safety 10 and welfare of others before her own. 11 As we salute her for being named by 12 the New York State Deputies Association as 13 2004 Deputy of the Year in Law Enforcement, 14 let me also, on behalf of the people of 15 Onondaga County, thank you, Deputy Leshinski, 16 for all that you do in making Onondaga County 17 a better place. 18 THE PRESIDENT: The question is 19 on the resolution. All in favor please 20 signify by saying aye. 21 (Response of "Aye.") 22 THE PRESIDENT: Opposed, nay. 23 (No response.) 24 THE PRESIDENT: The resolution is 25 adopted.

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(518) 371-8910 1 Congratulations and best wishes for 2 continued success. 3 (Standing ovation.) 4 THE PRESIDENT: Senator Skelos. 5 SENATOR SKELOS: Madam President, 6 there's a Resolution 1189 at the desk, by 7 Senator Maltese, which was previously adopted. 8 If we could have the title read at this time, 9 and then if you'd recognize Senator Maltese. 10 THE PRESIDENT: The Secretary 11 will read. 12 THE SECRETARY: By Senator 13 Maltese, Legislative Resolution Number 1189, 14 congratulating the Christ the King Regional 15 High School Girls Basketball Team upon the 16 occasion of capturing the New York State 17 Federation Class AA Championship. 18 THE PRESIDENT: Senator Maltese. 19 SENATOR MALTESE: Madam 20 President, I appreciate your indulgence in 21 this matter. 22 As has been mentioned, the Christ 23 the King Regional High School, where I have 24 the honor to be chairman of the board, has 25 emerged as the New York State Federation AA

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(518) 371-8910 1 champions. This in no small part due to their 2 coaches, Bob Mackey and Jill Cook, as well as 3 their athletic director, Carol Timpone. 4 Bob Mackey has a winning record -- 5 and he's with us today -- of 153 games won to 6 13. He of course was instrumental in winning 7 the New York State Federation AA Class 8 Championship. He is at the top of USA Today's 9 Super 25 rankings, and he is the WBCA Coach of 10 the Year. 11 The team itself has an overall 12 record this year of 27 to 0. The girls are, 13 quite frankly, a fantastic team, because they 14 combine not only athletic prowess and 15 excellence but good sportsmanship as well as 16 superior academic ability. 17 They are indeed a team that we can 18 be proud of, not only we in Queens County or 19 those of us in the Christ the King Regional 20 High School family, but all of us in New York 21 State, for their exemplary record not only 22 this year but in past years. They are truly a 23 superior team. 24 Joining them today is the Christ 25 the King AP History class, taking courses in

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(518) 371-8910 1 United States government and politics, taking 2 advantage of observing not only this session 3 but being here at the State Capitol. All are 4 in the top 10 percent of the class, and all 5 are college-bound. 6 Madam President, colleagues, I am 7 very proud to welcome today the Christ the 8 King Regional High School Girls Basketball 9 Team and the Christ the King AP History class. 10 Thank you very much. 11 THE PRESIDENT: This resolution 12 was previously adopted on April 5th. 13 Congratulations and continued best 14 wishes. 15 (Applause.) 16 THE PRESIDENT: Senator Skelos. 17 SENATOR SKELOS: Madam President, 18 if we could go to the noncontroversial reading 19 of the calendar. 20 THE PRESIDENT: The Secretary 21 will read. 22 THE SECRETARY: Calendar Number 23 78, by Senator DeFrancisco, Senate Print 47, 24 an act to amend the Real Property Law, in 25 relation to prohibiting certain lease

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(518) 371-8910 1 provisions. 2 THE PRESIDENT: Read the last 3 section. 4 THE SECRETARY: Section 2. This 5 act shall take effect on the first of 6 September. 7 THE PRESIDENT: Call the roll. 8 (The Secretary called the roll.) 9 THE SECRETARY: Ayes, 58. 10 THE PRESIDENT: The bill is 11 passed. 12 THE SECRETARY: Calendar Number 13 143, by Senator LaValle, Senate Print 93, an 14 act to amend the Navigation Law, in relation 15 to requiring the use of personal flotation 16 devices. 17 THE PRESIDENT: Read the last 18 section. 19 THE SECRETARY: Section 4. This 20 act shall take effect on the 30th day. 21 THE PRESIDENT: Call the roll. 22 (The Secretary called the roll.) 23 THE SECRETARY: Ayes, 58. 24 THE PRESIDENT: The bill is 25 passed.

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(518) 371-8910 1 THE SECRETARY: Calendar Number 2 191, by Senator Larkin, Senate Print 415, an 3 act to amend the Education Law, in relation to 4 requiring institutions. 5 SENATOR SCHNEIDERMAN: Lay it 6 aside. 7 THE PRESIDENT: The bill is laid 8 aside. 9 THE SECRETARY: Calendar Number 10 227, by Senator Rath, Senate Print 2637A, an 11 act to adjust certain state aid payments to 12 the Elba Central School District. 13 THE PRESIDENT: There is a local 14 fiscal impact note at the desk. 15 Read the last section. 16 THE SECRETARY: Section 3. This 17 act shall take effect immediately. 18 THE PRESIDENT: Call the roll. 19 (The Secretary called the roll.) 20 THE SECRETARY: Ayes, 58. 21 THE PRESIDENT: The bill is 22 passed. 23 THE SECRETARY: Calendar Number 24 290, by Member of the Assembly Morelle, 25 Assembly Print Number 1551, an act to amend

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(518) 371-8910 1 the General Business Law, in relation to 2 regulating. 3 THE PRESIDENT: Read the last 4 section. 5 THE SECRETARY: Section 2. This 6 act shall take effect on the 90th day. 7 THE PRESIDENT: Call the roll. 8 (The Secretary called the roll.) 9 THE SECRETARY: Ayes, 58. 10 THE PRESIDENT: The bill is 11 passed. 12 THE SECRETARY: Calendar Number 13 392, by Senator Maziarz, Senate Print 3102B, 14 an act to amend the Parks, Recreation and 15 Historic Preservation Law, in relation to 16 creating. 17 THE PRESIDENT: Read the last 18 section. 19 THE SECRETARY: Section 5. This 20 act shall take effect immediately. 21 THE PRESIDENT: Call the roll. 22 (The Secretary called the roll.) 23 THE SECRETARY: Ayes, 58. 24 THE PRESIDENT: The bill is 25 passed.

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(518) 371-8910 1 THE SECRETARY: Calendar Number 2 433, by Senator Meier, Senate Print 3318, an 3 act in relation to adjusting certain state aid 4 payments. 5 THE PRESIDENT: There is a local 6 fiscal impact note at the desk. 7 Read the last section. 8 THE SECRETARY: Section 2. This 9 act shall take effect immediately. 10 THE PRESIDENT: Call the roll. 11 (The Secretary called the roll.) 12 THE SECRETARY: Ayes, 58. 13 THE PRESIDENT: The bill is 14 passed. 15 THE SECRETARY: Calendar Number 16 441, by Senator Skelos, Senate Print 3685B, an 17 act to amend the Executive Law, in relation to 18 establishing an independent office. 19 SENATOR SCHNEIDERMAN: Lay it 20 aside. 21 THE PRESIDENT: The bill is laid 22 aside. 23 THE SECRETARY: Calendar Number 24 449, by Senator Volker, Senate Print 877A, an 25 act to amend the Criminal Procedure Law, in

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(518) 371-8910 1 relation to granting certain powers. 2 THE PRESIDENT: Read the last 3 section. 4 THE SECRETARY: Section 2. This 5 act shall take effect immediately. 6 THE PRESIDENT: Call the roll. 7 (The Secretary called the roll.) 8 THE SECRETARY: Ayes, 58. 9 THE PRESIDENT: The bill is 10 passed. 11 THE SECRETARY: Calendar Number 12 452, by Senator Volker, Senate Print 1539 -- 13 SENATOR SCHNEIDERMAN: Lay it 14 aside. 15 THE PRESIDENT: The bill is laid 16 aside. 17 THE SECRETARY: Calendar Number 18 461, by Senator Saland, Senate Print 3168, an 19 act to amend the Penal Law, in relation to 20 harassment of teachers. 21 THE PRESIDENT: Read the last 22 section. 23 THE SECRETARY: Section 2. This 24 act shall take effect on the first of 25 September.

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(518) 371-8910 1 THE PRESIDENT: Call the roll. 2 (The Secretary called the roll.) 3 THE SECRETARY: Ayes, 56. Nays, 4 2. Senators Duane and Montgomery recorded in 5 the negative. 6 THE PRESIDENT: The bill is 7 passed. 8 THE SECRETARY: Calendar Number 9 499, by Senator Wright, Senate Print 2533, an 10 act to amend the Tax Law, in relation to 11 imposition of sales and compensating use 12 taxes. 13 THE PRESIDENT: Read the last 14 section. 15 THE SECRETARY: Section 2. This 16 act shall take effect immediately. 17 THE PRESIDENT: Call the roll. 18 (The Secretary called the roll.) 19 THE SECRETARY: Ayes, 58. 20 THE PRESIDENT: The bill is 21 passed. 22 THE SECRETARY: Calendar Number 23 528, by Senator LaValle, Senate Print 3020, an 24 act to amend the Real Property Tax Law, in 25 relation to extending the date.

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(518) 371-8910 1 THE PRESIDENT: Read the last 2 section. 3 THE SECRETARY: Section 2. This 4 act shall take effect immediately. 5 THE PRESIDENT: Call the roll. 6 (The Secretary called the roll.) 7 THE SECRETARY: Ayes, 58. 8 THE PRESIDENT: The bill is 9 passed. 10 THE SECRETARY: Calendar Number 11 534, by Senator Spano, Senate Print 3284, an 12 act to amend the Labor Law and the Public 13 Officers Law, in relation to public access. 14 THE PRESIDENT: Read the last 15 section. 16 THE SECRETARY: Section 7. This 17 act shall take effect on the 60th day. 18 THE PRESIDENT: Call the roll. 19 (The Secretary called the roll.) 20 THE SECRETARY: Ayes, 58. 21 THE PRESIDENT: The bill is 22 passed. 23 THE SECRETARY: Calendar Number 24 551, by Senator Robach, Senate Print 3894, an 25 act to amend the Retirement and Social

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(518) 371-8910 1 Security Law, in relation to investments. 2 THE PRESIDENT: Read the last 3 section. 4 THE SECRETARY: Section 8. This 5 act shall take effect immediately. 6 THE PRESIDENT: Call the roll. 7 (The Secretary called the roll.) 8 THE SECRETARY: Ayes, 58. 9 THE PRESIDENT: The bill is 10 passed. 11 THE SECRETARY: Calendar Number 12 552, by Senator Robach -- 13 SENATOR ROBACH: Lay it aside for 14 the day, please. 15 THE PRESIDENT: The bill is laid 16 aside for the day. 17 THE SECRETARY: Calendar Number 18 558, by Senator Maltese, Senate Print 4001, an 19 act to amend Civil Service Law, in relation to 20 the resolution of disputes in the course of 21 collective negotiations. 22 THE PRESIDENT: Read the last 23 section. 24 THE SECRETARY: Section 2. This 25 act shall take effect immediately.

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(518) 371-8910 1 THE PRESIDENT: Call the roll. 2 (The Secretary called the roll.) 3 THE SECRETARY: Ayes, 58. 4 THE PRESIDENT: The bill is 5 passed. 6 Senator Skelos, that completes the 7 noncontroversial reading of the calendar. 8 SENATOR SKELOS: Thank you, Madam 9 President. 10 As we embark upon our journey to 11 the controversial calendar, I'd just like to 12 mention that having taken a long journey to 13 come to this country are members of the 14 Knights of Malta from Italy. 15 So we do welcome them to our 16 chamber today. 17 (Applause.) 18 THE PRESIDENT: The Secretary 19 will ring the bell, and members should return 20 to their seats. 21 ACTING PRESIDENT LITTLE: Senator 22 Skelos. 23 SENATOR SKELOS: Madam President, 24 if we could go to the controversial reading of 25 the calendar.

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(518) 371-8910 1 ACTING PRESIDENT LITTLE: The 2 Secretary will read. 3 THE SECRETARY: Calendar Number 4 191, by Senator Larkin, Senate Print 415, an 5 act to amend the Education Law, in relation to 6 requiring institutions. 7 SENATOR SCHNEIDERMAN: 8 Explanation. 9 SENATOR LIZ KRUEGER: 10 Explanation. 11 ACTING PRESIDENT LITTLE: Senator 12 Larkin, for an explanation. 13 SENATOR LARKIN: Madam President, 14 Senator Krueger, this is a bill you and I 15 discussed last year. This is a bill that was 16 passed. 17 Don't make me talk too long, 18 Schneiderman. 19 (Laughter.) 20 SENATOR LARKIN: You know, there 21 was a question last time about did we ever 22 talk to any of the colleges. I've talked to 23 about 10 or 12 colleges since last year, and 24 the question comes up about dependency. 25 And that's where the colleges in my

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(518) 371-8910 1 district felt that it was a very fine 2 justification. Because, if you know, the law 3 authorizes, it doesn't mandate that you will 4 do this to the parent. And I think that was a 5 concern that you had. 6 But when you start to look at this, 7 under the current law, there's no obligation 8 to do anything. But by giving them the 9 authority, for those who have parents 10 providing the tuition, room and board and 11 everything else, there's many people who 12 believe that they have an obligation, if they 13 so desire, to go to the college and say: I'd 14 like to find out what my $40,000 a year is 15 getting for me. 16 And basically, that's all this 17 says. 18 SENATOR LIZ KRUEGER: Thank you. 19 SENATOR LARKIN: And my kids are 20 all paid for. 21 SENATOR LIZ KRUEGER: Thank you. 22 ACTING PRESIDENT LITTLE: Senator 23 Krueger. 24 SENATOR LIZ KRUEGER: Thank you, 25 Madam President. On the bill.

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(518) 371-8910 1 ACTING PRESIDENT LITTLE: Senator 2 Krueger, on the bill. 3 SENATOR LIZ KRUEGER: Thank you. 4 And I certainly didn't want to make you speak 5 too long, Senator Larkin. Thank you. 6 And you're right, we've debated 7 this in the past and I've had concerns about 8 the authority of parents to get this 9 information on college students, since I do 10 believe that, under my belief in what the role 11 of state government should be, that we should 12 not be imposing ourselves on adult 13 child-parent relationships. 14 I would like to ask you to consider 15 pulling your bill for today, Senator Larkin, 16 because since our last conversation, and 17 before I had a chance to talk to you today, I 18 found that under federal law, the Family 19 Educational Rights and Privacy Act of 1974 -- 20 shorthand, FERPA -- 20 USC, 34 CFR, Part 99, 21 that federal law says that in order to receive 22 funds under an applicable program of the U.S. 23 Department of Education, that certain rights 24 are given to parents with respect to their 25 children's educational records, but these

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(518) 371-8910 1 rights transfer to the student when he or she 2 reaches the age of 18 or attends a school 3 beyond the high school level. 4 And then it very specifically 5 spells out that in fact the school doesn't 6 have the right to give these documents or 7 records to anyone without the student's 8 permission. 9 So while I recognize that your law, 10 proposed law would say that parents would have 11 to specifically ask the schools for the right 12 to get their children's grades, that in fact 13 we would be putting, if this law went into 14 effect, our educational institutions at risk 15 of losing their right to federal funding under 16 the FERPA law. 17 So I don't change my position about 18 the bill from past years, that I don't think 19 New York State should be inserting itself into 20 the relationship between college-age students 21 and their parents. And that if college 22 students' parents want to say, Give me your 23 grades or I don't pay the $40,000, I think 24 that's a perfectly reasonable analysis by the 25 parent and the student.

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(518) 371-8910 1 But my concern, as before, is the 2 state shouldn't insert itself into this 3 process. But in fact, based on federal law, I 4 don't think we legally want to insert 5 ourselves into the process, because we'd be 6 putting our institutions of higher education 7 in direct conflict between federal privacy 8 rights for students over the age of 18 and 9 then state law. 10 So I will share this report with 11 you. I believe this is still a one-house 12 bill, so even if it were to pass today, I hope 13 we'll take a more careful look at this before 14 we move forward and again would suggest, based 15 on the fact that I think we're violating 16 federal law if we move forward with this law, 17 that we ought to rethink it before we go 18 forward. 19 Thank you, Madam President. 20 ACTING PRESIDENT LITTLE: Senator 21 Robach. 22 SENATOR ROBACH: Yes, Madam 23 President, on the bill. 24 I would like to commend Senator 25 Larkin and just say very briefly that I think

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(518) 371-8910 1 for the amount of students who are really 2 emancipated, 18, are going on their own way, 3 making their own money, this is not an issue. 4 I think this is a bolstering for 5 the vast majority of parents, which I am one 6 of, who are involved financially, emotionally, 7 in every way in our kids' college life, and we 8 want to make sure they're staying on the right 9 track. 10 I think giving them that 11 information, allowing them access, makes all 12 the sense in the world, both as a legislator 13 and as a parent, and want to commend Senator 14 Larkin and encourage a yes vote on a bill that 15 I think helps students and bolsters parents 16 who are very functional and interested in what 17 goes on in their children's lives. 18 Thank you. 19 ACTING PRESIDENT LITTLE: Thank 20 you, Senator. 21 Is there any other Senator wishing 22 to be heard? 23 The debate is closed. 24 The Secretary will ring the bell. 25 Read the last section.

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(518) 371-8910 1 THE SECRETARY: Section 2. This 2 act shall take effect on the first of January. 3 ACTING PRESIDENT LITTLE: Call 4 the roll. 5 (The Secretary called the roll.) 6 ACTING PRESIDENT LITTLE: Senator 7 Montgomery, to explain your vote. 8 SENATOR MONTGOMERY: Yes, Madam 9 President, to explain my vote. 10 I'm going to support this 11 legislation. I do understand the issues that 12 have been raised by Senator Krueger, but I 13 also understand, as a parent, that you get to 14 a point in the relationship between a parent 15 and the young person, I will say the child, 16 when they just stop communicating. I just 17 think it's the nature of what happens to young 18 people. And you ask them what's happening, 19 and they say nothing or they give you one-word 20 answers. It's not very helpful, and there's 21 very little that you can do about it as a 22 parent. 23 But I do think that it is still 24 important, even though they're 18, to be more 25 a part of helping to guarantee that they're

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(518) 371-8910 1 moving in the right direction, that they're 2 being successful, and that if there's anything 3 that you need to be doing in addition to what 4 you are already doing, that you know when to 5 move and how to move. And that very often and 6 probably won't come from them. 7 So I'm going to support this, 8 because I certainly do want to know, I would 9 like to know how my son is doing in school. I 10 know that he is not going to tell me the whole 11 truth. And I want to be able to move 12 appropriately, if necessary. 13 So I commend Senator Larkin on 14 this. And certainly this is for New York 15 State; there are some states that have not -- 16 that don't have this law in place, and that 17 creates a problem for those of us who have 18 children in those states. 19 But nonetheless, I think it's a 20 good law for New York State, and I'm 21 supporting it. 22 Thank you. 23 ACTING PRESIDENT LITTLE: Thank 24 you. Senator Montgomery will be recorded in 25 the affirmative.

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(518) 371-8910 1 The Secretary will announce the 2 results. 3 THE SECRETARY: Those recorded in 4 the negative on Calendar Number 191 are 5 Senators Breslin, Duane, L. Krueger, Parker, 6 Serrano, and A. Smith. Ayes, 52. Nays, 6. 7 ACTING PRESIDENT LITTLE: The 8 bill is passed. 9 The Secretary will read. 10 THE SECRETARY: Calendar Number 11 441, by Senator Skelos, Senate Print 3685B, an 12 act to amend the Executive Law, in relation to 13 establishing. 14 SENATOR SAVINO: Explanation. 15 ACTING PRESIDENT LITTLE: Senator 16 Skelos, for an explanation. 17 SENATOR SKELOS: Thank you, Madam 18 President. 19 You know, as you know, in the past 20 two years the issue of Medicaid has become a 21 significant if not the most significant issue 22 facing this Legislature and the state. 23 This year we enacted a historic 24 cap, and by the year 2008 the Medicaid program 25 will be administered by the state. While the

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(518) 371-8910 1 cap will alleviate the local property 2 taxpayers and counties of an enormous burden, 3 true reform is needed to control the program's 4 skyrocketing costs and ensure that our health 5 care resources are going to those who truly 6 need help, the poor. 7 The system needs to be made more 8 accountable to the taxpayer. This bill is an 9 important step in this direction. According 10 to public and private sector studies, we lose 11 billions of dollars a year to Medicaid fraud. 12 Unlike the complex, overlapping structure in 13 place now, this bill creates a single 14 independent entity to investigate -- and I use 15 the word "investigate" -- Medicaid fraud and 16 coordinate the state's recovery efforts. 17 Through the creation of a Medicaid 18 inspector general, we will create a 19 streamlined, efficient system that clearly 20 separates the three distinct responsibilities 21 involved: Data collection, which will remain 22 with the Department of Health; investigation, 23 which will be with the inspector general; and 24 prosecution, which will be maintained in the 25 Office of the Attorney General.

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(518) 371-8910 1 This new office of Medicaid 2 inspector general will work with and provide 3 assistance to the Attorney General and local 4 prosecutors, to enable more prosecutions of 5 criminals that rip off New York State 6 taxpayers. The office of the inspector 7 general cannot commence criminal actions 8 themselves. 9 Now, the statistics don't lie. We 10 have the largest Medicaid program in the 11 country, but we're not recovering as much as 12 we can or should in Medicaid fraud. This is a 13 bold plan. We've worked with the Department 14 of Health and Human Services in the federal 15 government to develop this legislation and 16 ensure that it complies with federal laws and 17 regulations. 18 We've incorporated the concerns 19 raised by the Attorney General in the initial 20 bill that was introduced, and we've received 21 support from the New York Association of 22 Counties. 23 New York State taxpayers deserve 24 nothing less than a Medicaid system that is 25 accountable to them. And this is the type of

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(518) 371-8910 1 reform that will go a long way in making sure 2 that not only will the poor be able to obtain 3 the services that they deserve, but also the 4 system will not be ripped off by those who 5 would abuse the system. 6 ACTING PRESIDENT LITTLE: Thank 7 you. 8 Senator Savino. 9 SENATOR SAVINO: Madam President, 10 would the sponsor yield for a question. 11 ACTING PRESIDENT LITTLE: Thank 12 you. 13 Senator Skelos, would you yield? 14 SENATOR SKELOS: Yes, I shall. 15 ACTING PRESIDENT LITTLE: Yes. 16 SENATOR SAVINO: Thank you, Madam 17 President. Through you, has there been an 18 evaluation of the current procedures and of 19 the technology in place that shows deficiency 20 in the existing fraud detection system? 21 SENATOR SKELOS: I believe that 22 this will be a new, streamlined, more 23 efficient system where everybody will talk to 24 each other and that the inspector general will 25 do what he or she should do best, and that's

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(518) 371-8910 1 investigate. 2 We want to build on the strengths 3 of the Department of Health, in terms of data 4 collection; the inspector general, whose sole 5 purpose will be to investigate; and the 6 Attorney General, whose sole purpose will be 7 to prosecute and to obtain restitution. 8 SENATOR SAVINO: Madam President. 9 ACTING PRESIDENT LITTLE: Thank 10 you. Senator Savino. 11 SENATOR SAVINO: Through you, if 12 the sponsor would continue to yield. 13 ACTING PRESIDENT LITTLE: Senator 14 Skelos, will you continue to yield? 15 SENATOR SAVINO: Again, unless we 16 determine what is wrong with the current 17 system of fraud detection, how do we attempt 18 to create a system that will work in a new 19 agency? What I haven't yet heard -- 20 SENATOR SKELOS: Well, you know, 21 I was sort of hoping this would go on the 22 noncontroversial calendar, because whenever 23 you bring up statistics, it will then be 24 indicated that there's something political 25 about what is happening with this legislation.

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(518) 371-8910 1 Let me just say this. From 2001 to 2 2003, for every dollar that we spent in 3 New York State on Medicaid fraud detection, we 4 recovered 72 cents. So there's something 5 wrong with the system right now. 6 We're not looking to accuse or 7 point fingers. What we're looking to do is 8 reform the system. And that seems to be a big 9 word right now, is "reform," which I believe 10 this legislation will do. It will reform a 11 very dysfunctional system of collection and 12 prosecuting Medicaid fraud that exists right 13 now in the State of New York. 14 SENATOR SAVINO: Madam President, 15 on the bill. 16 ACTING PRESIDENT LITTLE: Thank 17 you. Senator Savino, on the bill. 18 SENATOR SAVINO: Certainly 19 recognizing that Medicaid fraud is a critical 20 problem that the state faces, and having spent 21 many years working in the social service 22 delivery system in New York City representing 23 people who do Medicaid fraud and do welfare 24 fraud, I will tell you, the creation of a new 25 bureaucracy is not the answer to improving

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(518) 371-8910 1 Medicaid fraud. 2 The answer to improving Medicaid 3 fraud detection is taking a look at the 4 current system in place, recognizing where 5 there are deficiencies, and improving them. 6 That I have not heard an answer 7 from either you or anyone else as to what this 8 new agency will do differently, except become 9 a separate agency, a new bureaucracy, in 10 essence, to do the same thing that the current 11 system does, that current system which has 12 proven that it has -- it has recovered record 13 dollars, a 29-year record -- more money this 14 year than we have in the past 29 years. So 15 we've recovered more than $65 million this 16 year alone under the current Medicaid fraud 17 collection unit. 18 Obviously, something is working. 19 Are there deficiencies? Perhaps there are. 20 We need to examine them, not create a new 21 bureaucracy, a new layer of government. 22 Improve the current layer of government and 23 continue to work towards not just fraud 24 collection, but fraud detection. I haven't 25 heard anybody talk yet about preventing fraud

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(518) 371-8910 1 in the Medicaid system, just the collection of 2 money upon the prosecution. 3 So on that, I will be voting 4 against this bill, because I think the 5 creation of a new bureaucracy is not the 6 answer. We should go back and see what's 7 wrong with the current system and improve that 8 first. 9 Thank you. 10 ACTING PRESIDENT LITTLE: Senator 11 Skelos. 12 SENATOR SKELOS: If I could 13 comment on that, Madam President. 14 You're absolutely wrong. We're not 15 creating a new bureaucracy. And I know that 16 that is a good sound bite, but that is not 17 what's happening here. 18 Right now there are approximately 19 300 people in the State of New York working in 20 our current Medicaid fraud control unit. We 21 are recovering less than just about every 22 other state in the nation. 23 I mentioned the 72 cents for every 24 dollar. At the same time, California, with 25 189 employees, recovered 200 percent more;

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(518) 371-8910 1 Florida, with 127 employees, 300 percent 2 more -- no? Then I'm going to correct myself. 3 But they all recovered more. And I'll use the 4 statistics. 5 Texas, for every dollar spent, 6 $4.96 recovered. Florida, for every dollar 7 spent, $3.14 recovered. California, for every 8 dollar spent, $1.98. New York, 72 cents. 9 Now, in Texas they receive -- well, 10 in New York State we receive Medicaid fraud 11 control unit money from the federal government 12 $30.6 million, 295 members of staff, and we 13 recovered $24 million. That's out of a 14 roughly $44 billion budget. 15 California, $16.2 million in 16 dollars from the federal government, 189 in 17 staff, recovered $39.4 million out of a 18 $30 billion budget. 19 Washington, D.C., $1.2 million in 20 funding, 16 employees, 16 employees, and they 21 have an inspector general in Washington, D.C., 22 recovered $13 million. And certainly their 23 Medicaid program comes nowhere near the 24 $44 billion Medicaid program that we have in 25 this state.

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(518) 371-8910 1 Now, Senator, you mentioned the 2 $62 million that was recovered. While we 3 collected around $62 million, $30.8 million of 4 that was from a national pharmaceutical 5 settlement negotiated by the National 6 Association of Medicaid Fraud Control Units, 7 with no New York State involvement. 8 That leaves about $32 million that 9 was recovered by our state Medicaid fraud 10 control unit, or about the same amount as in 11 the past. Of the $62 million our state 12 Medicaid fraud control unit recovered, 13 $45 million had to be repaid to the federal 14 government. And when you go through local 15 shares, how much we got back, the state may 16 have received $15 million more from the 17 federal government for monies that were not 18 collected, with the $12.8 million from the 19 state recovery fund used by the state to 20 collect the money. That's 75 employees. And 21 the work of 283 employees, we recovered a net 22 for the state of $9.2 million. 23 This is bureaucracy at its worst. 24 And that's why it's important that we 25 streamline the system. Many of the employees

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(518) 371-8910 1 that will be used in the inspector general's 2 department will be assigned from the 3 Department of Health, will be assigned from 4 the Attorney General's office, through 5 memorandums of understanding, so we're not all 6 of a sudden creating a bloated bureaucracy. 7 Rather, we're streamlining the 8 bureaucracy, because the present one that 9 exists in terms of Medicaid fraud right now is 10 not functioning properly. And that's why 11 we're doing this. 12 So you're wrong when you say we're 13 creating a new bureaucracy. We're having 14 employees that exist assigned to this office 15 with a new, up-to-date Medicaid fraud control 16 unit that will collect more dollars. Because 17 it's just not happening right now. 18 ACTING PRESIDENT LITTLE: Senator 19 Meier. 20 SENATOR MEIER: Thank you, Madam 21 President. 22 I've spent a considerable part of 23 my public career dealing with Medicaid, first 24 as a county executive and then here in the 25 State Senate. And it seems to me that there's

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(518) 371-8910 1 a very simple and very intuitive answer as to 2 why we need to pass Senator Skelos's bill. My 3 experience in public life has been that 4 nothing much happens about anything until 5 somebody identifiable is accountable. 6 Now, here's the present structure 7 of running the Medicaid program in this state. 8 Ostensibly the Department of Health is 9 responsible for running Medicaid, but the 10 Office of Mental Hygiene, the Office of Mental 11 Retardation and Developmental Disabilities, 12 the Office of Alcoholism and Substance Abuse 13 Services, the Office of Temporary and 14 Disability Assistance also all have roles in 15 administering the Medicaid program. And by 16 the way, while I'm thinking of it, the 17 Department of Education and the Department of 18 Correctional Services also has somewhat of a 19 role. 20 There are 57 counties in this state 21 that have a role, in addition in the City of 22 New York. The Comptroller of the State of 23 New York and the Department of Audit and 24 Control have responsibility to audit and to 25 look into the expenditure of public funds.

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(518) 371-8910 1 And the Attorney General has rather broad 2 jurisdiction in terms of what he can do with 3 regard to the expenditure of public funds and, 4 in particular, has a Medicaid fraud recovery 5 unit. 6 Now, you tell me, after you 7 navigate through that alphabet soup of 8 agencies and that collection of individuals 9 and jurisdictions, who's responsible, who's 10 accountable. And the problem is, although the 11 Department of Health controls a significant 12 part of the data, they use it mostly for the 13 purpose of paying the providers. 14 What Senator Skelos has done is 15 really not at all the creation of a new 16 bureaucracy. It's not an attempt to layer 17 something more on. It is an attempt, and a 18 very good one, to get to the point -- to get 19 to the only point where anything ever gets 20 done in government, and that's where somebody 21 identifiable is accountable. 22 And that's what the inspector 23 general's office will be. That will be the 24 person with cross-jurisdictional power to 25 collect the data, review it. And it doesn't

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(518) 371-8910 1 supplant the Attorney General. This includes 2 referrals to the Attorney General, it includes 3 referrals perhaps to local prosecutors. 4 This is -- Senator Skelos, this is 5 a very important bill. The General Accounting 6 Services has said perhaps 10 percent of the 7 money expended on the Medicaid program goes to 8 fraud and abuse. That would be $4.5 billion 9 in this state. Let's say they've exaggerated 10 that by a factor of ten. We're still talking 11 about $450 million. 12 This is a significant expenditure 13 of public funds that is identified year after 14 year after year in this town and in this 15 chamber as one of the most severe problems we 16 face within our budget process. It affects a 17 program that millions upon millions of 18 vulnerable New Yorkers rely upon, that our 19 health care industry relies upon. 20 We have an obligation here to bring 21 some people to the center of this debate who 22 have been long overlooked. That's the 23 patients who rely on Medicaid, and that's the 24 taxpayers who pay for it. And all this bill 25 does is say it's time for somebody that we can

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(518) 371-8910 1 identify to be accountable and to be held 2 accountable. 3 And I'm going to vote for this 4 bill. And, Senator Skelos, congratulations. 5 ACTING PRESIDENT LITTLE: Thank 6 you, Senator. 7 Senator Volker. 8 SENATOR VOLKER: Madam President, 9 this, in my humble opinion, is the -- one of 10 the key issues of this decade. 11 And you know, it's interesting, 12 because when you're dealing with these kinds 13 of issues, you get the distinct opinion that 14 there's a reason why certain people are so 15 reluctant to get into this sort of thing. 16 It is difficult. It reminds me of 17 how difficult we were in getting the inspector 18 general for welfare many years ago, to set up 19 the inspector general for welfare. And what 20 we found out, of course, there was an enormous 21 amount of welfare fraud. 22 And when this house and the other 23 house did one of the most extensive welfare 24 reforms in the country -- and Medicaid 25 reforms, too, by the way, which has gotten

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(518) 371-8910 1 very little press -- and 700,000 people ended 2 up off of welfare back in the '90s. And a lot 3 of people said, Well, that was the feds. No, 4 it wasn't the feds. We were there before the 5 federal government. This house and the other 6 house moved. 7 And one of the fascinating things 8 about it and one of the most controversial was 9 they called finger imaging. Really, 10 fingerprinting. Very controversial. Well, 11 there's a story that has really never gotten 12 much publicity about when finger imaging or 13 fingerprinting tripped in. Amazingly, within 14 about two months, a hundred thousand people 15 disappeared off the welfare rolls. Just 16 dematerialized. 17 And people said, Well, jeez, what 18 happened? And of course when they disappeared 19 from welfare, they disappeared from Medicaid 20 also. 21 Well, we know what happened. What 22 happened was that an awful lot of people were 23 fraudulent. A ton of people. And by the way, 24 as a result of that, they found thousands of 25 people who were triple-dippers,

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(518) 371-8910 1 quadruple-dippers. And one famous guy, I 2 believe, in the city was a six-time dipper. I 3 don't know how you do that. I have no idea 4 what kind of programs those were. 5 And I'm only saying this because I 6 think the story here is that you've got to 7 realize that people internally that have 8 spoken to me in the criminal justice area say, 9 This is the issue, this is what you in the 10 Legislature have to deal with. 11 If you're going to deal with 12 Medicaid and if you're going to deal with the 13 real funding of Medicaid, you must deal with 14 fraud. Because there isn't even a question 15 that there's enormous fraud out there. We all 16 know it. Deep down, we all know it. Some 17 people claim it's 10 percent. Some say it's 18 15 percent. But it's big stuff. 19 Some of it is not even in this 20 state. That is, there are out-of-state people 21 and out-of-state companies that are doing it. 22 And there's all sorts of things that are 23 happening here. 24 And Senator Skelos has got on an 25 issue, very honestly -- in my budget

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(518) 371-8910 1 subcommittee or conference committee, we 2 looked at this issue, and the Assembly 3 initially rejected it only because they didn't 4 know what to do with it. But this is an issue 5 that not only has this house got to deal with, 6 but the Assembly has got to deal with it. 7 And this is not a knock on the 8 Attorney General, at least from my 9 perspective. We have got to develop a 10 coordinated approach to deal with something as 11 complicated as Medicaid fraud. It's way too 12 complicated for just the Attorney General or 13 the Health Department. What has to happen is 14 you've got to find it, put it together, set up 15 a computerized system. 16 And I think, Senator, you mentioned 17 that you've got to set up a -- well, that's 18 what this is all about. Because when you 19 think about it, how else could we really do an 20 overall job? Because you need Social 21 Services, you need Health, you need the 22 Attorney General, you need local district 23 attorneys, you need a link. And the best way 24 to link that is with a separate office. We've 25 always found that. It's not that we want

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(518) 371-8910 1 another bureaucracy. We don't need another 2 bureaucracy. 3 On the other hand, if you're going 4 to deal with this -- and there's a lot of 5 things, and Senator Skelos and Senator Meier 6 and myself have talked about this, about 7 incentives for local district attorneys, for 8 instance, or for local counties, to find 9 welfare fraud, that they can keep some of the 10 money and all that sort of thing. But that 11 can be coordinated by an inspector general's 12 office. 13 And so from my perspective, it just 14 seems to me that Senator Skelos has an issue 15 here that, personally, this may be as 16 important an issue as we have to deal with in 17 this entire session. 18 Because last year, by the way, 19 Senator Balboni had an issue -- and the funny 20 thing is, with all the Brennan Commission and 21 all that, he passed one of the most important 22 bills in this decade and the last decade, 23 which was the terrorism bill. And the rest of 24 the country said, Oh, my gosh, look at that 25 bill.

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(518) 371-8910 1 And then we did DNA, and then we 2 did drug reform -- which was very historic, in 3 many ways, because it calmed down the people 4 that wanted to get everybody out of jail and 5 at the same time did some substantial reform. 6 My point, I think, is that people 7 are running around saying, Oh, you guys passed 8 a budget -- or all of us, guys and girls -- 9 and now you're not going to go anything. 10 We're doing something. This is important. 11 The Assembly is going to do this 12 bill or a similar bill, mark my words on it, 13 because they're going to have to. And that's 14 why today is a much more historic day, in my 15 opinion, than we realize. 16 ACTING PRESIDENT LITTLE: Thank 17 you, Senator Volker. 18 Senator Balboni. 19 SENATOR BALBONI: Thank you very 20 much, Madam President. 21 I just want to point out that 22 there's something ironic about this debate. 23 For all the time that I've been here, we have 24 always had to struggle over how we spend 25 money. And at the core of every decision,

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(518) 371-8910 1 whether it was the amount of money we spent on 2 education or health care, we always had to 3 talk about what services to cut, what services 4 to create. 5 Here we have a situation in front 6 of us where we're talking about crime. That's 7 what we're talking about. And I would really 8 like to meet somebody who thinks that we 9 should perpetuate, in any way, shape or form, 10 crime or fraud. That's something we should 11 all be able to agree on. 12 And so this is one of the issues 13 that we should be jumping all over and saying, 14 absolutely, whatever program we can try to get 15 at the fraud that's in our system, that is 16 rampant in our system, we should embrace. If 17 for nothing else, as an experiment. 18 There's something ironic about 19 saying that we're worried about setting up 20 another bureaucracy when we see the costs that 21 have been recovered by other states. Because 22 that would truly lessen the burden of the 23 decisions we have to make. 24 And what I always like to do is 25 just take a step back and look at this from

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(518) 371-8910 1 the context of how we're viewed by the rest of 2 the nation. We are viewed as a system that 3 spends too much money. And we can all argue 4 it's because of the age of our infrastructure, 5 it's the size of our programs, and perhaps 6 it's a little bit of administrative costs in 7 those. But there's also fraud. 8 If you need any better evidence, 9 check out the newspaper last week that talked 10 about private insurance companies that did 11 rate reductions in automobile insurance. All 12 the major companies had between 5 and 13 6 percent reductions, and there were several 14 factors attributed to that reduction. But one 15 of those factors were the aggressive fraud 16 prosecutions by the private companies. 17 Ladies and gentlemen, just talk to 18 any of the district attorneys in the city, 19 around the state, ask them what's happening in 20 their communities. And they'll tell you, 21 there are mills set up that do nothing but 22 work through fraud. 23 It's a problem. We should have all 24 of the tools in our arsenal that are necessary 25 and possible to try to recover as much money

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(518) 371-8910 1 as possible. Because it truly is a cruel 2 thing to do to the people we represent and 3 say: You know what, we want to give you the 4 health care you deserve and you need, but 5 we're also not going to take this step and 6 really root out all the fraud. 7 And the benefit of this is every 8 time you go and prosecute, every time you use 9 the force of government to go after fraud, the 10 money will be returned to the taxpayers and to 11 the people who use the system. That is our 12 first mandate in any type of system of this 13 size, complexity and importance. 14 Thank you, Madam President. 15 ACTING PRESIDENT LITTLE: Thank 16 you, Senator Balboni. 17 Senator Johnson. 18 SENATOR JOHNSON: Madam 19 President, many years ago -- I've been here a 20 while -- I was chairman of the Social Services 21 Committee. And at that time there was a 22 Channel 2 or Channel 4 in New York City that 23 did an expose on Medicaid fraud showing the 24 doctor's office, the lawyer's office, the 25 pharmacist, the whole racket and how it

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(518) 371-8910 1 worked. The guy who gives the sonograms, 2 every little provider, criminal-intented 3 provider who was in the business of giving 4 away our money, stealing our money. 5 I talked to the Health Department 6 at the time. Oh, they were oblivious to it: 7 Oh, really? Well, we didn't know anything 8 about that. Oh, really, you didn't? Well, I 9 got them a copy of the videotape and I said, 10 Come watch a videotape. Now, do something 11 about it. 12 Now, that was maybe 15 years ago. 13 I've been out of the Social Services Committee 14 for a long while. And I guess in the 15 meanwhile they've gone back to the same old 16 practice and the people who got caught then 17 are gone or out of the business. But the 18 entrepreneurial spirit of the American 19 people -- and some non-American people in this 20 country -- apparently is still working and 21 still creating more opportunity for fraud. 22 So I say I mentioned that, and now 23 that -- about that time the Medicaid 24 expenditures were perhaps what I'm saying 25 25 -- let me read my own notes -- probably,

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(518) 371-8910 1 yes, 25 percent of the present amount of 2 Medicaid expenditures which are now taking 3 place. At that time, Medicaid expenditures 4 were the second largest item of our budget 5 behind school aid. 6 As you all know, now school aid has 7 gone up to some considerable extent, and 8 Medicaid is approximately three times the 9 amount of school aid. 10 Now, during this recent budget, 11 you're all aware of being lobbied by your 12 counties. Most everybody got lobbied. County 13 executives, county boards, they need more 14 money for Medicaid, it's too expensive, they 15 can't carry the load. Why did it triple, why 16 is it triple what it was eight or 10 years 17 ago? Not only because we have more people on 18 it and the practices are more expensive, but 19 because of fraud. 20 And there was recently a report, 21 and Dean probably knows who wrote the report, 22 that approximately 10 to 30 percent of our 23 expenditures are fraudulent. When you ask why 24 does Texas or California, with more people on 25 Medicaid, spend a lot less money, it's because

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(518) 371-8910 1 fraud is a big part of the picture. And 2 everybody knows it. 3 And if you weren't lobbied by your 4 county executives about Medicaid and something 5 needs to be done about it, then you must have 6 been sleeping, because they lobbied everybody. 7 And all they said was, Give us more money. 8 And at that time, during the 9 budget, I said, We can't just give them more 10 money, we've got to find out where that money 11 is going. And if these fraud artists are at 12 it again, then we have to nab them. 13 And that's why this bill was 14 developed, to deal with the problem. Not of 15 just giving more money to the counties from 16 some other necessary quarter in the state or 17 raising taxes in the state to keep giving 18 those people money, but to find out who are 19 these people taking it and what are we doing 20 about those people, and then put them away. 21 And this bill is going to help you 22 do that. And I think we should all be very 23 aware of the problem we had in this last 24 budget with Medicaid and know this is part of 25 the solution to the problem.

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(518) 371-8910 1 Thank you. 2 ACTING PRESIDENT LITTLE: Thank 3 you, Senator Johnson. 4 Senator Savino. 5 SENATOR SAVINO: Thank you, Madam 6 President. 7 I just want to -- I want to clear 8 up a misinterpretation. When I rose before, I 9 asked a simple question: What will we do 10 differently in this new agency that we're not 11 doing now? And if other states are doing a 12 better job at fraud collection, what are they 13 doing differently and how can we improve? 14 I did not get an answer to that 15 question, and for that reason I felt that I 16 should not support this bill. But I've heard 17 an awful lot of discussion here, and I've 18 heard people talk about the importance of 19 Medicaid fraud detection and -- 20 ACTING PRESIDENT LITTLE: Senator 21 Skelos. 22 SENATOR SKELOS: If Senator 23 Savino would yield, I -- 24 ACTING PRESIDENT LITTLE: Thank 25 you.

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(518) 371-8910 1 Senator Savino, will you yield? 2 SENATOR SAVINO: Sure. 3 ACTING PRESIDENT LITTLE: Thank 4 you. 5 Senator Skelos. 6 SENATOR SKELOS: I believe I 7 answered that question when I indicated to you 8 that the District of Columbia has a Medicaid 9 inspector general. And I think I gave you the 10 statistics in terms of how successful their 11 collection efforts are as compared to New York 12 State. 13 ACTING PRESIDENT LITTLE: Thank 14 you. 15 Senator Savino. 16 SENATOR SAVINO: The question was 17 had there been an evaluation -- Madam 18 President, through you -- has there been an 19 evaluation of the current procedures and 20 practices in place in the Medicaid fraud 21 collection unit, and are there deficiencies 22 that have been detected and is there any 23 attempt to fix them. That was the question. 24 But you answered it in the way that 25 you felt was sufficient. I did not feel that

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(518) 371-8910 1 I got a sufficient explanation. But I want to 2 just state that with -- 3 ACTING PRESIDENT LITTLE: Senator 4 Skelos, why do you rise? 5 Sorry. Senator Savino. 6 SENATOR SAVINO: Thank you. 7 I want to state for the record, 8 because a lot has been bandied about about the 9 importance of Medicaid fraud collection and 10 even welfare fraud collection, I actually have 11 a record on that. 12 In 1996, as a representative of the 13 social service employees union representing 14 the entire social service system in New York 15 City in the public sector, I was involved in 16 the creation -- after the passage of the 17 Welfare Reform Act of 1995, I was involved in 18 the creation of the eligibility verification 19 review unit in the Department of Welfare in 20 New York City's Human Resource Administration, 21 recognizing that one of the principles of 22 welfare reform was detected fraud, rooting it 23 out, and decreasing fraud in the New York City 24 public welfare system. 25 What we did, through our

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(518) 371-8910 1 cooperative effort with Mayor Giuliani, who 2 was the mayor at the time -- 3 ACTING PRESIDENT LITTLE: Senator 4 Padavan. 5 SENATOR SAVINO: May I continue, 6 Madam President? 7 ACTING PRESIDENT LITTLE: I'm 8 sorry. 9 SENATOR SAVINO: Mayor Giuliani 10 was the mayor of the City of New York at the 11 time; Jason Turner was his new welfare 12 commissioner. We took a very long look at the 13 current procedures in place with respect to 14 welfare fraud investigation, Medicaid fraud 15 investigation, child welfare fraud 16 investigation, the Office of Child Support 17 Enforcement, and every other agency that 18 worked within HRA. 19 We recognized where the 20 deficiencies were, we created a new system and 21 a new division within the current agency. 22 They improved their fraud investigation 23 techniques. They separated the services of 24 fraud investigators from caseworkers, 25 recognizing that oftentimes caseworkers can

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(518) 371-8910 1 become sympathetic to their clients and 2 overlook issues that would be considered 3 fraud. We created a new title of fraud 4 investigators, a new chain of command. They 5 reported directly to the commissioner's 6 office. And as a result of that, in five 7 years we cut welfare fraud in New York City in 8 half. 9 We recognized the deficiencies, we 10 improved it, and we did not do that by 11 creating another agency. 12 So my suggestion was that we look 13 at the current system, figure out what's 14 wrong, and determine whether or not we can fix 15 it in its current setting before we create 16 another agency and/or simply a new title or 17 someone else that they report to. 18 ACTING PRESIDENT LITTLE: Thank 19 you, Senator Savino. 20 Senator Krueger. 21 SENATOR LIZ KRUEGER: Thank you. 22 On the bill, Madam President. 23 I've also been listening to the 24 debate. No one, I'm sure, in this house 25 disagrees with the idea that we should do

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(518) 371-8910 1 whatever we can to improve the system of our 2 programs, that we should root out fraud, that 3 we should not in any way excuse any kind of 4 fraud. 5 But I share my colleague Senator 6 Savino's both past experience in New York City 7 and her concern that this bill isn't going get 8 us there. I think her questions were 9 legitimate questions. How do we look at best 10 practice from other states and see if we can 11 replicate them here? And I don't believe that 12 Senator Skelos would disagree with me. We 13 want to replicate best practice. 14 My concern around this bill is that 15 we're actually creating a public benefit 16 corporation. We're taking responsibilities or 17 a portion of responsibilities that ought to be 18 state government's -- to evaluate the 19 operation of programs and to, in fact, root 20 out fraud, stop it and prosecute it -- and 21 we're moving it into a model that, if 22 anything, we're learning in this state is not 23 necessarily part of the solution but in many 24 cases part of the problem: off-budget 25 corporations and authorities.

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(518) 371-8910 1 And so while I don't disagree with 2 the goal of my colleagues on either side of 3 this chamber that we want to decrease the cost 4 of fraud in the Medicaid program, I am not 5 convinced that a bill that creates a new 6 off-budget public corporation that then does 7 RFPs without coordination with the agencies 8 right now that have direct responsibility -- 9 the Department of Health and the Attorney 10 General's office -- for following through on 11 investigations and prosecutions, I'm not at 12 all convinced that this is the right direction 13 to go, even though I have no disagreement with 14 Senator Skelos or my other colleagues who have 15 spoken here today that we want to save the 16 money in the Medicaid system to be used for 17 actual health care and not fraud. 18 But I also must rise, when Senator 19 Volker raised his examples on welfare fraud, 20 something I have raised before. There can be 21 fraud in every program in the history of 22 government. And no doubt there has been fraud 23 in every program in the history of government. 24 But in fact, his data on welfare fraud was 25 wrong. When we created a finger-imaging

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(518) 371-8910 1 system in this state, there were only a couple 2 of hundred cases of duplicative fingerprints 3 in the system. And while there was an initial 4 hundred thousand New Yorkers who failed to 5 show up to be fingerprinted over the course of 6 months after fingerprinting was implemented, 7 the vast majority came into the system. 8 Because while there is fraud in 9 welfare, as there is fraud in every other 10 system, there really wasn't a fraud problem 11 with people attempting to receive benefits 12 under multiple IDs, not in any significant 13 statistical way. 14 I specifically remember a group of 15 homeless men, I believe who there were 80 of 16 them, who were eligible for or receiving 17 public benefits, both in Newark, New Jersey, 18 coming across the PATH train to New York and 19 in fact were, quote, unquote, double-dipping 20 to, I think, the tune of an additional $80 per 21 month per person. 22 The fact is, welfare fraud you 23 can't make a lot of money on. Medicaid fraud, 24 I think it's important for today's debate to 25 note, you can, but only with providers. That

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(518) 371-8910 1 Medicaid fraud should not be callously 2 discussed as catching individuals who are 3 ripping off the Medicaid system for cash 4 value. 5 Medicaid fraud is double-dipping by 6 medical institutions by billing for services 7 that were not needed, by billing for services 8 that were never provided -- perhaps worse, 9 billing for services that weren't needed but 10 were provided. We're talking about 11 skyrocketing costs in prescription drugs and 12 patterns of abuse there that almost always 13 involve large ring operations involving 14 prescription-writing operations, 15 pharmaceutical companies themselves. 16 When you're talking about Medicaid 17 fraud, you are talking about large 18 institutional fraud. Which is an argument to 19 go forward, go forward with the right model. 20 So again, it is not my opposition 21 to taking a look at what we do with Medicaid 22 fraud. I don't think this is the right way to 23 go. I hope we'll sit down and reevaluate 24 this. I'd be happy to work with my colleagues 25 on the Republican side to come up with looking

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(518) 371-8910 1 at best practices from around the country. 2 And again, it's not just saying 3 we're not doing the right thing and changing 4 it; it's actually looking at what works more 5 effectively and going down that road. 6 I know that Attorney General 7 Spitzer has actually called on this house to 8 pass a bill, I believe sponsored by Senator 9 Farley, if I am correct -- just trying to find 10 the number of Senator Farley's bill -- which 11 would give the Attorney General much greater 12 power to in fact follow through on 13 investigations of fraud. I believe it is -- 14 excuse me, it is the New York State False 15 Claims Act, sponsored by Senator Farley. 16 And I hope that we might go forward 17 and look at that bill and other proposals that 18 have been made to in fact improve our ability 19 to stop Medicaid fraud, to collect money that 20 is wrongly being distributed, and to reinvest 21 that in the kinds of programs that we know we 22 need and never have the funding for. 23 So I'll be voting no. 24 Thank you, Madam President. 25 ACTING PRESIDENT LITTLE: Thank

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(518) 371-8910 1 you, Senator Krueger. 2 Senator Padavan. 3 SENATOR PADAVAN: Thank you, 4 Madam President. 5 I think, Senator Krueger, when you 6 emphasize the fact that providers are a big 7 part of this problem, you in effect tell 8 Senator Skelos he's on the right track. 9 Those providers who run the full 10 gamut, as you described, and accurately so, 11 whether they be Medicaid providers of 12 transportation or drug operations or hospitals 13 or clinics -- Medicaid bills, common term -- 14 they are operated in a very sophisticated 15 manner. It takes a very sophisticated, 16 focused apparatus to ferret them out. 17 And from time to time we pick up 18 the newspaper and we read stories where some 19 have been found and where millions of dollars 20 have been recovered. But we know, when we 21 read those stories, that we're talking about 22 the top of the iceberg. And to really get 23 down to where the big numbers are, an awful 24 lot of effort and energy has to be expended, 25 as well as technical expertise.

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(518) 371-8910 1 Now, this is not a new issue. Back 2 in 1993 we had a series of hearings, five in 3 number, dealing with issues of illegal 4 immigration. One of those hearings was 5 dedicated to public assistance and Medicaid 6 and other social services. One of the most 7 important presenters at that hearing was the 8 welfare inspector general, whose name was 9 Elmer Toro. Very capable individual. And he 10 explained to us not only the issue of welfare 11 fraud among illegal immigrants and 12 undocumented aliens, but rampant Medicaid 13 fraud. 14 And I'm just going to read one 15 sentence from his testimony. "I strongly 16 believe that many of those illegal aliens 17 arriving from Spanish-speaking countries are 18 in possession of fraudulent identification. A 19 full assortment of social services and public 20 assistance benefits are at their disposal." 21 Now, that hasn't changed. At that 22 point in time, INS told us that there were 23 roughly a half a million illegal immigrants in 24 the metropolitan New York City area. Today, 25 that figure, by the same source, is in excess

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(518) 371-8910 1 of 700,000 -- I'm sorry, 500,000, 700,000 -- 2 people in the metropolitan area who are 3 identified as illegal immigrants. Therefore, 4 the magnitude of the problem that existed in 5 1992 that Elmer Toro was talking about is even 6 greater today. 7 Now, recently Senator Skelos and I 8 met with the welfare inspector general who 9 serves in that capacity today. And during the 10 course of our meeting with him, and he 11 providing us with some insights, he made it 12 clear that the current configuration that 13 exists today between the Health Department, 14 Social Services and other agencies is 15 inadequate to deal with the magnitude of 16 Medicaid fraud. Both again, as you said 17 before, on the part of the providers and on 18 the part of recipients. 19 Document fraud is rampant. 20 Commissioner Martinez of the Office of Motor 21 Vehicles recently determined that fact when he 22 had people -- when he had Social Security 23 numbers checked and found that there were 24 thousands of them, thousands of them in this 25 state that had more than one Social Security

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(518) 371-8910 1 number and more than one driver's license. 2 And they're able to do that because 3 you can go on streets in the city of New York 4 and get a phony birth certificate, a phony 5 Social Security card. You can even get a 6 phony green card at very minimal cost. And 7 they're doing it. And because of technology, 8 they're very, very sophisticated documents. 9 Hard to tell the real ones from the bad ones. 10 So the fact that we would have 11 someone who would be dedicated, with all the 12 resources necessary, bringing together what is 13 available today both in terms of personnel -- 14 we do have technology that we didn't have back 15 in '93 -- and using those resources to not 16 hurt the people who are generally in need of 17 and deserving of health care, but those who 18 are ripping off the State of New York and, in 19 so doing, ripping off every citizen in the 20 State of New York. 21 Imagine what we could do with that 22 $4 billion or $5 billion, whatever the figure 23 might be, dealing just with education, one of 24 our most difficult issues today. And it's out 25 there to be obtained without hurting anybody

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(518) 371-8910 1 who is really entitled to the kind of 2 assistance that Medicaid provides. 3 I think we're on the right track 4 here. I know we're on the right track. We 5 had a welfare inspector general 13 years ago, 6 and a welfare inspector general today who 7 works in this field all the time, tell us that 8 we have a serious problem. And the difference 9 between the two is it's gotten worse, not 10 better, despite all our best efforts. 11 Now, you can be on Medicaid without 12 being on welfare, and a significant percentage 13 of Medicaid recipients are not on welfare. So 14 therefore, when you weed out welfare fraud, 15 you're not taking care of them, you're not 16 dealing with that population. 17 We had a task force, as you all 18 know, that worked diligently for over six 19 months, chaired by two of our colleagues. 20 Part of that responsibility was dealing with 21 hospital administrators. And when we met with 22 them in conferences and in conclaves, one of 23 the issues frequently raised is: Tell me, how 24 much Medicaid fraud do you think is going on 25 in your hospital? And the answer is

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(518) 371-8910 1 uniformly: A lot. 2 "What can you about it?" "Nothing. 3 If they arrive at our doors with a Medicaid 4 card, we can't do anything about that. You 5 have to get at the problem before they get the 6 Medicaid card. And if they got it, somebody 7 in the state government has got to deal with 8 it if they got it fraudulently and are using 9 it in that manner." 10 So no matter where you turn in the 11 health care industry, or anywhere you turn in 12 government, and you talk with people who have 13 expertise and knowledge and are working on a 14 day-to-day basis, you hear the same story. 15 It's an enormous problem. And frankly, the 16 bulk of it is in New York City. It's a fact. 17 We can't ignore that. 18 Now, in the City of New York we 19 have 11 hospitals owned by the city, operated 20 by the Health and Hospital Corporation. We 21 talked to them too. "Do you go after Medicaid 22 fraud?" "Well, no, not really." "Well, why 23 not?" "Well, we don't have the ability, the 24 resources, or the authority." 25 "Also, if we find someone who's

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(518) 371-8910 1 receiving Medicaid benefits fraudulently, if 2 that happened to be the case, and they're 3 removed from Medicaid and they're an illegal 4 immigrant, you've got to provide health care 5 anyhow. However, not to the same extent. But 6 then we pay for that out of our own pockets a 7 hundred percent, and the state and the federal 8 government contribute nothing." 9 There's no incentive, absolutely 10 none whatsoever, by hospitals to go after 11 people who they can bill under Medicaid. And 12 we have to therefore assume that 13 responsibility. If it's not going to be done 14 at that level, we have to do it at the state 15 level. 16 And so Senator Skelos' bill and all 17 the things that other members have spoken to 18 are right on the mark. This is long overdue. 19 We should have done it a decade ago. But now 20 is the time to do it, and to do it quickly. 21 ACTING PRESIDENT LITTLE: Thank 22 you, Senator Padavan. 23 Senator Montgomery. 24 SENATOR MONTGOMERY: Yes, Madam 25 President. I would like to just be on record

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(518) 371-8910 1 and very clear that no one on this side, I 2 don't believe, is saying that we don't agree 3 absolutely a hundred percent with what Senator 4 Skelos, his ultimate aim with the legislation. 5 And that is to reduce Medicaid fraud, 6 hopefully, and certainly to recover as much as 7 we can from those who are using it 8 fraudulently. 9 Certainly for my district and for 10 me, as a representative of the people in the 11 part of the city where I am, Medicaid fraud is 12 a huge problem. It is a disgrace, because it 13 hurts the people that I represent, a lot of 14 them. And so I resent it very much and I'm 15 very much in favor of fighting it. 16 I do, however -- I would like to 17 propose that what we're creating is just what 18 Senator Savino has spoken of, and that is 19 another layer of bureaucracy. I only wish 20 that we would look to enhance and empower the 21 Office of the Attorney General, who will 22 ultimately be responsible, we think, to 23 prosecute anyone who is guilty of Medicaid 24 fraud. And so therefore, in the end, that 25 person is the one who we will look to to deal

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(518) 371-8910 1 with this issue in the last and final 2 resolution. 3 So why do we want to create another 4 bureaucracy, another bureaucrat, another level 5 of government which will conduct and supervise 6 investigations, which will initiate civil 7 suits to recover monies, to make information 8 and evidence related to fraud available to law 9 enforcement, to grant immunity? All of these 10 are good things, but we already have that 11 power vested in the Office of the Attorney 12 General. 13 But in addition to all of these 14 things that we have listed here as part of 15 this legislation, we have the authority to 16 prosecute. And that, I think, is the ultimate 17 authority and the ultimate resolution. 18 And so, yes, let it be very known 19 and clear that I am adamantly opposed to any 20 kind of Medicaid fraud, because it hurts my 21 constituents. It hurts the elderly in my 22 district, it hurts the students in my 23 district. We don't have school based health 24 care in my district for teenagers -- 25 ACTING PRESIDENT LITTLE: Senator

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(518) 371-8910 1 Winner, why do you rise? 2 Excuse me, Senator Montgomery. 3 SENATOR WINNER: Will the Senator 4 yield. 5 ACTING PRESIDENT LITTLE: Senator 6 Montgomery, will you yield for a question? 7 SENATOR MONTGOMERY: Yes, I will. 8 ACTING PRESIDENT LITTLE: Thank 9 you. The Senator yields. 10 SENATOR WINNER: Senator, I 11 listened with great interest to your 12 explanation that all of these powers currently 13 exist and are vested within the Attorney 14 General. 15 I just ask the obvious question, 16 that what has he been doing all this time with 17 regard to collecting money? If in fact he has 18 all these powers, and you acknowledge that all 19 this fraud exists, and so does all of the 20 members of the Senate on your side of the 21 aisle, that the fraud is there, yet we don't 22 really need to do anything else because why 23 create another bureaucracy? 24 It appears that the taxpayers are 25 crying out for the Attorney General to do

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(518) 371-8910 1 something about this and perhaps help out in 2 saving them some money in this program. 3 SENATOR MONTGOMERY: Madam 4 President, through you. 5 ACTING PRESIDENT LITTLE: Senator 6 Montgomery. 7 SENATOR MONTGOMERY: With all due 8 respect to my colleague, the record that I 9 have here is that in one year we recovered 10 $64 million, $65 million in Medicaid. That's 11 just in one year. 12 And certainly over the years there 13 are a number of instances and cases that I'm 14 aware of where millions of dollars have been 15 recovered because of the activity of the AG's 16 office. 17 Now, obviously, that is not enough, 18 I grant you. I would like to see more. 19 However, I think that it is a mistake to say 20 that we have not -- the Attorney General's 21 Office has not been involved and engaged in 22 recovering, both the current attorney general 23 as well as the prior attorney general, one of 24 them being a Republican, the other one being a 25 Democrat.

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(518) 371-8910 1 But nonetheless, both attorneys 2 general have been very much involved in 3 trying -- attempting to recover funds that 4 were fraudulently received through Medicaid. 5 SENATOR WINNER: Would the 6 Senator yield. 7 ACTING PRESIDENT LITTLE: Thank 8 you. 9 Senator Montgomery, will you yield 10 for another question? 11 SENATOR MONTGOMERY: Yes. 12 SENATOR WINNER: Senator, you 13 know, in all due respect, it appears that 14 you're arguing more in favor of this 15 legislation than arguing in opposition to it. 16 You make the statement that the 17 Attorney General has made the successful 18 recovery of $60 million, of which $30 million 19 of which was not done by his office. 20 In fact, if the only amount of 21 recovery that was done in the entire state was 22 $30 million -- of which, Senator Skelos has 23 accurately pointed out, is 72 cents recovered 24 for every dollar expended -- it would appear 25 that the Attorney General has done such a

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(518) 371-8910 1 horrible job here, in fact, that the taxpayers 2 have been so adversely impacted by his 3 performance that you are in fact making the 4 case for why it should be entirely changed 5 such that we have now an accountable inspector 6 general that will in fact produce results 7 rather than the woeful job that the state's 8 Attorney General has done so far to protect 9 the taxpayers. 10 ACTING PRESIDENT LITTLE: Senator 11 Montgomery. 12 SENATOR MONTGOMERY: Madam 13 President, in answer to my colleague, an 14 attempt to answer, at least certainly to 15 reiterate my position, I am in favor of an 16 aggressive move to recover funds that were 17 fraudulently received through the Medicaid 18 program. I wanted to make that very clear. 19 However, the point of departure for 20 me, and I believe some of the other colleagues 21 on this side of the aisle, is with the way in 22 which Senator Skelos has decided and 23 determined that this is the way that we should 24 go in order to recoup those funds. 25 He proposes to establish a new and

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(518) 371-8910 1 different bureaucracy. What we are saying is 2 we would like to have the Attorney General -- 3 ACTING PRESIDENT LITTLE: Senator 4 Skelos, why do you rise? 5 SENATOR MONTGOMERY: -- fulfill 6 that role. And if we are going to make any 7 changes, we should -- 8 ACTING PRESIDENT LITTLE: Excuse 9 me, Senator Montgomery. Excuse me just a 10 moment. 11 Senator Skelos, why do you rise? 12 SENATOR SKELOS: Would Senator 13 Montgomery yield. 14 SENATOR MONTGOMERY: Yes, sure. 15 SENATOR SKELOS: Senator 16 Montgomery, do you understand how a group or 17 an entity can be certified by the federal 18 government in order to qualify for the federal 19 funding for Medicaid fraud collection money? 20 There are three ways. The system 21 that exists right now, which is not working. 22 That's one. System number two, where the 23 Attorney General is not involved at all. And 24 system number three is the model that we've 25 created in this legislation.

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(518) 371-8910 1 Those are the only three ways that 2 the federal government will certify a state 3 for Medicaid fraud collection dollars. Okay? 4 The only three ways. 5 So if the one way is not working -- 6 and I should point out that in this 7 legislation we seriously looked and changed 8 our original bill based upon the memo of 9 opposition from the Attorney General. We made 10 the changes to meet his concerns. 11 As of right now, I do not have a 12 memo in opposition from the Attorney General. 13 I do have a memo in support by the Association 14 of Counties that will say -- that says the old 15 system is not working and this new 16 legislation, the new system that we're 17 establishing, that we've discussed with the 18 Department of Health and Human Services, is a 19 better way to go in order to save the state 20 money -- the federal government too -- the 21 state and the localities, and to make sure 22 that the money is there to provide the 23 services for my constituents and your 24 constituents that need Medicaid assistance. 25 So these are the three types of

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(518) 371-8910 1 units that can be established that will be 2 certified by the federal government. 3 Again, I want to point out that I 4 had hoped at the beginning that this would not 5 be a finger-pointing exercise at either the 6 Attorney General or at us, that we want to 7 create a bureaucracy. That's not the case. 8 The problem right now is that the 9 system as it exists is not working. And if 10 you put in more money the way it is now, the 11 72 cents that you collect is going to become 12 more and more of a net loss to taxpayers of 13 the State of New York. 14 Now -- and again, I hoped we 15 wouldn't get into this. The Attorney 16 General's report that came out for 2004 -- and 17 I think some of the information came out, just 18 coincidentally, on the day we were having a 19 press conference concerning our Medicaid fraud 20 legislation. 21 In 2004, 187 civil and criminal 22 cases were completed, 139 civil recoveries 23 with the responsibility of the Department of 24 Health. Criminal restitutions, which were the 25 responsibility of the Attorney General,

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(518) 371-8910 1 constituted $8.2 million ordered and 2 $5.6 million actually collected in 2004. 3 It's not working. And that's why I 4 think that we should emphasize the strengths 5 of the Health Department data collection and 6 the inspector general to do the investigation, 7 and then say to the Attorney General: Here, 8 we're going to work with you. This is what 9 we've found. You go out and do what you do 10 best and prosecute. 11 The inspector general cannot 12 prosecute criminal cases. They can make 13 referrals to the Attorney General, and they 14 work out a process with the local district 15 attorneys, help them with funding and 16 individuals to help them prosecute. 17 So it really does streamline the 18 system. It does not create a new bureaucracy, 19 because as I mentioned to Senator Savino 20 before, there are also individuals that are 21 brought together from either the Health 22 Department, assigned from the Health 23 Department, or the AG's office to this 24 inspector general's office. 25 So really what it is is a

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(518) 371-8910 1 coordinated effort to try something new, to 2 reform the system that's dysfunctional right 3 now, and to make sure that the people of the 4 State of New York, their hard-earned tax 5 dollars are not wasted and that your 6 constituents and my constituents, as I said 7 before, that need Medicaid assistance, the 8 money will be there for them and that the only 9 answer to the growing cost will not be cut 10 programs, cut programs, cut programs. 11 ACTING PRESIDENT LITTLE: Thank 12 you. 13 Senator Montgomery. 14 SENATOR MONTGOMERY: Madam 15 President, I think the question intended was 16 what would I do, do I agree with -- let me 17 just say the areas where I certainly agree 18 with Senator Skelos, since he's asking me what 19 would I propose. 20 I propose that there are two places 21 where we agree and we should go. This should 22 not be a partisan finger-pointing 23 one-upsmanship, you know, debate. It is 24 within all our interests that this process 25 takes place and that it's improved. So we

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(518) 371-8910 1 agree on that. 2 I agree also, as Senator Skelos has 3 said, it is the Attorney General who has the 4 ultimate authority to do the prosecutorial 5 aspect. So I would hope and propose that we 6 could in fact sit down with the Attorney 7 General and with the Department of Health and 8 with all of the other entities and come up 9 with a plan for in fact making this work, 10 making it possible, making it an operation 11 within the Attorney General's Office -- no 12 matter who that attorney general may be, from 13 whatever party -- that the main interest and 14 focus should be the process of aggressively 15 going after and recouping funds that were 16 fraudulently received through the Medicaid 17 program. 18 So certainly there are some areas 19 that we agree on. There's, I believe, a 20 possibility of working out a program that we 21 can all feel comfortable with and agree with 22 and go with and hope that it makes a 23 difference in this process. 24 So, Senator Skelos, I hope that we 25 can come to that point.

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(518) 371-8910 1 Thank you, Madam President. 2 ACTING PRESIDENT LITTLE: Senator 3 Skelos. 4 SENATOR SKELOS: Madam President, 5 if I could comment on Senator Montgomery's 6 good words. I mean, good recommendations. 7 During the budget process, we 8 sought to have more funding go to the Attorney 9 General's office for this. It was refused. 10 We also asked for an appointment for the 11 Attorney General and the Department of Health 12 people to meet with us. The Department of 13 Health people were willing to do it; the 14 Attorney General's office refused to come and 15 meet with us. 16 So again, this legislation now has 17 grown out of the recommendations that the 18 Attorney General made in opposition to the 19 first bill, the Department of Health and Human 20 Services, discussing it with numerous experts 21 in this area far better than I am in coming up 22 with an alternative model, one out of the 23 three that we're allowed to go back to 24 Washington to get certified. Because the 25 model right now is just not working.

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(518) 371-8910 1 ACTING PRESIDENT LITTLE: Thank 2 you. 3 Senator Onorato. 4 SENATOR ONORATO: Madam 5 President, will Senator Skelos yield to a 6 question. 7 ACTING PRESIDENT LITTLE: Senator 8 Skelos, will you yield for a question? 9 SENATOR ONORATO: Senator Skelos, 10 you know that I'm going to be supporting this 11 bill. But you just made a remark about the 12 process, when we were going through the budget 13 process, that the Attorney General didn't want 14 to support anything. 15 Now we're coming up with another 16 process of investigating fraud. Where is the 17 money coming from in this bill to address that 18 particular problem? 19 SENATOR SKELOS: Let me explain 20 to you. There is presently, right now, in the 21 budget $1 million of Senate money to start the 22 process going. 23 What we do is -- what we have done 24 is we have, under this legislation, which 25 would become effective immediately, the

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(518) 371-8910 1 Governor would immediately have to -- would 2 have to go for certification to the federal 3 government within 30 days, and the board would 4 be appointed. 5 Now, let me just go into the board 6 appointment, because Senator Krueger talked 7 about not liking the idea of public benefit 8 corporations. 9 The reason why we do it this way is 10 because we truly want an independent board. 11 And to show our desire to do so, we want to 12 make the inspector general, number one, that 13 one person truly responsible. Rather than 14 some bureaucracy that is not necessarily 15 responsible to anybody. 16 The board: two appointed by the 17 Governor, two by the Majority Leader, two by 18 the Speaker, and one each by the respective 19 Minority Leaders. So we want the minority of 20 both conferences to be involved in the 21 selection process. 22 The qualifications -- I mean, these 23 are tough qualifications. The -- well, number 24 one, there will be post-audit supervision by 25 the Comptroller of the state. So I think

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(518) 371-8910 1 that's critically important to point out. 2 The Medicaid inspector general, 3 prior to his or her appointment, at least ten 4 years of experience in auditing or law 5 enforcement or investigation or in prosecuting 6 or aiding in the prosecution of fraud. 7 The board members, ten years of 8 experience. Plus we preclude individuals from 9 either being on the board or serving as 10 inspector general if they have held certain 11 political positions for a period of, I 12 believe, five years or if they have been one 13 of your employees or my employees within the 14 past five years. 15 So we truly want, within this 16 public benefit corporation, an independent 17 board selected by everybody and an inspector 18 general that will have to produce for the 19 people of the State of New York. Because also 20 included within the legislation is that they 21 have to report to the Governor, to the 22 majorities and the minorities in both houses 23 at least once a year on how they are 24 progressing. 25 So we've put the million dollars

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(518) 371-8910 1 there. We can start the process. And if we 2 start collecting the money, it will fund 3 itself eventually. 4 ACTING PRESIDENT LITTLE: Thank 5 you, Senator. 6 Is there any other Senator wishing 7 to be heard? 8 The debate is closed. 9 The Secretary will ring the bell. 10 Read the last section. 11 THE SECRETARY: Section 3. This 12 act shall take effect immediately. 13 ACTING PRESIDENT LITTLE: Call 14 the roll. 15 (The Secretary called the roll.) 16 ACTING PRESIDENT LITTLE: The 17 Secretary will announce the results. 18 THE SECRETARY: Those recorded in 19 the negative on Calendar Number 441 are 20 Senators Andrews, Duane, Gonzalez, L. Krueger, 21 Montgomery, Parker, Paterson, Sabini, Savino, 22 Schneiderman, Serrano, A. Smith and Stavisky. 23 Ayes, 45. Nays, 13. 24 ACTING PRESIDENT LITTLE: The 25 bill is passed.

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(518) 371-8910 1 The Secretary will continue to 2 read. 3 THE SECRETARY: Calendar Number 4 452, by Senator Volker, Senate Print 1539, an 5 act to amend the Civil Practice Law and Rules. 6 SENATOR SCHNEIDERMAN: 7 Explanation. 8 ACTING PRESIDENT LITTLE: Senator 9 Volker. 10 SENATOR VOLKER: Madam President, 11 this is a bill that has passed this house on a 12 number of occasions. 13 Ironically, many years ago -- and 14 Harvey Weisenberg and I have sponsored this 15 bill for some time -- the bill initially was a 16 much broader bill and was whittled down after 17 we came to an agreement between both houses 18 and the Governor. Unfortunately, the 19 communication got mixed up in the delivery, 20 and it got vetoed. So ever since then, we've 21 been trying to get this bill passed. 22 And what it is is, as I was 23 explaining to my good friend in front of me 24 here, this is really not much of a problem 25 upstate, because most police officers will

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(518) 371-8910 1 talk to lawyers. But there's something in 2 downstate New York, apparently a lot of the 3 law enforcement people, for one way or 4 another, feel more comfortable with getting 5 advice from union officials. 6 And there have been a number of 7 strange situations, from what I understand, 8 where there has been an attempt -- and most of 9 these are not criminal issues, these are 10 bargaining issues. And so what has happened 11 is that the -- there has been a request in 12 this bill to deal with confidential 13 communications with an elected union official 14 only. 15 And what it basically means is -- 16 it has no criminal impact at all. What it 17 means is that if the police officer asks for 18 advice from a union official and discusses it 19 with him, then that communication cannot be 20 obtained by, in effect, the City or Long 21 Island or whoever it is, and the communication 22 with that elected official is privileged. 23 Go ahead. 24 SENATOR SCHNEIDERMAN: 25 Explanation satisfactory.

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(518) 371-8910 1 (Laughter.) 2 ACTING PRESIDENT LITTLE: Thank 3 you, Senator Schneiderman. 4 SENATOR SCHNEIDERMAN: Very 5 briefly on the bill, Madam President. I would 6 like to incorporate by reference my remarks 7 last year. 8 The problem with this bill, quite 9 clearly, is that it's like one of those little 10 kid's toys that hits a speed bump; it just 11 can't get over it. There's no momentum to do 12 it. There's not a perception that this needs 13 to be done. 14 It essentially elevates a union 15 official to the status of a professional, like 16 a doctor or lawyer, with whom communication is 17 already confidential. 18 And the problem, I think, really at 19 this point -- and times change. And when you 20 first started introducing this bill and it got 21 vetoed by accident, the sense of the 22 relationship of the police to the public in 23 New York City was somewhat different. 24 I think the problem we have now is 25 there's a strong impression out there that

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(518) 371-8910 1 this creates some special legal status for the 2 police, unlike anyone else, and gives them 3 special privileges that are denied to others. 4 The official duties, as are defined 5 here, would mean that a union official in fact 6 cannot have this special privilege apply if 7 they're talking to a police officer about 8 issues related to collective bargaining, wages 9 and those things. 10 So the problem we have here, I 11 think, is that the bill is actually losing 12 momentum. And if there is a good reason to do 13 this, we're going to have to take a different 14 approach. Maybe there needs to be a hearing 15 to bring the issue out into the fore, if this 16 really is a problem that police officers won't 17 talk to lawyers and aren't getting 18 representation. Because right now I feel like 19 it's losing support as we move forward. 20 I don't know that there is a reason 21 for it right now. I'm going to vote no just 22 because I don't think we need to create a new 23 privilege. I don't believe that this is 24 something that is impeding law enforcement 25 officers, and I don't know why they should be

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(518) 371-8910 1 put in a special category. 2 But politically, if there is a 3 problem here, we'd all like to address it and 4 move past this sort of the perpetual one-house 5 status of the piece of legislation. 6 So I would encourage the sponsor 7 that maybe a hearing -- and we'd welcome you 8 to New York City, if that's where the problem 9 is. We'll have a nice hearing down there and 10 see if we can get out facts that indicate the 11 need for this legislation. 12 But in the absence of that, I will 13 vote no. 14 Thank you, Madam President. 15 ACTING PRESIDENT LITTLE: Thank 16 you, Senator Schneiderman. 17 Is there any Senator wishing to be 18 heard? 19 The debate is closed. 20 The Secretary will ring the bell. 21 Read the last section. 22 THE SECRETARY: Section 2. This 23 act shall take effect immediately. 24 ACTING PRESIDENT LITTLE: Call 25 the roll.

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(518) 371-8910 1 (The Secretary called the roll.) 2 ACTING PRESIDENT LITTLE: The 3 Secretary will announce the results. 4 THE SECRETARY: Those recorded in 5 the negative on Calendar Number 452 are 6 Senators Andrews, Brown, DeFrancisco, Duane, 7 L. Krueger, Montgomery, Parker, Paterson, 8 Schneiderman, Serrano, A. Smith and Stavisky. 9 Ayes, 46. Nays, 12. 10 ACTING PRESIDENT LITTLE: The 11 bill is passed. 12 Senator Skelos, that completes the 13 controversial reading of the calendar. 14 SENATOR SKELOS: Madam President, 15 is there any housekeeping at the desk? 16 ACTING PRESIDENT LITTLE: No, 17 there is not, Senator Skelos. 18 SENATOR SKELOS: There being no 19 further business to come before the Senate, I 20 move we stand adjourned until Tuesday, 21 May 3rd, at 3:00 p.m. 22 ACTING PRESIDENT LITTLE: Thank 23 you. 24 On motion, the Senate stands 25 adjourned until Tuesday, May 3rd, at 3:00 p.m.

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(518) 371-8910 1 (Whereupon, at 5:00 p.m., the 2 Senate adjourned.) 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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(518) 371-8910

Monday, May 2, 2005

Transcript

Bills on the floor