Provides for appointment of a special prosecutor for criminal medical care fraud

Summary of specific provisions

The bill provides for the appointment of a special prosecutor for criminal medical care fraud by the Governor with the advice and consent of the Senate. The special prosecutor would serve for a term of ten years unless removed for cause.

The special prosecutor shall have the authority to receive, investigate and prosecute complaints from the public or any other source concerning alleged abuses, suspected criminal frauds and other violations committed by a medical care provider, a recipient, third party payors or any other entity connected to such care or system. The prosecutor would have the power to receive, investigate and prosecute complaints of alleged failures to enforce state laws and regulations regarding the medical care provider and reimbursement system. Additionally, among the duties, the prosecutor is granted the authority to receive, investigate and prosecute complaints concerning pricing of medical supplies and materials, the provision of unnecessary tests and services including false diagnosis which may involve patient complicity, false billings and claims and allegations of solicitation or kickbacks for steering patients and for the utilization of products and/or services.

To facilitate reporting of criminal fraud and abuse, the special prosecutor would establish a statewide toll free telephone number and reporters would be immune from lawsuits and their communication would, in most cases, remain confidential.

The special prosecutor would be required to make an annual report to the Governor, Attorney General and the Legislature describing the work performed and outlining future goals.

The prosecutor would work in concert with the insurance, health and education departments and the special prosecutor for Medicaid Fraud to effectuate the provisions of this act.

Finally the special prosecutor is granted the authority to seek and recover damages

equal to three times the amount fraudulently obtained. Amounts collected shall be deposited in the general fund to the credit of the office to offset the expenses of the office.

Effects of present law which this bill would alter

The Executive Law is amended by adding a new section 62-a.

Justification

Criminal fraud, abuse and waste in the health care industry cost the government, citizens, and insurers billions of dollars each year and cause incalculable damage to the quality of our health care system. Estimates of fraud, scams and abuse in the health care industry and reimbursement system indicate that the cost could reach between 50 and 80 billion dollars a year. As the GAO concluded, the size of the health care sector and the volume of " money involved make it an "attractive and relatively easy target for fraudulent and abusive providers."

Additionally, fraudulent practices contribute to the skyrocketing cost of health care which remains the obstacle to accessible health care and affordable insurance. For every dollar wasted and defrauded, beneficiaries risk potential reductions in coverage, increased out-of-pocket expenses and increased premiums.

Health care frauds, abuses and crimes committed by health care professionals and others strike at those least able to protect themselves. The sick, especially the terminally ill, elderly and the disabled seeking medical treatment are the unwitting victims of unnecessary tests, surgeries, x-rays, prescriptions, supplies and other services which not only defraud government and insurance carriers but also expose these patients to unwarranted dangers.

In the current system, only a fraction of the fraud and abuse committed against the health care system is identified and prosecuted. The success of the Special Prosecutor for Medicaid Fraud in combating criminal fraud and white collar crimes justifies application of the strategy to the entire health care spectrum and reimbursement system in order to enhance our efforts in developing and instituting cost containment measures.

Prior legislative history

2003-2004 A.2820 - referred to governmental operations 2001-2002 A.517 - referred to governmental operations 1999-2000 A.508 - referred to governmental operations

Fiscal implications for state & local governments

It is projected that restitution and damages secured by the Special Prosecutor will offset the expenses of the office. Moreover, the presence of the unit

will deter outbreaks of large-scale provider fraud thereby contributing to systemic reform.

Effective date

The act shall take effect on the sixtieth day after it shall become law.