Relates to creating incentives for counties to investigate and prosecute medicaid fraud

5 Co-sponsors

• Greg Ball
• David Carlucci
• Patrick M. Gallivan
• Thomas F. O'Mara
• David J. Valesky

BILL NUMBER:S2617A

Title of bill

An act to amend the social services law, in relation to creating incentives for counties to investigate and prosecute medicaid fraud

Purpose

The purpose of this bill is to provide financial incentives to the City of New York and the counties to identify and prosecute Medicaid fraud, thereby helping eliminate fraud, waste and abuse.

Summary of provisions

The social services law is amended by adding a new article 5-A and amending subdivision 2 of section 145-b to enable the City of New York and the counties to keep 100% of the local share of any successful Medicaid fraud prosecution or settlement, or 10% of the total recovery, whichever is greater.

Justification

It is essential to minimize any waste, fraud or abuse in the Medicaid system by encouraging and rewarding successful efforts by the City of New York and the counties to prosecute Medicaid fraud.

The current law limits the amounts that local governments can receive based on successful Medicaid fraud prosecution. This bill would ensure that local governments would receive 100% of the local share of such Medicaid payments, thereby reimbursing the local governments in full for the original overpayment. Since the local share on some programs may be very small, the local governments would be guaranteed at least 10% of any recovery, including settlement. The State would receive the balance of recoveries.

By encouraging more Medicaid fraud prosecutions, the total costs of the system will be reduced, to the benefit of both the State and local governments. The State, of course, would be the biggest beneficiary of the reduction in the amount of fraud and abuse because it pays a substantially higher percentage of Medicaid costs than the local governments.

This legislation is particularly important because the existing Medicaid payment cap that applies to local governments inadvertently reduced the financial incentive for local governments to root out fraud, waste and abuse. Under the cap legislation, the cost to local governments is automatically determined by the amount specified by the cap rather than being based on actual costs. This bill would restore the financial incentive to local governments by enabling them to enjoy 100% of the local share of any savings resulting from successful Medicaid fraud prosecutions and settlements.

Legislative history

2012: S 6881/A.9494 Passed Senate

Fiscal implications

This bill allows the city of New York and the counties to recoup 100% of the local share upon the successful prosecution or settlement of Medicaid fraud, or 10% of the total recovery, whichever is greater.

Effective date

This act shall take effect immediately.