Reimburses counties who have purchased or will purchase Medicaid fraud detection software

BILL NUMBER:S1444

Title of bill

An act to amend the social services law, in relation to the state reimbursement of county payments for medical assistance fraud, waste and abuse detection software

Purpose

To provide fiscal relief to counties in combating Medical fraud, waste and abuse through the use of data mining software.

Summary of provisions

Amends the social services law by adding a new paragraph (aa) to section 368-a of the social services law to require the State to reimburse counties if such county has previously purchased or intends to purchase data mining software that detects inaccuracies in the Medicaid system. Further defines "data mining software" as a database application that utilizes advanced data searching capabilities and statistical analyses to discover patterns and correlations in the use and abuse of medical assistance practices.

Justification

New York State's Medicaid program is the largest and most costly in the nation. Although New York has seven percent of the U.S. population, Medicaid cost the State approximately $46.5 billion in 2007 - 33 percent more than California, which maintains the nation's second largest Medicaid system. Between DOH and the State's Medicaid Fraud Control Unit (MFCU), New York spends more than $130 million to combat fraud. Further, statistics indicate that fraud equals about ten percent of total Medicaid dollars spent each year in New York State.

Medicaid costs are the largest part of county budgets and fraud, waste and abuse (FWA) consume a good portion of these budgets. Providing funding to counties to do their own FWA investigations would free up resources at the State level for more complicated cases. Counties can immediately determine where there may be a problem by drilling through reimbursement data, thus giving them better control of their Medicaid dollars and become more accountable to the taxpayer.

Additionally, smaller counties have cited numerous concerns over paying for this software themselves, although many of them are supportive of the concept. Counties such as Franklin, Clinton and Essex already do not have enough staff assigned to the task of investigating FWA, and therefore cannot pay for software and hire additional staff to utilize this software for these investigations. Furthermore, they have indicated that if the State is dedicated to having the counties investigate and prosecute FWA then they should also dedicate the funds to do so.

Combating fraud, waste and abuse is the first step in fixing a broken system. The Medicaid program itself was established with honest intentions and it is our duty to preserve it so that those individuals who need Medicaid services the most receive them, and those who are utilizing Medicaid fraudulently are prosecuted accordingly.

Legislative history

2014 - S.3284

Fiscal implications

Undetermined at this time. However, any cost would conceivably be accomplished through FWA investigation, prosecution and deterrence.

Effective date

This bill shall take effect immediately.