Attorney General Cuomo Reports That 2007 Medicaid Fraud Recoveries Nearly Double Those Of 2006
NEW YORK, N.Y. (April 30, 2008) - Attorney General Andrew M. Cuomo today released the 2007 Annual Report of the New York State Attorney General’s Medicaid Fraud Control Unit (MFCU), which was submitted to the Secretary of the U.S. Department of Health and Human Services.
The report, which details MFCU’s activities and major cases for the past year, includes data regarding the $112.5 million in court-ordered civil damages and criminal restitution the Attorney General’s Office obtained - nearly double the $59.4 million recovered in 2006.
“My office’s Medicaid Fraud Control Unit is dedicated to recovering taxpayer dollars,” said Attorney General Cuomo. “These are funds that are misspent or lost to fraud. My office will continue striving to ensure that the Medicaid program serves those who need it without becoming a crushing burden on the backs of New York taxpayers.”
The report also illustrates ways in which the Attorney General is more effectively combating Medicaid fraud. Attorney General Cuomo:
- Increased the staff of the Unit, particularly in the area of civil enforcement by 11 percent and the number of its civil attorneys by 71 percent.
- Established Medicaid Fraud partnerships with District Attorneys across the state
- Collaborated with New York City in filing a lawsuit against Merck & Co., Inc., for false marketing of the drug Vioxx under the recently enacted New York State False Claims Act
- Created a hotline (1-866-NYS-FIGHT) for New Yorkers to report alleged abuse of the program
- Some highlights of the total amount in recoveries from 2007:
- $41.5 million stemmed from cases involving home health care, which is the focus of Attorney General Cuomo’s long-term and industry-wide probe of the state’s home health care industry, known as Operation Home Alone. In 2007, 32 Operation Home Alone defendants pleaded guilty, including two licensed home care service agencies. More than 80 defendants have been charged in this ongoing investigation.
- More than $35 million came from settlements with more than 30 managed care organizations that submitted duplicate claim payments. A product of a series of joint audits and investigations with the New York State Office of the Medicaid Inspector General, these managed care organizations agreed to repay the state for submitting duplicate coverage claims for Medicaid recipients who had more than one client identification number assigned to them.
- $7.8 million of the total came from New York state’s leading role on behalf of states in negotiating settlements with pharmaceutical companies Purdue Pharma, L.P. and Medicis Pharmaceutical Corporation for unlawfully misbranding and marketing OxyContin and Loprox. The companies agreed to repay the funds New York state expended for patient prescriptions for these drugs.
- Two Bronx nursing homes were ordered to repay $7.2 million as a result of the prosecution of owner Abe Zelmanowicz for submitting bills to Medicaid fraudulently claiming that the facilities were entitled to payments for reserving or “holding” residents’ rooms during periods when the residents were temporarily hospitalized - without meeting the legal “bed-hold” requirements.
The report also highlights Attorney General Cuomo’ efforts to police providers who defraud the Medicaid program and caregivers who abuse or neglect patients. In an extremely rare criminal prosecution, the Attorney General's Medicaid Fraud Control Unit secured the conviction of the corporate owner of a nursing home in a patient abuse case. Following a jury trial, Highgate LTC Management, LLC owner and operator of Northwoods Rehabilitation and Extended Care Facility in Cortland was convicted of neglecting a patient and falsifying business records to conceal its neglect.
“We have made significant strides in the ongoing battle against Medicaid Fraud since I took office,” said Attorney General Cuomo. “Whether it is prosecuting home health aides who file false paperwork or taking swift action against those who do harm to or neglect our loved ones in nursing homes, my office will continue to use all tools necessary to serve as the national model in reducing Medicaid fraud.”
Attorney General Cuomo’s Medicaid Fraud Control Unit, which is within the office’s criminal division, is the oldest and largest statewide operation in the nation dedicated exclusively to the investigation and prosecution of Medicaid fraud and patient abuse and neglect. The Unit has served as the federal statutory model for the national Medicaid fraud control program. Federal legislation currently provides 75 percent the MFCU’s operating funds and the Unit’s own monetary recoveries make up the required state funding for 25 percent of its budget.
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