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Post date: January 19 2006

"martin Act" Proposed To Crack Down On Medicaid Fraud

Attorney General Spitzer today proposed new Medicaid fraud legislation modeled after the statute he used to bring far-reaching reform to the financial industry.

Spitzer's proposal, dubbed the "Martin Act for Health Care," removes limitations that hamper prosecution of health care fraud.

"New York State has been a national leader in the recovery of fraudulently obtained Medicaid funds," Spitzer said. "We could do even better if we strengthened the ability of prosecutors to prosecute obvious crimes."

In today's health care delivery system, approaches to cheating the system by committing fraud have surpassed the dated definitions of larceny. This proposal overcomes the hypertechnical obstacles imposed by current law, and would allow prosecutors to bring cases against Medicaid providers who steal money through half-truths, omissions and deceptions.

The proposal would also help speed investigations and recoveries by providing new investigative tools for law enforcement authorities. For example, one key provision would allow the Attorney General to conduct examinations of Medicaid providers under oath and use the providers' answers in civil recovery actions.

The Martin Act was used by the Attorney General with great success in prosecutions of fraud by investment banks, mutual funds and insurance companies. Those efforts led to the recovery of more than $6 billion for investors, businesses and the government.

Without Martin Act powers, New York still led the nation in Medicaid fraud recoveries, with $219 million recovered last year. With such powers, the Attorney General believes recoveries would increase significantly.

Spitzer previously introduced several bills aimed at improving Medicaid fraud recoveries and deterring fraud. One would provide financial incentives to those who report incidents of fraud and protects whistle blowers. Another would stiffen penalties for health care-related fraud.

The Attorney General maintains a toll-free tip-line for aid in his fight against Medicaid fraud. To report incidents of fraud or nursing home abuse contact: 866-NYS-FIGHT or (866-697-3444).