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Medicaid Fraud in New York Targeted by New House Report

New York, NY (PRWEB) April 04, 2013

On February 14, 2013, the United States House of Representatives Committee on Oversight and Government Reform issued a report titled “Billions of Federal Tax Dollars Misspent on New York’s Medicaid Program.”

The report finds that there has been rampant waste, fraud and abuse of federal dollars in New York’s Medicaid Program over the past ten years, it highlights several examples of such fraud, and recommends six specific actions that should be taken immediately to reduce Medicaid fraud, waste, and abuse in New York’s Medicaid program and potentially save both Federal and New York State taxpayers significant amounts of money each year.

New York’s Medicaid program is the largest in the country. According to the Committee’s report, “[i]n fiscal year 2010, New York’s $2,700 per resident Medicaid spending exceeded per capita Medicaid spending in the rest of the country by more than $1,500.” The Committee cites “poor program oversight” by both the state and federal governments as contributors to New York’s Medicaid problem. Another source of the problem - New York’s Medicaid program is “so utterly complicated that nobody completely understands it,” says the report.

The report discusses several instances of Medicaid fraud in New York that have contributed to the current monster. A primary example of New York Medicaid fraud is the “lack of controls and misspending in New York City’s Personal Care Services Medicaid program.” To illustrate this problem, the Committee focused its attention on the case of U.S. ex rel Gabriel Feldman v. The City of New York*, a federal qui tam case filed by Levy Phillips & Konigsberg LLP (“LPK”).

In 2009, LPK whistleblower attorneys Alan J. Konigsberg and Theresa A. Vitello filed a lawsuit under the Federal False Claims Act based on the allegations made by whistleblower client Dr. Gabriel Feldman. According to the complaint, Dr. Feldman, a local medical director employed by a private company under contract with New York City’s Human Resource Administration (“HRA”), alleged that New York City’s HRA routinely and improperly authorized and reauthorized personal care services (“PCS”)** for thousands of Medicaid beneficiaries each year who did not meet the regulatory requirements for the services. The United States Attorney for the Southern District of New York intervened in Dr. Feldman’s Medicaid fraud case, resulting in a $70 million recovery for the federal government in the end of 2011.

The House Report goes on to cite the following other lead contributors to the New York Medicaid problem:

? Overpayments to New York Developmental Centers, i.e. State-operated institutions that treat and house patients with developmental disabilities.
? Abuses of Medicaid Eligibility Rules in New York, i.e. so called “Medicaid estate planning”
? Excessive Salaries Paid to Executives of Medicaid-funded Organizations, i.e. in 2011 top executives at the Young Adult Institute, a nonprofit that runs group homes, used Medicaid money to lease luxury cars, pay tuition bills and living expenses for their children, and gave themselves generous compensation packages.

In an effort to correct New York’s Medicaid problems, the House Report recommends six specific actions that it says “should be taken immediately to reduce Medicaid fraud, waste, and abuse in New York’s program”:

? CMS or a qualified government watchdog agency should conduct a complete and independent audit of New York’s Medicaid program, including the work of the New York State’s Office of the Medicaid Inspector General;
? CMS should finalize an agreement with New York on a corrected payment methodology that ends the developmental center overpayments as soon as possible and pursue recoveries;
? CMS’ review of New York’s Section 1115 waiver request to allow the State to keep a portion of the savings its Medicaid reforms are projected to achieve, should follow all applicable statutory requirements;
? New York’s PCS program must only enroll individuals who meet the eligibility thresholds required by law;
? New York’s legislature should ban “spousal refusal” and other abuses of Medicaid eligibility rules;
? New York’s legislature should codify Governor Cuomo’s executive order that limits the compensation of executives at organization that receive nearly all their money through Medicaid.

Having assisted our clients to recover more than $70 million for the government, the whistleblower attorneys at Levy Phillips & Konigsberg LLP have the experience, tenacity and know-how to make your case a success.

If you have knowledge and evidence of fraud involving federal, state or local funds, including Medicaid fraud, both in New York and anywhere in the United States, contact a whistleblower attorney at Levy Phillips & Konigsberg LLP at 212-605-6200, or toll-free at 1-800-988-8005, for a free and confidential consultation.

For more information, please visit or

  • U.S. ex rel. Dr. Gabriel Feldman v. the City of New York, 09-CIV-8381 (JSR) (S.D.N.Y).
** The personal care services program allows Medicaid beneficiaries to receive 24-hour care for activities such as cleaning, shopping, grooming and basic aid. Source:

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