Probe into Medicaid - Newsday

Probe into Medicaid - Newsday

News and Commentary | Fraud Cases | Medicaid Fraud Cases

Probe into Medicaid - Newsday -
Probe into Medicaid
Newsday, NY - 9 hours ago
Suffolk has about 130,000 people enrolled in Medicaid. County county. “If there is waste and fraud in the system, we wanted it weeded out.
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“Experts say that Medicaid abuse may cost as much as 10 percent of the state’s $44.5-billion Medicaid bill. Nationally, federal officials say, in 2003 states recovered $268 million.”

If these figures are correct, it is easy to conclude that recoveries are far too small for the amount of fraud in the system. Suffolk County’s $1.4-billion-a-year program would have about $140-million-a-year in fraud. That’s almost half of nationwide recoveries!

Are national recoveries far too low or is the 10% estimate far too high? Let’s do some math to figure it out. First of all, $268 million is only the states’ recoveries. It leaves out federal recoveries, but these are also orders of magnitude too small. We know the federal government recovered “over $1.4 billion in settlements and judgments in the fiscal year ending September 30, 2005, pursuing allegations of fraud against the federal government, the Justice Department announced today.” “WASHINGTON, Nov. 7 /U.S. Newswire”: That $1.4 billion includes non-healthcare recoveries, TriCare and Medicare recoveries.

Even if the above recoveries were all for Medicaid, they would still be far too low, if fraud is 10% of Medicaid spending. If the 10% figure is about right, then New York Medicaid alone would have $4.5-billion-a-year in fraud. That’s 3 times our highest possible estimate of nationwide recoveries! Even if fraud is much lower than 10%, nationwide recoveries are far too low.

And yet return on investment for fraud control is very high (around $10 recovered for every dollar invested). Why aren’t counties, states and the federal government investing enough to stop a higher percent of fraud? One answer is that fraud control dollars come from a different budget than the fraud does. Doubling the administrative budget to reduce the program budget by 5% would result in substantial savings, but it is a surprisingly difficult thing to accomplish.