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NY Medicaid Fraud and Corruption in Developmental Disabilities

September 6, 2010

Federal officials have launched an inquiry into Medicaid payments to nine state institutions for the developmentally disabled, after the Poughkeepsie Journal revealed the facilities had reimbursement rates of $4,556 per day for each of 1,400 residents.

The U.S. Centers for Medicare & Medicaid Services announced the probe Thursday, when it released a Tuesday letter to the state Department of Health. In it, Sue Kelly, CMS associate regional administrator, asked the state to justify the rates, the highest in the nation by one study.

“It has come to CMS attention that several New York state operated developmental centers currently claim … daily Medicaid rates in excess of $4,500 per beneficiary,” said the letter to Donna Frescatore, deputy commissioner of health. “CMS is requesting that New York provide us with additional information about these claims.”

While the facilities are operated by the state Office for People with Developmental Disabilities, the Health Department has chief rate-setting authority.

Nicole Weinstein, a spokeswoman for the disabilities agency, said in response, “We will be in discussion with DOH.”

Question. Are the NYS government employees who perpetuated this fraud on the American Taxpayer going to be fired? fined? Any consequences? Is the NYS Taxpayer paying for a legal defense so NYS can continue perpetuating fraud?

Health officials said they would share their response to the federal government after a letter is written.

Specifically, the federal agency — which pays half the rate as part of a 50-50 state-federal match — requested that the state provide:

• a “detailed description” of how the rates are developed and how they “comport with the methodology” in a federally approved rate-setting agreement;

• total Medicaid payments and operating and capital costs for each institution;

• and documents showing that New York’s rates do not exceed what’s called the “upper payment limit,” which prohibits payments above a “reasonable” threshold.

Question. Why isn’t the Feds asking NY to prove its been paying the 50/50 match? Any overbills to the Feds is an equal overbill to the NYS taxpayer. The money should be refunded to the general fisc to meet NYS’s current $9 billion budget shortage.

“New York has made assurances to CMS that its … rates are set at the lower of actual facility operating costs … and that the level of costs reimbursed does not exceed the upper payment limit,” the letter said.

Among the institutions named in the letter was the Wassaic campus of the Taconic Developmental Disabilities Service Organization, a Town of Amenia facility with about 150 residents.

A CMS spokesman, Jeffrey Hall, said the inquiry was a “result of what you brought to our attention,” referring to a June 20 Journal report on the rates.

At the time, federal officials said that while they approve the rate-setting methodology, the state actually sets the rates.

They declined to say if they were aware of the rate.

Hall said the probe would take time.

“We have launched an inquiry with the state,” he said. “This is this is going to take a long time. Things aren’t going to happen immediately.”

In 1991, the state announced plans to close all of its institutions for the developmentally disabled by 2000 in the belief that mentally disabled people are better served in small community-based facilities. It abandoned those plans as the reimbursement rate rose, from $348 a day in 1990 to $2,149 in 2000 — and to more than double that today.

The federal letter also asked whether the state institutions retained all of the reimbursement funds or if “any portion of these payments” was used for another purpose. State officials have said the actual cost of care is only about one-third the rate, and that much of the $1.2 billion in federal matching funds every year supports other state programs for the disabled.

Question. Are the funds really going to other services for the disabled or are they just distributed as OMR-DD employee payoffs and to maintain their jobs and salaries?

Here is an interesting comment from CallMeJoe84:

If anyone out there thinks that NYS OMRDD is paying over $4,000/person per day to serve the developmentally disabled in their state institutions, I have a bridge to sell you.

Here’s how the fraud works. Taxpayer money is siphoned to pay for NYS employee’s pensions and salaries instead of for services for the disabled. There’s a conflict of interest between the NYS employees perpetuating the fraud to support themselves and friends and the NYS and Federal taxpayer. The question is why isn’t Attorney General Cuomo (the fraud crusader) going after corruption in his own government offices? Why aren’t the government employees caught stealing from the American taxpayer fired? Why isn’t the Federal Government imposing sanctions on NY for not following the rules? How many times does NYS have to be caught engaging in State and Federal taxpayer fraud before the same government employees who perpetuate the fraud over and over and over again are fired?

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