Fitzpatrick Urges Assembly To Adopt Senate Bill Creating Medicaid Inspector General

June 14, 2006

Assemblyman Michael J. Fitzpatrick (R,C,I-Smithtown) last week urged his colleagues to adopt the state Senate version of a bill that creates the Office of Medicaid Inspector General after he voted against a similar Assembly measure because it contains a “qui tam” provision.

Qui tam is a Latin phrase commonly used in the legal profession meaning “he who sues for the king as for himself.”

“The Senate’s bill is a better instrument for combating Medicaid waste, fraud and abuse in New York state,” said Fitzpatrick. “The bill is a more suitable fit for our state because it creates the Office of Medicaid Inspector General without the qui tam provision. Qui tam action would open the floodgates of litigation, clog the courts and ultimately lead to higher prescription costs and health insurance premiums, which are exactly the ends we are trying to avoid.”

Under the existing, modern-day Federal False Claims Act, qui tam actions mean employees and individuals can receive financial incentives to investigate and initiate fraud cases against alleged Medicaid violators.

The Assembly bill is troubling because it relies on a “bounty-hunter” approach to detecting and reporting Medicaid fraud, waste and abuse. Favored by the Assembly majority, this approach has the potential to increase frivolous lawsuits against the medical industry and promotes reporting Medicaid fraud at the latest possible date. The longer Medicaid fraud goes unreported under the provision, the larger the bounty becomes.

The Assembly measure would provide individuals with, in some cases, up to 30 percent of the proceeds recovered by the state through settlements and court victories.

“The Assembly bill actually deters individuals from reporting Medicaid fraud early and is incentive-laden for those who are aware of Medicaid fraud and report it at the latest possible date,” remarked Fitzpatrick. “The qui tam payments would increase the cost of health insurance because the losses would be passed on to consumers through higher premiums.”

The Pharmaceutical Research Manufacturers of America, GlaxoSmithKline, Blue Cross/Blue Shield, Health Plan Assn. of NYS, Health Care Association of NYS and other experts all agree that the Assembly’s version of the bill would increase healthcare cost for average New Yorkers due to increases in litigation.

Assemblyman Fitzpatrick argues that New York would not need extra legal provisions to encourage people to report Medicaid waste, fraud and abuse if the offices of Attorney General Eliot Spitzer and state Comptroller Alan Hevesi “did a more thorough job at combating Medicaid waste, fraud and abuse.”

“The attorney general and comptroller have the tools and the staff to combat Medicaid waste, fraud and abuse, but they lack the political will to tackle the problem,” added Fitzpatrick. “The Attorney General’s office showed they were more than capable in combating certain practices in the financial services industry.”

According to a July 18, 2005 front page New York Times article, New York was once near the top in Medicaid fraud investigation efficiency; it now ranks near the bottom. As a result, only 37 Medicaid fraud cases were referred to prosecutors last year, 220 fewer than Texas – a state that spends less than half as New York on Medicaid.

New York’s unwillingness to police Medicaid has led to as much as 40 percent, or $18 billion per year, in questionable Medicaid claims.

To help combat Medicaid waste, fraud and abuse, Assemblyman Fitzpatrick favored an amendment proposed by his minority conference colleagues that would create an Office of Medicaid Inspector General but not authorize a “bounty system” that would clog the courts and raise health care costs.

The amendment was defeated by the Assembly majority.