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Spitzer seeks tougher Medicaid fraud law

New York Attorney General Eliot Spitzer has submitted draft legislation to lawmakers to help fight Medicaid fraud, seeking investigative powers similar to those he used to great effect in his Wall Street and insurance probes.
/ Source: Reuters

New York Attorney General Eliot Spitzer has submitted draft legislation to lawmakers to help fight Medicaid fraud, seeking investigative powers similar to those he used to great effect in his Wall Street and insurance probes.

New York's spending on Medicaid, a government health care program for the poor and elderly, is approaching $50 billion this year, more than 40 percent of the overall state budget. As a result, there is a growing sense among lawmakers that the program, and its costs, require greater scrutiny.

"We're committed to continue to build upon our effort to control Medicaid costs," said Peter Pope, a deputy attorney general and head of the state's criminal division, in an interview Thursday. "If there is fraud in the system, we want to minimize it."

The actual scope of fraudulent claims is not known, but a federal audit estimates as much as 1.5 percent of claims result in payment inaccuracies, including fraud.

Last year, Spitzer's Medicaid Fraud Control team helped recover about $218 million in fraud cases and a total of $447 million since 1999. Tougher laws would help the state recover significantly more money, Spitzer has said, and deter fraudulent claims.

Under the state's current law, prosecutors have to prove a defendant made fraudulent claims and knew the claims were false. Moreover the state must secure the claim in writing and show the state relied on the false claim when approving the application.

The result is health care fraud is difficult to prove.

Spitzer's proposals, submitted to lawmakers Wednesday, would give prosecutors the authority to require testimony. That's a powerful investigative tool based on similar provisions in New York's Martin Act, which Spitzer used to wrest billions of dollars in settlements and policy reforms from brokers, mutual fund firms and insurance brokers.

Only state assemblymen and senators can sponsor and introduce legislation. Spitzer's office has been consulting with legislative committee chairs regarding sponsorship, though no lawmaker has yet come forward.

To be sure, efforts targeting Medicaid fraud have gone nowhere, including a health care fraud act submitted by former New York AG Dennis Vacco and similar bills from Spitzer

But Spitzer's office said it expects the growing impact of rising health care costs on the state budget will compel lawmakers to consider his proposals.

"New York state has been a national leader in the recovery of fraudulently obtained Medicaid funds," said Spitzer, who is running for governor this fall, in a statement. "We could do even better if we strengthened the ability of prosecutors to prosecute obvious crimes."