Congressional Panel Hears HHS OIG Testimony About Increasing Oversight of New York State’s Medicaid Program

The United States Congress House Committee on Oversight and Government Reform, Subcommittee on Energy Policy, Health Care and Entitlements, held a hearing on July 29, 2014 entitled “Examining the Federal Government’s Failure to Curb Wasteful State Medicaid Financing Schemes.” Mr. John Hagg, Director of Medicaid Audits for the United States Department of Health and Human Services Office of Inspector General (OIG), testified, and, at the Subcommittee’s request, focused on the State of New York’s alleged Medicaid compliance issues.

Mr. Hagg summarized select OIG reports in four areas of the New York Medicaid program: (1) provider types that are susceptible to fraud, waste, and abuse; (2) Medicaid payments to managed care organizations; (3) payment rates for State-operated facilities; and (4) other areas or issues that the OIG has determined to be vulnerable to inappropriate claims.

Improper payments cost taxpayers and beneficiaries billions of dollars a year, Mr. Hagg testified, making it imperative that New York do a better job of monitoring providers to ensure that only allowable services are paid. In areas such as home health services, continuing day treatment (CDT) services, orthodontic and dental services, and traumatic brain injury waiver services, OIG has found millions in improper payments, including payments for services that were not provided and duplicative payments. With such significant dollars and a sizeable beneficiary population at risk, Mr. Hagg stressed that it is critical that New York vigorously oversee providers and other components of its Medicaid program.

Regarding the States as a whole, in 2013, the DHHS reported an improper Medicaid payment rate of 5.8 percent, or $14.4 billion in federal payments. Greater monitoring of providers by the States protects both State and federal dollars from being misspent.

Mr. Hagg also testified that the Centers for Medicare & Medicaid Services (CMS) must take more aggressive action to ensure that States do not improperly claim federal reimbursement for payments to which they are not entitled. In the past, the OIG has seen States inappropriately maximize their payments from the federal Government. When this happens, according to Mr. Hagg, CMS must stop these occurrences and correct them.

For more information, please contact David R. Ross, who served as Acting New York State Medicaid Inspector General under Governors Pataki and Spitzer, as well as General Counsel, Deputy Medicaid Inspector General, and Director of Audits and Investigations for the Office of the Medicaid Inspector General (OMIG). He can be reached at (518) 462-5601 or via e-mail at dross@oalaw.com.


David Ross

About David Ross

David is Partner and concentrates his practice on Medicaid, Medicare and private insurance audits & investigations, Health Law including fraud and abuse, governmental investigations of all kinds, Medicaid compliance plans and Article 78 cases. He is head of our Government Investigations practice and also works in Healthcare Fraud & Abuse.