At more than $50 billion, Medicaid spending in New York State has almost doubled since 2000 when total spending was $29.9 billion. Today, Medicaid spending represents more than one third of the entire state budget. In addition, enrollment is projected to increase in the 2010-11 fiscal year to 4.7 million, a 9.5 percent increase over the current year. In 2000 enrollment was 2.7 million.

Spending and enrollment increases occur for a variety of reasons, such as program eligibility expansions, new programs and the current economic downturn. As spending and programs expand, opportunity for fraud also increases. The sheer size of our Medicaid program provides ample opportunity for fraud.

The U.S. Government Accountability Office has previously cited estimates depicting 10 percent of Medicaid expenses being diverted through fraud. In our state, where the 2010-11 Executive Budget proposes spending of more than $53 billion on Medicaid alone, this means as much as $5 billion of our costs could potentially be the result of fraud. Additionally, in December of 2009, three Medicaid audits released by the state comptroller identified as much as $92 million in Medicaid overpayments, billing errors and other oversights.

Whether or not all of these reports are accurate, it is irrefutable that millions of dollars are wasted and need to be recouped to protect New York taxpayers. It is imperative that we act immediately to amend the process and ensure that taxpayer dollars are not slipping through the cracks of a potentially flawed system. Therefore, in an effort to strengthen the state’s efforts to fight Medicaid fraud and protect our taxpayers, my fellow Republican colleagues in the New York State Senate and I announced the creation of the Task Force on Medicaid Fraud this week.

In 2006, Albany enacted legislation to combat and remove fraud and abuse in the Medicaid system. Initiatives set forth by the law included: creating the new, independent Office of Medicaid Inspector General, providing county governments with new incentives and access to information to become more active partners in the fight against Medicaid fraud, and providing new Health Care Fraud offenses to aid in the criminal prosecution of Medicaid fraud.

However, in implementing the 2006 law, the State has fallen short in achieving the goals of its sponsors. That’s why this Task Force was created: to discover where the ball is being dropped in the process, to determine the prevalence of fraud and to develop better tools and refine the existing tools for fraud prevention, prosecution and recoveries.

My goal as Chairman of this critical, analytical Task Force, is to ensure that a proper investigation is conducted pertaining to whether or not the fraud prevention system is working at an optimal level. If the suggested, colossal amount of fraud does indeed exist within New York’s Medicaid system, there is no excuse for tolerating it.

My colleagues and I remain dedicated to the mission of the Medicaid Fraud Task Force and are prepared to enact the necessary amendments to the system in accordance with the findings of our investigation.


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Kemp Hannon, a Republican representing parts of Nassau County, is the ranking member of the Senate Health Committee.