$96+ Million in Medicaid Waste in NY

Medicare Inspector General James Sheehan

Medicare Inspector General James Sheehan

As New York tries to crack down on wasteful spending, a report by the State Medicaid Inspector General shows that there is much fraud going on when it comes to free health insurance for the most needy.

According to the report, $96.7 million in Medicaid funds was misspent with nearly half of it in New York City.

The report claims, however, that the waste comes from bad bookkeeping and billing errors but the sum for some individual hospitals and pharmacies adds up to millions of dollars. For example, St. Barnabas Hospital alone charged Medicaid an excess $1.2 million while Trinity Pharmacy in Queens overcharged Medicaid by as much as $5.6 million.

The problem with all of these audits is that the funds aren’t simply taken back. In the two instances above, the Inspector General expects to settle an amount with the organizations regarding how much of the money that they did not earn they will keep meaning that the taxpayer will still foot the bill for the overcharges.

The state only hopes to get back around $10 million in overcharges this year which many believe just sends a message to hospitals, pharmacies, and select charities that it is okay to play it fast and loose with bills and records.

Overbilling, accidental or otherwise, is only the tip of the iceberg. The waste arises in true cases of fraud all around the country. Countless stories have come up of cases of people setting up fake companies to bill Medicaid and Medicare for fraudulent charges.

These cases have cost taxpayers all around the country hundreds of millions of dollars.

UPDATE: Wanda Fischer of the Office of the Medicaid Inspector General has e-mailed us to clarify some of the numbers in this article.

According to Ms. Fischer, New York City, not the state, expects to recover $10 million in wrongful spending.

The Inspector General also expects to identify as much as $1 billion in Medicaid abuse and fraud over the next fiscal year.

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