District Attorney, Social Services Commissioner agree: Reform Medicaid


NEW CITY – With about 24 percent of Rockland County’s budget directed toward medicaid reimbursements and a 50 percent local share of the state’s Medicaid expenses on localities’ shoulders statewide, the issue of Medicaid fraud has become a topic of increasing concern among county residents.

When the matter was discussed at a public forum at the County Legislature on Tuesday, it elicited concerns among both the Department of Social Services, which identifies and refers cases to the District Attorney’s Office, who prosecutes them. Both called for reform to proactively combat the issue.

District Attorney Thomas Zugibe and Social Services Commissioner Susan Sherwood agreed changes to state and federal law were necessary to discourage dependency and fraud before it occurs. Though they emphasized the county was almost powerless to affect change itself, they both provided opinions for change and encouraged an indirect county influence for high-level policy change.

Medicaid, a state-funded health insurance program for low income residents, is largely designed to be accessible to healthcare consumers below the poverty line. Though the process has always been streamlined to benefit consumers, the introduction of online applications in recent years has encouraged its ease of use.

Use of the system in the county has more than doubled since the financial crisis in 2008, jumping from 47,587 to 87,918. Of these recipients, about 64 percent are vulnerable populations of children or seniors.

However, Sherwood warned the enrollment process, which is largely based on income, lacks sufficient front end safeguards. In effect, an inordinate focus on the poverty level of new applicants can leave significant blind spots in other areas, leaving the door open for misuse and fraud.

“It’s a little bit of a black hole right now,” Sherwood said.

For example, reports of possible abuse often involve ownership of cars, homes or other assets well outside the perceived means of the recipient. While such assets might signal fraud, the perceived over-reliance on income information often precludes an initial, detailed examination of other assets, some of which might only indicate affluence on a surface level.

Enforcement can work against Medicaid as well. Insufficiently detailed investigations can detract from deserved benefits and harm consumers.
“You don’t want a senior to lose their house because they need Medicaid,” Sherwood said.

Most improper use of Medicaid appears to happen in the areas where Medicaid enrollment is highest. Though Sherwood stressed that the vast majority of recipients follow the rules and truly need the program, she pointed out that “pockets” of fraud often occur where the program is needed most.

“It is consistent with poverty demographics and the population of an area.”

Most tip offs reach DSS once the process is well-underway and public money has already been misspent, according to Sherwood. When the District Attorney’s Office is called in to investigate, this usually means there has been a failure in the screening process rather than suspicion of potential misuse.

Zugibe argued the new e-applications have played a big role in complicating investigations. In the past, Social Services often referred cases when something seemed suspicious during an up-front, in-person application, making enforcement much easier.

Now that a sizable portion of applications occur online, Zugibe argued anonymity and a lack of accountability have made the problem worse. According to him, applications for benefits can and have been filed from all across the globe in blatant attempts to cheat the system.

“There is no way of identifying who filed the application,” Zugibe explained. “You sign on and you get benefits.”

|An altered reporting process and weakened county role have also impacted enforcement, according to Zugibe. Fraud referrals are now filed with the state, a process which takes the county out of the equation until the final stages of investigation and enforcement.

Instead, Zugibe promoted more county support for the DA’s Special Investigations Unit to supplement state and social services enforcement, funding he claimed would be repaid “in spades.” Sherwood agreed, pointing to rough figures compiled by her office that suggest about $250,000 in cost avoidance can be secured for every investigator hired.

Figures from the DSS further elucidate the monetary value Sherwood and Zugibe attached to enforcement. Between 2010 and 2014, the Special Investigations Unit received 4,865 referrals and completed 4,066 investigations. During that same time period, they were able to identify $4,165,180 in losses and recover $2,422,917, a 58.2 percent mitigation.

At the same time, front end detection formed only a fraction of referrals. Out of the 2010-2014 referrals, only 28.6 percent came from the front end.

“We saw our referrals drop to the floor when this started going on,” Zugibe said.

Investigations also occur on the state level before they are referred to local social services and law enforcement, but they similarly kick in only after a crime has been committed. Assistant Medicaid Inspector General for Investigations Daniel Coyne explained his office’s audit division usually receives information on fraud directly through a hotline and website.

After they initiate an investigation, they usually work with local, state and federal authorities before cases are ultimately referred to local law enforcement.

However, localities remain important as the eyes and ears of investigators. Sherwood stressed this principle when she recommended front end safeguards such as periodic reviews and real-time reports on healthcare exchanges, resource tests and time limits on benefits, sharing of local knowledge, more in-person verification and documentation, public awareness to bolster reporting and more hiring of Medicaid inspectors. Zugibe largely agreed.

On the state level, Sherwood added she would like to see a united lobby of county officials to communicate local enforcement needs to the state and fed, increased state use of technology for front end examinations of clients, required reporting of New York State IP addresses to obtain benefits and a sharing of local knowledge between all parties in investigation, enforcement and compliance.

Ultimately, however, the County is bound to its own legal limits. According to Legislator Jay Hood, who organized the discussion, high-level cooperation is not only important but critical when state laws might subject to change because in the end, those are matters that are outside county control.

“We can’t make the rules, we can’t change the rules, but we can ask for the rules to be changed if the need arises,” Hood said.