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House Panel Criticizes NY Medicaid Program for Misspending Billions

5:54 PM, Feb 14, 2013   |    comments
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By Brian Tumulty
Gannett Washington Bureau

WASHINGTON - Fifteen executives at various New York nonprofits primarily financed by Medicaid money each was paid more than $500,000 a year, according to a report a House committee approved Thursday.

WEB EXTRA: Read the Medicaid report

The report, titled "Billions of Federal Tax Dollars Misspent on New York's Medicaid Program,'' also found that another 100 executives earned "excessive salaries'' - more than $200,000 each - at New York nonprofits operating primarily to provide Medicaid health services to the poor.

The House Oversight and Government Reform Committee culled the salary information from publicly available Form 990s that the nonprofits filed with the Internal Revenue Service. The committee noted that its findings don't cover all Medicaid-funded nonprofits around the state.

"New York's per-resident Medicaid spending is nearly double that of Pennsylvania and more than double that of California and the entire country,'' the report said.

Reports of exorbitant compensation at New York's health care nonprofits receiving Medicaid funding aren't new.

In August 2011, the New York Times wrote about two brothers - Philip and Joel Levy - who earned nearly $1 million each overseeing the Young Adult Institute Network, which cares for the developmentally disabled.

Philip Levy retired and Joel Levy resigned after the newspaper looked into their spending practices about two months before the story was published.

Gov. Andrew Cuomo recently issued an executive order capping executive salaries at $199,000 for most contractors doing business with more than a dozen state agencies beginning April 1.

Cuomo's cap on executive compensation should be codified by the state Legislature, the congressional report suggests.
It also said state lawmakers should act on the governor's request to ban "spousal refusal,'' in which someone financially abandons their marriage without a divorce. In those cases, one spouse qualifies for Medicaid-paid nursing home care while the other spouse retains the couple's financial assets.

A spokesman for Cuomo, Richard Azzopardi, noted, "These issues occurred under previous administrations. Most, if not all, of them have been addressed."

Democratic Rep. Carolyn Maloney of Manhattan, the only New York House member at Thursday's hearing, didn't dispute the report's findings, but did cast the only vote against approving the report.

Maloney said the report doesn't give Cuomo enough credit for his recent Medicaid reforms and doesn't highlight the important social benefits of the Medicaid program.

The reforms already put into place by Cuomo are expected to save $34 billion over five years, including $17 billion for the federal government, she said.

"The governor is attacking a problem that has plagued the state for over two decades and should be applauded,'' Maloney said.
Chairman Darrell Issa, R-Calif., said a draft version of the report had been amended over the last week to include more information about Cuomo's recent reforms. Issa credited Cuomo with having "begun the process.''

The report offers a litany of well-publicized financial abuses that have occurred over many years.

Among them: an estimated $15 billion the state over-billed the federal government for Medicaid services to developmentally disabled people housed in large institutional settings. Many of the billing practices were documented in a series of stories published in 2010 by the Poughkeepsie Journal. \

The deputy director of the federal Center for Medicaid and CHIP Services told a congressional subcommittee in September her agency planned to reduce those reimbursements to New York by 80 percent and seek restitution, but a final agreement with the state has not yet been finalized.

The House committee estimates the over-billing in 2011 alone amounted to $1.27 billion for 1,313 patients at New York facilities for the developmentally disabled.

Media outlets around the state have reported numerous other cases of over-billing and outright fraud. One case involved the Personal Care Service Program in New York City, which cost up to $150,000 per person annually for services such as cleaning, shopping, grooming and basic aid. The city settled a lawsuit over that program for $70 million in 2011.

"Two state Senate majority leaders have been convicted of fraud or corruption charges related to health care,'' the report noted.

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