Time and again Gov. Andrew Cuomo has pledged to root out structural waste and inefficiencies in state government in general and, in particular, Medicaid.
In his 2010 book, “The New N.Y. Agenda: A Plan for Action,” Cuomo noted in a section titled “Make Medicaid More Efficient”:
“New York will spend almost $52 billion on Medicaid in 2010-11, including federal, state and local funding. State operating funds spending on Medicaid is projected to grow by another $1.8 billion in the 2011-12 fiscal year. New York must find a way to bring its Medicaid costs more in line with that of other states if we are to control overall state spending. New York state spends 69 percent more per beneficiary than the national average. New York’s Medicaid program suffers from spiraling costs, inadequate outcomes and widespread inefficiency.”
He added: “We need fundamental restructuring of Medicaid that looks to achieve long-term efficiencies and focuses on services that actually improve the health outcomes of New Yorkers.”
After 10 years in office, however, it doesn’t appear the governor has made much progress in taming the Medicaid leviathan.
In 2011, with 6 percent of the nation’s population, New York consumed 23 percent of the nation’s Medicaid spending. “By 2016,” Bill Hammond of the Empire Center for Public Policy, has reported, “New York had surged to 40 percent — and its spending has more than doubled since then.”
Total Medicaid spending for the state’s 2020-2021 fiscal year is projected to hit $80.3 billion.
That’s up 63 percent since 2010, well above the rate of inflation.
Granted, some of the growth is due to the COVID pandemic. However, hair-raising audits released by state Comptroller Tom DiNapoli’s office in September, indicate there is plenty of mismanagement, fraud and inefficiencies.
The DiNapoli audits found more than $700 million in unnecessary costs and overpayments. Here’s a summary of the findings:
The state’s Department of Health has not developed “sufficient controls and oversight to ensure the most effective delivery of pharmacy services under managed care.” The DOH failed to procure the lowest net cost drugs. By failing to establish proper procedures, the auditors estimated that between Jan. 1, 2016 and Dec. 31, 2019, $605 million was squandered on unnecessary drug costs.
Due to the failure to track Medicaid recipients who had multiple Client Identification Numbers (CIN) assigned to them, there were duplication of payments. The audit “found DOH made $47.8 million in improper payments on behalf of recipients with multiple CINs for the period Jan. 1, 2014 through March 31, 2019.”
The transmission of inaccurate or incompetent enrollment information “resulted in $11.7 million in improper payments on behalf of 1,096 recipients who had terminated coverage and another $4.9 million in improper and questionable payments was identified for 319 recipients who died.”
As for reimbursement payments to various Medicaid providers, the audit discovered improper payments to the tune of $15.4 million.
Auditors identified “$29 million in improper Medicaid payments for drugs dispensed after they had been removed from the market for safety or commercial reasons.”
Over $700 million of taxpayers’ dollars misspent. And there might be a lot more that was wasted because auditors only perform sampling tests. For example, they do not review every one of the 244 million claims for payments that were filed with the DOH between March 2019 and September 2019.
In other words, the inappropriate disbursements and overpayments that the auditors discovered may be only the tip of the Medicaid “iceberg.”
In releasing his Medicaid audit findings, DiNapoli declared “The state is facing budget gaps of billions of dollars because of the COVID-19 crisis and needs to find cost savings wherever it can. Hundreds of millions of dollars could be saved with better financial and management controls over the state’s Medicaid program.”
And before Albany Democrats impose tax increases on struggling New Yorkers to pay for the damage caused by Cuomo’s shutdown of the economy, they should heed DiNapoli’s “cri de coeur” and clean out incompetent and corrupt bureaucrats and right-size New York’s bloated government and failing Medicaid system.
