ALBANY — Gov. Cuomo yesterday moved to step up the state’s crackdown on Medicaid fraud as he nominated James Cox, a former high-level federal auditor, as New York’s new Medicaid inspector general.
Criminal fraud has been a major problem in the state’s massive $53 billion Medicaid system, ranging from notorious “Medicaid mills” that bilk taxpayers through use of phantom patients and phony diagnoses to individual doctors, dentists, pharmacists and other health-care providers who pad bills with unneeded procedures and medications.
Experts estimate that fraud accounts for 5 percent or more of Medicaid payments, or more than $2.5 billion.
“Jim Cox is exactly who we need to serve as the inspector general,” said Cuomo.
“His experience with the auditing process will help create a more efficient and cost-effective system that will monitor the delivery of crucial services across the state,” he continued.
Cox, who’ll take over the $150,000-a-year post in an “acting capacity” pending confirmation by the Senate, worked for the US Health and Human Services’ Office of Inspector General for 23 years, most recently as regional inspector general for Region 5, consisting of six Midwestern states.
As regional inspector general, he helped create a joint Department of Justice and HHS task force to combat waste, fraud and abuse in government programs.
Cox replaces James Sheehan, who became the state’s first Medicaid inspector general in 2007 and was widely criticized by health-industry leaders for allegedly treating payment and billing errors as fraud and abuse, even though they may have resulted from honest mistakes.
Sheehan, whose office recovered over $1 billion in improper payments and fines, was dumped by Cuomo last month.
The office of Medicaid inspector general was created in 2006 as an independent agency within the Health Department in an effort to coordinate anti-fraud activities among several state agencies including the Attorney General’s Office.
Meanwhile, Cuomo announced that senior adviser Larry Schwartz would take over the top appointed position as secretary, or chief of staff, from Steven Cohen, who has held the position since the governor took office in January.
Schwartz, who served as secretary to former Gov. David Paterson, was sharply criticized by the inspector general’s office last year for failing to recall key events in a scandal involving an eventually aborted state contract to operate a casino at the Aqueduct Race Track in Queens.
Healthy dose of reform
Cutting Medicaid costs is a key part of Gov. Cuomo’s efforts to control state spending.
* New York’s Medicaid program spends $53B a year.
* Experts estimate that fraud accounts for 5% of Medicaid spending, more than $2.5B a year.
* Medicaid’s state IG’s office has recovered more than $1B in improper payments since 2007.