The federal government has demanded that New York state pay
back nearly $1.3 billion in Medicaid money distributed in 2010, prompting a
rebuke from Gov. Andrew Cuomo's administration and a promise to appeal the
decision.
At issue are the costs of caring for about 1,300
developmentally disabled people—about $2 million per patient in 2013—in nine
state facilities from Staten Island to Rochester .
New York 's
Medicaid program is among the nation's most expensive.
A subsequent review by federal Medicaid officials found that
New York couldn't justify some of its reported costs, lacked proper internal
controls, didn't comply with federal reporting requirements and had an
unreliable fiscal report from 2010-11, among other issues. A separate U.S.
Department of Health and Human Services inspector-general probe in 2012 found
the amount charged by New York
to be excessive.
Medicaid spending in New
York was roughly $52.5 billion in fiscal 2013, about
half of which was borne by the federal government.
CMS told New York
officials last week that it would seek nearly $1.3 billion from the 2010 fiscal
year alone, and possibly more once further reviews of the 2011 and 2012 fiscal
years are complete. New York
officials have 30 days to respond with a plan to fix its Medicaid spending
issues.
The request cuts against Mr. Cuomo's image as a Medicaid
reformer, an issue he took on in his first year in office with a panel that
made recommendations to save money that were ultimately signed into law.
It also comes after Mr. Cuomo's deal in May allowing New York to spend $8 billion in federal Medicaid savings
over a five-year period, a pot of money seen as helping Brooklyn
hospitals on the verge of closure. It isn't clear how the Medicaid office's
request for reimbursement would affect that.
The New York State Department of Health said Tuesday it
would appeal the federal demand, saying it would have "untold negative
consequences on the state's health-care system."
"Under this administration, Gov. Cuomo proactively
redesigned a wasteful and inefficient Medicaid program that was sanctioned by
[the U.S. Department of Health and Human Services] and prior
administrations," said Bill Schwarz, an agency spokesman.
The Medicaid review and request for repayment are part of
the federal government's work to ensure proper Medicaid spending, officials at
the CMS said in a written response to questions.
"We will continue to work with New York state officials to address issues
outlined in this report in order to strengthen the financial management of the
Medicaid program," said Courtney Jenkins, a Medicaid spokeswoman.
The request for repayment was welcomed by congressional
Republicans on Capitol Hill, where New
York 's expensive Medicaid system has drawn attention.
"We applaud CMS's action, and we encourage CMS to
recover the full amount due the federal taxpayer for both 2011 and 2012,"
said U.S. Rep. James Lankford (R., Okla.) at a hearing of the House Oversight
and Government Reform Committee.
Federal auditors also said New York has used some of its share of
Medicaid money each year for general spending for a broad number of state
disability programs. A Republican-led congressional oversight panel accused New York of fraud last
year, allegedly overcharging Medicaid $15 billion over two decades. New York officials have
said the panel's conclusions were wrong.