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
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
to be excessive.
Medicaid spending in
York was roughly $52.5 billion in fiscal 2013, about
half of which was borne by the federal government.
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
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
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.