Oversight Leaders Urge Action on New York Medicaid Overpayments

WASHINGTON – Today, leaders on the House Oversight and Government Reform Committee sent a letter to Health and Human Services Secretary Kathleen Sebelius urging action to recover an appropriate amount of the tens of billions of taxpayer dollars that were improperly received by New York State through Medicaid overpayments over the past two decades, described in the Committee’s bipartisan March 2013 report, prior to granting a waiver which would transfer additional billions of federal funds to the State.

“The government has a responsibility to provide a safety net for individuals who truly need public assistance,” the letter, signed by Chairman Darrell Issa, R-Calif., Subcommittee Chairman Jim Jordan, R-Ohio, and Subcommittee Chairman James Lankford, R-Okla., states. “However, New York’s Medicaid program has fostered a system that over the past two decades has wasted vast sums of our nation’s limited resources.”

“This waiver request will potentially cost taxpayers an additional $10 billion. We urge you to ensure taxpayers are justly compensated for decades of Medicaid overpayments received by New York State prior to the approval of this pending waiver … [W]e ask that CMS’s Office of the Actuary certify the budget neutrality of New York’s waiver application prior to its approval.”

According to the Committee’s calculations, “New York State received approximately $15 billion in federal overpayments between 1991 and 2011 through just the State-operated developmental centers.”

“Powerful special interest groups, cronyism, and political corruption in the State have largely contributed to the New York Medicaid program’s unchecked growth and have made program reform exceedingly difficult,” the letter to Secretary Sebelius continues. “As a key steward of the federal Medicaid program, you have a responsibility to ensure that taxpayers are reimbursed for improper Medicaid payments and that State waiver requests do not impose additional costs on the program.”

In March 2013, the Committee issued a bipartisan report on the billions of federal tax dollars misspent on New York State’s Medicaid program, which included six recommendations to address the systemic waste and abuse in the program. In response to pressure from the Committee, HHS dramatically reduced prospective Medicaid overpayments to the State in April 2013, saving taxpayers an estimated $1.2 billion over 18 months.

You can read the letter to Secretary Sebelius here.