Issa, Jordan Urge Recovery of Millions in Federal Overpayments, Oversight of New York’s Mismanaged Medicaid Funds

Published: Aug 22, 2014

Oversight and Government Reform Committee Chairman Darrell Issa, (R-Calif.) and Subcommittee on Economic Growth, Job Creation and Regulatory Affairs Chairman Jim Jordan, (R-Ohio) urged in a letter yesterday to Centers for Medicare and Medicaid Services (CMS) Administrator Marilyn Tavenner that CMS recover improper federal payments to New York State, exemplified by billions in improper Medicaid payments received by New York State-operated developmental centers, New York State-operated residential habilitation facilities and New York City government hospitals. The Chairmen also directed CMS to conduct proper oversight of New York State’s expenditures under an $8 billion federal Medicaid waiver, particularly given the State’s selection of politically-connected lobbyists to disburse the money. The request comes after CMS’s decision last month to disallow $1.26 billion in the developmental center overpayments received by New York State in fiscal year 2010-2011.

“As a result of New York State’s long history of Medicaid mismanagement that inappropriately pass costs to federal taxpayers, we urge you to fully investigate the excessive Medicaid payments received by the two New York City hospitals identified by [the Government Accountability Office] and determine how long these hospitals have received inflated payment rates,” the congressmen write in the letter. “Additionally, CMS should recover additional overpayments owed federal taxpayers. At the July 29, 2014, hearing, GAO reiterated its long-standing recommendation that CMS maintain accurate and reliable provider-specific payment data. The example of these two New York City government hospitals shows the need for CMS to adopt GAO’s recommendation without delay.”

The letter continues:

“Further, in April 2014, CMS issued an $8 billion waiver to New York for the purpose of restructuring aspects of its Medicaid program. Because of New York’s track record of abusing and mismanaging federal Medicaid dollars and CMS’s failure to identify and halt outrageous payments made by the State for years or decades after they have started, we are concerned that the State will misspend the $8 billion in funds. Already, New York has announced that it is bailing out several hospitals throughout the State with these funds, particularly in Brooklyn. While we disagree with CMS’s decision to award the $8 billion waiver to New York State, we now urge you to carefully review the appropriateness of the State’s disbursement of these funds.”

“We are concerned that the State has decided to put former health care lobbyists with current conflicts in a decision-making position with regard to these funds,” the congressmen continue. “As such, the Committee will continue to monitor this situation very closely moving forward, including CMS’s oversight of the disbursement of these funds.”

Last year, the Committee released a bipartisan Committee report which documented how poor program oversight by both the State and federal Government has contributed to tens of billions of dollars in Medicaid misspending by New York State. The report built upon previous Committee work that estimated New York State received approximately $15 billion in federal Medicaid overpayments to State-operated developmental centers over two decades.

Read the Committee’s letter to CMS here.