My law firm and I specialize in fighting frauds on the

federal and state treasuries by helping citizens bring cases under the Federal

False Claims Act and their state equivalents.

But what really helped me understand what's going on in Albany in the fight

against Medicaid fraud harkened back to my days as a young prosecutor

arraigning three-card monte cases in night court. These cases involved

defendants who were particularly skillful in rapidly moving three playing cards

around the surface of a cardboard box, inviting passersby to place a bet and

pick the right one. The three-card monte players could ensure a consistent

outcome: The public always lost.

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The State Senate majority announced in March it had passed "the toughest

most comprehensive plan to combat Medicaid fraud." It wasn't. The bill excluded

the single most effective fraud-fighting tool: citizen-initiated

whistle-blower lawsuits.

The Senate majority proclaimed that its bill included a False Claims Act.

It explained that "the federal Deficit Reduction Act encourages the states to

adopt state False Claims Acts mirroring the federal False Claims Act" by

providing the state with a larger share of Medicaid fraud recoveries. But the

Senate bill did not mirror the federal law; in fact, it excised the

whistle-blower suit provisions needed to qualify for the larger share of funds.

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So I traveled to Albany as a concerned citizen with a record as a private

attorney in fighting Medicaid fraud, and as chairman of Taxpayers Against

Fraud, a Washington-based, nonprofit, public-interest organization dedicated to

combating fraud against the government through the promotion and use of False

Claims Acts.

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I thought I had a pretty powerful message to deliver: The Senate told us it

did one thing, when in fact it did precisely the opposite.Instead I was told

that as a lawyer what I had to say was self-serving and inconsequential and, by

definition, at odds with the health care community. So I pointed out that I

was indeed a lawyer, a former fraud prosecutor who continued to fight fraud as

a private practitioner. False Claims Acts, with their whistle-blower

provisions, are aligned with the interests of medical professionals dedicated

to delivering cost-efficient care.

But why take my word for it? Why not listen to Charles Grassley, Republican

chairman of the U.S. Senate Finance Committee, a strong fiscal conservative

and the original Senate sponsor of the federal False Claims Act? In a March

letter to federal officials, Grassley explained that the recently passed

Deficit Reduction Act requires that a state False Claims Act contain provisions

for whistle-blower lawsuits to qualify the state for retaining a larger share

of Medicaid fraud recoveries.

After all that, how did the Senate majority respond? On Wednesday, the

Senate passed a new bill stripping out the False Claims Act portion of its

proposed law. The principal sponsor of the legislation, Sen. Dean Skelos

(R-Rockville Centre), recently said of that new bill: "Why does [the law] have

to be linked to more work for trial lawyers?" One answer might be because the

Senate majority told the public it passed a False Claims Act in March.

Skelos also removed from the new bill sections allowing for

government-initiated cases with treble-damage recovery provisions and for the

state attorney general to protect workers who expose Medicaid fraud from

employer retaliation. And neither Skelos nor his Senate majority colleagues

have even attempted to explain to the public what happened to the $325 million

in anticipated anti-fraud recoveries they scored to the state budget based on

their original bill.

We now stand as much chance of seeing those recovered funds as we would in

trying our luck in three-card monte.

What happened on the Assembly side is a different story. From the

beginning, the Assembly passed a real False Claims Act bill. But it did not

allow whistle-blower cases to proceed in the absence of government

participation. Again, Sen. Grassley wrote a letter explaining that the Deficit

Reduction Act required such a provision.

The Assembly reacted by passing a new bill fixing that problem. There are

still some significant flaws in the bill, but it demonstrated a willingness to

get things right and will likely make changes next time around.

But nothing is going to get done without similar action by the Senate.

Just last week a federal audit severely criticized New York's anti-fraud

efforts. But beware of members of the State Senate majority who are heralding

themselves as the vanguard fighting Medicaid fraud. When called upon to make

the good fight, they went into a full retreat. And even the best three-card

monte dealer can't move so fast that his victims don't realize, after their

money is gone, what's happened.