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.
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
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.
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
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.