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NY to Receive $1.1 Billion Reduction in Medicaid Funding; Fraudulent Billing to Blame

Posted by Sunny Bjerk , February 04, 2013

NY to Receive $1.1 Billion Reduction in Medicaid Funding; Fraudulent Billing to Blame

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Well, it wouldn’t be budget season without a growing list of challenges.

Yesterday news broke that New York State is facing a $1.1 billion loss in Medicaid funding which will greatly affect hospitals, providers, and community-based organizations that serve Medicaid recipients.

The loss in Medicaid funding stems from a federal government report that found certain facilities that served the developmentally disabled had been overcharging Medicaid for 20 years, resulting in $15 billion dollars worth of overages. The federal government calls this overbilling the result of “a system of massive waste and illegal billing,” and is asking the state to absorb an annual $1.1 billion cut in Medicaid funding and to repay some of the misused funds.

According to state Medicaid Director Jason Helgerson, New York is currently unwilling to reimburse the federal government for their oversight and inability to identify and correct the mishandled billing themselves. However, anonymous sources claim that the $10 billion New York state requested for Medicaid funding is being “held hostage by CMS (Center for Medicare and Medicaid Services)” until the two sides agree on a payback schedule or timetable.

While we will have to wait until Governor Cuomo’s revised budget comes out to see how the $1.1 billion in reduced Medicaid funding will be disseminated, Helgerson claims the cuts will likely be spread across a variety of Medicaid-funded health care providers and services. However, many health care workers, speaking on the condition of anonymity, hope Governor Cuomo widens the scope of programs that may see funding cuts extend beyond the health care sector.

Projections in the Times Union suggest that these funding cuts may be activated as early as April, and that the $15 billion dollar Medicaid billing fiasco will likely affect New York’s budget for years to come.

Stay tuned for updates and how this budget shortfall will affect those living with and affected by HIV/AIDS.

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