Previously Published in The Messenger
By Matt Meduri
Senator Dean Murray (R-East Patchogue) has three specialties in his capacity as a New York State Senator: advocating for crime victims, railing against the MTA, and regularly discussing his grievances with New York’s Medicaid system.
Murray told The Messenger last month in our “good, bad, ugly” review of this year’s State Budget that New York offers the “Cadillac” of Medicaid services that allows for virtually any services – medically necessary or not – to be covered under Medicaid, that out-of-state patients are treated, and that the State’s error rate is substantially higher than the federal government’s benchmark.
Murray was joined by Senators Mario Mattera (R-St. James), Anthony Palumbo (R-New Suffolk), Assemblyman Joe DeStefano (R-Medford), Suffolk County District Attorney Ray Tierney (R), and Suffolk County Executive Ed Romaine (R-Center Moriches) in Hauppauge last Thursday to unveil a pair of bills he’ll be pitching in Albany next session.
The first bill would “formally designate the New York State Office of the Medicaid Inspector General (OMIG) as the official clearinghouse for Medicaid fraud tips at 1-877-87-FRAUD and establish, in statute, a standardized process for how those tips are received, evaluated, and investigated,” according to Senator Murray’s office.
Under that bill, the OMIG would be required to receive and review all Medicaid fraud tips submitted through the official tipline; refer all information deemed credible to the New York Attorney General’s Medicaid Fraud Unit and the appropriate local District Attorney; make a determination within 30 days if the tip will be pursued; receive reports from completed investigations; and submit an annual report of the total tips received, the number of investigations initiated, and the outcomes of those investigations.
The OMIG would also be required to report to the Governor, the State Attorney General, and the Majority and Minority leaders of both the State Senate and Assembly to “ensure transparency and legislative oversight.”
The second bill would establish a Medicaid Fraud Tip Reward Program to “encourage individuals with documented knowledge of Medicaid fraud to come forward.” The fund would be financed through 1% of all funds recovered through Medicaid fraud investigations, seizures, and forfeitures. Guilty pleas or criminal convictions in Medicaid fraud schemes could result in financial rewards for the tipsters.
The bill would also require a Medicaid Fraud Tip Reward Board to “develop reward guidelines, determine eligibility, and establish minimum and maximum award amounts.” The seven-member board would meet semi-annually to review qualifying cases and would be composed of two appointments from the Governor’s office, one appointment from the Lieutenant Governor’s Office, and one appointment each from the party leaders in the Senate and Assembly.
“This year, New York will spend roughly $124 billion on Medicaid. That is more than most states’ entire budgets,” said Murray. “That’s 77% higher than the national average. New York spends $4,942 per resident. In second place is Kentucky, which is almost $1,000 per person less.”
He added that Texas and Florida, both with “millions of more residents” than New York, only spent $1,579 per resident and $1,536 per resident, respectively.
“The bigger the system, the more ripe it is for fraud.”
Murray cited an Empire Center report that found that over the six-year period since 2020, New York ranked forty-ninth out of all fifty states plus the District of Columbia for investigations per billion of Medicaid dollars spent. New York ranked fifty-first for convictions per billion spent.
“We [New York State] spend $124 billion. In 2020, they recovered $181 million, and in 2025, they recovered $110 million. That is less than a fraction of a percent of what we’re spending,” said Murray. “We’re leaving the money in the pockets of the fraudsters.”
Murray also criticized Attorney General Letitia James’ (D-Clinton Hill) “grabbing” of the headlines and leaving certain cases “on the table.” He added that even though the federal and state governments split the Medicaid bill 50-50, the state government then splits their half and puts the remaining 25% on the municipalities.
According to the Medicaid Fraud Control Unit, a division of the Attorney General’s Office, 69 of the 115 convictions were “high-impact convictions.”
Assemblyman Joe DeStefano called the problem “waste, fraud, and abuse in its worst form.”
“Our Medicaid program exists to help our most vulnerable residents – our seniors, people with disabilities, low-income families, and children. Every dollar stolen from the system is a dollar taken away from someone who genuinely needs care,” said DeStefano, adding that “fraudsters” have been “padding their own pockets in funding lavish lifestyles and buying luxury homes and sports cars at the expense of honest residents.”
DeStefano mentioned a letter he submitted to the Attorney General’s Office urging her to investigate a Buffalo daycare center that had not filed tax returns from 2004 to 2020. He said he never received a follow-up from the Attorney General’s Office. Three months later, he sent another letter and claims to have not received a response.
Senator Palumbo, a former prosecutor, said that the bills “provide tools” to local law enforcement. He mentioned Comptroller Tom DiNapoli’s (D-Great Neck Plaza) reports alleging $10 billion to $20 billion in potential Medicaid fraud in New York alone.
“New York is the only state that makes counties pay for Medicaid,” said Executive Romaine. “Yet, we don’t have the type of role we need to have to investigate fraud?” He invoked an ongoing Flushing scandal where Medicaid is being billed, yet the associated buildings are empty.
“You want to cheat the public? You want to steal from the poor? You want to enrich yourself? We’re coming for you,” said Romaine.
Suffolk D.A. Tierney said that Suffolk County paid $246 billion in State taxes, but received about $98 billion back.
“We’re not making out on this deal, and we want to help solve the problem,” said Tierney, adding that his team’s partnership with the federal prosecutors of the Eastern District of New York (EDNY) has “yielded results.”
One of Tierney’s first cases he brought upon becoming D.A. in 2022 was that of an owner of a Montauk taxi company and part-owner of a Ronkonkoma taxi company. The owner was “falsely billing Medicaid for fake medical transportation that did not occur.”
“He was just sentenced two weeks ago to eight years in prison, as well as forfeiture of $19 million for his scheme,” said Tierney. He’s working with EDNY to mount a case against the Shirley Medical Transportation Company for an alleged $35 million in fraudulent Medicaid billing.
Tierney expressed his support for these bills and said that if these bills pass, it could unlock more options and authority for municipalities to investigate and prosecute, rather than having the cases bottleneck to the Attorney General’s Office. Tierney added that the financial incentives could prompt previous whistleblowers to come forward with more evidence, or prompt those otherwise reluctant to report to bring more evidence to the State and/or municipalities.