By Hank Russell
The Office of the Medicaid Inspector General (OMIG) is questioning the results of a report on the office’s own performance.
According to the Empire Center for Public Policy, based on the OMIG’s annual reports, office staffing increased 17% between 2019 and 2024, from 405 to 472. The 2024 figure was also 6.8% higher than the previous year, when 442 people were on staff. In addition, state Medicaid spending went up 65% at the same time, from $72 billion to $101 billion.
But the report showed that more spending didn’t translate to better results. In fact, the OMIG finalized 62% fewer audits from 2019 to 2024, the Empire Center said. In 2019, there were 1,842 audits that were finalized but two years ago, 702 were finalized, 59 of which were from Long Island. In 2023, 891 audits were finalized, which is 21.2% lower than in 2024.
The Empire Center also showed that, in 2024, only seven audits per billion in Medicaid spending were completed — the lowest level in OMIG’s 20-year history. That same year, only 1.5 audits per full-time equivalent employee were finalized. That is the second-lowest level, next to the figure of 1.0 audits per employee in 2012, after then-Governor Andrew Cuomo removed the OMIG’s original director, James Sheehan, after Sheehan’s aggressive enforcement tactics drew the ire of the politically connected healthcare industry, the think tank said.
Monetary recoveries also slipped, the think tank said. In 2019, the agency recovered approximately $302 million, but over the next five years, that amount dropped to $220 million — a 27% decline, That is also 10.2% less than the $245 million collected in 2023. Long Island collected $12 million in recoveries in 2024.
Referrals also dropped, according to the Empire Center. In 2019, there were 768 referrals made to the Medicaid Fraud Control Unit (MFCU) and other agencies, but, in 2024, that number fell to 431, a decrease of 44% and a drop of 33.7% from 2023, when 655 referrals were made.
“These declines come at a time when the Trump administration is raising an alarm about Medicaid fraud and pressuring New York and other states to crack down,” said Bill Hammond, the Empire Center’s senior fellow for health policy. “Another agency charged with Medicaid oversight – the attorney general’s Medicaid Fraud Control Unit – has also shown signs of diminishing effectiveness in recent years, which the Trump administration cited as a reason to suspend its federal funding.”
Established in 2006 as an independent agency within the Health Department, OMIG is charged with defending against fraud, waste and abuse in Medicaid, a safety-net health plan for the low-income and disabled.
Upon reviewing the report, OMIG spoksesperson Bill Schwarz said the think tank’s report “completely misrepresents New York’s nation-leading Medicaid program integrity efforts.
Under Governor Hochul’s leadership, the State has undertaken painstaking efforts to root out Medicaid fraud, waste, and abuse.”
Schwarz pointed out that, from 2020 to to 2024, New York State has realized more than $18 billion in cost savings and recoveries. Further, the Centers for Medicare and Medicaid Services (CMS) found that the state’s Medicaid improper payment rate at 1.43% is well below the national estimated federal Medicaid improper payment rate of 5.09%.
“The program’s success is unassailable,” Schwarz said. “In short, the state’s approach deters, detects, and remedies fraud, waste and abuse while maintaining and increasing access to necessary services.”
Using the same timeframe as the Empire Center, Schwarz noted that, from 2019 to 2024:
- total recoveries increased 36%, from $552,255,994 to $752,398,131
- total cost savings were up 61%, from $2,365,172,753 to $3,811,290,415
- recovery audit contractor, casualty and estate, and third-party liability recoveries (combined) increased 70%, from $283,201,399 to $483,171,346
Schwarz concluded, “A legitimate review of OMIG’s performance measures reveals a sound, proven program integrity strategy that extends beyond traditional pay-and-chase tactics and includes pre-payment controls, investigations, third-party liability activities, self-disclosures, managed care oversight, provider enrollment reviews, exclusions and other efforts that serve to both recover improper Medicaid payments and prevent inappropriate Medicaid payments upfront.”