U.S. Accuses NYC of Massive Fraud in Program for Developmentally Challenged Toddlers

It’s the city that never sleeps.  So when it does something, it can do it in a big way.  That applies to Medicaid fraud, according to a suit filed yesterday by the U.S. Attorney for the Southern District of New York.

The city also has a tough-as-nails reputation.  So maybe we shouldn’t be too surprised that the victim of the fraud was an early intervention Medicaid program for infants and toddlers with developmental delays.

According to the suit, the city’s Department of Health & Mental Hygiene joined with contractor Computer Sciences Corp. to create computer programs that, over a five-year period, defrauded Medicaid with tens of thousands of false claims for payments from the program.

According to the U.S. attorney, they switched correct billing codes to one they knew Medicaid would approve: “unspecified delay in development.”  In another, they short-circuited the requirement to exhaust commercial insurance by creating a phony code that commercial insurers were sure to reject immediately.

How much money are we talking about?  The U.S. attorney didn’t say, but he gave a hint:  in one four-day period in the spring of 2009, the scheme was used in over 600,000 claims, for $49 million in Medicaid payments.  In a similar case filed by the same U.S. attorney in 2011, the city ended up paying $70 million in settlement.

Today’s post was contributed by Norman G. Tabler, Jr.

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