Life Sciences

New York law will help state crack down on Medicaid fraud

Pharma Compliance Alert, July 26, 2006

New York will have increased power to investigate and prosecute Medicaid fraud under new legislation that was sent to the governor on July 14.

The legislation will establish an independent office of the Medicaid inspector general within the state's health department to consolidate fraud detection and prevention.

The law also requires healthcare providers to develop a compliance program that includes:

  • written policies and procedures

  • employee training and education

  • a system to identify and respond to compliance issues

  • a policy of non-intimidation and non-retaliation for participation in the compliance program

    Although New York's Attorney General Elliot Spitzer said the law was "useless" because it doesn't contain a qui tam provision, Bruce Armon, J.D., partner in Saul Ewing's Life Sciences Industry Service Team, says that doesn't make the law any less important to pharmaceutical companies.

    Armon says putting into place a dedicated office for fraud prevention is important to any pharmaceutical company that's reimbursed through Medicaid. "It gives the state a lot of tools to coordinate its efforts to prevent and investigate fraud and abuse in the Medicaid program," he says.

    Read the bill on the New York state legislature's Web site.

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