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Commentary

Medicaidís Code Red
Louis S. Richman, The New York Times, 10-2-05

New Yorkís Medicaid program has hit the trifecta. It seems to lead the nation in fraud, waste and cost. Richman warns New York legislators that if they want to save the programís generous benefits they are going to have to consider deep and wide-ranging reforms:

NEW YORK lawmakers are understandably concerned about the runaway cost of Medicaid. With nearly four million people receiving benefits, New York's program is the largest and most costly in the country.
And the program is rife with fraud and abuse. According to James Mehmet, former investigator for the Health Department's fraud and abuse office in New York City, some 40 percent of all claims in the state are considered questionable, costing taxpayers as much as $18 billion a year. Ö
To fix Medicaid, the program needs to be fundamentally rethought. Ö
Fortunately, states like Colorado, Florida and South Carolina recognize the need to change and have developed a new model that other states could use. Perhaps New York can learn from their experience.
Under the new patient-centered approach these states are pursuing, they would no longer pay Medicaid bills directly. Instead, they would give eligible recipients cash grants to purchase health insurance from a range of providers approved by the state through a competitive bidding process not unlike the process used to qualify insurers under the Federal Employees Health Benefits Program. Any part of the cash grant not spent on insurance would be invested in a medical-savings account to cover deductibles and co-payments.

Would NY legislators accept such patient-centered changes? Perhaps, but itís a difficult scenario to imagine. Surrendering control of Medicaid would mean disenfranchising the powerful interests that have mined the program for funds and plowed the proceeds back into NY politics. The stateís Medicaid spending is, in short, a goldmine for everyone concerned. Until tax increases due to Medicaid spending set off a voter revolt, reform is a political non-starter.



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