NYS. $22 Billion Dollar Medicaid Fraud NYS Health Department and Research Foundation for State University of New York (SUNY)

NYS. $22 Billion Dollar Medicaid Fraud NYS Health Department and Research Foundation for State University of New York (SUNY)


Department of Justice alleged that NYS Department of Health conspired with the SUNY Research Foundation to Engage in Massive Medicaid Fraud.

An action brought by a whistleblower for retaliation by NYS for assisting the Department of Justice in an investigation into NYS’ dirty little Medicaid Fraud secret conspiracy with SUNY Research Foundation she alleges that, Plaintiff, a computer programmer/analyst employed by SUNY RF Center for Development of Human Services (“CDHS”) and a whistleblower who has uncovered SUNY RF’s commission of major fraud upon the Federal government aka taxpayer with regard to an ongoing audit of the Medicaid program, in conspiracy with certain officials at the New York State Department of Health (“DOH”).

Plaintiff, a witness for the federal government in this investigation, has provided the federal government with documentary evidence of a pervasive and unlawful conspiracy among her supervisors at RF to defraud the American taxpayer with regard to approximately $22 billion in annual matching funds which the federal government provides to NY for the Medicaid program. Because of her whistleblowing activities, Plaintiff has been subjected to unrelenting retaliatory conduct by her supervisors at RF, including adverse employment reviews, alteration of her job duties, reassignment of work away for Plaintiff, suspension from work and other discriminatory treatment.

This Isn’t The First Time SUNY Research Foundation Has Been Sued for Fraud
In 1992 a whistleblower plaintiff George Denoncourt filed a false claims act action against the Research Foundation of SUNY. This suit resulted in a $26.97 million which contained only double rather than treble damages as the statute allows and a stern warning to NYS not to engage in fraudulent practices again.

NYS Keeps Getting Caught For Committing Fraud, But There Never Seems to Be Any Consequences
In 2009 NYS was fined for false Medicaid claims whereby NYS and NYC were falsely billing Medicaid for speech therapy services resulting in a $540 million dollar (single damages) settlement against the State of New York,

Just this month (9/2010), the U.S. Centers for Medicare & Medicaid Services announced a probe into Medicaid payments into nine state institutions for the developmentally disabled after it was revealed the facilities had reimbursement rates of $4,556 per day for each of 1,400 residents. State officials have said the action cost of care is only about one third the rate, and that much of the $1.2 billion in federal matching funds every year supports other state programs. Now, right on it’s heels comes a fraud so large in scope, that it had to be an inside job.



Einstein has said insanity is doing the same thing over and over and expecting a different result.
In the case of NY, the Feds keep auditing NYS for fraud. The frauds keep getting bigger and bigger and more and more secretive. While NYS gets fined time and time again, the people running the fraud from the safety of their administrative offices and under the protection of the NYS Attorney General who uses taxpayer money to defend these white collar government criminals who were ripping off the taxpayer cost. After the investigation is done and a settlement reached, the same workers who thought up the government criminal enterprise, go back to work at the same taxpayer paid for salary and pension benefits. Their mission, find another way to steal from the Federal taxpayer.

The Current $22 Billion Latest and Greatest NYS Medicaid Fraud Scheme
A federal grand jury is continuing to examine allegations that state Health Department managers may have conspired with the Research Foundation for the state University of New York to manipulate audits of New York’s $22 billion a year Medicaid program.

The investigation is centered on a federally mandated program that requires states to randomly audit their Medicaid programs to determine the rate of ineligible recipients of Medicaid benefits. The Research Foundation has had a contract to conduct the auditing for the Health Department.

Why, you ask would NYS contract out their auditing requirements to a private entity? Plausible Deniability.

After the Denoncourt Action, settled in 1992, NYS split it’s billing and instead of having NYS offices responsible, NYS put 1/2 the responsibility on the private entity and the other 1/2 on NYS. This way unless you were an insider to the fraud, the NYS employee would be hard pressed to put the 2 pieces together.

Several people who formerly worked for the Research Foundation have alleged that their audits were deliberately sanitized so that New York state would not be penalized for excessive error rates that could have led to New York being penalized or not receiving all or part of approximately $22 billion in federal matching funds.



The workers, who have not been identified publicly, have said officials with the Research Foundation and Health Department intentionally used inaccurate information to manipulate the outcome of the audits so that New York would have a lower error rate. The employees also claimed their access to audit files were restricted and the “random” samples of cases plugged into audits were not random at all.

The allegations also are that the Health Department was able to review and change the audits before they had been submitted to the federal government.

A person briefed on the investigation said two Research Foundation workers who complained to Health Department managers about the situation in April 2008 were fired within days.

Six months later the Research Foundation learned its program was being audited by two federal agencies, the Center for Medicaid Services and the Department of Health and Human Service’s Office of Inspector General.

A person briefed on the case said investigators are examining allegations by a former Research Foundation worker that managers for the non-profit agency and the Health Department responded to the audits by ordering data fields to be deleted and replacing them with a second database, which had been sanitized, for the auditors to review.

NYS and SUNY Research Foundation Retaliates Against Whistleblowers
Meanwhile, several Research Foundation workers have alleged they were fired or retaliated against after questioning the practice of altering data or manipulating information such as residency requirements of Medicaid recipients.

Ava Dock, who lost her job at the Research Foundation in December, filed a federal whistleblower complaint against the Research Foundation two months earlier in U.S. District Court in Albany. Dock’s complaint, which is pending in federal court, alleges her job was eliminated because she stood up to supervisors who were altering data in their audits. The complaint seeks at least $250,000 in damages.

Dock’s complaint also accuses an unnamed Research Foundation supervisor of altering records before the information was released two years ago to investigators with the U.S. Department of Health and Human Services office of inspector general. The OIG began investigating the New York program in late 2008.

The complaint, and allegations from other Research Foundation workers who have not been publicly identified, accuses the Research Foundation of submitting documents to the federal government purporting to show an “error rate” in its Medicaid program of below the maximum permitted rate of 3 percent. The actual error rate was in excess of 20 percent, the workers have claimed, according to sources briefed on the case.

FCA.Ava.Dock v. OHRD