In October 2006 Governor Pataki announced that the federal Centers for Medicare and Medicaid Services had approved New York State to enter into the Federal-State Health Reform Partnership Medicaid Demonstration Agreement (F-SHRP), whereby Medicaid would received $1.5 Billion to modernize so long as Medicaid recovers the following amounts over the next four (4) years:

• 2008 - $215 Million

• 2009 - $322 Million

• 2010 - $429 Million

• 2011 - $644 Million

Should Medicaid fail to meet any of the stated monetary deadlines, Medicaid will be responsible for repaying funds back to the federal government. James Sheehan of the Medicaid Inspector General office has stated that he is determined not to allow that to happen. He further explained that he does not anticipate a recovery issue until the 2011 required deadline, as the “highest year ever for national fraud and abuse recoveries for all health programs – 2006 - $2.2 Billion for the entire country.” Clearly the New York State Medicaid program is facing a steep challenge. So, what impact will F-SHRP have on providers?

The impact of F-SHRP will be far-reaching and severe as Medicaid has been thrown into a tizzy finding new ways to recoup monies from providers. For instance, whistle blower provisions, triple damages, penalties for false claims, and civil enforcement by the Attorney General are just a few initiatives and measures that have been instituted to assist in the recoupment battle.

Additionally, Medicaid is utilizing contract audits, Centers for Medicare and Medicaid Services revenue recovery contractors, and county civil damages. Practitioners should be wary that the following are potential areas of increased Health Fraud attention:

• Kickback/stark issues

• Managed Care programs

• Quality of care/access to services

• Data accuracy/mandatory reporting

• Prescription drugs (At the manufacturing and pharmacy level)

• Hospitals

• Nursing Homes

• O-agency programs

As an owner/employee/member/practitioner in New York State, we strongly urge you to seek a regulatory compliance review from a healthcare practitioner immediately, so that you may avoid being the target of Medicaid’s recoupment frenzy.

For additional information on F-SHRP or for a consultation to review your practice structure, please do not hesitate to contact Kirschenbaum & Kirschenbaum, P.C. at (516) 747-6700 or email Ms. Kirschenbaum at Jennifer@KirschenbaumEsq.com.