06/18/09 06:51 AM
By Phil Fairbanks
Buffalo News Staff Reporter

When Erie County got the go-ahead last year to audit Medicaid providers for fraud and abuse, the state suggested the county start with 10 local pharmacies.

A year later, state officials still are waiting for the county to act.

“They’re in a state of dormancy,” said Katherine Napoli, program director of the state’s four-year-old Medicaid demonstration project. “Erie County is not doing anything with those 10 targets.”

The county’s handling of Medicaid fraud and abuse allegations, especially those involving doctors, hospitals and other providers, came under attack Wednesday by state officials reacting to a new county report.

The report, like Napoli, suggests the administration of County Executive Chris Collins — and that of his predecessor, Joel A. Giambra — might have missed an opportunity to track down millions of dollars in Medicaid fraud, waste and abuse.

Released by County Comptroller Mark C. Poloncarz, the report claims the county has been slow to use computer software and other data mining tools to audit Medicaid providers.

“Here we are, years later, and we’re no further along,” Poloncarz said of the administration’s enforcement efforts. “In fact, it appears Erie County dropped the ball.”

Poloncarz’s report contrasts the county’s efforts with those in neighboring Monroe County, which state officials have hailed as a model of sorts, leading to a Rochester pharmacy being charged with overbilling Medicaid by $3.3 million.

A top Collins aide disputed Poloncarz’s version of why the county has been slow to partner with the state on Medicaid investigations.

Michael Weiner, the county’s social services commissioner, said the lack of progress should be laid at the state’s feet. He cited state resistance to the law firms and approach used by the county.

“We’ve been blocked from doing a lot of things,” Weiner said Wednesday.

Weiner said the delays have forced one of the county’s law firms, Levy Phillips & Konigsberg of New York City, to withdraw from the effort. He also released a letter in which Diane Paolicelli, a partner in the firm, said the state “stalled, impeded and discouraged” the firm’s work.

“We’re stepping back and reevaluating our role,” Weiner acknowledged Wednesday. “Right now, we don’t have a vendor to complete these audits.”

Weiner also lambasted Poloncarz, suggesting his report was politically motivated and misrepresented the facts. Poloncarz, a Democrat and frequent critic of Collins, a Republican, is up for re-election this year.

“This is a no brainer,” Poloncarz replied. “Medicaid is the largest line in the county budget, and we know Medicaid fraud exists.”

State officials echoed those comments while dismissing Weiner’s allegations that they are to blame.

“I would beg to differ. I would say au contraire,” said John Sullivan, the state’s deputy Medicaid inspector general for legislative and intergovernmental affairs. “There’s been very little if any response from Erie County.”

Poloncarz’s report claims the county has had the ability since 2005 to coordinate its investigations with the state Medicaid inspector general but so far has failed to do so.

The result, it suggests, is millions of dollars lost through abuse of the Medicaid system by doctors, hospitals, pharmacies and others.

The county’s Medicaid costs total about $800 million a year, with the federal government picking up half and the state and county splitting the balance.

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