HMO Representatives are caught on videotape telling investigators
not to list off-the-books income

Suozzi seeks penalties for HMOs that process fraudulent applications

Mineola, NY - Nassau County Executive Tom Suozzi said a county investigation has caught representatives from two H.M.O.'s on videotape telling undercover investigators seeking Medicaid benefits not to list their off-the-books income when they went to the H.M.O.'s to apply for benefits.

A third H.M.O. submitted applications to the County on behalf of individuals who clearly were not eligible for Medicaid based on their income, the County's investigation also shows, Suozzi said.

The two H.M.O. employees, known as "facilitated enrollers," help individuals sign up for Medicaid benefits. They were captured on videotape instructing the undercover investigators to not worry about disclosing off-the-books income that would have made them ineligible for Medicaid benefits, Suozzi said. The undercover investigators used hidden cameras to record the enrollers when the investigators posed as Nassau County residents seeking benefits.

"Giving H.M.O.'s the ability to help people sign up for Medicaid is a great service for the public, as is the Medicaid program itself, but both must be run properly and without harm to the taxpayers," Suozzi said.

Suozzi called on the state to create financial penalties for H.M.O.'s that repeatedly attempt to enroll persons who do not meet the income eligibility requirements for Medicaid.

Nassau County Commissioner of Investigations Bonnie Garone said these cases are being referred to the New York State Department of Health for review.

The two H.M.O.'s caught in the sting were HIP and Fidelis, Garone said. A third H.M.O., Affinity Health Plan, sent questionable Medicaid applications to the county that did not fully disclose the income levels of the applicants. The H.M.O.'s are active in Nassau County and, along with other H.M.O.'s, sign up thousands of recipients each year in the Medicaid program. Medicaid costs $1.5 billion in taxpayer funds in Nassau County each year, $217 million of which comes directly from the Nassau County budget.

These cases are part of an ongoing examination of the Medicaid program in Nassau County that Suozzi initiated earlier this year as part of a continuing effort to reduce waste, fraud and abuse in the program.

"This investigation and the videotape evidence in particular shows that there is still a lot of work to be done in the fight to keep Medicaid costs down in Nassau County," Suozzi said. "Allowing people who are not eligible for Medicaid to enroll raises costs for everyone and cheats those who are truly in need. The County will now pursue an aggressive campaign to route out waste, fraud and abuse in the Medicaid system at the county level."

Investigators for Nassau County set up a sting operation and sent testers out to eight H.M.O. enrollers. Of the eight tests, two uncovered evidence that enrollers apparently were willing to submit false applications, as captured on the videotape.

In addition, Department of Social Services (DSS) officials spotted questionable Medicaid applications submitted to the county by facilitators from Affinity Health Plan. In one recent case, an Affinity representative completed an application for a woman and her three children with a reported household income of $250 per week. But the Affinity facilitator neglected to complete the question that requires applicants to disclosure their monthly housing expenses. When a DSS worker phoned the applicant she learned that the family had a housing expense of more than $4,000 a month - more than four times their reported income. When the applicant subsequently was interviewed by county investigators, she disclosed that her income actually consisted of the $250 per week the H.M.O. facilitator had recorded, plus earned income of almost $800 a month and rental income of almost $2,000 per month. The applicant also told county investigators that she had provided all of this information to the Affinity facilitator who had processed her application and forwarded it to the county.

In another instance involving an Affinity enroller, DSS received an application that suggested another family received child support income. However, when a DSS worker called the home seeking more information she discovered that the father, in fact, lived with the family and earned $400 a week that was not mentioned on the application and that the family also received an additional $1,000 per month in rental income.

Under a special waiver granted by the federal government, New York is the only state that allows H.M.O.'s, health clinics and community organizations to assist people with Medicaid applications. Elsewhere in the United States, applicants are required to fill out their own paperwork or go to a government welfare office to apply. New York's waiver is scheduled to expire on April 1, 2006. Gov. Pataki must decide by Dec. 1, 2005 whether to request a new waiver.

Suozzi is urging Gov. Pataki to seek a renewal of the waiver but at the same time to implement new procedures at the state level to ensure H.M.O.'s are not improperly profiting by signing up individuals who are not eligible for Medicaid. In addition, Suozzi is putting all Medicaid facilitated enrollers on notice that Nassau County is monitoring applications they forward to the county for approval and will vigorously pursue any that are potentially fraudulent.