Massachusetts owes $86.6m to the US, audit says

And these bureaucratic bunglers think they are the light on the hill!

State Medicaid officials repeatedly violated federal laws and regulations and must return $86.6 million to the US government, a new federal audit has found. The audit, by the inspector general for the US Department of Health and Human Services, found that from 2001 to the first quarter of 2004, state Medicaid officials overcharged the federal government for services provided by the state Department of Social Services. The audit found that the violations did not involve willful misconduct, but resulted instead from lax oversight.

In all of the reported violations, state Medicaid officials billed the federal government for care that was not directly related to arranging medical services. The audit documented hundreds of thousands of instances of those improper claims over the period studied, times when the state overcharged Medicaid by amounts ranging from $209 to $295. State Medicaid officials labeled the audit ``seriously flawed and erroneous" and said they would contest the findings in a reply to the federal government that they plan to submit at the end of the month.

In one example cited by Inspector General Daniel R. Levinson, the state billed federal Medicaid officials for a social worker who called a child's school, asking that the child be allowed to return to class. In another reported violation, the state billed Medicaid for a social worker who accompanied a child to court. ``We attribute these unallowable costs to the state agency's lack of procedures for ensuring compliance with Medicaid requirements," Levinson wrote in his 13-page report, a copy of which was obtained by the Globe. ``The state must comply with all federal requirements."

Beth Waldman, the state Medicaid director, said the federal government had reached an agreement with the state in 1994 to allow Massachusetts to bill for such services. ``We believe that they are allowable under the regulations that [the federal government] worked with us to put in place and that they understood that at the time," Waldman said in an interview yesterday. ``So, if they want to change them, that's fine, but you can't do it retrospectively, and you can't do it through an audit."

Waldman sounded a skeptical note, saying she ``would not be surprised" if the federal government brushed aside the state's reply and demanded return of the $86.6 million. It would then be up to the Legislature to decide how to handle the hit to the state budget, she said. ``Eighty-six million dollars is a lot of money; there's no doubt about that, but there's not going to be an impact on the kids," because the services under review have already been provided, Waldman said. ``It would be a hit to the General Fund".

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THE NEW YORK MESS

It makes even the dubious Massachusetts initiative look good

For years this nation has sought a way to provide every American with affordable health-care coverage. Now the problem is coming to a head. Small businesses and the self-employed are multiplying by the day-yet they cannot access affordable health insurance. Today, the fastest-growing group of uninsured are small-business owners and independent contractors. They are shut out of buying insurance at group rates.

The choice is clear: We can set aside special-interest politics in order to expand coverage for all. Or we can continue utilizing the power of government to exclude some-namely small businesses and the self-employed-while rewarding others. Massachusetts has chosen the first path, while New York seems intent on catering to special interests. The Massachusetts legislature recently passed a bipartisan bill that seeks to insure every resident. It requires able-bodied people to obtain coverage at group-health rates. It gives the self-employed the same buying power and tax breaks enjoyed by large corporations when purchasing health care. Finally, it provides subsidies, scaled to income and family size, that allow people to buy insurance though groups formed by religious, civic, and community organizations. The Bay State health proposal uses a combination of market innovations, quality improvements, and government support to provide fair care for all.

The Massachusetts approach is not perfect. But it stands in stark contrast to the so-called "Fair Share Health Program" bill being pushed by New York Assemblyman Daniel O'Donnell. The New York bill is a typical example of the quick-fix solution that misguided legislators and labor organizations are proposing in states all around the country. Modeled after legislation that passed in Maryland, the bill would force companies-Wal-Mart in particular-to pay an arbitrary amount of their payroll toward health benefits. Specifically, it would require companies with over 10,000 employees in the state to contribute 8 percent of their payroll to health-care coverage.

Troublingly, it was introduced without any serious study of the long-term effect of these massive health obligations-whether they would result in the same unfunded liabilities that are now pushing our auto and steel companies toward bankruptcy. Nor was there any evaluation of whether such a bill would encourage companies to pare back benefits to minimize coverage. Or whether the bill would simply shift costs from state-subsidized programs to private businesses.

Because this type of legislation is driven by politics and not facts, it fails to address the real issue: More people have to find health insurance on their own. Indeed, the proposed New York legislation is a triumph of special-interest politics. It completely ignores the urgent needs of small businesses and the self-employed to access affordable care. According to the Kaiser Family Foundation, last year only 59 percent of firms with fewer than 200 employees offered health insurance, compared to 98 percent of firms with 200 or more employees. Additionally, the Employment Policies Institute reported that a full 45 percent of the uninsured work in firms with fewer than 25 employees.

New York's legislators should be able to work together with our business and community leaders to provide health care for all without resorting to political ploys like "Fair Share Health Care." The problems facing our health-care system are bigger than any one business or group of citizens, and we must continue to seek solutions that include everyone, instead of attacking one group or benefiting a privileged few.

As Massachusetts has shown, it is possible for a broad coalition to come up with a real solution that provides affordable and fair health care for all. It's a great model for the Empire State-perhaps even the starting point for a New York health-care revolution.

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

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