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Panel Cites Misspent New York Medicaid Funds

Several executives are in hot water this week as federal officials approved the final draft of a report that rips the use of New York Medicaid funds. All budgets are getting a close look these days as officials try to figure out ways to minimize shortfalls, and Medicaid is often given particularly close analysis because it represents such a large portion of annual expenditures. That is true at all levels of government. Because Medicaid is a joint program paid for by state and federal coffers, all lawmakers have some incentive to study the spending and offer efficiency proposals.

The latest report, entitled “Billions of Federal Tax Dollars Misspent on New York’s Medicaid Program” took a critical look at the compensation of executives at many New York nonprofit hospitals which rely on Medicaid support. In particular, as explained in a Journal News story, at least fifteen of those executives reportedly earned more than half a million dollars in compensation last year; another hundred earned over $200,000.

Besides the general outrage at the potential misuse of funds, all of these developments may factor into decisions by policymakers in crafting changes to Medicaid. As a result, these news items may, in small ways, impact future options for New York residents on Medicaid. In fact, the report specifically called out our state’s current spending, noting that “New York’s per-resident Medicaid spending is nearly double that of Pennsylvania and more than double that of California and the entire country.”

Even more alarming for community members is a proposal in the report calling on New York lawmakers to ban a practice known as “spousal refusal.” In general, this Medicaid strategy allows one spouse in need of nursing home care to qualify for Medicaid support while the other retains the couple’s assets. This avoids the need to “spend down” assets to qualify. State law dictates how (and if) this option is available to local families.

Importantly, this is a federal report that has no actual legal authority over state officials. Any changes must come from individual state lawmakers, and there is no specific indication that these proposals have any legs in the statehouse. However, the spotlight shone on the New York Medicaid program via this report may spur some action. Local families should be careful to pay attention to these developments and visit with an elder law attorney to get more tailored advice about how these changes may impact their access to long-term care in the future.

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