Medicaid waste leads to call for swift action

TRENTON - New Jersey legislators dealing with state budget woes demanded quick action yesterday to fix wasteful spending found in a state health-care program for the poor.

"I'm starting to wonder if state government in and of itself is permanently dysfunctional," Assemblyman Joe Malone (R., Burlington) said during a Budget Committee hearing.

The state spends 11 percent of its $33 billion budget on Medicaid, which is funded by the state and federal government and pays for health care for the poor, the elderly, the disabled, and low-income families with children.

Two recent state audits found several examples of waste, including allowing people earning as much as $295,000 a year to join the program, failing to try to collect money from people who owe the program, and improperly overseeing equipment purchases.

State criminal-justice investigators are looking into at least one Medicaid equipment contract, the audits revealed.

Assemblyman Joseph Cryan (D., Union) called the findings unacceptable while the state is looking to slash spending by $2.7 billion and implement co-payments for some Medicaid services. Cryan called the proposed co-payments for prescription drugs and emergency room visits "immoral."

He also said he was dismayed that Gov. Corzine's administration still hadn't hired a Medicaid inspector general to find waste and fraud, more than a year after Corzine and the Legislature approved the post.

"It's beyond frustrating to me that we don't have a Medicaid inspector general," Cryan said. "It's ridiculous."

State Human Services Commissioner Jennifer Velez said the administration expected to hire someone "in relatively short order."

She said the state had also referred high-income earners enrolled in programs meant for the poor to investigators.

"We will hold accountable those who choose to ignore the law," Velez said.

State Attorney General Anne Milgram said the state had been investigating fraud, noting that 14 people were arrested in January and charged in an alleged fraud scheme involving drugs for HIV and AIDS.

But Velez and Milgram noted that the state hiring freeze meant there were fewer fraud investigators and auditors.

Velez said the department was aware of many of the problems cited in the audit and had been working to fix them when they were reported.