Hochul donor, Medicaid contractor cost NY taxpayers up to $195 million

Gov. Kathy Hochul is standing by a contractor — who is tied to more than $100,000 in donations to her campaign — that federal auditors say botched New York City’s Medicaid transportation program, which taxpayers may do has cost up to $195 million in repayments to the US government.

The most recent US Department of Health and Human Services inspector general asked the state to reimburse the federal government for at least $84.3 million in state Medicaid payments because records were not kept to account for the billing of transportation services for Medicaid patients during calendar years 2018 justify and 2019.

Medical Answering Services was the prime contractor, acting as the state Department of Health’s “transportation manager” to oversee and arrange transportation services with vendors — such as taxi rides and ambulance services — during the period, and its contract with the state for the Big Apple region was extended to November 2023.

As The Post previously reported, company owner Russ Maxwell and his wife Morgan McDole together have pledged more than $300,000 to the campaign coffers of Hochul, former Governor Andrew Cuomo and the Hochul-controlled state Democratic Party.

Russ Maxwell
Russ Maxwell and his wife have contributed more than $300,000 to Hochul’s campaign.

The pair have also collectively contributed more than $100,000 to Hochul’s campaign coffers as governor and before that as lieutenant governor under Cuomo and the Hochul-controlled state Democratic Committee. They’ve poured another $236,000 into Cuomo’s coffers over the years.

The company has received more than $400 million in government contracts since 2011.

HHS IG also estimated that New York was demanding an additional $112,028,279 in state Medicaid reimbursement from providers managed by medical answering services “who may have failed to meet certain state and state requirements” — and said state officials should Work with medical answering services to “reimburse improper amounts to the federal government.”

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When asked if they would be going out of business with the medical answering services, Hochul spokesman Avi Small said, “The Executive Chamber is not involved in the agency’s RFP process and has not directed, suggested or implied that the Department of Health conduct any particular should select providers for this contract.”

Hochul’s rep also noted that the contract was originally awarded at a time when Cuomo was governor and she was lieutenant governor.

New York State Governor Kathy Hochul
Medical Answering Services was the prime contractor, acting as the New York City Department of Health’s “transportation manager” to oversee and arrange transportation services with vendors.
Getty Images for the Concordia Summit

A state health spokesman said on Wednesday that “while the department disagrees with many of their findings,” they “will work with HHS to address any concerns, as clearly expressed in our response.”

“We are committed to ensuring that Medicaid members have access to efficient transportation to the medical services they need and that transportation providers adequately document their services,” said spokesman Cort Ruddy.

And in a June 8 response to the audit, Kristin Proud, acting chief executive of the Department of Health, defended the Hochul-linked company, saying: “The new [transportation manager of Medical Answering Services] had set a record for providing quality, cost-effective services in 55 of New York State’s 62 counties” and outperformed its competitors for the services provided. She insisted that Medical Answering Services saved the Medicaid program “nearly $19 million a year.”

Medical answering machines declined to comment on this article.

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Hochul’s Republican opponent in the gubernatorial race, Long Island Rep. Lee Zeldin, said the brutal federal scrutiny involving a Hochul-affiliated contractor is another reason voters should elect him to head the statehouse.

“Pay-to-play corruption is Kathy Hochul and Albany’s favorite pastime. Kathy Hochul is enthusiastically trading access and hard-earned taxpayers’ money for campaign donations,” Zeldin said.

“The state must immediately terminate contracts with this company and Kathy Hochul must immediately return the massive amount of campaign funds she received from this government vendor.”

Michael Henry, the GOP nominee for attorney general in the Nov. 8 election, said “this dirty deal should be stopped” and questioned Hochul’s office’s interactions with the firm’s lobbyists during the contract bid, saying the matter “must be thoroughly investigated. ”

New York State Governor Kathy Hochul
“Pay-to-play corruption is Kathy Hochul and Albany’s favorite pastime,” said Lee Zeldin.
Getty Images for the Concordia Summit

The pay-to-play allegations are just the latest being leveled at Hochul, who is facing calls for an investigation into over $637 million in unsolicited state contracts. to political donor Charlie Tebele’s company Digital Gadgets. Tebele held a fundraiser for Hochul last November – just four days before she declared the state of emergency that paved the way for his company to get the orders. And he and his family members funneled $300,000 into Hochul’s campaign.

Medicaid is the federal public health insurance program for those in need whose distribution is overseen by the states. Federal law requires states to provide necessary transportation for Medicaid beneficiaries to get to and from medical appointments under the Non Emergency Medical Transportation Program [NEMT].

The federal government reimburses the state for much of the cost, but “service providers must keep records that are necessary” to justify the cost of the services.

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The audit included 4,768,858 payments totaling $445 million, with $269.6 million billed to the federal government for which the state sought reimbursement.

The audit examined 100 payments and found that only 17 met both federal and state billing requirements, 41 failed, and 42 others were questionable.

The audit found 22 examples of “no valid medical prescription for transport services”, 13 examples of transport services that were not adequately documented, seven examples where evidence of driver qualification requirements was not provided, and other deficiencies.

“The payments for prohibited and potentially prohibited services were made because the government agency’s oversight of the NEMT program and transportation manager was insufficient to ensure compliance with the requirements for permitting, documenting and billing of NEMT services,” it said in the test.

“Based on our sample results, we estimated that the state agency at least made claims
$84,329,893 in federal Medicaid reimbursement for payments made to NEMT providers who failed to meet federal and state requirements. ‘

“In addition,” the audit states, “we estimated that the state agency requested $112,028,279 in federal Medicaid reimbursement for payments to NEMT providers that may not meet federal and state requirements.” to have.”

The audit also found that the transport providers “did not provide any or insufficient documentation” to determine compliance with driver and vehicle requirements.

The audit says the transportation manager — in this case, Medical Answering Services — is “responsible” for giving transportation providers “prior approval” to pick up patients and “maintaining the documentation of the approval.”

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