It was widely reported today that New York State and New York City have agreed to pay the federal government $332 million and $100 million respectively, to give back money fraudulently billed to Medicaid for school health services. By billing Medicaid, the school districts involved saved money, because the federal government covered half the cost. According to the settlement, the state gave false guidance to the school districts on what could be billed to Medicaid.
The question I have is this: why is New York City the only local government contributing to the settlement? If all the fraud was in New York City, and much of it will be paid for by state taxes collected elsewhere, then residents elsewhere in the state have something to complain about. But what if school districts throughout the state used this ruse to shift costs to the federal government? Then New York City residents are paying other people's share. Anyone want to guess which is more likely?
If others shared in this ruse, which evidently involved speech therapists, one could make the following argument: elsewhere in the state Medicaid recipients are concentrated in poor communities that can hardly afford the additional bill, and residents of wealthy areas within the same county were already forced to pay more than they should have when the costs were shifted to Medicaid, and thus in part to county governments. New York City, unlike most older cities and rural areas, has rich as well as poor, and can pay. If that or another argument is to be made, however, I want to hear it made. I at least want to hear the question asked.
I'm suspicious because New York City has been on the wrong end of just about every deal like this for who knows how long. Just with regard to Medicaid, the required local contribution is higher for New York City than for other parts of the state. How? The very services and populations that are concentrated outside the city are those which the state covers 80 percent of the non-federal share, rather than 50 percent of the non-federal share. There are virtually no states that even have a local share.
The tobacco settlement required tobacco companies to pay the state and local governments back for the extra Medicaid costs associated with tobacco. New York City, home to most of the state's poor for the period in question, paid most of the local government share of those tobacco-related costs. But it got back relatively little of the tobacco settlement money.
Perhaps the Democrats in the state legislature supported that deal because they figured hurting the city would make then-Mayor Giuliani look bad. Perhaps they feel the same way about hurting the city under Mayor Bloomberg. Republicans? Given what they've done, particularly on state school aid in the 1990s, why are there any left representing this city? Speaking of Giuliani (and Dinkins and Pataki), this is yet another hidden off the books debt shifted to today, our moment of greatest need. How many more are there?
The recent MTA deal everyone was complaining about? If the MTA was allowed to collapse, it would shrink to the only form of transit that has a chance of covering its operating costs — the New York City subway, with no overnight service and some stations closed. With that, walking and biking, city residents would have retained access to the high wage jobs in Manhattan. So would New Jersey residents, and residents of Connecticut if they continued to pay for their share of MetroNorth. Other areas would have face a sharp decline and unsaleable real estate. That payroll tax, which I opposed, was a bailout for outer areas of the MTA service region that they feel free to resent New York City residents for. Again.
I suspect that someone is getting cheated by this Medicaid settlement. Based on the past, I think I know who. But the question should be asked, and someone should be forced to given an answer.