[MUSIC]

David Lombardo: After months of buildup, the Trump administration began taking formal steps earlier this year to investigate Medicaid spending in New York. The state's health care program is one of the largest in the country, covering more than a third of New York's population, with the highest rate of spending per capita. It has long been a punching bag for critics looking to fling allegations of waste and abuse, some grounded in reality and others and others not so much.

Dr. Mehmet Oz, who leads the US Centers for Medicare and Medicaid Services, asked for information about program integrity, screening and oversight, with a focus on personal care, home care, medical transportation and related services, with similar inquiries sent to California and Minnesota.

For more on what this probe might uncover, as well as the broader room for cutting out waste, fraud, and abuse in New York's Medicaid program, we're joined by Carlos Cuevas, who is now a private advisor in the healthcare space, is the founder of Safety-Net Health Advisors, and he previously did a tour of duty as the senior advisor to New York's Medicaid director.

Carlos, I want to start with the status quo in New York and what you think of the current watchdogs on the so called Medicaid beat. We've got the Medicaid Inspector General, we've got the comptroller's office, there's a Medicaid unit in New York's AG's office, and I imagine other institutional forces that play some role in policing New York's Medicaid spending. From time to time we do get press releases about improper cost that all these different players have flagged. How effective do you think this existing system is in preventing the holy trinity of waste, fraud, and abuse?

Carlos Cuevas: Thanks for having me, David. Appreciate it. To jump right into it, I think New York State actually has a very robust system in place. Everyone always likes to critique the one off, but on a daily basis when we look at the infrastructure we have, CMS data has actually shown that New York State has an improper payment rate of 1.43%, which is three times below the national average of a little over 5%.

We have several structures in place, whether it's at the DOH within the office of the Medicaid Inspector General, and a great team of fraud prevention for the Medicaid Fraud Control unit within the AG's office. That said, there is fraud, waste, and abuse. I think overarching people lump them into one under one umbrella, but they are three distinct things. It might help just to frame those things in terms of what we do and who deals with them.

There's straight fraud, which is intentional deception. That's when you are billing for a service that you never delivered. That goes to the AG. There's waste, which is overuse but not through deception. Just maybe we're doing more than we really should be and necessary. I think that's really in the realm of the regulations and policies that guide the services we deliver. That falls within DOH to either make better policies, improve policies, evolve policies, and then there's abuse, which is the practices that are inconsistent with sound financial and clinical practices.

That's where we have OMIC. OMIC has a variety of tools to identify things when someone is over billing too much than rather. That's an abuse or building up. Then when it gets to really serious, that is serious not just using a wrong code, but really deception, that's when they make referrals over to the AG's office. We have a great system. I think it does very well, but we can always improve.

David Lombardo: You held up that low rate of improper payment as proof that the system is working. What about the idea that we're just not catching improper payments? That's why the number is so low. If, for example, you're closing your eyes and ears to fraud, waste, and abuse, maybe you're just going to miss it.

Carlos Cuevas: New York has a very, very large and very intricate Medicaid program. I believe we process over 660 million claims a year. We use that number, but it takes you around 11.5 days if you were to use every second to count to a million. You multiply that by 660 million, you really understand the vast undertaking that we have. We are constantly improving. We are constantly using the latest technology to try to basically make our systems as efficient in catching these things as possible.

Some of the framing that I think that, "Oh, we cover so many people and cover so many services and all these costs," that is basically waste and that is technically abuse, and that falls under this large umbrella. I think we are using data to basically make a political argument.

David Lombardo: I want to flesh that out a little bit more because one person's waste could also be viewed as, this is an important use of spending for this person. They've gotten used to XYZ service or being eligible for XYZ service. You could say that the waste is a reflection of policy priorities from stakeholders. How do you think about the line between when something is waste and when something is just, "Hey, we think it's important to cover this and to make it accessible to this population,"?

Carlos Cuevas: That's really a societal call. The way that I look at it and to frame it, for example, the Medicaid program, and through CHIP, the health insurance program for children, usually covers children up to 200% of the federal poverty line, which is the federal standard. New York, for example, covers children up to 400% of the federal poverty line. There alone, we are going to increase our system costs because we are just covering more people.

When you look at basically zero to three in terms of a child's development, the mental health, the developmental health, the physical health of a child, that is an absolutely crucial time to make sure that we have clinical and behavioral health interventions to basically set the foundation for that individual's life and success. A lot of these costs aren't much, but there are some that are really important. If you intervene at that time and you give that child the proper support mechanisms, that really helps them not only have a rich life, but also enrich our society.

David Lombardo: I want to turn to the inquiry from Dr. Oz. Some of the areas that he is interested in are some areas that have come up over and over again in New York when people talk about Medicaid and maybe spending that we wish we could get back after the fact, and that includes something like transportation costs, that includes some of the personal assistance programs. Do you think that state policymakers, the Hochul administration, is going to have good answers on some of those areas to federal officials, or are they going to be exposed for having systems that either invite abuse, waste, or fraud?

Carlos Cuevas: For those of us who listen to your show, who might not have heard, but basically, March 3rd was a big date. On March 3rd, basically, New York State received a formal letter from Dr. Mehmet Oz, who is the administrator for the center for Medicaid and Medicare Services, which on the federal level oversees our Medicaid program.

Basically that formal letter was to the governor, to our Medicaid director, to our commissioner of the Department of Health, as well as the Medicaid inspector general, basically asking, what do we do about fraud prevention and program oversight, and basically gave around 50 questions in a variety of areas. Basically they have 30 days to respond. This is a formal letter. It is a serious inquiry. There has been been research here. The way that I look at this is New York has to have a serious informal response.

I also want to say that this isn't the first time that inquiries have come to New York State. I think under every administration, New York has received an inquiry. New York has a very large, intricate Medicaid program. We ourselves look at our program and the federal government looks at our program, and there's nothing wrong with that. However, what I do worry about is hopefully we should always be working in partnership, whether it's with our stakeholders, our other government agencies, and government partners at the state, local, federal level.

If CMS does not deem our responses from New York State that they receive on April 3rd adequate, there is a chance that they can defer payments. We saw this happen in Minnesota last month. They were deferred around $300 million in payments. We have a much larger Medicaid program. We're talking this could potentially hurt people in terms of our ability to finance services, those jobs. This can really impact people's lives.

David Lombardo: You bring up the fact that inquiries into New York's Medicaid program are not new, but I wonder whether inquiries that have been brought by, say, Democratic administrations to blue New York may have approached this with a less critical eye or maybe were more willing to wink at New York when they got their responses, as opposed to this administration, which has no political allies here in Albany's seats of power. Could the approach from the Trump administration be very different in terms of how they digest any information from the officials you just mentioned who are going to be responding to this inquiry?

Carlos Cuevas: I'm not on the inside. I don't know, but yes from my outside perspective. That's how I think. There have been major fraud cases brought during and raised by our AG and executed and brought on by research that happened under Federal Democratic administrations. Fraud is something that even the governor has said recently if it's about getting rid of fraud and whatever we can do and whatever we can get in place to make sure less of it happens and hopefully that we are able to eradicate it, New York State is forced, she is fully supportive of. Now it's how we go about building a better program.

I think penalizing and really cutting funding and cutting care really only hurts the individuals and the communities that need it most. There's a way to approach change. There's a way to evolve. That's really what I'm concerned about. Not if there's fraud. Yes, I'm sure there is some amount of fraud. Do I think with a $100 plus billion program, is it the runaway fraud that people think that there is? I think more of it, as we say, is the waste and abuse and how do we make the system more efficient. If we want to focus on eradicating that small percentage of fraud that's out there, yes, let's put better systems in place. Let's work together.

David Lombardo: After a quick break, we'll continue our discussion about the Trump administration's inquiry into New York's Medicaid practices with our guest, Carlos Cuevas, who is a former senior advisor to New York's Medicaid director and is the founder of Safety-Net Health Advisors.

[music]

David Lombardo: This is WCNY's The Capitol Pressroom, and we're continuing our discussion about the ramifications of a federal inquiry into New York's Medicaid practices with Carlos Cuevas who previously served as a senior advisor to New York's Medicaid director and is the founder of Safety-Net Health Advisors. When thinking about the more immediate outcomes of this increased scrutiny of New York's Medicaid program, my cynical brain returns to The Wire, the HBO show, and how anytime there was pressure on the police to show some action, they ran out, made some street level arrests, didn't really do anything of significance, but they had "dope on the table."

I wonder if there's a parallel that we might see here in New York by some of the regulators in the Medicaid space and whether they might be having some sort of ripple effect on the different stakeholders, like the providers, like the middlemen in the system who are going to now have to fill out paperwork and triplicate or explain themselves for the second or third time. Do you have any sense of what that might look like, or am I too cynical to think that they might just try to have some sort of immediate scalps, so to speak, to show that, "Oh, look, no, we are doing a great job."

Carlos Cuevas: I think in New York's response, they should really lead with their statistics. I believe the statistics show that we do a good job of basically mitigating fraud, waste, and abuse. There's something called the electronic verification system, the electronic visit verifications, where we are using basically electronic reporting to report time, location, and the identity of the person using the service. This was part of the, I believe, the 21st century Care Act. It's been implemented in 2020, but it came to basically home health services in January of 2023. New York State has rolled that out.

I hope that we are able to use that kind of AI and other technologies that we have to basically wart fraud and wart waste and help us even identify potential abuses or things that are using large amounts of data that we have to identify things quicker, flag things, and use that rather than more paperwork. We have excellent providers, but our providers want to help the patients and those in need. They don't want to be doing more paperwork. I think government; it's what are the programs and the policies and the procedures that we can put in place to secure our system without adding more red tape.

David Lombardo: I've read one analysis of the potential responses to this inquiry being that we'll see increased enforcement from that Medicaid fraud control unit within the state Attorney General's office. As a backdrop for that, Bill Hammond over at the Empire Center for Public Policy highlighted how few investigations this unit does relative to spending on Medicaid. It was 8 investigations per $1 billion spent, which was the third lowest rate among the 50 states and 63% below the US average.

What do you think about, one, the idea that the fraud unit may increase its presence in the wake of this inquiry, and two, what do you think of the idea that there is probably room for them to be more aggressive?

Carlos Cuevas: First of all, really appreciate and respect Bill Hammond. I think he's one of our best healthcare analysts. We're very lucky to have someone like him in New York State.

David Lombardo: I feel like there's a but coming.

Carlos Cuevas: [laughs] I think it's, again, the way we look at it. Bill's information is not wrong in terms of fewer cases. The flip side of fewer cases is that the cases that that unit goes after are usually much larger. It isn't just the number of cases, but the intricacy of those cases, the size of those cases and really going after the large wells, the egregious to put things on.

Now, for that, if we wanted to increase the size, again, I don't want to play Monday morning quarterback because I'm not there, I'm not inside, but we could potentially increase the units at the AG's office looking into Medicaid fraud. We could increase the budget for OMIC so that they can buy, as we said, these electronic tools and the latest technology to flag things sooner, to send more cases, and to send them faster to the AG's office.

I am on the outside now, but as a former government employee, we have some brilliant, dedicated civil servants who are operating at the highest levels, really mastering highly technical cases and work. Again, I think we have a record saying there is fraud, waste, and abuse. We do look at it. When you look at the Mehmet Oz citing, there was a $68 million case of Medicaid fraud that was by RAG under a Democratic administration that we internally looked at and we have prosecuted and then shored up after that.

David Lombardo: One of the tools that New York has to prevent bad actors from existing in the Medicaid space is the exclusion list. Do you think that's an area where the state could be either more aggressive in terms of who gets onto that list as a way of preventing fraud?

Carlos Cuevas: Yes. I don't think there's one silver bullet. I don't think there's one panacea, but I hope and I know that this inquiry, on top of everything else, will make New York state reevaluate. What are we doing and what can we do better and what else can we do? This fraud, waste, and abuses has been a campaign for this current federal administration. Basically, there's this RFI request for information out called CRUSH, which I think is Comprehensive Regulations to Uncover Suspicious Healthcare or something, CRUSH.

Basically, they're asking for information on how can they reduce, detect Medicaid fraud. There's an RFI. If you have thoughts and ideas, you can submit something by March 30th. I think CMS, in partnership with states, in partnership with our OMIC, et cetera, will work together to say, "Hey, what are the best practices and how do we implement them with one of them, again, using these lists?"

David Lombardo: Sticking with waste specifically, the governor has made the case that the changes that she spearheaded with the Consumer Directed Personal Assistance program have rooted out, I think, $1 billion annually in waste. I'm curious whether you think there are other programs that might be ripe for the same type of review and overhaul in the Medicaid space that could generate some meaningful savings.

Carlos Cuevas: Yes. I think that there are plenty. I think with the consumer-directed programs, that is a program that has to tightly be monitored because we're talking 15 minute increments. It's easy to just add an extra 15 minutes here, an extra 15 minutes there. I think we do a good job, but we constantly have to evaluate there.

Medicaid, for example, spends close to $3 billion on transportation. I don't think it's fraud, waste, and abuse, but I think $3 billion on transportation, that's an area that we have to really critique, but people don't understand. New York is a very large and very diverse area. We have New York City, we have urban areas, but we also have north country and very rural areas. That non emergency medical transportation is a vital resource to keep people extremely healthy in those areas.

David Lombardo: You say extremely healthy. This makes me think of the outcomes though, because I think a lot of people would look at New York's health outcomes and say not only are we spending more per person on Medicaid, but there might not be evidence that those people are getting the best bang for their buck. New York, in terms of that population, isn't as healthy as they could be, but maybe there's evidence to the contrary because in some cases New York, more broadly, has some good health outcomes.

Carlos Cuevas: I think it's good point. The data points to that. I think part of the evolution that we have worked towards is really-- we're dealing with acute episodic care. More and more, through the New York State 1115 waiver, that allows us to pilot demonstration programs in terms of service delivery and financing.

We're really able to treat a person more holistically and really looking to bring providers together as integrated delivery systems. I think that's the next iteration and how we are going to work to keep people healthier. If we're treating people acutely instead of holistically working on their clinical, behavioral, as well as social needs, I think that's where we will really end up keeping people as healthy as possible.

Now, because of rules and regulations, even the federal government around a decade ago, you couldn't use medical dollars really for anything that was non-clinical, that was social service related. More and more we realize that basically it's these social determinants of health or social drivers that really impact someone's health. The food being environment. Now, just with the waiver, we're really starting to integrate those providers together and the financing together and hopefully we will see better outcomes and better efficient use of our dollars with this type of holistic care.

David Lombardo: Is one of the things that the state could do to ensure money is being spent the way it's supposed to be under existing rules and regulations would be to help providers with compliance instead of making them be responsible for a lot of this work, maybe beefing up our own help desk, so to speak, increasing the FAQ responsiveness so that people don't feel like they're necessarily navigating this byzantine system on their own and potentially making mistakes that lead to waste?

Carlos Cuevas: In short, yes. I think the government really tries to. Several times a year with the waiver, with other programs, there's public comment periods, there are different committees, commissions, and panels to really make sure that the state gets feedback from the public, from those in the trenches.

Obviously, as we evolve, as we're creating these programs, I think the most important thing we can do is we need to create policy that is flexible, that can be implemented in both urban and rural areas that allow us to deliver culturally competent care. When we try things and things work, but not perfectly, we have to have the flexibility to really alter so that they're more responsive to what we're seeing in the actual communities.

David Lombardo: We've been speaking with Carlos Cuevas. He is a former senior advisor to New York's Medicaid director and now private advisor in the healthcare space, is founder of Safety-Net Health Advisors. Carlos, thanks so much for making the time. I really appreciate it.

Carlos Cuevas: Appreciate it. Have a good one.

David Lombardo: Thanks for listening to today's edition of The Capitol Pressroom. For an insider take on what's happening in state government, check out our Dispatches from Planet Albany show, available wherever you get podcasts or at capitalpressroom.org.

Speaker 3: Join us again for Capitol Pressroom, a production of WCNY Connected Syracuse.

 

Copyright © 2026 New York Public Radio. All rights reserved. Visit our website terms of use at www.wnyc.org for further information.

New York Public Radio transcripts are created on a rush deadline, often by contractors. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of New York Public Radio’s programming is the audio record.