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May 19, 2010



DiNapoli: Get eMedNY Right This Time

Flaws in Current Medicaid Payment Processing System
Have Cost Taxpayers Hundreds of Millions


State Comptroller Thomas P. DiNapoli today called on the State Department of Health (DOH) to ensure that the proposed procurement process for replacing the state’s current computer Medicaid payment system guarantees the best price and product for taxpayers. DiNapoli released an analysis that found the implementation of the current system, known as eMedNY, had been plagued by cost overruns, delays and inefficiencies that have cost taxpayers hundreds of millions of dollars, not only in the cost of the system, but in the inability of the system to consistently track fraud, waste and abuse.

“eMedNY was implemented 33 months late and $166 million over budget,” DiNapoli said. “And it still isn’t working right. Our audits have uncovered hundreds of millions of dollars in Medicaid payments that should have been stopped by eMedNY. The system is supposed to save taxpayer dollars, not flush them down the drain.

"DOH has to do a better job on this procurement. The state spends more than $38 billion on Medicaid. Itís the largest state expenditure, and opportunities abound for abuse. New York needs a payment system that efficiently tracks Medicaid payments. Weíre in the middle of a fiscal crisis. New Yorkers canít afford an ineffective eMedNY retread."

DiNapoli noted that despite the cost, the eMedNY system, which was implemented in March 2005, did not employ the most advanced technology available at the time. He urged DOH to make sure that the new system employs the most up-to-date technology and employs a fully competitive process. He recommended that DOH review the flaws in the prior procurement to avoid repeating the same errors. He also urged that DOH include penalties for delay and non-performance in the contract and strictly enforce these penalties.

Click here for a copy of DiNapoliís analysis.

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