GOSHEN — Two years ago, Orange County enlisted three firms to scour medical billing records and help recover an estimated $2 million per year misspent in the single largest expense in the county budget, Medicaid.

By this time, county officials planned to have audited 25 businesses they targeted through an initial screening of Medicaid bills.

But to date, only two audits have been done, no funds have been recovered and the future of the investigation is uncertain.

Social Services Commissioner David Jolly blames the delay on bureaucratic obstacles posed by the state Department of Health and the Office of the Medicaid Inspector General, the agency overseeing experimental efforts by New York counties to combat overbilling in the health insurance program for the poor.

Orange County is one of a dozen counties that agreed in 2005 to participate in a demonstration project empowering them to root out Medicaid waste, fraud and abuse, a job that only state investigators had handled until then.

But after contracting with two law firms and an accounting firm to conduct the work, Orange County officials grew so frustrated with the state's oversight that they effectively quit the program in 2008 to audit providers on their own.

"It's like every single time we went to get something done, there was just one delay after another," Jolly said.

The enormous expense and deluge of records involved in Medicaid virtually invites mistakes and outright fraud: in Orange County alone, some 18,500 families and individuals are enrolled, and the expense for the federal, state and county governments for Orange County enrollees last year totaled $484 million.

Full story