(JUNEAU) - Senate Bill 41 passed out of the Senate Tuesday, and it puts those in the health care industry on notice. The Department of Health and Social Services will be joining hands with the Department of Law to crack down and prosecute those who abuse the Medicaid system in Alaska.

According to bill sponsor, Sen. Lyda Green (R-Mat-Su), Medicaid costs in Alaska have risen nearly $100 million a year since 1999. This means in fiscal year 2004 the total projected program costs for the State's Medicaid program will be roughly $1 billion. Green says national estimates place overpayment error rates at around 7 percent, and just plain old fraud against the system at as much as 10 percent. In Alaska that equates to anywhere from $70 - $170 million of our annual Medicaid budget.

"I could not believe it," said Green. "When I saw the estimates of potential loss each year from Medicaid overpayments and fraud, I had to find out why? The answer: there are no current criminal laws in Alaska that address Medicaid fraud. Prosecutors had to find coincidental charges to prosecute Medicaid theft. Unfortunately, traditional theft statutes are not suited to health care crime prosecution, leaving the Medicaid system and the people whose health depends on the system inadequately protected."

Senate Bill 41 will preserve the integrity and fiscal viability of the State's Medicaid program by implementing rigorous controls and frequent scrutiny of Medicaid providers. This Bill will also establish the crime of "medical assistance fraud," and defines what action under this law would constitute a misdemeanor or a felony. Green says, in short, if you abuse the system you will face criminal and fiscal retribution.

"It is vital that the State of Alaska administer its Medicaid program in a manner that ensures effective, long-term cost containment while providing needed medical care," said Green. "Medicaid providers must operate honestly, responsibly and in accordance with the law. If they don't, they will be held accountable for their actions."

Senate Bill 41 passed the Senate unanimously and now heads to the House of Representatives for their consideration.

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04-22-03: Senate Finance Co-Chair Lyda Green explains the recent history of efforts to combat medicaid fraud and waste in Alaska.

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04-22-03: Senate Finance Co-Chair Lyda Green comments on the national rates of medicaid fraud.

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04-22-03: Senate Finance Co-Chair Lyda Green speculates on the Alaskan rates of medicaid fraud.

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