Schenectady County settles Medicaid fraud suit

The Schenectady County Legislature has accepted a settlement by one of the nation's largest pharmaceutical companies in relation to a county Medicaid fraud lawsuit brought in 2006.

In the settlement, which was accepted unanimously at the Legislature's monthly meeting on Wednesday, Feb. 13, Bristol-Myers Squib will pay the county $57,014. The company is one of 77 pharmaceutical firms the county sued two years ago for inflating the average wholesale price of prescription drugs, allegedly overcharging the county by more than $15 million.

Chairwoman of the Schenectady County Legislature Susan E. Savage, D-Niskayuna, said she felt confident that the settlement with Bristol-Myers will lead to settlements with the other 76 companies accused of Medicaid fraud.

I am hopeful that this will be the first of many settlements that will come to Schenectady County in coming months, which will reimburse our taxpayers for this unfair pricing, said Savage.

The county paid Bristol-Myers $949,000 between 1995 and 2005 as part of the Medicaid program. Savage said the settlement represents a 6 percent cost savings to county taxpayers.

"Schenectady County is committed to fighting Medicaid fraud wherever it exists in order to save taxpayers money," Savage said in a statement. "This is an important first step in that fight."

Legislator Brian Gordon, D-Niskayuna, voiced concern that Medicaid fraud may be rampant.

"It's important that our state and federal government also pick up on these abuses and go at companies who are committing these frauds," he said.

Minority Leader Robert Farley, R-Scotia, shared the concerns of county Democrats on this bipartisan issue.

"This settlement will save taxpayer dollars," said Farley. "And hopefully, it will free up aid for those that need it."

County Attorney Chris Gardner said that if the county could settle for $20,000 to $30,000 from the other 76 companies, they could expect to recover nearly $2 million.

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