WASHINGTON – A congressional committee is investigating whether an upstate pharmacy and downstate nutrition company cashed in on their connections with the Cuomo administration and former Pennsylvania Gov. Ed Rendell to win huge concessions from the New York State Office of Medicaid Inspector General, which had accused the firms of taking massive Medicaid overpayments.
Rep. Darrell Issa, a California Republican who chairs the House Committee on Government Oversight and Reform, has sent letters to the pharmacy and the nutrition company, seeking emails and other documents regarding their Medicaid payments dating back several years.
Issa – whom Republicans see as their top investigator in the House, but whom Democrats dismiss as a partisan attack dog – gave the firms until Aug. 20 to respond.
Richard Azzopardi, a spokesman for Gov. Andrew M. Cuomo, called Issa’s probe “Washington partisan politics at its worst, using government resources to make political attacks.”
But in a letter to Marra’s Pharmacy of Cohoes, near Albany, Issa’s committee indicated that political ties to Cuomo may have resulted in the pharmacy returning only $268,000 in Medicaid overpayments when a 2009 audit by the State Office of the Medicaid Inspector General charged that the drug store received $2.9 million more than it should have.
Writing to Assemblyman John T. McDonald III, a Cohoes Democrat and the pharmacy’s current president, the committee wrote: “Two days after that final audit was issued, Barbara J. McDonald, your mother and (then) president of Marra’s Pharmacy, wrote Governor Cuomo in an attempt to have him intervene in your dispute with OMIG.”
The inspector general’s office then reduced how much the pharmacy would have to repay, Issa’s committee said in the letter to the pharmacy.
Similarly, the committee wrote to John Navarra, owner of Town Total Nutrition Inc. in Manhattan, questioning why the inspector general had reduced the amount it said the company overcharged Medicaid from $10 million to only $521,291.
In that letter, Issa and his colleagues said that James Sheehan, the Medicaid inspector general in New York at the time of the audit, had told the committee that Rendell – Pennsylvania’s governor from 2003 to 2011, and now a Philadelphia lawyer – “called him in an apparent attempt to obtain favorable treatment for Town Total.”
Issa’s committee is doing a comprehensive investigation into whether the inspector general’s office is letting health care companies with strong political connections get off easy in the Medicaid audit process.
But in a statement, the inspector general’s office indicated that the cases Issa’s committee cited were settled for legitimate amounts and for legitimate reasons.
“This settlement, just like all of the others, was based on what we believed would legally be upheld in court – any assertion to the contrary is baseless,” the inspector general’s office said.