Under pressure, NY to soften tough Medicaid audits

Gov. George E. Pataki and the State Legislature created the Office of the Medicaid Inspector General to curb billions of dollars in fraud and misspending by healthcare providers. But a backlash from the politically powerful healthcare industry has erased broad support for the crackdown. Last year, amid a crescendo of provider complaints of overzealous, nitpicking audits and unfair tactics, Gov. Andrew M. Cuomo quietly dismissed the state's first Medicaid inspector general, James G. Sheehan, and directed Mr. Sheehan's successor, James C. Cox, to collaborate with providers on changes to the agency's policies and auditing methods.