Friday, August 05, 2005


Subject: Cooper and Browne Go To Town
Date: 04-Aug-05 18:21:33 Eastern Standard Time
Sent from the Internet (Details)


By Henry J. Stern
August 4, 2005

We appreciate the enthusiastic response from many of our readers to yesterday's column heralding the demise of the principle of vicarious liability in its last American refuge, the Empire State.

It took the United States Congress, perhaps inspired by some judicious contributions from the automobile industry, to reverse the stranglehold that trial lawyers exerted over our State Assembly through its powerful Speaker.

Cooper Tells How the Deed was Done

Today the New York Times' Michael Cooper writes the definitive piece on the subject. You should read it because the article puts the other stories in perspective. Cooper goes to the heart of the dispute and looks at the forces arrayed on each side. On B1, jumping to B5, and headed FEDERAL BILL WIPES OUT A STATE LAW AND MAKES IT EASIER TO LEASE CARS, the news story has a near poetic cadence as it describes the Congressional action:

"Buried deep in the mammoth transportation bill that passed both houses of Congress last week was a provision nullifying a New York State law that has prompted many car companies and banks to stop leasing cars in New York.

"The New York law -- which dates to 1924, when Ford was still selling Model T Touring Cars -- makes it possible to sue the owner of a vehicle involved in an accident, regardless of who was driving the vehicle. The law was intended to hold rich owners responsible for the damage caused when their livery drivers were involved in crashes. But in recent years, after juries granted large judgments against several car leasing companies, many major carmakers and some banks decided to stop leasing cars in New York because of the law."

In a Blistering Editorial, The News Exults at Congress' Action

The Daily News, which has campaigned vigorously against vicarious liability, exulted in its lead editorial: CONGRESS REPEALS THE SHELLY TAX. We quote:

'It is now $600 cheaper for New Yorkers to lease a car, thanks to an act of Congress that cut Assembly Speaker Sheldon Silver off at the knees, along with his cronies among the state's trial lawyers.

"Tucked into the $287 billion transportation bill that has been sent to President Bush for signature is a provision outlawing New York's so-called vicarious liability law, a statute that drove up the cost of leasing in New York by making car companies responsible for every accident in every vehicle they lease.

"...Typical was a case in which an upstate man ran over his 15-year-old daughter as he was backing out of the driveway in a leased Ford pickup. A jury found the man liable for $100,000 and socked Ford for $900,000."

Link to the editorial, crafted in the style of Arthur Browne, to get the full flavor of an indignant journalist implacably pursuing his political quarry, while excoriating the powerful, moneyed interests who profited mightily over the years from their investments in the New York State Assembly and its wily Speaker.

Medicaid Reform Made More Difficult
By Sen. Skelos' Staff's Shots at Spitzer

Following up on our Medicaid watch, we note that Michael Luo of the Times reported yesterday on B3 a Republican initiative on the multi-billion dollar fraud-ridden program. The headline: REPUBLICAN TO PROPOSE BILL ON MEDICAID FRAUD CASES. The lede: "Saying that Attorney General Eliot Spitzer's office has failed to crack down on Medicaid fraud, a leading Republican in the New York State Senate plans to introduce legislation today that would turn over some of the fraud cases to county district attorneys. Dean G. Skelos, the Senate's deputy majority leader (to Joe Bruno), announced the measure yesterday (Aug 2), and his aides used the opportunity to take a shot at Mr. Spitzer, who is a Democratic candidate for governor."

This is precisely the wrong way to go about Medicaid reform -- making it a partisan issue. It is also a shabby tactic for a public official to allow his spokesman to attack others, while he poses himself on the high road. We welcomed Senator Skelos' Medicaid initiatives this spring, and were disappointed at what appeared to be the Assembly Speaker's casual dismissal of proposals. But if today's sniping is the way Republicans will conduct the public dialogue, the most likely result, in view of the divided leadership in the legislature, is that no bill will pass. Only the cheaters will benefit from such an impasse in government. They may even now be snickering up their sleeves at the display of disunity.

The idea of turning some Medicaid fraud cases over to county district attorneys is not entirely unreasonable, since counties pay 25 per cent of Medicaid costs and presumably have an interest in reducing theft and fraud. To be considered seriously, however, the plan would have to be carefully fine-tuned, lest counties employ varying standards in pursuing fraud, or adhere to different levels of tolerance of misconduct. These local decisions may depend on the political or economic influence of the doctor, hospital, nursing home or pharmacy that is overcharging Medicaid for services that may be unnecessary, or not even rendered.

Law enforcement is usually strengthened by coordinating or consolidating jurisdiction, not dividing it with the provinces. This is particularly the case where parameters of wrongdoing are not immediately apparent, and technical expertise is needed to prosecute cases successfully.

The first response of state officials to the July 18-21 exposes should have been to bring the agencies together to see if they can agree on a plan to strengthen Medicaid enforcement, but it is not too late to do that now. Paul Shechtman, the governor's designee as Medicaid Inspector General, should be involved in any negotiations in this area. At this time all parties should hold their tongues and pens, and refrain from disparaging each other, in person or by proxy.

One mystery as this drama unfolds is the role, if any, of Antonia C. Novello, M.D., who has been New York State's Commissioner of Health for six years. She was once Surgeon General of the United States and is both a doctor of medicine and a doctor of public health. The State Health Department has the lead responsibility in the administration of Medicaid, yet we have not heard a word from her since serious problems were reported.

Is the Commissioner in good health herself, or has she, like Elvis, left the building? Governor Pataki refused to discuss Medicaid with the Times, but when his aides referred questions to the State Department of Health, Commissioner Novello "also declined to be interviewed." When $12 million is being stolen or wasted every day, doesn't an agency head have an obligation to say or do something? All responses have been left to spokesmen, notably her deputy Mr. Dennis P. Whalen. His response to the Times' searing critique is worthy of your attention, if only for its sophistry.

"'This continues to be an area where we think that we have made substantial progress', said [Mr.] Dennis P. Whalen, executive deputy commissioner of the State Health Department. 'But by no means are we sitting back and resting on the accomplishments that we have made.'"

Henry J. Stern
New York Civic
520 Eighth Avenue
22nd Floor
New York, NY 10018
(212) 564-4441
(212) 564-5588 (fax)

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