Marra's Pharmacy in Cohoes to pay $268k Medicaid penalty

COHOES A family-owned pharmacy run by the Cohoes mayor has agreed to pay $268,038 to the state of New York to settle a penalty levied by the Health Department's Office of Medicaid Inspector General.

The settlement is a result of a 2009 state audit that uncovered bookkeeping errors in the Medicaid records at Marra's Pharmacy. The state initially sought $1.46 million from the Remsen Street pharmacy that's headed by Mayor John T. McDonald III, who is a licensed pharmacist.

But under a settlement reached this week, the pharmacy agreed to the reduced settlement amount. The agreement calls for weekly deductions of $1,167 from the pharmacy's Medicaid payments it receives from the state.

McDonald went to court last year to challenge the proposed $1.46 million levy, which he said would have crippled the family-run business that's been a fixture in Cohoes for generations.

John McDonald said he decided recently to settle the case rather than go forward with a hearing before a state administrative judge. Had he lost, the state may have sought a penalty of up to twice the $1.46 million levy. McDonald said he'd already spent about $100,000 in legal fees and the reduced penalty will allow his family's business to remain open.

"This is a business decision. It allows me to finally sleep at night," McDonald said. "It's been three years of hell and uncertainty ... for what is truly a human error."

Thomas Marcelle, Albany County attorney, said the county, which helps administer Medicaid, will not suffer any financial loss as a result of the reduced penalty. Marcelle added that his office, in consultation with County Executive Daniel McCoy, declined to sign off on the settlement when contacted by the state.

"I had concerns that if we acted out of the ordinary in a highly political case, that wouldn't be appropriate for the county," Marcelle said. "You're dealing with a public figure in the middle of a campaign."

McDonald, a Democrat, has been mayor since 2000 and is a candidate this year for Assembly.

OMIG employees had previously alleged he was being given preferential treatment. Earlier this year, those employees said they were told OMIG would sharply reduce the proposed $1.46 million penalty.

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Marra's Pharmacy in Cohoes to pay $268k Medicaid penalty