• This is a rush transcript from "Your World With Neil Cavuto," April 5, 2010. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, ANCHOR: Fox on top of a government gaffe that is over the top — new reports saying that a computer glitch in New York State enrolled 13,000 people who were ineligible to receive Medicaid in the first place. That cost taxpayers $141 million over just the past decade.

    But here’s the kicker: the problem reportedly still not completely fixed, the government unable to undue what it did. As Uncle Sam gears up to add millions to the Medicaid rolls, my next guest is getting very worried.

    James Tedisco is a Republican New York assemblyman.

    And, Assemblyman, what is most intriguing here is this can’t be undone that easily, if at all, huh?

    JAMES TEDISCO R-N.Y. STATE ASSEMBLYMAN: Right, Neil.

    This also may just be the tip of the iceberg. And it really may be the first warning shot over the bow for states like New York and other states across this nation of the economic impact of this new 2,000-page total revamp of our health care system nationally.

    I mean, those 2,000 pages could amount to 4,000 to 6,000 codes, guidelines and regulations. If our staff — and I’m not letting our staff off the hook here — lost $141 million because they can’t understand the centralized federal codes, guidelines and regulations to get it right with the clients who really need this Medicaid assistance, what is it going to look like when we get a total revamp, and there’s 2,000 pages that are coming out at us?

    The last Ways and Means report I just received from our conference illustrates New York State is going to be losing $300 million in the first year, $400 million in 2011 with this new 2,000-page plan.

    CAVUTO: All right, well, Assemblyman, you’re getting a little — you know this inside and out, so you’re getting ahead of us here, but ahead of certainly me. But the bottom line was here that officials in New York State couldn’t keep up with the changes being dictated by the federal government. And whether — be they new codes or new rules and regulations...

    TEDISCO: Right.

    CAVUTO: ... they were still operating under the old rules and regulations. That effectively had them offering Medicaid to people who didn’t deserve it.

    For example, there was some confusion with those who received SSI Social Security, incremental income, on top of what was already allowed. And it just got to be a bureaucratic mess.

    So, you’re saying...

    TEDISCO: Right.

    CAVUTO: ... that, in a bigger sense, more rules, more changes coming out of the federal government, you’re not quite sure the state or any other state is up to keeping up with it.

    TEDISCO: Right.

    This is going to mean more total centralized control of how we allot this money, guidelines, codes and regulations — $16 million was also lost in New York City in fraudulent payments.

    CAVUTO: That’s right.

    TEDISCO: So, my fear is, you know...

    CAVUTO: Then how can you undo that? Assemblyman, can it be undone? The moneys that were given to a lot of these folks, some of whom, I have since discovered, have died, what do you do? What does the state do? What does the taxpayer do to recoup that, or is it just blown, gone?

    TEDISCO: Well, the first thing that we have to understand is that we have to go back to the federal government and to really give the people who work for us, our staff, an understanding of what these guidelines are all about and how they’re related, and work with the federal government to make the adjustments to see if we can get some of this funding back.

    The larger worry is, as I have said, we’re heading towards a tsunami here for our children and for our children’s children, if we have a 2,000-page new health care plan which could have regulations beyond our control. If we can’t understand the Medicaid regulations, how are we going to understand the 4,000, the 5,000 or 6,000 pages of regulations for these new guidelines in this new health care proposal?

    So, what I suggest is that we scale this 2,000-page proposal down to about 250, 300 pages...

    CAVUTO: Good luck. Good luck.

    TEDISCO: ...and we add some things that make sense for affordability and accountability.

    CAVUTO: All right. Well, good luck on that.

    But, Assemblyman, thank you very much. We appreciate it.

    TEDISCO: My pleasure. Good to be with you, Neil.

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