Maryland Acting Gov. Blair Lee III yesterday authorized the state attorney general to set up and direct a new 15-member investigative unit to ferret out Medicaid fraud in hospitals and nursing homes.

The move is part of a general trend in scandal-ridden Maryland to centralize corruption investigations at the state level, despite strong protests of local prosecutors who fear an erosion of their authority.

The trend began last year when a special prosecutor was appointed to investigate political corruption cases anywhere in Maryland without being required to get approval first from local state's attorneys.

Lee said he decided to set up the Medicaid fraud unit after learning that a similar team in New York recovered $4 million in illegally used state funds the first year and expects to collect $20 million this year.

There is no way to calculate how widespread Medicaid fraud is in Maryland, the acting governor said, stressing he does not assume nursing homes and hospitals in the state "are a bunch of crooks."

But he said even if the state gets back 1 percent of the $328 million appropriated for Medicaid patients, Maryland would save $3.3 million. "It's not an unreasonable assumption," he said, "that if this goes on in one state (New York), it can be going on a little bit in all states."

The new investigative team, composed of lawyers and auditors, will review records of health care providers double-billing and extra charges, Lee said.

The unit should begin operations within 60 days, he said. The state will seek federal aid of more than $700,000 to finance 90 percent of the team's investigations.

The decision to create the unit was held up about a month, Lee said, to iron out disagreements with local prosecutors who believe the team impinges on their jurisdiction.

"If the governor could give authority to the attorney general to prosecute Medicaid fraud, why couldn't he authorize him to investigate all armed robberies?" asked Ronald Cooper, administrative assistant to Prince George's State's Attorney Arthur A. Marshall Jr.