Court approves Medicare freeze on payments to Miami home healthcare companies

Medicare will continue to suspend payments to Miami home healthcare agencies suspected of fraud, according to a November 24 Miami Herald article.
A federal judge ruled Medicare’s refusal to pay reimbursement to companies suspected of overcharging for diabetic and other services, which began in October, is reasonable and appropriate.

A home healthcare company sued Medicare following the initial announcement claiming that the program was beyond Medicare’s scope of authority.

According to the article, Medicare estimates it spends $1.3 billion of its $16.5 billion national home healthcare budget on companies based in Miami-Dade County.

Miami Herald article.
By: Compliance Monitor
December 1st, 2008

Eight-count indictment for Fabian Aurignac ; health care fraud,...

McAllen Cardiologist Indicted For Health Care Fraud
Monday , December 01, 2008 Posted: 11:46 AM
Suspect faces up to 10 years in prison and fine of $250,000, if convicted

MCALLEN - A federal grand jury in McAllen has indicted cardiologist Fabian Aurignac for health care fraud, acting United States Attorney Tim Johnson announced today. Aurignac, formerly of McAllen, was arrested today in Austin, Texas, where he was to appear before the Texas Medical Board for a hearing regarding the suspension of his medical license. He is expected to make his initial appearance before a U.S. Magistrate Judge in Austin today at 3:00 p.m. The case will be prosecuted in McAllen.

The eight-count indictment, returned under seal Oct. 21, 2008, and unsealed today following his arrest, accuses Aurignac of defrauding the Medicaid and Medicare health care benefit programs by means of false and fraudulent claims in connection with the use of unlicensed, foreign doctors and medical personal and for billing for medical services not rendered. Aurignac, 45, faces a sentence of up to 10 years in prison and a maximum fine of $250,000, if convicted.

The investigation leading to the charges in this case was conducted by the FBI and the Texas Attorney General's Medicaid Fraud Control Unit. Assistant United States Attorney Carolyn Ferko is prosecuting the case. An Indictment is a formal accusation of criminal conduct, not evidence. The defendant is presumed innocent unless and until convicted through due process of law

Qualifications for a Job in anti-medicare medicaid fraud

Post Date 11/12/2008

Employer WellPoint, Inc

Benefits
Job Description

TrustSolutions is a wholly owned subsidiary of Government Health Services, LLC, and is part of the WellPoint family of companies. TrustSolutions holds a Medicare Program Safeguard contract with the Centers for Medicare & Medicaid Services to help reduce fraud and abuse in the Medicare Program. Headquartered in Milwaukee, Wisconsin, TrustSolutions also has offices in California, Illinois, Michigan, Virginia, Indiana, Florida and Texas.

Bring your expertise to our innovative, performance-focused culture, and you will discover lasting rewards and the opportunity to take your career further than you can imagine.

Healthcare Fraud Program Director
This position is contingent upon contract award, and can be filled in any of these locations: PA, NY, MD, DC, DE, ME, MA, NJ, CT, RI, NH, VT

Responsible for the development and ongoing management of Medicare and Medicaid Program Integrity anti-fraud programs that are multi-state, multi-function and multi-year in scope. Provides leadership to program managers, project managers and sub-contractors. Typically reports to an executive or senior manager. Program directors typically manage programs, their associated budgets and compliance with contractual requirements that require managing activities and resources of multiple departments or business areas of the organization. Program directors typically support business strategies through an integrated portfolio of programs, projects and initiatives. Essential duties include, but are not limited to: coordinates and manages the development, approval, implementation and compliance of on-going programs; establishes program governance when needed to assure response to issue escalation; develops program budget; ensures program meets its stated objectives; provides subject matter expertise in response to day to day business issues; researches applicable subject matter practices and remains aware of industry trends; manages relationships and partners with corporate and regional business areas; coordinates training related to program; develops program success measures and performs periodic assessments of program success; and performs other duties as assigned.

Qualifications

BA/BS degree and 14 years of experience in related field or an equivalent combination of education and experience or 10 years related experience and a MA degree required with at least 3 years as a manager responsible for managing complex systems and work flows or large contracts for private insurance companies, federal agencies or state agencies related to the detection and prevention of healthcare fraud.
Understanding of complex business processes related to federal contracting required.
Project management experience preferred.
2+ years experience with Medi Medi data
2+ years experience with Medicare Program Integrity Work
2+ years experience with Medicare, Medicaid, or Medi-Medi data analysis
3+ years experience with Medicare claims, including types A, B, C, D, DMEOS, and Regional Home Health
Demonstrated leadership skills and proven planning and organization skills to ensure development and maintenance of relationships across organization is required.

former Minnesota Department of Health and Human Services (DHS) employee ...FRAUD

Aug. 5, 2003, through Sept. 10, 2008, ...$903,896.54 from the State of Minnesota through Medicaid health care fraud.
Hudsonite indicted for health care fraud in Minnesota
Hudson Star-Observer
Published Wednesday, October 22, 2008

A former Minnesota Department of Health and Human Services (DHS) employee was recently indicted by a federal grand jury for health care fraud and for the alleged theft of more than $900,000 in Medicaid funds.

Kim Joann Austen, 47, Hudson was charged Oct. 7 in Minneapolis with one count of health care fraud and 22 counts of theft of health care funds. Her indictment was unsealed Wednesday following her initial appearance in Minneapolis.

Austen turned herself in to authorities Tuesday. Austen remains in custody, and a detention hearing is scheduled for 4:30 p.m. Thursday at the United States Courthouse in Minneapolis.

Austen's indictment alleges that from Aug. 5, 2003, through Sept. 10, 2008, she knowingly and willfully executed a scheme to defraud Medicaid, a federal health care benefit program. It also alleges that Austen used her position to receive $903,896.54 from the State of Minnesota through Medicaid.

Austen had been a state employee since 1981, and had worked in several positions within the DHS since that time. Since approximately August 1997, Austen had been the supervisor of the Medicaid Management Information System (MMIS). The MMIS is a computerized system that processes submitted Medicaid claims for payment.

For more information see the Oct. 30 edition of the Star-Observer.

A federal judge today sentenced a Detroit doctor to more than 16 years in prison for health care fraud and pay more than $1.1 million in restitution

A federal judge today sentenced a Detroit doctor to more than 16 years in prison for health care fraud, saying crimes like his are making health insurance unaffordable and threatening the viability of major employers such as the automotive industry.

“I like to find some good in somebody when I sentence them and I find no good in you,” U.S. District Judge Marianne O. Battani told Dr. Zack Brown as she sentenced him to 200 months in prison.

Brown, 61, who was also ordered to pay more than $1.1 million in restitution, was convicted in May of 80 counts of conspiracy, health care fraud and mail fraud for a scheme in which he recruited phony patients to bilk Blue Cross Blue Shield of Michigan, as well as Medicare.

.

CEO Magazine reports healthcare costs are within the top three business concerns....

ACFE Healthcare Fraud Seminar

Posted On: August 19, 2008 by Robert David Malove


CEO Magazine reports that healthcare costs are within the top three business concerns, and for good reason: U.S. healthcare spending has increased from a mere $27 billion in 1960 to $2 trillion in 2005. That is a 7,100 percent increase in spending! Employers today face many unique regulations, systems, procedures and records, with the potential for fraudulent activity at a heightened level.

Fraud fighters need an improved understanding of these staggering numbers and the types of healthcare fraud that may occur. This two-day, instructor-led course is designed for anti-fraud and audit professionals who work in the payer, provider, vendor and employer benefit areas or advise clients who operate within the healthcare continuum.

Get the targeted training you need to keep up with the latest fraud schemes and related laws affecting this highly complex profession.

For more info, please visit http://www.ACFE.com

Posted by Robert David Malove | Permalink | Email This Post

Medicare instructed AdvanceMed to disregard those policies

"...officials at Medicare instructed AdvanceMed to disregard those policies...'

WOW! is this suppose to be a surprise?
What do you want from the Secretary of DHHS, who comes from the "FAMILY OWNED" LARGEST INSURANCE BROKER in the STATE of UTAH?
THE LEAVITT GROUPReport Rejects Medicare Boast of Paring Fraud
By CHARLES DUHIGG
Published: August 20, 2008

Medicare’s top officials said in 2006 that they had reduced the number of fraudulent and improper claims paid by the agency, keeping billions of dollars out of the hands of people trying to game the system.

But according to a confidential draft of a federal inspector general’s report, those claims of success, which earned Medicare wide praise from lawmakers, were misleading.

In calculating the agency’s rate of improper payments, Medicare officials told outside auditors to ignore government policies that would have accurately measured fraud, according to the report. For example, auditors were told not to compare invoices from salespeople against doctors’ records, as required by law, to make sure that medical equipment went to actual patients.

As a result, Medicare did not detect that more than one-third of spending for wheelchairs, oxygen supplies and other medical equipment in its 2006 fiscal year was improper, according to the report. Based on data in other Medicare reports, that would be about $2.8 billion in improper spending.

That same year, Medicare officials told Congress that they had succeeded in driving down the cost of fraud in medical equipment to $700 million.

Some lawmakers and Congressional staff members say the irregularities that the inspector general found were tantamount to corruption and raise broader questions about the credibility of other Medicare figures.

“This is outrageous,” said Senator Charles E. Grassley of Iowa, the top-ranking Republican on the Senate Finance Committee, who has repeatedly credited the Centers for Medicare and Medicaid Services with reducing improper expenditures. “If heads don’t roll, you can’t change the culture of this organization,” he added.

Senator Grassley had not yet received the full report from the inspector general but had been briefed on its contents.

The report — a draft of which was obtained by The New York Times — will probably be made public within the next week, according to federal officials. The inspector general may change or edit the findings of the report before it is officially released. Congressional staff said the Centers for Medicare and Medicaid Services — the agency overseeing Medicare — was lobbying the inspector to play down the report’s conclusions.

A spokesman for Medicare said that the agency agreed with the inspector general that the agency’s reported level of improper billing for durable medical equipment, or D.M.E., should have been higher. But Medicare says the $2.8 billion figure is unsupported.

“Allegations of manipulation of this error rate are preposterous,” said the spokesman, Jeff Nelligan. “The agency has aggressively targeted fraud and improper payments in the D.M.E. program. We have a history of working closely with the inspector general and will continue to do so.”

A representative of the Office of Inspector General that created the report — part of Medicare’s parent, the Department of Health and Human Services — said it did not comment on draft reports.

Fraudulent and improper payments have long bedeviled Medicare, a $466 billion program. In particular, payments for durable medical equipment, like power wheelchairs and diabetic test kits, are ripe for fraud.

Equipment sellers have submitted counterfeit documents, forged doctors’ signatures and filed claims on behalf of patients who were dead or had never been seen by the prescribing physician, according to many reports by government oversight agencies.

For example, a Florida businessman was sentenced last year to 37 months in prison for submitting more than $5.5 million of fake claims to Medicare. The businessman operated for months, despite giving the agency an address that was actually a utility closet.

On July 1, Medicare instituted a new competitive bidding system that officials said would reduce both fraud and costs for medical equipment.

On July 15, however, Congress suspended the program, after equipment manufacturers and sellers began an aggressive lobbying campaign.

Senator Grassley said Congress might push for an investigation into the private company that was hired to fulfill Medicare’s auditing program, the AdvanceMed Corporation, a division of the Computer Sciences Corporation. The report mentions AdvanceMed by name.

Representatives of AdvanceMed did not return calls. The company has received contracts worth more than $34 million from the Centers for Medicare and Medicaid Services since 2005.

“This report doesn’t surprise me,” said Representative Pete Stark, Democrat of California and a senior member of the Ways and Means Committee. He has pushed to cut improper Medicare spending. “To look better to the public, you cook the books,” he said. “This agency is incompetent.”

The Office of Inspector General’s report details scrutiny of a program known as Comprehensive Error Rate Testing, or CERT, that audits a sample of Medicare claims submitted by sellers of durable medical equipment. That program is supposed to randomly choose claims and review the medical records and other documents supporting submitted claims to determine whether payment is justified.

According to the inspector general’s report, officials at Medicare instructed AdvanceMed to disregard those policies. Instead, AdvanceMed was told to examine only the documents submitted by the companies selling the medical equipment, rather than verify those documents against physicians’ records.

Medicare reported to Congress that, for the fiscal year of 2006, AdvanceMed’s investigations had found that only 7.5 percent of claims paid by Medicare were not supported by appropriate documentation. But the inspector general’s review indicated that the actual error rate was closer to 31.5 percent.
For instance, according to the report, the Office of Inspector General examined a claim for an electric wheelchair that AdvanceMed had said was appropriate. The inspector general’s investigation revealed that the physician who was listed as having prescribed the wheelchair had no knowledge of the prescription.

The person who received the wheelchair said that he had never met with the physician, that he did not need a wheelchair and that he had never used it, according to the report. His wife had also received a wheelchair that she had not asked for and never used.

Equipment sellers can pocket more than $2,500 every time they send a powered wheelchair to a patient and bill Medicare.

“This is like letting the fox guard the henhouse,” said Malcolm Sparrow, a Harvard University professor who focuses on health care fraud. “The supplier has an incentive to supply fabricated documents or to imply that medical records support a purchase when they don’t. If you don’t ask the physician or ask for medical records, you can’t really verify anything.”

"...masters of Medicare fraud, prosecutors say"

A Rolls-Royce valued at $200,000 once belonged to Eduardo Moreno, a fugitive wanted in connection with Medicare fraud.
Gallery | Fugitives suspected of fraud

The Benitez brothers were masters of Medicare fraud, prosecutors say.

They spent their Medicare millions on Mediterranean-style homes, apartments, hotels, boats, a helicopter, even a water park — all in the resort area of Bavaro, Dominican Republic, court records show.

After they were indicted on fraud charges in late May, Carlos, Jose and Luis Benitez used their Cuban passports to travel from Miami to the Dominican Republic, then to Cuba.

The three brothers are accused of defrauding the U.S. government’s health insurance program by billing $110 million in false claims for HIV drug-infusion treatments at their dozen Miami-Dade clinics. Medicare paid their companies about $84 million in reimbursements between 2001 and 2004, according to federal authorities and court records.

The Benitezes — who came to this country in 1995 and became U.S. citizens five years later — have a lot of company. They are among 56 fugitives charged since 2004 with filing at least $272 million in phony Medicare claims before disappearing from Miami-Dade. Collectively, the fugitives absconded with at least $142 million in taxpayer funds.

Thirty-three of the 36 fugitives whose names have been released by authorities are Cuban immigrants, most of whom came to the United States during the past 15 years, according to FBI, immigration and court records obtained by The Miami Herald. Half of those fugitives have fled to Cuba, according to the FBI, which based its information on travel, customs, passports, bank and computer records.

The majority of some 700 Medicare fraud defendants charged since 2004 are immigrants who share an implicit trust when they join small criminal enterprises in South Florida to defraud the government program, according to perpetrators, prosecutors and investigators.

Timothy Delaney, assistant special agent in charge of the FBI’s office in Miami, said Medicare fraud has spread over the past decade in certain pockets of South Florida’s population of 750,000 Cuban Americans — just as it has in heavily populated immigrant communities in other major cities.

Medicare is seen as an easy mark for fraud because it is built on an honor system that pays claims quickly with scant review. Also, the odds of getting caught are low and the odds of making millions are high.

Delaney said certain segments of Cuban immigrants in Miami and Hialeah — just like Armenians in Los Angeles, West Africans in Houston and Russians in New York — trust one another to form mini-rackets.

‘’We have unscrupulous providers, willing doctors and willing practitioners,'’ said Delaney. “They don’t think they’ve committed a crime.'’

CHASING FUGITIVES

Among the known Medicare fugitives who fled to Cuba: Eduardo Moreno, who came to the United States in 1997.

Moreno, 39, used a network of offices to operate medical equipment and HIV drug-infusion scams totaling $7.2 million in false Medicare claims, according to federal court records. He bought himself a $445,000 southwest Miami-Dade home and a $200,000 Rolls-Royce Phantom.

When the FBI arrested him last year on fraud charges, he made a $250,000 bond, then skipped the country — back to Havana, according to the FBI. Agents tracked him through his travel records and his relatives.

Moreno is among at least 18 identified fugitives suspected of fleeing to Cuba — with another 18 escaping to other parts of Latin America, Europe, Canada, Florida or unknown locations, according to the FBI’s account of travel records and other information.

In addition, there are 20 unidentified fugitives whose names remain under seal until their arrests.

‘’A good number of them are Cuban and they will return to Cuba, where, as you know, there is no extradition policy and we have no way to get them back at this point,'’ said Delaney, who headed the FBI’s national healthcare fraud program before transferring to Miami in 2005.

U.S. Sen. Mel Martinez, R-Florida, a Pedro Pan Cuban exile who benefited like thousands of others from the Cuban Adjustment Act, is pushing legislation in Congress to double the criminal and civil penalties for Medicare fraud offenders. While Martinez said he didn’t think Medicare fraud was strictly a ‘’Cuban issue,'’ he also condemned the Cuban government for harboring the fugitives.

‘’My first thought is, it’s one more reason why the Cuban government is an outlaw state because it allows fugitives of justice to find refuge there,'’ Martinez said.

Cuban leaders Fidel Castro and his brother Raul Castro have rarely turned over fugitives of any kind.

Tracking down Medicare fugitives in countries such as the Dominican Republic, however, can be successful because they have extradition agreements with the United States. Federal authorities are working with the Dominican Republic to pursue the Benitez brothers and seize their extensive assets in Bavaro — including a hotel called Cabañas Singapur.

Other assets include more tourist hotels, a Robinson R44 Raven helicopter, apartment complexes, luxury homes, supermarkets and a rental car agency — registered under shell companies or straw names. Dominican officials started seizing properties and freezing their bank accounts in July in cooperation with the U.S. government, which plans to return the proceeds to Medicare.

On Friday, Justice Department prosecutors filed a proposed restraining order in federal court in Miami to ensure the Benitez brothers’ assets are not sold or transferred to other parties.

The Benitez brothers’ fugitive case has made headlines in the Dominican Republic not only because of the U.S. government’s pursuit of their ill-gotten gains. Over the Fourth of July weekend, Carlos Benitez’s daughter and son-in-law — Yanelkis Benitez Ramirez and Lenin Linares Guerrero — were kidnapped. Days later, Dominican authorities rescued the couple.

Meanwhile, FBI agents have traced the Benitez brothers to Havana, according to federal authorities.

In general, the FBI has had little luck capturing Medicare fugitives abroad in recent years. ‘’We’ve had no one returned on a healthcare fraud warrant that I’m aware of,'’ Delaney said.

The one exception: In June 2004, authorities in the Dominican turned over three Medicare fugitives — Ruben Martinez; his daughter, Adriana Ramos, and her husband, Daniel Ramos — who had fled to that country months before their indictment on fraud charges.

They were part of a Miami-Dade family racket headed by Martinez, 57, that was eventually convicted of bilking $14.5 million from Medicare by charging for bogus medical equipment orders such as hospital beds, oxygen tanks and foot arch supports in 2000-02. Federal authorities recovered $1 million from Dominican bank accounts, $900,000 from U.S. banks, real estate, jewelry and a Porsche Boxster.

‘’It was a classic case of international cooperation,'’ said former federal prosecutor Wifredo Ferrer, the lead attorney in the prosecution of Martinez and 11 others. “The three fugitives were Cuban nationals, not citizens of the Dominican Republic. The Dominican authorities deemed them persona non grata and expelled them to the United States.'’

FEDERAL JUDGES

Still, one Medicare fugitive in that case is still at large: Emilio R. Seijo, who is in Cuba, according to the FBI.

The escalating problem of Medicare fraud defendants who flee has become a sore point for federal judges in South Florida.

This spring, the chief judge of the U.S. District Court in Miami raised the issue in a memo to magistrate judges, cautioning them about flight risks. U.S. District Judge Federico Moreno also reviewed Medicare defendants’ bonds in cases before him, citing the unusual pattern of defendants fleeing after they were charged with Medicare fraud and granted bail.

In June, Moreno said in court that “it seems to me that our thinking has to change — that someone from Cuba can flee back to Cuba just like someone from Mexico.'’

Moreno questioned whether the Cuban Adjustment Act — passed by Congress in 1966 to grant asylum and residency to the first wave of Cuban political refugees — was being abused by a new generation of Medicare fraud suspects. The judge wondered aloud “whether someone can be categorized as a political refugee when you can pick up and go back.'’

Moreno raised the point after learning that a former secretary charged in an $11 million Medicare healthcare scheme fled to Cuba with her son and father.

The judge had given Carmen González a $50,000 bond. Her father, Enrique González, who co-signed it, was indicted in May on separate Medicare fraud charges in a $26.2 million HIV-drug scam at other Miami-Dade clinics.

‘’I don’t know what your client’s situation is, but money goes a lot farther in Cuba,'’ the judge told Gonzalez’s attorney, Joel DeFabio. “Dollars do. And the government’s allegation is that dollars are the result of Medicare fraud.'’

Moreno isn’t the only federal judge to be blindsided.

The case of Medicare fraud felon Gustavo Smith illustrates how easy it is for fugitives to leave the United States.

After Smith was convicted on healthcare fraud charges at trial in April, U.S. District Judge Marcia Cooke allowed him to remain free on a $300,000 bond while he awaited sentencing. Prosecutors insisted that Smith be detained. Cooke placed him on home confinement.

On June 11, Smith, who had surrendered his U.S. passport, took an American Airlines flight to Santo Domingo with his girlfriend. How? Smith used his Cuban passport under the name Gustavo Smith Wong. The FBI and Dominican authorities are tracking him down. In early July, Cooke sentenced him in absentia to 10 years and 10 months in prison.

MEDICARE OUTLAWS

One of the obvious reasons that Medicare defendants can evade prosecution is because they’re routinely allowed to post bond before trial. But most of the Medicare defendants who fled since 2004 left South Florida before federal agents could arrest them, according to the FBI and prosecutors. In some cases, suspects get nervous when a colleague is arrested and flee before they can be implicated.

A typical example: Fermin Rey, 49, who emigrated from Cuba in 1995 and was indicted last year on charges of using a series of healthcare corporations to bill Medicare for $5.2 million in bogus medical equipment claims. Rey, described by authorities as a Santeria high priest who used associates as straw owners of his illegal businesses, failed to appear in court and is believed to be in Mexico.

Why do so many Cuban immigrants become Medicare fraud perpetrators? Andy Gomez, a senior fellow at the University of Miami’s Institute for Cuban and Cuban-American Studies, has a theory.

Gomez said some immigrants came with survival instincts cultivated under the totalitarian regime of Fidel Castro. They distrusted and cheated his communist government as a way of getting around the system, but they did not shed that behavior when they came to Miami simply because they were living in a free country.

‘’They are a product of their element,'’ Gomez said. “It’s a very difficult habit to break.'’

FBI agents not only have a hard time tracking down Medicare fugitives, but also their money.

Law enforcement officials suspect that most Medicare defendants who flee — such as the Benitezes — launder their money offshore.

Prosecutor Eric Bustillo, chief of the economic crimes section at the U.S. attorney’s office in Miami, said that once Medicare money is withdrawn from local banks it’s difficult for federal authorities to follow it.

‘’It’s the opposite of drug trafficking,'’ Bustillo said. “The drug traffickers get paid in cash, so they have to find businesses and other ways to launder it. The Medicare providers must receive all of their payments in checks or wire transfers to a designated bank account. So the money can be tracked down to that bank. But they immediately cash it out. And once they do that, who knows where it goes?'’

Federal authorities and money-laundering experts know some of the Medicare fugitives’ money ends up outside the United States. Case in point: the Benitezes’ assets in the Dominican Republic.

But unless authorities can identify the laundered Medicare millions — bank accounts, real estate, cars, boats — they can’t take legal action to go after the assets.

According to money-laundering experts, it’s easy to move dirty money to certain countries.

For a pittance, Medicare violators can hire lawyers offshore to set up shell companies and assist in the opening of related bank accounts, said Brett Wolf, a U.S. money-laundering analyst with Complinet, a London-based firm that helps financial institutions meet their compliance obligations.

‘’Cash smuggling is almost certainly playing a role,'’ Wolf said. “Considering the heavily state-controlled nature of Cuba’s financial network, it’s very unlikely that these Medicare funds are being moved through the formal banking system.'’

Fugitives, based in a country such as the Bahamas or Mexico where there is regular travel to Cuba, can go back and forth to the island, carrying thousands in cash that can be exchanged for a currency called CUCs (pronounced “kooks'’).

But it would be risky business for fugitives carrying a lot of cash, say $50,000, to attempt to bribe communist government officials unless they have connections.

Still, a Medicare fugitive with hundreds of thousands or even millions of dollars stashed in offshore accounts could live like a tycoon in Cuba, where the monthly salary averages $17.

Source

Medicaid False Claims Act Amendment Stalls ....

Posted On: July 19, 2008 by David L. Haron
Michigan Medicaid False Claims Act Amendment Stalls Because of Petty Legislative Political Bickering

As I reported earlier, the Michigan Medicaid False Claims Act was amended effective January 1, 2006 through the efforts of Attorney General Mike Cox and Representative David Law (R., Commerce). I worked actively for passage of the amendment and testified before the Michigan House of Representative Judiciary committee, then chaired by Rep. Law..

The State of Michigan can recoup extra funds from combined state/federal recoveries because of the provisions of the federal Deficit Reduction Act of 2005 ('DRA"). To explain, shortly after the the Michigan Medicaid False Claims Act amendment passed the Michigan Legislature and Governor Granholm signed the Act, the U.S. Congress passed the DRA providing for a 10% incentive to States which enacted a "compliant" Qui Tam statute addressing Medicaid fraud. Specifically, the Medicaid program is a joint federal/state program. Thus, in Michigan, the federal government pays about 56% and the state 44% of the costs of the Medicaid program and fraud recoveries are divided on the same percentage.

If the state has a "compliant" Qui Tam statute, the state receives an extra 10% of the recovery--that is, 54% in Michigan--of the recovery--instead of 44%--a significant amount of money since most recoveries are in the tens of millions of dollars or more!!

However, on December 21, 2006, the U.S, Department of Health and Human Services/Office of Inspector General ("HHS/OIG") advised the state, by letter, that its Medicaid False Claims Act was NOT "DRA compliant" (that is, a mirror image of the federal False Claims Act).

In order to comply, all that was needed was a simple bill adding civil monetary penalties of at least $5000 for each violation and making one other technical amendment. Since the revisions would not have had any negative fiscal impact on the state and would have had a potentially tremendous positive impact in the event of any recovery, one would have expected Representative Law to quickly introduce a clarification/modification bill and obtain quick passage--after all, the State would most certainly not turn down the opportunity to reverse the flow of funds from Michigan to Washington??

Unfortunately, in 2006 and 2007, petty partisan bickering was rampant in the Michigan Legislature--we were paralyzed by the absurd budget fight and leadership was non-existent.

Rep. Law, finally, on September 17, 2007, introduced a one-page bill. The date of introduction is significant. In addition to being a Saturday, the day of the Notre Dame-UM football game (a game, I suspect, Rep. Law, a Notre Dame grad, was attending), it was three days before Ray Sayeh, then a WXYZ-TV investigative reporter, had scheduled (at my request) an interview with the representative to discuss the failure to take action on the revisions.

Unfortunately, again because of partisanship and Democratic control of the House of Representatives, the bill went nowhere while the Attorney General continued to obtain recoveries from fraud-feasors and the unclaimed 10% incentive was lost to Washington.

Finally, on February 19, 2008, Representative Marc Courveau (D., Northville) introduced HB 5757. The amended FCA, as presented in HB 5757, would allow the Michigan FCA to become DRA compliant. Once again, the small changes made by HB 5757, as required by the federal HHS/OIG., would cost the state nothing in administrative or other costs and would bring millions of dollars in the future back from Washington.

HB 5757 quickly passed the House with NO opposition and was sent to the Senate.

Tragically, because of continued political maneuvering, the Bill sits in the Judiciary Committee.

It seems that Rep. Courveau was elected at the expense of a Republican and the leadership of the Judiciary Committee and Senate Majority Leader, Mike Bishop will not allow this largely unopposed, fiscally responsible bill, to be brought up at the committee or floor level because it would give "points" to Rep. Courveau!!!!

The State of Michigan is in a deep recession/depression, unemployment sits at 8.5%, the highest in the nation, GM is in deep trouble, the City of Detroit is selling assets and landmarks--such at the Detroit-Windsor tunnel--and the Legislature cannot pass a one-page bill that will bring money to the state and its Medicaid recipients.

This Bill is under the radar, unfortunately--Ray (now Rez) Sayeh has joined CNN International and is posted in Pakistan, columnists such as Brian Dickerson and others have been unresponsive despite my entreaties, my solicitations to the Legislature and the use of my contacts have been unavailing.

I am frustrated. Medicaid fraud is rampant, the Attorney General is acting diligently in pursuing the cheaters, and we have been filing qui tam cases under the new Act, but even if all of these activities are successful--and they will be--the State will not receive the full benefit of its recoveries!!!