Ohio tops in Medicaid fraud indictments

Investigations of health care providers billing taxpayers while neglecting or defrauding Medicaid patients have more than doubled in Ohio since 2010 and led to 124 indictments last year — more than in any other state.

State officials have stepped up fraud-fighting measures as Ohio Gov. John Kasich’s decision to expand Medicaid under the Affordable Care Act has increased Medicaid expenditures in Ohio from $15.6 billion in 2010 to $20.2 billion in 2014.

“(Investigations) certainly are continuing to rise and we have no reason to believe this year won’t be higher than ever if we stay on track,” said Keesha Mitchell, section chief of the Ohio Attorney General’s Office health care fraud division.

State officials say the increased caseload is likely not because of an explosion in fraud — the number of providers billing Medicaid has remained fairly constant at around 92,000 — but because the state is getting better at catching the fraud that already existed.

“The Ohio Medicaid Fraud Control Unit is doing as good or better than any (other unit) in the country,” said Lloyd Early, special agent in charge of Medicaid fraud.

Numbers reported to the U.S. Department of Health and Human Services bear out that claim. With 124 people indicted and 114 convicted last year of defrauding Medicaid, Ohio closed more cases than states like California and New York, which have more than twice the Medicaid budget.

Still, the number of convictions has stayed consistent even as the number of investigations skyrocket. State officials say this is because closing criminal cases takes a lot more legwork than opening them. But they are training new investigators to catch up.

“I believe we do have the (appropriate) resources, but it’s just not going to turn into conviction numbers overnight,” Mitchell said. “It takes time to hire people. It takes time to train them. It takes time to put them out in the field.”

But HHS inspector general reviews have criticized Ohio’s program. They found officials usually don’t use their power to suspend Medicaid payments to providers while they investigate credible allegations of fraud, and have dragged their feet on reporting convictions to federal officials that keep a national database of people kicked out of the program.

Fraud costly, tragic

Criminal cases recovered $4.8 million in taxpayer money last year. The largest court-ordered restitution was $900,000 to be paid by a Columbus doctor who was convicted of bribing patients with video game systems and walkers to use his practice.

Civil cases netted another $66.4 million. Nearly $53 million of this was a multi-state lawsuit against Janssen Pharmaceuticals, a Johnson and Johnson subsidiary accused of improperly marketing anti-psychotic drugs.

In addition to the financial cost, Medicaid fraud cases can take a tragic human toll.

Fourteen-year-old Makayla Norman starved to death in 2011 because a Medicaid-funded nurse wasn’t feeding the girl, who had cerebral palsy. The nurse, Mollie Parsons, is serving a 10-year-prison sentence and pleaded not guilty to additional federal charges last week.

In all, five people were prosecuted for various crimes connected to Norman’s death, including her mother and doctor. The registered nurse who was supposed to be supervising her care, Kathryn Williams, was convicted last year of failing to report child abuse and is facing federal charges of for making false statements on a skilled nursing initial evaluation/assessment form.

$14,000 profit

The penalties for defrauding Medicaid often consist of no jail time and an order to repay the money.

Home health aide Jessica Getchell, for example, pleaded guilty in March 2014 to falsely claiming to be providing care and services for a Medicaid recipient in Xenia. Prosecutors say she claimed to come to the client’s apartment twice a day, but the client said that wasn’t true and apartment complex staff said the apartment was not clean and Getchell was not coming regularly.

An investigator staked out the apartment for three days and never saw Getchell, though she billed for those dates.

In total, prosecutors say she falsely billed the state for $34,649. They agreed to six years of probation and restitution of $20,000 after a key witness recanted, damaging their ability to make a case for the full amount.

Nine months after she pleaded guilty, she was added to the federal list of people barred from billing Medicaid.

Exclusion delay

An April 2015 report by the U.S. Department of Health and Human Services Office of Inspector General noted the state often missed the 30-day deadline to pass along information of a conviction for inclusion in the federal exclusion list. Twenty percent of cases were reported after 45 days, dozens of them were months late and 13 were more than two years late.

“The Ohio Medicaid Fraud Control Unit acknowledges that some of its posted convictions were not timely reported,” said a prepared statement, attributing the problem to a “clerical error” that has since been fixed.

But there is still a months-long lag between when fraud is concluded and when the culprit is barred from billing federal programs, the I-Team found.

Absent from the federal exclusions list, for example, is Anne Goodrich of Troy. State investigators say Goodrich was caught on camera billing Medicaid for hours when she wasn’t at the home of the recipient she was supposed to be caring for.

“This fraudulent activity spanned from March 1, 2012, to February 20, 2013,” according to state records.

Goodrich was indicted in July 2014 and pleaded guilty in September. She was ordered to pay $5,000 in restitution.

Federal delay

Ohio officials maintain their own list of people barred from billing Medicaid, which is administered by the state, and shares its list with the U.S. Department of Health and Human Services. HHS maintains a list of people barred from billing any federal program.

HHS officials say adding someone to the federal list has its own process, including waiting periods and opportunities to appeal, and they are within federal time frames.

“Each exclusion referral, whether coming from a state Medicaid agency, a state licensing board, or public source is a separate matter that requires investigative efforts to ensure the alignment of the facts of the case through legal sufficiency with our exclusion authority,” said a statement from HHS Office of Inspector General Special Agent in Charge Thomas Sowinski.

“In some cases, the OIG is unable to exclude a provider if the identified actions or convicted conduct does not align with our exclusion authorities.”

During this process, providers can still submit claims to other federal programs.

“That’s a pretty big, potential loophole there so I would be troubled by that,” said Greg Lawson, policy director of the conservative Buckeye Institute.

Repeat offenders

Sowinski said other barriers exist to stop people from defrauding Medicaid, including efforts by other states and Medicare to block Medicaid payments to providers if they become aware of a suspension or charges in Ohio.

Also, fraud convictions impact a person’s license to practice, serving as a deterrent.

But Medicaid fraud cases from 2014 do include people who shouldn’t have been allowed in the program. Brendalee Roseman of Trotwood, for example, was prohibited from billing Medicaid because of a 1999 conviction of theft by forgery.

State investigators say Roseman used her husband David to enroll with four different Ohio Medicaid agencies, claiming he was a home health aide and billing Medicaid for the same hours he spent working at his other job.

Brendalee was sentenced to a six months suspended jail sentence and the couple was jointly ordered to pay $33,106 in restitution.

A Salem, Ohio, pharmacist billed Medicaid $310,550 over two years, though he was excluded from participating in federal funded programs because of a prior drug conviction. He was ordered to pay restitution and given a 24- month jail sentence.

Payments not stopped

A March OIG report also found Ohio was routinely not suspending payments to Medicaid providers against whom there was a credible allegation of fraud, as federal rules require. Federal inspectors looked at 401 credible fraud allegations and found the state decided not to suspend payments in 321 cases.

Even after their suspensions, 24 providers were paid a total of $96,516 because of work done before the action taken by the state, the OIG investigation found.

Ohio Medicaid officials responded saying they will shut off all payments to suspended providers. But they defended the practice of letting money flow to alleged fraudsters, saying it helps them to build a criminal case against them.

“There are times we don’t want (a suspension of payments) to happen,” Early said. “We don’t want them to know they’re the subject of an active criminal investigation.”

Preventing fraud

Improving their fraud-fighting efforts has been a learning experience, state investigators say, and involves both gumshoe detective work and high-end data analysis.

For example, years ago they found a home health provider billing for time when the patient was in the hospital.

“We started thinking, ‘who else has done that?’” said Mitchell. “We had the department of Medicaid run the data…and darned if we didn’t discover a number of conflicts and discover a bunch of providers and open a bunch of investigations.”

“Now we run that same query four times a year.”

Still, Lawson said the state could do a better job of not just policing fraud, but preventing it, by tightening regulations. He noted that more than half of last year’s fraud convictions statewide were of people providing home care.

Gov. John Kasich’s proposed budget includes provisions aimed at reducing independent home care providers, though it has received push back from providers and patients who fear losing control of their care.

The Medicaid expansion puts an even bigger priority on catching cheaters, Lawson said.

“(Fraud) is an issue where we need to definitely get a handle on it sooner rather than later because there’s going to be an increase in volume,” he said. “It’s good that they’re finding it now, because it was already happening at some level.”

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