Maryland nabbing more Medicaid fraudsters

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Local,Maryland,Andy Brownfield

Maryland has recovered more than $14 million in the last six months from companies trying to rip off Medicaid, marking a massive increase from the less than $2 million collected in all of fiscal 2012, and state officials expect that amount to grow.

Of the money collected from July through December, $12 million was pursued under the Maryland False Health Claims Act, a 2010 law that allows the state to go after fraudsters itself instead of waiting for the federal government to target them. State officials credit the law with a spike in Medicaid busts.

Shelly Martin, supervising attorney in the Medicaid Fraud Control Unit, said this is the first time the state's had that power.

"It's extremely important," she said. "The Medicaid program does not have unlimited resources, and it's very important to ensure that whatever money is being paid is used to provide services to people who need it."

Fraud by the numbers
• $9 billion: Maryland's Medicaid budget
• 1 million: the number of Marylanders who rely on Medicaid
• 43,000: the number of Maryland health care providers Medicaid pays
• $14 million: the amount in restitution fraudsters have paid Maryland in the first half of fiscal 2013
• $12 million: the amount of recovered fraud pursued under the Maryland False Health Claims Act of 2010
• $341,000: the amount of fraud recovered from Maryland Medicaid recipients
• Up to $451 million: the amount Maryland's Department of Health and Mental Hygiene inspector general estimates is lost to fraud each year
• 219: the number of open cases Maryland

About 1 million Maryland residents are enrolled in the program.

Maryland Department of Health and Mental Hygiene Inspector General Tom Russell estimates that 3 to 5 percent of the state's $9 billion in annual Medicaid spending -- up to $450 million -- is lost to fraud.

The state still has 219 cases open, though it can take three to five years to nail each scam.

Virginia, which has had its own Fraud Enforcement and Recovery Act since 2009, has already deposited $16 million into state coffers recouped from Medicaid fraudsters. A spokeswoman for Virginia's attorney general said the state hasn't seen any significant increase in recent years, even with more residents covered under Medicaid through President Obama's health care overhaul.

Medicaid fraud recovery numbers for D.C. weren't readily available, but a spokesman for the U.S. Attorney's Office for the District of Columbia said fraudsters have been ordered to pay at least $3.5 million in restitution in the last three months.

States tripled what they recovered from fraud between 2004 and 2010, according to published reports.

Though late to the game, Maryland's law allows it to go after fraudsters harder.

Martin said the vast majority of the millions of dollars in Medicaid fraud is perpetrated by companies -- pharmaceutical manufacturers and health care providers.

Drug companies can try to scam the system by marketing their products to doctors for uses that have not been approved by the Food and Drug Administration. Hospitals and other health care providers can squeeze extra money by billing Medicaid for services that are more expensive than the ones provided, or billing for services that weren't provided at all.

The state busted a Woodstock man for submitting bills for services that were never provided.

Spencer Brown, 51, was handed a year in prison for billing $156,918 in bogus charges at his wife's dental practice. He was ordered to repay the money, do 150 hours of community service and serve five years of probation.

But providers and companies aren't the only ones trying to rip off the program meant to provide health care for low-income people.

Russell said $341,000 has been recovered from Medicaid recipients from July through November, the most recent time period for which records are available.

Russell said people will commonly lie in their paperwork to make it look like they make less income than they really do.

The state's false-claims law allows it to recover three times the amount scammed and fine fraudsters $10,000 for each offense, meant to discourage such fraud.

Examiner Staff Writer Steve Contorno contributed to this report.

abrownfield@washingtonexaminer.com

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Andy Brownfield

Examiner Staff Writer
The Washington Examiner