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Specialized units target Medicare, Medicaid swindlers in Indiana

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Inside an unmarked building in a nondescript office park in Castleton is a burgeoning, multi-million-dollar legal enterprise. Its mission: cracking down on Medicaid fraud.

“This work is really a niche area; there are not a lot of people involved in it,” said Deputy Attorney General Allen Pope, who heads the 53-member Indiana Medicaid Fraud Control Unit’s 10 offices around the state that operate under the direction of the attorney general’s office. “Just the acronyms you have to learn is daunting.”

fraud-main-15col.jpg Assistant U.S. attorney Bradley Shepard in the Southern District of Indiana oversaw fraud cases that recovered more than $3 million in tax dollars in 2012. (IL Photo/ Dave Stafford)

Complex investigations that involve an array of agencies and local, state and federal law enforcement also must delicately balance patient care. Nevertheless, sums recovered from providers in Medicaid and Medicare fraud investigations have soared in recent years. For instance:

For 2012, through early December, the Indiana MFCU recovered more than $52 million, Pope said. That’s a record that compares to about $4 million when Pope came to the agency a decade ago.

According to the U.S. Department of Health and Human Services, the government has recovered a record $10.7 billion from Medicare and Medicaid fraud in the last three years.

Health care fraud cases can come from anywhere. Bradley Shepard, assistant U.S. attorney for the Southern District of Indiana, recalls a case that originated with a quality-control representative’s follow-up call to a Medicaid patient in a routine survey about care.

When the patient was unfamiliar with prescription medications for which Medicaid had been billed in the patient’s name, it raised suspicions that ultimately led to federal prison for Terre Haute pharmacist John D. Love. He was sentenced in October 2011 to 51 months for billing Medicaid more than $3.5 million for prescriptions that were never given to patients.

Love had billed for prescriptions that far exceeded the quantities his pharmacy received, investigators learned.

“I just find it very offensive,” Shepard said, discussing why he is so motivated to fight health care fraud. “For people to have their greed prey upon a system that’s based on purely good intentions, those individuals are due all the punishment they have coming to them.

“And I like the puzzle aspect of it,” he said.

For Medicaid program administrators at the state Family and Social Services Administration, the puzzle pieces come from analysis of billings using nearly three dozen algorithms designed to ferret out red flags in the multitude of individual claims filed for payment, explained audit manager Kim Forrest. A simple algorithm, for example, identifies claims for services provided after a patient’s date of death.

“We try to prevent money from going out the door, because it’s much harder to get it back once it’s gone out the door,” Forrest said.

Impact on patient care is a consideration, though. “We do that evaluation every time we make a payment decision,” she said.

FSSA takes charge of cases in which waste is found, and that can be for instances such as billing twice on the same day for payment of services allowed just once, program officials said. “Most of what we find is not fraud, it’s waste and abuse,” said Kristina Moorhead, deputy manager for program integrity for Medicaid planning at FSSA.

But the new health care law puts an emphasis on enforcement and puts the onus on the agency.

“The Affordable Care Act has done a few things – one is that we are required to submit credible allegations of fraud to the Medicaid Fraud Control Unit,” said Moorhead. Those can be from patient tips, those developed internally, or from whistleblowers.

What constitutes a “credible allegation” isn’t defined. “It’s a pretty light standard our office has to meet,” said Brandon Shirley, an attorney with the FSSA Office of General Counsel.

The Affordable Care Act also increased provider enrollment standards, requiring site visits for new providers and in other situations. “Between 20 and 30 providers were not enrolled in the past calendar year due to onsite visits,” Moorhead said.

A couple of times a month, FSSA officials who oversee Medicaid meet with MFCU representatives and other law enforcement to talk about possible cases and share information, including those credible allegations of fraud the agency is compelled to disclose.

U.S. Attorney for the Northern District of Indiana David Capp said the information sharing is invaluable. In his office, Medicaid and Medicare fraud cases are assigned to some of the most experienced attorneys.

Capp said health care fraud cases “have received substantial attention from us for quite some time. They’re high-priority prosecutions, and we work hand-in-hand with Attorney General (Greg) Zoeller on many of them, and I can’t say enough about the attorney general’s office. They’ve been instrumental in a number of prosecutions.”

The Northern District in 2012 won Medicare and Medicaid fraud judgments of $8.1 million, compared with less than $1.5 million a year earlier, according to spokeswoman Mary Hatton. Major convictions came in U.S.A. v. Human Services Transport Provider Inc., 3:11-CR-5. The Gary-based ambulance service defrauded Medicaid of $1.9 million, according to two guilty pleas in the case, and restitution of close to $2.5 million was ordered.

In that case, the ambulance company billed for services that weren’t provided, inflated mileage claims, and conspired to kick back some of the fraudulent revenue to another provider.

pope Pope

Often, people identify fraud with the anticipation that they might share in the reward for doing so. “Ninety percent of the people are whistleblowers,” Pope said of those who initiate MFCU investigations.

Such cases have been enabled by Indiana’s False Claims Act, I.C. 5-11-5.5. Passed in 2005, the act allows qui tam claims in which whistleblowers may be eligible to collect 10 to 30 percent of tax money recovered by the government. “The truth is at this time we have multiple whistleblowers in the cases that get settled,” Pope said.

The dollars coming in this year are the result of investigations that began years earlier, he said. Whistleblower cases can take as long as eight years to conclude because of the amount of discovery required and the complexity of the cases.

Several multi-million-dollar settlements of late involve “off-label” marketing of pharmaceuticals – medications sold for treatments other than those the drugs have been approved for by the Food and Drug Administration, Pope said. Whistleblowers were key to those cases.

One of the most prevalent fraud schemes Shepard described is “upcoding” – vendors billing for procedures, products or services costlier than those provided. But he said it’s not easy to get jury convictions based on billing-code patterns found in reams of documents in Bankers Boxes worth of evidence.

“Sometimes the investigation is a lot easier than coming up with a compelling way to take it to the jury and make it make sense,” Shepard said. Nonetheless, he’s personally overseen cases in 2012 that resulted in recovery of more than $3 million in tax dollars. The total of recovery in Medicaid and Medicare fraud cases for all of the Southern District was not available.

For all the information sharing that’s led to a spike in recoveries and criminal penalties, Pope said there’s more that he and others in the field would like to be able to do. Currently, Medicaid Fraud Control Units are prohibited from independent claims analysis without referrals from the administrative agency – in Indiana’s case, FSSA.

“For 10 years it’s been a matter of discussion (nationally among MFCU officials) because it does make sense” to have greater independent investigative authority, Pope said. “When we have a particular suspected pattern of fraud, we’d like to have the ability to do that.”•

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  1. A high ranking Indiana supreme Court operative caught red handed leading a group using the uber offensive N word! She must denounce or be denounced! (Or not since she is an insider ... rules do not apply to them). Evidence here: http://m.indianacompanies.us/friends-educational-fund-for-negroes.364110.company.v2#top_info

  2. A high ranking bureaucrat with Ind sup court is heading up an organization celebrating the formal N word!!! She must resign and denounce! http://m.indianacompanies.us/friends-educational-fund-for-negroes.364110.company.v2#top_info

  3. ND2019, don't try to confuse the Left with facts. Their ideologies trump facts, trump due process, trump court rules, even trump federal statutes. I hold the proof if interested. Facts matter only to those who are not on an agenda-first mission.

  4. OK so I'll make this as short as I can. I got a call that my daughter was smoking in the bathroom only her and one other girl was questioned mind you four others left before them anyways they proceeded to interrogate my daughter about smoking and all this time I nor my parents got a phone call,they proceeded to go through her belongings and also pretty much striped searched my daughter including from what my mother said they looked at her Brest without my consent. I am furious also a couple months ago my son hurt his foot and I was never called and it got worse during the day but the way some of the teachers have been treating my kids they are not comfortable going to them because they feel like they are mean or don't care. This is unacceptable in my mind i should be able to send my kids to school without worry but now I worry how the adults there are treating them. I have a lot more but I wanted to know do I have any attempt at a lawsuit because like I said there is more that's just some of what my kids are going through. Please respond. Sincerely concerned single parent

  5. California Sex Offender Management Board (CASOMB) End of Year Report 2014. (page 13) Under the current system many local registering agencies are challenged just keeping up with registration paperwork. It takes an hour or more to process each registrant, the majority of whom are low risk offenders. As a result law enforcement cannot monitor higher risk offenders more intensively in the community due to the sheer numbers on the registry. Some of the consequences of lengthy and unnecessary registration requirements actually destabilize the life’s of registrants and those -such as families- whose lives are often substantially impacted. Such consequences are thought to raise levels of known risk factors while providing no discernible benefit in terms of community safety. The full report is available online at. http://www.casomb.org/index.cfm?pid=231 National Institute of Justice (NIJ) US Department of Justice Office of Justice Programs United States of America. The overall conclusion is that Megan’s law has had no demonstrated effect on sexual offenses in New Jersey, calling into question the justification for start-up and operational costs. Megan’s Law has had no effect on time to first rearrest for known sex offenders and has not reduced sexual reoffending. Neither has it had an impact on the type of sexual reoffense or first-time sexual offense. The study also found that the law had not reduced the number of victims of sexual offenses. The full report is available online at. https://www.ncjrs.gov/app/publications/abstract.aspx? ID=247350 The University of Chicago Press for The Booth School of Business of the University of Chicago and The University of Chicago Law School Article DOI: 10.1086/658483 Conclusion. The data in these three data sets do not strongly support the effectiveness of sex offender registries. The national panel data do not show a significant decrease in the rate of rape or the arrest rate for sexual abuse after implementation of a registry via the Internet. The BJS data that tracked individual sex offenders after their release in 1994 did not show that registration had a significantly negative effect on recidivism. And the D.C. crime data do not show that knowing the location of sex offenders by census block can help protect the locations of sexual abuse. This pattern of noneffectiveness across the data sets does not support the conclusion that sex offender registries are successful in meeting their objectives of increasing public safety and lowering recidivism rates. The full report is available online at. http://www.jstor.org/stable/full/10.1086/658483 These are not isolated conclusions but are the same outcomes in the majority of conclusions and reports on this subject from multiple government agencies and throughout the academic community. People, including the media and other organizations should not rely on and reiterate the statements and opinions of the legislators or other people as to the need for these laws because of the high recidivism rates and the high risk offenders pose to the public which simply is not true and is pure hyperbole and fiction. They should rely on facts and data collected and submitted in reports from the leading authorities and credible experts in the fields such as the following. California Sex Offender Management Board (CASOMB) Sex offender recidivism rate for a new sex offense is 0.8% (page 30) The full report is available online at http://www.cdcr.ca.gov/Adult_Research_Branch/Research_Documents/2014_Outcome_Evaluation_Report_7-6-2015.pdf California Sex Offender Management Board (CASOMB) (page 38) Sex offender recidivism rate for a new sex offense is 1.8% The full report is available online at. http://www.google.com/url?sa= t&source=web&cd=1&ved= 0CCEQFjAA&url=http%3A%2F% 2Fwww.cdcr.ca.gov%2FAdult_ Research_Branch%2FResearch_ documents%2FOutcome_ evaluation_Report_2013.pdf&ei= C9dSVePNF8HfoATX-IBo&usg=AFQjCNE9I6ueHz-o2mZUnuxLPTyiRdjDsQ Bureau of Justice Statistics 5 PERCENT OF SEX OFFENDERS REARRESTED FOR ANOTHER SEX CRIME WITHIN 3 YEARS OF PRISON RELEASE WASHINGTON, D.C. Within 3 years following their 1994 state prison release, 5.3 percent of sex offenders (men who had committed rape or sexual assault) were rearrested for another sex crime, the Justice Department’s Bureau of Justice Statistics (BJS) announced today. The full report is available online at. http://www.bjs.gov/content/pub/press/rsorp94pr.cfm Document title; A Model of Static and Dynamic Sex Offender Risk Assessment Author: Robert J. McGrath, Michael P. Lasher, Georgia F. Cumming Document No.: 236217 Date Received: October 2011 Award Number: 2008-DD-BX-0013 Findings: Study of 759 adult male offenders under community supervision Re-arrest rate: 4.6% after 3-year follow-up The sexual re-offense rates for the 746 released in 2005 are much lower than what many in the public have been led to expect or believe. These low re-offense rates appear to contradict a conventional wisdom that sex offenders have very high sexual re-offense rates. The full report is available online at. https://www.ncjrs.gov/pdffiles1/nij/grants/236217.pdf Document Title: SEX OFFENDER SENTENCING IN WASHINGTON STATE: RECIDIVISM RATES BY: Washington State Institute For Public Policy. A study of 4,091 sex offenders either released from prison or community supervision form 1994 to 1998 and examined for 5 years Findings: Sex Crime Recidivism Rate: 2.7% Link to Report: http://www.oncefallen.com/files/Washington_SO_Recid_2005.pdf Document Title: Indiana’s Recidivism Rates Decline for Third Consecutive Year BY: Indiana Department of Correction 2009. The recidivism rate for sex offenders returning on a new sex offense was 1.05%, one of the lowest in the nation. In a time when sex offenders continue to face additional post-release requirements that often result in their return to prison for violating technical rules such as registration and residency restrictions, the instances of sex offenders returning to prison due to the commitment of a new sex crime is extremely low. Findings: sex offenders returning on a new sex offense was 1.05% Link to Report: http://www.in.gov/idoc/files/RecidivismRelease.pdf Once again, These are not isolated conclusions but are the same outcomes in the majority of reports on this subject from multiple government agencies and throughout the academic community. No one can doubt that child sexual abuse is traumatic and devastating. The question is not whether the state has an interest in preventing such harm, but whether current laws are effective in doing so. Megan’s law is a failure and is destroying families and their children’s lives and is costing tax payers millions upon millions of dollars. The following is just one example of the estimated cost just to implement SORNA which many states refused to do. From Justice Policy Institute. Estimated cost to implement SORNA Here are some of the estimates made in 2009 expressed in 2014 current dollars: California, $66M; Florida, $34M; Illinois, $24M; New York, $35M; Pennsylvania, $22M; Texas, $44M. In 2014 dollars, Virginia’s estimate for implementation was $14M, and the annual operating cost after that would be $10M. For the US, the total is $547M. That’s over half a billion dollars – every year – for something that doesn’t work. http://www.justicepolicy.org/images/upload/08-08_FAC_SORNACosts_JJ.pdf. Attempting to use under-reporting to justify the existence of the registry is another myth, or a lie. This is another form of misinformation perpetrated by those who either have a fiduciary interest in continuing the unconstitutional treatment of a disfavored group or are seeking to justify their need for punishment for people who have already paid for their crime by loss of their freedom through incarceration and are now attempting to reenter society as honest citizens. When this information is placed into the public’s attention by naive media then you have to wonder if the media also falls into one of these two groups that are not truly interested in reporting the truth. Both of these groups of people that have that type of mentality can be classified as vigilantes, bullies, or sociopaths, and are responsible for the destruction of our constitutional values and the erosion of personal freedoms in this country. I think the media or other organizations need to do a in depth investigation into the false assumptions and false data that has been used to further these laws and to research all the collateral damages being caused by these laws and the unconstitutional injustices that are occurring across the country. They should include these injustices in their report so the public can be better informed on what is truly happening in this country on this subject. Thank you for your time.

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