Statistics show that the number of Medicaid fraud investigations and prosecutions is on the increase in Kansas.
Enforcement officials say in part that is because Attorney General Steve Six has emphasized vigilance against government fraud as one of his top priorities. Six was appointed in January 2008, after Paul Morrison resigned.
Also on Six’s watch, the state for the first time has gone it alone in a civil suit filed against 34 drug companies that Kansas alleges were systematically overbilling the state’s Medicaid program for about 15 years. Similar cases in other states have recovered millions, sometimes hundreds of millions of dollars. In the past, Kansas has entered those sorts of lawsuits in conjunction with other states, but not alone, according to officials in the Attorney General’s Office. Those 34 cases, filed in Wyandotte County, remain in the discovery phase and the damages Kansas will claim are still being calculated. But if the state wins, no one expects the sums recouped to be small.
More investigations
“Attorney General Six has really put us in a position where we can do more,” said Loren Snell, head of the state’s Medicaid fraud unit. He works for Six.
In 2002, the unit filed eight criminal cases and recovered $2. 1 million.
In 2008, it filed 18 criminal cases, the 34 civil cases against the drug companies, and recovered $17.8 million, which is four times more than in any previous year, according to agency figures.
2009 isn’t finished yet, but “we opened 113 new investigations this year compared to 63 last year,” Snell said.
Last month, the Attorney General’s Office co-hosted a “multi-agency fraud summit” at Washburn University for police investigators, forensic accountants and others.
“It’s no secret that Attorney General Six has been extremely vocal,” Snell said. “He doesn’t like fraud and abuse. What he’s done is empower us, said this is a priority.”
The federal government also has recently announced it will step up its Medicaid and Medicare anti-fraud efforts. In May, Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder announced they were forming the Health Care Fraud Prevention and Enforcement Action Team or HEAT. Officials said the task force would work to improve cooperation, intelligence sharing, and training among the two agencies’ investigators, agents, and prosecutors.
In July, the officials called another press conference to announce 53 indictments in Detroit and Miami against an alleged scheme involving nine health care provider companies, including executives, doctors and others.
‘Very prevalent’
With all that is happening, officials said, prosecution numbers likely will continue trending upward in Kansas and across the country.
According to Snell, the prevalence of general health care fraud seems to be growing even as investigators are getting better at ferreting it out — both of which also could help explain the recent spike in investigations.
Total health care spending in the U.S. topped $1.3 trillion in 2000, according to federal statistics and the Internal Revenue Service estimates that between 3 and 10 percent of that was fraudulent. More precise estimates aren’t available. Experts say it is impossible to know the full dimensions of the problem.
“We deal with every state but North Dakota,” Snell said. “Nationally, I think Medicaid and Medicare and overall health care fraud is very prevalent.”
Also, the Legislature earlier this year put new teeth in the state’s false claims law, allowing Snell’s unit to keep 10 percent of the money it recovers under the act.
That “absolutely” will help the anti-fraud programs at the Attorney General’s Office grow, Snell said
Currently, his unit, which includes 13 staff members, relies heavily on federal grants to fund its police efforts.
Snell said his investigators work closely with the Kansas Health Policy Authority, the U.S. Attorney, and EDS, the claims processing company that handles the state’s Medicaid payments to root out fraud. He said investigators also are helped by snitches.
Good cooperation
He said his unit has an unusually close and fruitful working relationship with the U.S. Attorney’s Office, something he said doesn’t happen in every state. Snell is cross-deputized and so is able to prosecute in federal court some cases developed jointly by his office and federal officials. He said his unit’s abilities are trusted by the U.S. Attorney’s Office and vice versa.
James Cross, a spokesman for U.S. Attorney for Kansas Lanny Welch said, “Loren knows about as much about it (Medicaid fraud in Kansas) as anybody I can think of.”
Meanwhile, officials at the Kansas Health Policy Authority told KHI News Service last week that they were close to hiring a new chief for the Medicaid inspector general’s office. That office is tasked with auditing for fraud, waste and abuse in the Medicaid program and is required to refer criminal cases to the Attorney General.
The agency’s officials also rely on some built-in safeguards to help alert them potential fraud or abuse, or simple errors.
“The Kansas Medicaid program uses incredibly complex computer systems to process enrollment applications and claims for payments. Built into those systems are complex filtering programs that are designed to flag things that don’t fit the standards, or that look suspicious,” said Andy Allison, executive director of the health policy authority. “That enables us to physically go in and double-check everything to make sure it’s proper and accurate.”
“I think there are safeguards out there,” Snell said. “The Medicaid program and SRS all take steps to safeguard and make sure funds are spent appropriately. But criminals are very innovative and are going to keep trying to figure out new ways to not get caught.”