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Alaska targets Medicaid fraud

Jill Burke

When it comes to defrauding Medicaid, Alaskans have shown they have no shortage of schemes by which to scam the system. Some fraudsters net merely a pittance for their effort – maybe only a few extra dollars here or there. Others line their pockets with hundreds or thousands of dollars in unauthorized income. Regardless the amount of ill-gotten gains, state investigators say they're ready to nab any of the crooks they can find, big or small.

"My investigators are hearing it's already started to have an impact," said Andrew Peterson, the assistant attorney general who's leading the charge. "It has a direct impact on the number of people that are willing to commit that kind of activity."

The state of Alaska spends about $1.5 billion each year on Medicaid, a government program that helps low income individuals gain access to needed medical services. Rides to the pharmacy or a doctor's visit can be covered, as can in-home care from a personal assistant.

Personal care attendants play an important role in the lives of patients who wish to stay at home but require help with daily tasks. Through the use of a care attendant, Medicaid patients in theory should be able to continue to live at home, thus avoiding or delaying a more costly stay at a nursing home or other facilities offering higher levels of care.

In recent years, the amount paid by the state for personal care attendant services is expected to increase from $120 million to nearly $160 million per year, Peterson said. It's a benefit that's attractive to fraudulent claims, though he couldn't say how much fraud was taking place.

But some of it is being exposed: in the last eight months, Peterson's fraud unit has uncovered approximately $41,390 in bogus claims submitted to and paid by Medicaid. Now, the state is on a mission to recover the money and send a message that bilking the system won't be tolerated.

Since October, the Alaska Department of Law has resolved nine cases involving fraudulent claims -- involving husbands and wives, sons and daughters and professional care givers alike -- for medical assistance fraud and other paperwork crimes. Most were working as personal care attendants who got caught billing for services they never provided, according to charging documents filed by Alaska's Medicaid Fraud Control Unit.

Bad blood among family members can become a big headache for anyone who's trying to skim for themselves extra fat off Medicaid. Ex-husbands and angry siblings have proven to be reliable tipsters. As have neighbors, doctors and employers of the care givers. And on at least one occasion, investigative teams used a sting to nab their man.

In one extreme case, the state says a caregiver never once set foot inside the home of a patient who desperately needed the help. Instead, the hired care giver merely passed paperwork through the man's window for signature, then submitted it for payment of services that were never provided to the patient. Left unassisted, the big toe of the diabetic patient, who wasn't fully aware of his health condition, began to rot off his black, swollen foot.

Double dipping

The schemes often involve charging for care when the patient is out of the state or out of the country. Peterson's unit found that in at least eight of the recently charged cases, personal care attendant time cards were turned in for patients who were variously in California, Samoa, Panama and New Zealand. In other cases, it was the caregivers themselves who had charged for services when they were later shown to be in Japan or Cambodia.

Sometimes the caregivers stayed in town, but were actually at other jobs as hospital staff or auto workers during the times they claimed to have been helping at home patients with the tasks of daily living. Sometimes they billed Medicaid for care of multiple patients during the same hours of same days -- an impossibility, since the care givers can't be two places at once.

Another no-no for which at least one woman got caught? Charging the patient directly for some care not covered by Medicaid. Under Medicaid's rules, patients are not allowed to private pay their help. 

Someone's watching

Investigations often begin when someone outside his office -- an angry family member, neighbor or employer -- makes a report of harm or fraud, giving law enforcement a place to start looking.

Many personal care attendants are placed through an agency, which might earn $24 per hour from Medicaid for the attendant's time, and pass on $16.50 an hour or so to the employee. Agencies are responsible for making sure the invoices submitted by their employees are on the up and up. Sometimes they catch falsely inflated time cards, but not always.

In one case out of Wasilla, it was the watchful eye of a patient, his care coordinator and his neighbors that led to the bust of three people for fraud. Worried that his care attendants were billing for more time than they were actually showing up for, he complained to his care coordinator. Through logs kept by his neighbors, including a month's worth of video surveillance, investigators were able to show the care attendants billed double and triple hours beyond those they actually showed up for.

Then there's the case of the rule-breaking taxi driver, who got caught cheating Medicaid a different way. During a sting operation, the driver committed a series of infractions involving the way travel voucher are to be handled. The vouchers, which allow a patient to get cab rides, are only valid for rides between a home or hotel and medical facility or similar destination like a pharmacy or doctor's office.

Undercover agents using the vouchers were able to get the cab driver to take them from a pharmacy to the bar Chilkoot Charlie's in Spenard. In a subsequent trips, the driver took the agents from the bar to a bingo hall with a stop at Brown Jug liquors in between, and from bingo to a local hotel.

The total value of all four trips was only $26.50, but the driver submitted the vouchers in a way that made it look like the trips were compliant with the rules, and for longer distances. His paperwork showed the trips were between the Dimond Center and an apartment complex, to and from a medical complex and the Dimond Center, and to a local hotel. The total bill he submitted was for $91.25 – more than three times the amount of the actual driving he did.

Small bust, big payoff

Though the taxi cab sting yielded a comparatively small financial loss compared to the thousands of dollars charged in other Medicaid fraud cases, it's still worth going after, Peterson said. If crooks are going to fraudulently bill for small amounts that the state can prove, there's a likelihood they or others are going after even bigger takes but are not getting caught, he said. The hope is by busting even the smallest of schemes, those working within the Medicaid system will see it's not worth the risk.

Defendants risk jail time, fines, having to repay the defrauded funds and a lifetime ban from billing Medicaid for services provided to Medicaid recipients. In some cases, immigration officials may also get involved, depending on the individual circumstances.

“A lot of them [the defendants] are extremely remorseful,” Peterson said, explaining that many defendants were being paid to care for a family member, but once convicted are no longer eligible to provide that service through Medicaid.

Of the 14 cases charged since Peterson joined the Medicaid Fraud Unit last Fall, nine have resolved. Four of the convictions summarized on the fraud unit's web page show fines ranged from $500 to $2,500, and if the state can get the defendants to pay back what is owed to Medicaid, it should be able to recover about $21,000 in restitution. All of the defendants received suspended jail sentences and were placed on probation for three to five years. 

If the state can't get its money back from the individual defendants, it has the authority to go after the agencies that hired, placed and paid them, something Peterson characterizes as “a definite incentive for the employer to watch for the fraud.”

Contact Jill Burke at jill(at)alaskadispatch.com