Local Politics

State roots out $53M in Medicaid fraud

Posted January 3, 2011 12:25 p.m. EST
Updated January 3, 2011 1:02 p.m. EST

Money

— North Carolina’s Medicaid fraud investigators recovered more than $53 million and investigated dozens of cases of fraud and patient abuse in 2010, Attorney General Roy Cooper said Monday.

“Medicaid cheaters rob taxpayers, hurt needy patients and push medical costs higher for all of us,” Cooper said in a statement. “We’re stopping the waste and abuse and making violators pay.”

During the federal fiscal year that ended Sept. 30, the Medicaid Investigations Unit of the state Attorney General's Office won 22 criminal convictions and negotiated 18 civil settlements worth $53.5 million. Several of the cases started with referrals by the state Department of Health and Human Services, which identified tens of millions of dollars in possible overpayments and waste.

The Medicaid fraud unit has recouped more than $400 million over the past decade and helped to convict more than 450 people on criminal charges, including patient abuse and neglect as well as financial fraud.

Medicaid is a joint federal-state program that provides health insurance for the poor.

In the largest single case in 2010, drug maker Pfizer paid $25.5 million to North Carolina to resolve charges that the company cheated the state’s Medicaid program. The state alleged that Pfizer paid illegal kickbacks and marketed drugs for unapproved uses in order to sell more of certain drugs, including Bextra, Geodon, Zyvox and Lyrica.

Investigators also recovered nearly $1.9 million from a mental health provider in Fayetteville and Dunn that fabricated and forged records to overcharge Medicaid and Tricare, a program that provides health insurance to members of the U.S. military and their families. Sandra Elliott, owner of Learning Links, pleaded guilty in January 2010 to health care fraud and aiding and abetting fraud. She was sentenced to 120 months in federal prison to be followed by three years of probation.

The Medicaid Investigations Unit will expand its focus on waste and abuse, particularly on community service providers that commit fraud. The unit is doubling in size, with 25 new attorneys and investigators.