Data aids Medicaid detectives

These cases often uncover unscrupulous medical providers who develop schemes such as overbilling to defraud the state Medicaid program, which is jointly funded by the state and federal governments to provide health insurance coverage to the needy.

Some charge for services that were never performed.

Attorney General Thurbert Baker’s office helps in the investigations and prosecutions. Recovering that money — $26 million in fiscal year 2009 — is welcome, Baker told The Atlanta Journal-Constitution, especially this year as the state faces a $608 million Medicaid funding gap.

Computer analysis often works hand-in-hand with old-fashioned investigative work. One Medicaid fraud case against two men started with a traffic stop by the Twiggs County Sheriff’s Department. That’s when officers found labels for filled prescriptions in the car.

Over time, using techniques that included computer data analysis of these prescriptions, investigators discovered that Varian Scott of Miami and his cousin, Hezron Collie of Atlanta, were buying blank doctors’ prescription pads from a source at Emory University’s Winship Cancer Institute and other doctors’ offices in Atlanta and in Florida.

The two then forged prescriptions for cancer and HIV medications and resold the expensive drugs on the so-called “gray market” in Florida, according to a press release by the U.S. Justice Department.

All told, they bilked $1.1 million from state Medicaid.

Scott was sentenced in December to 12 years in federal prison. Collie, who cooperated with investigators, received a sentence of 18 months. They were ordered to jointly pay about $1.2 million to the Georgia Medicaid program.

Pursuit heats up

Several of these stepped-up measures can be traced to four years ago, when the state Department of Community Health created its own office of inspector general, in part to improve efforts to recoup more taxpayer dollars lost to Medicaid fraud and mistakes.

The benefits show.

In fiscal 2009, the state recovered $26 million lost to Medicaid fraud and mistakes. That’s $10 million more than the $16 million recouped in 2007, DCH figures show.

“We’re very aggressive about these reviews,” DCH Inspector General Robert Finlayson told the AJC.

Most of these cases involve medical professionals — doctors, pharmacists, nursing home administrators and others — and the medical claims they file with the state to obtain Medicaid payments.

Certain cases uncovered by the computer analysis turn out to be simple mistakes, such as entering the wrong code for a procedure on a Medicaid form.

Others, though, point to people gaming the system for millions.

Cases may lead to criminal prosecutions, but more often they are settled by having the medical professional pay back the money.

When a case rises to a criminal level, it is handed over to the State Medicaid Fraud Control Unit, a joint operation of the state Attorney General’s Office, Georgia Bureau of Investigation and the State office of Audits and Accounts.

State aids U.S. cases

Georgia’s efforts have been bolstered by two developments.

There has been an increase in national settlements against pharmaceutical companies for paying kickbacks to distributors and for marketing their drugs to treat ailments for which they were not approved.

Last year, for example, drug maker Pfizer agreed to pay $2.3 billion in a national case to settle these allegations. Georgia assisted in that investigation and received about $9 million in state dollars.

In addition, the state Medicaid False Claims Act of 2007 authorized Georgia to collect up to triple the amount of actual losses. The law also provides for penalties of $5,500 to $11,000 for each false claim submitted to the state. Single cases can consist of thousands of false claims.

The law also gives incentives to whistle-blowers, providing them up to 30 percent of whatever money is recovered.

The new law has prodded many medical professionals to settle with the state rather than risk a potentially expensive false-claims action, Finlayson said. The law has pressed the medical providers to audit themselves more carefully and report problems, he said.

David Cook, CEO of the Medical Association of Georgia, said the law sent a “chill” through the medical community.

Some providers actually started under-billing Medicaid just to avoid problems, he said.

The DCH inspector general’s office investigated 2,631 cases in fiscal 2009, which ran from July 2008 to June 2009, and closed 1,006 cases.

Twenty-eight cases were handed over to the fraud control unit for possibly involving criminal activity, but the majority of cases were resolved without prosecution.

Billing scams

The investigation of Athens psychologist Paul Mangum began when a woman responded on a state questionnaire that her daughter had never received Mangum’s services.

One way the state nabs crooked medical professionals is to send out questionnaires to people who were supposed to have received various medical services. Some are sent at random, others as part of cases.

Mangum submitted thousands of fraudulent claims and bilked Medicaid for more than $550,000 for therapy work he did not perform, prosecutors said.

To carry out his fraud, Mangum fabricated patient notes in the files and kept two sets of appointment books, one for legitimate appointments and another for billing purposes, prosecutors said.

In January, Mangum pleaded guilty to defrauding the government for nearly six years and was sentenced to two years in prison, according to the DCH. He was ordered to pay the state $558,086 in restitution.

Computer data analysis also is used to help spot medical professionals who are billing the state at rates that don’t make sense, Finlayson said.

“There are examples of billing that are mathematically impossible,” he said, such as “billing for 24 hours a day, or for 365 days a year.”

Data analysis helped catch Tina Webster-Fabayo, who owned and operated two mental health services companies in Stockbridge.

Her scheme included billing Medicaid for services that were not rendered to patients and double-billing for services provided to adolescents but already paid for through the Georgia Department of Juvenile Justice, according to the state attorney general’s office.

During a two-day period in April 2007, while clinic employees were receiving massages and skydiving on a company retreat, she billed that program $15,000, the release said.

On Aug. 11, 2008, Webster-Fabayo pleaded guilty to two counts of Medicaid fraud and was sentenced to five years in prison. She was ordered to pay $200,000 in restitution.

That kind of outcome means the state is doing a better job of protecting taxpayer money intended for Medicaid, the attorney general said.

“This is money for the least among us,” Baker said, “and we should be protecting them.”