New York AG Announces Medicaid Fraud Unit Criminal Convictions

ATTORNEY GENERAL CUOMO ANNOUNCES MEDICAID FRAUD UNIT SETS RECORD WITH 148 CRIMINAL CONVICTIONS IN 2009
Cuomo’s Medicaid Fraud Control Unit Also Recovers Over $283 Million in 2009
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Cuomo Recovers Over $660 Million in Taxpayer Funds in First Three Years as Attorney General

NEW YORK, NY (April 12, 2010) - Attorney General Andrew M. Cuomo today announced that his Medicaid Fraud Control Unit (MFCU) obtained a record 148 criminal convictions across New York and recovered over $283 million in 2009. The information is detailed in his office’s Annual Report submitted today to the Secretary of the U.S. Department of Health and Human Services. The entire report can be found at www.ag.ny.gov/media_center/2010/apr/mfcu_2009.pdf.

In Cuomo’s first three years as Attorney General, MFCU has recovered over $660 million in taxpayer funds. As the largest unit within Attorney General Cuomo’s division of criminal justice, MFCU investigates and prosecutes Medicaid fraud as well as patient abuse and neglect, and served as the federal model for the creation of the national Medicaid fraud control unit program.

“Our Medicaid Fraud Control Unit continued to be a national leader in 2009, garnering a record number of criminal convictions and recovering hundreds of millions of taxpayer dollars,” said Attorney General Cuomo. “MFCU’s mission is clear - protect vulnerable patients from neglect and abuse while ensuring taxpayer dollars are safe and secure. I am confident that in 2010 MFCU will continue building on this nationally recognized record of excellence.”

The 2009 Annual Report details MFCU’s major criminal and civil cases for the past year and the $283 million in recoveries. MFCU also obtained a record 148 convictions. In addition, MFCU was honored with two awards last year from the Health and Human Services Office of the Inspector General (OIG). For the first time, MFCU was named Medicaid Fraud Control Unit of the Year for its work in 2008. In addition, the Inspector General also awarded members of MFCU with the 2009 Cooperative Achievement Award in recognition of their outstanding work on the civil settlement with Eli Lilly, which resolved allegations that the company illegally promoted Zyprexa for off-label uses. New York recovered $91 million in that settlement.

The report highlights MFCU’s activities and major cases during 2009 and includes data regarding the 148 convictions and $283 million in recoveries. Some of the cases, settlements, convictions, and achievements described in the report include:

* Operation Home Alone: The Attorney General’s Operation Home Alone investigation of corruption in the home care industry during 2009 resulted in civil settlements with licensed home health care services and certified home health care agencies totaling $51.7 million and 25 criminal convictions. As part of this ongoing investigation, MFCU indicted two home health aide training schools and their owners for selling phony home health aide certificates - resulting in millions of dollars of unlawful Medicaid billings. In addition, a home care agency and its owner were convicted of stealing more than $1 million for nursing services provided by unlicensed nurses in the State of New York. To date, 125 defendants have been charged and approximately 100 have been convicted through Operation Home Alone.
* Pharmaceutical Settlements: MFCU participated in settlements with several pharmaceutical companies, including Eli Lilly, Pfizer, Mylan Pharmaceuticals, Astra Zeneca, and Aventis for off-label marketing, kickbacks, misreporting prices, and other fraud.
* Drug Diversion and Prescription Fraud: In 2009, MFCU secured a 3 year prison sentence for a doctor who was convicted of selling prescriptions, which were then filled, and sold on the street - all paid for with Medicaid money. In addition, a pharmacist was sentenced to one year in jail for billing Medicaid over $1 million dollars for prescription drugs that were never dispensed.
* Program Fraud: An upstate hospital debt collecting company and its owner were indicted for scamming Medicaid for over $700,000 by bribing a local Department of Social Services employee to assist in approving Medicaid coverage for certain hospital patients. The DSS employee pleaded guilty and is cooperating in the ongoing prosecution. MFCU filed a civil suit against the debt collecting company seeking over $2 million dollars in civil damages and penalties under the False Claims Act and Social Services Law.
* Nursing Homes: MFCU filed criminal charges and a civil lawsuit seeking damages of $5 million against a nursing home and its owner for paying kickbacks to a hospital employee for patient referrals ultimately billed to Medicaid. By law, patients are entitled to a choice of 5 nursing homes, but the hospital employee referred the patients to nursing homes he knew would refuse the referral, leaving the patients no choice but to go to the corrupt home. As a result of this scheme, patients were denied a real choice of where they or their loved ones would be admitted.
* Dentists: A judge issued a $15.6 million judgment against two dentists who operated a mobile dentist business and who knowingly employed an individual with a prior felony conviction. The convicted felon had also been barred from participating in the Medicaid program and paid kickbacks for Medicaid patient referrals. The felon made illegal payments to have “runners” and “hustlers” refer Medicaid patients to the buses for treatments billed to Medicaid.
* Hidden Camera Investigations: Cuomo’s MFCU leads the nation in using hidden surveillance to investigate neglect and abuse in nursing homes. MFCU arrested 22 current and former health care workers at nursing homes in Troy and Buffalo just last month. To date, 30 nursing home employees have been convicted based on undercover video.

Under the federal legislation that created the Medicaid fraud control unit program in 1978, the federal government funds 75 percent of Medicaid fraud control units’ budgets and states fund 25 percent. The U.S. Department of Health and Human Services administers the federal grant funds for the nation’s 50 Medicaid fraud control units. The New York MFCU’s own monetary recoveries fund New York State’s share of the unit’s budget with the remainder of the money returned to the New York State Department of Health’s Medicaid budget.