A.G. Schneiderman Announces Over $335 Million In Medicaid Fraud Recoveries For Taxpayers In 2012 -- Western New York

Top Cases In Western New York Include Resolutions Of Patient Safety Concerns And False Medicaid Claims

Banner Year Follows Schneiderman Initiative To Bolster Fraud Fighting Efforts On Behalf Of Taxpayers

Schneiderman: We Will Continue To Root Out Fraud And Abuse Wherever They Exist To Protect Taxpayers

 

BUFFALO – Attorney General Eric T. Schneiderman today announced that his office recovered over $335 million in 2012 that had been improperly claimed through fraud or abuse in the Medicaid system. This was the second highest annual recovery total ever by the Attorney General’s Medicaid Fraud Control Unit (MFCU), and the highest recovery in seven years.

“Part of my first major initiativewhen I took office was to bolster the Medicaid Fraud Control Unit with additional prosecutors, investigators, and auditors, in order to even more aggressively root out fraud and return money illegally stolen from taxpayers and their government,” Attorney General Schneiderman said. “That initiative has paid off with record recoveries for taxpayers this year. My office’s Medicaid Fraud team will keep working hard to root out fraud wherever it exists, and protect the integrity of the Medicaid program for Western New Yorkers who truly need it.”

In addition to whistleblower and civil enforcement actions, recoveries and other actions to protect patient safety in Western New York included:

  • Recovering $180,000 in a civil settlement with Buffalo Transportation, Inc. after the company improperly billed Medicaid for multiple-passenger transports using the higher single-passenger rate;
  • Obtaining an indictment for Grand Larceny in the Second Degree, and other charges, against a pharmacist from Horseheads for stealing over $100,000 from the Medicaid program. The pharmacist submitted false Medicaid billings for pharmaceuticals, treatments and supplies that were never actually dispensed;
  • Arresting a doctor on charges of a Criminal Sexual Act in the Third Degree in Erie County, after he was found to have had sexual relations with a patient during office visits;
  • Obtaining a jail sentence for a certified nurse aide for breaking the leg, and endangering the welfare of an 87 year old resident with Alzheimer’s disease at Beechwood Nursing Home in Amherst.

MFCU also closed down schemes to illegally obtain prescription drugs through Medicaid and distribute them on the street for profit, and obtained prison sentences for the heads of two separate drug rings. In addition, MFCU targeted providers that billed for unnecessary services or unnecessary visits to perform services that could have been rendered in a single visit; providers that referred patients to unlicensed facilities in exchange for kickbacks; unlicensed healthcare workers; and black market drug sellers that diverted prescription medications of unknown origin, re-packaging and re-selling them to pharmacies.

And in 2012, MFCU continued to vigilantly pursue major pharmaceutical manufacturers that engaged in unethical marketing practices. Abbott Laboratories, Boehringer-Ingelheim, Dava Pharmaceuticals, Inc., GlaxoSmithKline, K-V Pharmaceutical Company, McKesson Corporation, and Merck Sharp & Dohme Corp, among others, paid over $250 million to settle cases where they marketed their drugs to physicians for treating conditions that the Food and Drug Administration had not approved, or for marketing and illegal pricing practices. Some of those companies took criminal pleas in federal court for this conduct.

“The Medicaid Fraud Control Unit does an outstanding job, not only protecting taxpayers, but protecting patients from fraudulent practices that endangered their safety,” Attorney General Schneiderman said. “I know this unit will continue to be vigilant in the coming year and send the message that fraud and abuse that endangers patients and rips off taxpayers will not be tolerated in our state.”

Special Assistant Attorney General Gary Baldauf supervises the MFCU Buffalo office. Special Assistant Attorney General Catherine Wagner supervises the MFCU Rochester office.

The Medicaid Fraud Control Unit operates under the supervision of Special Deputy Attorney General Monica Hickey-Martin within the Criminal Justice Division led by Executive Deputy Attorney General Kelly Donovan.

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