Audit

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Friday, January 31, 2003

OAKLAND, Maine - Bob Nutting admits that his company, True’s Pharmacy, made some billing mistakes over the past five years. But to the tune of $3.6 million, as the state claims? No way.

“We’re looking at something in the $200,000 to $400,000 range, perhaps,” said Nutting, 55, who is also a state representative. “We’ve offered them close to that, and they’ve laughed at us.”

Nutting’s problems started 18 months ago when the state Department of Human Services (Medicaid) performed a random audit on True’s Pharmacy, the largest provider of incontinence supplies in the state. Following the review, auditors said True’s owed Medicaid a whopping $3.6 million - $1.2 million from overbilling the program; the rest due to incomplete records that, if available, would verify his customers received what they ordered.

In mid-December, a state hearing officer listened to Nutting and Medicaid officials present their arguments. The officer’s expected to issue a ruling in March.

In Maine, Nutting’s case has received extensive media coverage, much of it sympathetic to his side of the story: that he’s an honest man who runs a legitimate 32-year-old business; that True’s made some mistakes and is willing to repay what Nutting believes is reasonable; that the state bureaucracy and its ambiguous regulations contributed to his problems.

“An honest man made a couple of honest mistakes,” wrote Portland Press Herald columnist Bill Nemitz in a December column. “In a business-friendly state, that would be punishable by a fine and reasonable restitution. Not a $3.6 million death sentence.”

That kind of media coverage hasn’t swayed Medicaid officials . In fact, Nutting surmises, that to avoid charges of favoritism, officials may be taking a tougher stand with him than they would with an ordinary Joe.

Not so, said Department of Human Service (DHS) spokesman Newell Auger. DHS doesn’t take issue with Nutting’s character and has “the greatest amount of respect for Rep. Nutting and the work he does in the legislature,” Auger said.

But, he added, rules are rules.

“We’re not trying to be heavy handed,” Auger said. “We’re not requiring anything here that any other insurance company or other state Medicaid program doesn’t require. We need the receipts that document that those products and services were delivered. It’s not enough to have someone say they provided those services.”

If fact, if Nutting can reconstruct the missing and incomplete delivery documents, DHS might be willing to concede that True’s delivered the supplies in question. But the $1.2 million Nutting allegedly overbilled Medicaid for incontinence supplies is “non-negotiable,” Newell said.

“When we are talking about an overpayment, there is no wiggle room,” Newell said. “We need that money back.”

DHS refutes Nutting’s argument that he billed correctly, and that 70% of all Maine pharmacists bill the same way. Unfortunately, the chances of reconstructing the necessary delivery documents are slim to none, said Nutting. Those that weren’t thrown away are too old to revisit. Nutting has affidavits from customers (mostly nursing homes and other institutional settings) attesting that True’s did indeed deliver the supplies, but that’s not good enough for the state, which wants to know specifically which patients received what supplies.

Nutting claims that no place in the Medicaid regulations does it say a provider must maintain delivery records. And even if he could reconstruct them, there’s no way he could repay the alleged $1.2 million overbilling. “I’m 55 and at the rate Medicaid reimburses us I won’t live long enough to make $1.2 million.”

On Dec. 25, Nutting stopped doing business with Medicaid and the following week laid off eight of his 23 employees. It could get worse.

“If we don’t get relief from the hearing officer, Superior Court or (state) Supreme Court, if the final verdict is that we have to pay up, we’ll lock the door and go home,” Nutting said. HME

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