Medicaid miasma

Monday, February 28, 2005

WASHINGTON - Don’t be surprised if state law enforcement agencies kick their healthcare fraud units into high gear as a way to help control Medicaid’s ballooning expenditures, say industry watchers.

“I think it is something you are going to see a lot of,” said healthcare attorney Asela Cuervo. “It is a very hot issue because Medicaid programs are all in distress.”

“It’s a growing phenomenon,” added Jeff Baird, a healthcare attorney with Brown & Fortunato in Amarillo, Texas. “I’m seeing more aggressive action by state Medicaid programs.”

In fact, over the past several months, Baird said, he has handled more Medicaid fraud cases than Medicare fraud cases.

In terms of policing healthcare fraud, the states are several years behind federal prosecutors, but that doesn’t mean they haven’t been watching. In fact, success on the federal level has probably encouraged the states to act, Baird said.

Often, when a person commits Medicaid fraud, he’s also broken some kind of federal law. When that happens, federal prosecutors generally take the lead and the states watch from the sidelines. Recently, however, Baird has handled case where the feds sit on the sidelines.

“They are listening and watching,” he said. “The federal mindset is that you can only squeeze so much water from a turnip. When the state gets through, there is probably nothing left over.”

Nevertheless, even if states want to be more aggressive in policing healthcare fraud, unlike federal investigators, they may not have the resources to do so. In the past, that has forced states to pick and choose what cases they pursue and may continue to do so, say industry sources.

“We haven’t seen a lot of effort at the state level because while they have the right to go after somebody, it doesn’t mean they are going to commit those resources unless they think it is important to do so - either because of the dollars involved or because of the lessons to be learned or because they are looking at them for something anyway and are doing some piling on,” said attorney Neil Caesar, president of the Health Law Center in Greenville, S.C.