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Medicaid Fraud committee hears expert testimony

February 22, 2006
By: John Amick
State Capital Bureau

JEFFERSON CITY - Implicating Medicaid fraud in Missouri would be easier for whistleblowers under a proposal before Missouri's legislature.

The Missouri Special Committee to Investigate Medicaid Fraud heard testimony from Medicaid experts in an ongoing effort to root out waste, fraud, and abuse in the system.

"Compensating whistleblowers is the needed financial incentive to come forward, even though their job may be at stake," said Patrick O'Connell, Texas assistant Attorney General and chief of the Civil Medicaid Fraud Unit.

O'Connell said Texas currently pays whistleblowers a minimum of 10 percent of settlements as a result of lawsuits brought against dishonest suppliers.

The federal compensation rate is 15 to 25 percent, depending on the magnitude of a particular case.

These cases are known as Qui Tam from a provision of the Federal False Claims Act that allows a citizen to file a suit charging fraud by suppliers who receive or use government funds. That citizen may then share in any money recovered in the suit.

States that enact language from the Federal False Claims Act may retain 10 percent of false claims income, but Sen. Chris Koster, R-Harrisonville, said Missouri's current law is not strong enough for the language, therefore leaving Missouri unable to compensate whistleblowers.

"No whistle provisions is a problem in Missouri," said, Rich Miller, a Kansas City attorney who specializes in federal false claims.

Miller said the federal government has recoverd billions of dollars in Qui Tam cases.

Gary Sherman, Missouri's Social Services director, stressed the need for deeper examination of the system.

"We need to do a better job of checking assets," Sherman said. "We must cut off loopholes and tighten certain areas to maximize resources for those in need.

"We've left our keys in the Medicaid lockbox for too long," he said.

Sherman added that web-based pharmaceutical fraud, doctor hopping, and illegal sales of prescription drugs must be reduced in order to improve the system.

Sherman said businesses that Medicaid may have been lenient with in the past, such as daycare centers, may be the subject of audits.

Other potential remedies discussed by the committee include creating an inspector general position and imposing criminal sanctions on providers who interfere with fraud investigations.

The committee plans to form a consensus regarding suggestions to help fix the state's Medicaid fraud problems before the March 1st bill filing deadline.