Medicaid Fraud Busts Net More Than $20 Million In 07, Says North Carolina AG Cooper

NC recovers $20 million, wins 16 criminal convictions in 2007 Medicaid fraud cases

December 17, 2007 -- Raleigh: North Carolina’s Medicaid fraud investigators recovered more than $20 million and investigated dozens of cases of fraud and patient abuse in 2007, North Carolina Attorney General Roy Cooper said today.

“Medicaid cheaters drive up health costs and keep needy patients from getting care,” said Cooper. “We’ll continue our crackdown on fraud and abuse to protect patients and save taxpayers’ money."

These latest successes build upon several years of record-setting Medicaid fraud busts, which resulted in more than $250 million recovered over the last 6 years.

The Medicaid fraud unit investigated and closed 56 cases of fraud and patient abuse between October 1, 2006 and September 30, 2007. Investigations lead to 16 criminal convictions and ten civil settlements that recovered more than $20 million from Medicaid abusers. Of that total, $3.7 million in Medicaid penalties went to local public schools, with the bulk of the remainder going to state and federal Medicaid efforts in North Carolina.

Medicaid is a joint federal-state program that provides health insurance for the poor Cooper’s Medicaid Investigations Unit aggressively investigates fraud and abuse of Medicaid benefits by nurses, doctors, hospitals, pharmacies and other health care providers, and also investigates patient abuse and neglect in nursing homes and other Medicaid-funded facilities.

For example, in one of the first cases of the 2008 fiscal year, North Carolina won $687,000 as part of a $9.8 million national settlement with Medicis Pharmaceutical Corporation of Scottsdale, AZ. The agreement resolves allegations that Medicis urged doctors to use its drug Loprox as a treatment for diaper rash even though it had not been approved by the Food and Drug Administration.

In one of the final cases of the federal fiscal year that ended September 30, 2007, Purdue Pharma paid more than $6.4 million to the North Carolina Medicaid Program to resolve charges that Purdue falsely marketed its popular painkiller OxyContin as less addictive and less likely to lead to abuse and withdrawal than similar painkillers.

In another notable case from 2007, North Carolina won a $8.8 million as part of a multistate settlement with Schering-Plough to resolve allegations that the drug maker’s actions caused Medicaid programs to pay too much for a number of its medications, including allergy drug Claritin Redi-Tabs, potassium supplement K-Dur, brain cancer drug Temodar, and certain hepatitis and bladder cancer drugs.

To continue these efforts, Cooper worked with legislators to win funding for five new positions for the Medicaid Investigations Unit including three new investigators and one new attorney. The Unit is also in the process of opening a branch office in Charlotte to better serve western North Carolina and Mecklenburg County, which has the highest total dollars in Medicaid provider payments of any county in North Carolina.

Source: North Carolina Attorney General

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