Media Center

Medicaid Fraud Control Unit Recertified By Office Of Inspector General

MADISON - The Medicaid Fraud Control Unit in the Wisconsin Department of Justice has been recertified by the Department of Health and Human Services' Office of Inspector General, Attorney General J.B. Van Hollen announced today. The recertification covers a one-year-period ending June 30, 2009. Certification is obtained for meeting specific performance criteria, which allows the Unit to maintain its federal funding.


The Wisconsin Medicaid Fraud Control Unit, which was initially created an implemented in 1977, investigates and prosecutes allegations of provider fraud and patient abuse in facilities receiving Medicaid funds. The Unit investigates and prosecutes violations of criminal law affecting the Medicaid program, including laws affecting the health, safety, and welfare of recipients of Medicaid. In 1999, the Unit's authority was expanded to encourage investigators and prosecutions related to abuse and neglect of residents in non-Medicaid board and care facilities.


"The Medicaid Fraud Control Unit protects the elderly from abuse and protects taxpayers from fraud," said Attorney General J.B. Van Hollen. "With Medicaid expenditures expected to increase 8% per year over the next decade, it is my ongoing priority to protect recipients from abuse and taxpayers from fraud."


In federal fiscal year 2007, the Wisconsin MFCU reported recoveries of $4,225,733. Between 2000 and 2006 the MFCU generated $17 million in restitution for the Medicaid program and $1.6 million in fines. The cost of the operation of the unit averaged $1.2 million per year.


"By actively enforcing the law and ferreting out fraud, we recover much more that is stolen from taxpayers than the costs of operating the program," Van Hollen continued. "The program not only helps protect our most vulnerable citizens, it makes fiscal sense. This is why I made expansion of our investigative resources a priority in my administration." At Van Hollen's request, two new Medicaid Fraud investigator positions were authorized in the state's biennial budget passed last October.


The Medicaid Fraud Control Unit has been responsible for several notable criminal prosecutions in the last several months. In June, for example, Karen Mason was convicted of felony theft and neglect of residents likely to cause bodily harm. Mason was the COO and Administrator of the Havenwood Nursing and Rehabilitation Center in Milwaukee and had used resident funds to purchase personal and luxury items for herself. Vendors to the facility had stopped providing services due to lack of payment by the facility directly affecting residents' care. Havenwood was closed down due to the Unit's investigation; Mason was sentenced to four years probation to include 15 months in the House of Corrections and she was ordered to pay $85,132 in restitution.


In another matter, Eileen Lee was sentenced in July for felony neglect of a patient likely to cause great bodily harm. Lee had worked as an RN at Mt. Carmel Medical and Rehabilitation Center in Milwaukee and was responsible for monitoring patient wounds or bedsores. A patient entered the facility with three minor wounds and was treated by Lee for about a month. Lee then stopped treating the patient and never told anyone else to monitor or treat his wounds. Two months after the patient had been admitted he died from bronchopneumonia stemming from bacteria that entered his body through the wounds. At the time of his death, the patient had 11 untreated wounds. Lee was placed on three years probation with conditions of four months in jail and 100 hours of community service.


In another recent case, employees of Compassionate Mothers, Inc. were convicted of fraud. Compassionate Mothers provided prenatal care and childcare coordination for pregnant women and mothers with newborns who were eligible for the Medicaid program. Owner Nicole Stewart had been billing the Medicaid program for services that had not been provided and when told of an upcoming audit by DHFS, Stewart paid employees to fabricate documents in an attempt to cover up the fraudulent billings. Each of the four employees was convicted of misdemeanor fraudulent filing of insurance and employee benefit program claims and were placed on one year probation. As a condition of probation, each must pay $1,500 in restitution.


For her part, Nicole Stewart was convicted of three counts of felony medical assistance fraud and was sentenced to 14 years imprisonment, with 5 years initial confinement. Stewart must also serve three years probation and pay $320,603 in restitution. Van Hollen noted that three members of the Unit, Assistant Attorney General Frank Remington and Medicaid Fraud Investigators Al Gutierrez and Rich Basiliere, received the Inspector General's Integrity Award from the federal Department of Health & Human Services for their exemplary work on the case.


In addition to these criminal cases, in the past six months, the Unit has been responsible for monitoring the recovery of over $4 million in civil settlements related to improper billing and rebates by pharmaceutical companies Merck and Walgreens. The Unit has a related law enforcement action against 37 other pharmaceutical companies that alleges fraudulent price reporting resulting in the overpayment by the Medicaid program for approximately 3400 drugs. The first of several trials in that case is scheduled for February 2009.