New York Attorney General Eric Schneiderman says his office recovered more than $335 million last year from Medicaid fraud and abuse.

The total, including $146 million from a multi-state settlement with pharmaceutical giant GlaxoSmithKline, is the second highest annual recovery by the Medicaid Fraud Control Unit.

The following is a release sent to YWN NYC from his office:

Attorney General Eric T. Schneiderman today announced that his office recovered over $335 million for New York State in 2012 that had been improperly claimed through fraud or abuse in the Medicaid system. This was the second highest annual recovery total ever by the Attorney General’s Medicaid Fraud Control Unit (MFCU), and the highest recovery in seven years.

“Part of my first major initiative when I took office was to bolster the Medicaid Fraud Control Unit with additional prosecutors, investigators, and auditors, in order to even more aggressively root out fraud and return money illegally stolen from New York taxpayers and their government,” Attorney General Schneiderman said. “That initiative has paid off with record recoveries for taxpayers this year. My office’s Medicaid Fraud team will keep working hard to root out fraud wherever it exists, and protect the integrity of the Medicaid program for those who truly need it.”

MFCU was active in every part of the state in 2012. Major statewide and regional cases included the following:

• In the largest health care fraud settlement in U.S. history, Attorney General Schneiderman reached a$146 million agreement with GlaxoSmithKline as part of a $3 billion multi-state settlement to resolve claims that the pharmaceutical giant engaged in various illegal schemes related to the marketing and pricing of drugs it manufactures, including Paxil, Wellbutrin and Advair;
• Through an investigation code-named “Operation Black Market Meds,” Attorney General Schneiderman’s office shut down a massive scheme to distribute black market prescription HIV drugs through Suffolk County-based MOMS Pharmacy and bill the Medicaid Program for over $155 million;

• In New York City, the Attorney General obtained guilty pleas from four pharmacistsand a pharmacy owner who bilked the state’s Medicaid program of $9.9 million by submitting bills for drugs that they never dispensed to their patients;

• In Western New York, the Attorney General obtained a $1.6 million recovery of excess Medicaid payments on claims for dental services provided by Kaleida Health through the Buffalo Women’s & Children’s Hospital Dental Clinic;
• In Central New York, the Attorney General reached a$3.1 million settlement with Cayuga Medical Center for billing Medicaid and federal programs for patients referred by physicians engaged in a financial relationship with the hospital;
• The Attorney General shut down a major Staten Island drug trafficking operationthat was dealing a supply of illegal narcotics, including thousands of oxycodone pills paid for by Medicaid and other insurers, obtained through false auto insurance claims and doctor shopping. The operation’s ringleader was convicted and sentencedto seven years in state prison.

Attorney General Schneiderman’s Medicaid Fraud Control Unit also shut down schemes to illegally obtain prescription drugs through Medicaid and distribute them on the street for profit. The head of one prescription drug ring in the Bronx and another on Staten Island received prison sentences. In addition, MFCU targeted providers that billed for unnecessary services or unnecessary visits to perform services that could have been rendered in a single visit; providers that referred patients to unlicensed facilities in exchange for kickbacks; unlicensed healthcare workers; and black market drug sellers that diverted prescription medications of unknown origin, re-packaging and re-selling them to pharmacies.

MFCU continued to vigilantly pursue major pharmaceutical manufacturers that engaged in unethical marketing practices. Abbott Laboratories, Boehringer-Ingelheim, Dava Pharmaceuticals, Inc., GlaxoSmithKline, K-V Pharmaceutical Company, McKesson Corporation, and Merck Sharp & Dohme Corp, among others, paid over $250 million to settle cases where they marketed their drugs to physicians for treating conditions that the Food and Drug Administration had not approved, or for marketing and illegal pricing practices. Some of those companies took criminal pleas in federal court for this conduct.

“The Medicaid Fraud Control Unit does an outstanding job, not only protecting taxpayers, but protecting patients from fraudulent practices that endangered their safety,” Attorney General Schneiderman said. “I know this unit will continue to be vigilant in the coming year and send the message that fraud and abuse that endangers patients and rips off taxpayers will not be tolerated in our state.”

MFCU’s Civil Enforcement Division is headed by Amy Held and multi-state matters are coordinated by Counsel Jay Speers.

The Medicaid Fraud Control Unit operates under the supervision of Special Deputy Attorney General Monica Hickey-Martin and Assistant Deputy Attorney General Paul Mahoney, within the Criminal Justice Division led by Executive Deputy Attorney General Kelly Donovan.

(YWN Desk – NYC)