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Federal data showed that the state ranked 20th nationally in terms of total recoveries.
Wednesday, August 28, 2013
Attorney General Ken Cuccinelli’s push to crack down on Medicaid fraud has won bigger recoveries than the state’s earlier efforts, but funds actually flowing into the state’s coffers have lagged by millions of dollars.
And the latest U.S. Department of Health and Human Service’s annual report on state Medicaid fraud units ranked Virginia 44th among the states for recoveries per employee.
While Cuccinelli says his push won nearly $1.6 billion in funds for the taxpayer-funded health insurance program, funds returned to the state actually amounted to just under $54 million as of the end of 2012, according to his office’s report to the House of Delegates Appropriations Committee earlier this year.
The unit’s own reported recoveries declined from $541 million in fiscal year 2008, the last full fiscal year Gov. Bob McDonnell served as attorney general, to $40.3 million in fiscal year 2012, the year the state won its 44th-place ranking.
At the same time funds paid into the state’s general fund declined by nearly $7.5 million, or 51 percent, over that period, to reach $6.95 million in fiscal year 2012. In addition, fines from its cases contributed $1.9 million to the unit’s operation, an increase of $600,000.
Over that same period, the unit’s staffing rose 55 percent. Convictions ranged between eight and 12 over those years, but the number of cases it dropped rose by 64 percent to a total of 64 in fiscal year 2012.
Since then, a joint investigation by Virginia and the federal government of unlawful use of an anti-seizure drug on dementia patients boosted recoveries recorded for fiscal year 2013 to more than $1 billion. As of Dec. 31, payments into the state general fund totaled $16.3 million.
Fiscal year 2013 saw a 20-person expansion of the fraud unit, which won 14 convictions that year and settled six civil cases, but decided to drop 85 cases.
“Mr. Cuccinelli expanded the unit because adding employees is netting millions more dollars in recoveries for Virginia — we recover more stolen taxpayer dollars than we spend in additional salaries,” said spokesman Brian Gottstein.
He said the smaller sums going into the state general fund are restitution for losses Virginia incurred from Medicaid, which is equally funded by the state and federal governments. It excludes moneys the federal government gets, as well as federal and state fines, asset forfeiture, and recoveries Virginia’s investigations won for other states.
“Additionally, there is a difference between what the courts order and what is actually collected because few criminals pay back their fines and restitution in full immediately. They often end up paying monthly restitution payments for years or for the rest of their lives,” he said.
Federal data from fiscal year 2012 showed Virginia had the fifth-largest fraud unit among the states, and ranked 44th in terms of recoveries recorded per staff member. It ranked 40th in 2011 and 46th in 2010, the earliest year for which the office publishes the data.
Virginia ranks 34th among the states in terms of recoveries as a share of Medicaid spending in 2012, which amount to four-tenths of a penny of every dollar spent. The national average is just under seven-tenths of a penny per Medicaid dollar spent.
“You can’t fairly compare single years,” Gottstein said. “There are certainly individual years where other [Medicaid fraud units] may recover more than we do in a single year, but to compare states, you have to look at five-year rolling averages, because the big cases take three or four years to investigate and prosecute.”
He said after considering the four largest states in the country — California, Texas, New York and Florida — “no one else has recovered as much as Virginia has over the last three years, five years, or 10 years, period.”
According the U.S. Health and Human Services Department data, Virginia ranked 20th in terms of total recoveries in 2012, 16th in 2011 and 33rd in 2010. The recoveries the federal agency reports are generally lower than those the Office of the Attorney General claims.
Gottstein said the fraud unit’s recoveries in every year of Cuccinelli’s term exceeded every earlier total except for the sums reported after a 2007 settlement over marketing of the pain medication Oxycontin. That settlement resulted in more than $600 million in recoveries and fines.
“Our collections are not in decline. Instead, we are breaking records,” he said.
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