State suspects more cases of Medicaid fraud

State officials have discovered seven cases of potential Medicaid fraud involving state eligibility workers who put themselves or their families on Medicaid rolls when they were not eligible.

Two employees have been fired and the other five are in the process of being fired, Department of Health and Human Services director Robbie Kerr told The State.

The State Law Enforcement Division is investigating. No arrests have been made.

The firings and resulting policy changes come as Medicaid reform legislation sits in the S.C. Senate, having already passed the House.

Medicaid provides health care to almost a fifth of the state’s population — more than 800,000 people. The department spends $550 million on Medicaid each year, and needs an additional $140 million this year.

HHS has nearly finished its own investigation of its 459 eligibility workers around the state. So far, abuse has been discovered in only the seven cases — or 1.5 percent.

The State newspaper first reported in November that the department had discovered two cases. The other five were found as part of the department’s investigation.

Because of the ongoing investigation, agency officials said they could not release the names of the fired employees or discuss how much money the misuse cost the state.

In each of the seven cases, Kerr said, a department employee falsified applications.

“It’s a real concern of ours,” Kerr said. “We obviously don’t condone that by any stretch of the imagination.”

Deidra Singleton, the department’s top lawyer, said in some cases the employee did not list a spouse or other person in their household on their application. The presence of other people in the household can affect eligibility, she said.

There was one case in which an employee did not submit an application but entered her data directly into the computer system.

In response, the agency has instituted a new set of checks and balances for Medicaid eligibility officers. When the department took over responsibility for Medicaid from the Department of Social Services in 2002, there was little accountability, Kerr said.

“We have significant concerns with our policy,” Kerr said. “Is it adequately stated? Is the policy (that is) in force appropriate? We are going to have very clear, distinct policies in place.”

Now, every eligibility case officer’s work is checked by a supervisor. A management-level employee reviews cases as well.

It is not unusual for department employees to apply for Medicaid for themselves, Kerr said. More than 300 HHS employees are legitimately eligible for the program, which provides health care for the poor, elderly and some children.

Kerr said these seven cases should not tarnish the reputations of the majority of his employees.

“We have a few problems here, a few more than we’d like to have,” he said. “For the most part, those workers are very hard-working and are our last line of defense. We’re going to put the tools in place to make sure they have the ability to do it.”

The bill now before the Senate would require face-to-face interviews for all new Medicaid applicants and for those seeking re-certification. It also would privatize parts of the application process.

Advocates for reform said the discovery of the seven cases of potential fraud and the HHS response does not change the need for the legislation.

“This does not lessen the need for Medicaid reform. If anything, it points to the need for it,” said Rep. Bobby Harrell, R-Charleston. “But I’m pleased to see that the agency is doing what they should be doing.”

A major goal of that legislation is to cut down on fraud to save the state Medicaid dollars.

The legislation won’t meet its goal, said Rep. Gilda Cobb-Hunter, D-Orangeburg. Medicaid shortfalls are not due exclusively to fraud and abuse, she said.

“The bill is simply a way to point the finger at employees rather than giving the department the revenue they need to do the job and cover the people who need the service,” she said.

Besides, the fact that the department uncovered the abuse shows the system is working without legislation, said Sue Berkowitz, executive director of the Appleseed Legal Justice Center, which provides low-cost legal representation to low-income individuals.

Reach Gould Sheinin at (803) 771-8658 or asheinin@thestate.com