Medicaid fraud

An unhealthy prescription


By Juliana Morehead, J.D., Associate Member

Fraud examiners are aided by numerous laws and regulations plus many detection methods when there are suspicions that Medicaid fraud is afoot. 

In June of 2002, California Deputy Attorney General Hardy Gold, on behalf of the state's Attorney General Bill Lockyer, filed a 114-page complaint against the largest-ever Medicaid/ Medicare crime ring. By 2004, 16 individual defendants and 13 corporations were successfully prosecuted with several serious sentences imposed including the largest sentence anywhere for Medicaid fraud - 18 years and 8 months.

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In April of 2003, Bayer Corporation pled guilty for inflating prescription drug prices for Medicaid patients. Evidently, the pharmaceutical giant concealed discounts resulting from selling re-labeled drugs at substantial discounts and dodged Medicaid by failing to provide millions of dollars in rebates.(1) Bayer Corporation paid more than $257 million in restitution to Medicaid, making it the largest fraud-related payment to Medicaid in history.(2)
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In March of 2005, in a 288-count indictment, a U.S. District Court grand jury in Georgia indicted eight individuals and two corporate defendants with conspiracy, money laundering, wire and mail fraud, and transporting stolen goods. The charges arise from a $45 million Medicaid fraud scheme involving BioMed Plus, Inc., its owners, and several workers. The U.S. Attorney's office claims that the defendants were involved in the unlawful purchase and sale of prescription drugs - primarily blood derivatives used in the treatment of cancer, AIDS, hemophilia, and other ailments.(3) As of publication, the case hasn't been set for trial.


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