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Crime

NJ Man Gets $15.4 Million for Uncovering Largest Medicaid Fraud In History

Sep. 13, 2011 3:20pm Becket Adams

A New Jersey man is being awarded $15.4 million for his part in uncovering the largest Medicaid fraud in history.

Richard West was shocked when he went for some dental work and was told his Medicaid benefits had maxed out.

Pulling up his Medicaid record, he totaled the care he’d received, the bills submitted by his provider–and found the problem.

According to The Star-Ledger, West, 63, found the company arranging his nursing care, Maxim Healthcare, was over-billing the government for hundreds of hours of service from people he’d never seen.

After being given the runaround, and being routed from one government agency to the next, the Vietnam veteran decided to enlist the aid of his own lawyer. What they found was staggering.

During their preliminary investigation, West and his lawyer “unraveled a fraud stretched across 40-states and resulted in a $150 million settlement–the largest settlement for healthcare fraud in history.”

The resulting federal probe showed that submitting false bills to federal agencies “was a common practice at Maxim from 2003 through 2009. During that time period, Maxim received more than $2 billion in reimbursements from government health care programs in 43 states based on billings submitted by Maxim,” according to a recent Gazette.net article.

For example, according to nj.com, one of West’s nurses was told that she would be paid $27 an hour. The article continues:

When she received her paycheck, it showed her hourly rate was only $21 an hour. According to the lawsuit, the manager of the office showed her payroll stubs indicating that she was being paid for administering to a patient she had never seen.

“What’s this?” she asked.

“If you want to make the money, this is how we do it,” he responded.

“Fraudulent billing for services not rendered uses patients as pawns in a game of corporate greed that puts cash over care and wastes precious taxpayer dollars,” said Tony West, assistant attorney general of the Justice Department’s Civil Division in a Gazette.net report.

“At a time when we’re all looking for ways to reduce public expenditures, settlements like this one recapture taxpayer dollars lost to fraud and abuse, and help ensure that funds are available for the vital health care programs and services that people depend on day in and day out,” he said.

Authorities charged the home healthcare provider with conspiracy to commit health care fraud and operating offices that were not properly licensed.

The lawsuit also forced Maxim to return $121.5 million in state and federal claims; $8.4 million to the VA, and pay a $20 million fine.

As a reward for his part in uncovering the Medicaid fraud, West will receive $15.4 million. “He told the Ledger it wasn’t tough figuring out the scam,” reports Business Insider.

“The hard part,” he said, “was turning them in.”

Also, according to the report, nine people have pleaded guilty to felony charges, but no top executives have been charged.

What conditions, or gross lack of oversight, could enable one company to scam so much?

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Comments (100)

Truthmonster
Posted on September 13, 2011 at 4:58pm
NO TOP EXECUTIVES HAVE BEEN CHARGED!!! Welcome to Obama’s Omerika. They must be liberals.

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- AOL_REFUGEE
  Posted on September 13, 2011 at 6:38pm
  Since when does anyone get that kind of reward for something like this, and where the h3ll is it coming from?
  
  Report this comment
- turkey13
  Posted on September 13, 2011 at 6:43pm
  Does this mean if Medicare employees call Mrs. Smith and ask her about the new charge that just came in and Mrs.Smith denies she had the service and Medicare worker reports violation they get a reward? WoW – What a novel idea.
  
  Report this comment
- Sheepdog911
  Posted on September 13, 2011 at 6:44pm
  Just think, under ObamaCare, this kind of think won’t be acted upon, it will be the norm.
  
  Report this comment
- RN MOM
  Posted on September 13, 2011 at 6:51pm
  There is a law on the books that if you suspect fraud you can contact the Office of the Medicaid Inspector General’s office in your state, Or Inspector General’s office, and be entitled to up to 1/3 of the government’s recoups in Medicaid or Medicare fraud. Fraudulently billing insurance companies has been going on since the insurance industry began- you can’t blame Obama for this. White collar crime rarely gets jail time- you can thank the criminals in our government for that. I remember it once being said that ‘it’s better to steal using a pen rather than a gun- you get more money and no jail when caught (plus the cops don’t pursue you with their guns).’
  
  Report this comment
- Guitanguran
  Posted on September 13, 2011 at 7:08pm
  Not just a Obamanomic disease. Our representatives need a vaccination before they take office.
  
  Report this comment
- LOOKINGFROMTHERIGHT
  Posted on September 13, 2011 at 7:13pm
  tHIS IS WHY WE MUST HAVE OBUMRECARE SO WE CAN ELIMINATE WASTE, FRAUD AND ABUSE.
  
  Report this comment
- SpankySpankerton
  Posted on September 13, 2011 at 7:15pm
  It would seem that Mr. Bennett is an equal opportunity slimeball.
  
  http://www.campaignmoney.com/political/contributions/w-bennett.asp?cycle=08
  
  He contributes to EVERYBODY.
  
  Report this comment
- RN MOM
  Posted on September 13, 2011 at 7:16pm
  The anti-fraud laws have been in effect well before Obama came to power.
  
  Report this comment
- holy ghostbuster
  Posted on September 13, 2011 at 8:47pm
  It comes from the money the feds recover and is part of the federal whistleblower program.
  
  Report this comment
- IntransigentMind
  Posted on September 13, 2011 at 10:01pm
  Nah, they just contributed to his campaign:
  http://markamerica.com/2011/09/12/obamas-giant-green-crony-capitalism-machine/
  
  Report this comment
- pumpalope
  Posted on September 14, 2011 at 12:09am
  As much as I would love to lay this on Obama’s doorstep, this has been going on for decades. It’s disingenuous to blame one administration over another. Greed and deceit are not the sole property of any political persuasion. When it is found out it should be dealt with with extreme predudice. Lock the bastards up and throw away the key!
  
  Report this comment
- PRAY4OURUSA
  Posted on September 14, 2011 at 12:45pm
  I was wrongfully billed for a catscan and xrays by a local hospital that I never had. I tried reporting this to medicare and no one would listen. They told ME to work it out with the hospital. I contacted the hospital and got a run around. I finally gave up. Multiply ME by millions of patients and what do you get!
  
  Report this comment
LarryofArabia
Posted on September 13, 2011 at 4:38pm
Could this be the Obama stash that everyone is talking about? Naturally…
Fraud is everywhere. We need just open our eyes.

Thanks Barry.

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- riverdog1
  Posted on September 13, 2011 at 5:31pm
  yeah, blame obama for a private sector company ripping off the goverment. oh and it occured on bushs watch and found out on “barrys”. nice try.
  
  Report this comment
Agnes
Posted on September 13, 2011 at 4:33pm
I wish someone in the totally corrupted/fraud state of Illinois would find a similar situation.

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- LaidBackTaps
  Posted on September 13, 2011 at 5:07pm
  Agreed.
  
  Been living in this corrupt state long enough to know its going to be a while before it changes though
  
  Report this comment
yiska8
Posted on September 13, 2011 at 4:19pm
Tip of the iceburg. The government is milked,hence the taxpayer is milked dry. This is a major reason why the healthcare system is broken. Abuse and waste. Happens everyday.

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Salamander
Posted on September 13, 2011 at 4:16pm
Anybody wonder why single payer is so dangerous? Easier to defraud, harder to catch, temptation in the megabucks! With a more diversified more distributed system, it’s more expensive to audit, and perhaps easier to scam, but the rewards of such scamming are so small as to not make it worthwhile. If the doctor and the patient were involved in the transaction, as it was in this case, the fraud is more likely to be exposed. Imagine if the Maxim Healthcare fraud were sufficiently sophisticated to limit the theft to, say, 3% of any patient’s total billings–it would likely NEVER have been caught! It would have been too diffuse to notice, and if noticed, too diffuse to muster the energy to file a complaint and see it through! In this case, the patient actually had to engage a lawyer to pursue it–imagine if the most the lawyer could have made was $100–it wouldn’t have been worth his time to even take a second look–after all, he has to feed his family too!

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- PATTY HENRY
  Posted on September 13, 2011 at 4:23pm
  GO GET THEM!!! Don’t you just love those people who say..this is just a small amount. DUDES!!! add it all up!!!… pennies = nickles = dollars = millions of dollars!!!!
  
  Report this comment
- Mike N
  Posted on September 13, 2011 at 4:39pm
  Single payer is far more vulnerable for another more important reason.
  
  Private for-profit insurers watch the bottom line much more closely than does our government. Unlike our politicians, who play with our money like it’s sand on the beach, private corporations aren’t going to just sit around and let someone try to bleed them dry.
  
  Report this comment
Shrugged
Posted on September 13, 2011 at 3:59pm
Yet another reason not to trust the government with our healthcare. Corruption always seems to find a home there.

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- Rowgue
  Posted on September 13, 2011 at 4:07pm
  This wasn’t the government, it was a private healthcare company defrauding the government. Not that I approve of government having anything to do with healthcare whatsoever, but if you’re going to make a point try to use stories that actually support your premise next time.
  
  Report this comment
- jzs
  Posted on September 13, 2011 at 4:11pm
  I think you’re confused. The government didn’t commit the fraud, a company called Maxim did.
  
  I still don’t think this beats Rick Scott’s record though (he’s the governor of Florida, at least for now). When he was CEO of Columbia/HCA (a group of hospitals), that company was charged with defrauding the US government and ulitmately the corporation had to pay 2 billion dollars to settle (http://en.wikipedia.org/wiki/Rick_Scott#The_Health_Network)
  
  Of course, at the time Floridians didn’t think that disqualified him for the office of govenor, but I think now they are changing their minds.
  
  Report this comment
- Blackhawk1
  Posted on September 13, 2011 at 4:58pm
  JZS
  
  I don’t think Rick Scott’s record even comes close to Michelle Obama’s at the University of Chicago Medical Center who was paid $317,000-a-year as a vice president of the prestigious hospital and helped create the program Urban Health Initiative that steers patients who don’t have private insurance — primarily poor, black people — to other health care facilities. This was also known as dumping poor patients on its neighboring institutions. As a nonprofit, the University of Chicago Medical Center receives annual tax breaks worth nearly five times as much as it spends on charity care. I am surprised no one has yet sued Moochelle or Valerie Jarret who was another conspirator in the program.
  
  Report this comment
- Anonymous T. Irrelevant
  Posted on September 13, 2011 at 5:03pm
  What SHRUGGED is saying is that the government isn’t paying attention, or doesn’t care, how the dollars are being spent.
  
  Report this comment
- jzs
  Posted on September 13, 2011 at 5:33pm
  Anonymous, that’s a unique angle, suggesting that when hospital deliberately commits fraud against the US government, it’s the government’s fault. I suppose that by extension the hospital that committed the fraud is blameless.
  
  Yeah, I follow you. Are you an attorney or something?
  
  Report this comment
- Simple Skeptic
  Posted on September 13, 2011 at 6:20pm
  Shrugged and Anonymous aren’t suggesting that Maxim is blameless, but rather that the US Govt., in this case Medicare / Medicaid, doesn’t watch closely to what’s happening because it isn’t their money…it’s the taxpayers’ money. If Medicaid / Medicare watched the bottom line closely, they likely would not have $150Bln in waste/fraud/abuse annually and this $150+MM may have been caught internally vs. externally.
  
  Report this comment
- Therightsofbilly
  Posted on September 13, 2011 at 7:17pm
  Wow, liberalism really is a mental disorder, isn’t it?
  
  Report this comment
- SpeckChaser
  Posted on September 13, 2011 at 7:39pm
  @JZS/ANONYMOUS
  
  You are both right on the subject of blame. Taxpayers would benefit from more checks and balances, but it is not governments fault that they were defrauded. Investigating each claim is not feasible.
  
  @SHRUGGED
  
  Corruption resides in opportunity.
  
  Report this comment
- Rowgue
  Posted on September 13, 2011 at 10:43pm
  @SIMPLE SKEPTIC
  
  Yes the government can’t be trusted to manage taxpayer dollars competently. That’s the argument for smaller government and eliminating these entitlement programs altogether. However that’s an entirely different conversation than offering this story as proof that the government shouldn’t handle healthcare. It’s simply a non sequitur. The conclusion does not follow from the . The conclusion is correct, this story is simply not the reason why. It’s a nonsensical point.
  
  Report this comment
- Rowgue
  Posted on September 13, 2011 at 10:51pm
  @JZS
  
  Yes Rick Scott and many others in that organization are criminals just as the people in this story. However this story is about the largest medicAIDE fraud in history. The Rick Scott fraud was a mediCARE fraud, and it’s not even close to being the largest medicare fraud in history.
  
  Report this comment
- Shotgun167
  Posted on September 13, 2011 at 10:54pm
  There are SO many examples of this type of fraud, and it is so easy to fix. In this case, all it would require is sending statements to the recipients saying that the government has paid $XXX for your procedure on DD-MM-YYYY. Put a phone number at the bottom to report an error. It could even be an email. I used to wonder why my insurance company did that. Then I woke up one day. It is good PR for them (You just got a bunch of STUFF from us!!), and they know at least a few people will be calling them if they get statements when they haven’t been to the doc.
  
  Identity fraud. Why the hell don’t the credit agencies send me a copy of what they’re sending whoever orders one? They know where I live, and it can’t cost that much more to make one more copy. Then I’d know if someone were tracking me or trying to use my identity to buy something I’ll never get to see.
  
  Is it that hard to just close the loop?
  
  Report this comment
santramir
Posted on September 13, 2011 at 3:57pm
easy money culture in the usa = clear third world symptom

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krenshau
Posted on September 13, 2011 at 3:56pm
They made $120 million and the fine was $20 million. The fine should have been as much as was made in the fraud. That might make companies think more before trying this.

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- VISITORNUMBER3
  Posted on September 13, 2011 at 4:15pm
  And I’d be willing to bet a couple of million (if I had it) that the fine never actually gets paid, …
  
  Report this comment
- JazzGuy
  Posted on September 14, 2011 at 1:15am
  I could not agree more. That’s the main problem with a lot of the laws in this country: the punishment never seems to fit the crime. Fine and JAIL the top managers when a fraud like this occurs, and I GUARANTEE you it will drop like a ton of bricks. The goons at the top with the nerve to pull a job like this one, have little or no fear of fines, but most of ‘em DO know they don’t wanna be first on Brutus’s dance card in jail!
  
  Report this comment
IronSights
Posted on September 13, 2011 at 3:56pm
Ok, so a settlement of $150 Million was the penalty for bilking the government for $2 Billion in fraudulent fees and claims. Anybody want to get in on a start up business, that’s a heck of a return when you can spend $150 M and get a return in $2 B. And not pay it till 7 years later.

The penalty for government fraud isn’t painful enough to deter anyone from committing it.

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- Iobject
  Posted on September 13, 2011 at 4:13pm
  The $2B was not all fraudulent, just the overbilling. At least get the facts straight. How about instead of a stiffer penalty the spending is allocated locally by people who are involved in the local community.
  
  I would think that many of the billers, providers, and patients are doing this every day and getting away with it. The bureaucracy has no interest in policing the fraud they only wish to perpetuate the bureaucracy.
  
  Report this comment
- POdVet
  Posted on September 13, 2011 at 5:01pm
  Intentionally over billing is FRAUD!
  
  Report this comment
- Anonymous T. Irrelevant
  Posted on September 13, 2011 at 5:09pm
  @IOBJECT
  Who decides who should allocate the money?
  No, I think it should go back in the coffers of the US treasury, not given to people who pay no taxes.
  they get enough free stuff, courtesy of the taxpayers.
  
  Report this comment
team1blazer
Posted on September 13, 2011 at 3:55pm
More excellence in government. The whole system is broken, because it has become too big of a beauracracy. Get the government out of the way and this crap will disappear. Private sector has a way of weeding out crooks, cheats and scam artists….government has a way of funding them by taxation.

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jakartaman
Posted on September 13, 2011 at 3:54pm
Gonzo,

Love the little toad – he is brilliant but unelectable. Would make a great Secretary of State

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- team1blazer
  Posted on September 13, 2011 at 4:53pm
  Ah, but they said Reagan was not electable ….stop paying attention to who the msm is telling you the frontrunner is…let’s decide this for ourselves. so far, newt and Cain are looking like our best options.
  
  Report this comment
fcbs46
Posted on September 13, 2011 at 3:52pm
Everyone gets paid along the way nobody talks.

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FedupinFlorida2
Posted on September 13, 2011 at 3:49pm
Good for him, hopefully people will go to jail and we get our money back. Take their houses, cars, everything.

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MONICNE
Posted on September 13, 2011 at 3:44pm
Wow this gets Florida governor Rick Scott off the Top of the “Notorious CEO List”- he was the former largest medicare fraud payer as top executive of health care associates (HCA) – who forced him out in 2001. In all, civil law suits cost HCA more than $2 billion to settle, by far the largest fraud settlement in US history until this case!

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KickinBack
Posted on September 13, 2011 at 3:37pm
And that’s just Medicaid. Wait until Obamacare goes into full swing!

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olddog
Posted on September 13, 2011 at 3:37pm
There’s no secret why healthcare is so expensive.. If you have insurance you’re paing for yourself and five other people you don’t know.. We don’t need obamacare we just need a Very Large Prison, something the size of Texas or Alaska..

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- Bill Rowland
  Posted on September 13, 2011 at 6:35pm
  Please use Alaska they could freeze the thieves and stack them like cord wood.
  Besides we have enough illegals in Texas to break the system without fraud.
  
  Pray for our President – Psalm 109:8
  
  Report this comment
ZAP
Posted on September 13, 2011 at 3:36pm
“The hard part,” he said, “was turning them in.” THIS GOVERNMENT SYSTEM IS BROKE!

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GardenoftheGods
Posted on September 13, 2011 at 3:36pm
Did you see the line ” the hard part was turning them in”…? That’s the government at it’s finest. Can you imagine what the loss & fraud will be when ObamaCare is fully enforced…we will be screwed. Think we owe a lot of money now, wait til then… we’re sunk unless we get rid of the dead weight in DC. God save us all; if Obama wins in 2012. God save us if a RINO wins as well. Personally, I support Herman Cain. He’s not perfect; but he knows how to solve problems. He needs a Congress willing to work with him as well.

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Coach54
Posted on September 13, 2011 at 3:36pm
I have seen similar issues with other Health Care/Service providers in Calif as my family is a heavy user of Medicade due to debilitating illness, who it was originally designed to help. Billing the Govt for $65.00 per month for 3 years for a wheel chair that can be purchased on Ebay for $120.00 is just one of multiple examples of how screwed up the system is. This kind of lunacy is costing hundreds of millions per year. Sure glad the Govt can just keep printing more money to cover it all….

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- Mikev5
  Posted on September 13, 2011 at 4:54pm
  Same taking care of my Mom $150 a month for a bed that costs $450 it was way cheaper just to buy the bed for her, Medicare and Medicaid means lets rip off the Government and that means we the people are getting ripped off all of these home care companies that cater to Medicaid and Medicare rip us off big time it’s a major scam going on
  
  Report this comment
- Shotgun167
  Posted on September 13, 2011 at 11:05pm
  Heh guys, that is what happens when you have a one size fit all, Federal beauracracy in charge. There’s really not much of a way around it. The thing they can’t wrap their head around is that people are naturally greedy, but that isn’t necessarily evil. You just have to provide the right incentive.
  
  I propose a new cabinet level position. The Secretary of the Cheaper Way. They get paid a percentage of the money they can save. They make proposals, and the other government agency gets a chance to argue why the way they are doing things is necessary. If the Secretary is correct, they get paid 10% percent of the money saved. If the agency wins the argument, the Secretary loses 5%. Now, THAT will root out some fraud and abuse.
  
  And how about welfare. Give agents a percentage of the tax revenues generated by people they help get out of the welfare system. Make me an agent, and I’ll be trying to have every one of my cases in school to be doctors, lawyers and engineers. I’m not just going to try to get them off welfare, I’m going to make their asses RICH if I can.
  
  Of course, liberals can only scream that greed is evil. They can’t see that it is just energy and can be directed to good if used correctly.
  
  Report this comment
Exrepublisheep
Posted on September 13, 2011 at 3:35pm
Oh no! Job creators did this? Thankfully only the lower ranking will be punished. Maybe if they didn’t have to pay taxes this would’nt have happened.

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IMCHRISTIAN
Posted on September 13, 2011 at 3:34pm
I am so proud of you Mr. West. Honesty is the best policy. God Bless You

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heavyduty
Posted on September 13, 2011 at 3:33pm
This is just one more reason why Obama doesn’t need to raise taxes. If they just eliminated the fraud from these government ponzi schemes. Then we would probably be rolling in money. Hopefully everyone involved will spend some time in the big house plus paying the money back. But I can’t see 15.4 million in reward. Just can’t see it.

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- Mikev5
  Posted on September 13, 2011 at 4:57pm
  I believe it’s a % of recovered monies not a set reward
  
  Report this comment
- Blackhawk1
  Posted on September 13, 2011 at 5:11pm
  I wonder if the whistle-blower who was on medicaid can now afford his own healthcare with the 15.4 million of taxpayer reward he just received? Probably not. Not that he shouldn’t have exposed the fraud but maybe if the government would do a little book keeping this kind of thing wouldn’t happen.
  
  Report this comment
loriann12
Posted on September 13, 2011 at 3:32pm
I have Tricare prime. 3 years ago, they didn’t have any eye doctors in my area. They said get the exam, and send us the receipts and we’ll reimburse you 80% (of what they allow). So this year that’s what I did (I know, I waited 3 years, that’s life). I got denied because I didn’t use one of their doctors. Out of curiosity, I looked one up to call and find out what an exam cost. I paid $65 for the one I got. The one approved by Tricare charged $160 – for a basic exam.

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- MONICNE
  Posted on September 13, 2011 at 3:53pm
  These Docs are just trying to make a profit. The system is against honest God fearing medical doctors.
  
  TEA
  
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- Mikev5
  Posted on September 13, 2011 at 5:02pm
  My Mom was told she needed to return every two weeks for her skin cancer that was the non-lethal type meaning it’s not going to kill her or spread the office was billing Hugh sums of money for non-needed services but always found something to bill Medicare for every two weeks we are talking large sums of money.
  
  Report this comment
JRook
Posted on September 13, 2011 at 3:30pm
For those who like to cry about government waste, maintaining low administrative costs depends on health care providers being honest and ethical. Situations like this and over billing by defense contractors is more frequent than anyone wants to believe. All nine should get 50 years a piece. Be interesting to see if they have contributed to any political campaigns or pay lobbyist with OUR money.

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- RejectFalseIcons
  Posted on September 13, 2011 at 3:39pm
  Health Care Reform would not have happened in such a grotesque, ugly way if Healthcare Reform wasn’t brought on by a LARGE chunk of providers ripping off taxpayers. If you suspect your doctor or employer of healthcare fraud, you need to blow the whistle.
  
  Report this comment
Gonzo
Posted on September 13, 2011 at 3:29pm
I guess Gingrich was right last night.

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- kentuckypatriot
  Posted on September 13, 2011 at 3:53pm
  Gonzo, I don’t know about you, but I am liking Newt more and more. But, time will tell if he is a RINO or not!
  
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