Provider Billing Most Common Fraud but PhRMA Biggest Ticket

Medicaid spends $6 billion a year in Oregon alone and “whenever there is that big a pile of money, there is going to be fraud,” Rodney Hopkinson, attorney in charge and director of the Medicaid Fraud Unit for the Oregon Department of Justice told a City Club of Portland audience.

The state’s Medicaid fraud unit covers 81,000 Medicaid providers including doctors, nurses, dentists, hospitals, nursing homes, pharmacies, durable medical equipment suppliers, home care workers, medical transport companies – any facility receiving Medicaid funds even if the victim is not a Medicaid recipient.

“We’ve convicted providers in every one of those areas,” said Rodney Hopkinson, who runs the fraud unit.

What he sees most: phantom billing or billing for services not rendered such as a provider billing for a patient who has moved out of state or dentists billing for a procedure that wasn’t done.

His unit also prosecutes financial exploitation, abuse and neglect and drug diversion. Hopkinson has seen 20 cases in the past 15 years of “addicted people working in a facility using patients’ drugs.”

The fraud unit brings in $10-$20 million a year from prosecutions with a $2.5 million budget for 16 staffers. Federal grants pay for three-quarters of its budget to fight pharmaceutical fraud.

“There’s not a pharmaceutical company that has not paid hundreds of millions” in restitution, Hopkinson said, most often for off-label marketing where a company’s sales rep convinces a doctor to prescribe drugs that have not been approved for a specific treatment.

So far the biggest judgment topped $3 billion, but pharmaceutical companies seem to view these cases as “just a cost of doing business” because the practice continues, he said.

In 2015, Oregon became one of only three states to hire justice department staff to prosecute elder abuse.

Last month, professional fiduciary Lisa Bayer-Day was sentenced to 48 months in prison and ordered to pay $117,000 in restitution to victims for intercepting checks in her court-appointed role as guardian and/or conservator for 26 victims, including 21 disabled veterans.

In March, pharmacist Hung Viet Tran was sentenced to 20 months in prison and paid $825,000 in restitution to Medicare and Medicaid for dispensing 2.4 cent Costco fish oil capsules instead of prescription Lovaza, which Medicare reimburses at rate of $1.64 per capsule.

Jan can be reached at [email protected].

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