Kansas Nets $33.7 Million Connected To Medicaid Fraud

A new report by Kansas Attorney General Derek Schmidt has concluded that $33.7 million in fraudulent Medicaid payments were collected in the Sunflower State during 2012, up more than 40% from the $23.9 million collected in 2011.

According to the report, 64 cases against potential fraudsters were initiated in 2012. Of those, 23 were opened against home healthcare aides and providers, while 10 were against pharmaceutical firms. None were initiated against hospitals. Altogether, another 93 cases were closed during the year, including 35 for lack of evidence. A total of 141 cases remained pending as of June 30 of this year.

Altogether, the state received $15.1 million in global settlements from cases that may be pursued by federal prosecutors. $2.3 million was order as restitutions against those who committed Medicaid fraud, and $16.3 million was collected as the result of civil judgments. And $3 million was recouped as part of the administrative process.

“We are committed to vigorously prosecuting those who defraud the taxpayers and to recovering misspent funds from providers who are not entitled to keep them,” Schmidt said. He praised the investigators and prosecutors involved in the work, but added that extra vigilance was required.

Among the biggest cases was Jason Sellers, the former chief financial officer for Kansas Health Solutions. Arrested in 2011 for bilking $2 million in Medicaid revenue from his organization to build his home, he pled guilty to a single federal count of wire fraud and was sentenced to 36 months in prison and to pay restitution. In another case, Caela Kinchion-White was convicted on 11 federal counts of healthcare fraud and one count of conspiracy to commit healthcare fraud in connected with her job as nursing director at a Topeka home healthcare business. She will be sentenced next month.

Kansas officials project they will make 175 Medicaid fraud referrals to the appropriate agencies over the next fiscal year.

Schmidt's report noted that coming years will prove more challenging in investigating and recouping fraudulent payments. “Increasingly, many of the referrals coming into the (Medicaid Fraud and Abuse Division) involvelarger, more complex issues. Even many of the referrals involving “run of the mill” fraud now involve more advanced schemes to defraud,” the report said. “The result is that many of the cases being opened by the unit are extremely demanding on our limited resources.”