Feds, Ohio Republicans focus on individual cases of Medicaid fraud, but what about corporations?

In early June, top officials from the Trump administration traveled to Ohio to highlight investigations of people suspected of cheating the state's Medicaid program out of tens of millions of dollars.

They didn't mention the corporations that have huge contracts with the state Medicaid system — even after several have been sued and two were accused of up-charging the system by a quarter-billion dollars in a single year.

"President Trump and Vice President Vance's war against fraud has come to the great state of Ohio," acting U.S. Attorney General Todd Blanche said from a stage in Whitehall with other administration officials and Ohio Republicans arrayed behind him.

"And this is a war that we will win. The team behind me, federal and state partners, have come together to battle what is a fraud crisis in this country. It has crippled our taxpayer programs and robbed the American purse for too long."

Blanche focused on suspected cheats such as two Ohio state employees and two others who are accused of billing the state Medicaid system $30 million for behavioral health services that weren't delivered.

"Some criminals have gotten so bold, so audacious as to defraud the government of tens of millions of dollars…," Blanche, who formerly worked as Trump's criminal defense lawyer, said. "It should shock your conscience."

Blanche represented Trump when Trump was convicted of 34 felony counts of falsifying business records.

The acting attorney general ticked off allegations that Ohioans ripped off the pandemic-era Paycheck Protection Program and other alleged scams as he touted Trump's Task Force to Eliminate Fraud. The group is led by Vice President JD Vance, an Ohioan.

All told, the alleged scams described by Blanche and the others appeared to total about $100 million.

"These numbers are staggering, but just the tip of the iceberg," Blanche said.

He later added, "Americans deserve to know that if someone lies or cheats or steals to get ahead, they will be punished, and they deserve a government that will never be taken advantage of by fraudsters."

What never came up were giant health conglomerates that have huge contracts with the state Medicaid program.

In Ohio, for example,UnitedHealthcare provides health plans financed by Ohio Medicaid. Similarly, CVS Health offers Medicaid managed-care programs through its insurance company, Aetna.

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The cooporations are, respectively, the third and fifth-largest by revenue in the United States. And they own a "vertically integrated" gamut of companies, including health insurers, physician practices and pharmacies. They do business with each other and with competitors.

They also own two of the three dominant pharmacy middlemen — known as "pharmacy benefit managers" — in the country. They've been accused of abusing their dominance in multiple aspects of healthcare to take huge profits and drive up costs.

In 2017, pharmacy benefit managers owned by CVS and UnitedHealth served all of the Medicaid managed-care companies under contract with Ohio Medicaid.

A newspaper investigation a year later turned up evidence suggesting that the middlemen might have charged taxpayers far more for prescription drugs than they reimbursed the pharmacies that had bought and dispensed them.

When the Medicaid department obtained all reimbursement data for 2017 and hired a company to analyze it, Ohioans learned they'd paid $224 million more for Medicaid prescriptions that year than already-struggling pharmacies received.

The conglomerates denied doing anything wrong, and continue to insist that they save money for consumers.

Details unearthed in the same investigation led then-Ohio Attorney General Dave Yost to sue Centene, the country's largest Medicaid managed-care provider.

Yost accused them of using redundant pharmacy middlemen to overbill the state.

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Within months, Centene settled with Ohio for $88 million and announced it was setting aside more than $1 billion to settle with other states that hadn't even sued it.

Centene never admitted wrongdoing, and it's unknown how much it made off of the disputed pharmacy arrangement.

Despite the company's conduct, Buckeye Health Plan, a Centene-owned managed-care company, still does business with Ohio. It collected more than half a billion dollars in 2024.

Yost has sued the drug middlemen owned by the big health conglomerates over other things. For example, he accused them of defrauding state pension funds.

In 2022, Yost announced that he'd collected more than $100 million from the companies, with other cases still pending.

But Yost did not mention the hundreds of millions he's accused big corporations of improperly collecting from taxpayers when he took the podium during the June 4 press conference.

Speaking just before his planned resignation, he instead focused on alleged fraud by smaller players — and on praising Trump.

"Today marks something different," Yost said. "I've been engaged in this fight since I was the elected auditor of state back in 2011. Through my eight years as auditor of state and almost eight years now as attorney general, I have been doing Medicaid investigations, prosecutions… I have never had the level of interest and support from the federal government under any administration that you're witnessing here today."

One of those less-supportive administrations Yost was referring to was Trump's first.

"It's sometimes been a lonely fight," Yost said. "It's no longer a lonely fight. What's the difference? President Trump, Vice President Vance and this team that you see arrayed here today."

Antonio Ciaccia is a Columbus-based expert on drug pricing who has worked with numerous state attorneys general to investigate government spending on drugs.

He said there has to be a focus on provider fraud, as the Trump team is doing. But, Ciaccia said, it doesn't go nearly far enough.

"There are billions of dollars flowing through the system. You should look at it essentially as a spigot that people think they can just pull out as much as possible," he said.

"In the era of managed care, fraud, waste and abuse prevention has to extend far beyond the provider level because providers can engage in small-scale fraud. But now that insurance companies and their vertically integrated subsidiaries stand in between the provider and the state paying the bill, vertical integration has created conflicts of interest and opportunities for fraud, waste and abuse to be conducted at a far larger scale."

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Blanche and other members of the Trump administration blamed laxness by former President Joe Biden for Medicaid fraud in Ohio. But John Kulewicz, a Democrat running for state attorney general, pointed out that Republicans have been in charge of the Ohio Department of Medicaid since January 2011.

"It seems to me that here you have a classic case of people who were either asleep at the switch, or they looked the other way," Kulewicz said in an interview.

"The folks who got together a few weeks ago for that press conference have had absolute control of the state government for the past 16 years now. So they've had the unimpeded ability to audit and prosecute any issues like that and nothing's been done."

Ohio Auditor Keith Faber is the Republican nominee for attorney general. He was on the stage during the June 4 press conference, but he didn't speak.

His campaign was asked whether he intends to investigate possible fraud by corporations that contract with the state, and whether he intends to continue Yost's efforts.

"Keith opposes fraud in whatever form and wherever it might be. He looks forward to serving as Attorney General and working with the administration and General Assembly to limit fraud, waste, and abuse," Matt Dole, an advisor to the Faber campaign, said in an email.

"One of Keith's first steps as Attorney General will be to learn more about ongoing investigations and litigation. He won't commit to any outcome now, but rather encourages voters to look at his record and philosophy to understand the strong stance he'll take to support law enforcement, protect consumers, and defend Ohio's Constitution."

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Courtesy of Ohio Capital Journal