Tennessee indictments of 7 Alabama residents on Medicaid fraud began with a tip, then grew

Jul. 10--NASHVILLE -- So how is that seven people living in various units of a single apartment complex in tiny Bridgeport, Alabama, have now found themselves indicted on criminal Medicaid fraud and theft of services charges involving Tennessee's Medicaid program?

It began with an anonymous complaint, according to Tennessee Inspector General Kim Harmon, whose office investigated the matter.

It just kept growing as investigators kept finding more people living in different units at the same apartment complex in Bridgeport, population 2,312.

All now face criminal charges of theft of services and Medicaid fraud by reporting they had a Tennessee residence to get on TennCare, the state's version of the government-run Medicaid health insurance program.

"Basically, the anonymous complaint spun off several investigations," Harmon said in an interview this week after officials announced the indictment of a seventh Alabama resident by the nearby Marion County, Tennessee, grand jury. "It just kept spinning off" with all involving the one apartment complex.

Calling it "very unusual," she said that absent additional information, the investigation has run its course.

The inspector general's office focuses largely on ferreting out individual fraud or abuse in the massive $12 billion-plus TennCare program, which provides some 1.3 million low-income mothers, children, the disabled and elderly with health care insurance coverage.

Health care provider fraud is investigated by the Tennessee Bureau of Investigation's Medicaid Fraud Control Unit.

Harmon, who previously worked for a decade in the TBI's Medicaid Fraud unit's Chattanooga office, became inspector general in January 2018. The office is not part of TennCare and is attached to the state Department of Finance and Administration.

Harmon said investigating allegations that residents of other states are fraudulently getting onto the state's TennCare program, while important, amounts to a relatively small percentage of the office's work.

In the fiscal year that ended June 30, Harmon's office received a total 4,958 complaints about various types of enrollee fraud and abuse. Only 239 involved allegations that someone from out of state was on the program. Of those, 184 were closed due to lack of evidence.

Fifty-four are active investigations or proceedings involving residents of 18 other states and one from outside the U.S.

No. 1 was Georgia, which borders Southeast Tennessee, with 16 cases involving someone lying to get on Tennessee's program. Mississippi, which abuts the southern border of West Tennessee, was second with 12 cases. And as a result of the Bridgeport cases, Alabama has catapulted into the third spot with 10 cases.

The majority of the Office of the Inspector General's fraud work deals with in-state cases. The list includes complaints involving enrollees who falsely claimed their income qualifies them for TennCare, recipients selling prescription drugs, whether a covered child actually lives in the home and other issues.

Harmon said a growing issue, while still a "small percentage," involves some self-employed people running businesses falsely claiming their income qualifies them for TennCare.

"They say they make very little money, and they report that they are making very little money. But they're living beyond their reported means," she said.

When investigating a potential case, the office will examine financial records, determine "their true income. And then compare that to what the limitations are and whether you should actually get those benefits," Harmon said.

As a result, the office has brought on two forensic accountants as contract employees in the 48-worker office. And just last week, she reclassified a position as a full-time forensic accountant and will soon post the job to attract applicants.

Since the Office of the Inspector General was created in 2005, a little more than 3,100 people have been arrested for TennCare fraud and/or theft of services. The state estimates that's led to to more than $3 million being repaid to TennCare, with a total estimated cost avoidance of more than $163.6 million for TennCare, according to latest figures.

Tennessee has an advantage over a number of other states in that the General Assembly made Medicaid fraud a Class D felony, Harmon said. It can carry prison sentences of between two and 12 years. Theft of services over $10,000 and $60,000 boosts the theft to a Class C or B felony.

Comparatively speaking, Harmon said, out-of-state cases "are easy because you either reside here or you don't. That's a simple case compared to what is someone's true income, who actually lives in the home, household composition, some of those other things require a little bit more work.

Investigating out-of-state complaints only requires figuring out "where you are living," she added.

District Attorney Mike Taylor, whose Twelfth District includes Marion County, said when the Office of the Inspector General's office brought him the cases to prosecute, "I think this was the most we'd had in one grand jury this last go around."

Most of his cases involve the Tennessee counties in his district.

"They can come up with so many ways to defraud TennCare," Taylor said. "It never ceases to amaze me."

The state says anyone who has a tip on TennCare fraud or abuse can call 1-800-433-3982 or email [email protected] .

Contact Andy Sher at [email protected] or 615-255-0550. Follow him on Twitter @AndySher1.

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