Texas Legislature Takes Aim at Dental Medicaid Fraud -- but will they hit the target

From WFAA (Dallas):

State Sen. Jane Nelson (R-Flower Mound) put it simply Wednesday, speaking to a group of reporters at a news conference in Austin:  "It is infuriating to hear of the kind of problems that are taking place... problems that are particularly serious in Medicaid dental, orthodontia and transportation for Medicaid patients," she said.

For the past two years, News 8 has been investigating the Texas Medicaid Dental program and hundreds of millions of dollars the state has spent on orthodontics under Medicaid.

Sen. Nelson specifically mentioned the parents of Medicaid children who had been solicited by "marketers" bearing free gifts and cash, the subject of several News 8 stories.

Senate Bill 8 is designed to cure some of those abuses.

Watch the news story.
 

Click here for Senate Bill 8.

Qui Tam Lawsuit Against Lance Armstrong

Since the guy confessed to cheating, I thought it appropriate to post this qui tam lawsuit, filed by Floyd Landis against Lance Armstrong and others. You know what they say about payback.

   U.S. ex rel. Landis v. Armstrong 

Click here for an earlier blog post on this matter. 

My Article for the State Bar of Texas Advanced Employment Law Course

   Dan Hargrove (SBOT 2013 Article) by  

Slides for the Advanced Employment Law Course

Here are my slides for the State Bar of Texas Advanced Employment Law Course (Dallas, January 2013).

   D Hargrove Slides (SBOT - Advanced Employment Law CLE Jan. 2013)   

Military Health Care Costs for Drugs is Alarming

I meant to post this article when it came out.  The skyrocketing cost of the military health care system, caused in part by unchecked fraud, is a national security issue.   

From the Austin American Statesman:

Last year, the Pentagon spent more on pills, injections and vaccines than it did on Black Hawk helicopters, Abrams tanks, Hercules C-130 cargo planes and Patriot missiles — combined.

Some of the prescription drugs that have fueled the military’s skyrocketing pharmaceutical budget are the same ones that have medicated the civilian world over the past decade. Since 2002, the Department of Defense has spent more than $5 billion on Lipitor, Plavix, Advair, Nexium and Singulair.

Click here for the full article.  

Here are some eye popping and alarming charts:

Click here and here for my earlier posts. 

FCA Stats for FY 2012

The Department of Justice released the FY 2012 False Claims Act statistics (see below).  The False Claims Act resulted in the recovery of almost $5 Billion from the bad guys.  While admirable, this is chicken scratch given the total amount of fraud, which is estimated to be in the hundreds of billions of dollars per year (mostly within the Medicare and Medicaid programs).  

   FCA FY 2012 stats

CMS Steamrolled by Scooters Gone Wild

A little home town news, by way of the San Antonio Express News:

The Scooter Store received as much as $87.7 million in Medicare overpayments from 2009 to 2011, an independent auditor found, but the New Braunfels company only has to repay $19.5 million.

Two U.S. senators last month sent a letter to the Centers for Medicare and Medicaid Services, known as CMS, asking why it agreed to accept an amount “significantly less” than what it overpaid the seller of power wheelchairs and scooters.

CMS hasn't yet answered the letter and it didn't specifically address the question in an email to the Express-News.
The Scooter Store disputed the auditor's findings, according to the senators' letter. The company didn't directly address questions regarding the repayment agreement, though it said in an email the $19.5 million is less than 4 percent of what it received from CMS from May 2009 to May 2011.

What is troubling about these revelations is that the Scooter Store was under a Corporate Integrity Agreement with HHS-OIG, see below.

   Corporate Integrity Agreement (Scooter Store) by  

 

Pictured to the right is Doug Harrison, perhaps enjoying the fruits of his labor and your tax dollars.  

Mr. Harrison is the founder of the Scooter Store and also a party to the Corporate Integrity Agreement above.   One last tidbit from the Express News: 

"CBS News, meanwhile, reported this week that four former Scooter Store employees said the company's strategy was to “bulldoze” doctors into writing prescriptions so patients would get the power wheelchairs. The company didn't address the claim in its email to the Express-News."

Click here for a link to that CBS News story. 

And here is the video:

 

Fraud Always Pays -- Are Fraud Settlements Tax Deductable

From the NYT via the TaxProf Blog:

New York Times:  Paying the Price, but Often Deducting It, by Gretchen Morgenson:

With multibillion-dollar mortgage settlements making headlines this year and last, the question has come to the fore again. Why should taxpayers subsidize corporations that are paying to right sometimes egregious wrongs? That is a particularly weighty question, given the urgent need for tax revenue to offset the ballooning federal budget deficit.

Under federal law, money paid to settle a company’s actual or potential liability for a civil or criminal penalty is not deductible. But, this being taxes, the issue is complicated. As Robert W. Wood, a tax lawyer, said in a 2009 Tax Notes article, “The tax deduction for business expenses is broad enough to include most settlements and judgments.”

In an interview last week, Mr. Wood, who is also the author of Taxation of Damage Awards and Settlement Payments, said the test for deductibility boils down to whether the payment is a penalty or is meant to be remedial. “I don’t know the specifics on these mortgage settlements,” he said, “but if any of the lenders are putting a bunch of money into a pot that goes to help people, yes, I would assume that everybody will deduct that.”

Phineas Baxandall, senior analyst for tax and budget policy at the United States Public Interest Research Group, a consumer-oriented nonprofit, and Ryan Pierannunzi, a tax and budget associate there, explored this issue in a report published last week. The report, titled Subsidizing Bad Behavior, details the history of the practice and suggests that government agencies should follow the SEC’s lead and disallow deductibility in settlements. Barring that, the authors said, regulators should disclose only the after-tax amounts of settlements, so that people understand how much money is really being paid.