Pallone Seeks Help from Federal Government in New Jersey Medicaid Fraud Case

Washington, D.C. --- U.S. Rep. Frank Pallone, Jr. (D-NJ), Chairman of the House Energy and Commerce Subcommittee on Health, today asked the Acting Administrator at the Centers for Medicare and Medicaid Services (CMS) for help in a fraud case in New Jersey in which $2 million was defrauded from Medicaid.

Medicaid is a joint federal-state program that pays for health care and prescription drug services on behalf of low-income and disabled beneficiaries. At the federal level, CMS oversees the Medicaid program, and the New Jersey congressman's Health Subcommittee has jurisdiction over both Medicaid and CMS.

In a letter to CMS Acting Administrator Kerry Weems, Pallone voiced serious concern over the Medicaid fraud case in New Jersey where 14 people were arrested for defrauding $2 million from the Medicaid program. According to an article in Monday's Star-Ledger, Bryan Chandler, an ex-convict, opened a medical clinic in Newark called Good Samaritan Medical for the express purpose of filing false prescription drug bills through Medicaid. Chandler recruited chronically ill patients, going so far as searching for new clients at area shelters, so that he could then file thousands of dollars in false prescription drug bills on their behalf. (A COPY OF THE LETTER FOLLOWS.)

"CMS has an important role to fulfill in ensuring that Medicaid consumers are protected from Medicaid fraud and abuse," Pallone wrote in his letter to CMS Acting Administrator Weems. "These fraudulent organizations divert dollars that could otherwise be spent to safeguard the health and welfare of Medicaid clients. Although the states have primary responsibility for policing fraud in the Medicaid program, CMS plays a key role in providing necessary technical assistance, guidance and oversight."

The New Jersey congressman asked the CMS Acting Director to answer several questions and provide additional information on how a recently developed CMS plan to help states identity fraud is progressing. In 2006, the Medicaid Integrity Program (MIP) was created to support state Medicaid agencies with oversight and technical assistance in order to identify, recover and prevent inappropriate Medicaid payments.

Pallone asked for an update on CMS' efforts to establish such a program in New Jersey and an inventory of specific actions the agency has made to assist New Jersey in fighting Medicaid fraud.

"I would like to collaborate with CMS in developing actions that may be taken to assist with the prevention, identification, and prosecution of Medicaid fraud," Pallone concluded in his letter.