The Illinois media recently reported that Illinois' Department of Healthcare and Family Services paid $12 million in Medicaid benefits for deceased Illinois Medicaid recipients. These improper payments of taxpayer dollars are an example of why Illinois is cash strapped. More disturbing is my investigation of the past year that has discovered that HFS has routinely failed to protect Illinois taxpayers from fraud.
In 1999, the Healthcare and Family Services Office of the Inspector General knew they had a problem. The OIG staff reviewed a limited set of data containing three months of claims. They discovered that 963 deaths were reported during the fourth quarter of fiscal year 1997 and $1,119,269 in inappropriate payments were made to 94 providers on behalf of 145 deceased clients. What did HFS do? NOTHING. Not one corrective, preventive measure was taken by HFS.
My investigators learned that this issue would resurface year after year in HFS meetings. The problem is not unique to Illinois, but it is obvious that Illinois' Department of Healthcare and Family Services is not tough on waste or fraud. In the past two years alone, most of the fraud cases have been settled via loose corporate integrity agreements that have not permitted the state to recover funds rightfully due the state.
In the years prior to the Quinn administration hundreds of cases were sent to the Medicaid Fraud Control Unit. Then, that trend came to an end. The problem was so alarming that the Illinois State Police sent a letter on November 29, 2010, to John Allen (the OIG at HFS) detailing that they had not received cases from the OIG. It was common for 1,600 plus Illinois cases to be referred to the OIG each year for investigation of potential fraud. It is required by Federal Law (ACA, Section 6402(h)(2)) that once a credible allegation of fraud is made that all payments to the provider are suspended.
My investigation team has interviewed state employees that have said that the providers are checked against campaign donors prior to any referral to the Illinois State Police. I wonder if the lack of referrals to the ISP relates to mismanagement or campaign donations by certain medical providers?
Through my investigation, I have obtained records reflecting that Wyona Johnson and Eppie Dietz, both working for HFS's Office of the Inspector General, were scheduled to meet with an EHR staff responsible for discussing death match files, since the law requires that providers are checked prior to issuing payments. Fifteen meetings were scheduled with OIG supervisors Johnson and Dietz. The EHR staff sat in a conference room with no one from the OIG's office to meet and deliberate. The EHR staff were deemed irrelevant since Johnson and Dietz both chose not to attend these meetings and did not bother to call or reschedule these meetings.
My investigation also discovered that eventually the EHR staff conducted its own research and learned that the versions of the data files were seven years old, thus the potential to pay a Medicaid provider for a deceased recipient was very high. This matter was researched by EHR staff with the assistance of Mark Langenfeld whom managed the Medical Data Warehouse which holds all of the Medicaid claims. Subsequently, Renee Perry moved to another position in state government and with their history within HFS, both Johnson (formerly Rod Blagojevich's Inspector General and Ethics Officer) and Dietz took employment with the HFS Office of Information Systems. This office has been under attack for its decisions to outsource government jobs to H1B visa workers. Johnson took control of the very program that mandates the double-check of death match files. To date neither Johnson nor Dietz have stepped up to fix the problem that has led in the past to the Medicaid payments to providers of deceased clients amounting to millions.
Unfortunately, Director Hamos seems to have been left in the dark by her own staff and has brought in Avery Dale, Manager of Special Projects with the Division of Medical Programs, to investigate the reason(s) the state is years behind in checking the deceased files. The death matching is really tangential to the systemic failures of HFS in regards to fraud detection.
Under the direction of OIG Brad Hart, and at the time Wyona Johnson, the OIG have held, and continue to hold in “technical review” hundreds of fraud cases with credible allegations of fraud. Why are cases being held? The Affordable Care Act provisions require HFS to suspend payments to any provider whom HFS refers to the Illinois State Police Medicaid Fraud Control Unit.
As one whistleblower described it, “Wyona Johnson was responsible for deciding what cases are assigned and what cases are sent to the Illinois State Police Medicaid Fraud Unit to be further investigated and she along with Brad Hart held cases in fear of retaliation by the political powers during election time. The providers committing fraud are connected at the highest levels.”
The problem was so alarming that in November 2010, Illinois State Police Captain Mike Zerbonia stated in answers to a Senate Committee inquiry, “suggestions have been made...but no actual changes have occurred” in five years and “we could provide recommendations that could reduce fraud, but the bureaucracy has to be willing participate....and not actively stifle our recommendations.”
There are solutions to the problems that confront HFS. The insurance industry has used various methods of data collection to determine if a person is deceased. Mandated billing transactions can be implemented similar to the ones required to be sent when a baby is born to a Medicaid recipient. In the final analysis it comes down to some fundamental issues. In the last year alone it is estimated that the same management personnel referenced above have been responsible for hiding over $80 million in fraud from the Illinois Auditor General and the general public.
HFS under Rod Blagojevich referred 80% less potential fraud cases than the administration before him. Under the Quinn Administration almost no cases of potential fraud have been referred to the Medicaid Fraud Control Unit at the Illinois State Police for investigation and prosecution. Anytime HFS refers a case to ISP they are required to suspend payments. Has all the fraud stopped or have we merely created a system that allows some providers to avert Medicaid fraud investigations as long as they are a campaign donor?
Why all my interest? I am a sitting member on the Human Services Appropriations Committee of the Illinois House of Representatives which has constitutionally mandated oversight authority over the Department of Healthcare and Family Services. It is my job to see that taxpayers are protected. It is also my job to assure that taxpayer's money is properly spent and those that are committing fraud are prosecuted.
This report on the Illinois Department of Healthcare and Family Services was distributed by State Rep. Dwight Kay's office on June 25, 2014, after Kay's team conducted their own private investigation. First published at IllinoisLeaks.com.