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Tampa Bay Chapter - ACFE       http://TampaBayCFE.org          January 2009

Medicaid Fraud

Under the Medicaid program, taxpayer dollars are used to provide health care to low-income individuals. It is vital that these dollars be effectively spent to help those in need. Unfortunately, a small percentage of Medicaid providers and recipients engage in various forms of fraud and abuse.

Fraud and abuse affects everyone - the recipients of care, the taxpayers who pay for it and the vast majority of providers who provide quality care. Each dollar lost to fraud is one less dollar available for someone in need of care.

There are several types of Medicaid fraud committed by providers or recipients. They are described below. If you think you know of someone who is abusing the Medicaid program, you should report it. There are several ways to contact us and, if you prefer, you may do so anonymously. The sources of all fraud referrals are kept strictly confidential.

The Department of Health is committed to eliminating all forms of healthcare fraud and abuse. We need your help to accomplish this.

Recipient Fraud

A small percentage of recipients engage in fraudulent behavior and abuse their Medicaid privileges. The Health Department's Office of Medicaid Management reviews recipient utilization and investigates other charges of fraudulent behavior in order to take appropriate actions. Some types of recipient fraud, such as forging prescriptions, are subject to prosecution and will be referred to the appropriate authorities.

Examples of Fraud

Medicaid recipient fraud can take several forms and we need the cooperation of diligent providers and Medicaid recipients to uncover this type of activity. Among the kinds of actions that constitute recipient fraud are:

  • Loaning his/her Medicaid Identification card to another person;

  • Forging or altering a prescription or fiscal order;

  • Using multiple MA ID cards;

  • Intentionally receiving duplicative, excessive, contraindicated or conflicting health care services or supplies; and

  • Re-selling items provided by the Medicaid program.

Provider Fraud

A small number of Medicaid providers engage in fraudulent activities. The Office of Medicaid Management reviews provider billing and other activities and investigates charges of fraudulent behavior in order to take appropriate actions.

Examples of Provider Fraud

Medicaid provider fraud has many forms and we need the cooperation of diligent providers and Medicaid recipients to uncover this type of activity. One way for a recipient of medical services to assist us in identifying fraud is to keep a record of the following:

  • When a professional service is used;

  • Where the service takes place;

  • Who takes care of you;

  • What services are provided during the visit; and

  • What additional services were ordered by the provider.

If a recipient suspects that a provider has billed Medicaid for more services than were actually provided, that would be fraud.

Some examples of provider fraud include:

  • Billing for services that were not provided, e.g., a chest x-ray that was not taken.

  • Duplicate billing which occurs when a provider bills Medicaid and also bills private insurance and/or the recipient.

  • Requiring the recipient to return to the office for more visits when another appointment is not necessary.

  • Taking unnecessary x-rays, blood work, etc.

  • Upcoding, e.g., providing a simple office visit and billing for a comprehensive visit.

  • Having an unlicensed person perform services that only a licensed professional should render, and bills as if the professional provided the service.

  • Billing for more time than actually provided, i.e., counseling, anesthesia, etc.

  • Billing for an office visit when there was none, or adding additional family members' names to bills.

  • Accepting payment from another provider, including sharing in the reimbursement paid by the Medicaid program, as a result of referring a patient to the other provider.

Source: http://www.health.state.ny.us/health_care/medicaid/fraud/

TRAINING OPPORTUNITIES

Tampa Bay Chapter

Dinner Meetings

February 10, 2009
"Medicaid Fraud"
Carol Conry, Lieutenant, Medical Fraud Control Unit, Office of Attorney General

March 10, 2009
"Contractor Fraud"
Richard B. Campbell, Esquire
Carey, O'Malley, Whitaker & Mueller, P.A. 

April 14, 2009
"Red Flags of Fraud"
Debbi Drake, CFS. VP/Sr. Corporate Investigator, Mercantile Bank 

10th Annual Fraud & Computer Crimes Seminar

T.B.A.

Association of Certified Fraud Examiners

20th Annual ACFE Fraud Conference and Exhibition - Las Vegas, NV

2008 - 2009
OFFICERS & DIRECTORS

PRESIDENT
Steve Hooper, CIA, CFE, CCSA, CGAP
Clerk of the Circuit Court Hillsborough County, FL
(813) 276-2029 x3703

VICE PRESIDENT
Christine Dever, CPA, CFE
City of Tampa
(813) 274-7166

SECRETARY
Ellen Wilcox, CFE
Florida Department of Law Enforcement
(727) 298-2482

TREASURER
Laura Krueger Brock, CPA, CFE
Kirkland, Russ, Murphy & Tapp, P.A.
(727) 572-1400

DIRECTOR
 Mark Dubina, CFE
Florida Department of Law Enforcement
(813) 878-7366

DIRECTOR
Sharon Shaw, CFE
Tel: (727) 674-8399

DIRECTOR
Debbie Venanzio, CFE
Branch Banking & Trust Co.
Tel: (727) 302-5498

DIRECTOR
Bill Miles, CFE
Florida Department of Law Enforcement
Tel: (863) 701-1474

DIRECTOR
Gary Chapman, CIA, CGAP, CFE
City of Tampa
Tel: (813) 274-7163

CHAPTER TRAINING
Wayne Boytim, CFE
Retired
(813) 274-7167

News from the ACFE

McVeigh and Turner Elected to ACFE Board of Regents

Congratulations to Martha Reynolds McVeigh, CFE and Jonathan E. Turner, CFE, CII, who have been elected to the ACFE Board of Regents. The Board of Regents is responsible for setting membership standards that promote professionalism and ensure the future of the organization as a whole. Read More.

New Guidelines For Fighting Fraud Released

New guidelines for fighting fraud have been released jointly by three leading professional organizations. "Managing the Business Risk of Fraud: A Practical Guide" is sponsored by the ACFE, The Institute of Internal Auditors (IIA), and the American Institute of Certified Public Accountants (AICPA). Principles for establishing effective fraud risk management, regardless of the type or size of an organization, are outlined in the guide. Read More.

Chapter News

Charles D. Riggs, III & Pamela A. Ranney Pass the CFE Exam

Congratulations are in order for Charles D. Riggs, III and Pamela A. Ranney.  Charles successfully passed the CFE exam and received his certification recently.  Pamela is waiting for confirmation. By doing so, they may be eligible to receive a CFE  scholarship from the Chapter.  Remember, Tampa Bay Chapter Associate Members who pass the CFE examination will be reimbursed for the cost of the examination (up to a $250 value). The only requirements are that they be an Associate Member of the Tampa Bay Chapter for at least one full year, which means they must also be an Associate Member of the ACFE and that they pass the examination. To apply for the CFE Exam Scholarship, submit a scholarship request letter along with proof of passing the exam to Wayne Boytim, Chapter Training Director.

Tampa Bay Chapter Awards Two CFE Prep Courses

Congratulations to our Associate Members Margaret Brown and Susan Klein. They each received a free CFE Exam Prep Study Course, compliments of the ACFE and the Tampa Bay Chapter's Board of Directors. The picture to the right is Chapter Training Director, Wayne Boytim, presenting the awards.

Dinner Meeting News

Our next Dinner Meeting is scheduled for February 10, 2009

NOTE: Kate Barker will be bringing her MBA class from USF, St. Petersburg Campus – approximately 15 students.

Lieutenant Carol Conry of the Office of Attorney General's Medicaid Fraud Control Unit will be presenting Medicaid Fraud.  The unit is responsible for policing Florida's 16 billion dollar per year Medicaid Program. It is comprised of attorneys, law enforcement officers, auditors, registered nurses, and analysts. Its authority to investigate Medicaid provider fraud is codified in the Florida Statutes, Section 409.920.

Medicaid fraud can take on many forms and cost Floridians millions of dollars each year. The most common forms of the fraud involve doctors, dentists, clinics and other health care providers billing for services never performed, over billing for services rendered, unbundling or, billing for tests, services and products which are not medically necessary.  In addition to investigating fraud committed by health care providers, the Unit also investigates abuse, neglect and exploitation of the elderly, ill and disabled residents of long term care facilities for the mentally and physically disabled and assisted living facilities.

Lieutenant Carol Conry has been employed by the OAG, MFCU for 13 years. She has worked numerous cases, both criminally and civilly. Lt. Conry has had the opportunity to work various multi-agency task force cases with federal, state and local law enforcement agencies. The lieutenant has worked many Qui Tams in addition to single state fraud cases. She has affected many arrests and has been instrumental in the recovery of millions of dollars for the Florida Medicaid Program.

Her most notable case was a 30 million dollar joint Medicare/Medicaid Durable Medical Equipment Case. The investigative team consisted of the FBI, HHS-OIG and MFCU. The team was able to prove approximately 15 million dollars of fraudulent billings. The case began with an undercover FBI agent and as it progressed we utilized informants, conducted hundreds of interviews to include recipients and doctors, recovered funds from off shore accounts and had two separate indictments/cases of defendants. We convicted 18 defendants and seven corporations. We have also entered into civil settlements with owners of several of the DME companies.

Prior to MFCU, Carol had a 22 year career with the New York City Police Department, retiring as a lieutenant. She worked in many various units and assignments to include patrol, narcotics, decoy work, precinct detective, organized crime investigations, internal affairs and vice squad. Lt. Conry holds a Bachelor of Science Degree in Criminal Justice from the State University of NY and is a graduate of the FBI National Academy, 168 Session.

The dinner meeting will be held at the Westshore Hotel, located at 1200 N. Westshore Boulevard. The hotel is just north of I-275 and Cypress Avenue on the east side of Westshore (map). Evenings will begin with a social at 6:00 P.M., followed by a buffet dinner at 6:30 and a presentation at 7:00. The cost is $25.00, payable at the door.

To make your reservation, please use the following link Chapter Meeting Reservation and complete the form at the bottom of the page.  You can also make your reservation by emailing Wayne Boytim by February 6, 2009. Reservations will be accepted after that date and walk-ups are always welcome. Please remember that cancellations are accepted up to the afternoon of the meeting. No shows will be billed after the second missed meeting. Please help us keep our costs down by letting us know if you are unable to attend.

NOTE: We ended up turning away a few members last month due to the lack of space. Please make your reservations early.

Summary of the January 13 Dinner Meeting

Our third dinner presentation of the year was "PBS&J Embezzlement Scheme" by Gary Jordon, Post, Buckley, Schuh & Jernigan. PBS&J recently experienced a $36 million dollar fraud committed by its  former CFO and two other  former employees. Last month, they were sentenced to the Federal Penitentiary. Gary Jordan , PBS&J's VP & Director of Internal Audit  will tell you how they did it, how they were caught and what happens next for the Company as it recovers from the criminal activity that was cloaked by collusion.

Gary Jordan has served as a Vice President of Internal Audit for the past  5 years for PBS&J Corporation and  has 7 years of additional internal and external audit experience including  serving in Deloitte’s Atlanta practice. He recently completed his term as President of the Florida West Coast Chapter of the Institute of Internal Auditors.

Mr. Jordan’s career also includes 20 years at BellSouth Corporation where he served 12 years in financial leadership positions  for  several key business units including:  CFO for  $3.2 billion BellSouth Business Systems Inc., CFO for BellSouth Telecommunications Strategic Management,  CFO for BellSouth.net, CFO for Dataserv and as the Controller for BellSouth Advertising and Publishing Company while also serving in  a Board capacity for several of those units and others. He holds a Masters of Accountancy Degree from Georgia State University and an undergraduate degree from North Georgia College and State University. He is a Certified Public Accountant, a Certified Internal Auditor, a member of the Georgia Society of CPA’s,  American Institute of CPAs and the Institute of Internal Auditors.

SECURITIES FRAUD:
HELPING VICTIMS RECOVER THROUGH TAX DEDUCTIONS

Over the last decade the news has sensationalized the huge losses, perpetrators and court battles of companies like WorldCom. However in these huge settlements, how much does the individual investor really receive?

In working with smaller securities investment fraud most of these individuals are lucky to receive thirty cents on the dollar even when the case goes to a court receiver.

In a recent Florida case, that was exactly what the victims were determined to receive after many of them had invested their life savings, like IRA’s and children’s college funds. This Florida corporation sold huge unregistered investments to a group of individuals who worked in the same career field and then paid new investors with funds from earlier investors. Thus the fraud devolved into a Ponzi scheme.

Fraud as defined by the IRS is deception by misrepresentation of material facts, or silence when good faith requires expression, resulting in material damage to one who relies on it and has the right to reply on it. Simply stated, it is obtaining something of value through deceit.

A theft loss deduction is allowable, where the person being sued, or against whom the claim is made, is shown not to have sufficient assets to satisfy the judgment, or liquidate the claim.

  • A theft loss deduction is an ordinary deduction that is not subject to Code Sections 1211.

  • A theft loss deduction is not a miscellaneous itemized deduction subject to the 2 percent floor imposed by Code Section 67(a) Code Section 67(b)3.

  • A theft loss is excluded from the phase-out of itemized deductions required by Code Section 68(b).

  • A theft loss that exceeds a taxpayer’s gross income gives rise to a net operating loss that is not subject to the limitation imposed on non-business deductions of individual taxpayers. Code Section 172(d)(4)(c). A net operating loss resulting from a theft loss may be carried back three years of carried forward for 20 years. Code Sections 172(b)(1)(a) and 172 (b)(1)(F).

  • A theft loss can be used to reduce a taxpayer’s liability for alternative minimum tax (AMT). Code Sections 56(b)(1)(A)(i) and 67 (b) (3).

The courts have stated that whether a loss from theft occurred depends upon the law of the jurisdiction where it was sustained, and the exact nature of the crime. As long as it amounts to theft in the state where it is sustained, IRC Section 165 is applicable.

When the Fraud Examiner discovers such a loss, it is best to consult an expert as to “Reasonable Certainty”. In the case above the Florida Corporation recovery amount was determined by a court receiver. The Internal Revenue Code often requires the calculation of amounts that are less than absolute but more than mere guesses. If a claim for reimbursement has a reasonable prospect of recovery, the loss is not treated as sustained “ until the taxable year in which it can be ascertained with reasonable certainty whether or not such reimbursement will be received.
Jeppsen v Commissioner, 123 F. 3d 1410 (10th Cir 1997).

The United States will continue to see greed that leads to bankruptcy and theft by corporations that break the rules for their own personal profit.

It is the duty of Certified Fraud Examiners to not only enforce the rules but restore the victims to the best possible situation for the future health of our nation and economy and their family.


Submitted by: Jacqueline R. Maltry, CPA CFE MBA
Professor of Graduate Accounting Schiller International University

STATE OF FLORIDA
ANNUAL MEDICAID FRAUD REPORT
December 29, 2008

TALLAHASSEE, FL – Attorney General Bill McCollum and Agency for Health Care Administration Secretary Holly Benson today released the state’s annual Medicaid fraud report, highlighting the importance of increased vigilance against Medicaid fraud. The agencies’ combined efforts have prevented more than $100 million in Medicaid overpayments over the past three years and that the Attorney General’s Medicaid Fraud Control Unit collected over $56.7 million during fiscal year 2007-08, which includes court judgments,
fines and civil penalties.

“Medicaid fraud diverts valuable health care resources away from those who truly need the assistance, and we will not permit that to go unnoticed and unaddressed,” said Attorney General McCollum. “Our resources are best utilized when we cooperatively combat this issue and I look forward to continued progress made on this front.”

The Attorney General’s Medicaid Fraud Control Unit (MFCU) and the Agency for Health Care Administration (Agency) continue to work together on joint investigative projects, Medicaid program issues, enhancement of processes and development of protocols for improved coordination. The Agency and MFCU have also committed to improving the referral process for allegations of fraud and abuse.

“Fraudulent and abusive providers jeopardize the delivery of quality health care for Floridians,” Secretary Benson said. “It is disheartening to realize that there are individuals who would steal from taxpayers in order to make a living, but it is even more disappointing to realize that they are also depriving those who really do need health care. Every day our team is on the frontlines working with MFCU to build cases against the fraudulent providers and restore the integrity of the program.”

In addition to the cooperation between the Agency and the Attorney General’s Office, strong partnerships with other state agencies are critical to ensuring high-quality referrals are made following investigations. Partnerships with the Florida Department of Health, the Agency for Persons with Disabilities and the Federal Centers for Medicare and Medicaid Services, among others, ensure that the appropriate regulatory entities are notified of the actions of those they oversee. Referrals are now staffed monthly, making the referral move to a case a quicker process.

The AHCA Inspector General’s Bureau of Medicaid Program Integrity (OIG-MPI) is responsible for minimizing fraud and abuse losses in the Medicaid program. MPI carries out fraud and abuse preventive activities, performs detection analyses, conducts audits, imposes sanctions as appropriate and refers certain providers to the Medicaid Fraud Control Unit and to other regulatory and investigative agencies. The Medicaid Fraud Control Unit is responsible for policing the Medicaid Program, as well as investigating allegations of corruption and fraud in the administration of the program. For fiscal year 2007-08, 88 arrests were made, of which 62 resulted from Medicaid Fraud investigations.

The Medicaid Fraud Control Unit also investigates the abuse, neglect and exploitation of the elderly, as well as ill and disabled residents of long-term care facilities, such as nursing homes, facilities for the mentally and physically disabled and assisted care living facilities. Random spot-check visits to these types of facilities help determine whether Medicaid policy and procedures are being followed. Other entities that attend these visits include the Agency for Persons with Disabilities, Department of Health, Ombudsmen, Building Code Compliance officials, local fire inspectors and the Health Quality Assurance Division of the Agency for Health Care Administration, which licenses and regulates this industry. Of the 88 arrests made during fiscal year 2007-08, 26 resulted from abuse and neglect investigations.

The Agency for Health Care Administration is committed to better health care for all Floridians. AHCA administers Florida’s Medicaid program, licenses and regulates more than 32,000 health care facilities and 37 health maintenance organizations, and publishes health care data and statistics. For more information, please visit http://ahca.myflorida.com.

The Attorney General’s recent efforts to combat Medicaid fraud include the launch of a statewide initiative to educate citizens and health care providers about the dangers and costs of Medicaid and other health care-related fraud. Intended to foster a spirit of cooperation and raise awareness of how to report and avoid fraud and abuse, the presentations will be given by members of the Attorney General’s Medicaid Fraud Control Unit at hospitals, senior centers and other venues around Florida. Additional information about the Attorney General’s Medicaid Fraud Control Unit is available online at: http://myfloridalegal.com.

A copy of the annual report for the 2007-2008 fiscal year is available online at:
http://myfloridalegal.com/webfiles.nsf/WF/MRAY-7MLQFJ/$file/2007-08MFCUReport.pdf

President's Message

Thomas Fuller, a noted British Clergyman and author once said, “Health is not valued till sickness comes.” I now know the full value of my health since suffering the past 24 days with a severe chest cold. I want to thank Christine Dever, Wayne Boytim, and Sharon Shaw for standing in so admirably for me at the last dinner meeting. Speaking of, what a great turnout. Sixty-three professionals attended and were entertained with an excellent embezzlement scheme presentation by Gary Jordan from Post, Buckley, Schuh & Jernigan. What a way to kick off the dinner meetings for the New Year! Thanks Gary for donating your time to share this story with us.

Congratulations to our Chapter associate members Margaret Brown and Susan Klein. They each received a CFE Exam Prep Study Course, compliments of the Board.

I also want to recognize and thank our first time attendees. They were:

Robert Baldree - Kirkland, Russ, Murphy & Tapp;
Lisa Calabrese – Protiviti;
Jeffery Cockrell – Citigroup;
Paul DeLeo - Clerk of Court, Sarasota;
Dutch Hinkle - Whispers of Bushido LLC;
Rita Maher - Guest of Jean Perrino;
Trudy Noze - Post, Buckley, Schuh & Jernigan;
Tolia Pandolfi - Post, Buckley, Schuh & Jernigan;
Bill Thomas – Protiviti;
Chad Whetstone - Carr, Riggs & Ingram LLC;
Catherine Hunt

One of our chapter members was awarded the CFE designation by the association. Congratulations, Charles D. Riggs, III. In addition to Charles, another member recently learned she had passed all four parts of the CFE exam, and is waiting for her confirmation. Congratulations to Pamela A. Ranney.

Our two-day seminar dates are changing this year. The most current information is (or will be soon) on our website under “seminars.” We still need members to assist in recruiting speakers for the seminar and to help prepare the handout materials, as we get closer to the seminar. At our next dinner meeting on February 10th, Kate Barker will be bringing her MBA class from USF, St. Petersburg Campus – approximately 15 students. We always look forward to the students attending our meetings. Again, if you know of someone who is interested in pursuing our profession, you may sponsor them to our dinner meeting and the Chapter will pick up the cost. Just notify Wayne Boytim by the registration deadline date.

I will close with this. English composer, novelist, and satiric author Samuel Butler once said, “If we attend continually and promptly to the little that we can do, we shall long be surprised to find how little remains that we cannot do.”


Steve Hooper, CFE, CIA, CGAP, CCSA
President, Tampa Bay Chapter - ACFE