A Brooklyn Park couple is to appear in Hennepin County court Tuesday on charges the husband and wife bilked the state for $864,878.35 in false Medicaid claims.
It's the latest move in an expanded effort by state and federal officials to try to get back some of the billions in fraudulent payments for Medicaid, the government's health care program for the poor.
The Minnesota Attorney General's office alleges Anita and Stephen Soledolu, the owners of a Brooklyn Park home health care service, submitted claims which had no documentation.
The six-count felony indictment also alleges that the Soledolus submitted claims for home care of Medicaid recipients when investigators found the clients weren't home.
Anita Soledolu couldn't be reached for comment.
Hennepin County property records list the Soledolus as owners of a Brooklyn Park home, but a visit shows the house is vacant, and there's no sign of them at a nearby office park.
If convicted on all six counts, the Soledolus each face maximum penalties of $300,000 and up to 60 years in prison.
Minnesota Department of Human Services Ccommissioner Lucinda Jesson said estimates for the amount of Medicaid fraud vary widely.
"You see everything from it's 3 to 4 percent of health care costs to 10 percent of health care costs," said Jesson.
Minnesota House of Representatives research shows that, in 2009, more than 557,000 Minnesotans received some type of Medicaid care. And that legislative analysis found the state paid out about $6.7 billion in claims to doctors, pharmacists and others involved in the program.
A fraud rate of between 3 and 10 percent means anywhere from about $200 million to about $670 million was lost. Yet Jesson said on average the state recovers only about $7 million a year in fraudulent payments.
Pharmacist and Minneapolis attorney Neil Thompson said that's the tip of the iceberg. Thompson blew the whistle a few years ago on his employer at the time, Walgreens, alleging the company overcharged Medicaid for drugs resulting in a settlement of more than $8 million.
He praised the work of state and federal government investigators but says there are too few of them compared to the money the fraudsters can make.
"Small percentage are actually audited, and the government just doesn't have the resources to catch up with them, so they're playing their odds," said Thompson.
Jesson said dozens of state workers analyze Medicaid claims before money is paid and there's additional scrutiny afterwards.
"We have nine of our employees that all they do is the investigation after the payments are made," Jesson said.
She said the state receives about 300 calls a month with tips from Medicaid recipients, providers and others on instances where they suspect fraud.
Jesson said about a fourth of the calls get a closer look from investigators. Cases where criminal activity is suspected are handed over to the Minnesota Attorney General's office for investigation. Jesson alson said the state is now hiring so-called data miners to find fraud.
"These are contractors that are going to help us identify where they seem problems in the claims data and where we ought to focus our investigations," said Jesson.
Thompson, while admitting he's personally benefited from his own fraud fighting agenda, praised the strategy. He noted there's a $15 recovery rate for every dollar the government spends on fighting fraud.
Thompson says the government should make much greater use of private sector legal firepower.
"They simply don't have the time and resources to devote to every case where private sector attorneys do," said Thompson.
The federal government is stepping up attempts to slow the rise in Medicaid fraud by spending much more over the next decade including additional money for state antifraud efforts.
Medicaid and Medicare, the country's medical insurance program for the elderly, have annual total outlays of about $900 billion.
In January, Attorney General Eric Holder and Department of Health and Human Services Sec. Kathleen Sebelius outlined a fraud-fighting effort that uses an additional $350 million over the current decade.
Officials for both programs emphasize getting payments to service providers in a timely fashion. That's led to the creation of electronic automated payments for some services. The effort to make timely payments has helped spawn Medicaid and Medicare fraud.