Medicaid fraud investigators may be missing the big-time cheats

Anita Soledolu, the owner of a defunct Brooklyn Park-based home health care service, is going to jail on Sept. 15. after pleading guilty to defrauding Minnesota's Medicaid program out of $900,000.

State officials say the conviction sends a message to others stealing public assistance dollars. But others say the health care fraud perpetrated by mom-and-pop-sized operations is small compared to the misdeeds of big companies.

The Minnesota attorney general's office prosecuted the Soledolu case, and spokesman Ben Wogsland says the investigators found claims for work done by personal care assistants that never happened.

"They were services that weren't provided by PCA's that she claimed had worked there that no longer worked for the company, in some cases billing for over twenty four hours of personal care services in a day," he said.

The fraud took place from 2005-2007, until state investigators caught on.

After Soledolu pleaded guilty to one count of theft of public funds, a felony, a Hennepin county judge sentenced her to three months in the county workhouse followed by community service and ordered her to pay $100,000 restitution. Wogsland says the state will do everything in its power to get Soledolu to pay the restitution, although getting back the nearly $900,000 in stolen Medicaid dollars is much more difficult from a business that is now closed.

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"The money comes in, the money goes out and with a lot of these types of defendants," he said. "They claim empty pockets so collection can be a challenge."

And while stealing $900,000 of Medicaid money is serious, but it's a drop in the bucket compared to the overall loss.

Minnesota's Department of Human Services says the state's 2010 Medicaid outlays amounted to almost $9 billion. And department officials say anywhere from 4 percent to 10 percent of health care spending in this country is lost to mispayments or fraud. That would mean that as much as $900 million of Minnesota's Medicaid outlays are stolen or misapplied.

St. Louis Park attorney James Vander Linden represents whistleblowers, company insiders filing claims for money recovered from employers suspected of stealing funds. He has spent years trying to recover Medicaid and Medicare dollars, and he doesn't think the government has enough muscle to go after the big time health care fraud perpetrators.

"The real problem," he says, "is corporate America."

Earlier this year the Obama administration said it is directing hundreds of millions of dollars more to detect health care fraud. And a couple weeks ago Minnesota Department of Human Services commissioner Lucinda Jesson announced creation of an inspector general office in her agency.

She says the inspector general will have as many as 150 human service staff to detect fraud. In addition, she says, the department will expand the search for early warning signs of theft.

"Much of our payment process is automated, so we generate a lot of claims data," she said. "The Minnesota legislature gave us more ability to use data mining or data analytics that will help look at our claims data and say, 'where are red flags?'"

Slowing the rate of health care fraud in this country has proven to be a daunting task. One reason, attorney James Vander Linden says, is because penalties for the biggest perpetrators amount to little more than a slap on the wrist.

"The CEO and the other officers of the corporation sign what's called a corporate integrity agreement which says, 'OK, we promise never to do this again,'" he said. "They're not going to prison, they're not going to do community service, they're not going to pay a dime out of their own pocket, and that's, I think, unfair."

Vander Linden says more jail time for perpetrators of corporate health care fraud would send a stronger message.