posted on July 05, 2012 13:14
When Dr. Craigon Gray headed Medicaid in North Carolina he didn’t care much for home health care – he would tell anyone who’d listen how home health care was riddled with fraud.
Now a lot of folks suspected Dr. Gray’s animus towards home care (and his preference for sending elderly people to nursing homes) had something to do with his boss, Secretary Lanier Cansler, having been a lobbyist for nursing homes. But Dr. Gray just kept right on hammering away about the fraud in home care and, eventually, a lot of folks – including legislators – got to thinking he might be right.
Well, two years ago, Dr. Gray hired a company from Maine – Public Consulting Group – to root out all the fraud in home health care. The firm worked for 21 months and recovered $183,000 the state had spent due to fraud – so, in the end, the fraud was less than a fraction of 1% of the $300 million the state had spent.
That was good news. But there was a catch: Dr. Gray had paid the Maine company a fee of $250,000 a month, plus a commission of $378,000 – a total of $5.6 million.
In all, from all the different Medicaid programs the Maine Company audited, the state recovered a total of $3.6 million it had spent due to fraud.
The bottom line: The state spent $3.6 million due to fraud, then Dr. Gray spent $5.6 million to get the money back, and the state ended up $1.8 deeper in the hole.
And that’s how government works.