Health care company settles Medicaid fraud case

Posted: Friday, April 07, 2000

JUNEAU (AP) -- A health care company has paid the state and federal government more than $1 million to settle allegations of false billings under the Alaska Medicaid program.

Attorney General Bruce Botelho said Healthsouth Corp. of Birmingham, Ala., paid $1,060,682.60 to settle claims of misrepresentation by four Anchorage clinics between 1992 and 1998.

Healthsouth purchased the clinics, formerly known as North+Care Centers, in September 1997. The clinics are suspected of submitting billings for services that were not provided, keeping inadequate records, submitting double billings, and committing numerous other violations of Medicaid regulations, Botelho said.

The alleged violations were uncovered by Deloitte & Touche, a national accounting firm under contract with the Alaska Division of Medical Assistance to audit Medicaid providers. The division administers the Alaska Medicaid Program for the Alaska Department of Health and Social Services.

In addition to the Deloitte & Touche audit, which covered 1995 to 1998, a certified public accountant in the Medical Provider Fraud Control Unit in the Alaska Department of Law independently examined billings dating back to early 1992.

The Department of Law initiated a criminal investigation in September 1998. The U.S Attorney and the Office of the Inspector General of the U. S. Department of Health and Human Services also investigated.

Shortly after the Deloitte & Touche audit, but before Healthsouth learned the results, Healthsouth began its own investigation, Botelho said. Through its own audit, Healthsouth became aware that its new clinics had continued the improper billing practices of the former owners, Botelho said.

Healthsouth discontinued those practices in mid-1998, but failed to report to authorities as required by law. When later confronted with the states audit findings, Healthsouth admitted the wrongdoing and cooperated with authorities.

Botelho said Healthsouth settled to avoid the inconvenience and expense of litigation. The million-dollar settlement covers all overpayments, penalties, auditing expenses and interest.

Assistant Attorney General Stephen Branchflower said Healthsouth in 1999 filed a civil lawsuit in federal court against the former owners of the clinics in U.S. District Court. Leo Morresey, Lesley Morresey, Tanrale Inc., William Swayn, North Care Partners, and Work Care Inc. are defendants in the suit.

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