SCI Finds Pattern of Medicaid Fraud by CARL ZEITZ Frank L
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The Daily Register VOL. 99 NO.46 SHREWSBURY, N. J. TUESDAY, AUGUST 31, 1976 15 CENTS Landlords seen getting Medwaid profits WASHINGTON (AP) - Much of the money that finances Senate committee and the head of the investigation, said Me gress intended M to N per cent of Medicaid monies to be investigators posed as indigent Medicaid patients and visited the Medicaid program winds up in the pockets of landlords in- dicaid bills from clinics and physicians surveyed in the study spent for rent, to be relegated as profit for a businessman, Medu-aid clinics stead of paying for medical care, Senate investigators say. would be examined for any sign of criminal fraud Prose- rather than as a legitimate fee tor the services rendered by They complained of having colds, although rongmMnal A Senate subcommittee staff reported yesterday after an cution would be sought if there is evidence of fraud, he said practitioners." doctors had previously found them lo be in perfect health eight-month study of the Hedicaid program that fee-splitting In studying clinics in inner-city areas, the investigators The report said the practice presents serious ethical ques- A large variety of ailments were diagnosed at the clinics, agreements, between physicians and landlords lead to numer- found that "most of the Medicaid money went to businessmen tions It quoted from an opinion by the American Medical As- and numerous costly and unnecessary tests were made. Most ous abuses. In effect, the physician ends up working for the who owned the building or held the lease." sociation judicial council that said: said Enough prescriptions were given them "to till a five- landlord on a commission basis. Most of the physicians were allowed to keep about 20 to 40 "An arrangement by virtue of which a physician leases drawer filing cabinet." the report said Such agreements "present serious moral, legal and ethic- per cent of the money they generated from Medicaid, the sub- office space for a percentage of gross income Is not accept- Investigators made a total of about MO visit* to Medicaid al questions," the subcommittee said. committee staff said. able. It is violative of ethical principles " clinics in New York, California. Michigan and New Jersey Hearings on Hedicaid continued today before a subcom- The physicians were under heavy pressure from their The subcommittee staff said the percentage lease "unde- They estimated that M per cent of the medical care received mittee of the Senate Committee on Aging. The panel is head- landlords to see more patients, order more medical tests and niably Increases providers' propensity to commit abusive al the clinics is inadequate ed by Sen. Frank E. Moss, D-Utah. spend less and less time with each patient, it said. practices." "Most patient visits lasted three lo five minutes People Meanwhile, Val J. Halamandaris, associate counsel of the The report expressed "grave reservations that the Con- In order to document (he abuses, Moss and subcommittee were hurried through in assembly line fashion." Moss said SCI finds pattern of Medicaid fraud By CARL ZEITZ Frank L. Holstein, execu- "This l.i taxpayers money New Jersey would be eligible tive director of the commis- To pay a dollar and hive 60 for Medicaid this year TRENTON (AP) - The sion, held a news conference cents of that dollar taken by a The sketchy commission re- State Commission of In- to discuss the report To such landlord-entrepreneur merely port followed closely the dis- vestigation says it has found specific questions as how lo maximize his profiis - closure of a report on the con- a pattern of fraudulent Modi much money was being lost that we can say is not getting gressional committee's in- cald bills from physicians and through fraudulent medical what we're paying for." Hoi- vestigation of the .Medicaid other medical professionals practices, the number of New stein said program In eight cities, in- but It can't say how much the Jersey physicians relying on The system Is wasteful. cluding Newark, Panatc and state is being bilked. Medicaid for most of their in- Holslein said later "II I'aterson The director of the SCI said comes, or how many "Medl doesn't Insure good health The Senate committee's re- yesterday he doesn't know cald mills" operate through- care and It seems to promote port waa said lo place the loss how much money is being out the state he had one con bad healthcare " of funds through fraud at up wasted but that the Medicaid sistenl answer. "I don't lo half of the $15 billion a program Is wasting tax- know " While Holstein was briefing year that Medicaid now costs payers' money by (ailing to Nevertheless, Holstein newsmen In Trenton the The SCI undertook In- deliver the most economical placed the blame largely with chairman of the SCI. Joseph vestigation of the Medicaid and soundest medical assis- businessmen who lease facil- Rodriguez, was in Washington program at the request of tance to the poor. ities to physicians to treat testifying before the II S Sen- Cov Brendan T Byrne more Medicaid patients and provide ate Special Committee on Ag- than 18 months ago Last year Noting the release of a 77- the needed laboratory and ing He delivered a capsule it held a senei of hearings to GOVERNOR SIGNS HOMESTEAD ACT - New yard of Frank and Mary Ameo, left and right, re- page SCI report on Medicaid clerical services also required summary of the slate com disclose the kinds ol abuses It Jersey Gov. Brendan T. Byrne, center, gives cere- spectively. The Ameos were selected to host the abuses. Gov. Brendan T. by the doctors mission report and Its recom lound in laboratory Medicaid monial pen away after signing Assembly Bill 1330, signing as a typical New Jersey family, who will Byrne who asked for the in- mendatlons receive a $204 rebate under the new law. services the Homestead Rebate Tax Exemption. The sign- vestigation more than 18 In one case, Holstein said, Both the federal and Male Holstein said information Ing was held In Belleville yesterday in the back- months ago, said yesterday, SCI Investigators found a governments have an interest leathered by the commission "Most practitioners are dili- businessman who sometimes in the Medicaid program suggesting the need for crimi- gent and live up to the letter acted as a physician, even since it U funded about equal nal prosecutions would be lor- and spirit of the law, but we doing medical ex»min»tlont ly by Washington and Tren warded to Atty Gen William must maintain constant vigil- when the crush of cases al his ton K Hyland signs two more bills ance tor those who do not " facility outstripped the pro- The current state budget Byrne The commiMion said gener The document was based fessional staff includes more than $220 mil ally lhal evidence II gathered on SCI investigations of 12 He estimated that the typi- lion for Medicaid with nearly al the 12 Medicaid clinics was high powered Medicaid ser- cal agreement between a a like amount provided by the insufficient In challenge as- income tax package vice centers in the North Jer- Medicaid building landlord federal government for the sertions that only a small per- of the sey cities of Hoboken, Irving- and a physician brings the New Jersey program alone centage of doctors abuse the ton, Jersey City, Newark, landlord 60 per cent of every The Department of In- availability of Medicaid By SHERRY CONOHAN sessed at the rate of 2 per "These two programs of awaiting the governor's signa- Passaic and Paterson, anil In dollar the doctor is paid by property tax relief for every ture. Three are scheduled to stitutions and Agencies has funds SUtefeoue Correspondf it cent on taxable income up to Camden in South Jersey. Medicaid estimated 675.000 residents of 120,000 and 2% per cent on homeowner in New Jersey be signed in public ceremo- See M I, page I TRENTON — New Jersey that over (20,000. are financed out of the new nies yet this week No dates wage earners will begin to Two major property tax re- income tax and represent a have been set for the signing feel the bite of the new state lief bills in the income tax significant step in reforming of the other two. Income tax this1 week package of approximately 20 our inequitable tax struc- The bills to be signed this Payroll withholding for the measures passed by the State ture," Gov. Byrne said after week are those which: GAO discounts fort report tax begins tomorrow and just Legislature were signed into the signings. Repeal the unincorporated how much it's going to hurt law yesterday by Gov. Bren- "It's important to remem- business tax. By JIM OSTROFF pleted, it won't approve or clusions " Army's primary plan, known will show up with the next dan T. Byrne. These were the ber that every dollar collect- Provide for the distribution disapprove the ECOM shift " , Although he conceded that as the "preferred alterna- paycheck. The amount with- homestead rebate bill, which ed from that income tax goes of revenues by the state to WASHINGTON - A top-lev- The published report also "several pieces" of the study, tive," calls for the reorgani- held should drop somewhat, he signed at a private home to local governments in one municipalities as replacement el official in the General Ac- claimed that a source in the begun in April, are now com- zation of ECOM al the Harry however, on Jan. 1. It will be in Belleville to dramatize the form or another to ease the for the unincorporated busi- counting Office (GAO) last GAO, the accounting arm of pleted, he emphasized that Diamond Research Labora- higher for the last four relief it will provide, and the property tax burden, except ness tax and the retail gross night dismissed as "pure con- Congress, said the study "none of these pieces contain months of this year because revenue sharing bill, provid- for one per cent needed to ad- tories, Adelphi.