By Jessica Bliss, The Tennessean
Sullen faces stare back from the mural of mug shots that lines the hallways in the Office of the Inspector General - the state agency that investigates TennCare fraud.
The cast of characters is a visual representation of the hundreds of arrests the investigative unit has made over the past seven years. They are married couples, twin sisters and single moms, all appearing quite harmless. But the state says they have scammed the TennCare system of millions of dollars.
Fraud investigators reported a record January and February with 42 arrests. Since the unit was created in 2004, investigators have charged 1,382 people with TennCare fraud. The majority of those ended with a conviction or pre-trial diversion, which allows the accused to avoid a trial and go on probation without admitting guilt. The fraud unit also has collected just over $3.7 million in restitution and recoupment since its inception.
Critics say it's not enough, there should be more prosecutions and more money recouped for the state. Supporters say the fraud unit's real worth and most valuable service - deterring fraud - can't be calculated.
As a family practitioner, state Rep. Joey Hensley, R-Hohenwald, has turned in several people he believed were defrauding the system, but he is not impressed with the fraud unit's performance, considering that TennCare has more than 1.2 million annual enrollees.
"With so much fraud I am honestly not too happy with the conviction rate," said Hensley, who also is chairman of the TennCare oversight committee. "I feel like there is a lot more of it going on than they are picking up."
The fraud unit has opened 132,515 cases since 2004, but the majority of them - 127,665 cases - were closed because fraud could not be proved.
Sometimes the unit got bad information and there was not enough evidence to proceed with a criminal or civil case, and other tips had incomplete information, but every tip was investigated, Inspector General Deborah Faulkner said.
Even if there was no crime but there was some indication of wrongdoing, the unit submitted those cases to the TennCare Bureau for review. The fraud unit has forwarded more than 48,000 cases to TennCare. Given that the state spends $3,656 on each TennCare enrollee, the fraud unit says alerting TennCare about those cases may have saved the state $173 million, but it can't be sure because it's up to TennCare to decide who should be removed from the TennCare rolls.
"To me it's about letting people know that Tennessee is not going to tolerate it," said Faulkner, the former Metro deputy police chief who runs the TennCare fraud investigation office. "If you need it, you can have it, but if you are violating the rules and you are lying, we are going after you.
"I am a taxpayer, too, and I want to know that my money is going towards people who need it, not who are abusing it."
Tony Garr, policy director at Tennessee Health Care Campaign, wonders if funding the unit is the best use of taxpayers' money.
He said some convictions are "very legitimate," but in cases in which a grandma or single parent has turned to an illegal alternative for care because they felt the health-care system failed them, then money would be better spent on counseling and support programs.
"(Prosecuting) is part of the solution," Garr said. "The other part of the solution does not exist, and that is to provide real care and other service to folks who really were not criminals. They were just seeking some help and could not find it."
TBI plays key role
TennCare is the state's Medicaid program. It provides health insurance to
1.2 million poor, elderly, disabled and otherwise uninsured Tennesseans at a cost this year of $8 billion.
Federal law requires that each state offering a Medicaid plan maintain a Medicaid Fraud Control Unit, which investigates and prosecutes provider fraud. That unit is part of the Tennessee Bureau of Investigation.
With its 34-person staff and $4.3 million annual budget, the TBI identified $46.6 million in misspent TennCare money with 19 indictments and 12 convictions during the 2009-10 fiscal year, according to TBI spokeswoman Kristin Helm and the bureau's annual report.
But federal regulations prohibit TBI from pursuing recipient or patient fraud unless there is a conspiracy with a provider. Instead, the Office of Inspector General, which Gov. Phil Bredesen established, investigates patients who commit TennCare fraud.
On a white board in her office, Faulkner tracks her unit's progress. In its first year of operation (July 2004-June 2005), the Inspector General's Office made 60 arrests. The next year that number increased to 205.
It has continued to improve. The 2009-2010 fiscal year was the office's most successful with 266 arrests resulting in nearly $700,000 in recovered funds.
When compared with the millions collected by the TBI, the number produced by Faulkner's unit looks small, but her investigators generally deal with lower amounts of misspent TennCare funds because they pursue individuals and not doctors or institutions.
"You have to have people that are willing to go out and unearth fraud of all sizes," said Jerry Martin, U.S. attorney for the Middle District of Tennessee. "If you don't have that, then people think they can get away with anything, then you will have massive fraud done in small increments."
Some lawmakers agree but believe the unit should be self-sustaining.
"I think that is a pretty good point if it is only recouping a couple hundred thousand a year and spending $5 million a year to do it," said state Sen. Eric Stewart, D-Belvidere. "But if we can truly make it a disincentive for folks to break the law, maybe it's worth it.
"Do they need to be doing more? Sure, I think they do. They may be working their tails off every day - and I am sure that they are - but we need to crack down on all the fraud and doctor shopping we can.The end result is they need to be paying for themselves, and I think there is ample room for them to be paying for themselves."
Last year, taxpayers spent $4.6 million funding the unit's operating budget.
The fraud unit's 41-person staff sifts through reports from TennCare and its providers and compares them with state and federal databases and criminal records. The public also provides tips via a phone hotline, the unit's website, e-mail and postal mail.
The staff includes two hotline operators, three attorneys, two nurses to examine medical records, and desk reviewers to analyze the information. Ten special agents with arrest powers also tour the state's 95 counties doing field investigations.
Each tip translates into an open case, regardless of whether it is viable. The office prides itself in being responsive, and Faulkner believes that reliability has resulted in more tips and more arrests, but it also means time spent following dead ends or misinformation.
In the cases in which fraud could not be proved, a tipster may have provided a common name and no address, an angry spouse might have been trying to get revenge, or the alleged fraud didn't happen in Tennessee.
"No matter who calls here, they are going to get a response, and we are going to do everything we can to assist them," Faulkner said. "Are they all good cases? No, they're not. And we are quick to close them if they're not."
Fraudulent actions worth investigating include filling phony prescriptions, reselling drugs purchased through TennCare, under-reporting income or lying about access to private insurance.
Faulker attributes the increase in arrests mostly to the 2007 "doctor shopping" bill, which made it a crime to visit multiple doctors to obtain the same controlled-substance prescription within a 30-day period without notification. Doctor shopping cases comprised 139 of the unit's total arrests through March 8.
The state agency understands why its critics want higher arrest rates and convictions, but those critics may not understand what it takes to resolve a case, said Lola Potter, spokeswoman for the Office of Inspector General.
"You have to understand when we place charges against someone, you have one word you have to focus on - 'knowingly,' '' Potter said. "You have to have pretty solid evidence to prove 'knowingly.' ''