Tax Watch

Attorney General Eric Schneiderman announced today that his office recovered $335 million in Medicaid funds that were fraudulently claimed last year. The amount is the second highest that was reclaimed by the agency’s Medicaid Fraud Control Unit in any year, and the highest in seven years, he said. 

Major cases included obtaining guilty pleas from four pharmacists and a pharmacy owner in New York City who bilked the state’s Medicaid program of $9.9 million by submitting bills for drugs they never dispensed to their customers and shutting down a scheme to distribute black-market prescription HIV drugs through a Suffolk County pharmacy and bill the Medicaid program more than $155 million.

“Part of my first major initiative when I took office was to bolster the Medicaid Fraud Control Unit with additional prosecutors, investigators, and auditors, in order to even more aggressively root out fraud and return money illegally stolen from New York taxpayers and their government,” he said in a statement. “That initiative has paid off with record recoveries for taxpayers this year.”

The Medicaid Fraud Control Unit also shut down schemes to obtain prescription drugs illegally through Medicaid and sell them on the street for profit and targeted providers that billed for unnecessary services or unnecessary visits, referred patients to unlicensed facilities in exchange for kickbacks, Schneiderman said. The unit also went after unlicensed health-care workers and black market drug sellers that repackaged prescription drugs of unknown origin and resold them to pharmacies.

Schneiderman reached a $146 million agreement with GlaxoSmithKline as part of a $3 billion multi-state settlement of claims that the company engaged in illegal schemes to market and price drugs it manufactures, including Paxil, Wellbutrin and Advair. The multi-state settlement was the largest health-care fraud settlement in U.S. history.