Not Exactly What the Doctor Ordered


Pharmacists are experts about the chemical properties of drugs and how they work within the human body. Their job is to fill medication orders as prescribed by doctors and provide advice to patients on health-related issues – sometimes referring them to doctors. Most pharmacists are professionals, who strive to improve their customers’ quality of life through the medicine they dispense – not to create more headaches. The Sentinel reports that one New York pharmacist took advantage of the sick to defraud the Medicaid system of $7.7 million by submitting phony bills for drugs never dispensed to patients. (I bet it’s going to take more than two aspirin in the morning to make that felony go away.)

The article states that the pharmacist owned and operated three pharmacies in the Bronx and one in Manhattan prior to being arrested by special investigators from the Medicaid Fraud Control Unit (MFCU). Between 2003 and 2008, those pharmacies submitted bills to Medicaid for drugs that were never doled out to patients. The lead culprit was one of five owners or supervising pharmacists that were audited to compare the amount of drugs each pharmacy legally purchased to the total amount Medicaid paid each pharmacy. The MFCU determined that none of the pharmacies had enough inventories to fill the prescriptions for which Medicaid was billed. (These guys weren’t exactly mathematical geniuses and were probably hoping that no one would notice the fraudulent bills.)

The not so fabulous five were basically caught red-handed and pleaded guilty to stealing from Medicaid (and U.S. taxpayers too). Coincidentally, four of the convicted had the same last name – and one individual was the older brother of the ring leader. The younger brother, who masterminded the scheme, received a sentence of one to three years in prison and must pay restitution of $7.7 million to the State of New York. The other four received a variety of sentences, including probation, community service and home confinement. The New York State Board of Pharmacy will handle professional discipline, which will include revoking the defendants’ pharmacist licenses. The five defendants also will be excluded from participation in any federally funded health care programs such as Medicaid and Medicare. (Those are some bitter pills to swallow.)

The MFCU did the leg work and got it right. Here’s hoping the mastermind hasn’t spent his ill gotten gains on fancy cars and houses. I’m not so sure the taxpayers will ever see their $7.7 million again. Here’s my question? What steps could have been taken to catch the fraud before it occurred? I’ll look for your answers in the comment section.

Source: Today’s ”Fraud of the Day” is based on an article titled ”Edison Man Receives Prison Time for Medicaid Fraud,” published in the Orlando Sentinel on August 14, 2013.

EDISON — A New York Supreme Court judge on Aug. 7 sentenced a township resident and previous owner of four New York pharmacies to one to three years in prison for bilking $7.7 million from the state’s Medicaid program, according to New York Attorney General Eric T. Schneiderman.

Sanjay K. Patel, 44, the former owner of three pharmacies in the Bronx and one in Manhattan, was arrested by special investigators from the attorney general’s Medicaid Fraud Control Unit last fall after a wide-ranging investigation uncovered more than $10 million in fraud at several New York City pharmacies.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.