Fraud, cost overruns illustrate problems of Virginia's Medicaid program

Terry McAuliffe VirginiaVirginia Governor Terry McAuliffe, a Democrat, has been pushing for his state to expand their Medicaid program as part of ObamaCare, but new budget projections and uncovered fraud, point out how expanding Medicaid would be a risky and expensive proposition.

First to the fraud. Ten former employees of Progressive Counseling Services, LLC in Virginia “have been convicted and sentenced for their roles in a scheme to defraud the Virginia Medicaid program.” Court records show that “the defendants submitted false claims for mental health support services in order to obtain reimbursement payments from the Virginia Medicaid Assistance Program in 2011 and 2012.”

Here’s a breakdown of the scam:

Barbara Bing Banks, 34, of Hampton is one of nine defendants who operated as Qualified Mental Health Professionals and claimed to provide the support services to Medicaid-eligible clients in the Tidewater area, the documents state.

David Weaver, 71, of Chesapeake, operated as a Licensed Mental Health Professional and was responsible for assessing Progressive patients to ensure they required mental health services, according to the documents. He and the businesses owner created fraudulent assessments of Progressive clients to obtain authorization to bill Medicaid for mental health support services.

False Medicaid reimbursement claims were then submitted for mental health support services purportedly provided by the nine other defendants.

The claims were false because most of the counselors were not qualified to serve as mental health professionals, the counseling sessions never occurred, and progress notes used to document the sessions were fabricated, according to the release.

The total costs of the massive scam weren’t reported, but with an operation of this magnitude, the taxpayers were certainly robbed for a lot of money.

Of course, this comes on top of news that a recent audit uncovered critical flaws in Virginia’s Medicaid program which cost the state “at least $21 million last year.” The audit illustrated how lax enforcement mechanisms within Virginia’s Medicaid program are, and how much waste and abuse has penetrated the system.

Now comes word that Virginia’s Medicaid costs, only for the program as it stands now, will increase by nearly $1 billion through the next two-year budget cycle. The reason: increased enrollment.

The $956 million increase is due primarily to a surge in enrollment by people who were eligible for program benefits but either did not know it or did not act on it until this year. Since July 1, more than 51,000 people have enrolled in the program, including 11,000 low-income parents who became aware they are eligible for Medicaid because of the debate over expanding the program and the requirement that individuals have some form of medical insurance under the federal health care law, the Richmond Times-Dispatch report.

This is not good news for Governor Terry McAuliffe, whose efforts to expand Medicaid now have to overcome an already high cost hurdle. Virginia House Speaker William J. Howell, a Republican, is leading the opposition to the Governor’s plan and called the latest cost estimate “simply staggering.”

Howell told the Richmond Times-Dispatch that “Every new dollar spent on Medicaid is a dollar that cannot be invested in K-12 or higher education,” and that “This number, combined with the last two (Joint Legislative Audit and Review Commission) reports on Medicaid, are all the evidence the House needs as to why Virginia should not expand Medicaid.”

Legislators in other states that have expanded Medicaid under ObamaCare are coming to the same realization Howell already has: Democrats may make Medicaid expansion sound enticing, but as costs of the program increase, and reimbursements from Washington decrease, states (and their taxpayers) will be left with a tab they may not be able to pay without significant tax hikes or cuts to needed services.


Kristina Ribali is the Senior Coalitions Director for the Foundation for Government Accountability.  Follow Kristina on Twitter for the latest on Obamacare and Medicaid expansion news.