(The Center Square) – More than $730 million in Medicaid-related and health-care fraud was recovered from entities and individuals who defrauded the Texas Medicaid system or were accused of doing so in fiscal year 2023, according to a newly released joint investigative report.
A Joint Interagency Coordination Report summarizes the collective efforts of investigators with the Texas Health and Human Services Office of Inspector General and the Office of Attorney General’s Medicaid Fraud Control Unit (MFCU) and Civil Medicaid Fraud Division (CMF).
Their objective is to detect and prevent fraud, waste and abuse in the Texas Medicaid program through audits and investigations, including responding to complaints. The OAG prosecutes the cases working with the OIG; both endeavor to recover taxpayer money.
In fiscal 2023, their efforts resulted in HHS OIG staff recovering about $532.4 million in Medicaid and non-Medicaid fraud amounts, including recouping provider overpayments when no criminal charges are filed. The OAG’s CMF staff recovered $151.4 million and MFCU staff recovered $51.7 million.
In FY 2023, OAG CMF staff settled and recovered funds in several matters with recoveries totaling $2 million or more. One settlement was reached in a state civil action against Shire OLC, Baxter International Inc., Baxalta Incorporated, Viorpharma Inc., Takeda Pharmaceuticals U.S.A. Inc., and Takeda Pharmaceuticals America, resulting in recovering about $42.8 million. A federal and state civil action against Biogen Inc. resulted in recovering a little more than $3 million.
OAG MFCU prosecutors also obtained 79 indictments and 61 convictions averaging 4.6 years prison sentences on various Medicaid fraud charges, according to the OAG. In one case, a pharmacy owner was sentenced to more than 17 years in federal prison for participating in a fraudulent opioid pill mill scheme. The scheme involved diverting narcotics and fake prescriptions billed to government health care programs. Investigators also identified over $124 million in Medicaid overpayments.
There are also multiple ongoing OAG CMG investigations related to Medicaid investigations, according to the report, including into the lab testing company Medical Diagnostic Laboratories LLC and drug manufacturer Gilead Sciences Inc.
Another ongoing investigation relates to misrepresentations to Texas Medicaid by Dallas-based dental provider Richard Malouf, the former owner of All Smiles Dental Center. Two individuals brought the case to the OAG. A trial court ruled against Malouf, entering a $16.5 million final judgment in favor of Texas in the case. Malouf appealed to the Eighth Court of Appeals, which affirmed the lower court’s ruling and granted the OAG’s motion for partial summary judgment. Malouf then filed a Petition for Review with the Texas Supreme Court, which agreed last fall to hear his case.
Malouf also “allegedly billed for services while out of the country” and “as accusations about the Medicaid fraud at All Smiles mounted, Malouf sued several people,” Dallas Magazine reported.
Another investigation involves drug manufacturers Pfizer, Inc, Tris Pharma, Inc, and Tris CEO Ketan Mehta “for providing an adulterated pharmaceutical drug to Texas children. Defendants manufactured an ADHD drug that was adulterated due to faulty quality control practices. The defendants’ practices caused labeling for the drug – which included certain efficacy claims and instructions for reconstitution – to be rendered misleading,” according to the OAG.
Another investigation is of the drug manufacturer Tris Pharma, Inc., and Tris CEO Ketan Mehta “for unlawfully promoting an ADHD drug through misleading claims about the drug’s efficacy, causing the drug to be misbranded under federal and state law.”
