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As a result of limited administrative resources, most insurers rely upon the basic integrity of the provider population, paying claims prior to review.
Virtually every state MFCU has found egregious examples of fraud by nonemergency medical transportation companies. For example, following numerous transportation company prosecutions, the Maryland MFCU looked at transportation companies, finding fraud or abuse in virtually every one. Many transportation providers had as their sole purpose the transportation of Medicaid passengers to and from methadone clinics. Most of those methadone passengers were able-bodied men and women who had previously driven themselves or taken buses to the clinics but were now subjected to marketing pressures from the van companies, who learned that they could easily persuade the recipients to “purchase” a service that literally cost the recipient nothing. Van companies paid a finder’s fee to anyone who brought in new clients with eligible Medicaid cards. One enterprising owner agreed to pay for the recipients’ weekly methadone service at a private clinic in a faraway county, just for the privilege of billing Medicaid for the lengthy trip to and from Baltimore City.
Few of the van companies could resist the lure of easy money with virtually no prepayment audit, and it was not difficult for the Maryland investigators to locate ample evidence of outright fraud. Three van company owners were prosecuted for billing for recipients who continued to drive themselves, for allowing ineligible persons to use another recipient’s card and for paying weekly kickbacks to recipients who used their transportation services.
The general transportation program in Maryland virtually collapsed under the weight of fraud and abuse. In 1988, the program cost taxpayers only $4.5 million per year. Fraud, abuse, and aggressive marketing caused demand for program services to increase fourfold in four years, for a cost of $16.2 million in 1992, at which time it was abolished.
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