San Diego public hospital administrator paid over $1 million per year

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A hospital administrator in San Diego County turned up on California State Controller John Chiang’s salary database in no. 2 position, just shy of Robert Rizzo – the former City of Bell administrator accused of looting the blue-collar suburb of Los Angeles.

Michael Covert, CEO of Palomar Pomerado Health, a two-hospital public district, was paid $1.15 million in 2009. The information was only disclosed this week after The San Diego Union-Tribune questioned the hospital why its information was not reported last month with other public health care districts. Hospital representatives claimed that it has technical difficulties uploading the salary data to state computers.

Covert declined to discuss his salary with the Union-Tribune, although a hospital official, Theldore Kleiter, said “We have to compete for talent with all of the for-profit and nonprofit health systems. If you want the top management, that’s what you have to pay.”

Others were not as convinced that the million-dollar salary was justified. “Is this really rocket science?” asked Kris Vosbergh of the Howard Jarvis Taxpayers Association. “We’re talking about paying an administrator more than we pay a doctor, who makes life and death decisions.”

“Essentially, this is a bureaucrat.”

The state salary database project was begun last year to provide the public with accurate information regarding salaries earned by public servants.

“What we found in the absence of transparency is a breeding ground for waste, fraud and abuse,” state spokesman Garin Casaleggio said of the data in general, not any particular person. “This provides the public with a snapshot of what public compensation includes and allows them to weigh the figures along with the public benefit.”

Public hospital employees dominate the top end of the salary database.  Eight of the top twenty public positions are held by hospital administrators and four of the top twenty are physicians.

Other highly paid officials listed in the database include Washington Hospital CEO (Freemont, CA) at $905,084; the Orange County chief counsel at $692,768; the Upper San Gabriel Valley water agency manager at $646,902 and the Downey (pop. 107,000) Police Chief at $623,664.

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Feds shut down major Medicare fraud operators, arrest more than 100

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Federal authorities charged more than 100 doctors, nurses and physical therapists in nine cities with Medicare fraud Thursday, part of a massive nationwide bust that snared more suspects than any other in history.

More than 700 law enforcement agents fanned out to arrest 111 people accused of illegally billing Medicare more than $225 million. The arrests are the latest in a string of major busts in the past two years as authorities have struggled to pare the fraud that’s believed to cost the government between $60 billion and $90 billion each year. Stopping Medicare’s budget from hemorrhaging that money will be key to paying for President Barack Obama’s health care overhaul.

Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder partnered in 2009 to allocate more money and manpower in fraud hot spots. Thursday’s indictments were for suspects in Miami, Los Angeles, Dallas, Houston, Detroit, Chicago, Brooklyn, Tampa, Fla., and Baton Rouge, La.

They show that “health care fraud is not easy money,” Holder said at a press conference in Washington.

A podiatrist performing partial toenail removals was among 21 indicted in Detroit. He is accused of billing Medicare about $700,000 for the costly and unnecessary procedures, which authorities said amounted to little more than toenail clippings. The podiatrist billed Medicare for 20 nail removals on three toes of one patient, according to the indictment. He charged Medicare about $110 for each procedure.

A Brooklyn, N.Y., proctologist was charged with billing $6.5 million for hemorrhoid removals, most of which he never performed. He claimed he performed 10 hemorrhoid removals on one patient, which authorities said is not possible.

Authorities also busted three physical therapy clinics in Brooklyn, run by an organized network of Russian immigrants accused of paying recruiters to find elderly patients so they could bill for nearly $57 million in physical therapy that amounted to little more than back rubs, according to the indictment.

In Miami, two doctors and several nurses were charged with swindling $25 million by writing fake prescriptions recommending nurses and other expensive aids to treat homebound patients, authorities said. The services were never provided.

In total, nearly three dozen defendants were charged in Miami in various scams that topped about $56 million.

Thursday’s totals exclude busts two days earlier in Miami that netted 21 suspects accused of bilking $200 million from Medicare.

“These unprecedented operations send a clear message. We will not tolerate criminals lining their pockets at the expense of Medicare patients and taxpayers,” HHS Inspector General Daniel R. Levinson said in prepared remarks to be delivered at a news conference.

For decades, Medicare has operated under a pay-and-chase system, paying providers first and investigating suspicious claims later. The system worked when the agency was paying hospitals and institutions that couldn’t close up shop and flee the country if they’d been overpaid. But as Medicare has expanded to one of the largest payer systems in the world, he agency has struggled to weed out crooks. There are about 1.3 million licensed suppliers nationwide with 18,000 new applications coming in every month.

Sebelius has promised more decisive action on the front end, by vigorously screening providers and stopping payment to suspicious ones, under greater authority granted by the Affordable Care Act. removals, most of which he never performed. He claimed he performed 10 hemorrhoid removals on one patient, which authorities said is not possible.

Authorities also busted three physical therapy clinics in Brooklyn, run by an organized network of Russian immigrants accused of paying recruiters to find elderly patients so they could bill for nearly $57 million in physical therapy that amounted to little more than back rubs, according to the indictment.

In Miami, two doctors and several nurses were charged with swindling $25 million by writing fake prescriptions recommending nurses and other expensive aids to treat homebound patients, authorities said. The services were never provided.

In total, nearly three dozen defendants were charged in Miami in various scams that topped about $56 million.

Thursday’s totals exclude busts two days earlier in Miami that netted 21 suspects accused of bilking $200 million from Medicare.

“These unprecedented operations send a clear message. We will not tolerate criminals lining their pockets at the expense of Medicare patients and taxpayers,” HHS Inspector General Daniel R. Levinson said in prepared remarks to be delivered at a news conference.

For decades, Medicare has operated under a pay-and-chase system, paying providers first and investigating suspicious claims later. The system worked when the agency was paying hospitals and institutions that couldn’t close up shop and flee the country if they’d been overpaid. But as Medicare has expanded to one of the largest payer systems in the world, he agency has struggled to weed out crooks. There are about 1.3 million licensed suppliers nationwide with 18,000 new applications coming in every month.

Sebelius has promised more decisive action on the front end, by vigorously screening providers and stopping payment to suspicious ones, under greater authority granted by the Affordable Care Act.

The  Associated Press

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Insanity plea in Oregon costing taxpayers hundreds of millions of dollars

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The cost to taxpayers in Oregon for just one inmate in its state mental hospital system is a staggering $17,661 per month, according an investigative report in the Oregonian. The cost of housing an inmate in one of the state’s prisons is just $2,569.

Wayne Richards, 27, a non-violent offender with a record of mental health issues, was arrested after stealing a scooter at a local shopping center. Previously, he had a record of low-level crimes including drug possession, trespassing and theft.

In August 2009, he pleaded guilty except for insanity because he thought he would get help in the state hospital that he couldn’t get while on the outside, and also receive free food and housing.

Shortly thereafter, he found out that he would be under the supervision of the Psychiatric Security Review Board for five years — twice the time that he would have been in prison.

According to the Oregonian, over the course of five years, the cost to taxpayers will be more than $1 million.

Last week, there were 503 patients at the Oregon State Hospital in Salem such as Richards, some violent, although most of them are not. Many of them would have received sentences of probation for their offenses, except for their insanity pleas.

While the state is paying tens of thousands of dollars each month for the inmates, others in the prison system have limited mental health care, and thousands more on the streets have no treatment at all.

Information from: The Oregonian

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Medicare fraud runs deep in prescription drug program

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Crooks are taking advantage of lax oversight in Medicare’s Part D prescription drug program to obtain highly addictive drugs including oxycodone, Ritalin, and methadone, according to results of a federal probe.

The report by an independent inspector said Medicare can’t verify all the prescriptions it pays for, leaving the system open to exploitation by criminals using fake medical ID numbers and the identities of dead doctors.

The Centers for Medicare and Medicaid Services, which administer the federally funded health insurance program, isn’t adequately confirming that prescriptions are written by physicians, according to the investigation by the Office of the Inspector General at the Department of Health and Human Services.

Pharmacies and other Medicare contractors are supposed to enter a number that identifies prescribers. But in many cases, that information is being left blank or assigned a dummy number, last week’s report found. The missing information doesn’t always indicate fraud and could include clerical errors, but without prescriber identifiers, it’s hard for investigators to determine.

The report showed the agency paid $20.6 million for 228,000 prescriptions for so-called schedule II drugs with invalid prescriber IDs in 2007. The agency paid for about $1.6 billion worth of schedule II drugs during that same time period.

Investigators said the prescriptions with invalid IDs represented a small portion, but are alarming because schedule II drugs include heavy-duty painkillers and stimulants that are frequently trafficked.
Critics say pharmacies are getting around safeguards in the system, making it nearly impossible for federal health officials to track whether a licensed doctor prescribed the drug and in what quantities.

“It’s similar to placing a combination lock on a gate to protect what’s inside but then allowing any combination to open the gate,’’ said Robert Vito, a regional inspector general for the Department of Health and Human Services, during testimony before Congress last year.

Investigators recommended that contractors not be paid for Schedule II prescriptions that have an invalid doctor ID number, but Medicare officials worried stricter oversight could hamper legitimate patients’ access to medications.

The Associated Press

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New Jersey Republicans advance pension reform initiatives

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A plan supported by Gov. Chris Christie to reform the state’s troubled public pension system was introduced on Monday in the New Jersey House by Republican Assemblymen Declan O’Scanlon and Gary Chiusano, with Sen. Joseph Pennacchio planning to introduce the same measures in the Senate.

“The system in its present form is unworkable which is a major concern for every resident in the state,” O’Scanlon said. “This legislation will provide comprehensive and substantive improvements to save the system and protect taxpayers. If continue on our present course, public employees will lose their pensions and beleaguered taxpayers will face crushing tax increases.”

“There are several major public policies which need to be reformed in order to make New Jersey more affordable, and the public pension program is one of them,” Chiusano said. “The plan is grossly underfunded and will collapse without far-reaching systemic improvements. By enacting these measures, we will stabilize the state’s pension contribution at a manageable level and ensure its long-term viability. These reforms will ease the burden on taxpayers and strengthen the pension system for our public employees.”

If no changes are made to the current system, O’Scanlon and Chiusana said that the current unfunded liability of $54 billion will balloon to over $180 billion by 2041.

Under the sweeping proposal, future employees would be mostly affected by the 139-page bill.  The highlights include:

  • The retirement age would be raised to 65 for most employees, reflecting an increase in life expectancy. To retire early, workers would be required to have worked 30 years, instead of the current 25.
  • Workers would be required to contribute 8.5 percent of their salaries towards retirement.
  • Pensions would be calculated on employees’ earnings from their five highest-paid years, up from the current three.
  • Firefighters and police would have the maximum pension benefit reduced from 70 percent of their current salaries to 65 percent.
  • Cost of living increases would be eliminated.
  • The 9 percent pension increase given to workers in 2001 would be eliminated for current and future employees.

Two weeks ago, Democrat Senate President Stephen Sweeney proposed a bill that stopped short of the Republican’s bill.

Sweeney’s bill would replace the present oversight boards of the public employees, teachers, police and firefighter pension systems with joint boards of management and labor organizations. The boards would oversee the management of the pension funds and have the power to adjust annual contributions and benefits based on the investment performance of the funds.

The plan would require workers to make additional pension contributions if the wanted to take advantage of the 9 percent pension increase given in 2001.

Workers with fewer than five years of employment would not receive cost-of-living adjustments, unless the board found some way to pay for it.

Sweeney said “This legislation will remove politics from the process and establish a private-sector model for the pension system. This will be comprehensive reform that will ensure that those who benefit from the pension fund are paying their fair share without adding any additional burden to already overtaxed taxpayers in New Jersey.”

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Florida judge rules Obama health care law unconstitutional

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A federal judge ruled Monday that the Obama administration’s health care overhaul is unconstitutional, siding with 26 states — including Nevada — that sued to block it. U.S. District Judge Roger Vinson accepted without trial the states’ argument that the new law violates people’s rights by forcing them to buy health insurance by 2014 or face penalties.

Attorneys for the administration had argued that the states did not have standing to challenge the law and that the case should be dismissed.

The next stop is likely the U.S. Supreme Court. Two other federal judges have upheld the insurance requirement, but a federal judge in Virginia also ruled the insurance provision violates the Constitution.

In his ruling, Vinson went further than the Virginia judge and declared the entire health care law unconstitutional.

“This is obviously a very difficult task. Regardless of how laudable its attempts may have been to accomplish these goals in passing the Act, Congress must operate within the bounds established by the Constitution,” Vinson wrote in his 78-page ruling.

At issue was whether the government is reaching beyond its constitutional power to regulate interstate commerce by requiring citizens to purchase health insurance or face tax penalties.

Attorneys for President Barack Obama’s administration had argued that the health care system was part of the interstate commerce system. They said the government can levy a tax penalty on Americans who decide not to purchase health insurance because all Americans are consumers of medical care.

But attorneys for the states said the administration was essentially coercing the states into participating in the overhaul by holding billions of Medicaid dollars hostage. The states also said the federal government is violating the Constitution by forcing a mandate on the states without providing money to pay for it.

Florida’s former Republican Attorney General Bill McCollum filed the lawsuit just minutes after Obama signed the 10-year, $938 billion health care bill into law in March. He chose a court in Pensacola, one of Florida’s most conservative cities. The nation’s most influential small business lobby, the National Federation of Independent Business, also joined.

Other states that joined the suit are: Alabama, Alaska, Arizona, Colorado, Georgia, Indiana, Idaho, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming.

The Associated Press

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Investigation widens on Philly Housing Authority contractors and lawyers

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A document circulated the Department of Housing and Urban Development, includes new details about the federal government’s investigation into allegations of financial irregularities in the Philadelphia Housing Agency, while under the direction of its former executive director, Carl R. Greene.

Greene was fired in September, after its governing board learned that the agency secretly paid $648,000 to settle claims of three women who accused him of sexual harassment. One of those women, who settled her claim for $350,000, has since filed another claim for $600,000, alleging further intimidation and harassment after she left the agency.

In the five months since Greene was fired, a total of 10 lawsuits have been filed against the PHA, charging Greene and the organization with sexual harassment, fraud, theft and wrongful termination.

The HUD document, obtained by the Philadelphia Inquirer under the Freedom of Information Act, is a request for bids from auditing firms that it plans to hire, and augment the effort currently in process by its own internal auditors.

The audit scope of engagement is to examine the agency for evidence of “fraud, waste, and abuse,” to determine is anyone “misappropriated assets for personal gain,” and whether the agency was overcharged for services, including legal work and tenant services. The HUD audit of the PHA will cover the period from April 1, 2005 through March 31, 2010.

The audit also seeks to determine if all PHA policies and procedures were adhered to, and if legal and accounting standards were followed, including by “non-federal agencies” doing work for the agency.

Auditors are also expected to examine transactions between PHA and related entities. A non-profit, controversial agency called the Pennsylvania Association of Public Service Agencies, was formed by Greene after he left the PHA and has since collapsed under scrutiny by HUD officials.

HUD spokesman, Jereon M. Brown said that the audit assignment is expected to be awarded next month, most likely to a large, national CPA firm with forensic expertise. The last time a full forensic audit was conducted occurred in 2007, when HUD took over the local operations of the Miami-Dade County Housing Authority. There, federal investigators found several developers who were involved in stealing monies from the agency through fraudulent development deals.

The HUD document also disclosed that other agencies, including the Justice Department and the FBI are conducting their own investigations of the alleged corruption in the PHA under Greene.

The U.S. Attorney’s office in Philadelphia recently subpoenaed records from two nonprofits affiliated with PHA. The firms are Tenant Support Services Inc., run by Asia Coney, a public-housing resident leader and an associate of Greene’s, and the Philadelphia Asset & Property Management Corp., which manages 1,600 public-housing units financed via private and public sources.

Under a separate investigation, is PHA’s payment of what many consider to be excessive legal fees paid to outside firms during the last several years. Between 2007 and 2010 alone, $33 million was paid to 20 Philadelphia law firms. Greene got rid of most of the agency’s in-house lawyers, and turned over the legal work to high-priced outside firms. In 2002, HUD questioned the practice, but didn’t take any action.

The inquiry into its legal fees is being headed by U.S. Sen. Charles E. Grassley, the ranking Republican on the Senate Finance Committee.

PHA interim director Michael P. Kelly said the agency will cooperate fully with the finance committee, and asked all the firms to release non-confidential records and information including personnel used, rates and a description of services. He also vowed to bring much of the legal work back into the agency and strike an “appropriate balance” between in-house lawyers and outside counsel. This year, he said, legal fees have been reduced by about 15 percent.

Greene was the executive director of the agency since 1998, previously employed in the same position with the Detroit Housing Commission. Before that, he worked with other major city housing authorities in senior positions, including Atlanta and Washington, D.C. For the year 2010, Greene was to earn $350,000, more than the salaries of the mayor of Philadelphia and the Governor of Pennsylvania, combined.

The Philadelphia Inquirer

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