Former senior New York fraud investigator allegedly took gifts from a state contractor

A former senior official with the Office of Medicaid Inspector General (OMIG) is accused of accepting gifts in the form of meals, travel and a job offer from Health Management Systems (HMS), which had a $120 million contract with the state, according to a report released by the New York State Office of the Inspector General (NYSOIG).

From 2011 through the spring of 2013, Joseph "Jeff" Flora, who served as the director of the Bureau of Third Party Liability at OMIG at the time, received approximately $1,600 worth of food and beverages from HMS. In February 2013, HMS paid more than $1,000 for a round trip ticket to Texas and then offered Flora a job with a $135,000 salary and an $18,000 signing bonus. New York law prohibits state employees from receiving gifts from companies under contract with the state.

During this time, Flora oversaw a $120 million contract with HMS in which the company helped identify improper Medicaid payments. Flora also touted HMS services to other state government agencies, sometimes using language written by an HMS employee. Flora's testimony helped HMS secure a $200,000 contract in Nevada, according to the NYSOIG report.

"Flora used his official position to secure improper gifts and a financially lucrative job from HMS, and HMS used Flora to help expand its business," Inspector General Leahy Scott said in a press release.

"This arrangement flouted state law, and the investigation and my recommendations highlight the need to ensure the utmost integrity in the government contracting process."

In December 2013, Flora agreed to forfeit 15 vacation days from his accrued balance as punishment. However, the OMIG failed to deduct the vacation days, leaving Flora unpunished until the Inspector General alerted the OMIG of the oversight. Scott went on to recommend that the OMIG retrain employees involved in vendor contracts on policies against accepting gifts and that the agency determine whether HMS should be barred from state contracts.

The report brings to mind a similar scandal involving top officials at the Texas Health and Human Services Commission and a $110 million no-bid contract awarded to 21CT to root out Medicaid overpayments. In February, a Texas state audit revealed operational defects and an unethical working environment within the HHSC that led to the contract.

For more:
- read the NYSOIG report
- here's the press release

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