Yachting with Medicaid recipients

I'd like to share with you one the most egregious cases of alleged enrollment fraud I've seen.

It started in Minnesota. The special investigations unit at Medica received intelligence in 2012 that Colin A.J. Chisholm III and his wife, Andrea Lynne Chisholm, may have fraudulently enrolled in Medicaid. The insurer suspected something was wrong when they learned the couple presented themselves as Scottish aristocrats and rented a luxury lakeside home.

Medica's SIU assessed a medical claims overpayment of more than $60,000 to the Chisholms, part of which the couple spent on massages at a wellness center and spa. The insurer referred the case to the Hennepin County Fraud Unit. Here's what its investigators found:

Since applying for public assistance in 2004, the Chisholms made false statements and misrepresentations to the Hennepin County Human Services & Public Health Department (HSPHD). The couple concealed their assets, income, household composition and their actual residence, along with their 28-month absence from Minnesota. As a result, the Chisholms stand accused of fraudulently receiving public assistance.

The couple failed to tell HSPHD they owned an 83-foot yacht, The Andrea Aras, purchased in Florida for $1.2 million. They didn't mention they moved to Florida and lived there for years onboard their yacht and later in a seaside home near Palm Beach. The Chisholms didn't disclose they were simultaneously receiving Medicaid benefits, food stamps and welfare payments from Florida. Minnesota public assistance recipients are prohibited from simultaneously collecting similar aid from another state, the state's complaint against the couple noted.

The Chisholms also failed to report bank balances of nearly $3 million. And they concealed that they lived in upscale homes since 2008. On at least 13 applications, recertifications and shelter verification forms, the couple said they lived with a relative in south Minneapolis. And though the HSPHD terminated the Chisholms' welfare benefits in 2012, somehow the couple managed to get back into the system, according to Hennepin County Attorney Mike Freeman.

This case raises many issues for anti-fraud professionals.

First, I think of what I learned in college from an old psychology professor: Behavior generalizes. The Chisholms stuck their fingers in many pies, allegedly robbing government programs in two states. Their case underscores that once payers find fraud and abuse in one area or program they should check every other line of business for criminals' sticky fingerprints. Ask yourself: Where else and how else can they do damage?

And we need better enrollment gatekeeping to protect program integrity. How did the Chisholms get back into the system after being thrown out? Their case echoes recent news of an excluded provided accused of defrauding Medicaid of $78 million.

While all fraud and abuse are forms of stealing, there's something really galling about stealing from programs meant to help the poor.

I've listened for years to a Medicaid plan colleague discuss the obstacles health poverty brings. He talks about the degree of difficulty in Medicaid business, how hard it is to case manage people who sometimes lack access to safe housing, child care, transportation or nutritious food. He talks about the challenges of supporting customers who may have low levels of education or inadequate family support. And he insists the last thing his company wants is long-term customers; they want a transient customer base where people leave Medicaid after landing jobs that offer affordable health insurance and enough pay for a better life. Medicaid fraud and abuse threaten vital steps on route to that end.

"It's outrageous," Hennepin County Attorney Mike Freeman said of the Chisholm case."You hear of people getting public assistance when they're having a hard time in their lives and getting it back together. And then you see this ... These were rich folks ripping off the system. I will make sure they do hard time."

If convicted, the Chisholms face a maximum sentence of 20 years in prison. But authorities must catch them first; they've been on the lam for over a month. Freeman hinted they've gone "someplace warm." I wonder if they're yachting again? - Jane (@HealthPayer

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