For Immediate Release - January 05, 2011

Attorney General Martha Coakley's Office Announces Record $66 Million in Recoveries for the Massachusetts Medicaid Program in 2010

BOSTON - Today, Attorney General Martha Coakley's Office announced that recoveries by the Office's Medicaid Fraud Division totaled more than $66 million during 2010, breaking the previous recovery record, set in 2009, by over $14.3 million and marking the fourth consecutive year of increased recoveries. Over $191 million has been recovered for the state Medicaid program by the Medicaid Fraud Division during Attorney General Coakley's four years in office. The Medicaid Fraud Division is responsible for the investigation and prosecution of fraud against the state Medicaid program.

"Holding accountable those who attempt to defraud the Commonwealth's Medicaid program continues to be a priority of our office, especially at a time when more people struggle to afford critical health care services," said AG Coakley. "These settlements recover taxpayer money to a program that provides health services to over a million Massachusetts residents. Our office will continue to fight abuse in the Medicaid system, whether it is by a pharmaceutical giant or a local dental clinic, to prevent any entity from taking advantage of the Medicaid program."

Attorney General Coakley's Office continues to maintain a leadership position nationally in the fight against fraud, waste and abuse in the Medicaid program. In 2010, representatives from the Attorney General's Medicaid Fraud Division served as the lead negotiators for multi-state litigation teams that worked with the federal government to secure the two largest health care fraud settlements of 2010. The settlements with AstraZeneca L.P. in April 2010, and GlaxoSmithKline in October 2010, returned over $28 million to the Massachusetts Medicaid program and approximately $806 million to Medicaid programs nationwide.

In addition to the settlements above, representatives of Attorney General Coakley's Medicaid Fraud Division negotiated a variety of cases for the Commonwealth that achieved substantial settlements from various entities including a long-term care pharmacy, pharmaceutical manufacturers, independent clinical labs and dental practices. In September 2010, AG Coakley's Medicaid Fraud Division received $9.45 million in a settlement with long-term care pharmacy and MassHealth provider, Omnicare Inc., after an investigation revealed that the company had overcharged MassHealth for prescription drugs supplied to residents of skilled nursing facilities in Massachusetts.

Settlements from 12 pharmaceutical manufacturers, who were sued by the Commonwealth in 2003, recovered $22 million in total to the Massachusetts Medicaid program. On September 30, 2010, AG Coakley's Office won a $4.6 million verdict from a jury in federal court in Boston against the thirteenth pharmaceutical manufacturer in the case, Merck & Co., Inc. (f/k/a Schering-Plough Corporation), and its subsidiaries Schering Corporation and Warrick Pharmaceuticals Corporation. The Commonwealth is awaiting final judgment and the imposition of penalties by the court in this case.

As a part of an ongoing industry-wide investigation by the AG's Medicaid Fraud Division, two clinical laboratories, Life Laboratories and Clinical Science Laboratory, Inc., agreed to reimburse the state Medicaid Program for improperly billing Medicaid for urine drug tests, returning $975,000 to the state program. In July 2010, the AG's Medicaid Fraud Division indicted Calloway Laboratories and two of its principles on 42 counts for overcharging Medicaid for urine drug tests.

In January 2010, AG Coakley's Office, along with 22 states and the federal government, settled with FORBA Holdings, LCC., a dental management company that provided management services to Small Smiles dental clinics nationwide, two of which are located in Worcester and Springfield. Under the settlement, the company agreed to pay over $2.6 million to the Commonwealth to resolve allegations that it submitted bills to the participating state's Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid.

Medicaid is a multi-billion dollar joint state and federal program that provides health insurance for the economically disadvantaged. The Medicaid Fraud Division works cooperatively with MassHealth and other state and federal agencies to prosecute fraud against the Massachusetts Medicaid program.

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