Issaquah senator sponsors bill to reform Medicaid

March 12, 2012

By Warren Kagarise

NEW — 6 a.m. March 12, 2012

Lawmakers — including local state Sen. Cheryl Pflug — passed legislative to crack down on Medicaid fraud and recover taxpayer funds.

The measure, Senate Bill 5978 or the Medicaid Fraud False Claims Act, aims to create additional tools for the state to pursue Medicaid fraud. Supporters said the effort could raise millions of dollars in fraud recoveries in the years ahead. The legislation is modeled on a longstanding federal program.

The measure relies on whistleblower tips to learn about fraud from health care companies out to defraud the state Medicaid system.

The act encourages health care company employees to alert state regulators to fraud. The legislation then awards a portion of funds recovered during a successful investigation.

Medicaid is health insurance for qualifying low-income and needy people. Experts from the National Conference of State Legislatures estimate the cost of Medicaid fraud accounts for 3 and 10 percent of total expenditures for the program. Washington spent $8.5 billion on Medicaid last year — and recovered less than $20 million in fraud.

Pflug, a registered nurse and a 5th Legislative District Republican, signed on as the bill’s prime sponsor. (The district includes Issaquah and East King County.)

“Without this tough enhancement of our False Claims Act, our state has been almost powerless against the corporate culprits who defraud taxpayers through false Medicaid claims,” she said in a statement. “Fraud only leads to higher health-care costs, and as the Medicaid program grows the need to deter fraud grows as well. This bill also would help take away the incentive to commit fraud — to discourage the egregious corporate schemes that have raked in hundreds of millions of dollars.”

The measure passed 40-9 in the Senate on March 8. The legislation cleared the state House of Representatives, 56-42, the same day. The bill heads to Gov. Chris Gregoire to be signed into law.

Pflug joined another senator, Kent Democrat Karen Keiser to support the legislation.

“The bill allows us to be party to over 100 ongoing cases of multistate fraud around the country that already exist and are under way, that we are denied access to right now,” said Keiser, Senate Health and Long Term Care Committee chairwoman. “In the last three years, Washington has missed out on our proportionate share of over $1 billion. Leaving such sums on the table during these difficult times is simply unacceptable. I’m proud that members of both parties were able to come together to enact this legislation.”

Pflug and Keiser joined forces last year to pass a similar measure, but after the bill passed the Senate, the House failed to act on the legislation.

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