WOW, this is a BFD:
Americans are confused and conflicted, polls show, about “Obamacare”. Recent polls show that a majority want to “gamble” and just give it a chance. News junkies like me know that there are many conflicting news reports and opinion pieces – mostly written by those pushing a political agenda. Wouldn’t it be wonderful if we could just find a trusted, non-partisan research group that would study the darn thing and give us some straight answers we could believe in?
Well, this morning my dream came true. News I have been waiting for. One of the country’s most respected think-tanks, the RAND Corporation ( http://www.rand.org/ ), has just completed an exhaustive study of 2000+ health reform policy scenarios. The conclusion (drum roll please):
“The new U.S. health care reform law was the best option for providing health insurance to the largest number of people while keeping federal government costs as low as possible.”

away we go before then had to pay it back that story is wrong you never get something for nothing and the war our boys and mine are there dying while our congess does nothing 9 yrs 9thousand lives enough is enough sir bring our boys home or let some one else push the button to end this war the way they did us in 9 11 bush left us with a mess he new he was wrong to begian with as a american we all want our boys home now if not election time we will choise some one wqho has the guts not play games with lives

Would somebody please close the beltway exits that lead to Maryland from D.C.!!! Every time this poor excuse for a president comes to Maryland it costs me money.

As usual, no specifics on dealing with fraud.

FEDERAL JUDGE SAYS IF THEY DID NOT PROMISE OR SIGN ANYTHING KICKBACKS ARE OK??? WHICH IS NOT TRUE BY THE WAY.
Turning next to relators’ claims based on alleged violations of the Anti-Kickback Statute, the court concluded relators failed to allege “that United Health certified compliance with the Anti-Kickback Act, nor did they allege that such compliance was relevant to the Government's funding decisions.” The court then declined to exercise supplemental jurisdiction over relators’ state law claims and refused to grant relators leave to amend.
MEDICARE FRAUD, MEDICADE FRAUD, AND KICKBACKS AND BRIBES BUSINESS AS USUAL,INSIDER INFORMATION GIVEN. 9B BS ONE THING BUT WHAT ABOUT YOUR "HANDS OFF POLICY" BY THE DOJ AND CMS AND HHS, AND WHY NO INVESTAGATIONS OR AUDITS TO CONFIRM OR HELP? "SELF DISCLOSURE BY CARRIER ANOTHER JOKE".

WHAT ABOUT "TAXPAYERS TO PREVENT AND STOP AND PREVENT FRAUD FOR MEDICARE AND MEDICADE" WHAT ABOUT WILLIS AND WILKINS BEING FIRED FOR NOT WANTING TO BREAK THE HEALTH FRAUD LAWS?

NJ CEPA CLAIM NOW ON FILE.....FALSE CLAIM UNDER APPEAL AND FILED..... WHERE WAS ANY HELP FROM YOUR DEPARTMENT?

The U.S. District Court for the District of New Jersey dismissed May 13 a qui tam action alleging violations of the False Claims Act (FCA) by United Health Group and its subsidiaries. According to the court, the complaint failed to state a claim upon which relief could be granted under the FCA. Relator Charles Wilkins began employment with United Health Group and its subsidiary AmeriChoice in October 2007 as a sales representative. Relator Darryl Willis began employment with United Health Group and AmeriChoice in 2007 as the general manager for Medicare/Medicaid marketing and sales.

In their qui tam complaint, relators allege 11 violations of Medicare and Medicaid regulations. The United States declined to intervene in the case and the relators filed an amended complaint that stated one federal count—violation of 31 U.S.C. § 3729(a)(1)-(3)—and nine state law counts. United Health moved to dismiss under Fed. R. Civ. P. 12(b)(6), arguing relators failed to plead the elements of a "false certification" claim, they failed to plead any anti-kickback violations, and failed to adequately plead a conspiracy. Relators alleged that because United Health entered into a contract expressly certifying that it agreed with all "terms and conditions of payment," they made a false claim when they submitted claims despite any one of the 11 purported regulatory violations alleged in the amended complaint. Rejecting relators' express false certification claim, the court found “[not once in the Amended Complaint have Relators identified even a single claim for payment to the Government.”The court also held relators’ implied false certification claim failed. According to the court, relators argued that because United Health agreed to comply with all CMS regulations when it contracted to become a prescription drug plan sponsor, and because at times it was in violation of some regulations, it therefore committed fraud each time it submitted a claim for payment. The court found such a theory of liability overly broad. “If Relators' theory were correct, the FCA would become a federal tort fountain, flowing claims for every trivial violation of Medicare/Medicaid regulations,” the court said. Relators next argued that under the recently enacted Fraud Enforcement and Recovery Act of 2009 (FERA) a relator need only show whether compliance with regulations would have a tendency to influence the government's payment decision. While that argument is true, the court reasoned, “Relators must still show a claim . . . and [t]hey have not done so.” Turning next to relators’ claims based on alleged violations of the Anti-Kickback Statute, the court concluded relators failed to allege “that United Health certified compliance with the Anti-Kickback Act, nor did they allege that such compliance was relevant to the Government's funding decisions.” The court then declined to exercise supplemental jurisdiction over relators’ state law claims and refused to grant relators leave to amend.

United States ex rel. Wilkins v. United Health Grp. Inc., No. 08-3425 (D.N.J. May 13, 2010).

FCA claim alleging aggressive marketing tactics by health plan provider dismissed
Publication: Health Law Week
Date: Friday, June 4 2010

The U.S. District Court for the District of New Jersey dismissed a qui tam action brought by two former employees of healthcare plan providers alleging violations of the False Claims Act (FCA) arising from excessively aggressive marketing methods. United Health Group Inc., a provider of access to healthcare services, had as its subsidiaries AmeriChoice and AmeriChoice of New Jersey, which each offered Medicare Advantage plans. Charles Wilkins and Darryl Willis (the relators), who were each employed by United Health Group and AmeriChoice, initiated a qui tam claim against United and its two subsidiaries under the FCA alleging numerous violations of Medicare and Medicaid regulations governing administration of the Medicare Advantage plans. The complaint alleged that the defendants engaged in unauthorized and aggressive sales methods in marketing the plans -- including the provision of illegal cash payments to providers to induce them to change beneficiaries to AmeriChoice and the provision of illegal kickbacks to doctors for obtaining the names of patients they could call and approach. The defendants moved to dismiss.

The district court concluded that the complaint failed to identify a single instance in which the defendants submitted a false claim to the government for payment as required to prosecute a qui tam claim as relators under the FCA. Under applicable federal appellate court precedent, the absence of such an allegation was fatal to the relator's false certification claim. The relators' theory of liability at base was that because United Health agreed that it would comply with all Centers for Medicare and Medicaid Services regulations, and because it was at times in violation of some regulations, it committed fraud each time it submitted a claim for payment. The district court concluded that this contention confused the conditions of participation in a Medicare or Medicaid program with the conditions of payment, and would open the door to a flood of tort claims of a type not contemplated by the FCA. Moreover, the complaint failed to allege that the violation of any regulation was actually relevant to any funding decision. As a result, the complaint failed to state a claim on which relief could be granted and, accordingly, the defendants' motion to dismiss was granted.

Source: Health Law Week, 06/04/2010

Copyright © 2010 by Strafford Publications, Inc. http://www.straffordpub.com / All rights reserved. Storage, reproduction or transmission by any means is prohibited except pursuant to a valid license agreement.

2009 and 2010 $120,000 from your tax dollars.

Philadelphia PA Mayor Nutter received two years in a row $60,000 checks to help keep open and operate the city swimming pools.

These checks came from AmeriChoice Health and on the surface seems like fine gifts.

Yet, they are Bribes non the less, these checks come from a company who receives all its money from the Federal Government as a vendor for Medicare Medicaid services is not allowed to offer bribes kickbacks and money gifts of any kind in order to promote its share of the market place.

This is not allowed as a use of your taxpayers dollars yet it happens.What does it really cost the City of Philadelphia to receive this money?

Americhoice Health has a long history of corruption over the years yet seems to be protected by those who are responsible to over see their actions why is that?

Honest Fraud wrote:
Honest Kickbacks Honest Bribes

Judical decision, It’s true there is email thanking AmeriChoice health for their $25,000 gift and requesting a larger amout for the pending year etc. from Community Health Center located in Bridgeton N.J. etc. It’s true a licensed Health Agent was fired for his refusal to deliver these checks. It’s true this behavior violates all the laws concerning bribes, kickbacks,fraud and Stark laws.

What is Bribery Any Way? a form of corruption,is an act implying money or gift given that alters the behavior of the recipient. It’s also true that the various Government agencies were notified of these frauds as well as a FCA case being filed.

It’s true this taint’s all the business then received from Community health center to AmeriChoice Health Company and then submitted to Mediciad and should be then held accountable and subject to all the violations of the health laws involved.

Are Kickbacks becoming a normal way of doing business ?

It’s true that relators argued that because United Health agreed to comply with all those trivial regulations when it contracted to become a prescription drug plan sponsor,as well as sign a formal contract of compliance.

The court found such a theory of liability overly broad. “If Relators’ theory were correct,the FCA would become a federal tort fountain, flowing claims for every trivial violation of Medicare/Medicaid regulations,”the court said. Relators next argued that under the recently enacted Fraud Enforcement and Recovery Act of 2009 (FERA) a relator need only show whether compliance with regulations would have a tendency to influence the government’s payment decision. While that argument is true, the court reasoned, “Relators must still show a claim . . . and they have not done so.”Turning next to relators’claims based on alleged violations of the Anti-Kickback Statute, the court concluded relators failed to allege “that United Health certified compliance with the Anti-Kickback Act, nor did they allege that such compliance was relevant to the Government’s funding decisions.” The court then declined to exercise supplemental jurisdiction over relators’state law claims and refused to grant relators leave to amend.

It’s true many additional laws were broken and proof furnished but no copy of checks to suppot the bribes only the unapproved forms and email etc.

I think the Federal courts have already decided that not only is Honest Fraud OK but Honest Bribes as well as Honest Kicbacks are OK. It’s amazing a Federal Judge thinks bribes and kickbacks and fraud are to trivial for the court system to waist their time on. What should courts spend their time on and since when do you have to certify compliance for non-violation of any Federal And State Kickback laws??

By Wayne Barrett Tuesday, Jul 3 2001

Most of Bill Thompson's "financial consulting" clients are not revealed on his Board of Ed disclosure forms. The most disturbing one that Thompson did list, however, was Managed Healthcare Systems Inc., where he earned a total of $65,000 in 1997 and 1998, according to his tax returns. A black-owned HMO whose principals worked at the highest levels of the Reagan administration, the company is shrouded in scandal.

Last year, New York Attorney General Eliot Spitzer forced the MHS, which specializes in recruiting Medicaid recipients for its HMO, to repay the state $2 million for Medicaid services that patients never received. Spitzer also put Jean Moise Millien, the director of an MHS clinic, in jail for up to three years after he pled guilty to stealing $275,000 from Medicaid. Spitzer's press release revealed that MHS knew for years that Millien's clinic, Stuyvesant Heights Medical Group, was largely run by "unsupervised physician's assistants and nurse practitioners" and that patients "were consistently complaining that they were having difficulty getting services."

Yet, said Spitzer, the company "failed to take corrective action or properly oversee its subcontractor." MHS portrayed itself as "a victim" of the clinic when they settled with Spitzer.

The State Health Department also revoked Millien's physician's assistant license in November 2000, finding that he'd run the clinic since 1991—four years before the MHS contract began—without on-site supervision by a licensed M.D. The Department also found that the clinic corporation had been dissolved by state officials for tax delinquency reasons in 1994 and that Millien had a prior criminal record. Spitzer said a doctor from Pennsylvania came to the clinic once a week "to sign charts" for a while, but "eventually stopped coming altogether."

An MHS affiliate left a similar trail of complaints in Pennsylvania—where it became the subject of Philadelphia Inquirerexposés in 1996 and 1997, before and during Thompson's employment. According to one study, it was three times as likely to refuse to pay for days of hospital care as the state's next most stingy HMO. The "focus of six special state and federal audits" and a onetime target of a Pennsylvania grand jury, according to the Inquirer,the company took a reported $119 million in profits and executive bonuses from its Pennsylvania Medicaid work alone in the early '90s, making it the "most profitable HMO" in the state.

Anthony Welters, the principal owner of AmeriChoice, the Virginia-based parent of MHS, was a top Reagan transportation official, gave $20,000 to Pennsylvania GOP governor Tom Ridge, and has given over $56,000 in recent years to Republican candidates and committees across the country. Clarence Thomas is the godfather of one of his children. Thelma Duggin, another top executive, worked in the Reagan White House and at the Republican National Committee under Lee Atwater, the engineer of the Willie Horton campaign.

Thompson said he'd known Welters and Duggin since 1992, when they started trying to do business in Brooklyn, and that he "bumped into Tony" in 1997 and Welters offered him a consulting job that started that June. Charged with "reaching out and helping them obtain business," Thompson said he "spoke to community organizations." Though he says he "never visited an MHS clinic"—including the Stuyvesant Heights one near his home—he insists that MHS is "a good company." While Thompson's tax returns indicate that AmeriChoice paid him $35,000 in 1998, his disclosure forms report no income from the company.

Thompson is quick to point out that he wasn't the only prominent Brooklyn Democrat to wind up on the MHS payroll. Assemblyman Al Vann was hired, as was DeCosta Headley, a Democratic district leader, Ed Miller, a campaign aide of Congressman Ed Towns, and Chris Owens, the son of Congressman Major Owens. "I don't think Al and Chris are getting involved in anything that's not 100 percent benefit to the community," said Thompson, apparently oblivious to the higher standard demanded of a candidate for so powerful a citywide post as comptroller.

Special Treatment? This company was already found guilty of FCA violations before and now there back for more. Remove them from the Medicare and Medicaid programs now. Why are the Judges not doing the job they were hired for? Forget about the FCA and go after them for the inducement crooks they are.The Health Industry would be better off without this company. Federal Register: December 19, 1994 What Is the Medicare and Medicaid Anti-Kickback Law?

Among its provisions, the anti-kickback statute penalizes anyone who knowingly and willfully solicits, receives, offers or pays remuneration in cash or in kind to induce, or in return for: A. Referring an individual to a person for the furnishing, or arranging for the furnishing, of any item or service payable under the Medicare or Medicaid program; or B. Purchasing, leasing or ordering , or arranging for or recommending purchasing, leasing or ordering, any goods, facility, service or item payable under the Medicare or Medicaid program. Violators are subject to criminal penalties, or exclusion from participation in the Medicare and Medicaid rograms, or both. A violation of the anti-kickback law is a felony offense that carries criminal fines of up to $25,000 per violation, imprisonment for up to five years and exclusion from government health care programs.

The federal anti-kickback statute, 42 U.S.C. § 1320a-7b(b), prohibits individuals or entities from knowingly and willfully offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid or any other federally funded program.

If this were any one person they would be in jail now, if the FBI were called in on this matter they would be in jail now, if the IRS were notified they would be in jail now. Since all Ameri-Choice checks come from the United Health's home office they should be held equally responsible for any bribes, kickbacks, Stark, Fraud and inducements violations that have occured. Federal and State Governments have developed a depended position with this company that laws and rules no longer apply for them in their everyday business. .This role is nothing new for the AmeriChoice and its been going on for years, look at some of the prior news articles that date back for years only now they can afford to hire the best of Law firms and give the most for Political contributations all on the back of the taxpayer.The Laws have become tighter for sure but they can still dance away their problems.

HMO Finds Lots of Money in Poverty By Craig R. McCoy and Karl Stark, INQUIRER STAFF WRITERS

Six Special Audits Found HMA Profited Too Much From Taxpayers

Healthcare Management Alternatives is a small HMO that manages medical care for poor people on Medicaid in the Philadelphia area. Its performance over the last seven years is eloquent proof that money can be made in the poverty business. The company, which relies solely on government contracts, has generated $119 million in pretax profits, executive bonuses and money paid to affiliates since 1989, according to an analysis by the Pennsylvania Treasury Department and a review of other records by The Inquirer. Healthcare Management's Medicaid contract has been the focus of six special state and federal audits since it began. Each audit concluded that ineffective state oversight permitted the company to make too much money from taxpayers. Healthcare Management reported making $43 million in profits since 1989 from Medicaid, the government's health program for the poor. State and federal regulators say that figure represents less than half of what the company and its affiliates made. The auditors who studied much of the company's operations since 1989 said that, in addition to the $43 million in reported profits: * Healthcare Management paid its four founders $26.8 million in bonuses. * The firm paid $36 million in management fees to affiliates controlled by owners. Auditors who reviewed most of these fees said they were unable to document what work was performed for most of the payments. * The company paid owners $12.7 million for co-signing loan guarantees and $1.4 million in other fees to affiliates. Auditors questioned both expenses.

The Philadelphia company, which did not exist before 1989, began running a pilot program that year with $200,000 in seed money from the firm's founders, according to company records. Its profits, bonuses and other earnings of more than $100 million represented ``an incredible figure for a contractor doing 100 percent of their business with the Commonwealth of Pennsylvania,'' according to a 1996 audit by the Pennsylvania Treasury Department. No auditor said the firm's high profits are illegal. Healthcare Management's principal owners, Anthony Welters and Dr. Walter P. Lomax Jr., said the firm's profits are small compared to the millions the company has saved the state in lower health-care costs for the poor. ``The commonwealth received their dollar back [in savings] before we received our 10 cents of benefit,'' Welters said in an interview last week. Healthcare Management took over its Medicaid contract from a failed company in 1989.

``In retrospect, people can look and say, `Wow,' '' Welters said, referring to the firm's profits and bonuses. ``Most people passed on this business because they thought it was a hornet's nest and it could only pull you down.'' ``I was scared to death,'' added Lomax, a longtime Philadelphia doctor. The two men said government audit reports were ``flawed'' and repeatedly overestimated the company's profits. The firm's management fees had been approved in recent years by the Pennsylvania Insurance Department, they said. Loan guarantees, they said, are common tools for start-up companies that need capital to operate. Welters and Lomax said that, in their view, they are pioneers, not profiteers, who took managed care into poor neighborhoods. For their troubles, the two men said, they have been subjected to repeated audits and labeled by some as ``poverty pimps.'' Welters said he gives back at least 30 percent of his income to charity, and that his partners also donate heavily to community causes. ``One could walk away,'' he said, ``with the impression that we pulled the wool over somebody's eyes and got something for nothing.'' Instead, he said, Healthcare Management has worked hard to be creative in improving medical care for the poor. How did an HMO for the poor make so much money? The answer has much to do with timing.

Healthcare Management set up shop during a unique moment in history. It started managing poor people's care when state officials were not controlling profits and few knew how much money could be made from the Medicaid system, according to interviews with regulators, auditors and industry experts. As early as in 1991, federal auditors were warning the state that Healthcare Management was in ``imminent danger'' of becoming ``a cash cow.'' By the end of 1995, when the firm's profits had become a clear trend in the eyes of state treasury auditors, they called the Pennsylvania Department of Public Welfare's oversight lax and ``inexcusable.'' Peg Dierkers, Welfare's policy director, acknowledged that the agency failed to limit profits for Healthcare Management and other Medicaid HMOs.

Even so, Dierkers said, the state is saving millions by placing the poor in HMOs. In the past, welfare recipients could go to individual doctors who accepted Medicaid patients and the medical bills were much higher. Last year, she said, the Welfare Department moved to control profits by cutting premiums paid to HMOs statewide and forcing them to provide the same coverage for less cost. The move saved taxpayers $76 million, Dierkers said. Those rate cuts have also helped push Healthcare Management into the red. The company reported a $1.8 million pretax loss in the first quarter of 1997. Dierkers said she was not surprised that Healthcare Management and three other HMOs serving the poor in the Philadelphia region each posted first-quarter losses this year. She said that could change. She attributed the losses to start-up costs as managed-care companies adjust to a new state mandate that they enroll all welfare recipients. In the interview, Welters said the rate cuts had hurt but added: ``We're not going to lose money forever.'' Until this year, Healthcare Management has been an industry leader in profits. Excluding management fees, the company's own numbers - in records filed with the state Department of Insurance - show that it was the state's most profitable HMO over the two-year period of 1995 and 1996. The firm paid no bonuses during those years. The company's reported profit rate of 5.4 percent over 1995 and 1996 outpaced such industry giants as U.S. Healthcare, whose profit margin in Pennsylvania was 1.8 percent in that period.

Two years ago, Healthcare Management's financially attractive ledger enabled its owners to sell about one-third of the parent company to private investors, led by the CNA insurance company of Chicago and a General Motors pension fund, according to state records. General Motors alone paid $24 million for a 7.5 percent stake in the company, according to Internal Revenue Service public records. Welters and Lomax declined to discuss the sale. Healthcare Management was not the only company to make substantial money from Medicaid managed care. Mercy Health Plan generated $50 million in pretax profits and fees from 1990 through 1993, the state Treasury Department said in a 1995 report that also criticized the Welfare Department's oversight. In all, the HMO, now known as Keystone Mercy Health Plan, produced $88 million in profits and fees since 1990 - a 7.2 percent annual return, according to a report by the Treasury Department and a review of other records by The Inquirer. A spokeswoman for Keystone Mercy said the company declined to comment. In a 1993 Inquirer article, Mercy officials said they were offering the poor better health care while saving the state money. The Keystone Mercy HMO - half-owned by Independence Blue Cross - was outperformed during that period by Healthcare Management, which earned an 8.4 percent return, state records show.

Such earnings by Medicaid HMOs anger advocates for the poor, who feel that profits from Medicaid should be capped until recipients' health is improved. ``As a taxpayer and a health advocate for low-income children, it makes me sick,'' said Ann Torregrossa, who heads the Pennsylvania Health Law Project. ``The money should be going to health care for the poor.'' ``We had long been saying, from the beginning, that there should have been a cap on [HMO] profits because this is a public-program area where there's a large number of unmet needs,'' said attorney Richard Weishaupt, who specializes in health care for Community Legal Services. Healthcare Management has maintained that it provides quality care to the poor. In the interview, Welters and Lomax said the firm made many innovations and was the first to put a health clinic inside a public middle school. Advocates for Medicaid patients who have reviewed HMO health-care data say none of the four welfare HMOs in Philadelphia is providing enough care. Healthcare Management - the third-largest Medicaid HMO in the five-county Philadelphia region, with 68,519 members - had the highest number of welfare clients opting to leave its plan in the first six months of this year, state records show. The firm lost 4,729 members.

Welters attributed the losses to start-up problems from the state's new plan placing all Philadelphia-area Medicaid recipients into managed care. * Like other Medicaid HMOs, Healthcare Management receives Medicaid money from the state and pays out a portion for medical claims of welfare recipients. Andrew Wigglesworth, president of the Delaware Valley Healthcare Council, said one way for HMOs to make money is by not paying for patients' hospital stays after the care has been given - a practice known as ``denying days.'' A study by the Healthcare Council of seven Philadelphia HMOs found that in October 1994, Healthcare Management initially refused to pay 24 percent of days billed by hospitals - a rate three times greater than the next closest insurer's. Healthcare Management officials contended that the hospital trade group's study was unfair because the HMO is not always notified when its Medicaid clients are treated in emergency rooms and hospitals. Wigglesworth said Healthcare Management has been trying to improve its procedures, but, he said, doctors and hospitals are still complaining that they are not receiving some payments from Healthcare Management.

Another way for HMOs to make gains is to pay bills slowly, Wigglesworth said. Healthcare Management's payment systems often did not pay bills on time, former employees said. Their accounts are backed up by public audits. The state Insurance Department, which regulates HMOs, randomly selected a group of Healthcare Management's claims during a review in May 1995 and reported that the company paid 60 percent of doctor bills after the required payment period of 30 days. ``Company officials confirmed our finding,'' the report said. ``It was a business decision'' to pay some claims late, and the company ``agreed to implement internal controls'' to pay medical bills faster. The company's late-payment problems continued before and after the Insurance Department's review. The Welfare Department has cited Healthcare Management for violations involving late payments and assessed a total of $745,000 in penalties since 1991, including $123,000 in penalties this year. Welters said the department's on-time requirements are difficult to meet. Computer glitches had slowed payments this year, he said. Those problems have been fixed, he said.

The question of whether Healthcare Management pays all of its bills attracted the attention of the Pennsylvania Attorney General's Office, which has been conducting an investigation over the last 18 months, according to former employees who were interviewed. A state grand jury has been asking whether the company refused to pay large bills from hospitals and doctors who treated Healthcare Management's clients, according to two officials close to the investigation. When the probe was first reported last October, a company spokesman denied any wrongdoing. In the interview last week, Welters and Lomax added that they had never been contacted by the Attorney General's Office and that they had no knowledge of such an inquiry. Healthcare Management was incorporated a day before bidding was held in 1989 to insure 80,000 welfare recipients under what was then called Pennsylvania's HealthPass program, records show. Welters and Lomax said they spent three months preparing their plans. Five companies submitted bids in 1989 for the Welfare Department contract to cover Medicaid recipients in South and West Philadelphia. Healthcare Management's bid was the lowest, but the Welfare Department ranked the firm last among the five, largely because it had no experience and lacked capital, according to a federal review. John F. White Jr., then Welfare secretary, asked another committee in the department to reevaluate the bids - because, he said, Healthcare Management was not treated fairly in the first review. That committee ranked the firm second. White then awarded the $750 million contract - at the time the largest of any kind in state history - to Healthcare Management. White said at the time of the award that the department chose Healthcare Management because it was the lowest bidder.

Within months, the U.S. Department of Health and Human Services sued the state Welfare Department, citing ``the appearance of favoritism in this contract award.'' To settle the suit, the state agency rebid the contract in 1991. After the rebidding, the agency again selected Healthcare Management because it was the low bidder. As the contract recipient, the company had several advantages. Those who failed to choose a health insurer were automatically assigned to Healthcare Management if they lived within its service area in South and West Philadelphia. No other HMO received referrals in that manner. Also, in its early years, Healthcare Management was the only firm allowed to solicit customers at tables set up inside welfare offices. The company quickly became a financial success.

In 1991 and 1992, federal and state regulators concluded that the company was making large profits and understating them in its financial reports. The auditors said the company reduced the profits it reported by subtracting bonuses, management fees and loan guarantees and listing those items as expenses. ``In our opinion, the recorded net earnings are extremely misleading and completely overlook the vast sums made by HMA's owners, directors and affiliated companies from the HealthPass contract,'' a 1991 federal report said. A federal audit the next year said: ``We are not implying that by earning this amount, HMA, its owners/directors, and its affiliated companies violated any of the terms of the HealthPass contracts, committed any other types of violations, or underserved HealthPass clients.'' The report said the state should act to reduce Healthcare Management's profits.

Besides bonuses and management fees, federal auditors identified ``loan guarantees'' as another way owners were making money in the early years. The company granted a Welters family-owned affiliate 30 percent of all profits over three years in exchange for co-signing bank credit for Healthcare Management in its early years, according to auditors. Under that arrangement, the affiliate ended up being paid a total of $12.7 million over three years for co-signing a $3 million line of credit, a federal review said. Welters said he would have lost heavily if Healthcare Management had failed. The new venture was so risky that Lomax said he chose not to put his personal wealth on the line. In retrospect, he said, ``I wish I had participated in it'' because of the payback. The auditors concluded that after adding back bonuses and other fees, Healthcare Management generated $16.6 million in earnings in its first 28 months of operation - more than twice what the firm had reported as profits. The year 1994 was an even better one for Healthcare Management. Besides paying $4.59 million in management fees to affiliates, the company granted its four founders $13.9 million in bonuses, according to state audits. Their salaries were not listed publicly.

Those bonuses marked the high point, but they were not unusual. From 1990 to 1994, Healthcare Management paid $26.8 million in corporate bonuses to its four founders. Welters, the firm's top executive, received a total of $9.3 million, records show. Board vice chairman Lomax was granted $8.2 million during that four-year period, while board secretary Edgar G. Rios and treasurer Jess E. Sweely each was given nearly $4.7 million. Healthcare Management claimed income of $9.3 million in 1994 - or 4.2 percent of revenues. State Treasury auditors said the firm's reported numbers were understated and called its real profits ``exorbitant.'' They said by adding the executive bonuses and management fees, the income was actually $27.8 million - a 12.6 percent profit rate. That margin was nearly triple the average for the state's profitable HMOs, Treasury auditors said.

Welters said Treasury's analysis was flawed. He said the firm's record keeping had been approved by the accounting firm Deloitte & Touche. ``We were the whipping boy between two gladiators,'' Welters added, referring to the state Treasury and Welfare Departments. State agencies generally do not criticize one another. Then-Pennsylvania Treasurer Catherine Baker Knoll, a Democrat, was elected and served alongside the Democratic administration of then-Gov. Robert P. Casey Jr. Knoll's auditors repeatedly criticized the Welfare Department for poor oversight of Medicaid HMO contracts. ``I was truly appalled,'' Knoll said of Healthcare Management's profits in an interview before her term expired last January. ``I think everyone is entitled to a fair return. This was out of control.'' In a 1994 report of the Healthcare Management contracts, Knoll's auditors said the Welfare Department ``should have been aware of the trend of excessive profits and shell transactions'' with affiliates by Healthcare Management. ``Treasury feels a return of 7,600 percent [on a $200,000 investment] and profits three times the average on taxpayer dollars is excessive,'' the report added. The firm stopped paying guarantee fees in 1991. Healthcare Management continues to pay management fees.

The Treasury auditors also criticized this practice. Management fees are paid when one company does work for another. The auditors said Healthcare Management ``could not provide a description of the services they received for the $4.59 million management fee'' paid to affiliates in 1994. The Treasury audit also said the company was unable to show that its management fees were reasonable costs reflecting the going rate in the market. The Department of Welfare levied a penalty of $4,390 against Healthcare Management for failing to get advance contract approval for paying management fees. Welters said the penalty was unfair because state officials were apprised in the firm's early years that the management fees were for legitimate work, such as hiring, data processing and legal work. ``What I'm saying is that services were clearly rendered,'' Welters said in the interview. ``No question about it.'' In 1995, the firm sought to more than double its management fees to $10 million. The state Insurance Department subsequently cut the firm's request by 60 percent. The agency allowed Healthcare Management to pay $3.8 million in management fees to its parent last year.

*
Anthony Welters grew up in two New York neighborhoods not unlike the blighted areas in West and South Philadelphia that made up his company's original target area. ``I grew up in a family of asthmatics,'' he said. ``I understand what it is to get up in the middle of the night to run to the emergency room with a bunch of kids because your mother is under the tent.'' He said the welfare system provided abysmal care to his family when he was a child. The 42-year-old lawyer now lives in a $1.75 million house in McLean, Va., a suburb of Washington. He socializes with prominent people, including President George Bush's former Health and Human Services secretary, Louis Sullivan. Supreme Court Justice Clarence Thomas is godfather to one of Welters' children. A Republican activist, Welters has spent his adult life working for the government and, later, running companies with federal and state contracts. He managed the New York state offices for the late Sen. Jacob Javits, was an Amtrak vice president, and served as an associate deputy transportation secretary in the Reagan administration from 1983 to 1985. Welters also is a leading contributor to political campaigns. He gave two reasons: Welters said he wants to encourage African Americans to succeed in politics. He also said that, as a businessman, he understood the value of making contributions. ``When you come to the table, it makes a difference,'' he said. As a member of the Governor's Club Board of Directors, he gave $20,000 to Gov. Ridge's 1998 reelection campaign and has pledged $30,000 more. Welters and his wife, Beatrice, have given a total of $28,000 over the last two years to congressional and senatorial candidates and to party organizations, generally in states where Welters does business, campaign finance records show. Lomax, 65, and his family gave $35,500 to candidates for federal office in the last two years, records show. ``I'm an ideological contributor,'' said Lomax. He said he gives to candidates who look out for ``human rights and poor people.'' He added: ``Ninety-nine percent of my candidates lose.'' Their other partners, Rios and Sweely and relatives gave $17,500 during the same period, according to records.
A spokesman for Healthcare Management said Welters spoke in behalf of Rios and Sweely, both of whom declined requests for interviews. Sweely, 59, is an accountant and former real estate broker who joined another Welters family company, Atlantic Systems Inc., in 1988. Rios, 45, is a lawyer and a longtime Welters friend from New York City who worked for the IRS and in private practice. The four men and their families own most of Healthcare Management's parent company, AmeriChoice, of Vienna, Va., which operates a Medicaid HMO in New York and which last month paid $19.5 million for a Medicaid HMO formerly owned by the State of New Jersey. The firm is now seeking to open a Medicaid HMO in Atlanta. The company has spent heavily on consultants. Last year, Healthcare Management paid $1.2 million for various experts, including WHAT-AM talk show host Mary Mason, to represent the company in the community. Mason declined to discuss how much she is paid now, but in 1995, she described her pay as more than $300,000 a year. Welters said Mason serves the same role for Healthcare Management as former Philadelphia Eagles coach Dick Vermeil does for Independence Blue Cross. ``We want to embrace the community we serve with people they respect,'' Welters said. Healthcare Management has also spent thousands of dollars on travel and hotel expenses. Last year, the company spent far more than any other Medicaid HMO in the Philadelphia region on travel and conferences. It spent $556,169. As early as in 1989, the company spent $30,029 for rooms over eight days at Hotel Atop the Bellevue, according to a federal audit. Welters said the week at the Bellevue was needed to gather 35 employees and executives to launch operations.

Records show that the firm also sent five executives and their wives to London in the summer of 1990 to host a Healthcare Management reception for Lloyd's of London, which was providing the firm insurance. Welters, Sweely and Rios then flew on to Hong Kong to meet with the firm brokering the insurance. The airfare alone was $39,963. The executives received an additional $35,670 in travel advances, company records show. In the last three years, company meetings have been held at such Florida resorts as the Beach Club in Boca Raton and the Breakers in Palm Beach, former employees said. Welters said the company's annual retreats are strictly business, with no family members allowed. The workload, he said, ``is very, very intensive.''

©1997 Philadelphia Newspapers Inc.

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Medicare.gov as well as other agency's encourage you to report any fraudulent activities, yet the same government agencys were notified the way this company did business yet did nothing.

Three years ago they were reported to these agencys and as of todays date not only were they allowed to continue doing business but were never charged once.

Protected vendor status sure, politics sure, limited government budgets sure, Federal and State officals looking the other way sure, and rather then stop these activities a strong desire not to rock the boat exist. Even with the vast changes in rhe laws and budgets,a hands off policy remains, you tell me what's wrong with this picture?

The Government created this monster and now they don't know what to do about it, like shooting yourself in your own foot etc.Tons of money to advance their national growth, its market positions, tons of money for political donations, tons of money to send 75 millon back to its home office from New York state alone, tons of money to suppot National TV shows, tons of money to pay hugh State fines, tons of money to hire the very best law firms, tons of money to pay for bribes and kickbacks, tons of money for hugh salarys and bonuses, all done on the back of the American taxpayor, you see this company receives all its money from the Federal government.

Should your tax dollars be held to a higher standard? Should the government agencys responsible for there review be held to that same standard? Should the IRS audit their corruption? Why has this company not been charged?

How long can the buck be passed here in more ways then one? Hey, it's your tax dollars don't complain now.. then don't complain later on...

As a former employee of AmeriChoice Heath Newark New Jersey those who were signed up with AmeriChoice Personal Care Plus received as one of the benefits approved by CMS I might add and listed on their company sales brochure 570004 972-1034 10/7 M0002 508N (9/17/07) under transportation were allowed 75 round trips per year to plan approved locations at a cost of " you pay 0". AmeriChoice considered the following locations as plan approved Doctor offices,Grocery Shopping, Movie Theaters, and of course a local Parmacy to have any needed prescriptions filled.

The transportation used were 'limo-carriers' from the Newark area.This also seems like a great idea to help those who can't help themselves of course its with the taxpayer who foots this bill for these benefits as well as the many others offered under the Plan. This Limo-services supplied a pick up service and and return service for the duel beneficiarys to go to their Doctors, get their prescriptions filled, grocery shopping, and once a month to go to a free movie at a local Newark theater once again all on the back of the taxpayer. Their Brochure goes on to say when you enroll with AmeriChoice Personal Care Plus you get more benefits, and more coverage,more personalized care and more services than Medicaid and Original Medicare.

I'm not attacking the poor or any of these wonderfull programs beng offered for medicare and medicaid folks, I'm sure these benefits were well thought out and by those responsible for such thrifty decisions etc. But I would like to question the grocery trips and theater trips and how this all relates to any taxpayors interest, All these new great Audit teams that report to CMS now, I'm sure if they uncover any thing wrong, it will be brought to our attention and corrected if necessay and any taxpayors money loss will be returned then will be protected.

I would like to know how this is not considered a major inducement under the Medicaid rules and regulations, you know to get those millions of Americans signed up that AmeriChoice Health keeps talking about. I wonder what roll the States play in this limo matter, and if Congress really knows how these tax dollars are being spent on limos to go to the movies?