Rutledge commends Medicaid fraud unit

Advises successor to build on its work

Attorney General Leslie Rutledge announced Thursday her office’s Medicaid Fraud Control Unit had a record-breaking year, and she encouraged whoever takes over her post to build on the work the unit has accomplished.

Rutledge told media members during a news conference that in fiscal 2022 the unit secured 33 convictions, 51 arrests and more than $42 million in civil settlements, restitution and fines.

“If you are a criminal or con looking to take advantage of Arkansas taxpayers or harm someone who is in residential care, think again, because the folks at the attorney general’s office will hold you accountable,” Rutledge said.

Including those secured in 2022, Rutledge said her office has achieved a total of 185 convictions since 2015.

“I think it’s fair to say if it wasn’t for the national pandemic of covid and not having access to the courts we would have busted straight through 200,” she said.

Rutledge said the total collected in settlements, restitution and fines during her administration is up to nearly $78.5 million.

“With this record sum, the return on investment is 1,327%,” Rutledge said. “That means for every dollar of government money spent, we had a return of $13.27. Wouldn’t it be great if all of the government was as efficient as the Medicaid Fraud Control Unit of the attorney general’s office?”

The Republican attorney general also took some time during the news conference to encourage whoever takes her position next year to take a look at the work the Medicaid Fraud Control Unit has done for Arkansas.

“I would encourage the next attorney general, whoever that may be, to look at this Medicaid Fraud Control Unit and say those are exactly the sort of public servants we need working on the behalf of Arkansas,” Rutledge said.

The unit investigates and prosecutes Medicaid fraud and abuse, neglect and exploitation.

“As a former prosecutor I know the importance of holding criminals accountable, and more importantly as a daughter and a granddaughter I know the importance of holding those accountable in residential care facilities,” she said. “Both my grandmothers and my mother-in-law all lived in residential care facilities. We want to make sure everyone who lives in residential care facilities in Arkansas receives the utmost caring and treatment that they deserve.”

The unit has 20 employees who fill various roles including attorneys, nurses, accountants and specialists.

“This is an incredible group of Arkansans who make up this team and all of them have a very special skill set,” Special Agent Lloyd Warford, who is head of the unit, said. “One of the things that we have done is to really go out and try to find people who bring more than one thing to the table. Beside me I have a licensed professional counselor who is also a badge-carrying, gun-toting certified law enforcement officer.”

The unit receives 75% of its funding from the U.S. Department of Health and Human Services under a grant award totaling $3,270,540 for fiscal 2022. The remaining 25%, totaling $1,090,175, is funded by state general revenue and the attorney general consumer education and enforcement fund.

Warford said one of the most memorable cases the unit has worked involved the investigation into Skyline Health Care.

Earlier this year, Joseph Schwartz of Suffern, N.Y., was arrested and charged in federal court in Newark, N.J., with failing to pay $29.5 million in payroll and unemployment taxes in addition to benefit plan fraud, according to a federal indictment.

Schwartz’s Skyline Health Care LLC and Skyline Management Group LLC owned and operated as many as 114 nursing homes in 11 states, including 21 facilities in Arkansas, until the operation failed financially in 2018, according to court documents and past interviews with company officials.

Reports of resident neglect and abuse at some facilities, including cases tied to lack of money or staffing, have surfaced in court cases since.

Schwartz was charged in state court in Pulaski County last year with eight counts of Medicaid fraud involving facilities in Arkansas and two counts of tax violations.

Allegations against Schwartz include submitting false cost reports and other documents to the Arkansas Medicaid program, resulting in federal and state Medicaid over-payment to his company in 2018 of more than $3.6 million, according to a statement from Rutledge and affidavits for arrest warrants.

The documents list eight Arkansas nursing homes in connection with the Medicaid fraud allegations: Batesville Health and Rehab, Broadway Health and Rehab in West Memphis, Creekside Health and Rehab in Yellville, Jonesboro Health and Rehab, Magnolia Health and Rehab, Mine Creek Health and Rehab in Nashville, Searcy Health and Rehab and White Hall Health and Rehab.

Skyline also failed between July 2017 and March 2018 to pay the state more than $2 million that had been withheld from employees’ paychecks for state taxes, court documents allege. And Schwartz is accused of failing to file required state income tax returns in 2018 and 2019.

“Medicaid fraud is a very complicated process that requires sometimes digging through records and data and information for months at a time before you can connect the dots and put together the case,” Warford said. “It’s not easy. It takes smart people working hard with the right type of training.”