DHHS Worker: “If you don’t have proof of income, then you have no income”
An outside investigation into Maine’s Medicaid system reveals a shocking potential for fraud within Maine’s vast welfare bureaucracy, and it’s all on video. Yet policy reforms to increase accountability and safeguard measures will help protect Maine’s welfare system from fraud, if officials act soon.
The Maine Heritage Policy Center (MHPC) and Americans for Prosperity-Maine (AFP) held a joint press conference in Augusta today, where the groups showed footage from a video-recorded interaction earlier this year between a Department of Health and Human Services employee at the Biddeford office, and an individual posing as a “pharmaceutical” importer seeking free, taxpayer-funded Medicaid health coverage.
The individual, who posed as a Mr. Ted Ceanneidigh, revealed the following to the DHHS worker:
- He has access to enough money to buy private health insurance
- He drives a Corvette
- His parent are unaware he has turned their failing fishing business into a “pharmaceutical imports” business that does its dealings in international waters
- His business card prominently features a marijuana leaf
- His income is strictly in cash and precious metals, because metals are “less traceable.”
- He has no pay stubs and none of his income is declared
After learning this information, the DHHS employee advised the individual to keep his income hidden.
“You don’t have a paycheck, you don’t file taxes, you have no income,” the employee said.
Applicants for Medicaid must earn below a certain level of income to qualify for the free taxpayer-funded health coverage.
“How many Ted Ceanneidighs out there were advised by DHHS workers to hide their income? How many were never reported for suspected drug dealing? How many Ted Ceanneidighs are receiving taxpayer-funded health care today because of unethical practices within Maine’s welfare bureaucracy?” AFP-Maine State Director Carol Weston asked at the press conference.
The explosive details in the video demonstrate the vulnerability of the welfare system to fraud and abuse, which may contribute to the growth in enrollment and cost for Maine’s welfare programs. Today, almost one in three Mainers is on some form of welfare, and the state spent more than $2.5 billion on its welfare system in 2008 alone.
“Maine spends billions on its welfare system. Is this potentially illegal behavior what those billions are funding?” Weston asked.
Prior to the press conference, Weston and MHPC chief executive officer Lance Dutson met with the Commissioner of Health and Human Services and staff from the Governor’s office to show them the video, and to discuss potential reforms to safeguard Maine’s welfare system from fraud and abuse.
MHPC has specifically suggested the creation of a divergence program that helps potential applicants find work or job training while making welfare benefits a last resort, establishing a Secret Shopper-type program to monitor the performance and practices of DHHS employees, and lifetime bans from receiving benefits and working in state government for applicants and employees, respectively, who are found to have knowingly engaged in fraudulent or illegal behavior.
“I hope that what we have revealed today motivates action from officials in all branches of our government. Our system is clearly vulnerable to fraud and abuse, and we can no longer pretend these things only happen in other states,” Dutson said.
“I have shared our reform ideas with the Commissioner of Health and Human Services and members of the Governor’s staff at our meeting this morning,” Dutson continued. “I have also pledged the full support of The Maine Heritage Policy Center to develop and promote welfare system reforms that root out fraud, waste and abuse, while preserving our safety net for those in need. Action must be taken.”
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CLICK HERE to watch the footage shown at today’s press conference.
CLICK HERE to watch the complete, 48 minute video on YouTube.
Download the PDF of the full transcript here.
Download the PDF of business card and picture of boat shown to DHHS worker
For more information, or for an interview with Lance Dutson, please contact Chris Cinquemani at chris@mainepolicy.org, or at (207) 240-7090
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Press Conference Revealing Evidence of Maine Medicaid System’s Vulnerability to Fraud
Remarks by Carol Weston, State Director
Americans for Prosperity-Maine
August 11, 2011
Good morning and thank you for joining us. I am Carol Weston and I serve as State Director of Americans for Prosperity-Maine. I am joined today by Lance Dutson, the newly-named chief executive officer of the Maine Heritage Policy Center.
Today, AFP and MHPC have partnered to share with you the shocking results of an investigation into the Maine Medicaid system’s vulnerability to fraud and abuse. We will show you video footage from an interaction earlier this year between an employee at the Biddeford office of the Department of Health and Human Services, and an individual posing as a “pharmaceutical” importer seeking free, taxpayer-funded Medicaid health coverage.
The video you are about to see was produced and sent to me by James O’Keefe. Mr. O’Keefe is best known for exposing on video how employees at multiple branches of the taxpayer-funded ACORN provided advice on how to avoid detection by authorities of tax evasion, human smuggling and child prostitution.
Just a few moments ago, we shared this video with the Commissioner of the Department of Health and Human Services and the Legal Counsel for Governor LePage. They were as shocked as we were to see this footage. Now, we are making this footage available to the public.
The unabridged footage, which is 49 minutes, is available on the Web. A link has been provided in your press kits.
This video reveals explosive evidence of the potential for fraud within Maine’s Medicaid system. It replaces what have been unverifiable anecdotes of welfare system fraud and abuse with a concrete example of unethical and potentially illegal behavior within Maine’s welfare bureaucracy.
In your press kit we have provided a transcript of the dialogue from this footage, as well as a profile of Ted Ceanneidigh, the individual seeking free health care. This profile includes images of the business card he presents to the DHHS worker, as well as the boat he shows her.
This is what we, and the DHHS worker, know about Ted Ceanneidigh:
- Ted confirms to the DHHS worker he has access to enough money to buy private insurance
- He drives a Corvette
- Ted explains that his parents don’t know he has turned their failing fishing business into a “pharmaceutical imports” business that does its dealings in international waters
- His business card prominently features a marijuana leaf
- Ted’s income is strictly in cash and precious metals, because metals are “less traceable.” He has no pay stubs and none of his income is declared
- Ted never verifies Maine residency
When asked if he will be questioned about his income, the DHHS worker responds, “You don’t have a paycheck, you don’t file taxes, you have no income.”
When Ted expresses concern that his Corvette might be noticed, the DHHS worker responds, “They probably won’t see your Corvette” and then councils Ted not to say anything about it.
Had Ted actually taken the advice of the DHHS worker and went on to submit an application for free health care based on that advice, fraud would have been committed.
How many Ted Ceanneidighs out there were advised by DHHS workers to hide their income? How many were never reported for suspected drug dealing? How many Ted Ceanneidighs are receiving taxpayer-funded health care today because of the unethical procedures within Maine’s welfare bureaucracy?
Maine taxpayers deserve better than this. They deserve peace of mind that their tax dollars are funding a safety net only for the truly needy, not people who game the system. Taxpayers should not be paying government employees to ignore obvious drug felonies. And they should not be paying them to advise individuals to commit tax evasion and hide assets in order to qualify for free health care.
Every year, Maine spends billions on its welfare system. Is this what those billions are funding?
Let me be clear. I am not suggesting all recipients of Medicaid and welfare system benefits are engaged in illegal behavior or gaming the system. For many of our most vulnerable neighbors, our welfare safety net helps them through tough times.
But this video does prove that welfare fraud is possible, and it might be fostered by a broken welfare system, and the employees tasked with keeping that system running.
Reform is needed. The potential for fraud within our welfare system must be erased. The parts of the system that allow for unethical and abusive practices must be fixed. In our meeting this morning, it was quite clear the Commissioner of DHHS and the Governor’s administration agree.
Here to talk more about the policy reforms needed to root out abuse and fraud from our welfare system is Lance Dutson, chief executive officer of the Maine Heritage Policy Center.
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Press Conference Revealing Evidence of Maine Medicaid System’s Vulnerability to Fraud
Remarks by Lance Dutson, CEO
The Maine Heritage Policy Center
August 11, 2011
Good morning. As Carol mentioned, my name is Lance Dutson, and I serve as chief executive officer of The Maine Heritage Policy Center.
Let me begin by saying that I never imagined my first week on the job would be this eventful.
The video you just watched is shocking. It shows clearly what many of us have believed for some time – that Maine’s welfare system is exceedingly vulnerable to fraud, and that we have frontline stewards of taxpayer funds who are not adequately equipped to perform their duties. What we have seen in this video is unacceptable, and calls for action.
Last year, The Maine Heritage Policy Center launched a major welfare reform initiative known as Fix the System. Our research throughout that initiative found that between 2003 and 2010 welfare system enrollment grew 70 percent, that almost one in three Mainers is on some form of welfare, and that in 2008 alone, Maine spent more than $2.5 billion on our welfare system.
How much of that explosive growth is due to fraud and abuse?
In this era of limited funds and budget shortfalls, can Maine taxpayers afford to have that question remain unanswered?
In a small state like Maine, we like to think that something like this doesn’t happen. Sadly, this video shows that the potential for fraud is real. Action must be taken.
Part of the bipartisan budget that passed this year included several reforms MHPC called for as part of its Fix the System initiative. Time limits for certain benefits, elimination of benefits for legal non-citizens, and greater accountability measures for convicted drug felons are among them.
One idea we proposed that was not adopted was the creation of a diversion program. Such a program would have those seeking enrollment in the welfare system first be assisted in finding meaningful employment. Welfare would be reserved as a last resort.
Had a diversion program been in place, this video would have shown a DHHS employee running through various employment or training opportunities. What we saw instead was the employee assisting in a potentially fraudulent gaming of the system. Diversion programs not only help well-intentioned individuals explore ways to become self-sufficient first, they also reduce the potential for fraud and abuse.
In light of the shocking details we all just saw in the video, we believe additional reforms must also be explored to identify and discourage fraud and unethical management within our welfare system.
Elected officials should explore what is best known as a Secret Shopper program for our welfare system. State authorized “secret shoppers” would visit DHHS offices seeking enrollment in our welfare system, and would monitor the responses and practices of DHHS employees as they interact with potential applicants.
If DHHS workers are found to be unethical, incompetent, or engaged in fraudulent or illegal behavior, they would be reported to the state and face whatever penalties are deemed appropriate. No one, including state employees, should be above the law. Taxpayer-funded government workers must be held accountable and to a strict set of standards to protect state resources and the public at large
Maine should also further public trust with a series of strict penalties for individuals found to be knowingly engaged in illegal and fraudulent behavior.
If a welfare applicant or recipient is found to be hiding income, hiding assets, or committing fraud in any way in an attempt to receive taxpayer-funded welfare benefits, that individual should face a lifetime ban on all state benefits. Our safety net should be reserved for the truly needy. Those who willingly take advantage of taxpayers’ generosity should be penalized.
Similarly, if a state employee, particularly a DHHS employee, is found to be knowingly advising individuals to commit illegal or fraudulent behavior, or if known violations of law or policy are not immediately reported, that individual should face a lifetime ban from any position working in state government. There are plenty of good-natured, law abiding individuals in Maine who would appreciate a job working in government. Those positions should not be filled by known law-breakers.
I have shared each of these reform ideas with the Health and Human Services Commissioner and the Governor’s staff at our meeting this morning. I also pledged the full support of The Maine Heritage Policy Center to develop and promote welfare system reforms that root out fraud, waste and abuse while preserving our safety net for those in need.
We have to keep in perspective the reason we have these programs in place. Maine is a generous state, and we share a strong commitment to taking care of those in society who are unable to take care of themselves. The real tragedy of waste, fraud and abuse in our social welfare programs is that it diverts much-needed funding from our most vulnerable. At a time when there is a limited amount of funding available for these programs, fraud like that demonstrated in this video takes services away from those who really need it. When an offshore drug dealer receives welfare benefits because he’s hidden his earnings, a Maine family in real need is deprived of the safety net taxpayers have sought to provide.
I hope that what we have revealed today motivates action by our officials in all branches of government. The evidence this video investigation has revealed cannot be ignored.
Thank you for your attention. Carol and I are happy to answer any questions at this time.
