CORPORATE CRIME REPORTER
Fraud
Buster Sheehan to Head Spitzer’s Medicaid IG Unit
21 Corporate Crime Reporter 16, April 10, 2007
After 27 years as one of the nation’s top health care fraud prosecutors, James Sheehan is leaving the U.S. Attorney’s office in Philadelphia.
Destination – Albany, New York.
New York Governor Eliot Spitzer has hired Sheehan to be the state’s new Medicaid Inspector General.
Fraud busters and defense attorneys alike give high marks to Sheehan.
“It would be hard to find a better person for that particular job,” said Joseph Spinelli, CEO of Daylight Forensic & Advisory, a white-collar defense firm based in New York City. “He has been a pioneer in rooting out health care fraud for years. I’m surprised that Governor Spitzer could get him.”
Patrick Burns of the Washington, D.C.-based public interest group Taxpayers Against Fraud agrees.
“New York State is spending more money than any other state on health care,” Burns said. “In some respects, it has been a fraud factory. The state’s Medicaid fraud control unit has not been able to bring fraud to heel. Sheehan will be the new sheriff in town. By hiring him, Spitzer is signaling that he’s serious about health care fraud.”
Sheehan will go from prosecuting health care fraud cases to investigating cases and making referrals to state prosecutors.
The Medicaid Inspector General’s office, which Sheehan will head, is only a year old, but already it has a staff of 670 and a budget of about $90 million.
Burns said a political firestorm ensued a couple of years ago after the New York Times exposed rampant fraud in New York’s $50 billion Medicaid program.
“Politicians on the right and the left wanted to show they were the biggest players in the health care fraud arena,” Burns said. “It was like two dogs on a fire hydrant.”
Sheehan said that one reason he made the move from Philadelphia to Albany was because he realized that the historic approach of “pay and chase” wasn’t working.
“One part of the government pays the bills, and another part of the government sees who’s lying, stealing and cheating,” Sheehan said.
“I like the idea of being upstream in the system to help identify the problems in a systematic way,” Sheehan said.
He’ll have subpoena power.
He’ll do investigations.
He’ll identify the systemic problems.
And he’ll make referrals to the Attorney General and to the Medicaid Fraud Control Unit.
Is the False Claims Act defense bar rejoicing now that he’s leaving the federal system?
“If they are rejoicing, it would be a mistake,” Sheehan said. “There is still a strong team here in Philadelphia. Plus, New York State just passed it’s own False Claims Act. And New York State is the biggest Medicaid program in the country by a factor of two.”
Sheehan expects a cooperative effort between the Medicaid IG and the Attorney General in enforcing the state’s new False Claims Act.
Burns predicts that Sheehan will return hundreds of millions of dollars to the people of New York state.
“It’s not just good economics, it’s good politics,” Burns said. “The taxpayers of New York are not interested in feathering the beds of the greedy. They want to cut back on fraud to extend health care to the needy.”
While serving as a federal prosecutor in Philadelphia, Sheehan personally handled over 500 health care fraud matters.
He led, managed and developed health fraud and kickback cases against pharmacy benefit firms, pharmaceutical manufacturers, medical suppliers, hospitals, nursing homes, and physicians.
Over the past seven years, Sheehan led the government investigation against Medco Health Solutions, which resulted in the recovery of over $155 million.
In the 1990s, he was lead counsel in United States v. SmithKline Beecham Clinical Labs, which resulted in a $332 million recovery for the United States.
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