Office of the Attorney General News Release Archive

Tuesday, September 7, 1999


$7.6 million in overpayment fraud identified

AUSTIN - Texas Attorney General John Cornyn today announced that the Medicaid Fraud Control Unit of the Attorney General's office investigated and discovered a record amount of Medicaid fraud. Over $7.6 million was overpaid to providers due to fraudulent claims in fiscal year 1999.

"We have an obligation to investigate and punish these criminals. In stealing from this program, they take advantage of those who desperately need this assistance and the taxpayers who give billions of their hard earned dollars to fund it," said Attorney General Cornyn. "I am proud of the investigators and attorneys who performed this record setting work. It is a high bar, but they are on track to exceed this record next year."

These unscrupulous providers typically bill Medicaid for work that never took place. The largest single case was worked in conjunction with the FBI and involved $2,566,207.53 in Medicaid fraud by Youth Enhancement Services, a chemical dependency counseling service. They intentionally submitted fraudulent claims and were paid by Medicaid for services which they did not perform. This counseling service was headquartered in Austin and had offices in Fort Worth, Houston, Temple, Pharr, Taylor and Holland. On April 19, 1999, a federal court ruled that this counseling service had committed fraud and ordered the fines and restitution. The service is no longer in business.

The results of the Attorney General's investigations are given to the District Attorneys or US Attorneys with the jurisdiction in these cases. They prosecute the cases for prison time, fines and restitution. In 1999, $5.27 million in fines and restitution were ordered against fraudulent providers as a result of the Attorney General's investigations. In 1998, federal and state judges ordered $5.77 million in fines and restitution. Both years were a tremendous increase from the $32,000 ordered in 1997.

In 1999, the Attorney General's office opened 261 investigations of Medicaid fraud. The cases have dramatically increased over the years in not only the amount of fraud and but also in the complexity of the cases. For example, many cases now total millions of dollars and are more carefully disguised by the providers.

These statistics were reported as a fiscal year 1999 summary to the US Department of Health and Human Services which partially funds the Medicaid Fraud Control Unit.

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Contact Ted Delisi, Heather Browne, or Tom Kelley at (512) 463-2050