For this story, I investigated how Tennessee prosecutes Medicaid fraud among people living just across the border in Alabama. They represent a small slice of more than 2,000 criminally charged with Medicaid recipient fraud. But they are particularly vulnerable because of the big difference in Medicaid eligibility between the two states.
Alabama parents cannot receive Medicaid coverage if they earn more than $4,000 a year. Tennessee provides coverage for low-income parents who earn up to $20,000 a year. Some people who cross state lines try to keep their Tennessee coverage, risking felony prosecution. Tennessee operates Medicaid through a managed care program called TennCare.
Tennessee officials zealously target Medicaid fraud. But the average amount stolen by beneficiaries is about $3,000, a tiny amount compared to provider fraud. One man who was arrested for fraud had his restitution set at $1.57, the cost of a single prescription.
The people charged with TennCare fraud are often single mothers with few options for health care coverage. The state has a very aggressive approach to finding and prosecuting these cases. People who fail to report a loss of child custody or a move across state lines, which can disqualify a person for TennCare coverage, risk fines, probation and even jail time. In one case, an eviction forced a family to move to Alabama, cutting off their access to TennCare.
If families are truthful, they lose health insurance. In one case, a mother signed up for TennCare at a Chattanooga hospital because she and her daughter were uninsured and facing a potential cancer diagnosis. The mother went to jail for six months, charged with stealing $35,000 in benefits.
Many other states take a less punitive approach to Medicaid fraud by recipients. In Alabama, cases are rarely prosecuted in criminal court. Instead, the Medicaid agency may disqualify a recipient until they have repaid the amount of the fraud. I found a handful of other criminal Medicaid recipient fraud cases in other states, but none that publicized arrests and prosecutions as vigorously as Tennessee.
In addition to prosecution, officials with Tennessee’s Office of the Inspector General also publish mugshots and press releases about TennCare fraud arrests. In one case, a mother lost a good job at a nuclear power plant after her case was featured on the local news. She had to take a part-time job cleaning hotel rooms until it was dismissed.
That person was fortunate. She had enough savings to afford a private attorney. Many others charged with fraud have been assigned public defenders and pleaded guilty instead of going to court, incurring felonies that will follow them for years.
Cases of TennCare fraud are common in Bridgeport, Ala., a town right across the border from Tennessee. Investigators from the Office of the Inspector General stepped up patrols in border communities after fraud prosecutions for pain pills began to fall.
Many Southern states, including Tennessee and Alabama, have not expanded Medicaid. That leaves many families desperate for health care coverage.
Officials from the Tennessee Office of the Inspector General said they are protecting the interests of state residents, who pay taxes to support the Medicaid program. But this investigation raised questions about the strategy of targeting low-income people for investigation and prosecution. After it ran in Alabama, a newspaper in Chattanooga also ran the piece.