US Attorney To Investigate Two Health Plans For Excessive Costs

Armen Hareyan's picture

Robert Maruca, director of the Washington, D.C., Medicaid program, has asked the U.S. Attorney's Office for the District of Columbia to investigate more than $15 million in excessive costs charged to the program by two health plans, Amerigroup Maryland and D.C. Chartered Health Plan, the Washington Times reports. Maruca made the request after a recent audit by the city Office of the Inspector General found that the Medicaid program had overpaid three health plans by tens of millions of dollars (McElhatton, Washington Times, 8/3).

The audit, which the office made public in July, found that the Medicaid program had paid Amerigroup, Chartered Health and Health Right $96.6 million over the past five years for services that many beneficiaries did not receive. According to the audit, the city Medical Assistance Administration, the division of the Department of Health that administers the Medicaid program, did not review and negotiate contracts with the three health plans to ensure that the cost of care for beneficiaries matched their needs (Kaiser Daily Health Policy Report, 7/23).


In a letter to U.S. attorney Jeffrey Taylor, Maruca wrote that an internal audit by the department found $7.7 million in "potentially excessive or unsupported" costs charged to the Medicaid program by Chartered Health and $8.1 million in such costs charged by Amerigroup. He added, "Because of the potential for fraud in those two cases, I request that you review them to determine whether the U.S. attorney's office sees sufficient justification in the audit results to pursue this matter." The U.S. attorney's office declined to comment on the request.

Amerigroup officials disputed the results of the audit, and Chartered Health CEO Tamara Smith said that the company has not reviewed the letter. Both companies said that city officials never raised concerns about costs charged to the Medicaid program (Washington Times, 8/3).

Reprinted with permission from You can view the entire Kaiser Weekly Health Disparities Report, search the archives. The Kaiser Weekly Health Disparities Report is published for, a free service of The Henry J. Kaiser Family Foundation. 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.