MARGATE — City officials are prepared to suspend without pay any city employees indicted as a result of an alleged federal investigation into Margate employees’ health benefits.
Mayor Mike Becker said Saturday he would like to wait until the situation plays out entirely before taking any permanent action against city employees.
“This is America, so people may get charged, but they’re innocent until they’re found guilty by a jury or make a deal. In the meantime, I should think that we should suspend everybody (indicted) without pay until this is adjudicated,” he said.
However, no charges have been filed at this point, and no investigation has been acknowledged by the federal government. The spokesman for the U.S. Attorney’s Office, District of New Jersey, could not be reached for comment Saturday. Special Agent Jessica Weisman of the FBI’s Northfield office said she could not comment on the matter.
Becker said he was surprised to learn Friday of a grand jury subpoena from the U.S. Attorney’s Office in June requesting information from the city about employee health benefits.
“It astounded me,” he said.
According to an NBC10 report, the subpoena asks for a list of all police, fire and city employees who have health insurance plans through benefit providers ExpressScripts, Medco and/or NJ Direct. No reason was given for why the subpoena request was made.
The report also notes the city’s brand-name prescription drug costs increased from $713,935 in 2014 to $3.351 million in 2015, with only a small increase in the number of prescriptions filled. Becker said he could not speculate on the reason for the increase.
“I’ve heard all the same rumors that everybody has heard, but until we get to the bottom of it, we really don’t know,” he said.
Becker said the cost of health benefits paid by the city and funded by local property taxes could be affected by the large jump in prescription costs.
“You get charged according to your experience,” he said.
The small but affluent island city of Margate has 116 employees covered under the state health benefits plan, according to its 2017 user-friendly budget, which breaks down employee health costs. The budget includes an appropriation of $2.5 million for the city’s contribution toward employee health benefits.
Defense attorney Rocco Cipparone of Haddon Heights, Camden County, who has represented clients in various federal fraud cases, said the details of the subpoena are too scarce to make an assumption of what investigators are looking for. He said there are many reasons investigators may be requesting such information.
“A lot of times you see them in health care fraud cases and fraud cases that relate to sometimes a physician overbilling. You might see it in a political corruption investigation,” Cipparone said.
As far as the prescription cost increase, Cipparone said it was not fair to speculate at this point.
“It’s a pretty significant leap, but it’s hard to know whether there are or there are not legitimate reasons for that. There can be legitimate reasons that those costs increase,” he said.