A couple of weeks ago, a man pleaded guilty for his part in a scheme to defraud the New Jersey State Health Benefits Plan of millions of dollars by submitting bogus prescriptions for expensive compound medicines.
Here’s the sad thing — what was most newsworthy about his story wasn’t the benefits fraud, which is common, but the fact that he wasn’t part of the large prescription fraud ring centered in Atlantic County that used the same scheme to bilk $50 million from the taxpayer-funded program.
This guy in Morris County was part of a completely separate benefits fraud operation with its own corrupt doctor. He’ll be sentenced in November and the law requires he pay $2.7 million in restitution.
In the Jersey Shore case, 30 have been charged and 23 have pleaded guilty the past two years among the more than 200 who participated in defrauding the state health benefits program for government workers. During that time, several other benefit-fraud cases have been brought against others in New Jersey, some even bigger than the one centered on the Downbeach community.
In July, a doctor and three others in Bergen County were charged in a $10 million scheme to defraud the federal workers compensation program with expensive pain prescriptions.
A few months earlier, seven people in New Jersey were among 24 charged with submitting $1.7 billion in fraudulent health benefits claims to Medicare, Medicaid and other insurers. The prescriptions for back and joint braces, none of them needed, resulted in losses of more than $1.2 billion to the plans.
Last June, the U.S. Attorney’s Office announced the prosecution of 162 people, including 76 doctors, for health fraud schemes involving $2 billion in false billings. Of seven in New Jersey arrested, three in South Jersey also were charged with distributing the opioid oxycodone.
And last year started with a Monmouth County pharmacist charged in a conspiracy to submit to Medicare, Medicaid and others $1.5 million worth of bills for medications that were never dispensed to patients.
The first sentencing in the Jersey Shore prescription benefits fraud, on Aug. 21, gave a two-year federal prison term to Kristie Masucci of Stafford Township, who as a pharmaceutical representative had a lead role in the scheme. She faced up to 10 years in prison and a fine up to $250,000. She also received three years of probation, but no fine.
Taxpayers and the law-abiding public may hope that at least the restitution required in these cases — $1.8 million from Masucci — will recoup a significant amount of their losses and serve as a deterrent to those who would betray the public for personal gain. But that hope is almost never justified.
A study by the U.S. Government Accountability Office found that while courts order tens of billions of dollars in restitution each year, only a tiny fraction of it is ever collected. While $34 billion in restitution was ordered from 2014 to 2016, only $3 billion was collected, and half of that was from prior claims dating back to 1988.
Of the $110 billion in restitution debt outstanding, the federal government has deemed $100 billion of it “uncollectible,” the GAO study said. Nearly all offenders — 95 percent — got a waiver from paying restitution because of a lack of ability to pay.
The money is going somewhere. Hard to tell which is worse, the lax handling of taxpayer money by government benefits programs or failing to get the money back while those who take it are punished lightly. It doesn’t inspire confidence that government is serving the public well or deserves its trust.