New Mexico health care provider settles in fraud case

New Mexico health care provider settles in fraud case

August 20, 2017
Updated: August 20, 2017 3:30pm

SANTA FE, N.M. (AP) — One of New Mexico’s major health care providers has settled a secret court case that stemmed from allegations the company cheated the state’s Medicaid program out of $300 million.

Former Lovelace Inc. senior executive Duke Rodriguez claims the company collected state gross receipts taxes from Medicaid for services provided to program recipients, even though Lovelace was exempt from paying gross receipts taxes to the state, meaning it pocketed the tax money from Medicaid.

The Attorney General’s Office wrote to Lovelace, its parent company, Ardent Health Services, and former Lovelace parent Cigna. The letters said the companies had fraudulently collected at least $142.6 million in gross receipts taxes from the insurance program for low-income people, the Santa Fe New Mexican reported ( ).

The Attorney General’s Office settled with the companies for less than the amount alleged.

Lovelace and Ardent paid the state $2 million and Rodriguez $500,000, as allowed under the whistleblower law. Cigna paid the state about $39,000 and Rodriguez about $8,000.

The companies denied wrongdoing in the settlement agreements with the Attorney General’s Office.

Lovelace said Medicaid paid gross receipts taxes to the company even though the state had “full knowledge” it was exempt from paying such taxes.

The June 2015 letters from the Attorney General’s Office to Lovelace, Ardent and Cigna that alleged massive fraud were among hundreds of pages of documents related to the case that were obtained by the Santa Fe New Mexican from the Attorney General’s Office under the state open-records law.

Officials with the Attorney General’s Office said recently the office received additional information from Lovelace and the state Human Services Department after the June 2015 letters and that the information showed Lovelace had wrongly retained just $1.6 million in gross receipts taxes.

“We collected well beyond . the gross receipts tax that were paid” in error to Lovelace, said Sharon Pino, deputy attorney general for criminal affairs. Ultimately, what Rodriguez had alleged was unproven, Pino said.

As part of the agreements to settle Rodriguez’s complaint, the Attorney General’s Office agreed not to disclose the case to the news media.


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