Thursday, July 30, 2009

Obama's Health Care and Stimulus Plans Collide in Alabama

The Obama administration plans to crack down on Medicare fraud as a way to help reign in health-care costs. That is a good thing.

The Obama administration plans to spend federal dollars to help stimulate a stagnant economy. That, too, is a good thing.

But what happens when those two meritorious goals collide--as is about to happen in Birmingham, Alabama?

On the health-care front, recent indictments exposed about $200 million of Medicare fraud in Miami, Detroit, Denver, and other cities. Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius said such crackdowns will be a priority for the administration.

If that's the case, the Obama crowd soon should turn its attention to Birmingham. As we have reported here at Legal Schnauzer, the University of Alabama at Birmingham (UAB) apparently has engaged in massive research and Medicare fraud that dates back to the 1990s.

One whistleblower in the UAB case, forensic accountant Thomas Gober, estimated the total fraud to be almost $600 million. Under federal law, that means the government should have been able to recover about $1.5 billion in damages. The Bush Justice Department allowed UAB to settle the case for about $3.4 million, way less than one percent of the alleged total.

Given the soft "penalty" UAB received in the 2005 settlement, there is little reason to think the university has changed its ways.

And that presents a conflict for Obama's stimulus plans. You see, UAB recently announced that it expects to receive an extra $80 million in research grants this year and next from federal stimulus funds.

The Birmingham News quoted one UAB administrator:

"We have made a remarkable, robust effort here to try to bring home the bacon," says Richard Marchase, vice president for research at UAB. "It's a big deal."

Is the Obama administration going to send $80 million to an institution with a recent history of committing health-care fraud?

Has anyone reviewed the methods UAB has used in the past to "bring home the bacon"?

Is anyone going to investigate UAB's current practices before writing out a big federal check?

Alabamians, who voted against Obama in large numbers, seem more than happy to receive federal dollars from the president now. But shouldn't those funds go to institutions or organizations that have shown they are good stewards of taxpayer money.

UAB is not such an institution--and that's a matter of public record.

1 comment:

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