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Saturday, November 17, 2018
HomeAlaska NewsNo-tell Motel: Bethel Medicaid scam unravels

No-tell Motel: Bethel Medicaid scam unravels

State Medicaid officials might have gotten suspicious when the Tundra Suites in Bethel went from billing Medicaid $4,000 a month in 2016 for the Medicaid patients coming into town, to billing $56,604 a month in December of 2017.

But evidently they didn’t. The tens of thousands of dollars being billed to the State by a 13-room hotel each month wasn’t what tipped the State Department of Health and Social Services off to the fraud. The State just kept paying the exponentially increasing bills, no questions asked.

What got the State’s attention was that other hotels in Bethel complained they were not being paid by the State of Alaska for housing patients. Their bills to the State were being refused.

Hawkins

As it turns out, they were being refused because the Medicaid housing vouchers they were submitting had already been paid to Chin Kim, the 100 percent owner of the Tundra Suites, a 13-room hotel that is a registered Medicaid provider, and which has a sketchy past, including being involved in some illegal whiskey sales a couple of years ago.

Medicaid dollars don’t only pay for doctors and hospital services. They also pay for transportation and other costs to and from medical hubs like Bethel and Anchorage. The State has aggressively enrolled people in villages, already covered by Indian Health Services, into the Medicaid program under the Medicaid expansion that came with Obamacare.

The Affordable Care Act (Obamacare) Medicaid expansion increased revenues to IHS and tribe-owned facilities. Before the expansion, IHS and tribe facilities depended on congressional appropriation. In FY 2017, Congress appropriated $4.8 billion for IHS. Third party payers include Medicaid, and with Medicaid expansion, many more costs are covered, without a congressional appropriation. There is no spending limit — i.e., no budgets capping expenditures — which makes it an attractive line of business.

Bethel is a hub community for 48 predominantly Native villages from Akiachak to Upper Kalskag. Patients from those villages have been signed up for the state’s Medicaid program under the Obamacare Medicaid expansion and the Walker Administration, which signed onto expansion in August of 2015.

Patients in the Bethel region frequently visit the Yukon-Kuskokwim Health Corporation, the biggest health provider in the region. With uncapped dollars from Medicaid, this means a lot more trips to town, more hotels, taxis and restaurants that are eligible to receive the patient vouchers.

It was only a matter of time before those vouchers became a form of fungible currency in the community.

IT UNFOLDED IN JANUARY

In January 2018, the Alaska Department of Law’s Medicaid Fraud Control Unit was tipped off by the Department of Health and Social Service which said Tundra Suites was billing for housing Medicaid recipients who were not actually staying at Tundra Suites. They were staying at other hotels in the area, staying with relatives, or weren’t even in Bethel at all.

The vouchers, which come in paper packets, contain an original and three copies for a total of four Medicaid vouchers per packet. Each packet has the same authorization number, which appears on all four vouchers for flights, taxis, meals, and hotels with pre-approved “Medicaid providers.” The providers (hotels, taxi companies, etc.) then submit the vouchers to the State of Alaska for reimbursement.

Tundra Suites was one of those Medicaid providers.

Once the investigation started, other irregularities emerged. Tundra Suites was housing people together in rooms, when the guests were clearly not related to each other. Normally, vouchers would cover the cost of an escort for a family member, but in this case, investigators found that people were sharing rooms when they were from different communities altogether, with no known connection.

In one example from Dec. 18, 2017, Tundra Suites submitted a voucher stating that a 69-year old man stayed in Room 5 on that night, and submitted another voucher stating that a 20-year old female recipient from a different community stayed in the same room on the same night. Tundra Suites billed Medicaid for each recipient separately.

When investigators looked into it, the escort that was supposed to stay in that room was in Anchorage, not Bethel, during the medical travel.

Kim was also billing Medicaid recipients more than he charged other travelers. If two recipients and each of their escorts were put in the same room, he’d charge $356 a night for that room, when normally he’d charge $320.

Medicaid recipients do not have to pay any of the room charge, so there is no financial incentive for recipients to share a hotel room, and there was also no shortage of rooms in Bethel, investigators said, so there was no reason to pile people up in rooms.

There were other ways the hotel was scamming the State, including nights when Tundra Suites billed Medicaid for more recipients than the hotel even has rooms to house people, and instances where more than four vouchers were submitted by the various providers with the same voucher number. In other words, someone was altering the voucher numbers.

While investigating the Tundra Suites, investigators found that Mi Ae Young, who had previously scammed Medicaid when she operated a Bethel taxi company, was now assisting Tundra Suites and doing billing to Medicaid for the hotel. She lost her Medicaid provider status as a cab owner, and was thus prohibited from participating in any activity related to Medicaid. The work she was doing was apparently under the table.

The plot thickened.

According to the State’s case against Kim and Young:

“During the investigators’ recorded interview with Young in March 2018, she made several phone calls in Korean while in the presence of the investigators. During one of the calls, she spoke to an individual later discovered to be Yeong Jin, an enrolled Medicaid taxi cab provider. The audio recording of Young’s side of these phone calls was later translated and transcribed. The translation revealed that while the investigators were with Young, she made a call to Jin and instructed him to contact Tundra Suites and tell them that investigators were with her and would be going to Tundra Suites. Young told Jin to pass on the message that Tundra Suites should get the papers ready for the investigators, except for the ones that they had altered; Young told Jin that they should hide those forged vouchers. Unbeknownst to Young, other investigators were already at Tundra Suites collecting documents at the time of this phone call.”

As it turns out, Mi Ae Young was also submitting claims for cab driver Jin.

Kim testified under oath that in April or May of 2017, a person from “the government agency” told him to stop billing separately for recipients an escorts that shared the same room.

But those practices continued and it doesn’t appear any sanctions were likely to be imposed until other hotels complained and the entire billing scheme blew up in January, 2018.

[Read the State’s case against Kim and Young here.]

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • DHSS is where competence and accountability go to die; you could write this story in every community that has medical facilities. Medical tourism may be Alaska’s biggest business.

  • I bet Tundra Suites is still housing Medicaid recipients… The State is an enabler to fraud all the time! AK DOT is the biggest enabler

  • They need to be shut down! How are they even being allowed to remain in business with this kind of fraud? Any fraud for that matter. Also why is this not being covered by mainstream media????

  • Finally a factual article without any bias from mustreadalaska.

  • Good to see reporters …report. Thank you! It’s a job and you did it well.