Posted on 09/03/2003 10:15:33 AM PDT by Theodore R.
Henry to pay $162,000 Money settles federal case alleging billing fraud By John Cheves HERALD-LEADER STAFF WRITER
Associated Press
Lt. Gov. Steve Henry will pay $162,000 to settle a federal lawsuit alleging he defrauded the Medicaid and Medicare programs.
Henry, an orthopedic surgeon, signed a deal yesterday with the U.S. attorney's office in Louisville that allowed both sides to claim victory.
Prosecutors said they recovered $60,378 for taxpayers that Henry improperly billed to Medicaid and Medicare, plus "a significant financial sanction" of about $100,000.
But Henry did not concede wrongdoing. In an interview, he said the suit was based on isolated billing errors and misunderstandings, not on fraud.
"This is a refund," Henry said of his payment. "This is not a penalty. This is not a fine."
Still, he and others said the settlement could cloud his political future.
Henry, 49, a Democrat twice elected with Gov. Paul Patton, dropped out of this year's gubernatorial race after prosecutors sued him in November. He is considered a possible candidate for next year's U.S. Senate or House races.
But his image now is tarnished, said Larry Sabato, director of the University of Virginia's Center for Politics.
Sabato said that "$162,000 is a lot of money to 99 percent of the population. The average person will assume that if Henry is innocent, he would not be paying that kind of money. Just imagine the television commercials and direct-mail pieces his opponents could generate from this. It would be devastating."
Henry said he settled the civil suit to avoid an estimated two-year court battle that could cost him $250,000 or more. He was not charged with a crime.
"I'm convinced that I would have won it," he said. "The federal government does not deserve this money."
The federal government disagreed. Assistant U.S. Attorney William Campbell said "justice was served."
"Through this settlement, we hope to send a message that false claims submitted to Medicaid and Medicare will not be tolerated," Campbell said. "This case in our view is not about mistakes or isolated problems. This was much more than that."
Originally, prosecutors sought $412,000 from Henry -- $60,000 in overbilling, which could be tripled to $180,000 under federal anti-fraud laws, and $232,000 in penalties.
The government sued Henry last year, alleging 44 instances from 1996 to 2001 in which he approved billing claims for his services despite not having been in the operating room. Henry supervises surgical residents at the University of Louisville Medical School.
Yesterday, Henry dismissed those instances as isolated clerical errors by the hospital's billing service, or a misunderstanding of his political and surgical schedules, which prosecutors cross-referenced to determine where he was. In 20 cases, Henry said, he attended only the portion of surgeries for which he was needed.
Henry, who as lieutenant governor is paid about $90,000 a year, said he had no financial incentive to cheat the government.
In 2000, he said, he pledged to donate to Bucks for Brains -- a state university research program -- the $100,000 he expected to collect from Medicaid and Medicare over the next four years, after taxes. Instead, that money will be used to settle the suit, he said.
Henry said he suspected a political agenda behind the fraud allegations. Steve Pence, who was U.S. attorney in Louisville when the suit was filed, now is the running mate of Ernie Fletcher, the Republican nominee for governor.
Pence did not return a call for comment left yesterday with the Fletcher campaign.
As for his own political plans after he leaves office in December, Henry said he is uncertain. Statewide voters who do not know him might mistake yesterday's settlement for an admission of guilt, he said.
"There is no way to explain this to people. There's just no way," Henry said, gesturing at a pile of billing records, letters and other documents related to the suit.
He has mulled a campaign next year for the 3rd District congressional seat in Louisville, where he lives with his wife, former Miss America Heather Renee French Henry, and their two children. But he underwent prostate surgery in July after being diagnosed with cancer. More tests are needed to determine whether cancer remains, he said.
"I've got to settle my life down a little bit and rethink my priorities," Henry said.
-------------------------------------------------------------------------------- Reach John Cheves at (859) 231-3495; 1-800-950-6397, Ext. 3495; or at jcheves@herald-leader.com.
Imagine, a KY Democrat says the people could never understand his case! It's too complicated for them.
Gotta agree with you there...Dimocrat voters have NO tolerance for ethical lapses...
</sarcasm>
The lawsuit cited 44 separate billings from October 1996 to February 2001 that defrauded the government of $60,378.49. The billings were for cases that came up while Henry worked in the volunteer clinic at the University of Louisville Medical School, where he taught. In most of the incidents, the lawsuit said, Henry was attending political functions during the surgeries.
I don't think Medicare should be paying for his time while he's attending a political function.
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