The conviction of a former state employee for stealing nearly $1.8 million intended to help residents pay steep medical bills epitomized the lax oversight of a Maryland health program, analysts said, pointing to uncorrected pitfalls. Donna McRae Lam, a claims processor with the Department of Health and Mental Hygiene, concocted more than a dozen fictitious health care providers to collect money on phony claims from the state’s Kidney Disease Program.
She filed more than 900 fake claims — including those on behalf of deceased individuals — for payment over a decade and used the funds to buy cars, jewelry and gifts for family members — before being sentenced to five years in prison and five years of probation. She also was ordered to pay $1.5 million in restitution.
At the time, Baltimore City Circuit Court Judge Sylvester B. Cox Jr. called the episode “the highest form of the violation of trust by a public employee.”
Investigators now say a similar crime could happen again, even though the program has implemented new protections.
“The actions taken were not sufficient,” said the report from the Maryland Office of Legislative Audits. “The new edits would only identify extreme abnormalities in the amounts entered, and therefore, would not identify all significant errors.”
After Lam’s arrest, the program overpaid a health care provider by $161,744 for nearly 450 pharmaceutical claims because the pharmacy failed to record the amounts paid by other insurers, the report found.
And investigators found that three employees still routinely entered new individuals into the program’s database without independent review, meaning they could “add or change recipients on the system to process improper claim payments without detection.”
The Kidney Disease Program was established to assist late-term patients for costs not covered by federal, state or private medical insurance. During fiscal 2009, the program devoted roughly $12.5 million to 2,600 recipients.
