IRS Releases Medicaid Fraud Settlement Money

Jun 6, 2013

The IRS has agreed to release 115 million dollars in Medicaid fraud settlement money to the Commonwealth just hours after Virginia Attorney General Ken Cuccinelli accused the agency of holding out on the 125 million owed to the state.

This comes at a time when the IRS is under scrutiny for its spending and other questionable practices, but the Attorney General says that's just a coincidence. And as Virginia Public Radio’s Tommie McNeil reports, after months of trying to get the agency to ante up, he spoke about the problem through the media in the hope of getting a response. 

The money is from a 2012 settlement in which Cuccinelli was the lead investigator into Medicaid fraud by Abbott Laboratories. The plea agreement was one-point-five billion dollars, with the federal government already collecting more than a third for itself. Cuccinelli says most of Virginia’s share is designated for law enforcement agencies, but the state had not seen a dime because the IRS had not submitted a double-sided sheet of paperwork to the Treasury Department.  For eight months, he was asking the agency to expedite the process.  While not specific about motives, he says he wondered if someone had something against him or Virginia:

"If you set that aside, there's incompetence or there's malevolence. The level of incompetence here is so astoundingly high that it does become hard to believe that even a federal agency like the IRS is capable of that level of incompetence." 

Cuccinelli says he turned to Virginia's congressional delegation for help, including both U.S. Senators Tim Kaine and Mark Warner, House Judiciary Committee Chair Bob Goodlatte, and House Majority Leader Eric Cantor.