Medicaid Fraud May Sully Tobacco Case the Trial, Set to Begin Next Week, Pivots in Part on Whether the Industry Should Pay for Abuses of Health-Care System

By Warren Richey, writer of The Christian Science Monitor | The Christian Science Monitor, August 25, 1997 | Go to article overview

Medicaid Fraud May Sully Tobacco Case the Trial, Set to Begin Next Week, Pivots in Part on Whether the Industry Should Pay for Abuses of Health-Care System


Warren Richey, writer of The Christian Science Monitor, The Christian Science Monitor


If the tobacco industry loses its upcoming landmark trial in Florida, cigarette makers may end up paying more than just the usual civil damages.

They could face the prospect of picking up the tab for millions of dollars worth of fraud, waste, and abuse in Florida's Medicaid system - expenditures that had nothing to do with the tobacco industry, smokers, or cigarettes.

The case is being closely watched in legal circles across the country. Never before in United States history has there been less sympathy for the tobacco industry. Yet many legal analysts are concerned about the way Florida is pursuing its case. While the jury will ultimately decide what - if anything - cigarette makers will pay, some experts say the fact that the state may ask manufacturers to pay for fraud is part of an unusual effort to strong-arm a much-reviled industry. In addition, Florida's effort to make the cigarette companies pay for fraud could introduce yet another level of complexity to the 40 lawsuits across the country filed by state attorneys general against the tobacco industry. Should those cases go to trial, each state would have to deal with the issue of health-care fraud, and each judge would have to rule on it, creating a legal tangle that could make cases drag on for months and cost millions more dollars. For now, it remains unclear how much of Florida's billion-dollar Medicaid tab may be the result of outright fraud and misdiagnosis by health-care providers. How much waste? Lawyers for the state say the amount of fraud, waste, and abuse is negligible, perhaps 2 to 4 percent. The state will argue that fraud rates are low enough that the jury need not consider them when or if it begins the task of awarding compensatory damages, says Tim Howard, a former lawyer for the agency that administers Medicaid and a current member of Florida's trial team. "We can do a reasonable estimate of fraud and abuse, but it is so minuscule," he says. Other state officials who work directly in the Medicaid system say there is no way to accurately measure the level of fraud because some of it goes undiscovered. They say no systemwide audit has ever been performed. And lawyers for the tobacco companies counter that making firms pay the Medicaid bill - without finding out how much fraud there was - is a violation of their constitutional rights. Tobacco-industry lawyers say fraud is "rampant" in Florida's health-care system and that it would be unfair to force the industry to pay any damages to cover these crimes and mistakes - for which it had no responsibility. "Our legal system requires that there be certainty in damages, that you can't have speculation. You have to have {evidence} that supports your claim of damages," says Dal Burton, a trial team lawyer with the tobacco firm R. …

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Medicaid Fraud May Sully Tobacco Case the Trial, Set to Begin Next Week, Pivots in Part on Whether the Industry Should Pay for Abuses of Health-Care System
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