AG targets
special-ed fraud

There are "many more" cases
to come, Earl Anzai says after
the first indictment

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By Crystal Kua
ckua@starbulletin.com

The state Attorney General's Office is investigating six fraud cases in addition to yesterday's 10-count indictment of a provider of services under the Felix consent decree.

"This is the first step; there are many more to come. We feel that there are many cases to be made, and we're going to devote all the attention we can provide to this area," Attorney General Earl Anzai said.

Susan Puapuaga, who was a therapeutic aid with Alaka'i Na Keiki, an agency that provides services to special-needs children, was charged with 10 counts of medical assistance fraud, each a Class C felony punishable by up to five years in prison. She is accused of billing the state for a total of $1,800 worth of services that were not delivered on 10 different occasions.

They are the first charges brought in connection with the federal mandate to improve educational and mental health services.

Besides investigating services that were allegedly charged to the state but never provided, Anzai said his office also is targeting money diversion, unqualified providers and falsification of records.

"This is a rather large investigation, and we're trying to take the most obvious stuff first and then get into the more, what I consider, the more systematic type of schemes that may have been going on," said Dewey Kim, supervisor of the Medicaid Investigations Division.

Deputy Attorney General Michael Parrish said medical assistance fraud covers any state health program and any federally funded programs. "The counts the defendant is charged with is not necessarily money counts, they're claims that they made."

Puapuaga could not be reached for comment and has not yet been arraigned on the charges.

"She's no longer an employee with our agency," said Alaka'i Na Keiki Executive Director Linda Hufano, who has not seen the indictment and declined to discuss the case.

Hufano said therapeutic aides work individually with special-education children. Many of the children are autistic.

"They are responsible for carrying out strategies to help the children ... learn to speak, socialize, communicate. All of these are important to their education and their learning in the classroom," Hufano said.

Anzai credited the work of the joint Senate-House Investigative Committee, which used its subpoena powers in calling witnesses before the panel to testify under oath last year in a series of hearings, with laying groundwork for the criminal probe.

"It intensified the attention given to this area, and people have called in and are still calling in," Anzai said.

Anzai said anyone else with information on irregularities involving the consent decree should call the Medicaid Investigations Division at 586-1058.

"There was so much money that was being thrown at the problem so fast that it was kind of a gravy train in effect, and then many people tried to hop on it," said Rep. Barbara Marumoto (R, Kahala), a member of the committee.

Sen. Colleen Hanabusa (D, Waianae), co-chairwoman of the committee, said the indictment validates the work of the committee. She said the panel's work had been criticized by those connected to the Felix case, including U.S. District Judge David Ezra, who is overseeing compliance.

"What we were concerned about was whether the monies that were being expended were actually going to the children that needed the service, and that was the fundamental concern of this investigative committee," Hanabusa said. "We have to service the children -- that's not at issue here -- but we have to make sure that the taxpayers' money is properly spent."

But reaction to the indictment was mixed.

"A small fish caught ... (but there are still bigger) fish still safe in schools," said health advocate Larry Geller.

State Health Director Bruce Anderson said his department has and will continue to cooperate with the attorney general's investigation.

Anderson said that his department has zero tolerance for abuse, and noted that the $1,800 in billings is a fraction of the $80 million in services that are provided each year.

"I think the vast majority are providing good services requested by the state. I don't see any widespread evidence of fraud and abuse in the system," Anderson said.

Anderson also said that checks are in place from the time service proposals are requested to when the contracts are monitored. He said parents, care coordinators and random audits help the department catch fraud.

"It's conceivable that fraud could occur even with the checks and balances, but it's much less likely now than it was in the past," Anderson said.