D.C. hires firm accused of fraud

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The District has awarded a contract for managing its troubled Medicaid transportation program to a St. Louis-area company that the Missouri governor’s office called “scurrilous” after the company paid millions of dollars to resolve a fraud investigation.

The hiring of Medical Transportation Management Inc. (MTM) for more than $10 million a year is meant to address increasing concerns about fraud and mismanagement in the District, where one top Medicaid van company recently was convicted in a million-dollar fraud scheme.

But MTM has had a troubled history in its home state.

Medical Transportation Management was involved in very serious contract violations when they overcharged Missourians and bilked the system,” said Rich Chrismer, a spokesman for Gov. Matt Blunt.

Alaina Macia, chief executive of MTM, sharply disputed that account, saying there was no admission or findings of wrongdoing when MTM paid $2.4 million to settle with state officials in 2005. She said the company settled to avoid “protracted litigation” and damage to its reputation.

“There was absolutely, unequivocally no fraud,” said Ms. Macia, adding that her company was the victim of a “politically charged” investigation.

A contract summary sent to the D.C. Council last month makes no mention of the MTM’s troubles in Missouri.

“Letters of reference and past performance evaluations consistently rate MTM excellent or good,” the contract summary states.

However, D.C. health officials told The Washington Times that they learned of the company’s settlement in Missouri nearly a year ago, when the D.C. Office of Inspector General’s Medicaid fraud unit alerted the health department.

A spokeswoman for the health department said the District’s Office of Contracting and Procurement and the Office of Attorney General ruled that the company could not be disqualified for the contract, saying MTM was not found guilty of any wrongdoing or disbarred from operating in Missouri.

The city’s contracting office yesterday referred questions about the MTM award to its Freedom of Information division. According to contract papers, MTM competed against First Transit Inc. of Ohio and Atlanta-based Southeastrans Inc. to win the D.C. contract.

A five-member “technical evaluation panel” reviewed the offers and found that MTM and Southeastrans were tied on technical ratings, but MTM won out because its final offer of $54.9 million for five years bested Southeastrans’ bid.

MTM was the focal point of an investigation into fraudulent billing and antitrust violations, according to press releases from the governor and attorney general’s offices.

Announcing the settlement in September 2005, state Attorney General Jay Nixon’s office said the company “was paid for third-party vendor trips that did not occur and received payment from the state in excess of what was allowed by the contract.”

MTM also submitted bills for three round trips provided to a recipient on Jan. 17, Jan. 19 and Jan. 21 in 2005, even though the recipient had died on Jan. 11, according to the Attorney General’s Office.

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