- Associated Press - Monday, June 22, 2015

DALLAS (AP) - The case of a troubled Texas hospital system shows how a federal, $24 billion stimulus program that distributes funds to help computerize health-care records has been vulnerable to fraud.

It also highlights the challenges in recouping the money that wasn’t used for those purposes, The Dallas Morning News (https://bit.ly/1QLLwAO ) reported. Experts say the stimulus fraud is made worse by a “pay-and-chase” system, or for giving out money without first screening recipients and later chasing it, usually after it’s vanished.

A recent inspector general report also disclosed that outstanding federal criminal debts have climbed past $100 billion while staffing to recover stolen funds has declined.

The U.S. Health and Human Services Department awarded nearly $18 million through the program to Tariq Mahmood’s rural hospital chain. The newspaper reported in 2013 that the vast majority of the money wasn’t used to upgrade the hospital’s electronic records.

The program gave the funding to the hospitals without verifying statements by Joe White, who managed the chain, or checking the hospitals’ documented history of safety violations.

White was sentenced to 23 months in prison. Mahmood was sentenced to 11 years for separate crimes of billing fraud.

After the stimulus money was deposited into the hospital’s accounts, it became mixed with other funds in a complex way and was hard to trace. Authorities only had enough evidence to prove stimulus fraud against White, making him solely responsible under the law for restitution.

Around $117,000 has been found in White’s bank accounts, but that money isn’t guaranteed to be recovered. White’s attorney, Colin Amann, said the fact that White’s family has a right to some or all of the money must be considered by the judge.

“Would it be proper to penalize his wife?” Amann said.

Since then, the Centers for Medicare & Medicaid Services - the Health and Human Services unit that distributes the money - has declined to discuss details of its fraud prevention efforts other than to say it has begun several “prepayment audits.”

“We do not release the volume or results of these audits,” said Tony Salters, a spokesman with the Centers for Medicare & Medicaid Services.

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Information from: The Dallas Morning News, https://www.dallasnews.com

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