Former government employee charged with embezzlement, fraud

MM Summary- A Virginia state employee falsified her own Medicaid application and received $1,800 of medical services.



A former Medicaid eligibility supervisor for the V.I. Human Services Department was charged Friday with lying on government forms to obtain Medicaid benefits that she was not eligible to receive, according to the warrant for her arrest.

Kathleen Gussie was charged with embezzlement by a public or private officer, embezzlement or falsification of public accounts, conversion of government property, and three counts of making fraudulent claims upon the government. She was released after posting 10% of $50,000 bond, and is scheduled to appear in court Monday.

V.I. Attorney General Denise George held a press conference Friday, when she praised the Justice Department’s newest division, the Medicaid Fraud Control Unit, for acting on a case that had been sitting untouched for years.

It’s unclear why prosecutors did not pursue the case sooner, but according to the affidavit filed by Special Agent Gisselle Quinones, who is in charge of the Special Investigations Division, the suspected fraud was first reported in February 2018. At that time, another Medicaid eligibility supervisor was reviewing “error reports” to identify suspicious entries and came across “what appeared to be fraudulent activities connected with entries in the name of Gussie,” according to the affidavit.

Gussie went to Luis Hospital emergency room on Dec. 11, 2017, and submitted a “Hospital Presumptive Eligibility,” or “HPE” application for Medicaid benefits that listed her income as $30,000.

The income threshold to determine eligibility for Medicaid benefits at the time was $31,931 per household, but Gussie’s actual salary was $44,103, and government documents show that she “was aware of her salary” and “should have known that she was not eligible for Medicaid benefits,” according to the affidavit.

Gussie was deemed eligible for temporary benefits from Dec. 11, 2017, through Jan. 31, 2018, and subsequently enrolled as a permanent Medicaid beneficiary. Gussie continued submitting claims for payment by various medical providers up until July 3, 2018, according to the affidavit. “At no time did Gussie notify the Medicaid program, of which she was a supervisor, that income information provided on her HPE application and in her permanent application for benefits was in error and request that the necessary correction be made. Had that notification been done, Gussie would not have qualified for Medicaid benefits.”

Between June 2007 and April 2016 Gussie worked in various capacities throughout the Medicaid division, and even helped edit the department’s “Manual for the Determination of Medicaid Eligibility,” according to the affidavit.

On Feb. 22, 2018, then-Human Services commissioner Felicia Blyden notified Gussie she was being placed on administrative leave pending an investigation into allegations she violated Medicaid eligibility procedures by applying for benefits during the emergency room visit.

At an administrative hearing on April 11, 2018, “it was recommended that Gussie be terminated from her employment for defrauding the Medicaid Program,” according to the affidavit. “A letter dated April 18, 2018 addressed to Gussie officially notified her of the DHS’s recommendation for her immediate termination.”

But “Gussie did not request that her benefits be cancelled and continued to allow the fraud to continue for months,” according to the affidavit. Despite the recommendation that she be fired immediately, Gussie remained employed but under suspension for a further three years.

“She was on suspension for quite some time. Just recently, several months ago, she was then terminated, finally, with the approval of this governor, Gov. Bryan,” George said Friday.

A total of 35 medical claims were submitted by various providers for services totaling $485.85, and the emergency room visit cost Luis Hospital $1,478.43, according to the affidavit.

The claim for services was initially submitted for payment to Medicaid, but as an employee of the Virgin Islands government, Gussie’s primary insurance was CIGNA.

“Therefore, the claim was rejected for payment by the Medicaid Program. Subsequently, CIGNA paid the amount covered by the CIGNA plan,” according to the affidavit. The remaining balance of $1,478.43 “was again re-submitted for payment to the Medicaid Program; at which time it was determined that the claim was not processed in a timely manner and the claim was denied.”

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