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Attorney General Josh Stein’s Medicaid Investigations Division Surpasses $1 Billion in Recoveries

For Immediate Release:
Monday, October 10, 2022

Contact: Nazneen Ahmed

(RALEIGH) Attorney General Josh Stein today announced that his Medicaid Investigations Division (MID) has surpassed $1 billion in recoveries and restitution since the beginning of the division’s creation in 1979. Since its creation, MID has won 673 criminal convictions and 510 civil recoveries.

“I am so proud of our Medicaid Investigations team for their hard work on behalf of North Carolina’s taxpayers,” said Attorney General Josh Stein. “This team is smart and dogged in their efforts to protect North Carolinians’ wallets. I thank all of them for their hard work. I’m also grateful for our state and federal partners who are crucial to helping us win these cases and the conscientious people who report Medicaid fraud concerns to our office.”

The Attorney General’s MID investigates and prosecutes health care providers that defraud the Medicaid program. MID also investigates and prosecutes patient abuse of any patient in a facility that receives Medicaid funding, and misappropriation of any patients’ private funds in a nursing home that receives Medicaid funding. Medicaid is a joint federal-state program, so MID works closely with federal partners including the U.S. Department of Justice, the FBI, the IRS, the Office of Inspector General for the U.S. Department of Health and Human Services, and the U.S. Postal Inspection Service. MID also works closely with the NCDHHS Office of Compliance and Program Integrity and NCDHHS Information Technology Division.

Since Attorney General Stein took office in 2017, the MID has won or helped win more than $220 million in restitution and recoveries. Some notable matters include:

  • Agape Healthcare Systems: Timothy and Latisha Harron exploited a Medicaid eligibility tool and searched obituaries to find recently deceased Medicaid patients. They then back-billed Medicaid for fictitious home health services. In 2021, both Harrons were convicted of federal health care fraud offenses, sentenced to prison, and ordered to pay $13.3 million in restitution.
  • A Perfect Fit For You: Shelley Bandy, the biller for a durable medical equipment provider in Morehead City, submitted fraudulent Medicaid claims for equipment and received millions of Medicaid dollars. In 2020, Bandy pleaded guilty to making false statements related to health care matters in federal court, was sentenced to 30 months imprisonment, and was ordered to pay restitution of $374,809.92. The company agreed to pay $10,069,361.35 in criminal restitution. MID and the U.S. Attorney’s Office for the Eastern District of North Carolina pursued civil False Claims Act remedies against the company and its owner, Margaret Gibson, and reached a civil settlement in 2020 for $20 million.
  • Operation “You’ve Got Nerve”: Operation You’ve Got Nerve is an ongoing effort by MID to find and take action against providers billing Medicaid fraudulently for nervous system testing. Through this operation, MID has settled three cases and won $860,000.
  • Operation Root Canal: Operation Root Canal involves the MID review of billing practices for a wide variety of dental services, including dental cleanings, use of nitrous oxide, repetitive restorations on the same tooth, palliative care, and upcoding of patient examinations. Through this effort, MID has settled 15 cases of Medicaid fraud among dental providers and won more than $7.2 million in settlements.

To report Medicaid fraud or patient abuse in North Carolina, call the MID at 919-881-2320. The MID receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $6,106,236 for Federal fiscal year (FY) 2022. The remaining 25 percent, totaling $2,035,412 for FY 2022, is funded by the State of North Carolina.


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