Who's watching the watchdog?

At least one lawmaker says the latest allegations marring the Office of the State Comptroller's investigation into rampant Medicaid fraud in Lakewood deserves a closer look.

"We do have to look at it now that these issues have been raised. It would be irresponsible of us not to follow through," said state Sen. Declan O'Scanlon, R-Monmouth, who stopped short of calling for an official investigation by the Legislature.

On Tuesday, a former investigator who was fired for allegedly cutting improper deals with dozens of Medicaid cheats in Lakewood filed a whistleblower lawsuit accusing top administrators of signing off on the deals, then lying about their involvement to Comptroller Philip Degnan.

Andrew Poulos Jr. alleges he was made the scapegoat for the controversial amnesty program that was offered to members of the Orthodox Jewish community in Lakewood, resulting in a loss of $2.6 million in funds that Degnan had publicly promised would be repaid in exchange for the cheats avoiding criminal prosecution. The deals, however, did result in repayment of more than $2.2 million, by far the most money the office has ever managed to recover from Medicaid recipients.

The lawsuit contends Poulos got canned in December 2017 after disclosing how top administrators at the Comptroller’s Medicaid Fraud Division had approved the deals.

The deals were not revealed until this month, when Degnan released a statement acknowledging that the negotiations had been made without his knowledge.

Degnan has been nominated by the Murphy administration to be a judge.

After the lawsuit was filed on Wednesday, the Comptroller’s office refused to comment. But last week, the office insisted that Poulos was a rogue operator and that he had been the only one in the office who knew about the deals.

One of the lawyers cutting deals with Poulos was former Comptroller Matthew Boxer, who is now in private practice. When Boxer was in office, he complained that the state needed to do more to combat Medicaid fraud.

The State Comptroller's Office was created in 2008 but has been investigating Medicaid fraud since 2010. While the office's other investigations have made more headlines, it's the Medicaid Fraud Division that brings in the big bucks. By the office's own estimations, their investigations into Medicaid providers have recovered and saved about $3.5 billion over the years.

Now the office finds itself the focus of uproar caused by the news of the deals and Poulos' lawsuit, which claims that the Lakewood amnesty program was devised a year before it was announced to the public and that politically connected people in Lakewood were tipped off about certain investigations and the amnesty plan.

O’Scanlon said it’s important to find out exactly what happened. If it's true that "managers knew what was going on, that deals were being cut, and they may have been dishonest to their superiors, that’s a problem. Anyone who was found to have done that needs to go."

O’Scanlon said it would be troubling if vital information was kept from the comptroller by members of his own staff.

"If you covered it up by suggesting that there was a lone wolf rogue employee and you make him your scapegoat, I’ll be the one to be there and kick you in the ass as you go out the door," he said.

"The people of New Jersey have a right to transparency, to know what’s going on. Even when people make mistakes and even if it means you might lose your job, that’s just how life works."

He added: "We have to look at what the real fact pattern is here, verify who’s telling the truth. There’s a lot of moving parts here and we’re going to have to look at all of them."


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