Man convicted for billing fraud

Hearing aid dealer faces sentencing for improper Medicaid bills

Posted: Friday, March 03, 2000

A Juneau businessman pleaded no contest Thursday to a felony after being charged with more than $141,000 in Medicaid fraud.

Kenneth George Klepinger, 47, co-owner of the Beltone Electronics in the Nugget Mall, was charged with fraud for billing the state Medicaid program for services he claimed to have provided to 126 Southeast patients.

Klepinger is due to be sentenced May 4 before Juneau Superior Court Judge Patricia Collins. It is not yet known if he will serve jail time, but he has lost his license, and can no longer practice.

The state had hopes of recovering the fraudulently obtained funds. ``We thought he had assets, but he claims he does not,'' said Medicaid fraud investigator Michelle Nolan of Anchorage.

Calls this morning to the Klepinger residence and business were not returned.

According to court documents, between Oct. 13, 1997, and Jan. 26, 2000, Klepinger attempted to collect $662,473 by billing the state Medicaid program. The program paid Klepinger $280,036 during that period.

Authorities alleged $138,278 was illegally claimed, and that an additional $3,358 was stolen directly from indigent Medicaid patients as a result of billings.

Medicaid is a state-managed program that helps pay for health care for the needy and people with disabilities, with partial federal reimbursement.

Klepinger enrolled as a hearing aid dealer in the state's Medicaid program on June 1, 1997. He came to the attention of the state Division of Medical Assistance a year later when a local woman reported difficulties.

A Juneau Medicaid recipient said she had ordered a hearing aid from Klepinger and signed a contract to pay the difference between what Medicaid would pay and the total purchase price. She agreed to pay him $100 a month, an amount he claimed Medicaid would not cover.

Medicaid providers are not allowed to charge clients in addition to what Medicaid has paid, according to the state Division of Medical Assistance. According to court documents, Klepinger said the patient did not like the hearing aid covered by Medicaid and selected a different model.

The Alaska Long Term Care Ombudsman reached an agreement with Klepinger that allowed the woman to return her hearing aid for one Medicaid would cover.

But the state reviewed Klepinger's claim history and found evidence he was charging Medicaid for hearing aid options that were never provided.

Officials also found he exceeded his peer group in number of recipients served, dollars paid to him by Medicaid and Medicare, and dollars charged to Medicaid and Medicare.

Medicare is a federal health-care insurance program for the elderly and people with disabilities.

The review led the Medicaid Fraud Control Unit in the attorney general's office to begin a review in June 1999. Investigators found problems in all of a sample of 100 claims by Klepinger.

On Jan. 20, Anchorage Superior Court Judge Eric Sanders authorized search warrants on the Beltone Hearing Center and Klepinger's home. A Medicaid auditor, reviewing seized records, concluded there was fraud totaling $141,636.20.

Klepinger moved from Wyoming to Juneau in 1995 and purchased the dealership, the only Beltone dealership in Alaska.

This may be the only Medicaid fraud case ever prosecuted in Juneau and it's a large one, investigator Nolan said.

The Medicaid Fraud Unit has seen little activity in Southeast, Nolan said.

``When you are dealing with smaller communities, there is a little more public awareness. It's easier to hide (illegal activity) in big cities like Anchorage, but in Juneau things tend to come to attention of authorities immediately.''

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