To: Michigan Governor-Elect Gretchen Whitmer
cc: Office of Inspector General, U.S. Department of Health & Human Services
December 6, 2018
Dear Governor-Elect Whitmer,1106
My name is Everett Stern and I am the CEO and Intelligence Director of Tactical Rabbit, a private intelligence agency composed of former U.S. intelligence community officers and analysts. I have extensive expertise in identifying financial wrongdoing, and was the central whistleblower in the HSBC Bank money laundering scandal. In part as a result of my efforts,
HSBC agreed to pay a record $1.9 billion fine to U.S. authorities, for the bank’s many misdeeds.
Today, I am calling on you and the Inspector General of the U.S. Department of Health and Human Services to launch investigations into serious acts of fraud committed by the Michigan
Department of Health and Human Services (“MDHHS”)—acts that are putting thousands of Michigan’s most vulnerable residents at risk and are jeopardizing millions of dollars of taxpayer money.
Over the past weeks I have uncovered three blatant acts of fraud carried out by the MDHHS bureaucracy going back more than a decade, and continuing during the entire term of outgoing Governor Rick Snyder. I will be releasing a full Investigative Report next week, but wanted to share the highlights immediately.
The findings should be viewed through the lens of the Flint Water Crisis, a crisis of leadership that caused many deaths and exposed countless Michigan children to toxic levels of lead poisoning. As you may know, in August, a District Court Judge found that Michigan health and welfare chief Nick Lyon was “corrupt” in his handling of the Flint-area Legionnaires’ disease outbreak. The judge ruled that MDHHS Director Lyon “willfully and neglectfully refused” to protect the lives of two Flint area men who died from Legionnaires’ disease, by failing to notify the public of the outbreak after the Flint drinking water crisis went public. When questioned by investigators, Lyon’s cavalier response reportedly was “the government can’t save everyone” and “everyone has to die of something.” In coming months, Lyon will stand trial on felony charges including involuntary manslaughter.
Somehow, Lyon remains in office, free on bail, with taxpayers footing millions in his legal bills. It was on Lyon’s and Snyder’s watch that these three latest acts of fraud occurred, by perpetrators still on the MDHHS payroll.
Like in Flint, the victims here are a particularly vulnerable group – Michigan’s elderly, frail and disabled population, people who require help with daily living skills including dressing, bathing and eating. The program in question is intended to keep people in their homes, to improve their quality of life, to help our seniors maintain their dignity while saving millions of taxpayer dollars.
But today I can reveal that the MDHHS has cooked the books in an outrageous attempt to extort $1 million from M&Y Care, LLC, one of Michigan’s premier home care providers to the sick and elderly. Based on fraudulent assertions and backdated regulations, MDHHS is trying to shut down the home health program, which provides vital home health care services to Michigan’s most frail population. Many other home health providers in Michigan will soon be facing the same threat, and Michigan’s elderly population will suffer in the process.
Lyon’s department, with its fat multi-billion-dollar budget and disastrous response to the Flint water crisis, has a history of recklessly trying to take away local control of health care issues. Instead of dealing with true emergencies, the outgoing Trump-friendly Governor and the administrators of MDHHS have targeted the legitimate billing practices of a business that provides home health aides for the frailest of Michigan’s Medicaid patients.
Today, I am calling on you, Governor-Elect Whitmer, and the Office of Inspector General of the federal department of Health and Human Services, to launch investigations into the capricious, ongoing attacks against the state’s home health care providers.
When I looked into the allegations against M&Y, I uncovered a slipshod governmental operation that issues fraudulent and backdated directives to an honest company. More importantly, I found that the state has failed to keep up to date with federal Medicaid regulations, putting countless elderly Michigan residents at risk for injury and worse. MDHHS routinely ignores federal mandates to improve patient care and billing compliance, leaving the state of Michigan grossly out of compliance.
MDHHS has engaged in ongoing cover-ups and has falsely targeted one of the state’s oldest and largest Medicaid providers, to divert attention from the agency’s own bad actions.
- In 2010, MDHHS shut down a program designed to review millions of dollars in questionable payments for Home Health Aide services. The justification was “to ease the burden on claims processing staff” according to an email I uncovered under the Freedom of Information Act. “Ease the burden” on highly paid state bureaucrats, and patients and taxpayers be damned?
- In 2017, when insiders learned that federally mandated oversight software had been disabled for seven plus years, MDHHS launched a stalking-horse operation. It initiated an audit of one of the state’s largest home health aide providers, a family run business with an impeccable record over more than 18 years of service. The demand for an audit by the Office of Inspector General was based on a cursory MDHHS review of three cases out of several thousand handled. The review was carried out by a middle-level bureaucrat with a proven history of overstepping her authority. A co-conspirator in the attack was another bureaucrat who was then facing serious charges of patient neglect, charges that could have resulted in the loss of her nursing license. The ongoing cover-up is being staged behind a demand for a refund of nearly $1 million in fees paid to the provider – a demand that continues to this day even though an internal hearing officer deemed the case too difficult to reach a determination.
- Michigan has failed to update state manuals to bring the state into compliance with Washington-mandated regulations that would expand home health services to more Michigan residents. Although MDHHS reluctantly issued “bulletins” last spring and summer acknowledging that Washington had issued new rules in 2016 requiring that home health aide services be provided to a much larger group of the frail and elderly, the old misguided rules are still in the current issue of the providers’ handbook published in October of this year. There is no way of telling how many people have been forced out of their homes and into institutional facilities because of the state’s failure to promulgate Washington’s new rules. Not only do the new Washington-issued rules improve medical care and allow aging Michigan residents the dignity of remaining in their own homes, the new rule is designed to save millions in taxpayer money. Daily living aide services delivered in patients’ homes are reimbursed at FIVE PERCENT of the rate charged by nursing homes and similar institutions.
When discussing the victims of the Flint water crisis, Director Lyon said, “The government can’t save everyone.” Today, that egregiously callous attitude has been extended to Michigan’s home health care providers for the sick and elderly. We demand an investigation into this outrageous behavior, to ensure the best care for the residents of the great state of Michigan.
Thank you for your consideration. Next week, I will be releasing to the public a full investigation into these serious matters.
Everett A. Stern, M.B.A.
Intelligence Director, Tactical Rabbit
Former U.S. Senate Candidate