US President Donald Trump and his then-criminal defense lawyer Todd Blanche, now acting US Attorney General. (Photo: Yuki Iwamura-Pool/Getty Images)
In early June, top Trump administration officials traveled to Ohio to highlight investigations into people suspected of defrauding the state’s Medicaid program of tens of millions of dollars.
They did not mention the corporations that have huge contracts with the state’s Medicaid system – even after several of them were sued and two were accused of overloading the system with a quarter of a billion dollars in one year.
“President Trump and Vice President Vance’s war on fraud has arrived in the great state of Ohio.” Acting U.S. Attorney General Todd Blanche said from a stage in Whitehall, with other administration officials and Ohio Republicans standing behind him.
“And this is a war we will win. The team behind me, federal and state partners, have come together to fight the fraud crisis in this country. It has hampered our tax programs and robbed America’s purse for too long.”
Blanche focused on suspected fraudsters, such as two Ohio state employees and two others accused of taxing the state’s Medicaid system $30 million for undelivered behavioral health services.
“Some criminals were so bold and daring that they defrauded the government of tens of millions of dollars…” – Blanche, who previously worked as Trump’s criminal defense attorneyhe said. “This should shock your conscience.”
Blanche represented Trump when Trump was convicted 34 offenses related to falsifying business records.
The acting attorney general dismissed allegations that Ohioans defrauded the pandemic-era Paycheck Protection Program and other alleged scams, praising Trump’s Fraud Elimination Task Force. The group is led by Vice President J.D. Vance of Ohio.
In total, the alleged frauds described by Blanche and others amounted to approximately $100 million.
“These numbers are astonishing, but they are just the tip of the iceberg,” Blanche said.
He later added: “Americans deserve to know that if someone lies, cheats or steals to achieve success, they will be punished and deserve a government that will never be exploited by fraudsters.”
It never came to lightweight that giant health care conglomerates had huge contracts with the state’s Medicaid program.
In Ohio, for exampleGreat Healthcare provides health plans funded by Ohio Medicaid. Similarly, CVS Health offers Medicaid managed care programs through its insurance company, Aetna.
The regulator is accusing drug brokers of skyrocketing prices, possibly diverting business to themselves
These cooperatives rank third and fifth in revenue, respectively, in the United States. They also own a “vertically integrated” range of companies, including health insurers, medical practices and pharmacies. They do business with each other and with competitors.
They also own two of the country’s three dominant pharmacy intermediaries – known as “pharmacy benefit managers.” They have been accused of abusing their dominance in many aspects of health care make huge profits and enhance costs.
In 2017, CVS and UnitedHealth’s pharmacy benefit managers served all Medicaid managed care companies under the Ohio Medicaid contract.
A newspaper investigation a year later uncovered evidence suggesting that middlemen may have been charging taxpayers much more for prescription drugs than they reimbursed the pharmacies that bought and dispensed them.
When the Department of Medicaid obtained all 2017 reimbursement data and hired a firm to analyze it, Ohioans learned that they had paid $224 million more on Medicaid prescriptions this year than pharmacies that are already struggling.
The conglomerates deny they have done anything wrong and continue to insist they save money for consumers.
Details uncovered in the same investigation led then-Ohio Attorney General Dave Yost to sue Centene, the nation’s largest Medicaid managed care provider.
Yost accused them of using unnecessary pharmaceutical middlemen to inflate bills for the state.
Centene agrees to settle Ohio, Mississippi Medicaid claims for $143 million
Within months, Centene settled with Ohio for $88 million and announced that it was he has set aside more than $1 billion settle with other states that didn’t even sue him.
Centene has never admitted wrongdoing and it is not known how much it made from the disputed agreement with the pharmacies.
Despite Buckeye Health Plan’s conduct, the managed care company owned by Centene continues to do business with Ohio. It came together over half a billion dollars in 2024.
Yost sued drug brokers owned by gigantic health care companies on other grounds. He accused them of, among other things, embezzlement of state pension funds.
In 2022, Yost announced he would do just that raised over $100 million from companies, the remaining cases are still pending.
But Yost made no mention of the hundreds of millions he accused gigantic corporations of improperly collecting from taxpayers when he took the podium at a June 4 news conference.
Speaking just before he was scheduled to resign, he instead focused on alleged fraud by smaller players and praise for Trump.
“Today means something different,” Yost said. “I have been in this fight since I was elected state auditor in 2011. In my eight years as state auditor and almost eight years as attorney general, I have been leading Medicaid investigations and prosecutions… I have never seen the level of interest and support from the federal government in any administration that you are witnessing here today.”
One of these less supportive administrations that Yost was talking about was the first Trump administration.
“It was a lonely fight at times,” Yost said. “It’s not a lonely fight anymore. What’s the difference? President Trump, Vice President Vance and this team you see here today.”
Antonio Ciaccia is a Columbus-based drug pricing expert who has worked with multiple state attorneys general to investigate government drug spending.
He said the focus should be on vendor fraud, as Trump’s team is doing. But, Ciaccia said, that’s not enough.
“There are billions of dollars flowing through the system. You have to look at it essentially as a spigot that people think they can get the most out of,” he said.
“In the era of managed care, preventing fraud, waste and abuse must go far beyond the provider level because providers can engage in fraud on a small scale. But now, with insurance companies and their vertically integrated subsidiaries standing between the provider and the bill-paying state, vertical integration has created conflicts of interest and opportunities for fraud, waste and abuse on a much larger scale.”
Blanche and other members of the Trump administration blamed former President Joe Biden’s negligence for Ohio’s Medicaid fraud. However, John Kulewicz, a Democrat running for state attorney general, pointed out that Republicans have run the Ohio Department of Medicaid since January 2011.
“I think we have a classic case of people who were either sleeping on the switch or looking the other way,” Kulewicz said in an interview.
“The people who gathered a few weeks ago for this press conference have had absolute control over the state government for the last 16 years. As a result, they have had an unimpeded ability to control and prosecute any such problems and nothing has been done.”
Ohio State Auditor Keith Faber is the Republican Party’s nominee for attorney general. During the June 4 press conference, he was on stage but did not say anything.
His campaign was asked whether he intended to investigate possible fraud by corporations that contract with the state and whether he intended to continue Yost’s efforts.
“Keith opposes fraud in any form and wherever it occurs. He looks forward to serving as Attorney General and working with the administration and the General Assembly to reduce fraud, waste and abuse,” Matt Dole, a Faber campaign adviser, said in an email.
“One of Keith’s first steps as attorney general will be to learn more about ongoing investigations and litigation. He will not commit to any outcome at this time, but rather encourages voters to look at his history and philosophy to understand the strong positions he will take to support law enforcement, protect consumers and defend the Ohio Constitution.”
