Alamance County

Sheriffs Office
Alamance County Health Department
Investigation
 ACHD Investigation

On Monday June 23rd, 2008 the SBI initiated an
investigation into allegations that employees of the
Alamance County Health Department specifically Dr.
Kathleen Shapley-Quinn and Nurse Karen Saxer were
knowingly and willingly falsifying patient medical
records.

Sheriff Terry S. Johnson sought the assistance of the
SBI, at the request of County Manager, David Smith.

This request, made by County Manager David Smith
was based on concerns brought to his attention by
Commissioner William Lashley, and Board of Health
Chairman Keith Whited.
 Allegations

At the request of some patients, Alamance
County Health Department provided work
notes and prescriptions in alias names.

Providing these services would assist illegal
aliens with maintaining assumed or stolen
identities, which may be a violation of state, or
federal law. (Identity Theft, Fraud, etc.)
 Interviews

Interviews were conducted with the nursing administration and
nursing staff.

The staff was divided with some believing the practice of writing
work notes (utilizing aliases) to suspected illegal aliens was wrong
and therefore they refused to do so. Subsequently they reported
feeling pressured or feared repercussions.

Others, particularly Shapely-Quinn and Saxer believed the
guidance they had sought and received was vague at best, but
believed their actions did not violate the law and they were
providing care for their patients. Furthermore, according to
them, an illegal alien can not be refused medical care.
Dr. Shapley-Quinn Correspondence

During the course of this investigation, Dr. Shapley-
Quinn stated that she had sought various legal
guidance.

Investigators obtained a court order (search warrant) to
allow for review of Dr. Shapley-Quinns email
correspondence (specific to the County email).

Of the thousands of emails that were reviewed, several
were found to be relevant to issues regarding the
specific focus of this investigation.
 Dr. Shapley Quinn Correspondence

This Correspondence was sent from Jill D. Moore,
M.P.H., J.D. UNC Institute of Government, to Dr.
Shapley-Quinn on May 21, 2007.
 Dr. Shapley Quinn Correspondence

This Correspondence was with Jill D. Moore, M.P.H.,
J.D. UNC Institute of Government
 Dr. Shapley Quinn Correspondence

This Correspondence was with Clyde Albright,
Alamance County Attorney.
 Interviews (Cont.)

On more than one occasion Nurse Karen Saxer at the
direction of Dr. Shapley-Quinn prepared or made
health related employer work notes for patients under
alias names, knowing that the names on the documents
were in fact not the birth name or legal name of the
patient.

As a result of interviews, five specific individuals were
identified.

This investigation remained specifically limited to these
5 individuals.
 Maria Sanchez
One of the five persons of interest.

Veronica Arias, of Texas, reported on May 2nd, 2008 to

the ACSO that someone in Swepsonville, NC had
stolen her identity and was using same to be employed.

Maria Sanchez was arrested on May 6, 2008 by
investigators of the Alamance County Sheriffs Office
for stealing and using the identity of Veronica Arias.

Sanchez used the name, SSN, DOB, of Veronica Arias
who is a living resident of Texas.
 Maria Sanchez (Cont.)
One of the five persons of interest.

As a post-arrest procedure, Maria Sanchez was

processed under the 287G program and identified as an
illegal alien. She was subsequently processed for
deportation.

Sanchez was provided work notes by the Alamance
County Health Department to return to work at Honda
Power Equipment (this creates substantial tax
implications for the real Veronica Arias who is a lawful
U.S. resident/citizen).
 SBI/HHS

Medicaid investigators with the state (SBI) and U.S.
Department of Health and Human Services were
requested to review files of these five individuals to
determine if Medicaid fraud had been committed.

The purpose for requesting SBI/HHS was due to the
fact that this information may be contained in medical
files that are protected under HIPPA. Both agencies
have oversight and authority to review such files while
complying with HIPPA and confidentiality laws.
 SBI/HHS Cont.

Investigation revealed that Medicaid applications are
made at the Alamance County Department of Social
Services, and on limited occasions at four outposts.

Upon review by SBI/HHS it was determined that none
of the five individuals received Medicaid benefits in
violation of any law, but that their services were
absorbed in large by local funding (Alamance County
Health Department Maternal Health budget line
Section 101).
 ACHD Maternal Health Expenses
2007 2008FY

Below is a section of the Health Budget Expenditures
for 2007-2008 FY. This section applies to the Maternal
Health budget, line item 101.
 Emergency Services for Non-
Citizens SFY2007

Alamance County funds 5.6% of the County
cost ($85,492.12), the remainder is reimbursed
from Medicaid.

(Source: North Carolina Paid Claims Data)

 Summary

It was determined that work notes were
provided in alias names by members of the
Health Department i.e., Karen Saxer at the
specific direction of Dr. Shapely-Quinn.

There was no evidence found supporting the
allegation of prescriptions being written in alias
names (the aforementioned work notes were
written on prescription pads).
 Summary

A summary of this investigation was provided to
Assistant U.S. Attorney Arnold Husser, U.S.
District Court, Middle District of North
Carolina, to see if any federal charges would be
appropriate.

AUSA Husser declined prosecution at this time.

This matter is pending final review by the
Alamance County District Attorneys Office to
determine if state prosecution is warranted.
 Medicaid Application Process
Review

In order to obtain a clear understanding of the
Medicaid application process, Susan Osborne
Director of DSS was requested to process Major
Tim Britt through a simulated Medicaid
application procedure.

Director Osborne arranged for the request to be
met, and provided the ACSO with a Family and
Children Medicaid manual.
 Medicaid Procedure Review

Following the simulated application process and
review of the manual there were four areas of
further inquiry:

Citizen/Alien Requirements (FCM-MA-3330)

Confidentiality (FCM-MA-3500)

Fraud Policy/Abuse (FCM-MA-3535)

National Voter Registration Act

Public Assistance Applicant Registration
Citizen/Alien Requirements (FCM-
MA3330)

To be eligible for full Medicaid, an individual must be a
U.S. citizen or an alien admitted to the United States by
USCIS under a specific immigration status. Immigrants
who do not meet this requirement or citizens for whom
citizenship and identity are questionable, are eligible for
Medicaid for emergency medical services only.

Aliens who seek admissions to the U.S. must establish
that they will not become public charges. Many aliens
establish that they will not become public charges by
having sponsors who pledge to support them. (See
MA-2262, Sponsor Deeming)
Citizen/Alien Requirements (FCM-
MA3330)

Reporting to USCIS

Applicant/Recipients identified as illegally in the
U.S. (who are applying for Medicaid/North Carolina
Health Choice) are not subject to any USCIS
reporting requirements and should not be reported
to the USCIS. Also, persons who apply for benefits
on behalf of others (for example, an ineligible
mother applying for her eligible child) are not
subject to any USCIS reporting requirements
themselves.
Citizen/Alien Requirements (FCM-
MA3330)

Verification procedure

The IMC (Income Maintenance Caseworker) must
verify the alien status for all qualified aliens through
the Systematic Alien Verification for Entitlements
(SAVE) Program. This requirement does not apply
to non-qualified aliens.

The U.S. Department of Homeland Security
Systematic Alien Verification for Entitlements
(SAVE) system is used for verifying the status of an
alien in order to determine eligibility for Medicaid.
This Web-based system is used to verify the
authenticity of the aliens USCIS document, the date
of admission, and his current immigration status.
S.A.V.E Document
S.A.V.E. Document
Administrative Letter to Director of
Social Service
Administrative Letter to Director of
Social Service
Administrative Letter to Director of
Social Service
 Citizen/Alien Requirements

Per State policy, DSS must verify citizenship, and
immigration status of applicant/recipient's (DMA
Policy #3330, FS #225). Verifications received
during this process from the SAVE System
indicating invalid documents due to counterfeit
status cannot be released to law enforcement. DSS
is required by state policy to continue with the
eligibility determination for all other household
members.
 Confidentiality (FCM-MA-3500)

Section 5, Law Enforcement Fraud Investigations

Law enforcement personnel conducting or assisting
in an investigation or prosecution related to
Medicaid fraud may be given information or
evidence pertinent to the alleged fraud. Otherwise,
no information may be given to law enforcement
unless under a court order.
 Confidentiality (FCM-MA-3500)

Release of Information to Other Agencies

Information from the applicant/recipients case
record may not be released to other agencies, such as
public housing, legal services, private organizations,
Immigration & Naturalization Services,
Employment Security Commission, school lunch
programs, health departments or elected officials
without the clients consent.
 Confidentiality (FCM-MA-3500)

Confidentiality of Alien Status

All rules of confidentiality must be applied in regard
to alien status. It is a breach of confidentiality to
discuss the alien status of an individual with
employers, landlords, etc.
 Fraud Policy/Abuse (FCM-MA-
3535)

Legal Responsibility

Both the state and the county departments of social
services have a legal obligation to assure proper
administration of public funds and an obligation to
take necessary legal steps in cases of fraud or
misrepresentation. This obligation rests on the
efficiency, thoroughness, and integrity of the process
by which initial and continuing eligibility are
determined.
 Fraud Policy/Abuse (FCM-MA-
3535)

Legal Restrictions

The privacy Act permits an individual to have some
control over the accuracy and disclosures of records
maintained by Federal Agencies. However, the
Privacy Act of 1947 (P.L. 93-579) Section 552b (7)
allows a fraud investigator to obtain information
necessary to conduct a civil or criminal investigation.
 Fraud Policy/Abuse (FCM-MA-
3535)

Fraud

Fraud is, by law, a crime against society that can only be
determined in a criminal court. It is the willful and intentional
act that creates the crime.

A client is suspected of fraud when the client willfully and
knowingly and with the intent to deceive:

Makes a false statement or misrepresentation; or

Fails to disclose a material fact; or

Does not report changes in income or other eligibility factors that affect
the benefit; and

As a result, obtains, attempts to obtain or continues to receive assistance
 Fraud Policy/Abuse (FCM-MA-
3535)

Public Awareness

Informing the public about your county DSSs
attempts to prevent fraud and abuse is important, both
as a deterrent and as a public relations measure.
Information regarding court actions, amount of
recoupments, etc., should be made public. Publicize
the phone number to call to report cases of possible
fraud and abuse, stressing that such reports are
confidential. If the public realizes they will be
supported in their efforts, the county DSS may be able
to obtain much more information and cooperation.
 National Voter Registration Act
Public Assistance Applicant
Registration

There have been questions raised about the
potential of voter fraud being committed as a result
of ineligible applicants, who may have been
registered to vote during the process.

Questions of public confidence in our voter
registration in Alamance County have arisen.
 National Voter Registration Act
Public Assistance Applicant
Registration

Who

All North Carolinians who apply for or receive services or
benefits under one of 13 programs or agencies (Employment
Security Commission (ESC), Food Stamps, Division of Medical
Assistance (Medicaid), Division of Mental Health, Development
Disabilities and Substance Abuse Services (MHDDSAS), Services
for the Blind, Services for the Deaf and Hard of Hearing,
Vocational Rehabilitation, WIC, Work First, Office for Veteran
Services, State County Special Assistance for Adults, and low
income Energy Assistance Program).
 National Voter Registration Act
Public Assistance Applicant Registration

What:

The opportunity to register to vote or update voter
registration while applying for benefits, renewing
benefits, or reporting a change of address at one of the
above programs.

Where:

At any agency office that administers services or
benefits under one of the programs listed above.
 National Voter Registration Act
Public Assistance Applicant Registration

Why:

Its the law. The purpose of the law is to make the voter
registration process more accessible to all eligible voters.

How:

Agency staff must offer the applicant the opportunity to register
to vote, and the necessary form. Staff are required to provide the
same level of assistance in completion of the voter registration
form as would be offered in the completion of agency forms.
Completed voter registration forms must be transmitted within
five business days to the County Board of Elections.
 National Voter Registration Act
Public Assistance Applicant Registration

Who determines eligibility?

It is the responsibility of the county boards of elections, and not
agency personnel, to determine the eligibility of clients to register
to vote in North Carolina. If agency registration staff
questions the eligibility of a particular client, the best
procedure would be to allow the client to complete the
Voter Registration application and then transmit the
application to the proper county board of elections. The
county board of elections will utilize all available resources to
verify the information on the application and to correctly
determine eligibility. (NC State Board of Elections NVRA
Training Manual)
 National Voter Registration Act
Public Assistance Applicant Registration

There has been a lot of attention in the press
regarding illegal aliens and access to government
services. What prevents non-citizens from registering
to vote?

Only individuals who are citizens of the United States are eligible
to register to vote. Legal residents holding green cards or
persons holding visas allowing them to reside in the United States
are not citizens and may not register to vote. The voter
registration application requires that each person registering to
vote affirms citizenship once by checking a box and another time
by attestation. Falsely answering the citizenship question is a
felony, can be grounds for immediate deportation, and will
forever bar the client from ever becoming an American citizen.
(NC State Board of Elections NVRA Training Manual)
 National Voter Registration Act
Public Assistance Applicant Registration

Continued

If it is determined that a non-citizen has registered to vote
and subsequently is not eligible to vote, the registration will
be cancelled and the individual reported to the U.S. or
District Attorney. Agency staff, unless knowingly aiding the
non-citizen in providing false information on the voter
registration application, cannot be held liable for any person
who falsely completes a voter registration application.
Agency staff should notify the county elections office if they
believe a person has deliberately completed a registration
application with false information. (NC State Board of
Elections NVRA Training Manual)
 NVRA Report

From February to October 2007, over 24,000 new
voters were registered at county DSS offices across
North Carolina. (NC State Board of Elections)

ALAMANCE COUNTY REGISTRATION

 NVRA Summary

The most significant issue revealed during this review
appears to be logistics of the registration system
required of DSS.

How are employees of DSS able to ensure the integrity
of the registration when they are prohibited from
addressing questions of immigration status. (i.e.,
reporting to outside agencies).

A review of public records determined that none of the
persons of interest in the Health Department
investigation have ever registered to vote in N.C.
 Interviews

Interviews were conducted with Director Susan
Osborne and her staff. There was one common theme
in the interviews.

Staff members expressed a great deal of frustration with the
conflicting policies and mandates, as you have seen in the
previous slides.

Employees expressed concerns that their mission is to
provide services/assistance to those that are entitled and in
need, and not to those that are ineligible or precluded by law.
In addition, current state policies prevents law enforcement
notification even for apparent fraud.
Questions?