Public Affairs

Contact: Marc Kovac

press@ohioauditor.gov

Columbus – State auditors identified nearly $691,000 in improper Medicaid payments to a Warren County business for durable medical equipment it could not prove was delivered to patients or was otherwise not authorized to provide, Auditor of State Keith Faber announced Tuesday.

The total, which is due by Pacetti’s Apothecary Inc. (doing business as the Medicine Shoppe in Springboro), to the Ohio Department of Medicaid, includes $660,783.89 in improper Medicaid payments, plus $30,097.35 in interest for transactions that occurred between July 1, 2018, and June 30, 2020.

“There are about 3 million Ohioans who rely on Medicaid programming for needed care,” Auditor Faber said. “We will continue to ensure Medicaid funds are directed to providing that care and not for improper purposes.”

Ohio’s Medicaid programming provides health care services and equipment to eligible residents. The Auditor of State’s Office regularly reviews Medicaid program payments to providers, like Pacetti’s Apothecary, to ensure they are in compliance with federal and state requirements.

From July 1, 2018, through June 30, 2020, Pacetti’s Apothecary received total Medicaid reimbursements of more than $1.9 million.

As part of their review, state auditors checked durable medical equipment claims by Pacetti’s related to lumbar sacral orthotics, a type of brace used by individuals recovering from back injuries and spinal surgeries; pneumatic compressors, which are used by patients with certain medical conditions to improve blood circulation and prevent clotting; and transcutaneous electrical nerve stimulation, devices that are used to treat pain.

Among other issues, auditors determined that 45% of lumbar sacral orthotics and pneumatic compressor payments did not include documentation ensuring equipment was delivered to intended recipients. Additionally, auditors found rental payments for transcutaneous electrical nerve stimulation units were made on the same day or after payments were submitted for the purchase of the same equipment. In other instances, documentation of medical necessity or required prescriptions from physicians was missing, incomplete, or otherwise erroneous.

The report contains recommendations for Pacetti’s Apothecary to develop and implement procedures to ensure that it obtains the required documentation prior to billing for an item and that it maintains these records for the required period. In its response to the results of the compliance examination, Pacetti's noted that the errors were due to lack of awareness of requirements, an oversight with prescriptions, and a business arrangement it had at the time with a medical equipment company. 

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The Auditor of State’s office, one of five independently elected statewide offices in Ohio is responsible for auditing more than 6,000 state and local government agencies. Under the direction of Auditor Keith Faber, the office also provides financial services to local governments, investigates and prevents fraud in public agencies, and promotes transparency in government.