By Billy Davis

A federal trial is fast approaching in Oxford for former Tri-Lakes CEO Ray Shoemaker and Levi Garner, the Panola County businessman.

The trial, scheduled for May 9, comes after the U.S. Attorney’s Office announced charges in March against Shoemaker and Garner, who have pleaded not guilty to a 10-count indictment.

It’s still unclear, however, if the defendants will also face state charges related to the alleged kickback scheme at the Batesville hospital.

Any state investigation would come from Attorney General Jim Hood, who said two years ago he was investigating allegations of Medicaid fraud.

Hood, in 2009, was criticized for not pursuing criminal charges at the hospital, when accusations of fraud first surfaced.  

The revelation of fraud allegations, and the accusation against Hood, came at the state capital, where Medicaid director Dr. Bob Robinson was speaking to a Joint Legislative Budget Committee that same year.

Robinson, speaking to legislators, said the Medicaid fraud case totaled $24 million.

Hood denied the allegation from Robinson and countered that Robinson had failed to provide oversight of the federal program.  

“Bob Robinson ought to resign because he’s not properly conducting his audits,” Hood told the Jackson Free Press, a Jackson newspaper, days after Robinson made his allegation.

“He’s got a fleet of auditors in his office that’s supposed to be auditing these facilities,” Hood told the newspaper, “but he let a small hospital get $24 million ahead of the state without proper auditing.”

The federal investigation in Oxford, however, indicates that the Division of Medicaid was pursuing a fraud investigation of Shoemaker as early as 2005, when the public-owned hospital became a private non-profit.  

In the federal case against Shoemaker, court documents include a 20-page affidavit from a Division of Medicaid official that describes how an audit began soon after Shoemaker was named CEO at the hospital.

The audit discovered an “abusive process” that totaled $24,026,221 in alleged billing fraud, according to the affidavit.

The affidavit also includes a summary of a 2007 investigation at Humphreys County Memorial Hospital, where Shoemaker was accused of Medicaid billing fraud totaling $4 million.

A May 2007 letter to Shoemaker, included among the documents, states that Medicaid was ceasing payments at Humphreys due to “suspected fraud and or abuse and/or willful misrepresentation under the (Medicaid) program.”

The federal affidavit is signed by Janet Mann, deputy director for Audit and Recovery within the Division of Medicaid. Her affidavit was signed in November 2008, 10 months before Robinson’s accusation, and Hood’s counter-accusation, surfaced in the press.

Hood, in the same 2009 Jackson Free Press story, called the alleged Medicaid fraud “a scandal of beef plant proportions” and said he was “going to pursue these doctors to hell and back in civil actions.”

A spokesman for the attorney general, reached Monday, said the state office would not confirm or deny if any investigation is under way.

A call to the U.S. Attorney’s Office, to ask if Hood is working with the U.S. Attorney’s Office, was not immediately returned Monday.

Robinson apparently believes the Attorney General is not pursuing any charges: hours after the indictments were made public last month, he congratulated the U.S. Attorney’s Office “for aggressively pursuing healthcare fraud.”

“We tried to get Attorney General Hood interested in this case, but he never prosecuted it,” Robinson said in a statement.

“I am pleased to know that someone in this State is willing to pursue criminal charges…” he said.