Nutting says he's fit to be House Speaker despite Medicaid overbilling

LEWISTON — The presumptive speaker of the state House of Representatives is facing renewed scrutiny for overbilling state and federal agencies more than $1.6 million for Medicaid reimbursements.

About $1.2 million of that sum remains unpaid and unrecoverable, according to the state.

Rep. Robert Nutting, R-Oakland, last week was elected by a Republican caucus to lead the new GOP majority in the next legislative session, all but ensuring that he'll become the first Republican to preside over the chamber in 36 years.

However, what was supposed to have been a career achievement for the five-term legislator has become mired in questions about Nutting's business practices at True's Pharmacy. In 2003, Nutting closed the business after a settlement ordered him to repay $1.6 million for overcharging the state in Medicaid reimbursements for shipments of adult diapers, latex gloves and bed liners.

The case received significant media attention between 2002 and 2004, as the Maine Department of Health and Human Services originally alleged that Nutting, at the time a sitting legislator, defrauded the state for $3.6 million over five years. A subsequent investigation and settlement lowered the figure.

Nutting consistently countered that the issue stemmed from misinterpreting the state's prescribed reimbursement formula.

On Wednesday, Nutting agreed to a series of interviews with media outlets to explain the issue, which he claimed was largely driven by "confusing regulations" enforced by DHHS and other state departments that hurt Maine's small businesses.

"This is what we're working on," said Nutting, a reference to the new Republican majority's vow to dial back rules they say are strangling economic growth.

Nutting also contends that the state's vigorous pursuit of the case forced him to close his business and liquidate its assets after True's Pharmacy paid back just more than $433,000, 26 percent of the settlement.

"When an honest company, an honest business, an honest individual makes a mistake, instead of working through the problem ... instead of collecting more money back, (the state) just takes out a hammer when it's not necessary," he said.

According to documents obtained from DHHS through a Freedom of Access request, Nutting repaid $433,188 of the settlement. Shortly after filing a lawsuit to contest the sum, True's Pharmacy declared bankruptcy, forcing the Department of Health and Human Services and Medicaid to eat the remaining $1.2 million.

True filed Chapter 7 rather than Chapter 11. The distinction is significant because Chapter 11 would have allowed Nutting to hold off True's creditors and delay liquidation while he attempted to repay the balance of the settlement. 

Asked why True's Pharmacy filed Chapter 7 instead of Chapter 11, Nutting said Wednesday that he didn't know the particular ramifications of either filing. He said he acted on the advice of his lawyers and that the state urged him to file for bankruptcy.

"They were anxious to get their money," Nutting said, adding that the settlement schedule forced him to shutter the business and file for bankruptcy.

Press accounts from the time indicate that Nutting's team of lawyers in 2004 filed a countersuit to reduce the final settlement amount. However, shortly thereafter, True's Pharmacy dropped the suit and filed Chapter 7.

Nutting initially said he didn't recall the countersuit to reduce the settlement. However, when read a press account from that period, he said his decision to file Chapter 7 came at the state's suggestion.

"They wouldn't allow us a long enough period to pay the money back," he said.

Bankruptcy files showed that True's sold off its assets — a van, computers, tables and even soda fountain stools — for $128,000.

That amount, plus other assets, left True's with $189,882 in proceeds to go to the state.

The $433,000 amount was the result of the liquidation, plus the state's decision to choke off True's Medicaid reimbursements during the investigation.

Nutting said he found no contradiction between his new role as leader of the House, which oversees programs such as MaineCare, and his unpaid debt.

He said the errors he made were “unintentional” and that the overpayments did not make him wealthy.

Lance Dutson, communications director for the Maine Republican Party, said Nutting pumped the $1.6 million back into business operations. Dutson said the company didn't expand, nor did Nutting use the money for personal gain. 

"It's not like there's a house in Costa Rica, or something," Dutson said.

Nutting said he paid his three lawyers "over six figures" during the case. He couldn't give a specific amount.

The 2004 final decision on the case said True's Pharmacy didn't keep accurate records for an extended period, making it difficult for auditors to determine exactly how much he overcharged the state.

Nutting denied that claim, saying 96 percent of the documents the pharmacy provided were verifiable by state standards. He also refuted early charges that his employees had destroyed records to thwart the investigation.

Nutting said early accusations withered once the public understood that he'd made "an honest mistake."

"When this first came out, the stories said things like 'fraud', 'deceit' and 'bilked' and those sorts of things," he said. "Over the timeline you saw the dollar amount come down ... those words disappeared. It became much more about an honest mistake."

Press accounts from the period showed Nutting garnering support from Oakland residents, doctors and party members. During a hearing process that extended into August 2003, a Waterville Sentinel story detailed a rally at the State House in which supporters urged the state to halt the investigation. Some attendees carried signs that read, "If the diaper fits, you must acquit," and, "Stop the insanity."

Later that summer, Nutting closed True's Pharmacy and laid off its 23 employees.

In 2004, the state filed its final report, saying Nutting owed $1.6 million. An April 2004 Waterville Sentinel story quoted Nutting as saying, "There's no hope that True's will be able to repay anywhere near that. There's no source of income. We will file for bankruptcy at some point. The state will get whatever assets they will get."

Four months later, True's dropped its countersuit and filed for Chapter 7.

Nutting was serving his third term in the Legislature at the time. He won a fourth term in November, edging out two challengers.

Nutting said Wednesday that voters' endorsement of him despite the high profile of the True's case showed that the community supported him.

"Since this occurred, since the people who know me the best in Oakland and Sidney have seen this play out in real time, they have elected me three consecutive occasions," he said. "I think that should tell the people who don't know me very well, that if you did know me very well, that this is an honest mistake."

Nutting said he still intends to seek the House speaker position.

"Not only do I have the support of the House Republican Caucus, I think you will see that I have the support of the House Democratic Caucus as well," he said.

smistler@sunjournal.com

John Christie of the Maine Center for Public Interest Reporting contributed to this report

Associated Press file photo

Rep. Robert Nutting, R-Oakland, who owned True’s Pharmacy, is facing questions about overbilling the state for Medicaid reimbursements.

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Comments

PAUL ST JEAN's picture

That was pathetic, wasn't it?

That was pathetic, wasn't it?

 's picture

Nutting belongs in a jail

Nutting belongs in a jail cell with his (Bubba) yanking on his beard!

PAUL ST JEAN's picture

You mean like, "C'mere, boy;

You mean like, "C'mere, boy; Bubba gonnn make yewww, a star".

PAUL ST JEAN's picture

Good luck with THAT speech,

Good luck with THAT speech, Angels.

 's picture

Once again, lacking in an

Once again, lacking in an intelligent argument the troll resorts to name calling and threats....glad to see somethings never change, have a great day.

PAUL ST JEAN's picture

Good luck, man.

Good luck, man.

 's picture

as a conservative i totally

as a conservative i totally agree with you on this Jon, he really should be out of there if not in jail.

 's picture

Who is the stage AG?

Who is the stage AG?

RONALD RIML's picture

Now what Party is is that Pizzes and Moans

about so-called "Welfare Queens?"

Meet the Emperor!!

 's picture

it all started with electing

it all started with electing a known tax cheat as governor. It appears to be permeating throughout his entire administration. Fortunately they only have to weather the storm for another month and a half, afterwards they'll have the judiciary in their firm grasp, so they can plunder with wild abandon without any fear or accountability.

PAUL ST JEAN's picture

Was he ever convicted?

Was he ever convicted?

 's picture

They are all part of the same

They are all part of the same vast right wing wacko conspiracy. You know that, so take your point of order and point it......

PAUL ST JEAN's picture

Ben, you allowed hime to

Ben, you allowed hime to provoke you into getting yourself canned. Gotta stay cool, man.

PAUL ST JEAN's picture

Well stated, LAS

Well stated, LAS

 's picture

Will this be the first 'official' act for the "R's"

The Republicans have been praying for the day when they will be in charge. So what do they do when it happens; they appoint a crook to be Speaker of the House. GOOD MOVE! Your first opportunity to truly lead this state in another direction and you elect to do this! I can wait to see what's next. This is not your finest hour.

 's picture

The speaker is elected by the

The speaker is elected by the members of the house, he is not appointed..

 's picture

Businessmen

Amazing the arrogance of businessman.
Had someone stolen $1.6 million dollars from his pharmacy, Nutting would be asking the state to prosecute them to the limits of the law. But let him defraud the state and well its just an "honest" mistake.
You can see this in his statement "...he didn't know the particular ramifications of either filing." Unbelieveable. He has a team of lawyers advising him on these filings. He's a legislator. Does he expect anyone to believe that he doesn't understand legislation. At least, his own statement disqualifies him from serving in the legislature.
But he compounds the lie by stating that he is working on changing state regulations so that the next time he defrauds the state he will not be personally responsible for his actions.
Nutting should be in jail.

Mark Wrenn's picture

fraud

Kind of makes going after welfare fraud a little tricky. How can you claim to want to reform the system when one of your leaders is one the biggest frauds there is?

Dave Bussey's picture

"Rep. Robert Nutting,

"Rep. Robert Nutting, R-Oakland, last week was elected by a Republican caucus to lead the new GOP majority in the next legislative session"

Uh oh. I guess the members of the caucus must have had something more important on their minds, distracting them from what they were supposed to be getting done at the time. But what could it have been?

Doreen Sheive's picture

Leader?

How does someone like Nutting, who appears to be easily confused for many years, going to be able to run the Maine House of Representatives? The Legislative session is very stressful for all involved. I just question his ability to be able to do a good job. I also question why he should influence the operation of these programs after he has so skillfully cheated these programs. Remember, that every time he defrauded the State and Feds, he negatively impacted the amount of money available to our needy citizens.

PAUL ST JEAN's picture

LePage screwed up on this

LePage screwed up on this one. As you stated, it'll probably define his term as governor.

Fred Stone's picture

Spelling

Check your spelling before you post.

GARY SAVARD's picture

This is a brain fart on the

This is a brain fart on the part of the Republicans. Not a good PR move, and not a good start toward the credibilty that they are seeking.

 's picture

Steal a car - Go to jail

Steal a million bucks - become Speaker of the House.

PAUL ST JEAN's picture

America; land of opportunity.

America; land of opportunity. That's why all the immigrants want IN.

Mark Wrenn's picture

and you?

"When an honest company, an honest business, an honest individual" true, but what about you?

 's picture

You are such a CONfused

You are such a CONfused simpleton...are you a 2year old with the "CON" thing? Instead of making an "adult" argument you go the predictable juvenile route. Thanks for not disappointing....

 's picture

Typical example of a crook

Typical example of a crook trying to spin the facts.

Fred Stone's picture

Saying

My father had a great saying that rings true "show me a politician and l"ll show you a crook".

PAUL ST JEAN's picture

Show me one who's lips are

Show me one who's lips are moving and I'll show you a liar.

Terry Donald's picture

Wow! This guy is the slickest

Wow! This guy is the slickest of slick. Claims that overcharging the government nearly $2 million for gloves, diapers and bed liners? That's enough of those items to outfit the whole state, awful lot for one little pharmacy isn't it?
And so he files bankruptcy chapter 7, asked about why he filed that way. "he didn't know the particular ramifications of either filing. He said he acted on the advice of his lawyers and that the state urged him to file for bankruptcy." In my opinion, either a liar or an idiot. That's like saying that you didn't know your wife was changing her state of residence, isn't it?
How about this for a good person to help lead the state in a period of financial crisis?
"True's Pharmacy didn't keep accurate records for an extended period, making it difficult for auditors to determine exactly how much he overcharged the state."
and lastly,
"Nutting said he found no contradiction between his new role as leader of the House, which oversees programs such as MaineCare, and his unpaid debt."
Wow, how stupid are we?

no clue

what else will he and does he misinterpret ?

 's picture

And you can add to that list

And you can add to that list of businesses going belly up, and sticking the people with the tab, Prime Tanning in Hartland which owes the town $300,000 in back taxes. Who knows what kind of clean up will have to be done, and how much it will cost, when they close up.

Nutting is a prime example of the Republi-CON mentality. Slam the system with the one hand and over bill and steal from it with the other. To the people that elected Robert Nutting, this man stole from you, and all of the other taxpayers of Maine, and you reward him by re-electing him, and his cronies reward him by making him house speaker. Ah....Maine, the way life should be. Typical Republi-CON HYPOCRITES!

 's picture

"he claimed was largely

"he claimed was largely driven by "confusing regulations" enforced by DHHS and other state departments that hurt Maine's small businesses."

This has to be the "spin of the century"!! Blame everything on the big, bad government.

PAUL ST JEAN's picture

Yeah, they do; ask Pelosi,

Yeah, they do; ask Pelosi, Reid, Rangel, and Geithner. They're pretty knowledgeable on the matter. Let's face it; they're ALL scoundrels. Republicans democrats, it doesn't really matter any more. No one is CLEAN. Sad situation.

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