Business owner in Harrisburg accused of defrauding PA college/university faculty union out of $1.49 million

The head of Actuaries, Consultants and Administrators, Inc. (ACA) in Harrisburg has been charged by federal prosecutors with one count of health care fraud, according to a filing in the U.S. District Court for the Middle District of PA.

Michael Buchanan, the ACA’s vice president, secretary and treasurer, allegedly defrauded the Pennsylvania Faculty Health and Welfare Fund (The Fund) out of approximately $1.49 million by submitting false and inflated invoices for dental and vision benefit claims. The ACA is compensated by The Fund, which provides said benefits to the Association of Pennsylvania State College & University Faculties, a union that represents faculty members employed by the Pennsylvania State System of Higher Education.

The alleged fraud took place between April 2007 and November 2017.

For its services, the ACA received $3.50 for each union member, and $8.10 for each dental claim and $5.20 for each vision claim it processed.

It’s alleged that in 2009, Buchanan told ACA employees that they needed to increase the number of dental and vision claims billed to The Fund. To do this, he allegedly initiated a set of rules, which include (but aren’t limited to): each denial claim, request for a new x-ray and a phone call received were to be counted as one claim. Two claims were to be counted when a dental claim contained five or more lines, a vision claim contained four or more lines and any claim that took more than 10 minutes to process.

Buchanan is accused of telling staff to record each false and inflated claim in a notebook and to aggregate the number of false claims in a monthly report before he would submit the invoices to The Fund.

Funds were then deposited into the ACA checking account. Buchanan allegedly moved funds in excess of $500,000 to his personal checking account and to his brokerage accounts.

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