Amtrak watchdog says railroad’s Northeast region has a ‘troubling workforce culture’

WASHINGTON – Amtrak’s Office of Inspector General issued an investigative report to Amtrak on Tuesday that detailed the widespread scheme in which at least 119 employees conspired with New York health care providers to bilk the railroad’s health care plan of more than $12 million from 2019 to 2022.

Of the 119 employees implicated, 28 retired or resigned as a direct result of the OIG’s investigation, and 30 left the company for other reasons. A dozen employees have been criminally charged in the case, and seven have pleaded guilty, pending sentencing. The OlG’s findings on 61 remaining active employees were given to Amtrak for consideration of appropriate administrative disciplinary action.

“The sheer volume of employees who cavalierly participated in this scheme to steal Amtrak’s funds suggests not only a serious lapse in basic ethics, but a troubling workforce culture, at least in the Northeast region, in which blatant criminal behavior was somehow normalized,” Amtrak Inspector General Kevin H. Winters said in a statement. “After assessing the significant number of employees involved, this case represents the largest employee conspiracy our office has ever investigated. We hope this investigation and the resulting accountability process serves as a deterrent for Amtrak employees and health care providers who may choose to engage in such schemes, and we ask anyone who suspects or observes such fraud to report it to our fraud, waste, and abuse hotline.”

The employees implicated in the scheme, based in Pennsylvania, Delaware, New Jersey, New York, Maryland, Connecticut, and Washington, D.C., accepted cash kickbacks from three health care providers in exchange for the use of their insurance information, and in some cases, that of their dependents. The providers used the employee-provided information to file fraudulent and questionable medical claims for services that were never provided or not medically necessary.

In total, Amtrak’s health care plan was billed over $16 million and paid out more than $12 million during the scheme.

In addition to its investigative work, OIG auditors found in 2018 and 2019 reports that Amtrak could strengthen controls to better identify fraudulent medical claims sooner. The reports highlighted billing patterns indicative of potential fraud among hundreds of providers and outlined common fraud indicators similar to those uncovered in this investigation.

While Amtrak addressed the OlG’s recommendations in the 2018 report and has taken steps to bolster its fraud awareness training and communications, two recommendations for the 2019 report remain open. Specifically, the OIG recommended that Amtrak implement proactive fraud detection procedures, like data analytics, to stop fraudulent payments sooner, as well as cost effective fraud awareness initiatives to enable health plan members to better recognize and report potential fraud.

More recently, the OlG identified health care fraud as one of four high-risk areas in a report on fraud risks Amtrak could face as it leverages significant federal investments for major acquisitions and capital projects.

Amtrak spokeswoman Olivia Irvin said the railroad has taken significant steps to reduce health insurance fraud.

“Amtrak strongly condemns this reprehensible act that occurred between 2019 and 2022 and is taking swift action with all active employees involved in the investigation,” she said in an email. “While we continue to work closely with the OIG to identify and stamp out fraud, we also continue to work on other initiatives to address this issue. Amtrak has implemented various measures to enhance fraud prevention and empower employees to report suspected wrongdoing. These efforts include increasing oversight and strengthening efforts to eliminate fraudulent schemes.”

Note: Updated at 12:17 p.m. Central with comment from Amtrak.