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The federal Medicaid program allowed health care providers to charge a fee of $20 to repair broken eye glasses.

Some eye doctors provide that kind of service for free. Other eye care providers occasionally bill the federal Medicaid program for the $20 repair fee.

But Rev. Harriett Walden turned it into a one-woman industry.

The Seattle optician earned hundreds of thousands of dollars in Medicaid eye glass repair fees over the course of three years - the top biller in the state.

A KING 5 investigation uncovered evidence submitted to the state that raises questions about Rev. Walden s business and why she was allowed to continue questionable billing at taxpayer expense.

The Walden case also raises questions at the state s specialized Medicaid Fraud Control Unit that investigates and prosecutes health care providers who cheat the program that s supposed to provide medical care to low-income citizens.

The Walden case was closed last year, but last week the state filed a lawsuit against her to recoup hundreds of thousands of dollars in Medicaid money.

One day, many clients

On June 21, 2009, Rev. Walden seemed to do the impossible. Billing data obtained by the KING 5 Investigators shows Rev. Walden billed Medicaid for repairing eyeglasses on 91 different clients. What s more, records show that these clients were seen in ten different Washington cities on that day including Spokane.

That s impossible, says Lee Haldorsen, a licensed optician and the owner of Market Optical in Seattle. No optician I know has ever billed anywhere near those figures, not a tenth of those figures, in all the time I ve been in this business, which is 28 years, he said.

Haldorsen describes opticians as the pharmacists of the eye industry. They check prescriptions written by eye doctors, fit frames and patients and repair eye glasses.

Rev. Harriett Walden is a familiar face in Seattle. She s the head of Mothers for Police Accountability, which helped push for many of the reforms that are now underway in the Seattle Police Department.

Troubling audit

Long before that 91-client day in 2009, the state had eye-opening information about Rev. Walden s eye care business.

In a 2006 audit, the state Department of Social and Health Services found that Walden supplied insufficient documentation in support of her Medicaid billings. The audit determined that Rev. Walden had been paid for repairing eyeglasses on thousands of patients, whom she couldn t prove she had actually serviced.

The audit determined that Rev. Walden s conduct was not a case of fraud, but it ordered her to pay the money back about $320,000 in all, plus interest.

Rev. Walden responds

It was nothing criminal, Rev. Walden told the KING 5 Investigators by phone. She says her problems were paperwork errors and that she was entitled to all the money she received from Medicaid.

Rev. Walden declined to be interviewed on-camera, but said the state tried to run me out of business with the 2006 audit. She said state investigators didn t appreciate the type of work she did.

Walden explained that she billed a high number of repair fees because she was a mobile optician who visited nursing homes in Western Washington. She says her elderly clients couldn t visit the optical store, so she brought her services to them. Many clients couldn t fix their own broken glasses, so Walden fixed them for them each for a $20 fee to Medicaid.

Billing problems persist

Rev. Walden kept her optician s license after the 2006 audit and kept billing Medicaid for about $100,000 per year, most of it for eye glass repairs, until state investigators checked up on her again in 2009.

Through public records requests, the KING 5 Investigators obtained an investigator s hand-written notes that said Walden Bills high no. of clients per day.

The documents show that Walden was following the same billing patterns uncovered in the 2006 audit. For example, she was billing eye glass repairs for the same clients every month of the year.

Haldorsen, the Seattle optician, calls that a red flag.

Nobody has glasses issues like that, said Haldorsen. I care for disabled patients who don t have glasses issues every month.

Medicaid Fraud Control Unit

Unlike the 2006 audit, by 2009 state regulators did suspect fraud.

They sent the case to Washington s Medicaid Fraud Control Unit (MFCU), part of the Attorney General s Office.

No question this is a huge dollar case. It s very alarming, said Brian Moran, the Chief Criminal prosecutor for the Attorney General s Office.

Moran says investigators ran into problems. Elderly witnesses couldn t remember important details, or even remember Rev. Walden herself.

Investigators say they needed witness testimony to meet the high standard of proof in a criminal case.

We didn t have the evidence in this case and I ll stand by that, said Moran. That s the right decision. Is it possible there was fraudulent behavior? Absolutely. Was it provable? Absolutely not, he said.

After a year and a half of investigation, MCFU declined to criminally charge Rev. Walden.

Most cases not prosecuted

Records examined by the KING 5 Investigators show increasing numbers of MFCU cases are ending up like Rev. Walden s unprosecuted.

The number of investigations opened by Washington state s MFCU has grown by 300% in the last ten years.

Conversely, the number of prosecutions has stayed steady about two dozen each year.
So there are more cases, but a much lower percentage of fraud suspects facing criminal charges.

We have the same number of employees, said Moran. You can t lose sight of the fact that our state general fund has taken an extraordinary hit. We have about half of what we did. So we have the same number of employees, more cases coming in the door and the complexity of these cases hasn t gotten any easier. The dollar amounts are bigger.

Action against Rev. Walden

In the face of potential disciplinary action by the State Department of Health, Rev. Walden did eventually surrender her optician s license.

But she hasn t paid back any of the money that she was ordered to return in 2006.
This week, two days before KING 5 aired this story, the Attorney General s Office filed a lawsuit against Walden seeking to recoup the almost $600,000 she owes including interest.
The Medicaid money is supposed to help the poorest among us.

I can t think anyone who isn't happy we do this kind of thing for people who qualify, says Haldorsen.

But then to abuse it to this point.... It's just sick. It's vulgar and it's wrong.

New tools for the AG

Last year, Washington lawmakers gave the MFCU a boost.

The Legislature passed a state False Claims Act. This encourages insiders and whistleblowers to come forward to report Medicaid fraud. If they trigger a successful prosecution the whistleblower gets a share of any money recovered.

It also allows Washington state to participate in more national Medicaid fraud investigations.

Lawmakers gave the MFCU funding to hire several new lawyers and investigators, the first growth of the office in years.

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