The stain

The Nutting case
By AL DIAMON  |  December 1, 2010

"If the diaper fits, you must acquit."

According to press accounts from 2003, that was the wording on a sign carried at a State House rally by a supporter of Republican state Representative Robert Nutting of Oakland. Nutting had been accused by the Maine Department of Human Services (as it was then known) of over-billing the state and federal Medicaid programs by $1.6 million for incontinence supplies, including adult diapers.

Like much of what's been written and said about the Nutting case, the protest sign was clever, but made no sense.

Sort of like those defending the choice of Nutting to become the next speaker of the Maine House of Representatives.

Here's the background. Nutting, a strong advocate of running government like a business, ran his own business like a government bureaucracy. At True's Pharmacy in Oakland, records of purchases and sales were filed in a haphazard manner. Some of those documents, which were supposed to be kept for five years, were allegedly thrown away. Calculations of how much to charge for those items were based on an incorrect formula, even though Nutting sat on the legislative committee that reviewed some of the changes in that formula. The result of these errors turned into a seven-figure windfall for Nutting's company.

It's not clear what became of that extra money. A spokesman for the Maine Republican Party said recently that it was put back into the business, but when True's declared bankruptcy in 2004, the sale of its assets produced only about $190,000. The rest of the cash had somehow dribbled away, like bodily fluids around the edges of an ill-fitting diaper.

Anyway, back to the background. In 2002, DHS hired a firm to audit True's and other pharmacies getting Medicaid reimbursements. The audit showed several million dollars in overpayments, but as with most figures released by the department, that proved to be an exaggeration. Additional investigation and litigation eventually reduced the amount to $1.6 million.

"This is an audit poorly done," Nutting's lawyer told the Morning Sentinel. "It's run amok — and now [DHS] can't figure out how to stop it."

Added Nutting, "The state is trying to take my business away."

The legislator, an advocate of people on welfare taking responsibility for their lives, first denied that he or his staff had done anything wrong. Then, he conceded they might have made a few inconsequential mistakes. Then, he ran a full-page ad in the local paper claiming he'd always been willing to "refund the taxpayers (sic) money where there was a clear overpayment." Finally, he agreed to pay back about $867,000, an amount considerably less than what the department said he owed.

When the state and feds turned down that deal in 2003, he began threatening to close True's. That's when protesters with signs showed up at the State House to advocate for Nutting. As his self-imposed deadline for shutting down his pharmacy approached, he told the Sentinel, "[T]he arrogance and ignorance of some people in middle management [at DHS] has done this to me and others before me."

Nutting made good on his threat in September 2003, locking the doors and laying off all his employees. The company filed for bankruptcy the following year. The proceeds from that case, plus Medicaid reimbursements the state had withheld after the initial audit, totaled about $433,000, leaving a debt of $1.2 million the taxpayers had to mop up.

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