Rutherford County Woman Charged with TennCare Drug Fraud

NASHVILLE – A Rutherford County woman is charged with TennCare fraud for selling prescription drugs which had been paid for by TennCare, the state’s managed care health insurance program for Tennesseans eligible for Medicaid and certain children.

The Office of Inspector General (OIG) today announced the arrest of Kathy V. Stenberg, 46, of Smyrna, by the Smyrna Police Department.

Stenberg is accused of selling a portion of a prescription for the painkiller Hydrocodone to a Smyrna Police informant, after using TennCare to pay for the drug.  Stenberg is charged with one count of TennCare fraud, a class E Felony, and one count of selling a schedule III controlled substance, a class D Felony.

“Thanks to Governor Phil Bredesen’s efforts to put real integrity in the program, the abuse of TennCare benefits is no longer tolerated,” Inspector General Deborah Y. Faulkner said. “Local police, pharmacists, and other medical providers are all working together in the war against TennCare fraud – and we have the tools to pursue these cases as well as laws on the books to prosecute them.” 

If convicted, Stenberg could serve up to two years for TennCare Fraud, and 4 years for Selling a Schedule III Controlled Substance. District Attorney General William Whitesell, Jr., is prosecuting.

The OIG, which is separate from TennCare, began full operation in February 2005 and has investigated cases leading to over $2.5 million paid in restitution and recoupment to TennCare, with a total estimated cost avoidance of over $171 million for the TennCare program, according to latest figures.  To date, over 1,240 people have been charged with TennCare fraud.

Through the OIG Cash for Tips Program established by the Legislature, Tennesseans can get cash rewards for TennCare fraud tips that lead to convictions.  Anyone can report suspected TennCare fraud by calling 1-800-433-3982 toll-free from anywhere in Tennessee, or log on to www.tn.gov/tnoig and follow the prompts that read "Report TennCare Fraud."