About the Medicaid Fraud Control Units
The Medicaid program was authorized by Title XIX of the Social Security Act Amendments of 1965 (Public Law 89-97). The Medicaid program provides health care coverage to millions of Americans, including eligible low-income adults, the elderly and people with physical and developmental disabilities. Medicaid is administered by states, according to federal requirements, and is jointly funded with the federal government.
The Medicaid program was initially enacted and operated with few safeguards against fraud and without any specific state or federal law enforcement agencies responsible for monitoring criminal activity within the program. Medicaid Fraud Control Units (MFCUs) were created when the public and Congress realized that too many nursing home patients were held hostage by the greed of a small number of facility operators and often dishonest health care practitioners who used the Medicaid program as their own private “ATM machine.”
MFCUs play a vital role in fighting health care fraud and protecting patients from abuse and neglect. MFCUs are funded jointly by the Federal government and states/territories. Each MFCU receives a Federal grant award of 75% for its’ operation. HHS-OIG, in exercising oversight for the MFCUs, annually assesses and recertifies each MFCU based on its performance and compliance with federal requirements. There are currently MFCUs in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.
MFCUs use a multi-disciplinary, strike-force model - employing highly trained professional staff including attorneys, investigators, and auditors.
MFCUs conduct statewide investigations and prosecutions of health care providers who defraud the Medicaid program.
MFCUs investigate all types of health care providers from solo practitioners to multi-national corporations. MFCUs have prosecuted in-home care and individual providers such as physicians, dentists, and mental health professionals as well as numerous segments of the health care industry, such as:
- Nursing homes
- Home health care agencies
- Medical transportation companies
- Durable medical equipment companies
- Pharmaceutical manufacturers
Although Medicaid recipients also commit Medicaid fraud, federal law prohibits MFCUs from investigating and prosecuting Medicaid recipients unless they are conspiring with a Medicaid provider.
While health care fraud can take many forms, the following are common fraudulent Medicaid provider schemes:
- “Phantom Billing”—Billing false claims to Medicaid for patient services or goods that were not actually performed or provided. For example, billing for patient office visits that never took place or for blood tests when no samples were taken
- Double Billing—Billing for the same procedure. For example, dentists who were paid by the skilled nursing facility for their residents' dental care also separately billed Medicaid directly for these same services.
- Upcoding—Billing Medicaid for a more expensive service or good than was actually performed or provided. For example, a pharmacy bills Medicaid for a more expensive brand-name prescription when they filled the prescription with a cheaper generic drug.
- Billing for Unnecessary Services or Tests—Billing for services or goods that a patient does not need. For example, a provider misrepresents a patient's diagnosis in order to bill Medicaid for a service that is not medically necessary.
- Unbundling—Billing Medicaid using separate billing codes when the services should have been grouped together under one inclusive billing code.
- Kickbacks—When medical suppliers, home health agencies, etc. give things of value to other health care providers in exchange for patient referrals.
- False Cost Reports—A nursing home owner or operator includes personal expenses in its Medicaid claims.
Abuse, Neglect, and Misappropriation of Funds
The MFCUs also handle investigations and prosecutions against individuals and corporations to protect vulnerable persons from abuse, neglect, and misappropriation of funds.
- Abuse includes hitting, shoving, shaking; excessive force in treatment or therapy; nonconsensual sexual contact by a care provider; use of physical restraints or chemical restraints; drug diversion - depriving patients of medications by converting it for unauthorized use.
- Neglect includes deprivation or excessive delay by a care provider of food, water, medications, medical services, shelter, clothing, heat or cooling.
- Misappropriation of Funds includes the misappropriation of someone else’s property. For example, a caregiver diverts a resident or recipient’s personal funds for their own use.
MFCUs have historically had jurisdiction to investigate and prosecute abuse, neglect and misappropriation of funds in health care facilities that receive Medicaid. In addition, the MFCUs can also elect to investigate allegations of abuse, neglect and misappropriation of resident funds in “board and care facilities.”
In December 2020, federal law significantly expanded MFCUs' jurisdiction. MFCUs can now elect to investigate and prosecute abuse, neglect, and misappropriation of Medicaid resident funds in non-institutional settings—such as in a home, medical clinics; medical transportation, community based programs, etc.
For more information about a state's Medicaid Fraud Control Unit, visit their website below.
NAMFCU’s training programs bring together MFCU staff to learn about emerging legal issues and effective investigative techniques.
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Discover career opportunities with Medicaid Fraud Control Units.