What You Need To Know About Medicaid Fraud Control Units

Friday, August 12th, 2016

Medicaid fraud costs the American taxpayers millions of dollars every year in fraudulent claims and overcharges. All states are affected by Medicaid fraud. Culprits include large hospitals, pharmacies, medical equipment providers, physician practice groups, and clinics. It is important for everyone in the healthcare industry to understand Medicaid fraud and how Medicaid fraud control units operate. It is also good to know what you can do to avoid Medicaid fraud and investigations.

Origins of Medicaid fraud

Originally, Medicaid operated with very little oversight and few controls, so fraudulent claims were rampant. Congress began investigating Medicaid fraud in the early 1970s. The investigations found rampant cases of nursing and boarding homes taking advantage of their residents in order to fraudulently collect Medicaid payments.

In response to these findings, Congress enacted the Medicare-Medicaid Anti-Fraud and Abuse Amendments to provide for investigation and prosecution of fraudulent provider claims. This created the current system of Medicaid Fraud Control Units (MFCUs). Each unit is certified by the Department of Health and Human Services (DHHS) and each is a state agency, but the DHHS retains administrative oversight power. The DHHS will periodically send site inspectors to review a unit’s records and ensure that it is complying with the law.

Medicaid fraud control units (MFCUs)

MFCUs are independent state agencies that are responsible for the investigation and prosecution of healthcare providers that commit Medicaid fraud. These groups conduct their own investigations and respond to complaints filed with the unit. The complaints range from nursing home abuse and misappropriation of patient funds to fraudulent Medicaid claims.

MFCUs are funded by the federal government with matching state funds. Every state except North Dakota has an MFCU. All MFCUs are staffed by full time attorneys, investigators, and auditors. The funding rules do not allow for temporary or part-time workers. The goal of an MFCU is to create a specialized team that can effectively investigate and prosecute complicated fraud cases.

Although every MFCU cooperates with state Medicaid agencies, they are distinct entities. Federal law prohibits an MFCU from existing in the same command structure as the state’s Medicaid agency. Moreover, all MFCUs and Medicaid agencies must sign a memorandum of understanding that outlines their respective duties and rights. This measure allows each agency to focus on their respective goals.

MFCUs are prohibited by federal law from investigating fraudulent schemes implemented by patients. These units focus solely on providers like hospitals, pharmacies, medical equipment suppliers, clinics, and doctor groups. Limiting the scope in this manner allows the units to focus on large targets that are responsible for the majority of fraudulent claims.

What you can do to avoid Medicaid fraud investigations

MFCUs are incredibly effective and dangerous for providers who do not take Medicaid fraud seriously. Each MFCU is composed of specialized teams that are proficient at investigating and prosecuting Medicaid fraud. That is why it is critical that providers do everything they can to comply with laws and procedures.

You can speak with a law firm to review your practices and to design a compliance program. The compliance program does not need to catch every instance of fraudulent activity, but needs to deter it as much as possible. Appoint a compliance officer and require employees to attend regular training seminars. The more that you enforce your own internal procedures, the less likely you will appear on an MFCU’s radar for Medicaid fraud.

If you would like more information about Medicaid fraud contact the Healthcare Team at Brown & Fortunato today. We offer a variety of services to help bring you into compliance with Medicaid, Medicare, and the Affordable Care Act. Give us a call at (806) 345-6300 or Contact Us via email today. You can also visit our office at 905 S. Fillmore St., Suite 400, in Amarillo, Texas.

This information is subject to change. Please check for updates that are more recent than the published date of this article.