Medicaid Fraud Control Units Fiscal Year 2013 Annual Report

WHY WE DID THIS STUDY

The Department of Health and Human Services (HHS) OIG is the designated Federal agency that oversees State Medicaid Fraud Control Units (MFCU or Unit). This MFCU Fiscal Year (FY) 2013 Annual Report highlights statistical achievements from the investigations and prosecutions conducted by the 50 MFCUs nationwide. The report also explores relevant policy issues that affect Medicaid fraud work and describes oversight activities undertaken by OIG. This report represents a new effort by OIG to compile in one document information about MFCU activities and results, and we anticipate issuing annual reports for future years.

HOW WE DID THIS STUDY

We based the information in this report on an analysis of data from six sources: (1) Quarterly Statistical Reports submitted by Units; (2) supplemental data collected from Units for this FY 2013 MFCU Annual Report; (3) HHS OIG exclusion data; (4) information gathered through onsite reviews; (5) MFCUs' Memorandums of Understanding (MOUs) with their State Medicaid agencies; and (6) the annual reports of individual MFCUs. All statistical information is current as of January 31, 2014, except where otherwise noted.

WHAT WE FOUND

In FY 2013, MFCUs nationwide reported a total of 1,341 criminal convictions in cases involving Medicaid fraud and patient abuse and neglect, and criminal recoveries reached nearly $1 billion. Criminal convictions involved a variety of provider types, most notably home health agencies. MFCUs also obtained 879 civil settlements and judgments in FY 2013, and civil recoveries totaled over $1.5 billion. Civil settlements and judgments involved a variety of provider types, most notably pharmaceutical companies. MFCUs are an important source of referrals to the OIG for purposes of provider exclusions; for over 1,000 Medicaid providers convicted in MFCU cases, OIG took further action to exclude them from all Federal health care programs, including Medicare, in FY 2013.

We found that a lack of fraud referrals to MFCUs from Medicaid managed care organizations (MCOs) presents challenges; Unit officials expressed concern that some MCOs may not have incentive to refer providers suspected of fraud. We also found that recent provider payment suspension rules enacted by the Patient Protection and Affordable Care Act (ACA) require more coordination between MFCUs and State Medicaid agencies. Finally, in its oversight role during FY 2013, OIG conducted 10 onsite reviews of Units, published 8 reports on onsite reviews, issued regulations to allow data mining by MFCUs, and proposed additional authorities for Units to investigate allegations of patient abuse and neglect.

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