Kusserow on Compliance: OIG issues detailed report on state Medicaid Fraud Control Units

1,564 Criminal Convictions

1,000 Civil Settlements

Almost $2 billion in recoveries

The OIG Office of Evaluation and Inspection (OEI) issued a more detailed analysis of statistical results from the State Medicaid Fraud Control Units (MFCUs) for 2016. The OIG is the designated Federal agency that oversees them and has been instrumental in establishing the Units.  As Inspector General, I worked to establish a number of these MFCUs that currently operate in 49 States and the District of Columbia (States). Once established the OIG administers a grant to each of the units that provides 75 percent of their funding and set performance standards, reviews each state’s program, provides technical assistance identify best practices, and collect and analyze statistics. The mission of MFCUs is to investigate and prosecute, under State law, Medicaid provider fraud and patient abuse or neglect. In FY 2016, the OIG reported 1,564 convictions, over one-third of which involved personal care services attendants. The OIG reported nearly 1,000 civil settlements and judgments, with settlements with pharmaceutical manufacturers making up almost half of settlements; along with almost $1.9 billion in criminal and civil recoveries. The OIG works often with the MFCUs and in 2016 the OIG Medicaid cases resulted in 312 indictments, 348 criminal actions, and 222 civil actions. These Medicaid cases—some of which also involved Medicare—resulted in almost $3 billion dollars in expected recoveries. However, in most cases the MFCUs work their own cases without assistance from other agencies.

It is noteworthy that current funding for Medicaid fraud control is at a higher level than for the federally funded and administered Medicare program. Medicaid annual expenditures exceed $500 billion dollars and funding for the MFCUs was also at a high level of $258,698,147 in 2016.  The staffing level of investigators, auditors, and attorneys was 1,965. Those entities investigated 15,505 fraud cases and another 3,221 abuse and neglect cases. The largest category of convictions involved personal care services (PCS) (35 percent). Nursing care came in second (11 percent) and involved of licensed practical nurses (LPN), registered nurses (RN), physician assistants (PA), or nurse practitioners (NP). Convictions of nurse-aides represented the third largest category (10 percent).

In this report, the OIG provided a detailed breakdown of the types of cases and trending data. Statistical results by state are included in the OIG Report.  Comparison of results to the prior year can be made by referring to the OIG issued report for 2015 that noted MFCUs achieving 1,553 convictions, 731 civil settlements and judgments, and $744 million in criminal and civil recoveries.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2017 Strategic Management Services, LLC. Published with permission.