On September 13, 2016, the Department of Health and Human Services (HHS) published its Medicaid Fraud Control Units Fiscal Year 2015 Annual Report (Report).  Medicaid Fraud Control Units (MFCUs) operate in 49 states and the District of Columbia. Typically part of the state-level Attorney General’s offices, the MFCUs investigate and prosecute Medicaid provider fraud as well as patient abuse and neglect. The Report found that in FY 2015, there were 1,553 reported convictions, seventy-one percent of which involved fraud. In addition, 731 civil settlements were entered into.

The Report found that the number of criminal convictions increased over the past five years, while civil settlements decreased. Over half of the combined total of $740 million recovered in FY 2015 represented criminal case recoveries. The Report also found that over the past five fiscal years, OIG exclusions from MFCU referrals increased.

The largest category of convictions involved personal care service (PCS) attendants (almost one third), and included billing for time not worked, billing for time while the patient was in the hospital, and for work performed after the patient’s death. Another 11 percent involved nurses, physician assistants or nurse practitioners, and included abuse or neglect, provision of services without a license, and services not rendered, among other charges. Other cases included narcotic drug diversion by the provider (or pharmacist) for personal use or sale, and others involved improper marketing of drugs by pharmaceutical manufacturers. Many cases included significant restitution requirements.

The Report reiterates the need for Medicaid providers to carefully monitor documentation and claims, as the consequences of fraud are severe. All individuals involved in providing health care and generating claims should be trained to ensure the documentation appropriately reflects the services provided, the medical necessity of the services, and the accuracy of the claims. In addition, providers should have systems in place to evaluate claims before and after they are submitted. If a provider discovers that erroneous claims have been submitted, it is crucial that they investigate immediately, initiate corrective actions where appropriate, and determine whether overpayments have resulted that will need to be repaid.  Consulting with legal counsel having experience in fraud and abuse matters can help organizations make their way through this minefield. This is particularly important if the provider discovers a pattern or practice of abusive billing, or where there is an audit request or investigation by the government or private payers. As the number of fraud convictions continues to increase, providers need to be increasingly vigilant to assure documentation and claim accuracy, processing of repayments where appropriate, and proactive remediation of discovered errors and potentially fraudulent or abusive patterns and practices.