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OIG Releases FY 2016 Statistical Data About Medicaid Fraud Control Units

Earlier this week, the Office of Inspector General for the Department of Health and Human Services (“OIG”) posted its fiscal year ("FY") 2016 data about Medicaid Fraud Control Units (“MFCUs”) across the country.

Federal law requires each state to operate a MFCU separate and distinct from the state Medicaid Agency. MFCUs are charged with investigating and prosecuting fraud committed by Medicaid providers and in the state’s administration of the Medicaid Program, as well as patient abuse/neglect that occurs in a Medicaid-funded facility or at the hands of Medicaid providers.  MFCUs currently operate in 49 states and the District of Columbia (North Dakota presently has a waiver but proposals to create a MFCU have been introduced in the state legislature).  They are typically part of a state’s Attorney General’s office and are required to employ investigators, attorneys and auditors.  The OIG is responsible for overseeing MFCUs.  It annually recertifies MFCUs, assesses their performance and compliance with Federal requirements, and administers a Federal grant award that funds a portion of each MFCU’s operational costs.

As reflected in the OIG’s data, in FY 2016, some MFCUs operated with as few as 4 to 6 staff members on board (Montana, South Dakota, Wyoming), while others had many multiples more. For example, Florida had 156 staff members, Texas had 165, California had 185, and New York had 298.  In terms of total numbers, investigations, indictments, convictions, settlements reached, and recoveries obtained have not changed dramatically over the past few years, but FY 2015 saw a seemingly anomalous decrease in civil recoveries.

  FY 2013 FY 2014 FY 2015 FY 2016
Open Investigations 15,590 16,464 17,665 18,730
Indictments/Charges Obtained 1,588 1,659 1,892 1,721
Convictions Obtained 1,341 1,318 1,553 1,564
Number Civil Settlements or Judgments 879 874 795 998
Total Civil Recoveries $1,537,763,196 $1,710,879,440 $396,725,517


Also notable is the fact that in FY 2015 the OIG started reporting two separate categories of civil recoveries that comprise the total number reported: “Global” and “Other.” Global civil recoveries result from civil settlements or judgments involving the Department of Justice or a group of state MFCUs and are facilitated by the National Association of Medicaid Fraud Control Units.  In FY 2015, MFCUs recovered $146,926,639 in global civil recoveries.  That number increased to $1,225,709,487 in FY 2016.   You can access the OIG’s 2016 data here and an interactive map here. More information about MFCUs is also available on the OIG’s website.

The OIG’s data reflect that as a general rule, MFCUs provide a great return on investment. The OIG’s Reports include information on the budget of each state’s Medicaid Program (which does not include MFCU funding), the size of the federal grant provided to each state to operate a MFCU (federal funds generally account for 75% of the MFCU budget), and each MFCU’s total recoveries. As would be expected, the Medicaid Program budget dwarfs the MFCU budget; the MFCU budget is less than 1% of the Program budget.  Nevertheless, over the last few years, the return on investment on the federal MFCU grant has run from a low of 2.9 to a high of over 10.  For example, in 2013, the MFCUs reported more than $10 in civil or criminal judgments for each dollar the Federal government spent on a MFCU.

As many are aware, there has been a lot of talk in the present Congress about turning Medicaid into a block grant program (see our recent post here).  Absent from this discussion has been any mention of what that means for the MFCUs. This silence leaves open the question of whether the Federal government will continue to require states to operate MFCUs and continue to fund the MFCU program?  And if it doesn’t, will states recognize the need to support, with state funds, the continued productive operations of the MFCU program?

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Samantha advises clients on regulatory and enforcement matters. She has deep experience handling violations of the federal ant-kickback statute and FCA investigations for clinical laboratories and hospitals.