The Office of Inspector General (OIG)’s assessment found Medicaid Fraud Control Units (MFCUs), which review patient abuse and neglect complaints and Medicaid provider fraud, recovered nearly $1.9 billion and reported 1,564 convictions in fiscal year (FY) 2016. The annual report analyzing data submitted by MFCUs found that $1.5 billion of the total recovered came from civil recoveries and $368 million came from criminal (OIG Report, OEI-09-17-00210, May 19, 2017.).
MFCUs. Each state must operate an MFCU, with some exception, jointly funded by the state and federal government and administered by the OIG. MFCUs are charged with investigating and prosecuting state Medicaid provider fraud as well as patient abuse and neglect. MFCUs must operate as an entity separate from the state Medicaid agency; employ staff which includes at least an investigator, auditor, and attorney; have a formal agreement describing its relationship with the state Medicaid agency; and "have either statewide authority to prosecute cases or formal procedures to refer suspected criminal violations to an agency with such authority." As part of the OIG’s annual assessment of each MFCU’s compliance, it collects and disseminates statistical data reported by the MFCUs pertaining to the number of convictions and recovery amounts, for example. Onsite reviews are conducted of some MFCUs each year.
Findings. The current review focused on data submitted by the MFCUs for FYs 2012 through 2016, and summarized both the conviction numbers by provider type and the trends for FY 2016.
Convictions. The OIG found that in FY 2016, MFCUs reported 1,564 convictions.
- Personal care services (PCS) had 552 of the 1,564 convictions—500 involving provider fraud and 52 involving patient abuse or neglect.
- Fraud convictions amounted to 74 percent of all of the convictions (1,160), and over half involved unlicensed providers.
- Nurse aides had the greatest number of abuse and neglect convictions (134 of the 404 convictions).
- MFCUs reported 186 convictions related to drug diversion in FY 2016 (12 percent of total convictions—up from 8 percent for 2015).
Civil. MFCUs reported 998 civil settlements and judgments in 2016, 463 (46 percent) of which involved pharmaceutical manufacturers. Typically pharmaceutical manufacturer settlements involved the marketing of prescription drugs.
Recoveries. Nearly $1.9 billion in recoveries were reported by MFCUs in FY 2016, $1.5 billion from civil recoveries and $368 million from criminal.
Trends. Numbers of convictions and civil settlements and judgments reached five-year highs in FY 2016.
- MFCUs reported 7 more convictions in 2016 than 2015—more came from fraud while the number of abuse or neglect convictions decreased.
- Compared to 2014 and 2015, the OIG’s exclusion of convicted individuals and entities from federal health care programs decreased slightly in 2016 (1,337 in 2014, 1,306 in 2015, 1,284 in 2016).
- In FY 2016, the highest number of civil settlements and judgments were reported by MFCUs in the last five years. There was an average of 861 in FYs 2012 to 2014, 731 in 2015, and 998 in 2016.
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