State Medicaid fraud units no longer need to submit an annual report for recertification but must operate under other requirements of a revised final rule.
The regulation governing state Medicaid fraud control units (MFCUs or Units) has been revised in order to: (1) incorporate statutory changes that have occurred since the enactment of the Medicare-Medicaid Anti-Fraud and Abuse Amendments, (2) align the rule with practices and policies that have developed and changed since the first version of the rule was issued, and (3) reduce the burden on the Units, according to HHS. In addition to incorporating statutory changes, the revised rule also recognizes the Office of the Inspector General’s (OIG) delegated authority, adds definitions, clarifies organizational requirements, amends prosecutorial authority requirements, and puts in communication requirements. In addition, other changes are made regarding Unit duties and responsibilities, staffing, recertification, federal financing participation and disallowance procedures (Final rule, 84 FR 10700, March 22, 2019).
Incorporating statutes. The amended final rule incorporates statutory changes that have occurred since 1977, specifically: (1) extending funding for State MFCUs by authorizing a Federal matching rate of 90 percent for the first 3 years of operation and a Federal matching rate of 75 percent after that, (2) establishing a Medicaid State plan requirement that a state must operate an effective Unit, (3) requiring the Secretary of Health and Human Services to establish standards under which Units must be operated, (4) allowing Units to seek approval from the relevant Inspector General to investigate and prosecute violations of state law related to fraud in any aspect of the provision of health care services and activities of providers of such services under any Federal health care program, including Medicare, as long as the fraud is primarily related to Medicaid, and (5) giving Units the option to investigate and prosecute patient abuse or neglect in board and care facilities, regardless of whether the facilities receive Medicaid payments. HHS notes that these statutory changes were self-implementing and have been operational since their statutory effective dates.
Recertification Requirements. Annual reports are no longer required for recertification. The rule outlines what the OIG does need, including the submission of reapplication materials and statistical data.
Organizational requirements. The regulation clarifies that to be a single, identifiable entity of state government, a MFCU must have a single director with all staff reporting to him or her, operate under a budget that is separate from that of its parent agency, and have offices in their own mainly contiguous space.
Prosecutorial authority. Consistent with longstanding practice, amendments are made to the prosecutorial authority requirement options to include the prosecution of patient or resident abuse and neglect, and to include formal written procedures for making referrals to the State Attorney General or another office with statewide prosecutorial authority.
Communication with Medicaid agency. Under the amended final rule, the agreement with the Medicaid agency must establish (1) regular communication, (2) procedures for coordination, and (3) procedures by which the Unit will receive referrals of potential fraud from managed care organizations.
Duties regarding investigations. Units must submit all convictions to OIG, for purposes of program exclusion, within 30 days of sentencing. Also, a Unit must make information available to OIG investigators and attorneys, or other Federal investigators and prosecutors, on Medicaid fraud and investigations or prosecutions involving the same suspects or allegations.
Staffing requirements. The final rule clarifies that Units may choose to employ professional employees as full or part-time employees if they devote their exclusive effort to Unit functions. Also, consultants may be employed, employees may work at other jobs, and Units must train professional employees on Medicaid fraud and patient or resident abuse and neglect matters.
Data mining and other changes. With some exceptions, Units may not receive federal financial participation (FFP) for data mining activities that duplicate surveillance and utilization review responsibilities of state Medicaid agencies. However, Units may engage in activities other than data mining to identify fraud, such as efforts to increase referrals through program outreach activities. Procedures are created in the final rule for OIG disallowances of FFP and for Unit requests for reconsideration and appeal of disallowances. Amendments are also made to the CMS regulation 42 CFR 455.21 to require that the Medicaid agency has an agreement with the Unit.
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