State Medicaid Agencies have historically engaged in an epic balancing act.  Federal law requires State Medicaid Agencies to ensure beneficiaries have access to medically necessary services.  Federal law also requires State Medicaid Agencies to safeguard their Medicaid Programs against fraud, waste or abuse in billing for Medicaid services.  Balancing those competing requirements has long proven challenging.

Indeed, that very challenge is why federal law also requires State Medicaid Fraud Control Units (MFCUs) be housed outside of the State Medicaid Agencies, and that the State Medicaid Agencies have no authority over which cases the individual MFCUs investigate or prosecute under applicable civil or criminal statutes.  Concerns over access to care should not factor into prosecution judgments in the face of allegations of Medicaid fraud.

No state is more emblematic of the challenges presented by that balancing act than Texas.  But Texas may also be a case study in why use of private Medicaid Management and Medicaid Managed Care companies is no panacea for those challenges.  Moreover, Texas may be a case study in the importance of private Medicaid Management and Medicaid Managed Care companies understanding the depth of those challenges and the need to fully assess what the company may be taking on, before contracting to provide Medicaid services in a particular state. Continue Reading Texas:  A Cautionary Tale for Medicaid Management and Managed Care Companies

New York State Attorney General Eric Schneiderman recently announced that his office had reached a $2.5 million settlement in a federal False Claims Act (FCA) case with Trinity HomeCare and its related entities.  The case, filed as a qui tam action in federal district court in the Eastern District of New York, alleged that Trinity’s violations of New York’s Medicaid regulations in the delivery of hemophilia drugs resulted in its submission of false claims to the New York Medicaid Program, in violation of both the federal and state FCAs.

The Trinity settlement may seem relatively insignificant, especially in comparison to other FCA cases which settled for billions, not millions, of dollars.  But the Trinity case may be more representative of the future of FCA enforcement.  Indeed, there are five current FCA trends evidenced by the Trinity case. Continue Reading Trinity Homecare Settlement: Five False Claims Trends

Starting June 17, state Medicaid Fraud Control Units (MFCUs) can use federal funding to pay for data mining, according to a final rule published by the Department of Health and Human Services Office of Inspector General in the Federal Register on May 17. This final rule reverses previous regulations that prohibited MFCUs from using federal matching funds for data mining.

Now that MFCUs can make use of data mining to pursue Medicaid provider fraud, the question is what impact will data mining by state MFCUs have on Medicaid fraud investigations and enforcement actions at the state level? Ellyn Sternfield, an attorney in Mintz Levin’s Health Law Practice, who was the former head of the Oregon Department of Justice Medicaid Fraud Control Unit, says that many state MFCUs won’t be able to take full advantage of data mining’s potential. She enumerates their challenges in OIG Final Rule Allows State MFCUs to Use Federal Funding for Data Mining Technology, an article published last week in Bloomberg BNA’s Health Care Fraud Report.

In addition to a backlog of cases and the challenges of Medicaid managed care growth, she says, some state MFCUs do not have a great working relationship with the Medicaid agency in their state. Still Medicaid providers should prepare for what these new data mining powers may bring as far as fraud investigations and enforcement actions are concerned.

New state health care fraud recovery statistics reinforce that both the federal and state governments remain committed to health care fraud enforcement and demonstrate that their efforts are paying dividends.  Earlier this week, the Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) reported that the 50 state Medicaid fraud control units (“MFCU”) collectively recovered $2.9 billion from civil and criminal cases during fiscal year 2012 (“FY 2012”).  This represents a return on investment of $13.48 for every dollar spent by federal and state governments for MFCU operations.

Continue Reading State Medicaid Enforcement Efforts Net $2.9 Billion in Recoveries for FY 2012

Last week, the OIG released an interesting interactive chart listing, by state, key statistics of state Medicaid Fraud Control Units (MFCU) for FY 2010. The statistics, while perhaps an imperfect comparison among the MFCUs, provide insight into the level of activity in each state, the total amount recovered by each MFCU, and the resources allocated to combat Medicaid fraud, waste, and abuse in each state.  In total, for FY 2010, the MFCUs recovered more than $1.8 billion in judgments and settlements at a cost of approximately $205 million in MFCU expenditures. Total State Medicaid budgets exceeded $397 billion.

When asked about these statistics, Ellyn Sternfield, a Mintz Levin attorney and the former director of the Oregon Department of Justice’s MFCU, observed that  “it is difficult to compare MFCUs using just the numbers. There are significant differences in legal authority for the MFCUs based on individual state law and authority. And most MFCUs are part of their State Attorney General’s office; an individual Attorney General’s priorities will often dictate the areas of concentration of the MFCU.”

While statistics may not be the most accurate comparison of the performance of MFCUs, the OIG recently released a proposed rewrite of the MFCU regulatory Performance Standards, which each MFCU must follow as a condition of ongoing federal funding. The proposed rule requires MFCUs to take affirmative steps to maintain a case mix of both patient abuse/neglect cases and Medicaid billing fraud cases, including those involving Medicaid managed care. Ellyn noted that the “revisions recognize that a MFCU’s effectiveness is not only measured by numbers, but also by the non-specific case work that MFCUs may undertake, such as training, publication of fraud alerts, and liaison activities with provider groups.”