Fraud is very rampant within the Medicaid system. Each year it costs taxpayers in the United States hundreds of millions of dollars. It also puts the integrity of the Medicaid program at risk. The state Medicaid Fraud Control Units (MFCUs) are leaders in the world of health care fraud detection. An MFCU is a single distinct entity within a state’s government. Every year each MFCU obtains its certification from the Secretary of the United States Department of Health and Human Services. This entity of the federal government conducts programs in each state to teach investigation techniques and prosecution processes. The job of an MFCU is to hold accountable anyone who provides health care services and defrauds the Medicaid program.

Jurisdiction
The MFCU program started in 1999. The Ticket to Work and Work Incentives Improvement Act provided the jurisdiction of the MFCU to investigate the presence of fraud within a healthcare program that is funded by the federal government. Medicaid falls under this designation. MFCUs operate with the approval of the Inspector General of the appropriate federal agency.

Prohibitions
The MFCUs are prevented from working on recipient fraud unless it involves conspiracy with a provider. They are also unable to participate in any routine computer screen actions that are part of the Medicaid agency monitoring activity.

Funding
Every MFCU is funded by a federal grant provided by the United States Department of Health and Human Services. This grant pays 75 percent of the unit’s operating cost. The remaining 25 percent has to be matched by the state where the MFCU is located.

Staff
Each MFCU is required to hire investigators, attorneys, as well as auditors on a full-time basis. They must agree to focus their work on only Medicaid fraud cases. Utilizing temporary or part-time staff is discouraged. An MFCU is expected to use a multi-disciplinary approach to working their investigations. It should consist of a team of investigators and auditors properly managed by an attorney.

Case Sources
In some situations, MFCU investigators discover incidents of fraud on their own. In many cases, Medicaid recipients as well as whistleblowers and other members of the public are an important source for cases. An MFCU will also obtain referrals from a number of federal, local and state agencies. Every type of agency from the New York State Department of Health to the Medicaid Inspector General, as well as the U.S. Department of Health and Human Services, provide cases for an MFCU to investigate. It is also common for current investigations to create new cases of fraud for an MFCU.

Federal Certification
Every MFCU is managed by the Office of Inspector General of the United States Department of Health and Human Services. It must have federal certification in order to function and must be recertified each year. When an MFCU’s application is ready for recertification, the Inspector General may conduct an on-site visit.

Operational Requirements
The MFCU must be separate and not operate in conjunction with Medicaid or any other type of state agency. According to federal regulations, officials from the Medicaid agency have no authority to challenge or overrule any activities of an MFCU. The MFCU is not permitted to obtain any funding from the Medicaid agency. Before an MFCU can function, it must sign an agreement referred to as a Memorandum of Understanding. This details the MFCU and the Medicaid agency’s duties and responsibilities for working together.

Types of Medicaid Fraud
An MFCU will investigate allegations of a Medicaid Mill. This is a business designed to generate income by billing Medicaid no matter what the real medical needs of patients. Healthcare professionals who bill for services that are not necessary. Selling prescriptions or access to prescription drugs. Billing both Medicaid and private insurance for the same procedure. Healthcare providers who make a financial arrangement with one another to use their products or services resulting in treatments that aren’t necessary. Inflating reimbursement rates as well as creating false financial reports. Employing healthcare professionals banned from working in a government healthcare programs. Demanding cash payments for services from a patient and then billing Medicaid for it. Billing for services never provided and more.

Recovery Rates
On average MFCUs recover over 2 billion dollars each year in Medicaid fraud. Their investigations lead to over 1,300 criminal convictions as well as more than 870 civil settlements and judgments annually. Approximately 74 percent of the criminal convictions are for Medicaid fraud, and the other 26 percent are for patient neglect and abuse. The top criminal convictions on average are 26 percent for home health-care aids, 7 percent for medical support personnel and 7 percent for physicians. New York MFCU receive the most federal grant money in the country. It also has the largest staff dedicated to fraud control. The New York MFCU has been able to recover $8 for each dollar it spends from its grant.