Fraud and Abuse Update: HHS Reports Significant Medicaid Fraud Recoveries for Fiscal Year 2015

handcuffs-1156821-mThe U.S. Department of Health and Human Services (HHS) recently released its Medicaid Fraud Control Units Fiscal Year 2015 Annual Report (the “Report”).  The Report’s findings highlight 1,553 convictions, 731 civil settlements, and $744 million in criminal and civil recoveries relating to Medicaid fraud and abuse. Fraud and Abuse financial recoveries remain a top priority for the Federal Government and hence a primary objective of Federal law enforcement.  Our Georgia business and healthcare law firm follows developments in the world of healthcare law, including fraud and abuse issues.


The Social Security Act (SSA) mandates that, absent certain circumstances, each State operate a Medicaid Fraud Control Unit (MFCU). The District of Columbia and forty-nine States currently maintain MFCUs.   MFCUs are one of many Federal law enforcement tools in its fraud and abuse arsenal.  The statutory mission of MFCUs is to investigate and prosecute Medicaid fraud by health care providers and patient abuse and neglect.  HHS’ Office of Inspector General (OIG) certifies, provides oversight of, and assesses performance relative to Federal compliance standards of all MFCUs.  The States are responsible for operation of MFCUs and receive reimbursement for a percentage of their costs from the Federal Government, pursuant to the SSA.  MFCUs are currently reimbursed for 90% of their costs for the first three years of their operation and 75% thereafter.

Each MFCU employs staff that comprise investigator(s), auditor(s) and attorney(s) to review referrals of potential fraud and abuse involving Medicaid and to make decisions regarding potential civil and/or criminal prosecution.  The Report essentially provides the latest annual update on the success of MFCUs in prosecuting Medicaid fraud matters.

A Few Findings of the Report

The Report’s findings include:

  • 483 out of 1,553 convictions (nearly one third) in 2015 involved personal care services attendants
  • 1,097 of 1,553 (about 71%) of convictions in 2015 involved fraud. About half of the fraud convictions involved unlicensed providers.
  • Drug diversion convictions resulted in $4.4 million in criminal recoveries
  • More than one third of the civil settlements involved pharmaceutical manufacturers
  • The MFCUs recovered over $744 million. On average, MFCUs recovered almost $3 for every $1 of MFCU cost
  • New York, Tennessee, California, Florida and Wisconsin accounted for about half of all MFCU civil recoveries
  • While financial recoveries by MFCUs were down in 2015, they reported the highest number of criminal convictions in the last five years
  • In Georgia, there were 445 open fraud investigations; 11 abuse or neglect investigations; 21 indictments for fraud; 1 indictment for abuse/neglect; 12 criminal convictions for fraud; and 27 settlements and/or judgments based on fraud.
  • In Georgia, there were $2,217,127 in criminal financial recoveries; $5,990,382 in non-global civil monetary recoveries; $8,104,274 in global civil monetary recoveries; compared to $4,804,982 in MFCU costs.

The Federal Government anticipates continued success by MFCUs pursuant to the Federal Government’s objective of prosecuting and obtaining recoveries by MFCUs for fraud and abuse based on Medicaid.

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*Disclaimer: Thoughts shared here do not constitute legal advice.

Source: United States Department of Health and Human Services

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