Whistleblowers Assist States in Recovering Stolen Medicaid Dollars

HHS-OIG posted an interactive map providing a state-by-state view of the health care dollars recovered from Medicaid fraudsters. An accompanying chart provided a more in-depth peek behind the $1.84 billion recovered in 2010. Of particular note, less than 2,000 Medicaid Fraud Control Unit (MFCU) employees guarded the nation’s Medicaid coffers, and only four states had more than 100 MFCU employees.

So, how did such a small army of fraud-fighters recover such a notable sum in 2010? First, most of the recoveries are led by the federal government and their component agencies, such as the FBI, HHS-OIG, and the FDA. Further insight is available if you dissect the numbers on a state-by-state basis.

Notably, some states with large Medicaid budgets were substantially less successful in recovering stolen Medicaid dollars. For example, even though Pennsylvania had the fourth largest Medicaid budget, of nearly $20 billion, it only ranked eighteenth in the nation in Medicaid recoveries, securing a measly $29 million in civil recoveries. Tennessee, on the hand, had less than half the Medicaid expenditures, at $8 billion per year, but the state ranked sixth in the nation in recoveries with over $70 billion in civil recoveries.

At first glance, the size of a state’s MFCU staff seems to be the deciding factor. For instance, the three largest MFCU staffs belonged to the three most successful states in recovering Medicaid dollars—New York, Florida and California. However, these three states had the largest pool of funds to guard and, therefore, the greater chance to siphon out fraudulent dollars. Indeed, when you calculate the dollars recovered per MFCU staff member, these three states do not even appear in the top twenty.

States with False Claims Acts recover substantially more stolen Medicaid dollars. Indeed, eight of the top 10 states and twelve of the top 15 states have False Claims Acts. Conversely, six of the bottom 10 states and ten of the bottom 15 states do not have False Claims Acts. Seemingly, State False Claims Acts are a major factor in recovering funds from Medicaid fraudsters.

States with False Claims Acts efficiently and effectively fight Medicaid fraud because they leverage the resources and inside information of whistleblowers, and are able to participate in federal investigations and prosecutions. While other States are looking for the proverbial “needle in the haystack,” states with False Claims Acts are able to participate in federal prosecutions, and also independently zero in on fraudulent schemes that drain their limited Medicaid dollars. In return, MFCUs are better able to protect Medicaid dollars and whistleblowers are able to receive substantial rewards. This public-private partnership accounts for over half the $1.84 billion recovered by MFCUs in 2010.

For more information about qui tam law and healthcare fraud, contact Nolan & Auerbach, P.A.

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