Skip Navigation
United States Flag

An official website of the United States government. Here's how you know >

Change Font Size

Transcript for audio podcast:
Medicaid Fraud Control Units

From the Office of Inspector General of Department of Health and Human Services

[Don White] What role does OIG play with State Medicaid Fraud Control Units and why are they important? I'm Don White in public affairs with the Office of Inspector General, and today, we're here with Richard Stern, OIG's director of program oversight for the Medicaid Fraud Units, and from our regional Office of Investigations, Special Agent in Charge Shimon Richmond of the Miami region. Shimon, what is a MFCU?

[Shimon Richmond] Well, Don, aside from being an awkward acronym, MFCUs are Medicaid Fraud Control Units. And as that name suggests, they investigate and prosecute Medicaid provider fraud, as well as patient abuse and neglect in health care facilities. They are state-based agencies and there is one of each in 49 states and the District of Columbia.

[Don White] Well Richard, so you understand this best, why do we need Medicaid Fraud Control Units anyway?

[Richard Stern] Well, while we hear a lot about Medicare Fraud, involving the program for the elderly and the disabled, total taxpayer costs are actually higher in Medicaid, than in Medicare, with total yearly expenditures for Medicaid of over $500 billion dollars. And fighting fraud in Medicaid can be especially challenging. Each state runs its own program, So the rules vary from state to state. And we don't have good data at the national level. As we often hear, once you've seen one Medicaid program, you've seen one Medicaid program.

[Don White] I understand that MFCUs have an important role in investigating and prosecuting patient abuse and neglect in nursing homes and other health care facilities as well, is that true?

[Richard Stern] Yes, that is true.

[Don White] I can see that investigating Medicaid fraud would certainly be challenging given how different each State's programs can be. So since fighting Medicaid fraud is an OIG priority and a Top Management Challenge for the U.S. Department of Health and Human Services, I'm wondering how OIG works with these State MFCUs? Richard?

[Richard Stern] Well, yeah. Well, OIG administers a grant to each of the units that provides 75% of their funding. We also set performance standards, we review each state's program, we provide technical assistance identify best practices, and we collect and analyze statistics that we make available to the public on OIG website.

[Don White] How does that grant program work, Richard?

[Richard Stern] Well, as part of the Medicaid program, each of the States is required to have a MFCU or to receive a waiver. And the way it works, in exchange for receiving Federal matching funds, the States run a self-contained unit that includes investigators, auditors, and prosecutors or other attorneys. This model of having prosecutors work side by side with investigators and auditors has proven to be very successful. Most of the units are in the State Attorney General's Office and either prosecute cases themselves or refers cases to other State, County, or Federal prosecutors. MFCUs also collaborate closely with their State Medicaid programs, the OIG Office of Investigations and the FBI, as well as Department of Justice and U.S. Attorney offices nationwide.

[Don White] But I'm wondering how successful have these MFCUs been when working with OIG in fighting Medicaid fraud?

[Richard Stern] I'll let Shimon answer that. Florida, and especially South Florida, is one of our hot-spots for health care fraud.

[Shimon Richmond] Sure thing. So around the country, the OIG works a lot of cases with the Medicaid Fraud Control Units. In 2016, our Medicaid cases resulted in 312 indictments, 348 criminal actions, and 222 civil actions. These Medicaid cases - some of which also involved Medicare - resulted in almost $3 billion dollars in expected recoveries.

[Don White] So how important would you say these Medicaid Fraud Units are to your operations, Shimon?

[Shimon Richmond] Well Don, they're absolutely critical to our efforts.

[Don White] Can you give us some recent examples where your people worked with the MFCUs?

[Shimon Richmond] Sure Don, we work with the Florida MFCU quite a bit. And there are several cases that come immediately to mind. First, working with the Florida MFCU, we charged 10 owners of a Miami-Dade county Assisted Living Facility with health care fraud and receiving illegal cash kickbacks in return for referring residents to a specific pharmacy. The pharmacy owner was sentenced not long ago, to federal prison and ordered to pay back more than a million dollars to the Florida Medicaid program. This ring was exposed by joint efforts between OIG agents and MFCU agents working in undercover capacity.

[Richard Stern] You know I should also say, however, the MFCUs work many of their own cases without assistance from other agencies, and do so very successfully. MFCUs investigate, and prosecute, patient abuse or neglect in nursing homes, and hospitals, as well as in assisted living facilities. Sadly, the abuse of the elderly and other residents of these facilities has become a major social issue. These are difficult cases, and MFCUs are one of the few State or Federal agencies devoted to criminal prosecution of patient abuse or neglect.

[Don White] Well, Shimon, could these Medicaid Fraud Control Units be doing even more?

[Shimon Richmond] Absolutely they could. But many of the MFCUs really need additional resources to fight the fraud in their jurisdiction. And currently there are no MFCUs in Puerto Rico or North Dakota. Also, the Medicaid Fraud Control Units need the legal authority to investigate and prosecute patient abuse or neglect in home- or community-based settings in addition to institutions. The current rules made some sense when Medicaid services were primarily provided in institution in times past, but as those services are increasingly provided in the home and the community, things really have changed.

[Richard Stern] Right. We will need Federal legislation to make that happen and there does seem to be interest for that happen on Capitol Hill.

[Don White] Well, I hope that this podcast has provided some helpful information on the important work by of the Medicaid Fraud Control Units.

[Richard Stern] Thank you for the opportunity to speak about the work of the over 1900 MFCU professionals across the nation.

[Don White] Any last words, Shimon?

[Shimon Richmond] Well, just that the MFCU's play a critical role in protecting the taxpayers and the residents of health care institutions, so I'm happy to participate and glad that we can discuss this today.

[Don White] Thanks a lot.


Return to Podcasts

Office of Inspector General, U.S. Department of Health and Human Services | 330 Independence Avenue, SW, Washington, DC 20201