Testimony of: John Hagg Director of Medicaid Audits Office of Inspector General U.S. Department of Health and Human Services
Hearing: “Strengthening Medicaid Program Integrity and Closing Loopholes”
House Committee on Energy and Commerce
September 11, 2015 Rayburn 2322 9:15 AM
Medicaid Fraud Control Units
Another way that OIG helps protect Medicaid from fraud and abuse and Medicaid beneficiaries from harm is by overseeing State Medicaid Fraud Control Units (MFCUs). OIG evaluates MFCU operations, ensures that the MFCUs comply with grant requirements, compiles statistics on performance, and manages the awarding of Federal funds to them.
State MFCUs play the primary role for Medicaid in the investigation and prosecution of provider fraud and patient abuse or neglect in health care facilities. MFCUs, usually part of the State Attorney General’s office, operate under an interdisciplinary model, employing attorneys, auditors, and investigators, and are typically responsible for both the investigation and the criminal and or civil prosecution of cases.
Each MFCU receives a 75 percent Federal match under the program; new MFCUs receive a 90 percent Federal match for an initial 3-year period. In fiscal year 2014, MFCUs employed 1,957 staff and spent over $235 million in both Federal and State funds.
MFCUs reported a total of 1,318 criminal convictions for fiscal year 2014, including 956 for provider fraud and 362 for patient abuse or neglect. MFCU criminal and civil cases contributed to reported monetary recoveries of over $2 billion for the fiscal year. This translates to a return on investment of $8.53 in recoveries for each dollar expended in Federal and State funds.
MFCUs operate in 49 States and the District of Columbia. Under the Medicaid statute, all States – defined to include the District of Columbia and the five U.S. territories – are required to have a MFCU as a feature of their Medicaid State plan, unless the State receives a waiver from the Secretary.
All five U.S. territories and the State of North Dakota do not maintain a MFCU.