Government triples money recovered from Medicaid scams

WASHINGTON -- The federal government has more than tripled the amount of money it has recovered through efforts to stop Medicaid fraud in the past six years, records show.

In 2004, the government gained $573 million through fraud prosecutions, compared with $1.85 billion in 2010, according to records from the Department of Health and Human Services inspector general's office. This was spurred by a 57% increase in the amount of grant money to state Medicaid Fraud Control Units (MFCUs) from $131 million to $205.5 million.

Much of this money comes as the Obama administration, with bipartisan help in Congress, has increased spending on anti-fraud programs. Recent examples include a requirement in last year's health care law for electronic records systems for all medical professionals who provide health care for Medicaid and Medicare patients, as well as a proposed rule released on the Federal Register Oct. 6 requiring state MFCUs to better monitor their activities to show they are effective.

States would be scrambling to fight Medicaid fraud even without the federal money, says Matt Salo, executive director of the National Association of Medicaid Providers.

"It's absolutely at the top of everyone's agenda," Salo says. "If done right, this is the way to reduce out-of-control expenditures."

Medicaid is a state-run program that uses both state and federal funds to provide health care for low-income Americans. One-third of all children receive care through Medicaid, as do low-income pregnant women, disabled or blind people and nursing home patients.

This month, the states have seen Medicaid fraud cases ranging from a doctor in Pennsylvania accused of exchanging Oxycontin prescriptions for sex with one of his patients, to an Atlanta doctor sentenced to prison for billing elderly — and even dead — nursing home patients for services he did not provide.

Many of the data analysis techniques used to find Medicare fraud are being expanded to Medicaid, says Alper Ozinal, spokesman for the Centers for Medicare and Medicaid Services (CMS).

For example, the agency has sent more resources to high-fraud states, such as Florida and Texas, to help with investigations.

It also requires Medicaid contractors who audit claims to report all possible fraud to law enforcement agencies. The agency began sending fraud alerts to states and has intervened when states have fallen short.

Fraud fighters are pushing for more CMS data to be consolidated so investigators can better track fraud trends, says Louis Saccoccio, executive director of the National Health Care Anti-Fraud Association.