Convictions up, civil settlements down among MCFUs

A magnifying glass over the word "fraud"

Medicaid Fraud Control Units (MFCUs) saw a 33 percent increase in fraud convictions between 2011 and 2015 even as civil settlements and overall recoveries declined.

Fraud convictions hit a five-year high in fiscal year (FY) 2015, according to an annual report released by the Office of Inspector General, reaching 1,553. Of those convictions, 456 were linked to abuse and neglect charges, a sharp increase from the previous year.

Civil settlements and judgments declined steadily over the same time period from 908 in FY 2011 to 731 in FY 2015, coupled with an overall decline in civil fraud recoveries. Civil recoveries totaled just $394 million in 2015, a sharp decrease from the $1.7 billion recovered in 2014 and nearly seven times less than the $2.6 billion recovered in 2012. The OIG noted that the decline in civil settlements is part of national trend following two decades of large settlements with pharmaceutical companies.

MFCUs brought in more than $700 million in civil and criminal recoveries combined in 2015, representing a three-one return on investment. The Texas MFCU represented 28% of overall recoveries thanks to several large criminal cases. Comparatively, a separate OIG report indicated that South Dakota collected just $7 million in civil and criminal recoveries between FYs 2013 and 2015.

Nearly one in three convictions for fraud, abuse, and neglect by MFCUs were linked to personal care services assistants last year, further intensifying fraud concerns within the home health industry. Drug diversion cases, represented eight percent of convictions in FY 2015, representing a potential new focal point for state prosecutors in the midst of the opioid addiction crisis.