1/29/2011. Mark G. Bodner Bureau Chief Complex Civil Enforcement Bureau Medicaid Control Unit Office of the Attorney General

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1 Mark G. Bodner Bureau Chief Complex Civil Enforcement Bureau Medicaid Control Unit Office of the Attorney General The enactment of the Medicare and Medicaid Anti-Fraud and Abuse Amendments of 1977 authorized the establishment of, and Federal funding for, the State Medicaid Fraud Control Units. Currently 49 states and the District of Columbia participate in the Medicaid fraud control grant program. 1

2 A State MFCU budget is a hybrid of federal and state dollars. Ninety percent of a MFCU budget is federally funded for the first 3 years of operation. Seventy-five percent of a state MFCU budget federally funded after the third year of operation. Pursuant to Florida Statutes and in accordance with federal directives, the Medicaid Fraud Control Unit (MFCU) operates within the Office of the Attorney General. The majority of the State Medicaid Fraud Control Units are located within the Office of State Attorneys General. 2

3 The missions of the Medicaid Fraud Control Units are to investigate and prosecute both Medicaid provider fraud and incidences of patient abuse and neglect. A State MFCU does not administer the Medicaid program. However, the Unit is responsible for investigating fraud in the administration of the program. Medicaid Fraud Control Units do not focus on recipient fraud. 1. Conduct a statewide program for the investigation of fraud and abuse in the Medicaid program. MFCU is authorized to investigate possible criminal violations of any applicable state law pertaining to fraud in the administration of the Medicaid program, in the provision of medical assistance, or in the activities of providers of healthcare under the Medicaid program. (Section , Florida Statutes) 3

4 2. Conduct investigations and assist in the prosecution of abuse, neglect or exploitation of persons housed in Medicaid provider facilities. (Section (8)(b), Florida Statutes) 3. Investigate the alleged misappropriation of patients private funds in health care facilities receiving payments under the Medicaid program. (Section (8)(c), Florida Statutes) 4. The Office of the Attorney General has jurisdiction to investigate possible violations of the Florida False Claims Act and is authorized to file civil actions pursuant to the Florida False Claims Act. (Sections , Florida Statutes) 4

5 Complaints are reviewed to determine issues such as jurisdiction, matters for referral to another agency and viability of the complaint. Under this policy, a MFCU case is only opened when there is a criminal or civil predicate that warrants further investigation. Primary source of fraud related complaints in FY was private citizens. Primary source of Patient Abuse, Neglect and Exploitation complaints was the Department of Children & Families in FY Qui Tam complaint filings on the rise. 94 new filings in FY new filings in FY

6 Upcoding Billing for services not rendered Billing for ineligible recipients Billing for work done by ineligible employees Billing for unnecessary services Drug diversion and trafficking Short filling prescriptions Unlawful marketing (kickbacks, off label) Misuse of a provider number Drug substitution Cost report fraud 6

7 Home & Community Based Care Pharmaceutical Manufacturer, Physician, Medical Supplies/Durable Medical Equipment, Community Alcohol/Drug/Mental health. MFCU shall conduct criminal and civil enforcement actions designed to prevent, detect, prosecute and deter misconduct in MFCU s areas of enforcement responsibility in order to protect the integrity of the Medicaid program and the citizens of the state of Florida. 7

8 Medicaid Provider Fraud Patient Abuse, Neglect and Exploitation (PANE) Investigations Civil Recoveries Intelligence Community Outreach In appropriate cases, MFCU arrests individuals and works with the local State Attorney, United States Attorney or the Statewide Prosecutor. Criminal charges are varied and include Medicaid fraud, identity theft, money laundering, organized fraud, and aggravated white collar crime. 8

9 Florida False Claims Act (Chapter 68 Florida Statutes) Florida Contraband Forfeiture Act (Sections Florida Statutes) In FY total recoveries by the Florida Medicaid Fraud Control Unit were over $144.6M Complex Civil Enforcement Bureau (CCEB) CCEB is a Bureau within the MFCU which investigates and litigates alleged violations of the Florida False Claims Act. CCEB works closely with the National Association of Medicaid Fraud Control Units on multi-state cases. CCEB is currently litigating cases against Pharmaceutical manufacturers in both state and federal courts. CCEB opened 79 new investigations last year. CCEB recovered $79M in

10 MFCU s primary vehicle for civil enforcement is the Florida False Claims Act. The purpose of the Florida False Claims Act is to deter persons from knowingly causing or assisting in causing state government to pay claims that are false or fraudulent. Conduct that gives rise to liability under the Florida False Claims Act Overbilling Upcoding Off-label marketing Billing for services not rendered Pharmaceutical price manipulation Improper physician referrals 10

11 Damages for violations of the Florida False Claims Act Treble damages Unless self disclosure within 30 days of learning information. Defendant fully cooperated with investigation. At time person furnished information there was no civil or criminal action filed. Fines of $5,500-$11,000 per violation Attorney fees liability The Florida False Claims Act was amended to provide a financial incentive to private citizens who report Medicaid Fraud and Abuse. Section (4) Florida Statutes. Fund created to reward those who report criminal violations of the Medicaid laws or criminal fraud upon the Medicaid program. Information leads to a recovery of a fine, penalty or forfeiture of property. Reward is lesser of 25 percent of the amount recovered or $500, in a single case. 11

12 Deficit Reduction Act of 2005 DRA provides incentive for adoption of State False Claims Acts by decreasing the Federal medical assistance percentage by 10 percentage points for recoveries from legal actions brought pursuant to such laws. To be eligible for the increased recovery rate, States must meet several criteria. The law establishes liability to the State for false or fraudulent claims. The law contains provisions that are at least as effective in rewarding and facilitating qui tam actions as the Federal False Claims Act. The law contains a requirement for filing an action under seal for 60 days with review by the State Attorney General. Law contains a civil penalty that is not less than the amount authorized by the Federal False Claims Act. 12

13 The following cities, states and the District of Columbia have enacted False Claims Acts: Cities of New York and Chicago, District of Columbia States of Florida, Connecticut, Maryland, Colorado, California*, Delaware, Georgia*, Hawaii*, Illinois*, Indiana*, Kansas, Louisiana, Massachusetts*, Michigan, Minnesota, Montana, Nevada*, New Hampshire, New Jersey, New Mexico, New York*, Oklahoma, Rhode Island, Tennessee*, Texas*, Virginia*, North Carolina and Wisconsin*. * Qualified for increased share under DRA. Texas, Colorado, Connecticut, Maryland, Georgia, Louisiana and Michigan s False Claims Acts are Medicaid only. Florida False Claims Act was enacted in 1994 and amended in both 2007 and

14 Data Mining-efforts to identify situations in which a question of fraud may exist, including the screening of claims, analysis of patterns of practice or routine verification with recipients of whether services billed by providers were actually received. Federal law does not permit state MFCUs to conduct analysis to independently identify Medicaid fraud. On July 10, 2010 AHCA and OAG jointly requested an expedited review and approval of Florida s data mining demonstration project. On July 15, 2010 HHS approved Florida s Medicaid waiver request which will allow Florida MFCU to data mine. 14

15 Florida MFCU is currently the only MFCU that is permitted to data mine. HHS and CMS will monitor the progress of the waiver. Mark G. Bodner Bureau Chief Complex Civil Enforcement Bureau Medicaid Fraud Control Unit Office of the Attorney General, State of Florida PL-01, The Capitol Tallahassee, FL Telephone: Fax Number:

CRS Report for Congress

Order Code RS21071 Updated February 15, 2005 CRS Report for Congress Received through the CRS Web Medicaid Expenditures, FY2002 and FY2003 Summary Karen L. Tritz Analyst in Social Legislation Domestic