The function of Medicaid Fraud Control Units (MFCUs/Units) is to investigate and prosecute Medicaid provider fraud and patient abuse/neglect. The Social Security Act requires each state to operate a MFCU. MFCUs are funded jointly by federal and state governments – each Unit receives a federal grant award equivalent to 75 percent of its total expenditures to fund its activities. This grant award must be recertified each year by the OIG.
MFCU cases typically begin as referrals from external sources or are generated internally from data analytics. In Utah, the MFCU receives fraud referrals from the Utah Medicaid Inspector General (Utah MIG), the State Medicaid agency, the OIG, Medicaid managed care organizations (which Utah refers to as “accountable care organizations” or ACOs), as well as from other sources. Referrals regarding patient abuse or neglect may also be received from Adult Protective Services.
OIG Oversight of MFCU’s
Reducing Medicaid fraud and maximizing the effectiveness of MFCUs are top priorities for the OIG, and MFCU oversight of the Units supports both goals. OIG oversight of MFCUs includes both annual recertification of each Unit, conducting periodic on-site inspections of Units, providing technical assistance and monitoring key statistical data about each Unit’s performance.
OIG reviews each Unit’s application for recertification annually. The OIG’s approval of this application is necessary for the Unit to receive federal reimbursement. To recertify a Unit, OIG performs a desk review to assess the Unit’s compliance with the federal statutes, regulations, and policy transmittals and examines adherence to 12 performance standards.
OIG further assesses a Unit’s performance by conducting inspections of each state MFCU approximately every 5 years that may identify findings and make recommendations for improvement. During an inspection, OIG also makes findings regarding Unit operations and performance. For Utah, the last two inspections occurred in 2013 and 2018.
Utah MFCU Overall Performance
Below is a summary of Utah’s MFCU performance using the key indicators collected by the OIG over the last 8 years:
|Year||Investigations||Indictmants/Charges||Criminal Convictions||Civil Settlements/Judgments|
Beginning in 2017, there was a significant increase in all categories of performance which was largely maintained over the following three review periods. 2020 showed a slight decline but that may be attributable in part to the impact of the pandemic on Unit operations. It should be noted that between 2017-2020, the number of Medicaid enrollees in Utah was relatively flat which would indicate that the Utah MFCU’s performance reflects improved effectiveness rather due solely to an increase in the number of enrollees.
OIG Inspection Outcomes and Trends from 2013 and 2018 On-Site Reviews
While the statistics above reflect improved performance, the last two OIG inspections of the Utah MFCU reflect certain trends and areas of concern.
2013 Inspection Findings
In 2014, the OIG issued a report on its 2013 onsite review of the Utah MFCU. The following issues were noted:
- Unit case files lacked documentation of supervisory approval to open and close cases and documentation of periodic supervisory reviews.
26 percent of the Unit’s case files lacked documentation of supervisory approval to open cases, and 13 percent of the Unit’s closed case files lacked documentation of supervisory approval to close cases. To address this finding, MFCU management reported that it instructed staff to include case-referral approval forms signed by Unit management in the case files. The Unit also reported that it has instructed supervisors to note periodic supervisory reviews in the Unit’s electronic case-management system.
- The MFCU failed to refer three sentenced individuals to OIG for program exclusion.
The Unit reported 26 total convictions within the review period, but did not refer three of those sentenced individuals to OIG for program exclusion within an appropriate timeframe. Each of these individuals had been sentenced at least 2 years prior to the onsite review, but none had been referred to OIG for exclusion. Unit management acknowledged this oversight and referred all three to the OIG for program exclusion immediately following the onsite review.
- The Unit’s policies and procedures manual did not reflect current Unit operations.
The Unit’s policies and procedures manual had last been updated in 2013, prior to the onsite review but failed to address Unit operations specific to its case file review process or its procedures for documenting supervisory approval to open and close cases and periodic supervisory reviews in the Unit’s case files and/or electronic case file tracking system.
- The Unit failed to report adverse actions to the National Provider Data Bank (NPDB) as required by Federal regulations.
Under federal regulations, all State and Federal government agencies must report to the NPDB any adverse actions generated as a result of investigations or prosecutions of healthcare providers. However, the Unit did not do so during the review period. During the inspection, Unit management acknowledged the oversight and rectified the error.
Based on the MFCU’s reporting of subsequent actions taken to remedy these deficiencies, the OIG considered each of these findings were adequately addressed.
2018 Inspection Findings
In 2019, the OIG issued a report on its 2018 onsite review of the Utah MFCU. The following issues were noted:
- Many case files were missing documentation of periodic supervisory reviews and/or approval to open cases.
This was a repeat finding from the 2013 on-site inspection and represented a decline in performance since the prior OIG review. Supervisory oversight documentation and case disposition approval was found to be lacking, late or non-existent in a majority of the files reviewed.
The MFCU reported that it has worked to analyze and improve the case-tracking and documenting processes and said that it will continue to refine processes, as needed. The MFCU also stated that it has improved the documentation of its case reviews and has implemented a new case review process.
- Fraud referrals from the Utah Medicaid IG (MIG) and ACOs decreased in comparison to previous years.
During FYs 2015 – 2017, the Utah MFCU received a total of six fraud referrals from the Utah MIG. This number represented a decrease from the 14 fraud referrals that the MFCU received from the MIG during the previous 3-year period.
In addition, the MFCU reported that during the review period, it received only one fraud referral from Utah’s four ACOs. The low volume of referrals from ACOs is particularly concerning considering that nearly 90 percent of the Medicaid population is served by ACOs. The MFCU reported that it received no fraud referrals from the ACOs in FY 2018.
To address this concern, the MFCU stated that it will continue to evaluate the results of its outreach activities and implement additional strategies to increase referrals, as necessary.
- The MFCU’s nonglobal civil case outcomes declined.
The OIG noted this as a concern for FY2017 in particular. (A “nonglobal” case is conducted by a MFCU—individually or with other law enforcement partners—and is not coordinated by the National Association of Medicaid Fraud Control Units. “Global” cases are civil False Claims Act cases that are litigated by the U.S. DOJ and typically involve a group of MFCUs. The settlement of such global cases is managed by the National Association of Medicaid Fraud Control Units on behalf of the states involved.)
The MFCU had no nonglobal civil settlements or judgments in FY 2017, compared to 10 settlements and judgments in FY 2016 and 6 in FY 2015. Additionally, the MFCU’s nonglobal civil recoveries substantially declined in FY 2017— to $3,318 – down from $7.9 million in FY 2016 and $5.6 million in FY 2015.
Unit management explained that that this decline is at least in part attributable to the fact that the MFCU could no longer use its standard approach for litigating these types of civil cases because a 2015 State law restricts the use of outside counsel under contingent fee contracts, which the MFCU previously used.
The MFCU stated that it is attempting to identify the most effective plan to handle these cases and that it is pursuing multiple joint civil cases with the U.S. Attorney’s Office. Also, the Utah State Legislature approved funding for the MFCU to hire a civil attorney, should the MFCU determine that is the most effective way to pursue nonglobal civil cases.
- The MFCU did not store and maintain its case information in a manner that allowed for efficient access to the information.
The MFCU did not have standard practices to ensure that its staff consistently stored and maintained case information which limited the MFCU’s ability to efficiently access the information. Because the MFCU lacked standard practices for case information storage, case file information was not always complete, accurate, retrievable or consistently maintained in these locations.
The MFCU reported that it has created procedures, checklists, and standardized forms to improve its case documentation. The MFCU further indicated that it will create a case documentation subcommittee to determine what additional policies, processes, and forms are necessary to resolve this data management issue.
While the overall performance indicates that MFCU performance is adequate, the 2013 and 2018 inspection findings suggest inadequate attention to basic foundational elements such as documentation management, case supervision and oversight as well as required reporting of state convictions and adverse actions. Deficiencies related to these basic administrative functions in a mature MFCU unit are difficult to explain. Hopefully the next on-site review in 2023 will reflect that these issues are eliminated and the necessary resources have been deployed to avoid repetition.