U.S. Department of Health and Human Services 
Office of Inspector General 

 
 
 
 
 
Medicaid Fraud Control Units 
 
 
 
 
Fiscal Year 2014 

Annual Report 

 
Suzanne Murrin  
Deputy Inspector General 
for Evaluation and Inspections  
 
April 2015 
OEI-06-15-00010 
       INTRODUCTION 
This Medicaid Fraud Control Unit (MFCU or Unit) Fiscal Year (FY) 2014 Annual Report 
highlights statistical achievements from the investigations and prosecutions conducted by  
50 MFCUs nationwide. In FY 2014, MFCUs reported 1,318 criminal convictions involving the 
spectrum of providers who provide services to Medicaid beneficiaries.  Three-quarters of these 
criminal convictions were for fraud, consistent with recent years, and recoveries in criminal 
cases reached nearly $300 million.  Additionally, MFCU convictions led to the exclusion of 
1,337 providers from Federal health care programs.  MFCUs also reported 874 civil settlements 
and judgments that involved a few provider types, most notably pharmaceutical companies.  
Two-thirds of the $1.7 billion recovered in civil settlements and judgments were global 
settlements, which involved multiple Units and the U.S. Department of Justice.   
The Office of Inspector General (OIG) compiled information from Quarterly Statistical Reports 
(QSRs) submitted by each Unit, as well as supplemental data gathered by OIG through a variety 
of methods.  See Appendix A for details about data sources used in this Annual Report.  In 
Appendix B, we have compiled information about MFCU criminal and civil outcomes by 
provider type.  Additionally, OIG maintains updated information for each of the individual 
MFCUs on the OIG Web site, including an interactive map with statistical information about 
each MFCU. 
MFCU Operations   
MFCUs investigate and prosecute Medicaid provider fraud and patient abuse and neglect in 
health care facilities or board and care facilities.1  In FY 2014, 49 States and the District of 
Columbia (States) operated Units.2  As part of their Medicaid plans, all States are required to 
operate a Unit or demonstrate to the Secretary of Health and Human Services that operation of a 
MFCU would not be cost effective and that other program integrity protections are in place.3    
Units are jointly funded; the Federal government currently reimburses each of the States 
75 percent of the costs of operating a Unit, and the States contribute the remaining 25 percent.4   
In FY 2014, combined Federal and State expenditures for the Units totaled $235 million.5    
MFCUs operate on an interdisciplinary model and must employ a combination of investigators, 
auditors, and attorneys. At the end of FY 2014, MFCUs employed a total of 1,956 individuals.6    
Each Unit must be a single, identifiable entity of State government, distinct from the single State 
Medicaid agency, and must develop a formal agreementi.e., a Memorandum of Understanding 
(MOU)that describes its relationship with that agency.7  MFCUs are required to have 
Statewide authority to prosecute their own cases or else have formal procedures to refer 
suspected criminal violations to an office with such authority.8  In FY 2014, 44 of the Units were 
in offices of State Attorneys General; in the remaining 6 States, the Units were in other State 
agencies.9    
Unit staff review referrals provided by the State Medicaid agency and other sources and 
determine the potential for criminal prosecution and/or civil action. Units received many 
referrals of potential cases of fraud from the program integrity divisions of State Medicaid 
agencies and from other sources, including referrals from the general public.  Similarly, Units 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  1  INTRODUCTION 
received referrals of patient abuse and neglect from a variety of sources, including local adult 
protective services agencies. 
MFCUs authority to receive Federal funding for cases of patient abuse and neglect extends to 
Medicaid-funded health care facilities, such as nursing homes, and to board and care facilities, 
such as assisted living facilities, which may or may not be funded by Medicaid.10    
MFCUs may also be involved in global cases, which are civil false claims cases that are brought 
by the U.S. Department of Justice and involve a group of State MFCUs.  The National 
Association of Medicaid Fraud Control Units (NAMFCU) facilitates the settlement of global 
cases on behalf of the States. 
OIG Oversight of MFCUs 
OIG has oversight responsibility for the MFCUs and administers the grants that provide Federal 
funding for Unit operations. OIG developed 12 performance standards for use in assessing the 
operations of MFCUs.  A copy of the MFCU performance standards, most recently revised in 
2012, may be found on the OIG Web site at https://oig.hhs.gov/authorities/docs/2012/ 
PerformanceStandardsFinal060112.pdf. 
On an annual and quarterly basis, MFCUs provide OIG with statistical and other information 
about Unit operations as well as the results of investigations and prosecutions.  OIG uses this 
Unit information, as well as information from other sources, to determine whether to annually 
recertify each Unit. Periodicallyapproximately every 5 yearsOIG conducts an indepth 
onsite review of each Unit to evaluate its operations as related to the 12 performance standards 
and to assess compliance with laws, regulations, and OIG policy guidance. 
Standards 
This study was conducted in accordance with the Quality Standards for Inspection and 
Evaluation issued by the Council of the Inspectors General on Integrity and Efficiency. 
   
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  2    TABLE OF CONTENTS   
 
  MFCU CRIMINAL CASE OUTCOMES 
MFCUs reported 1,318 criminal convictions involving a variety of provider  

types, most notably home health care aides .............................................................4 

Three-quarters of MFCU criminal convictions were for fraud, consistent with 

recent years ..............................................................................................................5 

FY 2014 recoveries from criminal cases reached nearly $300 million ....................6 

  MFCU CIVIL CASE OUTCOMES  
MFCUs reported 874 civil settlements and judgments involving a variety  

of provider types, most frequently pharmaceutical companies ...............................7 

Two-thirds of MFCU civil settlements and judgments were global settlements  .....8 

FY 2014 recoveries from civil cases totaled $1.7 billionmost from 
 
global settlements.....................................................................................................9 

  PROVIDER EXCLUSIONS 
MFCU convictions led to the exclusion of 1,337 providers from Federal  

health care programs ..............................................................................................10 

  OTHER OBSERVATIONS  
MFCUs and State Medicaid agency PI units reported challenges with referrals 

involving credible allegations of fraud and the payment suspension process and 

referrals from managed care entities ......................................................................11
  
MFCUs and State Medicaid agency PI  units reported three key elements for 

successful collaboration: communication, experienced and knowledgeable  

staff, and joint training ...........................................................................................12 

  OIG OVERSIGHT 
In FY 2014, OIG conducted 7 onsite reviews of Units, published 12 reports,  

and submitted 2 legislative proposals  ....................................................................14 

  APPENDIXES 
A: Methodology....................................................................................................16 

B: FY 2014 MFCU Criminal and Civil Outcomes by Provider Type ...................18 

C: Selected FY 2014 Statistical Data....................................................................20 

D: Onsite Reviews Conducted and Reports Published in FY 2014 ......................24 

ACKNOWLEDGMENTS   ...............................................................................................25 

ENDNOTES .....................................................................................................................26 

   
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  3  CASE OUTCOMES 
MFCUs reported 1,318 criminal convictions involving a variety of 
provider types, most notably home health care aides    
MFCUs reported 1,318 criminal convictions in FY 2014, similar to FY 2013s total of 
1,344 criminal convictions.  MFCUs criminal convictions most frequently involved home health 
care aides, certified nursing aides, and other medical support.  See Appendix B for a list of all 
convictions by provider type. 
Home health care aides:  30 percent of criminal convictions 
In FY 2014, criminal convictions of home health care aides represented 30 percent of all MFCU 
criminal convictions, a small increase from the FY 2013 figure of 26 percent.  Most commonly, 
home health care aides were convicted of fraud, often for claiming to have rendered services that 
were not provided. For example, the Nebraska MFCU investigated several home health care 
aides who submitted timesheets for services that were never rendered or timesheets that claimed 
that the aide was working with more than one patient at the same time in different locations.  
Two of these Nebraska home health care aides were convicted; one was sentenced to 18 months 
of probation and ordered to pay restitution, and the other was sentenced to 2 years of probation 
and ordered to perform 200 hours of community service.   
 
Certified nursing aides:  9 percent of criminal convictions   
In FY 2014, criminal convictions of certified nursing aides represented 9 percent of all MFCU 
criminal convictions, a slight increase from the FY 2013 figure of 8 percent.  These convictions 
involved offenses such as patient abuse, billing for services not rendered, and falsifying 
timesheets.  For example, the New York MFCU investigated a certified nursing aide who falsely 
documented provision of services.  This aide was sentenced to 15 days in jail, fined $125, and 
required to surrender her certified nursing aide certificate.  
 
Other medical support:  7 percent of criminal convictions  
In FY 2014, criminal convictions of other medical support represented 7 percent of all MFCU 
criminal convictions, the same proportion as in FY 2013.  The category other medical support 
includes individuals, facilities, and organizationswhether licensed or unlicensedthat provide 
medical support services.  This category excludes pharmacies; pharmaceutical manufacturers; 
suppliers of durable medical equipment; laboratories; providers of transportation; home health 
care agencies and aides; nurses; physician assistants; nurse practitioners; and radiologists.  
Individuals in this provider category were convicted of a wide variety of offenses.  For example, 
the Florida MFCU obtained a conviction of a billing agent for one count each of organized fraud, 
Medicaid fraud, and conspiracy to commit Medicaid fraud.  The billing agent worked with two 
other individuals and three adult family homes to bill for services never rendered.   
 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  4  CASE OUTCOMES 
Three-quarters of MFCU criminal convictions were for fraud, 
consistent with recent years 
In FY 2014, about three-quarters of criminal convictions involved fraud; about one-quarter 
involved patient abuse and neglect.11 As shown in Chart 1, convictions related to fraud 
consistently represented the majority of all criminal convictions over the past 5 years.   
Chart 1:  Number of Criminal Convictions by Type of Case  

(Fraud vs. Patient Abuse and Neglect), FYs 20102014 
 
 
1600 
 
  1400 
  1200 
364  351  362 
490 
  1000  410 
 
800  Patient Abuse and Neglect 
 
Fraud 
600 
 
985  993  956 
  400  839  825 
  200 
 
0 
  FY 2010  FY 2011  FY 2012  FY 2013  FY 2014 
 
Source: OIG analysis of QSRs, 2015.  
 
FY 2014 criminal convictions for fraud:  73 percent  
Fraud convictions reported for FY 2014 by the MFCUs included convictions for (1) conspiracy 
to commit health care fraud, (2) submitting false statements related to health care matters, 
(3) making false statements in regard to health care reimbursements, (4) grand larceny, 
(5) violations of anti-kickback statutes, and (6) improperly prescribing drugs.  For example, the 
Illinois MFCU investigated a doctor who distributed controlled substances illegally in a so-called 
pill mill operation.  Between 2006 and 2010, nine patients who received controlled substances 
distributed by this doctor died from drug overdoses.  The doctor was indicted on 1 count of 
health care fraud and 14 counts of illegal dispensation of a controlled substance.  In April 2014, 
the doctor was sentenced to a year of incarceration.  
 
FY 2014 criminal convictions for patient abuse and neglect:  27 percent  
Cases of patient abuse and neglect reported by the MFCUs for FY 2014 included aggravated 
assaults, injury to elderly or disabled persons, and theft of patient funds.12  For example, the 
Florida MFCU investigated an owner of an adult family care home for allegations including 
neglecting residents, failing to provide medical services for a residents wounds, willfully 
abusing a disabled adult, and financially exploiting residents.  The owner was convicted and 
sentenced to more than 8 years of incarceration.  
 
 
 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  5  CASE OUTCOMES 
FY 2014 recoveries from criminal cases reached nearly $300 million  
As shown in Chart 2, recoveries from criminal cases in FY 2014 decreased from those of the 
previous 2 years. The bulk of the amount for FY 2013 came from the recoveries from a single 
criminal casethe largest such State MFCU recovery to that time.  In FY 2014, the recoveries 
from criminal cases returned to a more typical amount. 
 Chart 2:  Recoveries From Criminal Cases, FYs 20102014 
 
  $1,200,000,000 
  $968,894,234 
$1,000,000,000 
 
  $800,000,000 
 
$600,000,000 
 
 
$400,000,000  $308,561,168 
  $293,366,189 
$218,370,072 
$174,004,532 
$200,000,000 
   
$0 
 
FY 2010  FY 2011  FY 2012  FY 2013  FY 2014 
 
Source: OIG analysis of QSRs, 2015.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  6  CASE OUTCOMES 
MFCUs reported 874 civil settlements and judgments that involved a 
variety of provider types, most frequently pharmaceutical companies  
Of the 874 civil settlements and judgments that MFCUs obtained, most involved pharmaceutical 
manufacturers, pharmacies, and suppliers of durable medical equipment.  See Appendix B for a 
list of criminal and civil outcomes by provider type. 
 
Pharmaceutical manufacturers:  52 percent of civil settlements and judgments  
In FY 2014, cases involving pharmaceutical manufacturers accounted for about half (52 percent) 
of all MFCU cases that resulted in civil settlements and judgments.  This was a decrease from  
FY 2013, when such cases represented 62 percent of all civil settlements and judgments.  
In an example of a civil settlement with a pharmaceutical company, the Federal government, 
43 States, and the District of Columbia settled with Astellas Pharma US Inc. regarding 
allegations that the company had caused false claims to be submitted to Federal and State health 
care programs.  These claims were in connection with the companys marketing and promotion 
of a drug, Mycamine, for pediatric use.  Mycamine, a sterile, freeze-dried antifungal agent, was 
approved by the Food and Drug Administration for adult use only.  Astellas Pharma US Inc. will 
pay $7.3 million to resolve the allegations.  
Pharmacies:  10 percent of civil settlements and judgments  
Pharmacies were the second most common provider type for civil settlements and judgments.  In 
FY 2014, cases involving pharmacies represented 10 percent of all MFCU cases that resulted in 
civil settlements and judgments, an increase from the FY 2013 figure of 6 percent.  For example, 
the New York MFCU settled with a New York-based pharmacy regarding allegations that the 
pharmacy made false statements to the State Medicaid program to expedite authorization for 
some drugs and that it submitted other false claims to the program.  The pharmacy agreed to 
return $846,224 to the New York Medicaid program.  
 
Suppliers of durable medical equipment:  8 percent of civil settlements and 
judgments  
Suppliers of durable medical equipment were the third most common provider type for civil 
settlements and judgments.  In FY 2014, settlements with such suppliers represented 8 percent of 
all civil settlements and judgments, a large increase from the FY 2013 figure of 1 percent.  
In an example of such a settlement, the West Virginia MFCU entered into a civil agreement with 
the owner of a durable medical equipment company who agreed to make restitution of $57,500.  
The allegations were that the company collaborated with an excluded provider and billed both 
Medicare and Medicaid for back braces that were provided by the excluded company.  After 
submitting the charges to Medicare and Medicaid, the durable medical equipment company 
allegedly kept one-half of the reimbursement and passed the remaining monies on to the 
excluded company, using false invoices to support the billing.  
 
 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  7  CASE OUTCOMES 
Two-thirds of MFCU civil settlements and judgments were global 
settlements  
FY 2014 global civil settlements:  66 percent  
In FY 2014, MFCUs participated in the resolution of NAMFCU-coordinated global cases 
involving 650 civil settlements.13  One global settlement in FY 2014 involved the Federal 
Government, 50 States, and the District of Columbia settling with Shire Pharmaceutical, LLC 
regarding allegations that the company engaged in marketing campaigns that improperly 
promoted the off-label use of 5 of its drugs.  Shire is alleged to have unlawfully marketed these 
drugs for off-label uses, or overstated their efficacy, despite a lack of clinical data.  Shire 
Pharmaceuticals will pay $56.5 million, of which $48.1 million (85 percent) will go to State 
Medicaid programs.  
 
FY 2014 nonglobal civil settlements and judgments:  34 percent 
Nonglobal cases are civil cases that do not involve NAMFCU and generally involve a single 
State as a plaintiff.  Currently, 30 States have some type of civil false claims statute.14  States 
may qualify for a 10-percent increase in their share of civil fraud recoveries if OIG, in 
consultation with the U.S. Department of Justice, determines that the State civil false claims  
statute meets certain qualifications.15  To date, 18 States have false claims statutes that qualify 
them for this increase.16  
In one nonglobal settlement in FY 2014, the Illinois MFCU entered into a settlement agreement 
in the amount of $346,648 with the owner of a transportation company who was accused of 
fraudulently billing for 1-day trips. In another settlement, the New Mexico MFCU entered into a 
settlement of $446,135 with the Los Lunas Community Program, which was accused of failing to  
support its billing of day habilitation services (i.e., services that help a person acquire, keep, or 
improve skills related to communication and activities of daily living).   
FYs 20102014 civil settlements and judgments 
As shown in Chart 3, the FY 2014 number of civil settlements and judgments874was a 
slight decrease from  FY 2013s total of 881.  
Chart 3:  Total Number of Civil Settlements and Judgments,  

FYs 20102014 
 
   
1,200 
1,090 
  1,000 
908  827  881  874 
  800 
600 
 
400 
 
200 
 
0 
  FY 2010  FY 2011  FY 2012  FY 2013  FY 2014 
 
Source: OIG analysis of QSRs, 2015. 
 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  8  CASE OUTCOMES 
FY 2014 recoveries from civil cases totaled $1.7 billionmost from 
global settlements  
As shown in Chart 4, recoveries from global cases accounted for 69 percent of the $1.7 billion in 
civil recoveries in FY 2014.  
Chart 4:  Percentage of Civil Recoveries That Resulted From Global  

and Nonglobal Settlements, FY 2014*  

 
 
 
  Nonglobal, 
31% 
 
 
  Global, 
69% 
 
 
 
 
 
 
Source: OIG analysis of supplemental data collection for the FY  2014 MFCU Annual Report, 2015.
 
*Information differs slightly from that reported in the QSRs, which does not divide civil recoveries into these categories.  

 
As shown in Chart 5, total recoveries from MFCU civil settlements and judgments have varied in 
recent years.  FY 2014 shows a slight increase from FY 2013 and had the third-highest recovery 
amount of the past 5 fiscal years.   
Chart 5:  Civil Recoveries, FYs 20102014  
 
  $3,000,000,000 
$2,633,910,595 
 
$2,500,000,000 
 
$1,726,510,790 
$2,000,000,000 
  $1,710,879,440 
$1,532,592,663  $1,542,317,141 
  $1,500,000,000 
 
$1,000,000,000 
 
  $500,000,000 
  $0 
  FY 2010  FY 2011  FY 2012  FY 2013  FY 2014 
 
 
Source: OIG analysis of QSRs, 2015. 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  9  PROVIDER EXCLUSIONS 
MFCU convictions led to the exclusion of 1,337 providers from 
Federal health care programs 
OIG excludes individuals and entities from federally funded health care programs (primarily 
Medicare and Medicaid) when the providers are convicted of program-related crimes.17   
Exclusion means that no payment will be made for any health care items or services furnished, 
ordered, or prescribed by an excluded individual or entity.18  In FY 2014, OIG excluded 
4,017 subjects, of which 1,337 were excluded as a result of MFCU investigations, prosecutions, 
and convictions. This number was a 31-percent increase over the previous years figure.  As 
shown in Chart 6, the FY 2014 exclusion numbers continue a pattern from previous years, 
demonstrating that MFCUs are an important source of referrals to OIG for purpose of exclusion.   
Chart 6:  OIG Exclusions Based on MFCU Referrals, FYs 20102014 
 
1600 
  1,337 
1400 
  1200 
1,022 
942 
1000 
 
746 
721 
800 
 
600 
  400 
  200 
0 
 
FY 2010  FY 2011  FY 2012  FY 2013  FY 2014 
    
Source: OIG analysis of OIG exclusion data, 2015. 
   
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  10  OTHER OBSERVATIONS  
State Medicaid agency program integrity (PI) units are an important partner for MFCUs.  PI units 
aid in the prevention and reduction of Medicaid provider fraud, waste, and abuse in various 
ways, such as by examining provider enrollment trends.19,20  PI units refer cases of suspected 
fraud to MFCUs, and they also collaborate with MFCUs on ongoing cases and Medicaid 
program and policy changes.   
MFCUs and State Medicaid agency PI units reported challenges with 
referrals involving credible allegations of fraud and the payment 
suspension process and referrals from managed care entities 
PI units and MFCUs both reported challenges with referrals.  For example, MFCUs reported that 
referrals from PI units sometimes lack key data elements or do not distinguish between fraud and 
overpayments.  Consequently, it can be a challenge for MFCUs to decide whether to open an 
investigation. PI units reported their perception that MFCUs often take too long to let them  
know whether the MFCUs are declining or accepting a given referral.  This poses a challenge for 
PI units when a MFCU declines the referral and the PI unit needs to recover overpayments or 
take other administrative action involving the provider.   
Additionally, both entities reported challenges specific to referrals involving credible allegations  
of fraud and the payment suspension process, as well as challenges with referrals from managed 
care entities.  
Referrals Involving Credible Allegations of Fraud and the Payment Suspension Process. Since 
2011, Federal regulations have required Medicaid agencies to suspend payments to a provider on 
the basis of a credible allegation of fraud for which an investigation is pending, unless the 
Medicaid agency determines that there is good cause to not suspend payment.  When a Medicaid 
agency determines that an allegation of fraud against a provider is credible, Federal regulations 
require the Medicaid agency to refer the matter to a MFCU or other law enforcement agency for 
potential investigation.21, 22  The MFCU exercises its discretion as to whether to accept the 
referral. If the MFCU does not accept the referral, the State Medicaid agency may not proceed 
with a suspension of payments unless the agency has alternative Federal or State authority, or if  
it makes a referral to another appropriate law enforcement agency.  If the MFCU accepts the 
referral, a suspension of payments may proceed until the MFCU completes its investigation.  
However, the MFCU may assert a good cause exception to the suspension requirement on the 
basis that notifying the provider about the suspension of payments would jeopardize the 
investigation. 
MFCUs and PI units both reported an increase in the quantity of administrative work involved in 
payment suspension cases, as well as a change in the way they jointly work these cases. PI units 
reported that raising the threshold from suspected fraud (the standard that existed before 2010) 
to credible allegation of fraud has resulted in a reduced number of referrals to MFCUs.23   
MFCUs must immediately assess any credible allegation of fraud for a law enforcement 
exemption, regardless of other priorities.  Additionally, MFCUs reported that suspending  
provider payments can complicate investigations when a provider pursues administrative or 
judicial remedies to challenge a suspension or investigation.  For example, one MFCU said that 
suspending payments to a provider risks empowering the subject of investigation with access to 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  11  OTHER OBSERVATIONS  
judicial relief to limit or otherwise interfere with our investigation.  OIG has ongoing work in 
this area.24    
Managed Care Entity Referrals. In the 2013 MFCU Annual Report, OIG reported that MFCUs 
voiced concerns about the lack of fraud referrals from managed care entities.  Such referrals may 
go directly to MFCUs, or they may go to State Medicaid agencies and then be referred to 
MFCUs if warranted. MFCUs also reported that managed care entities lacked the incentive to 
detect and refer potential fraud and that managed care entities may have an incentive not to do 
so. Specifically, managed care entities indicated to MFCUs that (1) they can lose money if their 
contracts do not allow them to share in fraud-related recoveries and (2) their contracts typically 
do not include negative consequences for a lack of fraud referrals.  As a result, a managed care 
entity may find it preferable to remove a provider from its network rather than to make a referral 
of fraud to the PI unit or MFCU. As of January 2015, over half of all Medicaid beneficiaries 
were receiving their care through managed care entities.25  This year, PI units and MFCUs 
reported their expectation that the increased prevalence of managed care will exacerbate the lack 
of referrals from Medicaid agencies. 
MFCUs and State Medicaid agency PI units reported three key 
elements to successful collaboration:  communication, experienced
and knowledgeable staff, and joint training 
Collaboration between the PI units and the MFCUs on ongoing cases and on changes in 
Medicaid programs and policies is key to a successful working relationship.  MFCUs and 
PI units reported that three key elements help facilitate this collaboration:  (1) communication, 
(2) experienced and knowledgeable staff, and (3) joint training.  
Communication. Nearly all PI units and MFCUs reported communication through meetings with 
each other throughout the year, and many reported ongoing communication (e.g. informal 
discussions, phone calls, emails).  PI units and MFCUs usually meet formally on a monthly 
basis. MFCUs and PI units reported that meetings are beneficial for discussing potential 
referrals, ongoing cases, and changes in regulations and policies. Additionally, almost  
three-fourths of MFCUs reported participating in some type of healthcare taskforce with PI units 
and Federal partners such as the FBI and OIG.  During taskforce meetings, discussions about 
fraud trends, referrals, and investigations occur, and these discussions could lead to joint cases 
that might involve Medicaid fraud.  
Experienced and Knowledgeable Staff. PI units and MFCUs reported that having experienced 
staff with complementary skill sets facilitates successful collaboration.  For example, several 
PI units mentioned that MFCU investigators and attorneys are experienced and knowledgeable in 
investigating and prosecuting Medicaid fraud, while MFCUs praised PI units knowledge of 
Medicaid programs and data analysis skills.  In some States, PI unit staff and MFCU staff have 
worked together for many years and have developed a long-term relationship that is invaluable.   
Joint Training. Around two-thirds of PI units and MFCUs reported conducting joint training, 
which they said provides an avenue for experienced staff to inform others about program 
changes and to learn about the latest fraud trends.  For example, some MFCUs have provided 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  12  OTHER OBSERVATIONS  
PI units with legal training on State false claims acts and on the evidence required for criminal 
fraud cases. PI units have offered MFCUs training about the information available through data 
sources such as the Medicaid Management Information System (MMIS), which stores claims  
data that is often used as evidence of fraudulent billing.     
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  13  OIG OVERSIGHT  
In FY 2014, OIG conducted 7 onsite reviews of MFCUs, published  
12 reports, and submitted 2 legislative proposals 
Onsite reviews   
OIG conducted onsite reviews of seven MFCUs in FY 2014, fewer than in other fiscal years.  
OIG conducts these oversight reviews for each MFCU approximately every 5 years to assess 
MFCU compliance with applicable Federal laws, regulations, and policies, and Unit adherence to 
the 12 performance standards.  During onsite reviews, OIG meets with MFCU officials and with 
other key stakeholders familiar with the MFCUs operations, such as the State Medicaid 
agencys PI unit staff and Federal investigators and prosecutors who sometimes partner with the 
Unit. During the onsite visit, OIG reviews the Units operations, including policies, procedures, 
financial documentation, and information about staffing and staff training.  OIG reviews a 
sample of case files to assess (1) the Units compliance and performance in its handling of cases, 
including whether cases fell within the scope of Unit authority; (2) the Units supervisory 
oversight of cases; and (3) the timeliness of its casework.   
Reports on onsite reviews   
In FY 2014, OIG published 12 reports on MFCU onsite reviews that were conducted in 
FYs 2012 through 2014. (See Appendix D for a list of these reports.)  Each report includes 
results from the onsite review; identifies any areas of Unit noncompliance with Federal laws, 
regulations, or policies; identifies any areas in which operations did not adhere to the 
12 performance standards; and includes other observations, as appropriate.  The reports also 
contain recommendations for any corrective action that the Unit needs to take.  Findings from  
these reviews revealed a few common concerns:   
 	  Unit submission of conviction information: Onsite reviews revealed that several Units 
did not submit conviction information to OIG in an appropriate timeframe.  Performance 
Standard 8 notes that Units should submit all pertinent informationincluding charging 
documents, plea agreements, and sentencing orders on MFCU convictionswithin 
30 days of sentencing. 
 
 	  Memorandum of Understanding: Onsite reviews revealed that several Units MOUs 
with their respective State Medicaid agencies did not reflect current law and practice.  
Additionally, a few Units did not always comply with the MOU provisions.  
 
 	  Case file documentation and reviews: Onsite reviews revealed variation in Unit 
practices for maintaining records in case files and for ensuring supervisory review of 
ongoing investigations. The reports identified situations in which case file practices did 
not adhere to performance standards and recommended corrective actions, as appropriate.  
 
Proposal to support MFCUs for the U.S. territories  
The Presidents FY 2015 budget includes an OIG proposal to encourage U.S. territories 
(Puerto Rico, Guam, the Northern Mariana Islands, the U.S. Virgin Islands, and 
American Samoa) to establish MFCUs by eliminating an existing financial disincentive.26   
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  14  OIG OVERSIGHT  
The five territories have not established MFCUs, although Puerto Rico has recently expressed 
interest in doing so. Unlike Medicaid funding for the 50 States and the District of Columbia, 
Medicaid funding to the territories is capped, and the territories routinely use the full amount of 
that funding to pay for Medicaid services and to pay for essential administrative functions.  
Although a MFCU might eventually pay for itself through savings, in the short term a territory 
would need to fund its MFCU using monies that would otherwise have gone to pay for Medicaid 
benefits. A proposal in the Presidents budget would address this budgetary concern by allowing 
the territories to use appropriated funding to establish and operate a MFCU while retaining the 
same amount of appropriated dollars for Medicaid services and essential administrative 
functions.  
Proposal on investigative authority regarding patient abuse and neglect 
Like the Presidents FY 2014 budget, the FY 2015 budget includes an OIG proposal to expand 
MFCUs authority with regard to cases of patient abuse and neglect.27  Under current law, 
MFCUs can investigate such cases only when the complaints involve Medicaid-funded facilities 
(such as hospitals or nursing homes) or board and care facilities (such as assisted living 
facilities). As Medicaid has been increasingly relying on home and community-based services, 
the proposal would permit the investigation and prosecution of patient abuse and neglect arising 
when Medicaid services are provided in either of those settings.  The proposal would give 
MFCUs the same authority in the areas of patient  abuse and neglect that they already have in the 
area of fraud; MFCUs already investigate a large number of cases of fraud in personal care 
services and other fraud cases that arise in the home or community. 
 
 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  15  APPENDIXES  
Appendix A:  Methodology 
We based the information in this report on an analysis of data from  six sources:  (1) QSRs; 
(2) supplemental data collected specifically for this FY 2014 MFCU Annual Report; (3) OIG 
exclusion data; (4) information gathered through onsite reviews; (5) the annual reports of 
individual MFCUs; and (6) recertification questionnaires.  We analyzed data from all six sources 
to describe the outcomes of the MFCUs criminal and civil cases during FY 2014 and in previous 
years when data was available.  We also analyzed  data to describe exclusions from Federal health 
care programs, other observations about the environment in which MFCUs operate, and OIG 
oversight of MFCUs. All statistical information is current as of January 30, 2015, except where 
otherwise noted. 
Data Collection and Analysis 
Review of QSRs. In 2014 and in prior years, MFCUs submitted statistical data to OIG each 
quarter.  In these QSRs, the MFCUs reported data elements such as the number of open 
investigations; the number of persons indicted or charged; the number of criminal convictions; 
the number of civil settlements and judgments; the amounts of criminal and civil recoveries; and 
the number of staff employed.  We reviewed QSRs for FYs 2010 through 2014 to determine the 
number of convictions for fraud and for patient abuse and neglect; the amounts of recoveries 
associated with those convictions; the number of civil settlements and judgments; and the 
amounts of recoveries associated with those civil outcomes.   
Supplemental data collection. We requested additional data from all MFCUs in October 2014.  
We received responses from all 50 Units.  We used this supplemental information to provide 
statistical information about the types of providers that were most frequently convicted in 
criminal cases or involved in civil settlements and judgments in FY 2014.  We determined the 
number of global and nonglobal civil settlements and judgments and the recoveries associated 
with those civil outcomes.  We also used this supplemental data to assess the relationship 
between MFCUs and PI units.  
OIG exclusion data. We reviewed OIG exclusion data to determine the number of Federal health 
care program exclusions that OIG made on the basis of information referred by MFCUs.   
Information from onsite reviews. We examined information gathered during onsite reviews to 
identify other observations about the environment in which MFCUs operate, such as challenges 
in receiving referrals from managed care organizations and the extent to which the new rules on 
payment suspension require more coordination between MFCUs and State Medicaid agencies.  
MFCU Annual Reports.   As a grant requirement, each MFCU must submit to OIG an annual 
report that highlights its activities.28   We reviewed the most recent annual report from each 
MFCU for case examples of types of providers that were frequently convicted (such as home 
health care agencies) and types of providers with which MFCUs were frequently involved in 
civil settlements and judgments (such as pharmaceutical manufacturers).   
   
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  16  APPENDIXES  
Recertification Questionnaires. As part of the MFCU recertification process, each MFCU 
completes a recertification questionnaire that OIG uses to assess whether the MFCU is adhering 
to the performance standards.  As part of this process, each State Medicaid programs PI unit is 
asked to complete a questionnaire that assesses its relationship with its State MFCU.  We  
examined the most recent PI unit questionnaire and MFCU recertification questionnaires.  We  
reviewed responses regarding the relationship between the MFCU and the PI unit including staff, 
trainings, and the frequency and purpose of meetings.  
Limitations 
Where possible, we report information from QSRs.  However, when the QSRs did not offer the 
desired level of specificity, we report information from the supplemental data collection 
instrument.  The information collected from the supplemental data collection instrument differs 
slightly from that reported in the QSRs for some data elements.   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  17  APPENDIXES  
Appendix B:  FY 2014 MFCU Criminal and Civil Outcomes by    
Provider Type 
Table B1:  FY  2014 Outcomes:  Number of Convictions, Settlements  
and Judgments, and Recoveries by Provider Type*  
Criminal  Civil  
Provider Type  Number of  Amount of  Number of  Amount of 
Settlements and 
Convictions   Recoveries   Recoveries  
Judgments  
TOTAL  1,381   $293,949,816  889   $1,961,805,005 
ABUSE AND NEGLECT  
Certified Nursing Aides   101   $32,049   1  $150,000  
Home/Personal Care Aides   0  $0   1  $0  
Nursing Facilities  30   $11,381   5  $374,611  
Registered/Licensed Nurses, 
Physician Assistants, and Nurse  52   $31,472   3  $30,634  
Practitioners  
Other Long-Term Care   12   $10,251   0  $0  
Other  80   $273,244   0  $0  
THEFT OF PATIENT FUNDS  
Certified Nursing Aides   28   $91,523   0  $0  
Nondirect Care    25   $320,487   2  $156,407  
Nurses, Physician Assistants, and 
Nurse Practitioners   7  $62,300   0  $0  
Other  53   $2,014,273   0  $0  
FRAUD:  Facilities  
Hospitals  10   $6,293,981   19   $14,067,261  
Nursing Facilities   9  $8,119,201   14   $4,111,001  
Substance Abuse Treatment Centers  0  $0   2  $26,118,710  
Other Long-Term Care   12   $1,097,246   1  $446,135  
Other   12   $3,909,683  12   $9,716,501  
FRAUD:  Medical Support  
Suppliers of Durable Medical 
Equipment  33   $26,641,609  67   $3,226,887  
Home Health Care Agencies   48   $7,120,440   27   $186,651,599  
Home Health Care Aides   413   $12,533,282   21   $546,790  
Laboratories   0  $0   21   $12,919,426  
Nurses, Physician Assistants, and 
Nurse Practitioners   78   $1,718,242   9  $892,798  
Pharmacies   37   $3,754,868   86   $22,482,173  
Pharmaceutical Manufacturers    0  $0   462   $1,285,025,189 
continued on the next page  
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  18  APPENDIXES  
 
Table B1:  FY  2014 Outcomes:  Number of Convictions, Settlements  
and Judgments, and Recoveries by Provider Type*  
Criminal  Civil  
Provider Type  Number of  Amount of  Number of  Amount of 
Settlements and 
Convictions   Recoveries   Recoveries  
Judgments  
FRAUD:  Medical Support (continued)  
Radiologists   2  $16,879   4  $3,368,733  
Transportation Providers   25  $9,021,762   10   $1,837,856  
Other  95   $113,056,555   25   $2,954,400  
FRAUD: Practitioners  
Chiropractors  3  $1,421,745   2  $48,000  
Counselors/Psychologists   56   $21,794,328   10   $2,704,387  
Dentists  19   $4,163,020   18   $7,824,268  
Optometrists/Opticians  2  $229,455   3  $1,494,214  
Physicians or Doctors of Osteopathy    64   $52,400,623   44   $67,195,597  
Podiatrists   1  $132,876   1  $51,200  
Other  20   $1,451,598   5  $1,263,644  
FRAUD:  Program Related  
Billing Companies   3  $4,378   0  $0  
Managed Care Organizations   4  $61,000   2  $2,327,088  
Medicaid Program Administration   1  $311   2  $2,047,000  
Other  46   $16,159,754   10   $301,772,496  
Source: OIG analysis of supplemental data collection for the FY  2014 MFCU Annual Report, 2015.
  
*This information differs slightly from that reported in the QSRs, through which Units reported 1,318 criminal convictions, 

$293,366,189 in criminal recoveries, 874 civil settlements and judgments, and $1,710,879,440 in civil recoveries.  

   
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  19  APPENDIXES  
APPENDIX C:  Selected FY 2014 Statistical Data 
Table C1: Investigations, Indictments or Charges, Criminal Convictions, 
and Civil Settlements and Judgments by State 
Indictments or   Criminal 
Investigations  Civil 
Charges   Convictions  
Settlements 
State  Abuse Abuse  Abuse 
and 
Fraud   and   Fraud  and   Fraud  and  
Judgments  
Neglect   Neglect   Neglect  
Alabama   16   28   7  4  4  2  10  
Alaska  160   13   35   0  44   0  4 
Arizona  228   81   36   18   28   12   4 
Arkansas  24   84   6  9  5  17   15  
California   671   523   53   61   59   38   20  
Colorado  255   5  6  0  9  1  26  
Connecticut   59   3  12   0  8  0  18  
Delaware  538   86   1  15   0  11   21  
District of 
170   78   25   2  2  1  12  
Columbia  
Florida  600   65   55   26   42   18   34  
Georgia   410   4  4  0  9  0  23  
Hawaii  20   48   0  9  4  6  8 
Idaho   118   6  7  2  11   0  10  
Illinois  230   81   42   14   53   23   23  
Indiana  941   331   55   11   22   7  30  
Iowa  249   21   33   15   28   16   16  
Kansas   95   6  25   3  13   3  22  
Kentucky  118   27   14   13   14   4  18  
Louisiana   366   59   118   14   65   11   40  
Maine  31   8  6  4  5  2  12  
Maryland  283   31   6  7  6  6  22  
Massachusetts  500   112   7  0  19   3  21  
Michigan  483   48   32   7  17   8  16  
Minnesota  170   3  23   2  20   0  19  
Mississippi  79   589   3  31   5  36   11  
Missouri  207   23   9  1  8  0  23  
Montana   26   2  5  2  1  0  12  
Nebraska  104   26   8  8  4  3  15  
Nevada  21   2  8  0  12   2  15  
New  
33  7  1  1  0  3  4 
Hampshire  
New Jersey  395   23   15   5  7  3  13  
New Mexico   192   3  4  0  4  0  21  
New York   618   128   62   80   53   65   66  
continued on the next page  
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  20  APPENDIXES  
Table C1: Investigations, Indictments or Charges, Criminal Convictions, 
and Civil Settlements and Judgments by State 
Indictments or   Criminal 
Investigations  Civil 
Charges   Convictions  
Settlements 
State  Abuse Abuse  Abuse 
and 
Fraud   and   Fraud  and   Fraud  and  
Judgments  
Neglect   Neglect   Neglect  
North Carolina   439   16   5  3  8  2  8 
Ohio  903   287   124   25   88   14   32  
Oklahoma  186   67   14   8  9  8  15  
Oregon   69   13   29   5  26   2  13  
Pennsylvania  315   13   66   0  46   0  12  
Rhode Island   32   19   5  7  13   7  7 
South Carolina   146   34   8  3  11   7  16  
South Dakota   46   3  1  0  1  0  6 
Tennessee  198   43   15   16   14   5  22  
Texas   1,177   126   100   22   85   5  17  
Utah  115   17   3  2  3  2  18  
Vermont   82   18   18   0  12   0  10  
Virginia  373   16   45   6  30   4  23  
Washington   167   8  13   1  10   1  14  
West Virginia   96   29   8  12   7  2  17  
Wisconsin   383   7  5  0  7  1  10  
Wyoming  55   2  3  0  5  1  10  
Total  13,192   3,272   1,185   474   956   362   874  
Source: OIG analysis of QSRs, 2015. 
 
   
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  21  APPENDIXES  
 
Table C2:  Recoveries, Expenditures, and Staff by State  
Recoveries  Expenditures 
State  Staff
Total  Criminal  Civil   MFCU Grant  Total Medicaid  
Alabama  $17,988,911   $249,299   $17,739,613   $1,253,193   $5,454,050,260   10  
Alaska   $644,326   $535,433   $108,892   $1,105,990   $1,546,569,264   8  
Arizona  $538,729   $209,277   $329,453   $2,316,274   $9,452,683,998   20  
Arkansas  $2,228,765   $127,656   $2,101,109   $2,454,100   $5,154,278,818   22  
California  $77,622,975   $22,713,170   $54,909,804   $26,158,835   $68,248,444,914   193  
Colorado   $9,999,945   $84,090   $9,915,855   $1,615,525   $6,265,152,763   17  
Connecticut  $3,030,886   $17,599   $3,013,287   $1,989,924   $7,167,946,629   13  
Delaware   $1,949,634   $106,816   $1,842,817   $1,944,099   $1,805,108,123   17  
District of 
$3,973,338   $7,672   $3,965,666   $2,708,824   $2,524,458,778   21  
Columbia 
Florida   $91,867,057   $3,989,921   $87,877,136   $15,506,674   $20,818,233,200   161  
Georgia  $48,703,251   $7,776,456   $40,926,795   $4,523,320   $9,858,134,878   46  
Hawaii  $3,079,615   $61,241   $3,018,374   $1,301,425   $2,049,769,576   13  
Idaho   $801,858   $104,933   $696,924   $656,937   $1,692,361,521   8  
Illinois   $90,872,897   $1,202,160   $89,670,737   $7,719,034   $17,726,308,920   45  
Indiana  $54,591,557   $2,324,001   $52,267,556   $6,119,574   $9,600,134,668   55  
Iowa   $24,403,658   $987,348   $23,416,309   $1,020,053   $4,110,153,654   8  
Kansas  $27,437,135   $150,269   $27,286,866   $1,330,522   $2,933,837,600   14  
Kentucky  $66,222,772   $1,141,643   $65,081,129   $2,989,940   $8,017,227,454   28  
Louisiana  $245,305,060   $118,815,109   $126,489,951   $5,134,744   $7,337,796,633   52  
Maine  $9,776,295   $19,168   $9,757,127   $728,262   $2,528,826,380   8  
Maryland   $41,493,941   $48,049   $41,445,892   $3,510,342   $9,625,821,402   31  
Massachusetts   $59,771,098   $4,658,134   $55,112,964   $5,470,721   $14,952,760,958   41  
Michigan  $46,562,341   $116,479   $46,445,862   $5,392,509   $14,147,522,772   33  
Minnesota  $18,518,275   $806,716   $17,711,559   $1,539,617   $10,429,856,324   16  
Mississippi   $17,314,766   $299,775   $17,014,991   $3,318,064   $5,016,224,369   33  
Missouri  $8,224,673   $176,421   $8,048,253   $2,047,671   $9,238,680,706   21  
Montana   $438,209   $26,746   $411,463   $721,553   $1,146,046,567   8  
Nebraska   $10,058,620   $19,542   $10,039,078   $881,049   $1,907,477,721   9  
Nevada   $11,292,357   $1,080,007   $10,212,350   $1,887,577   $2,431,932,881   18  
New Hampshire   $4,409,810   $22,780   $4,387,030   $724,113   $1,420,746,975   7  
New Jersey   $45,632,566   $1,105,245   $44,527,321   $4,442,400   $13,193,930,655   31  
New Mexico  $9,389,208   $29,693   $9,359,515   $1,851,073   $4,349,892,086   18  
New York   $378,434,543   $2,452,239   $375,982,304   $45,814,464   $53,915,930,694   294  
North Carolina   $72,432,177   $20,362,133   $52,070,044   $5,190,481   $12,655,046,228   44  
Ohio   $71,166,459   $4,777,300   $66,389,159   $8,830,153   $20,223,303,745   89  
Oklahoma   $18,368,761   $395,659   $17,973,102   $2,391,463   $4,925,190,754   22  
Oregon   $17,025,308   $710,317   $16,314,992   $2,067,044   $7,291,147,501   15.5  
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  22  APPENDIXES  
Table C2:  Recoveries, Expenditures, and Staff by State  
Recoveries  Expenditures 
State  Staff
Total  Criminal  Civil   MFCU Grant  Total Medicaid  
Pennsylvania  $5,707,431   $1,354,491   $4,352,940   $5,352,554   $24,414,853,435   44  
Rhode Island   $3,677,355   $18,417   $3,658,938   $1,192,428   $2,566,378,392   11  
South Carolina   $27,403,805   $519,381   $26,884,424   $1,426,803   $5,596,632,601   16  
South Dakota   $3,853,756   $566   $3,853,190   $409,564   $840,849,947   5  
Tennessee   $62,298,837   $3,979,298   $58,319,539   $4,053,211   $9,654,242,145   35  
Texas   $106,075,376   $82,758,688   $23,316,688   $16,502,689   $32,831,310,090   175  
Utah   $23,725,403   $116,355   $23,609,048   $1,830,431   $2,234,539,587   13  
Vermont   $976,626   $145,457   $831,169   $850,206   $1,570,053,514   7  
Virginia  $64,755,506   $1,758,645   $62,996,861   $11,757,418   $7,980,183,305   93  
Washington  $24,063,858   $245,904   $23,817,953   $3,905,815   $7,522,374,478   32  
West Virginia   $19,608,914   $4,160,695   $15,448,219   $1,267,132   $3,488,266,696   21  
Wisconsin  $49,010,312   $550,803   $48,459,509   $1,359,679   $7,783,215,463   12  
Wyoming  $1,516,673   $46,989   $1,469,685   $485,829   $594,519,949   4  
Total    $2,004,245,629   $293,366,189   $1,710,879,440   $235,051,299   $488,240,409,971   1,957.5  
 
Source: OIG analysis of QSRs, 2015. 

*Expenditures (combined Federal and State) for MFCU operations of $235 million and MFCU reported recoveries of over  

$2 billion translate to a return on investment (ROI) of $8.53 per $1 expended by  the Federal and State Governments for MFCU
  
operations. ROI is calculated as the total dollar amount of recoveries in both civil and criminal cases divided by the total amount of 

grant expenditures by Federal and State governments.   

   
For additional FY 2014 statistical data, please see http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/.
 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  23  APPENDIXES  
Appendix D:  Onsite Reviews Conducted and Reports Published in  
FY 2014 
Onsite Reviews Conducted, FY 2014 
MFCU Reviewed  Onsite Review  Date  
Connecticut Medicaid Fraud Control Unit   October 2013  
Alabama Medicaid Fraud Control Unit  January  2014  
Mississippi Medicaid Fraud Control Unit   January  2014  
Nebraska Medicaid Fraud Control Unit  February 2014  
Iowa Medicaid Fraud Control Unit   April 2014  
New Mexico Medicaid Fraud Control Unit   April 2014  
Ohio Medicaid Fraud Control Unit   April 2014  
Source:  OIG, Work Plan for Fiscal Year 2014. Accessed at http://oig.hhs.gov/reports-and-
publications/archives/workplan/2014/Work-Plan-2014.pdf on April 3, 2015.  
 
FY 2014 Reports on Onsite Reviews  
Report Title   Release Date  OIG Report Number 
West Virginia State Medicaid Fraud Control Unit:  2013 Onsite Review   10/4/2013   OEI-07-13-00080  
Montana State Medicaid Fraud Control Unit:  2012 Onsite Review   10/17/2013   OEI-09-12-00700  
Nevada State Medicaid Fraud Control Unit:  2012 Onsite Review   10/22/2013   OEI-09-12-00450  
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review   12/26/2013   OEI-02-13-00360  
Michigan State Medicaid Fraud Control Unit:  2013 Onsite Review   1/29/2014   OEI-09-13-00070  
Minnesota State Medicaid Fraud Control Unit:  2013 Onsite Review   3/18/2014   OEI-06-13-00200  
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review   4/11/2014   OEI-06-13-00300  
Utah State Medicaid Fraud Control Unit:  2013 Onsite Review   4/16/2014   OEI-09-13-00490  
Nebraska State Medicaid Fraud Control Unit:  2014 Onsite Review   6/13/2014   OEI-07-14-00060  
Indiana State Medicaid Fraud Control Unit:  2013 Onsite Review   7/28/2014   OEI-07-13-00250  
Mississippi State Medicaid Fraud Control Unit:  2014 Onsite Review   8/25/2014   OEI-09-13-00700  
Connecticut State Medicaid Fraud Control Unit:  2014 Onsite Review   9/30/2014   OEI-07-13-00540  
Source:  OIG, Office of Evaluation and Inspections--Reports and Publications--Medicaid Fraud Control Units.  Accessed at 
http://oig.hhs.gov/reports-and-publications/oei/m.asp#mfcu on April 3, 2015.  
 
 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  24  ACKNOWLEDGEMENTS  
This report was prepared under the direction of Richard Stern, Director of Medicaid Fraud Policy 
and Oversight in Washington, D.C.; Kevin Golladay, Regional Inspector General for Evaluation 
and Inspections in the Dallas regional office; and Blaine Collins and Ruth Ann Dorrill, Deputy 
Regional Inspectors General in the Dallas regional office. 
Lyndsay Patty served as team leader for this study.  Other Office of Evaluation and Inspections 
staff who provided support include Maria Balderas, Susan Burbach, Jordan Clementi, and 
Christine Moritz. Office of Management and Policy staff who provided support include 
Alexis Crowley.  Office of Investigations staff provided support.  Office of Counsel to the 
Inspector General staff who provided support include Andrew VanLandingham. 
 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  25  ENDNOTES  
 
1  Social Security  Act (SSA)  1903(q). 

2 One StateNorth Dakotamaintains a waiver under SSA  1902(a)(61) which requires the State to demonstrate to the 
 
satisfaction of the Secretary that  operating a MFCU would not be cost effective because minimal fraud exists and  that 
 
beneficiaries will be protected from abuse and neglect without the existence of a MFCU.  Additionally, U.S. territories do not 

currently operate MFCUs.
   
3 SSA  1903(a)(61). 

4 SSA  1903(a)(6)(B). 

5 OIG,  State Medicaid Fraud Control Units Fiscal Year 2014 Statistical Chart. 

6 Ibid. 

7 SSA  1903(q) & (q)(2); 42 CFR  1007.5 and 1007.9(d). 

8 SSA  1903(q)(1). 

9 OIG,  Medicaid Fraud Control Units. Accessed at  http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/index.asp on 
 
December 9, 2014 

10 SSA  1903(q)(4). 

11 Cases may involve participation  by other Federal  and State law enforcement agencies. 
 
12 42 CFR  1007.11(b)(1) allows Units to receive Federal financial participation for reviewing complaints of the 

misappropriation of patients private funds.  This authority  falls under the Units general duties regarding cases of patient abuse 

and neglect. 

13 In 2014as in other yearsthe total number of settlements exceeded the total number of cases finalized by  MFCUs.  The 

reason is that many global cases result in multiple  settlementsbetween the defendant and each State MFCU that is party to the 

investigation and civil matter.  
 
14 Taxpayers Against Fraud.  States With False Claims Acts.  Accessed at  http://www.taf.org/states-false-claims-acts on February
  
25, 2015. 

15 SSA  1909. 

16 OIG,  State False Claims Act Reviews.  Accessed at  https://oig.hhs.gov/fraud/state-false-claims-act-reviews/index.asp on 

February 25, 2015. 

17 According to SSA  1128, 42 USC  1320a-7, OIG is required to exclude from participation in all Federal health care 

programs individuals and entities convicted of the following types of criminal offenses:  Medicare or Medicaid fraud, as well as 

any other offenses related to the delivery of items or services under Medicare, Medicaid, the Childrens Health Insurance 
 
Program, or other State health care programs; patient abuse or neglect; felony  convictions for other health care-related fraud, 
 
theft, or other financial misconduct; and  felony  convictions relating to unlawful manufacture, distribution, prescription, or 

dispensing of controlled substances.  OIG Exclusions Background  Information.  Accessed at
  
http://oig.hhs.gov/exclusions/background.asp on  April 3, 2015. Accessed at  http://oig.hhs.gov/exclusions/background.asp on 
 
April 3, 2015. 

18 OIG,  The Effect of Exclusion From Participation in Federal Health Care Programs. Special Advisory Bulletin, September 

1999. Accessed at http://oig.hhs.gov/exclusions/effects_of_exclusion.asp on December 9, 2014.  

19 SSA  1936(b)(1), 42 U.S.C.  1396u-6. 

20 CMS, Comprehensive Medicaid  Integrity Plan: Fiscal Years 20142018, p. 3.  Accessed at  http://www.cms.gov/Regulations-
and-Guidance/Legislation/DeficitReductionAct/Downloads/cmip2014.pdf on January 20, 2015. 

21 A Medicaid agencys mere consultation with  a MFCU to discuss an allegation of fraud, or to help the State determine whether 
 
an allegation is credible, does not in itself constitute a credible allegation of fraud.   CMS, Guidance to States on Section 

6402(h)(2) of ACA Program Integrity Provisions, CPI-B 11-04, March 25, 2011. 

22 In States without a MFCU, the  Medicaid agency must refer the case to an appropriate law enforcement agency, such as  the 
 
Medicaid Inspector General.  42 CFR  455.23(d). 

23 Despite this perception, MFCUs reported through their QSRs that referrals from PI units continually increased over the past 4 

years. 
   
24 OIG,  FY 2015  Work Plan, p. 38.  Accessed at  https://oig.hhs.gov/reports-and-publications/workplan/ on  

January 14, 2015.  See p. 38 for  OIG work regarding provider payment suspensions during pending investigations of credible 

allegations of fraud.  

25 Kaiser Family Foundation,  Medicaid Moving Forward. Accessed at  http://kff.org/medicaid/fact-sheet/the-medicaid-program-
at-a-glance-update/ on January 22, 2015.  

26  2015 Fiscal Year 2014 Budget in Brief, Strengthening Health and Opportunity for all Americans, p. 73.  Accessed at
  
http://www.hhs.gov/budget/fy2015/fy-2015-budget-in-brief.pdf on January  14, 2015. 

27 Ibid. 

28  42 CFR 1007.17. 
 
Medicaid Fraud Control Units FY 2014 Annual Report (OEI-06-15-00010)  26