U.S. Department of Health and Human Services 
 
Office of Inspector General 
 
 
 
 
Medicaid Fraud Control Units   
Fiscal Year 2019 Annual Report 
 
 
Suzanne Murrin 
Deputy Inspector General for Evaluation and Inspections 
March 2020, OEI-09-20-00110  U.S. Department of Health and Human Services 
O  ffice of Inspector General 
 
At a Glance 
 
M arch 2020, OEI-09-20-00110 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
      
Medicaid Fraud Control Units (MFCUs or Units) investigate and prosecute Medicaid provider fraud and patient abuse or 
neglect.  The Department of Health and Human Services Office of Inspector General (OIG) is the designated Federal agency 
that oversees and annually approves Federal funding for MFCUs through a recertification process.  For this report, OIG 
analyzed the annual statistical data on case outcomes (such as convictions; civil settlements and judgments; and recoveries) 
   
that 52 MFCUs submitted to OIG for fiscal year 2019.  Those MFCUs operated in 49 States, the District of Columbia, Puerto 
Rico, and the U.S. Virgin Islands.   
TABLE OF CONTENTS 
 
 
 
 
BACKGROUND  1 
Methodology  2 
CASE OUTCOMES  4 
The total number of convictions in FY 2019 remained consistent with those of previous years  4 
Criminal recoveries slightly decreased from FY 2018  7 
The number of civil settlements and judgments declined for the third consecutive year  7 
Civil recoveries almost tripled from FY 2018  9 
CONCLUSION   10 
APPENDICES   11 
A.  Office of Inspector General Priority Outcome: Maximizing Medicaid Fraud Control Unit   
Effectiveness  11 
B.  Beneficial Practices Described in Office of Inspector General Onsite Reports  12 
C.  Medicaid Fraud Control Unit Case Outcomes and Open Investigation by Provider Type and   
Case Type for Fiscal Year 2019  20 
ACKNOWLEDGMENTS AND CONTACT  27 
ABOUT THE OFFICE OF INSPECTOR GENERAL  28 
ENDNOTES   29 
   
BACKGROUND 
 
 
The function of Medicaid Fraud Control Units (MFCUs or Units) is to investigate and 
prosecute Medicaid provider fraud and patient abuse or neglect.1  The Social Security 
Act (SSA) requires each State to effectively operate a MFCU, unless the Secretary of 
Health and Human Services (HHS) determines that (1) the operation of a Unit would 
not be cost-effective because minimal Medicaid fraud exists in a particular State; and 
(2) the State has other adequate safeguards to protect beneficiaries from abuse or 
neglect.2  In fiscal year (FY) 2019, 49 States, the District of Columbia, Puerto Rico, and 
the U.S. Virgin Islands operated MFCUs.  The State of North Dakota was certified to 
operate a MFCU in FY 2020.3, 4           
MFCUs are funded jointly by Federal and State Governments.  Each Unit receives a 
Federal grant award equivalent to 90 percent of total expenditures for new Units and 
75 percent for all other Units.5  In FY 2019, combined Federal and State expenditures 
for the Units totaled approximately $302 million, of which $227 million represented 
Federal funds.6      
As illustrated in Exhibit 1, MFCU cases typically begin as referrals from external 
sources or are generated internally from data mining.7  MFCU staff review referrals of 
possible fraud and patient abuse or neglect to determine the potential for criminal 
prosecution and/or civil action.  If the Unit accepts a referral for investigation, the case 
may result in various possible outcomes.  Criminal prosecutions may result in 
convictions; civil actions may result in civil settlements or judgments.  Both criminal 
prosecutions and civil actions may include the assessment of monetary recoveries.  
The Office of Inspector General (OIG) has the authority to exclude convicted 
individuals and entities from any federally funded health care program on the basis of 
convictions referred from MFCUs.8  In addition to achieving these case outcomes, 
Units may also make programmatic recommendations to their respective State 
Governments to help strengthen program integrity and efforts to fight patient abuse 
or neglect.   
Exhibit 1: The typical life cycle of a MFCU case. 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Background | 1  Oversight of the MFCU Program 
Reducing Medicaid fraud is a top priority for OIG, and its role in overseeing MFCUs 
helps achieve that priority.  OIG oversees the MFCU grant program by recertifying 
Units, conducting onsite reviews of Units, providing technical assistance to Units, and 
monitoring key statistical data about Unit caseloads and outcomes.  Further, OIG has 
identified enhancing Medicaid program integrityincluding efforts to maximize the 
effectiveness of MFCUsas an OIG Priority Outcome.  (See Appendix A for details.) 
Annually, OIG reviews each Units application for recertification; approval of this 
application is necessary for the Unit to receive Federal reimbursement.9  To recertify a 
Unit, OIG performs a desk review to assess the Units compliance with the Federal 
requirements for MFCUs contained in statute, regulations, and OIG policy transmittals.  
OIG also examines the Units adherence to 12 performance standards, such as those 
regarding staffing, maintaining adequate referrals, and cooperating with Federal 
authorities.10   
OIG further assesses a Units performance by conducting onsite Unit reviews that may 
identify findings and make recommendations for improvement.  During an onsite 
review, OIG also makes observations regarding Unit operations and practices, and 
may identify beneficial practices that may be useful to other Units.  Finally, OIG 
provides training and technical assistance, as appropriate, to Units while onsite.  
OIG also provides ongoing technical assistance and guidance to Units.  These 
activities may include responding to questions from the Units, providing training to 
Units, and issuing policy transmittals to all Units.  OIG also collects and presents 
statistical data reported by each MFCU annually, such as the numbers of open cases, 
indictments, and convictions and amounts of recoveries.  These data can be accessed 
on the OIG website in two formats: a statistical chart and an interactive map. 
Methodology 
We based the information in this report on the FY 2019 Annual Statistical Reports that 
52 MFCUs submitted to OIG, the recertification materials that the MFCUs submitted to 
OIG, and OIG exclusions data.   
We aggregated case outcomes across all Units for FY 2019 and for each of the 
preceding 4 yearsFYs 2015 through 2018.  These outcomes include convictions; civil 
settlements and judgments; and recoveries.  For convictions and recoveries, we 
calculated an average across the 5-year period of FYs 2015 through 2019.  We also 
calculated the return on investment (ROI) for MFCUs.11  We identified the provider 
types with the highest numbers of criminal and civil outcomes in FY 2019 and the 
numbers of exclusions that OIG imposed in FY 2019 on individuals and entities as a 
result of conviction referrals from MFCUs.  We also analyzed MFCU drug diversion 
cases using data for FYs 2015 through 2019.  In addition, we highlight the beneficial 
practices described in each Units more recent onsite review reports, as described in 
Appendix B.   
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Background | 2  Standards 
We conducted this study in accordance with the Quality Standards for Inspection and 
Evaluation issued by the Council of Inspectors General on Integrity and Efficiency.  
OIG inspections of the MFCUs and this annual report differ from other OIG 
evaluations in that they support OIGs direct administration of the MFCU grant 
program, but they are subject to the same internal quality controls as other OIG 
evaluations, including internal and external peer review.   
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Background | 3   
Case Outcomes 
 
The total number of convictions in FY 2019 remained consistent 
with those of previous years 
In FY 2019, MFCU cases resulted in 1,527 convictions, including 1,111 convictions for 
fraud and 416 convictions for patient abuse or neglect.  The distribution of both types 
of convictionsconvictions of fraud and convictions of abuse or neglectremained 
similar to the distributions in previous years (see Exhibit 2). 
Exhibit 2: FY 2019 convictions remained similar to those from the past  
4 years. 
 
Source: OIG analysis of Annual Statistical Reports for FYs 20152019. 
MFCU convictions led to the exclusion of individuals and entities from Federal health 
care programs, broadening the impact of those convictions.  In FY 2019, OIG excluded 
1,235 individuals and entities from participating in Federal health care programs as a 
result of conviction referrals from MFCUs.  This is an increase from the 974 excluded 
as a result of conviction referrals from MFCUs in FY 2018.  When MFCUs make 
referrals to OIG regarding convictions for fraud and patient abuse or neglect in their 
respective States, OIG has the authority to exclude those convicted individuals and 
entities from federally funded health care programs.  Through these referrals, MFCUs 
help ensure that individuals and entities convicted in one State are excluded from 
Medicaid programs in other States, as well as from other Federal programs related to 
health care.12   
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Case Outcomes | 4  Significantly more convictions for fraud involved personal care 
services (PCS) attendants and agencies than any other provider 
type 
Compared to other provider types, PCS attendants and agencies had the highest 
number of fraud convictions in FY 2019.  Fraud convictions involving PCS attendants 
and agencies accounted for 492 of the total 1,111 fraud convictions (44 percent).  
Additional information on the prevalence of Medicaid fraud involving PCS and efforts 
to combat such fraud can be found in OIGs December 2019 Top Management and 
Performance Challenges Facing HHS (p.7).   
Exhibit 3 shows the provider types with the most fraud convictions in FY 2019.  See 
Appendix C for detailed statistics on the number of convictions and recovery amounts 
for criminal cases, as well as MFCU caseloads and outcomes by provider type. 
Exhibit 3: Convictions of PCS attendants and agencies for fraud were 
significantly higher than for any other provider type in FY 2019. 
 
Source: OIG analysis of FY 2019 Annual Statistical Reports. 
Convictions from drug diversion cases continued to increase in  
FY 2019 
Convictions from drug diversion cases increased slightly from 199 in FY 2018 to 206 in 
FY 2019, with associated criminal recoveries of $3 million in FY 2019.  In a Medicaid 
context, drug diversion cases involve investigating the fraudulent billing of Medicaid 
for drugs diverted from legal and medically necessary uses.  MFCUs may conduct 
drug diversion investigations jointly with other State or Federal agencies, such as OIG 
or the U.S. Drug Enforcement Administration.  Exhibit 4 on the next page shows the 
number of convictions associated with drug diversion cases during FYs 2015 through 
2019.   
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Case Outcomes | 5  Exhibit 4: Convictions from drug diversion cases continued to increase in  
FY 2019. 
 
Source: OIG analysis of Annual Statistical Reports for FYs 20152019. 
In FY 2019, more convictions for patient abuse or neglect 
involved nurses or nurse aides than any other provider type 
In FY 2019, convictions of nurses or nurse aides accounted for 184 of the total 416 
convictions for patient abuse or neglect (44 percent).  Exhibit 5 shows the provider 
types with the most convictions for patient abuse or neglect.   
Exhibit 5: In FY 2019, convictions of nurses and nurse aides for patient abuse 
or neglect were significantly higher than any other provider type. 
 
Source: OIG analysis of FY 2019 Annual Statistical Reports. 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Case Outcomes | 6  Criminal recoveries slightly decreased from FY 2018 
Criminal recoveries slightly decreased from $314 million in FY 2018 to $305 million in 
FY 2019, which represents the lowest recovery amount within the 5-year period.13  As 
shown in Exhibit 6, there was a significant spike in criminal recoveries during FY 2017.  
The spike in criminal recovery amounts in FY 2017 was a result of a single, large fraud 
case with a recovery amount totaling $268 million.14    
In FY 2019, the Florida Unit prosecuted a case that resulted in a large amount of 
criminal recoveries.  In this case, a pharmacist was sentenced to 78 months in prison 
and ordered to pay nearly $5 million in restitution for engaging in a fraud scheme.  
The pharmacist submitted false and fraudulent claims for compounded drugs and 
other medications that were not medically necessary and/or were never provided.15    
Exhibit 6: In FY 2019, criminal recoveries decreased below the average for 
FYs 20152019. 
 
Source: OIG analysis of Annual Statistical Reports for FYs 20152019. 
The number of civil settlements and judgments declined for the 
third consecutive year 
In FY 2019, MFCUs were responsible for 658 civil settlements and judgments; this was 
the third consecutive year of decline.  Fewer civil settlements and judgments involving 
pharmaceutical manufacturers accounted for most of the overall decline in the total 
number of civil settlements and judgments in recent years.  As shown in Exhibit 7 on 
the next page, both the total number of civil settlements and judgments and those 
involving pharmaceutical manufacturers declined since FY 2016.   
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Case Outcomes | 7  Exhibit 7: The total amount of civil settlements and judgments in FY 2019 
was the lowest in the 5-year period. 
The number of civil settlements and judgments involving pharmaceutical cases also 
declined during the same period. 
 
Source: OIG analysis  of Annual Statistical Reports for FYs 20152019. 
Nonetheless, more civil settlements and judgments involved pharmaceutical 
manufacturers than any other provider type.  In FY 2019, pharmaceutical 
manufacturers accounted for 162 of the 658 civil settlements and judgments  
(25 percent).  Retail and institutional wholesale pharmacies had the second-highest 
level of civil settlements and judgments (see Exhibit 8). 
Exhibit 8: Pharmaceutical manufacturers had the highest number of civil 
settlements and judgments in FY 2019, followed by retail and institutional 
wholesale pharmacies. 
 
Source: OIG analysis  of FY 2019 Annual Statistical  Reports.  
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Case Outcomes | 8  Civil recoveries almost tripled from FY 2018 
Civil recoveries significantly increased, from $545 million in FY 2018 to $1.6 billion in 
FY 2019, and were above the 5-year average.  Exhibit 9 shows the amounts of civil 
recoveries for FYs 2015 through 2019 in relation to the 5-year average.   
Exhibit 9: In FY 2019, civil recoveries increased above the 5-year average.   
Large monetary settlements or judgments may contribute to annual variability. 
 
Source: OIG analysis of Annual Statistical Reports for FYs 20152019. 
Approximately $1.2 billion (or 72 percent) of the  
Types of Civil Cases 
$1.6 billion in civil recoveries derived from 
A global case involves both the 
global cases.16  The remaining $460 million  
Federal Government and a group 
(28 percent) derived from nonglobal cases.  
of States and is coordinated by 
the National Association of 
Two global cases accounted for a significant 
Medicaid Fraud Control Units.  
portion of the civil recoveries.  In one case 
involving a pharmaceutical manufacturer, the  A nonglobal case is conducted by 
Virginia MFCU partnered with other State and  a Unit individually or with other 
law enforcement partners and is 
Federal agencies to obtain a record recovery for 
not coordinated by the National 
a case involving an opioid drug, Suboxone.17  
Association of Medicaid Fraud 
While the civil portion of the settlement 
Control Units. 
amounted to approximately $700 million, the 
pharmaceutical manufacturer agreed to pay a total of $1.4 billion to resolve its 
potential criminal and civil liability related to the marketing of the opioid addiction 
treatment drug.18  In the second case, 43 States partnered with Federal agencies to 
pursue allegations involving the distribution of unapproved and adulterated drugs by 
a pharmaceutical distributor.  As a result of the investigation, the pharmaceutical 
distributor will pay $625 million, $99.9 million of which is designated for State 
Medicaid programs.19 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Case Outcomes | 9   
CONCLUSION  
 
 
MFCUs play a vital role in fighting fraud in the Medicaid program and in protecting 
facility residents from patient abuse or neglect.  In FY 2019, MFCUs efforts 
contributed to total recoveries of $1.9 billion, with an ROI of $6.41 for every $1 spent.   
MFCUs developed innovative practices to achieve the significant case outcomes 
identified in this report and maximize their effectiveness.  As one technique for 
encouraging MFCU success, OIG identifies beneficial practices during its oversight 
activities that may be considered for adoption by other States.  A list summarizing 
these practices and organized by State is included in Appendix B.  Some beneficial 
practices include:   
  Ensuring Quality Referrals: The Kansas Units nurse investigator examined 
closed complaints of nursing home abuse or neglect that were maintained by 
the State Medicaid agency and arranged for the simultaneous receipt with 
local law enforcement of patient abuse or neglect referrals.   
  Use of Technology: The New York Unit, one of the 20 MFCUs with waiver 
authority to operate a data mining program, established data analytics 
working groups to provide guidance, training, and an assessment of the Units 
data mining efforts.  The groups include (1) the Data Analytics Tools group;  
(2) the Data Sources group; (3) the Fraud and Abuse group; and (4) the 
Governance group.  
  Recommending Program Integrity Improvements: The New Mexico Unit 
consistently made program integrity recommendations as a part of quarterly 
meetings.  One of these recommendations involved a technical change to the 
States managed care organization (MCO) contracts clarifying the Medicaid 
agencys responsibility to refer verified allegations of fraud, waste, or abuse 
in a managed care setting.  
In addition to identifying beneficial practices to spur continued improvement, OIG 
annually recognizes the efforts of one MFCU with the Inspector Generals Award for 
Excellence in Fighting Fraud, Waste, and Abuse.  In 2020, the Arizona MFCU received 
this award for its significant FY 2019 case outcome results, focus on drug diversion 
cases, and successful collaboration with its partners in joint investigations.
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Conclusion | 10   
APPENDIX A 
 
Office of Inspector General Priority Outcome: Maximizing Medicaid 
Fraud Control Unit Effectiveness 
It is a top OIG priority to strengthen the effectiveness of MFCUs as key partners in combating fraud and 
abuse.  As part of its oversight, OIG strives to support the MFCUs in ways that maximize their 
effectiveness.  Over the past few years, OIG has engaged in numerous actions to help drive MFCU 
effectiveness.  These include activities in five categories: (1) enhancing OIG oversight; (2) increasing the 
use of data; (3) expanding the MFCU program to better align with a growing and evolving Medicaid 
program; (4) enhancing MFCU training where it can be of greatest assistance to MFCUs; and  
(5) increasing collaboration between MFCUs and OIG.   
To assess the impact of these efforts, OIG has established two key performance indicators:  
(1) indictment rate; and (2) conviction rate.  The table below shows these rates for FYs 20152019 and 
the target that OIG aims to achieve in FY 2020 and FY 2021.20    
Key Performance  FY 2015  FY 2016  FY 2017  FY 2018  FY 2019  FY 2020  FY 2021 
Indicators  (actual)  (actual)  (actual)  (actual)  (actual)  Target  Target 
Indictment Rate  16.1%  16.3%  17.2%  16.7%  18.8%  18.0%  19.1% 
Conviction Rate  91.2%  89.6%  88.7%  89.8%  90.3%  90.6%  90.8% 
 
Calculations:  
Indictment rate = (total number of criminal cases with indictments or charges 
plus number of nonglobal civil cases open, filed, or referred for filing) 
divided by 
(total number of open cases) 
 
  Conviction rate = (total number of criminal cases resulting in a defendant convicted) 
divided by 
(total  number  of  cases  resulting  in  a  defendant  acquitted,  dismissed,  or 
convicted)   
 
To calculate these measures, OIG aggregates data that Units submit through Annual Statistical 
Reports.  
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix A | 11   
APPENDIX B 
 
Beneficial Practices Described in Office of Inspector General Onsite 
Reports   
This appendix summarizes MFCU practices that OIG has highlighted as being beneficial to Unit 
operations.  Other Units should consider whether adopting similar practices in their States may yield 
similar benefits.   
All of OIGs reports on its onsite reviews of MFCUs are available at https://oig.hhs.gov/reports-and-
publications/oei/m.asp#mfcu.     
STATE   PRACTICE 
REPORT NUMBER  CATEGORY  DESCRIPTION 
Alaska  Successful  Unit stakeholders reported that the MFCU 
OEI-09-16-00430  investigative  Director made efforts to improve communication 
September 2017  partnerships  with agencies such as OIG and the State 
Medicaid agency.  As a result, the number of joint 
OIGMFCU cases tripled from FY 2012 to  
FY 2015.  Also, the Unit collaborated with Federal 
and State partners to investigate allegations of 
PCS fraud that led to convictions and significant 
monetary recoveries. 
  Recommendations  Further, the Unit made program integrity 
for program  recommendations to safeguard against PCS 
integrity  provider fraud, and the State Medicaid agency 
improvements   implemented these recommendations.  
Arizona  Ensuring quality  MFCU staff attended quarterly meetings with the 
OEI-07-15-00280  referrals  State Medicaid agency and MCOs.  These 
December 2015  meetings provided guidance to MCOs about 
what constitutes a quality referral and the types 
of referrals that will result in the MFCUs opening 
a case for investigation. 
Arkansas   Ensuring quality  Outreach by the Unit built relationships with 
OEI-06-12-00720  referrals  stakeholders and aided the Units mission.  For 
September 2013  example, Unit investigators led training for staff 
of the State Office of Long Term Care about how 
to develop a potential referral to the MFCU. 
        continued on the next page 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix B | 12  Beneficial Practices Described in Office of Inspector General Onsite 
Reports (continued) 
STATE   PRACTICE 
REPORT NUMBER  CATEGORY  DESCRIPTION 
California  Ensuring quality  The Unit provided quarterly training for MCO 
OEI-09-15-00070  referrals  representatives that resulted in increased fraud 
February 2016  referrals from MCOs to the Unit. 
 
  Ensuring quality  The Unit hired a field representative to provide 
referrals  outreach and increase the number of fraud 
referrals sent to the Unit.  The field representative 
 
acted as a liaison between the Unit and other 
State agencies and trained staff from these 
agencies about Medicaid fraud and the Units 
role in combating provider fraud and patient 
abuse or neglect. 
  Colocation of Unit  Unit investigators have workstations at an OIG 
and OIG staff  field office; this facilitated the mutual referral of 
cases and improved communication and 
 
cooperation with OIG on joint cases. 
Florida  Colocation of Unit  Unit staff have workstations in an OIG field office; 
OEI-07-15-00340  and OIG staff  this improved communication and cooperation 
June 2016  with OIG on joint cases, including fraud cases 
generated through the U.S. Department of Justice 
(DOJ) Medicare Strike Force. 
Idaho  Use of media  The Units legal secretary monitored media 
OEI-12-18-00320  sources to report  sources for patient abuse and neglect 
August 2019  convictions  convictions.  Although the convictions were a 
result of investigations by local authorities and 
not the Unit, the legal secretary reviewed the 
conviction information and submitted the police 
reports and court documents to OIG.  As a result 
of those efforts, OIG has excluded seven 
individuals from Federal health programs. 
        continued on the next page 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix B | 13  Beneficial Practices Described in Office of Inspector General Onsite 
Reports (continued) 
STATE   PRACTICE 
REPORT NUMBER  CATEGORY  DESCRIPTION 
Kansas  Ensuring quality  The Units nurse investigator reviewed patient 
OEI-12-18-00210  referrals  abuse or neglect complaints that had been 
July 2019  previously closed by the States survey and 
 
certification agency to determine whether the 
complaints warranted further investigation.  In 
addition, the nurse investigator arranged for the 
Unit to receive complaints of patient abuse or 
neglect at the same time that the States survey 
and certification agency sent the complaints to 
local law enforcement agencies.  After reviewing 
the complaints, the nurse investigator would 
contact the law enforcement agencies to help 
determine whether further investigation by those 
agencies or the Unit was warranted.       
Kentucky  Ensuring quality  The Unit regularly met with the State Medicaid 
OEI-06-17-00030  referrals  agency, other State agencies, and MCOs to 
September 2017  encourage fraud referrals and improve 
 
communication and collaboration.  The results 
included improved quality, completeness, and 
timeliness of fraud referrals. 
  Improved staff skills  The Unit created an executive advisor position to 
help Unit attorneys develop litigation skills.  The 
 
executive advisor also mentored new attorneys 
and served as a cochair on Unit prosecutions. 
Maryland  Improved staff skills  The Unit developed an internal boot camp 
OEI-07-16-00140  training program that helped new staff develop a 
September 2016  full understanding of the Units work.  
Experienced MFCU staff gave 1- to 2-hour 
lectures on topics such as civil and criminal 
investigation procedures; interviewing 
techniques; and understanding medical codes.   
        continued on the next page 
 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix B | 14  Beneficial Practices Described in Office of Inspector General Onsite 
Reports (continued) 
STATE   PRACTICE 
REPORT NUMBER  CATEGORY  DESCRIPTION 
Massachusetts  Successful  The Unit developed partnerships with other State 
OEI-07-15-00390  partnerships  and Federal agencies and used clinical experts to 
June 2016  facilitate the investigation and prosecution of 
drug diversion and pharmaceutical cases. 
  Case management  The Unit used its intranet system to streamline its 
tools  administrative processes, such as periodic 
supervisory reviews of case files.  The Unit found 
that this helped improve case management and 
the effectiveness of investigations and 
prosecutions. 
Michigan   Colocation of Unit  The Unit made workspace available to an OIG 
OEI-09-13-00070  and OIG staff  agent.  Colocation facilitated communication 
January 2014  between the MFCU and OIG in their assessment 
 
of potential fraud referrals and their work on joint 
cases. 
  Case management  Unit management and the Michigan Department 
tools  of Licensing and Regulatory Affairs developed a 
streamlined process for referring cases of patient 
abuse or neglect.  This process helped to ensure 
that referrals from the Department of Licensing 
and Regulatory Affairs were consistent with the 
Units statutory functions, thereby promoting 
Unit efficiency and case flow.  
Minnesota   Program integrity  The Unit helped develop legislation to protect 
OEI-06-13-00200  improvements  Medicaid beneficiaries by strengthening 
March 2014  background checks for individuals who serve as 
guardians and conservators of adult Medicaid 
beneficiaries. 
        continued on the next page 
 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix B | 15  Beneficial Practices Described in Office of Inspector General Onsite 
Reports (continued) 
STATE   PRACTICE 
REPORT NUMBER  CATEGORY  DESCRIPTION 
New Mexico  Ensuring quality  Unit management and the State Medicaid agency 
OEI-09-14-00240  referrals  worked closely to develop and implement an 
February 2015  improved referral process that ensures that the 
Unit receives all appropriate fraud referrals 
generated by MCOs. 
  Recommendations  The Unit consistently provided program integrity 
for program  recommendations to the State Medicaid agency 
integrity  during quarterly joint protocol meetings.  One of 
improvements  these recommendations resulted in the inclusion 
of language in MCO contracts that clarified the 
State Medicaid agency role in referring to the 
MFCU all verified allegations of fraud, waste, or 
abuse in a managed care setting.  
New York  Improved staff skills  The Unit developed a written strategic plan to 
OEI-12-17-00340  help Unit staff make informed decisions 
 
September 2018  regarding the optimal use of resources.  The plan 
provides guidance to prioritize certain types of 
investigations, such as criminal investigations that 
are related to systematic patient abuse and 
neglect; fraud allegations against managed care 
companies; and fraud investigations of large 
providers.  The plan also establishes a priority for 
false claims investigations with higher potential 
for monetary recoveries or risk of patient harm. 
  Use of technology   The Unit established data analytics working 
groups to provide guidance, training, and an 
assessment of the Units data mining efforts.  The 
groups include: the Data Analytics Tool Group; 
the Data Sources Groups; the Fraud and Abuse 
Group; and the Governance Group.   
  Improved staff skills  The Unit used moot-court training to train Unit 
attorneys.  This training helped the Unit attorneys 
practice opening arguments to prepare for trial. 
        continued on the next page 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix B | 16  Beneficial Practices Described in Office of Inspector General Onsite 
Reports (continued) 
STATE   PRACTICE 
REPORT NUMBER  CATEGORY  DESCRIPTION 
North Carolina  Improved staff skills  The Unit partnered with another State agency to 
OEI-07-16-00070  create the North Carolina Financial Investigators 
September 2016  Academy.  The academy provided instruction to 
financial investigators on topics such as elements 
of criminal law; search and seizure procedures; 
interviewing; and testifying.  The Unit required all 
of its newly hired financial investigators to attend 
the academy, regardless of previous experience. 
Ohio  Successful  The Unit helped to establish the Ohio Program 
OEI-07-14-00290  partnerships  Integrity Group, which combines the knowledge 
April 2015  and resources of all of the State agencies that are 
responsible for Medicaid program integrity.  In 
addition, the Unit spearheaded the Managed 
Care Program Integrity Group, which meets 
quarterly. 
  Use of technology  The Unit employed a special projects team to 
provide technical support to all of its 
investigative teams. 
Oregon  Ensuring quality  The Unit created a group that provided outreach 
OEI-09-16-00200  referrals  to help increase referrals of patient abuse or 
December 2016  neglect and facilitate Unit work in remote areas 
of the State.  This group provided outreach about 
the Units mission and legal authorities by 
establishing Unit liaisons for each county in 
Oregon and attending multidisciplinary team 
meetings at the county level. 
South Dakota  Outreach activities  The Unit used providers who had previously been 
OEI-07-16-00170  investigated for Medicaid fraud to educate their 
September 2016  peers.  These providers gave presentations 
alongside Unit staff at training conferences; this 
helped to highlight Medicaid billing issues and 
the implications of Medicaid fraud. 
        continued on the next page 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix B | 17  Beneficial Practices Described in Office of Inspector General Onsite 
Reports (continued) 
STATE   PRACTICE 
REPORT NUMBER  CATEGORY  DESCRIPTION 
Texas  Ensuring quality  To help increase the number of referrals, the Unit 
OEI-06-13-00300  referrals  instituted outreach to heighten public awareness 
April 2014  of the Unit and its mission.  The Unit required 
each investigator and investigative auditor to 
make 12 outreach contacts per year. 
Vermont  Successful  The Unit director created provider focus teams in 
OEI-02-13-00360  partnerships  collaboration with the State Medicaid agency.  
December 2013  These teams facilitated existing cases, developed 
provider training, and made program 
recommendations.  
    The Unit director helped create the Vermont 
Elder Justice Working Group, which consisted of 
representatives from State and Federal advocacy 
groups, regulatory agencies, and law 
enforcement agencies.  The groups mission was 
to improve health care for the elderly living in 
long-term care facilities by improving 
communication among stakeholders and law 
enforcement agencies.  
Virginia  Successful  The Units partnerships with the Food and Drug 
OEI-07-15-00290  partnerships    Administration, the Internal Revenue Service, and 
August 2016  the Social Security Administration led to 
successful Medicaid fraud prosecutions, 
particularly with regard to pharmaceutical 
manufacturers, and increased Unit recoveries. 
  Use of technology  The Unit used specialty software designed to 
read the text in a document, analyze it for 
keywords, and systematically code it according to 
criteria established by an analyst.  This improved 
the Units ability to process and track evidence 
collected during investigations and to share that 
evidence with Federal and State partners working 
on joint cases.  
        continued on the next page 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix B | 18  Beneficial Practices Described in Office of Inspector General Onsite 
Reports (continued) 
STATE   PRACTICE 
REPORT NUMBER  CATEGORY  DESCRIPTION 
Washington  Ensuring quality  The Unit worked with the State Medicaid agency 
OEI-09-16-00010  referrals   to revise both the memorandum of 
September 2016  understanding between the Unit and the agency 
and the agencys contracts with MCOs to ensure 
that the Unit received copies of all MCO fraud 
referrals. 
  Recommendations  The Unit used a case closure form to make 
for program  numerous program integrity recommendations 
integrity  to State agencies and tracked the responses to 
improvements  these recommendations in a database.  
West Virginia  Improved staff skills  Unit staff learned new skills and obtained 
OEI-07-13-00080  certifications as Certified Fraud Examiners and 
October 2013  Certified Coding Professionals. 
  Ensuring quality  The Unit focused on managed care by holding 
referrals  meetings with MCO administrators to obtain 
referrals. 
Wyoming  Improved staff skills  The Unit used a MFCU investigator from a 
OEI-09-16-00530  neighboring State to help train its newly hired 
September 2017  investigator.  As part of the training, the 
investigator from the neighboring State observed 
work on active Medicaid fraud cases and met 
with the new investigator, Unit management, and 
attorneys to discuss progress.  This was a cost-
effective training option for the Unit and 
furthered a positive working relationship with the 
neighboring MFCU. 
         
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix B | 19   
APPENDIX C 
 
Medicaid Fraud Control Unit Case Outcomes and Open Investigations 
by Provider Type and Case Type for Fiscal Year 2019 
Exhibit C1: Number of convictions; settlements and judgments; and recoveries by provider type and 
case type 
  CRIMINAL  CIVIL 
Settlements 
Amount of  and  Amount of 
PROVIDER TYPE  Convictions  Recoveries  Judgments  Recoveries 
Patient Abuse or Neglect 
Assisted Living Facility  18  $121,686  0  $0 
Developmental Disability Facility  7  $20,157  1  $1,000 
Hospice  0  $0  0  $0 
Nondirect Care Staff  29  $703,889  0  $0 
Nurse Aide (CNA or Other)  86  $135,164  2  $40,000 
Nursing Facilities  28  $144,959  15  $669,500 
Nurse (LPN, RN, NP) or Physician  98  $149,706  1  $500 
Assistant  
Personal Care Aide or Other Home  45  $55,776  0  $0 
Care Aide 
Other  105  $3,418,029  2  $122,788 
FraudFacility-Based Medicaid Providers and ProgramsInpatient and/or Residential 
Assisted Living Facility  5  $2,088,948  0  $0 
Developmental Disability Facility  1  $14,425  0  $0 
(Residential)  
Hospice   4  $637,403  2  $296,075 
Hospital  2  $8,336,592  37  $41,668,365 
Inpatient Psychiatric Services for  1  $17,733  1  $213,858 
Individuals Under Age 21 
Nursing Facility  8  $57,997  14  $30,765,608 
Other Inpatient Mental Health Facility  0  $0  0  $0 
Other Long-Term Care Facility  0  $0  1  $548,410 
continued on the next page 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix C | 20 
  Number of convictions; settlements and judgments; and recoveries by provider type and case type 
(continued) 
  CRIMINAL  CIVIL 
Settlements 
Amount of  and  Amount of 
PROVIDER TYPE  Convictions  Recoveries  Judgments  Recoveries 
FraudFacility-Based Medicaid Providers and ProgramsOutpatient and/or Day Services 
Adult Day Center  2  $17,405  6  $1,313,325 
Ambulatory Surgical Center   0  $0  0  $0 
Developmental Disability Facility  3  $116,981  5  $7,398,510 
(Nonresidential)  
Dialysis Center   0  $0  0  $0 
Mental Health Facility (Nonresidential)   19  $11,099,104  9  $143,133 
Substance Abuse Treatment Center   4  $359,754  14  $23,080,543 
Other Facility (Nonresidential)   11  $14,467  9  $7,562,486 
FraudLicensed Practitioners 
Audiologist   0  $0  1  $686,000 
Chiropractor   1  $47,086  1  $211,000 
Clinical Social Worker   10  $2,651,143  6  $444,131 
Dental Hygienist   2  $3,536  0  $0 
Dentist   25  $16,842,150  21  $19,553,712 
Nurse (LPN, RN, or Other Licensed)  82  $22,952,138  1  $2,664 
Nurse Practitioner   17  $816,896  1  $445,641 
Optometrist   3  $90,414  3  $54,660 
Pharmacist   11  $796,903  5  $15,945,439 
Physician Assistant   3  $2,355,889  0  $0 
Podiatrist   0  $0  2  $163,870 
Psychologist   14  $7,518,044  4  $1,100,020 
Therapist (Non-Mental Health, PT, ST,  8  $6,215,627  6  $836,050 
OT, RT) 
Other Practitioner  16  $2,301,119  6  $590,895 
FraudMedical Services 
Ambulance   7  $16,408,618  2  $35,285 
Billing Services  1  $44,438  9  $722,599 
continued on the next page 
 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix C | 21 
  Number of convictions; settlements and judgments; and recoveries by provider type and case type 
(continued) 
  CRIMINAL  CIVIL 
Settlements 
Amount of  and  Amount of 
PROVIDER TYPE  Convictions  Recoveries  Judgments  Recoveries 
FraudMedical Services (continued) 
Home Health Agency   47  $62,845,537  14  $16,595,564 
Lab (Clinical)  0  $0  11  $1,663,390 
Lab (Radiology and Physiology)   1  $536,143  0  $0 
Lab (Other)  5  $1,222,737  5  $655,643 
Medical Device Manufacturer   0  $0  23  $17,906,806 
Pain Management Clinic   4  $2,378,326  0  $0 
Personal Care Services Agency  35  $9,759,420  6  $8,260,506 
Pharmaceutical Manufacturer   0  $0  162  $1,180,092,512 
Pharmacy (Hospital)   0  $0  0  $0 
Pharmacy (Institutional Wholesale)   2  $53,034  14  $22,061,954 
Pharmacy (Retail)   32  $9,354,182  101  $158,630,017 
Suppliers of Durable Medical  13  $10,712,116  28  $26,265,141 
Equipment, Prosthetics, Orthotics, and 
Supplies (DMEPOS) 
Transportation (Nonemergency)  26  $2,808,165  11  $1,388,634 
Other  8  $299,707  8  $3,585,632 
FraudOther Individual Providers 
Emergency Medical Technician or  0  $0  0  $0 
Paramedic 
Nurses Aide (CNA or Other)  19  $94,302  1  $1,250 
Optician   0  $0  0  $0 
Personal Care Services Attendant   457  $9,705,245  26  $221,181 
Pharmacy Technician   4  $112,952  0  $0 
Unlicensed Counselor (Mental Health)   27  $1,744,456  1  $1,728 
Unlicensed Therapist (Non-Mental  3  $108,537  1  $1,000 
Health) 
Other  71  $9,015,488  6  $4,692,613 
continued on the next page 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix C | 22 
  Number of convictions; settlements and judgments; and recoveries by provider type and case type 
(continued) 
  CRIMINAL  CIVIL 
Settlements 
Amount of  and  Amount of 
PROVIDER TYPE  Convictions  Recoveries  Judgments  Recoveries 
FraudPhysicians (MD/DO) by Medical Specialty 
Allergist/Immunologist  0  $0  0  $0 
Cardiologist  3  $4,070,058  2  $40,037 
Emergency Medicine  2  $13,410  2  $163,028 
Family Practice   23  $46,454,051  5  $5,547,674 
Geriatrician   0  $0  0  $0 
Internal Medicine   6  $144,937  2  $648,227 
Neurologist   3  $376,000  1  $61,175 
Obstetrician/Gynecologist   1  $15,000  4  $1,031,227 
Ophthalmologist   0  $0  1  $6,650,000 
Pediatrician   1  $77,000  5  $483,645 
Physical Medicine and Rehabilitation   2  $3,139  1  $96,151 
Psychiatrist   3  $90,326  3  $569,371 
Radiologist   0  $0  2  $2,294,406 
Surgeon   0  $0  2  $103,338 
Urologist   0  $0  0  $0 
Other MD/DO   20  $5,629,802  9  $2,343,481 
FraudProgram Related 
Managed Care Organization (MCO)   0  $0  9  $14,699,119 
Medicaid Program Administration   2  $198,765  2  $158,551 
Other  31  $20,718,865  3  $548,808 
TOTAL  1,527  $305,095,878  658  $1,632,077,878 
 
 
 
 
 
 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix C | 23 
  Exhibit C2: Number of open investigations at the end of FY 2019 by provider type and case type 
  OPEN INVESTIGATIONS 
PROVIDER TYPE    Criminal  Civil  Total 
Patient Abuse or Neglect 
Assisted Living Facility  202  0  202 
Developmental Disability Facility   132  3  135 
Hospice   3  0  3 
Nondirect Care Staff  123  0  123 
Nurse Aide (CNA or Other)  525  4  529 
Nursing Facilities   947  38  985 
Nurse (RN, LPN, NP) or Physician Assistant   371  0  371 
Personal Care Aide or Other Home Care Aide   438  0  438 
Other  845  2  847 
FraudFacility-Based Medicaid Providers and ProgramsInpatient and/or Residential 
Assisted Living Facility  44  8  52 
Developmental Disability Facility (Residential)  34  4  38 
Hospice  74  33  107 
Hospital   72  235  307 
Inpatient Psychiatric Services for Individuals Under  10  22  32 
Age 21  
Nursing Facility  132  204  336 
Other Inpatient Mental Health Facility  15  45  60 
Other Long-Term Care Facility  31  31  62 
FraudFacility-Based Medicaid Providers and ProgramsOutpatient and/or Day Services 
Adult Day Center   81  4  85 
Ambulatory Surgical Center   2  7  9 
Developmental Disability Facility (Nonresidential)   23  12  35 
Dialysis Center   0  58  58 
Mental Health Facility (Nonresidential)   282  48  330 
Substance Abuse Treatment Center   125  34  159 
Other Facility (Nonresidential)   103  63  166 
continued on the next page 
 
 
 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix C | 24 
  Exhibit C2: Number of open investigations at the end of FY 2019 by provider type and case type 
  OPEN INVESTIGATIONS 
PROVIDER TYPE    Criminal  Civil  Total 
FraudLicensed Practitioners 
Audiologist   3  1  4 
Chiropractor   17  9  26 
Clinical Social Worker   82  3  85 
Dental Hygienist   2  2  4 
Dentist   300  55  355 
Nurse (LPN, RN, or Other Licensed)  522  4  526 
Nurse Practitioner   68  2  70 
Optometrist   31  8  39 
Pharmacist   58  23  81 
Physician Assistant   33  0  33 
Podiatrist   20  7  27 
Psychologist   71  17  88 
Therapist (Non-Mental Health, PT, ST, OT, RT)  76  22  98 
Other Practitioner   141  21  162 
FraudMedical Services 
Ambulance   84  16  100 
Billing Services   28  67  95 
Home Health Agency   715  95  810 
Lab (Clinical)   88  463  551 
Lab (Radiology and Physiology)   15  32  47 
Lab (Other)  25  201  226 
Medical Device Manufacturer   1  573  574 
Pain Management Clinic   55  21  76 
Personal Care Services Agency   221  17  238 
Pharmaceutical Manufacturer   158  2,733  2,891 
Pharmacy (Hospital)   1  4  5 
Pharmacy (Institutional Wholesale)   20  176  196 
Pharmacy (Retail)   278  667  945 
Transportation (Nonemergency)  230  11  241 
Suppliers of Durable Medical Equipment, Prosthetics,  168  567  735 
Orthotics, and Supplies (DMEPOS) 
Other  79  260  339 
continued on the next page 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix C | 25 
  Exhibit C2: Number of open investigations at the end of FY 2019 by provider type and case type 
  OPEN INVESTIGATIONS 
PROVIDER TYPE    Criminal  Civil  Total 
FraudOther Individual Providers 
Emergency Medical Technician or Paramedic   3  0  3 
Nurse Aide (CNA or Other)  55  0  55 
Optician   3  7  10 
Personal Care Services Attendant   1,760  19  1,779 
Pharmacy Technician   13  0  13 
Unlicensed Counselor (Mental Health)   65  5  70 
Unlicensed Therapist (Non-Mental Health)   8  3  11 
Other  369  45  414 
FraudPhysicians (MD/DO) by Medical Specialty 
Allergist/Immunologist   6  2  8 
Cardiologist   14  14  28 
Emergency Medicine   14  27  41 
Family Practice   265  23  288 
Geriatrician   2  0  2 
Internal Medicine   159  19  178 
Neurologist   33  4  37 
Obstetrician/Gynecologist  25  7  32 
Ophthalmologist   19  11  30 
Pediatrician   46  6  52 
Physical Medicine and Rehabilitation   25  10  35 
Psychiatrist   97  11  108 
Radiologist   11  16  27 
Surgeon   23  6  29 
Urologist   2  2  4 
Other MD/DO  327  86  413 
FraudProgram Related 
Managed Care Organization (MCO)  21  74  95 
Medicaid Program Administration   12  12  24 
Other  114  117  231 
Total  11,695  7,458  19,153 
 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Appendix C | 26 
   
ACKNOWLEDGMENTS AND CONTACT 
 
Acknowledgments 
Christina Lester served as the team leader for this study, and Kira Evsanaa served as 
the lead analyst.  Office of Evaluation and Inspections (OEI) staff who provided 
support include Susan Burbach, Jordan Clementi, Kevin Farber, and Keith Peters. 
We would also like to acknowledge the contributions of other Office of Inspector 
General (OIG) staff, including Alexis Crowley, Lonie Kim, Frank Rogers, and Jessica 
Swanstrom.   
This report was prepared under the direction of Blaine Collins, Regional Inspector 
General for Evaluation and Inspections in the San Francisco regional office, and Abby 
Amoroso and Michael Henry, Deputy Regional Inspectors General, in consultation 
with Richard Stern, Director of the Medicaid Fraud Policy and Oversight Division. 
Contact 
To obtain additional information concerning this report, contact the Office of Public 
Affairs at Public.Affairs@oig.hhs.gov.  OIG reports and other information can be found 
on the OIG website at oig.hhs.gov. 
Office of Inspector General 
U.S. Department of Health and Human Services 
330 Independence Avenue, SW 
Washington, DC  20201 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Acknowledgments and Contact | 27   
ABOUT THE OFFICE OF INSPECTOR GENERAL 
 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-
452, as amended, is to protect the integrity of the Department of Health and Human 
Services (HHS) programs, as well as the health and welfare of beneficiaries served by 
those programs.  This statutory mission is carried out through a nationwide network 
of audits, investigations, and inspections conducted by the following operating 
components: 
The Office of Audit Services (OAS) provides auditing services for HHS, 
either by conducting audits with its own audit resources or by overseeing audit work 
done by others.  Audits examine the performance of HHS programs and/or its 
grantees and contractors in carrying out their respective responsibilities and are 
intended to provide independent assessments of HHS programs and operations.  
These assessments help reduce waste, abuse, and mismanagement and promote 
economy and efficiency throughout HHS. 
The Office of Evaluation and Inspections (OEI) conducts national 
evaluations to provide HHS, Congress, and the public with timely, useful, and reliable 
information on significant issues.  These evaluations focus on preventing fraud, waste, 
or abuse and promoting economy, efficiency, and effectiveness of departmental 
programs.  To promote impact, OEI reports also present practical recommendations 
for improving program operations. 
The Office of Investigations (OI) conducts criminal, civil, and administrative 
investigations of fraud and misconduct related to HHS programs, operations, and 
beneficiaries.  With investigators working in all 50 States and the District of Columbia, 
OI utilizes its resources by actively coordinating with the Department of Justice (DOJ) 
and other Federal, State, and local law enforcement authorities.  The investigative 
efforts of OI often lead to criminal convictions, administrative sanctions, and/or civil 
monetary penalties. 
The Office of Counsel to the Inspector General (OCIG) provides 
general legal services to OIG, rendering advice and opinions on HHS programs and 
operations and providing all legal support for OIGs internal operations.  OCIG 
represents OIG in all civil and administrative fraud and abuse cases involving HHS 
programs, including False Claims Act, program exclusion, and civil monetary penalty 
cases.  In connection with these cases, OCIG also negotiates and monitors corporate 
integrity agreements.  OCIG renders advisory opinions, issues compliance program 
guidance, publishes fraud alerts, and provides other guidance to the health care 
industry concerning the anti-kickback statute and other OIG enforcement authorities.
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  About the OIG | 28   
ENDNOTES 
 
 
 
1 Social Security Act (SSA)  1903(q)(3)(4).  Regulations at 42 CFR 1007.11(b)(1) add that a Units responsibilities 
may include reviewing complaints of misappropriation of patients private funds in residential health care facilities.  
Unit investigations of patient abuse and neglect are limited to incidents occurring in: (1) health care facilities that 
receive Medicaid payments; and (2) board and care facilities, which are residential settings that receive payment 
on behalf of two or more unrelated adults who reside in the facility and for whom nursing care services or a 
substantial amount of personal care services (PCS) are provided.  SSA  1903(q)(4). 
2 SSA  1902(a)(61). 
3 The SSA authorizes the Secretary of HHS to award grants (SSA  1903(a)(6)) and to certify and annually recertify 
the Units (SSA  1903(q)).  The Secretary delegated this authority to OIG.  See also 42 CFR 1007.15.  Units must 
meet a number of requirements established by the SSA and Federal regulations.  For example, each Unit must: be 
a single, identifiable entity of State Government, separate and distinct from the State Medicaid agency  
(SSA  1903(q)(2); 42 CFR 1007.5(a) and 1007.9(a)); employ an interdisciplinary staff that consists of at least an 
investigator, an auditor, and an attorney (SSA  1903(q)(6); 42 CFR 1007.13); develop a formal agreement, such as 
a memorandum of understanding, describing the Units relationship with the State Medicaid agency  
(42 CFR 1007.9(d)); and have either statewide authority to prosecute cases or formal procedures to refer suspected 
criminal violations to an agency with such authority (SSA  1903(q)(1); 42 CFR 1007.7).  
4 The territories of American Samoa, Guam, and the Northern Mariana Islands have not established Units.  Puerto 
Rico and the U.S. Virgin Islands were certified to operate in FY 2019.   
5 SSA  1903(a)(6).  For a Units first 3 years of operation, the Federal Government contributes 90 percent of 
funding and the State contributes 10 percent.  Thereafter, the Federal Government contributes 75 percent and the 
State contributes 25 percent. 
6 OIG analysis of FY 2019 MFCU Annual Statistical Reports. 
7 42 CFR 1007.20.  To conduct data mining, MFCUs must receive approval from OIG.  As of February 2020,  
20 MFCUs were approved for data mining.  HHS OIG, Data Mining Applications, n.d., 
https://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/data-mining.asp.  Accessed on February 4, 2020. 
8 SSA  1128, 42 U.S.C. 1320a-7.  See also HHS OIG, Background Information, n.d., 
https://oig.hhs.gov/exclusions/background.asp.  Accessed on January 22, 2020. 
9 42 CFR 1007.15. 
10 MFCU performance standards are published at 77 Fed. Reg. 32645 (June 1, 2012).   
11 To calculate the ROI for MFCUs, we first calculated the total recoveries by adding the $305 million in criminal 
case recoveries to $1.6 billion in civil case recoveries.  We then divided the $1.9 billion in total recoveries by the 
total MFCU grant expenditures of $302 million, resulting in the overall ROI of $6.41. 
12 The list of OIG-excluded individuals or entities can be found on the OIG website.  HHS OIG, LEIE Downloadable 
Databases, n.d., https://oig.hhs.gov/exclusions/exclusions_list.asp.  Accessed on January 22, 2020. 
13 Recoveries, which are defined as the amount of money that defendants are required to pay as a result of 
settlement, judgment, or prefiling settlement in criminal and civil cases, may not reflect the actual collection 
amount.  Recoveries may involve cases that include participation by other Federal and State agencies. 
14 One large, 268-million-dollar case prosecuted in FY 2017 accounted for about 39 percent of all criminal 
recoveries in FY 2017.  This case came from the Texas MFCU, which prosecuted the case involving a doctor and 
other codefendants who defrauded Medicaid and Medicare by improperly recruiting individuals and falsifying 
medical documents. 
 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Endnotes | 29 
   
 
15 DOJ, South Florida Pharmacist Sentenced to Over Six Years in Prison for Role in $5 Million Compounding 
Pharmacy Scheme, November 29, 2018, https://www.justice.gov/opa/pr/south-florida-pharmacist-sentenced-
over-six-years-prison-role-5-million-compounding-pharmacy.  Accessed on January 15, 2020. 
16 To calculate the percentages for civil global and nonglobal recoveries, we used the total civil recoveries of  
$1,632,077,878.  The dollar values in civil recoveries were rounded to the nearest tenth.  Total civil recoveries 
accounted for $1.632 billion and global cases accounted for $1.172 billion in FY 2019. 
17 In a July 2019 press release, DOJ noted that this was the largest recovery in a case concerning an opioid drug in 
U.S. history.  DOJ, Justice Department Obtains $1.4 Billion from Reckitt Benckiser Group in Largest Recovery in a 
Case Concerning an Opioid Drug in United States History, July 11, 2019, https://www.justice.gov/opa/pr/justice-
department-obtains-14-billion-reckitt-benckiser-group-largest-recovery-case.  Accessed on February 28, 2020. 
18 Ibid. 
19 National Association of Medicaid Fraud Control Units, AmerisourceBergen Corporation Pays $625 Million To 
Settle Allegations of Distributing Unapproved and Adulterated Drug, October 1, 2018, 
https://www.namfcu.net/assets/files/press-releases/AmerisourceBergen%20Press%20Release.pdf.  Accessed on 
January 7, 2020. 
20 Since the publication of the Medicaid Fraud Control Units Fiscal Year 2018 Annual Report, we have amended the 
indictment and conviction rates for FYs 20152018 to reflect the most current data as revised by the Units. 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report 
OEI-09-20-00110  Endnotes | 30