Medicaid Fraud

Medicaid fraud occurs when a provider knowingly submits false claims to the Medicaid program to receive unauthorized payments. Since Medicaid is a government-funded insurance program, this is considered defrauding the government. Here are some examples of Medicaid fraud:

• Billing for unnecessary services: Billing for medical services that are not medically necessary.
• Double billing: Billing for the same service twice.
• False cost reports: Including costs not incurred, such as personal expenses, in Medicaid claims.
• Kickbacks: Receiving payment in exchange for patient referrals.
• Phantom billing: Charging for services that weren’t provided.
• Unbundling: Charging separately for services that should be billed together.
• Upcoding: Billing for more expensive procedures than were actually performed.

Submitting false claims to the Medicaid program can result in imprisonment, criminal fines and administrative civil monetary penalties.  People who report Medicaid fraud they observe may be able to receive substantial rewards.

Who do I report Medicaid fraud to?

Medicaid fraud can be reported to the following governmental entities:

• State Medicaid Fraud Control Unit (MFCU)
• U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG)
• Your state attorney general’s office
• A federal district court

A qui tam case is filed in federal district court “under seal,” so only the government is aware of the case while they investigate.

Qui tam submissions can help hold wrongdoers accountable for fraud. If you are thinking of reporting healthcare fraud, speaking to a whistleblower attorney can help you understand your options. The attorneys at Motley Rice have represented numerous individuals reporting fraud.

Medicaid Fraud Control Units (MFCUs), located in state Attorneys General offices, investigate and prosecute Medicaid fraud. The U.S. Department of Health and Human Services (HHS) oversees each MFCU.

MFCUs investigate a variety of providers, including dentists, doctors, home health agencies, laboratories, medical equipment companies, medical transportation companies, mental health professionals, nurses, pharmaceutical makers, pharmacies and others. Medicaid beneficiaries may commit fraud, but federal law does not allow MFCUs to investigate and prosecute them unless they are plotting with a Medicaid provider to defraud the program.

Some events that may trigger a Medicaid fraud investigation include:

• Audits
• Billing irregularities
• Internal reports of potential misconduct
• Qui tam cases
• Referrals from other health care providers
• Third-party complaints

Medicaid fraud may be charged as a felony, depending on the scale and intent. A conviction for Medicaid fraud can result in criminal penalties of up to 10 years in prison per offense, fines, restitution, exclusion from participation in federal healthcare programs and the loss of medical license.

Most fraud lawsuits involve violations of one or more of the following federal statutes:

• Anti-Kickback Statute (AKS): Paying for patient referrals (remuneration) is illegal under the AKS. The law imposes criminal penalties on doctors who pay kickbacks and those who receive or solicit them. Penalties can include fines, imprisonment and exclusion from participation in Medicaid and other federal healthcare programs.
• Civil Monetary Penalties Law: This federal law authorizes HHS-OIG to impose civil penalties of $10,000 to $50,000 for each violation of the Anti-Kickback Statute. Imposed penalties are plus three times the amount of the remuneration and exclusion from federal healthcare programs.
• False Claims Act (FCA): Each time an item or service is billed to Medicaid, it counts as a claim under the FCA. Filing false claims can lead to fines of up to three times the government’s losses, plus civil penalties from $14,308 to $28,619 for each claim filed.  Those who submit false claims to Medicaid may also face penalties of imprisonment and fines under the law’s criminal provisions.
• Health Care Fraud Statute: Under the Health Care Fraud Statute, it is illegal to knowingly defraud a health care benefit program like Medicaid. Healthcare fraud prosecuted under this law is punishable by up to 10 years in prison and up to $250,000 in criminal fines.
• Patient Access and Medicare Protection Act: This law added stiffer penalties to the Anti-Kickback Statute for those who buy, sell and distribute Medicare and Medicaid numbers or other health identifiers. Individuals violating the Patient Access and Medicare Protection Act face up to 10 years in prison and a $500,000 fine. Corporations can be fined as much as $1,000,000.
• The Stark Law: This Law forbids doctors from referring patients to entities where the referring doctor has a financial interest for medical services paid by Medicare or Medicaid. Those who violate the Stark law may be fined and prevented from participating in federal healthcare programs.  This law is also known as the Physician Self-Referral Law.

The severity of penalties for Medicaid fraud typically depends on the nature and extent of the wrongdoing and whether the fraud resulted in patient harm.

Reporting Medicaid fraud is critical because doing so protects taxpayer money, helps Medicaid beneficiaries receive quality healthcare and enables the healthcare system to function more fairly and efficiently. Whistleblowers should consider reporting Medicaid fraud for several important reasons:

• Obtain rewards: Whistleblowers may be entitled to monetary rewards if the government’s case is successful. Under the False Claims Act, they may be eligible to receive 15% to 30% of the recovered funds. These penalties are adjusted for inflation and can be substantial.
• Protect taxpayer dollars: Medicaid fraud wastes billions in public funds. According to a 2023 CNBC report, Medicare and Medicaid fraud cost taxpayers more than $100 billion each year.
• Prevent patient harm: Medicaid fraud prevents enrollees from receiving services they need and providers from being paid for the services they perform. Fraudulent practices can lead to substandard or unnecessary medical care, higher health insurance premiums and increased taxes.
• Legal protections: Whistleblowers are protected from retaliation under federal law. Retaliation might include being subject to demotion, discharge, discrimination, harassment, suspension, termination or threats.

How a Medicaid fraud attorney can help

A Medicaid fraud attorney can be beneficial for many reasons. Medicaid fraud laws are extremely complex. A knowledgeable attorney can help whistleblowers understand their rights and obligations. In addition, whistleblowers must have an attorney to file a qui tam lawsuit.

A lawyer familiar with Medicaid fraud can help protect your rights, help you understand the legal requirements of a qui tam lawsuit, increase the chances of success and maximize your potential reward. 

Motley Rice’s whistleblower attorneys have represented thousands of individuals who strive to hold companies and individuals accountable for their unethical and illegal activity.

Our attorneys have experience representing a variety of whistleblowers. We’ve represented individuals who have blown the whistle on organizations such as:

• Banks and other financial services companies
• Companies that receive government grants, loans or financing
• Defense contractors and other government contractors
• Healthcare providers
• Major pharmaceutical companies
• Securities and commodities issuers and broker-dealers
• Tobacco companies

If you have information or evidence of fraudulent or illegal activity within an organization, discuss your options with a whistleblower lawyer as soon as possible.

Read more about our whistleblower experience.