Criminal Medicaid Fraud

Medicaid is a federal/state cost-sharing program that provides health care to people who are unable to pay for such care. In Texas, the Medicaid program is administered by the Texas Health and Human Services Commission.

More than 3.7 million Texans are eligible for Medicaid, and there are more than 57,000 active Medicaid providers. A provider can be any person, group of people, or health care facility that supplies medical services to Medicaid recipients. Providers include doctors, medical equipment companies, podiatrists, dentists, licensed professional counselors, hospitals, adult day care centers, nursing homes, clinics, pharmacies, ambulance companies, case management centers and others.

What is Medicaid Fraud

These are examples of fraud:

  • billing Medicaid for X-rays, blood tests and other procedures that were never performed or falsifying a patient’s diagnosis to justify unnecessary tests;
  • giving a patient a generic drug and billing for the name-brand version of the medication;
  • giving a recipient a motorized scooter and billing for an electric wheelchair, which can cost three times more;
  • billing Medicaid for care not given, for care given to patients who have died or who are no longer eligible, or for care given to patients who have transferred to another facility;
  • transporting Medicaid patients by ambulance when it is not medically necessary;
  • requiring vendors to “kick back” part of the money they receive for rendering services to Medicaid patients (kickbacks may also include vacations, merchandise, etc.);
  • billing patients for services already paid for by Medicaid.

Activities of this nature violate federal and state criminal laws and can result in significant fines and/or incarceration. Those convicted of fraud may also lose their status as Medicaid providers.

The Medicaid Fraud Control Unit

The Texas Medicaid Fraud Control Unit (MFCU) was created in 1979 as a division of the Office of the Attorney General. The Attorney General’s Medicaid Fraud Control Unit stands ready to investigate these allegations and bring perpetrators to justice.

The unit has four principal responsibilities:

  • investigating criminal and civil fraud by Medicaid providers;
  • investigating physical abuse and criminal neglect of patients in health care facilities licensed by the Medicaid program, including nursing homes and Texas Department of Aging and Disability Services homes;
  • prosecuting criminal fraud by Medicaid providers or assisting local and federal authorities with such prosecution;
  • investigating fraud within the administration of the Medicaid program.

MFCU does not look into fraud committed by Medicaid recipients. The Texas Health and Human Services Commission Office of Inspector General is responsible for investigating Medicaid recipient fraud.

Abuse of Medicaid Patients

It is a sad fact that too many Medicaid patients, especially the elderly, are physically abused or neglected by some health care providers. In many cases, an abused person is totally dependent on the abuser and is afraid to complain.

These are some of the warning signs of physical abuse, sexual abuse and criminal neglect:

  • cuts, black eyes, bruises and burns, especially when the caregiver cannot adequately explain how they happened (burns or bruises in an unusual pattern may indicate the use of cigarettes, instruments or similar items);
  • patients fear being alone with caregivers;
  • reports of slapping, hitting, kicking, or biting, or of sexual abuse;
  • difficulty sitting or walking;
  • pregnancy.

Drug diversion is another form of abuse. It is the simple theft of drugs that deprives a patient of proper medication. Drug diversion includes:

  • a health care worker selling a patient’s medication, keeping it for him/herself or throwing it away;
  • a doctor selling prescriptions;
  • a nurse ordering medication for patients without a doctor’s approval, and intercepting delivery of the medication for the nurse’s use.

Reporting Suspected Fraud or Abuse

If you have a reason to believe that someone is defrauding the Medicaid program or is abusing a Medicaid recipient, contact the Medicaid Fraud Control Unit headquarters in Austin or one of the field offices.

You can also report the abuse or neglect to the Texas Department of Aging and Disability Services by calling (800) 458-9858. You can also contact local or state law enforcement.

A CRIMINAL OFFENSE: If you own or work in a nursing home or other facility and believe that a resident has been or may be the victim of abuse or neglect, you must report it. Failure to report suspected abuse or neglect is a Class A misdemeanor (Texas Health & Safety Code Section 242.122).

MEDICAID FRAUD DRIVES UP THE COST OF HEALTH CARE FOR ALL OF US. We each have a moral responsibility and a legal duty under Texas law to report Medicaid fraud.

Revised: March 01 2012