The HHS Office of Inspector General (OIG) releases an annual report describing the current state of Medicaid Fraud Control Unit (MFCU) activities, convictions, and recoveries. These agencies are in charge of protecting the integrity of Medicaid and federal programs by investigating and prosecuting provider fraud and patient abuse or neglect.

In this post, we will take a look at some of the statistics from the FY 2019 report and break down MFCU referrals and trends in fraud increases and convictions. 

FY 2019 MFCU Annual Report 

According to the FY 2019 Medicaid Fraud Control Units (MFCU) Annual Report, MFCUs recovered $1.9 billion, equating to $6.41 for every $1 spent. The report is broken up into a few main categories such as convictions, civil settlements and judgments, excluded individuals and entities, and civil recoveries. 

Medicaid Fraud Control Units Fiscal Year 2019 Annual Report

The Department of Health and Human Services Office of Inspector General (OIG) is the designated federal agency that oversees and annually approves funding for MFCUs through a recertification process. Fifty-two MFCUs submitted to OIG for the fiscal year 2019. Those MFCUs operated in 49 States, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

The Lifecycle of MFCU Cases 

In the report, HHS OIG describes the relationship and main components of a typical MFCU case life cycle. The process was described in the following three categories: 

MFCU Referral Sources 

  • Public
  • State Medicaid Agency
  • Other Federal and State Agencies
  • MFCU Data Mining

MFCU Actions

  • Review Referrals 
  • Investigation is Conducted
  • MFCU Pursues Criminal Prosecution or Civil Action

Potential MFCU Investigation Outcomes 

  • Convictions 
  • Civil Settlements and Judgments 
  • Criminal or Civil Recoveries
  • OIG Excluded Individuals and Entities 

2019 MFCU Case Convictions and Excluded Individuals and Entities  

Medicaid Fraud Control Unit case convictions stayed relatively consistent with former numbers with a total of 1,527 last year. Case convictions are split up between two categories: fraud and patient abuse or neglect. Fraud convictions accounted for 73 % of all case convictions in 2019, and are focused on maintaining the integrity of federal and state healthcare programs from HHS OIG. Many of the objectives aimed at reducing fraudulent activities in healthcare can be found in the latest OIG Semiannual Report to Congress

MFCU convictions led to 1,235 excluded individuals and entities in 2019, an increase from 974 the previous year. The path of exclusion from a state program begins with MFCU referrals to OIG regarding convictions for fraud and patient abuse or neglect in their respective states, and from there HHS OIG has the authority to exclude those convicted individuals and entities from federally funded health care programs.

Through this process, MFCUs ensure that convictions in each state are taken into consideration for exclusion at a federal level by being named to the OIG List of Excluded Individuals and Entities (LEIE)

Fraud Conviction Increases Involving Personal Care Service Attendants and Agencies

According to HHS OIG, Personal Care Services provide a “benefit for the elderly, people with disabilities, and people with chronic or temporary conditions. It assists them with activities of daily living and helps them remain in their homes and communities.” Examples of PCS include bathing, dressing, light housework, money management, meal preparation, transportation, and more. 

Compared to other provider types, PCS attendants and agencies had the highest number of fraud convictions in 2019. In fact, this specific group accounted for 44% of the total 1,111 fraud convictions from 2019. When you take a look a the dramatic increase in convictions, especially in comparison to other services and specific clinicians, MFCU and HHS OIG will continue to keep a close watch on this group going forward. 

Increases in Nurse and Nurse Aid Patient Abuse or Neglect Convictions

In FY 2019, convictions of nurses and nurse aides for patient abuse or neglect were significantly higher than any other provider type, accounting for 184 of the total 416 convictions. Historically, we have seen that nurses make up a large number of excluded individuals and that primary source verification of their credentials and ongoing disciplinary action or sanctions screening is essential to protect patients and beneficiaries and prevent large fines for healthcare organizations. 

Protecting individuals served by HHS programs from abuse, neglect, and unsafe conditions are central to OIG’s mission. Oversight work to ensure safety and well-being is particularly important for facilities and home-based programs that care for the elderly, the terminally ill, and other vulnerable populations. 



FY 2019 Criminal Recoveries from MFCU Cases

Criminal recoveries decreased slightly from 2018 to 2019 but represented the lowest amount in the last 5 years at $305 million. In 2019, a large case from Florida accounted for a significant amount of criminal recoveries, totaling $5 million in restitution. This case involved a pharmacist who was sentenced to 78 months in prison for submitting false and fraudulent claims for compounded drugs and other medications that were not medically necessary and/or were never provided. 

Civil Settlements and Judgments from MFCU Cases Decline in 2019

Civil settlements and judgments from MFCU cases have declined for the third straight year, resulting in 658 in total for FY 2019. Figures have shown that pharmaceutical manufacturers are still accounting for the majority of these settlements and judgments, but have been declining since a significant spike in 2016.

Pharmaceutical manufacturers made up 162 of the total number, with retail and institutional wholesale pharmacies closely behind for civil settlements and judgments from MFCU cases. 


Significant Increases in Civil Recoveries from MFCU Cases in 2019

Civil Recoveries from MFCU cases almost tripled in a year’s time from $545 million (2018) to $1.6 billion in 2019. Civil recoveries are split between two categories – global and nonglobal civil cases. 

Global Civil Cases involve both the federal government and a group of states and is coordinated by the National Association of Medicaid Fraud Control Units. 

NonGlobal Civil Cases are conducted by a Unit individually or with other law enforcement partners and are not coordinated by the National Association of Medicaid Fraud Control Units.

$1.2 billion (72%) of FY 2019 civil recoveries came from global civil cases, with the largest recovery in a case concerning an opioid pharmaceutical manufacturer. Another large global case involved 43 state partnerships with federal agencies to pursue allegations involving the distribution of unapproved and adulterated drugs by a pharmaceutical distributor totaling $625 million ($99.9 million designated for state Medicaid programs). 


Smarter and Safer Healthcare for Everyone

Medicare and Medicaid are among the largest federal programs in the United States, both in terms of expenditures and individuals served. One in five Americans (approximately 73 million people) receives care through Medicaid at a cost of $560 billion per year. 

To promote safety and more sophisticated means of identifying any fraud, waste, and abuse in federal and state healthcare programs, MFCUs and HHS OIG are focused on utilizing the latest technology and insights to make informed decisions. 

It is our mission at ProviderTrust to partner with healthcare organizations to gather better data to quickly identify any risks within their healthcare populations. We’ve built solutions to help solve complex problems in healthcare that continue to protect the most vulnerable populations in healthcare. 


Looking for more information on identifying excluded individuals and entities?

Learn More About OIG Exclusion Monitoring