Ohio and Federal Medicaid Fraud and Abuse Enforcement Efforts on the Rise

Federal Enforcement Update

The federal government has new tools at its disposal to combat health care fraud and abuse. In May 2010, President Obama signed the Fraud Enforcement Recovery Act of 2009 (FERA). Although FERA is not specific to Medicaid Fraud, it generally expanded the Department of Justice's authority to prosecute crimes involving federal government assistance. It modified the federal False Claims Act to eliminate the requirement that a false claim be presented to a federal official, or that it directly involves federal funds. It also expanded the authority of the Department of Justice to share information with claimant-whistleblowers and to intervene in pending civil cases. And, it amended the False Claims Act's “reverse false claims” provision to ensure that the knowing retention of an overpayment is a violation. FERA dramatically increased funding for anti-fraud, waste and abuse investigations and prosecutions by increasing enforcement budgets in various agencies by tens, and even hundreds, of millions of dollars.

In the last five years, the United States government has consistently attacked Medicaid fraud and abuse through its civil and criminal investigations and prosecutions. Since 1996, with the enactment of the Health Insurance Portability and Accountability Act (HIPPA), the Secretary of the Department of Health and Human Services and the Attorney General have overseen a national Health Care Fraud and Abuse Control Program (HFCAC). Through HFCAC federal regulators and law enforcement elements overseen by the HHS Inspector General coordinate investigations with state Medicaid Fraud Control Units and other state and local agencies responsible for administering Medicaid.

The federal enforcement statistics, exclusive of the state enforcement efforts and recoveries, have been reported by in the HFCAC Annual Reports as follows.

FY2009 FY2008 FY2007 FY2006 FY2005
Medicaid Money Returned (exclusive of state match) $1.63B $1.00B $1.80B $2.20B $1.47B
Criminal HCF Investigations Opened/Defendants 1,014/1,786 957/1,641 1,548/2,603 836/1,448 935/1,597
Criminal HCF Investigations Pending/ Defendants 1,621/2,706 1,600/2,580 1,612/2,603 1,677/2,713 1,689/2,670
Filed Criminal Charges/Defendants 481/803 502/797 434/786 355/579 382/652
Convictions 583 588 560 547 523
Civil Health Care Fraud Investigations Opened 886 843 776 915 778
Civil Health Care Fraud Investigations Pending 1,155 1,311 743 2,016 1,334

FERA's enactment likely will result in greater enforcement numbers across the board. Recipients of federal funds therefore must be scrupulous in their compliance with federal program requirements, be prepared to respond to government audits, and in the worst cases defend civil or criminal action by whistleblowers, federal regulators and law enforcement.

Ohio Enforcement Update

Ohio has an exceptional record of Medicaid fraud enforcement. The Ohio Medicaid Fraud Control Unit has recovered hundreds of millions of dollars in its accomplished history, and has been recognized as one of the best Medicaid fraud control units in the nation. In 2009, the Ohio Attorney General added 10 new staff positions in the Medicaid Fraud Control Unit. More significant, the unit produced: 223 indictments — up from 164 in 2008; 212 convictions - up from 187 in 2008; $91.2 million in recoveries (new record) — up from $65.2 million in 2008 (previous record). Under the newly elected Ohio Attorney General, Mike DeWine, Medicaid providers should expect increased fraud control investigations and prosecutions.

Finally, looking ahead to the 2011 General Assembly and a new cast of statewide officeholders focused on reducing government waste, Ohio seems poised to have its own false claims act. The last serious attempt to enact an Ohio false claims act, in 2008, withered under fire from various interest groups. As drafted, it allows whistleblowers to bring civil actions in Ohio's common pleas courts on the state's behalf, and recover significant monetary awards — including attorneys' fees and costs, if they prevail. The proposed law was procedurally similar to the federal False Claims Act, and required whistleblowers to file their claims under seal to give the state attorney general time to investigate and determine whether to take action.

The law has many other features, including: significant civil penalties; authorization to recoup administrative, investigative and litigation costs; mandatory self-reporting of false claims; enhanced information sharing between civil and criminal investigations; contingent fee awards for whistleblowers based on the total amount recovered (regardless whether an action is brought by the state attorney general); enhanced whistleblower protections; increased authority for the Ohio Medicaid Fraud Control Unit to initiate, and intervene in, civil false claims cases in state court.

Axelrod Laliberte has extensive experience in compliance matters relating to government programs, defending regulatory, civil and criminal inquiries of recipients of government funds, and litigating such matters in various state and federal courts and tribunals.