This year, as always, the Medicaid Fraud Control Units (MFCUs) released an annual report dissecting the exclusions, enforcements, and overall takeaways from their work throughout the previous fiscal year (FY). This annual report offers a transparent look into the outcomes of Medicaid-related cases with valuable insights that shed light on fraud, waste, and abuse in the healthcare industry overall.
Lower Rates of Conviction, Higher Rates of Recovered Funds
In spite of a dip in convictions, this year’s report reflects a theme of steep monetary penalties. MFCUs recovered $1.2 billion in total, ultimately recovering $3.35 for every $1 spent and even increasing the previous year’s total recovery by approximately $100 million.
Though MFCUs reported a decrease in the volume of civil settlements and judgments in FY 2023, the amount of civil recoveries reached a four-year high. This high recovery rate is particularly notable considering that the number of convictions, exclusions, and settlements decreased across the board. MFCUs reported 1,143 total convictions in FY 2023—a marked decrease from 1,327 convictions in FY 2022. The Office of the Inspector General (OIG) handed down 850 exclusions based on State MFCU cases in FY 2023, making up 40% of the OIG’s 2,112 total exclusions for the year.
Whether these rates remain steady or not, this year’s report sends a clear message that perpetrators of fraud, waste, and abuse can expect to face serious consequences.
Key Takeaways from the 2023 Annual Report
The FY 2023 report continues a trend of year-over-year fluctuation in conviction and exclusion rates since the pandemic began, compared to the steadier—and noticeably higher—conviction and exclusion rates for the five years before FY 2020.
Last year, the OIG noted in a comment to ProviderTrust that FY 2022’s sizable increase in convictions and exclusions could be linked to courts and investigations resuming full-scale operations for the first time since the start of the pandemic. The 1,143 convictions in FY 2023 outnumber the 1,017 convictions in FY 2020, but the conviction rate remains lower than it was pre-pandemic.
This year’s report also shows greater participation from managed care organizations (MCOs) as a key trend. Since FY 2021, fraud referrals from MCOs that cover Medicaid enrollees have increased remarkably (from 2,971 in FY 2021 to 4,068 in FY 2023), and the number of cases that MFCUs open based on those referrals has increased each year as well (from 774 in FY 2021 to 893 in FY 2023).
More highlights from the 2023 annual report include:
- 1,143 total convictions — 814 for fraud, 329 for patient abuse or neglect
- Personal Care Services (PCS) attendants made up 34% of fraud convictions, far more than any other provider type
- 850 individuals or entities excluded from federally funded programs
- 436 civil settlements and judgments
- A total of $1.2 billion was recovered — $963 million for civil cases, $272 million for criminal cases
- MFCUs recovered $3.35 for every $1 spent
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