It would be interesting to know which is growing faster, the Medicaid program itself or the state-run legal and investigative team charged with rooting out and prosecuting the fraud, waste and abuse that appear on pools of dollars like algae on a still pond. My guess is the Medicaid Fraud Control Unit (MFCU), now around 100 people, has actually grown faster than the underlying program it polices.
Does that mean a growing Medicaid program is generating more fraud? Or does it mean the problems are always there and a more numerous and aggressive enforcement staff can bring more cases? The second argument was the one always used on me when MFCU argued for more budget during my time as administrator in the Office of Attorney General.
In 1983 the team started with about a half dozen staff and recoveries that year were minuscule, but these are cases that take time to investigate and build. Over 35 years that total has reached almost $2 billion, although one big year (2012) accounted for almost half of that. The $14.4 million it will spend in each of the next two years is over 25 percent of the entire budget for the OAG.
None of the money comes from state taxpayers, but as is often noted we are all federal taxpayers as well. Its recoveries exceed its cost. Overall it has returned hundreds of millions of ill-gotten gains to various treasuries. Its deterrence effect is hard to measure but has to be included in any assessment.
In 2009 the unit started publishing its own annual reports, giving each Attorney General (a.k.a. Aspiring Governor) a chance to print his photo and bask in the glow of success MFCU usually throws off. By the time the first report was published, Bob McDonnell was already running for Governor so it wasn’t his photo. Still, I’m not surprised these reports started with an election year and haven’t stopped.
That first one from 2009 showed a staff of just under 50 people and a $6.6 million spend (way above where I left it in 2002), reporting 16 convictions and almost $27 million in restitution. That was substantially below the totals for 2007 and 2008, but there are no annual reports for those years to dig into why. When you go to the 2017 report, you find the staff went up to just below 100 persons, the budget to just below $12 million, but recoveries were under $21 million that year.
To be fair, there are wide swings from year to year so the report does look at multi-year averages. (In the most recent example, above, they are happily boosting their average with that one phenomenal year 2012). There is also a large Elder Abuse and Neglect Squad that is focused on quality versus money, although monetary recoveries are generated. The MFCU now has an outreach and education team that is as large as the entire 1983 unit (with more brochures with more photos of smiling AG’s).
The biggest case for the Virginia unit was an investigation of Abbott Labs, accused of marketing a drug for unapproved uses and ordered to repay $1.5 billion during 2012. The move into pharmaceutical issues is one reason for the explosive growth. But reading the annual reports, you see summaries of the cases you would expect, mainly providers billing for services they did not deliver or “upcoding” their services to get paid more than allowed.
The 2017 report also describes an ongoing effort with the Social Security Administration to combat disability fraud, saving both Medicaid and Social Security dollars. Watch that grow.
Growing government grows more government, and MFCU is a classic example of that. As noted, the push was on almost 20 years ago to add staff and tweak the authority to bring in more recoveries. The one positive development I can take partial credit for was the hiring of a new director, still there 19 years later, who was a former police officer and not (ahem) an attorney. Bumping into him in the Charlotte airport Wednesday sparked my dive into his annual reports today, which I had not previously seen and commend to your attention.
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