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What is Medicaid Fraud?

Medicaid is state-managed health insurance for qualifying low-income, disabled individuals and children and families. Fraud can be committed by providers or clients of Medicaid. Medicaid fraud is an intentional deception or misrepresentation made by an individual with the knowledge that the deception or misrepresentation may result in excess payments. Medicaid fraud includes any actions or inactions that constitute fraud under federal or state law.

  • Provider Fraud
  • Client Fraud

“Provider” is a legal term that refers to doctors, hospitals, dentists, clinics, counselors or any other entity that Medicaid pays to serve our clients. Medicaid provider fraud occurs when a Medicaid provider knowingly makes, or causes to be made, a false or misleading statement or representation for use in obtaining reimbursement from the Medicaid program.

Examples of Medicaid provider fraud include:

  • Billing for services not performed (phantom billing)
  • Billing for a more expensive service than was actually rendered (upcoming)
  • Billing twice for the same services
  • Billing for services that should be combined into one billing (unbundling)
  • Dispensing generic drugs and billing for brand-name drugs
  • False costs reports
  • Embezzlement of participant funds
  • Falsifying timesheets or signatures in connection with the provision of personal care services
  • Giving or receiving something in return for medical services

Client fraud consists of deception to receive services that are then billed to Medicaid. Client fraud occurs when a Medicaid client seeks to have services billed to Medicaid for someone who is not on Medicaid; or when someone who is not on Medicaid uses the personal information or identification of a Medicaid Client to receive services that are then billed to Medicaid.

Examples of Medicaid client fraud include:

  • A non-Medicaid client using a Medicaid client’s identification to receive services.
  • Misrepresentation by a woman who presents herself as pregnant when she is not.
  • Failure to report receiving money such as an inheritance or personal injury settlement.
  • Failure to reimburse Medicaid or service provider when health insurance payment is made to the policy holder.
  • Failure to disclose a promissory note, contract for deed, life insurance policy, revocable trust, third-party trust, living will, life estate, structured settlement, annuity, or personal care coordination contracts.
  • Failure to report all sources of income in the household.
  • Conveying/transferring or selling an exempt asset during a span of Medicaid eligibility and not reporting it.

How Can I Spot Medicaid Fraud?

Many of the cases investigated and eventually prosecuted by the Medicaid Fraud Control Unit start with information submitted by private citizens. As a Medicaid client, if a provider suggests treatment or services that you do not believe are necessary, be cautious of the recommendation. If you are a participant, be wary of "free" tests, services, or medical products offered in exchange for your Medicaid information. If you are the legal guardian of a Medicaid participant who is in a nursing home or other healthcare facility, check the participant's personal funds account regularly. If you are visiting in a nursing home or other healthcare facility, pay attention to the patient's appearance and the appearance of the room for any indication of abuse or neglect.

Who is involved in stopping Medicaid Fraud?

Wyoming Attorney General's Medicaid Fraud Control Unit

The Wyoming Medicaid Fraud Control Unit (MFCU) became part of the Attorney General's Office in January 1995, pursuant to the Omnibus Budget Reconciliation Act of 1993. The Wyoming MFCU investigates and prosecutes Medicaid provider fraud and patient abuse and neglect in Medicaid-funded facilities.

Wyoming Department of Health

The Deficit Reduction Act of 2005 created the Medicaid Integrity Program (MIP) in section 1936 of the Social Security Act (the Act). This dramatically increased the Federal government's role and responsibilities in combating Medicaid fraud, waste, and abuse.  Section 1936 of the Act requires the Centers for Medicare & Medicaid Services (CMS) to contract with eligible entities to review and audit Medicaid claims, identify overpayments, and provide education on program integrity issues. The Act also requires CMS to provide effective support and assistance to states to combat Medicaid provider fraud and abuse.

The Wyoming Department of Health, Healthcare Financing Division through Quality Assurance and Medicaid Program Integrity strive to ensure compliance with state and federal statutes and regulations to assure that services are provided in the most appropriate and cost-effective manner. Quality Assurance monitors estate recovery and third-party liability rules and regulations and strives to track down fraudulent and/or abusive behaviors that drain Medicaid of funds that would otherwise be used for services.