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Medicaid Fraud Consequences

Medicaid is a health insurance program for low-income individuals and families offered in the United States. The program is funded by the federal government and overseen by the Centers for Medicare and Medicaid Services, but each state sets its own rules and guidelines concerning eligibility and services provided. Federal law requires that each state have its own Medicaid Fraud Control Unit unless it can prove that the unit is not necessary because of minimal fraud. States can apply their own laws regarding the consequences of Medicaid fraud, along with federal criminal fraud statutes.

  1. Imprisonment

    • The federal False Claims Act states that if a health care provider presents a fictitious or false claim to the government seeking reimbursement for medical goods and services, he is liable for fraud. If the act is proven to be intentional, the punishment can be quite severe, with a penalty of up to five years in prison for a felony conviction.

    Fines

    • The False Claims Act also allows the court to impose large fines for either a misdemeanor or felony conviction under the Act. Convicted providers can be sentenced to pay a fine of up to $250,000,or a $500,000 fine for a felony conviction for a corporation. A misdemeanor conviction may result in fines of $100,000 for individuals or $200,000 for corporations.

    Exclusion from Medicaid Practice

    • Health care providers or private individuals who are convicted of Medicaid fraud will be banned from participating in Medicaid again, at least for a certain amount of time. They will also be placed on the Department of Health and Human Services List of Excluded Individuals and Entities (LIEE). All Medicare providers are required to check this list before employing or contracting with a health care service or employing any person who has been excluded. The ban also applies to officers, shareholders and directors. In addition, Medicaid fraud will get a person or organization placed on the Government Services Administration's Excluded Parties List System (EPLS), which bans them from being able to contract with the federal government for any service.

    License Revocation

    • Providers who are convicted of Medicaid fraud may lose their professional licenses, either completely by revocation or temporarily through a suspension. In 2009, the Florida legislature passed state bill 1986, which took effect in July of that year. This law prohibits the Florida department of health from renewing or issuing a license to anyone excluded from Medicaid until she has been reinstated and has been delivering Medicaid services for a minimum of five years.

    Recipient Fraud

    • Medicaid fraud by recipients has huge financial consequences. Though most people who use Medicaid are doing so legally, abusers cost the system millions of dollars that could be used to help more of the truly needy. A 2009 study by the Government Accountability Office found that substance abusers and other participants in Medicaid fraud were misusing the Medicaid system in five states to the tune of $63.2 million dollars. $200,000 was used to buy prescriptions in the name of people later found to be deceased, while another $500,000 in prescriptions was found to be signed off by dead doctors.

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