Medicaid Fraud

Medicaid fraud is any intentional scheme to take money from Medicaid, the joint federal and state health program for people with low incomes. Most cases involve providers, such as clinics, pharmacies, labs, home health agencies, or nursing homes. Common schemes include billing for services never provided, "upcoding" to more expensive services, billing for medically unnecessary care, paying kickbacks for patient referrals, and billing for the same service twice.

States have dedicated units to fight it. According to the HHS Office of Inspector General, Medicaid Fraud Control Units operate in each of the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, usually within the state attorney general's office. These units investigate and prosecute provider fraud and also abuse or neglect of residents in health care facilities.

Private citizens play a major role through qui tam lawsuits under the federal False Claims Act and similar state laws. An employee or other insider who knows of fraud can file a sealed complaint on the government's behalf. Under 31 U.S.C. 3730(d), if the government takes over the case the whistleblower generally receives 15 to 25 percent of the recovery, and 25 to 30 percent if the government declines and the whistleblower pursues it successfully. The law also protects whistleblowers from retaliation by employers.

Patients who suspect billing fraud can report it to their state's unit or the HHS inspector general. Insiders should keep copies of records they are allowed to access and speak with a lawyer before taking documents. See our whistleblower and qui tam page and the related False Claims Act, Medicaid, and relator entries.