Governor signs bill moving Medicaid Fraud Control Unit from DHHR to AG's office

By Chris Dickerson | Mar 27, 2019

CHARLESTON — Gov. Jim Justice has signed a bill that will move the state's Medicaid Fraud Control Unit to the state Attorney General's office.

Senate Bill 318 was signed into law earlier this week. Attorney General Patrick Morrisey praised the move, calling it "a bold step that will significantly strengthen the state’s fight against Medicaid fraud."

“I sincerely thank Governor Justice for signing this crucial piece of legislation,” Morrisey said. “Governor Justice’s signature will move West Virginia past the status quo and unleash the investigative power of our office to root out fraud in hopes of protecting those who legitimately rely upon Medicaid as a safety net.”

Justice's signature brings West Virginia in line with 43 other states that house Medicaid Fraud Control Units within the Attorney General’s office. It currently is housed in the state Department of Health and Human Resources. Morrisey's office says the move will save taxpayers significant monies, fix deficiencies in West Virginia’s existing unit and yield greater efficiency and effectiveness to the benefit of the taxpayer.

It takes effect Oct. 1.

“We have the disability fraud unit here already," Morrisey recently told The West Virginia Record. "We’d like to build on that. We have the expertise. We want to protect those people who need these Medicaid benefits.”

Morrisey said Medicaid is meant to provide medical care for low-income residents and families who need assistance. He said the bill’s passage would fix deficiencies in West Virginia’s existing unit and yield greater efficiency and effectiveness to the benefit of the taxpayer.

“A responsible government, accountable to its citizens, cannot condone such thievery,” he said. “It must attack waste, fraud and abuse at every level, and our effectiveness in rooting out more than $14.3 million in disability fraud proves the success we can have in fighting Medicaid fraud.

“We have relationships with the attorneys general in these other states. We can use those relationships to partner up with other states to make this unit even more powerful.

“We hope the stars align this session to make it happen. We’re optimistic and hopeful.”

Earlier this year, Morrisey’s office announced its disability fraud partnership has generated more than $14.3 million since its inception, including a record-breaking $6.2 million in calendar year 2018.

On the DHHR’s Office of Inspector General’s website, it says the unit “is the single entity of West Virginia state government that is certified annually by the Secretary of the U.S. Department of Health and Human Services to conduct statewide investigations of health care providers that defraud the Medicaid program.”

The unit investigates complaints of criminal abuse or neglect in any health care facility, as well as allegations of misappropriation of patients' private funds in Medicaid facilities. The unit is also charged with the investigation of fraud in the administration of the Medicaid program.

Its website says the unit’s mission is “to protect West Virginia’s vulnerable citizens and the integrity of its health care program. In fulfillment of that mission, the MFCU investigates allegations of fraud in the Medicaid program and allegations of criminal abuse, neglect, or financial exploitation of residents in health care facilities or board and care homes.”

Under new director Mike Malone, the state’s current Medicaid fraud unit features eight investigators, two auditors and one data mining specialist. It has a budget of $1.88 million.

Morrisey also said Medicaid spending in the state totals more than $3.7 billion. That money is distributed by the DHHR. Morrisey also believes the agency handing out the money shouldn’t be the one investigating possible fraud.

“If one department is going to be spending such a significant portion of the state budget, it certainly makes a lot of sense to have a completely separate entity take a look at that and analyze the expenditures,” he said. “I think that alone, a fresh pair of eyes on a variety of issues, could result in savings.

“This is the second largest program in West Virginia. This is about budget savings, and I think it could be very beneficial.”

The Medicaid Fraud Control Unit has been under DHHR control since the unit's inception more than 35 years ago.

"The MFCU is better suited under DHHR because the unit has statewide criminal investigation authority and MFCU attorneys may assist in the prosecution of Medicaid Fraud, authority the Attorney General’s office does not currently have," DHHR spokeswoman Allison Adler told The Record before the bill was passed. "In fact, the MFCU legal division has successfully prosecuted fraud and financial exploitation cases utilizing a MFCU Special Assistant Prosecuting Attorney and obtained felony convictions."

Additionally, Adler said moving the unit would create unnecessary costs for the state.

"Additionally, it (the MFCU) has developed solid working relationships both within and outside DHHR and has had a number of successes including a healthcare fraud settlement of $2.21 million dollars, obtained in cooperation with the United States Attorney’s Office in 2017," she said. "In the last five years, recoveries have totaled more than $34 million dollars. Fiscal Year 2018 recoveries totaled $5.4 million, with seven cases referred for prosecution, seven civil cases resolved and seven criminal convictions obtained."

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State of West Virginia West Virginia Attorney General West Virginia Department of Health and Human Resources West Virginia Governor's Office

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