Sneak Preview: MFCUs Now Must Regularly Meet With State Agencies

(The following was excerpted from a recent article in the Single Audit Information Service.) Each State Medicaid Fraud Control Unit (MFCU) now must develop a written agreement with the Medicaid agency in the state noting that it will schedule regular meetings or establish some form of consistent communication to better coordinate its efforts to improve Medicaid program integrity. This requirement is included in a final rule recently issued by the Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) and the HHS Office of Inspector General (OIG), which amended the regulations governing MFCUs by incorporating various statutory changes established in recent years, as well as other agency policy and practice updates.

MFCUs, through grants provided by OIG, investigate and prosecute Medicaid provider fraud and patient abuse or neglect that occurs in health care facilities or other care facilities. CMS regulations pertaining to MFCUs are provided at 42 C.F.R. Part 455, and OIG regulations for the program are listed at 42 C.F.R. Part 1007. “This rule is designed to assist the MFCUs in understanding their authorities and responsibilities under the grant program, clarify the flexibilities the MFCUs have to operate their programs, and reduce burden, where appropriate, by eliminating duplicative and unnecessary reporting requirements,” according to the final rule.

The rule, which becomes effective on May 21, incorporated into regulation statutory changes that have been enacted since 1977 including:

• extending funding for state MFCUs by authorizing a federal matching rate of 90 percent for the first three years of operation, and 75 percent thereafter;
• establishing a Medicaid state plan requirement that a state must operate an effective fraud control unit;
• requiring HHS to establish standards under which MFCUs must operate;
• allowing MFCUs to seek approval from OIG to investigate and prosecute violations of state law related to any health care services fraud as long as the fraud is primarily related to Medicaid; and
• giving MFCUs the option to investigate and prosecute patient abuse or neglect in health care facilities, regardless of whether the facilities receive Medicaid payments.

“With the exception of the establishment of the standards, all of these statutory changes were self-implementing and have been operational since the statutory effective dates,” the final rule explained.

(The full version of this story has now been made available to all for a limited time here.)

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