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Utah Attorney General lawyers tasked with prosecuting Medicaid fraud outperform their peers when it comes to collecting misspent taxpayer funds, partly due to their dogged pursuit of rogue drug companies, a legislative audit shows.
Utah's Medicaid Fraud Control Unit recovered $11 million a year on average from 2007 to 2011. By comparison, fraud units in six peer states with similarly-sized Medicaid programs recouped an average of $3 million annually.
Utah recovers more because it is the only state in its peer group that directly goes after drug companies that overcharge Medicaid or market their drugs for off-label use, according to Legislative Audit Supervisor Janice Coleman. Other states join large national lawsuits, accepting a share of the settlement.
Utah could do a better job, however, at cracking down on overbilling by providers, said Coleman.
Trouble is, the strength of the fraud unit's civil and criminal cases rests on evidence provided by referring agencies: the Utah Department of Health, the Division of Services for People with Disabilities and Adult Protective Services.
Fraud unit director Robert Steed "acknowledges that, in the past fraud referrals were sparse and lacking substance," says the audit report. But referrals have markedly improved since creation of a Medicaid Office of the Inspector General, Steed said at an Audit Subcommittee on Wednesday.
The OIG was created last year to stop the waste and abuse of tens-of-millions in Medicaid funds spotlighted in earlier legislative probes. Lawmakers decided that the problem wasn't that no one was watching, just that the watchdogs worked for the same agency that oversees Medicaid, the Utah Department of Health.
Auditors suggest if OIG referrals decline in quantity and quality, the fraud unit should apply to the federal government for permission to generate its own cases. Meanwhile, it should tighten its tracking of investigations, they said. A review of open cases found some that might have been prosecuted were closed because the statute of limitations ran out.
Steed said this is a new area of focus for his team, while noting, "I'm very proud of our unit. We've recovered over $65 million in the short time I've been there as director."
Each state has a Medicaid Fraud Control Unit to investigate and prosecute fraudulent billings and patient abuse and neglect. Though state-run, the units are primarily federally funded and subject to federal law.
Utah's policing team — three lawyers, two auditors, six investigators and two support staff — has seen 100 percent turnover in six years, said Steed, who expects that with increased training, longevity and cooperation with referring agencies, recoveries will improve.