This presentation outlines the Centers for Medicare & Medicaid Services (CMS) September 21, 2016 proposed update to Medicaid fraud control unit (MFCU) regulations. MFCUs, which operate as independent state government entities and most often work out of the offices of state attorneys general, have investigated and prosecuted Medicaid provider fraud and patient abuse and neglect since the late 1970s.
Before this proposed revision of the MFCU regulation, federal regulators had amended MFCU regulations only twice. Although the proposal primarily contained technical changes, CMS also proposed to expand the definition of a provider subject to MFCU investigation and prosecution to physicians who do not claim Medicaid payment—such as ordering and referring physicians—and to add a requirement that MFCUs investigate credible allegations of misappropriation of patient funds, newly defined as a form of patient abuse. The proposed rule did not address the relationship between MFCUs and managed care organizations.