Keep key tool AG needs to fight Medicaid fraud

Medicaid fraud hurts all of us by driving up costs and skimming money to cheaters from legitimate safety net services. An estimated 3 to 10 percent of Medicaid outlays goes to fraudulent claims.

But a state law aimed at ferreting out and punishing those who make fraudulent Medicaid claims will sunset next year unless lawmakers act to reauthorize it under House Bill 1067. They should do so, and also retain a whistleblower provision that plays an important role in identifying fraud.

State Attorney General Bob Ferguson cites the Medicaid False Claims Act (FCA) as a crucial tool in his office’s ability to go after health care provider fraud. Since it went into effect in June 2012, his office has recovered more than $76 million, with $5.7 million directly the result of the FCA. In other words, it’s one of those government departments that actually generates revenue.

One case that has been in the news in recent months involves a Wenatchee-based consulting company that Ferguson’s office says provided fraudulent training on Medicaid reimbursement to dozens of school districts across the state.

That led to tens of millions of dollars in false Medicaid claims between 2005 and 2014, the AG’s office alleges, with the consultants pocketing a percentage of the reimbursements – $12.6 million over 13 years. Ferguson’s office is now suing the company, JT Educational Consultants, in Thurston County Superior Court.

If the FCA sunsets, it will be harder to fight this kind of fraud because funding for the AG’s Medicaid Fraud Control Unit civil division would be endangered. The alternative would be criminal prosecution, which requires a much higher burden of proof.

The AG’s fraud-fighting civil division is fully funded by recoveries and a matching federal grant that brings in $3 for every $1 in state money. Passing up that kind of “free” money doesn’t make sense.

The bill has broad support, except for what Ferguson calls a critical component, the controversial qui tam whistleblower provision. This allows a whistleblower who exposes fraud to sue on behalf of the government and receive a share of the recovery in reward.

The provision is opposed by pharmaceutical and medical interests that fear it leads to frivolous lawsuits. Ferguson’s office argues that those fears are groundless and, while there is no evidence of a single frivolous claim, it’s clear that legitimate claims won’t be brought if the provision dies.

Retaining the provision is also needed to mirror the federal False Claims Act or the state risks losing matching funds.

Fighting Medicaid fraud is an important part of the attorney general’s duties. Lawmakers should give his office the tools they need, and that includes reauthorizing the False Claims Act.