The Legislature must give the state Attorney General’s Office the tools to find Medicaid fraud.
FRAUD is estimated to siphon off between 3 and 10 percent of the $6.5 billion spent yearly on Medicaid in Washington.
The fraud happens when, for example, a Seattle wheelchair company overbilled Medicaid by $600,000 for wheelchairs used by people with disabilities. The owner of that company now faces criminal charges.
Any viewer of TV crime dramas knows investigation is often aided by tipsters. That is especially true with complex medical-fraud cases. Current Washington law encourages whistle-blowers to come forward, but key provisions of that law expire next year and the state Legislature has been slow to reauthorize them. It should act, and do so decisively.
At issue is the state’s 2012 Medicaid False Claims Act, which included what’s known as a “qui tam” provision that allows the state Attorney General Office’s Medicaid fraud unit to share a portion of fraud recoveries with whistle-blowers. Whistle-blowers generally get about 8 percent.
A Columbia Law Review analysis found that giving whistle-blowers this incentive to come forward is critical because “discovering health-care fraud requires medical expertise.”
Not surprisingly, that incentive has led directly to at least $5 million in reclaimed fraudulent billings going back into the state treasury. It also acts as a “significant” deterrent for other fraud, said Michael Pellicciotti of the attorney general’s Medicaid fraud unit.
This is a deterrence at no cost to the state. The approximately $400,000-a-year staffing cost is paid out of the recoveries.
Good fraud policing done at no cost to taxpayers should sail through the state Legislature. But medical providers lined up in state House and Senate committees this session in opposition to the whistle-blower provision, and that opposition has halted progress on the bills.
The House version, SHB 1067, has been awaiting a vote of the full chamber for more than two weeks. The Senate version, SB 5287, hasn’t moved at all since a Feb. 10 hearing in the Health Care Committee.
Among the arguments against renewal of the False Claims Act is a provision that allows whistle-blowers to file lawsuits on their own, should the attorney general decline to take action. That “unbalances” the system, opponents said.
But there is no evidence that actually has happened in Washington state cases. In a letter to the House Health Care and Wellness Committee, the Attorney General’s Office detailed its qui tam cases and noted that the office actively discouraged whistle-blowers from filing suit when it declined to go forward.
Should lawmakers fail to act this session and renew the False Claims Act, Washington potentially loses out. It would lose advance notice of multistate Medicaid fraud actions and the opportunity to pursue local overbilling. And it could lose out on a 75 percent federal reimbursement for the fraud unit’s staff.
Renewing the state Medicaid False Claims Act should be an easy decision for the Legislature. Medical fraud is happening, and someone needs to be looking for it.