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MID INVESTIGATIONS

Douglas ThorenCriminal Chief

Medicaid Investigations DivisionNorth Carolina Department of Justice

The North Carolina Medicaid Investigations Unit

MISSION STATEMENT

The mission of the Medicaid Investigations Unit is to eliminate fraud in the North Carolina Medicaid program through the investigation and prosecution of criminal violations, the assessment of civil penalties, and the collection of damages pertaining to fraud in the administration of the Medicaid program and fraud by providers of medical assistance, and the investigation and criminal prosecution of the physical abuse of patients and the misappropriation of private funds of patients in Medicaid funded health care facilities by providers, and, as authorized by the Office of Inspector General, the investigation of Medicare and other federal health care cases which are primarily related to Medicaid fraud.

The North Carolina Medicaid Investigations Unit

NC-MIU constituted in 1979 by way of Federal Legislation

50 units across the United States

including the District of Columbia

Oversight by HHS-OIG

Partially Federally funded

Three Areas Of Subject Matter Jurisdiction

Fraud or related offenses perpetrated by Medicaid Providers

Patient Abuse and Neglect

Misappropriation of Patient funds in Medicaid facilities

We do not do recipient fraud

See 42 C.F.R. sec. 1007.11

Where Do Cases Come From

Div of Medical Assistance – Program Integrity

Div of Facility Services

Private citizens including current & former employees

Other local, state and federal law enforcement agencies

The Referral Process

Referrals are received by our criminal paralegal and entered into MIU’s case management database.

They are then given to one of three screeners to determine if there is more information needed or if the screener believes it may make a good case for investigation.

Monthly the senior staff of the MIU meets to determine which cases will be accepted based on a number of factors described below.

Cases not accepted are referred back to PI when appropriate.

What makes a good referral?

Specific

Identifiably fraudulent behavior

An identifiable target

As much information as possible.

The Referral Acceptance Decision

MEDICAID NexusPossible Criminal ViolationNo “Roadblocks”– Evidentiary– Prior Investigations or Actions– Direct or Circumstantial Evidence

Beyond a Reasonable DoubtJuriesPrior History

What is Healthcare Fraud?

The deliberate submittal of false claims to private health insurance plans and/or tax-funded public health insurance programs such as Medicare and Medicaid.

Fraud Schemes

Billing for Services not rendered

Double billing

Forgery

Kickbacks

Unbundling

Up coding

Cost Report

Suspension and Investigation

Suspension of a provider at the outset may hinder the MIU investigation.– Begins an administrative process.– Puts the provider on notice.– Prohibits the use of undercover operations.– May expose a cooperative employee.

Prosecutorial Authority

Cover the entire state with authorization from local District Attorneys

Cross-designated at the federal level as “SAUSA”

CONFIDENTIALITY

Confidentiality is crucial to MIU investigations:– Agent safety– The creation of fabricated evidence – The destruction of evidence– Hiding, moving or disposing of assets.

INVESTIGATIVE PHASE

COMPLAINT

RECORDS

RULES & RESEARCH

INTERVIEWS

SUSPECT INTERVIEWS

END GOALS

RECOUP LOSSES

EXCLUSION

CONVICTION

PRISON

Records we need from the MCO or DMA

EVERYTHING!!!!!!

Application for a provider number

Provider agreement

Any and all communications between DMA, the MCO and the provider.

Any provider records PI or the MCO has obtained.

EVERYTHING!!!!!!

INVESTIGATIVE PHASE

Search and Seizure* By consent

Provider AgreementSigned form

* Subpoenas* Search Warrant

ReviewedSBI Cooperation

THIRD PARTY RECORDS

Subpoena

- N.C.G.S. 108A-63.1 authorizes the MID to issue a subpoena to produce documents

- Used to obtain documents from non-provider entities

Provider Agreement

- Failure to comply results in suspension of provider number (can’t bill anymore)

- Copies or scans only (unless circumstances warrant otherwise)

Federal Grand Jury and Health Care Subpoena

When working with the US Attorney’s office can request one of the above

Grand Jury subpoena will be criminal only, items and information obtained can NOT be shared with civil investigators or attorneys

Health Care subpoena best when unsure if civil or criminal or know it is both

Search Warrant

Take originals (must leave a copy)

Can’t say no

Motion to suppress

Consists of an affidavit and the warrant

Issued when there is probable cause to believe that a crime has occurred and that there is probable cause to believe that evidence of that crime is at a specific location

INVESTIGATIVE PHASE

INTERVIEWS

* Represented parties

* Confession v. Admission

i.e. “Those time sheets are forged.”

* In the suspects writing.

* SPECIFICS

Interviewing MCO employees

All contacts with DMA employees about a specific provider are in essence interviews and will be documented as such.

All e-mails about a specific provider will be saved and will be turned over to defense counsel if the provider is charged. Please refrain from any personal or subjective comments.

If you have worked closely in the investigation of a provider there is a good chance you will be called to testify.

CRIMINAL PROCESS

Warrant

Indictment

Information

SUPERIOR COURT

DISCOVERY

The State must make available to the Defendant:

THE COMPLETE FILES OF ALL LAW ENFORCEMENT AND

PROSECUTORIAL AGENCIES INVOLVED IN THE INVESTIGATION

Cases Are Resolved By:

Criminal conviction in either State or Federal Court

Civilly under the Federal False Claims Act

Civilly under the State False Claims Act

Administratively

Without action where none is warranted

POST CONVICTION

Once the final sentencing has occurred:– MID reports the conviction to DMA– MID reports the conviction to US DHHS - OIG

for exclusion

Federal False Claims Act 31 U.S.C. § 3729 - 3733

The “Lincoln Law”

First enacted in 1863

Response to widespread fraud by

Civil War defense contractors

Includes a qui tam remedy

Federal False Claims Act

Any person who:

knowingly presents a false or fraudulent claim

for payment;

conspires to present a false or fraudulent

claim; or

makes a false record to avoid an obligation to

pay money to the Government . . .


. . . is liable to the government for a civil

penalty of $5,500 to $11,000,

plus three times the amount of damages

the government sustains


Includes a qui tam remedy

Qui tam pro domino rege quam pro se ipso in

hac parte sequitur

“He who brings a case on behalf of our lord the

King, as well as for himself"


The qui tam provision offers a

reward to citizens to sue on behalf

of the government

A person who brings a qui tam

case is called a relator

North Carolina False Claims Act N.C.G.S. § 1-605 -618

Modeled after and virtually identical

to the federal False Claims Act

Became effective January 1, 2010

Not retroactive in its application,

except for Medicaid fraud

False Claims Act Procedure

Qui tam cases are filed under seal

The case is not a matter of public

record

The defendant is not served initially

When a qui tam case is filed, the

only party served with the

complaint is the government


The seal period is at least 60 days

(federal statute) or 120 days

(State statute)

The government may request

extensions of the seal period


The purpose of the seal is to allow

the government to investigate

the relator’s allegations and make a

decision about whether to

intervene


When the government intervenes, it

has primary responsibility for

prosecuting the case.

The relator will receive a smaller

share of any recovery when the

government intervenes.


When the government does not

intervene, the relator prosecutes

the case

The relator will receive a larger

share of the recovery when the

government does not intervene


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