1. The Medicaid Investigations Division Douglas Thoren Special Deputy Attorney General Chief – Criminal Section Medicaid Investigations Division North Carolina Department of Justice

2. THE MOST IMPORTANT SLIDE THE VIEWS EXPRESSED IN THIS MATERIAL AND DURING THIS PRESENTATION ARE THE SPEAKER’S VIEWS AND ARE NOT INTENDED TO REPRESENT AN OFFICIAL STATEMENT OF POLICY OR THE VIEW OR OPIONION OF THE NORTH CAROLINA DEPARTMENT OF JUSTICE, THE MEDICAID INVESTIGATIONS DIVISION OR ATTORNEY GENERAL ROY COOPER.

3. The North Carolina Medicaid Investigations Division MISSION STATEMENT The mission of the Medicaid Investigations Division 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.

4. The North Carolina Medicaid Investigations Division NC-MID 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 Criminal and civil sections

5. Four Areas Of Subject Matter Jurisdiction Fraud in the administration of the Medicaid Program 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

6. Where Do Cases Come From Div of Medical Assistance – Program Integrity Division of Health Service Regulation Private citizens, current & former employees, whistleblowers, providers MCOs, LMEs, fiscal agents, contractors, vendors through PI Local, state and federal law enforcement agencies

7. Investigations Unit is made up of 23 non-sworn investigators, 7 SBI agents, 3 analysts, 4 civil attorneys and 9 criminal prosecutors. Offices in Raleigh and Charlotte. Investigate using a variety of investigative techniques: - data analysis - interviews - records review - undercover operations - surveillance

8. Records review The MID has the authority to obtain from all Medicaid providers any and all records related to the provision of services billed to the Medicaid program, this includes (but is not limited to): - Patient records - payroll records - billing information - personnel files

9. Authority The Medicaid Investigations Division of the North Carolina Department of Justice is a Medicaid fraud control unit approved by the Secretary of the U. S. Department of Health and Human Services under 42 Code of Federal Regulations § 455.300 (recodified as 42 C.F.R. §§ 1007.1 - 1007.21) and authorized by 42 C.F.R. § 431.107(b) to request that Medicaid providers furnish access to records. Section 431.107(b) states: (b) Agreements. A State plan must provide for an agreement between the Medicaid agency and each provider or organization furnishing services under the plan in which the provider or organization agrees to: (1) Keep any records necessary to disclose the extent of services the provider furnishes to recipients; (2) On request, furnish to the Medicaid agency, the Secretary, or the State Medicaid fraud control unit (if such a unit has been approved by the Secretary under Section 455.300 of this chapter), any information maintained under paragraph (b)(1) of this section and any information regarding payments claimed by the provider for furnishing services under the plan.

10. Authority The provider agreement contractually obligates providers to provide the MID with records. On request, furnish to the Division of Medical Assistance (EMA) and its agents, the Health Care Financing Administration (HCFA), or the State Medicaid Fraud Control Unit of the Attorney General's Office, any information or records, including records of any outside entities, contractors, or subcontractors for costs related to services provided to Medicaid patients and billed to the Medicaid Program. (emphasis added) Recipients also agree to allow access when applying for Medicaid.

11. What about HIPAA The Medicaid Investigations Division is a health oversight agency as defined in the Health Insurance Portability and Accountability Act (HIPAA) in 45 C.F.R. §164.501 and the Preamble, 65 Fed. Reg. 82462 at 82492. You are required to produce this information to the Medicaid Investigations Division in its capacity as a health oversight agency, and this information is necessary to further health oversight activities. 45 C.F.R. § 164.512(d). Because you are required by law to furnish access to records as noted above, disclosure is permitted under HIPAA pursuant to 45 C.F.R. § 164.512(a). Since this information is requested by a health oversight agency and is required by law, no other requirements need to be met under the applicable federal regulations. 45 C.F.R. § 164.12(d)(1).

12. But What if I say NO!

13. Procedure Records Request Scan Search Warrant Take Conscious of continuing care issues.

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

15. Prosecutorial Authority Cover the entire state with authorization from local District Attorneys Cross-designated at the federal level as “SAUSA ”

16. END GOALS RECOUP LOSSES EXCLUSION CONVICTION PRISON

17. State and 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.

18. State and Federal False Claims Act 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

19. You do the Math 3 hours a day for a five day week at rate of $14.16 an hour $212.40 5 separate claims (one for each day) $55,000 in per claim penalties $637.20 triple the amount. plus litigation costs.

20. You Do the Math – Part 2 Same as above but for a month (four weeks) ($849.60) $220,000 + 2548.80 = $222,548.80 25% = $55,637.20 For one client, for one month.

21. Fraud Schemes Billing for Services not rendered Identity theft Forgery Kickbacks Unbundling Up coding

22. MID In the past 33 years the MID has convicted more than 500 Medicaid providers of crimes relating to fraud and abuse, and recovered over $600 million in fines, restitution, interest, penalties and costs.

23. DOUGLAS THOREN 5505 Creedmoor Road Raleigh, NC, 27615 919-881-2320 DTHOREN@NCDOJ.GOV