HISTORY: Medicaid was created by the U.S. Congress in 1965 to provide medical services to poor and disabled Americans. It is funded through a combination of state and federal dollars and administered through a designated single state agency. Pennsylvania's designated single state agency is the Department of Public Welfare (DPW). All 50 states, the District of Columbia and U.S. territories participate in the Medicaid Program.
Since 1965, the costs of the Medicaid program have spiraled out of control with double-digit inflation almost every year. While there are many legitimate reasons for the rising costs, a tremendous amount of money is lost to fraud and abuse. Members of Congress and those involved in individual state Medicaid programs identified a need to establish independent fraud units staffed by coordinated teams of attorneys, investigators and auditors, solely dedicated and trained in the prosecution of Medicaid fraud.
In response, Congress enacted Section 17 of the Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977 (Public Law 95-142) which established and funded the state Medicaid Fraud Control Unit to investigate and prosecute provider fraud in the Medicaid program.
In 1978, in response to the new law, the Pennsylvania Office of Attorney General formed its Medicaid Fraud Control Section (MFCS).
AUTHORITY: Along with the original jurisdiction to prosecute and investigate Medicaid fraud, the Commonwealth Attorneys Act gives the OAG the authority to investigate crimes arising out of the activities of the MFCS. This enables investigators to follow the leads generated by their investigations to other violations of the Pennsylvania Crimes Code.
The main focus of Medicaid Fraud investigations concerns providers which are usually physicians, dentists, mental health clinics, drug and alcohol clinics, hospitals and health maintenance organizations. Recipient fraud is generally left to local district attorneys to prosecute.
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