What Is Medicaid Fraud?

To understand Medicaid Fraud, you first need to know what Medicaid is and who it serves. Medicaid is a government-funded health insurance program for Americans with low incomes and limited resources. It provides for individuals and families. Medicaid also may include people with certain disabilities. The Affordable Care Act expanded eligibility and federal funding for Medicaid.

One type of Medicaid Fraud involves illegal kickbacks. These schemes involve health care providers paying fees to doctors, clinics or other programs to refer low-income patients to them for care, so they can submit Medicaid claims on them.

Another common type of Medicaid fraud involves prescription drugs. Individuals who are covered by Medicaid and who also have an additional supplemental private health insurance are classified as “dual eligible” when it comes to prescription drugs. The law states that the private insurer must assume the cost of health care for these beneficiaries. However, pharmacies and pharmacy service providers often defraud Medicaid by failing to reimburse the government for drug expenses that should have been paid by a private insurer.

Pharmaceutical companies also have attempted to defraud Medicaid by overcharging for their prescription drugs by reporting inflated drug prices. Drug companies sell drugs to health care providers such as pharmacies, physicians and hospitals, and the State pays all prescription drug costs for Medicaid patients. As a result of inflating the prices, the pharmaceutical companies defrauded the states’ Medicaid programs and endangered the programs’ ability to provide health coverage for citizens in the greatest need of financial assistance. Beasley Allen has been involved in ongoing litigation on behalf of a number of states, in cooperation with the states’ attorneys general, in what is known as the Average Wholesale Price (AWP) or Medicaid Fraud litigation.