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AG Derek Schmidt urges U.S. Senate to expand state authority to fight scams against Medicaid patients

Release Date: Jul 21, 2020

TOPEKA – (July 21, 2020) – The most immediate action Congress could take to strengthen the fight against scams targeting Medicaid beneficiaries is to repeal a federal restriction on the jurisdiction of existing Medicaid fraud control units, Attorney General Derek Schmidt today told a U.S. Senate panel.

“With a growing number of Medicaid beneficiaries receiving services in home-care settings, and with the increasing isolation at home of many Americans, including Medicaid beneficiaries, because of COVID-19 related restrictions, eliminating this federal restriction could immediately bring more enforcement resources to the fight,” Schmidt said, adding that a bipartisan group of attorneys general had joined him in a letter urging action on the proposed legislation.

Schmidt testified via videoconference before the Senate Committee on Commerce, Science and Transportation Subcommittee on Manufacturing, Trade and Consumer Protection. The subcommittee, chaired by Kansas Senator Jerry Moran, invited Schmidt to testify as part of a discussion of efforts by state attorneys general to combat scams and fraud during the COVID-19 pandemic.

“We know the volume of COVID-19 related scams will stretch law enforcement resources at every level,” Schmidt said.

Schmidt advocated passage of Senate Bill 2379, which would repeal an outdated and arbitrary federal statute that restricts the ability of states to use their Medicaid Fraud Control Units to detect, investigate and prosecute abuse of Medicaid patients in non-institutional settings. The expanded jurisdiction would include financial abuses in the form of COVID-19 related scams and frauds targeting Medicaid beneficiaries who do not reside in institutions. Schmidt has previously testified in support of the expanded-jurisdiction legislation in both the House of Representatives and in the Senate; the measure passed the House in 2019.

Under current law, states have authority to use their MFCU assets to address fraud against the Medicaid program itself anywhere it may be found but may address the abuse of Medicaid patients – including financial abuse through COVID-19 scams – only if it occurs in an institutional setting.

Schmidt also discussed the role the Kansas Office of Attorney General has played in fighting other scams and fraud during the pandemic. He said a provision of the Kansas Consumer Protection Act regarding price gouging took effect once a statewide emergency declaration was initiated on March 12. Since that time, the Office of Attorney General has launched numerous investigations following complaints filed with the agency. Common categories of scams reported in Kansas include COVID-19 prevention, personal protective equipment, stimulus checks, government imposters and fraudulent unemployment claims.

Schmidt’s written testimony is available at https://bit.ly/3eT4wut.

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