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AG Derek Schmidt: Congress expands state authority to fight abuse of Medicaid patients

Release Date: Dec 22, 2020

TOPEKA – (December 22, 2020) – New federal legislation broadening state authority to fight the abuse of Medicaid patients is headed to the President’s desk, Attorney General Derek Schmidt said today.

The measure, introduced as the Medicaid Patient Abuse Prevention Act, was included as part of the appropriations and COVID-19 relief legislation approved by Congress on Monday. The legislation now awaits the President’s signature. Schmidt has advocated for passage of the anti-abuse law since 2017 when he was the incoming president of the National Association of Attorneys General, and most recently in April led a bipartisan group of attorneys general in advocating for inclusion of the bill in COVID-response legislation because isolation caused by COVID-19 has increased the risk that abuse of patients in home heath settings may go undetected or unprosecuted.

“I am grateful that Congress has given states this additional authority to investigate and, when appropriate, prosecute cases in which Medicaid patients are criminally abused in home health care and other non-institutional settings,” Schmidt said. “This expanded jurisdiction will give us greater ability to bring to justice those who harm elder and disabled Kansans. I particularly want to thank Senator Moran and Senator Roberts, who both co-sponsored this bill and worked for its inclusion in the appropriations measure that now has passed.”

The bill will allow state Medicaid Fraud Control Units (MFCUs) to combat the abuse of Medicaid patients anywhere that abuse occurs. Under current law, states may use their MFCUs to detect, investigate and prosecute patient abuse only if it occurs in an institutional setting such as a nursing home or hospital. Abuse of patients in non-institutional settings, such as during home health care, was outside the MFCU’s jurisdiction. The new law removes that limit.

Three years ago, Schmidt began leading a national effort to persuade Congress to broaden MFCU jurisdiction so states could strengthen the fight against patient abuse. In 2018, Schmidt testified in support of the legislation before a subcommittee of the U.S. House of Representatives Committee on Energy and Commerce, and in 2019 he testified for it again before the U.S. Senate Special Committee on Aging. In July, Schmidt testified in favor of the legislation a third time before the Senate Committee on Commerce, Science and Transportation Subcommittee on Manufacturing, Trade and Consumer Protection. Senator Moran, who chairs that subcommittee, 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. 

As a condition of participation in the Medicaid program, states generally are required to operate a MFCU to help detect, investigate and prosecute Medicaid provider fraud and patient abuse. In Kansas as in most states, the unit is housed in the attorney general’s office. The federal government pays three-fourths of the cost of operating these units, and because of that sets limits on their jurisdiction. One of those limits – the one that is to be lifted by this legislation – has prevented states from using these units to address patient abuse in non-institutional settings such as a home health care situation.

In addition to expanding MFCU jurisdiction, Congress also voted to extend the deadline for the CARES Act funding, as well as providing additional federal funding for the expansion of the national broadband system. Schmidt joined bipartisan efforts in recent months encouraging Congress to act favorably on both of those measures.

The following statement about the Kansas Medicaid Fraud Control Unit is required by the federal government: The Medicaid Fraud and Abuse Division in the Attorney General’s Office receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $2,393,844 for Federal fiscal year (FFY) 2021. The remaining 25 percent, totaling $797,945 for FFY 2021, is funded by the Office of the Kansas Attorney General from moneys recovered in litigation.

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