January 03, 2006
January 3, 2006
LANSING – Governor Jennifer M. Granholm today signed legislation to further combat Medicaid fraud by providing incentives for citizens who suspect fraud against Michigan’s Medicaid program to come forward and report it to authorities. The legislation is part of the Granholm administration’s continuing efforts to eliminate fraud in the Michigan Medicaid program.
“This legislation will help us ensure that every taxpayer dollar is being spent wisely by providing the state with another valuable tool to detect and investigate Medicaid fraud,” Granholm said. “When a citizen suspects Medicaid fraud, it benefits everyone if they can fearlessly report the wrongdoing and possibly be rewarded for their risks and efforts.”
Public Act 337 (House Bill 4577) amends the Medicaid False Claim Act to allow any person to bring a civil action on the state’s behalf to recover losses due to Medicaid fraud.
Under the law, employers are prohibited from penalizing employees who initiated, assisted, or participated in an investigation or court action under the Medicaid False Claim Act. As an incentive to encourage citizens to report suspected fraud, whistleblowers could be rewarded with a certain percentage of the recovered funds if the lawsuit is successful.
Michigan’s Medicaid program pays $8 billion total annually to deliver health care to nearly 1.5 million low-income Michigan residents. The Department of the Attorney General, which is responsible for Medicaid fraud investigations and prosecutions, reports fraud recoveries in fiscal year 2003-2004 to be $10.4 million.
“It is absolutely imperative that we protect every penny of taxpayer money that is used to provide health care services to Michigan’s most vulnerable citizens,” said Granholm. “We have worked hard to provide an efficient, effective Medicaid program that leaves little room for fraud, but this bill allows us to use the invaluable help of Michigan’s honest and hardworking citizens to ensure that Medicaid funding goes solely toward serving Michigan’s citizens.”
In addition to signing the new legislation, the Granholm administration has taken the following steps to ensure that every taxpayer dollar is being spent as it should:
• matching death records with Medicaid eligibility rolls, which is saving the state about $5 million per year;
• electronic verification by health care providers and Blue Cross Blue Shield of Medicaid eligibility, which has reduced our costs in one year from $450,000 to $180,000;
• renewed a contract with Health Management Systems, Inc. (HMS) to provide revenue recovery and cost containment services for Michigan's Medicaid program. The contract extends a relationship between HMS and MDCH that dates back to 1994. In that period, HMS has recovered more than $50 million for the state;
• hired four additional staff members to increase our surveillance on inappropriate billing; and,
• entered into an agreement with the Attorney General’s (AG) Office that allows AG and DCH to work closely on Medicaid fraud issues.
House Bill 4577 was sponsored by Representative David Law (R-Commerce Township).
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