Jason S. Miyares
Attorney General of Virginia

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Common Health Care Fraud Schemes

In addition to hospitals, doctors and pharmacists, health care providers include the following:

  • Medical transportation companies such as taxi/van service providers
  • Home Health providers
  • Durable Medical Equipment suppliers – i.e. wheelchairs, prosthetics, adult diapers
  • Nursing Homes
  • Medical Laboratories
  • Home Infusion Treatment Companies
  • Managed Care Organizations – PPOs, HMOs
  • Rehabilitation Providers

Billing for Goods/Services not Provided

A common type of Medicaid or health care fraud scheme is billing for a treatment or procedure never rendered -- such as X-rays, laboratory tests, or drugs that were never dispensed.

Fraudulent providers also "upcode" various medical procedures. When a patient sees a doctor, they may be unaware of the extent of services which were provided. If payment is made by units of time, the time can be expanded. A minor service can also be upcoded as a more labor intensive or expensive service.

Paying "Kickbacks" in Exchange for Referring Business

"Kickbacks" are common in health care fraud cases. State and federal law generally prohibit payments to individuals who refer patients to a particular hospital or doctor. Medicaid fraud prosecutions have been brought, for example, against corrupt doctors for splitting fees in return for rent, demanding cash payments from Medicaid patients, and taking money in exchange for patient referrals.

Billing for Medically Unnecessary Tests

An age old scam by some providers is misrepresenting the diagnosis and symptoms on patient records and then submitting invoices to insurance companies to receive a higher rate of reimbursement. An example of this would be a patient who visited the doctor for a common cold treatment, but the insurance company was billed for a condition diagnosed as pneumonia, with associated pneumonia testing.

Charging Personal Expenses to Medicaid

This is a scheme most often engaged in by corrupt nursing homes. Nursing homes are reimbursed based upon the annual submission of a cost report. The inclusion of personal expenses in these costs reports is fraudulent. An example of this occurs when a nursing home administrator includes the cost of his personal car or home on the cost report. This is a criminal violation.

Inflating the Bills for Services Provided

This regularly occurs in the Medicaid transportation sector when van/taxi companies greatly inflate their claimed mileage in order to receive greater reimbursement.

Managed Care Organizations (MCOs)

Managed care presents different fraud issues. Whereas in standard health care reimbursement situations, the fraud is characterized by overbilling, a managed care environment creates an incentive to deny care to patients/consumers. This means that while a fee has been paid by the MCO to the doctor for covered services, the services are denied or cut back for other than sound medical reasons. This not only defrauds the insurance company, but also compromises patient health.

Fraud in MCOs also arises in enrollment practices whereby healthy patients are "recruited" to join certain MCOs in a practice known as "cherry picking." Often, they are paid in some fashion for their enrollment.

Double Billing

Double billing occurs when the provider obtains payment from two sources. For example, a provider involved in a drug study bills the insurance company while at the same time receiving payment from the pharmaceutical company. Similarly, two insurers or public programs, or both, may be billed for the same service.

Consumer Deception Fraud

Some fraud is committed by patients/consumers. Examples include using someone else’s insurance card for benefits, listing a non-relative as a family member to obtain coverage, claiming coverage for treatments or supplies not received, faking worker’s compensation injury to receive disability payments, and staged accident frauds. This type of fraud is handled by the Department of Medical Assistance Services as MFCUs are prohibited from handling recipient fraud.


Complaint Form Guidelines

Medicaid Fraud Control Unit (MFCU)

MFCU Form fill in - image of someone writing.

To complete the complaint form (please read instructions below prior to completing the form):

Online Complaint Form
*Adobe Acrobat required, click here to download free Acrobat Reader.

  1. Fill in the blanks with as much information as you can.
  2. Please provide your name, address and telephone number (with area code) so our investigators can contact you for more information or when their preliminary investigation is completed.
  3. If you have additional documents that you would like to send, please put your name on the documents so we can match them up with your complaint (if applicable).
  4. Be sure to retain a copy for your records.
  5. After completing the form, please mail or fax using the information below:

This email address is being protected from spambots. You need JavaScript enabled to view it.


Office of the Attorney General
Medicaid Fraud Control Unit

202 North Ninth Street
Richmond, VA 23219

An investigator will review your complaint.
Your complaint will become an active case, or it will be closed due to insufficient evidence or because no crime was committed.

MFCU - Frequently Asked Questions

What is Medicaid?

Medicaid is a health care program available to those who cannot afford medical services including low-income families, children, disabled individuals, and the elderly. Medicaid is administered by each individual state, but is jointly funded by state and federal governments. For more information on Medicaid, contact the Department of Medical Assistance Services, see This email address is being protected from spambots. You need JavaScript enabled to view it., or call (804) 786-7933.

What is Medicare?

Medicare is health insurance for: people 65 or older; people under 65 with certain disabilities; and people of any age with end-stage renal disease. There are different parts of Medicare including Medicare Part A that is hospital insurance; Medicare Part B which is Medical Insurance; Medicare Part C which is also known as Medicare Advantage and offers health plan options run by Medicare-approved private insurance companies; and Medicare D which provides Medicare prescription drug coverage. For more information or questions about Medicare, see www.medicare.gov, or call 1-800-MEDICARE (1-800-633-4227).)

What is a Medicaid Fraud Control Unit?

Medicaid Fraud Control Units (MFCUs) investigate and prosecute Medicaid provider fraud as well as abuse or neglect of residents in health care facilities and board and care facilities that receive Medicaid funding. MFCUs operate in each of the 50 States, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. MFCUs, is usually a part of the State Attorney General's office, employ teams of investigators, attorneys, and auditors; are constituted as single, identifiable entities; and must be separate and distinct from the State Medicaid agency. OIG, in exercising oversight for the MFCUs, annually recertifies each MFCU, assesses each MFCU's performance and compliance with Federal requirements, and administers a federal grant award to fund a portion of each MFCU's operational costs.

What is the National Association of Medicaid Fraud Control Units (NAMFCU)?

The National Association of Medicaid Fraud Control Units (NAMFCU) was founded in 1978 to provide a forum for a nationwide sharing of information concerning the problems of Medicaid fraud, to improve the quality of Medicaid prosecutions by conducting training programs, to provide technical assistance to Association members and to provide the public with information about the MFCU program. All 53 MFCUs are members of the Association. NAMFCU is headquartered in Washington, D.C. and is staffed by an Executive Director, an Association Administrator and a part-time Association Assistant.

When was the MFCU established?

The MFCUs, created by Congress in 1977, are federal and state-funded law enforcement entities that investigate and prosecute provider fraud and violations of state law pertaining to fraud in the administration of the Medicaid program. In addition, the MFCUs are required to review complaints of resident abuse or neglect in nursing homes and other health care facilities. The Virginia Medicaid Fraud Control Unit (MFCU) was established in 1982.

Who works for the Virginia MFCU?

The Virginia MFCU is made up of investigators, nurses, auditors, analysts, lawyers and staff. This team works together to recover millions of taxpayer dollars for the Commonwealth each year.

Must each state have a MFCU?

Under federal law, each state must have a Unit unless the state demonstrates to the satisfaction of the Secretary of the Department of Health and Human Services that a Unit would not be cost effective because minimal fraud exists in the state's Medicaid program and Medicaid beneficiaries will be protected from abuse and neglect.

What is the jurisdiction of a MFCU?

A Unit's function is to implement a statewide program for the investigation and prosecution of health care providers who defraud the Medicaid program. In addition, a Unit reviews complaints of abuse or neglect against patients in health care facilities receiving Medicaid funding or patients receiving Medicaid-covered home care and may review complaints of the misappropriation of patients' private funds. The Unit is also charged with investigating fraud in the administration of the Medicaid program. The Ticket to Work and Work Incentives Improvement Act of 1999 authorizes the Units, with the approval of the Inspector General of the relevant federal agency, to investigate fraud in other federally-funded health care programs, if the case is primarily related to Medicaid. This Act also authorizes the Units, on an optional basis, to investigate and prosecute resident abuse or neglect in non-Medicaid board and care facilities.

How can citizens help?

While committing significant resources to protect the public, the Virginia Attorney General's Office welcomes the assistance of citizens in fighting health care fraud. Under Virginia's Fraud Against Taxpayers Act, people who blow the whistle on Medicaid Fraud are entitled to share in a percentage of funds recovered by the Commonwealth. You should be aware that whistleblowers have rights. You might be protected, under state law, from being retaliated against or fired by your employer for reporting abuse and fraud. Consult with a private attorney for more on your rights under this Act.

How are MFCUs funded?

MFCUs receive annual grants (Federal Financial Participation or "FFP") from the U.S. Department of Health and Human Services. Grant amounts must be matched with state funding. Initially, a Unit receives federal funding at a 90 percent level. After its first three years, the FFP is reduced to 75 percent.

How much has the Virginia MFCU recovered?

Since 1982, the Virginia MFCU has recovered nearly $2 billion.

What is the extent of federal oversight over a MFCU?

Each Unit operates under the administrative oversight of the Inspector General of the U.S. Department of Health and Human Services and must be recertified annually. As part of the recertification process, the Inspector General reviews a Unit's application for recertification and may conduct on-site visits. Additionally, the MFCUs are required to submit annual reports to the Inspector General. These reports include specific statistical data required by federal legislation on the number and type of cases under investigation, the number of convictions obtained and the number of dollar recoveries to the Medicaid program. The day-to-day supervision of a Unit rests with the parent agency.

How many Virginians are currently enrolled in Medicaid?

According to the Department of Medical Assistance Services, an additional 117,268 adults enrolled through the new eligibility rules since the declaration of the COVID-19 state of emergency. Total Medicaid enrollment grew from 1.53 million to 1.76 million during the state of emergency – an increase of 228,528 members, including 72,286 children.

How much do we spend on Medicaid in Virginia?

According to DMAS, total expenditures in Fiscal Year 2021 will be more than $17.4 billion.

What is the cost of serving different Medicaid populations?

According to DMAS's newsletter titled The Virginia Medicaid Program at a Glance 2019 issue, the aged, blind, and disabled have more intensive and expensive health and long-term care needs compared to children and families. Children and families tend to use emergency rooms for routine health care.

How do Medicaid fraud cases typically arise?

While specifics may vary from state to state, a primary source of referrals is the agency responsible for auditing and reviewing Medicaid provider claims, the Medicaid agency. Other significant sources of referrals are the MFCUs in other states as well as other law enforcement agencies.

Who are providers?

Providers can be:

  • Nurses, CNAs, PAs, or NPs
  • Physicians
  • Transportation Companies
  • Ambulances
  • Counselors
  • Hospitals
  • Nursing Homes
  • Medicaid-covered home care
  • Clinics
  • Home Care Agencies
  • Laboratories
  • Home Health Care Providers
  • And any other service, providers, companies, organizations or individuals, or employee or agent of company, organization, or individual that provides goods or services to Medicaid recipients for which payments is claimed. See Medicaid 42 C.F.R. § 1000.30.

What is patient abuse or neglect?

Patient abuse or neglect occurs when a person or caregiver knowingly causes physical harm to a resident of a health care facility or fails to give a resident needed medical service.

How do the multi-state/federal global settlements arise and how are they handled?

The National Association of Medicaid Fraud Control Units (NAMFCU) will typically appoint global case teams based on referral from the Department of Justice. The NAMFCU President appoints a global case team, generally consisting of three to four attorneys and an analyst, from the state Medicaid Fraud Control Units. Global settlement agreements are negotiated by teams working in conjunction with the United States Department of Justice. The agreements are based on model language and resolve civil fraud allegations concerning the state Medicaid programs. Global case teams are essential to the recovery of fraud dollars to the states since providers are unlikely to settle the case without resolving the states' share of any Medicaid recovery.

What federal consequences follow a felony conviction for Medicaid fraud?

Under federal regulations, providers who are convicted of a program related offense are excluded for a minimum of five years from receiving funds from any federally funded health care program, either as a health care provider or employee. Often, this sanction has a greater impact on the convicted individual and the provider community at large than the criminal penalties assessed in the case.

How does Medicaid fraud affect me?

When providers steal from the Medicaid program in Virginia, they diminish the resources that are available to recipients under the program. Not only can the amount of available services decrease, but the quality of treatment provided by dishonest providers is diminished as they try to reduce costs and increase their own profit. So, it is in all of our best interests to report Medicaid fraud as well as abuse and neglect.


Virginia MFCU Contact Information

Medicaid Fraud Control Unit

MFCU Contact Info: Picture of Barbara Johns Building

Office of the Attorney General
202 North Ninth Street
Richmond, VA 23219
1-800-371-0824 or (804) 786-2071
(804) 786-3509 (fax)

Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

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