1. MID INVESTIGATIONS Douglas Thoren Criminal Chief Medicaid Investigations Division North Carolina Department of Justice

2. The North Carolina Medicaid Investigations Unit MISSION STATEMENT The mission of the Medicaid Investigations Unit is to eliminate fraud in the North Carolina Medicaid program through the investigation and prosecution of criminal violations, the assessment of civil penalties, and the collection of damages pertaining to fraud in the administration of the Medicaid program and fraud by providers of medical assistance, and the investigation and criminal prosecution of the physical abuse of patients and the misappropriation of private funds of patients in Medicaid funded health care facilities by providers, and, as authorized by the Office of Inspector General, the investigation of Medicare and other federal health care cases which are primarily related to Medicaid fraud.

3. The North Carolina Medicaid Investigations Unit NC-MIU constituted in 1979 by way of Federal Legislation 50 units across the United States including the District of Columbia Oversight by HHS-OIG Partially Federally funded

4. Three Areas Of Subject Matter Jurisdiction Fraud or related offenses perpetrated by Medicaid Providers Patient Abuse and Neglect Misappropriation of Patient funds in Medicaid facilities We do not do recipient fraud See 42 C.F.R. sec. 1007.11

5. Where Do Cases Come From Div of Medical Assistance – Program Integrity Div of Facility Services Private citizens including current & former employees Other local, state and federal law enforcement agencies

6. The Referral Process Referrals are received by our criminal paralegal and entered into MIU’s case management database. They are then given to one of three screeners to determine if there is more information needed or if the screener believes it may make a good case for investigation. Monthly the senior staff of the MIU meets to determine which cases will be accepted based on a number of factors described below. Cases not accepted are referred back to PI when appropriate.

7. What makes a good referral? Specific Identifiably fraudulent behavior An identifiable target As much information as possible.

8. The Referral Acceptance Decision MEDICAID Nexus Possible Criminal Violation No “Roadblocks” –Evidentiary –Prior Investigations or Actions –Direct or Circumstantial Evidence Beyond a Reasonable Doubt Juries Prior History

9. What is Healthcare Fraud? The deliberate submittal of false claims to private health insurance plans and/or tax- funded public health insurance programs such as Medicare and Medicaid.

10. Fraud Schemes Billing for Services not rendered Double billing ForgeryKickbacksUnbundling Up coding Cost Report

11. Suspension and Investigation Suspension of a provider at the outset may hinder the MIU investigation. –Begins an administrative process. –Puts the provider on notice. –Prohibits the use of undercover operations. –May expose a cooperative employee.

12. Prosecutorial Authority Cover the entire state with authorization from local District Attorneys Cross-designated at the federal level as “SAUSA”

13. CONFIDENTIALITY Confidentiality is crucial to MIU investigations: –Agent safety –The creation of fabricated evidence –The destruction of evidence –Hiding, moving or disposing of assets.

14. INVESTIGATIVE PHASE COMPLAINTRECORDS RULES & RESEARCH INTERVIEWS SUSPECT INTERVIEWS

15. END GOALS RECOUP LOSSES EXCLUSIONCONVICTIONPRISON

16. Records we need from the MCO or DMA EVERYTHING!!!!!! Application for a provider number Provider agreement Any and all communications between DMA, the MCO and the provider. Any provider records PI or the MCO has obtained. EVERYTHING!!!!!!

17. INVESTIGATIVE PHASE Search and Seizure * By consent Provider Agreement Signed form * Subpoenas * Search Warrant Reviewed SBI Cooperation

18. THIRD PARTY RECORDS Subpoena - N.C.G.S. 108A-63.1 authorizes the MID to issue a subpoena to produce documents - Used to obtain documents from non- provider entities

19. Provider Agreement - Failure to comply results in suspension of provider number (can’t bill anymore) - Copies or scans only (unless circumstances warrant otherwise)

20. Federal Grand Jury and Health Care Subpoena When working with the US Attorney’s office can request one of the above Grand Jury subpoena will be criminal only, items and information obtained can NOT be shared with civil investigators or attorneys Health Care subpoena best when unsure if civil or criminal or know it is both

21. Search Warrant Take originals (must leave a copy) Can’t say no Motion to suppress Consists of an affidavit and the warrant Issued when there is probable cause to believe that a crime has occurred and that there is probable cause to believe that evidence of that crime is at a specific location

22. INVESTIGATIVE PHASE INTERVIEWS * Represented parties * Confession v. Admission i.e. “Those time sheets are forged.” * In the suspects writing. * SPECIFICS

23. Interviewing MCO employees All contacts with DMA employees about a specific provider are in essence interviews and will be documented as such. All e-mails about a specific provider will be saved and will be turned over to defense counsel if the provider is charged. Please refrain from any personal or subjective comments. If you have worked closely in the investigation of a provider there is a good chance you will be called to testify.

24. CRIMINAL PROCESS WarrantIndictmentInformation

25. SUPERIOR COURT DISCOVERY The State must make available to the Defendant: THE COMPLETE FILES OF ALL LAW ENFORCEMENT AND PROSECUTORIAL AGENCIES INVOLVED IN THE INVESTIGATION

26. Cases Are Resolved By: Criminal conviction in either State or Federal Court Civilly under the Federal False Claims Act Civilly under the State False Claims Act Administratively Without action where none is warranted

27. POST CONVICTION Once the final sentencing has occurred: –MID reports the conviction to DMA –MID reports the conviction to US DHHS - OIG for exclusion

28. Federal False Claims Act 31 U.S.C. § 3729 - 3733  The “Lincoln Law”  First enacted in 1863  Response to widespread fraud by Civil War defense contractors  Includes a qui tam remedy

29. Federal False Claims Act Federal False Claims Act  Any person who:  knowingly presents a false or fraudulent claim for payment;  conspires to present a false or fraudulent claim; or  makes a false record to avoid an obligation to pay money to the Government...

30. Federal False Claims Act Federal False Claims Act ... is liable to the government for a civil penalty of $5,500 to $11,000,  plus three times the amount of damages the government sustains

31. Federal False Claims Act  Includes a qui tam remedy  Qui tam pro domino rege quam pro se ipso in hac parte sequitur  “He who brings a case on behalf of our lord the King, as well as for himself"

32. Federal False Claims Act  The qui tam provision offers a reward to citizens to sue on behalf of the government A person who brings a qui tam case is called a relator

33. North Carolina False Claims Act N.C.G.S. § 1-605 -618  Modeled after and virtually identical to the federal False Claims Act  Became effective January 1, 2010  Not retroactive in its application, except for Medicaid fraud

34. False Claims Act Procedure  Qui tam cases are filed under seal  The case is not a matter of public record  The defendant is not served initially

35.  When a qui tam case is filed, the only party served with the complaint is the government False Claims Act Procedure

36.  The seal period is at least 60 days (federal statute) or 120 days (State statute)  The government may request extensions of the seal period False Claims Act Procedure

37.  The purpose of the seal is to allow the government to investigate the relator’s allegations and make a decision about whether to intervene False Claims Act Procedure

38.  When the government intervenes, it has primary responsibility for prosecuting the case.  The relator will receive a smaller share of any recovery when the government intervenes. False Claims Act Procedure

39.  When the government does not intervene, the relator prosecutes the case  The relator will receive a larger share of the recovery when the government does not intervene False Claims Act Procedure