State Medicaid Fraud Control Units (MFCU) are responsible for investigating Medicaid fraud. This is part of the responsibility assigned to them from CMS as a part of receiving federal health care dollars to reimburse those services and items covered by Medicaid.
According to the OIG site, "Medicaid Fraud Control Units (MFCUs) investigate and prosecute Medicaid provider fraud as well as patient abuse or neglect in healthcare facilities and board and care facilities. MFCUs operate in 49 states and the District of Columbia. The MFCUs, 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 re-certifies 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."Performance Standard 8(f) states that a Unit should transmit to the federal OIG reports of all convictions for the purpose of exclusion from Federal health care programs, within 30 days of sentencing.
On June 1, 2012, the Federal Register published an important mandate to measure the success of state Medicaid Fraud Control Units.