Thomas to introduce legislation to raise penalties for Medicaid fraud

The Commonwealth experienced $694 million in improper Medicaid payments

Rep. Wendi Thomas (R-Bucks) recently joined a bipartisan group of legislators to unveil a package of bills to fight fraud within Pennsylvania’s Medical Assistance Program, also called Medicaid.

“Medicaid fraud and abuse hurts Pennsylvania taxpayers and Medicaid recipients,” Thomas said. “We must reform the system by encouraging whistleblowers to speak out, put tools in place to better guard the system, and make the penalties for fraud so harsh there will be no incentive to commit the crime.”

Thomas was joined at the press conference by Rep. Seth Grove (R-York), who headed the legislative initiative, and Attorney General Josh Shapiro.

According to the inspector general for the U.S. Department of Health and Human Services, the Commonwealth experienced $694 million in improper Medicaid payments.

To combat this, Thomas will introduce legislation to crack down on fraud. Specifically, under her bill, the penalty for knowing or causing a fraudulent claim to be submitted would be a second-degree felony if the fraudulent claim is $100,000 or more. If the claim is between $2,000 and $100,000, the penalty for the fraudulent claim would be a third-degree felony. If the claim is $2,000 or less, the penalty would be a third-degree misdemeanor.

In March, Shapiro released a grand jury’s findings on ways to prevent Medicaid fraud, including creating a law to recover money stolen through fraud.

“As one of the top eight Medicaid spending states, Pennsylvania is the only one without a False Claims Act, which means we cannot comprehensively combat Medicaid fraud and recoup money lost,” Shapiro said. “A state False Claims Act and the reforms recommended by the grand jury offer a dynamic, multi-faceted approach to fixing these problems.”

Grove will introduce a bill to adopt a state version of the federal False Claims Act, which would allow the Commonwealth to, during national settlements, recoup an additional 10 percent from false claims made against Medicaid. Additionally, this legislation would empower the attorney general’s office, or a district attorney designated by the attorney general, to investigate other potential cases of false claims made against the Commonwealth.

In order to prevent improper payments within state programs, legislation by Rep. Valerie Gaydos (R-Allegheny), which mirrors the federal Improper Payment law, would require agencies to review their programs and expenditures and assess whether they are highly, moderately or unlikely to be susceptible to an improper payment.

Legislation by Rep. Clint Owlett (R-Tioga/Bradford/Potter) would establish a state database of organizations, individuals and entities which are not eligible to receive funds from a Commonwealth agency. The bill is modeled after the Federal Do Not Pay Legislation.

“When the penalties are not strong enough, we cannot stop fraud,” Thomas said. “If you plot to steal thousands from the Medicaid system, you should pay a harsh price.”