In its most common form, Medicaid fraud consists of a person making a false statement or concealing information that affects the right to receive a Medicaid benefit or payment.  Fraud can also include a situation where an individual submits a claim for Medicaid payment for a product or service that such person is not licensed to provide.  Fraud can also extend to individuals who conspire to defraud the state of a Medicaid payment or benefit. 

The United States Congress has long recognized that the government, with limited resources, is overmatched in the fight against fraud.  In 1986, in response to widespread reports that the U.S. Treasury was being repeatedly bilked by contractors, Congress rejuvenated a Civil War-era law — the False Claims Act. The 1986 amendments strengthened the False Claims Act’s qui tam provisions, creating incentives for private citizens with evidence of fraud to commit time and resources to supplement the government’s efforts. By doing so, Congress put into play a powerful public-private partnership for uncovering fraud and obtaining the maximum recovery for American taxpayers.  In 1997, Texas enacted a law allowing individuals to file a qui tam suit on behalf of himself or herself or the State of Texas alleging Medicaid fraud.  

You can read more about the False Claims Act here.

Medicaid is a joint federal-state health care program for poor and disabled Americans that has been estimated to cost American taxpayers upwards of $450 billion per year.  Because of its enormous size and complexity, Medicaid is susceptible to substantial amounts of waste, fraud, abuse, and mismanagement. 

According to a report by the U.S. House of Representatives, no one can be sure of how much the U.S. Medicaid budget consists of fraud, waste, and abuse, but has been estimated to cost taxpayers over $100 billion a year.