Medicaid Fraud Recovery Tops $1 Billion

The Texas attorney general's office is touting a new state record — $1 billion in Medicaid fraud recoveries over the last 10 years.

About $400 million of the state's recoveries were returned to Texas' coffers. The federal government, which provides roughly 60 percent of funding for the state's Medicaid program for low-income Texans, received the remaining recoveries.

Texas has ramped up Medicaid fraud investigations in recent years, and the majority of the state's cases have been resolved with the help of private whistleblowers, who can receive up to 25 percent of a fraud settlement by referring the case to the state. 

More than half of the $1 billion recovered in litigation has come from suits against drug companies accused of misreporting the costs of their drugs to Medicaid providers. On Jan. 4, Pfizer Inc. and Endo Pharmaceuticals agreed to a $36 million settlement with the state over charges that the companies falsely reported market prices for some drugs. 

The Health and Human Services Commission estimates that Texas lost $6 billion from 2004 to 2011 on fraud, waste and abuse. Sen. Jane Nelson, R-Flower Mound, has praised the state's efforts to seek out and eliminate fraud. She has filed Senate Bill 8 to address fraudulent practices, such as illegal marketing to Medicaid recipients, by Medicaid providers.