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Wayne Stenehjem at the North Dakota Capitol on Oct. 27, 2016. (Sam Easter/Forum News Service)

North Dakota becoming last state to create unit tackling Medicaid fraud

BISMARCK — North Dakota is poised to become the last state in the country with a team tasked with investigating and prosecuting Medicaid fraud after some prodding by the federal government.

Federal officials in 2017 notified the state that its request for a new waiver allowing it to go without a "Medicaid Fraud Control Unit" would not be considered. North Dakota had a waiver since 1994, according to a letter Gov. Doug Burgum sent to the Centers for Medicare and Medicaid Services.

State lawmakers responded earlier this year by creating a new unit in Attorney General Wayne Stenehjem's office. The state's top law enforcement official said Thursday, June 20, the team will consist of six employees, with one attorney, two investigators, two auditors and an administrative assistant.

Stenehjem hopes to have the staffers in place by July 1.

Medicaid is jointly funded by federal and state governments and provides health coverage for low-income people. Common examples of fraud include providers billing for services that weren't performed and double billing, and the unit will also be responsible for fighting patient abuse or neglect.

Medicaid fraud units date back to legislation signed by then-President Jimmy Carter in the 1970s after Congress investigated instances of abuse, according to the National Association of Medicaid Fraud Control Units.

The federal government pays for 90% of the unit's expenses for the first three years and then 75% after that, Stenehjem said. The state's share comes to about $115,600 in the 2019-21 biennium, according to budget figures provided by his office.

Stenehjem said the state will also receive a portion of the recovered dollars.

"So in other states, there is no cost to the ... state taxpayer," he said.

Stenehjem said it's unclear how large of a problem Medicaid fraud is in North Dakota. He said it typically hasn't been pursued here on a state or local level because of the "highly complex" nature of the cases.

In fiscal year 2018, Medicaid Fraud Control Unit cases resulted in 1,503 convictions across the country, according a federal report. They also recovered $859 million in civil and criminal cases.

Fargo Republican Sen. Kristin Roers, a registered nurse who was the chief sponsor of the bill creating the unit, said the only resistance she encountered came from lawmakers who "didn't want to see government grow." But she said failing to act could have affected the state's Medicaid reimbursement rates.

Shelly Peterson, the president of the North Dakota Long Term Care Association, didn't think the attorney general's new team would uncover fraudulent billing practices in North Dakota nursing facilities.

North Dakota Medical Association Executive Director Courtney Koebele said her organization was neutral on the proposal during the legislative session and doubted that Medicaid fraud was a major problem here.

"I think our Legislature, when it was reviewing the issue, really didn't see that there was a need for it," she said. "On the other hand, we're not in favor of fraud and want that to be stopped if it exists."

John Hageman

John Hageman covers North Dakota politics from the Forum News Service bureau in Bismarck. He attended the University of Minnesota in the Twin Cities, where he studied journalism and political science, and he previously worked at the Grand Forks Herald and Bemidji Pioneer.  

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