In recent years, both state governments and the federal government have made a lot of money in settling Medicaid fraud cases. Because Medicaid is a jointly run state and federal health insurance program, Medicaid fraud cases often result in both state and federal governments receiving funds. A recent report from the consumer group Public Citizen details exactly how much money is involved.
During the first six months of 2012, companies and individuals settling Medicaid fraud cases with the state and federal governments have paid about $6.6 billion in settlement fees. This money comes primarily from healthcare providers and pharmaceutical companies that participated in various types of fraud, such as overcharging Medicaid, unlawfully promoting drugs, and engaging in illegal price fixing.
Between late 2010 and mid-2012, the total amount of Medicaid fraud settlement payments equaled about $10.2 billion. Much of this money came from three of the larger pharmaceutical companies, including Johnson & Johnson, Glaxo Smith Kline, and Abbott.
Because of the windfall settlements, many states can now boast Medicaid fraud investigation departments that bring in far more than they spend. According to the report, some states are recouping between $12 and $84 for every single dollar the state spends on investigating and prosecuting Medicaid fraud cases. According to the report, 17 states have recovered enough to either completely pay for their investigative costs, or have made a profit on Medicaid fraud investigations.