A fraud error can only be established through a finding by a court of appropriate jurisdiction. Therefore, additional steps are required before collection action may commence.
A suspected fraud error shall be referred to the Office of the Medicaid Inspector General (OMIG). The OMIG will decide whether to pursue the case in court. If a decision is made not to pursue, the claim will be labeled as Client Error and processed as such. If the claim is accepted by the OMIG for prosecution, no further action shall be taken until a decision by the court has been rendered.
Individuals should not receive notice that the case is under investigation for fraud. Client inquiries concerning the possible fraud investigation should be responded with a statement that the case is “under administrative review.” No additional information should be provided.
A fraudulent error occurs when the client intentionally:
An individual shall be considered to have committed fraud when the individual has been legally determined to have committed fraud through a court of appropriate jurisdiction. There is no other method of establishing a fraud claim.
A finding of fraud under these provisions may result in criminal penalty, including fines and imprisonment, but may only result in a period of ineligibility if so ordered by the court. See 11126.2. Fraud error status is not established if the court’s resolution to the willful client error is to place the individual on diversion.
Reserved
Reserved
An individual who has been convicted of medical assistance fraud under 42 U.S.C. Sec. 1320a-7b shall be ineligible for medical assistance for one year from the date of conviction. Convictions under state law do not carry a disqualification period.
Pregnant women who are sanctioned remain eligible for medical coverage when continuous eligibility provisions apply. See KFMAM 2300.
Before a referral to the Office of the Medicaid Inspector General (OMIG) for prosecution of suspected fraud can be made, it is necessary for the agency to first determine the amount (if any) of the alleged fraudulent overstated eligibility by following the procedures outlined in 11124. The same act of alleged fraud repeated over a period of time shall not be separated so that separate penalties can be imposed. If it is decided that a case will not be prosecuted for fraud, then the overstated eligibility shall be handled as a client error as outlined in 11121.2. The burden of proving fraud is on the agency. All referrals shall be reviewed by the Eligibility Supervisor and Program Integrity Specialist prior to the referral being sent to OMIG.
There is no minimum amount of alleged fraudulent overstated eligibility required to initiate a fraud referral.
Reserved
Reserved
Once the court has found the individual to be guilty of fraud the disqualification penalty shall be applied as follows:
Reserved
The remaining household members, if any, shall begin repayment during the period of disqualification imposed by the court. The repayment agreement shall inform the remaining household members of:
The household shall have 10-days from the date the notice is mailed to return the completed repayment agreement. If the household fails to return the completed repayment agreement in the time allotted, recovery action shall be imposed in accordance with 11126.1(6) if repayment is not otherwise established by a court. In addition, if the household agrees to make repayment but fails to do so, recovery action shall be automatically imposed, and adequate notice only is required. See 1432(17).
All repayments shall be made in accordance with established procedures in 11126.1 for cash repayment or monthly installments.
In cases where the determination of fraud is reversed by a court of appropriate jurisdiction, the individual shall be reinstated if otherwise eligible. Understated eligibility shall promptly be corrected as a result of the disqualification.