Medicaid Fraud Control Units: who they are and what they investigate
Medicaid Fraud Control Units are the state teams that prosecute Medicaid fraud by providers and the abuse or neglect of patients in care facilities. Most sit in the attorney general's office, apart from the agency that pays claims. HHS OIG recertifies all 53 every year: one per state, plus units for the District of Columbia, Puerto Rico, and the Virgin Islands. Transportation companies are a regular target.
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How the units are built
Federal law defines a fraud control unit in 42 U.S.C. 1396b(q). It is a single office of state government that HHS certifies and recertifies every year, and it must meet a few conditions:
- Prosecuting power. It sits in the attorney general’s office or another department with statewide authority to prosecute crimes, or it works under formal referral procedures with the office that has that authority.
- Independence. It cannot be part of the Medicaid agency, so the people who pay claims are not the people who prosecute them.
- Two jobs. It runs a statewide program against fraud by Medicaid providers, and it reviews complaints of abuse or neglect of patients in facilities that take Medicaid.
Units staff investigators, attorneys, and auditors together. Federal money covers 90 percent of a unit’s costs during its first three years and 75 percent from then on. OIG oversees them, recertifies each one annually, and measures them against performance standards that took effect September 18, 2024. The abuse and neglect side also reaches board and care facilities and Medicaid enrollees in noninstitutional settings.
A year of results
OIG’s report on fiscal year 2025 gives a sense of scale across all 53 units.
| Measure, FY 2025 | Result |
|---|---|
| Convictions | 1,185, of which 856 were for fraud and 329 for patient abuse or neglect |
| Civil settlements and judgments | 674 |
| Recoveries | Almost $2 billion: $1.3 billion criminal and $706 million civil |
| Exclusions that followed convictions | 900 individuals and entities |
| Fraud referrals from managed care entities | 5,991 |
| Return | $4.64 recovered for every dollar spent |
Transportation stands out in the detail. Nonemergency transportation providers accounted for 52 of the fraud convictions, tied for third among all provider types, and 31 of the civil settlements and judgments, fifth among provider types.
How transportation cases start
Referrals come from several directions. Every suspected provider fraud case the Medicaid agency spots goes to the unit by rule, along with any claims data and provider records the unit requests (42 CFR 455.21). Managed care plans refer cases too, as the 5,991 referrals in fiscal year 2025 show.
GAO reported in 2022 that unit investigations produced nearly 200 criminal convictions, civil settlements, and judgments against transportation providers in 25 states from fiscal years 2015 through 2020. New York shows what one sweep looks like. In June 2025, its unit announced actions against 25 transportation companies: 16 settlements worth more than $13 million, 7 new lawsuits against companies that had ignored cease-and-desist letters, and criminal cases. The schemes included billing trips that never happened, adding fake tolls, stretching mileage, using unlicensed, suspended, or excluded drivers, and paying riders kickbacks. One driver claimed 96 trips and 2,158 miles in a single day.
A unit can also work civil cases under the False Claims Act and its state versions, and a conviction usually brings exclusion from federal health programs, which puts a name on the OIG exclusion list.
If a unit contacts your company
- Call a health care attorney first. Let counsel handle interviews, subpoenas, and records requests.
- Preserve everything. Do not edit, backdate, or delete trip logs, manifests, or messages. A conviction for obstructing an investigation is a ground for exclusion on its own.
- Meet every deadline on subpoenas and document requests, through your attorney.
- Leave your staff free to talk. Punishing an employee for helping a false claims case is illegal, and the law lets them win back their job and twice the pay they lost.
- Watch your payments. The state must suspend payments on a credible allegation of fraud unless it finds good cause not to, and Medicaid health plans must follow suit. The notice tells you how to submit written evidence to the agency.
- Read your broker agreement. Some require prompt notice of any investigation. MTM’s Pennsylvania agreement, for one, calls for immediate notice if the company or one of its drivers comes under criminal investigation or is charged.
- Plan for repayment. If the facts show you were overpaid, the recoupment guide and Medicaid audit guide cover what comes next.
Pulling the records
Investigators work from trip-level records, and cases can reach back years. In HealthRide, each ride keeps GPS-recorded miles, timestamps, signatures, and the recorded wait on any no-show, while the reports export the trip log as a CSV or print-ready PDF.
Frequently asked questions
- Is the fraud unit the same office that audits my Medicaid claims?
- No. The office that runs Medicaid enrollment, payment, and audits cannot be the fraud unit, which has to stand apart from it. When the Medicaid agency suspects a provider of fraud, it is required to pass the case along, and the unit chooses whether to investigate and prosecute.
- Can a fraud control unit bring criminal charges?
- Yes. A unit sits in the attorney general's office or another office with statewide power to prosecute, or it has formal procedures for sending cases to the prosecutors who do. In June 2025, New York's unit announced two convictions of individuals and their transportation companies alongside its civil settlements and lawsuits.
- Will Medicaid keep paying me while a unit investigates?
- Maybe not. Once the state decides a fraud allegation against you is credible and an investigation is pending, federal rules make it stop every payment, unless it finds good cause to keep paying you in full or in part. No warning is required. The written notice must arrive within five days, though law enforcement can ask the state to hold it back for as long as 90 days. Managed care plans have to stop paying you too.
