Tennessee Medicaid Fraud Control Unit Gets an “A”

Congress spent $376 billion on Medicaid last year. The states spent billions more. Unfortunately, approximately 10% of that money gets lost to fraud. Standing between taxpayers and corrupt hospitals, pharmaceutical companies and doctors are the state Medicaid Fraud Control Units. Every state has one including Tennessee.

Tennessee Medicaid Fraud Control Unit Gets an “A”

Last year the federal Centers for Medicare and Medicaid Services audited the Tennessee Medicaid Fraud Control Unit. We are happy to report that Tennessee passed its review with flying colors!

In Tennessee, responsibility for Medicaid fraud investigations is given to the Tennessee Bureau of Investigation.

Since the Tennessee Medicaid Fraud Unit was started 25 years ago, each year it has brought in more money than it has spent. It has successfully prosecuted hundreds of fraudsters and recovered millions of dollars.

The federal audit of Tennessee looked at the last 3 years. The just released audit report says the Unit has 89 indictments, 80 convictions, 62 civil judgments and settlements, and total recoveries of $208 million. The last time the unit was audited was in 2012.

In recent years, the feds have looked carefully at how states police Medicaid fraud. That’s because the federal government contributes so much money to these state programs.

As part of the review, federal auditors did a deep dive into Tennessee’s fraud unit. And they didn’t just look at how much money was recovered. The audit included a (1) comprehensive examination of the unit’s files and finances, (2) interviews with key stakeholders, (3) interviews with the Unit's managers and selected staff; (4) an in-depth examination of 20 sample case files, (5) a review of all convictions, (6) a review to ensure that all adverse actions were submitted to the National Practitioner Data Bank, and (7) observation of Unit operations.

The audit found that the Tennessee Medicaid Fraud Control Unit “generally operated in accordance with applicable laws, regulations, policy transmittals, and the MFCU performance standards.”

The feds did note that the Unit “investigated 11 cases that were ineligible for Federal matching funds because they involved allegations of patient abuse or neglect in non-facility settings.” The federal government understandably wants to insure their matching funds are protected. Many stakeholders, however, believe that it is important for the Unit to investigate abuse cases even if no Medicaid money was involved.

Another problem area identified by the audit was low staffing. Although the state now spends nearly double what it did on TennCare in 2001, it now employs less people in the state’s fraud unit. (In Tennessee, Medicaid is called TennCare.) The state says that it will try to hire more agents and auditors. Typically, the federal government will pick up most of the tab.

The Unit received special recognition for its outreach efforts. Random audits are not a very effective way of uncovering fraud.

Over the last several years, the Unit dramatically increased its outreach efforts in the hopes of getting people in the healthcare community comfortable with reporting fraud. That effort is certainly working as outside referrals to the Unit have doubled since 2015.

Tennessee Medicaid Fraud Control Unit

The Tennessee Medicaid Fraud Control Unit is headquartered in Nashville. There are six field offices spread across the state. Of the 50 state Medicaid fraud agencies, Tennessee’s unit is one of just six that are not housed within the state Attorney General’s Office. As noted above, the Tennessee unit is a division of the state Bureau of Investigation.

Currently the unit has 36 employees, most of which are sworn law enforcement officers. The agency is headed by a Special Agent in Charge. There are 3 Assistant Special Agents in Charge, 21 agents, 2 auditors, 2 attorneys and various support personnel.

During the three year audit period, the Unit spent $13.4 million (with a state share of $3.3 million) and brought in $208 million. That means for every tax dollar spent, the Unit brings back $15.50!

Tennessee Medicaid False Claims Act

Tennessee is one of many states that has its own False Claims Act. Actually, Tennessee has two, one of those specifically geared towards TennCare fraud. Under the Tennessee Medicaid False Claims Act, whistleblowers with inside information about fraud involving TennCare can collect a reward of up to 30% of whatever the state collects from the wrongdoers. The federal government will also pay a reward.

For information about whistleblower rewards in Tennessee, visit our Tennessee Medicaid Fraud Whistleblower page. You will find plenty of details on how to claim an award, how to seek protection from illegal whistleblower retaliation and what conduct is considered fraud in Tennessee.

Remember, if you want a reward, you need to file a claim in court. If you aren’t interested in collecting a reward, you can contact the Tennessee Medicaid Fraud Control Unit directly. Calling the state’s Tenn Care fraud hotline does NOT make you eligible for an award!

Recent Tennessee Medicaid Fraud Control Unit Cases

Why did the Unit get such high marks? The answer is easy! The men and women who staff the unit are some of the best and brightest in the state. And they take their jobs seriously.

In April 2018, two Tennessee residents were indicted for allegedly participating in a $4.6 million Medicare fraud kickback scheme. John Davis, 40, and Brenda Montgomery, 69, were charged with one count of criminal conspiracy and seven counts of paying or receiving healthcare kickbacks.

Davis was the former CEO of Comprehensive Pain Specialists, a large pain management company. Montgomery was the owner of a durable medical equipment company. The indictment alleges that Montgomery agreed to pay kickbacks to Davis in exchange for Davis referring Medicare patients to her company.

Prosecutors say that Montgomery submitted $4.6 million in phony claims to Medicare while paying $770,000 in kickbacks to Davis.

Tennessee Medicaid Fraud Control Unit agents were assisted by federal and Health and Human Services and Department of Defense agents.

April Thrasher

Stopping a multi-million fraud is important but the Unit tries to protect at risk patients too. Two weeks ago, Unit personnel busted a Collingwood nurse for allegedly stealing medications from a patient and forging documents.

A Wayne County Grand Jury indicted April Nicole Thrasher, 34, with one count of abuse of a patient, one count of theft and one count of forgery. The patient was living in a group home at the time of the theft.

See Something? Say Something!

If you have information about Tennessee healthcare fraud, you may be eligible to file a lawsuit and potentially earn millions of dollars as a reward. Contact us today to learn more about your options.


Medicaid Fraud Hotline: 888.742.7248 or Report Online
and claim reward