7 things to know about what Medicaid Fraud Control Units really do: KFF

While Medicaid Fraud Control Units have existed under federal law since 1977, the units have received renewed attention amid the Trump administration’s fraud, waste and abuse crackdown.

KFF recently broke down the role of these state-level law enforcement entities and how they go about ensuring Medicaid program integrity.

Here are seven things to know:

1. In June, the MFCUs for Hawaii and New York faced funding freezes after HHS’ Office of Inspector General denied requests for recertification. HHS critiqued the units’ outcomes, including their number of fraud convictions.

2. The standard process for an MFCU case starts with an investigation, prompted by suspected provider fraud referrals or patient abuse or neglect complaints. These typically come from a managed care organization, state Medicaid agency, patient or past employee.

3. Once a case is opened, the team launches an investigation. If there is sufficient evidence, the MFCU can bring criminal charges or civil lawsuits, which may lead to criminal convictions and civil judgments. This could result in financial recoveries, and providers convicted of criminal fraud or patient abuse or neglect must be excluded from healthcare programs that get federal funds. Cases can take months or years.

4. Not every case directly leads to enforcement action. Cases can be dropped, resolved without a lawsuit or charges, or referred to other law enforcement.

5. MFCUs do not work in isolation. They collaborate with state inspectors general, state health departments, the Justice Department and HHS’ Office of Inspector General. Sometimes, cases are transferred to federal law enforcement.    

6. As of the end of fiscal 2025, there were 15,810 open investigations across MFCUs. Most of those cases, 12,818, were related to provider fraud. 

7. In fiscal 2025, MFCUs reached 1,841 case resolutions, including 661 civil settlements and judgments. MFCUs average more than $1 billion in recoveries annually from fraud investigations. These units recovered $1.97 billion in fiscal 2025, driven in part by a McKinsey case related to OxyContin marketing and sales.

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