Statutory Authority
In 1981, the Virginia General Assembly enacted Chapter 9, §§ 32.1-310 through 32.1-321 of the Code of Virginia to regulate medical assistance in the Commonwealth. This Chapter authorizes criminal sanctions for specific acts of Medicaid fraud and abuse. The duties and responsibilities of the Unit are set forth in § 32.1-320.
In 1982, the Medicaid Fraud Control Unit (Unit) was established within the Office of the Attorney General (OAG) in accordance with federal requirements. This Unit is separate and distinct from the Department of Medical Assistance Services (DMAS), which is the single state agency in the executive branch responsible for the administration of the Medicaid program.
In 1995, the General Assembly significantly amended the Medicaid fraud statutes by converting Virginia Code § 32.1-314 from a larceny offense to a false-claims offense. The change eliminated the requirement that the Commonwealth prove $200 or more was wrongfully taken from the program in order to secure a felony conviction. Under the amended statute, the Commonwealth need only prove that a materially false statement was made in an application for reimbursement under the program.
In 2007, the MFCU/OAG submitted a proposal to increase the penalty for abuse or neglect of an incapacitated adult that resulted in death to a Class 3 felony. This increased the term of imprisonment to not less than five years nor more than 20 years and a fine of not more than $100,000. 2007 Va. Acts cc. 562,653. Before this amendment, all abuse of an incapacitated adult resulting in serious bodily injury or disease was a Class 4 felony punishable by a term of imprisonment of not less than two years nor more than 10 years and a fine of not more than $100,000.
Also in 2007, the General Assembly enacted a number of changes to health care fraud statutes in Virginia to ensure Virginia would be deemed compliant with the federal Deficit Reduction Act of 2005 (DRA). If deemed compliant, Virginia would be allowed to keep an additional 10% of the money recovered from restitution. Among those changes the Assembly:
- Amended Virginia Code § 8.01-216.3 to increase the minimum civil penalty to $5,500 and increase the maximum penalty to $11,000;
- Amended Virginia Code § 8.01-216.3 to allow the Virginia Attorney General's Office to recover attorney fees and costs incurred in its investigation and prosecution of qui tam actions;
- Amended Virginia Code § 8.01-216.9 to prevent defendants from denying civil liability if they are convicted in a criminal proceeding based on the same transaction or occurrence; and
- Amended Virginia Code §§ 32.1-312 and 32.1-313 to extend the statute of limitations and allow Virginia to bring a civil action for fraud against health care subcontractors that provide services or goods to Medicaid recipients, but do not contract directly with Virginia's state provider (DMAS) pursuant to a provider agreement.
2007 Va. Acts, c. 569. The United States Department of Health and Human Services, Office of the Inspector General issued a ruling on March 13, 2007 that found Virginia's statutory regime was in compliance with the DRA.
In 2011, the General Assembly made several additional amendments to the Health Care Fraud statutes to facilitate investigations and recoveries. One such change amended Virginia Code § 32.1-314 to mandate that restitution be ordered to the victim, DMAS, upon conviction under the statute. Another amendment expanded the jurisdiction of the MFCU to investigate "complaints alleging abuse or neglect of persons in the care or custody of others who receive payments for providing health care services under the state plan for medical assistance, regardless of whether the patient who is the subject of the complaint is a recipient of medical assistance.”
The General Assembly also enacted changes to the Virginia Fraud Against Taxpayers Act (VFATA) that track changes to the Federal False Claims Act. The amendments to VFATA are designed to encourage the filing of qui tams, (commonly known as "whistleblower" complaints), facilitate the investigation of fraud allegations and seek to keep Virginia compliant with the DRA. Among those changes:
- Amended Virginia Code § 8.01-216.8 to expand the protection of whistleblower employees, contractors or agents from adverse employment actions taken as a result of the lawful acts of the whistleblower;
- Amended Virginia Code § 8.01-216.10 to allow the Attorney General's designee to issue a civil investigative demand, and to share information thus obtained with qui tam relators where necessary to pursue false claims investigations; and
- Amended Virginia Code § 8.01-216.2 and § 8.01-216.3 to broaden the scope of conduct covered by the VFATA.
In 2012-2013, the General Assembly amended § 32.1-320 of the Code of Virginia to expedite health care fraud investigations and litigation. The revisions clarify existing authority for the Medicaid Fraud Control Unit to subpoena health records under the Health Privacy Act. Further, the amendments codified protections for attorney work product and privileged investigative files developed in the course of MFCU investigations and litigation. The codification provides a statutory basis to assert protection for such materials during the course of litigation. As many qui tams are filed in jurisdictions outside of Virginia, this change provides additional protections of attorney work product and investigative materials in matters filed in jurisdictions with differing practices and case law as to the extent of such privileges.
In 2015, the General Assembly amended § 32.1-314 of the Code of Virginia to expand venue in Medicaid Fraud cases to include "the county or city in which (i) any act was performed in furtherance of the offense or (ii) the person charged with the offense resided at the time of the offense.