HCFA is expected to act within a week on a request by Massachusetts' attorney general for jurisdiction to prosecute health insurance fraud affecting all payers-federal and private.
If a waiver from current rules is granted, the state's Medicaid fraud control unit would be able to prosecute non-Medicaid insurance fraud that it uncovers in the course of going after suspected Medicaid cheats.
The Medicare and Medicaid fraud-and-abuse amendments to the Social Security Act in 1977 authorized states to create the units and also granted 75% federal funding. But HCFA regulations limited their enforcement powers to the joint state-federal Medicaid program.
In return, the Massachusetts unit would provide reports to HHS every six months on the status and progress of probes into other health insurance programs and, as a pilot project, it would supply an evaluation and list of recommendations at the end of two years.
"We're basically asking the federal government to give us federal dollars to prosecute federal fraud," Mr. Kogut said.
A HCFA spokeswoman said a deci-sion on the waiver request was antici- pated before the end of the month.
Nationally, 42 out of 50 states have Medicaid-fraud units, and federal law requires the remaining eight-Georgia, Idaho, Kansas, Montana, Nebraska, North Dakota, South Carolina and Wyoming-to establish them by 1995.
The units cost the federal government $62 million in 1993, according to the National Association of Medicaid Fraud Control Units.
During the past 15 years, the units have racked up more than 7,000 convictions for Medicaid fraud and patient abuse and neglect, the association said. It had no figures on the total amount of money returned to the Medicaid program.
The Massachusetts unit's activities have recovered $21 million for the state Medicaid program and resulted in indictments of 80 people and 15 corporations in its 31/2 years of operation, according to Mr. Harshbarger.
The specialization of such units on sophisticated white-collar crime, using registered pharmacists alongside full-time insurance-fraud investigators, makes them well-equipped to assist FBI and U.S. Justice Department agents, Mr. Kogut said. And, unlike federal enforcement agencies, the units don't have to reach a pre-established threshold of potential payback to justify time and resources of prosecution, Mr. Kogut said.
"The biggest reason for the request is to let us show the federal government that we can use the Medicaid fraud-control experience to prosecute healthcare providers who steal from private health insurance programs," he said. "That's where the big void is."