A recent final rule from OIG permitting Medicaid Fraud Control Units (MFCUs) to use federal funds to pay for data mining technology may not end up having a huge impact on fraud prevention, according to an attorney I talked to last week. Ellyn Sternfield, an attorney with Mintz Levin and a former head of the Oregon MFCU, told me that most MFCUs are already swamped with a backlog of cases, and don't have the time to data mine for undetected fraud cases. She also told me that around 10 MFCUs don't have direct access to Medicaid data from their state Medicaid agency, which would make any data mining very hard to do.

The OIG final rule said allowing MFCUs to use federal funds for data mining "will enable them to marshal their resources more effectively and take full advantage of their expertise in detecting and investigating Medicaid fraud vulnerabilities." MFCUs that want to use federal funds for data mining will have to coordinate their activities with their state Medicaid agencies and make sure their staff are fully trained in data mining technology, the final rule said. OIG said it expected the final rule would lead to combined federal and state savings of $60 million from FY 2014 through FY 2023.