Intern Investigates Fraud in Texas Medicaid

Intern Melissa McCracken worked in the Attorney General's Medicaid Fraud Control Unit.
Intern Melissa McCracken worked in the Attorney General's Medicaid Fraud Control Unit.

After working for two years in loss prevention at Saks Fifth Avenue, Melissa McCracken became intrigued by fraud and the thousands of dollars thrown away by criminals on frivolous items.

“People spend money on things they don’t need,” said McCracken, a Master of Science student in Security Studies at the College of Criminal Justice. “It’s ridiculous how much money they blow. It’s incredibly frustrating.”
McCracken was proficient at detecting fraud in the high-end store and could easily pick out some of the culprits, like the woman buying three Gucci purses for $9,000 and paying with a check."

She is now bringing that keen sense to her internship with the Attorney General’s Medicaid Fraud Control Unit, where she is sniffing out illegal activity in the government program among health care professionals and medical supply companies.

stethoscope“People are selfish,” said McCracken. “Some set up clinics only for the purpose of fraud and have not taken care of a single patient. Even though they are stealing from the state, we as taxpayers have to pay for that.”

The Medicaid Fraud Control Unit conducts criminal investigations of providers suspected of cheating the Medicaid program, a federal/state cost sharing initiative that provides approximately $27 billion in health care in Texas annually for people who are unable to pay for it. More than $3.7 million Texans are eligible for Medicaid, and there are more than 57,000 service providers, including doctors, medical equipment companies, podiatrists, dentists, licensed professional counselors, hospitals, adult day care centers, nursing homes, clinics, pharmacies, ambulance companies, case management centers and others.

An elderly woman sitting in a wheelchair in a nursing home.In addition, the unit also investigates allegations of physical and sexual abuse as well as criminal neglect in health care facilities which receive Medicaid funding. It also examines drug diversion, where health care workers, doctors or nurses sell, keep or throw away medications prescribed for patients.

Fraud, estimated to be 10 to 17 percent of the Medicaid spending in Texas, takes many forms. It may include:

  • billing Medicaid for x-rays, blood tests or procedures that were never performed
  • giving Medicaid patients generic drugs and billing for the name-brand version of the medication
  • providing the Medicaid recipient a motorized scooter while billing for an electric one at three time the cost
  • billing Medicaid for care not provided or for patients who died, were transferred to another facility or were not eligible for the program
  • transferring Medicaid patients by ambulance when it was not medically necessary
  • requiring vendors to provide “kick backs” for services to Medicaid patients
  • billing patients for service already paid by Medicaid

The investigation of Medicaid fraud is a long and arduous process, often taking two to three years to build a case for prosecution. McCracken spends her days combing through financial and patient records looking for anomalies, such as transfers and checks involving large sums of money or procedures not included in patient files. McCracken also will work with investigators in the field that follow up on claims that were made.

“She’s a great employee, and she is doing a fantastic job,” said Lt. Rob Lunsford of the Medicaid Fraud Control Unit. “This internship gives her the opportunity to work white collar crime and health care fraud, and it helps us to process cases a little faster.”

The Medicaid Fraud Control Unit includes certified peace officers as well as civilian employees, including investigators, auditors and attorneys who assist with the prosecution of providers that defraud the system or abuse the elderly. The headquarters is in Austin, and there are eight offices in the state, including Corpus Christi, Dallas, El Paso, Houston, Lubbock, McAllen, San Antonio and Tyler.

McCracken would like to pursue a career in fraud investigation and is seeking her certification from the Association of Certified Fraud Examiners. She has applied to the Houston Police Department and hopes to join a fraud unit in the department in the future.

McCracken is also active with ASIS, an organization of security practitioners in the public and private sectors, which she said is critical for networking . In fact, she learned about the Medicaid Fraud Control Unit internship from a woman attending a golf outing for the organization. She also encourages students to join the student chapter of the Association of Certified Fraud Examiners at Sam Houston State University if they are interested in pursuing a career in this field.

“Networking is really an important part of finding a job,” McCracken said. “I would really encourage students to join ASIS and the Association of Certified Fraud Examiners.”


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