September 2004 Texas announced that they had increased Medicaid Fraud Control Unit (MFCU) staff from 36 to 110, and expect to increase to at least 200 by the end of fiscal year 2005. In FY 2004 the MFCU doubled the number of cases it opened, the number of cases presented for prosecution and the number of cases in which criminal charges were filed. Identification of illegal overpayments made to fraudulent operators has increased by 85 percent to over $27 million. Last month the U.S. Department of Health and Human Services recognized Texas by awarding them the annual Inspector General’s State Fraud Award. I applaud their increase in staffing, but they’ve still got a long way to go. Considering that Texas Medicaid spending is about $18 billion per year, $27 million in identified illegal overpayments does not sound like a record to be celebrating. We know Texas is a huge target for fraud. If only 3% of Medicaid spending were caused by fraud (which is an incredibly conservative estimate), that would be $540 million per year. The federal government and Texas are celebrating that at most Texas has identified 5% of the fraud that is draining their Medicaid program. If I were a fraud perpetrator, I’d feel pretty comfortable that as long as I don’t get too greedy or careless, I’ll be pretty safe committing fraud in Texas. Of course, I’d be even safer in the states that didn’t get awards and haven’t increased staffing.