Texas Medicaid Fraud Recovery Passes $400 Million Thanks to Whistleblowers


Operated jointly by federal and state agencies, Medicaid is one of the largest and most complex governmental undertakings in the United States. Not surprisingly, it also provides a breeding ground for fraud, primarily from unscrupulous medical facilities and providers who overbill, double-bill, bill for services never rendered and perform all manner of other shenanigans in order to lay claim to U.S. tax dollars they did not earn. While the government constantly fights to prevent fraud and recover fraudulent payments already made, the sheer scope of the effort often makes it seem to resemble Hercules at the Augean Stables. However, some states, including Texas, have made great strides in cleaning up the filth with the help of whistleblowers.

In 2013 the Attorney General of the State of Texas reported that the state’s Civil Medicaid Fraud Division had recovered more than $1 billion in fraudulent overpayments. More than $400 million of this went to the State of Texas. The lion’s share of these landmark recoveries were thanks to private whistleblower lawsuits subsequently taken up by the Division:

  • More than $550 million recovered from fraudulent payments made to pharmacies due to inflated billing for prescription drugs
  • More than $48 million recovered from drug manufacturers who urged physicians to prescribe their products for conditions for which they had not received FDA approval
  • Additional recoveries from pharmaceutical manufacturers paying kickbacks to doctors who prescribe their products

While the dedicated people at the Civil Medicaid Fraud Division have certainly played a big part of the tremendous success of this program, they could not have done so without the brave whistleblowers in the pharmaceutical and healthcare industries who put their careers at risk in order to expose fraudulent conduct that they found to be intolerable.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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