Governor signs law making Medicaid fraud a Class C felony

On Tuesday, March 14, 2017, the governor signed into law legislation that makes Medicaid fraud a Class C felony and otherwise conforms the provider portion of Alabama’s Medicaid fraud statute with federal law. The new law takes effect June 1.

Under Act No. 2017-66 by Sen. Trip Pittman, R-Daphne:

  • a person must knowingly engage in prohibited conduct to be subject to the criminal penalties.
  • the definition of “a person” includes a corporation or other business entity.
  • the statute of limitations for prosecution is set at six years, which Pittman says is the average nationally. The prosecution timeline before the law change was three years.
  • the criminal penalties do not apply to certain safe harbor exceptions included in federal law.

A Class C felony in Alabama carries a punishment of “not more than 10 years or less than 1 year and 1 day” and fines of $15,000 or less. Medicaid fraud currently is a felony with a punishment of up to five years and a $10,000 fine.

The attorney general’s office told lawmakers the Medicaid Agency estimates 4 percent of Medicaid claims in Alabama are fraudulent.

The legislation was a priority of the Alabama Senate Republican Caucus.

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