Officials within the state Medicaid office say some healthcare providers cheat the system by encouraging patients to use services they do not need, and that's unethical and illegal.
Providers have been known to file claims with the Medicaid office for reimbursement after giving gifts, even cash, to get patients to agree to needless treatments.
"In tough economic times, we have an obligation to save every penny possible for the most crucial, essential services that are truly needed by our Medicaid patients," Gov. Bev Perdue said as she signed Senate Bill 675 into law Tuesday.
The bill is part of a package of initiatives to fight fraud, waste and abuse in North Carolina's Medicaid system. The Governor says the state will save millions as it cracks down on Medicaid fraud.
"Those unscrupulous providers who defraud the state and cost us millions every year won't be tolerated. This law is just another way we will fight Medicaid fraud, waste and abuse - another way we are setting government straight," said Perdue.
Investigators say some cases involve pharmaceutical supply and manufacturers who paid nursing homes and physicians to participate in Medicaid fraud.
In just three cases cited by the Governor's office, the state managed to recover a combined total of nearly $12 million.
The Department of Health and Human Services says it's strengthened investigation and prosecution of potential abusers and has a campaign to encourage the public and providers to report suspected abuse.