On March 17, 2011, the OIG published a proposed rule that would allow State Medicaid Fraud Control Units (MFCUs) to use federal matching funds to identify fraud through screening and analyzing State Medicaid claims data, a technique known as data mining. The OIG defines “data mining” as “the practice of electronically sorting Medicaid claims through statistical models and intelligent technologies to uncover patterns and relationships contained within the Medicaid claims activity and history to identify aberrant utilization and billing practices that are potentially fraudulent.” Currently, HHS regulations prohibit State MFCUs from claiming Federal Financial Participation (FFP) for data mining activities that attempt to detect potential Medicaid fraud, and the MFCUs instead rely on referrals from State Medicaid agencies and their analysis methods. The OIG believes that amending current HHS regulations to permit State MFCUs to claim FFP for data mining activities could permit the MFCUs to identify early fraud indicators and would be an efficient use of resources. The OIG has proposed certain conditions that MFCUs must meet in order to claim FFP for costs related to data mining, including: (1) the MFCU must describe the duration of the data mining activity and the amount of staff time to be expended; (2) the MFCU must identify the methods of cooperation between the MFCU and Medicaid agency, and between the MFCU and review contractors selected by the CMS Medicaid Integrity Group; and (3) the MFCU must specially train employees engaged in data mining. In addition, the proposed rule requires that an annual report be made that would, among other indicators, capture costs related to data mining activities and the number of cases generated from those data mining activities. The OIG is seeking public comments to the proposed rule, and such comments must be delivered no later than 5 p.m. on May 16, 2011. The proposed rule may be read here in its entirety.