One year after the signing of P.L. 95-142, the Medicare-Medicaid Anti-Fraud and Abuse Amendments, by President Jimmy Carter on October 25, 1977, 19 MFCU Directors met formally for the first time in Mt. Laurel, New Jersey at the inaugural National Training Conference for Medicaid Fraud Control. Directors met with key staff of the then-U.S. Department of Health, Education and Welfare (HEW) to discuss regulations, criteria for Unit certification and recertification and other matters of mutual concern. It was at this first meeting, due to a difference in opinion with HEW staff regarding the reporting requirements of the Units and the need for investigative confidentiality, that the Unit directors recognized the need to form a national association.

Formal organization of NAMFCU took place two months later, on December 12, 1978 at the National Conference on Fraud, Abuse and Error in Washington, D.C. The Unit directors from the 20 then-certified states met to elect a president and to form an Executive Committee that would ensure that all states had equal representation. New York State Deputy Attorney General and Special Prosecutor for Nursing Homes, Health and Social Services Charles (Joe) Hynes was elected the first NAMFCU President.