Fraud investigations to decline with OIG budget cuts

Recent budget cuts mean The Department of Health and Human Services Office of Inspector General won't be able to monitor and investigate as many Medicare and Medicaid fraud and abuse allegations, according to documents obtained by the Center for Public Integrity.

"As OIG's budget resources decline, so do our enforcement and oversight activities," the OIG document says. The agency is losing about 400 employees, amounting to 20 percent of its staff. As a result, the OIG "will not be able to keep pace with … the expected need for growth to combat ongoing healthcare fraud."

That means the OIG might not be able to conduct investigations like its audit of the Centers for Medicare & Medicaid Services, which found poor record-keeping hampers the agency's ability to recover billions of dollars in Medicare overpayments. It also might not have audited the state of Missouri to find it owes $21.4 million in Medicaid overpayments to Hawthorn Children's Psychiatric Hospital.

The OIG already has dropped several planned activities, including:

  • auditing the security of the health insurance exchanges' computer systems;
  • investigating whether nursing homes are overusing antipsychotic drugs;
  • inspecting potentially fraudulent suppliers of durable medical equipment; and
  • investigating hospitals that allegedly provide poor quality of care.

In fact, the OIG said the cutbacks could result in a "potentially high-risk hospital not being reviewed" and "potentially erroneous claims not being reviewed," the Center for Public Integrity reported.

The cuts are "deeply regrettable," Malcolm Sparrow, a professor at Harvard University, said, adding that federal officials must "stay ahead" of fraudsters. "Otherwise three years from now we'll be saying, 'how could we not have predicted this mess?' "

To learn more:
- read the Center for Public Integrity article