Budget Cuts To Hamper HHS OIG’s Ability To Curb Health Care Fraud

HHS Office of Inspector General officials say the agency will be significantly restricted in its ability to monitor and address Medicare and Medicaid fraud and abuse within the nation's health care system in the coming years, citing budget and staffing cuts and hiring freezes, according to an internal document obtained by the Center for Public Integrity.

The document states, "As OIG's budget resources decline, so do our enforcement and oversight activities," adding that it "will not be able to keep pace" with the expected jump in taxpayer-subsidized health care under the Affordable Care Act, "maintain/expand our highly successful Medicare Fraud Strike Forces, or keep pace with the expected need for growth to combat ongoing health care fraud."

In addition, HHS OIG will delay an unspecified number of investigations into hospitals identified for providing poor quality care, according to the document, citing "significantly reduced" travel budgets and the high cost to hire experts to review medical files. The document warns that the delay might result in a "potentially high-risk hospital not being reviewed" and "potentially erroneous claims not being reviewed."

Other projects that HHS OIG planned for 2013 but have been canceled include:

• An audit of computer systems security for the ACA insurance exchanges;
• An investigation of nursing homes to determine possible overuse of controversial antipsychotic treatments;
• An analysis of efforts by state governments and Medicaid managed care groups to uncover fraud and abuse;
• A probe of pharmaceutical drugs that are being marketed under the Medicare Part D program without FDA's clearance for safety and effectiveness; and
• An investigation into fraudulent suppliers of high-cost durable medical equipment.

HHS OIG Anticipates Budget, Staffing Crunch, Already Making Reductions

News of the budget and staffing crunch facing the agency first surfaced during a June hearing before the Senate Committee on Homeland Security and Governmental Affairs. An HHS OIG official testified that the agency's existing staffers were already facing difficulty conducting their oversight duties, adding that at least 1,200 complaints in the previous year of alleged improprieties still had not been investigated.

According to CPI, HHS OIG over the next two years is on track to experience a nearly 20% reduction in its workforce, which at its highest staffing level was at 1,800 last year. About 200 workers are expected to leave by the end of 2013, followed by another 200 by the end of 2015.

The staffing reductions are expected to further stretch the agency's workforce, which has been under a hiring freeze since February 2012. This year, the agency already has offered two rounds of buyouts and early retirements (Schulte, Center for Public Integrity, 7/25).