Budget Cuts Slash Healthcare Fraud Investigations

Tuesday, 24 Sep 2013 01:10 PM

By Melanie Batley

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The agency responsible for investigating healthcare fraud and recouping billions of taxpayer dollars is slashing its investigative unit because of budget cuts, just as a massive expansion of healthcare coverage is set to take effect under Obamacare.

The Health and Human Services Department's Office of Inspector General will scale back several high-profile healthcare fraud and abuse investigations, including an audit of the Obamacare insurance exchanges set to open on Oct. 1, according to The Center for Public Integrity, which first reported the cutbacks in July.

"As the (Office of the Inspector General) budget resources decline, so do our enforcement and oversight activities," says an agency document obtained by the center. The document notes that the agency "will not be able to keep pace" with the rapid growth of taxpayer-subsidized healthcare anticipated under Obamacare.

According to the HHS, for every $1 spent on healthcare-fraud probes, nearly $8 is recouped in fines, restitution, or settlements, CNBC reports.

"With fewer agents, we investigate fewer cases, and with fewer cases we're likely to have fewer convictions, few civil settlements, which will likely translate into less recoveries," Gary Cantrell, deputy inspector general for investigations at HHS, told CNBC.

"The problem is certainly growing . . . yet our resources are declining," Cantrell said. "We already turn down work that we can't proceed on. It's only going to increase with the continued expansion of the Medicaid program because of the Affordable Care Act."

The agency is being forced to reduce its staff by 400 people from its peak of 1,800 last year, with around 200 scheduled to leave this year. At the same time it will lose $30 million in expiring funding streams, $25 million that has not been appropriated since 2009, and about $15 million in cuts from the sequester, according to CNBC.

The savings to the federal budget from the cuts, CNBC said, is just a drop in the bucket compared to the amount of money that can and has been recovered by the government in healthcare-fraud cases and the tens of billions of dollars lost each year in Medicaid and Medicare fraud.

Discussing his concerns about Obamacare, Texas GOP Rep. Michael Burgess in July told Newsmax that cutting the number of inspectors at the Inspector General's Office was "a recipe for disaster."

"You're almost begging people to take advantage of you, and the person who loses in this transaction is the taxpayer," he said.

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