Federal officials are scaling back several high-profile health-care fraud and abuse investigations as a result budget and staff cuts, including an audit of the state insurance exchanges that are set to open later this year as a key provision of the Affordable Care Act.
The Department of Health and Human Services’s Office of Inspector General, which investigates Medicare and Medicaid waste, fraud and abuse, is in the process of losing a total of 400 staffers, about 20 percent of its workforce from its peak strength of 1,800 last year. About 200 of those staffers will have departed by the end of this year, and the other 200 are slated to be gone by the end of 2015.
“As OIG’s budget resources decline, so do our enforcement and oversight activities,” reads an agency document obtained by the Center for Public Integrity. The OIG noted that it “will not be able to keep pace” with the rapid growth of taxpayer-subsidized health care anticipated under the Affordable Care Act, the signature health reform effort of the Obama administration.
Several of the canceled projects were included in the agency’s 2013 “work plan,” which serves as a barometer for suspected fraud or billing abuse. One of them was a planned audit into computer security at state marketplaces – known as exchanges – that will sell individual health insurance policies under the Obama health-care law. The inspector general’s office said “time pressures” to get the exchanges up and running by Oct. 1 may increase risks that states will fail to shield private medical information from “hacker exploits, unauthorized data access and data theft or manipulation.” In addition, the OIG document said, about $3.8 billion in grant money to develop the exchanges is “potentially at risk for wasteful spending.” Seventeen states are planning to run their own exchanges, while the rest will be operated by the federal government or in state-federal partnerships.
An investigation to determine if nursing homes overuse controversial antipsychotic drugs in treating the elderly and which of these drugs are prescribed most often has been cancelled. The canceled initiative was supposed to identify nursing homes that failed to follow federal rules requiring that patients “be free from unnecessary drugs.”
Another canceled probe includes a study of crooked suppliers of costly durable medical equipment, such as wheelchairs and other medical devices used in the home, who manage to stay in business even after federal officials revoke their billing privileges. The durable medical equipment market has long been troubled by questionable expenditures. The audit was to target merchants in South Florida, a hotbed of Medicare and Medicaid fraud.
OIG officials contend their investigations typically return $8 for every dollar invested. They reported fiscal 2012 expected recoveries of about $6.9 billion and more than 1,100 criminal and civil investigations of individuals or health care businesses. News of the budget crunch first surfaced during questioning at a June 24 hearing of the Senate Committee on Homeland Security and Governmental Affairs. One official said at the hearing that existing staff was stretched so thin that the agency had failed to act on 1,200 complaints over the past year alleging wrongdoing – a number expected to rise.