Medicare Fraud Investigations Hurt By Budget Cuts

By Greg Bengel, contributing writer

As budget cuts and staff reductions slow government anti-fraud efforts, fewer providers may be scrutinized

Healthcare providers have been getting hit hard lately by Medicare fraud investigations. Since March of 2011, CMS has revoked the ability of 14,663 providers and suppliers to bill in the Medicare program, according to USA Today. In many states, that’s quadruple the number of revocations since the Affordable Care Act screening requirements went in place.

According to a CMS statement, providers have been removed from the program for a variety of reasons, including having felony convictions, having the wrong addresses on file, or failing to comply with CMS rules. The CMS statement also says that the Obama administration has recovered more than $14.9 billion in healthcare fraud judgments, settlements, and administrative impositions over the last four years.

But for as dramatic and sweeping as the provider revocations have been, providers may soon be seeing an equally dramatic drop-off in the number of investigations launched. According to an article on aronovitzlaw.com, Medicare and Medicaid fraud investigations are expected to drop as the HHS experiences both budget and staff cuts. And, as the number of investigations drop, the number of provider revocations will drop as well.

According to the article, the Office of Inspector General (OIG) will be losing 400 staff members in the next two years – people whose jobs are to uncover fraud. At the same time, the OIG will be dealing with significantly reduced funding. In all, the article says the OIG is shrinking as the Medicare and Medicaid programs are growing. The result will be a reduced ability on the part of the OIG to oversee providers and uncover fraud.

For providers, this could mean a swinging back of the pendulum —- fraudulent and wasteful practices may again go largely unpunished. In an article from The Center for Public Integrity, Gary Cantrell, deputy inspector general for the OIG Office of Investigations, is quoted from a June 24 hearing of the Senate Committee on Homeland Security and Governmental Affairs. “We’re operating with a reduced budget in the face of the growing program,” he says. “And just last year alone, our office closed down 1,200 complaints due to lack of resources. Those are complaints that came through the door that we didn’t have the resources to investigate further to determine whether it was a viable criminal case or not.” He also adds that the number of abandoned cases is certainly not going to go down anytime soon.