HHS OIG Staff Cuts Will Lead to Fewer Fraud Investigations

For a different point of view, please see former HHS Inspector General Richard Kusserow’s discussion of the planned reduction.

HHS’ Office of the Inspector General (OIG) is expecting to lose 400 staff members over the next three years, according to statements made in response to questions during a hearing on “Curbing Prescription Drug Abuse in Medicare”  before the Senate’s Homeland Security and Government Affairs Committee on June 24, 2013.  This loss in staff could result in fewer fraud allegations being investigated and prosecuted. Cracking down on fraud has been highlighted as a way to save money in the Medicare program for many years and was an integral part of the funding for the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148 and 111-152), more commonly known as the Affordable Care Act (ACA).

Staff Cuts

In response to questions by members of the committee, Gary Cantrell, Deputy Inspector General of the OIG’s Office of Investigations, said that the size of his unit is “shrinking.” Cantrell provided specifics by saying that “we’re set to lose roughly 400 bodies out of a total of 1,800 at our peak in 2012.”  Deputy Inspector General of the Office of Evaluations and Inspections Stuart Wright also commented at the hearing that 200 of those staffers will have left the OIG by the end of this 2013 and that 200 more will be gone by the end of 2015.

“That really limits out ability to expand our oversight in some of these areas,” Cantrell said during the hearing.  “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.”

In a statement made by the OIG reported on by The Center for Public Policy, the OIG said it “has ‘significantly’ reduced [funds] due to the expiring of a $30 million per year appropriation from the Deficit Reduction Act of 2005 and the end of stimulus funding and other budget cuts.”  Cantrell stated that the budget cuts as a result of sequestration hasn’t helped either.  The OIG continued to say, “these funding reductions have fundamentally impacted the agency’s ability to conduct its mission. Reduction in staff and resources will result in decrease across all of the OIG’s oversight activities.”

OIG’s Role

HHS’ OIG is charged with investigating suspected fraud or abuse and performing audits, inspections, and special studies of the Medicare and Medicaid programs. The OIG exercises an oversight role to assure that CMS is prudently and efficiently managing the Medicare program through evaluations of CMS self-assessment techniques and by conducting independent reviews of CMS activities.  In addition, the OIG acts on behalf of HHS when carrying out activities under the Health Care Fraud and Abuse Control Program (HCFAC) under which the OIG conducts investigations, audits, inspections, and evaluations relating to the delivery of and payment for health care in the United States. The OIG’s Office of Investigation (OI) conducts criminal, civil, and administrative investigations of fraud and misconduct related to HHS programs, operations and beneficiaries.  The OI also coordinates with the Department of Justice and other law enforcement authorities to leverage resources and fraud-fighting efforts.


In fiscal year (FY) 2012, HHS, the Department of Justice and other federal agencies recovered $4.2 billion, which is slightly more than the $4.1 billion they recovered in FY 2011, according to an HHS release.  Over the past four years, these agencies recovered $14.9 billion of fraudulently obtained funds.  The HCFAC report indicated that $8 dollars is recovered for every dollar spent on fraud and abuse investigations and prosecutions.  The Center for Public Integrity reported that in FY 2011, the OIG launched more than 1,000 criminal and civil investigations of individuals or health care business.

HHS said in the statement on the HCFAC success in FY 2012 that “these findings, released today in the annual HCFAC Program report, are a result of President Obama making the elimination of fraud, waste, and abuse, particularly in health care, a top priority for the administration.”  The Center for Public Policy stated OIG  “officials could not say at this point which ones [planned audits and investigations] would be scrapped or ratcheted back.”  Senator Tom Caper (D-Del.), Chairman of the Senate’s Homeland Security and Governmental Affairs Committee, said the inspector general’s work, “helps us save money, reveals and prosecutes wrongdoing, and promotes the integrity of government.”  Caper called the cuts “a penny-wise, pound foolish approach that will end up costing our country in the long run.”