Kusserow’s Corner: 2015 President’s Budget Moves to Increase Anti-Fraud Funding

The President’s proposed 2015 budget budget proposal includes $77.1 billion to fund HHS in FY 2015. This is a reduction of $1.3 billion from the FY 2014 level. In the face of this overall reduction in spending, the Administration proposed significant increases in funding for fraud enforcement. The Administration proposed expanding funding for the Health Care Fraud and Abuse Control (HCFAC) program by $403 million through a combination of mandatory and discretionary funding increases.

The discretionary portion of the funding for HCFAC from the estimated FY 2014 level, from $294 million to $319 million, a 9 percent increase. Most of the discretionary HCFAC spending (about $262 million) would go toward program integrity efforts at CMS. The remainder of the funding is divided between the HHS Office of Inspector General (OIG) that receives about $28 million and the Department of Justice that receives about $28 million. The proposed budget increase includes “$25 million over two years to monitor and prevent fraud, waste and abuse in the Health Insurance Marketplace” explicitly intended to monitor the use of federal funds under the Affordable Care Act.

The proposed budget increases the funding for HHS’ OIG from $300 million to $400 million. This reverses the downward trend in funding in the current fiscal year’s budget. Their oversight responsibilities fall into two broad categories. One is oversight of CMS programs that consumes most of its efforts, about 80 percent. The remaining 20 percent of the efforts is to provide oversight of more than 300 other programs that include the Public Health, Human Services, and a number of other social programs. Secretary Kathleen Sebelius stated in a press release that “[The budget] invests $428 million in HCFAC and the Medicare Integrity Program, both of which are proven to deliver results in fighting fraud. Every dollar we invest in HCFAC, for example, returns $8.10 of the money we recover. We’ve now announced recovering a record-breaking $4.3 billion,” she explained. She further stated that the budget indicates that preventing fraud and reducing improper payments are “top priorities” for the administration. The investments in HCFAC and Medicaid program integrity funds are expected to yield $13.5 billion in gross savings for Medicare and Medicaid over the next decade.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Copyright © 2014 Strategic Management Services, LLC. Published with permission.