March 17, 2017
On Thursday, March 16, 2017, President Trump and the Office of Management and Budget released its budget blueprint “America First.” While news reports have focused on the proposed cuts to federal spending and the enhancements in national security and defense spending, this blueprint provides the clearest indication yet to health care providers regarding the administration’s planned efforts to combat fraud and abuse in the Medicare and Medicaid programs.
In highlighting spending priorities for the U.S. Department of Health and Human Services (HHS), the blueprint provides that the President’s budget:
“Strengthens the integrity and sustainability of Medicare and Medicaid by investing in activities to prevent fraud, waste, and abuse and promote high quality and efficient health care. Additional funding for the Health Care Fraud and Abuse Control (HCFAC) program has allowed the Centers for Medicare & Medicaid Services in recent years to shift away from a ‘pay-and-chase’ model toward identifying and preventing fraudulent or improper payments from being paid in the first place. The return on investment for the HCFAC account was $5 returned for every $1 expended from 2014-2016. The Budget proposes HCFAC discretionary funding of $751 million in 2018, which is $70 million higher than the 2017 annualized CR level.”
As noted in an earlier client advisory, the HCFAC reported that, in FY 2016, 975 new criminal health care fraud investigations and 930 new civil health care fraud investigations were launched. The HCFAC report also highlighted that HHS excluded 3,635 individuals and entities from participating in federal health care programs during that same time period.
This clear indication of the administration’s priorities comes on the heels of the HHS Secretary and CMS Administrator’s letter to Governors highlighting their priorities for revamping state Medicaid programs.1 While focused principally on revamping Medicaid programs to return to “the core, historical mission of the program,” policing fraud and abuse in the state Medicaid program has long been a centerpiece and talking point of state government enforcement actions. In the most recent OIG annual report on Medicaid Fraud Control Unit activity, these state-based enforcement units reported 1,553 convictions, 731 civil settlements, and $744 million in criminal and civil recoveries for FY 2015.2
With the administration’s new proposed investment in combating fraud, waste, and abuse, it appears these staggering enforcement activity statistics will only continue to grow.
The information contained in this advisory is for general educational purposes only. It is presented with the understanding that neither the author nor Hancock, Daniel, Johnson & Nagle, PC, is offering any legal or other professional services. Since the law in many areas is complex and can change rapidly, this information may not apply to a given factual situation and can become outdated. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice. Under no circumstances will the author or Hancock, Daniel, Johnson & Nagle, PC be liable for any direct, indirect, or consequential damages resulting from the use of this material.