OIG Proposes $77 Million Increase to its FY 2017 Budget

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) has requested $419 million for its FY 2017 budget, an increase of $77 million from FY 2016. Given that OIG is responsible for the oversight of HHS administration, its budget request is worth reviewing since it provides meaningful insight to the scope of OIG operation. The OIG’s proposal cites several priority areas of HHS oversight such as: overseeing the Health Insurance Marketplaces; protecting HHS grants and contract funds from fraud, waste, and abuse; ensuring the privacy and security of information; oversight of HHS’s international programs and emergency preparedness; addressing prescription drug diversion and other such issues at a national scale; overseeing changes in Medicaid; ensuring patient safety and quality of care; overseeing reforms in how health care is delivered and ensuring payment accuracy; and the meaningful and secure exchange and use of electronic health information. In addition, OIG will continue promoting compliance with federal health care laws in the health care industry by providing guidance to health care providers and pursuing administrative enforcement actions against those who commit fraud.

OIG oversight operations fall into two broad categories: (1) Medicare and Medicaid, and (2) public health and human services (PHHS), which includes oversight of the Health Insurance Marketplaces and other programs created by Title I of the Affordable Care Act (ACA). The amount of work conducted in each respective category is set by the purpose limitations in OIG’s appropriations for a given year. Allocations between these two categories are about 20 percent and 80 percent respectively.

Budget requests for Medicare and Medicaid oversight are $334 million with an increase of $68 million above the FY 2016 budget. According to the FY 2017 request, this includes $200 million in Health Care Fraud and Abuse Control Program (HCFAC) Mandatory funds, $121 million in HCFAC Discretionary funds, and a projected $12 million in HCFAC Collections. OIG intends to increase its focus on fraud and wasteful spending, including improper payments and Medicaid expansion. It will also include continuing the joint HHS and Department of Justice Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative. Allocation would include the following:

• $200 million in HCFAC Mandatory funding, an increase of $12 million from FY 2016
• $122 million in HCFAC Discretionary funding
• $12 million in HCFAC Collections, which reimburse OIG for the costs to conduct investigations, audits, and compliance monitoring

A large portion of OIG’s budgetary efforts appear to be directed toward PHHS program oversight. Eighty-five million of OIG’s budget request is allocated for PHHS oversight, an $8.5 million increase from FY 2016. The funds will support oversight of PHHS programs including food and drug safety, disaster relief, child support enforcement, the integrity of departmental contracts, grants programs and transactions, emergency preparedness issues, and oversight of ACA-established Health Insurance Marketplaces, as well as adding 42 additional full-time equivalent employees.