Health Care Fraud and Abuse Control Program Financial Report for Fiscal Year 1997

AIMD-98-157: Published: Jun 1, 1998. Publicly Released: Jun 1, 1998.

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Pursuant to a legislative requirement, GAO reviewed the first joint report issued by the Department of Justice (DOJ) and the Department of Health and Human Services (HHS) on the fiscal year (FY) 1997 deposits to the Federal Hospital Insurance Trust Fund and the allocation of the Health Care Fraud and Abuse Control Program (HCFAC) appropriation, focusing on: (1) the amounts deposited to the trust fund and the sources of such amounts; (2) the amounts appropriated from the trust fund for the HCFAC program and the justification for the expenditure of such amounts; (3) expenditures from the trust fund for HCFAC activities not related to Medicare; and (4) any savings to the trust fund, as well as any other savings, resulting from the trust fund for the HCFAC program.

GAO noted that: (1) the HHS and DOJ joint report for FY 1997 reported that $130.7 million was deposited to the trust fund pursuant to the Health Insurance Portablity and Accountability Act (HIPAA); (2) the sources of these deposits were primarily penalties and damages and criminal fines resulting from health care fraud audits, evaluations, investigations, and litigation activities initiated prior to implementation of the HCFAC program; (3) the joint report also stated that $104 million was appropriated from the trust fund for the HCFAC program in FY 1997; (4) of the $104 million, HHS and DOJ allocated the maximum--$70 million--to thhe HHS Office of Inspector General (OIG) to increase its Medicare and Medicaid fraud activities; (5) the remaining $34 million was allocated to: (a) DOJ, which received $22.2 million primarily to increase litigative efforts and to provide fraud training; (b) the Health Care Financing Administration (HCFA), which received $5.3 million for various initiatives related to health care fraud and abuse, including the development of a new information system to identify potential targets for fraud investigations; and (c) other federal and state agencies, which received the remaining $6.5 million for a variety of activities, including increased litigation; development of a new adverse action data bank; and outreach, education and training; (6) GAO found no material weaknesses in HHS' and DOJ's processes for accumulating this information, and nothing came to GAO's attention to lead it to believe that the amounts related to HIPAA deposits and the allocation of the HCFAC appropriation reported by HHS and DOJ in their joint report were inaccurate or unsupported; (7) GAO could not identify expenditures from the trust fund for HCFAC activities not related to Medicare because neither HHS OIG nor DOJ separately account for or monitor those expenditures; (8) HIPAA restricts HHS OIG's use of HCFAC funds to Medicare and Medicaid activities; (9) furthermore, health care fraud cases often involve more than one health care program; (10) thus, it is difficult to identify non-Medicare related expenditures; (11) GAO also could not determine the magnitude of savings to the trust fund, or other savings, resulting from trust fund expenditures for the HCFAC program during FY 1997; and (12) finally, the implementation of the Healthcare Integrity and Protection Data Bank, which is to be an important tool to keep unscrupulous providers from having access to Medicare and other health care programs, has been delayed.

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