The U.S. Government Accountability Office (GAO) recently published a report analyzing the effectiveness of Health Care Fraud and Abuse Control (HCFAC) program activities titled, “Indicators Provide Information on Program Accomplishments, but Assessing Program Effectiveness is Difficult.”  Although $4.2 billion was collected in fiscal year 2012 as a result of HHS and DOJ judgments, settlements, and administrative penalties in health care fraud cases through the activities of the HCFAC program, the report emphasizes that it is difficult to measure the effectiveness of the more than $486 million that was appropriated for HCFAC activities in 2012. 

The GAO concludes that there are several factors that contribute to a lack of information regarding the program’s effectiveness and, in particular that there is no clear baseline for measuring fraud.  The report notes that, while “[w]e have previously reported that although there have been convictions involving multimillion dollar schemes that defrauded the Medicare program, there are no reliable estimates of the amount of fraud in the Medicare program or for the health care industry as a whole.”  The GAO further reports that, “it is difficult to isolate the effect that HCFAC activities, as opposed to other efforts such as changes to the Medicare provider enrollment process, may have in reducing health care fraud and abuse.”  Until a baseline is established, determining the effectiveness of the resources allocated towards these programs will remain a challenge.

Congress established the HCFAC program as part of the Health Insurance and Portability and Accountability Act of 1996 (HIPAA) to help reduce fraud and abuse in health care programs, including Medicare and Medicaid.  HHS and DOJ jointly administer the HCFAC program and several components within these agencies receive appropriations to carry out HCFAC activities including without limitation CMS.  The report is available here.

Reporter, Juliet M. McBride, Houston, +1 713 276 7448, jmcbride@kslaw.com.