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HHS FY2016 Budget in Brief

Office of the Secretary, Office of Inspector General (OIG)

The Office of Inspector General’s mission is to protect the integrity of Department of Health and Human Services programs as well as the health and welfare of the people they serve.

OIG Budget Overview

(Dollars in millions)

Funds 2014 2015 2016 2016
+/- 2015
Discretionary Appropriation 71 73 83 +11
HCFAC Collections 11 11 12 +1
Discretionary HCFAC 28 67 119 +52
Mandatory HCFAC 185 186 203 +17
Total Funding, All Sources 295 337 417 +80

Full Time Equivalents

2014: 1,574
2015: 1,591
2016: 1,821
2016 +/- 2015: +230

OIG Activities

The FY 2016 Budget request for the Office of Inspector General (OIG) is $417 million, an increase of $80 million above FY 2015.  The request includes $83 million for OIG oversight of HHS’s more than 100 non-Medicare/Medicaid programs, some of which are new or have grown in scope and complexity during the last decade.  These funds will enable OIG to target oversight efforts of HHS public health and human services programs and the Health Insurance Marketplaces (Marketplaces). 

Moreover, OIG is a key partner in the joint HHS and Department of Justice Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, and the President’s Budget includes $334 million in support of HEAT and other program integrity efforts aimed at reducing fraud, waste and abuse in the Medicare and Medicaid programs.  In addition to maintaining the efforts and success of the Medicare Fraud Strike Forces, HEAT activities in FY 2016 include protecting the integrity of the expanding Medicaid program and recommending solutions to reduce improper payments in Medicare and Medicaid. 

While specific oversight activities in FY 2016 will be determined through OIG’s work planning process, the following are OIG’s focus areas based on its assessment of the top management and performance challenges facing HHS.

Implementing, Operating, and Overseeing the Marketplaces

The Marketplaces add a substantial new dimension to the Department.  They include state, federal, and partnership marketplaces, each of which must implement and successfully operate a complex set of program requirements.  Individuals use the Marketplaces to get information about their health insurance options, be assessed for eligibility (for qualified health plans, premium tax credits, and cost sharing reductions), and enroll in the health plan of their choice.

OIG’s oversight of the Marketplaces focuses on payments, eligibility, management and administration, and security. By focusing on these key areas OIG hopes to ensure that taxpayer dollars are spent for their intended purposes in a secure system that operates efficiently.

Integrity of the Department’s Public Health and Human Services Programs

Grants Management and Administration of Contract Funds:  HHS is the largest grant-making organization in the federal government, awarding over 79,000 grants totaling $389 billion in FY 2014.  HHS is also the third largest contracting agency in the federal government.  The size and scope of departmental awards make vigilant oversight crucial to the success of programs designed to improve the health and well-being of the public.  In FY 2016, OIG will continue to examine the Department’s grants management and contracting practices and its oversight of grantees and contractors.  OIG will also identify misused grant and contract funds for recovery and investigate suspected grant fraud. OIG will provide the Department with vital information that will help hold accountable grantees and contractors that manage large grant awards and contracts, and ensure the integrity of these significant expenditures.

Protecting Consumers of Food, Drugs, and Medical Devices:  HHS is responsible for protecting public health by ensuring the safety, efficacy, and security of drugs, medical devices, biologics, and much of our nation's food supply.  Additionally, HHS must ensure that once a drug, biologic, or device has been approved for use, it is marketed appropriately.  Furthermore, during a food emergency, HHS must find the contamination source and oversee the removal by manufacturers of these products from the market. In FY 2016, OIG will continue to evaluate the Department’s management of food, drug, and device safety issues.  Furthermore, OIG continues to work closely with the Food and Drug Administration and the Department of Justice to investigate illegal marketing practices by drug and device manufacturers.

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Integrity of Medicare and Medicaid

Addressing Prescription Drug Vulnerabilities on a National Scale: In both the Medicare Part D and Medicaid programs, OIG has uncovered improper and potentially harmful prescribing practices, pharmacies billing for drugs not dispensed, and diversion of prescription drugs.  OIG has also identified waste related to payments for prescription drugs under HHS programs, which increase costs to taxpayers and beneficiaries. The need to invest additional resources in this area is clear, and additional FY 2016 funding would support the integrity of these two programs and ensure patient safety.

Overseeing Changes in Medicaid:  The number of individuals covered by Medicaid is continuing to grow.  The Congressional Budget Office projects the number of individuals covered by Medicaid to grow approximately 37 percent by 2024.  As enrollment and spending increase, there is heightened urgency to address the program integrity challenges that Medicaid already faces.  These include improving the effectiveness of Medicaid data, avoiding or recovering Medicaid improper payments and payments for which a third party is liable, preventing waste and fraud in Medicaid managed care programs, and reducing waste associated with excessive payment rates to public providers.

OIG’s work in this area will focus on ensuring that the federal government pays the appropriate share of costs; improper payments are identified and recovered; eligibility is correctly determined; managed care programs, in which approximately a third of all Medicaid beneficiaries are enrolled, maintain sufficient program integrity efforts; and payment rates to health care providers are economical.

Fighting Fraud and Waste, and Promoting Value in Medicare Parts A & B:  Fraud and waste in Medicare Fee-for-Service programs continue to be significant challenges.  Improper payments and payment inefficiencies waste Medicare dollars and divert finite resources away from beneficiary care and services.  In FY 2014, CMS reported an improper payment rate of 12.7 percent for Medicare Fee-for-Service.  OIG investigations continue to uncover durable medical equipment suppliers, home health agencies, community mental health centers, ambulance operators, and outpatient therapy providers that are defrauding the Medicare program. In national assessments, OIG has identified questionable billing patterns by home health agencies and community mental health centers and is conducting similar analysis of questionable billing by ambulance providers.  Additionally, OIG work spotlights various types of waste including hospital billing error, improper payments to Skilled Nursing Facilities and misaligned payment rates.  OIG will continue its work in these areas in FY 2016.

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Content created by Office of Budget (OB)
Content last reviewed on February 2, 2015