|Program Title||Health Care Fraud and Abuse Control|
|Department Name||Dept of Health & Human Service|
|Agency/Bureau Name||Office of the Inspector General|
Direct Federal Program
|Assessment Rating||Results Not Demonstrated|
|Assessment Section Scores||
|Program Funding Level
|Year Began||Improvement Plan||Status||Comments|
In April 2007, OIG began a performance measurement initiative, utilizing expert assistance, with the goal of identifying and developing improved performance measures to articulate the impact of OIG's HCFAC and other programmatic work. This effort links directly to the conclusions drawn during the CY 2002 PART assessment and builds upon OIG's prior Improvement Plan efforts done in CY 2003.
|Action taken, but not completed||OIG expanded its efforts under the aforementioned "performance measurement initiative" to include a more thorough strategic planning and performance measurement development process. The expanded effort addresses OIG-wide strategic management and reporting needs, not just HCFAC measures reported as part of this PART. An OIG workgroup comprised of senior staff meets regularly to advance this important goal and has developed frameworks for revised Strategic and Performance Plans.|
|Year Began||Improvement Plan||Status||Comments|
Developed performance measures that are closely tied to the program's mission, which are measurable against an established, objective baseline.
|Completed||Two performance measures were added: Savings and Return on Investment|
Measure: Expected Recoveries (millions)
Explanation:Expected Recoveries consists of the annualized 3-year moving average of: (1) court and administratively assessed fines, penalties, and restitution in which OIG investigations played an instrumental role; and (2) audit disallowances that resulted from OIG audit work.
Measure: Return on Investment (ROI)
Explanation:ROI is calculated by dividing the annualized 3-year moving average of Expected Recoveries by the annualized 3-year moving average of OIG's HCFAC budget, expressing the result as a ratio.
|Section 1 - Program Purpose & Design|
Is the program purpose clear?
Explanation: The purpose of the Health Care Fraud and Abuse Control Program (HCFAC) is clear. The program is designed to prevent health care fraud, waste and abuse. While the statute broadly defines health care fraud to cover fraud in all health care programs, public and private, the Office of Inspector General's (OIG) role is limited to Medicare and Medicaid. However, as health care fraud often involves multiple programs, the OIG's efforts frequently benefit programs other than Medicare and Medicaid.
Evidence: See statement of program purpose and goals in section 1128C of the Social Security Act. 42 U.S.C. 1320a-7c. Specifically, the statute requires that the Attorney General, and the HHS Secretary acting through the Department's Office of the Inspector General (OIG) establish a program (1) to coordinate Federal, state and local law enforcement efforts relating to health care fraud and abuse; (2) to conduct investigations, audits and evaluations relating to the delivery of and payment for health care; (3) to facilitate enforcement of all applicable remedies for such fraud; (4) to provide formal guidance to the health care industry regarding fraudulent practices; and (5) to establish a national data bank of final adverse actions against providers. The statute further specifies that the OIG focus their activities on Medicare and Medicaid.
Does the program address a specific interest, problem or need?
Explanation: "The primary problem HCFAC addresses is health care fraud, waste, and abuse. The HIPAA statute created the HCFAC program in 1996, at which time the FBI reported that vulnerabilities to fraud existed throughout the entire health care system, and the DOJ reported that fraud was being perpetrated not only by physicians, but also by public corporations, labs, hospitals, nursing homes, and other entities. An additional problem HCFAC addresses is the flagging solvency of the Medicare Trust Fund. The HCFAC program reduces fraud that drives up health care costs and also returns funds collected from health care enforcement activities directly to the trust fund."
Evidence: "In 1996, GAO estimated that health care fraud cost the industry between $30 and $100 billion. The OIG estimated the Medicare error rate at 14%, or $23.2 billion. The FY 2001 Medicare error rate, 6.3% or $12.1 billion, further indicates that the problem still exists. At the time HIPAA was passed, the Medicare Trustees predicted the program would be bankrupt by 2001. To address this solvency crises, HCFAC requires that funds collected as a result of health care enforcement be deposited to the HI trust fund even if the underlying case does not address Medicare (SSA section 1817(k)(2)(C)). Additionally, the statute requires the HHS Secretary and the AG to report annually to Congress on funds appropriated to and from the trust fund under HCFAC, and the GAO must audit these figures every two years. (SSA 1817 (k)(2)(C))"
Is the program designed to have a significant impact in addressing the interest, problem or need?
Explanation: The HCFAC program design is calculated to directly address the underlying problems of rising health car fraud. First, the statute mandates coordination among the OIG, FBI, and DoJ to plan, implement, and report on program activities. For example, the Secretary of HHS and the Attorney General have developed joint program guidelines and must annually agree on the level of resources to spend on various activities (subject to the statute's limitations). Secondly, the statute requires both enforcement and prevention activities and allows the agencies broad latitude on determining the best methods for reducing fraud, waste, and abuse rather than mandating discreet tasks in law. Finally, by requiring that all proceeds be deposited in the Medicare Trust Funds .
Evidence: "Section 1128C of Social Security Act outlines the broad authorities given to HHS and DOJ to fight health care fraud and abuse.(see question #1 above). Additionally, it stipulates that ""The Managing Trustee shall transfer to the Trust Fund..an amount equal to criminal fines..civil monetary penalties and assessments.. amounts resulting from forfeiture of property..and penalties and damage..due to the resolution of health care fraud and abuse cases. Evidence also includes the annual funding agreement between the HHS Secretary and AG"
Is the program designed to make a unique contribution in addressing the interest, problem or need (i.e., not needlessly redundant of any other Federal, state, local or private efforts)?
Explanation: There are a number of factors that make HCFAC's contributions unique. First, there is no other specific Federal program outside of HCFAC whose purpose is to reduce health care fraud, waste, and abuse. Second, the statute mandates the coordination of all Federal, State and local law enforcement programs to ensure that the various law enforcement entities coordinate efforts and are not needlessly duplicating activities. This effort to coordinate activities is appropriately centered at the national level. Finally, since law enforcement in inherently a governmental function, the program doe snot duplicate private sector activities.
Evidence: "Section 1128C of Social Security Act which requires coordination of Federal, State, and local law enforcement activities. Health Care Fraud and Abuse Control Program and Guidelines, January 1, 1997, which more specifically addresses coordination and cooperation between various participants."
Is the program optimally designed to address the interest, problem or need?
Explanation: "The HCFAC program supports the major components of a successful anti-fraud program, including prevention, audits and investigations, prosecution, and monetary and other penalties (e.g., disallowances). OIG activities are inherently governmental and there is no evidence to suggest an alternative program mechanism would be more effective. HCFAC activities are funded through direct spending authority, with funding fixed in statute. This is one element of the program's design that is not optimal because it does not allow for an annual review of funding for health care anti-fraud activities. The agencies contend that having dedicated, mandatory HCFAC resources is an essential component of the program's design. However, there is no evidence to suggest that HCFAC could not be equally successful if these activities were discretionary. Moreover, the inherent annual review and evaluation of the discretionary process could improve a program whose success, or lack thereof, has no impact on its budget currently."
Evidence: There is no evidence to suggest an alternative program mechanism would be more effective.
|Section 1 - Program Purpose & Design||Score||100%|
|Section 2 - Strategic Planning|
Does the program have a limited number of specific, ambitious long-term performance goals that focus on outcomes and meaningfully reflect the purpose of the program?
Explanation: "To date, the OIG has used return on investment (ROI) figures as performance measures. The measure calculated the ROI of (1) expected recoveries from investigative receivables and audit disallowances and (2) savings from funds not expended as a result of audits, investigations and inspections. As part of the PART discussion, it is now proposing three additional long-term goals. For its FY 2004 GPRA, the OIG is now proposing four HCFAC goals: expected recoveries, including judgements, settlements, and administrative actions; savings, or funds not expended as a result of OIG finding and recommendations; return of investment (ROI), or recoveries and savings for each dollar invested in OIG HCFAC activities; and the Medicare payment error rate. While these goals do provide some information on the status of fraud and abuse activities, they do not meet the PART standards for long-term performance goals for the following reasons (the OIG's response to these concerns is outlined in the evidence section: " "Overall concerns. The core purpose of HCFAC is to reduce or eliminate health care fraud and abuse. As such, one overall measure of the program should reflect progess towards this core purpose. For example, an estimate of fraud and abuse, such as a fraud rate, and progress at reducing it would an effective long-term goal for HCFAC. Although measuring fraud is very difficult, it is important to provide information on HCFAC's performance against its key goal. If something similar to a fraud rate cannot be developed, than a proxy should be used. A measure of the type outlined above would also provide the OIG with a baseline against which to measure progress. The goals proposed by the OIG do not have baselines, which makes it difficult to interpret the results. For example, an increase in expected recoveries could indicate on e of three things (1) a positive outcome - that the OIG is successfully resolving health care disputes, (2) a negative outcome - that fraud is increasing and there is thus more fraud to catch or (3) a combination. " (2) Expected Recoveries. Other than preventing fraud, another goal of the HCFAC program is to restore funds to the Medicare trust funds. For this goal, a measure similar to the OIG's expected recoveries goal could be suitable. However, expected recoveries do not translate into actual collections or deposits to the trust fund. Actual deposits to the trust fund for 1997-2000 were approximately 50% of expected recoveries. For this reason, actual recoveries may be a more informative measure. "(3) Savings and ROI measures A large majority of the OIG savings (approximately 85% in FY2001) is due to savings from the BBA, passed in 1997. While the savings and ROI measures include savings due to reduced fraud, waste, and abuse, they also include significant savings due to many other factors, such as management decisions, industry trends in payment methodologies, etc. Additionally, these savings are attributable to many actors, such as the GAO,CMS and the OIG. This is not to say that the OIG didn't contribute to these savings, just that they cover too broad a range of issues and actors to be a good indicator of OIG performance. Additionally, although some lag time is expected between law enforcement activities and results, the savings attributable to legislation passed in 1997 may not be a good indicator of the OIG's current successes . " Medicare Error Rate. The Medicare error rate measures improper fee-for-service payments. Due to the methodology used to calculate the error rate, it includes some, but not all, fraud. As such, the error rate is primarily focused on claims processing error, and is thus a good performance measure for CMS. Due to these limitations of the methodology, however, it is not a good measure of the OIGs contributions to reducing fraud, waste and abuse(although it could potentially be expanded or leveraged to help estimate abuse).
Evidence: "The OIG proposed four goals: (1) Expected recoveries: FY 2004 target of $1,240 million (2) Savings: FY 2004 target of $23,700 million (3) ROI: FY 2004 target of $156:$1 (4) Medicare Error Rate: FY 2004 target TBD by CMS" None of the OIGs targets (other than the Medicare Error Rate) are set against a baseline (such as expected recoveries out of total possible recoveries). The OIG objects to the development of a fraud rate or a baseline for expected recoveries and savings for the same general reasons. The OIG believes that a fraud estimate cannot be prospective - actual fraud occurs only when it has been legally adjudicated, and as such, as fraud rate would require enormous resources to pursue every potentially fraudulent item. Many industry experts agree. However, other entities, such as the GAO, believe it is possible to develop an estimate of health care fraud. Expected recoveries for 1997-2000 = $3623 million (OIG FY 2004 draft GPRA plan). Of these, $2,502 million were collected to date (69%). After paying relators and other, $1,881 were deposited to the trust fund (52%) (Joint HHS and DOJ Annual Reports 1997-2000). Figures for FY2001 are not included because it is unlikely that collections for those activities would have begun. The OIG objects to the measurement of actual recoveries because collections are not in their control. "Savings are calculated by the OIG using CBO projections of the savings due to the passage of the Balanced Budget Amendment. Savings are attributed to the OIG upon implementation of the legislation, and thus are still being recognized by the OIG in FY 2001. Total savings due to OIG activities in FY 2001 was approximately $16,058 million (OIG FY 2004 draft GPRA plan), of which approximately $13,720 million were due to the implementation of the BBA (OIG semi-annual reports for FY 2001 and staff analysis) " Medicare Error Rate: One of the main limitations to using the Medicare Error rate for fraud detection is its core methodology (which is appropriate for estimating improper payments but not fraud). It assumes that all claims received by contractors are for services that are actually provided. Thus, it does not detect completely fraudulent claims for services never delivered.
Does the program have a limited number of annual performance goals that demonstrate progress toward achieving the long-term goals?
Explanation: The OIG has proposed annual targets for each of the long-term goals identified in #1 above. Though these annual goals could measure the program progress towards meeting the OIG's long-term goals, the long-term goals do not meet the PART standards and requirements. As referenced in the answer to Question 7, OMB and OIG will continue to discuss setting preliminary, annual performance goals (e.g., developing methodologies and/or baselines) for new long-term goals.
Do all partners (grantees, sub-grantees, contractors, etc.) support program planning efforts by committing to the annual and/or long-term goals of the program?
Explanation: Substantially all of the OIG's work is done by its federal agents. While the OIG does occasionally use contractors, they work directly in response to specifications provided by the OIG to complete very technical services and are not strategic partners.
Evidence: Assessment made based on staffing processes followed by the OIG given the inherently governmental nature of their work.
Does the program collaborate and coordinate effectively with related programs that share similar goals and objectives?
Explanation: One of the primary goals of HCFAC is to ensure coordination among the many Federal agencies that are involved in reducing health care fraud, waste, and abuse. OIG collaborates with similar programs in CMS, other HHS agencies, and the DoJ from the initial planning to the execution through the reporting of successful anti-fraud, waste, and abuse activities.
Evidence: The Health Care Fraud and Abuse Control Program and Guidelines provides extensive documentation of coordination among Federal, State and local law enforcement efforts. Coordination is achieved chiefly through task forces at various levels, including the Executive Level Health Care Fraud Policy Group, the National Health Care Fraud Working Group, State and Local Health Care Fraud Task forces and the National Health Care Fraud Task Force.
Are independent and quality evaluations of sufficient scope conducted on a regular basis or as needed to fill gaps in performance information to support program improvements and evaluate effectiveness?
Explanation: Although the GAO conducts a statutorily-required biannual report of HCFAC activities, it focuses on ensuring the appropriateness of program expenditures and returns to the Trust Fund. As such, its scope is limited to auditing accounting transactions rather than assessing mission acheivement or recommending program improvements. The OIG is also subject to a peer review audit which reviews the organization's Office of Audit Services (one of three OIG offices) to ensure internal quality control systems are in place. However, this audit is also limited in scope as it reviews only OIG audit activities and focuses on quality control rather than program performance or achievement of mission. The Office of Investigations has an internal peer review, and is participating in a President's Council on Integrity and Efficiency (PCIE) intitiative which will institute peer reviews of OIG Offices of Investigation. However, that initiative has not yet been launched. To date, no external entity assesses the OIG's program management activities or performance against the goal of reducing health care fraud.
Evidence: Assessment includes a review of GAO-02-731 "Health Care Fraud and Abuse Control Program for Fiscal Year 2000 and 2001," and PCIE Guides conducting reviews.
Is the program budget aligned with the program goals in such a way that the impact of funding, policy, and legislative changes on performance is readily known?
Explanation: Total funding for OIG HCFAC activities is set in statute. In the aggregate, there is no alignment between budget, policy and legislative changes and program performance. Below the top line total, the OIG does not have a long-term performance goal that measures progress at eliminating fraud and abuse (see question #1) or that quantititatively breaks down the areas (e.g. home helath, DME, etc.) with the highest levels of fraud and abuse. It is thus difficult for the OIG to demonstrate integration of performance with budget decisions. When examining the question in relation to the OIGs goals (expected recoveries, savings, ROI and Medicare error rate), there is some evidience that these goals help influence budget decisions. However, it is unclear how failure to reach these goals, or a change in these goals, would impact resourcing decisions. It is also important to note that there is not a tight connection between the OIG's current goals and its resourcing decisions in part by design. (con't) Because of the nature of its goals, the OIG does not want to appear to set monetary or investigational goals for selected activities, which could be perceived as bounty hunting. Additionally, some of OIG activities are reactionary and unpredictable, such as special requests from stakeholders and Congress and emerging threats or vulnerabilities, which limits OIG's ability to integrate budget and performance completely in the program's strategic planning process.
Evidence: The HCFAC statute stipulates the OIG's budget. The FY 2004 budget is set at between $150-$160 million. Below the aggregate amount, the OIG resources are divided between the Office of Audit Services, the Office of Evaluations and Inspections, and the Office of Investigations. Each of these offices has their own work prioritization process. The OIG states that decisions are driven in part by the goals of reducing Medicare improper payments, maximizing recoveries to the trust funds, and preventing unnecessary expenditures. However, it is unclear how the different risk assessment methodologies, probes, pilots and other prioritization methods link the budget with attaining performance goals.
Has the program taken meaningful steps to address its strategic planning deficiencies?
Explanation: OMB and OIG conducted extensive discussions on the development of new measures. Proposals discussed included developing new measures such as a fraud rate, further exploiting current measure such as the error rate to dive out mistakes from abuses, and the development of baselines for existing measures such as expected recoveries or savings. However, as discussed in question #1 , the OIG strongly objects to the feasibility of developing a fraud rate or other baseline measure of the amount of fraud and abuse.
Evidence: The OIG believes that a fraud estimate cannot be prospective - actual fraud occurs only when it has been legally adjudicated, and as such, as fraud rate would require enormous resources to pursue every potentially fraudulent item. Many industry experts agree. However, other entities, such as the GAO, believe it is possible to develop an estimate of health care fraud.
|Section 2 - Strategic Planning||Score||14%|
|Section 3 - Program Management|
Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?
Explanation: The statute requires the annual collection and reporting of performance data annually from the AG and Secretary. These reports contain data on program expenditures, recoveries, and goals and accomplishments of agencies funded through HCFAC. OIG also collects additional information on program processes and outputs to help manage the program.
Evidence: The HCFAC Annual Reports outline data on program expenditures, recoveries, goals and accomplishments. Additionally, the OIG tracks and uses process and output measures, such as # of advisory opinions issued, exclusions from Medicare and other Federal health programs, administrative sanctions; program exclusions; criminal convictions, etc..
Are Federal managers and program partners (grantees, subgrantees, contractors, etc.) held accountable for cost, schedule and performance results?
Explanation: OIG managers are held accountable to the broad performance goals outlined in the agency's GPRA plan. These goals are incorporated into the performance contracts with senior OIG managers. The OIG believes that tying specific outcomes (e.g., monetary penalties and criminal sanctions) to performance management is problematic and would be tantamount to a 'bounty' system. The OIG has a very limited number of "partners," such as subcontractors, that participate in HCFAC-funded activities.
Evidence: Assessment based on OIG Personnel Evaluations
Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?
Explanation: OIG tracks the obligation of HCFAC resources on a monthly basis and ensures that only HCFAC resources (and no other OIG resources) are spent on health care fraud, waste, and abuse. The statute requires that GAO review the HCFAC program biennially and submit its report to Congress. The most recent report indicates that "HHS expenditures "were generally appropriate."
Evidence: GAO June 2002 Report "Medicare: Health Care Fraud and Abuse Control Programs"
Does the program have incentives and procedures (e.g., competitive sourcing/cost comparisons, IT improvements) to measure and achieve efficiencies and cost effectiveness in program execution?
Explanation: The OIG has only a limited number of process measures for efficiency, such as completing 80 percent of all audits within one year or less and requiring its Medicare Fraud Hotline contractor to meet customer service goals for Hotline calls. Additionally, the OIG does calculate an ROI measure. However, for the reasons discussed above, the limitations of the ROI measure as currently calculated make it less useful as a measure of efficiency or cost effectiveness .
Evidence: Assessment based on OIG GPRA Plan. Note that most of OIG's HCFAC activities (e.g., law enforcement) are inherently governmental so competitive sourcing and cost comparisons do not apply.
Does the agency estimate and budget for the full annual costs of operating the program (including all administrative costs and allocated overhead) so that program performance changes are identified with changes in funding levels?
Explanation: The budget for OIG activities under HCFAC is fixed in statute. Therefore, performance has no impact on OIG's HCFAC activities. However, OIG does track HCFAC resources carefully to ensure that anti-fraud activities in the Medicare and Medicaid programs are supported only through HCFAC funds.
Does the program use strong financial management practices?
Explanation: An independent audit of OIG's HCFAC activities performed by GAO has certified in each of the three biennial reports that the financial management practices are free from material weaknesses.
Evidence: GAO Reports for FYs 2001 and 2000, FYs 1999 and 1998, and FY 1997.
Has the program taken meaningful steps to address its management deficiencies?
Explanation: The OIG HCFAC program has not been cited for management deficiencies. However, OIG has accepted recommendations for program management improvements from GAO and other similar entities in the past. For example, the June 2002 GAO recommended that the OIG assess the feasibility of tracking savings and expenditures by affected program; OIG has accepted this recommendation.
|Section 3 - Program Management||Score||84%|
|Section 4 - Program Results/Accountability|
Has the program demonstrated adequate progress in achieving its long-term outcome goal(s)?
Explanation: As discussed in Section 2, question #1, the OIG does not have long-term goals that meet the requriements of the PART. As such, they are required to receive a 'no' for this quesiton. That being said, the OIG has had significant successes in helping to reduce fraud, waste and abuse. The OIG has realized substantial recoveries to the Trust Fund , and contributed to substantial program savings by identifying and recommending corrections to close loopholes or stop abusive billing practicies. For example, between 1997 and 2000, $1,881 million was deposited to the Medicare Trust Fund due to the combined efforts of the OIG, the FBI , CMS and the DOJ. Additioanlly, the Medicare Trustees have attributed the slowed groth in the Medicare baseline and improved Medicare solvency in part to "continuing efforts to combat fraud and abuse, and "changes made by the BBA of 1997." It is, however, difficult to tell what kind of an impact these success have had on the size of the problem of fraud and abuse without a measure that helps to define the problem.
Evidence: See Section #2, question #1 above
Does the program (including program partners) achieve its annual performance goals?
Explanation: As discussed in Section #2, question #2, the OIG's annual goals are incremental targets toward their long-term goals. As such, they do not meet the requirements of the PART. That being said, as mentioned above, the OIG has demonstrated significant success in reducing fraud, waste, and abuse. For example, in FY 2001, their were $1,624 million in expected recoveries and receivables. While not all of these funds will be collected or returned to the Trust Fund, a substantial portion should be.
Evidence: See section #2, question #2 above.
Does the program demonstrate improved efficiencies and cost effectiveness in achieving program goals each year?
Explanation: Although it is unusual to have a no in section #3, question #4 coupled with a positive response to this question, it is warranted in this case. Although the OIG doesn't calculated an ROI of actual dollars returned to the trust fund vs. HCFAC costs, such a calculation reveals that the program returned $1,900 million to the Trust Funds from 1997-2000 vs. the OIG's budget for that period of $373 million. Thus, the program returned $5 for every $1 spent. (Although, as described in section #2, question #1, it is unclear due to the lack of a baseline whether this number represents a large or small percentage of the universe possible returns to the trust fund) The program would benefit, however, from developing other, more micro-focused efficiency measures to assist in program management.
Evidence: Assessment derived from OIG GPRA plan, HCFAC Annual Reports issued by HHS and DOJ and staff analysis.
Does the performance of this program compare favorably to other programs with similar purpose and goals?
Explanation: The OIG is not part of the common measures exercise, nor are their relevant evaluations that allow comparison with other Federal Programs with similar purposes and goals.
Do independent and quality evaluations of this program indicate that the program is effective and achieving results?
Explanation: As discussed in Section #2, question #5, the OIG is not subject to independent evaluations of a broad scope. However, they are audited by the GAO on a biannual basis to ensure the appropriateness of program expenditures and returns to the Trust Fund. Each year of this audit, the GAO finds that "the planned use of HCFAC appropriations was in keeping with the stated purpose in HIPAA."
Evidence: Assessment based on a review of GAO-02-731 "Health Care Fraud and Abuse Control Program for Fiscal Year 2000 and 2001" and prior year reports.
|Section 4 - Program Results/Accountability||Score||25%|