Sequester May Hurt Long-Term, Short-Term Anti-Fraud Efforts, Experts Say

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Current fraud cases could take longer to resolve and fewer individuals may be willing to work for the federal government in fraud-fighting roles as a result of sequester cuts focused on Medicare and Medicaid program integrity that could harm both short-term and long-term fraud-fighting efforts, experts told BNA.

The sequester, which was signed by President Obama March 1, will cut $57 million from the Health Care Fraud and Abuse Control (HCFAC) account by the end of the fiscal year in September, as well as $3 million from the Department of Health and Human Services Office of Inspector General, according to a report from the Office of Management and Budget.

The HCFAC account coordinates law enforcement activity related to health care fraud and abuse on the federal, state, and local levels.

Demoralized Employees

Lewis Morris, an attorney with Adelman, Sheff & Smith LLC, in Annapolis, Md., told BNA that the sequestration will trigger furloughs, demoralize employees, and divert attention from critical missions.

Morris, who previously served as chief counsel to HHS OIG, said he was worried that “many talented individuals who might have made a contribution to public service will decide to forgo a career in the government.”

Although he acknowledged that federal employees will continue to work hard during the sequester, Morris said “cases may take longer to resolve, guidance and other discretionary projects may be postponed--and that hurts the integrity of the programs and the providers that play by the rules.”

Brian Roark, an attorney with Bass Berry & Sims PLC, Nashville, Tenn., said the biggest potential impact of the sequester would be the “disruption of momentum in the government's health care fraud enforcement initiatives, especially civil enforcement whose personnel are considered nonessential.”

He said that even if the sequester does not lead to reductions in the overall number of attorneys or agents focused on health care fraud enforcement, “extended furloughs generally increase attrition, with lawyers and agents leaving government service for the private sector, which likely could disrupt the momentum of civil enforcement activities.”

Reduced Resources

In addition to causing delays in resolving anti-fraud cases, the sequester may diminish available program integrity resources, Kirk Nahra, an attorney with Wiley Rein, Washington, told BNA.

He said the government's anti-fraud programs require substantial resources, provided by both internal government employees and outside contractors.

“By reducing the anti-fraud effort, the government will actually spend more on fraudulent claims, with an overall net negative effect on the government budget,” Nahra said, as fewer cases of health care fraud will be investigated.

Louis Saccoccio, chief executive officer of the National Health Care Anti-Fraud Association, told BNA that the immediate impact of the sequester would be felt in the training and education of federal agents at the Federal Bureau of Investigation and OIG who are involved in fighting fraud.

“Both agencies already are cutting back on planned attendance at training conferences by their agents,” he said.

Saccoccio also said the NHCAA offers a range of education and training events open to public and private fraud investigators, and “we expect to see a very significant decline in attendance by federal employees this year.”

Peter Budetti, director of the Center for Program Integrity at the Centers for Medicare & Medicaid Services, addressed the sequester during an appearance Feb. 27 before the House Energy and Commerce Subcommittee on Health. He said any reduction in resources resulting from the sequester would have a negative impact on program integrity efforts (see related item in the Federal News section).

By James Swann  

The OMB report is at

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