Trump Hiring Freeze May Affect Health-Care Fraud Recoveries


“Boots on the ground” is an often overused phrase, but it’s an essential part of any health-care fraud investigation. Technology can do a lot to identify potential fraud, but field agents do the actual work of investigating. The Trump administration’s federal hiring freeze may lead to fewer agents and fewer fraud recoveries, Linda Baumann, an attorney with Arent Fox, recently told me.

The Trump executive order prevents government agencies from replacing investigators and attorneys lost to attrition, Baumann said. “Because fraud and abuse enforcement efforts bring significant amounts of money back to the federal government, I would expect funding ultimately to be restored, but it's hard to predict at this point, particularly since the HHS and DOJ secretaries haven't been confirmed,” she said.

I spoke with Baumann shortly after the release of the annual Health Care Fraud and Abuse Control program report for fiscal year 2016, which found that health-care fraud recoveries were up almost $1 billion from FY 2015, moving from $2.4 billion to $3.3 billion. While recoveries were up, the program’s return on investment dropped a bit. The report identified a 5-to-1 ROI over the past three years, meaning that every dollar spent on the program led to $5 in savings. The ROI in FY 2015 was 6.1-to-1.

Gejaa Gobena, an attorney with Hogan Lovells, told me that the jump in recoveries was significant, especially since recoveries had dropped from FY 2014 to FY 2015. Gobena said the current report showed that the decline was a mere “blip” and not evidence of any downward trend.

Gobena also said the HCFAC recoveries are being driven by smaller settlements, as opposed to one or two multibillion-dollar off-label pharmaceutical settlements.

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