President Obama's FY2011 budget increases health care fraud enforcement

by Ben Vernia | February 2nd, 2010

The proposed budget released yesterday by the White House contains significant increases in health care fraud enforcement dollars, but you would be hard-pressed to locate them in the Department of Justice’s proposed appropriation.

The Department of Justice’s budget document is largely silent on healthcare fraud. The topic is not one of the FBI’s stated strategic priorities (p. 760), which instead focus on counterterrorism, white collar and violent crime. Similarly, although the Department expects its overall Criminal Division caseload to grow by nearly 10%, the Division is slated to receive only a modest $2.3 million in “program enhancements,” and the Civil Division, whose workload is expected to grow 7%, has a proposed increase of approximately $17 million, which the Department describes as addressing “response to the fiscal crisis, spent nuclear fuel litigation, and E-discovery.” (The nuclear fuel litigation has arisen from the Government’s failure to open a nuclear fuel storage facility on schedule despite collecting fees from the industry.)

To find the increase in healthcare fraud enforcement, one must instead look at HHS’s budget, which proposes a massive 80% increase – from $311 million to $561 million – in the Health Care Fraud and Abuse Control Account. The agency explains:

Almost half of the increase, $116.1 million, will be used to fund new Health Care Enforcement Action (HEAT) initiatives at CMS, the Department of Justice (DoJ), and the Office of Inspector General. HEAT will establish strike force teams in select cities and increase coordination, data sharing, and training among our investigators, agents and prosecutors in order to more effectively fight fraud and abuse in our programs.

The HEAT initiative, which was recently expanded to Brooklyn, Baton Rouge, and Tampa, emphasizes criminal enforcement and has focused to date on small to mid-size fraud schemes.

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