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Budget cuts are making healthcare whistleblowers more important than ever.
According to the Department of Health and Human Services Office of Inspector
General, thanks to cuts in the HHS budget, Medicare and Medicaid are about
to have even fewer resources to fight fraud and abuse.

Center for Public Integrity obtained internal documents from HHS-OIG that discuss the effects budget
cuts are about to have on Medicare’s ability to defend itself against
fraud in the medical field — and the outlook is grim. In all, OIG
is losing 400 employees – a full 20% of its staff – as a result
of the cuts.

Now that is a short-sighted plan. I don’t know whether Congress or
HHS is deciding where to place the cuts, but it is a huge mistake to cut
funding from the branch of the agency devoted to getting money back in
to Medicare and Medicaid coffers. As a whistleblower attorney, I can attest
that there are brave men and women willing to risk their jobs to try to
stop fraud. But these whistleblowers can address only a small fraction
of the fraud.

As I explained in an earlier legal blog post,
Government Recovers $4.9 Billion Thanks to False Claims Act, last year whistleblowers helped the Government recover $4.9 billion,
and 3.3 billion of that was just for fraud in the healthcare field. But
the Government estimates that
Medicare is losing more than $60 billion to fraud every year. With those sorts of numbers, the Government simply
cannot afford to shut down a program designed to bring dollars back into
taxpayer coffers.

If the Government gives up fighting fraud, it not only will lose money,
it also will embolden fraudsters who know they are very likely to get
away with what they are doing.

A Harvard professor is predicting dire problems could result from the cuts
to OIG funding. Malcolm Sparrow is warning that the Government needs to
“stay ahead” of the cheaters, “Otherwise three years
from now we will be saying how could we not have predicted this mess?”

OIG is worried, too. In an internal memo, an OIG official admitted: “As
OIG’s budget resources decline, so do our enforcement and oversight
activities.” And the cuts could not come at a worse time, as the
government prepares to ramp up its spending in the health care arena.
The agency conceded that it “will not be able to keep pace”
with the coming expansion.

Whistleblowers who have inside information about fraud will become increasingly
important as OIG’s ability to fight fraud decreases. The sheer amount
of fraud in the healthcare arena was already overwhelming for OIG. Now,
with their staff and budget cut drastically, they will be less able to
detect fraud on their own or pursue fraud.

The False Claims Act was strengthened in 2009 and 2010, fortunately just
in time to encourage whistleblowers to step into the breach being created
by the lack of agency funding to pursue fraud. A whistleblower who tells
the Government about fraud can receive between 15% and 30% of the amount
that the Government recovers. The Government is protected because the
Government does not have to pay the whistleblower anything unless the
whistleblower’s suit actually collects money for the Government.

With the Government ceding more of the ground on fighting fraud, we can
only hope the changes are enough to convince whistleblowers to come forward,
so that we can stop hemorrhaging our nation’s healthcare dollars.


Lee’s peers have named her a Georgia SuperLawyer every year for two decades.