Federal Budget Cuts Hit The False Claims Act

Federal Officials are scaling back numerous high-profile healthcare False Claims Act investigations due to budget decline.  The Department of Health and Human Services’ Office of Inspector General, which investigates Medicare and Medicaid fraud, is losing 400 staff members through 2015, about 20% of its workforce.

An unspecified number of investigations into poor quality care in hospitals are being delayed due to “significantly reduced” travel budgets and the high cost of paying experts to review medical files.  These delays may result in a “potentially high-risk hospital not being reviewed” and “potentially erroneous claims not being reviewed.”

Sequestration has played a part, but the inspector general’s funding problems are more complex, officials say.  The agency is operating with reduced funds because of the expiration of a $30 million per year appropriation form the Deficit Reduction Act of 2005 and the end of stimulus funding and other budget cuts.

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