Since taking office, President Barack Obama has been trying to cut down on government waste, including issuing a 2009 directive ordering agencies to report improper payments. But the Department of Health and Human Services didn't report such payments for nine of its programs.
The Department of Health and Human Services isn't meeting President Barack Obama's high-profile directive to reduce waste, fraud and abuse in government, failing to report all excessive or inappropriate payments from Medicare, Medicaid and other entitlement programs, the agency's internal watchdog warns.
The HHS inspector general also rebuked the department for trying to argue technicalities to explain why it chose not to review certain forms of overpayments at the federal and state levels.
"The Department’s quarterly reports were incomplete and cannot be used to adequately assess the level of risk of each of the Department’s programs or to determine the extent of necessary oversight," the inspector general wrote in a report released Thursday.
Though bland in language, the watchdog report could prove politically important as both parties jockey to convince voters their nominee is the best equipped to reduce federal spending and bring budget deficits under control.
The Obama administration made a full-court effort to blunt the findings, announcing Thursday a new partnership with states and insurers to better share data in hopes of identifying and reducing fraud.
“This partnership puts criminals on notice that we will find them and stop them before they steal health care dollars,” HHS Secretary Kathleen Sebelius said. “Thanks to this initiative today and the anti-fraud tools that were made available by the health care law, we are working to stamp out these crimes and abuse in our health care system.”
HHS also disputed the inspector general's report, arguing it did not have to review all high-dollar payments from Medicare, Medicaid, Head Start and other entitlements programs to comply with the president's November 2009 directive. Specifically, the department chose not to report mispayments that were being adjusted or those that involved federally funded state programs.
"It was the department’s view that overpayments for which adjustments were being made did not meet the definition of an improper payment and did not need to be reported, nor did any overpayment made by the State-administered programs need to be reported," the report said.
The inspector general disagreed, specifically faulting the agency for not examining readily available sources of data that could have identified mispayments. The lack of effort, it said, violated Obama's directive.
"An agency cannot comply with the Executive Order to identify and report high-dollar improper payments without considering data sources that are applicable and readily available," the watchdog countered.
Fraud is estimated to cost the Medicare program $60 billion a year alone, and Obama had made a high-profile effort to crack down on fraud and excessive payments. In November 2009, the president signed an order requiring agencies to cut back on waste, fraud and abuse and to report errant expenditures.
For HHS, the order required the agency to report quarterly high-dollar excessive payments -- usually payments over $5,000 -- from nine programs deemed by the White House to be ripe for fraud. They included the Medicare Parts A and B fee-for-service plans, Medicare Advantage, the Medicare Prescription Drug Benefit, the Head Start program for children, Medicaid, Children’s Health Insurance Program, Foster Care, Temporary Assistance for Needy Families, and Child Care Development Fund. The latter five are administered by states using federal funds.
The inspector general's report specifically examined HHS' compliance with the order in 2010, concluding that the data the agency ignored or excluded essentially understated the public amount of overpayments and made it impossible to calculate taxpayers' true risks.
The inspector general suggested the department create a comprehensive list of overpayments for each program, and HHS said it would study this proposal to see if it was economically feasible.
HHS said it would take the report into consideration since it is "always looking for ways to improve."
The inspector general is an independent investigative and watchdog office within each department charged with finding wrongdoing.
An executive order is a directive from the president, usually designed to change or amend the behavior of government agencies.
The Department of Health and Human Services is the "government’s principal agency for protecting the health of all Americans" according to their website.