FY 2006 Budget in Brief

Office of Inspector General

On this page:
Office of Inspector General
Bioterrorism
Grants Oversight
Child Support Enforcement Program
Health Care Fraud and Abuse
Medicare Prescription Drug, Improvement, and Modernization Act

Office Of Inspector General

Overview Table

Under the authority of the Inspector General Act, the Office of Inspector General (OIG) improves HHS programs and operations and protects them against fraud, waste, and abuse. By conducting independent and objective audits, evaluations, and investigations, OIG provides timely, useful, and reliable information and advice to Department officials, the Administration, the Congress, and the public.

For FY 2006, the Office of Inspector General (OIG) requests a discretionary appropriation of $40 million, the same as the FY 2005 discretionary level. OIG will also receive between $150 and $160 million in FY 2006 from the Health Care Fraud and Abuse Control (HCFAC) Account for Medicare and Medicaid related fraud, waste, and abuse activities. In addition to this, in FY 2005 OIG received $25 million to fight fraud, waste, and abuse associated with the implementation of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA). The FY 2006 budget request proposes to extend the date that OIG can obligate this $25 million by one year, from FY 2005 to FY 2006.

Over the FY 2005 - FY 2006 period, OIG will use its discretionary funding to continue its work across the non-Medicare and non-Medicaid areas of HHS, which are public health, children and families, aging, and department-wide activities. The funding level of OIG for FY 2006 allows OIG to continue its efforts in:

• Bioterrorism oversight, investigations, audits, and evaluations;
• Grant oversight and reviews that cover internal controls, accounting controls, performance measurements, and program evaluation; and
• Nation-wide involvement with the 10 Project Save Our Children (PSOC) Task Forces that identify, investigate, and prosecute individuals who willfully avoid the payment of their child support obligations.

In addition to this, OIG will continue its HCFAC activities to identify and prosecute health care fraud; prevent future fraud, waste, or abuse; protect HHS program beneficiaries; and ensure the solvency of the Medicare Trust Fund; as well as play an active role in implementation of the MMA.

Bioterrorism

Grants Oversight

OIG plans to review Department grant programs to determine whether they are appropriately monitored and managed throughout the grant life cycle. OIG will assess mechanisms in place to ensure that proper procedures are used to award grants, fund them, account for expenditures, and verify that they are used only for authorized purposes. The work of OIG will include review of performance measures used to determine the nature and value of the product of the grants, as well as the methods used to evaluate the individual grants and grant programs as a whole. The reviews of OIG will cover internal controls, accounting controls, performance measurements, and program evaluation.

OIG anticipates conducting grant oversight activities in FY 2005-FY 2006 that touch almost every Operating Division within HHS and include such diverse issues as patient safety, the National Electronic Disease Surveillance System, nursing workforce development, Native American diabetes prevention / treatment, and community health centers.

Child Support Enforcement Program

Health Care Fraud and Abuse

Through the Health Insurance Portability and Accountability Act (HIPAA), OIG receives mandatory funding for its activities that focus on fraud, waste, abuse, and efficiency improvements in the Medicare and Medicaid programs. The Act provides for minimum and maximum amounts of funding that are decided each year by the Secretary of HHS and the Attorney General. Starting in FY 2003, and each year thereafter, the maximum amount available to OIG for its HCFAC Program is capped at $160 million. OIG works with the Centers for Medicare & Medicaid Services (CMS), other HHS agencies, and the Department of Justice to ensure that funds due to the Medicare Trust Fund or CMS are recovered through audits and investigations, and provides recommendations for statutory, regulatory, and program changes that could strengthen program integrity.

Medicare Prescription Drug, Improvement, and Modernization Act

In FY 2005 OIG received $25 million to fight fraud, waste, and abuse associated with the implementation of the MMA. The FY 2006 budget request proposes to extend the date that OIG can spend this $25 million by one year, from FY 2005 to FY 2006. Under the MMA, OIG is tasked with several mandatory requirements, as well as general oversight activities.

Initially, OIG will focus on audits of drug manufacturers and surveys to monitor the market prices of Medicare Part B drugs; statutory requirements relating to safe harbors for electronic transmission of drug prescriptions and collaborative efforts of Federally Qualified Health Clinics; effects of Medicare payment rates on the availability of hematology and oncology drugs; prices of drugs included in the End-Stage Renal Disease composite rate; payment methods for training residents in non-hospital settings; and notices to beneficiaries relating to hospital lifetime reserve days. Even without specific mandates, OIG is expected to conduct investigations, audits, and evaluations and provide advice and technical assistance on all aspects of the Medicare program. Examples of planned work include:

• Graduate Medical Education (GME) Voluntary Supervision in Nonhospital Settings. The MMA requires that OIG study the appropriateness of alternative payment methodologies for GME involving the costs of training residents in nonhospital settings.
• Beneficiary Understanding of Drug Discount Card Program. OIG will assess beneficiary understanding of the Medicare Prescription Drug Discount Card program and materials CMS provides to beneficiaries, as well as determine if beneficiary materials comply with MMA requirements and if beneficiaries understand the program.
• Administrative Costs. Using the Federal Employees Health Benefit guidelines, OIG will examine the administrative amounts currently claimed by managed care organizations (MCOs). Congress has expressed interest in how MCOs determine funding amounts to meet administrative costs, which must be allocable, allowable, reasonable, and limited under the program.

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