HEALTH CARE 

FRAUD AND ABUSE 

CONTROL PROGRAM

Indicators Provide 

Information on 

Program 

Accomplishments, but 

Assessing Program 

Effectiveness is 

Difficult

Report to Congressional Requesters

September 2013

GAO-13-746

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-746, a report to 

congressional requesters

September 2013

HEALTH CARE FRAUD AND ABUSE CONTROL 

PROGRAM

Indicators Provide Information on Program 

Accomplishments, but Assessing Program 

Effectiveness is Difficult

Why GAO Did This Study

GAO has designated Medicare and 

Medicaid as high-risk programs partly 

because their size, scope, and 

complexity make them vulnerable to 

fraud. Congress established the 

HCFAC program and provided funding 

to HHS and DOJ to help reduce fraud 

and abuse in Medicare and Medicaid.

GAO was asked to examine how HHS 

and DOJ are using funds to achieve 

the goals of the HCFAC program, and 

to examine performance assessments 

and other metrics that HHS and DOJ 

use to determine the program’s 

effectiveness. This report (1) describes 

how HHS and DOJ obligated funds for 

the HCFAC program, (2) examines 

how HHS and DOJ assess HCFAC 

activities and whether key program 

outputs have changed over time, and 

(3) examines what is known about the 

effectiveness of the HCFAC program in 

reducing health care fraud and abuse.

To describe how HHS and DOJ 

obligated funds, GAO obtained 

financial information from HHS and 

DOJ for fiscal year 2012. To examine 

how HHS and DOJ assess HCFAC 

activities and whether key outputs 

have changed over time, GAO 

reviewed agency reports and 

documents, and interviewed agency 

officials. To examine what is known 

about the effectiveness of the HCFAC 

program, GAO conducted a literature 

review and interviewed experts.

In comments on a draft of this report, 

HHS noted examples of CMS’s efforts 

to reduce health care fraud, though 

these examples were not included in 

the HCFAC return-on-investment 

calculation. Additionally, HHS and DOJ 

provided technical comments, which 

GAO incorporated as appropriate.

What GAO Found

In fiscal year 2012, the Department of Health and Human Services (HHS), HHS 

Office of Inspector General (HHS-OIG), and the Department of Justice (DOJ) 

obligated approximately $583.6 million to fund Health Care Fraud and Abuse 

Control (HCFAC) program activities. About 78 percent of obligated funds were 

from mandatory HCFAC appropriations (budgetary resources provided in laws 

other than appropriation acts), 11 percent of obligated funds were from 

discretionary HCFAC appropriations (budgetary resources provided in 

appropriation acts), and 12 percent were obligated funds from other 

appropriations that HHS, HHS-OIG, and DOJ used to support HCFAC activities. 

HCFAC funds were obligated to support a variety of activities, including 

interagency Medicare Fraud Strike Force Teams—which provide additional 

investigative and prosecutorial resources in geographic areas with high rates of 

health care fraud—located in 9 cities nationwide.

HHS, HHS-OIG, and DOJ use several indicators to assess HCFAC activities, as 

well as to inform decision-makers about how to allocate resources and prioritize 

those activities. For example, in addition to other indicators, the United States 

Attorneys’ Offices use indicators related to criminal prosecutions, including the 

number of defendants charged and the number of convictions. Additionally, many 

of the indicators that HHS, HHS-OIG, and DOJ use—such as the dollar amount 

recovered as a result of fraud cases—reflect the collective work of multiple 

agencies since these agencies work many health care fraud cases jointly. 

Outputs from some key indicators have changed in recent years. For example, 

according to the fiscal year 2012 HCFAC report, the return-on-investment—the 

amount of money returned to the government as a result of HCFAC activities 

compared with the funding appropriated to conduct those activities—has 

increased from $4.90 returned for every $1.00 invested for fiscal years 2006-

2008 to $7.90 returned for every $1.00 invested for fiscal years 2010-2012.

Several factors contribute to a lack of information about the effectiveness of 

HCFAC activities in reducing health care fraud and abuse. The indicators 

agencies use to track HCFAC activities provide information on the outputs or 

accomplishments of HCFAC activities, not on the effectiveness of the activities in 

actually reducing fraud and abuse. For several reasons, assessing the impact of 

the program is challenging. For example, it is difficult to isolate the effect that 

HCFAC activities, as opposed to other efforts such as changes to the Medicare 

provider enrollment process, may have in reducing health care fraud and abuse. 

It is also difficult to estimate a health care fraud baseline—a measure of the 

extent of fraud—that is needed to be able to track whether the amount of fraud 

has changed over time as a result of HCFAC or other efforts. HHS has a project 

under way to establish a baseline of probable fraud in home health care, and will 

determine whether this approach to estimating a baseline of fraud should be 

expanded to other areas of health care. Results from this project and other 

studies could provide HHS and DOJ with additional information regarding which 

activities are the most effective in reducing health care fraud and abuse, and 

could potentially inform agency decisions about how best to allocate limited 

resources. View GAO-13-746. For more information, 

contact Kathleen M. King at (202) 512-7114 or 

kingk@gao.gov or Eileen R. Larence at 

(202) 512-8777 or larencee@gao.gov.
Page i GAO-13-746 HCFAC Program

Letter 1 

Background 7

Agencies Obligated $583.6 Million for HCFAC Activities in Fiscal 

Year 2012; Most Obligations Were for Personnel 12

Agencies Use Several Indicators to Assess HCFAC Activities, and 

Some Key Outputs Changed Over Time 22

Several Factors Contribute to Lack of Information about the 

Effectiveness of HCFAC Activities 30

Concluding Observations 35

Agency Comments 36

Appendix I Health Care Fraud and Abuse Control (HCFAC) Program 

Activities Conducted by Agencies in Fiscal Year 2012 38

Appendix II Health Care Fraud and Abuse Control (HCFAC) Program 

Obligations for Fiscal Years 2008 through 2012 41

Appendix III Indicators Used by Agencies to Assess Health Care Fraud 

and Abuse Control (HCFAC) Program Activities 48

Appendix IV Key Outcomes and Outputs of Health Care Fraud and Abuse 

Control (HCFAC) Program Activities 59

Appendix V Comments from the Department of Health and Human 

Services 61

Appendix VI GAO Contacts and Staff Acknowledgements 63

Contents 
Page ii GAO-13-746 HCFAC Program

Tables

Table 1: Total Health Care Fraud and Abuse Control (HCFAC) 

Obligations By Agency Component and Strike Force 

Location, Fiscal Year 2012 20

Table 2: Agencies, Components, and Health Care Fraud and Abuse 

Control (HCFAC) Program Activities 38

Table 3: Obligations For Health Care Fraud and Abuse Control 

(HCFAC) Program Activities, Fiscal Years 2008-2012, By 

Agency and Component and Type of Appropriations 42

Table 4: Total Health Care Fraud and Abuse Control (HCFAC) 

Program Obligations by Strike Force Location and Fiscal 

Year, 2008 through 2012 47

Table 5: Collective Indicators Reported in the Annual Health Care 

Fraud and Abuse Control (HCFAC) Program Report, and 

Outcomes/Outputs for Associated Indicator, for Fiscal 

Year 2012 48

Table 6: Indicators That Are Used by the HHS Components to 

Assess Health Care Fraud and Abuse Control Program 

Activities, Source of Indicators, and Outcomes/Outputs for 

Associated Indicator, for Fiscal Year 2012 49

Table 7: Indicators That Are Used by the Department of Health and 

Human Services Office of Inspector General (HHS-OIG) to 

Assess Health Care Fraud and Abuse Control (HCFAC) 

Program Activities, Source of Indicators, Associated 

Target (if any), and Outcomes/Outputs for Associated 

Indicator, for Fiscal Year 2012 52

Table 8: Indicators That Are Used by the Department of Justice 

(DOJ) Components to Assess Health Care Fraud and 

Abuse Control (HCFAC) Program Activities, Source of 

Indicators, Associated Targets (if any), and 

Outcomes/Outputs for Associated Indicator, for Fiscal 

Year 2012 55

Table 9: Key Program Outcomes/Outputs of Health Care Fraud and 

Abuse Control (HCFAC) Program Activities, Fiscal Years 

2008 through 2012 59

Figures

Figure 1: Appropriations for the Health Care Fraud and Abuse 

Control (HCFAC) Program for Fiscal Year 2012, By 

Agency 9
Page iii GAO-13-746 HCFAC Program

Figure 2: Fiscal Year 2012 Health Care Fraud and Abuse Control 

(HCFAC) Obligations (in Millions), by Agency Component 

and Type of Appropriations 14

Figure 3: Health Care Fraud and Abuse Control (HCFAC) Program 

Return-on-Investment, Fiscal Years 2008 through 2012 28

Figure 4: Selected Key Program Outputs and Total Obligations for 

Health Care Fraud and Abuse Control (HCFAC) Program 

Activities, Fiscal Years 2008 through 2012 29
Page iv GAO-13-746 HCFAC Program

Abbreviations

ACL Administration for Community Living

ASPE Office of the Assistant Secretary for Planning and

 Evaluation

ASPA Office of the Assistant Secretary for Public Affairs

CMS Centers for Medicare & Medicaid Services

CHIP Children’s Health Insurance Program

HHS Department of Health and Human Services

HHS-OIG Department of Health and Human Services’ Office of 

 Inspector General

DOJ Department of Justice

EOUSA Executive Office for United States Attorneys

FBI Federal Bureau of Investigation

FDA Food and Drug Administration

HCFAC Health Care Fraud and Abuse Control

HEAT Health Care Fraud Prevention and Enforcement Action

 Team

HIPAA Health Insurance Portability and Accountability Act of 1996

JMD Justice Management Division

OAS Office of Audit Services 

OCIG Office of Counsel to the Inspector General

OEI Office of Evaluation and Inspections

OGC Office of General Counsel

OI Office of Investigations

OMP Office of Management and Policy

SMP Senior Medicare Patrol

Strike Force Medicare Fraud Strike Force

USAOs U.S. Attorneys’ Offices

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-13-746 HCFAC Program

441 G St. N.W.

Washington, DC 20548

September 30, 2013

The Honorable Thomas R. Carper

Chairman

The Honorable Tom Coburn, M.D.

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Orrin G. Hatch

Ranking Member

Committee on Finance

United States Senate

The Honorable Charles E. Grassley

Ranking Member

Committee on the Judiciary

United States Senate

The Honorable Claire McCaskill

Chairman

Subcommittee on Financial and Contracting Oversight

Committee on Homeland Security and Governmental Affairs

United States Senate

GAO has designated Medicare and Medicaid as high-risk programs 

because their size, scope, and complexity make them particularly

vulnerable to fraud and abuse.1

 

1

GAO, High-Risk Series: An Update, 

According to the Department of Health 

and Human Services’ Office of Inspector General (HHS-OIG), common 

health care fraud schemes include providers or suppliers billing for 

services or supplies not provided or not medically necessary, purposely 

billing for a higher level of service than that provided, and paying 

kickbacks to providers for referring beneficiaries for specific services or to 

certain entities. To help reduce fraud and abuse in health care programs, 

including Medicare and Medicaid, Congress established the Health Care 

GAO-11-278 (Washington, D.C.: February 2011). 

Fraud represents intentional acts of deception with knowledge that the action or 

representation could result in an inappropriate gain. Abuse represents actions inconsistent 

with acceptable business or medical practices.

 
 

Page 2 GAO-13-746 HCFAC Program

Fraud and Abuse Control (HCFAC) program as a part of the Health 

Insurance Portability and Accountability Act of 1996 (HIPAA).2 The 

departments of Health and Human Services (HHS) and Justice (DOJ) 

jointly administer the HCFAC program and, in fiscal year 2012, received 

over $486 million in HCFAC appropriations. Several components within 

HHS and DOJ receive appropriations to carry out HCFAC activities, 

including the Centers for Medicare & Medicaid Services (CMS)—the 

agency within HHS that administers Medicare, Medicaid, and the 

Children’s Health Insurance Program (CHIP)3

—the HHS-OIG, and DOJ’s 

components—the Civil, Civil Rights, Criminal, and Justice Management 

divisions, the U.S. Attorneys’ Offices (USAOs), and the Federal Bureau of 

Investigation (FBI).4,5

By statute, HHS and DOJ are required to issue a joint report annually to 

Congress on the amounts appropriated through the HCFAC program, and 

the amounts recovered as a result of HCFAC activities. In fiscal year 

2012, HHS and DOJ reported having won or negotiated over $3 billion in 

health care judgments and settlements through the activities of the 

HCFAC program. The agencies also reported obtaining additional 

administrative penalties in health care fraud cases and proceedings as a 

result of these activities. In fiscal year 2012, about $4.2 billion was 

collected, a portion of which was deposited into the Medicare Trust Funds 

as a result of health care judgments and settlements and administrative 

penalties (including those that occurred before fiscal year 2012). We have 

previously reported that although there have been convictions involving 

multimillion dollar schemes that defrauded the Medicare program, there 

are no reliable estimates of the amount of fraud in the Medicare program 

 

2

Pub. L. No. 104-191, § 201, 110 Stat. 1936, 1992 (Aug. 21, 1996) (codified at 42 U.S.C. 

§§ 1320a-7c, 1395i(k)).

3

Medicare is the federal health insurance program for persons aged 65 and over, certain 

disabled individuals, and individuals with end-stage renal disease. Medicaid and CHIP are 

joint federal-state programs that finance health insurance coverage for certain categories 

of low-income adults and children.

4

In this report, we refer to the agencies, divisions, and offices within HHS and DOJ as 

components.

5

In addition to HCFAC mandatory and discretionary funding appropriated to HHS, HHSOIG, and DOJ, over $250 million in discretionary HCFAC funding was appropriated to 

CMS to support program integrity activities in Medicare and Medicaid for fiscal year 2012.
 

Page 3 GAO-13-746 HCFAC Program

or for the health care industry as a whole.6

Given these concerns, you asked us to examine how HHS and DOJ have 

used their appropriations to achieve the goals of the HCFAC program, 

and to examine performance assessments and other metrics HHS and 

DOJ use to determine the HCFAC program’s performance and 

effectiveness. This report (1) describes how HHS and DOJ obligated 

funds for the HCFAC program; (2) examines how HHS and DOJ assess 

HCFAC activities and whether key program outputs have changed over 

time; and (3) examines what is known about the effectiveness of the 

HCFAC program in reducing health care fraud and abuse.

Additionally, although HHS 

and DOJ work to reduce health care fraud and abuse through the HCFAC 

program, concerns have been raised about whether the HCFAC program 

has been effective in reducing health care fraud and abuse.

For our review, we included agencies within HHS (including HHS-OIG) 

and DOJ that received mandatory and discretionary HCFAC funding in 

fiscal year 2012 whose activities are described in the annual HCFAC 

report,7 and whose funding is included in the annual report’s return-oninvestment calculation (which compares the amount of monetary results 

to the federal government, such as funds returned to the Medicare Trust 

Funds as a result of HCFAC activities, with the funding appropriated to 

conduct those activities).8,9

 

6

See GAO, Medicare: Progress Made to Deter Fraud, but More Could Be Done,

For CMS, we only included the HCFAC 

GAO-12-801T (Washington, D.C.: June 8, 2012).

7

Mandatory funding refers to budgetary resources controlled by laws other than 

appropriations acts. Discretionary funding refers to budgetary resources provided in 

annual appropriations acts, other than those that fund mandatory programs. HHS and 

DOJ receive mandatory funding as well as discretionary funding for the HCFAC program. 

The FBI receives mandatory funding to support HCFAC activities.

8

HHS’s components that received HCFAC funding in fiscal year 2012 were: Administration 

for Community Living (ACL), CMS, Food and Drug Administration (FDA), and Office of 

General Counsel (HHS-OGC). HHS-OIG’s components that received HCFAC funding in 

fiscal year 2012 were: Office of Audit Services (OAS), Office of Counsel to the Inspector 

General (OCIG), Office of Evaluation and Inspections (OEI), Office of Investigations (OI), 

and Office of Management and Policy (OMP). DOJ’s components that received HCFAC 

funding were: DOJ’s Civil Division, Civil Rights Division, Criminal Division, Executive 

Office for United States Attorneys (EOUSA)—which provides administrative support for 

the 94 USAOs—the Justice Management Division (JMD), and the FBI.

9

The Medicare Trust Funds refer to the Hospital Insurance Trust Fund and the 

Supplementary Medical Insurance Trust Fund, which finance Medicare.
 

Page 4 GAO-13-746 HCFAC Program

funding that was included in the HCFAC return-on-investment 

calculation.10 We excluded all of the remaining HCFAC funding that CMS 

receives because it is not included in the HCFAC return-on-investment 

calculation and generally supports program integrity activities in Medicare 

Parts C and D, which are similar to the activities conducted under the 

Medicare Integrity Program.11

To describe how HHS and DOJ obligated funds for the HCFAC program, 

we obtained information about how the agencies obligated their HCFAC 

appropriations for fiscal year 2012, by expenditure category (such as 

personnel).12,13 We received this information from the HHS, HHS-OIG, 

and DOJ components that received HCFAC funding.14

 

10The HCFAC funding appropriated to CMS that we included in our review supports a 

Medicaid and CHIP financial management oversight project, a pilot project using data 

analytics to identify fraud in community mental health centers in 3 states, and some of 

CMS’s contributions to the Medicare Strike Force teams, which provide additional 

investigative and prosecutorial resources in high fraud cities. The funding included in our 

review is a small portion of the HCFAC funding that CMS receives. In fiscal year 2012, 

CMS received over $250 million in discretionary HCFAC funding, and CMS officials told us 

that most of this funding was used to support program integrity activities in Medicare Parts 

C and D.

Additionally, we 

obtained information on obligations of other appropriations that HHS, 

11In July 2011, we issued a report on how CMS used its Medicare Integrity Program (MIP) 

funding to support the program’s activities in fiscal years 2006 through 2010, how CMS 

assessed the effectiveness of MIP, and the factors CMS considered when allocating MIP 

funding. See GAO, Medicare Integrity Program: CMS Used Increased Funding for New 

Activities but Could Improve Measurement of Program Effectiveness, GAO-11-592

(Washington, D.C.: July 29, 2011). CMS concurred with our recommendations that CMS 

update the return-on-investment calculation when program expenditure data are updated 

and implement data system changes that will permit CMS to capture accurate spending 

data.

12An obligation is a definite commitment that creates a legal liability of the government for 

payment of goods and services ordered or received. Obligations can be paid immediately 

or in the future.

13We requested that HHS, HHS-OIG, and DOJ report their information within five 

categories of expenses: (1) personnel compensation and benefits; (2) contractual services 

and supplies (including rent, transportation, printing, and supplies); (3) acquisition of 

assets; (4) grants; and (5) other expenses. In addition to fiscal year 2012, we obtained 

information for fiscal years 2008 through 2011, which is included in appendix II.

14Two HHS components, the Office of the Assistant Secretary for Public Affairs and the 

Office of the Assistant Secretary for Planning and Evaluation, had HCFAC obligations for 

fiscal year 2011 only.
 

Page 5 GAO-13-746 HCFAC Program

HHS-OIG, and DOJ components used to support HCFAC activities.15

To examine how HHS and DOJ assess HCFAC activities, and whether 

key program outputs have changed over time, we interviewed officials 

from HHS, HHS-OIG, and DOJ to obtain information on indicators 

reported by their agencies. We asked these officials about indicators 

listed in the HCFAC report, as well as other indicators that HHS, HHSOIG, and DOJ components use to assess HCFAC activities. We also 

collected information from agency officials about how they use the 

indicators and other data analyses to determine how to target HCFAC 

resources and prioritize activities. We reviewed agency documents, 

including the fiscal year 2012 HCFAC report, agency annual and semiannual reports, strategic plans, performance plans, congressional budget 

justifications, and other reports to obtain information on HCFAC activities 

that HHS, HHS-OIG, and DOJ components conducted. We reviewed the 

return-on-investment calculation outlined in the HCFAC report to 

determine what funding and amounts recovered are included, as well as 

the method used to calculate the return-on-investment.

Additionally, we interviewed officials at HHS and DOJ components, and 

reviewed agency documents to examine the process by which HHS and 

DOJ have obligated HCFAC funds. We reviewed the data for any errors 

and followed up with agency officials for clarification when necessary. On 

the basis of these activities, we determined that these data were 

sufficiently reliable for the purpose of our report.

16

 

15For the purposes of our report, we refer to HHS-OIG and its components separately 

from HHS and its agencies. Several HHS and DOJ components obligated funds not 

specifically appropriated for the HCFAC program in addition to HCFAC appropriations to 

carry out activities related to health care fraud and abuse. For example, DOJ’s USAOs 

used other appropriations, including direct appropriations, to support HCFAC activities.

To examine 

whether key program outputs have changed from fiscal year 2008 to 

2012, we reviewed current and past HCFAC reports. We selected outputs 

from the annual HCFAC report to review, which the agencies consider to 

be key program outputs. For this analysis, we also took account of other 

funding (i.e., funds that agencies used to support HCFAC activities that 

were not specifically appropriated for the HCFAC program). We also 

interviewed agency officials regarding other factors that may have 

contributed to changes in program outputs in specific years.

16The return-on-investment calculation compares the amount of funding returned as a 

result of HCFAC activities with the funding appropriated to conduct those activities.
 

Page 6 GAO-13-746 HCFAC Program

To examine what is known about the effectiveness of the HCFAC 

program in reducing health care fraud and abuse, we conducted a review 

of relevant literature to identify measures used to assess the 

effectiveness of law enforcement programs, challenges associated with 

evaluating law enforcement programs, and the issues related to 

establishing a baseline estimate of the type and extent of fraud needed to 

measure progress over time. We included in our search both health care 

fraud enforcement programs specifically and law enforcement programs 

in general. We conducted literature searches in 44 online databases with 

health care and/or law enforcement content containing peer-reviewed 

publications and government reports to identify studies published from 

January 2003 through March 2013 using health care fraud, law 

enforcement, and performance measurement search terms. We 

conducted a preliminary review of abstracts for over 300 articles and 

selected 49 articles for closer review based on the following criteria: the 

article (1) identified performance indicators to assess the effectiveness of 

enforcement programs in general or health care fraud enforcement 

programs specifically; (2) discussed establishing a health care fraud 

baseline; or (3) identified challenges in evaluating law enforcement 

programs. Additionally, we interviewed HHS and DOJ officials to obtain 

information on the effectiveness of HCFAC activities and to determine the 

status of efforts by a CMS contractor to establish a health care fraud 

baseline. We also interviewed experts on health care fraud to discuss 

strengths and limitations of measuring the effectiveness of health care 

fraud enforcement programs, such as the HCFAC program.17

We conducted this performance audit from September 2012 to 

September 2013 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives.

 

17We selected these experts through our literature review.
 

Page 7 GAO-13-746 HCFAC Program

The HCFAC program was established under HIPAA to (1) coordinate 

federal, state, and local law enforcement efforts to control fraud and 

abuse associated with health plans; (2) conduct investigations, audits, 

evaluations, and inspections of delivery and payment for health care in 

the United States; (3) facilitate the enforcement of federal health care 

fraud and abuse laws; (4) provide guidance to the health care industry in 

the form of advisory opinions, safe harbor notices, and special fraud 

alerts; and (5) establish a national database of adverse actions against 

health care providers.18

HIPAA requires that HHS and DOJ issue a joint annual report to 

Congress that outlines the amounts returned to the Medicare Trust Funds 

for the previous fiscal year under various categories, such as amounts of 

criminal fines and civil monetary penalties—penalties for certain activities, 

such as knowingly presenting a Medicare claim that is not medically 

necessary. Additionally, HHS and DOJ are required to report the amounts 

deposited into and expended from the Medicare Trust Funds to conduct 

HCFAC activities during the previous fiscal year and the justification for 

those expenditures. In addition to the mandatory appropriations provided 

under HIPAA, which Congress increased in 2010, DOJ and HHS-OIG 

have received discretionary funding through annual appropriations for the 

HCFAC program since fiscal year 2009.19

The annual HCFAC report includes a summary of the key HCFAC 

activities that the agencies and their components carried out and provides 

information on the outputs or outcomes of those activities. For example, 

the report includes information on the amount of money returned to the 

 

18Safe harbors identify payment or business practices that are protected from 

enforcement under federal laws that prohibit such payment or business practices.

19See, e.g., Omnibus Appropriations Act, 2009, Pub. L. No. 111-8, 123 Stat. 524, 773 

(Mar. 11, 2009). In addition to appropriating discretionary HCFAC funds, this law and 

subsequent annual appropriations laws have required that the annual HCFAC report 

include measures of operational efficiency and impact on fraud, waste, and abuse in 

Medicare, Medicaid, and CHIP for the funds provided by these appropriations. Starting in 

fiscal year 2010, the annual HCFAC report has included a return-on-investment 

calculation. The calculation is estimated by dividing the monetary results (such as 

deposits and transfers to the Medicare Trust Funds) by the annual HCFAC appropriation 

in a given year.

Background 

Health Care Fraud and 

Abuse Control Program
 

Page 8 GAO-13-746 HCFAC Program

Medicare Trust Funds as a result of HCFAC activities. Additionally, the 

report includes sections that describe the activities each agency and 

component that received HCFAC funding conducted. These sections 

provide information on the outputs of each component’s activities. For 

example, DOJ’s USAO section highlights the number of new criminal 

investigations initiated and the number of civil matters pending.

HHS and DOJ receive funding from several appropriations to conduct 

their HCFAC program activities. Figure 1 describes HCFAC 

appropriations to HHS, HHS-OIG, and DOJ. Mandatory funds are 

appropriated by HIPAA from the Medicare Trust Funds, and are available 

until expended, meaning that the funds can be spent in other years.20

 

20The Patient Protection and Affordable Care Act and the Health Care and Education 

Reconciliation Act of 2010 provided additional mandatory appropriations from the 

Medicare Trust Funds for the HCFAC program for fiscal years 2011 through 2020. The 

additional fiscal year 2012 mandatory appropriation is reflected in figure 1. Patient 

Protection and Affordable Care Act, Pub. L. No. 111-148, § 6402(i), 124 Stat. 119, 760 

(Mar. 23, 2010); Health Care Education and Reconciliation Act of 2010, Pub. L. No. 111-

152, § 1303(a), 124 Stat. 1029, 1057 (Mar. 30, 2010).

A 

large portion of these funds are appropriated to HHS-OIG; the law 

appropriates the remainder to both HHS and DOJ, which must determine 

together how to allocate the funds—referred to as the wedge—between 

the agencies.

HCFAC Appropriations
 

Page 9 GAO-13-746 HCFAC Program

Figure 1: Appropriations for the Health Care Fraud and Abuse Control (HCFAC) Program for Fiscal Year 2012, By Agency

Note: In fiscal year 2012, total appropriations to the Department of Health and Human Services 

(HHS), HHS’s Office of Inspector General (HHS OIG), and the Department of Justice (DOJ) for 

HCFAC activities amounted to $486.1 million. This includes the $131.9 million in mandatory 

appropriations that the Federal Bureau of Investigation (FBI) received to conduct health care fraud 

and abuse activities and the portion of the DOJ discretionary funding that it allocated to the FBI 

($3.4 million).
 

Page 10 GAO-13-746 HCFAC Program

In each fiscal year, beginning with fiscal year 2009, Congress 

appropriated discretionary funding to DOJ and HHS-OIG to finance 

activities conducted under the HCFAC program. In addition, Congress 

also appropriated discretionary funds to CMS for program integrity 

activities it conducts in Medicare and Medicaid, which was outside the 

scope of our review.21

In addition to the HCFAC mandatory and discretionary funding that HHS, 

DOJ, and its components receive, the agencies use funding from other 

appropriations to support HCFAC activities. For example, HHS’s Office of 

General Counsel (OGC) uses appropriations from HHS's General 

Departmental Management appropriation to support its HCFAC activities.

Although the FBI is a component of DOJ and was 

allocated a portion of DOJ’s discretionary HCFAC funding (about 

$3.4 million), the FBI also received mandatory funding under HIPAA to 

conduct health care fraud and abuse activities. This mandatory funding 

was appropriated from the general fund of the U.S. Treasury.

HHS and DOJ components conduct a variety of activities under the 

HCFAC program using mandatory and discretionary HCFAC funding. 

Among other activities, HHS components identify and investigate fraud 

through programs, including the Administration for Community Living’s 

(ACL) Senior Medicare Patrol programs, which are designed to educate 

and train Medicare beneficiaries to identify fraud. HHS’s OGC supports a 

variety of program integrity work, including assisting DOJ on False Claims 

Act cases.22

 

21In fiscal year 2012, CMS was appropriated over $250 million in discretionary HCFAC 

funding and CMS officials told us that most of this funding was used to support program 

integrity activities in Medicare Parts C and D. In addition to HCFAC funding, CMS also 

received about $863 million in funding for the Medicare Integrity Program in fiscal year 

2012.

HHS’s Food and Drug Administration (FDA) conducts the 

Pharmaceutical Fraud Program, which is designed to detect 

pharmaceutical, biologics, and medical device fraud. CMS uses a portion 

of HHS’s HCFAC funding to improve its financial oversight of the 

Medicaid program and CHIP, and for a pilot project related to fraud in 

22The False Claims Act prohibits certain actions, including the knowing presentation of a 

false claim for payment by the federal government. Such claims may be brought by the 

United States or a private person—known as a relator or whistleblower—on behalf of him 

or herself and the United States, alleging the submission of false claims for payments by 

the federal government. DOJ may intervene in such an action, known as a “qui tam” 

action, and litigate the case along with the private party. 31 U.S.C. §§ 3729-3733. 

Activities Conducted 

Under the HCFAC Program
 

Page 11 GAO-13-746 HCFAC Program

community mental health centers. CMS also uses its portion of HCFAC 

funding to support its efforts related to the Medicare Fraud Strike Force

(Strike Force) teams, which consist of investigators and prosecutors who 

use advanced data analysis techniques to identify, investigate, and 

prosecute potentially fraudulent billing patterns in geographic areas with 

high rates of health care fraud.

HHS-OIG conducts a variety of activities to identify and reduce fraud, 

waste, and abuse. For example, HHS-OIG assesses civil monetary 

penalties and imposes other administrative penalties—such as excluding 

individuals and entities from participating in federal health care 

programs—against individuals and entities for certain types of conduct. 

Each of HHS-OIG’s components receives HCFAC funding for the work it 

conducts. Among other activities:

The Office of Investigations (OI) coordinates and conducts 

investigations of allegations of fraud, waste, and abuse in Medicare 

and Medicaid.

The Office of Evaluation and Inspections (OEI) conducts national 

evaluations on issues related to preventing fraud, waste, and abuse, 

and promoting economy, efficiency, and effectiveness of HHS 

programs.

The Office of Audit Services (OAS) conducts independent audits of 

HHS programs, grantees, and contractors.

The Office of Counsel to the Inspector General (OCIG) exercises the 

authority to impose civil and administrative penalties related to health 

care fraud, as well as issue advisory opinions.

The Office of Management and Policy (OMP) provides management, 

guidance, and resources in support of the other HHS-OIG 

components.

DOJ’s components have the primary role in enforcing U.S. laws related to 

health care fraud and abuse, including both criminal and civil matters. For 

example:

The Criminal Division prosecutes criminal health care fraud and leads 

the Strike Force teams.
 

Page 12 GAO-13-746 HCFAC Program

The Civil Division represents the U.S. in civil fraud matters, such as 

False Claims Act cases and has the authority to bring criminal 

charges under the Federal Food, Drug, and Cosmetic Act.

The USAOs litigate or prosecute civil and criminal health care fraud 

cases in their 94 districts throughout the country and are part of the 

Strike Force teams. 

The Civil Rights Division enforces several laws related to cases of 

abuse, substandard care, or needless institutionalization of certain 

individuals.

The Justice Management Division (JMD) provides financial oversight 

of the DOJ components.

The FBI serves as an investigative agency with jurisdiction in both 

federal and private health insurance programs, and participates in 

task forces and undercover operations to investigate health care 

fraud.

Although the agencies and components conduct certain activities without 

assistance from other agencies and components, HHS, CMS, HHS-OIG, 

and DOJ—including the FBI—frequently collaborate to investigate and 

prosecute fraud in federal health care programs. For example, HHS-OIG, 

FBI, and DOJ investigators and prosecutors comprise Strike Force teams. 

Table 2 in appendix I provides further detail on these activities.

In fiscal year 2012, HHS, HHS-OIG, and DOJ obligated approximately 

$583.6 million to fund HCFAC activities. About 78 percent of obligated 

funds were from mandatory HCFAC appropriations, 11 percent of 

obligated funds were from discretionary HCFAC appropriations, and 

12 percent of obligated funds were from other appropriations.23

 

23Percentages do not add to 100 due to rounding.

Most of 

the obligations for HCFAC activities were for personnel costs; some 

agencies reported obligating funds for services under contract and 

supplies. Additionally, HHS-OIG and DOJ obligated over 8 percent of 

their HCFAC funds to support Strike Force teams located in 9 cities 

nationwide.

Agencies Obligated 

$583.6 Million for 

HCFAC Activities in 

Fiscal Year 2012; Most 

Obligations Were for 

Personnel 
 

Page 13 GAO-13-746 HCFAC Program

In fiscal year 2012, HHS, HHS-OIG, and DOJ reported $583.6 million in 

obligations for HCFAC activities.24 This total includes obligations of 

mandatory (about 78 percent) and discretionary (about 11 percent) 

HCFAC appropriations and other appropriations not specific to the

HCFAC program (about 12 percent).25

In fiscal year 2012, DOJ incurred about 48 percent of the agencies’ total 

HCFAC obligations (about $280.3 million),

HCFAC mandatory funds are 

available until expended, while discretionary HCFAC funds are available 

for 2 fiscal years. Other appropriations that agencies use for HCFAC 

activities vary in how long they are available. Because agencies reported 

in fiscal year 2012 obligating funds that were carried over from prior fiscal 

years, and because agencies obligated funds from other appropriations 

not specific to the HCFAC program, the obligations the agencies reported 

for HCFAC activities in fiscal year 2012—$583.6 million—exceed the 

HCFAC funds appropriated to the agencies for that year. For example, 

HHS, HHS-OIG, and DOJ were appropriated $486.1 million in HCFAC 

mandatory and discretionary funding for fiscal year 2012. However, for

fiscal year 2012, these agencies reported HCFAC obligations of 

$583.6 million, including over $67 million in obligations of other 

appropriations, as well as obligations of funds appropriated in prior fiscal 

years.

26

 

24An obligation is a definite commitment that creates a legal liability of the government for 

payment of goods and services ordered or received. Obligations can be paid immediately 

or in the future.

while HHS-OIG incurred 

about 44 percent ($258.8 million), and HHS incurred the remaining 

8 percent ($44.4 million). See figure 2 for the distribution of HCFAC 

obligations by appropriations type—HCFAC mandatory, HCFAC 

discretionary, and other appropriations—by HHS, HHS-OIG, and DOJ’s 

25In addition to mandatory and discretionary HCFAC funding, we requested that HHS, 

HHS-OIG, and DOJ components identify other appropriations used to support HCFAC 

activities. For the purposes of this report, we define “HCFAC obligations” to be obligations 

used to support HCFAC activities, which includes obligations of HCFAC mandatory and 

discretionary appropriations, obligations of FBI mandatory appropriations provided under 

HIPAA for health care fraud and abuse activities, and obligations of other appropriations 

not specific to the HCFAC program. 

26As a component of DOJ, the FBI’s obligations are included with DOJ HCFAC 

obligations, even though it receives its mandatory funding for health care fraud and abuse 

activities from the U.S. Treasury’s general fund and not the Medicare Trust Funds. The 

FBI includes a description of its activities in an appendix to the annual HCFAC report and 

its funding is included in the HCFAC return-on-investment calculation.

HHS, HHS-OIG, and DOJ 

Obligated $583.6 Million 

in Fiscal Year 2012; 

12 Percent of Obligated 

Funds Came From Other 

Appropriations 
 

Page 14 GAO-13-746 HCFAC Program

components for fiscal year 2012. See table 3 in appendix II for the 

distribution of HCFAC obligations by appropriations type—HCFAC 

mandatory, HCFAC discretionary, and other appropriations—for HHS, 

HHS-OIG, and DOJ’s components for fiscal years 2008 through 2012.

Figure 2: Fiscal Year 2012 Health Care Fraud and Abuse Control (HCFAC) Obligations (in Millions), by Agency Component 

and Type of Appropriations 

Notes: Agency total HCFAC obligations may not equal the sum of HCFAC obligations for the 

agency’s components due to rounding.

a

The Department of Health and Human Services’ (HHS) components that received HCFAC funding in 

fiscal year 2012 were: Administration for Community Living (ACL), Centers for Medicare & Medicaid 

Services (CMS), Food and Drug Administration (FDA), and Office of General Counsel (OGC). HHS’s 

Office of Inspector General’s (HHS-OIG) components that received HCFAC funding in fiscal year 

2012 were: Office of Audit Services (OAS), Office of Counsel to the Inspector General (OCIG), Office 

of Evaluation and Inspections (OEI), Office of Investigations (OI), and Office of Management and 
 

Page 15 GAO-13-746 HCFAC Program

Policy (OMP). The Department of Justice’s (DOJ) components that received HCFAC funding were: 

DOJ’s Civil Division, Civil Rights Division, Criminal Division, the 94 U.S. Attorneys’ Offices (USAO), 

the Justice Management Division (JMD), and the Federal Bureau of Investigation (FBI).

b

For fiscal year 2012, CMS reported amounts in HCFAC mandatory appropriations, about 

$1.6 million, that the agency reserved to fund HCFAC activities in future years. These funds were 

allocated to CMS in fiscal year 2012, but were not obligated.

c

HHS’s OGC reported estimated obligations of other appropriations, which included reimbursements 

for attorney services provided to OGC clients within HHS, that supported HCFAC activities.

d

HHS-OIG’s reported obligations also include any funding the agency received as reimbursement for 

the costs of conducting investigations and audits and other activities when such costs are ordered by 

a court, voluntarily agreed to by the payor, or otherwise authorized under 42 U.S.C. §1320a-7c(b).

e

DOJ’s Criminal Division stated that it uses some of its annual appropriation for health care fraud 

activities. However, Division officials indicated that the Division infrequently funds HCFAC activities 

with other appropriations and, as a result, the Division does not track its use of these appropriations 

for HCFAC activities.

f

A portion of the mandatory HCFAC appropriation that supports HHS and 

DOJ’s HCFAC activities—or wedge funds—is allocated to each agency. 

According to a HHS official, in fiscal year 2010, the departments reached 

a standing agreement for the following allocations: approximately 

38 percent for HHS and 62 percent for DOJ.

For fiscal year 2012, DOJ reported allocations of HCFAC mandatory and discretionary appropriations 

that the department reserved for future use to fund HCFAC activities, about $4.7 million in mandatory 

HCFAC appropriations and about $10.8 million in discretionary HCFAC appropriations. These funds 

were allocated to JMD, but were not obligated. We have included these HCFAC allocations under the 

JMD, in addition to the $208,676 in mandatory HCFAC obligations JMD reported. However, in the 

return-on-investment included in the fiscal year 2012 annual HCFAC report, only a portion of these 

allocations (about $13.2 million) were included in the calculation. JMD may use these funds for 

unanticipated HCFAC costs.

27

HHS distributes its wedge funds to HHS components based on their 

annual funding requests that the Secretary approves. In fiscal year 2012, 

HHS distributed mandatory funding to ACL for the Senior Medicare Patrol 

programs, OGC to support program integrity work of its clients, FDA to 

support the Pharmaceutical Fraud Program, and CMS to support 

Medicaid and CHIP financial specialists and a pilot project related to fraud 

in community mental health center providers in Texas, Florida, and 

Prior to fiscal year 2010, 

HHS and DOJ negotiated each year how to divide the wedge funds 

between the two agencies, which a HHS official described as timeconsuming.

 

27The Patient Protection and Affordable Care Act and the Health Care and Education 

Reconciliation Act of 2010, which provide additional mandatory HCFAC appropriations for 

fiscal years 2011 through 2020, require that these additional appropriations be allocated in 

the same proportion as the wedge fund was allocated in fiscal year 2010. The agencies 

have applied this allocation to the entire wedge appropriation since fiscal year 2010.

Mandatory HCFAC Funding
 

Page 16 GAO-13-746 HCFAC Program

Louisiana.

28

In fiscal year 2012, DOJ and HHS-OIG obligated discretionary HCFAC 

appropriations. According to the information each agency reported to us, 

each DOJ component received a share of DOJ’s discretionary HCFAC 

appropriation for their HCFAC activities. A DOJ official told us that DOJ 

components generally received the same amount of funding from the 

agency’s discretionary HCFAC appropriation for their HCFAC activities in 

fiscal year 2012 as they had in prior fiscal years. Additionally, the official 

indicated that a large portion of DOJ’s HCFAC discretionary appropriation 

supports the Strike Force teams because DOJ believes that these teams 

reduce fraud. One component in HHS-OIG—OMP—received 

discretionary HCFAC appropriations.

According to a DOJ official, DOJ distributes mandatory 

HCFAC funds—its portion of wedge funds—to its components to carry out 

their HCFAC activities, and the distribution of such funds has not varied 

much since the inception of the program. Separately, HHS-OIG receives 

a mandatory appropriation for its HCFAC activities. This appropriation is 

HHS-OIG’s primary source of funding for Medicare and Medicaid fraud 

investigations, as well as for audits, evaluations, and inspections it 

conducts related to the Medicare and Medicaid programs.

29

HHS, HHS-OIG, and DOJ components obligated over $67 million in funds 

from other appropriations in addition to the mandatory and discretionary 

HCFAC appropriations they obligated for HCFAC activities in fiscal year 

2012. Within HHS, one component—OGC—used other appropriations to 

supplement its HCFAC funding.

 OMP officials told us that most 

obligations of these funds are for overhead expenses for the HHS-OIG 

components that are handled by OMP (such as rent and utilities).

30

 

28CMS’s efforts related to the Strike Force teams were funded with HCFAC discretionary 

appropriations.

To carry out its HCFAC activities, OGC 

obligated funds from the annual HHS General Department Management 

appropriation, which accounted for almost half of its overall obligations for 

HCFAC activities in fiscal year 2012. ACL, CMS, and FDA did not use 

other appropriations to support their HCFAC activities.

29OMP provides management, guidance, and resources in support of the other HHS-OIG 

components.

30HHS-OGC’s reported estimated obligations of other appropriations, which also included 

reimbursements for attorney services provided to OGC clients within HHS that supported

HCFAC activities.

Discretionary HCFAC Funding

Other Appropriations 

Supporting HCFAC Activities
 

Page 17 GAO-13-746 HCFAC Program

Each of HHS-OIG’s components obligated funds from other 

appropriations to support HCFAC activities in fiscal year 2012. From other 

appropriations, HHS-OIG obligated about $18.9 million of these

appropriations for HCFAC activities in fiscal year 2012, which represented 

about 7 percent of its overall HCFAC obligations. HHS-OIG reported that 

the other appropriations used to support HCFAC activities included funds 

appropriated specifically to support HHS-OIG’s Medicare and Medicaid 

program integrity work. For example, in fiscal year 2012, each HHS-OIG 

component reported obligating funds appropriated in section 6034 of the 

Deficit Reduction Act (which, among other things, established the 

Medicaid Integrity Program and provided HHS-OIG with increased 

funding for Medicaid fraud and abuse control activities) to conduct 

HCFAC activities.31

Most of DOJ’s components also used funding from other appropriations to 

support HCFAC activities, specifically the USAOs, the FBI, the Civil 

Division, and the Civil Rights Division.32 The USAOs obligated the most 

funding from other appropriations among all of the DOJ components, 

about $31.1 million in fiscal year 2012. This accounted for 42 percent of 

the USAOs’ overall obligations for HCFAC activities in fiscal year 2012. 

Officials from the USAOs reported obligating funds from DOJ’s annual 

appropriations and the DOJ’s “Three Percent” funds to support HCFAC 

activities.33

 

31Deficit Reduction Act of 2005, Pub. L. No. 109-171, § 6034(c), 120 Stat. 4, 77 (Feb. 8, 

2006).

According to USAO officials, a portion of the USAOs’ annual 

appropriation is used to fund attorneys, paralegals, auditors and 

investigators, and litigation support for resource intensive health care 

fraud cases. Officials from the Civil Division told us that they also used 

“Three Percent” funds to continue the division’s health care fraud litigation 

32Although some DOJ components reported obligating funds from other appropriations for 

HCFAC activities, they also reported carrying over some of their HCFAC funding into other 

fiscal years. A DOJ official told us that funds are often carried over to a new fiscal year, 

such as in the situation of a continuing resolution, which may shorten the number of 

months in which they are able to obligate the appropriated funds.

33Section 11013 of the 21st Century Department of Justice Appropriations Authorization 

Act authorized the Attorney General to credit, as an offsetting collection, to the 

Department of Justice Working Capital Fund—a revolving fund that is authorized by 

Congress, as a form of permanent appropriation, to maintain moneys from certain sources 

for specific purposes—up to 3 percent of all amounts collected pursuant to DOJ’s civil 

debt collection litigation activities. DOJ refers to this appropriation as “Three Percent 

Funds.” Pub. L. No. 107-273, § 11013, 116 Stat. 1758, 1823 (Nov. 2, 2002).
 

Page 18 GAO-13-746 HCFAC Program

work, such as to investigate qui tam cases alleging false claims and to 

prepare cases for trial.34 The Civil Rights Division reported using DOJ's 

Salaries and Expenses, General Legal Activities appropriation to fund the 

rent for office space used by personnel, and the FBI reported using its 

annual appropriation to cover personnel expenses for investigators 

working health care fraud cases beyond those covered by HCFAC funds.

HHS, HHS-OIG, and DOJ reported that most of their HCFAC obligations 

were for personnel costs in fiscal year 2012, with some exceptions based 

on the type of HCFAC activities each component performs (see table 3 of 

appendix II for HCFAC obligations for fiscal years 2008 through 2012 for 

HHS, HHS-OIG, and DOJ’s components).35

HHS, HHS-OIG, and DOJ components also reported that their next 

largest amount of HCFAC obligations was for contractual services and 

supplies. Components reported using these contractual services and 

supplies for transportation, rent, supplies, or other contractual services—

such as for litigation consultants (for example, medical experts) and 

litigation support (for example, paralegals to review case documentation), 

among other things. Obligations for personnel and contracted services 

and supplies generally accounted for almost all of a component’s HCFAC 

obligations.

A large portion of most HHS 

components’ HCFAC obligations were for personnel costs. The same was 

true for HHS-OIG and DOJ. Each agency relied on personnel to conduct 

HCFAC activities—HHS-OIG employed investigators to examine potential 

fraud cases and DOJ employed investigators, attorneys, and other 

support personnel to investigate and prosecute fraud cases. Additionally, 

HHS-OIG employed auditors and evaluators to study issues related to the 

Medicare and Medicaid programs, including issues related to fraud in 

these programs, as well as a variety of other issues.

 

34A qui tam case is a civil action brought under the False Claims Act by an individual—

known as a relator or whistleblower—on behalf of him or herself and the United States, 

alleging the submission of false claims for payment by the federal government. In these 

qui tam cases, the relator may be eligible to receive a portion of the proceeds of the 

action or settlement, and reasonable expenses and attorneys’ fees and costs. 31 U.S.C. 

§ 3730(b),(d).

35We requested that HHS, HHS-OIG, and DOJ report their HCFAC obligations within five 

categories of expenses. These categories were personnel compensation and benefits; 

contractual services and supplies (including rent, transportation, printing, supplies); 

acquisition of assets; grants; and other expenses.

Most HCFAC Obligations 

Were for Personnel in 

Fiscal Year 2012
 

Page 19 GAO-13-746 HCFAC Program

Specifically, for HHS’s components, obligations for personnel costs 

represented the largest portion of FDA’s, CMS’s, and OGC’s obligations 

for HCFAC activities for fiscal year 2012. In contrast, most of ACL’s 

obligations in fiscal year 2012 were for expanding grants to the Senior 

Medicare Patrol programs.

Each of HHS-OIG’s components, with the exception of OMP, reported 

obligations for personnel costs as their largest HCFAC obligations for 

fiscal year 2012, devoting 87 percent or more of their obligations to 

personnel in fiscal year 2012. For OMP, over 70 percent of its obligations 

were devoted to rent, communication, utilities, equipment, printing, and 

other contractual services. OMP officials told us that certain overhead 

expenses incurred by the HHS-OIG components—for example, rent 

payments—are handled by OMP.

About half or more of DOJ components’ obligations for HCFAC activities 

were for personnel costs. In fiscal year 2012, the USAOs, Civil Division, 

Criminal Division, Civil Rights Division, and FBI reported that obligations 

for personnel costs ranged from 47 percent (Civil Division) to 84 percent 

(USAOs) of their obligations. For example, for the Civil Division, 

obligations for contractual services and supplies represented 53 percent 

of its HCFAC obligations; and officials told us that they use contracted 

services for litigation consultants (such as medical experts to review 

medical records or to prepare exhibits to be used at trial) and for litigation 

support (such as paralegals to review case documentation).

In fiscal year 2012, HHS-OIG and DOJ obligated over $47 million in 

HCFAC funds to support Strike Force teams. This represented about 

8.1 percent of the $583.6 million in obligations for HCFAC activities. DOJ 

officials told us that Strike Force teams are an important and valuable tool 

for identifying potential health care fraud schemes. (See table 1 for the 

HCFAC obligations by Strike Force location for fiscal year 2012, and see 

appendix II, table 4 for information on HCFAC obligations devoted to 

Strike Force teams for fiscal years 2008-2012.)

Over $47 Million in 

Obligations in Fiscal Year 

2012 Supported Strike 

Force Teams in Nine Cities
 

Page 20 GAO-13-746 HCFAC Program

Table 1: Total Health Care Fraud and Abuse Control (HCFAC) Obligations By Agency Component and Strike Force Location, 

Fiscal Year 2012

Strike Force Location & 

Fiscal Year Launched

Department of 

Health and Human 

Services’ Office of 

Inspector General 

(HHS-OIG)

Department of 

Justice’s (DOJ) 

Criminal Division a U.S. Attorneys’ Offices (USAOs)

Federal Bureau of 

Investigation (FBI) Total, by city

Miami, FL

Launched FY 2007 $6,276,735 $1,570,190 $1,404,500 $3,711,474 $12,962,899

Detroit, MI

Launched FY 2009 $2,483,564 $913,940 $623,000 $1,078,020 $5,098,524

Dallas, TX

Launched FY 2011 $3,013,496 $480,834 $458,000 $1,075,460 $5,027,790

Los Angeles, CA

Launched FY 2008 $2,360,294 $431,460 $428,000 $1,596,209 $4,815,963

Brooklyn, NY

Launched FY 2010 $2,005,588 $855,329 $553,000 $978,934 $4,392,851

Baton Rouge, LA

Launched FY 2010 $1,612,787 $943,497 $386,000 $496,083 $3,438,367

Chicago, IL

Launched FY 2011 $1,270,269 – $715,000 $1,394,940 $3,380,209

Houston, TX

Launched FY 2009 $783,021 $738,069 $424,000 $621,018 $2,566,108

Tampa, FL

Launched FY 2010 $1,341,201 $94.901 $578,000 $535,100 $2,549,202

Headquarters 

Support of Strike Forces $187,840 $2,055,643 $485,000 $323,330 $3,051,813

Total $21,334,795 $8,083,863 $6,054,500 $11,810,568 $47,283,726

Source: GAO analysis of HCFAC obligations reported to GAO by HHS-OIG’s Office of Investigations and DOJ’s Criminal Division, 

USAOs, and FBI for fiscal year 2012.

Notes: CMS also obligated $350,656 of its discretionary HCFAC appropriations for headquarters’ 

support of the Strike Force teams. However, these obligations were not associated with any one of 

the nine Strike Force cities and this amount is not reflected in the table above.

a

In fiscal year 2012, DOJ and HHS-OIG obligated over $12.9 million for

the Strike Force team in Miami, which represented over 27 percent of 

funding for all Strike Force teams. The first Strike Force team was 

officially launched in Miami in fiscal year 2007, based in part on an HHSHHS-OIG reported estimated HCFAC obligations to support the Strike Force teams including 

obligations of non-HCFAC appropriations. In fiscal year 2012, these other appropriations consisted of 

funds appropriated to HHS-OIG under section 6034 of the Deficit Reduction Act that remained 

available for obligation in fiscal year 2012. Deficit Reduction Act, Pub. L. No. 109-171, § 6034(c), 

120 Stat. 4, 77 (Feb. 8, 2006).
 

Page 21 GAO-13-746 HCFAC Program

OIG evaluation that found aberrant claims patterns for infusion therapy for 

Medicare beneficiaries with HIV/AIDs that differentiated South Florida 

Medicare providers and beneficiaries from the rest of the country.36

Based on the obligations reported for fiscal year 2012, HHS-OIG’s Office 

of Investigations accounted for 45 percent of the total obligations used for 

Strike Force teams. The FBI incurred 25 percent, DOJ’s Criminal Division 

incurred 17 percent, and the USAOs incurred 13 percent of obligations for 

the Strike Force teams. HHS-OIG’s Office of Investigations and the FBI’s 

agents conduct investigations and gather evidence, such as through 

surveillance for Strike Force cases, while DOJ’s Criminal Division and the 

USAOs’ attorneys are the primary prosecutors of Strike Force cases. 

Additionally, although not reflected in the table above, CMS obligated 

approximately $350,656 in discretionary HCFAC appropriations to 

support Strike Force Teams. CMS’s HCFAC obligations were not 

associated with any one individual Strike Force city.

Additionally, obligations for Miami’s Strike Force team were more than 

twice as much as in Detroit, the team with the second highest obligations 

for fiscal year 2012 ($5.1 million).

Since fiscal year 2010, the USAOs have used some of their HCFAC 

discretionary appropriation for three Special Focus teams—in San 

Francisco, Boston, and Philadelphia. These Special Focus teams are 

similar to the Strike Force teams, but handle pharmaceutical civil cases 

rather than criminal cases. Approximately $2.8 million of the USAOs’ 

HCFAC obligations in fiscal year 2012 were for these Special Focus 

teams. This amount was in addition to the HCFAC obligations they used 

for the Strike Force teams.

 

36HHS-OIG found that three South Florida counties (Miami-Dade, Broward, and Palm 

Beach) accounted for half of the submitted charges totaling $976 million, and 79 percent 

of the amount for drugs, billed nationally for Medicare beneficiaries with HIV/AIDs in the 

last half of 2006. In addition, HHS-OIG found that CMS and its contractors’ efforts to 

control these inappropriate payments through multiple approaches—such as payment 

suspensions, provider revocations, and claims-processing edits—resulted in limited 

success in controlling the aberrant billing. See HHS-OIG, Aberrant Billing in South Florida 

For Beneficiaries with HIV/AIDs, OEI-09-07-0030 (Washington, D.C., Sept. 2007).
 

Page 22 GAO-13-746 HCFAC Program

HHS, HHS-OIG, and DOJ use several indicators to assess HCFAC 

activities as well as to inform decision-makers about how to allocate 

resources. These indicators include those listed in the annual HCFAC 

report as well as others outlined in agency reports. For example, FDA 

assesses the work of its Pharmaceutical Fraud Program by tracking the 

number of criminal investigations opened and the outcomes of criminal 

convictions obtained, among other indicators. Additionally, many of the 

indicators that HHS, HHS-OIG, and DOJ use reflect the collective work of 

multiple agencies since they work many health care fraud cases jointly. 

Outputs from some of these key indicators have changed in recent fiscal 

years. For example, the return-on-investment has increased from $4.90 

returned for every $1.00 invested for fiscal years 2006-2008 to $7.90 

returned for every $1.00 invested for fiscal years 2010-2012.

HHS, HHS-OIG, and DOJ officials reported using several indicators to 

assess HCFAC activities and that those indicators serve multiple 

purposes. Several indicators are included in the annual HCFAC report, 

while other indicators are reported in agency documents or used 

internally. Additionally, some indicators are collective—in that they reflect 

the work of multiple agencies—and other indicators outline the activities 

conducted by a particular agency or component. Appendix III, tables 5 

through 8, provides detailed information on indicators used to assess the 

activities conducted using HCFAC funding, including those outlined in the 

HCFAC report, as well as other indicators the agencies use, by agency 

and component.

Each HHS component conducts unique activities related to health care 

fraud and abuse. As a result of these different types of activities, the 

indicators that each HHS component uses to highlight the 

accomplishments of its HCFAC activities vary.

FDA uses indicators associated with its Pharmaceutical Fraud program—

which focuses on detecting, prosecuting, and preventing pharmaceutical, 

biologic, and medical device fraud—including the number of criminal 

investigations opened during a fiscal year and the outcomes of criminal 

convictions obtained (such as amount of jail time, probation, or amount of 

restitution). FDA officials told us that the indicators they use are outlined 

in the annual HCFAC report. For example, FDA reported in the fiscal year 

2012 HCFAC report that it had opened 42 criminal investigations since 

the inception of the Pharmaceutical Fraud Program, and 17 investigations 

during fiscal year 2012.

Agencies Use Several 

Indicators to Assess 

HCFAC Activities, and 

Some Key Outputs 

Changed Over Time

HHS, HHS-OIG, and DOJ 

Use Several Indicators to 

Assess HCFAC Activities 

and Inform Decisions 

about Resource Allocation 

and Prioritization of 

Activities

HHS Indicators
 

Page 23 GAO-13-746 HCFAC Program

ACL primarily uses indicators that track information related to the Senior 

Medicare Patrol (SMP) programs—which train senior volunteers to inform 

fellow beneficiaries on how to detect and prevent fraud, waste, and abuse 

in the Medicare program—such as indicators related to beneficiary 

education and training, outreach activities, and events the SMP programs 

conduct, and cases that were referred for investigation. For instance, ACL 

tracks the number of group education sessions the SMPs conduct and 

the estimated number of beneficiaries who attended the sessions. Many 

of the indicators ACL uses are outlined in an annual HHS-OIG report on 

the SMP programs, as well as the annual HCFAC report.37

HHS’s OGC uses several indicators to assess the HCFAC activities it 

conducts. These indicators include amounts of recoveries for matters on 

which OGC has assisted—such as False Claims Act matters and civil 

monetary penalties—and the number of physician self-referral disclosures 

in which OGC advised.

According to 

ACL officials, ACL has hired a contractor to assess the adequacy of the 

current indicators used by ACL and to determine if the indicators are 

appropriate for evaluating the performance of the SMPs.

38

CMS officials told us that CMS uses a variety of indicators to assess the 

HCFAC activities included in our review. For the Medicaid and CHIP 

financial management project, CMS tracks information related to the 

amount of the federal share of Medicaid funds that were recovered as a 

result of the project’s monitoring and financial management reviews of 

Medicaid expenditures. For the community mental health centers study, 

CMS officials told us that they do not have indicators since the project is 

relatively new. For CMS’s efforts associated with the Strike Force teams, 

As with the other HHS agencies, OGC’s 

indicators are outlined in the annual HCFAC report.

 

37HHS-OIG’s report on the Senior Medicare Patrol (SMP) programs presents performance 

data for each SMP program. HHS-OIG collects the data every 6 months, reports annually, 

and has done so since 1997.

38According to the fiscal year 2012 HCFAC report, OGC advised CMS on the new 

voluntary Self Referral Disclosure Protocol established by the Patient Protection and 

Affordable Care Act. Pub. L. No. 111-148, § 6409(a), 124 Stat. at 772. Under this protocol, 

providers of services and supplies may self-disclose actual or potential violations of the 

physician self-referral law, commonly known as the Stark law. The Stark law prohibits 

physicians from making certain referrals for “designated health services” paid for by 

Medicare to entities with which the physician (or immediate family members) has a 

financial relationship, unless the arrangement complies with a specified exception, such 

as in-office ancillary services. 42 U.S.C. § 1395nn(a)(1), (b)(2).
 

Page 24 GAO-13-746 HCFAC Program

officials told us that one indicator they use is the drop in number of claims 

for particular services, which they believe coincides with the efforts of the 

Strike Force teams to investigate and prosecute fraud. For example, 

according to information that CMS provided to us, payments for home 

health services dropped by nearly one-half from 2008 to 2011 in MiamiDade County, which officials believe was, in part, due to the Strike Force 

team’s efforts focused on reducing fraud in home health care.

HHS-OIG uses a variety of indicators to assess the work it conducts using 

HCFAC funds. Some of these indicators reflect the collective work of 

HHS-OIG’s components and some are unique to the activities conducted 

by a particular component. For example, HHS-OIG tracks the health care 

savings attributable to HHS-OIG investigations, audits, and evaluations. 

This indicator includes work from nearly all HHS-OIG components, 

including the Office of Investigations, the Office of Audit Services, and the 

Office of Evaluation and Inspections. Among many other indicators, HHSOIG’s Office of Counsel to the Inspector General tracks the number of 

corporate integrity agreements monitored for compliance, which is 

specific to the work of that office.39

DOJ uses several indicators to assess the work it conducts with HCFAC 

funding. The indicators it uses relate to the activities that each DOJ 

component conducts to enforce health care fraud and abuse laws. For 

example, the USAOs use indicators related to criminal prosecutions, 

including the number of defendants charged and the number of 

convictions. In addition to those measures, the USAOs also track 

information related to civil matters, such as the number of pending civil 

investigations.

HHS-OIG officials told us that the 

indicators they use to assess HCFAC activities are reported in the annual 

HCFAC report and in other HHS-OIG reports (such as its semi-annual 

reports to Congress). 

In addition to the indicators listed in the annual HCFAC report, officials 

from DOJ’s components told us that they use other indicators to assess 

the work they conduct related to health care fraud and abuse. Officials 

 

39Corporate integrity agreements outline conditions or requirements an entity agrees to as 

a part of a civil settlement. An entity agrees to the corporate integrity agreement’s 

requirements in exchange for HHS-OIG’s agreement that it will not seek to exclude the 

entity from participation in federal health care programs. HHS-OIG’s Office of Counsel to 

the Inspector General monitors the compliance with these agreements.

HHS-OIG Indicators

DOJ Indicators
 

Page 25 GAO-13-746 HCFAC Program

told us that these indicators are tracked at the departmental level and 

aggregate the work of multiple DOJ components. For example, DOJ 

tracks the percentage of criminal and civil cases resolved favorably. 

These indicators include health care fraud cases, as well as other cases 

that DOJ components handle.

Officials from HHS, HHS-OIG, and DOJ told us that they use indicators to 

inform decision-makers about how to allocate resources. For example, 

officials from DOJ’s Civil Rights Division told us that they use indicators to 

help determine what resources they need to handle their current 

caseload. The Civil Rights Division considers the number of cases the 

division is currently working along with the number of remedial 

agreements with facilities that the division needs to monitor in the 

upcoming year when developing requests for funding. Additionally, 

officials from FDA told us that they review the preceding year’s number of 

investigations and the costs associated with those investigations, when 

requesting annual funding.

Additionally, HHS, HHS-OIG, and DOJ officials indicated that they use 

data to inform their decisions about which activities to prioritize, including 

what cases or studies to undertake, as well as where to locate specific 

resources. For example, officials from HHS-OIG told us that they use 

Medicare claims data to identify which service areas to target for 

investigations, audits, or evaluations, as well as which geographic regions 

to focus their efforts. Officials said that they continually review whether 

HHS-OIG staff are located in the most appropriate geographic areas and 

have relocated staff to areas to enhance the efficiency of HHS-OIG 

resources. HHS-OIG officials also told us that the agency uses several 

indicators for internal management purposes. Additionally, officials from 

DOJ’s Criminal Division told us that one factor they consider when 

deciding how to prioritize cases is to review data analyses to focus on 

cases with large amounts of alleged fraudulent billing.

Since HHS-OIG and DOJ’s components work many health care fraud 

cases jointly, many of the indicators included in the annual HCFAC report 

highlight the work of both HHS-OIG and DOJ, as well as various 

components within each agency. For example, the report includes 

information on the results of HCFAC activities, such as the dollar amount 

recovered as a result of fraud cases, which HHS-OIG and DOJ officials 

say reflects the investigative work done by HHS-OIG and FBI, as well as 

the work of DOJ’s components in prosecuting the cases. Additionally, the 

report presents several indicators related to the work of the Strike Force 

Indicators Inform Decisions 

about Resource Allocation and 

Prioritization of Activities

Some Key Outputs that 

Reflect Work of Multiple 

Agencies Have Changed in 

Recent Years 
 

Page 26 GAO-13-746 HCFAC Program

teams, such as the number of indictments and complaints involving 

charges that were filed, the outcomes of the cases, and the total amount

of alleged billing to Medicare as a result of these Strike Force cases.

The return-on-investment is another indicator that reflects the work of 

multiple agencies and has changed in recent years. We have recognized 

that agencies can use a return-on-investment as a valuable tool for 

assessing a program’s activities and for determining how best to target 

resources.40

The total returns—the numerator—includes deposits to the Medicare 

Trust Funds. The calculation includes amounts that were deposited 

into the Medicare Trust Funds rather than amounts that were ordered 

or negotiated in health care fraud and abuse cases, but not yet 

transferred to the Medicare Trust Funds. Officials reported that 

although there may be large amounts of restitution ordered or agreed 

upon in health care fraud cases, the amounts actually returned to the 

Medicare Trust Funds may be lower.

The return-on-investment is included in the annual HCFAC 

report and compares the amount of funds that were returned to the 

Medicare Trust Funds, such as restitution and compensatory damages 

awarded, with the amount of appropriations for HCFAC activities. 

Specifically:

41,42 By including only those 

funds that have been returned to the Medicare Trust Funds, the 

return-on-investment is not artificially inflated.

 

40GAO, 2013 Annual Report: Actions Needed to Reduce Fragmentation, Overlap, and 

Duplication and Achieve Other Financial Benefits, GAO-13-279SP, (Washington, D.C.: 

April 2013); Medicare Integrity Program: CMS Used Increased Funding for New Activities 

but Could Improve Measurement of Program Effectiveness, GAO-11-592 (Washington, 

D.C.: July 2011); and Opportunities to Reduce Potential Duplication in Government 

Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: 

March 2011).

41For example, officials told us that although a defendant convicted of health care fraud 

may be ordered to pay restitution and penalties in a specific amount, the defendant may 

pay less than what is ordered as the ability to pay often affects how much is actually 

received.

42Many cases discussed in the annual HCFAC report include settlements reached with 

pharmaceutical and device manufacturers for criminal and civil liabilities. For example, the 

fiscal year 2012 HCFAC report describes many settlements reached with pharmaceutical 

and device manufacturers and the settlements ranged from about $200,000 to $3 billion.
 

Page 27 GAO-13-746 HCFAC Program

The total investment—the denominator—includes mandatory and 

discretionary HCFAC funds that were appropriated to HHS, HHS-OIG, 

and DOJ (including the FBI’s mandatory funds devoted to health care 

fraud and abuse reduction activities) and does not include funding 

from other appropriations. DOJ officials told us that the HCFAC 

funding that CMS receives through HHS’s wedge fund is included in 

the return-on-investment calculation, and a small portion of HCFAC 

discretionary funds that CMS uses to support the Strike Force 

teams.43

Return-on-investment is calculated using a 3-year moving average. 

To account for differences in the amounts returned to the Medicare 

Trust Funds between years, the return-on-investment is calculated 

using a 3-year average. For example, a case may have been 

investigated in fiscal year 2010 but not settled until fiscal year 2012, 

and thus the funds received from that case would not be deposited 

until 2012. Similarly, although agencies may carry over HCFAC 

appropriations into future fiscal years, the amount of appropriations 

included in the calculation is also based on a 3-year average with 

carry over amounts included in the year in which they were 

appropriated.44

According to the annual HCFAC report, the return-on-investment for fiscal 

years 2010-2012 was $7.90 returned to the Medicare Trust Funds for 

every $1.00 of HCFAC funds appropriated for HCFAC activities. The 

return-on-investment increased steadily from fiscal year 2008 to 2012. In 

fiscal years 2006-2008, the return-on-investment was $4.90 to $1.00, and 

in fiscal years 2010-2012, the return-on-investment was the highest at 

$7.90 to $1.00. See figure 3 for additional information on the return-oninvestment for fiscal years 2008-2012.

 

43The CMS activities for which funding is included are financial management oversight of 

the Medicaid program and CHIP; a pilot project related to payments for partial 

hospitalization programs made to community mental health centers (which is designed to 

use predictive modeling to prevent fraud in community mental health centers in Florida, 

Texas, and Louisiana); and for CMS support for the Medicare Strike Force teams. The 

return-on-investment calculation does not include the remaining HCFAC funding that CMS 

receives because it generally supports program integrity activities in Medicare Parts C and 

D.

44Mandatory HCFAC appropriations are available until expended. Discretionary HCFAC 

appropriations are available for two years.
 

Page 28 GAO-13-746 HCFAC Program

Figure 3: Health Care Fraud and Abuse Control (HCFAC) Program Return-onInvestment, Fiscal Years 2008 through 2012

Note: The return-on-investment is based on amounts recovered from HCFAC activities and deposited 

into the Medicare Trust Funds and amounts appropriated to Department of Health and Human 

Services (HHS), HHS Office of Inspector General, and the Department of Justice (DOJ) to conduct 

HCFAC activities. The information about the return-on-investment was obtained from DOJ. The 

return-on-investment is calculated using a 3-year moving average and, as a result, the calculation for 

each fiscal year incorporates amounts that were deposited into the Medicare Trust Funds and 

appropriations from that fiscal year and the two prior fiscal years. For example, the return-oninvestment for fiscal year 2008 is calculated using the amounts from fiscal years 2006, 2007, and 

2008. Additionally, because many fraud cases can take years to investigate and prosecute, the 

amounts deposited into the Medicare Trust Funds may have been the result of prior year’s HCFAC 

activities.

A review of other key outputs listed in the annual HCFAC reports from 

2008 through 2012 that reflect accomplishments or outputs of activities 

conducted by multiple agencies using HCFAC funding shows some key 

outputs have generally increased and some have remained stable. During 

the same time period, HCFAC obligations and funding from other 

appropriations used to support HCFAC activities increased about 

38 percent. See figure 4 for data on selected key outputs for fiscal years 

2008 to 2012, and see appendix IV, table 9 for additional detailed 

information on the key outputs for fiscal years 2008 to 2012.
 

Page 29 GAO-13-746 HCFAC Program

Figure 4: Selected Key Program Outputs and Total Obligations for Health Care 

Fraud and Abuse Control (HCFAC) Program Activities, Fiscal Years 2008 through 

2012

Note: Since many fraud cases can take years to investigate and prosecute, the number of 

investigations, cases, and defendants reported in the figure above may have been the result of a prior 

year’s HCFAC activities. The obligations information included in the figure above reports obligations 

for HCFAC activities that Department of Justice, Department of Health and Human Services (HHS), 

and HHS Office of Inspector General reported to GAO for a single fiscal year.

One key output that has increased since fiscal year 2008 is the number of 

defendants convicted of health care fraud. For example, the number of 

defendants convicted of health care fraud generally increased from 

around 588 in fiscal year 2008 to 826 in fiscal year 2012 (a 40 percent 

increase).

Some key outputs did not change between fiscal years 2008 and 2012. 

While funding has increased since 2008, there has not been a consistent 

pattern of increasing outputs. For example, the number of new criminal 

health care fraud investigations opened increased from fiscal year 2008 
 

Page 30 GAO-13-746 HCFAC Program

(957 investigations) to fiscal year 2012 (1,131 investigations). 

Additionally, the number of new civil health care fraud investigations 

opened did not vary much between 2008 (843 cases) and 2012 

(885 cases).

HHS-OIG and DOJ officials indicated that there are a number of factors 

that might contribute to these trends. DOJ officials told us that the 

complexity of fraud cases has increased in recent years and requires 

more substantial resources to investigate and prosecute than other, lesscomplex cases. Officials stated that this limits the amount of resources 

they are able to commit to other cases. HHS-OIG and DOJ officials also 

cited other factors, including external factors (such as an increase in the 

number of defendants opting to go to trial) and significant changes to 

federal health care programs (such as the implementation of the 

Medicare Part D prescription drug program), which might influence these 

trends.

Nonetheless, HHS-OIG and DOJ officials indicated that they consider the 

increase since 2008 in some of the key outputs to be significant. For 

example, HHS-OIG officials noted that there was an increase of 42 civil 

fraud investigations from 2008 to 2012, and they consider the increase to 

be of significance given the complexity of fraud schemes and the 

resources needed to handle these civil cases. Additionally, DOJ officials 

told us that they consider increases to the number of new criminal fraud 

investigations opened (an increase of 18 percent) to be significant. DOJ 

officials also indicated that several key outputs related to the Strike Force 

teams have increased since 2008. See appendix IV for detailed 

information on key outputs related to HCFAC activities, including the 

Strike Force teams. 

The indicators used by agencies to track the outputs of HCFAC activities 

provide information on the accomplishments of HCFAC activities, not on 

the effectiveness of the activities in reducing health care fraud and abuse. 

HHS, HHS-OIG, and DOJ officials reported that they consider the 

indicators to be the outputs or accomplishments of the HCFAC activities 

they conduct and in that sense they provide a composite picture of the 

achievements of the HCFAC program. However, difficulty in establishing 

a causal link between HCFAC activities and output indicators, difficulty in 

determining the deterrent effect HCFAC activities may have on potential 

health care fraud and abuse, limited research on the effectiveness of 

health care fraud interventions, and the lack of a health care fraud 

Several Factors 

Contribute to Lack of 

Information about the 

Effectiveness of 

HCFAC Activities
 

Page 31 GAO-13-746 HCFAC Program

baseline hinder a broader understanding of the effectiveness of the 

HCFAC program in reducing health care fraud and abuse.

The indicators that HHS, HHS-OIG, and DOJ use to track HCFAC 

activities offer insights on the accomplishments and outputs of HCFAC 

activities, but they do not measure the effectiveness of the HCFAC 

program in reducing health care fraud and abuse. HHS, HHS-OIG, and 

DOJ officials reported that they consider the indicators they use to be the 

accomplishments or outputs of the HCFAC activities they conduct. For 

example, the key program outputs discussed earlier in this report reflect 

accomplishments of activities agencies conduct using HCFAC funding. 

Officials from HHS, HHS-OIG, and DOJ told us that these indicators can 

be used to provide insights on program activities or the number of actions 

a component has been able to accomplish in a specific time frame 

(e.g., the number of defendants convicted in a fiscal year). However, 

several HHS and DOJ agency officials told us that they do not consider 

these indicators to be measures of the performance or the effectiveness 

of the HCFAC program in reducing health care fraud. The return-oninvestment is an example of an indicator that describes program results 

but does not measure program effectiveness. We found that the returnon-investment provides information on the accomplishments of HCFAC 

activities in relationship to the amount of funds appropriated for these 

activities, but does not provide information on the extent to which the 

HCFAC program reduces health care fraud.

Additionally, most of the indicators used to track HCFAC activities do not 

have targets or goals associated with them. Although standard practices 

for internal controls indicate that ongoing performance monitoring should 

include comparison of performance indicator data against planned 

targets, our previous work has recognized that establishing measures and 

setting specific targets in the law enforcement area can be challenging.45

 

45GAO, Intellectual Property: Federal Enforcement Has Generally Increased, but 

Assessing Performance Could Strengthen Law Enforcement Efforts, 

Officials from HHS, HHS-OIG, and DOJ told us that they intentionally do 

not set performance targets for indicators such as the number of health 

care fraud investigations or prosecutions undertaken because such 

targets could cause the public to perceive law enforcement as engaging 

in “bounty hunting” or pursuing arbitrary targets merely to meet particular 

GAO-08-157

(Washington, D.C.: Mar. 11, 2008).

Indicators Agencies Use to 

Assess HCFAC Activities 

Provide Information on 

Accomplishments, but Not 

Effectiveness
 

Page 32 GAO-13-746 HCFAC Program

goals.46 The officials believe that it is important that agencies carry out 

law enforcement actions that are based on merit and avoid the 

appearance that they strive to achieve certain numerical quotas.

HHS, HHS-OIG, and DOJ officials, as well as literature we reviewed, 

indicate that there are several factors that make assessing the 

effectiveness of the HCFAC program in reducing health care fraud and 

abuse challenging.

It is difficult to establish if the HCFAC program has a direct relationship to 

changes in the amount of health care fraud and abuse. HHS, HHS-OIG, 

and DOJ officials told us that HCFAC activities—as well as other efforts 

by federal agencies and others, including non-government entities—may 

have helped reduce health care fraud; however, the effect that any of 

these actions may have had on health care fraud and abuse is difficult to 

isolate. For example, HHS-OIG officials stated that compliance training 

and guidance provided by the HHS-OIG to health care organization 

directors—an activity conducted with HCFAC funding—may have had an 

effect on health care fraud but that it is difficult to isolate how much of an 

effect the activity has had. However, according to HHS-OIG officials, a 

rise in the number of provider compliance programs established by 

hospital organizations in response to shareholder interest in improving 

compliance with federal and state health care program requirements may 

also contribute to reductions in health care fraud. Moreover, many efforts 

within CMS aim to reduce health care fraud and abuse, in addition to 

those identified as HCFAC activities, and it is difficult to know which CMS 

program or activity has had an effect on the incidence of fraud. For 

example, CMS has implemented a number of initiatives to prevent health 

care fraud and abuse that are not funded with HCFAC funds. One such 

effort is a change to the provider enrollment process, which is designed to 

better ensure that only legitimate providers and suppliers are allowed to 

 

46According to one DOJ official, some of the department’s indicators have targets that 

focus on the quality or efficiency of its work, rather than focusing on the number of cases 

opened or criminal charges filed. For example, DOJ has department-wide measures for 

the percentage of cases favorably resolved, that is, a judgment in favor of the U.S. 

government or a settlement. The target rate of cases favorably resolved is 90 percent for 

criminal cases and 80 percent for civil cases, which incorporate all of DOJ’s cases 

(including health care fraud cases as well as other cases).

Several Factors Make 

Assessing the 

Effectiveness of the 

HCFAC Program 

Challenging 

Establishing a Causal Link
 

Page 33 GAO-13-746 HCFAC Program

bill Medicare. However, it is difficult to isolate the effect that either HCFAC 

activities or broader CMS efforts may have had in reducing health care 

fraud and abuse.

Another factor that limits understanding of the effectiveness of the 

HCFAC program in reducing health care fraud and abuse is the difficulty 

in quantifying the HCFAC program’s effect in deterring health care fraud 

and abuse. DOJ officials provided anecdotal evidence that HCFAC 

activities help to deter would-be offenders. For example, a Justice 

Management Division official asserted that DOJ prosecutions that result 

in doctors being sentenced to prison for health care fraud and abuse 

deter other doctors who are contemplating committing fraud. Other DOJ 

officials reported that cooperating witnesses in health care fraud 

investigations have told officials of instances where a provider committing 

potentially fraudulent acts had ceased operations because of the 

pressure brought on by Strike Force prosecutions. DOJ officials stated 

that they could recall about a dozen examples of specific individuals who 

have said they were deterred from committing fraud or ceased a 

fraudulent operation because they saw another individual get caught. 

However, these examples are anecdotal and DOJ and HHS-OIG officials 

stated that it is difficult to know how much health care fraud is deterred as 

a result of HCFAC activities.

Research on the effectiveness of health care fraud and abuse 

interventions, and on ways to measure the effectiveness of health care 

fraud and abuse interventions has been limited. We found that none of 

the 49 articles we selected to review for this study evaluated the 

effectiveness of the HCFAC program specifically, and few studies 

examined the effectiveness of health care fraud and abuse interventions 

in general. A recent review of literature conducted by experts in the field 

found similar results.47

 

47A. Rashidian, H. Joudaki, and T. Vian, “No Evidence of the Effect of the Interventions to 

Combat Health Care Fraud and Abuse: A Systematic Review of Literature,” PLoS ONE, 

vol. 7, no. 8 (2012).

Measuring Deterrence 

Limited Research 
 

Page 34 GAO-13-746 HCFAC Program

Another challenge that limits the ability to determine whether HCFAC 

activities are effective in reducing health care fraud and abuse is the lack 

of a baseline for the amount of health care fraud that exists at any point in 

time. Having such a baseline could provide information on the amount of 

health care fraud and how much it has changed in a given year or over 

time. We have previously reported that there currently is no reliable 

baseline estimate of the amount of health care fraud in the United 

States.48

HHS and CMS have taken steps to try to establish a health care fraud 

baseline because, according to the fiscal year 2012 HCFAC report, they 

appreciate that a baseline would allow the agencies to evaluate the 

success of fraud prevention activities. HHS officials stated that the 

Assistant Secretary for Planning and Evaluation initiated work to establish 

a baseline measurement, and that work was subsequently transferred to 

CMS’s Center for Program Integrity. According to the fiscal year 2012 

HCFAC report, the project is designed to measure probable fraud in 

home health care agencies and will pilot test a measurement approach 

and calculate an estimate of probable fraud for specific home health care 

services. CMS and its contractor will collect information from home health 

care agencies, the referring physicians, and Medicare beneficiaries 

selected in a national random sample of home health care claims. The 

pilot will rely on the information collected along with a summary of the 

service history of the home health care agency, the referring provider, 

and the beneficiary to estimate the percentage of total payments that are 

associated with probable fraud, and the percentage of all claims that are 

associated with probable fraud for Medicare fee-for-service home health 

care. CMS reports that after completion of the pilot, it will determine 

whether the measurement approach should be expanded to other areas 

of health care. Officials from the Center for Program Integrity stated that 

as of May 2013, they were beginning the data collection phase of the 

fraud baseline measurement pilot, which they expect will last two years.

Several experts told us or have written about the importance of 

establishing a baseline in assessing the effectiveness of law enforcement 

programs. A baseline estimate could provide an understanding of the 

extent of fraud and, with additional information on program activities, 

could help to inform decision-making related to allocation of resources to 

combat health care fraud.

 

48See GAO, Medicare: Progress Made to Deter Fraud, but More Could Be Done,

GAO-12-801T (Washington, D.C.: June 8, 2012). 

Establishing a Health Care 

Fraud Baseline 
 

Page 35 GAO-13-746 HCFAC Program

Some HCFAC-funded agencies have attempted to determine the effect of 

HCFAC activities on specific types of fraud in certain locations. DOJ 

officials provided examples of reductions in billings for certain services in 

specific locations and told us that they believe these reductions are 

associated with the work of the Strike Force teams. For example, DOJ 

officials reported assessing the amount of home health care billings in 

certain Strike Force cities before the Strike Force began operations and 

then again after the Strike Force had begun operations.49 Since the 

amount of home health care billing was measured before and after the 

Strike Force was implemented, HHS, HHS-OIG, and DOJ officials are 

able to estimate some effect that the Strike Force team had on the 

amount of billing in that area. For example, in a May 14, 2013 press 

conference, the Attorney General noted that after the Detroit Strike Force 

began investigating cases of potential group-psychotherapy fraud, claims 

for this type of treatment in Detroit dropped by more than 

70 percent since January 2011.50

Making progress in preventing and reducing health care fraud and abuse 

is an essential yet challenging task. HHS and DOJ use a number of 

indicators to assess the activities they conduct to reduce health care 

fraud and abuse. However, the indicators do not provide information 

about the effectiveness of the program, and little is known about whether 

and how well the HCFAC program reduces health care fraud. While 

positive results on the program’s return-on-investment can be seen as an 

indication of program success, the return-on-investment does not indicate 

the extent to which the program is reducing fraud. For example, the 

increasing returns from the fraud that is being investigated and 

prosecuted may indicate that HCFAC programming is effective in 

detecting or deterring potentially fraudulent schemes or indicate that there 

is simply an increase in potentially fraudulent activity. CMS’s recent 

efforts to establish a home health care fraud baseline is a good first step 

to understanding the extent of the problem and, if implemented as 

planned, could provide policymakers with information on how much fraud 

 

49For example, DOJ Criminal Division officials reported that home health billings in Florida 

dropped from $3.4 billion in 2009 to $2.3 billion in 2011.

50DOJ officials reported that they compared claims submitted to Medicare for group 

psychotherapy during the six-month period between January 1, 2011 and June 30, 2011 

to claims submitted to Medicare for those same services during the six-month period 

between July 1, 2012 and December 31, 2012.

Concluding 

Observations 
 

Page 36 GAO-13-746 HCFAC Program

exists and in coming years, how potentially fraudulent activity has 

increased or decreased over time. However, CMS has not yet determined 

whether the methodology used to establish a baseline of probable fraud 

in home health care could be used to assess the amount of fraud in other 

health care services. Additionally, even with a baseline estimate of the 

total amount of probable fraud, there will likely be continuing challenges in 

understanding the effectiveness of the HCFAC program, such as isolating 

the program’s ability to reduce or prevent fraud and abuse. Despite these 

inherent challenges, if a health care fraud baseline is established more 

broadly, it may become feasible to study how individual HCFAC activities, 

and possibly the program as a whole, affects changes in health care 

fraud. Results from these studies could provide HHS and DOJ with 

additional information regarding which activities are the most effective in 

reducing health care fraud and abuse, and could potentially inform 

agency decisions about how best to allocate limited resources.

GAO provided a draft of the report to HHS and DOJ. In its written 

comments reproduced in appendix V, HHS discussed its program 

integrity efforts to reduce fraud, waste, and abuse. HHS also provided 

examples of CMS’s efforts to reduce fraud, waste, and abuse in 

Medicare. The examples provided were not included in our review 

because they were not included in the funding used to calculate the 

return-on-investment for the HCFAC program. While not commenting 

specifically on our report, DOJ sent us examples of reductions in 

Medicare billings for specific services (such as durable medical 

equipment, home health services, and community mental health center 

services) in certain Strike Force cities. In their comments, DOJ officials 

stated that based on their examples, the Strike Force efforts have had a 

lasting effect on savings to Medicare payments. In addition, HHS and 

DOJ provided technical comments, which we have incorporated as 

appropriate.

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Secretary of HHS, the 

Attorney General, the Inspector General of HHS, and other interested 

parties. In addition, the report will be available at no charge on GAO’s 

Agency Comments
 

Page 37 GAO-13-746 HCFAC Program

website at http://www.gao.gov. If you or your staff have any questions 

about this report, please contact Kathleen M. King at (202) 512-7114 or 

kingk@gao.gov or Eileen R. Larence at (202) 512-8777 or 

larencee@gao.gov. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this report. 

Key contributors to this report are listed in appendix VI. 

Kathleen M. King

Director, Health Care

Eileen R. Larence

Director, Homeland Security and Justice
Appendix I: Health Care Fraud and Abuse 

Control (HCFAC) Program Activities 

Conducted by Agencies in Fiscal Year 2012

Page 38 GAO-13-746 HCFAC Program

The activities listed in table 2 below represent only activities that are 

supported with HCFAC funds (as reported in agency documents or 

interviews with agency officials). The table does not include other 

activities conducted by the agencies that are not related to health care 

fraud and abuse control.

Table 2: Agencies, Components, and Health Care Fraud and Abuse Control (HCFAC) Program Activities

Agency Components HCFAC Activities

Department of 

Health and 

Human Services 

(HHS)

Office of General 

Counsel (OGC)

Supports program integrity work of its clients (such as the Centers for Medicare & 

Medicaid Services) through a variety of activities. Among other activities, OGC works to 

recover payments by Medicare that are the primary responsibility of other payers under 

the Medicare Secondary Payer provisions, which preclude Medicare payment for 

services and items that certain other health insurance or coverage is primarily 

responsible for paying; to protect Medicare funds when providers seek bankruptcy 

protections; and to defend CMS and its contractors in cases seeking damages for the 

alleged wrongful denial of claims and other actions. In addition, OGC assists CMS in 

implementing provisions of the Patient Protection and Affordable Care Act; and provides 

legal advice to CMS regarding the development and imposition of Civil Monetary 

Penalties and defends CMS in administrative appeals and judicial litigation resulting from 

these cases. OGC also participates in the Health Care Fraud Prevention and 

Enforcement Action Team (HEAT) initiative; and assists the Department of Justice (DOJ) 

with cases filed under the False Claims Act.

Administration for 

Community Living 

(ACL) 

Provides infrastructure, technical assistance, and program support for the Senior 

Medicare Patrol (SMP) programs. Additionally, in fiscal year 2012, ACL used HCFAC 

funding to expand SMP programs and funded two technical assistance grantees.

Centers for Medicare 

& Medicaid Services 

(CMS) 

Supports, among many other program integrity activities, the Medicaid and Children’s 

Health Insurance Program (CHIP) financial oversight project, which conducts a variety of 

financial oversight activities, including monitoring of Medicaid expenditures and financial 

management reviews of Medicaid. Project activities include reviews of proposed 

Medicaid state plan methodologies and associated financing sources, to ensure their 

compliance with federal requirements. Additionally, CMS conducts a pilot project 

designed to use predictive modeling and data analytics to detect fraud and abuse in 

community mental health centers in Florida, Texas, and Louisiana. The pilot is related to 

funding received by community mental health centers for partial hospitalization services, 

where CMS has seen high levels of fraud and abuse and will identify high risk providers, 

conduct targeted site visits, and apply appropriate corrective actions, such as 

revocations, suspensions, and referrals to law enforcement. Finally, CMS uses some of 

its HCFAC appropriations for its contributions to the Strike Force teams—which are 

comprised of staff from federal, state, and local investigation agencies, designed to 

combat Medicare fraud by using technology, such as data analysis techniques—located 

in nine cities nationwide.

Food and Drug 

Administration (FDA)

Conducts Pharmaceutical Fraud Program to detect, investigate, prosecute, and prevent 

pharmaceutical, biologic, and medical device fraud.

Appendix I: Health Care Fraud and Abuse 

Control (HCFAC) Program Activities 

Conducted by Agencies in Fiscal Year 2012
Appendix I: Health Care Fraud and Abuse 

Control (HCFAC) Program Activities 

Conducted by Agencies in Fiscal Year 2012

Page 39 GAO-13-746 HCFAC Program

Agency Components HCFAC Activities

Department of 

Health and 

Human Services’ 

Office of 

Inspector 

General 

(HHS-OIG)

Office of Audit 

Services (OAS)

Conducts independent audits of HHS programs, grantees, and contractors. These audits 

review CMS operations and external entities that play a role in providing Medicare and 

Medicaid services, including Medicare contractors, state Medicaid agencies, and 

providers of healthcare services. These audits review program performance, identify 

opportunities for reducing costs, assess compliance with federal laws and HHS 

regulations, recommend recovery of improper payments, and identify vulnerabilities in 

systems controls and operations. OAS also responds to health care-related complaints 

received by the OIG Hotline; reviews proposed regulations and laws relating to Medicare 

and Medicaid; and responds to congressional requests.

Office of Evaluation 

and Inspections (OEI)

Conducts national evaluations to provide HHS, Congress, and the public with information 

on issues related to preventing fraud, waste, and abuse; and promoting economy, 

efficiency, and effectiveness of HHS programs. OEI reports also include 

recommendations for improving HHS program operations. OEI issues referrals (both 

internally and externally) to identify specific entities—such as providers and suppliers—

that merit further study or investigation. 

Office of 

Investigations (OI)

Coordinates and conducts investigations of allegations of fraud, waste, and abuse in 

HHS programs, including Medicare, Medicaid, and CHIP. OI is also responsible for 

excluding certain individuals and entities, such as physicians and pharmaceutical or 

device manufacturers, from participating in federal health care programs for certain types 

of conduct. OI investigators also play an active role in the Strike Force teams. OI also 

oversees the operations of the OIG Hotline, which receives complaints of fraud, waste, 

abuse, and mismanagement related to all HHS programs, and serves as the primary 

point of contact to report fraud.

Office of Counsel to 

the Inspector General 

(OCIG)

Exercises the authority to impose civil and administrative penalties related to health care 

fraud, including civil monetary penalties. OCIG also litigates appeals of exclusions, and 

assists on civil False Claims Act cases and settlements. Additionally, OCIG operates the 

voluntary disclosure program for providers—a program whereby providers can voluntarily 

report their fraudulent conduct affecting Medicare, Medicaid, and other federal health 

care programs; monitors compliance with Corporate Integrity Agreements; and provides 

industry guidance, such as through advisory opinions, fraud alerts, and public 

outreach/training. According to OCIG officials, OCIG also provides legal support for HHSOIG’s evaluations and audits and legal clearance on issuance of all HHS-OIG subpoenas 

and uses of electronic surveillance by OI. 

Office of Management 

and Policy (OMP)

Provides management, guidance, and resources in support of HHS-OIG’s other 

components, including budget formulation and execution, human capital planning, 

information technology solutions, and administrative services (such as space 

management, travel, and policies).

Department of 

Justice (DOJ)

Criminal Division Initiates and coordinates health care fraud prosecutions and supports the United States 

Attorney’s Offices (USAO) with legal and investigative guidance and training and 

attorneys to prosecute violations of criminal health care fraud. DOJ’s Criminal Division 

plays an active role in the Strike Force teams, as well as provides legal guidance, such 

as through annual health care fraud training conferences and review of qui tam, or 

whistleblower, lawsuits under the False Claims Act to assess whether the defendants in 

such lawsuits have engaged in criminal activity. DOJ’s Criminal Division also supports 

investigations and prosecutions of fraud and abuse targeting private sector health plans 

sponsored by employers and/or unions, as well as investigations and prosecutions of 

health care frauds perpetrated by domestic and international organized crime groups. 
Appendix I: Health Care Fraud and Abuse 

Control (HCFAC) Program Activities 

Conducted by Agencies in Fiscal Year 2012

Page 40 GAO-13-746 HCFAC Program

Agency Components HCFAC Activities

Civil Division Investigates and resolves matters against a wide array of health care providers and 

suppliers, often in response to qui tam, or whistleblower, lawsuits filed under the False 

Claims Act. For example, the Civil Division represents the U.S. government in civil 

matters, such as cases alleging that a pharmaceutical manufacturer has illegally 

marketed a prescription drug for an unapproved use and cases alleging that a provider 

improperly billed Medicare. The Elder Justice and Nursing Home Initiative, within the Civil 

Division, coordinates and supports law enforcement efforts to combat elder abuse, 

neglect, and financial exploitation, by hosting quarterly conference calls with DOJ 

attorneys to discuss issues or developments in connection with nursing home or failure of 

care cases. DOJ’s Civil Division also has the authority to bring criminal charges against 

pharmaceutical and medical device manufacturers under the Federal Food, Drug, and 

Cosmetic Act. 

Civil Rights Division Investigates cases of abuse and grossly substandard care in Medicare and Medicaidfunded long-term care facilities. The Civil Rights Division is the DOJ component 

responsible for enforcement of the Civil Rights of Institutionalized Persons Act, which 

authorizes investigation of conditions of confinement at state and local residential 

institutions (including facilities for persons with developmental disabilities or mental 

illness, and nursing homes) and initiates civil actions to remedy practices in violation of 

an individual’s rights. The Civil Rights Division also has primary enforcement authority for 

the Americans with Disabilities Act and investigates allegations of discrimination by public 

entities against individuals with disabilities, including discrimination in the form of 

needless institutionalization of persons who require health care services.

U.S. Attorney’s Offices Prosecute both civil and criminal health care fraud cases in their districts—94 USAOs 

throughout the country—that involve a wide variety of health care fraud matters, including 

false billings by providers; kickbacks to induce referrals of Medicare or Medicaid patients; 

and failure of care allegations against nursing homes. The USAOs often partner with the 

Criminal and Civil divisions to prosecute health care fraud cases. The USAOs and 

support personnel in the nine cities where Strike Force teams are located participate in 

those teams. 

Federal Bureau of 

Investigation (FBI)

Serves as the primary investigative agency of health care fraud, with jurisdiction to 

investigate fraud under both federal health care programs and private health insurance 

plans. The FBI investigates health care fraud through coordinated initiatives with federal, 

state, and local agencies. Additionally, the FBI participates in task forces and undercover 

operations to pursue investigations for health care fraud and participates in the Strike 

Force teams. The FBI also provides training and guidance on health care investigative 

matters—such as innovative methods of employing advanced investigative techniques—

to health care investigators and analysts. 

Source: Information from fiscal year 2012 annual HCFAC report, in agency reports, on agency websites, and from interviews with 

agency officials.
Appendix II: Health Care Fraud and Abuse 

Control (HCFAC) Program Obligations for 

Fiscal Years 2008 through 2012

Page 41 GAO-13-746 HCFAC Program

Table 3 summarizes the HCFAC obligations for the Department of Health 

and Human Services (HHS), including the HHS Office of Inspector 

General, and Department of Justice components for fiscal years 2008 

through 2012 by type of appropriations. An obligation is a definite 

commitment that creates a legal liability of the government for payment of 

goods and services ordered or received. The table includes obligations of 

mandatory HCFAC appropriations, discretionary HCFAC appropriations, 

and other appropriations used to support HCFAC activities. Mandatory 

HCFAC appropriations refer to the HCFAC budgetary resources 

controlled by a law, principally the Health Insurance Portability and 

Accountability Act of 1996, rather than appropriations acts. Discretionary 

HCFAC appropriations refer to budgetary resources provided in annual 

appropriation acts, other than those that fund mandatory programs. 

Congress appropriated mandatory funding for HCFAC activities beginning 

in fiscal year 1997, and appropriated discretionary funding for HCFAC 

activities beginning in fiscal year 2009. Other appropriations include 

funding from other appropriations not specific to the HCFAC program that 

the agencies used, in addition to the HCFAC funds, to carry out activities 

related to health care fraud and abuse. In addition, the table shows the 

percentage of HCFAC obligations for personnel services and contracted 

services and supplies.

Appendix II: Health Care Fraud and Abuse 

Control (HCFAC) Program Obligations for 

Fiscal Years 2008 through 2012
Appendix II: Health Care Fraud and Abuse 

Control (HCFAC) Program Obligations for 

Fiscal Years 2008 through 2012

Page 42 GAO-13-746 HCFAC Program

Table 3: Obligations For Health Care Fraud and Abuse Control (HCFAC) Program Activities, Fiscal Years 2008-2012, By 

Agency and Component and Type of Appropriations 

Fiscal Year 2008 Fiscal Year 2009 Fiscal Year 2010 Fiscal Year 2011 Fiscal Year 2012

Department of Health and Human Services (HHS)a

Administration for Community Living

Obligations of Mandatory 

HCFAC Appropriations $2,972,070 $3,180,221 $3,364,520 $3,702,737 $10,631,727

Obligations of Discretionary 

HCFAC Appropriations N/A $0 $0 $0 $0

Obligations of Other 

Appropriations $0 $0 $0 $0 $0

Total HCFAC Obligations $2,972,070 $3,180,221 $3,364,520 $3,702,737 $10,631,727

Percentage for Personnel 30% 29% 27% 24% 11%

Percentage for Contracted 

Services/Supplies 15% 22% 39% 27% 10%

Centers for Medicare & Medicaid Services

Obligations of Mandatory 

HCFAC Appropriations b b b $14,530,000 b 

Obligations of Discretionary 

HCFAC Appropriations N/A b b $350,656 b 

Obligations of Other 

Appropriations b b b $0 b 

Total HCFAC Obligations b b b $14,880,656 b

Percentage for Personnel b b b 73% b

Percentage for Contracted 

Services/Supplies b b b 16% b 

Food and Drug Administration

Obligations of Mandatory 

HCFAC Appropriations $0 $0 $699,691 $1,988,451 $2,768,273

Obligations of Discretionary 

HCFAC Appropriations N/A $0 $0 $0 $0

Obligations of Other 

Appropriations $0 $0 $0 $0 $0

Total HCFAC Obligations $0 $0 $699,691 $1,988,451 $2,768,273

Percentage for Personnel — — 88% 100% 63%

Percentage for Contracted 

Services/Supplies — — 1% 0% 35%
Appendix II: Health Care Fraud and Abuse 

Control (HCFAC) Program Obligations for 

Fiscal Years 2008 through 2012

Page 43 GAO-13-746 HCFAC Program

Fiscal Year 2008 Fiscal Year 2009 Fiscal Year 2010 Fiscal Year 2011 Fiscal Year 2012

Office of General Counsel

Obligations of Mandatory 

HCFAC Appropriations $5,745,975 $5,712,705 $8,711,228 $8,873,169 $8,854,695

Obligations of Discretionary 

HCFAC Appropriations N/A $0 $0 $0 $0

Obligations of Other 

Appropriations $8,080,155 c $9,113,745 $6,553,380 $6,680,831 $7,295,487

Total HCFAC Obligations $13,826,130 $14,826,450 $15,264,608 $15,554,000 $16,150,182

Percentage for Personnel 74% 85% 86% 84% 84%

Percentage for Contracted 

Services/Supplies 26% 15% 14% 14% 16%

Department of Health and Human Services’ Office of Inspector General (HHS-OIG)d

Office of Audit Services

Obligations of Mandatory 

HCFAC Appropriations $53,638,586 $45,534,873 $55,134,402 $52,261,218 $65,804,004 

Obligations of Discretionary 

HCFAC Appropriations N/A $14,314,348 $34,004 $0 $0 

Obligations of Other 

Appropriations $9,866,186 $6,904,396 $16,859,544 $24,863,597 $4,671,102

Total HCFAC Obligations $63,504,772 $66,753,617 $72,027,950 $77,124,815 $70,475,106

Percentage for Personnel 91% 90% 91% 91% 92%

Percentage for Contracted 

Services/Supplies 9% 10% 9% 9% 8%

Office of Evaluation and Inspections

Obligations of Mandatory 

HCFAC Appropriations $11,373,838 $10,344,700 $14,919,144 $15,860,518 $15,410,246

Obligations of Discretionary 

HCFAC Appropriations N/A $0 $0 $0 $0

Obligations of Other 

Appropriations $3,136,893 $5,365,036 $1,821,373 $1,297,694 $1,196,973

Total HCFAC Obligations $14,510,732 $15,709,735 $16,740,517 $17,158,212 $16,607,219

Percentage for Personnel 88% 87% 90% 90% 92%

Percentage for Contracted 

Services/Supplies 11% 13% 10% 10% 8%

Office of Investigations

Obligations of Mandatory 

HCFAC Appropriations $59,181,222 $68,339,359 $71,854,447 $70,876,633 $88,675,409

Obligations of Discretionary 

HCFAC Appropriations N/A $4,600,019 $0 $19,103,354 $0

Obligations of Other 

Appropriations $10,345,534 $5,038,277 $8,242,560 $6,961,168 $6,343,658

Total HCFAC Obligations $69,526,755 $77,977,656 $80,097,007 $96,941,156 $95,019,067
Appendix II: Health Care Fraud and Abuse 

Control (HCFAC) Program Obligations for 

Fiscal Years 2008 through 2012

Page 44 GAO-13-746 HCFAC Program

Fiscal Year 2008 Fiscal Year 2009 Fiscal Year 2010 Fiscal Year 2011 Fiscal Year 2012

Percentage for Personnel 89% 87% 84% 82% 87%

Percentage for Contracted 

Services/Supplies 10% 10% 12% 14% 11%

Office of Counsel to the Inspector General

Obligations of Mandatory 

HCFAC Appropriations $7,363,903 $9,342,140 $8,699,671 $9,879,173 $9,822,896

Obligations of Discretionary 

HCFAC Appropriations N/A $0 $0 $0 $0

Obligations of Other 

Appropriations $1,023,655 $511,664 $1,008,637 $741,009 $702,226

Total HCFAC Obligations $8,387,557 $9,853,804 $9,708,308 $10,620,183 $10,525,122

Percentage for Personnel 96% 96% 95% 94% 97%

Percentage for Contracted 

Services/Supplies 4% 4% 5% 6% 3%

Office of Management and Policy

Obligations of Mandatory 

HCFAC Appropriations $44,335,892 $43,945,152 $37,639,506 $46,779,355 $36,421,764

Obligations of Discretionary 

HCFAC Appropriations N/A $29,927 $18,393,657 $17,113,762 $23,817,566

Obligations of Other 

Appropriations $6,493,865 $13,754,488 $6,318,229 $4,782,107 $5,958,176

Total HCFAC Obligations $50,829,757 $57,729,567 $62,351,393 $68,675,224 $66,197,506

Percentage for Personnel 21% 20% 20% 22% 25%

Percentage for Contracted 

Services/Supplies 71% 67% 60% 68% 70%

Department of Justice (DOJ)

Civil Division

Obligations of Mandatory 

HCFAC Appropriations $15,396,015 $16,041,913 $19,874,046 $19,735,915 $22,977,000

Obligations of Discretionary 

HCFAC Appropriations N/A $8,236,767 $2,783,651 $6,405,988 $4,991,000

Obligations of Other 

Appropriations $1,636,524 $4,059,000 $2,246,099 $10,211,184 $1,948,000

Total HCFAC Obligations $17,032,539 $28,337,680 $24,903,796 $36,353,087 $29,916,000

Percentage for Personnel 56% 39% 47% 40% 47%

Percentage for Contracted 

Services/Supplies 44% 61% 52% 60% 53%
Appendix II: Health Care Fraud and Abuse 

Control (HCFAC) Program Obligations for 

Fiscal Years 2008 through 2012

Page 45 GAO-13-746 HCFAC Program

Fiscal Year 2008 Fiscal Year 2009 Fiscal Year 2010 Fiscal Year 2011 Fiscal Year 2012

Civil Rights Division

Obligations of Mandatory 

HCFAC Appropriations $2,375,999 $2,476,000 $2,376,000 $3,432,688 $3,823,868

Obligations of Discretionary 

HCFAC Appropriations N/A $0 $1,769,255 $1,942,057 $892,606

Obligations of Other 

Appropriations $629,995 $1,016,944 $373,283 $468,911 $453,209

Total HCFAC Obligations $3,005,995 $3,492,944 $4,518,538 $5,843,656 $5,169,683

Percentage for Personnel 59% 70% 67% 67% 68%

Percentage for Contracted 

Services/Supplies 41% 30% 32% 32% 32%

Criminal Division

Obligations of Mandatory 

HCFAC Appropriations $3,080,000 $948,746 $1,541,998 $1,482,273 $1,212,507

Obligations of Discretionary 

HCFAC Appropriations N/A $2,881,619 $3,389,957 $5,286,118 $8,083,863

Obligations of Other 

Appropriations $0 e $0 $0 $0 $0

Total HCFAC Obligations $3,080,000 $3,830,365 $4,931,955 $6,768,390 $9,296,370

Percentage for Personnel 50% 47% 56% 65% 52%

Percentage for Contracted 

Services/Supplies 33% 28% 38% 35% 47%

Federal Bureau of Investigation

Obligations of Mandatory 

HCFAC Appropriations $118,085,122 $126,953,586 $129,171,234 $125,166,278 $134,381,774

Obligations of Discretionary 

HCFAC Appropriations N/A $0 $0 $5,902,130 $3,806,330

Obligations of Other 

Appropriations $0 $0 $0 $3,570,676 $7,473,799

Total HCFAC Obligations $118,085,122 $126,953,586 $129,171,234 $134,639,084 $145,661,903

Percentage for Personnel 78% 78% 80% 82% 81%

Percentage for Contracted 

Services/Supplies 22% 20% 18% 16% 17%

Justice Management Divisionf

Obligations of Mandatory 

HCFAC Appropriations $0 $0 $157,621 $5,416,098 $4,951,367

Obligations of Discretionary 

HCFAC Appropriations N/A $0 $0 $7,266,1530 $10,799,404

Obligations of Other 

Appropriations $0 $0 $0 $0 $0 

Total HCFAC Obligations $0 $0 $157,621 $12,682,251 $15,750,771
Appendix II: Health Care Fraud and Abuse 

Control (HCFAC) Program Obligations for 

Fiscal Years 2008 through 2012

Page 46 GAO-13-746 HCFAC Program

Fiscal Year 2008 Fiscal Year 2009 Fiscal Year 2010 Fiscal Year 2011 Fiscal Year 2012

Percentage for Personnel — — 100% 3.3% 3.75%

Percentage for Contracted 

Services/Supplies — — 0% 0% 0.46%

U.S. Attorney’s Offices

Obligations of Mandatory 

HCFAC Appropriations $31,421,769 $33,255,655 $32,893,926 $29,723,423 $32,659,037

Obligations of Discretionary 

HCFAC Appropriations N/A $9,023,000 $6,227,568 $15,338,747 $10,760,057

Obligations of Other 

Appropriations $26,061,218 $35,035,966 $31,652,106 $31,896,207 $31,122,465

Total HCFAC Obligations $57,482,987 $77,314,620 $70,773,600 $76,958,377 $74,541,560

Percentage for Personnel 84% 78% 83% 83% 84%

Percentage for Contracted 

Services/Supplies 15% 20% 16% 17% 16%

Legend: N/A=Not Applicable; $0 means no funds obligated in that fiscal year for the type of 

appropriation; and “—” means no percentage in that fiscal year for the type of appropriation.

Source: GAO analysis of HCFAC obligations reported to GAO by HHS, HHS-OIG, and DOJ.

Notes: 

a

Two HHS components, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) and 

the Office of the Assistant Secretary for Public Affairs (ASPA), had HCFAC obligations for fiscal year 

2011 only—$45,000 for ASPE and $690,894 for ASPA. These amounts are not reflected in the table.

b

We chose to report on the activities that CMS conducted in fiscal year 2012 because those activities 

were included in that year’s HCFAC return-on-investment calculation. In total for fiscal year 2012, 

CMS reported about $14.9 million in HCFAC appropriations, about $1.6 million of which was allocated 

in fiscal year 2012 but not obligated, which CMS reserved to fund HCFAC activities in future years. 

We did not request fiscal years 2008 through 2011 HCFAC obligations from CMS because the 

agency conducted activities other than those that were funded with HHS’s mandatory HCFAC 

appropriations in fiscal year 2012. For example, in fiscal year 2010, CMS used its HCFAC mandatory 

appropriations for the One Program Integrity database, a centralized web-based portal that enables 

users, such as law enforcement, to access claims, provider, and beneficiary data from a centralized 

source.

c

HHS’s OGC reported estimated obligations of other appropriations, which included reimbursements 

for attorney services provided to OGC clients within HHS, that supported HCFAC activities.

d

HHS-OIG’s reported obligations also include any obligations of funds the agency received as 

reimbursement for the costs of conducting investigations and audits and other activities when such 

costs are ordered by a court, voluntarily agreed to by the payor, or otherwise authorized under 

42 U.S.C. §1320a-7c(b).

e

DOJ’s Criminal Division stated that it uses some other appropriations for health care fraud activities. 

However, officials indicated that the division infrequently funds HCFAC activities with other 

appropriations and, as a result, the division does not track the amount of other appropriations used 

specifically for the HCFAC program.

f

For fiscal years 2011 and 2012, DOJ reported amounts in HCFAC mandatory and discretionary 

appropriations that the department reserved for future use to fund HCFAC activities. In fiscal year 

2011, DOJ reported about $5.2 million in mandatory HCFAC appropriations and about $7.3 million in 

discretionary HCFAC appropriations; in fiscal year 2012, DOJ reported about $4.7 million in 

mandatory HCFAC appropriations and about $10.8 million in discretionary appropriations. These 

funds were allocated to the Justice Management Division, but were not obligated. We have included 

these HCFAC funds under the Justice Management Division, in addition to the $180,494 (in fiscal 

year 2011) and $208,676 (in fiscal year 2012) in mandatory HCFAC obligations the division reported.
Appendix II: Health Care Fraud and Abuse 

Control (HCFAC) Program Obligations for 

Fiscal Years 2008 through 2012

Page 47 GAO-13-746 HCFAC Program

Table 4 summarizes HCFAC obligations for Strike Force teams for fiscal 

years 2008 through 2012 by the geographic location of the Strike Force 

teams. Strike Force teams consist of investigators and prosecutors who 

use data analysis techniques to identify, investigate, and prosecute 

potentially fraudulent activities in geographic areas with high rates of 

fraud.

Table 4: Total Health Care Fraud and Abuse Control (HCFAC) Program Obligations by Strike Force Location and Fiscal Year, 

2008 through 2012

Fiscal Year

Strike Force Location 

& Fiscal Year Launched 2008 2009 2010 2011 2012

Miami, FL

Launched FY 2007 $5,335,321 $7,504,704 $8,344,504 $10,020,003 $12,962,899

Detroit, MI

Launched FY 2009 $524,578 $2,687,385 a $3,963,202 $4,930,594 $5,098,524

Dallas, TX

Launched FY 2011 $6,838 $28,247 a $40,070 a $3,696,685 a $5,027,790

Los Angeles, CA

Launched FY 2008 $4,197,914 $4,488,269 $4,861,523 $6,487,639 $4,815,963

Brooklyn, NY

Launched FY 2010 $43,782 $308,666 a $4,785,975 a $4,915,032 $4,392,851

Baton Rouge, LA

Launched FY 2010 $71,757 $253,915 a $1,806,066 a $3,422,416 $3,438,367

Chicago, IL

Launched in FY 2011 $39,334 $145,841 a $434,390 a $2,954,041 a $3,380,209

Houston, TX

Launched in FY 2009 — $2,611,054 $2,801,064 $3,038,569 $2,566,108

Tampa, FL

Launched FY 2010 $251,702 $566,604 a $1,450,824 a $2,613,618 $2,549,202

Headquarters Support of Strike Forces — — $1,618,348 $5,985,725 $3,051,813

Total HCFAC Obligations $10,471,226 $18,594,685 $30,105,966 $48,064,322 $47,283,726

Source: GAO analysis of HCFAC obligations reported to GAO by the Department of Health and Human Services’ Office of Inspector 

General’s (HHS-OIG) Office of Investigations and the Department of Justice’s Criminal Division, the U.S. Attorneys’ Offices, and the 

Federal Bureau of Investigation for fiscal years 2008 through 2012.

Notes: CMS also obligated $350,656 of its discretionary HCFAC appropriations for headquarters' 

support of the Strike Force teams. However, these obligations were not associated with any one of 

the nine Strike Force cities and the this amount is not reflected in the table above.

a

HHS-OIG reported obligations for the Strike Forces in these cities prior to their official launch, 

because HHS-OIG investigators worked to gather evidence on cases in those cities.
Appendix III: Indicators Used by Agencies to 

Assess Health Care Fraud and Abuse Control 

(HCFAC) Program Activities

Page 48 GAO-13-746 HCFAC Program

Table 5: Collective Indicators Reported in the Annual Health Care Fraud and Abuse Control (HCFAC) Program Report, and 

Outcomes/Outputs for Associated Indicator, for Fiscal Year 2012

Indicators reported in HCFAC report by agencies to assess 

activities

Outcomes/outputs of indicators for 

Fiscal Year 2012

Collective 

indicators, in 

which multiple 

agencies 

contribute 

(including 

Department of 

Health and 

Human Services’ 

Office of 

Inspector General 

(HHS-OIG) and

Department of 

Justice (DOJ)) 

Amount won or negotiated through health care fraud judgments and 

settlements

Over $3.0 billion in judgments and 

settlements

Amount deposited with the Department of Treasury and the Center for 

Medicare &Medicaid Services, transferred to other Federal agencies, 

or paid to private persons (result of fiscal year’s HCFAC efforts as well 

as efforts from previous fiscal years)

Approximately $4.2 billion deposited

Number of new criminal health care fraud investigations opened 1,131 new criminal investigations 

involving 2,148 potential defendants

Number of cases where criminal charges were filed 452 cases involving 892 defendants

Number of defendants convicted of health care fraud-related crimes 826 defendants convicted

Number of new civil health care fraud investigations opened 885 new civil investigations opened

Number of individuals and entities excluded from participation in 

federal health care programs by HHS-OIG

3,131 individuals and entities excluded

Return-on-investment $7.90 returned for every $1.00 expended 

for fiscal years 2010-2012

Indicators related 

to the Strike 

Force Teams 

located in 9 cities 

nationwide

Number of indictments, informations (an accusation of a criminal 

offense made by a public officer rather than a grand jury), and 

complaints involving charges filed against number of defendants

117 indictments, informations, and 

complaints filed against 278 defendants

Amount of alleged billing to Medicare from defendants Over $1.5 billion in alleged collective 

billings to Medicare

Number of defendants that pled guilty 251 guilty pleas negotiated

Number of defendants convicted in jury trials Guilty verdicts obtained for 29 defendants 

in 13 jury trials

Number of individuals that were sentenced to imprisonment and 

amount of average term

201 defendants sentenced with average 

prison term of 48 months

Source: Fiscal year 2012 annual HCFAC report and interviews with HHS-OIG and DOJ officials.

Appendix III: Indicators Used by Agencies to 

Assess Health Care Fraud and Abuse Control 

(HCFAC) Program Activities
Appendix III: Indicators Used by Agencies to 

Assess Health Care Fraud and Abuse Control 

(HCFAC) Program Activities

Page 49 GAO-13-746 HCFAC Program

Table 6: Indicators That Are Used by the HHS Components to Assess Health Care Fraud and Abuse Control Program 

Activities, Source of Indicators, and Outcomes/Outputs for Associated Indicator, for Fiscal Year 2012 

Source of indicator

HHS 

Component Indicators used by agencies to assess activities

FY 2012 

HCFAC report Other

Outcomes/outputs of 

indicator for Fiscal Year 2012

Administration 

for Community 

Living (ACL) – 

Senior Medicare 

Patrol 

programs

a

Total number of active volunteers, number of 

volunteer training hours, and number of volunteer 

work hours

b

ü n 5,137 active volunteers, 39,257 

training hours, and 120,953 work 

hours in calendar year 2012

Number of media airings ü n 188,199 media airings in 

calendar year 2012

Number of community outreach education events 

conducted and estimated number of people reached 

by events

ü n 10,032 education events in 

which 996,040 people were 

reached in calendar year 2012

Number of group education sessions for 

beneficiaries and number of beneficiaries who 

attended

ü n 14,748 sessions attended by 

449,509 beneficiaries in calendar 

year 2012

Number of one-on-one counseling sessions held 

with or on behalf of a beneficiary

ü n 113,457 sessions in calendar 

year 2012

Total number of simple inquiries received and 

number of simple inquiries resolved

n 84,061 inquiries received and 

83,856 inquiries resolved in 

calendar year 2012

Number of inquiries involving complex issues 

received and number of complex issue inquiries 

referred for further action

ü n 2,270 inquiries received and 

908 inquiries referred for further 

action in calendar year 2012

Total dollar amount referred for further action ü n $27,529,968 in calendar year 

2012

Number of complex issues resolved and number of 

complex issues pending further action

ü n 1,748 issues resolved and 

2,585 issues pending in calendar 

year 2012

Cost avoidance on behalf of Medicare, Medicaid, 

beneficiaries, or others

Additionally, expected recoveries or savings, 

including:

Expected Medicare funds recovered attributable 

to the projects,

Expected Medicaid funds recovered attributable 

to the projects,

Savings to beneficiaries attributable to the 

projects,

Other savings attributable to the projects 

(e.g., Supplemental Insurance), and

Total savings attributable to the projects (which 

is the sum of expected Medicare funds, 

expected Medicaid funds, savings to 

beneficiaries, and other savings attributable to 

the projects)

ü n c In calendar year 2012:

$113,692 in cost avoidance

Additionally:

$5,957,910 in expected 

Medicare funds

$102,000 in expected 

Medicaid funds

$130,796 in savings to 

beneficiaries

$3,175 in other savings

$6,193,881 in total savings
Appendix III: Indicators Used by Agencies to 

Assess Health Care Fraud and Abuse Control 

(HCFAC) Program Activities

Page 50 GAO-13-746 HCFAC Program

Source of indicator

HHS 

Component Indicators used by agencies to assess activities

FY 2012 

HCFAC report Other

Outcomes/outputs of 

indicator for Fiscal Year 2012

Centers for 

Medicare & 

Medicaid 

Services (CMS)

a

Estimated amount of the federal share of Medicaid 

funds that were removed as a result of CMS’s 

financial oversight of Medicaid and Children’s Health 

Insurance Program (CHIP), including approximate 

amount recovered and approximate amount 

resolved

ü Estimated $895 million removed, 

including $451 million recovered 

and $444 million resolved

Estimated amount of the federal share of Medicaid 

funds (in questionable reimbursement) that were 

averted due to preventive work with states from 

Medicaid and CHIP financial management project

ü Estimated $128 million averted

For the community mental health centers project, 

which uses data analytics to identify fraud in 

community mental health centers in 3 states

CMS officials indicated that 

because the project has recently 

started, CMS does not yet have 

indicators to assess it. CMS 

officials reported that they may 

consider using indicators similar 

to those used to assess the 

Fraud Prevention System, such 

as cost avoided as a result of the 

project.

Food and Drug 

Administration 

(FDA) – 

Pharmaceutical 

Fraud Program

Number of criminal investigations opened since the 

inception of the Pharmaceutical Fraud Program

ü 42 criminal investigations

Number of criminal investigations opened during 

fiscal year, including a description of the types of 

cases opened

ü 17 criminal investigations

Type of judicial actions related to the investigations 

(such as number of individuals convicted from 

investigations) and outcomes (including amount of 

jail time, probation, or amount of restitution)

ü 1 investigation resulted in 

conviction of 2 individuals, who 

received 12 months probation 

and were ordered to pay $36,040 

in restitution

Office of 

General 

Counsel (OGC)

Amount of recoveries for the government from:

False Claims Act and related matters in which 

OGC participated,

Civil Monetary Penalties that OGC established 

the right to recover, and

Money that OGC petitioned law enforcement 

agencies to seize as a result of criminal and civil 

litigation matters.

ü Over $2.6 billion in 

recoveries under False

Claims Act and related 

matters;

Over $4.5 million in Civil 

Monetary Penalties;

About $5.4 million in 

seizures

Number of physician self-referral disclosures in 

which OGC advised CMS on how to resolve

ü Over 100 disclosures
Appendix III: Indicators Used by Agencies to 

Assess Health Care Fraud and Abuse Control 

(HCFAC) Program Activities

Page 51 GAO-13-746 HCFAC Program

Source of indicator

HHS 

Component Indicators used by agencies to assess activities

FY 2012 

HCFAC report Other

Outcomes/outputs of 

indicator for Fiscal Year 2012a

Amount of money that OGC established the right to 

recover under the Medicare Secondary Payer 

provisions and amount involving bankrupt providers 

that OGC established the right to collect

ü Over $17 million recovered 

under Medicare Secondary 

Payer provisions and over 

$4.9 million collected from 

bankrupt providers

Legend:

ü indicates that measure is included in Fiscal Year 2012 annual HCFAC report

n indicates that measure is included in Department of Health and Human Services’ Office of 

Inspector General (HHS-OIG) July 2013 report on Senior Medicare Patrol programs.

Source: Agency reports, including fiscal year 2012 annual HCFAC report, and interviews with HHS officials.

a

Unless otherwise noted, the information on outcomes/output for each measure is for fiscal year 

2012.

b

For the outcomes and outputs for indicators associated with ACL’s Senior Medicare Patrol program, 

we used the most currently available data, which was calendar year 2012 data obtained from the July 

2013 HHS-OIG report on the Senior Medicare Patrol program. The outcomes and output for these 

indicators is also included in the fiscal year 2012 HCFAC report; however, the outcomes and output is 

calendar year 2011 data.

c

In HHS-OIG’s July 2013 report on Senior Medicare Patrol program, this indicator for Medicare and 

Medicaid funds recovered attributable to the programs was expanded to account for both expected 

and actual funds recovered. However, in the fiscal year 2012 report, the indicator included only actual 

funds recovered.
Appendix III: Indicators Used by Agencies to 

Assess Health Care Fraud and Abuse Control 

(HCFAC) Program Activities

Page 52 GAO-13-746 HCFAC Program

Table 7: Indicators That Are Used by the Department of Health and Human Services Office of Inspector General (HHS-OIG) to 

Assess Health Care Fraud and Abuse Control (HCFAC) Program Activities, Source of Indicators, Associated Target (if any), 

and Outcomes/Outputs for Associated Indicator, for Fiscal Year 2012

Source of indicator

HHS-OIG 

Component

Indicators used by agencies to assess 

activities (Associated target, if applicable)

FY 2012 

HCFAC report Other

Outcomes/outputs of 

indicators for Fiscal Year 2012

Collective 

indicators in 

which more 

than one HHSOIG component 

contributes

Number of prosecutions or settlements that 

resulted from investigations or other inquiries 

conducted by HHS-OIG

ü 1,145 prosecutions or settlements 

of which 1,047 were health care 

cases

Amount of health care savings attributable to 

statutory changes enacted and administrative 

actions taken in response to HHS-OIG 

investigations, audits, and evaluations, including: 

amount of savings to Medicare and Medicaid

ü v $8.5 billion in total; $8 billion in 

Medicare savings and $525 million 

in savings to the federal share of 

Medicaid

Examples of audits and evaluations by topic area ü Audits and evaluations covering a 

number of topics, including 

Medicaid drugs, Medicaid 

managed care, Medicare physician 

services, community mental health 

centers, and Medicare Advantage 

organizations

Amount of HHS-OIG Audit Disallowances 

recovered in Medicare and Medicaid

ü $89,667,376 in Medicare and 

$275,559,307 in Medicaid 

recovered audit disallowances

Amount of expected recoveries, including audit 

receivables and investigative receivables and 

non-HHS investigative receivables resulting from 

work in areas such as states’ shares of Medicaid 

restitution

v $6.9 billion consisting of 

$923.8 million in audit receivables 

and $6 billion in investigative 

receivables (which includes 

$1.7 billion in non-HHS 

investigative receivables resulting 

from work in areas such as the 

states’ shares of Medicaid 

restitution)

Ratio of expected return on investment measuring 

the efficiency of HHS-OIG’s health care oversight 

efforts

(Target: $12.0)

° $17.9

Number of quality and management improvement 

recommendations that HHS program managers 

accepted

° 190 recommendations

Number of audit reports with funds to be put to 

better use

v 19 reports

Examples of recently completed cases and 

settlements by specific types

v Examples cover many types, 

including medical equipment and 

supplies, pharmaceutical 

companies, laboratories, hospitals, 

and hospice care
Appendix III: Indicators Used by Agencies to 

Assess Health Care Fraud and Abuse Control 

(HCFAC) Program Activities

Page 53 GAO-13-746 HCFAC Program

Source of indicator

HHS-OIG 

Component

Indicators used by agencies to assess 

activities (Associated target, if applicable)

FY 2012 

HCFAC report Other

Outcomes/outputs of 

indicators for Fiscal Year 2012

Number of sanctions administered in the form of 

program exclusions or administrative actions

v 1,911 sanctions administered in the 

form of program exclusions or 

administrative actions for alleged 

fraud or abuse or other activities 

that posed a risk to federal health 

care programs and their 

beneficiaries

Amount of civil monetary penalties and 

assessments from cases in which OIG was 

involved

v $6.7 million

Amount of HHS receivables from self-disclosure 

cases in which HHS-OIG was involved

v $53.3 million in HHS receivables 

Office of Audit 

Services (OAS)

Number of audit starts by program area ° 472 reports started, 337 of which 

were health care-related

Number of final reports issued by program area ° 438 reports issued, 303 of which 

were health care-related

Questioned cost recommendations (dollar value) v $860.6 million 

Funds put to better use recommendations v $1,659.2 billion

Timeliness of draft reports (or final reports if 

issued without a draft)

(Target: 63 percent)

° 72 percent

Single Audits (A-133 audits) reviewed and 

transmitted to agencies for resolution

v 3,280 audits, which included 8,276 

recommendations

Audit receivables (disallowed questioned cost 

recommendations)

v

°

$923.8 million

Accepted management and quality improvement 

recommendations

° 83 recommendations, 18 of which 

were implemented

Office of 

Counsel to the 

Inspector 

General (OCIG)

Number of compliance roundtable meetings held 

and number of companies represented

ü 2 roundtables held with officials 

representing 55 companies

Indicators involving Civil Monetary Penalties 

(CMP), including dollar value of penalties and 

assessments for CMPs

° $20,980,462.53

Indicators related to Corporate Integrity 

Agreements (CIA) or other similar agreements, 

including:

Number of Corporate Integrity Agreements, 

Integrity Agreements, or other similar agreements 

monitored for compliance in fiscal year

ü ° 214 agreements monitored

Number of Corporate Integrity Agreements 

entered

° 35 agreements
Appendix III: Indicators Used by Agencies to 

Assess Health Care Fraud and Abuse Control 

(HCFAC) Program Activities

Page 54 GAO-13-746 HCFAC Program

Source of indicator

HHS-OIG 

Component

Indicators used by agencies to assess 

activities (Associated target, if applicable)

FY 2012 

HCFAC report Other

Outcomes/outputs of 

indicators for Fiscal Year 2012

Indicators related to advisory opinions, including:

Number of advisory opinions issued and number 

modified, including the number issued since 

inception of HCFAC program

ü ° 19 advisory opinions issued and 

2 modifications of advisory 

opinions in fiscal year 2012; 276 

opinions have been issued since 

inception of HCFAC program

Advisory opinion requests received ° 61 opinions received

Office of 

Evaluation and 

Inspections 

(OEI) 

Number of evaluations started

(Target: 57 evaluations)

° 83 evaluations

Number of reports issued ° 59 reports

Percentage of final reports completed within a 

year

(Target: 55 percent)

° 51 percent

Office of 

Investigations 

(OI)

Number of individuals and entities excluded from 

participation in federal health care programs, 

including by the top reasons for exclusion

ü v 3,131 individuals and entities 

excluded

Complaints received

(Target: 6,290 complaints)

° 4,827 complaints received

Cases opened ° 2,369 cases

Cases closed ° 2,105 cases

Legend:

ü indicates that the indicator is included in Fiscal Year 2012 annual HCFAC report. 

v indicates that the indicator is included in at least one of the two HHS-OIG’s Semiannual Report to 

Congress for fiscal year 2012. 

° indicates that the indicator is included in HHS-OIG’s Fiscal Year 2014 Justification of Estimates for 

Appropriations Committees, which includes outcomes/output of indicators for fiscal year 2012. 

Source: Agency reports, including fiscal year 2012 annual HCFAC report, and information from HHS-OIG officials.

Notes: In addition to the indicators listed in the annual HCFAC reports and other HHS-OIG reports, 

officials indicated that they use additional indicators internally to manage and assess the work they 

conduct related to identifying and reducing health care fraud and abuse.
Appendix III: Indicators Used by Agencies to 

Assess Health Care Fraud and Abuse Control 

(HCFAC) Program Activities

Page 55 GAO-13-746 HCFAC Program

Table 8: Indicators That Are Used by the Department of Justice (DOJ) Components to Assess Health Care Fraud and Abuse 

Control (HCFAC) Program Activities, Source of Indicators, Associated Targets (if any), and Outcomes/Outputs for Associated 

Indicator, for Fiscal Year 2012

Source of indicator

DOJ 

Component 

Indicators used by agencies to assess 

activities (Associated target, if applicable)

FY 2012 

HCFAC report Other

Outcomes/outputs of 

indicators for fiscal year 2012

Civil Division

a

Amount obtained through settlements and 

judgments

ü Over $3 billion in settlements and 

judgments

Number of new civil health care fraud 

investigations opened

ü 885 new civil investigationsb

Number of civil health care fraud matters pending 

at the end of the fiscal year

ü 1,023 civil investigations pendingb

Number of investigations completed per 

Department of Justice attorney working on 

financial fraud and health care fraud cases

(Target: 11.92 investigations per attorney)

c

t 10.28 investigations per attorney 

for fiscal year 2012

Percentage of civil cases favorably resolved for 

litigating divisions

(Target: 80 percent of civil cases favorably 

resolved)

c t 81 percent of civil cases favorably 

resolved

Civil Rights 

Division

Number of health care facilities reviewed 

(regarding conditions and services), including:

Number of health care facilities for persons 

with intellectual and developmental disabilities 

and/or mental illness found to violate 

residents’ statutory rights

Number of investigations continued for 

residential facilities for persons with 

intellectual and developmental disabilities

Number of investigations continued for 

residential facilities for persons with mental 

illness

Number of investigations continued for nursing 

facilities

ü Conditions and practices at 

12 state facilities for persons 

with intellectual and 

developmental disabilities 

and/or mental illness were 

found to violate residents’ 

rights

Investigations of 10 residential 

facilities for persons with 

intellectual and developmental 

disabilities that were continued

Investigations of 3 facilities for 

persons with mental illness 

that were continued

Investigations of 2 nursing 

facilities that were continued

Number of states where reviewed health care 

facilities are located

ü Reviewed conditions and services 

at 19 health care facilities in 

16 states

Number of formal investigations opened or 

continued and remedial agreements entered or 

monitored at facilities

ü 62 health care facilities in 

19 states, the District of Columbia, 

and the Commonwealth of 

Puerto Rico
Appendix III: Indicators Used by Agencies to 

Assess Health Care Fraud and Abuse Control 

(HCFAC) Program Activities

Page 56 GAO-13-746 HCFAC Program

Source of indicator

DOJ 

Component 

Indicators used by agencies to assess 

activities (Associated target, if applicable)

FY 2012 

HCFAC report Other

Outcomes/outputs of 

indicators for fiscal year 2012a

Number of existing remedial agreements 

monitored, including:

Number of remedial agreements monitored for 

facilities for persons with intellectual and 

developmental disabilities

Number of remedial agreements monitored for 

state-operated residential facilities for persons 

with mental illness

Number of remedial agreements monitored for 

nursing facilities

ü Remedial agreements for 

17 facilities for persons with 

intellectual and developmental 

disabilities monitored

Remedial agreements regarding 

18 state-operated residential 

facilities for persons with mental 

illness monitored

Remedial agreements at 2 nursing 

facilities monitored

Number of actions involving unjustified 

institutionalization of a disabled individual in which 

the Civil Rights Division intervened

ü 2 actions involving unjustified 

institutionalization of a disabled 

individual where the division moved 

to intervene

Number of statements of interest or amicus briefs 

in litigation filed

ü 10 statements of interest or amicus

briefs filed

Number of cases favorably resolved for litigating 

components

(Target: 80 percent of civil cases favorably 

resolved)

c t 81 percent of civil cases favorably 

resolved

Criminal 

Division

Number of new health care fraud cases ü 136 health care fraud cases

Number of defendants charged and amount that 

was collectively billed to Medicare and Medicaid

ü 110 defendants charged who 

collectively billed Medicare and 

Medicaid for more than $1.3 billion

Number of guilty pleas obtained ü 99 guilty pleas

Number of jury trials litigated ü 10 jury trials litigated

Number of guilty verdicts obtained against number 

of defendants

ü Guilty verdicts for 21 defendants

Average number of months of prison sentences in 

health care fraud cases

ü 56 months

Amount secured through court-ordered restitution, 

forfeiture, and fines

ü $373 million

Number of investigations completed per 

Department of Justice attorney working on 

financial fraud and health care fraud cases

(Target: 11.92 investigations per attorney)

c

t 10.28 investigations per attorney 

for fiscal year 2012

Percentage of criminal cases favorably resolved 

for litigating divisions

(Target: 90 percent of criminal cases favorably 

resolved)

c t 92 percent of criminal cases 

favorably resolved
Appendix III: Indicators Used by Agencies to 

Assess Health Care Fraud and Abuse Control 

(HCFAC) Program Activities

Page 57 GAO-13-746 HCFAC Program

Source of indicator

DOJ 

Component 

Indicators used by agencies to assess 

activities (Associated target, if applicable)

FY 2012 

HCFAC report Other

Outcomes/outputs of 

indicators for fiscal year 2012

Federal 

Bureau of 

Investigation 

(FBI)

a

Number of operational disruptions of criminal fraud 

organizations

ü 329 criminal enterprises disrupted

Number of dismantlements of criminal hierarchy of 

health care fraud enterprises

ü More than 83 criminal enterprises 

dismantled

Number of new health care fraud investigations 

initiated by the FBI

(Targets vary by field office)

ü 817 new investigations

Number of pending health care fraud investigations

(Targets vary by field office)

ü 2,835 pending investigations

Number of criminal health care fraud convictions ü 1,096 criminal convictions

Number of indictments and informations filed ü 909 indictments and informations 

filed

Number of FBI health care fraud investigators and 

analysts that received training

(Targets vary by field office)

ü More than 400 FBI health care 

fraud investigators and analysts 

received training

Number of dismantled criminal enterprises 

engaging in white-collar crime

(Target: 360 criminal enterprises)

t 409 criminal enterprises

Amounts received for restitutions, fines, seizures, 

civil restitution, and civil settlements

¤ In fiscal year 2011:

$1.2 billion in restitutions; $1 billion 

in fines; $96 million in seizures; 

$320 million in civil restitution; and 

over $1 billion in civil settlements.

United States 

Attorneys’ 

Offices 

(USAOs)

Number of new criminal matters received and 

defendants involved with those new matters

ü 1,131 new criminal matters 

involving 2,148 defendants

Number of health care fraud criminal matters 

pending and defendants involved

ü 2,032 criminal matters pending

involving 3,410 defendants

Number of criminal charges filed and defendants 

involved

ü Charges filed in 452 cases 

involving 892 defendants

Number of Federal health care fraud related 

convictions

ü 826 convictions

Number of new civil health care fraud 

investigations opened

ü 885 new civil investigationsb

Number of civil health care fraud investigations 

pending

ü 1,023 civil investigations pendingb

Number of investigations completed per 

Department of Justice attorney working on 

financial fraud and health care fraud cases

(Target: 11.92 investigations per attorney)

c

t 10.28 investigations per attorney
Appendix III: Indicators Used by Agencies to 

Assess Health Care Fraud and Abuse Control 

(HCFAC) Program Activities

Page 58 GAO-13-746 HCFAC Program

Source of indicator

DOJ 

Component 

Indicators used by agencies to assess 

activities (Associated target, if applicable)

FY 2012 

HCFAC report Other

Outcomes/outputs of 

indicators for fiscal year 2012a

Percentage of criminal cases favorably resolved 

for litigating divisions

(Target: 90 percent of criminal cases favorably 

resolved; 80 percent of civil cases favorably 

resolved)

c t 92 percent of criminal cases 

favorably resolved; 81 percent of 

civil cases favorably resolved

Percent of white collar crimes cases concerning 

mortgage fraud, health care fraud, and official 

corruption favorably resolved

(Target: 90 percent of white collar cases favorably 

resolved)

c

¡ 92.2 percent of white collar crime 

cases favorably resolved in fiscal 

year 2010

Legend:

ü indicates that measure is included in Fiscal Year 2012 annual HCFAC report

t indicates that measure is in DOJ’s Performance and Accountability report

¡ indicates that the measure is in DOJ’s Performance Plan for Fiscal Year 2012

¤ indicates that the measure is in FBI’s Financial Crimes Report to the Public for Fiscal Years 2010 – 

2011.

Source: Agency reports, including fiscal year 2012 annual HCFAC report, and interviews with DOJ officials.

a

Unless otherwise noted, the information on outcomes/output for each measure is for fiscal year 

2012.

b

The outputs for these indicators are included in the summary of the HCFAC report and in the section 

regarding USAO activities. We report the outputs in the Civil Division section and USAO section of 

this table because the outputs include civil matters handled by the USAOs and/or Civil Division.

c

These measures are reported at the departmental level for DOJ, in which several DOJ components 

contribute, and include health care fraud cases in addition to other cases.
Appendix IV: Key Outcomes and Outputs of 

Health Care Fraud and Abuse Control (HCFAC) 

Program Activities

Page 59 GAO-13-746 HCFAC Program

Table 9: Key Program Outcomes/Outputs of Health Care Fraud and Abuse Control (HCFAC) Program Activities, Fiscal Years 

2008 through 2012

HCFAC Key Program Outcomes/Outputs in Selected Years

Program outcome/output Fiscal year 2008 Fiscal year 2009 Fiscal year 2010 Fiscal year 2011 Fiscal year 2012

Approximate amount won or 

negotiated through health care fraud 

judgments and settlements $1 billion $1.63 billion $2.5 billion $2.4 billion $3 billion

Approximate amount deposited with 

the Department of Treasury and 

Centers for Medicare & Medicaid 

Services, transferred to other federal 

agencies or paid to private persons 

(result of fiscal year efforts as well as 

efforts from previous fiscal years) $2.14 billion $2.576 billion $4.02 billion $4.1billion $4.2 billion

Estimated amount in health care 

savings attributed to legislative or 

administrative actions to make 

funds available for better use 

(taken in response to HHS-OIG 

investigations, audits, and evaluations) $16.7 billion $16.47 billion $21.0 billion $19.8 billion $8.5 billion

Number of new criminal health care 

fraud investigations opened 957 1,014 1,116 1,110 1,131

Number of cases where criminal 

charges were filed 502 481 488 489 452

Number of defendants in cases where 

criminal charges were filed 797 803 931 1,430 892

Number of defendants convicted of 

health care fraud-related crimes 588 583 726 743 826

Number of new civil health care fraud 

investigations opened 843 886 942 977 885

Outcomes/outputs associated with Strike Force teamsa

Number of defendants charged 65 209 284 323 278

Number of defendants convicted 75 104 240 198 280

Number of defendants sentenced 

to prison 71 77 146 175 201

Estimated total amount billed to 

Medicare in alleged Strike Force 

cases $140 million $253 million $590 million $1 billion $1.5 billion

Number of individuals and entities 

excluded by HHS-OIG 3,129 2,556 3,340 2,662 3,131

Return-on-investment 

(3-year moving average) $4.9:1 $5.1:1 $6.8:1 $7.2:1 $7.9:1

HCFAC mandatory obligations $354,970,390 $366,075,050 $387,037,433 $395,868,822 $452,924,566

HCFAC discretionary obligations — $39,085,681 $32,598,092 $78,403,309 $63,501,482

Appendix IV: Key Outcomes and Outputs of 

Health Care Fraud and Abuse Control 

(HCFAC) Program Activities 
Appendix IV: Key Outcomes and Outputs of 

Health Care Fraud and Abuse Control (HCFAC) 

Program Activities

Page 60 GAO-13-746 HCFAC Program

HCFAC Key Program Outcomes/Outputs in Selected Years

Program outcome/output Fiscal year 2008 Fiscal year 2009 Fiscal year 2010 Fiscal year 2011 Fiscal year 2012

Obligations of other appropriations $67,274,025 $80,799,515 $75,075,212 $91,473,384 $67,165,097

Total obligations $422,244,416 $485,960,246 $494,710,737 $565,745,516 $583,591,144

Source: GAO analysis of annual HCFAC reports for fiscal years 2008 through 2012, return-on-investment data for fiscal years 2008-

2012 reported to GAO by the Department of Justice, and HCFAC obligations reported to GAO by Department of Justice, Department of 

Health and Human Services (HHS), and HHS Office of Inspector General (HHS-OIG) for fiscal years 2008 through 2012.

a

Some of the outcomes/outputs associated with the Strike Force teams are subsets of 

outcomes/outputs reported for the HCFAC program as a whole. For example, the number of 

defendants charged in Strike Force cases is a subset of the total number of defendants in health care 

fraud-related cases where criminal charges were filed. As a result, the outcomes/outputs reported in 

this table may be duplicative.
Appendix V: Comments from the Department 

of Health and Human Services

Page 61 GAO-13-746 HCFAC Program

Appendix V: Comments from the Department 

of Health and Human Services
Appendix V: Comments from the Department 

of Health and Human Services

Page 62 GAO-13-746 HCFAC Program
Appendix VI: GAO Contacts and Staff 

Acknowledgements

Page 63 GAO-13-746 HCFAC Program

Kathleen M. King, (202) 512-7114 or kingk@gao.gov

Eileen R. Larence, (202) 512-8777 or larencee@gao.gov

In addition to the contacts named above, Martin T. Gahart, 

Assistant Director; Tom Jessor, Assistant Director; Christie Enders; 

Sandra George; Drew Long; Lisa Rogers; and Meghan Squires 

made significant contributions to the work.

Appendix VI: GAO Contacts and Staff 

Acknowledgements 

GAO Contacts

Staff 

Acknowledgements 

(291073)
The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

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