40 years ago today (October 15, 1976), then U.S. President Gerald Ford signed legislation creating the Office of the Inspector General (OIG) in the Department of Health, Education and Welfare. From its humble beginnings, the agency has grown rapidly (along with federal healthcare spending). Today the agency boasts over 1600 employees and claims to have saved taxpayers $20.6 billion in just 2015. This post looks at both the history of the OIG and its amazing success in combating Medicare fraud.
The Inspector General model of oversight in America dates back to the birth of our nation and the first Continental Congress. Worried that the army might be misspending its precious funds, Congress appointed an Irish mercenary soldier named Thomas Conway as the first IG. He would serve only a few months before a Prussian military general took the position, Baron Frederick William Augustus von Steuben.
The OIG system of oversight never really spread after that until the 1970’s. Immediately after the resignation of Richard Nixon as President, the public’s trust in government was at an all time low. A Congressional committee found that there was no effective mechanism in most agencies to ferret out fraud and waste. On October 15th, 1976, President Ford signed into law the HEW Inspector General Act of 1976. The first inspector general, however, would not be appointed until the following year. A year later (1978) Congress would create another 14 inspectors generals in many other government agencies. Those positions (and many subsequent ones) remain today.
The agency grew along with federal spending on healthcare. The OIG’s budget took a big jump in 1979 when funding and oversight of the state Medicaid Fraud Control Units was transferred from the Health Care Finance Administration to the OIG’s Office of Investigations.
Today the agency oversees almost $1 trillion in annual healthcare spending ($1,000,000,000,000.00). Of that spending, many believe that 10% or almost $100 billion is lost each year to fraud and waste. The HHS OIG claims that in fiscal year 2015, it saved taxpayers $20.6 billion.
In addition to its audit and policy guidance functions, the OIG is also the top Medicare fraud cop. In the first 6 months of 2016, the agency has racked up some impressive stats:
- $2.77 billion in Medicare fraud recoveries
- 428 criminal prosecutions
- 383 civil prosecutions
Medicare Fraud and Whistleblowers
Many of the Medicare fraud criminal and civil prosecutions are the result of whistleblower tips. The OIG investigates tips made to the agency’s fraud hotline and works with the FBI and Justice Department to investigate healthcare fraud complaints filed under the federal False Claims Act. The latter statute pays whistleblowers for their inside information about Medicare fraud.
Callers to the agency hotline can receive up to $1000. Those who follow the False Claims Act process,however, can receive much more. Under the Act, whistleblowers can receive an award of between 15% and 30% of whatever the government recovers from wrongdoers. Million dollar awards are not uncommon. (Our clients have received over $100 million in awards in just the last few years.)
For every dollar the OIG spends on enforcement, it recovers $6.10. Much of the OIG’s budget is spent on audit activities. If the savings calculation is based on whistleblower tips and enforcement, the ratio is dramatically higher.
The takeaway of this article is that Health and Human Services Office of Inspector General has become one of the most successful law enforcement agencies in the nation. It owes its success, however, to whistleblowers. These whistleblowers are typically hard working, honest and caring healthcare workers tired of greed, corruption and poor quality healthcare.
Whistleblowers are the new American heroes. They risk their careers and reputations simply to do the right thing. In partnership with the HHS OIG and MahanyLaw, whistleblowers can make a difference. We are honored to help whistleblowers fight greed, improve healthcare and save tax dollars. We are also committed to protecting our whistleblower clients from illegal retaliation and getting them the highest possible awards.
For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct).
The fine print: All inquiries are protected by the attorney – client privilege and kept confidential. There are never any legal fees unless we recover money on your behalf. All inquiries are without cost or obligation. We have handled cases in over 30 states.
MahanyLaw – America’s Medicare Fraud Whistleblower Lawyers