The Congress enacted HIPAA, in part, to respond to the  problem of health care fraud and abuse. Under the joint direction of the Attorney General and the Secretary of HHS  (acting through the HHS/OIG), the HCFAC program goals are as follows:  coordinate federal, state, and local law enforcement efforts to control  fraud and abuse associated with health plans;  conduct investigations, audits, and other studies of delivery and  payment for health care for the United States;  facilitate the enforcement of the civil, criminal, and administrative  statutes applicable to health care;  provide guidance to the health care industry, including the issuance of  advisory opinions, safe harbor notices, and special fraud alerts; and  establish a national database of adverse actions against health care  providers. Objectives, Scope, and Methodology

The objectives of our review were to identify and assess the propriety of  amounts for fiscal years 2000 and 2001 reported as (1) deposits to the trust  fund, (2) appropriations from the trust fund for HCFAC activities,  (3) expenditures at DOJ for HCFAC activities, (4) expenditures at HHS for  HCFAC activities, (5) expenditures for non-Medicare anti–fraud and abuse  activities, and (6) savings to the trust fund. DOJ Made Errors in Reporting Collections; However, the Trust Fund Was Minimally Affected

The joint HCFAC reports included deposits of about $210 million in fiscal  year 2000 and $464 million in fiscal year 2001, pursuant to HIPAA. In testing at DOJ, we identified some errors in the recording of HCFAC  collections that resulted in an estimated overstatement of $169,765 to the  trust fund in fiscal year 2001. Based on our review, we found that the planned use of HCFAC  appropriations was intended for purposes as stated in HIPAA statute. We found that over $480,000 in interest penalties not related to HCFAC  activities were miscoded and inadvertently charged to the HCFAC  appropriation. HHS and DOJ Do Not Separately Track Non- Medicare Expenditures

We were not able to identify HCFAC program trust fund expenditures that  were unrelated to Medicare because the HHS/OIG and DOJ do not  separately account for or monitor such expenditures.
Why GAO Did This Study

The Medicare program is the nation's largest health insurer with almost 40 million beneficiaries and outlays of over $219 billion annually. Because of the susceptibility of the program to fraud and abuse, Congress enacted the Health Care Fraud and Abuse Control (HCFAC) Program as part of the Health Insurance Portability and Accountability Act (HIPPAA) of 1996. HCFAC, which is administered by the Department of Health and Human Services' (HHS) Office of Inspector General (OIG) and the Department of Justice (DOJ), established a national framework to coordinate federal, state, and local law enforcement efforts to detect, prevent, and prosecute health care fraud and abuse in the public and private sectors. HIPPAA requires HHS and DOJ to issue a joint annual report no later than January 1 of each year to Congress for the proceeding fiscal year. The joint HCFAC reports included deposits of $210 million for fiscal year 2000 and $464 million for fiscal year 2001, pursuant to the act. In testing at DOJ, GAO found errors in the recording of criminal fines deposits to the Federal Hospital Insurance Trust Fund in fiscal year 2001 that resulted in an estimated overstatement to the trust fund of $169,765.

What GAO Found

GAO found that the planned use of HCFAC appropriations was in keeping with the stated purpose in the act. Although GAO found expenditures from the trust fund were generally appropriate at HHS, at DOJ GAO found $480,000 in interest penalties not related to HCFAC activities that were charged to the HCFAC appropriation. GAO was unable to identify expenditures from the HCFAC trust fund for activities unrelated to Medicare because the HHS/OIG and DOJ do not separately account for or monitor these activities. Likewise, GAO was unable to identify savings specifically attributable to activities funded by the HCFAC program.