For example,  the report includes information on the amount of money returned to the  Medicare Trust Funds as a result of HCFAC activities. HCFAC Appropriations

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. 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.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. 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. 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 as well as to inform decision-makers about how to allocate  resources. 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. For  example, the USAOs use indicators related to criminal prosecutions,  including the number of defendants charged and the number of  convictions. 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. Several Factors Contribute to Lack of Information about the Effectiveness of HCFAC Activities

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. 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  baseline hinder a broader understanding of the effectiveness of the  HCFAC program in reducing health care fraud and abuse. Indicators Agencies Use to Assess HCFAC Activities Provide Information on Accomplishments, but Not Effectiveness

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. It is difficult to establish if the HCFAC program has a direct relationship to  changes in the amount of health care fraud and abuse. CMS reports that after completion of the pilot, it will determine  whether the measurement approach should be expanded to other areas  of health care. HHS and DOJ use a number of  indicators to assess the activities they conduct to reduce health care  fraud and abuse. 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. 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. Agency Comments

GAO provided a draft of the report to HHS and DOJ. 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. In addition, HHS and  DOJ provided technical comments, which we have incorporated as  appropriate. Discretionary  HCFAC appropriations refer to budgetary resources provided in annual  appropriation acts, other than those that fund mandatory programs. United States Attorneys’ Offices (USAOs)

Number of Federal health care fraud related  convictions  Number of new civil health care fraud  investigations opened  Number of civil health care fraud investigations  pending  Number of investigations completed per  Department of Justice attorney working on  financial fraud and health care fraud cases (Target: 11.92 investigations per attorney)

	DOJ Component

Indicators used by agencies to assess  activities (Associated target, if applicable)  Percentage of criminal cases favorably resolved  for litigating divisions (Target: 90 percent of criminal cases favorably  resolved; 80 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)
92.2 percent of white collar crime  cases favorably resolved in fiscal  year 2010   indicates that measure is included in Fiscal Year 2012 annual HCFAC report   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.
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.