Senators seek more funding for HHS inspector general's office

They argue that new Medicare law will overwhelm an office that has had to cut more than 40 jobs in two years because of budget constraints.

A handful of senators is leading an effort to boost funding for the Health and Human Services Department inspector general's office, fearing that it will be overwhelmed by duties required by the new Medicare law at a time when lack of funding has forced the office to cut more than 40 staff positions over the past two years.

That group, which includes Finance Committee Chairman Chuck Grassley, R-Iowa, and ranking member Max Baucus, D-Mont., is considering ways to move part of the $1 billion set aside for the implementation of the new Medicare drug benefit to the inspector general.

Responding to lawmakers' requests, the inspector general's office said it needs at least $25 million -- $10 million to carry out duties specifically outlined in the new Medicare law and $15 million for oversight of the massive new program.

Just a week into the new drug discount program, the office already is conducting inquiries into nearly 30 complaints from seniors claiming they inappropriately have been offered cards not endorsed by Medicare. In some cases, people have misrepresented themselves to seniors as government officials, according to the inspector general.

In addition to its new responsibilities, HHS Secretary Tommy Thompson also ordered the inspector general's office to investigate the complaints of the Medicare chief actuary that then-Centers Medicare and Medicaid Services Administrator Thomas Scully threatened to fire him if he shared cost estimates with members of Congress who had requested them. Despite the new responsibilities, funding for the inspector general's office has been flat for the last two years.

Grassley and Baucus first asked HHS in January to detail how it planned to fund its new oversight and enforcement of the new Medicare law, saying that the increased funding for State Health Insurance Programs, which conduct beneficiary education, as well as the inspector general, should come from the $1 billion Congress allotted for implementing the law.

"There is an overwhelming need for effective oversight, audits, evaluations and, where appropriate, investigations of these new programs and contractors," Grassley and Baucus said in a letter sent to Thompson in January.

"Under current law, funding ... is not set to increase sufficiently to allow the office to handle its new responsibilities in implementing and overseeing the act, while maintaining its current enforcement, investigative, and evaluative activities," they added.

The inspector general's office has sent a series of letters to concerned senators, including Grassley, Baucus and Sens. Bob Graham, D-Fla., and Tom Harkin, D-Iowa, responding to concerns about its ability to carry out its duties, given its flat funding.

In a Thursday letter, acting Principal Deputy Inspector General Dara Corrigan said she worried that funding caps on its largest funding stream, the Health Care Fraud and Abuse Control Program, could hamper the office.

"Resources for this program are capped at the 2003 level, resulting in annual reductions in OIG FTEs [full-time equivalent employees] and other operating expenses, making it increasingly difficult to carry out our mission," Corrigan wrote.

To make matters worse, the office has lacked a permanent director, which often is critical to making strong appeals for funding and taking on controversial investigations. Since last year, Corrigan has served as the interim head of the office.

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