Investment Returns on the Federal Enforcement Dollar Continue to Drop

The business of enforcing federal health care fraud laws isn’t as robust as it used to be. While revenues have remained pretty steady, return on investment (ROI) has been trending downward, providing the investment returns of yesteryears.

ROI Keeps Trending Down

That’s one of the main takeaways of the new joint HHS and DOJ report on the financial performance of the Health Care Fraud and Abuse Control Program (Program) during fiscal year 2018. Continuing recent trends, ROI for FY 2018 for the three-year period 2016-2018 dipped to $4.00 for every dollar spent, as compared to $4.20 in FY 2017. That’s the sixth annual decline in a row since Program ROI peaked at $8.10 in FY 2013.

“Because the annual ROI can vary from year to year depending on the number and type of cases that are settled or adjudicated during that year, DOJ and HHS use a three-year rolling average ROI for results contained in the report,” the agencies explain in their report. But while rolling averages may take off some of the edge for a particular year, they can’t conceal the long-term trend. Simply put, the return on enforcement dollars is only about 50% of what it used to be just six years ago.

By The Numbers

Total recoveries from health care fraud judgements and settlements topped $2.3 billion in FY 2018, slightly down from the previous year. The chart below summarizes the key year-to-year findings.

While these accomplishments are noteworthy, they come at a higher price than in recent years.