Deep staff cuts are hitting a federal agency responsible for investigating health-care fraud just as Obamacare is due to kick in, leaving less people to investigate an ever-growing crime that costs taxpayers billions of dollars.

And in a perverse twist, the funding cuts at the Health and Human Services Department's Inspector General's Office might save money in the short term for the U.S. taxpayer. But over the long run, more money that could have been recouped from the fraud cases now going unpursued, is being left on the table, the agency said.

For every $1 spent on health-care fraud probes, nearly $8 is recouped in fines, restitution or settlements, according to HHS.



"With fewer agents we investigate fewer cases, and with fewer cases we're likely to have fewer convictions, few civil settlements, which will likely translate into less recoveries," said Gary Cantrell, deputy inspector general for investigations at HHS, which investigates Medicare and Medicaid fraud.

"The problem is certainly growing . . . yet our resources are declining."

The Office of Inspector General is halfway to its goal of reducing staff by a total of 400 people from a previous level of about 1,800 employees. The cuts, which may continue into 2015, are being made because OIG is faced with $30 million in expiring funding streams, another $25 million in funds that have been authorized but not appropriated since 2009, and about $15 million in cuts as a result of the federal government's sequestration spending reductions.

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Staff for Sen. Tom Harkin, D-Iowa, noted that the Appropriation Committee subcommittee on health that he chairs "is trying to make up for the expiring funding streams" by including tens of millions of dollars in spending increases for OIG.

But there is no guarantee those increases will make it through the Senate, much less be approved by a Republican-controlled House of Representatives.