Final answer:
The Office of Inspector General within the U.S. Department of Health and Human Services prosecutes fraud and abuse in healthcare, overseeing Medicare and Medicaid, with support from the Justice Department and State Attorneys General.
Step-by-step explanation:
The entity that prosecutes fraud and abuse in the healthcare industry, particularly over programs like Medicare and Medicaid, is primarily the Office of Inspector General within the U.S. Department of Health and Human Services (HHS). Additionally, these efforts are supported by the Justice Department and State Attorneys General. It is important to understand that the government plays a pivotal role in providing healthcare through these publicly funded programs. In light of concerns such as moral hazard and adverse selection, and given the significant spending by the government on health care that was evident even before the enactment of the Patient Protection and Affordable Care Act (ACA or Obamacare), accountability and oversight are crucial to prevent fraudulent activities and overbilling in situations where services are provided on a fee-for-service basis, as seen with Medicare and Medicaid.