Testimony of 
Daniel R. Levinson 
Nominee for Inspector General 
Department of Health and Human Services 
Mr. Chairman and members of the Committee, thank you for this opportunity to appear before 
you today as the Presidents nominee for Inspector General (IG) of the Department of Health and 
Human Services (HHS).  I am grateful for the Presidents nomination and am mindful of the 
crucial role that the Finance Committee plays in a wide array of matters concerning HHS, 
including its Office of Inspector General (OIG).  I also want to thank members of the 
Committees staff who gave of their time generously in preparation for this hearing. 
This Office of Inspector General is charged with protecting the integrity of HHS programs, as 
well as the health and welfare of beneficiaries of those programs.  As in other agencies, the IG 
serves pursuant to the Inspector General Act of 1978 as chief audit and law enforcement 
executive, with dual reporting roles to the Department and to the Congress.  An IG is charged 
with providing the Secretary and program managers objective and independent findings and 
recommendations to improve program efficiency and effectiveness, and to undertake 
investigations to identify and hold accountable those who defraud our programs and 
beneficiaries. 
The IG must carry out a wide variety of tasks in the effective administration of many key 
government management laws, among them the Federal Information Security Act, the Chief 
Financial Officers Act of 1990, the Single Audit Act, and the Government Performance and 
Results Act, as well as OMB circulars and directives. The IG, through Hotlines and other 
integrity awareness efforts, also assists in the fulfillment of the important public policy goals 
embodied in the Ethics in Government Act, the Whistleblower Protection Act, and other similar 
laws, rules, and policies. 
These are roles with which I am familiar, as it has been my privilege and honor to serve as the 
Inspector General of the General Services Administration for the past three-and-a-half years. 
The multidisciplinary nature of IG activities always presents a challenge to integrate effectively 
a variety of internal tasks for the benefit of both internal and external uses. The size and scope 
of HHS, however, makes managerial demands of the highest order.  I, therefore, am aware of the 
differences, as well as of the similarities, of the positions that I am leaving and for which I am 
being considered. 
Indeed, I am cognizant that the HHS OIG is in some respects truly different from its peer 
organizations. Not only is it the largest office of its kind in the Federal Government, but its 
duties and responsibilities are unusually broad, encompassing significant regulatory and 
enforcement powers not typically available to OIGs elsewhere.  I pledge that, if confirmed, I will 
devote my efforts and energies toward ensuring that the office exercises all the authorities given 
it by the Congress. 
Senate Committee on Finance 
Hearing: February 17, 2005  Page 1  An important demonstration of the unique features of the HHS OIG is apparent in its role in the 
Medicare Modernization Act (MMA) of 2003. In making the most significant changes to 
Medicare in its 40-year history, the MMA, which goes fully into effect next January, both 
modifies the prices of drugs currently paid by the Medicare program and creates a new voluntary 
drug benefit for the programs 41 million beneficiaries.  
As recent OIG semiannual reports indicate, within the Medicare and Medicaid programs, which 
are the exclusive focus of approximately 80 percent of OIG activity, prescription drugs are 
especially vulnerable to fraud, waste, and abuse. It is therefore essential that the Centers for 
Medicare & Medicaid Services (CMS) build a sound infrastructure for program implementation, 
with strong internal controls, adequate data collection to enable proper oversight, and sound 
financial management systems.  The OIG will have a parallel responsibility to conduct audits, 
investigations, and evaluations that help ensure that resources are in place and that MMA 
implementation is on track and being accomplished in an efficient and effective manner. 
To fulfill the specific responsibilities mandated by Congress to the OIG in the area of 
pharmaceuticals, work is underway to monitor market prices and trends of Medicare-covered 
drugs, audit drug manufacturers prices, establish a safe harbor related to the electronic 
transmission of drug prescriptions, assess the effects of Medicare payment rates on the 
availability of hematology and oncology drugs, and study prices of drugs included in the end 
stage renal disease composite rate. 
In addition to providing new responsibilities under MMA in the prescription drug area, the 
Congress also directed the OIG to review payment methods for training residents in nonhospital 
settings, and to assess notices to beneficiaries relating to hospital lifetime reserve days.  The OIG 
already has met the statutory deadlines for this work and is planning additional projects as part of 
its commitment to prudent oversight of the new law.  
In order to meet both the preexisting and new responsibilities faced by the OIG today, this office 
will require an extraordinary level of collaboration and partnership internally, with a sufficient 
level of resources dedicated to an unusually diverse collection of disciplines. The HHS OIG 
now employs over 1400 public servants who bring to the mission an impressive expanse of 
experience and expertise in criminal investigations, audit and accounting, inspections and 
evaluations, management analysis, law, and staff support.  
To maximize the reach of the OIG in its mission to protect HHS program integrity, steps should 
be taken not only to ensure that human capital is deployed in the most efficacious manner 
possible, but that sufficient resources are available for new, as well as continuing 
responsibilities. I will, if confirmed, work with the OIG senior management team to make these 
determinations and share our progress and concerns with you. 
For most of the past 20 years, I have worked to promote internal integration of resources so as to 
improve government effectiveness.  In my capacities as inspector general, general counsel, chief 
of staff, head of agency, and consultant to agencies and the Public Administration Academy, I 
have sought to find and implement policies that marshal a public organizations internal 
Senate Committee on Finance 
Hearing: February 17, 2005  Page 2  strengths and to do so, when feasible, across disciplinary lines. This is especially useful in light 
of the complex nature of IG responsibilities.  As fraud examiners, for example, we are instructed 
to appreciate the interrelationship among discrete but related disciplines, including criminology, 
investigations, financial transactions, law and ethics, and to employ this knowledge holistically. 
I will endeavor, if confirmed, to apply these strategies to the HHS OIG. 
My previous work in central management and public safety agencies also has sensitized me to 
the crucial personal investments that must be made by the office leadership in building effective 
bridges to other parties whose oversight or enforcement powers touch, or perhaps overlap, with 
ones own. 
Indeed, in view of the enlarged and complex mission of this OIG, effective internal integration 
and collaboration only set the stage for the critical partnerships that need to be maintained 
between the office and external parties. In OIGs role as a health care law enforcement leader, it 
is critically important for the OIG and CMS to have a mutual understanding of their 
complementary roles in effectuating program integrity.  Along similar lines, it is important that 
the OIG relate to other major components of the Department, such as the National Institutes of 
Health, the Food and Drug Administration, and the other public health agencies, in a manner that 
reflects an appreciation for the respective roles of each office in ensuring that the public interest 
in honest and effective government is promoted.  If confirmed, I will devote my attention and 
energies to these important goals. 
Successful partnerships also must be maintained beyond the Department.  Congress has enacted 
a range of authorities empowering the OIG and the Department of Justice (DOJ) to pursue those 
who would undermine the beneficial purposes of our nations health and welfare laws through 
fraud or other unlawful means.  Those authorities, which include the False Claims Act, 
particularly its qui tam provisions, the anti-kickback statute, the Civil Monetary Penalties Law, 
EMTALA, and program exclusions, typically depend on effective coordination between the OIG 
and DOJ, including its Civil and Criminal Divisions, the Marshals Service, and offices of the 
United States Attorneys nationwide. Through joint participation in the Health Care Fraud and 
Abuse Control Program, created in 1996 as an important part of the Health Insurance Portability 
and Accountability Act, the OIG and DOJ together ensure that the Federal Government will 
effectively prosecute health care fraud and obtain appropriate judgments, settlements, and 
administrative impositions.  
In a parallel manner, the OIG must work effectively with its partners at the State level, 
principally through the various State Medicaid Fraud Control Units, which investigate and 
prosecute providers charged with defrauding the Medicaid program or abusing or neglecting 
patients. As Medicaid has become, in terms of Federal and State outlays, larger than Medicare, 
it is imperative for the OIG to devote increasing attention to this program.  One way this is being 
accomplished, as indicated in OIGs most recent semiannual reports, is to work with State 
auditors to conduct joint audits of Medicaid so as to help ensure more effective use of scarce 
audit resources in both Federal and State audit sectors. 
Senate Committee on Finance 
Hearing: February 17, 2005  Page 3  The OIG also must maintain effective relations with the Congress and the Government 
Accountability Office (GAO). It is of vital importance for IGs to deliver timely and accurate 
information to the Congress so it can fulfill its oversight role.  And in order to respect the 
relevant jurisdictions of the two entities, enhance coordination between them, and avoid 
duplicative work, it is important for the IG and GAO to share the focus and the timetable of their 
work plans. I remain committed to these objectives as important foundations for effective IG 
operations. 
In view of the enormous investment that the nations taxpayers make in our health and welfare 
laws, it also is important that the OIG find effective means to maximize opportunities and 
incentives for the health care industry to adopt preventive policies, engage in preventive 
practices, and assist Government authorities in uncovering instances of fraud, waste, and abuse. 
Among its outreach tools, the OIG has issued advisory opinions, special fraud alerts, special 
advisory bulletins, and industry-specific compliance program guidance, all directed toward 
promoting the highest level of ethical and lawful conduct by the health care industry.  The OIG 
also has established a set of guidelines for voluntary self-disclosure, known as the Provider Self-
Disclosure Protocol, giving providers and suppliers a process for structuring a disclosure of 
conduct that appears to constitute a potential violation of Federal laws. Through these and other 
potential avenues, I will, if confirmed, seek to build on successful strategies that make the 
industry, in many instances, a first line of defense in the protection against Federal health care 
fraud, waste, and abuse. 
The challenges involved in this position are great. For any Inspector General, they probably 
could not be greater. But the opportunities to make a positive difference in the lives of millions 
of Americans, especially those who are most needy and vulnerable, are also great.  While I trace 
my career interests in the disciplines encompassed by Inspector General positions to my father, a 
lawyer and a CPA with a distinguished career as a financial executive, it is the rest of the 
members of my family, my mother and my siblings, who together combine over a century of 
service and scholarship to health and human services, that contribute so greatly in forming my 
personal commitment to make the HHS OIG as successful in its mission as possible. 
Thank you for this opportunity to appear before you today, and I am pleased to respond to your 
questions. 
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Senate Committee on Finance 
Hearing: February 17, 2005  Page 4