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75–794 PDF 2012

ASSESSING MEDICARE AND MEDICAID PROGRAM 

INTEGRITY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT ORGANIZATION, 

EFFICIENCY AND FINANCIAL MANAGEMENT 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

JUNE 7, 2012 

Serial No. 112–176 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

DAN BURTON, Indiana 

JOHN L. MICA, Florida 

TODD RUSSELL PLATTS, Pennsylvania 

MICHAEL R. TURNER, Ohio 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

CONNIE MACK, Florida 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

ANN MARIE BUERKLE, New York 

PAUL A. GOSAR, Arizona 

RAU ́ L R. LABRADOR, Idaho 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

JOE WALSH, Illinois 

TREY GOWDY, South Carolina 

DENNIS A. ROSS, Florida 

FRANK C. GUINTA, New Hampshire 

BLAKE FARENTHOLD, Texas 

MIKE KELLY, Pennsylvania 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

EDOLPHUS TOWNS, New York 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

DENNIS J. KUCINICH, Ohio 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

MIKE QUIGLEY, Illinois 

DANNY K. DAVIS, Illinois 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

JOHN A. YARMUTH, Kentucky 

CHRISTOPHER S. MURPHY, Connecticut 

JACKIE SPEIER, California 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

ROBERT BORDEN, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

SUBCOMMITTEE ON GOVERNMENT ORGANIZATION, EFFICIENCY AND FINANCIAL

MANAGEMENT

TODD RUSSELL PLATTS, Pennsylvania, Chairman 

CONNIE MACK, Florida, Vice Chairman 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

FRANK C. GUINTA, New Hampshire 

BLAKE FARENTHOLD, Texas 

EDOLPHUS TOWNS, New York, Ranking 

Minority Member 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

ELEANOR HOLMES NORTON, District of 

Columbia 

(III) 

C O N T E N T S 

Page 

Hearing held on June 7, 2012 ................................................................................. 1 

WITNESSES 

Dr. Peter Budetti, Director of Center for Program Integrity, Centers for 

Medicare and Medicaid 

Oral Statement ................................................................................................. 5 

Written Statement ............................................................................................ 7 

Ms. Ann Maxwell, Regional Inspector General for Evaluation and Human 

Services 

Oral Statement ................................................................................................. 22 

Written Statement ............................................................................................ 23 

Ms. Carolyn Yocum, Director of Health Care, Medicaid, U.S. Government 

Accountability Office 

Oral Statement ................................................................................................. 35 

Written Statement ............................................................................................ 37 

APPENDIX 

The Honorable Todd Russell Platts, a Member of Congress from the State 

of Pennsylvania, Opening Statement ................................................................. 89 

The Honorable Michele Bachmann, a Member of Congress from the State 

of Minnesota, Opening Statement ...................................................................... 92 

The Honorable Gerald E. Connolly, a Member of Congress from the State 

of Virginia, Opening Statement .......................................................................... 93 

Statement for the Record submitted on behalf of the Council for Quality 

Respiratory ........................................................................................................... 94 

Statement of the American Medical Association ................................................... 98 

Rethinking Medicaid Program Integrity: Eliminating Duplication and Investing in Effective, High-value Tools ....................................................................... 101 

Questions for Dr. Peter Budetti from Rep. Todd Platts ....................................... 116 

Questions for Dr. Peter Budetti from Rep. James Lankford ............................... 120 

(1) 

ASSESSING MEDICARE AND MEDICAID 

PROGRAM INTEGRITY 

Thursday, June 7, 2012 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON GOVERNMENT ORGANIZATION, EFFICIENCY, AND FINANCIAL MANAGEMENT, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, Washington, D.C. 

The subcommittee met, pursuant to call, at 9:40 a.m., in Room 

2154, Rayburn House Office Building, Hon. Todd Platts [chairman 

of the subcommittee] presiding. 

Present: Representatives Platts, Lankford, Farenthold, Towns, 

and Norton. 

Also Present: Representative Bachmann. 

Staff Present: Ali Ahmad, Communications Advisor; Alexia 

Ardolina, Assistant Clerk; Kurt Bardella, Senior Policy Advisor; 

Molly Boyl, Parliamentarian; Sharon Casey, Senior Assistant 

Clerk; Katelyn E. Christ, Professional Staff Member; John 

Cuaderes, Deputy Staff Director; Gwen D’Luzansky, Research Analyst; Adam P. Fromm, Director of Member Services and Committee 

Operations; Linda Good, Chief Clerk; Ryan M. Hambleton, Professional Staff Member; Mark D. Marin, Director of Oversight; Christine Martin, Counsel; Mary Pritchau, Professional Staff Member; 

Noelle Turbitt, Staff Assistant; Peter Warren, Legislative Policy Director; Jaron Bourke, Minority Director of Administration; Beverly 

Britton Fraser, Minority Counsel; Ashley Etienne, Minority Director of Communications; Devon Hill, Minority Staff Assistant; and 

Safiya Simmons, Minority Press Secretary. 

Mr. PLATTS. Good morning. This hearing of the Subcommittee on 

Government Organization, Efficiency, and Financial Management 

will come to order. I first apologize to all of our guests and our witnesses and my colleagues for the short delay in getting started. 

Given that the delay is my responsibility, I am going to abbreviate 

my opening statement to get us back on track, but we are appreciative of everyone’s participation here today, and especially our 

witnesses. 

This hearing is focused on the fiscal integrity of Medicare and 

Medicaid and it is our subcommittee’s third hearing on this issue 

of helping to ensure that we do right by the American people in 

how we handle their hard-earned dollars that they send to Washington. And an important focus of this subcommittee for many 

years, going back to when I first joined it, my first term in Congress in 2001 under the chairmanship of Steve Horn, is how to prevent the making of improper payments by the Federal Government. 

2 

And when we look at Medicaid and Medicare, more than half of 

the most recent years’ identified improper payments were within 

these two programs, approximately $65 billion of the American people’s money that was not properly handled on their behalf by the 

Federal Government. 

Today’s hearing is looking at how these programs can do better, 

and we certainly appreciate our witnesses’ participation and your 

insights and knowledge that you will share with us. As in the past 

and working with the former chairman of the full committee and 

the chairman of this subcommittee, and now-ranking member Mr. 

Towns, our approach has always been a partnership with Federal 

departments and agencies and programs. We are not out to play 

‘‘gotcha’’ but we are simply here to see how can we do better and 

how can we help those involved specifically in the operation of 

Medicare and Medicaid and those who work with us at GAO and 

the Inspector General’s Office; how we can improve the effectiveness, efficiency of these programs, and ultimately serve the American people through these very important programs where the hundred million Americans receive health-care benefits but do so in a 

responsible manner where we are certainly getting a good return 

on the investment and properly handling their money. 

So we will look forward to your testimony. 

And with that, I am going to yield to the ranking member from 

New York, Mr. Towns, for the purposes of an opening statement. 

Mr. TOWNS. Thank you very much, Mr. Chairman, and thank 

you for holding this hearing. 

This subcommittee has held several hearings about fraud and 

waste in these critical health-care programs that we must continue 

to do so because we need to answer the question: Can we administer these programs more efficiently by reducing improper payments and fraud? 

Last year, Medicare covered about 50 million beneficiaries and 

spent approximately $560 billion, which is about 15 percent of the 

total Federal spending. Medicaid likewise provides coverage for 

about 70 million people nationwide and cost the government approximately $260 billion last year, about 8 percent of the Federal 

spending. These numbers are expected to grow as our population 

gets older. 

This country increases reliance over time on Medicaid and Medicare is unfortunately translating into a significant level of waste 

and fraud. Improper payments for Medicare was recently estimated 

to be $42 billion; and for Medicaid, $21.9 billion. That is a lot of 

money. That is the reason why both of these programs continue to 

be on the GAO’s high-risk list. 

The Affordable Care Act includes a number of provisions that 

will enhance our efforts to fight waste and fraud in Medicare and 

Medicaid. Eliminating avoidable mistakes and cracking down on 

criminals will be important elements in achieving this goal. 

Today we will look at some of the innovative steps that the Center for Medicare and Medicaid Services is taking to reduce improper payments and fight fraud. We will also examine some of the 

shortcomings that prevent existing programs from reaching their 

full cost savings potential. 

3 

There is no single approach that will result in the reduction of 

waste and fraud in the health-care system. The solution requires 

a multi-tiered approach involving stakeholders in Congress, CMS, 

the private sector, and law enforcement all working together in 

order to achieve this goal. 

I thank our witnesses for their testimony, and I look forward to 

hearing your recommendations and suggestions that we might 

make. 

So on that note, Mr. Chairman, I yield back. 

Mr. PLATTS. Thank you, Mr. Towns. I appreciate your testimony. 

I would now ask unanimous consent that our distinguished colleague from Minnesota, the gentlelady, Representative Bachman, 

be allowed to participate in today’s hearing for both the purpose of 

questions and an opening statement, and, without objection, so ordered. 

I now yield to the gentlelady for her opening statement. 

Mrs. BACHMANN. Chairman Platts and Ranking Member Towns, 

I thank you so much for your consideration and graciousness allowing me to be able to testify briefly before this committee today on 

this critical program, and I thank you also for the bipartisan way 

in which this committee is moving forward on this subject. As we 

are on the cusp of a major expansion in Medicaid in the United 

States, it is more important than ever, and I commend this committee for taking up this important issue about saving the expenditure of the people’s money. And I thank you for that. 

In April, I testified in a joint hearing of two oversight committees’ subcommittees on the complete lack of reporting, collection, 

and verification of meaningful data in Medicaid. I underscore what 

I just said. That is a breathtaking statement. There is a complete 

lack of reporting, collection, and verification of meaningful data in 

Medicaid. The same is not true for Medicare. That is why this is 

a bipartisan issue and one that we hope will focus on helping the 

needs of the poorest among us in the United States who must have 

these program moneys in order to survive. 

The staff report from that hearing stated, ‘‘Minnesota provides a 

stunning example of how States are failing to properly ensure the 

appropriate use of taxpayer dollars spent on Medicaid managed 

care. This is something we are not proud of. In order for States to 

ensure the appropriate use of taxpayer dollars, they must be able 

and willing to collect the data that shows how much is paid in a 

claim, for what, and to whom. That is only basic common decency. 

Since the investigation into Minnesota’s Medicaid fraud has unfolded, several implicated parties have begun to offer up excuses. 

According to the trade organization for managed care organizations, the Department of Human Services actually has the data but 

not the ability to analyze it. They say the State’s computer system 

is too antiquated. But in contradiction to this, a DHS assistant 

commissioner said the data is ‘‘literally analyzed by DHS on a daily 

basis and has been for years.’’ So now, either the trade association 

representing the health plan is fudging or DHS is. We need to find 

out who. It is our job to immediately get to the bottom of this. And 

I thank the committee for what you are doing. 

CMS is already tasked with identifying patterns or instances of 

fraud and abuse in Medicare and Medicaid. That much we know, 

4 

and that much is good. But despite that, they require no documented data. Now, the two don’t go together. You can’t do your job 

if you don’t have documented data. 

That is why this month I am introducing a bill that will hold 

CMS accountable to ensure stated audits are conducted properly. 

That is why this is totally bipartisan, a bipartisan bill. We just 

want to know where the people’s money is going and is it going to 

help the poor people in this country who need these services. 

But because this situation needs immediate attention, I am 

proud to announce that I am sending a letter today to CMS calling 

for an immediate third-party independent audit of Minnesota’s 

books. We can’t allow taxpayer dollars to flow without proper 

record keeping ever again. 

Thank you again to the committee for your fine work, Ranking 

Member Towns, and also for your fine work, Chairman Platts. I am 

thrilled to be a partner with you in this important work that you 

are doing. 

And I yield back. 

Mr. PLATTS. I thank the gentlelady for her opening statement 

and her involvement and interest in the issue, as well as your focus 

on the efforts of Minnesota specifically in seeking to make sure we 

do right by all of our taxpayers in Minnesota and across this great 

Nation. 

All members will have 7 days to submit opening statements and 

extraneous material for the record. 

I will now proceed to our panel of witnesses. And we are delighted to have a group of distinguished public servants with us 

who bring a welcome knowledge to our hearing today. 

First, we have Dr. Peter Budetti, who is director of the Center 

for Program Integrity at the Centers for Medicare and Medicaid 

Services; Ms. Ann Maxwell, regional inspector general for evaluation and inspections in the Office of the Inspector General for the 

Department of Health and Human Services; as well as Ms. Carolyn 

Yocum, who is director of health care for Medicaid at the United 

States Government Accountability Office; and Ms. Kathleen King, 

director of health care for Medicare at the United States Government Accountability Office. 

We thank all of our witnesses for being here with us today. Pursuant to committee rules, if I could ask all four of you to stand and 

raise your right hand and allow us to swear you in before your testimony. 

Raise your right hand. Do you solemnly swear or affirm that the 

testimony you are about to give this committee will be the truth, 

the whole truth, and nothing but the truth? Let the record reflect 

that all four witnesses answered in the affirmative. 

We appreciate the extensive written testimony you provided us, 

what I call my homework in preparation for our committee hearings, and your doing so certainly allows both members and staff to 

be better prepared to have a good engagement here today. 

With your oral testimony here today, if you can seek to limit 

yourself to roughly 5 minutes. You will see the light system in 

front of you. If you do need to go over a little bit, that is fine. But 

for the purpose of allowing members to get into exchange and Q&A 

with you, we will try to limit to 5 minutes. 

5 

Dr. Budetti, we will begin with you. 

WITNESS STATEMENTS 

STATEMENT OF PETER BUDETTI, M.D. 

Dr. BUDETTI. Thank you, Mr. Chairman, and thank you Chairman Platts, Ranking Member Towns, and members of the subcommittee for this invitation to discuss the Centers for Medicare 

and Medicaid Services program integrity efforts for the Medicare 

and Medicaid programs. 

As I describe in detail in my written statement, the administration made important strides in reducing fraud, waste, and improper payments. And I draw your attention to this chart, which 

I hope is in a font that at least some of us in the room can read, 

which illustrates the framework within which we have taken action 

over the last 2 years. 

The first point is moving beyond a pay-and-chase approach by focusing new attention on preventing fraud. We are adopting what 

we call a twin pillar approach, building upon the traditional program integrity efforts that focus on detecting and prosecuting 

fraud. 

We have implemented an approach that involves two pillars. One 

is what we are calling the fraud prevention system, which applies 

predictive analytic technology on claims prior to payment to identify aberrant and suspicious billing patterns. And the second pillar 

is the automated provider screening system which focuses on identifying ineligible providers or suppliers prior to their enrollment or 

revalidation. 

These innovative new systems are designed to work together. 

They’re growing in their capacity to protect patients and taxpayers 

from those intent on defrauding our programs. They represent an 

integrated approach to program integrity, preventing fraud before 

payments are made, keeping bad providers and suppliers out of 

Medicare in the first place, and quickly removing wrongdoers once 

they are detected. These complement the traditional program integrity activities which continue. 

Second, we would like to emphasize that our work is on a riskbased approach. We are not approaching this on a one-size-fits-all 

model. For example, in addition to the detailed assessment of credentials and other requirements that all providers and suppliers 

undergo through the automated provider screening system, we’ve 

identified those in a moderate level of risk who are now required 

to also undergo site visits and those in the high level of risk who 

will be subject to fingerprint-based criminal background checks. 

The fraud prevention system itself, the way it operates, represents another example of our risk-based approach. It targets our 

investigative resources to suspicious claims and providers, generates alerts in priority order, allowing our program integrity analysts to investigate the most egregious or suspect aberrant activity. 

Third, innovation. For the first time in the history of the program, CMS is using a system to apply advanced analytics against 

Medicare fee-for-service claims on a streaming national basis. This 

has enabled us to identify schemes operating across Medicare Parts 

A and B claims and across the country. 

6 

The fraud prevention system aggregates A and B data claims in 

near realtime, and this has revolutionized our approach. For example, our investigators formerly had to check multiple systems to determine whether a beneficiary had ever visited a doctor who billed 

Medicare for services and supplies. We’ve now consolidated disbursed pieces of claims data, beneficiary visits with the doctor, or 

orders for durable medical equipment and hospital, and other providers and other services provided under Part A, enabling our investigators to automatically see the full picture. 

Similarly, in the second pillar of our approach, the automated 

provider screening system, this is another significant advancement 

and innovation. We’re using advanced technology in a way that we 

are committed to both rooting out and screening out the bad guys 

while making it easier for the legitimate providers to enter the 

Medicare program. 

We expect that our enhancements to the Medicare enrollment 

system will speed up the time for legitimate providers to get in and 

our screening processes will keep out the bad ones. 

The fourth point, transparency and accountability, which are 

high priorities for this administration. We’ve held a number of regional fraud prevention summits around the country with a wide 

range of stakeholders and the general public, and we have engaged 

in a number of efforts to make sure that the public is aware of 

what we are doing to combat fraud and how they can join with us 

in doing that. 

We are engaging the public and private sector more extensively. 

For example, we conducted a month-long fraud prevention awareness month in concert with the California Medical Association and 

the State of California, and we’ve involved the private sector, especially the medical community, very closely in our remodeling of the 

enrollment system to address needs that they themselves have 

identified. 

And finally, I’m coordinating and integrating the program integrity programs. When Secretary Sebelius created the Center for Program Integrity, she brought together the Medicare and the Medicaid program integrity activities for the first time. This has provided a strong basis now for communication between the programs 

and for aligning as much as possible the fraud policy—anti-fraud 

policies and procedures across Medicare and Medicaid, as required 

in many cases by the Affordable Care Act. 

Mr. Chairman, Medicare and Medicaid fraud, we agree with you, 

they affect every American by draining critical resources and contributing to the rising cost of health care. We’ve made a firm commitment in this administration to rein in fraud, waste, and improper payments. We have more tools than ever to move beyond 

‘‘pay and chase’’ and implement 

strategic changes in pursuing and detecting fraud, waste, and 

abuse. 

I look forward to continuing to work with you as we make improvements in protecting the integrity of the Federal Health Care 

programs, and I very much appreciate your interest in our doing 

so. 

Thank you for this opportunity to speak with you. 

Mr. PLATTS. Thank you, Dr. Budetti. 

7 

[Prepared statement of Dr. Budetti follows:] 

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Mr. PLATTS. Ms. Maxwell. 

STATEMENT OF ANN MAXWELL 

Ms. MAXWELL. Good morning, Chairman Platts, Ranking Member Towns, and other distinguished members of the subcommittee. 

Thank you for the opportunity to testify about the Office of Inspector General’s evaluations of two national program integrity efforts. The national Medicaid audit program and the Medicare-Medicaid data match program, typically referred to as Medi-Medi. 

Our evaluations reveal that these national integrity efforts in 

many ways resemble a funnel. Significant Federal and State resources are being poured in, but only limited results are trickling 

out. 

Both national efforts are required to identify improper Medicaid 

payments for recovery. The National Medicaid Audit program 

strives to do this within States and across States. Medi-Medi attempts to detect overpayments in Medicaid and Medicare by 

matching the data across programs to identify suspicious patterns. 

However, both programs had limited success in achieving the goal 

of identifying Medicaid overpayments. As a result, both programs 

had a negative return on investment. 

In 2010, the national Medicaid auto program paid contractors approximately $32 million to identify Medicaid overpayments of just 

half that amount. In fact, we discovered that 81 percent of the audits assigned in the first half of that year did not or are unlikely 

to find overpayments. 

Medi-Medi also had a negative return on investment. Medi-Medi 

was appropriated $60 million over a 2-year period during which 

time it saved $58 million. Of that amount, only one-quarter, $11 

million, was recovered on behalf of the 10 States that are participating at the time. The benefits of the Medicaid program were so 

minimal for two States that they opted to withdraw from the program. One of the States that withdrew from the program stated 

that it saved $2,000 after investing $250,000 of State funds. 

There are a variety of challenges that limit the potential of these 

programs to attack Medicaid overpayments, including issues of 

Medicaid data, poor program administration and the lack of contractor accountability. The most fundamental challenge is the data. 

National Medicaid data are not current, they are not complete, 

and they are not accurate. In fact, the data is not going to capture 

all of the elements necessary for the detection of fraud, waste, and 

abuse. Due to these data problems, the National Medicaid Audit 

Program wasted resources, auditing potential overpayments that 

were not real. They were merely mirages created by the data. 

Due to these data problems, Medi-Medi does not have Medicaid 

data suitable for automated matching with Medicare data. CMS 

has said this matching will not be possible for a number of years. 

In addition to these data challenges, CMS’ administration of 

these programs was flawed. The National Medicaid Audit Program 

States suffered from inefficient communication between contractors 

and States that resulted in duplication of effort. Medi-Medi suffered from a lack of focus on Medicaid program integrity at the 

Federal level. CMS also did not always hold contractors accountVerDate Aug 31 2005 10:04 Sep 19, 2012 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 C:\DOCS\75794.TXT APRIL
23 

able from performing each of their tasks outlined in their statement of work. 

Our evaluations raise questions about the overall effectiveness of 

the National Medicaid Audit Program and Medi-Medi. We recognize that CMS has taken steps to improve these programs based 

on recommendations from the OIG, from GAO, and CMS’ own internal assessment. We recommend that CMS continue to evaluate 

the goals, the structure, and the operation of these programs to determine what aspects should be part of a national strategy to protect the Medicaid program. 

Further, we believe that more must be done to overcome the significant shortcomings in the Medicaid data. Without timely, complete, accurate, and standardized Medicaid data, it is impossible to 

effectively detect systemic vulnerabilities that span across States 

and into the Medicare program. 

Thank you again for the opportunity to present this work and to 

be a part of this discussion. The OIG shares your ongoing interest 

in program integrity, and I’d be happy to answer any questions 

that you might have on this topic. 

Thank you. 

Mr. PLATTS. Thank you, Ms. Maxwell. 

[Prepared statement of Ms. Maxwell follows:] 

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Mr. PLATTS. Ms. Yocum. 

STATEMENT OF CAROLYN YOCUM 

Ms. YOCUM. Chairman Platts, Ranking Member Towns, and 

members of the subcommittee, we are pleased to be here today. I’m 

pleased to be here today with my colleague, Kathleen King, as you 

discuss program integrity in Medicaid and Medicare. 

Our prior work has shown that CMS continues to face challenges 

with fiscal management of these programs which have some of the 

highest—largest estimated improper payments in the Federal Government. Both are on GAO’s high-risk list in part because of concerns over improper payments. 

Our remarks today are focused on CMS’ progress and important 

steps that remain to be taken from the perspective of four key 

strategies and recommendations that have been identified in GAO’s 

work: 

First, strengthening provider enrollment standards and procedures to help reduce the risk of enrolling entities intent on defrauding the programs. 

Second, improving prepayment controls to ensure that claims are 

paid correctly the first time. 

Thirdly, improving postpayment review and recovery of improper 

payments. 

And fourth, developing a robust process for tackling identified 

program vulnerabilities. 

With regard to Medicaid, since 2007 CMS has monitored States’ 

provider enrollment standards and procedures through comprehensive reviews of States. Within CMS’ most recent comprehensive reviews, we found 230 instances of noncompliance with Federal laws 

or regulations related to States’ provider enrollment standards and 

procedures. 

CMS continues to develop better controls to detect improper 

claims before they are paid. In this area, the agency has identified—has initiated discussions with and provided guidance to 

States in anticipation of new analytic tools that can identify potential vulnerabilities before rather than after Medicaid claims are 

paid. 

Regarding postpayment claims review, the importance of coordination with States has grown because of the increased number of 

entities conducting audits, including implementation of recovery 

audit contractors, or RACs. CMS’ shift to collaborative audits with 

States should help avoid duplication of Federal and State audit efforts. 

That said, CMS has not established a robust process for incorporating RAC identified vulnerabilities in State corrective action 

plans. CMS requires State Medicaid agencies to have a corrective 

action process as part of their activities to reduce their Medicaid 

error rates. And information from the Medicaid RAC program could 

be incorporated into these processes. 

For Medicare, the Patient Protection and Affordable Care Act authorized CMS to implement several actions to strengthen provider 

enrollment. Some of these actions, such as developing a final rule 

on screening providers and suppliers, have been completed. But 

36 

other actions, such as implementing relevant statutory provisions 

and some of our prior recommendations, remain incomplete. 

Our prior work found certain gaps in Medicare’s prepayment controls, and we made recommendations for improvements, such as 

adding controls to identify unusually rapid increases in medical 

equipment billing. We are currently evaluating CMS’ efforts in this 

area. 

CMS has also taken steps to improve its postpayment reviews 

and recovery efforts. In March 2009, the agency began the National 

RAC Program for Medicare fee for service. As of May 2012, the 

agency reported that just under $2 billion was recouped due to 

these contractors’ efforts. While CMS has implemented a RAC for 

its prescription drug program, it has not done so for its Medicare 

managed care plan. 

Lastly, our March 2010 report on CMS’ RAC demonstration program found that CMS had not established an adequate process to 

ensure prompt resolution of identified vulnerabilities. We’ve recommended that CMS do so, and we are currently evaluating the 

steps the agency has taken to develop such a process. 

While CMS has made efforts to improve program integrity, further action is needed. We believe that many of the lessons learned 

from our work on Medicare could be applied to strengthen the Medicaid program as CMS and the States begin to use the additional 

tools provided through recent legislation. 

Effectively implementing provisions of recent laws and our recommendations will be critical to reducing improper payments and 

ensuring that Federal funds are used for their intended purpose. 

Mr. Chairman, this concludes our prepared remarks. We would 

be happy to answer any questions you or other members of the subcommittee may have. 

Mr. PLATTS. Thank you, Ms. Yocum. 

[Prepared statement of Ms. Yocum follows:] 

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Mr. PLATTS. And Ms. King, I understand that Ms. Yocum was 

speaking for both of you. 

Ms. KING. She is. 

Mr. PLATTS. Okay. Thank you. 

I will now yield myself 5 minutes for the purpose of questions. 

Again, thank each of you for your testimony and your insights 

and look forward to not just today with this hearing, but in going 

forward to continue working with each of you and your respective 

offices as we collectively try to do right by the American people and 

how their dollars are used. 

Dr. Budetti, I would like to start with you. In your written testimony here today, you talk about kind of the traditional approach 

and then as you highlighted, a new approach, and your written testimony certainly focused extensively on new efforts, the fraud prevention services, the automated provider screening process. 

And the way I looked at your written testimony’s kind of view, 

you have mentioned the more traditional and National Medicaid 

Audit Program, the Medi-Medi program, but you really didn’t go 

into a lot of detail on that. 

Should I take from that that there is some maybe acknowledgment or understanding that the findings of the Inspector General 

of GAO of the previous programs or the older programs focused on 

program integrity have not been as effective as we would like and 

that you are devoting more focus and resources on a new approach 

to the FPS and the APS? 

Dr. BUDETTI. The short answer is yes, at least to the acknowledgment of the problems. You may not be surprised to know that I 

find very little to disagree with in much of what—what you’ve 

heard by way of testimony by the GAO and the Office of Inspector 

General. 

The current leadership, I’ll just focus on the Medicaid integrity 

programs, National Audit Program for a second, because I think 

that is where some of the most difficult problems have been identified. 

The current leadership of that program took over in late 2009 

and the program came into the Center for Program Integrity in 

early 2010. It was during that year that we identified internally 

that we were getting the wrong kinds of results—very limited, very 

limited results from the way that we were going about doing the 

national audits, and we both embarked on a way—a program to develop a new approach and also to cut off the old approach. 

So the life history of the audits that were initiated under—being 

based on the inadequate data that you’ve heard described, they 

started in September of 2008 before we took over the program; and 

the last one, my information is, went out in February of 2011. During that time—so we have not sent one out since then, that’s my 

understanding. And since then, we have been building a new approach which involves working more directly and more collaboratively with the States because the States do have—although they 

have it in very different systems in some cases and it’s not completely easy to get access to—the States do have, of course, much 

more complete information than we’ve been getting at the Federal 

level. 

70 

So we’ve engaged with them in thus far, I understand, 137 collaborative audits. Those are taking place in States that represent 

about 53 percent of all Medicaid expenditures, and we are looking 

to expand that substantially over the coming year. 

So we do acknowledge that there have been problems with the 

National Audit Program, and we initiated corrective action early 

on, and we are very much dedicated to improving that program. 

Mr. PLATTS. Specifically on the approach, on the traditional approach and acknowledgment of the problems there, one that came 

out in the Inspector General’s testimony and the written testimony, 

was the example between the— disparity between the review integrity contractors and the audit integrity contractors. And one example highlighted in that testimony was that the review contractors 

identified 113,000 providers with potential overpayments of $282 

million, and then when the audit contractors went in and got into 

that information, there was only 25 of these 113,000 were determined to have been given overpayments, and only $285,000 actually found to have been inappropriate versus the $282 million. That 

is quite a disparity and shows a significant problem with that approach. 

Dr. BUDETTI. That’s exactly right. Those are the kinds of numbers that caused us to stop that approach and that has caused us 

to look to a new way of doing business. 

One of the things that kept that going was that when the review 

contractors looked at the inadequate data, they made projections 

that looked very promising, and it wasn’t until we found out that 

they in fact did not return any results when we went out and conducted the actual audits, that we decided that this was so problematic that we would stop that and we would have a new approach. 

In the meantime, the Federal Government, as you’ve heard, does 

not have yet all of the data that are necessary for us to do the audits ourselves, and so we believe that for now the best way to go 

about this is to build up the collaborative audits, working closely 

with the States who do have the proper data. 

Mr. PLATTS. A quick follow-up before I yield to the ranking member. 

On that, so today are we still paying any review audit contractors going forward, or the audit integrity contractors under the old 

system? 

Dr. BUDETTI. So we have existing contracts. We have some audits 

that are out there that have yet to be completed, and we are at this 

very moment, we are looking at the restructuring of our entire 

audit program so that we can use those resources in a much more 

effective way, and that also will tie in, if I have time later, I can 

talk about how that—we’re exploring how that will tie into the use 

of our Medi-Medi resources as well. 

Mr. PLATTS. That is a concern of those existing contracts and 

what we are paying out still, when clearly the results versus a collaborative approach and the new systems is night and day. 

Dr. BUDETTI. We’re directing them to new tasks that are still 

within the scope of their existing contracts, and we’re exploring the 

way of—and we’re exploring how to completely restructure our approach. 

Mr. PLATTS. Okay. Thank you. 

71 

I now yield to gentleman from New York for the purpose of questions. 

Mr. TOWNS. Thank you very much, Mr. Chairman. 

Let me just begin by saying I am impressed that there is collaboration with CMS with the Inspector General’s Office and the Department of Justice in law enforcement in recent years, which I understand has resulted in more than 600 criminals being successfully prosecuted for fraud against Medicaid and Medicare, and 

more than 500 of whom were serving prison sentences of over 42 

months. 

How many would that—I am trying to get the conviction rate. 

Would anybody know in terms of that number how many actual indictments? 

Ms. KING. Sir, that is work that we are currently conducting, and 

we’ll have the answer to that later this year. 

Mr. TOWNS. Okay. Well, we would like to get the information. 

Ms. KING. Both on the civil and the criminal front. 

Mr. TOWNS. The reason I raise that is because the Inspector Gen- eral indicated that there was a situation where you spent $250,000 

to collect $2,000. You know, I just think we need to look at every 

area to make certain that there is not waste, fraud, and abuse. 

Let me ask, do you think the fact that these systems do not talk 

to each other? I mean, what is the problem? And as the chairman 

had mentioned earlier on, this is not one of those committees where 

we ‘‘got you.’’ We want to help. We recognize how important it is 

today more than ever that we save money and make certain that 

it is being used and used properly. So we want to be helpful. 

But is it the fact that you do not have the money to put the system in place to be able to get the information that is necessary to 

be able to adjust? And let me say why I raise this question. 

I was in bed one night, and at 1:30 in the morning I get a call 

from American Express; said to me that somebody was making a 

big purchase in the bar on my credit card, you know, and they said 

they hated to bother me so, but the point was that this was so unusual, I guess because my bar bill is like $5 I guess, I don’t know. 

But I am not sure as to why it was so unusual. But anyway, the 

point was that they reached out to me to make certain that there 

was no fraud. I mean, they wanted to make certain that they took 

care of it right away. I mean, why can’t we look and find a technique, a method to be able to do the same thing? 

Dr. Budetti? 

Dr. BUDETTI. Mr. Towns, I’m happy to report that under our new 

fraud prevention system, since as of the end of April, our investigators have conducted 1,541 interviews with beneficiaries that really 

are parallel to the call that you got, unfortunately, in the middle 

of the night from American Express, where we check to see whether or not beneficiaries can confirm that they have received the services that they may or may not have received. So that’s very much 

built into part of what we’re doing now. 

Mr. TOWNS. How long has that been in place? 

Dr. BUDETTI. This system went into place the end of June of last 

year. And so as of April of this year, we have counted 1,541 such 

interviews. 

Mr. TOWNS. Okay. 

72 

Dr. BUDETTI. On the broader question of resources, we’re very 

grateful to the Congress for the resources that have been provided. 

As you may know, the President has also asked for some additional 

resources in this area. I think that at the Federal level, we have 

had very good access to the kinds of data that we need and it is 

a question of putting the systems in place to deal with the information that we generate properly. I think a lot of States would tell 

you that they do face some resource constraints, notwithstanding 

that a lot of their expenditures would be covered by the Federal 

Government. So there are some ongoing discussions with States 

about that as well. 

Mr. TOWNS. I really, I think my question is, is it the fact that 

you do not have the kind of resources that would make it possible 

for you to put a plan in place that will help you to be able to evaluate and to see in terms of what is really going on? You know, I sort 

of get the feel that the technology in the system is not in place to 

do that. And I know it takes some money to do that, and sometimes I think that instead of putting the money in, you know, we 

just sort of try and make do and then we end up spending more 

by trying to make do. 

Dr. BUDETTI. We’re very pleased that under the Small Business 

Jobs Act of 2010 and also under the additional funding that was 

provided in the Affordable Care Act, that we have very substantial 

resources. The Small Business Jobs Act is what specifically called 

on us to go ahead with what we were intending to do, which is to 

put into place the advanced technologies that I was talking about, 

the fraud prevention system, and that is in place and it has been 

up and running now since the end of June of last year. 

So we believe on the Medicare side, we have the technology, we 

have the systems in place. They’re going to grow and continue to 

grow and become more and more sophisticated over time. So I 

think that on that side, I think—I think we’re in good shape. I do 

think we face the challenge that we’re facing up to of translating 

that advancement on the Medicaid side. 

Mr. TOWNS. I see my time has expired. 

Mr. PLATTS. I thank the gentleman. 

I now yield to the gentleman from Oklahoma, Mr. Lankford. 

Mr. LANKFORD. Thank you, Mr. Chairman. And I would say to 

the ranking member, I am very pleased to hear that the pastor— 

it is rare for him to be in a bar late in the evening, so much so 

that American Express calls him and says it is a rare event. So 

glad to be able to hear that. 

Let me bounce a couple of questions off of you as well, and I have 

some real concerns on the RAC audit process. If there is any one 

thing that I hear from hospitals, providers, and folks the most, it 

is the full-body cavity search that has become the RAC audit process. 

I have several concerns. One begins just with the process of it. 

As a Federal Government, we are designed to serve the people, 

rather than them serve us. And the RAC audit process seems to 

have put the whole process on its head, that they exist there to 

serve us, and we are going to stay long enough until we find some 

fraud. 

73 

The contingency fee process part of it, my fear is it’s turning this 

into a bounty hunter process, that we have outside contractors that 

are coming in and they’re going to stay until they get paid, until 

they find something there. 

That moves the system significantly towards we are going to find 

more fraud, but it also moves the system significantly towards a 

hostile, not helpful, environment in that. 

Saying all of that, that is where we are, I feel. I don’t know if 

anyone disagrees with me on that. I have yet to find anyone that 

disagrees with that. And I have had multiple conversations with 

that sense, if you have got a disagreement, I would like to hear 

about it. 

But I also would like to hear how are we preparing people for 

these RAC audits and what process is occurring currently so when 

people arrive, it is an environment where we evaluate, as we 

should, we should hold people to account. But this should not be 

a hostile event. 

Ms. KING. Representative Lankford, as you may know, the RAC 

program started with a demonstration. 

Mr. LANKFORD. Right. 

Ms. KING. And we evaluated that demonstration, and we did find 

a number of areas for concern. And there were some missteps on 

the part of CMS in terms of the issues that were explored there 

and, you know, perhaps overaggressiveness. 

And I think that CMS, in implementing the national program, 

took a lot of those concerns into account, and they devised a system 

at CMS where all of their central players in the operation would 

get together and agree on what kinds of situations the RACs could 

look into, rather than having them just go out on their own. So in 

the national program, I think that part has been smoother. 

Mr. LANKFORD. Still paying people a contingency based on what 

they find? 

Ms. KING. That’s the way the program was set up. 

Mr. LANKFORD. The way it is set up. 

Ms. KING. To pay on—to pay on contingency. 

But, you know, one more thing I might add about that is the 

RAC program is designed to identify overpayments and underpayments, and it is not specifically designed to look for fraud. It’s really looking at cases in which the agency has paid too much or too 

little. 

Mr. LANKFORD. Right. But a lot of the underpayment, I mean, 

what do we have, a 4 percent national rate for underpayment? 

Ms. KING. The vast majority are overpaid. 

Mr. LANKFORD. Yeah. They are really going in looking for overpayments, obviously, on that. And it becomes an issue of what is 

an overpayment and how complex this is. 

My assumption is it is typically we overpaid you because we 

shouldn’t have paid you at all for this, because we disagree. You 

shouldn’t have had them in the hospital 2 nights, or we disagree 

this shouldn’t have been an overnight stay at all, or this procedure 

or this coding. 

So agree or disagree on that? 

Ms. KING. I agree, but they are following Medicare policy when 

they’re doing the audits. 

74 

Mr. LANKFORD. When the hospital responds back to it, when 

there has been a denial, my understanding is there is about a 75 

percent rate of turning that over. Am I correct or incorrect? 

Ms. KING. When we did our work, we didn’t have the information 

about what the overturn rate is. 

Mr. LANKFORD. The appeal rate seems to be extremely high when 

we are looking for fraud, and we are fighting back and forth on 

whether this should have been through the process or not, whether 

it should have been a 1-night or 2-night or overnight at all, or 

whatever it may be. And then they appeal it and have a 75 percent 

appeal success rate. That tells me there is still an issue. There is 

still a problem hovering out there somewhere that we have got to 

be able to resolve, because we are creating a hostile environment 

with providers. 

This is someone we should be serving. We should hold people to 

account, but we should also be serving them rather than creating 

an environment where they are spending tens of thousands to hundreds of thousands of dollars defending something that was valid. 

Ms. KING. You know, we haven’t looked at the implementation 

of the national program, so I really don’t know there whether the 

appeal rate has gone down. And we did not have access to the appeal data during the course of our work. So you’re raising valid 

concerns, but I don’t know the answer. 

Mr. LANKFORD. Mr. Budetti, you were going to say something. 

Dr. BUDETTI. Yes, I would. I would just add a couple of things 

to that. One, I would echo what Ms. King said, but I would also 

add that CMS is listening to those kinds of concerns that you’ve 

identified. We’ve certainly heard them as well. We have put into 

place a demonstration project in order to work with hospitals when 

there is a question as to whether or not the patient should have 

been an in-patient or an out-patient, instead of a demonstration 

where hospitals can rebuild, if that is the determination, so that 

they don’t lose the entire payment, as they have under standard 

operating procedures that have been in place. 

We are also very much looking at all of those concerns, and 

they’re a matter of a great deal of internal discussion in the agency 

at this time. 

Mr. LANKFORD. I would encourage you to keep it as a matter of 

a great deal of internal discussion so we can try to evaluate it, because this obviously is an issue. I know this is a project you are 

trying to launch on it, but we have got to be able to resolve this. 

With that, I yield back. Thank you. 

Mr. PLATTS. I thank the gentleman. I now yield to gentlelady 

from Minnesota, Mrs. Bachmann. 

Mrs. BACHMANN. Thank you again, Mr. Chair, and also Ranking 

Member Towns. 

One area to look for fraud is with the Medicaid providers and 

others with the Medicaid—or the managed-care organizations. 

And this would be a question for Dr. Budetti, if you will. And 

just briefly based on the concerns that the managed-care organizations are using Medicaid premium dollars to cross-subsidize other 

non-Medicaid State health plans, could you tell the committee what 

data you are gathering to combat these allegations, if any? 

75 

Dr. BUDETTI. Congresswoman, I think that you’re aware that in 

your State, Minnesota, that after discussions with CMS that have 

been ongoing recently, that Minnesota has recently agreed to repay 

to CMS the appropriate Federal share of the amount of money that 

was contested. And we’re currently reviewing the State’s submission on that matter and have every intention of collecting the appropriate Federal share. 

We are also—— 

Mrs. BACHMANN. But if I could ask, Dr. Budetti, how are they 

coming to the conclusion of what number? Because my question is 

about what data are you gathering so that we can be confident that 

States aren’t taking Medicaid dollars and then using them for a 

cross-purpose to subsidize a non-Medicaid, non-Federal Medicaid 

State health plan. What specific data are you asking the States for, 

so we can be assured this isn’t going on? 

Dr. BUDETTI. I think that that question is very well taken. I 

think that we need to continue to build our capacity to collect the 

appropriate data on managed-care operations. 

Mrs. BACHMANN. So we aren’t collecting any data to that effect 

today? 

Dr. BUDETTI. The emphasis has been on the fee-for-service side, 

I agree with you on that. 

Mrs. BACHMANN. So we need to do better, it sounds like. 

Dr. BUDETTI. We do need to do a better job in terms of getting 

that degree of oversight, and we are engaging in doing that. 

Mrs. BACHMANN. Thank you. I agree. I think that shows a big 

hole that we have, because we are not even asking the right questions. I think that goes to Ranking Member Towns. The right question was asked of him at 1:30 in the morning. That is what we 

need to be doing, asking the right question. And clearly we are not. 

Let me ask you also, Dr. Budetti, since 2006, CMS has now spent 

over a hundred million dollars developing the one program integrity system to merge Medicare and Medicaid data, and the Medicare data has been collected, but to date the Medicaid data has not 

been included. Now, this is significant. It has been 6 years. 

Why is that, that the Medicaid data is not included, and what 

role should the States play in—or are they, perhaps, in delaying 

the collection of this data and are States withholding information 

from CMS? 

Dr. BUDETTI. We certainly recognize that the data that we have 

been getting from the States are not adequate, and that’s been at 

the core of our restructuring of the National Audit Program. We’ve 

been working very diligently over the last couple of years to improve that situation and to get the right kind of data. 

There’s a demonstration project going on with 10 States that’s 

designed to look at the data that we’re currently collecting, to identify the data that we do need to do proper oversight, and as well 

as a number of other program operation requirements at the Federal level, and then to get those data from those 10 States and to 

use that as a model for improving the flow of data from the States. 

Mrs. BACHMANN. I would agree, but that doesn’t answer my 

question why for 6 years we have Medicaid—Medicare data, but we 

don’t have Medicaid. 

Dr. BUDETTI. Yes. 

76 

Mrs. BACHMANN. There is just an absence. So the question is, is 

the State holding out on us? Are they not getting the data? Are we 

not holding them accountable? 

So if you could get back to the committee and answer that question. I just have one question—— 

Dr. BUDETTI. Sure. 

Mrs. BACHMANN. —for Ms. Yocum, if you could answer that also 

in the brief time I have. 

The GAO lists Medicaid as a high-risk program, and GAO has 

previously issued reports that addresses CMS’ lack of oversight 

into Medicaid managed-care rates. So given that we have threefourths of Medicaid beneficiaries enrolled in some form of managed 

care, could you speak to the data that is used by GAO and CMS 

to address this aspect of Medicaid? 

Ms. YOCUM. Certainly. Right now, one of the big issues across 

the Medicaid program are the different data systems and the extent to which they actually talk to each other. There are two different ways that managed-care data may be collected. One is 

through its expenditure system. The second is through a separate 

accounting system that looks at the managed-care reporting itself. 

Our work that we looked at on an actuarial soundness in Medicaid managed care, we ended up going back to State plans and to 

States’ contracts with managed-care plans in order to understand 

CMS’ review and oversight in that area. 

Mrs. BACHMANN. Mr. Chairman, I thank you for indulging me to 

be with the committee. It seems to me that there is a real problem 

in that we aren’t asking the right questions. And I think we would 

be a lot farther down the road if we asked the right questions. That 

is the purpose of my legislation that I will be introducing shortly. 

But I thank the committee so much for graciously allowing me to 

be here today, and I thank Dr. Budetti for getting the answers to 

the committee to the question that I asked. 

Mr. PLATTS. I thank the gentlelady. 

And Dr. Budetti, if you would follow up in writing to the committee for the record in response to Representative Bachmann’s 

questions. 

And I think the focus that you have touched on here, and the 

ranking member and I were speaking about, it is so important that 

unless we have that data, we really won’t be able to get to the root 

causes. And, you know, when I talk about internal controls, ultimately our goal is to get to the root causes of the improper payments, the fraud, the misuse of funds, but without the data, it is 

hard to know exactly where that is. So that focus, especially on the 

Medicaid side, is going to be so important to ultimately reducing 

the improper payment numbers for both Medicaid and Medicare. 

I thank the gentlelady for participating. 

I now yield to gentleman from Virginia, Mr. Connolly, for 5 minutes. 

Mr. CONNOLLY. I thank the chair. 

And I might ask my colleague who has joined us, and welcome 

her to the subcommittee—she indicated that we are not asking the 

right questions. Because I’m late, if you would indulge me, what 

pray tell is the right question? 

77 

Mrs. BACHMANN. I think the question is we want to have an 

independent third-party audit of where the payments are going. We 

today—— 

Mr. CONNOLLY. You mean the improper payments? 

Mrs. BACHMANN. Thank you. That is a better way to phrase it, 

and I thank you for that correction for the gentleman. 

We have not conducted for decades independent third-party audits of the States. We aren’t asking the meaningful data. In our 

State of Minnesota, for instance, a bill has been presented from 

managed-care organizations to our State of Minnesota. The State 

pays it. It is almost like if you went to the grocery store and you 

had maybe what you thought was $35 worth of groceries in your 

grocery cart, and then the cashier said, Please give me $300. And 

you said, Well, let me see the grocery tape so I know what I’m paying for. And the cashier says, No, I’m not going to give you the grocery tape. Give me $300. 

We at the Federal Government aren’t demanding the itemized 

statement of what the managed-care organizations are charging 

the States, and then the States are passing that bill on to the Federal Government—— 

Mr. CONNOLLY. I thank my colleague. 

Mrs. BACHMANN.—and we are just paying it. So thank you. 

Mr. CONNOLLY. Thank you very much. I appreciate it. 

Dr. Budetti, maybe start with you. What is your response to our 

colleague’s concern certainly with her home State of Minnesota, 

and I am sure other States as well, this idea that I am paying 

$300, and I can’t get the itemized bill to justify why I am paying 

$300, for example, at the grocery store. Is that applicable? 

Dr. BUDETTI. We have acknowledged that the existing data that 

are reported by the States in this area to the Federal Government 

have proved to be inadequate for conducting Federal audits. I 

would point out that there’s two ways to think about this. One is 

the Federal Government gets the data and does the audits or has 

people do the audits. The other is the Federal Government works 

with the States to make sure that the right data are available and 

works collaboratively with the States to do the audits. 

The first model we’re not—has not proved to be workable with 

the data sets that the Federal Government has been getting. We’re 

working to improve those data sets. We’re not abandoning that approach. We’re working very hard to improve them. 

But in the meantime, we know the States do have the data, and 

so we are embarking on a new approach with collaborative audits 

so that we will use our resources, with the States, to audit the data 

that are in the States. So we’re approaching it from both sides. We 

don’t want to wait until some future date when the Federal Government has perfect data from the States. We need to keep an eye 

on things right now, and that’s what we’re doing with the States. 

Mr. CONNOLLY. Could I ask, given Medicare—we are talking 

about Medicare? 

Dr. BUDETTI. So for Medicare, of course—— 

Mr. CONNOLLY. No, no. Wait. 

Dr. BUDETTI. For Medicaid we don’t have the data. The States 

do. 

Mr. CONNOLLY. But Medicaid is not a new program. 

78 

Dr. BUDETTI. No, sir. 

Mr. CONNOLLY. And obviously the problem did not occur only on 

this administration’s watch. Why is it taking us so long to sort of 

figure this out and try to figure out systems to put in place to correct this defect? 

Dr. BUDETTI. My understanding is that the current data set 

that’s collected was designed for the use of the program. It was 

being used in other ways, and it has not proved to be adequate for 

the way that we need to use it now. I’m not an expert on the history of Medicaid’s statistical information system, however. But I’d 

be happy to get you some background. 

Mr. CONNOLLY. I think the subcommittee would appreciate it on 

both sides of the aisle. 

Let me ask you this. I am under the impression that U.S. attorneys offices are focusing increasingly on Medicare fraud and recovering sizable amounts of money from fraud from vendors, medical 

practitioners, and the like. Is that a fair characterization of sort of 

this administration’s decision to crack down on that fraud and trying to recover as much as possible? 

Ms. Maxwell, did you want to comment on that? It looked like 

you were getting ready to comment. 

All right. Dr. Budetti. 

Dr. BUDETTI. I would be happy to yield to Ms. Maxwell. Sir, 

there are fraudsters who stay in business after we catch them, and 

they have assets that we can go after and recover. And in that 

case, as you know, there have been substantial recoveries in recent 

years. The most recent year was over $4 billion that was returned 

from a variety of different approaches. 

Then there are fraudsters who, of course, disappear as soon as 

we identify what they are doing. They have no assets for us to go 

after. We still want to catch them. We still want to throw them in 

jail if we can. But that is why we need to build—that is why we 

are building our system that is designed to prevent fraud from occurring in the first place, because many of those fraudsters we will 

never recover anything from. 

Mr. CONNOLLY. Right. Mr. Chairman, I know my time is up. And 

all of us on the subcommittee have been very focused on improper 

payments under your leadership. But fraud is an important subset, 

obviously, and making sure we have the focus of the Federal Government and the resources. And I must say I am impressed that 

the Obama administration has taken it very seriously. And I think 

the 99 U.S. attorneys offices are important allies in this particular 

component. So the more information I think we could get on that 

would be appreciated. I thank the chair. 

Mr. PLATTS. I thank the gentleman. We will proceed with a second round of questions, and I yield myself 5 minutes for that purpose. 

Dr. Budetti, you talk a lot in testimony, written and oral here 

today, about the automated provider screening process. And in your 

written testimony you give a number of examples of how it is helping to, you know, screen out either new applicants, new provider 

applicants that are illegitimate, inappropriate, as well as going 

back, and with a goal by 2015, to review all existing 1.5 million 

Medicare suppliers and providers. When I look at the numbers, and 

79 

I have tried to on page 6 of your testimony combine them, you talk 

about an initial review that kind of knocked out 13,000 deactivations of providers. And then you talk about an additional round, a 

second round that knocked out approximately another 10,000, 

11,000. If I total those up, I come up to about 23,000, 24,000 providers in the review of existing—that 1.5 million. And, again, from 

your testimony apparently there has been about 275,000 existing 

providers, suppliers, who have been rescreened. 

And so if my numbers add up correctly, we are talking 8 to 10 

percent of existing providers and suppliers, that when we went 

back and looked at them, we knocked out for some reason as not 

appropriate and were eligible for taxpayer funds. If that number, 

8 to 10 percent, is accurate, we are talking 120,000, 130,000 or 

more providers, if you translate that over 1.5 million. I mean that 

is obviously very disconcerting. Am I looking at that accurately, 

that that is perhaps the scale of the problem we are facing? 

Dr. BUDETTI. So even one would be disconcerting as far as I am 

concerned, Mr. Platts. So I would share your concern. I will tell you 

that we started out with identifying the highest-risk providers. So 

our initial efforts were focused on people that we considered to be 

the highest risk. And those included people that we had reason to 

believe were not licensed to practice in the States in which they 

were eligible for Medicare, or they were not in the national database, they were only in the local systems. There were a number of 

criteria that we used to identify them. 

So we started out by running all 800,000 physicians who were in 

the national database through the automated provider screening 

system to identify the ones who did not appear to be licensed in 

the place in which they were allowed—in which they had Medicare 

billing privileges. And so we examined those. And those represented a fair number of the ones—— 

Mr. PLATTS. Of that 800,000, about how many of the 800,000 

came back as not being licensed? 

Dr. BUDETTI. It was a fairly significant—I don’t have it in front 

of me, but I would be happy to get it to you. 

We then proceeded to run all 1.5 million providers and suppliers 

through the automated provider screening system to establish a 

baseline for future analysis, because we are doing several things. 

Not only are we in the process of revalidating all 1.5 million providers and suppliers, but we are also in the automated provider 

screening system putting into place an alert system. And the alert 

system will tell us between times, not just at enrollment, not just 

at revalidation, but if somebody dies, if somebody is convicted of a 

felony that is relevant for our concerns, if somebody loses their license, we will get pop-up alerts to that effect so that we can take 

action without waiting for the revalidation period. This is all new. 

Most of what was done in the past was being done manually, and 

was substantially less efficient, I would say. So now at the same 

time that we are enrolling our new applicants, because we do get 

approximately 20,000 new applicants per month to be providers 

and suppliers of Medicare and Medicaid—in Medicare, we are also 

engaged in the revalidation process that has gone on, as you said. 

So the numbers may be a little different when we have finished 

with everybody because we started with the highest-risk weight. 

80 

Mr. PLATTS. So that 8 to 10 percent probably is high because you 

were specifically targeting the high risk. 

Dr. BUDETTI. Yes. 

Mr. PLATTS. But as you say, even if it is 1 percent, 15,000, it is 

still a huge—— 

Dr. BUDETTI. We should do something about it. Know about it 

and do something about it. 

Mr. PLATTS. Yeah. That use of technology in the screening and 

the rescreening and those flags that go up that if there is a 

delicensing I think is critical to ultimately getting to where we 

want to be. 

Ms. Maxwell, in your testimony you talk about States that have 

participated with CMS on Medicaid not very effectively, and you 

reference two States that have withdrawn, and one in particular 

that in participating in the partnership had only recovered a minimal amount, a couple thousand dollars, but when they withdrew 

they recovered about $28 million. Are you able to identify which 

State that was that withdrew and what did they do different, to 

the best of your knowledge, that was so much more effective? 

Ms. MAXWELL. I am able to identify that State. It is the State of Washington. And it is my understanding that the $28.9 million 

that they recovered was part of their ongoing State Medicaid program integrity efforts. 

Mr. PLATTS. Are you aware of what their efforts were that were 

so different that they succeeded significantly better than in the 

partnership with CMS? 

Ms. MAXWELL. No, I am not aware of what they were doing that 

was different. 

Mr. PLATTS. Why I ask that is that seems like that is an example 

of a State that has a good State-based program in place that, perhaps with the Medicare Integrity Institute at CMS, that we would 

want to look at to try to share that approach with other States— 

maybe will match up, maybe not, depending upon the comparison 

of States—but that we learn from those best practices out there 

and get that information shared. 

So Dr. Budetti, are you familiar with what the Washington State 

had done and whether that has been looked at to replicate elsewhere? 

Dr. BUDETTI. I can’t speak exact precisely to that, but I can tell 

you that we have put into place a system of identifying best practices and sharing that among all of the States. We have an active 

process for doing that, as well as bringing people together. We have 

now passed the 3,000 State employees who have been trained down 

at the Medicaid Integrity Institute. And one of the activities that 

goes on certainly is networking and sharing of best practices. If you 

would like a little more information on the Washington program, 

I would be happy to get it for you. But I do know that we do certainly work our program integrity. Our Medicaid program integrity 

activities certainly have been very supportive for all the States, including Washington. 

Mr. PLATTS. If there is any information that you have available 

regarding Washington State and perhaps what they did different 

that seemed to be much more effective than what had been done 

in that partnership, that would be great. 

81 

I see my time has well expired. So I yield to the ranking member 

for questions. 

Mr. TOWNS. Thank you very much, Mr. Chairman. Let me begin 

with you, Ms. Maxwell. Does OIG use any cutting-edge technology 

tools of its own to help fight fraud? 

Ms. MAXWELL. Yes. The Office of Inspector General has increasingly used a data-driven approach. We have developed our own 

data warehouse that allows for the collection of data across the 

Medicare programs, and we mine that. In particular, we have used 

that approach in our strike force efforts. Since 2009, HHS and DOJ 

have created rapid response investigative teams in nine cities 

around the country, and those cities are targeted through the use 

of data. 

Mr. TOWNS. Could you comment on the effective tools that CMS 

is using in terms of tools they have in place and they are using, 

and the new ones that have been implemented? Could you comment on that? 

Ms. MAXWELL. The study that I am prepared to speak on focused 

primarily on Medicaid program integrity. And the tools I believe 

you are referencing are on the Medicare side, so I don’t have any 

comment on those. 

Mr. TOWNS. All right. Let me ask you, Ms. Yocom or Mrs. King, 

is it necessary to have so many categories of contractors? Can’t we 

consolidate some of the roles and still reach our objective? 

Ms. KING. I think on the Medicare side, since its inception Medicare has largely been run by contractors. There has been some significant consolidation on the Medicare side. It used to be that there 

were organizations called carriers and intermediaries that processed Medicare fee-for-service claims. They have been consolidated 

into the Medicare administrative contractors. And now there are 

many fewer of them. And also the program safeguard contractors 

have been consolidated up to the same level as the Medicare administrative contractors. 

That said, there are still different types of contractors that have 

specific functions. But you know, I don’t know that that is—it is 

not something that we have looked at, but I don’t know on its face 

that that would be inappropriate. 

Ms. YOCOM. Sir, on the Medicaid side, GAO does have some ongoing work that is looking at some of the contractors that are participating in the Medicaid integrity group. And that will be out this 

summer. 

Mr. TOWNS. All right. Let me ask this. When you make recommendations, do they follow it? 

Ms. KING. Largely. That is something that we keep track of. And 

we go back once a year and we look at that. And I think that our 

track record is many more recommendations are adopted than not, 

of those that the agency agrees with. 

Ms. YOCOM. Overall, it is about 80 percent of our recommendations get acted on by the agencies that we review. 

Mr. TOWNS. Are the ones that they do not adopt, are they saying 

that it is a lack of resources? 

Ms. YOCOM. I think it would be hard to describe at a global level 

what the reasons are. Sometimes it may be resources, sometimes 

82 

it may also just be that they disagree and they don’t believe it is 

a high enough priority. 

Ms. KING. Sometimes I think it is conflicting priorities. The agency has a lot of work to do, and we make recommendations, and 

they are in agreement with them, but they have higher priorities 

that bump them. 

Mr. TOWNS. Right. Let me conclude, Ms. Maxwell, with you. How 

widespread is the problem of lack of oversight of contractors? And 

what is the ultimate effect on program integrity? 

Ms. MAXWELL. Speaking with respect to the Medicaid program 

that our reports touch upon, we did find instances of lack of contract oversight by CMS, as I had mentioned. The contractor was 

not held accountable to all the tasks in its statement of work. On 

the Medi-Medi side, the annual assessment of the Medicaid—the 

Medicare program integrity contractor that runs that program did 

not actually assess all of the variables in that task order. 

Mr. TOWNS. I see, Mr. Chairman, my time has expired, so I yield 

back. 

Mr. PLATTS. Okay. I thank the gentleman. Just a quick followup before I go to the gentleman from Oklahoma. On that failure 

to fulfill all the task orders, all the requirements, was there any 

consequences for not doing that that you are aware of? 

Ms. MAXWELL. No. What we were told is that at the time—which 

was early in the program—CMS did not expect for the contractors 

to fulfill these particular aspects of their statement of work. It is 

my understanding that they have changed, and they are now holding the contractors more accountable to all the tasks in their contract. 

Mr. PLATTS. Thank you. Yield to the gentleman from Oklahoma. 

Mr. LANKFORD. Thank you. Let me do a quick follow up statement, finish out talking about the RAC audits. I do have a statement from the AMA about the RAC audits I would like to be added 

into the record. 

Mr. PLATTS. Without objection, so ordered. 

Mr. LANKFORD. Questions and issues that they had as well. Is 

there a system in place—still with coding and billing, some of those 

things are automated. Obviously, when they go through an audit 

they can get a chance to look at those, and those will bounce up. 

When I do my taxes, I go through a program, at the end of it, it 

comes back and does a red flag for me on everything and says, 

okay, double-check and make sure this is contract. 

For providers, do they have any system like that so that before 

someone comes in and does a RAC audit, someone is checked and 

rechecked locally, this might come up as a question? This is not 

consistent with typical billing. Is there anything like that that is 

in place for the providers? 

Dr. BUDETTI. I do know that there are a number of reasons why 

claims are not accepted the first time around and providers get information back on the claims. But I really can’t speak to that, exactly that point in detail. 

Mr. LANKFORD. This is submitted online. It is submitted through 

a program, right? 

Dr. BUDETTI. Most of those are now, yes. 

83 

Mr. LANKFORD. Right. That is what I assume. So what I am asking, is there a way to be able to set that up so it is built so it 

checks it locally before they ever submit it, that there is a quick 

verification of that to say double-check this line was left out, this 

code seems to be inconsistent with this one? 

Ms. KING. That is not something that we have ever looked at. 

But my understanding is that the providers do use software billing 

programs that would enable them to check for those kinds of 

things. 

Mr. LANKFORD. Okay. But you are saying that is not something 

that—— 

Ms. KING. That we have looked at. 

Mr. LANKFORD. They purchase a separate one that actually attaches to a third-party software somewhere that does that? 

Ms. KING. Yes, sir. 

Mr. LANKFORD. Because obviously the goal of this is that it is 

right the first time, not that we are paying chasing, and not that 

we are trying to do a RAC audit to be able to come down on someone on that. 

Ms. YOCOM. Our statement does talk about CMS’s efforts on the 

Medicaid side in this area looking for prepayment edits. CMS has 

to date looked primarily just at the process for doing this, not necessarily at the content of the individual edits. They have identified 

some notable practices, some of which sort of stop the claim and 

identify what information is necessary. 

Ms. KING. And on the Medicare side, we are doing a significant 

amount of work on Medicare prepayment edits so that Medicare 

would not pay claims that are not in conformance with its policies 

or for providers who are not eligible. But I think that you were asking questions that, you know, on the provider side, what do they 

do so that by the time they submit a claim it is clean. 

Mr. LANKFORD. That is correct. The goal is that when it is submitted it is clean, it has been checked and rechecked, and then 

they have some confidence that this is going through on it. 

Ms. Maxwell, I am very concerned on the data matching, the 

Medi-Medi program, in your testimony that in previous years we 

spent $60 million on a program that recouped $57.8 million. That 

doesn’t seem like a real great investment in the process. The question is, is this a program that can be improved? Is this a program 

that needs to be terminated? Are there ideas that have been submitted to what to do with it at this point? 

Ms. MAXWELL. The core issue that I bring up in the testimony 

today is the fact that the program is supposed to be matching 

Medicare and Medicaid data, and yet it doesn’t have the Medicaid 

data to match. So it is perhaps not surprising that they are not 

finding as much as they would expect. And certainly they are finding very, very little on the Medicaid side for that reason as well. 

So to improve that program, as well as the MIC program that we 

talk about, really it goes back to the Medicaid data. We absolutely 

need national standardized Medicaid data to make these programs 

worthwhile. 

Mr. LANKFORD. Is there a reason that the Medicaid data can’t be 

standardized to the Medicare data as far as how it is drawn in 

84 

from a provider—obviously, most providers do both anyway—that 

those systems can’t be consistent? 

Dr. BUDETTI. Just to engage this a little bit, Mr. Lankford, the 

Medi-Medi program operates on a State-by-State basis, so that the 

contractors who are actually the Medicare investigative contractors 

work with the State. And as I said before when I was talking about 

expanding our collaborative audits, we believe that this is a framework that we can use for enhancing our ability to work with the 

individual States. We have some 15 States now, representing well 

over half of all Medicaid expenditures, that are in the Medi-Medi 

program. A couple of those State’s, or one in particular we believe, 

has recently shown that with appropriate use of the Medi-Medi approach, it can have very substantial returns. And so we believe 

that this is a way for us to build out part of our collaborative approach with the States because of being onsite with the States, 

working directly with them, and engaging them with both the 

Medicare and Medicaid data. 

Mr. LANKFORD. So what is an appropriate return? Obviously, you 

know, spending as much as you get back in is not an appropriate 

return. 

Dr. BUDETTI. No. The return that we are seeing in more recent 

times is much higher than that. I don’t have the numbers in front 

of me, but I would be delighted to share them with the committee, 

because we believe they are very positive. But we don’t—we think 

there is more to do. There is definitely still more to do. 

Mr. LANKFORD. Thank you. With that, I yield back. 

Mr. PLATTS. Thank the gentleman. I have just a couple final 

questions I want to try to get into the record, and then I apologize, 

I have got a markup going on down the hall in Ed & Workforce, 

and have amendments I need to get there to offer. But a quick follow-up on the Medi-Medi issue and the States’ compliance or provision of data. 

Ms. Maxwell, in your testimony you reference that while there is 

Medicare Part A, B, and D information in, when it comes to Medicaid, the projected time frame is another 3 years, 2015. 

And Dr. Budetti, would you agree with that projection? And if so, 

why another 3 years before—you know, that is 3 more years of lack 

of information to act on to prevent fraud and improper payments. 

Dr. BUDETTI. Our current target is 2014, not 2015, I believe, for 

the full—for getting the Medicaid data into the integrated data repository, which then is accessed through the One PI system. But 

I agree with you that we can’t just sit and wait for those data to 

be available. That is why we have our pilots underway, to identify 

the best way to do this, and to get States actively pursuing doing 

this, and why we are also engaging the States in a hands-on collaborative way so that we are not just dependent on the data that 

flow to us. 

Mr. PLATTS. Right. Is there a point where—and maybe you are 

already thinking of this or looking at this—where you look at the 

Medi-Medi system and IDR versus your FPS and your APS systems that you have now put in place and say Listen, we have just 

got to cut our losses and move onto what apparently appears to be 

more effective, as opposed to trying to fix what has been going on 

for years in these older systems? 

85 

Dr. BUDETTI. Thank you for raising that question, because that 

is actually a very important aspect of the fraud prevention system 

is that it involves streaming data, live data. It is as if you were, 

I don’t know, looking at all of the publications that were coming 

out every day and screening through them for certain problems. 

Whereas the IDR is more like the Library of Congress that has all 

of the reserve data in it, which is extremely important for a number of purposes, not just program integrity purposes, but a number 

of different activities in CMS depend upon and use the IDR. But 

the IDR is also the warehouse, the data warehouse upon which our 

models for the fraud prevention system are based. Because if you 

have 5 or 6 years’ worth of data, we can build very sophisticated 

models, and then we put them into place to catch the streaming 

data on the fraud prevention side. 

So the two go hand in hand. One is not replacing the other. In 

fact, they are very much a combined approach. And both are extremely relevant. And the IDR for many aspects is an extremely 

valuable tool that gets more important all the time. 

Mr. PLATTS. So if you get that State data in there on the Medicaid side, the IDR, all the more effective the traditional approach 

is going to be to allow that One PI system to better work. But also 

your new approach—— 

Dr. BUDETTI. Yes. 

Mr. PLATTS. —and developing those analytics to really say, you 

know, what is the pattern of fraud that we then try to put in those 

flags in going forward. 

Dr. BUDETTI. That is exactly right. They are intimately related. 

The one is kind of the cornerstone of the other. It also allows us 

to test the models ahead of time, before putting them into place, 

by looking at historical data. 

Mr. PLATTS. Great. I won’t be in this chair a year from now or 

2 years from now, where hopefully all of this is more fulfilled. 

Whether that is a colleague on my side of the aisle—I am biased 

that we stay in the majority—or Mr. Towns returns to the chair, 

as he and I have switched positions here a number of times—remains to be seen. But I am certain whether it is under the leadership of Chairman Issa and the full committee, or Mr. Towns on the 

Democratic side, the importance of these issues are going to continue to be looked at by this subcommittee, whoever is in this 

chair. And we certainly want to have success in going forward. 

A final question, and I have got probably 12 more I would like 

to ask but not the time to do so. And I am going to conclude with 

I am going to say two quick ones, and I will say quick. 

But first is Dr. Budetti, with getting that State data in, I mean 

the way I read it is there are regs and requirements in place that 

the States have not adequately complied with as far as providing 

the data that they are supposed to. Is that a fair statement? And 

if so, what, if any, consequences have been threatened to the States 

to help ensure compliance? Because we are giving them one heck 

of a lot of money. And if they don’t want to comply with what we 

think is necessary oversight and protection against fraud and misuse, you know, they need to understand that they can’t just continue on. 

86 

Dr. BUDETTI. So the States have been cooperating with the existing requests which constitutes the Medicaid Statistical Information 

System data. What we need to do now is to flesh out exactly what 

data elements and what formats and what periodicity, and so all 

the details of reporting data from the States that we need to put 

into the new data that we are going to be collecting from the 

States. And that is a work that is taking some time. The States 

have different data systems. They have different ways of handling 

the data. And so we need to build that out extensively. But we do 

anticipate that we will learn from the transformed Medicaid Statistical Information System project, and we will then be able to do 

that. 

Yes, Mr. Platts, under the Affordable Care Act we can hold the 

States accountable for doing that. We want to make sure that we 

are doing it in a way that is supportive for them and for us, and 

to get it done in a way that is not disruptive. 

Mr. PLATTS. Certainly the carrot versus the stick approach hopefully is effective. But the States, are they being made aware that 

yes, you will comply with this? We want to work hand in hand with 

you, but ultimately if you don’t, there is a stick available as well 

to ensure compliance in some form? 

Dr. BUDETTI. The Affordable Care Act spells that out quite nicely, yes. 

Mr. PLATTS. Final question to Ms. Yocom and Ms. King. You 

know, GAO over the years has made a lot of recommendations, 

some of which have been embraced, others that haven’t. If you had 

to highlight one or two of your recommendations that you would 

see as most important to ensuring program integrity and what you 

would estimate the effectiveness of those recommendations would 

be in reducing that $65 billion improper payments number, what 

would that one or two recommendations be? 

Ms. YOCOM. Well, on the Medicaid side some of our recommendations are yet to come, and will be forthcoming soon. I think the big 

areas where CMS needs to focus are on continuing to work with 

the States on the data, continuing to collaborate with States on 

program integrity issues. And the collaborative audits are a very 

promising approach. We do think that their refocused view is a 

good one. 

Mr. PLATTS. And certainly in the testimony, the collaborative approach has had much greater success than the prior efforts kind of 

going—— 

Ms. YOCOM. That is correct. Yeah. 

Mr. PLATTS. Yeah. Ms. King? 

Ms. KING. And on the Medicare side, I think that we believe that 

CMS has taken some very important steps in the last couple of 

years. Certainly the new provider enrollment screening measures, 

the implementation of the fraud prevention system, which we are 

currently evaluating. And we are also looking at prepayment edits. 

So we will have more to say about that later. But certainly we see 

a positive direction. 

Mr. PLATTS. Okay. Thank you. Mr. Towns? 

Mr. TOWNS. Let me begin by thanking you, Mr. Chairman, for 

saying that I might be in the chair. But I need to let you know I 

am retiring after 30 years. 

87 

Mr. PLATTS. Actually, Mr. Towns, I apologize. We are both going 

to be gone. So somebody will be in both of these chairs. 

Mr. TOWNS. I just want to make that clear. Thank you so much. 

But let me also ask, Mr. Chairman, that we hold the record open 

to get the information that we requested in reference to the indictment and conviction numbers. I would like to get that to see in 

terms of what the rate, you know, of conviction is versus indictment. 

And of course I wanted to say again, Mr. Chairman, that I really 

feel that we still have a lot of work to do. And I think that my 

question at this point in time would be what can we do on this side 

that might be helpful to you? You know, sometimes as legislators, 

we just point our finger and point our finger and point our finger. 

But we want to really, really come up with a solution. So if there 

is something that we need to do, let us know. I mean you can say 

it now or you can put it to us in writing. Because we would like 

to just correct it. Because there is still some serious problems. And 

the fact that—I think that information in is important. And if you 

are not getting the proper information in, then it is not going to 

help you in the end. So if you have suggestions to us as to what 

we might be able to do, I entertain that in my next few seconds. 

Ms. KING. Mr. Towns, if I just might clarify, we are working to 

identify the rates of investigations and convictions in both the 

criminal and civil fraud matters. And we have taken 2005 as a 

base year, and we are comparing it to 2010. That work is not quite 

done yet, but will be done later this year. 

Mr. TOWNS. Okay. Fine. So we should not hold the record open, 

you are saying, to get the information. I mean, what are you saying? 

Ms. KING. No, don’t hold the record open because it is not done 

yet. But we are close to finishing it. 

Mr. TOWNS. But you will give us the information before I retire? 

Ms. KING. Yes, sir. 

Mr. TOWNS. Thank you. Thank you, Mr. Chairman. 

Mr. PLATTS. Thank the gentleman. We will keep the record open 

for 2 weeks for that follow-on information that has been requested. 

Certainly appreciate that. 

Also, I would ask unanimous consent, I have a statement for the 

record from the National Association of Medicaid Directors that focuses on their concern about the duplication of efforts at the Federal and State level, and the importance of a seamless coordination 

so we are not spending money on replicating what either we are 

already doing at the Federal level or at the State level or vice 

versa. So without objection, so ordered. 

I want to thank all of our witnesses again. And you know, I 

think that as I read through the testimony in preparation for the 

hearing, and the staff’s leg work in preparing and what we heard 

today, is there are a lot of concerns about what has transpired in 

the past and the ineffectiveness of program integrity efforts. And 

as Mr. Lankford identified, one example where $60 million spent 

to recoup less than that, obviously that is not a good cost-benefit 

to the American taxpayers. But I also think that what comes 

through is that CMS, in conjunction with the Inspector General’s 

Office and GAO, is working forward in a way that is learning from 

88 

the mistakes of the past and learning what worked in the past, 

such as collaborative efforts versus other approaches, and seeking 

to put in place a truly effective program integrity system that will 

bring down that improper payments number hopefully dramatically 

in the years ahead. Because in doing so, we help us address both 

the debt that we have as a Nation, but also those dollars are truly 

benefiting those in need of these health-care services, whether it be 

Medicaid or Medicare, as opposed to lining the pockets of criminals 

and wrongdoers. So I am encouraged that we are headed in the 

right direction, as we need to. 

The ranking member and I do have about 7 months left, so that 

gives us 7 more months to work with, not torment you in this partnership approach. And we look forward to that continued dialogue 

as we go forward. So this hearing stands adjourned. 

[Whereupon, at 11:14 a.m., the subcommittee was adjourned.] 

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