U.S. GOVERNMENT PUBLISHING OFFICE

32–668 PDF WASHINGTON : 2018

IMPROPER PAYMENTS IN STATE–ADMINISTERED 

PROGRAMS: MEDICAID 

JOINT HEARING 

BEFORE THE

SUBCOMMITTEE ON 

GOVERNMENT OPERATIONS 

AND THE

SUBCOMMITTEE ON 

INTERGOVERNMENTAL AFFAIRS 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

APRIL 12, 2018 

Serial No. 115–106 

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

( 

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

http://oversight.house.gov 


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(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

Trey Gowdy, South Carolina, Chairman 

John J. Duncan, Jr., Tennessee 

Darrell E. Issa, California 

Jim Jordan, Ohio 

Mark Sanford, South Carolina 

Justin Amash, Michigan 

Paul A. Gosar, Arizona 

Scott DesJarlais, Tennessee 

Virginia Foxx, North Carolina 

Thomas Massie, Kentucky 

Mark Meadows, North Carolina 

Ron DeSantis, Florida 

Dennis A. Ross, Florida 

Mark Walker, North Carolina 

Rod Blum, Iowa 

Jody B. Hice, Georgia 

Steve Russell, Oklahoma 

Glenn Grothman, Wisconsin 

Will Hurd, Texas 

Gary J. Palmer, Alabama 

James Comer, Kentucky 

Paul Mitchell, Michigan 

Greg Gianforte, Montana 

Vacancy 

Elijah E. Cummings, Maryland, Ranking 

Minority Member 

Carolyn B. Maloney, New York 

Eleanor Holmes Norton, District of Columbia 

Wm. Lacy Clay, Missouri 

Stephen F. Lynch, Massachusetts 

Jim Cooper, Tennessee 

Gerald E. Connolly, Virginia 

Robin L. Kelly, Illinois 

Brenda L. Lawrence, Michigan 

Bonnie Watson Coleman, New Jersey 

Raja Krishnamoorthi, Illinois 

Jamie Raskin, Maryland 

Jimmy Gomez, Maryland 

Peter Welch, Vermont 

Matt Cartwright, Pennsylvania 

Mark DeSaulnier, California 

Stacey E. Plaskett, Virgin Islands 

John P. Sarbanes, Maryland 

SHERIA CLARKE, Staff Director 

WILLIAM MCKENNA, General Counsel 

DREW BANEY, Professional Staff Member 

KELSEY WALL, Professional Staff Member 

SARAH VANCE, Health Care, Benefits, and Administrative Rules Subcommittee Staff Director 

JULIE DUNNE, Government Operations Subcommittee Staff Director 

SHARON CASEY, Deputy Chief Clerk 

DAVID RAPALLO, Minority Staff Director 


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SUBCOMMITTEE ON GOVERNMENT OPERATIONS

Mark Meadows, North Carolina, Chairman 

Jody B. Hice, Georgia, Vice Chair 

Jim Jordan, Ohio 

Mark Sanford, South Carolina 

Thomas Massie, Kentucky 

Ron DeSantis, Florida 

Dennis A. Ross, Florida 

Rod Blum, Iowa 

Gerald E. Connolly, Virginia, Ranking 

Minority Member 

Carolyn B. Maloney, New York 

Eleanor Holmes Norton, District of Columbia 

Wm. Lacy Clay, Missouri 

Brenda L. Lawrence, Michigan 

Bonnie Watson Coleman, New Jersey 

SUBCOMMITTEE ON INTERGOVERNMENTAL AFFAIRS

Gary Palmer, Alabama, Chairman 

Glenn Grothman, Wisconsin, Vice Chair 

John J. Duncan, Jr., Tennessee 

Virginia Foxx, North Carolina 

Thomas Massie, Kentucky 

Mark Walker, North Carolina 

Mark Sanford, South Carolina 

Jamie Raskin, Maryland, Ranking Minority 

Member 

Mark DeSaulnier, California 

Matt Cartwright, Pennsylvania 

Wm. Lacy Clay, Missouri 

Vacancy 


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C O N T E N T S 

Page 

Hearing held on April 12, 2018 .............................................................................. 1 

WITNESSES 

Mr. Tim Hill, Deputy Director, Centers for Medicaid and CHIP Services, 

U.S. Department of Health and Human Services 

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

Written Statement ............................................................................................ 8 

Ms. Megan Tinker, Senior Advisor for Legal Review, Office of Counsel, Office 

of Inspector General, U.S. Department of Health and Human Services 

Oral Statement ................................................................................................. 28 

Written Statement ............................................................................................ 30 

Ms. Carolyn Yocom, Director of Health Care, U.S. Government Accountability 

Office 

Oral Statement ................................................................................................. 43 

Written Statement ............................................................................................ 45 

The Honorable Daryl Purpera, CPA, CFE, Louisiana Legislative Auditor 

Oral Statement ................................................................................................. 68 

Written Statement ............................................................................................ 70 

Mr. Andy Schneider, Research Professor of the Practice, Center for Children 

and Families, Georgetown University 

Oral Statement ................................................................................................. 78 

Written Statement ............................................................................................ 80 

APPENDIX 

Hearing Follow-up Response submitted by Ms. Yocom, Government Accountability Office ......................................................................................................... 110 

Hearing Follow-up Response submitted by Mr. Schneider, Georgetown University Center for Children and Families .......................................................... 113 


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IMPROPER PAYMENTS IN STATE– 

ADMINISTERED PROGRAMS: MEDICAID 

Thursday, April 12, 2018 

HOUSE OF REPRESENTATIVES

SUBCOMMITTEE ON GOVERNMENT OPERATIONS JOINT

WITH SUBCOMMITTEE ON INTERGOVERNMENTAL AFFAIRS

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

Washington, D.C. 

The subcommittees met, pursuant to call, at 10:00 a.m., in Room 

2154, Rayburn Office Building, Hon. Mark Meadows, chairman of 

the Subcommittee on Government Operations, presiding. 

Present: Representatives Meadows, Palmer, Grothman, Jordan, 

Walker, DeSantis, Connolly, Raskin, Maloney, DeSaulnier, Norton, 

and Lawrence. 

Mr. MEADOWS. The Subcommittee on Government Operations 

and the Subcommittee on Intergovernmental Affairs will come to 

order, and without objection, the presiding members are authorized 

to declare a recess at any time. 

I would like to thank the gentleman from Alabama, Mr. Palmer, 

for his leadership on this particular issue, and certainly for the 

ranking members, Mr. Connolly and Raskin. We appreciate all of 

you being here. 

As we look at the hearing today examine once again improper 

payments, particularly within Medicaid, it is very simple that as 

we look at the payments that should not have been and were made 

for the incorrect amounts. These issues encompass the entire Federal government, and, in fact, improper payments are a huge problem. The GAO estimates that there is over $1 trillion in improper 

payments since the Fiscal Year 2003. And, again, that is $1 trillion 

since 2003. 

In Fiscal Year 2017 alone, the government got it wrong to the tune of $141 billion in improper payments. This amount of money 

is indeed staggering. As they say back home, eventually this adds 

up to real money, and so it is incumbent upon all of you as we look 

at the testimony today to hopefully highlight how we are going to 

address this issue. For some of you, this is, Ms. Tinker, your first 

rodeo here. We will try to make sure that it is not memorable in 

a negative way, and so welcome. 

The Department of Health and Human Services accounts for the largest amount of improper payments with over $90 billion. The 

Medicaid Program accounts for over $36 billion, or 40 percent, of 

the HHS improper payments. And if we think about that number, 

$36 billion in taxpayer dollars that are unaccounted for for one 


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Federal program, it is not only staggering, but you start to look at 

and say why are we not addressing it. 

One of the keys to addressing improper payments and restoring 

program integrity for the Medicaid issue is having complete, accurate, and timely data. Screening Medicaid providers with better 

data could prevent some of the improper payments that are made 

to bad actors. And I also want to stress that because we look at 

this, there are times when we have improper payments. There are 

times when some of those things are not indeed fraudulent. They 

are not bad actors. They perhaps are a result of our bureaucratic 

network that we have. I would be interested in hearing that. I am 

one that believes that every improper payment is not necessarily 

because of a bad actor. 

And yet when we look at this, Ms. Tinker, you are from HHS 

OIG. You have illustrated the importance of providing screening in 

your testimony, but describing some of the cases in Virginia, in 

North Carolina. And in the Virginia case, one individual participated in a scheme to defraud the special caregiver program covered 

by Medicaid by submitting timesheets for services that were not actually provided. Those are the kind of things that we do need to 

go after. This individual was in jail at the time, so it is amazing 

how creative they were getting from the jail cell, and a simple 

check of his status could have stopped the fraud, and yet somehow 

that did not happen. 

In North Carolina, a mental health facility operator defrauded 

Medicaid by submitting at least $2.5 million in fraudulent claims 

for services never provided to the beneficiaries with developmental 

disabilities. Now, to support these fraudulent claims, this individual used stolen beneficiary information from a company he previously co-owned that was no longer operational. And this could 

have been stopped with better data and a site visit. 

And when we look at these kinds of things, you would say, well, 

these should be easy operational checks that in the private sector 

if you were writing checks, you would actually say, well, if we are 

going to write a $2.5 million check, you would want to make sure 

that it was for legitimate purposes. So, we need to look at it, and 

I am going to challenge all of you to look at this as if it were your 

own money because indeed it is. It is the people’s money, and sometimes we forget when we are looking at this that it is a mom and 

dad, and an aunt and uncle, and, quite frankly, people who pay the 

taxes each and every day that we have an obligation, a stewardship, that we have to oversee. 

You know, Obamacare’s dramatic expansion of Medicaid has further highlighted the need for better data to determine eligibility. 

And if we are going to make sure that Medicaid dollars are going 

to those programs that they are designed to cover, we need to also 

look at detecting improper payments and fraud, and we need complete and accurate national data on Medicaid. 

So, for almost 20 years after Congress directed States to submit 

such data, the transformed Medicaid statistical information is still 

a work in progress after 20 years. And so, it is incumbent that we 

come together today. I see my time has run out in terms of my 

opening statement, but we look forward to hearing from all of you. 


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And with that, I will recognize the ranking member, Mr. Raskin, 

for his opening statement. 

Mr. RASKIN. Mr. Chairman, thank you very much, and thanks for 

that very fine opening statement, and thanks to all of our witnesses for testifying today. 

Medicaid provides comprehensive, affordable care to more than 

70 million Americans regardless of their preexisting health conditions. And I want to start just by identifying the fact that that is 

an historic achievement and triumph that we have a Medicaid system that is addressing the health needs of so many Americans. 

Roughly 40 percent of the beneficiaries are children, including 

nearly half of all kids with special healthcare needs, and 1 in 4 

children in my home State of Maryland. 1 in 5 Medicare beneficiaries relies on Medicaid for long-term care and other benefits. 

Thanks to the ACA’s Medicaid expansion, 12 million more Americans have gained health coverage for the very first time. 

Today’s hearing focuses on improper payments—excuse me— 

which include overpayments, underpayments, and legitimate payments with paperwork errors, as well as fraudulent payments. This 

year’s improper payment rate, I understand, was 10.1 percent. One 

dollar of an improper payment is a dollar too much, whether it is 

a dollar at Medicaid, or the VA, or the Pentagon, or whatever program it might be, and we can all agree that 10 percent is just too 

high. But solving that problem must take into account the fact that 

all 50 States administer their own Medicaid programs, and they all 

have their own challenges maintaining program integrity. It is a 

large and decentralized system, and it can be leaky. 

So, all 50 State Medicaid agencies along with the Federal Centers for Medicare and Medicaid Services must work together to 

lower the rate of improper payments, not only in the interest of 

preserving our tax dollars, but also because fraud and inefficiency 

threaten the stability of Medicaid and deprive enrollees of the benefits that they rightfully rely on. Fortunately, the ACA gave CMS 

new program integrity tools to fight fraud, including enhanced provider screening requirements, and I am eager to hear about people’s perspectives on that today. 

We should reject the notion that errors in Medicaid justify slashing Federal funding, or undermining the Federal/State financing 

structure, or imposing work requirements on Medicaid beneficiaries. I think all of these are a non-sequitur. 

I hope we will use this hearing as an opportunity to learn from 

the experts gathered today how we can improve the Medicaid Program, and I would like to close simply by sharing an experience of 

one of my constituents, Alaina from Silver Spring, whose family relies on Medicaid. Her daughter has serious medical conditions affecting her heart, her lung, her airways, and her kidneys. She 

spent the first 5 months of her life in an ICU and had three major 

surgeries before she could use a ventilator and oxygen tank, which 

allow her now finally to breathe to this day. But she must see over 

a dozen specialists to receive the care that she needs. When 

Alaina’s daughter left the hospital at 5 months old, she had incurred over $3 million in medical bills, an amount which would be 

higher today, and it includes medical supplies and equipment, 

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ily have depended on Medicaid and the ACA to save their family 

from financial ruin and to save her daughter’s life. 

This story reminds of why Medicaid is so important, why we 

have to do everything we can to strengthen this vital program, and 

to guarantee that every dollar is going actually to service the beneficiaries of the program. I hope this hearing brings us closer to this 

goal, and I thank you very much, Mr. Chairman, for convening the 

meeting. 

Mr. MEADOWS. I thank the gentleman. The chair will recognize 

the gentleman from Alabama, Chairman Palmer. 

Mr. PALMER. Thank you, Mr. Chairman. Today’s hearing marks 

the continuation of the committee’s close look at the rising problem 

of federal improper payments. As we watch the national debt continues to decline, improper payments grow with it. As Chairman 

Meadows pointed out, since 2003, we have sent out a trillion dollars in improper payments. I would only add to that that that is 

a trillion dollars plus interest. We have been operating in deficit all 

those years, so every dollar that we sent out improperly was a borrowed dollar. 

Every year, the Federal government loses billions of taxpayer 

dollars because of improper payments, dollars that were intended 

to fund programs that serve the people that are improperly paid 

out or managed. In my questions I will address this a little bit 

more. 

The Government Accountability Office has been unable to render 

an opinion on the Federal government’s consolidated financial 

statement since 1997 due in part to the Federal government’s inability to adequately account for and reconcile its financial activities. GAO has also stated with respect to improper payments that 

absent changes, the Federal government continues to face an 

unsustainable long-term fiscal path. This is the reason we are here 

today. We want to try to figure out a way to solve this. 

As Chairman Meadows cited, the Federal government reported 

$141 billion in improper payments last year, Fiscal Year 2017, a 

$4 billion increase from just 2 years ago. Over two-thirds of these 

erroneous payments originated from the Department of Health and 

Human Services. Rapid growth and improper payments is largely 

attributed to the Medicaid Program, which is the focus of this hearing. Medicaid is a federally funded, State administered program 

that covers over 73 million people. The program represents about 

a sixth of the national healthcare economy and accounts for over 

$36 billion in improper payment. I think it was about $36.7 billion 

to be precise. The GAO has placed the Medicaid Program on its 

high-risk list every year since 2003. That makes 15 years and 

counting. 

State partners are on the front lines of defense against these erroneous payments. However, the Centers for Medicare and Medicaid Services plays a critical role in monitoring and supporting 

State efforts to reduce and recover improper payments. Although 

the States have great flexibility in implementing Medicaid, they 

are constrained by lack of Federal guidance and overwhelmed by 

the vast and increasing enrollment from expansion of the program 

under Obamacare. Diligent and bipartisan oversight is imperative 


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in order to curb Medicaid’s current trajectory as the fastest-growing 

source of improper payments. 

Today we will hear from our witnesses about current efforts to 

strengthen Federal and State partnerships in the Medicaid Program and make an attempt to ensure program integrity. To achieve 

the necessary reform of Medicaid, only a whole of government oversight approach will safeguard the faith and credit of American taxpayers. 

I thank the witness for coming today, and I look forward to hearing their testimony. I yield back. 

Mr. MEADOWS. I thank the gentleman from Alabama. I am now 

pleased to introduce our witnesses: Mr. Tim Hall, deputy director 

at the Center for Medicaid and CHIP Services, Department of 

Health and Human Services. Welcome, Mr. Hill. Ms. Megan Tinker, senior advisor for legal review in the Office of Counsel to the 

Inspector General, Department of Health and Human Services. 

Welcome, Ms. Tinker. Ms. Carolyn Yocom, director of health care 

at the Government Accountability Office. Welcome. The Honorable 

Daryl Purpera, legislative auditor for the State of Louisiana, and 

I believe you are accompanied by Mr. Wesley Gooch, special assistant for healthcare audit, who will also be sworn in. And Mr. Andy 

Schneider, research professor of practice at the Center for Children 

and Families at Georgetown University, McCourt School of Public 

Policy. That is a mouthful, Mr. Schneider. Welcome. Welcome to 

you all. 

Pursuant to committee rules, all witnesses will be sworn in before they testify, so if you will please stand and raise your right 

hand. 

Do you solemnly swear or affirm that the testimony you are 

about to give is the truth, the whole truth, and nothing but the 

truth, so help you God? 

[Chorus of ayes.] 

Mr. MEADOWS. All right, thank you. You may be seated. Let the 

record reflect that all witnesses answered in the affirmative. 

In order to allow time for discussion, please limit your testimony 

to 5 minutes. However, your entire written testimony will be made 

part of the record. And as a reminder, the clock in front of you will 

show the remaining time during your opening statement. The light 

will turn yellow which means you had better speed up, you got 30 

seconds left, and red means that you are subject to being gaveled 

down at any time, hopefully in a light tap first, and then a stronger 

tap later. But we also ask you to press the button in front of you 

to turn on your microphone before speaking. 

So, Mr. Hill, we will go ahead and recognize you for 5 minutes. 

WITNESS STATEMENTS 

STATEMENT OF TIM HILL 

Mr. HILL. Great, thank you. Chairman Meadows and Palmer, 

Ranking Member Raskin, members of the subcommittee. Thank 

you for the invitation and the opportunity to discuss CMS’ efforts 

to prevent and reduce improper payments in Medicaid. We share 

your commitment to ensuring that spending for Medicaid is deVerDate Nov 24 2008 12:14 Nov 29, 2018 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 H:\32668.TXT APRIL

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voted to the care and the well being of the beneficiaries that we 

serve and is not wasted through error or fraud. 

In that regard, we greatly appreciate the ongoing work by the 

OIG and the GAO to highlight potential vulnerabilities in these important programs. And similarly, I want to recognize the work of 

this committee on these important issues, particularly with respect 

to Medicaid reimbursements and financing issues. I want to use my 

time this morning to highlight some of the foundational work we 

do here at CMS to promote the integrity of the Medicaid Program 

and then spend a little time emphasizing some of the new initiatives and approaches that this Administration has initiated in this 

area. 

In terms of our foundational work, I like to think of our efforts 

as resting on a three-legged stool. The first leg of the stool is measurement. Our primary tool in this regard is the Payment Error 

Rate Measurement Program, or PERM. Using PERM, we measure 

and report on improper payments in Medicaid. The information we 

get from this program, in addition to just measuring and giving us 

a measure, actually helps us identify the underlying cause of payment error. What is it that is driving the error rate? Using this information, we can drive States to implement corrective actions to 

reduce improper payments and to prevent them in the future. 

The second leg of the stool is partnership. We work with our 

State partners to provide the information, the resources, and the 

technical assistance they need to implement programs to safeguard 

Medicaid. The best illustration of our efforts in this area is our 

Medicaid Integrity Institute established in collaboration with the 

Department of Justice where we bring together State employees, 

CMS policy experts, our law enforcement partners, and other 

stakeholders to collaborate and share best practices while simultaneously staying up to date on emerging program vulnerabilities. 

The final leg of the stool is a robust financial oversight activities 

to ensure that when States ultimately claim for a Federal match 

on their expenditures, Federal Medicaid funds are spent lawfully 

and appropriately. We use specialized accountants and financial 

management analysts to review State claims each quarter using 

trend analysis, environmental scanning, and the results of external 

audits to find anomalies, and request additional documentation or 

justifications for spending when necessary. We also engage in 

State-specific reviews, going on site to State Medicaid programs to 

ensure that State expenditures and corresponding claims for Federal funds are allowable. Last year we worked with States to resolve $2.7 billion in questionable costs through this program. 

Under the leadership of Secretary Azar and Administrator 

Verma, we are building on this foundation to further enhance and 

strengthen our oversight efforts. As you know, this Administration 

is fully committed to providing as much flexibility as possible to 

States to help them structure Medicaid programs that work for the 

people and the situations of their State. In return for this flexibility, we will be holding States accountable in new and important 

ways. 

For example, for the first time ever, we are implementing a Medicaid scorecard to measure and report on Medicaid performance 

across three pillars: health systems, Federal administrative perVerDate Nov 24 2008 12:14 Nov 29, 2018 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 H:\32668.TXT APRIL

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formance, and state administrative performance. Driving improvement using the scorecard is integral to our efforts to safeguard 

Medicaid from unnecessary and wasteful spending. 

Underpinning the scorecard initiative is the implementation of 

the Transformed Medicaid Information System, or T–MSIS. The 

data we collect in T–MSIS will drive the analytics that will help 

us and States improve health outcomes and improve program integrity. I am happy to report that as of today, T–MSIS includes the 

data for 98 percent of the beneficiaries we serve, and we expect the 

remaining data, which represents one State, to be live in the system shortly. 

In terms of oversight of State financing problems, we have closed 

off financing loopholes that some States have used to generate Federal dollars to support State programs that are best support with 

State-only dollars. Finally, we are bolstering our ongoing efforts to 

ensure that States are appropriately determining eligibility for 

beneficiaries in the expansion population. While we have significant existing controls in this area, we are concerned by recent OIG 

findings about State implementation of eligibility systems as well 

as the findings of our own review of State managed care rates for 

beneficiaries in the expansion group. The issue is a top priority for 

this Administration and the CMS administrator, and moving forward, CMS will continue to enhance our oversight efforts to make 

sure States are appropriately enrolling beneficiaries and that the 

Federal government is bearing only its fair share of the cost for 

Medicaid. 

We look forward to continuing to work with our States and oversight partners and other stakeholders to improve efforts to reduce 

the improper payment rate in Medicaid. I thank you, and I am 

happy to take your questions. 

[Prepared statement of Mr. Hill follows:] 


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Mr. MEADOWS. Thank you, Mr. Hill. 

Ms. Tinker, you are recognized for 5 minutes. 

STATEMENT OF MEGAN TINKER 

Ms. TINKER. Good morning, Chairman Meadows and Palmer, 

Ranking Members Connolly and Raskin, and other distinguished 

members of the subcommittees. I am Megan Tinker of the Office 

of the Inspector General. Thank you for inviting me to discuss improper payments in Medicaid and the need for robust national 

Medicaid data. 

Medicaid is a $574 billion program that touches the health and 

welfare of 69 million Americans. In 2016, Medicaid estimated improper payments totaled $36 billion. Today I will highlight recommendations that OIG has made to help States and CMS secure 

the data necessary to reduce improper payments. 

OIG’s work clearly shows that in order to gain the full benefit 

of 21st century data analytics, Medicaid needs comprehensive national data. We recommend that CMS and States focus on OIG’s 

core program integrity principles: prevention, detection, and enforcement. First, prevent improper payments by using data to keep 

bad actors and ineligible beneficiaries from participating in Medicaid. Second, detect improper payments by using data to identify 

potential fraud, waste, and abuse. And third, enforce, take swift 

and appropriate enforcement actions to correct problems and prevent future harm. 

Our work shows that States often lack the necessary data to prevent bad actors from participating in Medicaid. Doing so effectively 

can reduce and prevent improper payments. For example, OIG has 

raised concerns that States are not conducting required provider 

screenings such as criminal background checks. Preventing improper payments also means ensuring Medicaid only serves eligible 

beneficiaries. OIG’s review of three States found that their enrollment data systems sometimes lacked the ability to reliably make 

proper eligibility determinations, which could result in incorrect 

payments. Quality data are vital to decreasing improper payments 

and to ensuring a high-performing Medicaid program. 

CMS has made progress in implementing T–MSIS, which is the 

Transformed Medicaid Statistical Information System. T–MSIS is a 

national system to aggregate Medicaid claims data. As of this 

month, as Mr. Hill said, almost all States are reporting data to T– 

MSIS. However, there is more to do to make sure that the data can 

be used effectively to prevent and detect improper payments and 

fight fraud, waste, and abuse. 

Improper payments and fraud do not respect State borders. 

Without complete and uniform national data, fraud schemes affecting multiple States are difficult to detect because we cannot see the 

whole picture. Utilization and spending patterns may not appear 

problematic until compared with other States. CMS must remain 

vigilant and ensure that States are consistently reporting data elements to T–MSIS, and that those are the data elements that will 

best inform program integrity efforts. 

In addition, an ever-increasing number of Medicaid patients receive some or all of their services through managed care. OIG’s 

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complete when submitted to CMS. As a result, both Federal and 

State governments lack the transparency to ensure proper oversight. 

OIG has seen the benefits of data in identifying and targeting 

bad actors in Medicare. For example, last summer the Medicaid 

Fraud Strike Force used comprehensive Medicare data, including 

data on opioid prescribing, to conduct the largest national 

healthcare fraud takedown in history. Over 400 individuals were 

charged for their alleged participation in healthcare fraud screens, 

responsible for $1.3 billion in fraud losses across numerous States. 

We cannot replicate this type of enforcement action in the Medicaid 

Program because we still lack comprehensive national Medicaid 

data. 

It remains to be seen whether T–MSIS will live up to its potential. That is why it is critical that CMS persist in ensuring the 

availability of complete, accurate, and timely national Medicaid 

data. Such data are essential to preventing, detecting, and decreasing improper payments, and to the efficiency and effectiveness of 

the Medicaid Program. 

Thank you for the opportunity to testify this morning. I am 

happy to answer any questions you may have. 

[Prepared statement of Ms. Tinker follows:] 


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Mr. MEADOWS. Thank you, Ms. Tinker. 

Ms. Yocom, you are recognized for 5 minutes. 

STATEMENT OF CAROLYN YOCOM 

Ms. YOCOM. Chairman Meadows, Chairman Palmer, Ranking 

Members Connolly and Raskin, and members of the subcommittee, 

I am pleased to be here to discuss oversight efforts in Medicaid. 

This joint Federal/State program financed healthcare services for 

over 70 million low-income and medically needy individuals, including children and people who are elderly or disabled. 

Medicaid is a significant component of Federal and State budgets 

with nearly $600 billion in estimated outlays for 2017. Due to concerns about the adequacy of oversight, Medicaid has been on our 

list of high-risk programs since 2003. 

The partnership between the Federal government and States is 

a central tenet of the Medicaid Program. Within broad Federal requirements, States have flexibility to design and implement Medicaid based on their unique needs. The overall program is overseen 

at the Federal level by CMS. However, despite oversight efforts by 

CMS, overall improper payments continue to increase from $29 billion to $37 billion between Fiscal Year 2015 and 2017. 

My statement today will focus on three broad areas critical to improving Medicaid oversight: addressing data challenges, strengthening Federal oversight, and improving and expanding Federal and 

State collaboration. 

First, data challenges. CMS oversight relies on State-reported 

data that address multiple aspects of Medicaid, including expenditures and utilization of services. We and others have reported that 

insufficiencies in these data have affected CMS’ ability to ensure 

proper payments and beneficiaries’ access to care. We have raised 

concerns about the usefulness of state-reported data due to issues 

with completeness, accuracy, and timeliness. 

To address these longstanding concerns, CMS has worked to develop a reliable national repository, T–MSIS. Implementing T– 

MSIS as has been and will continue to be a significant multiyear 

effort. Nearly all States are reporting some T–MSIS data. While 

recognize this progress, more work is needed before CMS or States 

can use T–MSIS for program oversight. For example, it remains 

unclear when all States will report complete and comparable T– 

MSIS data, and how CMS and States can use these data to improve the program. 

Second, strengthening program oversight. Our work has identified other areas where CMS should take action. CMS has implemented many of our related recommendations, yet additional actions are needed to further strengthen program oversight. 

First, our work has identified risks associated with provider enrollment and beneficiary eligibility. Continuing to develop strategies to address these risk and monitor progress will improve CMS 

oversight and reduce improper payments. Second, additional oversight is needed to ensure that Medicaid beneficiaries are able to access necessary healthcare services. This is particularly critical for 

beneficiaries who rely on long-term services and supports as well 

as behavioral needs, including treatment for those with opioid use 


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disorders. It is important to note that Medicaid is the largest payer 

for both long-term and behavioral healthcare. 

Third, collaboration between the Federal government and the 

States. Identifying and sharing program integrity practices is critical, and there are challenges, but also some successes, here. In 

March 2017, we reported that collaborative audits in which CMS 

worked with States in partnership have great potential, but they 

are limited in their current use. We recommend that CMS take 

steps to remove barriers that limit State participation in these audits. In 2016, CMS, GAO, and a select group of State audit officials 

met to discuss future collaboration and specific areas of concern in 

Medicaid. Involving the State auditors in program oversight adds 

an important arsenal to reducing improper payments in Medicaid. 

Lastly, in 2012, CMS created the Healthcare Fraud Prevention 

Partnership to study and share healthcare-related information on 

fraud, waste and abuse. Participants have told us that the partnership helped them identify potentially fraudulent providers and foster information sharing. 

Chairman Meadows and Palmer, Ranking Members Raskin and 

Demings, and members of the subcommittee, this concludes my 

prepared statement, and I will be pleased to answer any questions 

you might have. 

[Prepared statement of Ms. Yocom follows:] 


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Mr. MEADOWS. Thank you, Ms. Yocom. 

Mr. Purpera, is that how you say it? You can go ahead and correct me. Everybody does. 

Mr. PURPERA. That is how you say it. 

Mr. MEADOWS. Okay, all right. Well, the gentleman from Louisiana is recognized for 5 minutes. 

STATEMENT OF HONORABLE DARYL PURPERA 

Mr. PURPERA. Thank you, sir. Mr. Chairman and members, Daryl 

Purpera, legislative auditor for Louisiana. I really come to speak 

with you specifically today about the underutilization of State auditors across our Nation in the fight against fraud, waste, abuse, and 

improper payments. I have heard it mentioned here 2 times today that it is a $36 billion problem. I want to remind everyone that is Federal dollars. 

There is an additional $20 billion or so of State dollars that are 

also being misspent. 

I want to talk to you specifically about how the State auditors 

roll. State auditors are required by the Single Audit Act to audit 

the Medicaid Program, so that is one of our jobs responsibilities. 

We get our instructions from the OMB through what is called a 

compliance supplement. That is kind of the audit program, what 

are we to do. And I want to talk to you about some inadequacies 

in this. 

The Medicaid Program has as a key determination point for eligibility is the income component based upon modified adjusted gross 

income of the recipient. However, the compliance supplement, the 

document that we are to operate under, specifically tells the State 

auditor that we are not to test Medicaid eligibility based upon 

modified adjusted gross income. Now, the rationale behind that is 

because CMS has some other oversight mechanisms. Well, in the 

State of Louisiana, that other oversight mechanism is part of this 

pilot program, but that task was given to our department of health. 

So, you have the department who is administering the program auditing itself when it comes to eligibility using the modified adjusted 

gross income. That is a scope limitation for the auditor, a significant departure from auditing procedures. 

State auditors also do not have access to data that we need, specifically Federal tax information. Access to the Federal tax information is restricted by 26 USCA 6103, Federal law. We have access 

to the tax data when we are auditing our Department of Revenue. 

So, if my auditors are auditing our Department of Revenue, we 

have got the Federal tax data. But if I am auditing over at the Department of Health and Hospitals looking at my Medicaid Program, 

now I cannot use the very thing that I can use over here on my 

right hand. I cannot let my left hand see it. So, it is a counterproductive restraint upon us. 

Furthermore, the Federal regulations do not require the examination of Federal tax data when making eligibility determinations. 

We learned that 25 States actually use Federal tax data, but the 

remainder do not use the Federal tax data. But since we are basing 

the program on modified adjusted gross income, I would think it 

would be wise to use the Federal tax data. The other databases 

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ample, it does not include self-employment, farming and fishing, 

rents, royalties, retirements, pensions, and alimony, and many 

other things. And so, we are kind of operating the program with 

our hands tied behind our back. 

I also want to talk to you about what I believe is the costly effect 

of the reasonable compatibility standard. The reasonable compatibility standard came about with the Affordable Care Act, and it is 

a policy or a rule of the CMS. And what it does it allows an individual to attest to an income when they are applying for Medicaid, 

and the State agency is to verify that income by using electronic 

data sources such as wage data. And so, if they attest to, say, 138 

percent of Federal poverty limit and that is my attested-to income, 

but the State looks over at the wage data and sees that the individual makes, let’s say 150 percent of Federal poverty limit, in the 

State of Louisiana, we use a reasonable compatibility standard of 

25 percent. That individual is going to be deemed eligible even 

though their income is higher than the 138 percent. And so, I believe that’s a standard that not only creates a significant problem 

for auditors because we really can’t see where the line is anymore, 

but it’s also we’ve extended the upper limit of Medicaid eligibility 

by doing that. 

Now, why are these issues important to me? Let me tell you why 

they’re important. In 2017, our State formed the Medicaid Fraud 

Task Force. I chair that committee. It’s a legislative committee. We 

did a test, and we took 860,000 individuals, basically our adult population, and we asked our Department of Revenue, because I can’t 

get the data. We asked our Department of Revenue to compare 

what the individuals put on their Medicaid application, compare it 

to their tax returns. Eighty-three thousand individuals came back 

as they had a tax return income of $20,000 or more different than 

what was on their Medicaid application. We can’t make any conclusions from that, but it does point to a significant risk that there 

is a problem. In addition, 48 percent of the applicants had household sizes for their tax returns different than their Medicaid. Now, 

I realize the rules are a little different, but they’re very much the 

same. 

I believe that we need to be looking for new audit approaches, 

and the State auditors needs to be right in the middle of this. Currently, dollars are flowing from the Federal government to our attorney generals to prosecute fraud, but very few dollars are going 

to our State auditors all around our Nation to help prevent and detect these improper payments before they happen. 

Thank you, gentleman. I’ll take any questions you have. 

[Prepared statement of Mr. Purpera follows:] 


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Mr. MEADOWS. Thank you so much. 

Mr. Schneider, you are recognized for 5 minutes. 

STATEMENT OF ANDY SCHNEIDER 

Mr. SCHNEIDER. Thank you, Mr. Chairman, and good morning, 

Ranking Members Connolly and Raskin, and members of the subcommittees. I’m Andy Schneider, a research professor of the practice at the Center for Children and Families. The Center is an 

independent, nonpartisan policy and research organization based in 

the McCourt School of Public Policy at Georgetown University. Our 

mission is to expand and improve high-quality, affordable health 

coverage for America’s children and families, particularly those 

with low and moderate incomes. I want to emphasize I’m here in 

my individual capacity, and my views do not necessarily represent 

the views of Georgetown University. 

Thank you for the invitation to testify. I’m especially honored to 

be here. I had the privilege of serving as chief health counsel to the 

full committee in 2007 and 2008, and I know from that experience 

how important the oversight efforts of this committee’s members 

and staff can be to making government work better. And thank you 

for holding this hearing which I think is in the best tradition of 

government oversight. 

Medicaid is an enormously important health insurer for America’s low-income children and families. A growing body of research, 

added to just this week by analysts at America’s Health Insurance 

Plans, demonstrates that Medicaid is working well for children and 

adults alike, giving them access to care and preventive services at 

levels similar to those who have commercial coverage. All that said, 

Medicaid is not perfect. It can and should be improve by, among 

other things, reducing the rate of improper payments. And I hope 

today’s hearing will get us to that result. 

I want to make three quick points. First, Medicaid’s 10.1 percent 

improper payment rate is too high, and it needs to come down. 

There is a clear path forward to bringing it down, a path that the 

Office of Inspector General is also urging this morning, which is to 

fully implement the provider screening and enrollment requirements that are already on the books. By identifying bad actors, 

keeping them out of the program, provider screening and enrollment will protect children and families and other Medicaid beneficiaries from substandard care, at the same preventing the theft 

or diversion of Federal and State funds from their intended use. 

Secondly, I want to underscore a point made by Mr. Hill. Payments made to fraudulent providers are clearly improper, but improper payments are not the same as fraud. Fraud is a deception 

or misrepresentation made by a person or entity with the intent of 

receiving an unauthorized payment. Improper payments in contrast 

are payments that should not have been made or that were made 

in an incorrect amount. They include payments made to providers 

who have defrauded the program, but they also include unintentional documentation errors, noncompliance with provider screening, and enrollment requirements. 

The way to reduce fraud as well as improper payments generally 

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ficiaries and bill the Medicaid Program. And that is true whether 

you are in a fee-for-service or in a managed care mode. 

My last point is that Medicaid is a successful health insurer for 

4 in 10 of our Nation’s children, in large measure because of its 

Federal/State financing partnership. And as GAO testified this 

morning, CMS can improve that partnership by improving its expenditure and utilization data and strengthening its oversight. Disrupting that partnership by capping Federal Medicaid payments to 

States will not improve the oversight, it will not prevent fraud, and 

it will not reduce improper payments. Instead, it will put low-income children and families at severe risk for rationing of care. 

I look forward to your questions. 

[Prepared statement of Mr. Schneider follows:] 


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Mr. MEADOWS. Thank you, Mr. Schneider. Thank you all for your 

insightful testimony. And as I mentioned earlier, your entire written testimony, if you did not cover it orally, will be made part of 

the record. I will now recognize my good friend and the gentleman 

from Virginia, the ranking member, Mr. Connolly, for his opening 

statement. 

Mr. CONNOLLY. I thank the chair, and in the interest of time, I 

am going to forego my formal opening statement. I echo some of 

what we just heard from the panelists, particularly Mr. Schneider. 

A, Medicaid works. It does its job: 76 million Americans, 43 percent 

of them children, benefit from Medicaid, and it looks like we are 

going to expand those numbers. 

In my home State of Virginia, we are on the brink of a bipartisan 

agreement to finally expand Medicaid pursuant to the Affordable 

Care Act, which will now bring healthcare to 400,000 people in Virginia, and by the way, bring $400 million net to the coffers of the 

State of Virginia, allowing to reinvest in healthcare and other 

needed investments. So, that is a good thing, and we will become, 

I believe, the 33rd State to expand Medicaid, States led by both Republicans and Democrats. 

But secondly, the point Mr. Schneider just made, and I know 

echoed by our panelists. But the improper payment part of Medicaid is too high. Ten percent is not tolerable, and we have got to 

work to get that number down. And that will include actually implementing the regulations and screenings already on the books, 

but it also means law enforcement has got to get more involved. We 

need U.S. attorneys involved. We need attorneys general to be involved. We need to beef up Medicaid’s own self-policing to bring 

that number down because every dollar that is an improper payment is a dollar foregone. It is a dollar not invested in healthcare. 

It is a dollar that detracts from the important core mission of Medicaid. 

And finally, I would say, Mr. Chairman, working with you and 

others over the years on this committee, you know, there are two 

things this committee needs to focus on or can focus on that I think 

would make a material difference in reducing the debt, neither of 

which involve new taxes, neither of which involve, you know, cutting critical investments. And one is improper payments, about 

$142 billion a year. Multiply that times 10, and you get $1.4 trillion. Now we are talking real money. And the other is uncollected 

taxes, which have now grown, by starving the IRS over the years, 

to over $450 billion a year. You combine those two, we are at almost $6 trillion over 10 years, and I for one would be willing to 

commit that every one of those dollars we, in fact, recover I would 

devote to debt reduction because they are dollars we do not have 

now. And that would be a good down payment on the national debt 

over a 10-year period. 

And it seems to me there is some potential bipartisan common 

ground. You know, we would have to make some investments, but 

these are two things we can do something about, and there is no 

downside to addressing them. And so, I thank you, Mr. Chairman, 

for having a hearing on the Medicaid piece today, and I look forward to having the opportunity to hear more from our expert panelists. And, again, thank you for your leadership, Mr. Chairman. 


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Mr. MEADOWS. I thank the gentleman for his comments, and I 

would like to stress obviously today we are looking at Medicaid, but 

there is a huge improper payment issue with the Department of 

Defense as well. And so, at times where sometimes one program 

looks ideologically to be aligned more with one side than the other, 

I can assure you in a bipartisan manner, we are willing to tackle 

those. And I thank the spirit in which the ranking member offered 

that. 

The chair is going to recognize the chairman of the subcommittee, Mr. Palmer, for a series of questions at this time. So, 

he is recognized for 5 minutes. 

Mr. PALMER. Thank you, Mr. Chairman. Mr. Hill, Medicaid payments are made to States based on the number of people eligible 

in each State and the State maintenance of effort match. In other 

words, CMS has a reasonable estimate of how much funding to request from Congress on an annual basis. Given that for the last 2 

years Medicaid improper payments have exceeded $36 billion, does 

CMS inflate its funding request to include improper payments? Is 

that just part of your overhead? 

Mr. HILL. I would not say that we directly, that the measure of 

improper payments goes into the formula to say what we are going 

to ask for. It is much more of an actuarial analysis of the trends 

over time and what we think we are going to need in the next year 

given economic and other forecasts. So, I think it is baked there, 

and I think that is the point that folks have made across the board 

here, that because improper payments are in the baseline it is inflated, and to the extent that we could reduce improper payments, 

we would recoup some savings. 

Mr. PALMER. Well, you had a number of recommendations for 

correcting this. Ms. Tinker, thank you for being here. Welcome to 

OGR. How many recommendations has HHS inspector general 

made to CMS to establish a deadline for complete and accurate 

TMS data? 

Ms. TINKER. We have one recommendation that —— 

Mr. PALMER. Yeah, please turn that on. 

Ms. TINKER. We have one recommendation —— 

Mr. MEADOWS. You better hit that button or—no. 

[Laughter.] 

Ms. TINKER. We have one recommendation that is currently still 

on the books for CMS to set a deadline for the completion the T– 

MSIS system. 

Mr. PALMER. How about GAO, Ms. Yocom? 

Ms. YOCOM. We also have a recommendation. It is a little more 

detailed in terms of establishing some steps and some dates along 

the way. We think taking a step-by-step approach would be helpful 

rather than saying we are going to get this all done by X date. 

Mr. PALMER. Yeah, I agree with that. I think it is a process, and 

I think it is multifaceted. It is reading the GAO’s last report that 

I got on it that indicates, and this would be true across the Federal 

government, but I think it would be applicable to CMS, is about 

20 percent of the improper payments is a result of antiquated data 

systems. And one of the things that concerns me is the antiquated 

data systems is an issue that we can resolve. Obviously, we will 

have to spend some additional funding. 


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But, Mr. Purpera, in dealing with this between the State and 

Federal level, is that an issue, because one of the things we are 

saying is that State systems do not always match up with Federal 

systems. You have a communication issue with that. Is that a problem? 

Mr. PURPERA. Mr. Chairman, data is a problem. It is a considerable problem because are not dealing with finding a needle in a 

haystack here. We are dealing with finding needles in fields of haystacks. So, we have to have good data from the State level on up, 

and it extremely hard for my office to get data sometimes from the 

managed care operators. 

For example, we keep talking about the improper payment rate 

being 10 percent, but that number I would tell you is considerably 

understated because it includes managed care at .03 percent, which 

clearly we are not looking at the full spectrum there. 

Mr. PALMER. Well, Ms. Yocom, in the last GAO report that I saw, 

there were 18 Federal programs that were reported. Among those 

were the managed care side of Medicaid. So, and I agree, in talking 

with Mr. Dudero about this, he thinks the $141 billion is understated because of the failure of programs such as the managed care 

side of Medicaid report. 

Ms. YOCOM. Yeah, the estimation of managed care is focused on 

a very narrow piece of information. It is focused on what did the 

contract say that you would pay on a per capita basis and was the 

person who you paid for eligible for Medicaid. It does not look at 

whether or not the services were provided at all or whether they 

were necessary or anything else. 

Mr. PALMER. Well, that is an administrative issue —— 

Ms. YOCOM. It is. 

Mr. PALMER.—because the report also showed that you had failure to verify eligibility, failure to do proper documentation. That 

was about 52 percent of the improper payments. 

Ms. YOCOM. Yes. 

Mr. PALMER. And one other question in the last few seconds I 

have is on the fraud. Is fraud more an issue at the Federal level, 

people fraudulently billing the Federal government for Medicaid 

payments, or is it more at the State level? Where is the fraud most 

likely to occur? And, Ms. Tinker, if you know the answer to that, 

you can respond as well. 

Ms. TINKER. We see fraud at both the Federal and the State level 

in the Medicaid Program because it is a shared program between 

both the Federal government and the State. 

Mr. PALMER. So, when someone files a fraudulent claim, they file 

it at the State level, which when the State makes a payment it includes Federal dollars, or is it possible that they file it directly with 

the Federal government? 

Ms. TINKER. Directly with the State government. 

Mr. PALMER. Directly with the State. Thank you very much. I 

yield back. 

Mr. MEADOWS. I thank the gentleman from Alabama. The chair 

recognizes Ranking Member Raskin for 5 minutes. 

Mr. RASKIN. Mr. Chairman, thank you very much. Let me follow 

up on Mr. Palmer’s question. Ms. Yocom, your testimony includes 

a statement that between May of 2015 and December of 2017, 11 


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different recommendations were made by the GAO to CMS about 

improvements that could be made in terms of ferreting out fraud, 

but your testimony also says that these recommendations have not 

been adopted yet by CMS. And I am wondering, I do not know, Mr. 

Hill, if you could speak to that, why were they not adopted, and 

what is the hold up there? 

Mr. HILL. So, I would need to go back, and unfortunately, I do 

not know specifically the 11 recommendations. I know as a general 

matter, sometimes the recommendations that are offered require a 

change in regulation. Not often, but sometimes in statute. And the 

other issue in Medicaid unlike in Medicare because it is a shared 

partnership with the State, many of the recommendations that we 

have to implement, we have to do in partnership with our State 

partners. And so, we have talked a lot, for example, about provider 

enrollment and screening. 

We can require States to do that initial guidance and tell States 

they need to be doing a better job, but the actual on-the-ground implementation of screening, for example, takes place at the State. 

So, the shared partnership, I think, does introduce some level of 

slowness to our response. 

Mr. RASKIN. Okay. Well, I would be interested in following those 

recommendations because, you know, lots of times we have great 

hearings, and then recommendations come out, and then we do not 

see anything happen. So, I would love to see the follow through on 

that. 

So, I wonder if somebody would dig down deeper into this whole 

question of fraud. Is most of the fraud provider-based fraud, or is 

it actually people who are impersonating beneficiaries, or fabricating information on applications? I mean, what is the nature of 

the fraud component of the problem? And I do not know, Mr. 

Schneider, Mr. Purpera, yeah. 

Mr. SCHNEIDER. So, I do not know that I am the most qualified 

person to speak to this. 

Mr. RASKIN. Okay. 

Mr. SCHNEIDER. You already have some experts on this who have 

the data, right? 

Mr. RASKIN. Okay, let us take Mr. Purpera and Mr. Hill. 

Mr. PURPERA. Thank you, sir. I think I can approach it from the 

State level. At the State level, our attorney general offices, they 

have the Medicaid fraud control units, so they are looking at fraud. 

But the funds that flow from the Federal government to operate 

those units are strictly for provider fraud. My attorney general, if 

he were sitting here today, would tell you he would very much like 

to work in the area of recipient fraud, but right now he is prevented from doing so. Now, my office focuses not just on fraud, but 

we focus on fraud, waste, abuse, the whole gamut. And, you know, 

strategically, what we want to do is make recommendations to improve the process going forward. 

But I can tell you this. In the past, and as I heard about other 

recommendations, there have been times when I have written findings on my department of health that says, ‘‘for the 8th consecutive 

year,’’ and then the finding. And that seems to me where there is 

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how forcing the changes that are needed to prevent the waste and 

abuse. 

Mr. RASKIN. Thanks. Mr. Hill? 

Mr. HILL. I would say that in terms of the type of fraud that we 

see, and I have worked in Medicaid and I have worked in Medicaid, 

the key to the kingdom is a card, is an eligibility card. So, we do 

not see a lot of fraud of an individual beneficiary saying I am going 

to lie on my taxes to get Medicaid. They will get eligible, and then 

typically what we will see is they will then be in cahoots. There 

will be some sort of scheme with a Medicaid beneficiary or Medicare beneficiary and a group of providers to generate fictitious billings or fraudulent billings, and it is much more of a —— 

Mr. RASKIN. A collective activity. It is more than a conspiracy. 

Mr. HILL. Yeah, they are smarter than we are many times, and 

they have found ways to ping and game our systems. And typically, 

once somebody gets eligibility, they are able to, if they are so inclined, defraud us using nefarious providers to bill and get paid. 

Mr. RASKIN. Okay, yes, Ms. Yocom. 

Ms. YOCOM. I would just add that if you can screen and enroll 

and ensure that your providers act in good faith, you have managed most of the fraud. A beneficiary alone trying to commit fraud 

needs a complicit provider, so focusing attention on ensuring good 

screening and enrollment processes is critical. 

Mr. RASKIN. Great. Okay. My final question is about data. Everybody seems to agree that a much more comprehensive data system 

is going to be essential lower that 10 percent rate. Are there legislative changes that need to be made, or can all of this be done 

through regulatory action? Mr. Hill. 

Mr. HILL. In terms of collecting data from States and us aggregating the data, we do not see it as a statutory problem. If you 

want to write a check and give us more money, we are always 

happy to sort of have more infrastructure. But the issue really is 

compliance with States and us working with States to get the data 

in at the Federal level that they already have at the State level, 

so it is not really a statutory issue from our perspective. 

Mr. RASKIN. Thank you. Yield back, Mr. Chair. 

Mr. MEADOWS. I thank the gentleman. The chair recognizes himself for 5 minutes for a series of questions. Ms. Tinker, let me come 

to you. As we look at this transformed medical statistical information system, or, I guess, ‘‘T–MSIS,’’ as they would say, how significant are your concerns about the quality of the information in 

there? 

Ms. TINKER. We have significant concerns about the quality of 

the data. 

Mr. MEADOWS. Okay. Let me give it to you in a different way. 

On a scale of 1 to 10, with 10 being the most highest, most concern, 

what number would you give it? 

Ms. TINKER. That is a pretty difficult question to answer as the 

—— 

Mr. MEADOWS. And that is why I am here, so —— 

[Laughter.] 

Ms. TINKER. How I would answer is while we are very pleased 

that States are reporting and data now, and almost all are there, 

that that really means that we are really at the starting line and 


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not at the finish line in terms of building T–MSIS. We are still 

looking to see that the data has the quality necessary to perform 

program integrity efforts, specifically that all States report all data, 

and secondly, that when States are reporting that data, that it is 

actually uniform, that all States interpret the data pieces the same 

way. 

Mr. MEADOWS. Right, yeah. Ms. Tinker, you have been well 

coached, and so I am going to give you another piece of advice. 

When I ask a question on 1 to 10, you might as go ahead and answer it because I am not going to stop until you answer. So, on a 

scale of 1 to 10 with ‘‘10’’ being most concern, what number would 

you give it? 

Mr. HILL. I would give it a 7. 

Mr. MEADOWS. Thank you, Ms. Tinker. Mr. Hill, in your statement I think you said that 98 percent of those that should be reporting are reporting. Is that correct? 

Mr. HILL. That is correct. 

Mr. MEADOWS. And so, would you say 98 percent is a good percentage? 

Mr. HILL. It is. 

Mr. MEADOWS. Oaky. Out of the 98 percent based on the statement that Ms. Tinker gave me with a 7 being a concern, how much 

of the 98 percent data can you actually use? 

Mr. HILL. Right. I mean, I share Ms. Tinker’s concern. I would 

not say we are necessarily at the starting line. We are probably 

midfield. But it is absolutely the case that the first thing that we 

had to accomplish was get the States to report. We now have them 

to report. The next challenge for us is being sure that, as described, 

the data is uniform, that we can use it, that States are reporting 

—— Mr. MEADOWS. So, can you use it today? 

Mr. HILL. We are using it today. We were —— 

Mr. MEADOWS. Can you use it accurately today? 

Mr. MEADOWS. I would not want to rely a whole lot of policy 

analysis on the data that we have because we have just started 

—— 

Mr. MEADOWS. So, that means that we got 98 percent compliance 

of un-useful data. 

Mr. HILL. Right, and the —— 

Mr. MEADOWS. Do you not see a problem with that? 

Mr. HILL. I see a program that we had to continue —— 

Mr. MEADOWS. I see your staff behind you. They are nodding 

that there is a real problem with that. And so, as we look at that, 

how do you fix that, I mean, because for you to come and say, well, 

we got a 98 percent compliance rate, we really do not have a 98 

percent compliance rate because Ms. Yocom and Ms. Tinker both 

in their testimony have shown the quality of the data is worthless. 

So, if the quality of data is worthless, why are we focusing on a 

compliance rate of 98 percent? 

Mr. HILL. I would not characterize the data as worthless first. 

And as I said —— 

Mr. MEADOWS. But you just said you cannot use it. 

Mr. HILL. Well, I think it is important to understand how we 

build data systems, right? So, this is not an information system 


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that we are using to process and pay claims like the States are. We 

are asking States to aggregate their claims data and give it to us 

to put in a database that we can use to do analytics. The first step 

in that process is for them to build that interface, to give us that 

data, and to put it into T–MSIS, and that is where we have it. 

Until we —— 

Mr. MEADOWS. But the ranking member—hold on. 

Mr. HILL. Yeah. 

Mr. MEADOWS. I am running out of time. The ranking member 

and I have the Data Act. We have a number of other systems when 

we look at that. We have a dashboard on FITARA, which, you 

know, is the Connolly-Issa bill. Is that correct? So, when we look 

at that, bad data going in makes those systems worthless, and you 

say that it is not worthless, but at the same time, asking them to 

comply is a real problem. So, let me shoot real quickly to another area. It appears that $1.2 

billion worth of improper payments actually come from three 

States. Is that correct, Ms. Tinker, $1.2 billion in estimated improper payments came from three different States? 

Ms. TINKER. We did find beneficiary eligibility errors in three 

States—California, New York, and Kentucky—totaling $1.2 billion. 

Mr. MEADOWS. All right. So, what can we do to fix this? I mean, 

if it is three States, I would say that was a target rich environment, that we can focus on those three States. 

Ms. TINKER. The main causes of the errors we found were human 

errors and eligibility system inability to actually perform the functions it needed to. The recommendations that we made to States 

were three: one that where we found errors they do the redeterminations necessary; two, that they put policies and procedures in 

place to properly train people so that we could decrease the human 

errors; and third, that they update their systems so that they could 

better talk to other data systems to get the correct information to 

make those determinations. 

Mr. MEADOWS. So, Mr. Hill, are you going after the $1.2 billion? 

Mr. MEADOWS. The $1.2 is identified as potential overpayment. 

There was not a recommendation to collect it because —— 

Mr. MEADOWS. Well, let me give you a recommendation. Collect 

it. I mean, it is the American taxpayers’ dollars. I mean, is it your 

sworn testimony here today is because you did not get a recommendation to collect —— 

Mr. HILL. No. 

Mr. MEADOWS.—$1.2 billion in improper payments, you are not 

going after it? 

Mr. HILL. No, the recommendations were to fix the system in 

California —— 

Mr. MEADOWS. So, are you going after it or not? 

Mr. HILL. We are not issuing a disallowance to California —— 

Mr. MEADOWS. Okay. I want you to report back to this committee 

in 30 days on why you decided to ignore $1.2 billion in improper 

payments and decided not to collect it. 

Mr. HILL. Yep. 

Mr. MEADOWS. All right. 

Mr. MEADOWS. All right. The chair recognizes the ranking member, Mr. Connolly, for a generous 6 minutes. 


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Mr. CONNOLLY. I thank the chair, and let me echo what the 

chairman just said, Mr. Hill. I mean, on a bipartisan basis, we simply cannot say that, well, we have lost that if for no other reason 

besides the fact that this is taxpayer money, but also if we are 

going to get serious about improper payments, we got to get serious 

about improper payments. How about we start now? And people 

have to know they cannot get away with it, that mistakes will be 

corrected, and fraud or abuse will be pursued vigorously. And we 

are prepared to back you up on a bipartisan basis, but we need you 

to do it. So, I strongly support the chairman’s recommendation that 

we review, if not rescind, the decision not to pursue that $1.2 billion. 

Let me ask a question about how much we know about the data. 

Ms. Yocom, Ms. Tinker, Mr. Hill, how much of Medicaid improper 

payments is fraud? How much of it is fraud because in Medicare, 

for example, Mr. Hill, we know it is about $50 billion a year in 

fraud in Medicare. And correct me if I am wrong, most of it is provider fraud as you pointed out. It is not individual beneficiaries 

committing fraud, though some may be involved, but it is actually, 

and this is always hard for the public to believe, that doctors cheat. 

They lie. They steal. Not all doctors of course, but a handful of bad 

actors, but it adds up to a lot of money. A lot of money. 

So, in Medicaid, how much of the total improper payment we are 

looking at is fraud, because one has to disaggregate the kinds of 

improper payments because there are different strategies. You 

know, if it is overpayment because we messed it up, you know, we 

thought you were eligible and you were not, we thought you qualified for this additional benefit, but you did not or you did, that can 

be addressed through management, personnel, and technology. 

Fraud is different. That has a law enforcement element to it 

which I am going to get to. But in order to know how we marshal 

our resources to get at the improper payments, we got to be able 

to accurately say this much is fraud. So, what percentage of total 

Medicaid improper payments is fraud? 

Mr. HILL. My understanding in the way we measure improper 

payments now, you cannot disaggregate it. It does not measure 

fraud for a variety of reasons. As you just described, it measures 

compliance errors, it measures where documentation is missing. 

Sometimes when you look at a fraudulent claim, it is going to look 

perfect, right? It would not show up as an error because a fraudulent provider is going to make sure that they get it through the 

system in a way that it will get paid. And so, it is a much more 

complicated analysis to make the determination on whether it is 

fraud involving law enforcement partners and others. 

So, it is my understanding we do not have a measure, you know, 

a rigorous measure as we do with the Payment Error Rate Measurement Program for fraud in Medicaid, which is why we spend 

time with our law enforcement partners and in partnership with 

our States to identify it in an investigatory way. But it is not something that we can use the PERM Program to address. 

Mr. CONNOLLY. It is distressing to hear you say that because I 

do not how you have a coherent, let alone effective, countermeasure 

to improper payments. I mean, ideally want to bring improper payment to zero. 


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Mr. HILL. Right. 

Mr. CONNOLLY. Now, we know that we are never going to quite reach zero, but we certainly can do better than $142 billion a year. 

But I cannot devise a strategy that is efficacious if I cannot 

disaggregate fraud from administrative errors or technical error in 

the computer. Ms. Yocom, help us. Can GAO help Mr. Hill 

disaggregate that global number so that we are dealing with its 

component parts and developing efficacious strategies? 

Ms. YOCOM. Yeah, I do not have good news in terms of a percentage. However —— 

Mr. CONNOLLY. Oh, Ms. Yocom, come on. If there was one person 

in this room I thought would bring me good news, it was you. 

[Laughter.] 

Ms. YOCOM. However, we do have a fraud risk framework that 

we have put together and have looked at CMS’ practices to prevent 

fraud, and we have found that those are lacking. There are things 

that CMS could be doing to better look strategically across its programs and to coordinate within its program in order to better prevent fraud. 

Mr. CONNOLLY. Well, let me make an informal request of GAO, 

and I am sure my colleagues, Mr. Meadows, Mr. Palmer, and Mr. 

Raskin, as respective chairman and ranking member would join in 

the request. We need you to get back to us in developing methodologies in disaggregating the improper payment global number so 

that we can better devise strategies. 

Mr. MEADOWS. I concur with the ranking member, and so I 

would ask within 60 days if you can come back to this committee 

with a plan to do that, Ms. Yocom, once you check with your colleagues. 

Mr. CONNOLLY. Because I do not know how we do it rationally, 

frankly, if we cannot have that kind of analytical tool. 

Mr. CONNOLLY. My final question because I do not want to impose on my good friend and brilliant thespian, who makes Shakespeare happy every time she appears on stage, Eleanor Holmes 

Norton. But before that, I mean, Mr. Purpera is here from Louisiana and doing his job at the State level. But an observation: I 

do not think we are using U.S. attorneys all that well for fraud, 

and I will give you an example. I know of one example personally, 

but a few years ago the U.S. attorney in Boston decided to make 

Medicaid fraud a very high priority, and guess what happened? 

Her office alone identified and mostly recovered $3 billion. One office because she made it a priority. 

There are 99 U.S. attorneys, and my sense it is kind of up to the 

individual U.S. attorney whether this is a priority or, you know, we 

will look for it if we see it and find it, maybe we will do something 

about it, as opposed to saying, no, one of our top five this year or 

top three or whatever it might be is going to be fraud, Medicare 

fraud, Medicaid fraud. Any of you want to comment on that, I 

mean, because I think that is an underutilized tool as well that 

could really make a difference in reducing improper payments. Ms. 

Tinker. 

Ms. TINKER. We believe that obviously working closely with our 

partners in the U.S. attorneys office is extremely important. And, 

in fact, when you look at the return on investment in 2017, there 


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were $4.7 billion in expected recoveries, over 881 criminal actions, 

and 826 civil actions. But an additional important part in Medicaid 

is our work with the Medicaid Fraud Control Units. 

In 2017 in our Medicaid Fraud Control Unit annual report, we found that $1.8 billion had been recovered as a result of the efforts 

of Medicaid fraud control units across the country, including 1,500 

convictions, 1,100 exclusions, meaning providers who no longer able 

to participate in Federal healthcare programs, and over 961 civil 

settlements and judgments. We are very proactive in working to 

prevent fraud and to bring bad actors —— 

Mr. CONNOLLY. So, my time is up, but what you are saying to 

us is you are happy with the cooperation you are getting from U.S. 

attorneys. 

Ms. TINKER. There is always more we can be doing without a 

doubt. 

Mr. MEADOWS. So, Ms. Tinker, I want to follow up on that. If you 

will help us identify perhaps those U.S. attorney districts where 

you get more help, it would help us, you know, to the ranking 

member’s concern. If you could help us do that. I mean, that is not 

a formal request, but if you will get that as part of the report back. 

And I see your staff nodding behind. So, I feel we are in good 

shape. 

The gentleman from Ohio is recognized for 5 minutes. 

Mr. JORDAN. Mr. Hill, how many Americans are on the Medicaid 

Program? 

Mr. HILL. I think we have 70 million roughly. 

Mr. JORDAN. Seventy million? 

Mr. HILL. Yep. 

Mr. JORDAN. And what has happened to that number since 

Obamacare and the Medicaid expansion? 

Mr. HILL. Under the Medicaid expansion, we added about roughly 11 million people to Medicaid. 

Mr. JORDAN. So, it increased, you know, fairly significantly. 

Mr. HILL. Mm-hmm. 

Mr. JORDAN. All right. So, of the 70 million, how many of those 

70 million are able-bodied adults? 

Mr. HILL. Well, in general, the expansion was expanded to 

adults, childless adults, and so I would venture to guess that the 

majority of the folks in the Medicaid expansion are folks who otherwise would not have been covered either as a —— 

Mr. JORDAN. So, it is safe to say the 11 million is probably all 

in that category. 

Mr. HILL. Right. 

Mr. JORDAN. And some of the previous 59 million were probably 

in that category as well, even though Medicaid initially started off 

for disabled kids and different things. 

Mr. HILL. Right. 

Mr. JORDAN. Those kinds of populations. It is fair to say that 

there was some portion of the 59 million prior to Obamacare who 

were able-bodied adults as well. 

Mr. HILL. To the extent States have expended to that group, yes. 

Mr. JORDAN. The number we have heard is 28 million able-bodied folks in the Medicaid population. Do you think that is accurate? 

Mr. HILL. I am not familiar with that number. 


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Mr. JORDAN. Okay. All right. But it is something more than 11 

million. 

Mr. HILL. Presumably, yes. 

Mr. JORDAN. All right. Of that 11 million, do you know how 

many are working? How many have a job? 

Mr. HILL. I mean, the data suggests that a large proportion of 

the folks who are on Medicaid who can work, in other words, who 

are not disabled or a caretaking parent, are working. I do not have 

the specific number. 

Mr. JORDAN. The Kaiser Foundation says 40 percent of that ablebodied adult population in the Medicaid Program are not working. 

Do you think that is accurate? 

Mr. HILL. I would need to go back and look at the Kaiser data. 

Mr. JORDAN. That is a big number, though, right. 

Mr. HILL. Are not working, correct. 

Mr. JORDAN. That is a darn big number. Now, the Democrats 

sent a letter a couple months ago that said we should not even 

think about work requirements for able-bodied adults getting taxpayer money in largely the Medicaid expansion program. Do you 

agree with that? 

Mr. HILL. Well, as you know, the Administration is pursuing a 

number of waivers under our authority to promote community engagement. We have got a number of States that we have already 

approved. 

Mr. JORDAN. I am asking you. Do you agree with that? Do you 

think we need a work requirement for the program? 

Mr. HILL. Well, it is the Administration’s policy that we are pursuing work request and community engagement for States who believes that that works for their Medicaid system. 

Mr. JORDAN. Yeah. How about you, Ms. Yocom? Do you think we 

need to do that? 

Mr. HILL. Well, I think we need to carry out —— 

Mr. JORDAN. Well, I am going to ask some other people. 

Mr. HILL. Well, as others have said, right, we are here representing the Administration, and I am representing the Administration’s position. 

Mr. JORDAN. How many waivers have you given thus far to 

States to implement a work requirement for the Medicaid expansion population or for anyone on Medicaid, able-bodied? 

Mr. HILL. Three. Kentucky, Indiana, and Arkansas are the first 

three States that we have approved waivers for. 

Mr. JORDAN. Anyone else asked? 

Mr. HILL. There are a number of States in the pipeline. 

Mr. JORDAN. How many? 

Mr. HILL. I think a total of 10 or 11 States have expressed interest, and they are all in various stages of review right now. 

Mr. JORDAN. How long does it take to get the approval? 

Mr. HILL. Well, you know, overcoming and sort of getting our policy squared away, once we got the first waiver approved, they can 

go through relatively quickly, anywhere from, you know, 3 months, 

6 months, 9 months. Sometimes the waivers are packaged up with 

other innovations that the State wants to pursue that are not necessarily —— 


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Mr. JORDAN. It takes 9 months for you guys to okay. The State 

says we want to make people who are able-bodied folks, and the 

State says we want to acquire a work component, maybe a work 

study component, maybe a training component. And you take 9 

months for you to give them the thumb’s up to do that? 

Mr. HILL. Well, we try and do it as quickly as we can depending 

upon what the State is asking for and how complex their waiver 

is. 

Mr. JORDAN. Of that 40 percent of this at least 11 million number—I think it is closer to 28 million—who are able-bodied and 

non-working, how many of them are younger folks? How many are 

under 35, under 40? 

Mr. HILL. Well, I think that able-bodied or that expansion population is 19 to 65, anywhere from 19 up to 65. I do not know the 

distribution of how many are in what age category. 

Mr. JORDAN. Again, I think most of it from what we have seen 

in other studies, most of them are younger folks. So, you got younger folks, able-bodied in the program. States coming to you saying 

we would like to impose a work requirement, and you are telling 

me it takes 9 months to give them the thumb’s up. 

Mr. HILL. I am telling you we work as fast as we can to get the 

wavers approved depending on how complex they are coming from 

the State. 

Mr. JORDAN. And, again, refresh my memory. How many States 

have asked for the waivers thus far? 

Mr. HILL. We have approved three, and I think there are 11 in 

the pipeline. 

Mr. JORDAN. Eleven have asked. Do you know how long ago some 

of these States asked? 

Mr. HILL. Most of them have all been since last January. Some 

were in the previous Administration. 

Mr. JORDAN. Well, this is important. I mean, you talk to taxpayers across the 4th District of Ohio, my guess is taxpayers even 

in the Democrat districts who sent this letter saying do not do this, 

a bunch of taxpayers would say this makes so much sense particularly when so much of the population who are in Medicaid who are 

able-bodied are younger folks. The fact that there is not a work 

component just boggles people’s minds. So, I would just encourage 

you to work a little faster and get those waivers approved, and 

make sure this happens. 

With that, I yield back. 

Mr. HILL. Thank you. 

Mr. MEADOWS. Before I recognize the gentlewoman the District 

of Columbia, I want to make sure we clarify your testimony because I think you said it one way, and the gentleman from Ohio 

came back. There has been 14 States who have requested the waiver. You have granted three. Eleven are in the hopper. Is that correct? 

Mr. HILL. That is correct. 

Mr. MEADOWS. Okay. 

Mr. HILL. The 11, I would need to go back and just be sure it 

is precisely 11, but roughly 11. 

Mr. MEADOWS. Okay. 


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Mr. CONNOLLY. Mr. Chairman, could I just piggyback on your 

clarification? One of those pending States is Tennessee. Is that correct? 

Mr. HILL. I believe so, yes. 

Mr. CONNOLLY. And Tennessee has estimated that this work 

waiver requirement would actually cost $18.5 million to implement, 

and they have asked permission to use TANF money, taking sort 

of from Peter to pay Paul, to do that. Is that correct? 

Mr. HILL. I know that I have seen reports on how Tennessee 

wants to finance their work requirements. 

Mr. CONNOLLY. Right. 

Mr. HILL. I am really not in a position to get into what they have 

requested. 

Mr. CONNOLLY. And while philosophically we may agree or disagree on this, is there any reason to believe that a work requirement has anything to do with waste, fraud, and abuse in reducing 

improper payments? Is there a connection? 

Mr. HILL. I am not sure that I have drawn the connection myself. 

I mean, we believe the community engagement and getting folks 

into work —— 

Mr. CONNOLLY. Thank you. 

Mr. HILL.—promote health. 

Mr. CONNOLLY. Thank you, Mr. Chairman. 

Mr. JORDAN. Mr. Chairman? Mr. Chairman? 

Mr. MEADOWS. Yes. 

Mr. JORDAN. The work requirement has everything to do with 

treating taxpayers with respect. Able-bodied adults. Many of these 

folks are young, many of them single men, and you do not have to 

do anything to get free healthcare from the taxpayer. So, it has everything to do with treating the people who pay for this with respect they deserve. That is why it is so critical. And, oh by the way, 

it might actually help the recipient. That is why we are for it. 

Mr. MEADOWS. All right. The chair recognizes his allowance of a 

colloquy that came up without the intention of that. So, the chair 

is going to recognize, no intention of colloquy from the gentleman 

from Virginia. The chair recognizes the gentlewoman from the District of Columbia for a generous 5 minutes. 

Ms. NORTON. I thank my good friend. Mr. Chairman, he is always fair to me. That was just a debate in case you wondered what 

was just happening there. I want to thank my good friend from 

Virginia, the ranking member, for mentioning our work together, 

making fun of members of committee with Shakespeare. Every 

year it is one of the highlights —— 

Mr. MEADOWS. Does the gentlewoman want to strike down his 

words? 

[Laughter.] 

Mr. CONNOLLY. No, she does not. 

Ms. NORTON. On the contrary. I am a part of this play acting, 

Democrats and Republicans, and I must say it makes us understand that not all play acting occurs from this podium. 

Just let me say something about a waiver in order to allow people to work right here. I would welcome a waiver for people who 

are not working in the District of Columbia on Medicaid, and with 

that waiver I would need in this knowledge economy from the 


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agencies who grant the waiver, help in finding jobs for people in 

the District of Columbia who are on Medicaid who are not working. 

I have not found them as I go around my district. I do not know 

if this happens in yours, but if you want a job here, and you do 

not have a high school education, then you need training. You need 

what the Federal government is not offering such people. 

Most of the people on Medicaid are elderly, disabled, or children. 

So, let us understand who we are talking about. What I do not understand is the definition of terms. Once we get a term, it just begins to be used as if everybody understood what it means. ‘‘Improper payment rate’’ has been used over and over again. I thank 

you, Mr. Hill, for clarifying that that does not mean deliberate 

fraud. 

And one of the things I would ask the chairman to do is to call 

for a task force of U.S. attorneys to work with the Agency. I do not 

think you are equipped to tell us what is fraud and what is not 

fraud. I state that as a member of the District of Columbia Bar 

that you need help, particularly since you are not even able to 

disaggregate. That is very, very unfortunate because we are using 

‘‘improper payments’’ to cover all payments. And that is not very 

professional here, and it will not help you to uncover those improper payments. So, let us find out what we mean. 

In HHS’s 2017 financial report, and here I am quoting, ‘‘Improper payments are not necessarily expenses that should not have 

occurred.’’ So, why do we not just start there? Can you explain how 

payments are categorized as improper, and how improper payments could be legitimate payments? Any of you, please help us 

clarify what we are talking about here. 

Mr. HILL. I will start, and we can let others jump in, and we can 

turn back to our three-State audit in California, Kentucky, and 

New York where we are looking at eligibility systems failures. And 

it can be the case that a State has not complied with all the rules 

that we have established for verifications, for checking income, for 

determining whether or not a person was eligible. If they have not 

completed those system checks, we would count that eligibility decision as an error, and that would be a payment error. 

Ms. NORTON. So, that is an error, not fraud. 

Mr. HILL. Right, but in fact —— 

Ms. NORTON. Improper because it is an error. 

Mr. HILL. Right, but it does not mean necessarily that all those 

payments should not have been made. So, for example, when a 

State in those instances would have gone back and done their redetermination, actually fulfilled the checks that they were supposed 

to have fulfilled, and found that the person was, in fact, eligible, 

the payment would have been made. So, it is an improper payment 

because the State has not complied, but it may not necessarily —— 

Ms. NORTON. And, of course, the State may at a later date correct the mistake. 

Mr. HILL. Right, similarly with providers who —— 

Ms. NORTON. And we are talking about some people who do not 

have a high school education, some people are elderly, some people 

may have given the wrong data, some people may not have had the 

right data. Mr. Chairman, that was really my basic point, to try 

to clarify what we are talking about here, to understand that the 


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Agency itself has not, in fact, been able to decide whether we are 

talking about fraud or not. 

Every member of this body has women, children, elderly, the majority of the people we are talking about may have committed errors. But it would be terrible to categorize them together with, as 

Mr. Hill says, there are very few people who set out to lie on their 

forms, whether they are income tax or other forms, and, therefore, 

commit fraud. And so, Mr. Chairman, I call upon the committee 

again, if you would, at least as a pilot to ask some U.S. attorneys 

to join with some members of the Agency so that they can begin 

to, in fact, go after fraud. And I would be glad to have my district 

be one of those, who would work with the Agency on actual fraud 

so then you could come back and give us a report on progress you 

are making. 

I am outraged if there is actual fraud at a time when we are seeing cuts of all kinds in-services, and in Medicaid, and all kinds of 

threats to cover exactly the kind of services and benefits to women, 

children, the elderly, and disabled as are involved in Medicaid. So, 

a task force would help us clarify what we mean. I do not think 

we can ask the Agency, which is not a law enforcement agency, to 

do this on its own. 

Mr. MEADOWS. Well, I think the gentlewoman’s perspective on 

that, as she might have recalled in my opening statement, we do 

know that fraud is part of the problem because of —— 

Ms. NORTON. Granted. 

Mr. MEADOWS.—what happened in Virginia and what happened 

in North Carolina that I highlighted in my opening statement. And 

so, in doing that, I think it is incumbent upon us before we get the 

U.S. attorneys involved, and, Ms. Tinker, I have already asked you 

to help us identify those. But it is incumbent on Mr. Hill, it is 

about quality data. And the truth is it is not as much the beneficiaries, as Ms. Yocom has pointed, as those that are actually providing that. That is where the fraud comes from, so it is not actually as much your individual constituents as maybe a constituent 

who is providing the service where the greatest amount of fraud 

happens. And so, I think if you can help us, Mr. Hill, highlight 

that. 

I think the gentleman from Wisconsin, Mr. Grothman, is now 

recognized for 5 minutes. 

Mr. GROTHMAN. Thank you. I am not sure how many cuts there 

are, but I worry about cuts to amend, too. A couple question here. 

First of all, for Mr. Purpera, as far as Louisiana is concerned, we 

talk about over time going for fee-for-service to managed care. I 

would like you to comment the degree to which that will, in addition to other benefits, reduce fraud. 

Mr. PURPERA. Well, one thing to understand, sir, is that under 

managed care, our liability is 100 percent from day one. So, under 

fee-for-service, we enroll someone and they become a recipient, but 

there are no payments made until they actually go and see a physician or get a prescription. 

Mr. GROTHMAN. Correct. 

Mr. PURPERA. But under managed care, their liability becomes 

first day it is 100 percent. As to fraud, I can only speak for Louisiana at the moment and maybe 25 other States that do not use 


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income tax data to verify the eligibility role. But realize when you 

apply for Medicaid, it is very much based upon income, and the 

only thing that most of these States have to check is the wage 

data. Wage is data is very limited. It does not include all kinds of 

self-employment types of income. 

And so, you know, I guess we have talked several times today 

about fraud as only on kind of on the provider side. I am not so 

sure about that, but I do not know that we know either because 

we are not really looking. 

Mr. GROTHMAN. Right. Well, I guess the question is there is a 

feeling with regard to medical costs in general that maybe less procedures would be done on managed care than fee-for-service. And 

given that some of the fraud is from the provider side, there would 

be less opportunity for fraud there. I guess that is what I’m trying 

to get you to say, or do you think that is true or not? 

Mr. PURPERA. Well, I do believe, I think it was the State of 

Washington, their auditor issued a report saying that for every dollar in improper payment that went into the system under managed 

care, it came back in the form of a dollar and a quarter in increased per member per month later on. So, that kind of data is 

out there. In other words, a bad payment today can result in increased payments later in —— 

Mr. GROTHMAN. So, you do not think that managed care would 

be necessarily a benefit is what you are telling me. 

Mr. PURPERA. Would be, sir? 

Mr. GROTHMAN. Would necessarily be a benefit. You do not buy 

into the idea that managed care would —— 

Mr. PURPERA. No, sir, I am not saying it would not be. I think 

that the data on that is still out. In my State, we are looking or 

continuously looking at what are the actual costs in counter costs 

of our managed care partners as compared to the PM/PMs that we 

are paying, you know, the money that we are sending them. And 

we are looking at that gap and trying to determine what is the extent of that gap. 

The major portion of that, I am not saying this is fraud, but it 

is based upon the actuarial assumptions that go into developing the 

per month/per month. In Louisiana, for example, the normal rate 

for a Medicaid recipient PM/PM, let us say, $350. It is around 

there. But under expansion, it is $500. 

Mr. GROTHMAN. Okay. 

Mr. PURPERA. Now, I do not think we have really come to understanding why it jumped so much. 

Mr. GROTHMAN. Okay. Another question kind of follow-up on 

what a couple people have said in the past, obviously Medicaid is 

a huge benefit, and unless you do not get out at all, I think you 

know that people are intentionally holding down their income because they want to keep their Medicaid, which is understandable. 

It is such a generous program. Either they are making less, or 

maybe just reporting less income, which is maybe what you were 

referring to, because you want to hold under a given amount. 

Does anybody have any comments on that? Are there any people 

even beginning to make an estimate on the amount of income that 

the economy is losing as people either work less or find a way to 

work for cash to keep this generous benefit? Anybody given it any 


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thought? Mr. Purpera, that is why we like you. You are always 

thinking. 

Mr. PURPERA. Yeah. So, let me just say this. I do not have any 

statistics on —— 

Mr. GROTHMAN. I mean, it is obvious that it is going on to a degree because you hear about it if you talk to people. 

Mr. PURPERA. If you just strictly want to talk about the fraud 

perspective, and I am not trying to give any degree of how many 

people are committing fraud in this perspective. At least in Louisiana and 25 other States, they have to reduce their income because are not looking. The program is not looking, right? We are 

looking at their wages. So, if they are self-employed, they are a 

home building contractor, they can make as much money as they 

want to. We do not know the answer to that, and our State departments are not going to know the answer to that. 

In addition to that, the way the regulations are written right 

now, I have got one of the applications in my briefcase back here. 

It says what did you make this month, and what was your income 

this month? Well, so if you have cyclical incomes it really gets 

crazy as to whether or not they are eligible or not eligible. 

Mr. GROTHMAN. Yeah, and I was not aware of that. You can tell 

me this. If I am somebody who is working 60 hours a week from 

March 1st to November 30th, and I go in and apply for Medicaid 

on January 1st, how long do I get Medicaid for? 

Mr. PURPERA. In my State, they would ask you what was your 

income in the previous month. 

Mr. GROTHMAN. Correct. 

Mr. PURPERA. And then you are going to be based upon that. And 

then in addition to that, you are going to be enrolled in the system 

primarily for a year. Now, you have a responsibility to report any 

time that you increase your income, but we are talking about 

fraud, right? So, if we are talking about fraud, then that individual 

is not going to report. 

Mr. GROTHMAN. Okay. And in the case I said, and thank you, Mr. 

Chairman, for indulging me. In my example, if I am a guy, say, involved in construction and I am making a 80 grand a year every 

year from March 1st to November 30th, and I apply on January 1st 

and I am found eligible, as a practical matter, if I just let the Medicaid run and never report anything until the end of the year, am 

I ever going to get caught or is anything bad ever going to happen 

to me? 

Mr. PURPERA. Unless you are honest about what you make, I do 

not believe you will because in 25 States, they are not using tax 

data. In addition to that, let me just point out, because we are basing it on modified adjusted gross income, which is a number that 

looks a whole bunch like tax data, then in your construction company, if you buy a new piece of equipment that year and decide to 

pull a 1079 deduction and write off more that year in your depreciation, then you may be living off $100,000, but you qualify for 

Medicaid. 

Mr. GROTHMAN. Thank you. Do you think we should require all 

States to use tax data? 

Mr. PURPERA. I absolutely. 


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Mr. MEADOWS. You can answer the question, the gentleman from 

Wisconsin has exceeded my gracious timeframe. 

Mr. GROTHMAN. That is why. It was such a good question. 

Mr. MEADOWS. You can very quickly answer the question and we 

will close out. 

Mr. PURPERA. I absolutely, sir. Absolutely do. 

Mr. PURPERA. Thank you. 

Mr. MEADOWS. All right. I thank the gentleman from Wisconsin. 

The chair recognizes the gentleman from Virginia for his closing remarks. 

Mr. CONNOLLY. I thank the chair, and, again, I think this hearing is a good piece of work in trying to get at both methodology for 

accounting for improper payments, disaggregating them so that we 

can devise strategies working together to effectively reduce it. I do 

think it is important in listening sometimes to some of the rhetoric, 

you know, overwhelmingly people who take advantage of Medicaid 

need it. They are not gaming the system. They are not takers. They 

are not con men. They are families who are trying to make sure 

they have access to healthcare. 

And what we also know is that when people have that access, society benefits. There are not free riders. People get healthier, can 

live more productive lives, can become taxpaying, contributing 

members of society. So, healthcare is an investment. We do not 

want anyone cheating. We do not want people stealing. We do not 

want people defrauding. But let us not overstate the extent of the 

problem. Medicaid is there for a very good reason and it has 

worked. 

Ms. NORTON. Would the gentleman yield for a moment? 

Mr. CONNOLLY. Of course. 

Ms. NORTON. I just wanted to inject another bipartisan note here 

because my colleague who just spoke, who just asked questions indicated, and I am glad the chairman allowed him to ask the question, whether or not using tax forms would be better than having 

people report, for example, on a monthly basis what their income 

is, or even self-report. 

I must say in terms of whether hearings are designed to get to 

remedies, unless I hear something and we need another time for 

this, perhaps another hearing, or perhaps they could even respond 

to the chairman’s request for information on why tax forms would 

not be a better way to get at the notion of the actual income of people so that we could get at Medicaid fraud. And I yield back to my 

good friend. 

Mr. CONNOLLY. I thank my friend for that, and I think she 

makes a very good point. We have heard testimony here. No one 

has said there is massive individual fraud going on because people 

are gaming the system in terms of their income, reported income. 

There may be examples of that, and we want to try our best to perfect the system. But I want to go at the institutional problems first 

because that is where the real money is, and every dollar we save 

at that level can be invested in the program for people in need. And 

so, you know, until and unless we have testimony that would corroborate the need for such a thing because of wrongdoing by large 

numbers of individuals, let us focus at the problem at hand that 

we have heard testimony from, including from the Administration. 


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And, again, I want to thank my friend, Mr. Meadows, for this 

thoughtful hearing, and I know we are going to have others on improper payments. This committee is committed to addressing this 

issue and working with the executive branch to do so and with our 

friends at GAO to develop methodologies to better capture the nature of the problem. And I thank the chair. 

Mr. MEADOWS. I thank the gentleman for his remarks. A few 

housekeeping items and follow-ups that I would like to add. Mr. 

Schneider, you have been over there to my right. Normally I focus 

on my right. Today I did not. And in doing that, if you could actually give us a list of the top three recommendations that you either 

personally or in your official capacity could make to us on possibly 

implementing areas to address this improper payment issue. If you 

could do that from an intellectual standpoint. Are you willing to do 

that and get to the committee? 

Mr. SCHNEIDER. I am, Mr. Chairman. I did provide some recommendations in my written statement. Do you want additional 

ones? 

Mr. MEADOWS. Three additional ones above your opening written 

statement if you can, and I guess what I am saying is based on the 

testimony you have heard today, critiquing it from an intellectual 

standpoint, if you can do that, that would be very helpful so I can 

be very specific with that request. 

Mr. SCHNEIDER. I would be happy to, Mr. Chairman. 

Mr. MEADOWS. All right, thank you. 

Mr. MEADOWS. Mr. Hill, let me come back to you one area, and 

it gets back to the quality of the data that we talked about with 

the reporting system and the data that obviously is, according to 

Ms. Yocom and Ms. Tinker, is less than what we would want it to 

be, and I think from your testimony, less than what you would 

want it to be. We have had a number of deadlines that seem to get 

extended in terms of compliance. So, what I need from you is really 

a plan, and I will give you, is 45 days enough to come up with a 

plan on how we can date specific look at how you are going to implement and improve that quality, exponentially I might add, from 

where it is today. Is 45 days enough to get back to this —— 

Mr. HILL. Yep. 

Mr. MEADOWS.—with date-specific targets on when you are going 

to do that so it addresses that? 

Mr. HILL. It is a fair question. 

Mr. MEADOWS. Thank you, Mr. Hill. 

Mr. MEADOWS. And so, for all of you, thank you. And thank you 

for the thoughtful way that you have answered these questions. 

Hopefully this has not been as painful as some oversight hearings 

that you either may have been a part of. I know from a CMS standpoint, hopefully this is better. I look back in the back and she is 

smiling, but there have been some that have been a little bit more 

contentious in the past. And thank you all. 

And if there is no further business before the committees, the 

committees stand adjourned. 

[Whereupon, at 11:46 a.m., the subcommittee was adjourned.] 


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