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A MEDICAID FRAUD VICTIM SPEAKS OUT: WHAT’S

NOT WORKING AND WHY

JOINT HEARING

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT ORGANIZATION,

EFFICIENCY AND FINANCIAL MANAGEMENT

AND THE

SUBCOMMITTEE ON HEALTHCARE, DISTRICT OF

COLUMBIA, CENSUS AND THE NATIONAL ARCHIVES

OF THE

COMMITTEE ON OVERSIGHT AND

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

DECEMBER 7, 2011

Serial No. 112–113

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

and Natural Resources

(

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

http://www.house.gov/reform
(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

DARRELL E. ISSA, California, Chairman

DAN BURTON, Indiana

JOHN L. MICA, Florida

TODD RUSSELL PLATTS, Pennsylvania

MICHAEL R. TURNER, Ohio

PATRICK T. MCHENRY, North Carolina

JIM JORDAN, Ohio

JASON CHAFFETZ, Utah

CONNIE MACK, Florida

TIM WALBERG, Michigan

JAMES LANKFORD, Oklahoma

JUSTIN AMASH, Michigan

ANN MARIE BUERKLE, New York

PAUL A. GOSAR, Arizona

RAU ́ L R. LABRADOR, Idaho

PATRICK MEEHAN, Pennsylvania

SCOTT DESJARLAIS, Tennessee

JOE WALSH, Illinois

TREY GOWDY, South Carolina

DENNIS A. ROSS, Florida

FRANK C. GUINTA, New Hampshire

BLAKE FARENTHOLD, Texas

MIKE KELLY, Pennsylvania

ELIJAH E. CUMMINGS, Maryland, Ranking

Minority Member

EDOLPHUS TOWNS, New York

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, District of

Columbia

DENNIS J. KUCINICH, Ohio

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

STEPHEN F. LYNCH, Massachusetts

JIM COOPER, Tennessee

GERALD E. CONNOLLY, Virginia

MIKE QUIGLEY, Illinois

DANNY K. DAVIS, Illinois

BRUCE L. BRALEY, Iowa

PETER WELCH, Vermont

JOHN A. YARMUTH, Kentucky

CHRISTOPHER S. MURPHY, Connecticut

JACKIE SPEIER, California

LAWRENCE J. BRADY, Staff Director

JOHN D. CUADERES, Deputy Staff Director

ROBERT BORDEN, General Counsel

LINDA A. GOOD, Chief Clerk

DAVID RAPALLO, Minority Staff Director

SUBCOMMITTEE ON GOVERNMENT ORGANIZATION, EFFICIENCY AND FINANCIAL

MANAGEMENT

TODD RUSSELL PLATTS, Pennsylvania, Chairman

CONNIE MACK, Florida, Vice Chairman

JAMES LANKFORD, Oklahoma

JUSTIN AMASH, Michigan

PAUL A. GOSAR, Arizona

FRANK C. GUINTA, New Hampshire

BLAKE FARENTHOLD, Texas

EDOLPHUS TOWNS, New York, Ranking

Minority Member

JIM COOPER, Tennessee

GERALD E. CONNOLLY, Virginia

ELEANOR HOLMES NORTON, District of

Columbia

SUBCOMMITTEE ON HEALTH CARE, DISTRICT OF COLUMBIA, CENSUS AND THE

NATIONAL ARCHIVES

TREY GOWDY, South Carolina, Chairman

PAUL A. GOSAR, Arizona, Vice Chairman

DAN BURTON, Indiana

JOHN L. MICA, Florida

PATRICK T. MCHENRY, North Carolina

SCOTT DESJARLAIS, Tennessee

JOE WALSH, Illinois

DANNY K. DAVIS, Illinois, Ranking Minority

Member

ELEANOR HOLMES NORTON, District of

Columbia

WM. LACY CLAY, Missouri

CHRISTOPHER S. MURPHY, Connecticut
(III)

C O N T E N T S

Page

Hearing held on December 7, 2011 ........................................................................ 1

Statement of:

Brice-Smith, Angela, director, Medicaid Integrity Group, Centers for

Medicare & Medicaid Services; Gary Cantrell, Assistant Inspector General for Investigations, Office of the Inspector General, Health &

Human Services; Carolyn Yocom, Director, Health Care, Government

Accountability Office; and Valerie Melvin, Director of Information Management and Human Capital Issues, Government Accountability Office 41

Brice-Smith, Angela .................................................................................. 41

Cantrell, Gary ............................................................................................ 55

Melvin, Valerie .......................................................................................... 90

Yocom, Carolyn .......................................................................................... 65

West, Richard, victim of Medicaid fraud; and Robin Page West, attorney,

Cohan, West, & Karpook, P.C. ..................................................................... 12

West, Richard ............................................................................................ 12

West, Robin Page ...................................................................................... 19

Letters, statements, etc., submitted for the record by:

Brice-Smith, Angela, director, Medicaid Integrity Group, Centers for

Medicare & Medicaid Services, prepared statement of ............................. 44

Cantrell, Gary, Assistant Inspector General for Investigations, Office of

the Inspector General, Health & Human Services, prepared statement

of ..................................................................................................................... 57

Connolly, Hon. Gerald E., a Representative in Congress from the State

of Virginia, prepared statement of .............................................................. 123

Cummings, Hon. Elijah E., a Representative in Congress from the State

of Maryland, prepared statement of ............................................................ 9

Gowdy, Hon. Trey, a Representative in Congress from the State of South

Carolina, prepared statement of .................................................................. 5

Melvin, Valerie, Director of Information Management and Human Capital

Issues, Government Accountability Office, prepared statement of ........... 92

West, Richard, victim of Medicaid fraud, prepared statement of ................. 15

West, Robin Page, attorney, Cohan, West, & Karpook, P.C., prepared

statement of ................................................................................................... 21

Yocom, Carolyn, Director, Health Care, Government Accountability Office, prepared statement of ........................................................................... 67

(1)

A MEDICAID FRAUD VICTIM SPEAKS OUT:

WHAT’S NOT WORKING AND WHY

WEDNESDAY, DECEMBER 7, 2011

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON GOV- ERNMENT ORGANIZATION, EFFICIENCY AND FINANCIAL

MANAGEMENT, JOINT WITH THE SUBCOMMITTEE ON

HEALTHCARE, DISTRICT OF COLUMBIA, CENSUS AND

THE NATIONAL ARCHIVES, COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM, Washington, DC.

The subcommittees met, pursuant to notice, at 10:07 a.m., in

room 2154, Rayburn House Office Building, Hon. Todd Russell

Platts (chairman of the Subcommittee on Government Organization, Efficiency and Financial Management) presiding.

Present: Representatives Platts, Issa, Lankford, Gosar,

DesJarlais, Gowdy, Cummings, Towns, Norton, Connolly, and

Davis.

Staff present: John Cuaderes, deputy staff director; Sery E. Kim,

counsel; Mark D. Marin, director of oversight; Brian Blase, professional staff member; Will L. Boyington, staff assistant; Molly Boyl,

parliamentarian; Tegan Millspaw, research analyst; Linda Good,

chief clerk; Laura Rush, deputy chief clerk; Gwen D’Luzansky, assistant clerk; Suzanne Sachsman Grooms, minority chief counsel;

Yvette Cravins, minority counsel; Devon Hill, minority staff assistant; Lucinda Lessley, minority policy director; Ashley Ettienne, minority director of communications; Jennifer Hoffman, minority

press secretary; Jaron Bourke, minority director of administration;

and Carla Hultberg, minority chief clerk.

Mr. PLATTS. This hearing will come to order. I appreciate everyone’s attendance and welcome everybody here in this joint subcommittee hearing, the Subcommittee on Government Organization, Efficiency and Financial Management along with the Subcommittee on Health Care, District of Columbia, Census and the

National Archives.

Today’s hearing will examine the serious problem of fraud, waste

and abuse in Medicaid. In fiscal year 2011, the Medicaid program

issued $21.9 billion in improper payments, higher than any program in government except Medicare. It is unknown how much of

these improper payments are fraudulent or how much fraud goes

undetected. The integrity program is responsible for identifying improper payments, educating providers about fraud and providing

assistance to States in order to combat fraud, waste and abuse. The

Patient Protection and Affordable Care Act of 2010 expanded funding for Medicaid program integrity. However, it also expands the
2

size of the Medicaid program and will increase Medicaid spending

by over $600 billion between 2014 and 2021.

Given this dramatic expansion, fraud detection and prevention

will be all the more important.

Better data quality is essential in reducing waste, fraud and

abuse. In 2006, CMS initiated two new data systems in an attempt

to improve quality and access. GAO issued a report finding that

both the new systems were inadequate and underutilized. GAO

also could not find any evidence of financial benefits in implementing the new systems despite the fact that CMS has been using

them for over 5 years. There are also problems with State-reported

data.

Many States are not reporting all required data and there are

often lag times for up to 1 year between when States report data

and when CMS gets it and verifies it. This makes it extremely difficult and often impossible to prevent data fraud before payments

are issued. And as I know, we will hear in the testimony here

today from one of our witnesses some of the information is as old

as 12 years, which is just unthinkable as far as usefulness of it.

As a result of poor data systems, CMS relies on contractors to

identify fraud through audit work. CMS spent $42 million on Medicaid integrity contractors in 2010. However, GAO has noted pervasive deficiencies in CMS’s oversight of its contractors and has

issued numerous recommendations to CMS.

Most of these recommendations have not been implemented. The

Office of Inspector General has been on the front lines of investigating fraud through its work with the State Medicaid fraud control units, MFCUs.

In 2010, these units conducted 9,710 fraud investigations and recovered $1.8 billion. This work is essential and would become even

more crucial as Medicaid expands. But States have limited resources to combat the rising problem of Medicaid fraud, and there

is also a question of the incentive of States to do so because of

much of the money is coming back to Federal Government, not to

their own treasury.

Health care fraud is sometimes called a faceless or victimless

crime, and we also talk about it in terms of money lost. As a result,

it can be easy to overlook what a devastating impact it can have

on victims, beneficiaries who do not get the care that they need and

deserve.

Today we are joined by one such individual, Mr. Richard West,

a Vietnam war veteran and a victim of Medicaid fraud.

He and his lawyer, along with his son, will testify here today

about their personal experiences and their efforts to uncover fraud

within the Medicaid program.

And their case is going to show that this isn’t just about money,

this is about ensuring that we do right by every American citizen

who is in need of medical assistance and is a part of the Medicaid

program. As Mr. West will share, it wasn’t just the millions of dollars that was being stolen from American taxpayers, it was because

of that fraud that he was being denied care through the Medicaid

program. It is not just about money, it is about people. We will also

hear testimony from CMS, OIG and GAO on systemic problems
3

within Medicaid and what must be done to provide effective oversight and reduce fraud, waste and abuse in the Medicaid program.

And now I am honored to recognize the ranking member of our

subcommittee, the gentleman from New York, Mr. Towns, for an

opening statement.

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

Let me thank the ranking member, Mr. Davis, as well for convening today’s hearing on fraud in the Medicaid system. Weeding

out fraud is a bipartisan goal that all stewards of taxpayers’ dollars

should share, so I truly appreciate this opportunity to explore this

subject fully.

I thank the witnesses on both panels for joining us today to discuss their views. I especially would like to thank Mr. West for

sharing his story and for his service to this country, the Vietnam

War. Mr. West, I salute you.

There is no question that Medicaid is an essential program. It

provides a vital safety net for many children, seniors, and the disabled who truly need it. It is unfortunate, however, that it has become a target for bad actors seeking to game the system. There is

some positive news to note, even in this era of budget cuts. CMS,

in its efforts to undercover fraud, are actually making money for

the government and for taxpayers. For every $1 invested in fraud

prevention and detection, over $16 is actually recovered. Much of

this recovery came from cases like the very successful case brought

by Mr. West.

We need to be certain that we are encouraging whistleblowers

who become aware of these cases in the Medicaid program to bring

them forward. This administration has done an admirable job of

stepping up fraud detection in the Medicare and Medicaid programs. However, I understand that there have been a number of

recommendations made by GAO that intends to address this issue

but have not yet been adopted.

I look forward to exploring the limitations that CMS and HHS

has so that we can work together to further prevent undercover

and recover payments in the Medicaid system.

Thank you, Mr. Chairman, of course, and for this hearing and I

look forward to working with you and I yield back the balance of

my time.

Mr. PLATTS. Thank you, Mr. Towns. I am now honored to yield

to the chairman of the subcommittee on Health Care, District of

Columbia, Census and National Archives, the distinguished gentleman from South Carolina, Chairman Gowdy.

Mr. GOWDY. Thank you, Mr. Chairman. Today the committee will

hear from Richard West, a man with firsthand knowledge of how

easily government programs are defrauded and how the government all too often just doesn’t seem to care. Mr. West acted responsibly and alerted the State of New Jersey Medicaid and his social

worker to the fraudulent behavior of his health care provider, but

none of the government agencies did anything. This is wholly unacceptable. And this is why people have lost trust in the institutions

of government, and this is why our fellow citizens have so little

trust that we are spending their money as carefully as we would

spend our own.
4

Mr. West kept track of the nursing care received and was able

to compare his records to the provider’s records. He found discrepancies and because Medicaid capped the monthly services provided

to Mr. West, he was not receiving the care he was entitled to. In

other words, due to the fraudulent activities of the company providing Mr. West’s care, he reached the cap and Medicaid told him

his services were suspended. So not only was the provider ripping

off taxpayers, but the provider was also not providing the obligated

services to Mr. West.

It is impossible to believe that Mr. West’s story is isolated. Medicaid is designated a high-risk program and is, therefore, highly

susceptible to waste, fraud and abuse. Many experts believe the

loss rates for Medicaid and Medicare due to fraud equals about 20

percent of the total program funding. So perhaps as much as onefifth of the money spent is wasted, and ignoring legitimate calls for

investigations into fraud when witnessed firsthand, has a chilling

effect on other like-minded people who might be willing to alert authorities to abuse.

Most of the fraud occurs when providers bill for services never

delivered to Medicaid patients. According to Malcolm Sparrow, a

Harvard University expert on health care fraud, the rule for criminals is simple. If you want to steal from Medicare or Medicaid, or

any other health care insurance program, learn to bill your lies correctly. Then for the most part, your claims will be paid in full and

on time without a hiccup by a computer with no human involvement at all.

One reason for high rates of abuse might be that States do not

appear to have an adequate incentive to root out waste and fraud.

This is, in large part, due to the fact that a large part of what is

recovered must be sent back to Washington. Another reason may

be the Centers for Medicaid & Medicare Services doesn’t typically

analyze claims data for over a year after the date the claim was

filed.

This lag time indicates CMS needs to update the tracking system

used to root waste, fraud and abuse of the Medicaid system out.

Although every tax dollar inappropriately spent is a concern, the

magnitude of waste, fraud and abuse in Medicaid elevates this

problem.

Our country now spends $430 billion on Medicaid a year. And

CMS projects the total spending on Medicaid will double by the end

of this decade. States are struggling to deal with Medicaid’s growth

and Medicaid is crowding out State priorities like education, transportation and public safety.

I look forward to today’s hearing and hearing from our witnesses

and hopefully flushing out ideas for eliminating the amount of tax

dollars that are being wasted through the Medicaid program. When

folks like Mr. West are being hurt and neglected due to fraud, it

is time to find solutions and our fellow citizens, the ones who trust

us enough to let us be their voice in this town are increasingly losing confidence that we are not serious about tackling waste, fraud

and abuse. We must reclaim their confidence. We do that one episode at a time, and we might as well start with Mr. West. With

that, I would yield back to the chairman.

[The prepared statement of Hon. Trey Gowdy follows:]
5
6
7

Mr. PLATTS. I thank the gentleman. I am now pleased and honored and yield to the ranking member of the Subcommittee on

Health Care, District of Columbia, Census and National Archives,

the gentleman from Illinois, Mr. Davis.

Mr. DAVIS. Thank you very much, Chairman Platts, Chairman

Gowdy, Ranking Member Towns, I thank all of you for holding today’s hearing. Reducing waste, fraud and abuse in health care is

a rare and desirable policy shared by Republicans and Democrats

alike.

It is disturbing that some entrusted with caring for our most vulnerable populations would seek to defraud the government by falsely billing for services. It is the height of corporate greed. In this

era of budget shortfalls and cuts, we can no longer stumble upon

these bad actors. We must be vigilant in locating and weeding out

fraud. The proper resources must be dedicated to root out waste

and abuse. Our taxpayer dollars are too precious. The more funds

expended on phantom services delay or extinguish the authentic

and necessary health care programs and services that people depend upon daily.

As Medicaid is determined to be a high-risk program, I want to

further encourage CMS to fully utilize and implement all of the

tools available in this fight, including the Integrated Data Repository and the One Program Integrity. These technological programs

are invaluable in consolidating the data necessary in fraud detection. The Patient Protection and Affordable Care Act further provides tools to fight Medicaid fraud. The licensure and background

checks on providers and suppliers are a productive first step for

program integrity.

In the enforcement arena, the new civil penalties created for falsifying information is evidence that the Federal Government takes

fraud seriously. To that end, the Affordable Care Act adds $10 million annually for fiscal years 2011 through 2020.

Simply put, fighting health care fraud is good fiscal policy.

And I might add that I am totally opposed to fraudulent practices in medicine, especially involving the most vulnerable, the

most unsuspecting, and, in many instances, the most gullible members of our society. I have seen firsthand low-income communities

deal with Medicaid meals where people are lined up to be taken advantage of. These are practices we should not, cannot and must not

tolerate.

Therefore, I applaud the tireless efforts of Mr. Richard West. He

serves as an example to others. He saw a wrong and tried to right

it. And so we all thank you, Mr. West. I look forward to your testimony and the testimony of all the witnesses. And I thank you, Mr.

Chairman, and yield back.

Mr. PLATTS. I thank the gentleman. We have also been joined by

the distinguished ranking member of the full Committee on Oversight and Government Reform, the gentleman from Maryland, Mr.

Cummings. And I recognize him for an opening statement.

Mr. CUMMINGS. Thank you very much, Mr. Chairman. I would

also like to thank Mr. West for taking the time to come to Capitol

Hill today to share his experience so we might apply the lessons

learned from his case to future policy and law enforcement decisions. Last year, Medicaid provided critical health care services to
8

an estimated 56 million Americans in need, the vast majority of

whom are seniors, individuals with disabilities, and children. Since

so many Americans rely on this program, it is imperative that we

root out fraud because every dollar squandered is a dollar that does

not go to critical health care services for these vulnerable Americans.

Today’s hearing focuses on a case that was brought to light by

Richard West, a Medicaid beneficiary who asserted his rights under

the False Claims Act to prosecute fraud against the Medicaid system by Maxim Healthcare Service. Mr. West’s lawsuit retrieved

nearly $150 million for the U.S. taxpayers. We need support efforts

by people like Mr. West to ensure that American citizens are empowered to take on corporate wrongdoing. The written testimony of

our witnesses on the second panel also makes clear that we need

better coordination between State and Medicaid programs and the

Centers for Medicare & Medicaid Services to reduce duplicative efforts and better align resources.

Fortunately, the Affordable Care Act provides additional funding

to fight waste, fraud and abuse in Medicaid. It also contains a

number of provisions designed to improve data quality and promote

data sharing between Federal agencies, the States and health care

providers.

The fight against unscrupulous companies like Maxim

Healthcare Services requires more resources, not less. When we invest in fraud prevention, government spending more than pays for

itself. That is one reason why repealing the Affordable Care Act

and cutting Medicaid’s enforcement budget would be very shortsighted, and indeed, counterproductive.

I look forward to the testimony of our witnesses today, and I

hope their recommendations will help reduce fraud, waste, and

abuse and create a stronger Medicaid program for those who rely

on it.

And with that, Mr. Chairman, I yield back.

[The prepared statement of Hon. Elijah E. Cummings follows:]
9
10
11

Mr. PLATTS. I thank the gentleman, and yield to the distinguished gentleman from Virginia, Mr. Connolly, for his opening

statement.

Mr. CONNOLLY. Thank you Mr. Chairman and thank you for your

leadership on this important subject.

Reducing Medicaid improper payments contributes directly to the

long-term health of these essential health care programs. I appreciate our two subcommittees holding a hearing on the different

anti-fraud programs within HHS and Centers for Medicare & Medicaid Services. While HHS and CMS are devoting unprecedented

attention to reducing Medicaid fraud, it is clear we must do more

to reduce improper payments and protect the economic security of

individuals such as Richard West who have lost benefits temporarily as a result of attacking Medicaid and Medicare fraud.

As the written testimony of this hearing makes clear, Congress

and the administration have devoted a great deal of effort to reducing improper payments within the last decade. In 2005, Congress

passed the Deficit Reduction Act which established the Medicaid

integrity program. The MIP provides States with technical assistance to identify and prevent fraud which is appropriate since

States administer Medicaid.

The Deficit Reduction Act also requires CMS to work with Medicaid integrity contractors to ferret out overpayments, conduct audits and educate program participants about fraud prevention.

CMS uses this and other data for its Medicaid statistical information system which includes eligibility and claims information

across the country. By maintaining a central data base, CMS can

conduct analyses which identify possible fraud or areas where

fraud is likely to occur. It also works with agencies to duplicate

best practices and has identified 52 of them that could be replicated all across the country. Despite these laudable efforts, it is

clear more can and must be done to reduce fraudulent Medicaid

payments.

As the testimony of Mr. West today and Robin Page West demonstrates, CMS has not always been responsive to reports of fraud.

I look forward to learning more from Ms. Brice-Smith and Mr.

Cantrell about what CMS is doing to prevent such negligences from

occurring in the future.

Continuing robust implementation of existing policies is essential

because CMS also must implement important reforms enacted

under the Affordable Care Act.

As Ms. Brice-Smith notes in her testimony, the Affordable Care

Act sometimes referred to as ObamaCare significantly strengthens

anti-fraud programs. These include elementary reforms such as requiring service providers and suppliers to document orders and referrals. The Affordable Care Act also established the Medicaid Recovery Auditor Contract [RAC] program to create incentives for

contractors to reduce fraudulent payments and in conjunction with

Secretary Sebelius’ Center For Program Integrity, the Affordable

Care Act is designed to identify improper fraud payments before

they are issued by CMS.

I hope today’s testimony illuminates the progress we have already made and additional administrative improvements which

would reduce Medicaid fraud. Perhaps we should consider more
12

stringent punishments for companies and individuals who systematically defraud Medicaid. As Mr. West suggests in his testimony,

consider harsher punishment for the management of such companies.

Again, I thank you Mr. Chairman for holding this very important

hearing, part of a series of getting at so called improper payments

from the Federal Government which total $125 billion a year. So

there is plenty of work to be done. Thank you.

Mr. PLATTS. I thank the gentleman. I thank all of our witnesses

and guests, your patience while we gave our opening statements,

but now we are going to move to why we are really here, and that

is to hear from our witnesses, and we are honored in our first panel

to have a true patriot, Mr. Richard West, who served our Nation

not just in uniform during the Vietnam War, which we are all eternally grateful and indebted to you for that service, but also Mr.

West’s service as a private citizen who saw a wrong and sought to

correct it, and when the government didn’t take action to correct

it, he did.

And so, Mr. West, we are honored to have you here along with

your attorney, Attorney Page West and your son, Adam.

As is consistent with the rules of the committee, we need to

swear all three of you in before we have your testimony. Ms. West

and Adam, if you would stand and raise your right hands and we

will swear all three of you in.

[Witnesses sworn.]

Mr. PLATTS. Let the record reflect all three witnesses have affirmed the oath.

And you may be seated.

And on behalf of Mr. Richard West, who I will save his voice for

questions, we are going to have his son Adam read his opening

statement. Adam, if you are ready, please begin.

STATEMENTS OF RICHARD WEST, VICTIM OF MEDICAID

FRAUD; AND ROBIN PAGE WEST, ATTORNEY, COHAN, WEST,

& KARPOOK, P.C.

STATEMENT OF RICHARD WEST

Mr. ADAM WEST. Thank you, Chairman Platts, Chairman Gowdy,

Ranking Member Towns, Ranking Member Davis, and distinguished members of the subcommittees for inviting me to discuss

Medicaid fraud. I received home health care and other services

through the Community Resources For People With Disabilities

Medicaid Waiver program. As a ventilator wheelchair and oxygendependent person, I qualified for the government-funded program

that provides Medicaid benefits up to 16 hours per day of in-home

nursing care. There’s a limit on the services under this program

each month, and benefits may be suspended or reduced if the

monthly cap is exceeded.

Beginning in March 2003, I received home health care through

Maxim Health Care Services under this program. Maxim billed the

home health care services to Medicaid which paid for them with

both State and Federal funds. In September 2004, I received a letter from the New Jersey Department of Human Services Division

of Disability Services Home and Community Services telling me
13

that I had exceeded my monthly cap and that my Medicaid services

were being temporarily reduced or suspended as a result. This prevented me from obtaining needed dental care.

I complained to the State of New Jersey, I complained to Medicaid, and I complained to a social worker who was assigned to me

telling them that Medicaid had been billed for nursing care I had

not received. None of them did anything about it. Since none of the

government agencies I had contacted about this did anything, I

hired a private attorney, Robin Page West, no relation, of Baltimore, Maryland, who filed on my behalf a whistleblower lawsuit

under the False Claims Act that triggered an investigation of

Maxim.

Somebody decided to make a profit on my disability and rip off

the government. That was wrong and the right thing for me to do

was to expose it. But because the case was under seal while the

government investigated, I couldn’t talk about it. Sometimes I had

trouble getting nurses and I suspected word had gotten out that I

was a troublemaker. Over the course of the government’s investigation, viruses made me severely ill. Each day when I sat alone in

my home and no nurse came, I got sicker and sicker. I was afraid

of dying and leaving my son with a big legal mess. I feared that

if I were no longer alive, the case might be dismissed. Meanwhile,

the government investigation carried on, and investigators kept

discovering more and more billing improprieties.

Finally after 7 years, the government reached a settlement with

Maxim and the case went public with Maxim paying a civil settlement of approximately $130 million and a criminal fine of approximately $30 million. This was the largest home health care fraud

settlement in history. Yet Maxim is still permitted to do business

with the government and none of the executives went to jail. Details of the settlement are available at

www.homehealthcarefraudsettlement.com.

Maxim was overbilling and under delivering basic services to

America’s oldest, sickest and poorest. The goal was not to provide

better services and products at lower prices, but rather to see if

they could take advantage of weak Medicare and Medicaid oversight, to see if Uncle Sam could be ripped off and no one noticed,

to see if patients who complained would not be taken seriously or

would give up after a few calls to Medicaid. And guess what? They

were right. Maxim’s game went on for years and America’s taxpayers were systematically ripped off.

But not only were taxpayers ripped off, when corporations rip off

Medicare and Medicaid there are other victims besides taxpayers.

Maxim took services from people like me.

Despite the big monetary settlement, Maxim executives did not

go to jail and the company was not excluded from doing future

business with Medicare and Medicaid. The settlement received a

lot of these covers that many folks asking why this was. How is it

that a company that takes millions of government dollars is not entitled to continue along in business, while a shoplifter of a few $100

worth of merchandise will be sent to jail. It is commendable that

the government did take on Maxim, but until corporate executives

receive harsher penalties, I do not think we will see the fraud stop.
14

Having the corporation pay some settlement money is just a cost

of doing business for the fraudsters.

The settlement money does not even come out of their own pockets. Changing that and sending some executives to jail may actually make the fraud stop.

How many other companies got away with this same fraud for

the last 7 years? How many other people saw this and did nothing?

How many were afraid of losing their health care for being a troublemaker? That is what happened to me. At this time, I am being

told my Medicaid will end because of this settlement. My whistleblower recovery is being paid over 8 years with half of it coming

at the end of that period. In the intervening years, there will not

be enough to pay for my in-home care. I will go broke or die.

This is the price of doing the right thing. Do I know of other companies doing fraud? Yes. Four. Can I tell anyone? No. I can’t afford

to lose any more services. I thought if you do the right thing that

maybe things would work out in the end, but maybe not. I am a

Vietnam veteran and never took or asked for any services I didn’t

need. I lived a productive life and raised my son, Adam West. This

program allowed me to live in my own home, to see him graduate

high school and college, and now he is living on his own. If someone is willing to steal from and old sick vet, I would think my government would help. If I had an HMO, who would help? Should I

call their CEO? It took 7 years, but I had the full weight of the

U.S. Government behind me. Many folks are not as fortunate.

I came to this hearing hoping to help Congress help other people

who need help through no fault of their own. Thank you again for

inviting me to testify. I look forward to answering your questions.

Mr. PLATTS. Thank you, Mr. West.

[The prepared statement of Mr. West follows:]
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Mr. PLATTS. Ms. West, if you would like to share your testimony.

STATEMENT OF ROBIN PAGE WEST

Ms. PAGE WEST. Thank you, Chairman Platts, Chairman Gowdy,

Ranking Member Towns, Ranking Member Davis and distinguished members of the subcommittees for inviting us to discuss

Medicaid fraud. I represented Richard West in the Medicaid fraud

lawsuit that resulted in the $150 million settlement with Maxim.

For the past 20 years, I have focused on bringing cases such as Mr.

West’s to recover money the government has lost to fraud. I am

also the author of a book on this subject published by the American

Bar Association entitled Advising the Qui Tam Whistleblower.

In examining ways to improve oversight and accountability of

Medicaid, it is helpful to look at the process we followed in bringing

Mr. West’s Medicaid fraud lawsuit. As he testified, after Mr. West

attempted to bring this matter to the government’s attention by

contacting the State, the Medicaid program and his social worker,

all to no avail, he turned to a private lawyer. We then brought a

lawsuit under the False Claims Act [FCA], which empowers an ordinary person to step into the shoes of the government and sue

fraudsters to recover the amounts stolen plus civil penalties and

trouble damages.

The person who sues on behalf of the government, the whistleblower, is known as a qui tam relater, based on a Latin phrase that

translates as he who sues on behalf of the king as well as for himself.

The act provides for a whistleblower reward that in a successful

intervened case can range from 15 to 25 percent of the government’s recovery. In our case, using records Mr. West had kept, we

showed how the number of hours Maxim had billed Medicaid exceeded significantly the number of hours Mr. West received. In addition, we gave the government information Mr. West had learned

through discussions with various of his nurses that led him to believe Maxim was doing this on purpose.

The FCA provides 60 days for the government to decide whether

to intervene in a case, and if it needs more time, it must request

it from the court. This is quite different from hotlines that are not

accountable for acting on callers’ tips within a certain period of

time, if at all. The FCA is also different from oversight programs

and contractors that exist to identify improper payments and fraud.

These cost the government money, sometimes more than they recover. For example, CMS’s senior Medicare patrol program teaches

seniors and others how to review Medicare notices and Medicaid

claims for fraud and what to do about it.

Over 14 years, from 1997 to 2010, it saved $106 million. But its

current annual budget of $9.3 million leads to the question whether

it is even saving what it costs.

The incentive of earning a False Claims Act whistleblower reward, on the other hand, mobilizes private individuals and their attorneys to do the work without the need for any government programs. The FCA model also outperforms the Medicare Recovery

Audit Contractor, RAC, program which although it pays contractors a percentage of the improper payments they recoup stills dips

into the recouped fund to pay those contingencies.
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Not so with FCA recoveries. Not one dime comes from taxpayers

to pay for these recoveries because the statute allows recovery of

triple damages from the fraudster so that the government can be

made whole for the cost not only of the whistleblower rewards, but

also the investigation, prosecution and lost interest over time, not

to mention the savings caused by deterrence.

There is no doubt that the cases whistleblowers are bringing to

the government are of high quality. As shown on this graph, which

is based on Department of Justice statistics, recoveries from whistleblower-initiated cases by far outpace those in government-initiated cases. More than 80 percent of the False Claims Act cases now

being pursued by the U.S. Department of Justice were initiated by

whistleblowers, and the amounts of the recoveries are in the billions each year.

In closing, one aspect of Mr. West’s case that I would like to

highlight is that the waiver program capped his benefits at a

monthly amount that if exceeded, triggered a denial of further

Medicaid benefits. So when Mr. West went to the dentist, he was

informed that he could not get treatment because he had supposedly exceeded his cap.

In most Medicare, Medicaid and other Federal and State health

programs, that would not happen because there is no cap that

stops benefits from being paid, so even if Medicaid beneficiaries noticed suspicious billing, they have no incentive to spend time questioning them because their future Medicaid benefits are not at

stake. And this is one reason I believe we have not seen more

health care fraud cases initiated by Medicare and Medicaid beneficiaries.

Thank you again for inviting us to testify. I look forward to answering your questions.

[The prepared statement of Ms. Page West follows:]
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Mr. PLATTS. Thank you, Ms. Page. We appreciate, again, all

three of you being here with us to share your insights and the experiences you have had in helping to protect American taxpayer

dollars as well as to ensure citizens like Mr. West get the care they

need and deserve.

We will now begin questions, and I would yield to the subcommittee chairman, Mr. Gowdy, for the purpose of questions.

Mr. GOWDY. Thank you, Mr. Chairman.

Mr. West, on behalf of all of us, I want to thank you for your

service to our country, both on this soil and on foreign soil. We are

indebted to you. It strikes me, Mr. West, that you brought this to

the attention of every single person that you could reasonably have

known to bring it to.

Mr. RICHARD WEST. Yes.

Mr. GOWDY. And nobody did anything. You had to go get a private lawyer to do what either the State of New Jersey, CMS, or

some social worker should have done, is that correct?

Mr. RICHARD WEST. That’s right, yes.

The social worker asked Maxim if they could back up their billing with paperwork. They said yes. So she had no power to audit,

or she had no power, so I took it to the State. And the State sat

in my living room in August in 2003, I told them I was not getting

the nursing they are telling me I’m getting. They did nothing. The

person running the program retired. The only person sitting at my

dining room table got promoted, and everybody just goes on. If people aren’t held accountable, both Maxim and State and Federal

workers, there is nowhere for me to go.

Mr. GOWDY. And that is exactly what I want to ask Ms. West.

Do you have any criminal practice at all to go along with your civil

practice? Have you ever done criminal defense work?

Ms. PAGE WEST. No, I haven’t.

Mr. GOWDY. For those of us who are not smart enough to do civil

work and had to do criminal work, it has always struck me that

nothing gets people’s attention quite like the fear of going to prison. And poor folk who steal do go to prison. Rich folk who steal

have the corporation pay a fine and then they continue to participate in the Medicaid program. How in the world does that happen?

Ms. PAGE WEST. It is much more difficult to prove a criminal

case. The standard is guilty beyond a reasonable doubt, it takes a

lot of resources to investigate these cases.

Mr. GOWDY. Let me stop you right there. You have a Vietnam

war veteran witness who says that this work was not done on me

and you have a document that says that they were billed for it. I

think you and I could win that case. I guess that there is a different standard of proof, but there is a different standard of proof

in all criminal cases.

Ms. PAGE WEST. Someone in the government is making the decision of whether to prosecute these cases.

Mr. GOWDY. Do you know who that is? Do you know who it is?

Ms. PAGE WEST. The U.S. Attorney’s Office.

Mr. GOWDY. In New Jersey?

Ms. PAGE WEST. Yes. And the Department of Justice.

Mr. GOWDY. So they went to a Civil Division to reach an agreement, pay a fine, the shareholders pay, none of the corporate ex-
29

ecutives go to jail, and then they continue as part of the settlement

to be able to participate in the Medicaid program? That is as outrageous as anything I have heard in the 11 months I have been

here and I have heard some outrageous things.

Let me ask you this: There have been civilizations that of been

formed in less than 7 years. What took 7 years for this case to be

resolved?

Ms. PAGE WEST. The investigation started locally and then it expanded to the State of New Jersey, and then it expanded to the

States beyond New Jersey eventually expanding nationwide. And

during that time, there were numerous audits going on of the documents, there was an independent audit company that was hired to

determine what was, what type of document qualified as a proper

claim and what was an improper claim. Maxim’s attorneys were involved every step of the way. They were allowed to have input into

this process, and then at the end, because fraud is difficult to quantify, the settlement had to be reached, and it is often likened to

making sausage because there are so many elements that have to

be brought together that so many people have to agree on, and

that’s what also took a long part of the time is the agreement on

the various aspects of the settlement, and there was a criminal

component to it as well.

Mr. GOWDY. And the criminal component went away as part of

the civil settlement? Did anyone go to jail as a result of this?

Ms. PAGE WEST. My understanding is that there were nine indictments, eight of which were of Maxim employees, not executives,

but managers.

Mr. GOWDY. And did they go to jail?

Ms. PAGE WEST. I don’t know.

Mr. GOWDY. My time is expired, Mr. Chairman.

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

from Illinois, the ranking member, Danny Davis.

Mr. DAVIS. Thank you, Mr. Chairman. Mr. West, let me again

thank you for taking time to come to Capitol Hill to testify. And

I also thank you again for your service to this country during the

Vietnam War. The coalition against insurance fraud estimates that

80 percent of health care fraud is committed by providers, 10 percent by consumers, and 10 percent by others such as insurance

companies or their employees.

I applaud you for your diligence in maintaining records and

keeping such a close eye on the actual number of hours you were

receiving home health services and the number of hours Medicaid

was being billed.

What I want to ask you is when you receive notice that your

services, that you had reached or were going beyond your monthly

cap, and your Medicaid services were being temporarily reduced or

suspended, how did you feel when you read that letter or got that

information?

Mr. RICHARD WEST. I was in a nursing home, and this program

allowed me to live in my own home, and in 3 months, I knew what

they were doing. I had always been an advocate for people with disabilities, and when I got that notice, I knew that it wasn’t me, it

was all the other people that these services that were getting

screwed that they were going to take my service and I’m going to
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fight them. Other people can’t do that. I’m on oxygen. And I’m

probably too stubborn and arrogant to give up.

But if you’re the average person in my position, you can’t fight.

You’re helpless. You are being abused. So, how I felt? I was being

abused, and I needed to stand up for everybody.

Mr. DAVIS. And you knew that you were weren’t going to take

it sitting down?

Mr. RICHARD WEST. I started this as an advocate and through

the 7 years, it became more patriotic.

Mr. DAVIS. Thank you very much. Ms. West, let me ask you, you

indicate that you have handled any number of cases. What is the

typical client or person who comes to you with a situation and asks

for your assistance?

Ms. PAGE WEST. More often it’s a person who works in the company that’s committing the fraud, someone who sees something

that seems amiss, and they will go to their supervisor and say, hey,

why are we doing this, and the supervisor will try to brush it off,

and oftentimes they will escalate it to another superior, and eventually oftentimes they get fired for being nosy, at which point they

will come to me or close to the end of that process.

Mr. DAVIS. So they will come, they are whistleblowers who themselves have been abused in a way in terms of losing their jobs?

Ms. PAGE WEST. Exactly, and also in terms of being asked to do

things in the job that they know are not right. And as Mr. West

pointed out, many of their co-workers know the same thing but

they won’t come forward because they’re afraid of losing their jobs

and their health care.

Mr. DAVIS. Thank you very much, Mr. Chairman. My time is expired.

Mr. PLATTS. I thank the gentleman. I yield myself 5 minutes for

the purpose of questions.

And again, the case that you shared with us, Mr. West, and your

attorney, should not happen, and our efforts as focused here are in

trying to ensure it doesn’t happen again in the future.

If I understood your written testimony and your responses here

today, when you reached out to the State of New Jersey Medicaid,

social worker that, other than, if I understood, with the social

worker, it looks like they looked at Maxim’s records and said, well,

they have paper to back up saying they provided this service and

they basically took the company’s word over your word. Is that a

fair statement?

Mr. RICHARD WEST. Correct.

Mr. PLATTS. Did the State of New Jersey or Medicaid itself even

get to that point? Or did they just pretty much do nothing?

Mr. RICHARD WEST. They did nothing. I wrote to Governor

Corzine, Senator Menendez, they sent the paperwork to the same

people that were doing nothing.

Mr. PLATTS. So in addition to your own contacts, to the State and

Medicaid, you contacted your elected officials, Governor, U.S.

Senator——

Mr. RICHARD WEST. Yes.

Mr. PLATTS. They contacted those entities and still nothing happened?

Mr. RICHARD WEST. Correct.
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Mr. PLATTS. It is just as Mr. Gowdy said, just somewhat unbelievable that here you have a citizen trying to do the right thing

and protect taxpayers and ensure he receives the services and the

government collectively failed you terribly.

When they were denying your claim of fraud and failing to act

on it, what was their response as far as how that then related to

your care? Because of that fraud, you were being denied dental.

Were they saying, we don’t believe you that there is fraud, but we

are going to provide you care or——

Mr. RICHARD WEST. They don’t come out and say we don’t believe

you. They just don’t——

Mr. PLATTS. They just don’t do anything.

Mr. RICHARD WEST [continuing]. Return your calls, don’t answer

your letters, don’t respond to your emails. You are a burden to

them creating paperwork for them. It is easier for them to do nothing.

Mr. PLATTS. Push you to the side?

Mr. RICHARD WEST. Correct.

Mr. PLATTS. How about on the fact that that fraud was denying

your services, did they correct that and ensure that you got the

dental care, or did that continue to——

Mr. RICHARD WEST. Eventually, I got the dental care. But at that

time, I had nursing 7 hours a day, 7 days a week, and nursing 3

nights a week totaling 18 hours. I lost those 18 hours for 7 years.

So if you turn off my ventilator, I have a hard time breathing. But

if you let me sit there, I slowly deteriorate, because I’m not getting

the care I need.

Mr. PLATTS. I want to make sure I heard you correctly. While the

investigation was going on for 7 years, they were denying you the

services because saying you were not entitled to it because of the

fraud?

Mr. RICHARD WEST. Right.

Mr. PLATTS. Outrageous.

Mr. RICHARD WEST. Yes.

Mr. PLATTS. Thank you for persevering and weathering the terrible care and treatment you received.

Ms. West, a question, and I’m not sure from, as a lawmaker, how

our Federal whistleblowers were seeking to strengthen the whistleblower protections provided Federal employees because we want, as

you referenced, more often than not, it’s an employee who comes

forward with what they know is going on in their company or their

office.

We’re trying to strengthen that law. We’ve passed legislation out

of this committee, out of the full Oversight and Government Reform Committee and now working for a floor vote to give whistleblowers within the Federal Government more protection.

If a Federal employee came to you, I assume then that they are

impacted differently going to you for this type of case and bringing

forth fraud because they are a Federal employee, is that correct?

Ms. PAGE WEST. Historically in my experience, the government

has been less receptive to intervening in whistleblower cases

brought by Federal employees.

Mr. PLATTS. They keep it more internal?
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Ms. PAGE WEST. It’s hard for me for to understand the reasoning

that goes behind how an intervention decision is made. I don’t

know why that is.

Mr. PLATTS. But your experience over 20 years is it’s less common for them to intervene?

Ms. PAGE WEST. It’s more difficult for them to be accepted as an

intervened case.

Mr. PLATTS. So all the more unlikely, given that, for a Federal

employee to pursue this type case because they’re lease likely to

succeed?

Ms. PAGE WEST. Yes. More difficult. Yes.

Mr. PLATTS. Thank you. My time is expired. I yield to the gentleman from New York, Mr. Towns.

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

Let me, again, thank you, Mr. West, for coming and sharing your

story with us, and of course, regret that you had to go through so

much in order to make the point, but I appreciate your time here

today.

Let me begin by just, can you tell me about the process you went

through in trying to contact various agencies? Could you talk for

just a moment about the process that you went through trying to

reach agencies?

I know that you said that you sent out letters and e-mail and

phone calls. Can you just talking talk about the process just briefly?

Mr. RICHARD WEST. The local county social worker comes to the

house once a month. So once a month, I’m telling her I’m not getting my services, and I’m calling her in between those visits saying

the nurses aren’t showing up, I’m having to depend on family,

friends. The State workers, the county workers the State workers

supposedly, they didn’t follow through, and the State program was

telling me I had to have a caregiver in my home for when a nurse

didn’t show up. My son was in high school getting ready to graduate, and I wasn’t about to put that burden on him because the

nursing aid wasn’t doing their job.

So the State decided they wanted to have a meeting in my home.

So they all came down, sit at my table and tell me what services

I’ve got. And I said I am not getting the hours of nursing you are

telling me I’m getting.

And the State workers said, well, you need a caregiver and you

don’t have one, so maybe you don’t qualify for the program. And

I said, I’m not going to have a caregiver, and she said, you’re not

compliant and I said arrest me. She didn’t appreciate that.

And the county social worker told her those discrepancies in the

hours, they all went out, had a pow-wow out by the car and went

back to Trenton and never followed through with any of it. When

I realized the county and the State wasn’t doing anything, I went

to the Medicaid fraud hotline, called them. They said we’ll give you

an investigator and we’ll look into it. Never heard a word.

So I figured I have to get out of the State of New Jersey because

I have no idea who is involved, whether they’re involved with

Maxim or their own programs. So I went on the Web, looked up

Medicaid fraud. That is when I found out that there is a whistleblowers lawsuit. I had no idea. Then I read you could receive a por-
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tion of the recovery. I figured, well, hey, I could fish my brain,

maybe I will get $5,000. And the first person I called was in Alabama, a whistleblower attorney. He said well if it’s not $10 million,

I don’t even want to talk to you. I was informed of a whistleblower

lawyer in California. He said send me the documentation you have.

I did. He called me back and said, I think you have a pretty good

case but you need an attorney closer to where you’re at. Then I

found Robin on the Internet, and that’s how we proceeded.

Mr. TOWNS. So you found someone with the same last name?

Mr. RICHARD WEST. When I called, her secretary said, who is

calling? I said Richard West. And there was a silence. And I said

no relation.

Mr. TOWNS. Thank you very much.

Mr. Chairman, I just ask for an additional 30 seconds. I want to

ask Ms. Page to submit something to us.

In your written testimony, you indicated that the False Claim

Act is both unusual and effective in uncovering fraud in the health

care system. If you would be kind enough in writing to summarize

your top three arguments for why this law is effective. I’m interested in that because we would like to strengthen the law to improve it so if you would be kind enough to submit that to us in

writing, being my time is out.

Ms. PAGE WEST. The top three reasons why it’s effective.

Mr. TOWNS. Yes. Thank you.

Mr. PLATTS. I thank the gentleman. The gentleman Mr.

DesJarlais is recognized for 5 minutes for questions.

Mr. DESJARLAIS. Thank you, Mr. Chairman.

Mr. West, Admiral Mullens this past year was quoted as saying

the biggest threat to our national security is our national debt, so

not only did you fight for our country in Vietnam, you are fighting

for our country again against a big threat which is spending and

debt. So I applaud you for your courage and taking the time to

come here and speak with us today.

I just wanted to ask you a few questions about your relationship

with the people that spent a lot of time caring for you because with

your condition with the trach ventilator I’m assuming you had a

respiratory therapist that came to your home?

Mr. RICHARD WEST. No.

Mr. DESJARLAIS. No? You had home health nurses?

Mr. RICHARD WEST. I had nursing.

Mr. DESJARLAIS. And I’m assuming you had nurses aids to help

with activities of daily living, they have to help you dress, they

have to help you eat.

Mr. RICHARD WEST. Right.

Mr. PLATTS. They have to help you maintain your residence so

it’s safe?

Mr. RICHARD WEST. Yes.

Mr. DESJARLAIS. So they spent quite a bit of time in your home?

Mr. RICHARD WEST. Correct.

Mr. DESJARLAIS. Did you ever feel like you got close to any of

these people? They take care of you. Were they caring people? Did

you talk to them on a first name basis? Did any one, say, an aide,

stay with you for several months at a time or was it different aides

on different days?
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Mr. RICHARD WEST. I have a nurse now that has been with me

4 years. Over the course of the 7 years, there have been different

nurses, different agencies, but many have been there for extended

time.

Mr. DESJARLAIS. So you knew them very well and they knew you

very well and it was generally friendly and cordial? Did you like

them and they liked you?

Mr. RICHARD WEST. Yes.

Mr. DESJARLAIS. When you first started noticing the fraud, were

you able to talk to them about this, and share your concerns?

Mr. RICHARD WEST. They were part.

Mr. DESJARLAIS. I’m sorry?

Mr. RICHARD WEST. They were part of the fraud.

Mr. DESJARLAIS. Did you talk to them and ask them, did they

try to make excuses or did they say they’d talk to their managers?

Mr. RICHARD WEST. No. I could tell by what they were saying,

what they were telling me, they were getting paid but they weren’t

putting in for the hours in my home, they were putting in for additional hours. And the company, the nurses told me on several occasions that the Maxim office managers work on a bonus system so

the more profitable they are the bigger their bonus.

So these people, despite having a relationship—you liked them,

they liked you—you felt they were aware of the fraud that was

going on but would do nothing?

Mr. RICHARD WEST. They knew.

Mr. DESJARLAIS. They knew.

Mr. RICHARD WEST. They knew.

Mr. DESJARLAIS. Did you feel like you were betraying them in a

sense when you had to go over their head to try to fix this situation?

Mr. RICHARD WEST. You can’t betray somebody that is abusing

you.

Mr. DESJARLAIS. Okay. Well, I guess I just wonder, you know,

how unusual you are.

Ms. West, how many other Medicaid beneficiaries have come to

you such as Mr. West? How unusual is Mr. West?

Ms. PAGE WEST. It is very unusual. Just a handful of people have

even inquired. And if memory serves, Mr. West is the only beneficiary case that I have taken.

Mr. DESJARLAIS. Okay. So given the success by whistle blowers,

why do agencies and officials typically ignore people like Mr. West?

What would be your opinion on that?

Ms. PAGE WEST. I don’t think it’s so much that the False Claims

Act isn’t serving them and that the government isn’t picking up the

cases. I think it’s that there are not that many beneficiaries who

are coming to the False Claims Act attorneys.

Mr. DESJARLAIS. Okay. So why then when someone like Mr.

West, who obviously has a legitimate claim that was proven legitimate, why do you think Medicare just chose to ignore it? And I will

ask you that and ask Mr. West that.

Ms. PAGE WEST. Well, I think Mr. West is an extremely unusual

person. Relaters need to be very tenacious, very intelligent, very

persistent. And quite often, Medicare and Medicaid beneficiaries

who are sick cannot bring all those qualities and have the stamina
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to, you know, figure it all out and bring it to a lawyer. And I think

that’s basically the issue, is that they are not aware of it. They are

not aware of the incentives, and they don’t necessarily have the

skill set to put it all together and follow through on it.

Mr. DESJARLAIS. Okay. Well, I will just say—and I know I am

about out of time, if you will indulge me for a few seconds. As a

practicing physician, primary care physician, for 18 years before

coming to Congress, I dealt closely with home health. There was

a lot of issues of fraud and abuse in the 1990’s where people who

did not have near your level of disabilities had aides and what not

coming to the house. That was kind of reined in a little bit in the

1990’s. But I see that it tends to be alive and well as we moved

into the next decade as well.

Again, I applaud you, Mr. West, for your efforts. And clearly, I

think that CMS and Medicare, who we will have on the next panel,

we will get an opportunity to see why people like yourself are being

ignored. Thank you so much for stepping forward and fighting

again for your country.

I yield back.

Mr. RICHARD WEST. The people in my position don’t have the

support once they turn people in. If I was a government informant

for a mob-related case, you would take care of me. But when I went

to the special agent in charge and asked to get nurses so I could

continue through this case, there was nothing he could do to help

me. So why would those people turn somebody in, knowing they

should die? So you have to give support to the patient, client—

whatever you want to call me—so he can bring the lawsuit. If the

threat is, ‘‘you complain, we take you services,’’ where is the incentive? There isn’t.

Mr. PLATTS. I thank the gentleman.

Mr. West, along the lines of what you just expressed, it sounds

as if—whether through a need for a legislative change or regulatory change—that if you had a beneficiary, as in this case, that

the government makes a determination, they are going to take on

the case and go forward, that that decision should maybe include

a provision, you know, that while the case is being pursued, 1 year

or 7 years, in your case, you are given the services on a provisional

basis, you know, while it is proceeding. Because, again, otherwise

you have a disincentive from reporting it because of being at risk

of further losing care.

Mr. RICHARD WEST. Correct.

Mr. PLATTS. I thank the gentleman.

I yield to the distinguished ranking member of the full committee

Mr. Cummings from Maryland.

Mr. CUMMINGS. Mr. West, I thank you also for being here. And

I agree with you, these folks needed to go to jail. And it’s interesting that I now have done a little research to see what happened.

I want to follow up on some of Mr. Gowdy’s concerns.

They did go to jail. One went to jail from Maxim, and he got—

this was the highest sentence of eight or nine people—5 months in

prison and 5 months of home confinement. Most of them got a fine

and home imprisonment. That’s what they got.

Now 40 miles away from here, I represent Baltimore. And about

6 months ago, I had literally thousands, thousands of young Afri-
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can American boys, many of whom may have stolen a bike, may

have done something wrong with drugs or whatever, and they got

a record, Mr. West. They got a record.

And you know what, they can’t get a job. If they live to be 99

years old, they will not be able to get a job. But here we have

Maxim, a company that has basically stolen, stolen from the American people—Maxim, a company that has taken away the services,

not only from you but so many others, but yet and still, they are

in a position to continue to make millions. Something is absolutely

wrong with that picture.

And I agree with you. When the people from the CMS and the

IG come up, they have to explain to us—and by the way, every

member of this panel, every Member of this Congress should be

saying, Maxim should be put out of business with regard to doing

business with the Federal Government. It is ridiculous how a

young man in Baltimore can steal a $300 bike and not be able to

get a job for a lifetime, but Maxim can steal millions and continue

to do the same thing over and over again. Yeah, they got sentenced. But this sentence is simply a slap on the wrist. If you can

pay $150 million fine, this is just a cost of business.

And so, you know, I am very concerned about this.

And I want to enter into the record, Mr. Chairman, the U.S. Attorney’s Office, District of New Jersey—it’s basically their summary

of the sentencing. It is dated November 21, 2011. I would ask that

that be made a part of the record.

Mr. PLATTS. Without objection, so ordered.

Mr. CUMMINGS. And a Reuters article dated—I ask that this be

made a part of the record, too—dated Monday, September 12, 2011.

And it says, in part, Maxim settled with the U.S. Department of

Justice and 41 States. Their company entered into a deferred prosecution agreement with the Justice Department under which it

paid—it will pay a $20 million fine. If Maxim meets the agreement’s requirements, it will avoid charges. And the government

said it was willing to enter into an agreement with Maxim in

part—in part because of its cooperation and significant personnel

changes it has made since 2009.

Mr. PLATTS. Without objection, entered into the record.

Mr. CUMMINGS. Thank you very much.

Well, that’s all well and good; but if you are paying people bonuses to screw people and mess them over—and you’re right.

Everybody’s not like you. There are people who are sitting in

wheelchairs right now, looking at this right now, who feel helpless,

and many of them are going to die. That’s why I cannot understand

for the life of me how every Member of this Congress should not

want to put Maxim out of business, at least with regard to its business with the Federal Government.

Now to you, Ms. West. Ms. West, you stated in your written testimony that you have over 20 years of experience in bringing cases

such as Mr. West’s to the government’s attention. Can you explain

how these False Claims Act cases help government work better and

save taxpayer dollars?

I’m sorry. I didn’t mean to get so upset, but this makes me want

to vomit. Go ahead.
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Ms. PAGE WEST. The False Claims Act gives the government a

bird’s eye view into the fraud. Without the whistleblowers, the government really has no way of knowing how the fraud is being committed. Every time there is a fraud that’s detected, the government

learns about it, comes in, kind of shuts it down. But then there’s

a new fraud that pops up. And it’s a constant never-ending thing.

And there is more creativity behind fraud because there is so much

money to be made by it. And that’s why the False Claims Act is

so effective is because it reaches out to the people who are seeing

the fraud and understand the fraud and giving them an incentive

to tell about it and explain to the government how to stop it.

Mr. CUMMINGS. Ms. West, do you think there are too many False

Claims Act lawsuits? And what disincentives are there for bringing

a frivolous False Claims lawsuit?

Ms. PAGE WEST. Well, the disincentive for bringing a frivolous

False Claims Act lawsuit is there’s a provision in the statute that

allows the defendant to recover its attorney’s fees from the relater

if it’s shown that the suit was brought for purposes of harassment.

In addition, it’s difficult to bring a frivolous lawsuit because the

qui tam lawyers work on contingency. And if we don’t think a case

is really good, we’re not going to bring it. Only about 20 percent

of the False Claims Act cases brought are intervened in by the government. So we’re looking at a very tiny window, and we are looking for the very best cases to bring to the government’s attention.

Mr. CUMMINGS. I see my time is expired. Again, Mr. West, I

want to thank you very much for you and all others who will benefit from what you are doing.

Mr. PLATTS. I thank the gentleman.

Before yielding to the gentleman from Virginia, Ms. West, the example of having a bird’s eye view, the beneficiary goes out on the

front lines being able to bring a False Claims Act, in the second

panel, we’re going to hear about a lot of expenditures of moneys for

new technology, new analytical programs and things. Is it a fair

statement to characterize your experience here that—rather than

the investment of all this money in new programs, that if we had

simply better listened to the beneficiary, we would have prevented

the fraud?

Ms. PAGE WEST. Yes, I think so. And listen to Malcolm Sparrow,

who has analyzed this and feels that the money should not be paid

out first. It should be paid out properly, not paid and then followed

after to be gotten back.

Mr. PLATTS. Right. So it is being more up front as opposed to the

recovery type of audits. It’s focus up front.

Ms. PAGE WEST. Exactly.

Mr. PLATTS. I yield to the gentleman from Virginia, Mr.

Connolly, for the purpose of questions.

Mr. CONNOLLY. Thank you, Mr. Chairman.

And I want to thank Mr. West particularly for his courage, both

serving his country and in serving his country a second time in trying to make sure taxpayers’ investments are protected and are

made secure and for the courage of persisting when many others

might have been daunted and discouraged.

I also want to say to our colleague, if he’s still here. I guess Mr.

Gowdy isn’t here. But if Mr. Gowdy is serious about toughening up
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the criminal penalties, he will find allies on this side of the aisle.

Our subcommittee has pointed out that there are, every year, $125

billion in improper payments. Now sometimes it’s innocent—you

know, a mistake in billing. Somebody gets paid who shouldn’t have

or gets double paid; somebody who’s not qualified to receive a benefit gets a benefit. But a lot of it’s fraud.

I know that U.S. Attorney’s Offices are consumed with Medicare

and Medicaid fraud. The U.S. Attorney’s Office in Boston just announced a $3 billion recovery. That’s 1 out of 99 U.S. Attorney’s Offices. So we know it’s out there.

If we eliminated improper payments, by the way, we could give

a Christmas gift to the supercommittee of $1.25 trillion over the

next 10 years, without breaking a sweat, without affecting anyone’s

benefits, without having political drama, without having to gut any

necessary investments.

Mr. PLATTS. Would the gentleman yield?

Mr. CONNOLLY. I yield to the chair.

Mr. PLATTS. I thank the gentleman for yielding.

As you well state, if you took the fraud and improper payments—

again, we don’t know how much is fraud—improper payments of

Medicaid, as you are just discussing here today and as you know

from our previous hearing on Medicare, these two programs alone

account for about $70 billion a year of that 125. So over 10 years,

you are talking $700 billion.

I yield back.

Mr. CONNOLLY. Thank you, Mr. Chairman.

Of course, as you know, some of that money was cited in the financing of the Affordable Health Care Act, some criticized us for

that as if we were gutting the program. But in fact, we were simply

trying to recover either improperly made payments or illicitly made

payments.

I want to just make sure we get the narrative on the record, Ms.

West, if you don’t mind. I’ve heard Mr. West. When did Mr. West

first discover something was wrong and how?

Ms. PAGE WEST. He testified——

Mr. CONNOLLY. If you could speak into the microphone.

Ms. PAGE WEST. Three months after he came out of the nursing

home, he realized something was wrong.

Mr. CONNOLLY. And what made him realize something was

wrong?

Ms. PAGE WEST. That he was not getting the care that he was

entitled to get under the program. He was getting fewer hours of

nursing care.

Mr. CONNOLLY. Okay. And maybe initially he thought that was

a mistake?

Mr. RICHARD WEST. Initially, I thought that they were having a

hard time servicing my case. But then it became apparent that

they would send when they wanted, who they wanted.

Mr. CONNOLLY. Well, the testimony submitted on your behalf by

your attorney, Ms. West, says, you attempted to bring the matter

to the government’s attention by contacting the State. What State

was that?

Mr. RICHARD WEST. The State of New Jersey.
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Mr. CONNOLLY. New Jersey. The Medicaid program itself—so you

went to a local office, okay—and your social worker.

Mr. RICHARD WEST. Correct.

Mr. CONNOLLY. And the testimony says, all to no avail.

Mr. RICHARD WEST. Correct.

Mr. CONNOLLY. Meaning what, they ignored it?

Mr. RICHARD WEST. Yes.

Mr. CONNOLLY. Okay. So you then decided, this isn’t right. I’m

not getting anywhere, and I’m, therefore, going to turn to a private

attorney. And you used actually something Congress did well, the

False Claims Act.

Mr. RICHARD WEST. Correct.

Mr. CONNOLLY. Which gave you a vehicle for redress as a, as you

put it, qui tam relater.

Mr. RICHARD WEST. Right.

Mr. CONNOLLY. Ms. West, if you could describe for us, what was

the reaction of the Medicaid officialdom when faced with this potential fraud, at least on your initial contacts?

Ms. PAGE WEST. Are you asking me?

Mr. CONNOLLY. Yes. I’m asking you, Ms. West.

Ms. PAGE WEST. I did not contact Medicaid. I filed a lawsuit

under the False Claims Act. So my first contact was with the U.S.

Attorney’s Office With the District of New Jersey.

Mr. CONNOLLY. Did Medicaid at any point react to the filing of

the lawsuit or the claims contained therein?

Ms. PAGE WEST. Again, I didn’t have any contact with anyone

from Medicaid. I was coming in through the Department of Justice.

Mr. CONNOLLY. Did your client have any contact with Medicaid

in terms of reaction to the filing of the lawsuit or the claims therein?

Ms. PAGE WEST. Well, once we filed the lawsuit, it’s under seal,

and we aren’t allowed to talk about it.

Mr. CONNOLLY. Even with Medicaid?

Ms. PAGE WEST. Not unless there would be a partial lifting of the

seal or if they would set up a meeting and Medicaid officials would

be there. But there was nothing like that.

Mr. CONNOLLY. And presumably—you made repeated attempts

with the Medicaid office, Mr. West. And I know my time is running

out—to try to alert them to this and get them to act.

Mr. RICHARD WEST. Yes.

Mr. CONNOLLY. And they were indifferent?

Mr. RICHARD WEST. Correct.

Mr. CONNOLLY. We look forward to their testimony. Thank you.

My time has run out.

Thank you, Mr. Chairman.

Mr. PLATTS. I thank the gentleman for yielding back.

Before we conclude, I yield myself just a final minute.

Mr. West, my understanding is, in giving an interview, you

shared an example of the lack of cooperation you got as you tried

to correct this and that you were in front of a judge or an adjudicative setting where you were told that—well, there’s evidence that

they did provide these services, and they were not agreeing with

you or believing you, and that you made a statement that you

would bet that while you were in front of this individual that
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Maxim was probably falsely appealing for services to you. Could

you share that?

Mr. RICHARD WEST. We went to Scranton to the Federal courthouse. I picked up Robin at the train station. We met with I believe

it was Silverman and a special agent, and after they heard my

story, I said, I’ll bet Maxim bills for a nurse in my home while I’m

sitting here with you. I left my home at 6:45 in the morning. My

son was driving. We went to Scranton, met with the prosecutors.

I said, I’ll bet they bill for this time. And they said, no, they

couldn’t possibly do that.

In January, I sent an email to Robin saying, I told you so. They

billed for 7 to 3 for an RN in my home. Me and Adam didn’t get

home until about 5 that night. They also billed for the same nurse

Christmas Day. We were in Pennsylvania, the next State over. And

this particular nurse was reading my mail, looking at my email. I

had to tell my attorney, do not send anything to my home. All updates and emails, don’t mention who they’re from or who they’re

about. I lived in a closet because I couldn’t—I had people spying

on me in my home while they were stealing from you.

Mr. PLATTS. One more example of how you were being victimized

by a very unscrupulous company.

Mr. RICHARD WEST. Yep.

Mr. PLATTS. And its employees. And the fact that while you were

sitting with the very investigators, they’re falsely billing for services to you just epitomizes the outrageousness of this case. And

again, as you reference having left your home at quarter of 7 a.m.,

and not getting back until 5, another example of your persistency

and willingness to do whatever it took to bring justice on behalf of

the American people, the taxpayers and to ensure that you were

properly provided the services you’ve earned and deserved, especially as a veteran of our Nation’s Armed Forces. I thank each of

you again for your testimony here today, but more so than just

your testimony here today, your efforts over almost a decade of trying to bring justice on behalf of your fellow citizens.

And Adam, I think it probably goes without me saying, but I

imagine you’re a very proud son to be Richard West’s son and know

that he’s a true servant of this Nation.

Mr. ADAM WEST. Very much so.

Mr. PLATTS. So God bless each and every one of you. We will recess for 5 minutes as we recess for the second panel.

Mr. RICHARD WEST. May I have 1 minute?

Mr. PLATTS. Yes, you may.

Mr. RICHARD WEST. Today is Pearl Harbor today. And I would

like to say, my dad, Thomas L. West, served in the Pacific. My

mom, Catherine B. West, worked in a factory during that war. We

had a country that worked together for the country. We need that

now. We need people like me, people like you to sit down and fix

the government.

Mr. PLATTS. Well stated, Mr. West.

Mr. RICHARD WEST. Thank you. I’m honored to be here.

Mr. PLATTS. God bless you. Thank you. We will stand in recess.

[Recess.]

Mr. PLATTS. The hearing is reconvened.
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And we thank our second panel of witnesses for being with us

and again your knowledge and insights to help educate both of our

subcommittees on this important topic of how do we prevent and

protect and recover American taxpayers’ dollars that have been defrauded through the Medicaid program.

We are delighted to have four witnesses with us: First Ms. Angela Brice-Smith, director of the Medicaid Integrity Group at the

Centers for Medicare & Medicaid Services; Mr. Gary Cantrell, assistant inspector general for investigations at the Office of the Inspector General for Health and Human Services; Ms. Carolyn

Yocom, director of health care at the Government Accountability

Office; and Ms. Valerie Melvin, director of information management and technology resource issues at the Government Accountability Office.

We thank each of you for being with us. And again, as is pursuant to the committee rules, if I could ask each of you to stand and

raise your right hand, swear you in before your testimony.

[Witnesses sworn.]

Mr. PLATTS. Thank you. You may be seated.

And the clerk will reflect that all four witnesses affirmed that

oath. And again, we have had the chance of reviewing your written

testimony and appreciate your providing that to us. It allows us to

be a little better prepared for today’s hearing, and we will set the

clock for roughly 5 minutes for your oral testimony here today.

Ms. Brice-Smith, if you would begin.

STATEMENTS OF ANGELA BRICE-SMITH, DIRECTOR, MEDICAID INTEGRITY GROUP, CENTERS FOR MEDICARE & MEDICAID SERVICES; GARY CANTRELL, ASSISTANT INSPECTOR

GENERAL FOR INVESTIGATIONS, OFFICE OF THE INSPECTOR GENERAL, HEALTH & HUMAN SERVICES; CAROLYN

YOCOM, DIRECTOR, HEALTH CARE, GOVERNMENT ACCOUNTABILITY OFFICE; AND VALERIE MELVIN, DIRECTOR

OF INFORMATION MANAGEMENT AND HUMAN CAPITAL

ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE

STATEMENT OF ANGELA BRICE-SMITH

Ms. BRICE-SMITH. Thank you Chairmen Platts and Gowdy, Ranking Members Towns and Davis, and members of the subcommittees.

Thank you for the invitation to discuss the Centers for Medicare

& Medicaid Services’ efforts to reduce fraud, waste, and abuse in

the Medicaid program. Medicaid is the primary source of medical

assistance for 56 million low-income and disabled Americans. Although the Federal Government establishes requirements for the

program, States design, implement, administer, and oversee their

own Medicaid programs. The Federal Government and States share

in the cost of the program.

State governments have a great deal of programmatic flexibility

within which to tailor their Medicaid programs. As a result, there

is variation among the States in eligibility services reimbursement

rates and approaches to program integrity.

Prior to 2005, States were solely responsible for the oversight of

their Medicaid program. However, in 2005 with the passage of the
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Deficit Reduction Act, Congress recognized the need for a greater

focus on health care fraud and gave CMS new authority and funding to establish the Medicaid Integrity Program.

I am the director of the Medicaid Integrity Group which implements the Medicaid Integrity Program. The Medicaid Integrity Program is a Federal effort to prevent, identify, and recover inappropriate Medicaid payments. It also supports the program integrity

efforts of the State Medicaid agencies through a combination of

oversight and technical assistance.

The establishment of the Medicaid Integrity Program began a

new era of combating waste and fraud in the Medicaid program,

which was once again improved by the creation of the Center for

Program Integrity. The Center for Program Integrity brings a coordinated approach to program integrity across all Federal health

care programs.

This new focus on program integrity and anti-fraud efforts continue with the Affordable Care Act, which is the most comprehensive legislative step forward to fight health care fraud in over a

decade. The administration has made an unprecedented investment

to reduce improper payments, invest in program integrity strategies, and rein in waste, fraud, and abuse in Federal health care

programs.

Our efforts within the Medicaid Integrity Program focus on protecting Medicaid resources at the beneficiary level, the State level

and the national level. Beneficiary involvement is a key component

to all of CMS’s anti-fraud efforts. We strongly believe that alert

and vigilant beneficiaries are one of the most valuable tools in our

efforts to stop fraudulent activity.

We are committed to enlisting beneficiaries in our fight against

fraud in several ways: For example, our Education Medicaid Integrity Contractor [EMIC], provide beneficiaries with quick facts and

tips on how to prevent, spot, and report Medicaid fraud through social network sites, through electronic letters, through public service

announcements, and other educational materials. We encourage

Medicaid beneficiaries to report suspected fraud, waste, and abuse

to their State’s Medicaid fraud control unit or Medicaid agency or

the HHS fraud tips hotline as examples.

CMS is also committed to supporting our State partners and

their program integrity efforts and their efforts to reduce improper

payments. Our Medicaid Integrity Institute provides substantive

training and support to the States. We have trained more than

2,600 program integrity staff from all 50 States, D.C. and Puerto

Rico.

CMS provides boots-on-the-ground teams that can assist States

with special investigative audits and emerging threats. Since October 2007, CMS has participated in 10 projects in 3 States, which

have resulted in $33.2 million in savings through cost avoidance.

In addition, CMS’s review and audit MICs, or Medicaid Integrity

Contractors, complement and support program integrity efforts underway in the States. Between 2009 and November 1st of this year,

the audit MICs have initiated 1,663 audits in 44 States. In addition

to the Federal audits, States report that they have recovered $2.3

billion as a result of all Medicaid program integrity activities.
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The Affordable Care Act has also strengthened Federal oversight

for the Medicaid program by providing new tools to CMS and law

enforcement officials to protect Federal health care programs from

fraud, waste, and abuse. These tools include the new screening and

enrollment requirements, strengthen authority to suspend potentially fraudulent payments, and increased coordination of the antifraud actions and policies between Medicare and Medicaid.

The Affordable Care Act expanded the Recovery Audit Contractors to Medicaid, which will help States identify and recover improper Medicaid payments. Over the next 5 years, we project that

the Medicaid RAC effort will save the Medicaid program $2.1 billion, of which $910 million will be returned to the States.

CMS is committed to working with and sharing with our law enforcement partners, who take a lead in investigating, determining,

and prosecuting alleged fraud. We also continue to work to address

the concerns raised by the GAO that could reduce improper payments and potential vulnerabilities in the Medicaid program.

I am happy to announce that the fiscal year 2011 Medicaid’s national improper payment rate is 8.1 percent, a drop from the 9.4

percent in fiscal year 2010. Despite this decrease, we remain focused on improving program integrity in Medicaid and are confident that the actions outlined today and in my written testimony

as well as the continued efforts of our Federal, State, and public

partners will continue to reduce improper payments.

I look forward to working with the subcommittee to ensure that

CMS carries out this important work. Thank you.

[The prepared statement of Ms. Brice-Smith follows:]
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Mr. PLATTS. Thank you Ms. Brice-Smith.

Mr. Cantrell.

STATEMENT OF GARY CANTRELL

Mr. CANTRELL. I am Gary Cantrell, assistant inspector general

for investigations with the U.S. Department of Health and Human

Services Office of Inspector General. I appreciate the opportunity

to testify today about our efforts to combat Medicaid fraud.

First and foremost, I would like to thank Mr. West for coming

forward with allegations of billing fraud on the part of Maxim

Health-care Services. OIG recognizes that our success is dependent

upon cooperation with courageous individuals like Mr. West. The

documentation that he provided was critical to us in helping us unravel a broader scheme within Maxim Health-care that spanned

across the Nation.

Our investigation resulted in Maxim agreeing to pay more than

$150 million to resolve civil and criminal allegations of fraud, the

largest-ever settlement relating to home health services. Nine individuals, including three senior managers, also pled guilty to felony

charges. This example highlights the potential for citizens and government to collaborate and curtail schemes that are harming the

Nation’s most vulnerable citizens. OIG encourages citizens to report suspected fraud, so we can investigate and bring to justice

those responsible.

Medicaid fraud drains vital Federal and State program dollars

that harms both recipients relying on those services as well as the

American taxpayers. OIG has a team of over 480 highly skilled

criminal investigators located throughout the country. And in fiscal

year 2011, our enforcement efforts resulted in record numbers that

included over 720 criminal convictions and $4.6 billion in expected

recoveries. Nearly 400 of these actions addressed schemes related

to Medicaid fraud, and over $1.1 billion is expected to be returned

to the program.

The types of schemes perpetrated in the Medicaid program in

many ways mirror Medicare fraud schemes. For example, we see

billing for services not rendered, medical identity theft, false statements, bribery and kickbacks. These have been especially common

in relation to home health prescription drugs charitable medical

equipment and transportation services.

Data access is critical to our enforcement efforts in both Medicare and Medicaid. OIG has worked closely with CMS to expand

our access to national Medicare claims data. This improved access

has enabled OIG to more effectively identify Medicare fraud trends.

And that allows our agents to more efficiently investigate allegations of fraud. Unfortunately, this is not the case on the Medicaid

side.

Our inability to access timely comprehensive data impedes effective oversight of the program. CMS’s Medicaid statistical information system is the only source of nationwide Medicaid claims data,

and weaknesses in the system limit its usefulness for effective

oversight and monitoring of the program. For example, the system

does not capture many of the data elements necessary for us to detect fraud, waste, and abuse.
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As in the Maxim case, Medicaid presents our investigators with

unique data challenges. Why? It’s because the data does not exist

in a single location. Rather, it exists in independent systems across

50 States and the District of Columbia. We understand that CMS

is taking steps to collect more timely comprehensive data from the

States, and we hope they move quickly to accomplish this goal.

State Medicaid fraud control units have been valuable partners

in our investigative efforts. Our number of joint investigations has

nearly doubled over the last 5 years. And to improve on our success, we believe that Medicaid fraud control units could also benefit

from enhanced analytic capabilities with regard to their State Medicaid data. This will lead to improved oversight and enforcement.

In closing, we need to make a lasting impact on Medicaid fraud.

The need has never been more important. The Congressional Budget Office estimates that in 2014, 16 million new recipients will be

added to the Medicaid program. Therefore, it is especially critical

that OIG have access to timely comprehensive data in order to protect these Federal and State dollars.

Together, we must work to eliminate vulnerabilities and ensure

that we are positioned to effectively oversee this program for years

to come. Thank you for your support of our mission and I would

be happy to answer any questions you have.

[The prepared statement of Mr. Cantrell follows:]
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Mr. PLATTS. Thank you Mr. Cantrell.

Ms. Yocom.

STATEMENT OF CAROLYN YOCOM

Ms. YOCOM. Mr. Chairmen, ranking members, and members of

the subcommittees, I am pleased to be here as you discuss improper payments in fraud in the Medicaid program. My remarks

today will focus on an important challenge as well as opportunities

that CMS faces, given its expanded role in Medicaid program integrity.

In 2005, GAO testified that CMS needed to increase its commitment to helping States fight Medicaid fraud, waste, and abuse.

That year, Congress passed the Deficit Reduction Act, which provided for the creation of the Medicaid Integrity Program and other

provisions. The Patient Protection and Affordable Care Act gave

CMS and States added responsibilities and new oversight tools.

Thus CMS’s spending for and attention to Medicaid program integrity activities has grown, primarily through the creation of the

Medicare Integrity Group or the MIG.

The MIG gradually hired staff and contractors to implement a

set of core activities, such as reviewing and auditing Medicaid provider claims and providing education to State officials and Medicaid providers. In 2005, CMS had approximately 8 staff years focused on program integrity. Today it has over 80 of the 100 statutorily required positions authorized in the DRA.

However, more is not necessarily better. A key challenge faced by

the MIG is the need to avoid duplication of Federal and State program integrity efforts, particularly in auditing provider claims,

which has been primarily a State function. The amount of overpayments that the MIG identifies is not commensurate with its costs

or with amounts identified by some States. For example, in a similar number of audits, New York reported identifying more than

$372 million in overpayments compared with $15 million identified

through the national provider audits.

In 2011, the MIG reported plans to redesign its national provider

audit program to allow for greater coordination with States on data

policies and audit measures. While it remains to be seen whether

these changes would help identify additional overpayments, the

proposed redesign appears promising. In particular, the collaborative projects currently underway in 13 States would first allow

States to augment their own resources; second, address audit targets that States have too few resources to handle; and third, assist

States with less analytic capability. These projects could help avoid

duplication as well as strengthen Federal and State efforts.

CMS’s expanded role also offers the opportunity to enhance State

program integrity efforts, but more consistent data are needed. For

example, two core activities of the MIG, triannual comprehensive

reviews and annual assessments, collect similar information such

as States’ program integrity planning, prevention activities, and recoveries. However, some of the data that States report show implausible and/or inconsistent State responses. Improved data would

allow CMS to further target assistance to States through the MIG’s

primary training initiative, the Medicaid Integrity Institute. Not

only is the training offered at no cost to States, but such venues
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provide opportunities for State program integrity officials to develop relationships with their counterparts in other States. Such

relationships are critical in a program like Medicaid where providers and beneficiaries can cross State lines and repeat improper

or even fraudulent behaviors.

Since fiscal year 2008, the institute has trained over 2,200 State

employees. Instituted expenditures are a small portion of MIG’s

spending, just $1.3 million of its $75 million budget. Yet they could

greatly increase networks across States and disseminate best practices for ensuring appropriate payments in Medicaid.

For many years, Medicaid has been a critical part of the health

care safety, providing health care services to some of our Nation’s

most vulnerable populations. This heightens CMS’s responsibility

to ensure that billions of program dollars are appropriately spent.

In these difficult economic times, it creates an even greater imperative. The challenges of coordination are significant for States and

for CMS. No less significant is the need for improved data to prevent overpayments.

But there’s also an opportunity for the MIG to work with States

to disseminate and improve oversight of program spending and

hopefully decrease the level of improper payments. This concludes

my prepared remarks. I’d be happy to answer any questions you or

members of the subcommittees may have.

[The prepared statement of Ms. Yocom follows:]
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Mr. PLATTS. Thank you, Ms. Yocom.

Ms. Melvin.

STATEMENT OF VALERIE MELVIN

Ms. MELVIN. Chairmen Platts and Gowdy, Ranking Members

Towns and Davis and members of the subcommittee, thank you for

inviting me to testify at today’s hearing on fraud and improper

payments in the Medicaid program. At your request, my testimony

will summarize findings from a report that we issued earlier this

year on CMS’s efforts to protect the integrity of the Medicare and

Medicaid programs through the use of information technology.

Specifically, in June 2011, we reported on two programs that

CMS initiated in 2006 to help improve the ability to detect fraud,

waste, and abuse: The integrated data repository or IDR, which is

intended to provide a single source of data on Medicare and Medicaid claims and the one program integrity or one PI system, a

Web-based portal that is to provide CMS staff and contractors with

a single source of access to the data contained in IDR as well as

tools for analyzing that data.

Our work examined the extent to which IDR and one PI had

been developed and implemented as well as CMS’s efforts to identify, measure, and track benefits resulting from these programs.

We also provided recommendations on actions CMS should take to

achieve its goals of reduced fraud and waste.

Regarding IDR, we noted that this data repository had been in

use since 2006. However, it did not include all of the data that

were planned to be in the system by 2010. For example, IDR included most types of Medicare claims data but no Medicaid data.

IDR also did not include data from other CMS systems that can

help analysts prevent improper payments. Moreover CMS had not

finalized plans or developed reliable schedules for efforts to incorporate these data.

Further, while one PI had been developed and deployed, we

found that few analysts were trained in using the system. Program

officials had planned for 639 analysts to be using the system by the

end of fiscal year 2010. However, as of October 2010, only 41 were

actively using the portal and tools. None of these users included

Medicaid program integrity analysts.

We pointed out that until program officials finalized plans and

schedules for training and expanding the use of one PI, the agency

may continue to experience delays. With one PI, CMS anticipated

that it would achieve financial benefits of about $21 billion. As we

have previously reported, agencies should forecast expected benefits and then measure the actual results accrued through the implementation of programs.

However, CMS was not positioned to do this. As a result, it was

unknown whether the program had provided any financial benefits.

CMS officials told us that it was too early to determine whether

the program had provided benefits since it had not met its goals

for widespread use.

To help ensure that the development and implementation of IDR

and one PI are successful in helping CMS meet the goals of its program integrity initiatives and possibly save tens of billions of dollars, we made several recommendations to CMS. Among our rec-
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ommendations was that the agency finalized plans and schedules

for incorporating additional data into IDR, finalized plans and

schedules for training all program integrity analysts intended to

use one PI, and establish and track outcome-based performance

measures that gauge progress toward meeting program goals. In

commenting on a draft of our report, CMS agreed with our recommendations. The agency’s timely implementation of these recommendations could lead to reduced fraud and waste and overall

substantial savings in the Medicare and Medicaid programs. This

concludes my oral statement. I look forward to addressing your

questions.

[The prepared statement of Ms. Melvin follows:]
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Mr. PLATTS. Thank you, Ms. Melvin.

We will begin questions. I will yield myself 5 minutes to begin

this round of questions. And I certainly appreciate all four of your

testimonies and your efforts in regard to protecting American taxpayer funds and ensuring that we are properly caring for and providing services.

Ms. Brice-Smith, I am going to begin with you. And I certainly

appreciate the breadth and depth of your testimony on what we are

trying to do. I have to be honest with you that I am surprised after

hearing the testimony of Mr. West that as a representative of CMS,

you did not acknowledge how badly we failed him and how I believe CMS—specifically our government in total—owes him an

apology. And I worry that that’s a sign of trouble for us in trying

to address this issue because we can have great programs in place,

but if we’re not listening to the beneficiaries—I mean, having a

hotline’s great. Teaching beneficiaries how to detect and report

fraud is great. He did. And we didn’t do anything in response.

So I do have to express that I was disappointed that you did not

acknowledge what he went through to make sure that we, as a government, did right by the taxpayers and by him. Because if he was

denied services, how many other citizens are out there who are

being denied services because of fraudulent conduct? So more of a

statement there than a question, I guess.

But specific to his case is, to the best of your knowledge, has

CMS begun and conducted any investigation of why we did not

heed Mr. West’s claims of fraud and that it resorted to him hiring

a private attorney to have it investigated?

Ms. BRICE-SMITH. When I heard Mr. West’s story, I was very

much touched by what he said. And I was trying to figure out what

was the root cause and how did that happen. But when he said

that he communicated with State officials, I felt like that was appropriate. Medicaid is run by the States. And he indicated he spoke

with local people. That was in 2004. And as Ms. Melvin indicated,

we had less than six full-time equivalents that even—there was no

Medicaid Integrity Group back in 2004. The DRA didn’t happen

until 2005. We started the building of that infrastructure for staff

in 2006. So there was no existence of Federal level contact, if you

will. We had—prior to 2005—six full-time equivalents that had no

funding, that supported the States when questions came into CMS.

So there was really no structural vehicle at the Federal level in

2004.

Mr. PLATTS. I think the point’s well made. And that’s what your

testimony is for, we are trying to do much better today at the Federal level.

But I guess while we didn’t have it in 2004 in place, New Jersey,

as the operator or the provider of the Medicare services that we’re

helping to fund, did and was responsible. And I guess what I’m

saying, have we even gone back to New Jersey and said, Listen,

this is a case where you blatantly failed somebody that we’re paying you know a huge share of you to provide this service; and because of your failure, you know, tens of millions of dollars was

being lost and but for that private citizen’s efforts would have been

forever lost. So what has New Jersey done—in other words, what

did New Jersey do to better ensure that it’s not repeated?
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And even though that may be at the State level in addition to

what we’re doing, CMS has a responsibility to make sure they are

doing that. Have we made those types of inquiries to New Jersey

to make sure they’re doing much better?

Ms. BRICE-SMITH. Yes, we have. We did contact New Jersey and

request information about what happened and what was their information in terms of how the communications took place. We’re

still looking at that information to understand what actions that

they plan to take to mitigate that in the future.

In the meantime, CMS has taken a number of actions related to

how to report fraud, who are the contacts in the State, even

through the 1–800 Medicare line. There’s a clear vehicle for people

to be able to reach us at any time.

Mr. PLATTS. And I think that’s critically important because of the

efforts of trying to encourage beneficiaries who, as we talked with

the previous panel, are truly on the front lines. They are the ones

who see the inaccurate information, you know, if they’re diligent as

Mr. West was and those are the ones who are suffering the consequences if they’re fraudulently taken advantage of because of denying services.

So having a system in place is one thing, but making sure we

respond to the information that comes in to that system is going

to be key.

A final question here and then my time is going to be up. Regarding Maxim itself. Can you—I don’t know if you have it here

with you today or if can estimate. For this year, fiscal year 2011

that just ended, roughly how much money did Maxim receive under

the Medicaid program nationally?

Ms. BRICE-SMITH. I would have to research that question. I don’t

have that information.

Mr. PLATTS. If you could provide that. My guess is it’s hundreds

of millions, if not billions of dollars as a provider in 41 States,

they’re probably receiving. And as Mr. Cummings in the previous

round specified, it just is, to me, incredible that someone who

knowingly, intentionally a company defrauded the American people

to the tune of tens of millions and if not more—this is what we

know of—and would never have known of but for the heroic efforts

of a private citizen that that company is still receiving hundreds

of millions, if not billions, of dollars from the American taxpayers

to provide a service. And it just, to me, sends a terrible message,

as Mr. Cummings said, that companies are going to just look at

this as the cost of doing business. Hey, if we get caught, we just

pay a fine and we just factor that in, but we keep getting the business. And in the real world, the private sector, if you defrauded

somebody $130—$150 million, I guarantee you, you are not going

to be doing business with that company anymore. And they

shouldn’t be doing business with the American taxpayers. So we

need to do much better. And I know there’s also a criminal side

that we may get into with Mr. Gowdy.

So my time is well expired. I yield to the ranking member, Mr.

Davis from Illinois.

Mr. DAVIS. Thank you very much, Mr. Chairman. The Affordable

Care Act put into place various provisions. And of course, it was

just passed last year to help fight fraud and abuse in Medicare and
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Medicaid. The Congressional Budget Office estimates that these

provisions, when fully implemented, will save the American taxpayers $7 billion over the next 10 years.

Ms. Brice-Smith, can you describe the tools and technical

changes to the anti-fraud laws that are included in the Affordable

Care Act that will directly benefit your office?

Ms. BRICE-SMITH. Sure. In the Affordable Care Act, it offered up

several things related to provider enrollment and screening. And

we believe that that’s the best tool for making sure that we keep

people who are more fraudulent or fraudsters out of the program

and also be in a place to reverify and validate them over time to

make sure that we can keep them out of the program or adjust our

scrutiny of them through risk assessments, if you will, over time.

So that’s part of that.

Then there is the payment of suspension activity with respect to

changing the level of proof, if you will, from a reliable evidencebased allegation to a credible allegation; that will also give us additional flexibility.

Then there’s also the opportunity for a temporary moratorium

that can be effectuated through that vehicle as well.

And also Congress recognized the shortcomings of the data, as

we’ve recognized the shortcomings of the data, in the Medicaid program and offered up section 6504 that will allow us to strengthen

the data elements that we desire and need for program integrity

purposes.

Mr. DAVIS. Thank you. Mr. Cantrell, what specific aspects of

fraud detection do you think will be most positively impacted by

the activity that has been included or the provisions included in

the Affordable Care Act?

Mr. CANTRELL. One of the things that was included in the Affordable Care Act are stiffer penalties, stiffer sentences for those convicted of health care fraud. And we believe, as was discussed during the first panel, that stiffer sentences are important in deterring

ongoing fraud.

Mr. DAVIS. Let me ask you and Ms. Brice-Smith, knowing that

there are some of our colleagues who have put forth efforts and

have continued to push for a repeal of the Affordable Care Act, if

that was to happen, do you see your organizations being affected

in any way, certainly negatively affected if we were to repeal the

Affordable Care Act?

Ms. BRICE-SMITH. Before the Affordable Care Act, we had improper payments. One would argue that I think we would still have

the concerns around improper payments. I think we are working

very diligently to address them.

I think many of the concerns I think around repeal seem to be

around the growth or the expansion of the programs, and what I

have seen from Congress is a recognition that you have provided

commensurate administrative tools and authorities to expand our

efforts commensurate with that growth.

Mr. CANTRELL. We did receive additional funding for our organization through the Affordable Care Act, and we were able to hire

almost 100 new investigators so that was certainly welcome.
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Mr. DAVIS. Could I suggest that the Affordable Care Act

strengthens your ability to weed out fraud and abuse in Medicare

and Medicaid?

Ms. BRICE-SMITH. I would agree with that, yes.

Mr. CANTRELL. Some of the tools and certainly the additional

agents on the ground will definitely assist us in weeding out additional fraud.

Mr. DAVIS. Thank you very much and thank you Mr. Chairman.

Mr. PLATTS. I thank the gentleman for yielding back.

I recognize the subcommittee chairman Mr. Gowdy.

Mr. GOWDY. Thank you, Mr. Chairman.

Ms. Brice-Smith, which States have the highest rate of improper

payments?

Ms. BRICE-SMITH. That is a very good question. We are aware of

which States they are. We do what we refer to as a payment error

rate measurement that bans 17 States on a 3-year cycle. We engage those States and expect corrective actions from those individual States. But we do not release it publicly.

Mr. GOWDY. Well, I was looking for the name of a State because

it strikes me that you want to put your law enforcement/prosecutorial resources where there is the highest level of graft or fraud

or waste or abuse.

So which five States would have the highest improper payment

ratios?

Ms. BRICE-SMITH. We would gladly share any of those data with

our law enforcement partners, but we usually do not disclose them.

Mr. GOWDY. Why? There are four States being sued right now by

the Department of Justice for having the unmitigated temerity to

want to enforce immigration laws. Why the reluctance to say which

States can’t get their act together with respect to Medicaid payments? What is the reluctance?

Ms. BRICE-SMITH. I think it could be perceived as somewhat punitive. I think there is a desire by CMS to work with our State

partners to address the improper payments in a meaningful way.

We are continuing to do that. The States know who they are. We

work with them on a corrective action plans. We follow up on that.

Mr. GOWDY. Do this for me then: Tell me are there any States

that on an annual basis just don’t seem to get their act together?

I can understand not wanting to dime out an episodic State that

just had one bad year but then later engaged in corrective actions.

Are there any States that just have a history of Medicaid overpayments?

Ms. BRICE-SMITH. I cannot for certain give you the repeated findings because it is early in the per-measurement cycles. We have

now completed the fourth year of measuring the States, so we have

passed the cycle of the first 17 States now being examined for the

second time.

Mr. GOWDY. So you know who the States are, agreed?

Ms. BRICE-SMITH. I do not personally know who the States are,

but my colleagues do.

Mr. GOWDY. Someone does know, and they’ve made the decision

to not publicize the States that are doing the worst job?
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Ms. BRICE-SMITH. I think our desire is to work with our State

partners, and we are continuing to do that in a meaningful way,

and we will continue to do so.

Mr. GOWDY. Mr. Cantrell, I was under the mistaken impression,

apparently, that the amount of loss impacted the amount of time

you went to jail. Apparently, that’s not the case, because in the

Maxim case, other than watching television at home for 3 months,

I only saw one person go to a Federal Bureau of Prison. And that

was for what, 5 months? So has that changed since I left the U.S.

Attorney’s Office? Is the amount of loss or the amount of the fraud

no longer a factor in the length of a prison sentence?

Mr. CANTRELL. The amount of fraud is a factor in the prison sentence, and it would depend though on the individuals who were

convicted the amount of fraud that was actually attributed to them.

Mr. GOWDY. They still don’t have relevant conduct.

Mr. CANTRELL. There is relevant conduct that is taken into consideration.

Mr. GOWDY. They do in the drug cases, they take the lowest mule

in a cocaine conspiracy, and they dump all the drugs they can possibly dump on them. But it doesn’t happen when it’s rich folk committing the crime.

Mr. CANTRELL. I don’t think that is the case, sir. I think a recent

example we are seeing increased sentences throughout the

country——

Mr. GOWDY. Let me ask you about that. Let me ask you about

that. How many motions for upward departure are you aware of

being filed?

Mr. CANTRELL. I don’t have that information, sir. That would be

the Department of Justice.

Mr. GOWDY. Can you get that for me? Can you find out? Because

that is a really good indicator to me about how serious someone is

about criminal activity, whether or not they are going to move that

the sentence be higher than what the guideline was? If you can tell

me where to find that, I will be happy to do that myself.

Mr. PLATTS. If the gentleman would yield.

Mr. Cantrell, if you could submit that to the committee for the

record, that would be great.

Mr. CANTRELL. We will have to get that information from the Department of Justice, but we will work with them to identify what

we need to get and provide it to you.

Mr. PLATTS. I thank the gentleman for yielding.

Mr. GOWDY. Thank you, Mr. Chairman.

My final question is, do you believe there is a presumption in

favor of criminal prosecution over civil enforcement? When you

prosecute somebody criminally, not only can you recoup the losses,

but you also get to punish people. So is there a presumption in

favor of criminal over civil?

Mr. CANTRELL. That is our presumption in the Office of Inspector

General, Office of Investigations.

Mr. GOWDY. What about the U.S. Attorney’s Office in the Department of Justice?

Mr. CANTRELL. I believe that is also the case with the U.S. Attorney’s Office when there is evidence to support a criminal indictment.
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Mr. GOWDY. You heard the facts of Mr. West’s case. That

wouldn’t be a hard case for you and I to win would it?

Mr. CANTRELL. I can’t comment on the specifics of that.

Mr. GOWDY. Sure you can. He just announced it to the whole

world. Even you and I can win a case where you are billing someone while they’re at the U.S. Attorney’s Office for a meeting; you

and I could win that, couldn’t we?

Mr. CANTRELL. That case, it sounds obvious, there are I’m sure

several factors that we went into decisions at the U.S. Attorney’s

Office to determine who to prosecute and who not to prosecute.

Mr. GOWDY. I yield back.

Mr. PLATTS. I thank the gentleman for yielding back.

The ranking member of the full committee, Mr. Cummings, recognized for 5 minutes.

Mr. CUMMINGS. To Ms. Brice-Smith and to Mr. Cantrell, as you

heard, I was very upset that a kid from Baltimore, thousands of

them by the way, thousands, can face a lifetime of economic punishment over a few hundred dollars stolen, yet a company like

Maxim can be found guilty of stealing from taxpayers, pay a fine

and continue to bill the Federal Government for millions of dollars

of services each year.

Ms. Brice-Smith, do you share that sentiment? Something is

wrong with that picture.

Ms. BRICE-SMITH. I’m equally concerned about the equity that

you have pointed out.

Mr. CUMMINGS. Yeah, and who has the power, by the way, do

you all have the power, who has the power to debar these companies?

Mr. CANTRELL. We do have the power to exclude providers.

Mr. CUMMINGS. Have you ever done it can?

Mr. CANTRELL. Certainly, we do.

Mr. CUMMINGS. Why not this company?

Mr. CANTRELL. The decisions on who to exclude is based on several factors, including access to care as well as the specific conduct

and the expectation of whether they will continue the bad behavior

or not. We utilize, in cases where we do not exclude corporations,

we utilize corporate integrity agreements, in this case, there was

a deferred prosecution agreement where we will monitor this corporation in hopes to——

Mr. CUMMINGS. To hell with monitoring. They’ve already done it.

If you had somebody working in your house, cleaning your house

and you came home and your wife’s bracelet that was worth $50

is missing, you don’t hire them again. Duh.

What do mean deferred prosecution? This company needs to go.

How many other companies are like this or, in other words, have

defrauded the people of the United States of America, have taken

away services from people like our witness, our earlier witnesses,

and are still doing business with Medicaid? How many?

You’re the IG. You sat up here and you said all these wonderful

things, sounds nice, oh we’re doing this, and we’re doing that.

That’s real nice. But what I’m trying to tell you is that your normal

is not good enough. If you’re going to come in here with a badge

on your chest and talk about what you’ve done in a company that’s

taken millions of dollars away from taxpayers is still doing busi-
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ness, and they come in 41 States and have said, all right, we’re

ready to do business again, yeah, we’ve stolen from you, but we’re

ready to go. And we say, okay, all right, we’ll do it. Something is

wrong with that picture, and you’re the IG. So is that the normal

that we should expect?

Here we are slashing budgets, people talking about slashing

Medicare, slashing Medicaid, slashing Social Security, and we’ve

got some greedy folks who are out there stealing money from people, and you’re going to tell me that we have the power to debar,

and we’re not using it? In what case will we use it?

Mr. CANTRELL. We use it, on average, nearly 3,000 times every

year.

Mr. CUMMINGS. Well, why not this company?

Mr. CANTRELL. As I said, there are factors that play into the decision, depending on whether they are criminally convicted or

whether there’s going to be an impact to access to care going forward and their expectation of whether or not they will continue to

commit the fraud or whether we believe that, through compliance

monitoring, we can bring them into the fold and allow them to continue to provide services to the population that they are serving.

Mr. CUMMINGS. Oh. Oh. The fact that maybe they steal your

wife’s broach, you say to her, or the cleaning person, you say to

her, oh, Ms. Jane or Mr. Johnson, yeah, you have stolen a broach,

but we want you to come back in because we think you can be rehabilitated. We think the next time you have a cleaning assignment, you won’t take the diamond ring. Something is wrong with

that picture. And I guess what I’m trying to get through to you is

that that is not the normal. Our country is better than that.

And there are people in my district that are suffering because

they can’t get the services they need, but yet and still, we are letting these companies do this.

And by the way, there are other situations in government where

people did much less than this, and they’d be out. Again, I go back

to the young boys and girls in my district, some of whom live in

my block and if they stole a $300 bike, they would be punished for

a lifetime, not a day, not an hour. And they damn sure wouldn’t

get a multimillion dollar contract and multimillion dollar contracts

in 41 States.

I would be embarrassed to even come in here and stick out my

chest talking about what I have accomplished when the company

is still—they’ve got to be looking at us like we’re fools. So I’m hoping that we’ll be able to work in a bipartisan way to get rid of

Maxim because see, all of this stuff you’re talking about, it does not

matter if the end result, Mr. Gowdy said part of it—I’m almost finished, Mr. Chairman—part of it is making sure somebody goes to

jail, but there is another part.

That other part is saying to them that we are not going to allow

you to do business and screw over the American people any more.

That’s the second part. And you can do all these things you’re talking about, bring in all the technology you want to talk about all

these wonderful things you’re doing, but if there’s not that end result, do you know what they do? They just come right back, and

they pay the price, but they come right back.

Thank you, Mr. Chairman.
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Mr. PLATTS. I thank the gentleman.

The gentleman from Arizona, Dr. Gosar, is recognized.

Mr. GOSAR. I got to tell you, this is great playing the closer on

these two gentlemen right here. I couldn’t agree more. Being a

health care provider who did Medicaid for 7 years and left it for

all the reasons they talked about, I did not stop; I just provided it

for free.

This system, we are starting to talk about access to care, and the

only provider is those that are thieving in one of the most densely

populated parts of the country is absurd to me folks, absolutely absurd to me.

So I’m going to ask you something real quickly. I want to give

you the opportunity to give yourself a grade in front of the American people on how you think you have done this job in regards to

policing yourself.

Mrs. Brice-Smith, give yourself a grade.

Ms. BRICE-SMITH. In light of our youngness of our program——

Mr. GOSAR. I don’t really care. Give me a grade.

Ms. BRICE-SMITH. C.

Mr. PLATTS. Mr. Cantrell.

Mr. CANTRELL. I would give us a B. I know—we know there is

much more fraud out there that we need to attack, but we are improving every year. This last year was a record year with 720-plus

criminal convictions, which is over 50 more than our previous

record year, and $4.6 billion in recoveries through these criminal

and civil fraud investigations.

Mr. GOSAR. I’m going to interrupt you there, because I think

what you have to do is you are working on behalf of the American

people, and I doubt that they would give you a above a D. Don’t

you agree with me?

I think so. I have been out there on Main Street walking this,

and so I understand this very well. Because there is a missing component; the process, the whole process is broken here because the

problem for this gentleman, Mr. West, here would have been a lot

less if he was empowered to help make those decisions on the

ground. And we have failed to do that.

Let me ask you a question, Ms. Brice-Smith, when we were looking at these innovative ideas of making some change, did you contact Visa or MasterCard on what may be some ideas they may have

to reduce some of the fraud, waste and abuse?

Ms. BRICE-SMITH. CMS has engaged credit card companies in

using the analytics and tools that they have available and try to

apply that in the Medicare claims.

Mr. GOSAR. How would you look at that as far as the IT systems?

I know that in a lot of the States in the IT system its lowest bid

buys. That is not usually a good investment, as far as I’m concerned. Dentists love their toys, okay, and the better the IT, the

better, and so sometimes it’s not the most frugal decision that is

always is better.

Would you agree?

Ms. BRICE-SMITH. Yes.

Mr. GOSAR. Do you work with the States in allowing them to

have the flexibility to working with that?
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Ms. BRICE-SMITH. Yes, we do. In fact, we have incentivized the

States to upgrade and enhance their IT systems for the future. We

have done that through setting what we refer to as a matching a

90–10 match, where they get additional funding, but we apply criteria or expectations to that funding so we can have a better system at the State level for the Medicaid claims.

Mr. GOSAR. So when you start looking at, I look at these two gentlemen looking at criminal prosecution, and very few people or

fewer people, I should say, in the criminal division really want to

renege on their rules of parole. And the reason I look at that and

I bring it to point is called bounty hunters, is because they have

a lot more eyes on the prize. There are some incentives. And it

seems to me when you lot these F maps on reimbursement rates,

we ought to be engaging the States for activity, as well as patients.

The first person who is going to know is the patient. And giving

them some oversight on their bill. That’s why it needs to be in

hand. And I think that what we are trying to do is we’re putting

a Band-Aid here. And I will tell you I’m one of these people speaking I’m tired of Band-Aids here. I came to Congress to recorrect

things. I think trying to reconstruct doing the same things over

and over and expecting a different result is insanity, absolutely insanity.

But we need to start empowering patients. And that’s not what

you’ve done. There is no part of this—that does not empower these

patients. And I can tell you I have firsthand knowledge of that. I

served our dental patients who couldn’t be seen by a federally

qualified health center. I can repeat stories, not as bad as this because they’re dental, but I can repeat this all day long. It’s sad. Because I think what we ought to be doing is sharing that information all across the sandbox, not playing and not explaining who is

a bad player here, and allowing them to be still participating to the

rules is criminal. And it is criminal on our part for not changing

it.

That’s what’s wrong here.

So let me ask you a question, I want to see thinking outside the

box, how could you envision something that we could empower patients like Mr. West to have some skin in the game, to be one of

those whistleblowers and to uphold their ability and right? Give me

some ideas, Ms. Brice-Smith.

Ms. BRICE-SMITH. We have already observed that there are a

handful of States that have developed sort of reward programs, if

you will, that are short of sort of the qui tam approach of the False

Claims Act but will give cash for tips, if you will, related to health

care fraud.

So there are already a handful of innovative States that have

recognized that that is an additional insight and benefit to fighting

fraud.

Mr. GOSAR. Do you have an insider newsletter that says, hey, listen, these State are on cutting edge, days to crime, days to time?

Ms. BRICE-SMITH. We are using our education to be able to communicate and outreach that information. We also use best practices

summaries for the States so that we can inform other states of

what States that are being innovative are doing. So we use our
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Web sites, we use forums and meetings and our Medicaid institute

to communicate that information.

Mr. GOSAR. Thank you. I’m out of time.

Mr. PLATTS. I thank the gentleman.

I’m going to go to a second round here, while we have the opportunity for a few more questions. Yielding myself 5 minutes. First,

to follow up on the questions of Mr. Gowdy about the States that

are most egregious as far as improper payments. It sounds like

your contention is that information is not subject to the Freedom

of Information Act [FOIA].

Ms. BRICE-SMITH. I am not sure FOIA, but we could certainly,

I could certainly look into that.

Mr. PLATTS. Because I’ve shared his, I guess, statements regarding the fact that American taxpayers are sending $275 billion to

States to handle properly, and I think the American taxpayers

have a right to know which States are doing it well and which

States are not. And I’m not sure, I would be interested in any additional feedback from CMS as to why we don’t want to share—often

in cases of deadbeat dads, one of the ways we can get them to pay

is we publicize that they are not paying. We shame them into paying.

Well, maybe we need to shame these States into doing a better

job of protecting the American people’s money. So I do look forward

to further interaction with you and CMS on that.

Mr. Cantrell, on the specific case of Mr. West, appreciate various

factors. I find it somewhat unbelievable that we are still doing

business with this entity.

Can you tell me when, the 41 States, as part of the agreement,

in addition to Mr. West’s case in New Jersey, was there evidence

of other similar misconduct in other States regarding this company?

Mr. CANTRELL. Yes, there was. The $250—$150 million was not

related specifically to Mr. West’s scenario. It was a broader issue.

Mr. PLATTS. In how many States would, if you know, or estimate

that we found this misconduct?

Mr. CANTRELL. I don’t know specifically. The answer to that.

Mr. PLATTS. That, to me, would go to, if it was just New Jersey,

and we had some bad apples in one subdivision of this large company, that is one thing to say we’re not going to punish the whole

company. But if we found similar misconduct in half, 20 of the 41

States, that’s a very different story.

So if you could provide to the subcommittee how many States

and how many different States do we find similar misconduct by

Maxim?

Mr. CANTRELL. I don’t believe our evidence suggested that they

were committing 100 percent fraud across the country, but I don’t

know how many States. But we will get back to you on that.

Mr. PLATTS. We would welcome that information.

Also, looking at an analogy to the private individuals in a criminal sense, when we have a victim, because most of our focus has

been about the money, which is very important, but it is also about

the care provided. As we heard from the testimony of Mr. West, because of the fraud Maxim committed, it wasn’t just the money

being lost; it was care to an individual. And that is an even more
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serious crime in my opinion; because of their intentional fraudulent

conduct, they denied medical care.

Given that he was a victim directly, taxpayers in total were victim, but he was a victim directly of their misconduct, was he consulted or any other similar victims consulted as to whether they

felt the settlement with Maxim was acceptable punishment for

their wrongdoing?

Mr. CANTRELL. I believe, as in most of these cases, the attorneys

for Mr. West, Ms. Page, would probably have been participating in

some of those discussions, yes. I don’t know specifically in this case

how it was, but that is, I believe, the routine.

Mr. PLATTS. So and they are given the opportunity to say, yes,

I sign off on this, or they are just aware of this.

Mr. CANTRELL. I think they’re aware of it. I don’t know that they

have the ability to stop, stop it from happening.

Mr. PLATTS. In a sentencing in a court, there is a formal process

where the victims can offer testimony to the final decider. Do you

know if there is any formal process of that nature where a victim

can make a presentation to the U.S. attorney directly that is going

to make that decision?

Mr. CANTRELL. Certainly, there is the opportunity. I don’t think

there was a sentencing hearing in this case, so there was no, may

not have been the opportunity to do it in a courtroom, but I believe

it have would been conversations between U.S. Attorney’s Office

and the assistant U.S. attorney, Mr. West.

Mr. PLATTS. My hope is that we make sure that is a formal process, a routine part of any settlement. Because I do acknowledge

that you can have somebody who had some bad apples in a small

way, that’s got to be factored in versus a more deliberate acrossthe-board fraudulent case. But we have to remember there are victims here that aren’t just about money; it is about care being denied, and that is a very serious crime in my opinion.

I want to quickly get to two other issues. In your testimony, Mr.

Cantrell, you talk about the Medicaid statistical information service, and you reference in your testimony about some of the data is

12 years old? How common is that?

Mr. CANTRELL. Sir, let me correct the record. That is 1 and a half

years old.

Mr. PLATTS. Twelve years just seems so outrageous. But even 1

and a half, when you talk about then trying to correct it, it goes

to the point of I guess what you talked about and Ms. Brice-Smith

of trying to much more quickly identify, respond to and prevent,

because 1 and a half years even is the money is long gone.

Mr. CANTRELL. We agree. The more timely the data, as close as

we can get to real time, the better we are. On the Medicare side,

as I said, we have a lot more success to talk about. We use that

data, which is much more timely to mine for fraud, identify areas

where we have hotspots of fraud. We had the strike force model,

which we utilized. We deploy those to areas of the country where

there is high instances of the fraud, such as south Florida, Bronx,

New York, Detroit, Los Angeles, Dallas, Houston.

Mr. PLATTS. Seeking to replicate where you have had success for

Medicare to Medicaid?

Mr. CANTRELL. Absolutely.
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Mr. PLATTS. And that’s one of the things that came through to

me in preparing for this is that it seems like there is almost a conscious decision within CMS to devote much more attention and resources to Medicare fraud than to Medicaid fraud. Is that a fair,

until the last, say, 5 years. Is that a fair statement?

Mr. CANTRELL. I would have to defer to my colleague on that

question.

Mr. PLATTS. Ms. Brice-Smith, is that it, that we are kind of late

to the game on the Medicaid side?

Ms. BRICE-SMITH. I think you’re recognizing certainly the support that Congress gave us through DRA in that 5 year period.

But I think one could take that a step further. The Medicaid program was structured to be administered day to day by the States,

so those claims are going to the States or their fiscal agents. And

we are engaged at the postpay with the subset of data to try to

oversee the——

Mr. PLATTS. I think a very valid point. In the Deficit Reduction

Act and as Mr. Davis well reflected in the Affordable Care Act,

there is a greater understanding here in Washington in the last 5

years that maybe it’s State administered, but bottom line is we are

paying the majority of the bill. And so we need to be a little more

proactive in protecting the taxpayer funds. And that is why I said

I think we’re late to the game, but we are finally getting there and

being more, I think, hands on in trying to protect those dollars.

I know, I’m one last question. I appreciate my colleagues’ indulgence here with being way over my time, and Ms. Yocom, in your

testimony, you talk about the, again, the Medicaid statistical information system and you talk about what States are supposed to provide. But it says MSIS does not contain billing information such as

referring provider’s identification number or beneficiary’s name.

The less information provided, the harder it is to say, hey, this provider, obviously, is billing for an inordinate number, and that

would be one of the flags that would jump out that there may be

something askew here.

Can you try to address, based on your knowledge, why aren’t we

requiring States to provide all of that information to make the

MSIS system a more useful tool, to be more timely, but also more

comprehensive?

Ms. YOCOM. I can’t speak to why we don’t require it, but I can

speak to the effect of not having that information available. As you

say, it’s impossible to do some of the data mining techniques on

things that are done routinely on the Medicare program.

GAO does have some work underway right now, and that is just

looking at the States’ capabilities and their activities in this regard.

Mr. PLATT. Thank you.

Ms. BRICE-SMITH. May I speak a little bit to that?

Mr. PLATTS. Yes.

Ms. BRICE-SMITH. I just want you to be aware that we are taking

active actions to actually enhance that data. We are referring to it

as transformed MSIS data, which is largely expanded. We’re currently pilot testing it now to test drive, if you will, if that data will

give us a better output in terms of program integrity activity

among 10 volunteer States. So we are very excited about that.
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Mr. PLATTS. My hope is that that is successful, and I will say

more successful than IDR and the one program integrity, which

many years in doesn’t seem that we’re getting the results that were

intended and certainly not in the timeframe, and I am way over

my time.

Mr. Davis, I don’t know if you had other questions. I yield to the

ranking member, Mr. Davis.

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

The cap on services and denial of his dental needs were a major

red flag to Mr. West that something was awry, that something was

wrong, something was not right with his benefits.

Ms. Brice-Smith, to those patients without a similar cap, are

they less likely to ensure that their services are properly being rendered and billed to Medicaid correctly?

Ms. BRICE-SMITH. I think what we’ve learned about fraud if you,

many fraudsters can submit a very clean looking claim. And you

have to examine many other factors, such as complaints from beneficiaries, such as our own data analytics in terms of patterns and

trends to see, does this really make sense? Is this even feasible

that he could have used that many services for example.

Mr. DAVIS. The 1–800 Health and Human Services tips hotline

is widely publicized as an avenue that individuals can use to provide information that assist in combating fraud waste or abuse in

Federal health care programs.

While the extent of health care fraud is estimated to be in the

billions of dollars each year, HHS emphasizes that Medicare and

Medicaid beneficiaries are the frontline of defense in detecting

Medicare and Medicaid fraud because they have firsthand knowledge of the health care services they have received.

Mr. West contends that there was no follow-up to his hotline

calls.

So, Mr. Cantrell, could you provide information on the 800 HHS

tips hotline, what procedures are followed, and any timeframes

there might be to handling or responding to complaints?

Mr. CANTRELL. Sure. We have the 1–800 HHS tips telephone

line, which in this case, Mr. West, we don’t believe he contacted

that. I think he called the State and local offices. But we have that

phone number. We also have a Web site, where we collect complaints via Web forum. And between those two mechanisms, we receive thousands of complaints every year. And we have a process

for evaluating those complaints, determining the—whether there’s

enough information there to proceed with an investigation or

whether there isn’t enough information.

In some cases, we refer those complaints out to our regional offices for our investigators to look at further, and in other cases, we

refer them directly to CMS for administrative review.

Mr. DAVIS. While our focus today has been on Medicaid fraud, I

will just point out that there is also fraud in the private sector, in

private health care. For example, in 2009, United Health paid $350

million to settle lawsuits related to the intentional manipulation of

the reasonable and customary rate. And also Pfizer, in 2009, paid

a $2.3 billion civil and criminal penalty for unlawfully marketing

medications for conditions that they had not been approved for by

the Food and Drug Administration.
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Ms. Melvin, Ms. Yocom, could you comment on the challenges,

from GAO’s perspective, of looking seriously into the private sector

fraud and abuse situations?

Ms. YOCOM. Well, one of the challenges of looking into the private sector, I think, particularly on Medicaid, might be the Federal

State partnership. That is an unusual circumstance to begin with.

Data is also a huge challenge in terms of combating fraud. And

the steps that CMS is taking right now are in the right direction,

but there is a lot of work to be done there.

Mr. DAVIS. Ms. Melvin.

Ms. MELVIN. From a technical perspective, in looking at moving

data, for example, from the States into the integrated data repository, a lot of the key challenge stems or surrounds having to make

sure that the data is of a format, that the their data elements follow formats that are consistent with the IDR requirements for a

file format. So there are technical challenges in being able to do

that.

One of the concerns we raised in our report is CMS’s plan, as we

understand it, to try to bring all of the 50 States or 50 plus programs data into IDR by September 2014, I believe. The concern we

have is what type of planning they will have in place to make sure

that they can, in fact, bring that data, consolidate it, identify all

the data elements that are very different.

We talked previously about disparate systems in all of the different State programs, and those have to be addressed, the differences in data have to be addressed and brought into the system

in a common format.

We have not seen plans yet. We haven’t done the work that

would allow us to know how effectively CMS is handling that particular challenge.

Mr. DAVIS. Thank you very much.

I want to thank all of the witnesses.

And thank you, Mr. Chairman, for this hearing. And I yield back.

Mr. PLATTS. I thank the gentleman.

Dr. Gosar.

Mr. GOSAR. So let me ask you a question. We are talking about

fraud. Is it just limited to the private sector, or is it also for public

health? Ms. Brice-Smith.

Ms. BRICE-SMITH. I believe that there are equally concerns in private and public sector in terms of fraud, waste and abuse. And I

think evidence of that certainly is the American Medical Association’s own fourth annual report card on health insurers, which

showed their error rate was double, more than double certainly the

Medicaid error rate.

So when you think about extrapolating even that out, you’re talk- ing about a savings in the private sector of $70 billion right there.

So I think that is an example.

I think with Medicaid and Medicare, two big high priority programs, we certainly recognize that we tend to report and disclose,

and we are transparent, as we should be, but many private companies don’t have to be transparent about the fraudulent activities

that might be occurring.

Mr. GOSAR. I also want to highlight federally qualified health

centers. I’m a dentist, just to make sure that we all get that out
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there, that when we work a rule, for example, a child, we numb

up the whole quadrant, and then we only do one tooth at a time

because of the reimbursement rate. Would you call that fraud? I do.

Ms. BRICE-SMITH. It sounds like there are a lot of things going

on that we would have to take into consideration in terms of how

that billing is occurring. It sounds like that might be an effort to

unbundle services possibly. It might draw some suspicions depending on how——

Mr. GOSAR. Do we have the same scrutiny on federally qualified

health centers as we do everybody else?

Ms. BRICE-SMITH. Certainly, they are inclusive. Although I think

our efforts tend to be focused on where we relieve the greater Medicaid expenditures and the greater vulnerabilities are and the categories of services that tend to drive the error rate as we know it

today.

Mr. GOSAR. Ms. Yocom, do you believe that the Medicaid, the

State Medicaid systems are maybe too big and unwieldy the way

they are?

Ms. YOCOM. Too big———

Mr. GOSAR. To oversee properly? We’re finding a big problem

here, and it just seems like it is unwieldy.

Ms. YOCOM. I think the actions taken by the Congress under the

Deficit Reduction Act and under the Patient Protection and Affordable Care Act meant a lot of activity which can help oversee these

programs in a better fashion.

To speak to the States on this, this is a partnership, but CMS

also needs to be able and willing to——

Mr. GOSAR. Give up some of the rules.

Ms. YOCOM. Yeah.

Mr. GOSAR. It seems to me like we’re talking about a broken system. It is very obvious to me. I’m from rural Arizona. We don’t get

paid. I can tell you right now, in dentistry, you might be getting

paid in 6 months. So I don’t know too many people that can make

a business work that way. Somehow we do.

But in this government take-over of health care, that’s the only

way I can talk about it, okay, we are going to dump another 20

million people into this, into a broken system. I don’t see a lot of

urgency in fixing this situation and looking outside the box for solutions.

Do you agree with me?

Ms. YOCOM. Well, it’s not my position to agree or disagree.

Mr. GOSAR. Do you agree it’s broken right now?

Ms. YOCOM. I think the facts are we need to do better on program integrity, yes.

Mr. GOSAR. And it’s going to be problematic when you dump another 20 million people in there.

Ms. YOCOM. And the best approaches are, frankly, to keep the

payment from happening at the beginning.

Mr. GOSAR. In Medicare, most of our Medicare patients are older,

right? They are very responsible, and they have been empowered

to look at bills, which gets back to my point about empowering people in being part of that.

I want to go back to that and ask you a question.
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Do any States use the advanced analytics, like the credit card industry, that would spot in realtime an outlier of billing practice before payment goes out the door?

Ms. MELVIN. We have just started work to look at that, so I’m

not in a position yet to say exactly what States are doing. We do

know there are analytical tools that are being used in some capacity by them at this point, but I couldn’t speak to how much or to

what extent they are using them.

Mr. GOSAR. Are there any rewards to utilizing the analytic tool?

Mr. MELVIN. The analytic tools, as I understand them, are to be

used to in particular to help prevent improper payment so that it

allows them to analyze, say, if you will, mined data and really

make calls on data that would help them to prevent fraud and improper payments on the front end versus, for example, the integrated data repository and one PI tools that we have currently assessed, which are, at this point at least, focused on the back end

in terms of identifying improper payments after they’ve been made.

Mr. GOSAR. Indulge me just for a second. To me, it seems like

there is a common tool here I want to get to. It’s on the front end

with a card empowering the patient to pay to make the system a

lot faster.

Because here is another part to this. There’s also the State board

because when you defraud a patient on a billing process directly

when they’re paying for it, it is also a standard of care issue. So,

therefore, there is a better penalty that we’re talking about.

So I think that there should be some aspect that we look at the

front end more so the back end in empowering patients. And I

think you’ve got something that works very, very well.

I come from a State that the dental board is extremely active.

Arizona is not one, two or three in the country for population, but

we are for activity, because patients are empowered. And that’s

where we need to go. And I think that’s what we’re failing to do

is empowering people.

And I see constantly, I’m approached by the WIC program, saying, Dr. Gosar, we need you to sign a contract? And I say, why are

we signing a contract? What’s the deal? Why is it taking a WIC

mother six or seven visits just to see the doctor? Something is

wrong there. But there’s also something right because women are

speaking out about that process.

And I think the more eyes on the prize, the stiffer the penalties,

I think the better opportunity that that happens in empowering

States to make those jurisdictions really helps and I think standard of care is a remarkable tool.

Mr. PLATTS. I thank the gentleman.

And I would just comment, as we heard Mr. West’s testimony,

it seems like not only empowering the patient, the beneficiary, but

in this case, we heard we discouraged and prevented them from

taking hold. So we do certainly do need to do much better.

And I think as we wrap up here kind of a final comment and

that’s that we need to remember that there are two issues at hand

here. First, it’s protecting tax dollars, and while certainly we’re

glad to have the improper payment rate for Medicaid to be down,

we’re still talking about $22 billion of improper payments this last

past year that we know of. And again, using Mr. West’s case, but
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for his individual heroic efforts to uncover the fraud, we would not

have known about Maxim. And so how many other Maxims are out

there that we don’t know about? The $22 billion is what we do

know about of improper payments. So when we talk about the

whole number of $125 billion, there are some estimates that that

is probably at least $200 billion, but we only know of $125 billion.

So we certainly have a lot of work to do.

I want to thank each of our witnesses for your testimony here

today, both your written testimony, which is, again, very helpful in

preparing, and your oral testimony here today, and most importantly, for your efforts day in and day out.

I know we are all on the same page, that we are trying to seek

the same result, and I think that with the Deficit Reduction Act

of 2005, the Affordable Care Act language on trying to better go

after fraud, we’re all collectively better acknowledging and starting

to commit the resources necessary to protect ours, ensure the care

that is earned and deserved is provided and not denied inappropriately.

So I commend you for your efforts, and we certainly as a committee look forward to continuing to work with you, both subcommittees, work with you and your respective agencies on this important issue.

We will keep the record open for 2 weeks for additional information as was requested to be submitted, and we stand adjourned.

[Whereupon, at 1 p.m., the subcommittees were adjourned.]

[The prepared statement of Hon. Gerald E. Connolly and additional information submitted for the hearing record follow:]
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