achieving growth as was the euro zone crisis is to take action in britain's interest, burdens on small companies, so many of which -- >> i think the honorable lady makes an important point to where to start here in our own backyard and stop the gold plating and the overregulation that happen in the past but that's why we have the red tape challenge with every will being put up on the internet so people can show how little we need to keep it that so that the one in one out rule that applies to every single minister. they can introduce a regulation without getting rid of the regulation. but we have just achieved in europe a major breakthrough that michael businesses employing less than 10 people will not be subject to european regulation from 2012 onwards. that is a big breakthrough, something that hasn't happened before and shows it to make the arduous for growth, for jobs, for enterprise, you can when them. >> thank you, mr. speaker. the prime minister has refused

to say that women and children will fear that grants of his failed -- [inaudible] no wonder he continues to turn off women. [laughter] would he expect -- 100,000 more children will be living in poverty as a result of his policy. [shouting] >> what i would say to the honorable lady is how on earth does it advantage women and children to pile them up with the debt after after debt so that they didn't have to pay back? mr. speaker, we have been standing here for 33 minutes, all we have heard is proposals for tax reduction, for spending increases, for reforms that would ahead on come for scrapping the changes for public sector pension. they would take those women and children at we are concerned about, and pile them high with debt and let them live under that burden for the rest of their day.

>> may i pass back a month through the seventh of november when i put three suggestions to my right honorable friend for containing the euro crisis with which he appeared to agree, but none of those he would those have been acted upon by the european central bank. so may i now expressed to him my belief that the alternative policy of fiscal union will, as my honorable friend, for what he just said, pose a greater threat to the whole and his liberty for your. can he -- because he knows it makes germany more dominant.

can the germans be persuaded to study the reason for the boston tea party, because -- [laughter] because no taxation without representation -- >> here, here. [shouting] >> order. we have heard of the question. [laughter] we don't want to hear the prime minister's answer. spent as ever, the leader of the house speaks with great knowledge and wisdom and forthright. [shouting] but i will say to him, the reason that he and i don't want to join the single currency is that we would not be prepared to put up with the supernatural power of being told what our dads and to pressure debt and deficit and anything else is but

the point i was at the make is if the countries of the eurozone want to make their system work, that it is clear to me fiscal rules are one thing that they may need, but that won't be enough without proper competitiveness, and the third point he made, the full hearted intervention and support of the institution fashion institutions of the eurozone includi about a seven year struggle for medicaid fraud of health care services. mr. west, whose in a wheelchair

and uses a ventilator first notice to the fraud in 2004. a new jersey officials suspended his medicaid benefits for he had exceeded his monthly cap. maxxam healthcare agreed to pay 150 million-dollar settlement but is not barred from participating in the medicaid program. this hearing is about two and a half hours. >> welcome everybody here in the joint committee, a joint subcommittee hearing. the subcommittee on government organization and efficiency and financial management along with the subcommittee on health care, district of columbia census and the national archives to read today's hearing will examine the serious problem fraud, waste and abuse and medicaid. in fiscal year 2011 the medicaid program issued $21.9 billion in improper payments. higher than any program in government accept medicare. it is on known how much of these proper to lead to improper payments or fraudulent or how

much fraud goes. the integrity program is responsible for identifying improper payments to getting providers about fraud, providing assistance to the states in order to combat fraud and abuse. the patient protection affordable care act of 2010 expanded funding for medicaid program integrity. however, it also expands the size of the medicaid program and will increase medicaid spending by over $600 billion between 2014 and 2031. given the dramatic expansion. better quality, excuse me, better quality is essential and reducing waste, fraud and abuse. in 2006 see amish initiated an attempt to the quality and access to read the gao issued

the report finding that those in the systems were inadequate and underutilized. giglio also could not find any evidence of financial benefits and implementing the new systems despite the fact cms has been using them for over five years. there are also problems with state reported data. many states are not reporting all required data and they are often lag times up to one year between when the state's report data and when cms get eight. this makes it extremely difficult and often impossible to prevent the def rot before payments were issued and as i know we will hear the testimony today from one of our witnesses, the information is as old as 12 years, which is just unthinkable as a result of the 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' oversight

of its contractors and has issued numerous recommendations to cms. most these recommendations have not been implemented. the office of inspector general has been on the front line of the investigating fraud for which work with the medicaid fraud control units. in the 2010 the units conducted 9,710 fraud investigations and recovered $1.8 billion. this work is essentials and becomes even more crucial as vindicate expands. but states is limited resources to combat the rising problem on medicaid fraud and there's also a question of the incentive states. health care fraud is sometimes called a dictums crime and 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 they need and deserve. today we are joined by one such individual mr. richard west a vietnam war mike veteran and dictum of medicaid fraud. he and his lawyer along with his son testified here today of their personal experiences and their efforts to uncover fraud with the medicaid program. it isn't just about money. it's about insuring 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 the fraud that he is being denied care through the medicaid program. it's not just about money. it's about people. we will also hear testimony from cms, oig and gao on the system problem with medicaid and what must be done to provide effective oversight and reduce fraud, waste and abuse in the

medicaid program. i'm proud to recognize the ranking member of the subcommittee the gentleman from new york mr. towns for an opening statement. >> thank you very much, mr. chairman. let me thank 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. the witness on both panels joining us today to discuss their views. i especially would like to thank mr. west for sharing his story and for his service to the country, the vietnam war. mr. west, i salute you. there is no question that medicare provides a vital safety

net for many children, seniors and 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 though even in this era of budget cuts. cms and its efforts to undercover fraud or actually making money for the government and for tax plans. for every 1 dollar invested in detection, over $16 is actually recovered. much of this recovery came from cases like the case brought by mr. west. we need to be certain that we are encouraging who become aware of these cases in the medicaid program to bring them forward. this administration has done an admirable job stepping up fraud

detection in the medicaid and medicare programs. however, 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 invitation that cms and hhs has so we can work together to further prevent undercover and recovered payments in the medicaid system. thank you, mr. chairman, for this hearing. i look forward to working with you come in and i yield back the balance of my time. 64, mr. towns. i enjoy it to the chairman of the subcommittee on the district of columbia census and national archives. the distinguished gentleman from south carolina. >> thank you, mr. chairman. today the committee will hear from richard west with firsthand knowledge of how the commit programs are brought it and how the government all too often just doesn't seem to care.

mr. west exit responsible and contacted the social worker to the fraudulent behavior of his health care provider but none of the government agencies did anything. this is unacceptable and this is why people have lost trust in the institutions of government, and this is my fellow citizens have such little trust that we are spending their money as carefully as we would spend our own. mr. west kept track of the nursing care received and was able to provide his records and found discrepancies because medicate capped the monthly service is provided to mr. west he was not receiving the care he was entitled to. in other words, due to the fraudulent to cities of the company providing mr. west care he reached the cap and medicaid told him his services were suspended. so not only was the provider retain all taxpayers of the provider was also not providing the obligated surfaces to mr. west to read 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 rates for medicaid and medicare due to fraud equals about 20% of the total program funding. so perhaps as much as one-fifth of the money spent is wasted, that ignoring legitimate calls for investigations in the fraud would witness 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 the providers bill for services never deliver the medicaid patients. according to malcolm spero, a harvard university expert on health care fraud, the rule for the criminals is simple. if you want to steal from medicare or medicaid or any other health care insurance program, learn to build your why is complete. and for the most part your claims will be paid in full and on time without a pickup by a computer with no human involvement at all. one reason for the high reach 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 in large part of what is recovered must be sent back to washington. another reason the centers for medicare and medicaid 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 tracking system used for the waste, fraud and abuse of the medicaid system also every tax dollar is appropriately spent is a concern, the magnitude of leased, fraud and abuse elevates this problem. our country now spends $430 billion on medicaid a year. and cms projects that 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 limiting the amount of tax dollars being wasted through the medicaid program. when folks like mr. west are being hurt and neglected due to fraud it's 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. >> thank the gentleman. pleased and honored to yield to the ranking member on the subcommittee on health care district of columbia census and national archives the government of illinois mr. davis. >> thank you very much. chairman, ranking member towns, i thank all of you for holding today's hearing. reducing waste, fraud and abuse and health care is a rare and

desirable policy share by republicans and democrats alike. it is disturbing that some entrusted in the most vulnerable populations seek to defraud the government by falsely billed in the services. it is the height of the corporate greed. in this era of budget shortfalls and cuts, we can no longer stumble upon the bad actors. we must be vigilant in locating and meting out the fraud. the proper resources must be dedicated to root out waste and abuse. our taxpayer dollars for the question. more funds expended on the phantom services, delayed and extinguished the necessary health care program and services that people depend upon daily.

as medicaid is determined to be a high risk program, i went to further encourage cms to further utilize and implement all of the tools available in the fight including the integrated data repository and the one program of integrity. these technological programs are invaluable in consolidating the the the necessary in fraud detection. the patient protection and affordable care act further provides the tools despite medicaid fraud. the messenger and background checks on providers and suppliers are a productive first step for the program integrity. and the enforcement arena, the civil penalties created falsified information as evident that the federal different takes for a seriously. to that end, the affordable care

act against $10 million annually for the fiscal year 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 and medicine. especially involving the most affordable, the most unsuspecting and in many instances the most gullible members of our society. i have seen firsthand low-income communities with medicaid meals where people were lined up to be taken advantage of. the practices we cannot, should not and must not tolerate. therefore i applaud the tireless efforts of mr. richard west. he serves as an example to

others he saw the wrong and tried to make the right so we'll thank you, mr. west. i look forward to your testimony and the testimony of all the witnesses and i think you mr. chairman. i yield back. >> we've also been joined by the distinguished ranking member of the full committee on oversight and government reform governor from maryland and i recognize him to the estimates before 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 the case the future policy and law enforcement. lester medicaid provided critical health care to an estimated 56 million americans in need the vast majority of whom are senior to individuals with disabilities and children. since so many americans rely on this planet is imperative that we rid of fraud because every

dollar squandered is a dollar that does not go to the critical health care services for these abominable americans. today's hearing focuses on the case that was brought to light by richard west. a medicaid beneficiary who assert his rights under the false claims act to prosecute fraud against the medicaid system by maxxam health care service. mr. west's lawsuit retreat nearly $150 million for united states taxpayers. we need to support efforts by people like mr. west to ensure that american citizens are empowered to take on the corporate wrongdoing. the written testimony of the witnesses on the second panel also make clear that we need better coordination and between state and medicaid programs and the centers for medicare and medicaid services to reduce duplicative efforts and better

aligned resources. fortunately the affordable care act provides 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 the federal agencies in the states and health care providers. to fight against the companies like max on health care requires more resources, not less. when we invest in the fraud prevention, government spending more than pays for itself. that is one reason why the affordable c.a.r.e. repealing and cutting medicaid's enforcement budget would be very shortsighted and indeed counterproductive. i look forward to the testimony of the witnesses today and i hope the recommendations will help reduce fraud and waste and abuse and create a strong medicaid program for those who rely on it and with that mr. chairman of i yield back.

>> thank the gentleman and i yield to the distinguished gentleman from virginia for an opening statement. >> thank you mr. chairman and for your leadership. the medicaid prepense contributes directly to the long-term health of the seasonal health care programs to really appreciate the subcommittees holding the hearing on the different anti-fraud programs for medicaid and medicare services. while hhs and cms or devoting unprecedented attention to reducing medicaid fraud, it's clear we must do more to reduce improper payments and protect the economic security of individuals such as richard west, who lost benefits to burleigh as a result of attacking medicaid and medicare fraud. as the written testimony for the hearing makes clear congress and the administration promoted a great deal of effort to reduce in the public image of the lost decade. in 2005 congress passed the deficit reduction act to sell which the medicaid integrity program at mit provide states with technical assistance to identify and prevent fraud which

is appropriate since the states administer medicaid to read the deficit reduction act also requires cms to work with medicaid integrity contractors for payments and educate the fraud prevention. cms uses this and other data for the medicaid statistical the information system which includes eligibility claims information across the country by maintaining the central database cms can conduct in all this is what to identify the possible fraud or in areas where the fraud is likely to occur. it also works with the agencies to duplicate best practices and has identified two of them that could be replicated all across the country. despite these efforts made clear more can and must be done to reduce fraudulent medicaid payments to read as the testimony of mr. west today demonstrates cms hasn't always been responsive in its reports really look forward to learning

more about what cms is doing to prevent such negligence from occurring in the future. the robust implementation of existing policy is essential because they must implement the reforms enacted under the affordable care act. as noted in the testimony the affordable care act sometimes referred to as obamacare significantly strengthens anti-fraud programs these include elementary reforms as requiring service providers to supply documents orders paid the affordable connect also still is the medicare recovery auditor contract program to create incentives for the contractors to reduce fraudulent payments and in conjunction with psychiatry sebelius the affordable care act designed to identify and proper payments before they are issued by cms to reply to this testimony illuminates the progress we have already made an additional administrative and her friends which wouldn't reduce medicaid

fraud. we should consider more stringent punishment for companies and individuals who systematically defrauded medicaid. mr. west suggested in the testily to consider partial penalty. thank you mr. chairman for holding this important hearing as a part of a series of getting at the so-called improper payment for the federal government which totaled $125 billion a year so there's plenty of work to be done. thank you. >> thank the gentleman. thank all the witnesses and guests. we gave our opening statements but now we are going to move to why we are really here and hear from the witnesses and we are honored in the first panel to have mr. richard west who served the nation not just in uniform during the vietnam war which we are all internally grateful to for that service the also mr. west service is a private citizen who corrected and when government didn't take action he

did so mr. west, we are honored to have you here with the attorney and your son, adam, as is consistent with the rules of the committee will need to swear in all three of you before we have your testimony. ms. west and adam, if you would stand and raise your right hand to you solemnly swear the testimony you're about to give the committee will be the whole truth and nothing but the truth? okay. with the record reflect all three witnesses have affirmed the aoth. dtc to commit on behalf of mr. richard west who will save his voice for questions and you're going to have his son adam read his opening statement. adam? if you are ready, please begin. >> thank you, chairman. ranking member towns, ranking member davis and distinguished members of the subcommittee for inviting me to discuss medicaid fraud.

i received home health care and other services to the community resources for people with disabilities medicare waiver program. as a ventilator wheelchair and oxygen independent person might qualify for the government-funded program that provides medicaid benefits of 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 the monthly cap is exceeded. beginning in march of 2003i received home health care through maxxam health care services under this program. maxxam ability some care services to medicaid which paid for them with both state and federal funds. in september of 2004i received a letter from the new issues the department of disability services. the home and community service is telling me that i have exceeded my cat and that my medicaid services were being temporarily reduced as a result. this prevented me from attaining the needed dental care. i complained to the seat of new jersey. a complete to medicaid and to the worker assigned to me telling them that medicaid had been billed for nursing care that i had not received and none

of them did anything about it. since none of the government agencies i contacted about this did anything i hired a private attorney, robin west, no relation of baltimore maryland who filed on my behalf to whistle-blower lawsuit of false claims act that triggered an investigation. some decided to make a profit of my disability and ripoff the government. that was wrong. the right thing for me to do is expose it. but because the case the government investigation i couldn't talk about it. sometimes i had trouble getting nurses and i suspected word got out alive was a troublemaker. over the course of the government investigation viruses meat meal. each day when i sat alone in my home and the owners can i get sicker and sicker. i was afraid of dying and leading my son with a legal mess. i fear if i were no longer alive the case might be dismissed. meanwhile the government investigation carried on in investigators kept governing more and more dillinger and propriety. finally, after seven years, the government reach a settlement with maximum the case went public. ex mex and pay and islamic of approximately $130 million in criminal approximately

$30 million. this is the largest home health care fraud known in history. yet maximus still permitted to do business with the government and none of the executives want to deal to be a congealed. details are available at www.homehealthcarefraud.com. .. the settlement received coverage in many folks ask me why this

was. hausa company takes billions of government dollars is not entitled to -- wallace shoplifter of a few hundred dollars will be sent to jail. it is commendable the company did take on maximum until executives receive harsher penalties i do not think we will see the frauds. having the corporation pay some settlement money is just the cost of doing business for the fraudsters. the settlement money not even coming out of their own pocket. sending executives joe might make a brought. how many companies got away with fraud for the last seven years? how many people saw this and did nothing? how many were free to be losing their health care for being a troublemaker? that is what happened to me. at this time i'm being told my medicaid will and because of the settlement. my whistleblower cover is being paid over eight years with -- in the intervening years that will not be 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 other companies that

do fraud? yes. can i tell and when? i can afford to lose more services. i thought if you did the right thing things would work out in the end but maybe not. i'm a vietnam veteran and never took or asked for services i didn't need. i lived a productive life and raise my son. this brogue remoulade meets with in my home and graduate high school and college and now he is living on his own. as someone who is willing to steal from an old sick that i would think the government would help. if i had an hmo who would help should i call the ceo? it took seven years but i have the full weight of the united states government behind me. many folks are not as fortunate. came to that hearing hoping to help congress and the other people who need help. thank you providing me to testify and i look forward to answering your questions. >> thank you mr. west. ms. west you can share your testimony. >> thank you chairman platt, chairman gowdy, ranking member towns, ranking member davison to sing which members of the

subcommittee for inviting us to discuss medicaid fraud. i represent richard weston 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'm also the author of a book on the subject published by the american bar association entitled advising the whistleblower. and examining accountability of medicaid, it's helpful to look at the process we followed in bringing mr. west's fraud lawsuit. as he

through discussions with various nurses that led him to believe maxim was doing this on purpose. the sca 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 colleagues tips within a certain period of time if at all. the sca is also different from

oversight programs and contractors that exist to identify improper payment and fraud. these cost the government money. sometimes more than a recover. for example cms's senior medicare patrol program feature 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 and save $106 million. its current annual budget of $9.3 million leads to the question whether it is even saving what it cost? 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 program. the sca model also outperforms the medicare recovery audit contractor rack program which although it pays contractors a percentage of the improper payments they recoup still dips into the recouped funds to pay

those contingencies. not so with the sca recovery, 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 the case is whistleblowers are bringing to the government are high-quality. as shown in this graph based on department of justice statistics, recoveries from whistleblower initiated cases by far outpaced those in government initiated cases. more than 80% 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 i would like to

highlight is that the waiver of program tapped his benefits in 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 and medicaid or other federal and state health programs that would not happen because there is no cap that stops benefits from being paid. even if medicaid beneficiaries notice 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 and i look forward to answering your questions. >> thank you ms. page. we appreciate all three of you being with us to share your insights and experiences you have had in helping to protect the american taxpayer dollars as

well as ensure citizens like mr. west get the care they need and deserve. we will now begin questions and would yield to the subcommittee chairman mr. gowdy for questions. >> thank you mr. chairman. mr. west on behalf of all of us i want to thank you or your service to our country both on this and -- we are indebted to 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 and nobody did anything. you had to go get a private lawyer to do what either the state of new jersey or some social worker should have done. is that correct? >> yes.

the social worker asked if they backed up my paperwork. they said yes so she had some power to audit, so i took it to the state and the state had been monitoring in august, 2003. i told them i was not getting -- [inaudible] they did nothing. the person running the program retired. the other person sitting at my dining room table and everybody

just goes on. people are not held accountable. both maxim and state and federal workers, so there was nowhere for me to go. >> 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? 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 folks who steel company to prison. rich folk who steel have the corporation pay a fine and then they continue to participate in the medicaid program. how in the world does that happen?

>> it's 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. >> well 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 even i could win that case. i mean, i guess their cities different standard of proof that there, if there is a different standard of proof bunol from the cases. >> someone in the government is making this decision. >> do you know who that is? >> the u.s. attorney's office. >> in new jersey? >> yes. >> do they want their civil division to reach an agreement, pay a fine, the shareholders pay. none of the corporate executives go to jail and then they

continue as part of the settlement to be able to reinstate the medicaid program. that is just outrageous as anything i've heard in 11 months i have been here and i have heard some outrageous things. let me ask you, there have been civilizations that have been formed at less than seven years. what took seven years for this case to be resolved? >> the investigation started locally and then it expanded to the state of new jersey and then it expanded to the states be on new jersey eventually expanding nationwide. during that time there were numerous audits going on of the documents. there was an independent audit company that was hired to determine what type of document qualified as a proper claim and what was in the 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 is what also took a lot of the time is the agreement on the various aspects of the settlement and there was a criminal component to it as well. >> and the criminal component went away as part of the civil settlement or did anyone go to jail as a result of this? >> my understanding is that there were nine indictments, eight of which were maxim employees, not executives but managers. >> did they go to jail? >> i don't know. >> i thank the gentleman. i yield to the gentleman from illinois, ranking member -- >> thank you mr. chairman. mr. west let me again thank you for taking time to calm to capitol hill to testify. i also think -- thank you for your services to this country

during the vietnam war. the coalition against insurance fraud estimates that 80% of health care fraud is committed by advisers. 10% by consumers and 10% by others such as insurance companies or their employees. i applaud you for your diligence and maintaining records and keeping such a close eye on the actual number of ours you were receiving home health services and the number of hours medicaid what i want to ask you is when you receive notice that your services had reached or gone 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? >> i was in -- and this program allowed me to live in my own home and in three months, i knew what they were doing. i had always been an advocate for people with disabilities, and so when i got that notice, i knew that it wasn't me. it was all the other people.

they were going to take my service and i am going to fight them. other people can't do that. i am just too stubborn and arrogant to give up but if you are the average person, you can't fight. you are helpless. you are being abused, so how i felt? i was being abused and i will stand up for everybody.

>> and you knew that you weren't going to take it sitting down. >> i started this as an advocate and through the seven years it he came more -- 's. >> thank you very much. ms. west let me ask you, you indicated you have handled any number of cases. what is the typical climate of a person who comes to you with a situation and asks for your assistance? >> more often it is a person who works in the company that is committing the fraud. someone who sees something that seems on this 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. close to the end of that process. >> so they will calm, i mean the whistleblowers who themselves have been abused in terms of losing their jobs. >> 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 are afraid of losing their jobs and their health care. >> thank you very much mr. chairman. my time has expired. >> thank the gentleman and i yield myself five minutes for questions and again, the case that you share with us mr. west and your attorney should not

happen and our focus here is to make sure doesn't happen again in the future. if i understood your red 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 a social worker it looks like they looked at maxim's records and said they have got paper to back up saying they provided you service and they basically took the company's word over your words. is that a fair statement? >> right. >> and the social worker, did the state of new jersey or medicaid itself even get to that point or did they just pretty much do nothing? >> they did nothing. governor corzine, senator menendez, they sent the paperwork to the same people.

>> so in addition to your own contacts to the state and medicaid, contacting your elected officials, the governor and u.s. senator. they contacted those entities and still nothing happened? >> correct. >> it is just as mr. gowdy said somewhat unbelievable that here you have a citizen trying to do the right thing and protect taxpayers and he receives his services and the government collectively failed you terribly. when they were denying your claim of fraud and failure to act on at what was their response as far as how that related to your care because of that being denied dental, where they saying, we don't believe you that there is broad but we are going to provide you care?

>> they don't come out and say, we don't believe you. they just -- >> they didn't do anything. >> they will not answer the letters and don't respond to e-mails. you are a burden to them, creating paperwork for them. it's easier for them to do nothing. >> push you to this site. >> correct. >> how about on the fact that fraud was denying your services? did they correct that and ensure that you got the dental care or continue to -- >> eventually i got the dental care. died but at that time i had

nothing, seven hours a day, seven days a week. three nights a week, totaling 18 hours, i lost those 18 hours for seven years. so, if you turn off my ventilator, i have a hard time breathing but if you let me sit there and slowly deteriorate because i am not getting the care i need, -- >> i want to make sure i heard you correctly. while the investigation was going on for seven years, they were denying you the services,

saying q. were not entitled to it because of the fraud? >> right. >> outrageous. thank you for persevering and weathering the terrible care and treatment that you receive. ms. west, a question and i am not sure, as a lawmaker, how our federal whistleblowers were seeking to strengthen the whistleblower protections provided to federal employees because we want as you reference more often than not as an employee comes forward with a no is going on in their company and their office. we are trying to strengthen outlaw. we pass legislation out of this committee, out either the full oversight committee and now working for a flow vote -- floor vote to get whistled blowers more protection. if a federal employee came to you, i assume they are impacted

differently going to you for this type of case and because they are a federal employee. is that correct? >> historically in my experience the government has been less receptive to intervening in whistleblower cases brought i federal employees. >> do they keep it more internal? >> is hard for me to understand the reasoning that goes behind how an intervention decision is made. i don't know why that is. >> but your experience over 20 years is less common for them? >> it's more difficult for them to be accepted as an intervening case. >> so, unlikely given that for a federal employee to pursue this type of case because they are less likely to perceive? >> yes, more difficult, yes. >> my time has expired and i yield to the gentleman from new york. >> thank you very much mr. chairman.

let me again thank you mr. west for coming and sharing your story with us and of course i regret that you had to go through so much in order to make the point but we appreciate your time here today. let me begin by, can you tell me about the process you went through and trying to contact various agencies? can you talk just a moment about the process that you went through, trying to reach the agencies? i know you said you sent out letters and e-mails and phonecalls. can you just talk about the process processes just briefly? >> the social workers would come to the house once a month so once a month i am telling her i

am not getting my services and telling her in between those visits, saying the nurses aren't showing up and i'm having to depend on family and friends. estate workers, the county workers -- to the state workers. they didn't follow through and the state program was telling me i had to have a caregiver in my home but the nurse didn't show of. my son was in high school getting ready to graduate and i

wasn't about to put that burden on him because the nurses were not doing their jobs. sows the state, they wanted to have a meeting in my home. they all came down, sat at my table and said tell me what your services are? i am not getting the nursing you are telling me i am getting. and the state workers said, you need a -- and you don't have one so maybe you don't qualify for the program. and i said, i am not going to have a caregiver.

she said you are not compliant. so i said, arrest me. she did not appreciate that. and the county social worker told me, there is an uncertainty. [inaudible] when the county and the state wouldn't do anything, i went to the hotline and called them. they said, we will 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 are involved with maxim or their own program. so i went on the web, and that is where i found out there is a whistleblowers lawsuit. i had no idea. and i read a portion of recovery. i said hey, maybe i will get

$5000 the first person i called was from alabama, a whistleblower. she said if it's not $10 million i don't even want to talk to you. i said i am a whistleblower who lives in california. she said, send me the documentation you have. she called me back and she said i think you have a pretty good case but you need an attorney closer to where you are. then i found robin on the internet and that is how we proceeded. >> so you found someone with the same last name? >> when i called, her secretary

said, who is calling? i said richard west end west end there was a silence. [laughter] >> thank you very much. mr. chairman i asked for 30 seconds. i want to ask ms. page to submit something to us. in your written testimony you indicated that false claim act is both unusually effective in covering 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, and so i'm interested in that because we would like to strengthen or to improve its so if you would be kind enough to submit that to us in writing, seeing my time is our. >> three reasons why it is effective? >> yes, and i thank you. >> thank the gentleman. the gentleman mr. desjarlais isñ recognized for five minutes for

questions. >> thank you mr. chairman. mr. west admiral bowens 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 spend a lot of time caring for you because with your condition, with the trach ventilator, i'm assuming you had a respiratory therapist? you have home health nurses? >> i had nurses. >> i'm assuming you had nurses aids aides to help with activity with daily living to help you address. they have to help you eat and

help you maintain your residence so it is to it is safe so they have spent quite a bit of time in your home. >> correct. >> did you ever feel like you got close to any of these people? where they caring people? did you talk to them on a first name basis? did anyone, say an aide, stay with you for several months at a time or what was it different aides on different days? >> i have a nurse now for four years. over the course of the seven years, there have been different nurses, different agencies but many have been there for an extended time. >> 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 like to? >> yes. >> when you first started noticing the fraud were you able to talk to them about this and share your concerns?

>> they were part. >> i'm sorry? >> they were part of the fraud. >> did you talk to them and asked them? did they try to make excuses or did they say they would talk to their managers? >> no. they were telling me they were being paid and they were putting in, in my home, putting in four additional hours and the company, the nurses told me on several occasions that the maxim

office managers work on bonuses so the more profitable they are -- >> okay so these people despite having a relationship they like to any like them, and they felt that they were aware of the fraud going on? >> they new. >> did you feel like they -- you are returning them in a sense when you had to go over their heads to try to fix this situation? >> no, you can't betray somebody who is abusing you. >> i guess i just wonder how mrs. west how many other beneficiaries have come to you such as mr. west? >> very unusual. a handful of people have even

inquired and if memory serves mr. west is the only beneficiary case that i have taken. >> okay so given the success by whistleblowers why do agencies and officials typically ignore people like mr. west? what would be your opinion on that? >> i don't think it's so much that the false claims act is in serving them and the government isn't picking up the cases. i think it is that there are not that many beneficiaries who are coming to the false claims acts attorney's. >> why then when someone like mr. west to obviously have jena claims and were proven legitimate why do you think medicare avoided it. i will ask you you that and asked mr. west that. >> mr. west is an extremely unusual person. very tenacious, very intelligent, very persistent and quite often medicare and

medicaid beneficiaries who are sick cannot ring all those qualities and have the stamina to figure it all out and bring it to a lawyer, and i think that is basically the issue. 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 that. >> i will just say and i know i am about out of time and if you will and those me for a few seconds. as a primary care physician for 18 years working in the congress i have dealt closely with home health. there are a lot of issues of fraud and abuse in the '90s were people who did not have near your level of disability who had aids and whatnot, that was kind of reined in a little bit in the '90s but i see that it tends to be alive and well as we have moved into the next decade as well. so again i applaud you mr. west for your efforts and clearly i think that cms and medicare we have on the next panel will have an opportunity to see why people

like yourself are being adored and thank you so much for stepping forward and fighting against it. >> may i add that people in my position don't have to be -- the support once they turn people in. if i was a government informant for a case, you would take care of me. but, when i went to the special people in charge and asked to have nurses so i could continue through this case, there was nothing he could do to help me.

so, why would most people turned somebody in, knowing that they would die. you have to give support to the patient or whatever you want to call me, so he can bring the lawsuit. what is the incentive? there isn't. >> i thanked the gentleman and along the lines of what you just expressed it sounds as if, whether a need for legislature change or regulatory change that if you have a beneficiary and in

this case the government makes the determination they are going to take on the case, and go forward, that that decision should maybe include a provision that a lot of the cases being pursued one year or seven years in your case, you are given the services you want on a individual basis. again otherwise you have a disincentive from reporting it for being risk of further losing care. >> that's correct. >> i thanked the gentleman and yield to the distinguished ranking member of the full committee. >> 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 have now done a little research to see what happen 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. five months in prison and five months of home confinement. most of them got a fine and home in prison and. that is what they got. now, 40 miles away from here represent baltimore, and in about six months ago i had literally thousands, thousands of young african-american boys, many of whom may have done something wrong or whatever and they have a record mr. west. they have a record. do you know what? they can't get a job. if they lived to be 99 years old they will not be able to get a job but here we have maxim come 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 get still they are in a position to continue to make millions. something is absolutely wrong with that picture and i agree with you. in his people from cms and ig, they have to explain to us and 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-dollar 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 that this sentence is simply a slap on the wrist. if you can pay 150 million-dollar fine, this is just the cost of business and so you know i am very concerned about this and i want to intrude entered into the record mr. chairman begin i attorney's

office district of new jersey basically their summary of the sentencing dated november 21, 2011 and i would ask that be made part of the record. >> without objection. >> and the reuters article dated and i asked this be made part of the record too, dated monday september 12, 2011 and it says in part maxim settled with the united states department of justice and in 41 states. the prosecution agreement with the justice department under which it will pay a 20 million-dollar fine. of maxim meets the agreements and requirements it will avoid charges and the government said it was willing to enter into an agreement with maxim in part, in part to cousin of its cooperation and significant personnel changes it has made since 2009. that is all well and good. thank you very much. that's all india but if you are paying people bonuses to screw people and miss them over you

are right, 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 is 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, midwest he 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 the false claims act helps government work better and save taxpayers millions of dollars? i'm sorry, did not mean to get so upset but this made me want to. go ahead. >> the false claims act gives the government a birdseye view into the fraud. without the whistleblowers that government really has no way of knowing how the fraud is being

committed. every time there is a fraud protected the government learns about it and comes in and shuts it down but then there's a new fraud that pops up and it's a constant never-ending thing. there is more creativity behind fraud because there is so much money to be made by it and that is why the false claims act is so effective because it reaches out to the people seeing the fraud and understand the part in giving them an incentive to tell about it and explain to the government you know how to stop it. >> ms. west you think there are too many laws claim act lawsuits and what disincentives are there for bringing a frivolous false claims lawsuit? >> well the disincentive for bringing a frivolous false claims lawsuit is there is a provision in the statute that allows the defendant to recover his attorney's fees from the relator if it are shown that the suit was brought for purposes of harassment. in addition it's difficult to bring a frivolous lawsuit because the lawyers work on contingency and if we don't think a case is really good we are not going to bring it.

only about 20% of the false claims act cases of fraud or intervened in by the government so we are looking at a very tiny window and we are looking for the very best cases to bring to the government's attention. >> i see my time has expired and again mr. west i want to thank you very much, you and all others who will benefit from what you are doing. >> thank you. >> i take the gentleman. yielding to the government -- senator from virginia. ms. west the example of having a birdseye view the beneficiary goes on the front line for false claims act and in the second panel we are going going to hear a lot of expenditure money for new technology and analytical programs and things. is it is fair statement to characterize your experience here that rather than the investment of all this money new programs if we had simply better listened to the beneficiary we would have prevented the fraud? >> yes, i think so and malcolm

sparrow who has analyzed this and feels the money should not be paid out first. it should be paid out properly, not paid out and followed after. >> right so being more upfront is supposed to recovery type audits to focus up front? i yield to the gentleman from virginia mr. conley for questions. >> cannonmack mr. chairman i want to thank mr. west particularly for his courage both serving his country and serving a second time in and trying to make sure taxpayers investments are protected and made secured and for the courage of persisting when many others might have been daunted and discourage. i also want to say to our colleagues, i guess mr. gowdy said here but mr. gowdy is serious about criminal prindle -- penalties he will find allies on the side of the aisle. parts of the committee have pointed out that there are every

year $125 billion in improper payments. sometimes it is innocent, mistaken bill when somebody gets paid to should have forgets double paid, somebody was not qualified and gets a benefit but a lot of it is pride. i know you as attorney's offices are consumed with medicare and medicaid fraud. the u.s. attorney's office in boston is now a 3 billion-dollar recovery. that is one out of 99 u.s. attorneys offices so we know it's out there. if we eliminate in improper payments by the way, we could give a christmas gift to the supercommittee of $1.25 trillion over the next few years without breaking a sweat, without affecting anyone's benefits without having political drama, without having any unnecessary investments. i yield to the chair.

>> thank to the gentleman for yielding. as you well stayed the fraud of improper payments and again we don't know how much is fraud at the improper payments of medicaid we are discussing it 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. >> thank you mr. chairman and 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 is if we were gutting the program but in fact we were simply trying to recover either improperly made payments for illicit payments. i want to make sure we get the narrative on the record mr. west if you don't mind. i have heard mr. west. when did mr. west first discover

something was wrong and how? >> he testified -- to speak if you could speak into the microphone. >> three months after he came out of the nursing home he realized something was wrong. >> what made him realize something was wrong? >> that he was not getting the care that he was entitled to get under the program. he was getting fewer hours of nursing care. >> okay and maybe initially he thought that was a mistake. >> actually, i thought they were having a hard time servicing my case but then it became apparent they were -- who they wanted when they wanted. >> the testimony submitted on your behalf by her attorney says

you attempted to bring the matter to the government's attention to contacting this day. what stayed with that? >> new jersey. >> new jersey. the medicaid prague and the celts he went to a local office and your social worker. >> correct. >> the testimony says all to no avail. meaning what? they ignored it? >> yes. >> okay. so you then decided this isn't right. i'm not getting anywhere and i'm ever going to turn to a private attorney and you used actually something congress did well, the false claims act. which gave you a vehicle for redress, as you put it, -- ms. west if you could describe for us what was the reaction of the medicaid official when faced with this potential fraud, at least on your initial contact?

>> are you asking me? bsi ps i'm asking you miss wes. >> i filed a lawsuit under the false claims act so my first contact was with the u.s. attorney's office. district of new jersey. >> gotcha. did medicated any point react to the filing of a lawsuit or the claims contained therein? >> again come i didn't have any contact with anyone from medicaid. i was coming in through the department just as. >> did your client have any contact with medicaid in terms of reaction to the filing of a lawsuit or the claims there therein? >> once we filed a lawsuit it was under seal and we aren't allowed to talk about a. >> even with medicaid? >> if they would set up a meeting and medicaid officials would be there but there was nothing like that. >> 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? ps. >> and they were indifferent? >> correct. >> we look forward to their testimony. thank you. my time is right now. i thank the gentleman. >> before we conclude i yield myself the final minute and mr. west my understanding is you were in giving an interview, you shared an example of the lack of cooperation you had in you try to correct this. you were in front of a judge or an adjudicative setting where you were told that well, there is evidence that they did provide these services and they were not agreeing with you are believing you and you made the statement that you would bet that while you were in front of this individual that maxim was probably falsely revealing services to you. could you share that? >> we went to scranton to the

federal courthouse. i picked up robin at the train station and i believe -- and a special agent. i said, i'll bet maxim bills for a nurse and my home while i am sitting here with you. i left my home at 7:00 in the morning. i went to scranton, met with the prosecutors. i said, i'll bet they bill for

this time. fay said how could they possibly do that? in january i sent them an e-mail, and i said, i told you so. they build 47:00 to 3:00 for an r.n. in my home and i didn't get home until 5:00 that night. they also build christmas day when we were in pennsylvania, the next state over, and this particular nurse was reading my mail, and i had to tell my

attorney. do not send anything to my home. sent updates through e-mails and don't mention who they are from or what they are about. i had people spying on me while they were stealing from you. >> one more example of how you were being victimized by a very unscrupulous company and its employees and the fact that while you were sitting in the investigators, they are falsely billing service to you epitomizes the outrageousness of this case and again you reference having westerholm at a quarter to seven in the morning and not getting back until 5:00,

another example of your persistence and willingness to do whatever it took to bring justice on behalf of the american people, the taxpayers and to ensure that you are properly provided the services you have 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 reference over almost a decade of trying to bring justice on behalf of your fellow citizens. adam i think it goes without me saying but i imagine you are a very proud son to be richard wes's son and know that he is a true servant of this nation. god bless each and everyone of you and we will recess for five minutes while we reset for the second panel. >> may i have one minute? >> yes, you may. >> today is pearl harbor day, and i would like to say my dad

served in the pacific. my mom worked in a -- during that war. they worked together for the country. we need that now. we need people like me and people like you to sit down and fix the government. >> well stated mr. wes. >> thank you. i am honored to be here. >> god bless you. thank you. we stand in recess.

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

the hearing is reconvened and we thank our second panel of witnesses for being with us and again, your knowledge and insight should help educate both our subcommittees on this important topic of how do we prevent and detect and recover american taxpayers dollars that have been defrauded through the medicaid program. we are delighted to have forwardness is with us, and angela brice-smith director of the medicaid integrity group and the centers for medicare and medicaid services. mr. gary cantrell inspector general for investigations of the office of inspector general for health and human services, ms. carolyn yocom director of health care and government accountability office and ms. valerie melvin director of information management and technology resource issues at government accountability office. we thank each of you for being with us and again as pursuant to the committee rules if i could ask you to standard raise your right hand, we will swear you in before your testimony.

.. deutsch is fraud we stand abuse in the medicaid program. medicaid is the primary source of medical assistance for 56 million low-income and disabled americans. federal government establishes

requirements for the program, states design, implement, administer and oversee their own medicaid program. the federal government shares in the cost of the program. state governments have a great deal of flexibility within which to tailor their medicaid programs. as a result, there is a variation on the states and eligibility, services, reimbursement rates and integrity. prior to 2005, states were solely responsible for the oversight of the medicaid program. however, in 2005 with the passage of the deficit reduction act, congress recognized the need for the greater focus on the health care fraud and gave up cms new authority to establish the medicaid program. i am the director of the medicaid integrity group which implements the medicaid integrity program. the medicaid integrity program is a salles effort to prevent, identify recover inappropriate

medicaid payment. it also supports the integrity office of the state medicaid agencies through a combination of oversight and technical assistance. the medicaid integrity program began a new era of combating we stand for all the medicaid program which is once again proved by the creation of the center for program integrity. the center for integrity brings a coordinated approach to program integrity across all federal health care programs. this new focus on the integrity and anti-fraud efforts continue with the affordable care act which is the most comprehensive legislative step forward to fight health care fraud over decades. the administration has made it unprecedented investment to the improper payments, invest in the strategies and rain in waste fraud and abuse in the federal health care programs. our effort focuses on protecting medicaid resources at the beneficiary level, the state level and the national level. the involvement is a key

component to all of the cns anti-fraud efforts. we believe the beneficiaries are one of the most valuable tools in our efforts to stop fraudulent activities. we are committed to investing beneficiaries in the fight against fraud in several ways for example with our education medicaid integrity contractor or mic hot spot and report medicaid fraud through social networks sites through electronic letters, public-service announcements and other materials we encourage them to report fraud, waste and abuse to the states. medicaid fraud unit for medicaid agencies or what if rot tips hot line as examples. cms is also committed to supporting our seat partners and program integrity efforts to reduce improper payments. our medicaid integrity provides what training and support to the

state. we've trained more than 2600 programs integrity staff from all 50 states, d.c. and puerto rico. providing boots on the ground that can assist states with special investigative audits and threats. october of 2007 cms has participated in ten projects in three stages has resulted in $33.2 million in savings through cost. in addition cms review and audit mix were medicate contractors complement and support program integrity efforts under way in the state. between 2009 and november 1st of this year the audit makes has initiated 1663 audits in 44 states. in addition to the federal audit states report that they have recovered $2.3 billion as a result of all medicare program activity. the affordable care act has also

strengthened federal oversight for the medicaid program by providing new tools to cms and law enforcement's officials to protect federal health care programs from fraud, waste and abuse. these tools include the new screening and enrollment requirements, strengthen the authority to suspend the fraudulent payment and increase coordination of anti-fraud action and policies between medicare and medicaid. the affordable care act is the recovery audit contractors for medicaid which will help states identify and recover improper medicaid payments. over the next five years we project the effort will save the medicaid program to $2.1 billion of which $910 million would be returned to the states. cms is committed to working with and sharing with our law enforcement partners with giglio and the investigative returning prosecuting alleged fraud we also continue to work to address the concerns raised by the gao

to reduce improper payments and potential vulnerability in the medicaid program. i am happy to announce the fiscal year 2011 medicate's national and proper payment rate is 8.1%, a drop from the 9.4% in fiscal year 2010. despite the decrease we remain focused on improving maintaining the integrity and medicaid and confident the actions outlined today and in the 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 they carry out this important work. >> thank you. mr. cantrell? >> good morning, german, ranking members and other members of the committee. i am gary seat, assistant inspector general for investigations with the u.s. the board of health and human services also 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 maxxam health care services. the oic recognizes our success is dependent upon collaboration with courageous individuals like mr. west. the recommendations he provided was critical to us in helping us unravel a broad scheme within the health care that span across the nation. our investigation resulted in maxim agreeing to pay more than $150 million to resolve similar to the kosovo and criminal allegations of fraud, the largest ever settlement related 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 and are harming the nation's most vulnerable citizens. we encourage citizens to report suspected fraud so we can investigate and bring to justice those responsible.

medicaid fraud trains vital federal and state program dollars. that harms both recipients relying on the services as well as the american taxpayers to oig as a team of over 480 highly skilled criminal investigators located throughout the country. in fiscal year 2011, our enforcement efforts resulted in record numbers the linwood over 720 criminal convictions and $4.6 billion of inspector recovery. nearly 400 of these actions under steams related to medicaid fraud. and over $1.1 billion is expected to be returned to the program. the tide of schemes 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, in relation to health and prescription drugs, medical equipment and transportation services.

the data access is critical to our enforcement efforts in both medicare and medicaid. oig has worked closely with cms to expand access to the medicare claims data. this improved access has enabled oig to identify medicare fraud trends and that allows the 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 mckyer 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 the elements necessary for us to detect fraud, waste and abuse. as in the maxim case medicaid provides unique data challenges. why? is 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 cms is taking steps to collect more timely comprehensive data from the states and we hope they move quickly to accomplish this goal. state and medicaid fraud control units have been valuable partners in our investigative efforts. our number of joint investigations has doubled over the last five years. to improve on the success we believe that medicaid fraud control units could also benefit from enhanced and ogle capabilities with regard to the state medicaid data. this will lead to improved oversight and enforcement. in closing a 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 we have access to timely comprehensive data in order to protect the federal and

state dollars to read together we must work to eliminate vulnerabilities and ensure 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. >> thank you, mr. cantrell. ms. yocom? >> mr. chairman, ranking members and members of the subcommittee, i am pleased to be here to discuss the improper payments and fraud in the medicaid program. moly remarks today will focus on an important challenge as well as opportunities of cms given its expanded role in medicaid program integrity. in 2005, gao testified that cms needed to increase its commitment to help the state's fight medicaid fraud, waste and abuse. that year congress passed the deficit reduction act, which provided 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. both cms's spending for and attention to medicaid program integrity activities has ground primarily through the creation of the medicaid integrity group. the mig heiberg stuff and contractors to implement its core activities such as reviewing and auditing medicaid provider claims and providing education to the state officials and medicaid providers. in 2005, cms had approximately eight staffers focused on program integrity. today, it has over 80 at the 100 statutorily required positions offered. however, more is not necessarily better. the key challenge faced by mig is the need to avoid duplication of state and federal program activity efforts, particularly on auditing provider claims, which has been primarily a state function. the amount of overpayments the

mig identifies is not commensurate with its cost or amounts identified by some states. for mexicana in a similar number of audits new york reported identifying more than 372 million overpayments compared with 15 million identified through the national provider audits. in 2011 the mig reported plans to redesign a national provider audit program to allow greater coordination with seats on data, policy and audit measures while that remains to be seen whether these changes would help identify additional overpayment, the proposed redesign appears promising in particular the collaborative projects currently underway in 13 states with first allow states to augment their own resources, second address the targets the states have too few resources to handle and third, assist states with less analytical capability. these projects could help avoid duplication as well as strengthen federal and state

efforts. cms expanded role also offers the opportunity to enhance state program integrity efforts but more consistent data are needed. for example, the two core activities at mig the comprehensive review is an annual assessment collect similar information such as state prevented a planning, prevention activities and recovery. however some of the data the state's report showed impossible and or inconsistent state responses to the improved data will allow cms to further target assistance state to state for the mig's primary training initiative, the medicaid integrity institute. not only is the training offered at no cost to the states but such venues 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 in proper or even fraudulent.

since fiscal year 2008, the institute has to hand over 2,200 state employees, institute expenditures are a small part of extending gist 1.3 million of its 75 million-dollar budget yet they could greatly increase networks across the state's and disseminate those practices for ensuring appropriate payments and medicaid. for many years medicaid has been a critical part of the health care safety net providing health care services to some of the nation's most vulnerable populations. this heightened cms's responsibility to ensure 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 present over payment. there's also an opportunity for

the mig to work with states to disseminate and improve oversight of program spending and hopefully decrease still level of improper payments. this concludes my prepared remarks. i'd be happy to answer any questions you or members of the subcommittee may have. >> thank you, ms. yocom. ms. melvin? >> chairman platts, ranking members towns and adidas and members of the subcommittee, think you for inviting me to testify to the ceiling on fraud and improper payments in the medicaid program. fi request fisa testimony will find summaries from the report be issued earlier this year on cms's efforts to protect the integrity of the medicare and medicaid program through the use of information technology. specifically on june, 2011 we've reported on to programs that cms initiated in 2006 to help improve the ability to detect fraud, waste and abuse. the integrated data repository which is intended to provide a

single solicit because of data on medicare and medicaid claims and the one per integrity one fpi system the web based portal that is to provide cns said contractors with a single source of access to the data contained in idr as well as tools for analyzing the data. our work examine the extent to which idr had been implemented as well as the cms efforts to identify common measure and track benefits from 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 the state and repository had been in use since 2006. however, it did not include all of the data that was planned to be in the system by 2010. for a simple, idr included most types of medicare claims data but no medicaid data. idr also did not include data from other systems that can help

analysts prevent improper payment. moreover, idr had not finalized plans were developed reliable schedules for efforts to incorporate the data. further, while one 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 the 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 pla the agency may continue to experience delays. cms anticipated that it would achieve financial benefits of about $21 billion. as we've previously reported, agencies should forecast

expected benefits and then measure the actual results accrued through the implementation of the programs. however, cms is 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 the widespread use. to help ensure that the development and implementation of idr are successful in helping cms meet the goals of the >> and integrity initiatives and possibly save tens of billions of dollars, we made several recommendations to cms. among our recommendations was that the agency finalize plans and schedules for incorporating additional data into idr, finalists plans and schedules for training all program integrity analysts intended to use 1pi and to track outcome based performance measures to gauge progress for meeting

program goals. in commenting on the draft of our report, cnn's agreed with our recommendations. the agency's timely implementation of these recommendations could lead to reduced fraud and waste and overall savings in medicare and medicaid program. this concludes my oral statement. i look forward to addressing your questions. >> thank you, ms. melvin. i will yield myself five minutes to begin a round of questions and certainly we appreciate all four of your testimony and your efforts in regard to protecting american taxpayer funds and ensuring we are properly caring for and providing services. i'm going to begin with you and i certainly appreciate the breadth and depth of your testimony, 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 are not listening to the beneficiaries -- having a hot line is great, teaching beneficiaries how to detect fraud is a great. he did and we didn't do anything in response. so why do have to express that i was disappointed that you did not acknowledge what he went through to make sure 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 being denied services because of fraudulent conduct? samore of a statement there than a question i guess but specific

to his case to the best of your knowledge has cms conducted any investigation of why we did not heed mr. west's claims of fraud that it resorted to him hiring a private attorney to have to investigate? >> when i heard mr. west's story i was very much touched by what he said and i was trying to figure out was to root cause and how did that happen. but when he said that he communicated with state officials, i felt like the was appropriate. medicaid is run by the state. 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 pra didn't have until 2005. we started the building of that infrastructure for the staff in 2006. so there was no existence of the federal level contact if you will. we had prior to 2005 those that no funding that supported the state's one questions came. so there was really no structural vehicle at the federal level. >> i think the point is well made and that is your testimony, how we are trying to do better today at the federal level, but i guess while we didn't have in 2004 and placed new jersey as the operator of the provider of medicare services that were helping to fund did and was responsible, and i guess what i'm saying is have we even gone back to new jersey and say listen, this is a case you

blatantly failed to somebody that we are paying a huge share to provide this service and because of your failure, you know, tens of millions of dollars was being lost and private citizens efforts would have been forever lost. so what has new jersey done in other words what did new jersey due to better ensure that it's not repeated and even though that may be at the state level in addition to what we are doing cms has the responsibility to make sure they are doing it. have we made this type of increase to new jersey to make sure they are doing much better? >> 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 are still looking at that information to understand what actions the plan to take to mitigate that in the future. in the meantime, cms has taken a number of actions related to

report fraud with contacting the state even through the 1-800-kidcare line there is a vehicle for people to be able to reach us at any time. >> i think that is critically important because of the efforts of trying to encourage beneficiaries who as we talk to or on the front lines. they are the ones who see the inaccurate information if they are diligent as mr. west was, and those are those who were suffering the consequences if they are fraudulently taken advantage of some of because of the systems. having the system is in place but making sure we respond to the information that comes into that system has got to be key. final question and then my time will be out. regarding maxim itself, i don't know if you have it with him today or can estimate for this year, fiscal year 2011 just ended, roughly how much money

did maxim receive under the medicaid program nationally? >> i would have to research that question. >> 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 are probably receiving, and as mr. cummings in the previous round specified it just is to me incredible that someone who knowingly and intentionally defrauded the american people to the tune of tens of millions of 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 of not billions of dollars from american taxpayers to provide a service, and it just to me sends a terrible message as mr. cummings said the companies are just going to look at this as a cost of doing business.

if we get caught we just pay the fine and factor that in but we keep getting the business. in the real world the private sector if you fraud somebody 130, 150 million i guarantee you are not going to be doing business with that company anymore and they shouldn't be doing business with american taxpayers so we need to do much better and i know there's also a criminal side that we may get into. my time as well expired. i yield to the ranking member mr. davis. >> thank you very much mr. chairman. the affordable care act put in place various provisions. of course it was just passed last year to help fight fraud and abuse in medicare and medicaid. the congressional budget office estimates that these provisions when fully implemented will save american taxpayers $7 billion over the next ten years.

this brice-smith, can you provide the tools and technical changes to the anti-fraud laws that are included in the affordable care act that will directly benefit your office? >> sure. in the affordable care act it offered several things related to provide our enrollment and screening, and we believe that is the best tool for making sure the we keep people who are more fraudulent out of the program and also be in a place to leave verify and validate them over time to make sure that we can keep them out of the program or of just our scrutiny of them through risk assessment if you will overtime. so that's part of that. then there is the payment

suspension activity with respect to changing the level of proof if you will from a reliable evidence based obligation to a credible allegation that will also give additional flexibility then there's also the opportunity for a temporary moratorium that can be affecting weeded 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 integrity purposes. ..

for 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?

>> i was waiting for you, gary. before the affordable care act we had improper payments. one would argue we would still have the concerns around improper payments. i think we're working very diligently to address them. i think many of the concerns i think about the repeal seem to be around the growth or the expansion of the programs and what i've seen from congress is a recognition that you've 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. >> could i suggest that the affordable care act

strengthens your ability to weed out fraud and abuse in medicare? medicaid? >> 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. >> thank you very much. and thank you, mr. chairman. >> thank you. excuse me, gentleman yielding back. i recognize the subcommittee chairman, mr. gowdy. >> thank you, mr. chairman. miss brice-smith, which states have the highest rate of improper payments? >> that's a very good question. we are aware what states they are. they do, what we refer to as a payment error rate measurement that ban spans 17 states on a three-year cycle. we engage those states and expect corrective actions

from those states but do not release is publicly. >> i was looking for the name of the state but it strikes me you want to put your law enforcemen 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. >> we would gladly share any of those data with our law enforcement partners but we usually do not disclose them. >> why? i mean, 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? >> 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 plan. we follow up on -- >> do this for me then. tell me, are there any states that, 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 hat one bad year but then later engaged in corrective actions. are there any states that just have a history of medicaid overpayment? >> i can not 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 passed the cycle of the first 17 states now being examined for the

second time. >> all right. so you know who the states are. agreed? >> i do not personally know who the states are but my colleagues. >> someone does? and they have made the decision to not publicized the states that are doing the worst job? >> 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 that. >> 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 is not the case because in the maxim case, other than watching television at home for three months, i only saw one person go to a federal bureau of prison. and that was for what, five 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? >> the amount of fraud is a factor in the prison sentence and it would depend though on the individual who is were convicted, the amount of fraud that was actually attributed to them the. >> they still don't have relevant conduct? >> there is relevant conduct that is taken into consideration. >> well they do it in drug cases. boy, 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 is rich folk committing the crime? >> i don't think that is the case, sir. i think a recent example, we are seeing increased sentences throughout the country. >> let me ask you about that. let me ask you about that. how many motions for upward departure are you aware of being filed? >> i don't have that information, sir. that would be the department of justice? can you get that for me? can you find out? that is a really good indicator how someone is

about criminal activity. whether or not they're going to move that the sentence be higher than what the guidelines was. >> sure. we'll research that the. >> if you can tell me where to find that i will be happy to do it myself. >> gentleman yield? >> yes. >> mr. crenshaw, if you could submit that to the committee for the record, that would be great. >> i think we've have to get the information from the department of justice and we'll work to get that. >> thank you, mr. chairman. my final question is, do you believe there is 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 the favor of criminal over civil? >> that is our presumption in the office of inspector general, office of investigations. >> what about the u.s. attorney's office, the department of justice. >> that is also the case of the u.s. attorney office when there is evidence to support criminal indictment. >> you heard the facts in

mr. west's case. that wouldn't be a hard case for you and i to win, would it? >> i can't comment on the specifics of that. >> sure you can. he just, he just announced it to the whole world. even you and i could win a case where you're billing someone while they're at the u.s. attorney's office for a meeting? you and i could win that, couldn't we? >> that case, it sound obvious. i'm sure there were several factors that went into decisions at the u.s. attorney's's office to determine who to prosecute and who not to prosecute. >> i yield back. >> thank the gentleman for yielding back. the ranking member of the full committee, mr. cummings recognized for five minutes. >> to miss 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 lifetime of economic punishment over few hundred dollars stolen yet a company like maxim can

be found guilty of stealing from taxpayers, pay a fine, and continue to build bill the federal government for million of dollars of services each year. miss brice-smith, do you share that sentiment? something is wrong with that picture. >> i'm equally concerned about the equity that you've pointed out. >> yeah. who has the power by the way, do y'all have the power, who has the power to disbar these companies? >> we do have the power to exclude providers. >> you got, have you ever done it? >> certainly we do. >> why not this company? >> the decision 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

defered prosecution agreement where we will monitor this corporation in hopes to bring them -- >> to hell with monitoring. they have already done it. if you had somebody working in your house, clear your house and you came home and your wife's bracelet that was worth $50 is missing you don't hire him again. duh? what do you mean, defered prosecution? this company needs to go. how many other companies are like this? in other words have defrauded the people of the united states of america, have taken away services from people like our witness, our earlier witness and are still doing business with medicaid? how many? you're the ig. youed sat up here around doing all these wonderful things. we're doing this, we're doing that that's real nice. what i'm trying to tell you your normal is not good

enough, you know? if you're going to come in here with a badge on your chess and talk about what you've done and a company that has taken millions of dollars away from taxpayers is still doing business and they come in 41 states, all right, we're ready to do business again. yeah we've stolen from you, but yeah, we're ready to go. 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? >> we use it, we use it on average, nearly 3,000 times every year. >> well why not this

company? >> as i had said the factors that play into the decision, depending whether they're criminally convicted or whether there is going to be impact to access to care going forward and their expectation 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're serving. >> oh. oh. the like the lady that steal's your wife's broach or cleaning person, you say to her, oh, miss jane, mr. johnson, yeah you stole 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. i guess what i'm trying to get through to you 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're letting these companies do this and by the way, there are other situations in government where people did much less than this think would 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 mean i would be embarrassed to even come in here and stick out my chest talking about what i've accomplished when the company still -- they have got to be looking at us like we're fools. so i'm hoping that we'll be able to work on 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. gotti 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. the other part is saying we're not going to allow to you do business and screw over the american people anymore. that's the second part. you can do all these things you're talking about, bring in all the technology you want, talk about all the wonderful things you're doing, if there is not that end result, you know what they do? they come right back and pay the price but they come right back. thank you, mr. chairman. >> thank the gentleman. gentleman from arizona, dr. gosar. >> i can tell you this is great playing the closer on these two gentlemen right here. i couldn't agree more who being a health care provider who did medicaid for seven years and left it for all the reasons they talked about it. i did not stop. i just provided it for free. this system when we're starting to talk about access to care and only provider is those that are thiefing in one of the most densely populated part of the country is absurd to me, folks.

absolutely absurd to me. so i want to ask you something real quickly. i want to give you, i want to give you the opportunity to give yourself a grade in front of the american people on how you think you've done this job in regards to policing yourself. miss brice-smith, give yourself a grade? >> in light of youngness of our program -- >> i don't really care. >> c. >> mr. cantrell? >> i would give us a "b." we know there is much more fraud we're able we need to attack but we're improving every year. this last year was a record year with 720 plus criminal convictions is over 50 more than the previous record year and $4.6 billion in recoveries through these criminal and civil fraud investigations. but -- >> i'm going to interrupt you there. i think what you have to do is, you are working on behalf of the american people and i doubt they would give you above a d. don't you agree with me? i think so. i have been out there main street walking this. so i understand it very,

very well because there is 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 fail to do that. let me ask you a question miss brice-smith, when we were looking at innovative ideas making some change did you contact visa, mastercard, some ideas they may have to reduce some of fraud, waste and abuse? >> cms has engaged credit card companies in using the analytics and tools that they have available to try to apply to the medicare claims. >> how would you look at that as far as the i-t systems? i know a lot of the states in the i-t system, lowest bid buys. that is not usually a good investment as far as i'm concerned. i mean, dentists love their toys okay? the better the i-t, the better. so sometimes it is not the most frugal decision that is always better, would you agree? >> yes. >> do we work with the

states in allowing them to have that flexibility to working with that? >> yes, we do. in fact we've incentivized the states to upgrade and enhance their i-t systems for the future. we've done that through setting what we refer to as a matching, 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 to, for the medicaid claims. >> so, you know, when you start looking at, i mean, many hands, i look at these two gentlemen looking at criminal prosecution and you know very few people or fewer people i should say in the criminal division really want to renege on their rules of parole. the reason i look at that and i bring that to point it is called bounty hunters. we have a lot more eyes on the prize, okay? there is some incentives. seem to me when we look at fmaps on reimbursement rates we ought to be engaging the

states for activity, okay? as well as -- [inaudible] the first person who is going to know is the patient. and giving them some oversight on that bill. that's why it needs to be enhanced. and i think that what we're trying to do is we're putting a bandaid here. i will tell you i'm one of these people speaking, i'm tired of bandaids 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. i can tell you i have first-hand knowledge of that. i served our dental patients who couldn't even 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, 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's 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 could empower patients like mr. west to have some skin in the game, to be one of those whistle-blowers and uphold their bt ability and rank? give me some ideas, miss brice-smith? >> we have already observed there are a handful of states that have developed sort of reward programs if you will are short 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's an additional insight an benefit to fighting fraud. >> do you have an insight or newsletter says, hey, listen these states are on the cutting-edge, days to crime, days to time? >> we are using our education net to be able to communicate and outreach that information. we also use best practices, summaries for the states, so that we can infirm other states of what states that are being innovative are doing. so we use our websites. we use forums and meetings and our medicate institute to communicate that information. >> thank you. i'm out of time. >> thank the gentleman. going to go to a second round here while we have the opportunity for a few more questions. yielding myself five minutes. first, a follow-up on the questions of mr. gowdy about

the states that are most egregious as far as improper payments. it sound like your contention that information is not subject to the freedom of information act, to foia? >> i am not sure on foia but we could certainly, i can certainly look into that. >> because i share his, i guess, statements regarding the fact that, you know, 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, you know, often in cases of deadbeat dads one of the ways we get them to pay we publicize you know, that they're not paying. we shame them into paying. maybe we need to shame the states doing a better job

protecting american people's money. i look forward to further interaction with you and cms on that. mr. cantrell, on specific case of mr. west, appreciate the various factors. i find it somewhat, you know, 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? >> yes, there was. the, $150 million was not related to specifically to mr. west's scenario. it was broader issue. >> and how many states would, if you know or estimate that we found misconduct? >> i don't know specifically the answer to that but we could get back to you. >> 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's 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 did we find similar misconduct by maxim? >> i don't believe our evidence suggested that they were committing 100% fraud across the country but i don't know how many states but we'll get back to you on that. >> we would welcome that information. also, looking at, analogy of private, individuals, in a criminal sense where we have a victim, most of our focus has been about the money which is very important but it's also about the care provided. as we heard from the testimony of mr. west, because of the fraud maxim committed it wasn't just money being lost, it was care to an individual. that's, an even more 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 a victim but he was a victim directly of their misconduct. was he consulted or any other similar victims consulted as to whether they thought the settlement with maxim was acceptable punishment for their wrongdoing? >> i believe as in most of these cases the attorneys for mr. west, miss pain would be probably -- page. participating in those discussions yes. i don't know specifically in this case but yes, that is the routine. >> and they're given an opportunity to say yes, i sign off on this or they're just aware? >> i think they're aware of it. i don't know that they have the ability to stop, stop it from happening. >> is there, you know, in a sentencing in a court there's a formal process where the victims can offer testimony to the final decider. do you know if there was any

formal process of that nature where a victim can make a presentation to the, you know, the u.s. attorney directly that's going to make that decision? >> 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 there would have been conversations between the u.s. attorney's office and the assistant united states attorney, mr. west. >> my hope is, that we make sure that's a formal process, a routine part of any settlement because i do acknowledge that you could have somebody who had some bad apples in a small way, you know. that has to be factored in more than a deliberate across the board fraudulent case. we have to remember there are victims here that just aren't 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 are talking 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? >> sir, let me correct the record. that is one 1/2 years old. >> okay. yeah, 12 years -- >> right. >> so outrage just but even 1 1/2, when you talk about then trying to do correct it, i mean it goes to the point of i guess what you talked about and miss brice-smith of trying too much more quickly identify, respond to and prevent, you know, because 1 1/2 years even is, the money's long gone. >> 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 hot spots of fraud.

we have the strike force model which we utilized and we deploy those to areas of the country where there is high instances of fraud such as south florida, bronx, new york, detroit, los angeles, dallas, houston. >> seeking to replicate where you've had success with medicare to medicaid? >> absolutely. >> that is one of the things that came through to me in preparing for this that it seems 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, five years? is that a fair statement? >> i would have to defer to my colleague on that question. >> miss brice-smith, is that, that we're kind of late to the game on the medicaid side? >> i think you're recognizing certainly the support that congress gave us through dra in that

five-year period. >> right. >> 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 agent. and we're engaged at the post-pay with a subset of data to try to oversee them. >> i think very valid point. i think in the deficit reduction act and as mr. davis well reflected in the affordable care act there is greater, greater understanding here in washington in the last five years that maybe it is state administered but bottom line we're paying the majority of the bill. so we need to be more proactive protecting taxpayer funds. that's why i say i think we're late to the game but we're finally getting there and being more hands on in trying to protect those dollars. . .

system a more useful tool to be more timely but also more comprehensive. >> we can't speak to why we don't require a but we can speak to the effect of not having that information available. as you say it is impossible to do some of the data mining

techniques and things that are done on the medicare program. gao does have work underway right now that is looking at the state could devotees, and their activities in this regard to >> this before. >> may i speak to that? i just want you to be aware that we are taking active action to actually enhance that data. we are referring to it as transform office data which is largely expanded we are testing it now to test drive if you will but the data will give a better route term in terms of the activity among the volunteer states, so we are very excited about that. >> my hope is that that is successful and i will say more successful than idr and the program integrity which many years and doesn't seem we are getting the results intended and certainly not in the timeframe

in volume we over my time. i don't know if you have other questions? i will yield to the ranking member mr. davis. >> thank you very much mr. chairman. the services and denial were a major red flag that something was wrong, something was not right with the benefits. one ms. brice-smith, to those patients, are they less likely to ensure that their services or properly being rendered in the delta medicare correctly? >> i think what we've learned about fraud, many frogs terse kim, submit a very clean looking claim and you have to examine other factors such as complaints

from the beneficiaries, such as our own data analytics in terms of the patterns does this really makes sense is this even feasible that they could use that many services for example. >> the 1-800-health and human services tips potline is publicized as an avenue that individuals can use to provide a nation that is, vetting fraud, waste, abuse and federal health care programs. while the extent of health care fraud is estimated to be in the billions of dollars each year they emphasize medicare and medicaid beneficiaries or the front line of the defense 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 hot line

calls and so mr. cantrell, can you provide information on the 800 tips hotline what procedures have followed and any time frame there might be for the complaints? >> we of the 1-800-hhs tips hot line which in this case mr. west we don't believe he contacted that. we believe that he contacted state and local offices but we have the phone number. we also have a website where we collect complaints via web form, and between the two mechanisms, we've received thousands of complaints every year and we have a process for evaluating those complaints, determining whether there's enough information to proceed with an investigation or whether there is enough information. in some cases we refer the result of the regional offices for the investigators to look at

further and in other cases to refer them directly to the administrative review. >> the focus today has been on medicaid fraud i will just point out that there's also fraud in the private sector and private health care. united health paid $350 million in the lawsuit related to the intention of the manipulation of the reasonable and customary rate and also fisa to 82 billion-dollar civil and criminal penalty on the medications while conditioned the have not been approved for by the food and drug administration.

ms. cantrell melvin mr. yocom, can you contact on looking seriously to the private sector? >> one of the challenge is looking to the private sector and particularly on medicaid might be the federal-state partnership. that is an unusual circumstance to begin with. the data is also a challenge in combating fraud and dust of the cms is taking right now or in the lot deily coverage direction the there's a lot of work to be done. >> from a technical perspective, looking at moving the data from the states into the integrated data repository a lot of the key challenges surrounds having to make sure that the data is of the format that the data elements file format consistent

with idr requirements so there are technical challenges in being able to do that one of the concerns we've raised in the report was a 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, 2014i believe. the concern we have is what type of planning they will have in place to make sure they can in fact bring that data consolidated, identify the data elements that are different. we talked previously about disparate systems at the different state programs and does have to be addressed. the differences in the data have to be addressed and brought into the system and the common format. we have not seen the plans yet. we haven't done the work that would allow us to see how effectively cms is handling that particular challenge.

>> went thank the witnesses and the chairman for the hearing and i yield back. >> with me ask a question. about fraud, is it just limited to the private sector or also the public health? >> i believe there are equal concerns in the public sector in terms of fraud, waste and abuse and i think evidence of that is the american medical association annual report card on health insurance which shows the rate was doubled to more than doubled the medicaid rate when you think about extrapolating that out you are talking about a savings in the private sector of $70 billion right there so that is an example with medicaid and medicare to big high-pressure programs we certainly recognize we tend to record and disclose

and more transparent as we should be but many private companies don't have to be transparent about the fraudulent activity that may be occurring. >> i want to highlight like the federal qualified health centers -- would you say that when we broke a rule flexibly child the whole quadrant and we only do one tooth at a time it gives a reimbursement rate; would you call that fraud? >> it sounds like there are a lot of things going on we would have to take into consideration in terms of how the billing is occurring. it sounds like that might be an effort to unbundle services possibly punitive might drop the suspicion depending on how -- >> we have the same scrutiny on the cultic health centers as we do with everyone else? >> certainly they are inclusive, the waiting our efforts tend to be focused on where we believe

the greater the medicaid expenditures and the greater fool notabilities and the categories of services that tend to drive the rate as we know today. >> gotcha. ms. yocom, you believe that the medicaid systems are maybe two big and on wielding the way they are to oversee properly? >> we are finding a big problem here and it just seems like it is on wielding. >> i think the actions taken by the congress and the deficit reduction act and other under the patient protection and affordable care act as a lot of activity which can help oversee these programs in the better fashion. to speak to the states on that this is a partnership but cms also needs to be able and willing. >> it seems to me like we are

talking about a broken system and from rural arizona. we don't get paid. i can tell you right now in dentistry you might get paid in six months. i don't know many people that can make a business work that way but somehow we do. in the government takeover of health care that is the only way the law can talk about it. we are going to dump another 20 million people into this and a broken system. i don't see a lot of urgency into fixing this situation and looking outside the box for solutions. do you agree with me? >> it's not my position to agree or disagree. >> would you agree it's broken right now? >> the facts are we need to do better on the program integrity. >> and it's going to be problematic when we don't dump another 20 million people in here. >> the best approaches are frankly to keep the payment from happening at the beginning of

the gao. >> i don't like where you're going with this because in medicare most of the medicare patients are older, right? very responsible and they've been in power to look at bills which to get back to write about in powering people being a part of that. i want to go back to that the credit card industry fought in real time and the hot wire business practice before the payment goes out the door? >> we just started work to look at that so i don't see the position to see the states are doing. we do know there are analytical tools being used in some capacity by them at this point but i couldn't speak to how much or to what extent. >> is there any reward to utilize the analytics toole? >> there's the analytics toole inslee understand to be used in particular to health in the proper payment so that it allows them to analyze if you will mine

the data and make calls on the data that would help them prevent fraud and improper payments for the integrated data repository tools that we are currently assessed which are focused on the back and in terms of identifying the proper payment after they've been made. >> couldn't we -- just for a second it seems to me there is another common tool that i want to get to. in the front end in powering the patient to make the system a lot faster. when you d from a patient on a building process directly and when they are paying for it is also a standard of care issue so therefore there's a better penalty that we are talking about, so i think that there should be some aspect the we look at the front end morceau

the backhand and in powering patience and if you have something that works very well i come from a state that the then awarded extremely active arizona isn't one, two or three in the country for activity for population. the patients are in power and that is what they're feeling to do is empowering people, and i see constantly when i am approached by the program saying dr. goasr we need you to sign a contract. why is it taking a wic mother six or seven visits 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 stricter the penalty the better off the opportunity that that happens and in power in the states to make those to restrictions really helps and i think the standard of care is a remarkable tool. thank you.

>> thank you, gentlemen. as we heard in mr. west's testimony not only not in helvering -- in power in but in this case we heard we discouraged and prevented them from taking hold. so we certainly need to do much better and i think as we wrap up here a final comment and that is that we need to remember there are two issues at hand. first it's protecting tax dollars and while certainly we are glad to have the improper payments rate for medicare to be down we are still talking about $22 billion of the government payment this last year that we know what, and again, using mr. west's case, for his individual here like efforts to uncover the fraud, we would not have known about maxim, so how many other maxim's routt there?

the 22 billion is what we do know about of improper payments. so, you know, when we talk about the number of 125 billion, there's some estimates that's probably at least 200 billion but we know of only 125 billion. so we certainly have a lot of work to do. i want to thank each of the witnesses for the testimony today both written testimony which is helpful in preparing and your oral testimony today. and most importantly for your efforts day in and day out. i know we are on the same page to seek a result, and i think that with the deficit reduction act of 2005, the affordable care act we are all collectively bitter acknowledging and starting to develop the resources necessary to protect the dollars, ensure the care that is irma and deserved is provided and not denied inappropriately. so commend you for your efforts and on the committee we look

forward to continue to work with you both, you in your respective agencies on this important issue. we will keep the record open for two weeks for additional information as was requested to be submitted and we stand adjourned. [inaudible conversations]

today senator daniel inouye marked the 70th anniversary of the attack on pearl harbor with a speech on the senate floor. senator inouye was 17 at the time of the attack and helped the wounded as a volunteer medical assistant. this is ten minutes. >> mr. president, today december 7th, 2011. 2 seven years ago something happened in pearl harbor. i shall never forget that day because it was a sunday, andmers like many americans, i was prepared to go to church, i wasd putting on my necktie and having a good time listening to music.

suddenly at about this time, 7:e 55, the disc jockey and disc turrets of the program began screaming, yelling, and he was saying the japanese are bombingt pearl harbor. he kept on repeating that.was a until a moment i thought it wasr a repeat or replay of orson welles if you recall the prograo that was a mighty hit in the uni united states. doing he kept on doing this for about five minutes, no music, just ded screaming, and so i decided to take my father and out on the street and look towards pearl harbor coming and you could sees

black puffs, dewitt aircraftou shells, and then you knew what suddenly while watching these black puffs of explosions yout could hear the rumble overhead and there were three aircraft they were pearl gray in color with red dots on the wing i knew what was happening and i felt the world had come to an end. at just about 2400 american sailord and soldiers and noncombatants died that morning. of i was a young man of 17 at thata time, but i was also a volunteer medical aid man and we had a

middle-aged station like the elementary school and so i rushe rushed there to call, respond to the call of duty, and i stayed there for about a week takingand care of the wounded and the dear in the school promise. i became familiar to cost of was full of the world was much more than just blood and guts, we have an extraordinary a constitution.n set we have an extraordinary set of

loss, but throughout the histore of mankind, not just the uniteds states but the history of mankid mankind, more has alwayse provided some justification to set aside these laws. fer sable, just about christmas eve of 1941, about three weeks after december 7th, the united states government made a decision, and the decision was to provide a new designation foe the japanese residing in the united states. citizens and non-citizens like my father for seem as you know

something is wrong, foresee is s the designation of an enemy just imagine that, enemy alien. this was used as one of the ove justifications to round up overm 120,000 japanese, most of them american and japanese and placee them in to these internment camps throughout the united arkansas, arizona, utah and out in the desert sun, and the crime is that they were enemy alien. none of them had committed any crime. investigation after investigation disclosed that. st

no seven tauscherag camano espionage, no salt, nothing. they were rounded up and placed into these camps which were described by the government as concentration camps. yes it was unconstitutional, but our leaders felt that the warwas was a justification to set aside the con the law. well, many of us especially the young ones were ready to demonstrate to our neighbors and a government that we were loyal, the we wanted to do our part in this war and that if necessary to put our lives on the line and ea petitioned the government.boy

finally after about a year ofree petitioning, president roosevelt issued a statement saying americanism is not a matter of blood or color he says okay from a volunteer group and that was done. did our best. the 100th battalion, the 42nd regimental combat team were assigned to do our battles in europe.we start we fought in italy and france and we started off the war with about 6,000 men at the endan 12,000 had gone through the t ranks. so you can imagine the casualty

rates we had about 10,000 partst for all that they received.ecame and we were told that these units became the most decorated in the history of the united states. the bombing of pearl harbor 70 years ago began a period of my v life when i becameer an adult, h it is something that i will never forget. it changed my life forever. intt something of interest at this moment. 20 years ago when we decided to, make a national event, the 50th

earl pearl harbor, on that morning ws the president was there, the secretaries of defense the secretary of the war, the secretary of the interior department, state department,plf all of the important people of the united states were in prepan ootendance, and in preparation t of this, we took a poll aboute six months before december 7thol and the poll was among highhool school seniors, well-educated the question was a very simple question what is the significance of december 7,ad to 1941.ess mr. president, i'm sad to report to you that less than half coult