>> sunday night on q&a, constitutional lawyer david stewart on his impeached, the trial of president andrew johnson and the fight for lincoln's legacy. it's a scandal. it's a terrible, the chapter on johnson i will be beyond. the chapter on johnson to be expunged every library in the country . it focuses on a fellow named ross credited with passing the single vote saved johnson's tail. and because calls ross's boat the most moment in american history. i think it was bought, that his boat was purchased . and saving johnson i think was not a heroic moment. >> david stewart sunday at eastern on q&a. >> the ways and means subcommittee on oversight held a hearing on how the centers for medicare and medicaid services medicare

fraud and abuse . witnesses answer questions on how repeal of the affordable care act will impact their efforts. this is justunder an hour . >>. >> good morning. we're going to get started this morning and thank you all for being here. nearly 60 million individuals in the us ally on medicare for their health and in my home state of kansas, i'm a sworn in depend on the medicare program. it's one of the governments largest and most complex programs and it's susceptible to fraud, waste and abuse and because of this medicare has been designated as a high-risk program for old two

decades. improper payments accounted for nearly $52 billion of medicare spending. fraud in particular is often challenging to identifyand measure due to its deceptive nature . fraud may also be nonfinancial making it more difficult to measure. the centers for medicare and medicaid services measures improper payments, some of which may result from fraud. however, loss payments identified through the comprehensive error rate testing program, is difficult to get a clear understanding of which improper payments are a result of fraud. how much fraud is in the medicare program? there are varying opinions about the bottom line and what is too much. currently medicare anti-fraud efforts focus on identifying fraud after occurred in a pay and chase format.

instead, cms should focus on identifying and assessing where there is fraud before it happens. which i understand cms is starting todo . fraud exists when there is the incentive, opportunity or pressure to commit fraud . focusing on and mitigating fraud risk in medicare, cms can reduce the likelihood and impact of fraud in the neighborhood, preventing it before it occurs. the government accountability office developed the fraud risk framework in 2015 in order to guide agency's efforts to combat fraud. congress likes the framework so much that we passed the fraud reduction and data analytics act of 2015 requiring fellow agencies to incorporate leading practices from the fraud risk report. as it stands, there's no comprehensive risk based

strategy for combating fraud and medicare and cms has not conducted an assessment of medicare using a framework that would allow it to develop such a strategy. that strategy implies it is difficult to address fraud. today's hearing will cover ways in which cms can improve its anti-fraud efforts including the development of a comprehensive anti-fraud strategy . this panel will provide helpful updates on cms rent anti-front efforts and where there is room for improvement. our goal is to better understand what needs to be done to more effectively, fraud in medicare and support those efforts however we can. unfortunately at cns there seem to be some level of acceptance of the improper payment amount and i know this is something every member of the subcommittee wants to improve, given that

every dollar lost to fraud is a dollar could be spent on patients. i want to thank our witnesses for being here today and i look forward to their testimony. now i would like to yield to the distinguished ranking member, mister lewis for the purpose of open statements. >> thank you madam chair for holding this hearing. i apologize for being a littlelate . >> .. i look forward to hearing words from you. madam chair, the subcommittees work touches many areas. protecting and preserving medicare is perhaps the most sacred obligation. the fight forward waste and

abuse is not the matter. medicare covers 58 million elderly and disabled in every state from every section, from every corner of the country. the subcommittee has alone, historic track record of bipartisan work preserving the sacred trust of our seniors, families in need and people with disabilities. i deeply believe that the fight against waste and abuse is defeating the premise of medicare. who all rely on. as we commit to fighting for let us take care, the first party should be to ensure that beneficiaries have access to quality and lifesaving

services. >> is medicare adopts new payment models, this administration must continue president obama is work to fight new forms of fraud. they must consider investment in innovation to prevent fraud before it happens. madam chair, i will always welcome the opportunity to work with you, strengthen and protect medicare just as i did almost one year ago today on this committee and the exact same hearing. the exact same agency out the witness table this morning. your time remains in this congress in each stage there are struggling reports about the state of our health systems. for the past 18 months, the committees on ways and means has made little mention about patient access to care.

-- prescription drugs. i hope we can find more areas in which to work and continue our committed bipartisan commitment. for medicare beneficiaries. thank you and i yield back. >> without objection other open statements will be made part of the statement. today the witness panel has three experts. seto bagdoyan, director of forensic audit and investigative service of the government accountability office. gloria jarmon, inspector general of the department of health and human services office of the inspector general. alec alexander, director of the center for program integrity at the centers for medicare and medicaid. the subcommittees received your written statement and they will all be made part of a formal hearing record.

you each have five minutes to deliver oral remarks. and so, we'll get started and will begin with mr. seto bagdoyan. begin when you are ready. >> thank you, madam chairman. chairman jenkins, ranking member lewis and members of the subcommittee, i am pleased to appear before you this morning. to discuss the gao december 2017 report on how cms manages fraud risk and programs including medicare. the 2017 medicare expenditures total $710 billion or about 18 percent of all federal outreach.covering over 58 million beneficiaries. reflecting an aging population and rising per capita healthcare costs, they project the expenditures to rise to about 1.5 trillion by 2028. the equivalent of about 21

percent of all federal outlay. this annual average growth rate of seven percent. the current and projected levels of spending for medicare highlight what is at risk from potential fraud and why it is imperative for cms to comprehensively address would be fraud risks to the program. illustrating that magnitude and reach of potential risk recently, the attorney general and hhs secretary announced a major healthcare enforcement action involving 601 defendants across 58 federal districts including 165 doctors, nurses and other licensed medical professionals for the alleged participation in healthcare fraud schemes totaling more than $2 billion in false billings or among other things, medically unnecessary treatments and prescription drugs. relating to medicare, 124

defendants were charged with offenses related to various fraud schemes totaling over 337 million dollars in false billings for services such as pharmacy fraud. with this in mind i will now focus on four essential points from the december 2017 report. first, consistent fraud risk framework, cms has demonstrated commitment to combating fraud by creating a dedicated entity the center for program integrity to lead overall efforts with direct reporting line to executive level cms management. second, cms has taken steps to establish a culture conducive to fraud risk management. although it could expand training to include all employees. with the framework cms has promoted antifraud culture by for example, coordinating what

internal stakeholders -- to increase awareness of fraud risk in medicare, cms requires training for stakeholder groups such as providers but does not require the same training for most of its own workforce. the framework identifies training as one way of demonstrating an agencies commitment to combating fraud. training and education intended to increase fraud awareness among employees serves as a key preventative measure to help create an agency culture of integrity. third, cms has taken some steps to identify fraud risk and medicare. for example, it has identified fraud risks who control activities that target areas the agency has designated as higher risk. home healthcare providers good however, cms has not conducted a fraud risk assessment for medicare as a whole or developed a risk-based antifraud strategy.

number four, cms has established monitoring and evaluation mechanisms for his program integrity activities that if aligned with strategy could enhance antifraud management. they use a metric called return on investment and savings estimates to measure the effectiveness of integrity and developing antifraud strategy, cms can includes form building on existing methods such as that roi measure to evaluate the effectiveness of all the antifraud efforts. in closing i wouldócms is already agreed with a three recommendation in the report. it is essential for the agency to place a high priority on implement in them in a timely fashion to help better manage fraud risks and medicare. doing so would provide reasonable assurance that the programs expenditures totaling hundreds of billions of dollars

annually will be adequately safeguarded. otherwise, dollars lost to fraud could significantly detract from the cms ability to ensure that individuals who rely on medicare are provided adequate care. chairman jenkins, ranking member lewis, this concludes my remarks. i look forward to the subcommittees questions. >> thank you, mr. chairman. you are recognized. >> good morning chairman, ranking member and distinguish numbers of the subcommittee. i am gloria jarmon deputy inspector general for audit and also inspector general for health and human services. i appreciate the opportunity to appear before you today to discuss the strategy to combat fraud and promote program integrity and medicare. medicare represented more than 15 percent of all federal spending 2017.

expenditures can be expected to rise further as a number beneficiaries increases and per capita healthcare costs continue to increase. this makes it more important than ever to protect medicare's financial integrity by fighting fraud and reducing improper payments. a central component of the mission. the multidisciplinary team conducts audits, investigations for identify payments and building cases against those who seek to defraud the medicare program. this work has led to numerous fraud convictions and has generated recommendations for improper payment recovery and prevention of future improper payments. oig has long been in the forefront of measuring monitoring and recommending actions to prevent improper payments. we developed the first medicare payment error rate 1996.a time when there were few error rate models in government. in this context it's important to stress that while monetary

losses for fraud constitute improper payments, not all improper payments are fraud. a copy has a program integrity strategy helps to address multiple sources of improper payments including fraud. today i would like to highlight oig's three-pronged approach focusing on prevention protection and enforcement for the fraud protection prevention system is an important tool for preventing fraud and other types of improper payments. however, they recommend improvements to this that would increase the effectiveness. specifically we recommended that cms ensure that the redesign contract savings from administrative actions back to individual models. we've also recommended that contractors report only fps related savings amounts to cms. finally we recommend that the evaluations of the model

performance considering the only identify savings but also the amount likely to be recovered. we have increase the effectiveness of our fraud detection efforts. oig uses advanced data analytics to scrutinize millions of claims and billions of data points.once suspected fraud is detected we thoroughly investigate the facts aggressively and enforced the law. oig partners with the department of justice, and hhs on medicare strikeforce teams and other healthcare fraud enforcement activities to the healthcare fraud and abuse control program. just last month, oig along with state and federal law enforcement partners participated in unprecedented nationwide healthcare takedown. the takedown took down the largest -- both in the number of defendants charged and total loss amounts.

i would also like to speak today about the use of risk management practices. to improve decision-making. we integrate these practices into all practices ever were. the risk assessment process for our audit work considers a variety of factors including fraud related factors. the information we obtain from ongoing risk assessments help us to develop our work plan. oig historically publishes annual work plans but now we may maintain a dynamic work plan that updated throughout the year. to keep the public better informed, each year we also identify the top management and performance challenges facing hhs. where these challenges cover a wide range of critical departmental spots abilities, ensuring programming remains a top management challenge for

hhs. thank you again for the opportunity to testify this morning. i'm happy to answer questions you may have. >> thank you, mr. alexander, you are recognized. >> good morning, chairman jenkins, and members of the subcommittee. thank you for the opportunity to discuss the ongoing efforts of taxpayer dollars by protecting the integrity of the program. cms takes very seriously the responsibility to make sure we paying the right amount to the right party the right beneficiary according to all applicable laws and regulations. as a former assistant united states attorney responsible for prosecuting healthcare fraud, i've seen firsthand how medicare fraud can inflict real harm on beneficiaries. when fraudulent providers perform medically unnecessary tests, treatments, procedures or surgeries, or prescribed dangerous drugs without thorough examinations or medical necessity, program beneficiaries are put at risk.

when fraudulent providers steal, beneficiaries identity and bill for services or goods never rendered, that beneficiary may later have difficulty accessing care. strengthening our program efforts, protect beneficiaries from harm that fraudulent providers and bad actors might otherwise cause and at same time it safeguards trust fund dollars. while we are not a law enforcement agency we do collaborate closely and on a regular basis with our law enforcement partners. most recently, cms began and is leading an important new process improvement we call major case coordination. this innovative initiative provides an opportunity for cms policy experts, law enforcement, including hhs oig, the department of justice and healthcare fraud strikeforce, as well as cms fraud investigators to collaborate before, during and after the development of fraud leads. this involves weekly meetings to discuss and prioritize new leads and coordinate and assign appropriate paths for

resolution. this early and frequent collaboration and coordination maximizes our joint ability to identify and investigate and pursue fraudsters might otherwise endanger program beneficiaries or steal from federal programs. just last month, as was mentioned, hhs along with department of justice, oig and other law enforcement partners, announced the largest ever healthcare fraud enforcement action by the medicare fraud strikeforce. when the 600 defendants were charged participating in fraud schemes involving approximately $2 billion in losses to medicare and medicaid. only 45 days after being referred to the strikeforce, as part of this new coordination effort that i have described, one of those reviewed cases was charged as part of the june 28 healthcare fraud takedown. cms has been working to identify and prevent fraud decades and we truly appreciate the extensive work of the gao

to provide systemic conceptual framework within which we can assess areas at risk of fraud across our programs. cms is also strengthening efforts to ingrain fraud risk assessment principles throughout the agency to cultivate a culture and a program of integrity to ensure that this critical work does not occur in a silo. we will continue to work closely with gao and other stakeholders as we take steps to expand our capacity to conduct fraud risk assessments and make the process more standardized and more efficient. cms is also using other tools to identify and prevent fraud waste and abuse in our programs. as was mentioned before prevent system allows us to implement prepayment edits and stop payments before they go out the door. through advanced data analytics and modeling, it also allows us to better target investigative resources toward suspect claims and providers and swiftly

impose under administrative action or make law enforcement referrals when they are warranted.additionally, when one of the fraud prevention systems approximately 100 predictive models identifies and reaches suspect or activity, the system automatically generates leads for further review and investigation. the fps help cms identify and prevent $27 million in an appropriate payments in the year 2016. this reflects internal investment of $6.30 for every one dollar spent on the effort. recent work of the oig is helping us in our efforts to continually improve the fraud prevention system.in addition to our efforts to identify and prevent fraud waste and abuse, we are taking a number of steps to lower the improper payment rate across our programs. it's important to remember while all payments resulting from fraud are improper, most improper payments are not fraud. under the leadership administrate, cms is

re-examining existing corrective actions and explore new and innovative approaches to reducing improper payments while minimizing the burden and because of the actions we are put into place, we are glad to point out the medicare improper payment rate fell from 11 percent in 2016 to 9.5 percent in 2017. that represents a five billion dollars decrease in estimated improper payments to go forward we must continue our effort to identify vulnerabilities in the program and payment systems and create strategies to actively reduce fraud. we share the subcommittee commitment to safeguarding extra dolls and strengthening the medicare program to assure his long term sustainability for the millions of

beneficiaries we are honored to serve. thank you for your interest in our work and i look for questions you may have. >> thank you for your testimony. each and every one of you. now we will proceed to question and answer session. i would like to direct my first question to mr. seto bagdoyan. can you or expand on this antifraud strategy. other benefits you been able to assess and mitigate the risk of fraud? >> thank you for your question. madam chairman. strategy is basically a roadmap that allows an agency in this case, cms, to meet its mission. it has objectives within the mission and it has a capacity, there is a symmetry usually between the two. in antifraud strategy is designed to close the gap in terms of meeting the mission while also achieving fraud management. the strategy is the best way to organize and target desperate

measures that cms and cpi have in place already. plus anyone that might be needed to target those against prioritized risks. he certainly cannot address each and every risk but you have to prioritize them in a strategy that provides the best roadmap to do so. >> what wouldn't effective antifraud strategy look like? and can you talk a little bit about what other agencies or entities that have successfully conducted fraud risk assessment using the fraud risk framework and how that has informed a risk based antifraud strategy? >> sure. just to follow-up, strategy is basically the result of performing a risk assessment. in which identify all of the risks that are facing a particular program. then you create a risk profile which is essentially, the

documentation from the assessment. there could be various assessments, certainly. and the profile identifies in priority order, the risks that need to be addressed. and then the strategy comes in with identifying the existing controls that are in place and also, identify any new ones that are needed and any new controls, how they might be sequence in a particular program. they work with each other and essentially also has performance measures to see whether any of these activities actually move the needle, so to speak in terms of achieving reduction in fraud or vented management of fraud. in terms of your other, the subpart to your question, the framework has been around for about three years now. we have applied it to various

agencies. to be candid, most of them are still struggling to come up to speed in terms of fully utilizing the capabilities within the framework. there is a lot of good faith efforts. we have seen, as i described, within cms, they have lots to build on. it just needs to be better organized and focused and targeted. >> thank you. mr. alexander, cms has a number of antifraud initiatives in place. he described their efforts to align the antifraud initiative with gao 's framework and the risk framework? if you will turn your microphone on.thank you. >> thank you, madam chairman. of course we are able to have the gao guidance with respect to the fraud risk framework. we are using every day. we assess risk and all of our

programs every day. this is a continuous effort because fraud and fraud risk involves day to day. we are also standing up right now which is, it will be associated with our use of the framework, a vulnerability management process. we are at the end of putting into place which will do and incorporate essentially, all the elements of the fraud risk framework the gao has allied specifically. this is enterprisewide, across the horizon at emerging fraud risks. bring them together with the entire team, prioritize them, analyze them, score them for impact if they do occur, attach action plans to them to ensure as my colleague indicated, that we move the needle from red to green. then attach outcomes assessment tool at the back. we do that not only add payment system level on a regular basis. not only with respect to for example, the marketplace and

exchanges, we are doing it in modeling from cmi. we are doing at the program what level and worked regularly at the issue level. when each of these vulnerabilities are identified, we put them into this management process, we will be doing a version of exactly what is recommended in each of those. the gao report was also very thoughtful in observing because of the size of our program probably makes sense not to try to eat the elephant all at once but instead to break into some sub assessments. which is essentially what we are trying to do. we want the committee to be aware and gao to be aware we are following exactly the protocols. in fact, they mirror pretty standard enterprise risk management practices that we described a moment ago. >> finally, what does the inspector general have in mind? >> we have a significant role in managing fraud risk and medicare as part of our

oversight role. and due to the large size of the medicare program, mike was mentioned almost about $700 billion. we continually overseeing how the department is managing medicare and even determining what work we do, audits, evaluations or investigations. we have to do our own risk assessment to determine what areas to focus on. we have we call priority outcomes. the size of the programs we are responsible for, that continues to evolve. when you determine what areas we are focusing on. like in medicare the improper payments have been in non- traditional settings. we have a focus on medicare work and claims in those areas could wear continuing to do advanced data analytics to see what areas to focus on. we use our own risk assessment in deciding what work we do and overseeing the department. >> thank you.

now i will recognize suzan delbene for a couple of minutes. >> thank you, mrs. chair. the affordable care act has and has a 30s for cms to combat waste, fraud and abuse in medicare and medicaid and the children's health insurance program. now as you know, several states are suing to have the aca overturned and the argument is that the law is not severable. meaning that if they are successful, enhanced capability of cms would be repealed as well. mr. alexander, i wanted to ask you, if those states prevailing argument and the aca is overturned in its entirety, wood providers, suppliers, medicaid managed care plans, medicare advantage plans and medicare prescription drug plans, be required to report and return any overpayment in 60 days? >> thank you very much for the

question. first of all, i would like to ensure the subcommittee that the secretary and administrator made very clear that we are committed to -- >> if this is overturned, that requirement goes away. isn't that true? it is a simple yes or no question. >> the 60 day rule is a little bit beyond the purview of what i was going to discuss today but yes. it would have an impact. >> thank you. i also want to ask, wood-- something else that was required under the affordable care act. >> we have many different sources of information and vulnerabilities in the program for that is one of them. >> that would go away? >> not necessarily. >> the requirement will go away. and that would cms have the authority to impose an administered penalty if a

medicare beneficiary for medicaid recipients, knowingly participated in healthcare fraud scheme? >> we have multiple authorities upon which to revoke provider billing privileges or payment suspension. >> the administrator penalty, that is an authority provided under the affordable care act. and i want to highlight these because i think it is safe to say that a fair number of important fraud prevention tools would be taken out of the cms toolbox if the aca were overturned in its entirety. and those are just a few of them. another others that would also be removed that we probably do not have time to mention right here. i also wanted almost exactly one year ago this subcommittee held the same hearing. and i submitted a question to the record. and i have not received a response.i wanted to ask it here today for you, mr. alexander. certain value-based models such as accountable care

organizations are uniquely positioned to help identify and ultimately, report fraud to the center for program integrity. on average, medicare covers 17,000 lives and comprise hundreds of clinicians. and their success depends on continuously monitoring their expenditures. ... to your department. >> thank you very much. we have multiple ways to receive concerns of vulnerabilitiesfrom all the payment systems that we have. yes, we wouldmake that available.

we want to know what are the emerging vulnerabilities so we can place it within the management process i've just described . >> we will follow up with you on the, thank you . then lastly to you mister jarmon, mister trump came into office saying he was going to drain the swamp but it didn't take long for his appointees to waste taxpayer dollars, on particular on trips on charter jets. the oig found the secretary price wasted 41,000 taxpayer dollars on trips that did not comply with real policy use. the oig recommended that hhs recoup these funds. as hhs supplied you a timeframe to recoup the $341,000 that were wasted? >> i don't believe we have a timeframe yet with regard to that. last weekend as part of our process we will be following up with the department on how they are implementing those

recommendations and following up with them over the next few months on how to make those recommendations and at some point we will get a timeframe. >> i be interested in knowing when you have one. thanks for your time and i yielded back. >> i'd like to recognize miss wall or ski for five minutes. >> mister bagdoyan, it's my understanding that to implement a strategy in line with gao's framework must be first conducted. can you talk about that? >> sure. an assessment is basically a bottoms up held out from looking at all the in this case medicare's various parts and identifying risks that are known and perhaps speculating on the ones that are emerging. fraud risk is not static, it's a very dynamic from region to region, that he to city. it's a grand design or counter fraud measures take

effect, those schemes evolve so an assessment is essentially a thoughtful process from all stakeholders to determine essentially a portfolio of risk, then also determine the likelihood and then impact and those assessments as i mentioned earlier feed into a risk profile which is the formal documentation of anassessment . >> mister alexander, mr. bagdoyan mentioned earlier a lot of good faith efforts going on around all these systems and i'm curious what steps is cms taking to determine what order they should develop a broad risk assessment and to hispoint , if you could talk about is there a fall timeline that these fraud risk assessments are going to be completed? i imagine there's a master grid so can you talk about

that of the medicare programs, how they should develop in the timeline we are looking at for all these programs? >> as i mentioned, we have been and do fraud risk profiling as described for a long time. we have done in the marketplace in the exchanges, and the modeling and with each of those steps we are bringing those learnings forward to each subsequent program. i would point out each of the programs and payment systems that you would do a risk assessment on has unique peculiarities to it. the way we pay for critical action in this hospital is different than the way we pay for acute care hospitals so each presents a different table or plate full of risks that need to be assessed. so they each break into a separate brick if you would so if you imagine we are building under the framework gao has given us, all wall that would cover the program,

it's going to be comprised of many different bricks, each containing a risk assessment of its own so we are in the process of doing that. as to the timeline, i'm not sure when it gets done but i would assure the committee that we do these on a vulnerability by vulnerability issue by issue basis every day as we see fit . >> can you ballpark those for the sake? are we looking at two years, five years? >> by the fall of next year we should have a general idea of where we are. i believe we are steadily making progress and i want to reiterate that as a vulnerability process i mentioned that we are standing up comes into fruition we will take each of those vulnerabilities on a weekly basis, informing this process and assessing it to make sure we are addressing it and measuring the outcome of how we are moving the needle but generally speaking probably the fall of next year we should have something in terms of the overall extent.

>> back to your point, you talk about aca. can you talk about the aca marketplace on how that may inform a broad risk assessment for medicare? >> absolutely. we take marketplace exchange integrity is a priority for all of us. we are following the recommendation the gao has given us and are performing a risk assessment to the exchanges. i'm happy to tell you that process as identified a particular vulnerability among agents and brokers. has led to a referral. we have stood up and contracted a marketplace program that has the sole responsibility of working with us as part of our case coordination process to look into that. we've referred the first of those cases as a criminal trial in september and there are more that are coming so we are making very important progress there and we expect we will identify vulnerabilities in the future

. >> mister chairman, i yielded back. >> you are recognized for five minutes. >> iq madam chair. i appreciate the opportunity to deal with these oversight issues. one item i would mention as a side point is that another area of potential oversight would be our committees responsibility dealing with the integrity of the american infrastructure system. today marks the 397 hearing that we have had as a committee in the 7 and a half years my republican friends have been in charge and we have had one five minute witness testified about the responsibilities we have dealing with infrastructure and that have significant impact in terms of the health

of our country, the economy and it's sad to me that the ways and means committee as shirt that responsibility. there will be a wide range of opportunities to exercise oversight and i hope some point the owner to the responsibility we have in that regard. i appreciate the focus on the medicare integrity. you've referenced here that we are already talking about over $100 billion in the next 10 years if i understand correctly. that's going to double the integrity of the program is absolutely essential. part of the problem we have in this country where we paid more than anybody else in the world for mediocre results overall for average, americans get sick more often. they take longer to get well and they die sooner than in other countries simply as inefficiency and waste is a part of that. i appreciate the effort to look at comprehensive efforts moving forward.

my friend pointed out a number of the tools that were available under the affordable care which is a comprehensive approach to dealing with americans health and embedded in that were elements to be able to have more efficient ways of monitoring, guaranteeing program integrity. we have a long way to go but there are tools there. we hope the administration will take those seriously unlike some of the other areas where they appear to be taking apart the affordable care act old bible, destabilizing thesystem and making things worse . i appreciated the reference here, $4.20 was returned for each dollar invested in terms of that. you mentioned one example that was six dollars for every dollar invested. i'm curious if you have some sense here of whether or not

we are making adequate investment. if we have the rate of return that is 4 to 1, 5 to 1, 61, are we making the appropriate investments through the budgetary process and within the administration to be able to fully capitalize on the power of these approaches? >> thank you for the question. first of all i believe it's important to note that the committee and subcommittee have been particularly good at providing resources whether it's the small business jobs act or macro or any of the tools that you have provided. allthese observed : tension functions exceedingly well. i'm not in a position to request any particular funds. i would point out that the president's budget proposal does contain i believe it's 17 specific program integrity focused proposals, all of which have the capacity to advance our efforts considerably.

just to mention one or two, we regularly see problems with what we call affiliated entities. there's a proposal that would allow revocation and denial of provider enrollment on affiliation with a previously sanctioned entity.a person who was honored to participate in one of the first healthcare fraud cleaning classes in 2009 i believe. i'm familiar with the fact that fraud organizations will disappear and reappear, reorganize themselves in different but related corporate structures that are then untouchable . this particular authority is one. there are severalothers. i would ask the committee to pay attention to those . >> i would ask consent to enter into the record a statement concerning the

failure of the committee to deal with its responsibilities of american infrastructure. >> thank you very much. >> thank you and you are recognized for five minutes. >> thank you madam chair and thank you for being here today. we look at this process and you may be trying to find the area looking at crime statistics, it's very similar i'm curious, i want to ask a little bit about the types of fraud that you see and are we looking at breakdowns of the types of fraud because you've mentioned a couple different ways that people can go about committing fraud whether it's from the provider or people that pretend to be providers, etc. i'm curious as to where , where does most of the fraud occur? are you looking at trends like most of it in urban areas or is it in rural areas? is it in certain states or in

certain cities? the number of occurrences that occur in the amount of dollars that are involved with these occurrences say per capita and where you look at trends like this and i'm also curious to know how does medicare fraud compare with fraud in the private healthcare sector and insurance if you will. >> thank you congressman. the answer is yes. we in collaboration with our law enforcement partners are particularly adept and focused on doing what you just said. we look at i concentrations of fraud geographically and concentrations both as monetary and fiscal matters as well so where are the dollars going? is that geography particularly prone for fraud or susceptible to it and you might see that of the nine or 10 or 11 now current strikeforce jurisdictions as we call them, they are located in places where that's occurring. i volume and a particular

concentration so that's where these 25 or so elite prosecutors and a number of agents from the bureau and oig focus their work. coordination process is locked in with them once a week. we're sitting down with them looking at the loose weeds being brought in to assess them and we make quick decisions as to what path they should be in. is this a matter based on the conduct that we see to go straight into a criminal referral? is it one where there's an administrative action we should take or is there more investigation or importantly, is it one where a provider is exhibiting a high error rate with effect to their claims through error? additional fraud and malcontent and in that case we want that provider to not have a burdensome, onerous referral. we want them to have the benefit of a chance on one on one education.

>> i want to go back to how you compared the private sector but what you brought up his key. i can remember a time that i held conversations and one of our lower extremities was a prosthetic and i circled one extremity is what i treated. the staff didn't notice that, so the lady walked out crying and build for two extremities which i noted later, called medicaid right away and said we're going to reimburse the $12. it was innocent misquoting. what i'm worried about is the headline. that there was some misdeed and that happened to people but you know there's cases out there. that someone who they didn't like one code that he was using and went into his office,rated the office in the middle of the day , read the headlines, led to a divorce, led to a tremendous amount of money and legal fees to end up assigning him $60. now, there's a difference between innocent misquoting and intentional over coding and i hope that you are

addressing that in a more proper way. i'm going back a few years when this happened. but i think that's important to from the standpoint of our providers. can we behold little more parental if someone, hey, you're not necessarily doing this right . without any type of warning but if you could in the time i have left talk about how you might compare to the private sector as far as fraud and abuse. >> thank you congressman and of course that process i described i'll follow up with you about. the program does what you just described for a provider who need that education. with respect to the private sector i would point out that the goal thereis to be as quick as we can , not to chase, pay and chase but to prevent a payment from going out and i believe i heard your question, are we as good

as the private sector? i'm not sure how they measure that but we have several tools that give us the capability of stopping payments before they go out if they are improper. a fraud prevention system allows us to place edits that immediately will deny a claim if it violates a policy. we have the ability to do prior authorization and one of the budget proposals i referred to is to expand prior authorization and i would ask that you consider that. we have prior enrollments, prepayment review among other tools designed to stop those payments before they are made . >> if i can indulge for a moment i'd like to be able to get the statistics you gathered about the geographic findings that you have. i'd like to be able to get those from you and compare to private sector the amount of fraud. is there less fraud occurring in the private sector and why if that's the case and i yielded back .

>> thank you very much madam chair. i want to thank each of you for being here. and for your great work. i'dlike to ask each of you, are we doing enough ? as a nation? and as agencies? to protect our nations from medicare fraud? if we're not doing enough, what should be our next steps ? >> thank you congressman lewis. i believe that we have the resources. i told my team all the time we have a $1.3 billion budget to protect $30 million in medicare. we have the financial resources to do it although they are always emerging responsibilities that are required but i think we have to bring greater insight to the process and i believe what i've described in this new coordination process is where we bring the insight of all the relevant parties

along what i call the enforcement continuing which starts with education on one hand and ends with criminal prosecution and sentencing at the high-end of the guidelines on the other end and everything in between needs to be assessing these issues holistically at the beginning together to make sure we are making insightful and proper decisions from the bill beginning so we can improve their and we are working to do that. >> i would say there has been some progress as mister alexander mentioned. the decrease in rates for medicare but the numbers are so large. it went from 11 percent in 2016 9.5 percent in 2017 but there's a lot of medicare fraud out there so we've made progress but there's a whole lot that needs to be done and some of the things miss alexandermentioned , the coordination with law enforcement and the meetings you have weekly, i think that our use of data analytics information and targeting

areas where we needto use our resources . i think that our use of all of that and we've made several recommendations related to the fraud project prevention system. i know cms is working on it and we feel like more needs to be done in that area. we talked about recovery and identified recovery but actually it's a return to the trust fund 40 different amounts so the adjustments recoveries are the ones that need to be looked at to determine how effective the fraud prevention system is and that's different from 6.31. >> thank you mister lewis for your question. it's a really good question to bring it all together, acting upon points that mister alexander made and mr. jarmon as well. there's a lot going on from the gao perspective. it needs to be better organized and better focused.

we cannot spite all of them all the time so that's very important and then assessments will yield also additional actions that may be required, i think mister alexander mentioned the presidents budget request outlining i think 17 or so programs or activities that would certainly come into the next. but a comprehensive forward-looking strategy is imperative to make sure that fraud risks are identified and managed at the most effective level possible. >> are you describing what i would like to call bad apples? engaging in something in georgia , legal to florida or some other state and are we doing the same thing? >> yes congressman, we are and only the eight or so weeks that we've run this new

coordination process, we are seeing emerging risks that are both geographically disparate and tied together so we are seeing through what we call link analysis that behavior over your problematic is also showing itself here and through this process , we've along with our law enforcement partners are linking those together. we also have a contractor we are able to bring to bear on the supplemental medical review contractor for matters that require investigative resources and have multijurisdictional connections so the answer is yes and we are working those very aggressively. >> 19. madam chair, i would like to submit a recent story from my hometown newspaper, the atlanta journal-constitution. the story tells of a provider who was defrauded and harming

the elderly was already struggling making ends meet . >> objection so ordered. >> i yielded back to my chair . >> we now recognize mister ledford for 10 minutes. >> i want to thank the witnesses for your testimony and service. i understand under the fraud prevention system at cms, there have been steps taken to develop mechanisms to determine return on investment and other savings when combating fraud but that cms is unable to evaluate all activities without a comprehensive raw assessment strategy. recognizing that there are a number of anti-fraud efforts happening at cms, i want to focus on the health on prevention partnership. the health fraud prevention partnership is a private partnership between the federal government, state, law enforcement, insurance plans and others that analyzes and studies multiple player claims data to

identify providers with suspect patterns. i know for example in my home state of illinois the department of healthcare and family services officerof inspector general is amember of that partnership . i think that , i think it's used in the right way, public-private partnerships are an effective tool for the federal government to harness the expertise of the private sector in helping to identify challenges in proper payments and fraud. mister alexander, i wanted to know if you could elaborate more on some of the successes in the in fraud prevention related to the hpp and secondly, talk a little bit about, i mentioned earlier a voluntary program, how the process could join hf pp works. >> thank you very much. as you mentioned this is a very important collaboration

that includes federal, state and private entities and the purpose of it is to facilitate information sharing and to manage, identify managed fraud risk that pervade across payers for example or across systems. currently the partnership as i believe 102 members. i was honored to participate in the last board meeting. director levinson was there. the chief of the health care fraud criminal division and strikeforce chief was there as well. we were there with many state representatives and we talked a great deal about how this data sharing can reveal sorts of fraud schemes that we are looking for. for example, if the federal government is aware of a particular provider billing and amount of time in a day for a particular thing , and then we are able through data shared through the partnership to compare that

to the same provider that may have billed multiple private payers on the same day the same rate, then what emerges is an impossible time scenario that is something that can be pursued. that's an example of the sort of fruit that we seized from the data sharing. it's a critical component in identifying risks not just for the federal programs but for fraud units or administrative programs as well and for the private entities who are exposed to this sort of fraud. >> you anticipate growth in the program? >> i noticed from last year as i prepared the number last year for this, to the extent it might have come up again, it was 79 this year. i heard 102 recently at the board meeting so i know it's growing. it makes a lot of sense and we are honored to coordinate it and i expect additional growth.

>> what about any deficiencies or challenges that need to be worked out? >> i only have the honor of work in this capacity for six months. i would be glad to follow up and make you aware if i do become aware of shortcomings. >> those are all my questions, thank you madam chair . >> mister kahlo, you are recognized forfive minutes . >> the witnesses for their time here today. south florida, still number one for health fraud holding a massive takedown around the nation. that was the headline last month in the miami following the unveiling by the department of justice hundred defendants accused of fraudulently billing $200 to private insurance. it's been reported over $300 million of those fraudulent claims by south floridians were treatment for opioid, home health and prescription

drugs. i'd like to submit into the record the referenced miami herald article published in june regarding healthcare fraud in south florida . last year a hearing before the subcommittee i asked why you are always chasing so much fraud? we learned of the biggest challenges is understanding the fraud behind improper payments since it isn't always cost but also clerical and legal errors that contribute to payment statistics. while i'm grateful for the work to bring bad actors to justice as evidenced by the recent down, we need to do more to cut down on pay and focus on prevention measures. i agree with mr. jarmon that a program of an strategy that focuses on detection and enforcement helps address the sources of improper payment. i worked on a bill with my colleagues to introduce the

reed child back which recently passed the house. this bill would direct cmf to work with entities including improvement organizations to engage in outreach with prescribers to prevent prescription drug abuse. this bill is directed toward educating outlier opioid prescribers to help change their behavior and prevent overprescribing. mister alexander and by the way, this issue is in many ways personal to me because it's no secret south florida is the medicare fraud capital of the united states and my constituents no longer want for that to be the case. so my question to you is how does the administration view prescribed education as fitting into an overall fraud strategy? >> thank you for the question. as you know first of all, the secretary and the administrator and privateer

made it clear that fighting the opioid crisis is a top priority and we are working closely with law enforcement to do that. we are bringing tools to that fight, the civic tools from the program integrity perspective that would include the medicare drug integrity contractor which provides investigative work and referrals to fraud and other problematic behaviors in that space and the medic is part of the uk medic major case coordination process i described so once every seven weeks -- [audio lost] to deny

payment for claims associated with thoseprescribers and finally , the new lot in authority we have thanks to congress, we now have the authority to limit high risk beneficiaries to specific pharmacies and specific prescribers. all important to us that we are bringing to that importantwork . >> thank you mister alexander. i appreciate cms's commitment and i am grateful to the ranking member because this is all very demoralizing to american taxpayers obviously unfair to medicare beneficiaries. every dollar that goes into one of these fraudulent schemes is one dollar less

that we have to those who have earned medicare by working hard in our country and in south florida is particularly personal and painful . our community does not want to be known as a place where medicare fraud is prevalent and we look forward to working with all of you to root out this horrible situation in ourcountry . >> i want to thank our witnesses for appearing before us today. be advised that members after weeks to submit written questions to be answered later. those questions and your answers will be made part of theformal hearing record and that the committee stands adjourned . >>. >>.

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>> this morning's washington journal program was dedicated to learning about opioid abuse in urban areas . watch that tonight here on c-span2. we talked with baltimore doctor henning the treatment response of theopioid epidemic . >> there is no question that we are in a state of emergency a public health crisis here in baltimore. last year in 2017 we just got these numbers that there's 761 people in our city who died from an overdose.

and the major contributor is fentanyl. a number of people dying has climbed from 12 in 2013 to nearly 600 last year which is a 5000 percent increase. this is terrible. this is terrifying because these are our community members, family members who are dying . >> the washington journal talked with the head of maryland's opioid command center, asking both police commissioner and congressman elijah cummings. you can watch the entire story tonight at the eastern here on c-span2. in prime time tonight on c-span, anthony kennedy discusses hislegacy in the court the ninth circuit judicial conference in anaheim california and you can watch that tonight at eight eastern on c-span . supreme court nominee