matters, they outdo us. disabiblt adjusted life expectancy, they outdo us. years of life lost, we have more years of life lost. this is not a re-republican or these are the facts. but that's not the way to judge a health care system entirely. surely a health care system reflects these indicators, but not just the health care system. my colleagues at nyu would still say we have the best health care system in the world in spite of these indicators. they would argue that these indicators reflect other things for which they assume no responsibility, social services and equality of income, family policies which are very strong in france, maternal and child health programs, all of which are factors which explain why they have better population health than we do. so we have to look at other indicators, and one important indicator of health system

performance is called avoidable mortality. that is in a good health care system, women should not die in child birth. people should not die of tuberculosis. people should not die of aschemic heart disease. people should not die of cancers that can be cured. and when we look at that, i'm embarrassed to say that we come out in the united states as 19 and the french come out as number 1, i repeat, number 1. that is a fact that cannot be ignored. it must be addressed. it was written up in health affairs, a reputable journal. it was confirmed with different measures by the oecd, and it has not received in my judgment sufficient discussion. another indicator of how well a system is doing and a theme of this subcommittee that i know is dear to chairman sanders is access to primary care. you can talk about primary care

until you're blue in the face, but let's look at the consequences of whether you receive primary care or not in different health care systems. we have a very established measure of primary care access. it's very direct. if people end up in the hospital for conditions for which you should not have exacerbations if you have access to primary care, that's called avoidable hospitalization, and on that criterion, avoidable hospitalization, the rates of avoidable hospitalization are twice as high in the united states as they are in france. that's an unfortunate statistic from the point of view of an american, but that's the way it is. lessons that we can draw. i believe that health systems cannot be transplanted from one country to another, but we can talk about some issues, and i will just tick them off. i'll go over 30 seconds if you will allow me, mr. chairman. in france there's no choice of insurance plan.

everybody is in the same plan for the standardized benefits, but there's a complete choice of hospital or doctor. in france all insurers, and there are more than one, pay the same price according to nationally set rates. you don't have a lower price for medicaid, a higher prays for medicare and even higher price for commercials. in france there are no physician gatekeepers. everybody can go where they like. no one is telling them what network they can or cannot go in. they don't have to cuil their insurance company to get authorization. in france there's extensive c co-insurance, small, but there's a voluntary -- >> we're going to have to learn more about france in a few minutes. senator murphy, did you want to make a brief opening remark? let's go to dr. yeh if i'm pronouncing your name -- forgive me if i'm not. dr. yeh is a professor at the school of public health in taiwan, and we very much appreciate your being with us

today. just speak closely into that microphone and tell us a little bit about what goes on in taiwan. >> chairman sanders, senators, and distinguished members of the committee, thank you for inviting me to testify here. my name is ching chuan yeh. i'm sorry a p a professor a the founding ceo of our national health insurance in 1995 to 1998, and i was the minister of health in taiwan. taiwan established the universal national health insurance in 1995. 99.6% of our population enroll in this program. the other 0.4% have citizenship but stay abroad. they are not covered.

taiwan's program is a single-payer system and has a large single risk pool. before that we have 12 different social programs, strong and weak programs, and we merge into one single pool. that enabled us to have cross subsi dation among the rich and poor, the well and the sick. studies show that the premium contribution compared to the health resources utilized are favorable to the low end to middle income. having a single payer system is the main reason for our efficient services and also how the low prices of our health care we can achieve. we have a private not for profit delivery system and very highly

competitive providers enable us to have efficient service. we contract 100% of the hospital in taiwan and 93.5% of the private pration track practitioner. if they have a car they can go any hospital, any private practitioner and seek their advice. and that's a very easy and equal access to the system. and single insurance administration have the benefit of very low administrative costs which is only 1.15% of the total of spending. and people enjoy complete free choice of provider and provider in taiwan must be mindful of

their patients' demand to stay competitive. our satisfaction rate is after two year of the implementation it's always between 70% to 80%. we have a national fee schedule, uniform fee schedule, so the cost -- the hospital and the provider can only compete on quality instead of price competition, and patients carry their insurance card can go to any provider if they are certified with their quality of services. basically there are no waiting list at all except for a few well-known medical institutes or well-known doctors. and rationing is stopped by provider competition and efficiency of our services.

in 2012 our life expectancy, infant mortality, our maternal mortality, and twe are much better than u.s., although we spend only 1/6 of the u.s. dollar. if ppp adjusted, it is 1/4 of the u.s. we spend, but we are doing better than u.s. and last thing i wish to mention is health information system. everyone have this card, and we six last visits record in this card, but actually all our provider submit their data electronically so we on the way

to develop a cross system emr so we expect to accomplish a lifelong erecord for everyone in the next few years. i think my time is up. thank you. >> thank you very much. senator roberts, did you want to make a brief opening remark? >> no, sir. in the interest of time, i do have a question of the witnesses but i'll wait -- >> okay. we'll get to that. >> thank you, mr. chairman. >> thank you very much. senator burr, i think you have a panelist you want to introduce. >> thank you, mr. chairman. and i thank my colleagues. i have the pleasure of introducing to you today miss sally pipes, president, ceo, and taub fellow in health care studies at the pacific research institute in san francisco, california. sally, thanks for joining us today to explore what we might learn from other countries

around the world to improve our health care system here at home. as a nativend naturalized american, miss pipes has a unique understanding of how single payer systems actually operate. congratulations on becoming an american citizen. we're pleased to welcome you and look forward to hearing about your personal experiences and professional analysis of single payer systems. the mic is yours, sally. >> thank you, chairman sanders and ranking member burr for inviting me to testify today. i'm sally pipes, president of the pacific research institute, a think tank based in san francisco that's dedicated to advancing opportunity for all through market-based solutions. i'm going to focus my remarks today on canada's single payer medicare for all system, a system with which i am extremely familiar as i am, as senator burr said, a native of canada. many health care reform advocates point to canada as a

shining example of advantages of a state-run, single payer system. canada is, in fact, one of only a handful of countries with a bona fide single payer system. government officials set the budget for what can be spent on health care every year. provinces administer their own insurance programs with additional funding from the federal government. private insurance is outlawed in many provinces. this is the sort of system that many are calling for here in the united states. they want to abolish private insurance and leave government as the sole source of health coverage, but the canadian system is one that would not be suitable for america. officials severely restrict patient access to care, and those restrictions saddle patients and their families with massive monetary and nonmonetary costs. or to frame this in terms of the title of this hearing, if you're

looking for lessons from health care systems abroad, canada shows us exactly what not to do. let's start with wait times. in order to keep a lid on health care costs, canadian officials have to ration care. according to canada's frazier institute, the average canadian has to wait over 18 weeks from seeing a primary care doctor to getting treatment by a specialist. and wait times are only growing. the 18-week delay today plaguing canadians is 91% higher than it was in 1993. at any given time, 17% of the canadian population, 5 million out of 35 million, are on a waiting list to get primary care. there's also a severe shortage of essential medical equipment. for instance, canada ranks 14th out of 23 oecd countries in mri

machines per million people with an average wait time at just over 8 weeks. these lengthy waits have profound consequences, not just for patients who are suffering, but the rest of society. when people aren't treated in a timely fashion, their conditions worsen and their health deteriorates. their productivity drops and they may have to stop work entirely, and they often end up requiring significantly more expensive and extensive treatments which are costly for the entire system. one estimate from the center for spatial economics found that wait times for just four key procedures, mri scans and surgeries for joint replacement, cataracts and coronary artery bypass graphs cost $181 $14.8 bn every year. once canadian patients receive

medical treatment, it is far from free. about 68 cents out of every dollar in government revenue goes to health care spending, but the typical canadian family spends about $11,300 in taxes every year just to finance the public system. technically every canadian has access to needed health care services. in 2005 madam chief justice beverly mclaughlin of the canadian supreme court ruled in favor of overturning the ban on private health care coverage. she wrote access to a waiting list is not access to health care. those canadians who can afford to opt out often come to the united states, about 42,000 canadians come every year to this country to pay out of pocket. danny williams, former premiere of newfoundland in 2010 flew to florida for heart valve surgery. when questioned by the press about that decision, he said it's my heart, it's my health, it's my choice.

i did not sign away the right to get the best possible health care for myself when i entered politics. brian day, an orthopedic surgeon who runs an illegal clinic in vancouver said a person can get a heart -- a hip replacement for their dog in less than a week. for a canadian, it's over two years. my own mother died from colon cancer because she had to wait, she could not get a colonoscopy. when she had lost 35 pounds four months later, she entered the hospital, had a colon os ka pi and died from colon cancer. in the va there is a lot of dissatisfaction with waiting lists. i think this is no way for us to run a single payer system. we need a new way to inject genuine market competition and choice into our health care system.

we need to scale back top down controls by government. thank you and i look forward to your questions. >> thank you very much, ms. pipes. turning out we have another canadian with us as well. our fourth witness is dr. danielle martin, a primary care family physician actively involved in practice at women's college hospital in toronto, canada, where she also holds an administrative leadership position as vice president of medical affairs and health systems solutions. dr. martin, thank you very much for being with us. >> chairman sanders, ranking member burr, distinguished committee members, thank you for inviting me to address you today. my name is danielle martin. as a practicing physician and vice president medical affairs and health systems solutions at women's college hospital i have daily first-hand experience with the canadian single payer system. in addition to my clinical training, i also hold a mosters in public policy from the university of toronto where i am currently an assistant professor. i do not presume to claim today that the canadian system is

perfect or that we do not face significant challenges. the evidence is clear, the evidence is clear that those challenges do not stem from the single payer nature of our system. quite the contrary, working within a public insurance structure helps us to better tackle many of the challenges shared by all developed nations in health care including rising costs, variations in quality, and inequities of access. i would like to highlight three major benefits of the canadian single payer model. the first is equity. poll after poll has demonstrated a strong consensus among canadians that access to health care should be based on need, not ability to pay. while, of course, we continue to struggle with inequity on other fronts, it is worth emphasizing that at substantially lower cost than in the u.s. all canadians have insurance that covers doctor and hospital care. we do not have an insured residence. we do not have different qualities of insurance depending on a person's employment.

we do not have an industry working to try to carve out different niches of the risk pool. this is a very important accomplishment, and as we watch the debate unfold in the u.s. as to how to address the challenges you face, we are reminded daily of its significance. one of the big challenges in a multipayer system is the question of how to achieve policy reform with so many players in the game. in a single payer framework, if government and providers identify a significant challenge in the health care system, they can work together at the bargaining table to align financial incentives to advance their shared policy objectives. an example upon which i elaborate in my written submission is the way in which ontario's government and physicians have worked together to increase the number of medical students choosing primary care as a career and choosing to work in rural underserviced communities. finally, one cannot speak about single payer without addressing the issue of administrative costs. it has been estimated that if u.s.ed a minute stray at this costs were curtailed to the level of those in my home

province of ontario, the total estimated savings here would be $27.6 billion per year. indeed, overall, as you have heard, we spend a much lower proportion of our gdp on health care in canada. 11.2% compared to 17.9%. importantly, this is not at the expense of quality. canadians enjoy the same or better health outcomes as americans both at the level of life expectancy and infant mortality as you have heard and when we look at outcomes for a range of acute and chronic illnesses. in fact, a recent scientific systematic review found that canada achieved health outcomes that are at least equal to those in the united states at 2/3 of the cost across a wide range of diagnoses. the issue of wait times is very widely covered i note in the american media. when it comes to urgent and emergent care, canadians are not waiting substantially longer than our peers in other countries, including the united

states. unfortunately, it is true that that has not been the case for elective medical care such as nonurgent diagnostic imaging and elective surgeries. a great deal of work under way to address this challenge and, indeed, waits have been decreasing over the last decade for a variety of elective medical procedures. it is important to note that moving away from a single payer model would likely exacerbate our wait time challenge rather than alleviating it by drawing critical health human resources out of the public system. this is borne out by international evidence from other jurisdictions such as australia. the canadian system is proof that public health care insurance need not be provided federally in order to achieve the benefits of the single payer model. in canada each province provides public health care insurance to its residents with minimum standards set at the federal level. furthermore, moving to single payer insurance does not necessarily mean moving to the direct provision of health care services by government or

socialized medicine. although our provincial health insurance plans in canada are financed publicly, almost all health care services are delivered by private entities. this includes our hospitals, which are mostly independent not for profit entities and also our providers, most notably physicians who are not employees of the state but rather independent contractors who happen to bill a public insurance plan for their services. i want to reiterate my thanks to the committee for giving me the opportunity present to you today. i look forward to your questions and engaging in dialogue. >> dr. martin, thank you very much. senator burr, do you want to introduce your other guest. >> i'd like to introduce dr. david hogberg who is the health care policy analyst at the national center for public policy research here in washington, d.c. dr. hogberg, thank you for joining us today. i look forward toe your testimony and thoughts as we examine the lessons learned from

other abroad countries in order to strengthen our own health care system here at home and the mic is yours. >> chairman sanders, ranking member burr, members of the committee, thank you for this opportunity to testify before you. my name is david hogberg and i am a health care policy analyst for the national center for public policy research. i think the most important lesson we can learn from other nations is that we should avoid putting more and more of your health care system under the control of politicians. most politicians want to get re-elected and that fact will have a substantial impact on health care policy. groups that have political clout that can influence a politician's re-election chances are more likely to get good treatment under government-run health care systems. groups that lack such clout are more likely to be neglected by politicians and sear inferior care. people who are very ill usually lack such political clout. first, the very sick are relatively few in number which means they amount to a limited number of voters, too limited to have much impact on elections.

second, they are too sick to engage in the type of political activities such as organizing, protesting, and so forth that can bring about change in health care policy. ultimately under a government system, those with the most medical need are those most likely to have difficulty getting the care they need. both denmark and france provide good examples of this. the health care system in denmark could be best described as single payer with the government financing over 85% of health care expenditures. health care in denmark is largely free at the point of consumption. this has consequences for how health care resources are alloca allocated. if patients pay nothing at the point of consumption, then patients will over use health care putting strain on government budgets. health care systems must be -- health care must be rationed in another manner and like most systems that are single payer, denmark rations by using wait times for treatment of serious conditions. for example, danes must wait a median of 45 days for a herniated disk, 57 days for a

knee replacement and 81 day for cataract treatment. under the national standard for cancer treatment in denmark, a patient should not wait more than 28 days between the time he sees a physician for diagnosis to the time of treatment. however, a 2010 study found that less than half of danish patients diagnosed with head or neck cancer were treated within that national standard. this can have serious consequences for patients. an analysis found that for every month treatment is delayed for head or neck cancer, the probability that the cancer will recur increases by about 3.7%. now, looking to the french system, health care -- the health care system in france is financed heavily through the government yet also has an extensive market of private insurance that covers co-payments and services the government does not cover. when a patient visits a physician in france he must pay the cost directly. he is then reimbursed by the government and the private insurer. the patient must cover any costs that is not reimbursed. the method of payment and the

extensive system of private finance is what allows france to avoid using wait times to ration care. however, the health care portion of france's budget has been running a deficit since 1988. as a result, the health care system in france has used other methods to ration care. one rationing method is limited investment in new medical technology. among industrialized nations france has one of the lowest number of cat scanners, pet scanners and mri machines. rationing pharmaceuticals is another method. in brief the french government often refuses to pay for drugs that are incremental improvements over existing drugs. such rationing has consequences. according to one study, only one-quarter to one-third of alzheimer's patients are receiving state of the art medication. rationing technology and medication or using waiting times falls hardest on people with serious illnesses. yet these methods persist because they are politically tolerable. in general, they do not cause

trouble for politicians since the people affected seldom are a significant political force. in summary, i think the chief benefit of an examination of other nation's health care system is to discover what policies we should avoid. that said it would be far more productive if we studied other markets instead of other nations. other markets f-- tax policy an regulation have not resulted in a three-tiered system of insurance and where consumers are not were hinted from buying goods and services out of state. as a result, these markets reduce the cost of goods and services while also improving quality. it is in these markets that we should look for guidance in reforming the u.s. health care system. thank you very much. >> thank you very much, dr. hogberg. our last but not least witness

is jakob kjellberg. dr. kjellberg is a professor and program director for health at the danish institute for local and regional government research. mr. kjellberg, thank you very much for being with us. >> thank you, chairman sanders and ranking member burr. members of the committee, i would like to thank you for the opportunity to participate in this hearing. i have been asked to give an overview of the danish health care system. the danish health care system provides comprehensive and universal coverage for all patients. no patient may be denied services on the basis of income, plout status, age, or health status. most patients in denmark are listed with a gp of their choice. all visits to the gp are free and the use of all specialized health services is free with a referral from the gp. patient could also choose group

two health insurance and access specialist treatment directly. but group two patients will face a co-payment for visits to gp and specialists practicing outside the hospitals. only about 1% of the population have chosen group two health insurance and people are generally quite satisfied with the gp system. if referred to a hospital treatment, patient may choose among all public hospitals offering the relevant treatment. all hospital treatment is free including all hospital -- patients may choose among private hospitals in denmark or hospitals abroad if the waiting time exceeds one or two months depending on the severity of the condition. many patients prefer to stay with a local hospital. therefore median wait can't be longer than the waiting time guarantee but it's a choice. if cancer is suspected, we offer two-week waiting time guarantee for examination and treatment. it had previously been a

problem, as you mentioned. to finance a health care system, the state collects the necessary revenue through general taxation. the state funds the regions on basis of objective criteria. it ensures equal opportunities for the regions across the country. the simplicity of the financing structure also keeps the administrative costs low. only 4.3% of the total health spending is used for administration. the public sector finances about 85% of the total health expenditure. the 15% private expenditure mainly covers out of pocket primary for pharmaceuticals, dentistry, and optical services like glasses and contact lenses. half of the population has supplementary health insurance to cover the out of pocket payments. also other supplementary health insurances where you can access health care quicker than the one

month or two month waiting guarantee or free access to therapists but the supplemental health insurance covers less than 1% of the total health care budget but it's a choice. service shows 85% of the population perceive their own health status as excellent or very good. life expectancy is on average 80.1 years. historic high smoking rates is blamed for the relatively low life expectancy. the european consumer powerhouse ranks all the european health care systems and here the danish health care system ranked second in europe. denmark scores especially high on patients rights and services provided and information. denmark scores low in prevention and health outcome disciplines. health expenditure in denmark is

slightly above oecd average when you look at statistics. however denmark has a practice of reporting certain expenses for social care as health exp d expenditur expenditures. if these costs were reported in line with the practice used in most other countries, the health expenditure is significantly below oecd ample. to sum up the danish health care system is an example of a transparent health care system that provides comprehensive and universal coverage and high level of patient satisfaction. the simplicity of the system keeps a low cost and makes it easier for the patient to access health care. i would be happy to answer any questions you might have. thank you for the attention. >> thank you very much, mr. kjellberg. now we'll begin with questions and comments, and let me begin. let me begin by asking all of our distinguished panelists a

very simple question. in the united states today, we are the only nation in the industrialized world that does not guarantee people health care as a right, and we still have, although numbers have gone down since the affordable care act but we still have many, many millions of people with no health insurance at all, others have high co-payments or deductibles. let me ask all of the panelists a very simple question. should health care be a right of all people regardless of income? yes, no, maybe. >> miss cheng? should health care be a right of all people? >> i think it should because it is a sign, an expression of a civil society. >> i will ask for brief answers. dr. yeh? >> access to health care

regardless of their job, their income is an inalienable right in our constitution. >> okay. miss pipes. >> no. we're entitled to life, liberty, and the pursuit of happiness. how do you determine which right is worth more? do we have a right to housing, a right to food, a right to health care? how do you measure which is the appropriate level. so no. >> okay. thank you. dr. martin? >> yes, access to health care is a human right and i know that the vast majority of canadians in poll after poll feel the same way. >> mr. kjellberg. >> yes, i believe that access to health care should be a right. >> dr. hogberg. >> yes, i think it should be a right in the classical liberal notion of rights that government should not interfere, congress should make no law and so forth. so, yes, everyone should have the right to health care in that sense. >> dr. rodwin. >> we have a right for health

care in the united states for emergency care. i believe that should be extended to primary care as well. >> okay. let me stay on that point, maybe get dr. hogberg. you indicated that you thought health care should be a right, but government should not be involved in that process. does that suggest that you would do away with the government-run medicare program? >> it's a moot point. >> no, it's not. >> it's a very moot point because seniors vote at very, very high rates and we're not getting rid of medicare. >> but i'm asking you as an academic. you're right, it's a popular program, but if you say government should not be involved in health care and medicare is a government health care program, in your judgment in the best of all your possible worlds, should the government -- should we vote to get rid of medicare. some people think we should. what do you think zm. >> i think it's a moot point.

it's here to stay. >> well, i think you didn't answer my question. mooiz pipes, i would like to ask you that question. >> i believe that we are not going to get rid of medicare. medicare is a program for our seniors. i think we do have severe problems. the medicare trustees have said that medicare will be bankrupt by 2024 at a cost of over -- >> just want to ask you a simple question. >> it should be -- >> medicare is a government-run program. >> right. >> as dr. hogberg indicated, i think it's a popular program. we could disagree. my question is should, in your judgment, we abolish this government-run medicare program? >> not entirely. medicare should be there for those people who truly need it. the problem is -- >> truly need it, but not as it is right now. >> because a lot of people are wealthy and can afford care -- >> not a lot of people are wealthy. >> it causes pressure on the system. congressman ryan i think has some very good ideas -- >> he would transform medicare

into a voucher program. dr. rodwin, let me ask you a question. despite the fact that our health care outcomes are not particularly good in terms of infant mortality, in terms of life expectancy. the united states ends up spending almost twice as much money per person on health care as any other nation. why is that? we'll give senator burr additional time as well. dr. rodwin, why is that? put your mic on. >> we spend more, senator sanders, for several reasons. first, our prices are higher than all other wealthy oecd nations. >> if a woman has a birth in this country compared to france, how much more does it cost or give me some examples. >> it can cost different prices here depending on who insures you. it can range from $5,000 to $27,000. the figures are in the excellent

paper by mei cheng from oe cd for all to see. price is one very, very important issue. prices of drugs -- >> how do drug prices compare in the united states compared to other prices? >> in the aggregate, they are much higher. >> why is that? >> why is that? >> yeah. >> because we have no price control. because -- >> so if i need a cancer drug in the united states, why is it much more expensive here than it is in canada or in france? >> in canada and in france, you have regulated prices for these drugs and people have access to them. in france -- >> but that interfere was the free market system. is that a good idea? >> of course it's a good idea. the free market system doesn't exist anywhere in health care. i challenge anyone to give me one example of a free market system that is operational and works. it's a fine idea in theory, but i challenge anyone to give me one, one concrete example. all the evidence suggests that it does not work. >> okay. senator burr. >> dr. martin, in your testimony you note that canadian doctors

exiting the public system for the private sector has had the effect of increasing waiting lists for patients seeking public health care. why are doctors exiting the public system in canada? >> thank you for your question, senator. if i didn't express myself in a way to make myself understood i apologi apologize. there are no doctors exiting the public system in canada. in fact, we see a net influx of physicians from the united states into the canadian system over the last number of years. what i did say was that the solution to the wait time challenge that we have in canada, which we do have a difficult time with waits for elective medical procedures, does not lie in moving away from our single payer system towards a multipayer system. and that's borne out by the experience of australia. so australia used to have a single tier system and in the 1990s moved to a multiple payer system where private insurance was permitted, and a very

well-known study was tracked, what took place in terms of wait times in australia as the multipayer system was put in place. what they found was in those areas of australia where private insurance was being taken up and utilized, waits in the public system became longer. >> what do you say to an elected official who goes to florida and not the canadian system to have a heart valve replaced. >> it's interesting because in fact the people who are the pioneers of that particular surgery, which premiere williams had and had the best outcomes in the world for that surgery are in toronto at the cardian center just down the work from where i work. what i say is sometimes people have a perception, and i believe that actually this is fuelled in part by media discourse, that going to where something -- where you pay more for something, that that necessarily makes it better, but it's not actually borne out by the evidence on outcomes. >> one would believe the

american people prefer their system bcause they know consciously they pay more. no, i think it's because they judge quality and they judge innovation. miss pipes, in your testimony you noted that more than 42,000 canadians come to the united states each year for health care. why is that? >> because they find that they're on a waiting willist in canada for too long a period and they feel their health is at stake. so a lot of people in canada come to the u.s. for mris, ct scans. there are many examples in the media of people like brian who came to the u.s. because he was told by his primary care doctor that he might have a brain tumor but the wait for an mri was very long. he spent the $1,000, came to the u.s., paid out of pocket. you will see advertisements in canadian newspapers for mris -- >> it's a pretty fertile ground to market in. >> right. >> dr. martin, in your testimony you state that the focus should be on reducing waiting times in a way that's equitable for all. what length of time do you

consider to be equitable when waiting for care? >> well, in fact, the wait time alliance in canada, sir, has established benchmarks across a variety of different diagnoses for what's a reasonable period to wait. and what we've found is that actually working within the single payer system we can reorganize things. i waited more than 30 minutes at the security line to get into this building today, and when i arrived in the lobby i noticed across the hall that there was a second entry point with no line upwhatsoever. sometimes it's not actually about the amount of resources that you have, but rather about how you organize people in order to use your queues most effectively. that's what we're working to do because we believe when you try to address wait times you should do it in a way that benefits everyone not just people who can afford to pay. >> on average how many canadian patients on a waiting list die each year? >> there are 45,000 in america who die waiting because they don't have insurance at all. >> well, let me go back to dr.

rodwin's statement. the american system has access to health care for everybody. it's called the emergency room. now, we don't admit that clearly because we're lobbying for a particular angle but every american can access health care. they can access primary care, and dr. rodwin i would agree with you we ought to make sure there's a medical home for practically everybody we can place. we don't do it in medicaid. we should, states should adopt it because primary care is an absolute necessity to wellness. but, mr. kjellberg, how many danish citizens have supplemental health insurance policies and why has that number been increasing in recent years? >> about half the population got co-payment insurance, and that has increased dramatically over the last year because the family were included, the children were included and that brought up the numbers quite significantly but the number for policy holders

hasn't really changed much. >> half the population has supplemental insurance. >> co-payment insurance. and then many people in the labor market also as part of a benefit package are offered health insurance so you can have faster access to elective care. >> so they can actually buy their way to faster access. >> you can buy that at private hospitals, you can buy any hospital services. >> so they have options, they have choice. >> yes. >> dr. rodwin, in your testimony you note that parliament sets health care expenditure targets each year. if a hospital or physician exceeds their target expenditure by billing for higher than projected volume of services, prices are negotiated downward for the following year. beyond volume or utilization of services, are there quality metrics the french use to determine reimbursement for providers to incentivize quality care for patients, for example measuring health outcomes to ensure patients are receiving

quality care. >> this is a science that's not well developed neither in our country nor in france, but they are working on this very question which is very timely right now, that is the negotiations focus certainly on volume but now there's a program which will remunerate physicians -- that's actually already in place if they follow certain standards of preventative care. >> but they're penalized if they bill at a higher rate one year, they're penalized in the next year by a reduction -- >> no, every year, sir, there's a negotiation to set these rates, and if the volume goes up, then the following year the price -- that's the practice, it's the volume health performance standard. >> thank you, doctor. thank you, mr. chairman. >> senator enzi. >> thank you, mr. chairman, and i want to thank the distinguished panel for all of the information that they've provided. it's a little different than a session that senator kennedy and i held several years ago, but

first of all, i want to thank miss pipes for being here. she wrote a book in 2010 that predicted what was going to happen with our health care system as it is now, and then more recently she's written something called "the cure for obamacare," and it's not even copywrited, but it's an outstanding book on what we could do to repair the damage that's been done on our present system, and i thank you for your effort on that and hope i can get a few more people to read them. i mentioned senator kennedy and i. when i was the chairman and he was the ranking member we went to a system called a round table and this is very similar except that at a round table we had, again, eight to ten people and they were all practitioners of some sort in the health care area rather than people who were studying the health care system, and he and i would come up with the questions for the panel as

well as total agreement on who should serve on it as opposed to the way we do panels now which is the chairman gets to pick everybody, you know, 4/5 of every panel, and the ranking member gets to pick another one or two, and then we all come and beat up on the witnesses. so at a round table, the senators really didn't speak much, but one of the questions we asked is, will universal single pay health care work in america? and the first person was an engineer for hospitals, and he wasn't sure. but the other practitioners all said america won't settle for universal single pay health care. at the end of that hearing, that round table, senator kennedy came to me, and he said, i guess we better take a look at some of the things you have suggested like small business health plans and being able to sell across state lines and things like that. and i think one of the things

that this panel points out, most of you are talking about countries whose population is and size in some cases is relative to our states, each state, and in the united states each state has health care plans, and they do it differently. and as the chairman mentioned, some of them have good ideas and those spread to others, but what will work in canada with a smaller population or denmark with a smaller population or france with a smaller population might not work in the united states, especially under the form of government that we've got. i'm pretty sure that the affordable health care initiative was designed to fail. that was predicted by senator graham about 15 years ago, and he thought that they would come up with a system that would

fail, and then we could go to universal single pay health care. i think that would have worked except for one thing, the debacle with the design of the exchange reminded people in america what happens when our federal government tries to handle everything for this vast united states with one plan, and, of course, i'm on the homeland security committee, too, and we're trying to work with another one of those government agencies that's called the post office, and that's another example that people use of what might happen if we went to universal single pay health care. i have been to some countries that have a lot of population like india and they're very proud of their system. i asked how they took care of that vast of a population, and they said, well, our doctors see 200 patients a day. i don't think our doctors see 200 patients a day and wouldn't take that quick of action.

the question of medicare that was asked earlier, if people were given another option, i think they'd go with another option. too many people in america right now that are seniors at least know somebody that tried to see a doctor and the doctor said, i'm not seeing any medicare patients. so medicare is not the best example of how to get health care in america, and i have almost used up my time without asking a question. i'm the accountant on the panel. in fact, i'm one of three accountants in the united states senate, and so the questions that i have are really kind of technical and get down to some of the costs, and so i will submit those in writing and would appreciate it if you'd answer the questions. thank you. thank you, mr. chairman. >> thank you very much, senator enzi. senator roberts. >> well, i too, want to thank the panel and thank you, mr. chairman, for holding this hearing. stea seems to me that the entire

question here has been summed up by the chairman, does the government if we have a government guarantee of health care as a right, he questions, senator enzi and senator burr have pointed out, is it a right to a waiting list at play. i think that is the statement by ms. pipes. and ms. pipes, my deep regrets for the loss of your mother. how long did she have to wait? >> she went to the primary care doctor, general practitioner we call them in june, and she was admitted to vancouver general hospital, which is one of the largest hospitals in canada in late november. >> late november. and then you lost her after two weeks. did you say that you could get a hip replacement for a dog in a week, but you could not get a hip replacement for an individual for "x" number of -- >> yes, two years. the wait for orthopedics is one

of the longest waits in canada. my friend dr. brian day who is an orthopedic surgeon in vancouver made that statement to "the new york times." dr. day who runs the camby clinic is being sued by the british columbia government for operating a clinic which is considered illegal in british columbia. the interesting thing is he told me the other day, the government keeps postponing the case and i think it's because his practice is so busy with people getting hip replacements, knee replacements, they're afraid of the backlash that will happen because of that. >> i have a legislation that i called the four rationers repeal bill. i'm not going to get into the four rationing boards, ipcr, et cetera, et cetera, to get into some of my concerns with the government controls and where we are with the affordable health care act. and i'm trying to get heard of that curve. by the way, i don't know, dr. martin, does prime minister harper, does he change the rules

and delay implementation of the system every week, like we see going on with the affordable health care act? >> i'm not sure that you want me to answer that question, sir, i don't completely understand what you're saying -- >> i'm saying that the prime minister of canada, i don't think, changes the national health care act that we have in place, which i think is basically a first step towards single payer, and i think that was the intent of it. the president of the united states has changed the health care about every friday, we have what we call a regulation dump, okay? a consortium of unions indicated that they would like a big change in the affordable health care act. he's going to have a carve-out for them. and on the other side of the fence, 27 members of the finance committee and some on this committee wrote to marilyn tavenner the head of the centers of medicare and medicaid services to say whoa, don't change the medicare "d" program

that we have in this country. a very popular program under budget used by a great number of our senior citizens. and if we hadn't written a letter and if there hadn't been a real backlash from the people to save medicare part d, it wouldn't have happened. so we are sort of writing this thing as we go along. the president doesn't come to us and ask us to help him do that with each individual change. i'm just wondering with the problems you have up in canada, who makes the change? if, in fact, there needs to be a change? >> well, the answer to the question comes in two parts. first is acknowledgment of what senator enzi was saying earlier on, which is that like the united states, canada is a huge country. and our health insurance is actually not provided at the national or federal level. pr provincial level, or the equivalent of your states. so the notion that something can begin in one subnational jurisdiction and then spread is, in fact, exactly how we came to have 13 separate single-payer

systems, in the 13 provinces and territories of canada. so the first part of the answer to your question is no, we don't see that kind of -- those kinds of changes being made to health care legislation at the national level. but the second part of the answer to your question is that it is widely known in canada that the public commitment to our single payer medicare system is so strong that for a prime minister of any political stripe to try to alter that and undermine it any way would be political suicide. >> i got your message. dr. hogberg, you mentioned that we ought to keep the politicians out. and we just had two changes, medicare part "d," and then also a carve-out for the unions. is that an example of what we're talking about? and 33 other changes by the way and that's the last count that i've -- that i have. >> well, very good examples of groups that have political clout

can keep, you know, changes from happening that they don't want to see. unions and seniors certainly have plenty of clout up here on capitol hill. if i -- would you mind if i were to take a second to talk about some of the outcome measures here? >> well i am already over time 23 seconds. i'll ask the permission of the chairman if that would be possible. all right, thank you, sir. you've got 30 seconds. >> first of all, with regard to life expectancy and infant mortality, using those as measures to tell you something about a health care system is a bit like using batting average and onbase percentage to tell you something about football. life expectancy and infant mortality, there are so many factors that go in to those outcomes that are not related to the health care system. that the health care system has no control over, that they are really not good measures for telling you the quality of a health care system. one other problem is that many of these measures are not measured the same from country to country.

infant mortality -- >> thank you for that. the chairman has already -- hit the golf. my main question is access to care. and denial of that care. and what other, what other alternative a person would have with a single-payer system. >> senator, we're going to have another round of questions. this is a great panel. and these are good questions. but let me pick up on a point that's my turn now. pick up on a point that dr. martin raised, because i wanted to ask the same question. i live one hour away from the canadian border. canadians watch american television. canadians are very familiar with our political system. probably know more about politics in america than most americans know. is your prime minister a socialist? >> no, sir. our prime minister is quite conservative. >> conservative? >> yes, indeed. >> so obviously as a conservative he wants to implement the american health care system that the canadians are very aware of. i gather that was probably the first thing he did when he took

power, is that right? >> not exactly. >> why not? >> support for single-payer medicare in canada goes across all political stripes. quite famously we had the leader of the most right wing party in the canadian federal debate on television hold up a sign in the middle of the debate on which he'd written in marker, no two-tier. as a means of trying to reassure the canadian public that if elected he would not dismantle the system. >> in other words you have a nation bordering on the united states, two nations that are probably as close together in so many respects as any two nations in the world, a conservative prime minister, and yet there is no effort to move to an american health care system. i would say to my colleagues, there is not a better example of maybe how people feel about two systems. they know the american system. they have a conservative prime minister. they can move in our direction, but for whatever reason and i think sensible reasons, they

understand that a system that guarantees health care to all of their people in a cost effective way is the way that they want to stay. ms. pipes, let me ask you that question. why do the canadians not come to the american health care system? >> well, as i mentioned in my testimony about 42,000 canadians come to the u.s. and pay out of pocket -- >> that wasn't my question. >> no, i wanted to make that point first. second the canadian government and the provinces who administer the canadian health care system, this started in 1974. a lot of people in canada have no idea of an alternative system. >> oh, my goodness, they live an hour away from me in burlington, vermont, they watch american television, they read american newspapers, they have no idea of what goes on in the united states of america? that is a little bit hard for me to believe. >> i would say canadian people are very, very nice people. they're not impatient like americans. my mother said to me, i hope you're not becoming an impatient american. i am an impatient american. americans do not want to wait. canadians are very nice.

the doctor says -- >> and then the second -- >> i have a limited time. i think the answer is pretty clear. the canadians have seen the american system, they'd prefer their own. i want to say a word about access. because -- and waiting lists. and i know robert's raised that issue and senator byrd did. i want to focus on that picture over there. i know it's hard to believe and i mean this quite seriously. this is the united states of america. this is not a third world developing country. this is a town called wise, virginia. and i don't mean to pick on virginia because i think the same story can be told all over america. when we talk about access, what we're looking at here is that a number of times a year, people -- working-class people -- who have no health insurance at all are given free health care, episodic care, volunteer doctors very kindly come, and in a day thousands of people line up, because this is the health care they get. this takes place in a field in

wise, virginia. i think it a stadium in los angeles where something similar takes place. now, if this is the kind of health care that we are proud of in the united states of america, well, some of us have some strong disagreements about that. dr. rodwin, i want to get back to another point which to me is very important. it is, and i'd like dr. martin to comment on this as well and maybe dr. yeh and miss cheng. to the get good health care, you need medicine very often. if i go into a french hospital, i leave the hospital and i'm sick, how much do my -- how much does my medicine cost? >> under french national health insurance, there is very high levels of pharmaceutical coverage. >> meaning what? my medicine is free or virtually free? >> virtually free, 90%, 80%, 70% -- >> those prescription drugs that

are cut are cut because they're ineffective. >> ms. martin? >> interestingly, this is an area where we made a mistake in the design of our single-payer program in canada at the time that medicare -- canadian medicare was designed in the 1950s and '60s, medication was not a really big part of the way that we treated disease. and medicines were left out of coverage. so the single-payer program in canada does not include medications. and as a rut, one in ten canadians today fails to fill a prescription, or take their medicine as prescribed because of concerns about cost. >> thank you. mr. kjellberg, what about prescription drugs in denmark? >> all hospital use and hospitals are free of charge. and if prescription drugs are needed, you have a maximum copayment a year about $600. >> dr. yeh, in taiwan, how much do prescription drugs cost? >> it is covered by the nhi. but a patient has to pay some

copayment up to a ceiling of about $10 u.s. dollars. >> up to 10 u.s. dollars? >> up to ten. and each year the ceiling including hospitalization, the ceiling would be $1,000 u.s. dollars. >> and ms. cheng, what is your view on the prescription drugs? >> prescription drug use in the united states in fact is low compared to total health spending. relatively speaking in europe as well as in taiwan, the percent of monies spent on drugs in terms of the total health spending is a much higher percentage. example, in the french system it's roughly 25%. in taiwan, 25% of total health spending is on drugs. so they have much greater access to drugs. that's number one. number two, the reason why the drug price -- >> i apologize, because my time has gone over. senator murphy has joined us, and senator murphy you have some questions you wanted to ask?

>> yes, thank you, mr. chairman, thank you to this hearing. thank you to all of the witnesses. i'm sorry i had to step out for just a few moments. i guess i just had one broad question for the imagine because i think it's come up in some of the testimony. especially i think from ms. pipes and dr. martin. i am fascinated by this intersection between convenience and quality. and the extent to which metrics like wait times often don't automatically translate into differences in outcomes, often they do. i mean there are some services in which if you don't get it right away it's going to have a pretty severe consequence on your health, and on the amount of money you're going to spend later on. there are parts of this country for instance, that have enormous convenience that you can't drive more than a couple miles outside your door without finding an mri machine, or a dialysis center, and you know, there's health care all around you. and yet that doesn't seem to be

adding to quality. that seems to be adding to convenience. similarly, i hear all of the stories from canada that mrs. pipes talked about in terms of wait times and yet when we sort of look at all the underlying data it tells us that in the end, on a lot of the diseases, where you have wait times that might cause you to question the system, the outcomes in canada are fundamentally better than they are in the united states from heart disease to cancer. and that is not to say that we shouldn't sort of look at issues of convenience, and issues of wait times, and your proximity either spatially or temporarily to services. but i wanted to kind of -- i mean specifically kind of asking dr. martin and ms. pipes to talk about this but maybe asking others on the panel who have thoughts about this with your experiences, to talk about how in other countries, where there may be less easy access to

health services, not as much health care as we have in the united states. we have tons of it. as to whether that actually has a true relation all the time to the outcomes that we get. dr. martin, happy to have you start. >> thank you. it's a really thoughtful question. and i guess i might reframe it slightly by saying that what you refer to as convenience, i would refer to as patient experience. so when we talk about quality in health care the so-called triple aim coined by dawn beurrewick here, the quality having three dimensions. one is population health outcomes in which single-payer countries like canada fare quite well. another aspect of 9 triple aim is cost per capita and the third is patient experience. of course patient experience is important. i said that i was not here to be an apologist for every single thing of the canadian health system. we're working very hard on reducing wait times for elective surgeries because we believe that patient experience matters

but you're right, that our outcomes are very good. i think it is critically important for the committee to understand that single-payer does not equal wait times. we heard our colleague from taiwan tell us clearly that they have a single-payer system with virtually no wait times and 99.6% coverage of the entire population. so of course, we should consider all aspects of the triple aim when we talk about quality. but we should not -- we should avoid oversimplifying the message and equating a single payer model with wait times. that simply is not the case. >> ms. pipes. well madam justice marie dechamp who retired from the canadian supreme court in 2012 in that hearing in '05 said the idea of a single-payer health care system without waiting lists is an oxymoron. i just want to make that point that even -- and the canadian supreme court is not a conservative court by any stretch of the imagination. . >> but do you dispute the

characterization of the taiwan system? >> well, the united states, i think as senator burr said, we have 350 million people here. we have such a diverse, not a homogeneous society which is much more typical in other countries around the world. i did want to make a point about life expectancy, and you know the w.h.o., the world health organization, often says united states ranks 37th out of 190 countries. well, as professor steven wolf, who was the lead author in the institute of medicine study, which, you know, was really based on life expectancy and infant mortality rates, he said life expectancy and other noted health outcomes are determined by much more than health care. and here in america, when you look at our lifestyle choices, we have a huge obesity problem. we have homicides, and car accident deaths at a much higher per capita rate than any country in the world. so when you look at the numbers for five-year survival rates on cancer based on the work done by

lancet oncology united states ranks number one in the world on 13 of the 16 most popular cancers. so you have to be careful when you're doing statistics that you're comparing apples to apples. >> thank you very much. my name has expired mr. chairman. >> senator burr. >> thank you, mr. chairman. let me say before i ask a second round of questions there's been a lot of reference to medicare and single-payer system. let me just remind everybody, medicare for a working lifetime i pay in to a system to finance part. there is a government share. when i become a senior and i go and get part "b" coverage, which is the physician's side, i pay a premium for that. when i go to get drug coverage, i pay a premium for that. you can't look at medicare and say this is like the single-payer system in taiwan, where the government picks up the entire tab. health care is not free, and we all know that. it comes out of the general taxes, but there is a difference for seniors in america that they are personally invested into a

system. and they even have choices. they can choose a medicare advantage, which is a private sector coverage. at least they could before obamacare and now that's getting knocked out. and they can choose, as a senior, to buy medicap insurance so they -- they can buy their way out of skin in the game. the one thing that i heard is everybody except for possibly taiwan has some degree of copay. france does. canada doesn't. but they do as it relates to drugs, because they are on their own for drugs. what i want to talk about is drugs, because ms. cheng, dr. yeh, our friend from taiwan, said in his testimony that patients in taiwan can experience delays from new drugs and technologies from two to five years from adoption of the united states in that. and ms. cheng, you touched on the prescription drug prices in your testimony, almost all countries enjoy the benefits of america's medical research and

development, but developed countries don't pay their fair share for the immense expense involved in the development of innovative life-saving therapies these countries are free riders on the united states. by enacting price controls on drugs and devices. how would sharing more of the financial burden that comes with research development of life saving drugs and devices affect comparison between the united states and the countries we're discussing today? >> that's to you, ms. cheng. >> thank you for this question. first of all, the, yes. we -- united states does fund a whole lot of r&d in pharmaceutical and other device innovations. but in so doing, we are also helping to make the american health care system that much more expensive, in fact, so expensive that we're pricing people out of the health care altogether.

so united states, the united states is, you know, we are -- so, in terms of r&d in the single-payer systems, i think it is the governments of these systems can set aside specific r&d funds to help with r&d for innovations. >> and ms. cheng, in the u.s. system when we shifted from exclusively doing bypass surgery for heart blockage. >> right. >> and we went to catheterization, because the innovation allowed us or the technology allowed us to do catheterization, do you consider that to be a cost savings to the united states or the expense of a new innovation? >> well, if it is done on the right patients at the right time, yes, it is a cost saving innovation and application of that innovation. however, i think with the united states health care, there's a very serious issue, which has not been addressed, which is overuse of services.

we have here in my testimony, the -- >> but isn't that the risk of letting the american people choose health care and having a marketplace versus having government dictate what, where, when and how much? it's not a matter of letting people decide in the marketplace where to go or what to choose, what to have. >> weover prescribe grossly pharmaceuticals in the united states. why? because the american patient has the right to go in and ask their doctor, and because of our liability exposure the doctor feels compelled to write the script in the united states. i would tell you that's a lot of the health care -- a lot of the costs. >> may i just say in an institute of medicine book, in fact i brought it, it says that this overuse of

everything, services, devices, drugs, it causes waste in the american health system, and according to the american institute of medicine book about one-third of u.s. health care is waste. and $750 billion a year. and of that, unnecessary services accounts for $210 billion of the $750 billion. >> i would not disagree with the conclusion of that. i have one more question, mr. chairman, and it is to dr. hogberg. in contrast to what i talked about with ms. cheng, price controls overseas don't reward innovation. if the united states were to follow that what would happen to the treatments here in the united states as well as overseas? >> in the long run, you would see less access to new innovative drugs. it'd be that simple.

>> if in fact, we eliminated the innovation, in many cases that innovation, which takes somebody out of a hospital setting and puts them in an outpatient facility, they're treated, they no longer have the risk of infection, because of in-patient, they no longer have the days in the hospital, that's not only been beneficial to the cost in health care, it's actually beneficial to the quality of the outcome? >> well, sure. >> frank liktenberg's looked at this extensively and he's estimated that for about every dollar we put into pharmaceuticals you save well over $3 in hospital costs by avoiding hospitalizations. the price controls can have one of two impacts. if you have price control that's lower than the market price you'll see a shortage. if it's above the market price, you'll see a -- sorry, i'm losing my train of thought here. you'll see a surplus. and that's kind of, you know, what you're going to end up with a system of price controls. >> i thank you, and i thank the witnesses. i ask the chairman for unanimous

consent to allow us to smit questions to all of the witnesses for the purposes of the record. >> absolutely. this has been, let me thank all of you for being here. i want to apologize, because i would like to stay for another round of questioning, but we have votes taking place right now. so i think this has been a very thoughtful and vigorous discussion, and i appreciate all of you very much for being here. thank you very much. this hearing is adjourned. in kansas, incumbent senator pat roberts is facing independent challenger greg orman in a close race. we're covering that debate live from wichita, kansas, at 8:00 p.m. eastern on c-span. here are just a few of the comments we've recently received from our viewers. >> thought c-span was a worthy television channel to call in and leave a comment.

never do something like this. just got done watching benjamin netanyahu, the prime minister of the israeli state. thanks again, c-span, for displaying such important world events like that. >> just wondering why you're covering that valued voters thing constantly. it's been on like 90 times, and why is it continually on c-span? it's even on c-span 1, 2 or 3. >> i enjoy very much the intelligent discussions on c-span, and i love the fact that there's no commercials. >> c-span is my favorite station. >> and continue to let us know what you think about the programs you're watching. call us at 202-626-3400. e-mail us at comment comments @c-span.org. or send us a tweet at c-span #comments. like us on facebook. follow us on twitter. according to a government report, improper medicare payments totalled $50 billion in 2013.

up next, the house oversight committee investigates medicare fraud and abuse. this hearing from earlier this year is about two hours 20 minutes. congressman darrell issa of california chairs the committee. >> the hearing will come to order. without objection, the chair's authorized to declare a recess of the committee at any time. we'll take this a little bit out of order today. some of the democrat members will be here later today. we'll begin the opening statements and allow them to catch up. the subcommittee hearing on health care entitlement, called medicare mismanagement, oversight of the federal government effort to recapture misspent funds. i'd like to begin this hearing by stating the oversight committee mission statements. we secure two fundamental principles. first americans have the right to know that money washington

takes from them is well spent and second americans deserve an efficient effective government that works for them. our duty is to protect these rights. the solemn responsibility is to hold government accountable to the taxpayers. because taxpayers have a right to know what they get from their government. we will work tirelessly as citizen watchdogs to deliver the facts to the american people. and bring genuine reform to the federal bureaucracy. this is the mission of the oversight and government reform committee. medicare currently pays one-fifth of all health care services provided nationwide, making it the largest single purchaser of health care in the country. unfortunately, every year the medicare program wastes an enormous amount of money in overpayments, frauds and unnecessary tasks and procedures. according to the government accountability office, in 2013, $50 billion was lost to improper payments. an increase of $5 billion from 2012. medicare fee for service accounted for $36 billion of this total. gao has related medicare as a high risk since 1990. in part due to programs to the

program us isibility to this waste which make up a staggering 47% of total improper payment identified by the federal government last year. misspending and fraud represents a significant threat to the 50 million beneficiaries who depend on its services, and also the program's financing. at present the medicare trust fund has been in deficit since 2008. the medicare actuaries predict the fund will be fully depleted by 2026. the centers for medicare and medicaid services have the responsibility to maintain the program integrity of medicare, to combat fraud cms works in partnership with several outside organizations like the health care fraud prevention enforcement action team which operates medicare fraud strike forces to combat perpetrators who often steal identities and falsify billing documents. the agency recently implemented a risk based screening to identify fraudulent medicare providers and suppliers. in april of 2014, cms announced fingerprint based background checks will be conducted on high risk providers. temporary enrollment moratoriums are placed on

some new medicare providers and suppliers in areas that are high risk for fraud. cms has begun administering risk based private sectors technologies like predictive analytics to identify possible fraudulent claims for review. cms also relies on four types of contractors to combat improper payments. these contractors such as the recovery audit contractors, or racs, review claims to identify overpayments and then recover the misspent funds. gao and others found these contractors efforts sometimes overlap and the requirements are responding to audits are not uniform. this puts a greater burden on providers. the gao has recommended that improving consistency among contractors would improve efficiency of post payment reviews of medicare claims. once the improper payments are identified cms may take steps to reclaim identified overpayments. providers and beneficiaries are given an opportunity to appeal these determinations through a lengthy appeals process. this third level of appeal is administered by 66 administrative law judges at hhs's office of medicare hearings and appeals.

there's currently a massive back it log of over 460,000 pending appeals for alj hearings. due to this backlog, hhs stated it could currently take up to 28 months for a hearing before an alj during which providers have their money held by the government. not many businesses can survive having their money held for 28 months while they wait to decide if they're actually going to get reimbursed. committee invited chief of alj nancy griswald to testify today on these issues but she was unable to appear but bee will follow through on that. today we have three witnesses. kathleen king, drefkter of health care at the government accountability office. brian p. ritchie acting director inspector general for evaluation of inspection of hhs office of the inspector general. and dr. shantanu agrawal from cms to discuss how cms can improve medicare oversight and integri

integrity. i look forward to their testimony. the american people deserve a government that protects their tax dollars and uses them wisely. we must do more to strengthen the integrity of government programs overall. but particularly medicare given the enormous size and scope. clearly more needs to be done to improve the federal government efforts to recover $50 billion in overpayments and other improper payments. i hope today's hearing will provide the subcommittee with clarity about these areas. the process cannot drive up the cost of health care for seniors and reduce their options for care. i look forward to the conversation we'll have today. with that i recognize miss grisham for an opening statement. >> good morning. thank you chairman lankford for holding the hearing. i agree with the chairman that reducing waste and fraud and abuse in the medicare program is critically important, not only to protect taxpayer funds, but as you just heard, it's also incredibly important to protect the health of our

nation's seniors and disabled adult population. we've got more than 10,000 seniors aging into the medicare program each day this year. it is now more important than ever that we ensure the integrity of the medicare funds and keep the medicare promise alive for generations of future americans. i'm grateful to have mr. ritchie here on behalf of the department's office of inspector general to speak about the oig's efforts to do exactly that. the oig in conjunction with the department of justice prosecutes some of the worst instances of health care fraud. providers billing for nonexistent beneficiaries or services that were never provided, and providers who order unnecessary or in fact harmful procedures. the health care fraud and abuse program, a joint program under the direction of the attorney general, and the secretary of the hhs, is a model for interagency cooperation and coordination. in fiscal year 2013 that program

recovered a record $4.3 billion in health care fraud judgments and settlements. this is remarkable. i look forward to hearing from the assistant inspector general about how this was achieved and what can be done to strengthen the program going forward. i also think it's important to underscore what we've heard, that these bad actors represent a small fraction of all providers. the vast majority of providers are not fraudsters and are deeply dedicated to the care of their patients. and given the size and complexity, the theme, of the medicare programs, overpayments are going to occur. and cms must be vigilant in detecting and recouping them. but well-meaning providers are entitled to have their claims administered fairly, efficiently, and without undue delay so that they can focus on the core mission of providing care. i have some serious concerns that the current system of

post-payment audits by racs is resulting in a significant burden on some providers particularly smaller entities. smaller providers, such as durable medical equipment or dme providers have more difficulty complying with rac requests for medical documentation and may not have the resources to appeal overpayment determinations. the considerable backlog in the office of medicare hearings and appeals only makes these matters worse as they providers and suppliers do not have the luxury of waiting months for their appeals to be adjudicated. i also have concerns about how rac audits may affect beneficiaries. as a representative of new mexico's first district the issue of access to care is always paramount in my mind. if a provider or a supplier is forced to cut back services or close its doors as a result of a rac audit, i think this is a lose-lose situation for everyone. particularly as we're working to build access to care,

particularly preventive care for these populations. the cms recently announced that it will implement several changes to the rac program, which will be effective with the next rac program contract awards. i look forward to hearing from dr. agrawal about the efforts to improve the oversight of the rac in particular. i hope that you will also address some of the issues we both raised, the chairman and i, regarding the burden on medicare providers, and with a particular focus on the smaller providers, or providers in rural and frontier states like mine. and the impact that that has directly on the beneficiaries, who are working to access those services. i also look forward to hearing from all the witnesses about what cms is doing to move away from the pay and chase model, to a more proactive model that identifies improper payments up front. such a model would spare both providers and taxpayers from expending resources that could be much better spent on

providing care. which in the long run shores up medicare for future generations. with that, mr. chairman, i yield back. >> mr. meadows for an opening statement. >> thank you, mr. chairman, for holding this hearing. and thank you for continuing to highlight that we need to make sure that the american taxpayers' money is well protected. this particular hearing is of importance to me, primarily because i have some constituents that have been caught up in this alj backlog. and as the ranking member just testified, it can be extremely difficult on small businesses. the request for a particular company in my district threatens to put them out of business. and yet all they want is a fair hearing.

i shared this with the chairman, and shared some of my concerns about where we are. and in his opening statements he talked about the fact that we have a 28-month backlog. well, actually, it's worse than that. if you look at the real number, that today if we hired, according to the budget request for cms, if we hired all the adjudicators, it would take close to ten years to work through this backlog. a million appeals. and if you look at the rate, and actually, the adjudicators have been improving their efficiencies. they've been getting better year after year. and yet what we do is we have a policy of saying you're guilty until proven innocent. and we're all against waste, fraud and abuse. but what we must make sure of is that we do it under the rule of law, and that we have laws that -- the guidelines that are there.

there is a law right now that says that if we ask -- if a constituent asks for a hearing, the law says that they should have some kind of adjudication, and a decision within 90 days. and yet, even according to the website there for cms, we're not even opening the mail for weeks and months, and months and months. so it's not even being put in terms of on the docket where it can be assigned to a judge, for many, many months. we've got to do better than this. and make sure that in this, we don't take those that are innocent and put them out of business. now, i say that, because if our overturn rate was not that great, we wouldn't have a problem. but according to documents, many of these appeals are being overturned by the adjudicators. over 50% of them are being

overturned. so you have over 50% of the people who are innocent, who are having to wait years for a decision. and in that, we must do better, and we must find a better way to address this. so i look forward to hearing your testimony on all these things. and i thank you, mr. chairman. >> thank the gentleman for all his work and research that has gone into this hearing. he's been a leader in this. i'd be glad to be able to receive the testimony now of our three witnesses. pursuant to committee rules, all witnesses are sworn in before they testify. so if you would please rise and raise your right hand. do you solemnly swear or affirm the testimony you're about to give is the truth, the whole truth and nothing but the truth, so help you god? let the record reflect all three witnesses answered in the affirmative. you may be seated.

miss kathleen king is the director for health care at the united states government accountability office. thank you for being here. dr. agrawal is the deputy administrator for program integ resulty at cms. mr. brian ritchie is the acting deputy inspector general at the office of inspector general at hhs. thank you all for being here. and thanks for your testimony today. we've all received your written testimony. that will be a part of the permanent record. we would now be glad to receive your oral testimony as well. in order to allow time for discussion, i ask you to limit your oral testimony to five minutes. you'll see the clock in front of you. miss king, you are first. >> mr. chairman, and members of the subcommittee, thank you for inviting me to talk about our work regarding medicare improper payments. cms has made progress in implementing our recommendations to reduce improper payments. but there are additional actions they should take. i want to focus my remarks today on three areas. provider enrollment, prepayment claims review, and post-payment

claims review. with respect to provider enrollment, cms has implemented provisions of the patient protection and affordable care act to strengthen the enrollment process so that potentially fraudulent providers are prevented from enrolling in medicare, and higher risk providers undergo more scrutiny before being permitted to enroll. cms has recently imposed moratoria on the enrollment of certain types of providers, in fraud hot spots, and has contracted for fingerprint-based background checks for high-risk providers. however, cms has not completed certain actions authorized, which would also be helpful in fighting fraud. it has not yet published regulations to require additional disclosures of information regarding actions previously taken against providers, such as payment suspensions, and it has not

published regulations establishing the core element of compliance programs, or requirements for surety bonds for certain types of at-risk providers. with respect to review of claims for payment, medicare uses prepayment review to deny payment for claims that should not be paid. and post-payment review to recover improperly paid claims. prepayment reviews are typically automated edits in claims processing systems that can prevent payment of improper claims. for example, some prepayment edits check to see whether the claim is filled out properly, and that the provider is enrolled in med other prepayment edits check to care. see whether the service is covered by medicare. we found some weaknesses in the use of prepayment edits, and made a number of recommendations to cms.

to promote implementations effective of edits regarding national policies, and to encourage more widespread use of local policies by contractors. cms agreed with our recommendations, and has taken steps to implement most of them. post-payment claims reviews may be automated, like prepayment reviews are complex. which means that trained staff review medical documentation to determine whether the claim was proper. cms uses four types of contractors to perform most post-payment reviews. we recently completed work that examined cms's requirements for these contractors, and found differences that can impede efficiency and effectiveness by increasing administrative burden on providers. for example the minimum number of days contractors must give providers to respond to a request for documentation of a service ranges from 30 to 75 days.

we recommended that cms make the requirements for these contractors more consistent, when it would not impede the efficiency of efforts to recover improper payments. cms agreed with our recommendations, and is taking steps to implement them. we also have further work under way on the post-payment review contractors, to examine whether cms has strategies to coordinate their work, and whether these contractors comply with cms's requirements regarding communications with providers. although the personal of claims subject to post-payment review is very small, less than 1% of all claims, the number of post-payment reviews has increased substantially in recent years. from 2011 to 2012, the number of these reviews increased from 1.5 million to 2.3 million. this is one factor contributing to a backlog and delays in

resolving appeals by administrative law judges. we have been asked to examine the appeals process, including reasons for the increase, its effects on beneficiaries, providers and contractors, and options to streamline the process. in conclusion, because medicare is such a large and complex program, it is vulnerable to improper payments and fraud and abuse. given the level of improper payments in medicare, we asked cms to use all available authorities for preventing, identifying and recouping improper payments. this concludes my prepared remarks. thank you. >> thank you. dr. agrawal. >> thank you. chairman lankford, ranking member lujan grisham and members of the subcommittee, thank you for the invitation to discuss the centers for medicare and medicaid services program integrity efforts. program entig ridty is a top priority for the administration and agency wide administration

at cms. we share the subcommittee's commitment to protecting beneficiaries and ensuring taxpayer dollars are spent on legitimate items and services both of which are at the forefront of our efforts. i view program integrity through the lens of my experience of an emergency medicine physician who fundamentally cares about the health of patients. our health care system should offer the highest quality and most appropriate care possible to ensure the well-being of individuals and populations. cms is committed to protecting taxpayer dollars by preventing recovering payments for wasteful abusive or fraudulent services, helping to extend the life of the trust fund. the importance of the efforts extend beyond dollars in health care costs alone. it is fundamentally about protecting our beneficiaries and ensuring we have the resources to provide for their care. as part of our responsibility to taxpayer and beneficiaries to see that resources are use add appropriately, cms has an obligation to prorm audits, medical review and use other oversight tools as a pardon of these efforts. i would like to make three points about the status of our efforts. first, we are having real impact

in reducing waste and abuse and fraud in the medicare program. second we continuously work to reduce provider burden while meeting our obligations to the trust fund. finally, we continue to improve and innovate to meet our mission. on the first point, we're seeing success from our efforts to detect and prevent waste, abuse and fraud. through medical review activities, in fiscal '13 alone, $5.6 billion in payments were prevented from being paid, or were returned to the trust fund. we've saved an additional $7.5 billion over the last several years from payment edit. which prevent bad payments from being made in the first place. at the direction of congress, cms uses the recovery auditors to perform medical review to identify and correct medicare improper payments. recovery auditors have returned over $7 billion to the medicare trust fund since the start of the national program in 2010. last year funding returned about $4 billion to the trust fund resulting in an 8-to-1 return on investment.

we've revoked over 17,000 and deactivated over 260,000 providers and suppliers since passage of the affordable care act. at the same time we recognize the efforts can impose burdens on providers. cms continually strives to carefully balance our responsibilities to protect the medicare trust fund with our desire to limit the burden these efforts can place. to that end, we use tools such as educational efforts, data transparency, and significant contractor oversight to minimize burden wherever we can. we also engage in continuous dialogue with provider communities to improve our programs. as one example, during the next round of recovery audit contracting, cms is making changes to the program based on feedback from stakeholders, that we believe will result in a more effective and efficient program with improved accuracy and more program transparency. we have also utilized other approaches such as prior authorization to reduce improper payments, while granting more security and assurances to the provider community. we will continue to listen to

stakeholders to make improvements to our program. third, we appreciate the committee's interest in ensuring that cms is improving the program integrity efforts and know that the congress and the public expect real and tangible results. to that end we're looking to implement new authorities or improvements which can enhance our efforts and impact. in july 2013, cms imposed moratoria for the first time on the enrollment of certain types of new providers in geographic areas which have been prone to high amounts of fraud. with the moratoria in place, we've revoked the billing privileges of over 100 home health agencies in the miami area, and we've an additional 1679 ambulance suppliers in texas. we're also continuing to work with law enforcement in these hot spot areas. cms is also using private sector tools and best practices to stop improper payments. since june 2012, the fraud prevention system has applied advanced analytics on all medicare fee for service claims on a streaming national basis. in the first year they

stopped, prevented or identified over $100 million in improper payments, including savings from kicking out bad actors. we've also begun to use the common private sector tool of prior authorization to address an area of high improper payments, the use of powered mobility devices. in 2012, cms began a demonstration in seven states to require prior authorization. this demonstrated -- this demonstration has resulted in a significant decrease in expenditures. over 66% in the demonstration states and over 50% in the non-demonstration states. support from the provider community has been significant. many of whom have requested cms expand prior authorization to other parts of the country. while we know that we have made progress to address areas of vulnerability, we also know more work remains to further refine our efforts and prevent improper payments and fraud. i look forward to answering the subcommittee's questions on how we can improve our commitment to protecting taxpayer and trust fund dollars while also protecting beneficiaries' access to high-quality care. thank you. >> mr. ritchie?

>> good morning chairman lankford, ranking member grisham, and other distinguished members of the subcommittee. thank you for the opportunity to discuss oig's work on medicare improper payments. improper payments cost taxpayers and medicare beneficiaries about $50 billion a year. recovering these lost dollars and preventing future improper payments is paramount. in short, more action is needed from cms, its contractors and the department. cms needs to better ensure that medicare makes accurate, appropriate payments, when improper payments do occur cms needs to identify and recover them. it must also implement safeguards to stop additional overpayments. cms relies on contractors for many of these vital functions. this means that ensuring effective contractor performance is essential. finally, the medicare appeals system needs to be fundamentally changed to ensure efficient, effective, and fair outcomes for the program, its beneficiaries,

and providers. my written testimony elaborates on oig's work and recommendations in all these areas. this morning i'll focus on four key points to illustrate our work on these issues. first, cms must do a better job ensuring the payments are accurate. for example, cms needs to better protect medicare and beneficiaries from inappropriate prescribing and billing for drugs. this is both a safety issue, and a financial issue. we found the part "d" paid millions of dollars for drugs prescribed by a massage therapist, athletic trainers and others with no authority to prescribe. cms is working toward implementing several oig recommendations to tighten up monitoring and billing for drugs. second -- >> mr. ritchie you might check your microphone there. see if it clicked off. is it still lit up there? >> thanks. second, improper payments occur, cms needs to do four things. identify, recover, assess, and

address. cms contracts with recovery auditors or racs to identify improper payments. in 2010 and 2011, rac audits resulted in more than $700 million in overpayments recovered. cms also assesses the rac findings to understand why the overpayments occurred. it must then address these issues to prevent future improper payments. my third point is that cms needs to better ensure that its contractors perform effectively. cms contractors pay claims, identify and recover overpayments, and protect medicare from fraud and abuse. oig has consistently raised concerns about contractor performance and oversight. cms needs to assess performance more effectively and take action when contractors fail to meet standards. finally, the medicare appeals system needs to be fundamentally changed. even before the recent surgeon appeals and subsequent backlog,

oig raised concerns about the administrative law judge, or alj level. the alj overturned decisions more than half the time. alj is also vary widely amongst themselves in decision making. this happens partly because medicare policies are not clear. oig recommends clarifying medicare policies, and then coordinating training on those policies at all levels of the appeals. administrative inefficiencies also contribute to the problem. we recommend the paper files be standardized and made electronic. in closing, more needs to be done to reduce and recover improper payment, ensure effective contractor performance and improve the appeals process. oig is committed to finding solutions to reduce waste, protect the beneficiaries and improve the program. thank you for your time. and i welcome your questions. >> thank you all. i recognize myself for five minutes for first round of

questioning and then we'll just go back and forth along the dais from here. let me set some context during my time. if a provider will have something reviewed, let's talk through the process and let context for everyone on this. go back to miss lujan grisham's statement about the pay and chase side of this. this is the post-payment has occurred, how will someone find out that they're going to be checked, inspected, whatever it may be, post-payment, for any kind of claim? what's the step one? how will they be notified? >> they get a letter from a contractor. >> okay they get a letter from a contractor. that being the rac audit contractor? >> it could be one of four types of contractors. it could be a mac, a medicare administrative contractor, a brac, it could be the cert contractor which pulls a sample of random claims to estimate the improper payment rate. or it could be a z-pic, a zone program integrity contractor who is looking specifically for

potential fraud. >> let's back up. let's take a physical therapy clinic. stand-alone, privately owned clinic. seeing patients. mixture of insurance, private pay, and then also medicare. okay. so you're saying that one physical therapy clinic could receive a request to pull a file from any one of those four, or those four are unique, four different entities? >> they are -- they could receive a request from any one of the four. >> is it possible that all four of them will make a request during the course of the year? to pull a file. >> not supposed to happen. >> is it possible? >> theoretically, but highly unlikely. >> okay. so how are they notified then, if one of them does it, or could two of them do it in the course of the year, or could three? you're saying all four unlikely. >> the racs are not supposed to duplicate reviews that have been done by other contractors. >> to the same provider? or to the same case? >> to the same case. >> okay --

>> a duplicate claim is considered to be the same file for the same service. >> could a provider get a review from all four of those different folks, different cases, but that provider itself get reviews from four different groups of people from medicare? >> possible. but it's unlikely. >> so what about from two of those? or from three of those? you say four is unlikely. is it possible for them to get two of them? >> yes. for example, they might get a review from a rac and they also might get a review from a cert who is estimating the improper payment rate. >> so when a rac contacts them how many are they pulling? how many files are they pulling at that point? are they pulling one? are they pulling a sampling? how many are they going to pull? >> they're pulling one. i believe. you know, overall, the rac did over 1 million reviews. >> correct. >> but when they're reviewing, you know, for a provider, they're pulling for that service.

>> but they're pulling -- go back to the physical therapy clinic as well. they're not going to reach in and randomly grab one case, are they? they're going to grab a sampling of cases from them to be able to review? >> no, i don't believe so. >> how do they select which patient's file to review? >> in the case of rac, cms tells the rac what kind of issues they can look at. they work together with cms, and cms approves the type of issues that racs are going to investigate. >> they go in and make the request of a certain type of client that's there? but i'm saying they're not just pulling one patient, are they? from that type? they may pull ten? they may pull 20? how many do they pull? >> no, i believe the claims are investigated on an individual basis. >> right. but the provider, i'm saying to the provider, when they get notification from the rac -- >> yes. they'll get notification of a claim. investigation of a claim.

[ inaudible ] i'm sorry. correction. there could be more than one but there is a limit. >> that's what i'm trying to get, what is that limit? how many are they trying to pull? does anyone else know the number on that? trying to pull? >> if i might just take a little bit of a step back. i agree there are numerous contractors that can audit a provider. each of the contractors are supposed to do the job that they're doing. the contractor's function is to go in there and actually determine the improper payment rate. it's not primarily looking at the provider. it of course has to do the medical record audit to determine if annen improper payment has occurred. it's a function to evaluate our services. so while i agree that numerous contractors can touch providers, we also try to coordinate, not touching the same claim and not touching the same provider too often. in answer to your last question

we have set limits so they can request a particular sampling becaused on the size of the providers themselves. >> so large is that? >> a hypothetical example may be a smaller provider that sends in 10,000 claims a year. and no more frequently than, i believe, every 45 days. >> so they could come in and pull 20 to 25 different files and say we're not going to pay these until we get a chance to check them. correct? not correct? >> i think conceivably, that's correct. we do provide support to make sure we're not burdening individual providers. >> we'll come back to that. i want to come back to the

statement that we're not burdening individual providers. i could name you several dozens that would beg to differ on that statement. you will find no greater advocates than us. that aren't providers who say, this is not worth it, and drop out. i won't take medicare anymore because it's so burden some for them. >> i'm going to do a couple of things assuming i don't run out of time. i want to follow-up on a couple of things that chairman said. that balance is really tricky, and given that this committee clearly wants to focus on waste, fraud, and abuse, even if the medicare program and every other health care program was flush, and that wasn't our -- being efficient and worrying about

having services available for a growing population, you know, our job is to make sure that every tax dollar is being used the way it was intended and we want bad actors and bad providers barred from this system and all others. no question about that. we also recognize that you have to do a due process system and we appreciate that. but the due process system is clearly broken because if you are waiting years for -- and without payment, or having that payment removed, that's not due process, and i would agree too that we've created a very burdensome administrative environment. it's not just the federal touches for the medicare program, although that is federally operated. remember, that most of these programs take medicare, medicaid, they are serving dual eligibles. they are being touched, audited, reviewed,ed a administratively regulated and audited by states

and some states with a whole different variety of private entities. so these small -- sometimes small providers are spending an incredible amount of time being administratively reviewed and these recovery audits given that there is a contingency fee where they are being incentivised to identify problems, this creates a pretty ripe environment for what i think you have today, which is we've now, with the office of medicare hearings and appeals, we've recently announced that we're going to suspend the ability of providers to have their appeals heard by administrative law judges. the decision was made as a result of a massive backlog of appeals awaiting an alj hearing, which by the medicare hearings and appeals own admission has grown from over 92,000 to over 460,000 in just two years. now, dr. agrawal, i understand that the office of medicare hearing and appeals is not part of cms. i also understand that your office oversees these contractors, including the racs, whose audits are the cause of

many, if not most, of these appeals. given the law wait times for given the long wait times for getting an appeal heard by -- wouldn't it be prudent for cms to suspend rac audits until the claims backlog is cleared? and i want you to touch, dr. agrawal, on the fact that there are other ways to make sure we are preventing fraud more than just the rac audits. >> sure. thank you. so i would start at just agreeing with you that this is a real challenge in program integrity to make sure we're doing our job protecting the trust fund and at the same time doing as much as we can to lower the burden on providers and make sure that there are no access to care issues for our beneficiaries. that's a top priority. it's something i said in my opening statement. i think it's also important to level set the amount of burden

we are placing on the system through our activities. as pointed out earlier by miss king, we audit far less than 1% of the claims we receive. with respect to racs in particular, there are clearly appeal that is occur from rac audits. but the overall rate of appeals -- i'm sorry. the overturn rate from all of the overdeterminations is about 7%. that's in the latest publicly available data. if you look at just appeals that are initiated after an overpayment determination by a rac, the overpayment rate is about 14% out of all appeals that are generated. so i do think that the appeals process is important for providers. it allows them an opportunity to represent their claim, to represent their interest, and it provides an important check and balance on our approach. as far as the third level of appeal, that involves the alj. as you pointed out, that is not directly under our control. we have been working with the department to devise strategies for that backlog. what is directly under our

control are the first two levels of appeal and i can tell you that both the overturn rate is not substantially high in those areas, and they are being -- and the appeals are being heard in a timely fashion. there are other numerous other kind of strategies that we've taken to try to decrease the appeals. i want to afford you your time, so i'm happy to go into them if you like. >> i appreciate that, except that i would certainly make the statement that -- and you'll hear this theme throughout this hearing. we have providers that would differ with you about these administrative burdens and whether 14% is reasonable in terms of what they can manage, in terms of cash flow for their patients and staff. and i would also say that many of the smaller providers couldn't afford to appeal. so, i'm not sure that this data is really relevant and what strategies have you undertaken to identify how many providers certainly come to me, who would love to appeal because they

believe that they've been wronged or there's been an administrative error but don't have the ability to do that. also, i would say, fear, intimidation, retaliation and just pay or do whatever it is that they're asked to do at the next level. and i'm way over time. so, if you could respond to that, and then i'll come back. >> in addition to appeals, congresswoman, there are other controls that we have implemented over our contractors. we do determine what areas racs can look at. they have to achieve sort of get permission from a board at cms to -- before they enter into any particular audit area. that is a type of oversight. we have an independent validation contractor that looks behind the racs themselves to evaluate whether they are making these determinations accurately. and all of the racs, through that validation contractor, have received well over a 90% accuracy rate. i think the incentive structure itself insent rac does get paid on a

-- itself incentivises getting it right. they do get paid on a contingency basis, as you pointed out. if they lose on appeal, they lose the contingency fee. i think that is an enormous sint incentive on the racs to make sure they are making the right determination in the first place. i said it was a 14% overturn rateover all. that is in part "a", since a lot of issues you identified were not part "a." >> mr. chairman, if i can -- so the answer is, however, we don't know how many providers are unable to appeal and there's no test to determine -- i mean, you have one side of the data equation. and i'm not sure that that's an accurate representation as a result. so, i appreciate that you're looking at these tests. and i'll yield back, mr. chairman. but i would like to explore that further. >> we will in the second round. before i yield, let me make one quick statement to dr. agrawal as well. you mentioned the incentive for racs to be able to limit that, because they lose their contingency fee if they lose on appeal. the problem with that is let me give you a fishing illustration. if you are fishing, you can put

one hook in the water or you can put five hooks in the water and you may only catch one fish but you are going to catch more more often if a rack decides they are going to grab 20 different cases and they hope they win ten of them that's better than just grabbing ten of them and if it's close, go ahead and just grab that file and keep moving from there and we may win it, we may not win it. that's helpful to the rac in their contingency fee. that's certainly not helpful to the provider to go through the process. with that, i recognize dr. gosar. >> do you have any differential in your facts in terms of small providers, large providers, in overturn rates? >> i don't think the data differentiates, in terms of appeals data, i'm not aware of differences. i think the point i made earlier is that we do have different requirements of the contractors