tonight on c-span 3. paul ryan's weekly press briefing. pete hoekstra discusses the president's foreign policy.

and later, the head of the consumer protection bureau testifies at a house services committee hearing. officials with the inspector general's office and the government accountability office discuss the implementation of the affordable care act and the health care.gov website. senator orrin hatch chairs the subcommittee. this is just over an hour. >> the meeting will come to order. it's a pleasure to welcome everyone here this morning. we'll be talking with representatives from the office of inspector general, and from

the government accountability office about their ongoing oversight work with respect to health care.gov. and enrollment in the federal health insurance marketplace. i want to thank both entities for their hard work on these issues and acknowledge the contributions they made to help this committee perform more accurate and timely oversight. >> no secret i've been a fan of the so-called affordable care act. the evidence overwhelmingly shows that i and the many others oppose this from the beginning has been right all along. the facts speak for themselves. republicans signed into law, hhs, lig and gao have released at least 6 dozen reports detailing various operation and information issues.

detailing the numerous areas where the law has fallen short. these reports are specific and focused on key operational failures like systems issues. some of which we'll hear about today. the gao and hhsoig are not independentities. they're tasked with the responsibility of assessing what is and what is not working in various federal programs. including those created or amernded by the affordable care act. there's no better record showing how this happened in the reports we received from these offices. today we are going to specifically discuss operations issues, related to health care.gov and enrollment problems at the federal insurance marketplace, otherwise known as the federal exchange. let's start with healthcare.gov

launch. with the deemployment of healthcare.gov and it's supporting systems, customers, really kwon assumers encountered widespread performance issues when trying to create accounts and enrole in health plans. after numerous inquiries and reports, we know what caused these performance issues. for example, there was inadequate capacity planning. the centers for medicare and medicaid services cut corners and did not plan for adequate capacity to maintain health care.gov and it's supporting systems. there were problems with the software that were entirely avoidable. they identified errors in the software coding for the website, but did not adequately correct them prior to the launch. we saw a lack of functionality. they did not adequately prepare

the supporting systems prior to the initial launch. cms also failed to apply -- recognize best practices for system development which contributed to the problems. admittedly since the initial launch. cms has taken steps to address these problems, including increasing capacity, requiring additional software quality reviews and awarding a new contract to complete development and improve the functionality of key systems. many of the problems have still not been entirely resolved and continue to cause frustration. especially for consumers trying to obtain health insurance. i wish we could boil all this down. boil down all the volunteers problems to the functions of a single website. indeed this was just an it problem, all of our jobs would be a lot easier. however, the problems with obama care and the federal insurance

marketplace in particular go much deeper. and many of them remain unaddressed. now, we know for example that the enrollment controls for the federal marketplace have been inadequate. during undercover testing by gao, the federal marketplace approved insurance coverage with taxpayer funded subsidies for 11 out of 12 fictitious online applicants. in 20 14 the gao applicants which once again were fake, make up fake -- made up people. obtained roughly 30,0$30,000. these fictitious enrollees maintained subsidized coverage throughout the year, even though the documents or no documents at

all to reserve the inconsistencies. the subsidies, including those branded the gao's fictitious applicants are paid to health care insurers. they nevertheless represent a benefit to consumers and a cost to the government. now, gao did find that cms relies on a contractor charged with document processing, to basically uncover the -- to uncover and report possible instances of fraud. yet gao also found the agency does not require that the contractor has any fraud detection capabilities. and according to gao, cms has not performed a single comprehensive fraud assessment. recommended best practice of the obama care enrollment and eligibility process. until such assessment is

completed, cms is unlikely to know whether existing control activities are designed to produce inherent fraud risk to an acceptable level. in other words, cms isn't even sure if cms is fraud prevention systems are designed correctly or if they're affected. not the focus of the reports that will be covered by the testimony today. another matter we've been tracking closely is cms's other side on the health care co-ops. we had a hearing on this topic in late january, where we examined a number of financial and oversite explanations for the abject failure of the co-op program. today's report describes cms's efforts to deal with financial or operations issues that the co-ops, including the use of an escalation plan for co-ops with serious problems.

. as of november 2015, 18 co-ops, had enough problems they had to submit to a cms escalation plan including nine that disfinned operations. >> cms appeared to have failed just like virtually every other element of this program. the failure of cms to adequately implement the co-op program is well documented here on the finance committee and elsewhere. so many other parts of obama care, the highlighted rhetoric surrounding this program has fallen short of reality. with nearly half of the co-ops now closed, the failed experiment has wasted taxpayer

dollars and forced patients and families to scramble for new insurance. so many problems now, i believe cms should work with and not against states to safeguard taxpayer dollars. as always, we have a lot to discuss. i look forward to hearing more from the officials, we have testifying here today. >> mr. chairman, and colleagues. it's known the healthcare.gov rollout three years ago was botched. it's new news that the inspector general of the health and human services department recently said and i want to quote here, "cms recovered the healthcare.gov website for high

consumer use within two months and adopted more effective organizational practices." that's what the inspector general said. the department recovered the website for high consumer use within two months. that quote comes from one of two reports looking back at 2013 and 2014 the finance committee will be presented with today. i think we ought to start by recognizing the story is well documented. after the launch went badly, some of the best minds, technology and a new contractor were brought in. they scrambled to overhaul the system and the exchange is soon up and running. the center for medicare and medicaid services is now following up on each of the inspector general's recommendations which the inspector general notes in its repo

report. nearly 10 million americans used healthcare.gov to sign up for a plan or reenrole automatically. in my home state, close to 150,000 persons have used the site to sign up for a plan. that's up by more than 30% compared to last year. the committee will hear an update from the government accountability office. the government accountability office first brought this study before the committee in july of last year. i'm going to repeat what i said back then. on this side of the aisle we don't take a back seat to anybody in fighting fraud and protecting taxpayer dollars. one dollar ripped off is one dollar too many. let's recognize what was true last summer remains true today. this gao investigation has not uncovered one single shred of

real world fraud in the insurance marketplace. it was built on fictitious characters with specially created identities not real consumers and not real fraud. it's true that government accountability office found there are sometimes differences between the information on somebody's insurance application and their tax forms and citizenship records. when it comes to these inconsistencies in people's data, this investigation can't differentiate between fraud and a typo. meanwhile, health and human services has not looked the other way when it finds the red flags. in 2014, the year of the gao's investigation, the center of medicare and medicaid services closed more than 100,000 insurance policies because documents didn't match the warrant provided. tax credits were adjusted for nearly 100,000 households. in 2015, health and human services closed more policies and adjusted more tax credits. if you come at this from the

left, you may say that's too harsh. if you come at it from the right, you may take a different view. there's no basis whatsoever for the argument that health and human services ignores problems with people's records or leaves the door open to fraud. it seems to me rather than rehashing old news, you ought to be looking at the facts and talking in a bipartisan way about how to move forward together. because of the affordable care act, the number of americans is at or near it's lowest point in half a century. for the 160 million people who get their insurance from their employer, colleagues premiums climbed 4% last year. let me repeat that, for 160 million people who get their insurance from their employer, premiums climbed only 4%. working age americans in oregon

with pre-existing conditions, 80 million people or more can no longer be denied insurance. so instead of battling out what happened three years ago, we ought to be pulling on the same end of the rope and solving some problems. for example, democrats and republicans ought to be working together to look at ways in which we can provide even more competition and bring costs down for consumers. and a lot of you in this room have worked with me on that issue for some time. if you're going to be spectacular, the real question is whether our health care system is going to be able to afford them. here senator grassley has worked closely with me to put together a bipartisan case study, which looked at one blockbuster drug involving hepatitis c. solving the cost of blockbuster drugs is going to take a lot of hard work, it again can only be done on a bipartisan basis. and finally, i want to express

my appreciation to colleagues on both sides of the aisle. i think we're on the cusp of being able to make real progress on a huge opportunity for older people and our country. and that is protecting the medicare guarantee. very sacred guarantee we have for seniors, while updating the program to look at the great new challenge which is chronic illness, i want to thank senator bennett who is out in front. he's not here, but senator isaacsohn and senator warner were champions as well much i want to express my appreciation to the chairman you can the progress that we are making. i have to make some comments with respect to something we didn't know about, until about an hour ago. that's this matter of the co-ops. what we have said is that we want to work in a bipartisan way to improve a variety of sections

of the affordable care act. now the, this new material on the co-ops that neither i nor anyone knew something about, was available. i intend to look at it with an eye on what can be done on a bipartisan basis going-forward. but my work -- and i think the work of colleagues here always ought to come back to the idea of making health care policy more accessible and more affordable. and for now, and i certainly haven't seen this report. i'm not going to be participating in any celebration of people suffering because the co-ops were tied up in a congressionally induced economic straightjacket. thank you, mr. chairman. >> thank, senator. >> our first witness is miss erin bliss. from the office of inspector general or oig at hhs.

miss bliss has served in many roles at oig since her career began. i think your career began in 2000, correct? >> she started as an analyst for the office of evaluation and inspections, and later went on to serve as a senior adviser where she provided management advice and analysis to the inspector general and other senior executives on priorities and internal policies and operations. afterwards she worked from 2009 to 2014 as director of the external affairs at oig. and was responsible for implementing oig's communication strategies and relationship management with the administration. congress, media, the health care industry and the public. miss bliss received her bachelor's degree from the government at the university of notre dame, before receiving her master's degree in public policy

from the university of chicago. our second witness, during his gao career, he's served in a variety of positions, including as legislative adviser and the assistant director for homeland security and justice. mr. bagdoyan has also served on congressional details with the senate finance committee we're glad to see you back here again. am i pronouncing that right? >> pretty close. >> he's also had a number of positions in consultancies, including most recently focusing on political risk of home land security. he received his master's degree in international relations and

an mba in strategy from pepperdine university. i want to thank you both for coming. miss bliss, please proceed with your five minute statement. >> thank you. good morning, chairman hatch. thank you for the opportunity to testify today about the office of inspector general's case study which examines the management of healthcare.gov. the website consumers use to purchase health insurance through the federal marketplace. as is well known on october 1st, 2013, the healthcare.gov website failed almost immediately upon launch. within two months, cms had substantially improved the site's performance.

how did such a high priority project start so poorly? and how did cms turn the website around? our case study provides insights into these questions and lessons learned to help health care.gov work better. we police our assessment at the intersection of technology, policy and management can benefit a broad range of federal projects and programs. our report chronicles the breakdown and turn around of healthcare.gov over a five-year period. from the outset, the healthcare.gov project faced a high risk of failure. it was technically complex with a fixed deadline and many uncertainties. still hhs and cms made many missteps in its implementation. most critical was the absence of clear leadership and overall project responsibility which had ripple effects.

policy decisions were delayed affecting the technical decisions. policy and technical staff were in silos and not well coordinated. contract management was disjointed. changes to the project were not well documented and progress not adequately monstered. this culminated in cms not fully communicating or acting upon many warnings of problems before the launch. cms failed to fully grasp the poor status of the build. one reason was that no one had a full view into all of the problems and how they fit together. red flags raised to leadership, did not always float a staff working on the build. and staff did not always alert leadership to problems on the front lines. cms was unduly optimistic. last minute attempts to correct problems were rushed and pin sufficient. and the two months before the launch. cms added twice the staff to the

project and cut many planned website functions. just 72 hours ago, cms asked its contractor to double it's computing capacity. even with these efforts, the health does care.gov website saw many problems. the problems went beyond capacity. the website entry tool worked poorly, and software coding defects caused malfunctions. cms and its contractors did not have coordinated tools to diagnose these problems. cms pivoted quickly to make corrections to the website. they brought in additional staff and expertise from across government and the private sector. one key was creating a badgeless culture. cms integrated policy and technical staff and developed

redundant systems to aroid future website problems. cms took a more realistic approach. it practiced what officials called ruthless prioritization. which focused on effectively developing the most critical functions like reenrollment and delaying other features. they measured progress and monitored problems to respond more quickly and effectively. these factors contributed to an improved website, and important organizational changes. looking ahead, cms continues to face challenges and improving healthcare.gov and managing the federal marketplace. this includes addressing more than 30 recommendations from oig's other federal marketplace reports. we will continue to monitor cms's reactions and it's overall management of this and other programs. thank you again for inviting oig to speak with the committee

today. i'll be happy to answer your questions. >> thank you, so much, mr. bagdoyan. we turn to you. >> i am pleased to be here today to discuss results from our february 2016 report on enrollment and verification controls for aca health care coverage obtained through the federal marketplace during the 2014 open enrollment period. our results are based on extensive forensic analysis of relevant data from cms and other agencies such as ssa, irs and dhs, involving originally the entire 2014 applicant and are independent of the undercover work we perform for that period. the central future of enrollment controls is the federal data services hub, which is the primary vehicle for cms to initially check information provided by applicants against various federal data sources. in addition, the aca established

a process to resolve inconsistencies, instances where applicant information doesn't match that of marketplace sources. in terms of context for our work, coverage offered through the federal marketplace is a significant skmendy tour for federal government. current levels of coverage involve millions -- who involve 85% receive subsidies. cbo has put subsidy costs at about $880 million through 2025. i would note that while subsidies are paid to insurers and not directly to enrollees, they never let us represent a financial benefit to them. as i stressed before, a program of this scope and scale remains inherently at risk for errors, including improper payments and fraud. accordingly, it is essential that effective enrollment

controls are in place to help narrow the window of opportunity for such risk, and safeguard the government's investment against this backdrop i'll now discuss our two principle and analytical results. first we found that cms does not track or analyze aggregate outcomes, the extent to which a query agency delivers information responsive to a request, or whether an agency reports that information was not available. in this record, for example, we found that ssa could not match 4.3 million queries related to names of -- names, dates of birth or social security numbers at 8.2 million queries related to citizenship claims. irs could match queries involving about 31 million people related to income and family size, and within this, 1.3 million people had i.d.

theft issues. and finally, dhs couldn't match 510,000 queries related to citizenship and immigration status. accordingly, cms forgoes opportunities for gaining valuable insights about significant program and ea integrity issues. second, we found that cms didn't have an effective process for resolving inconsistencies for applicants, using the federal marketplace many for example, we found that about 431,000 applications with about $1.7 billion in associated subsidies still had about 679,000 inconsistencies unresolved as of april 2015. four months after the close of the 2014 coverage year.

within these, cms didn't resolve social security numbering for about 35,000 applications with about 154 million or incarceration inconsistencies for about 22,000 applications with about 68 million in associated subsidies. by leaving inconsistencies unresolved, they risk making subsidy payments on behalf of those -- they are vital for income tax compliance and the reconciliation of premium tax credits through filing tax returns which is a key back end control under aca. in closing, our work today collectively shows that cms shows a passive approach weakening the programs integrity.

accordingly, we underscore, we continue to underscore that cms needs to make aca program integrity a priority and implement effective controls to help reduce improper payment and preclude them from being embedded early in the program. in this regard, we made 8 recommendations to cms in our february report which are intended to help mitigate the vulnerabilities and risks we identified. the agency agreed with the recommendations, it is incumbent on cms to achieve and sustain measurable results. mr. chairman, this concludes my statement, i look forward to the committee's questions. i appreciate the indull gans for an extra 30 seconds. >> happy to give you that extra time. the previous reports at the office of inspector general, criticized healthcare.gov. and the marketplace, describing important problems with internal

controls such as inadequate procedures for checking the eligibility of enrollees. how does the case study differ on the same topic? >> thank you for your question, chairm chairman. the case study is one of a dozen reports the oig has issued. most of those were more targeted audits or evaluations, examining aspects of eligibility controls payment accuracy, contracting and security of information. the case study took a different approach and cast a wide lens at cms's management for multiple perspectives and over a long period of time in order to glean lessens learned about what went wrong and what went right. in an effort to help improve this healthcare.gov project and other projects moving forward.

>> your report pointed out the electronic clearinghouse for checking information about federal databases. you said that cms needs to make better use of this enrollment control process, would you explain that a little bit? >> i would be happy to do that, mr. chairman. the data hub is a key cog in the overall control environment for aca. it processes a lot of queries for information. a lot of those queries are in fact not captured for future analysis. we believe that such capture and analysis would provide cms with a lot of insight into potential indicators of improper payments as well as fraud. so a comprehensive control

system would theoretically enable that sort of analysis for the long term, and we do actually have a recommendation to that effect to cms. >> thank you. >> we have long been told by cms, don't worry. even if there are issues, everything eventually gets fixed when people file their income taxes. gao found practices that undermind tax compliance. am i right about that? >> yes, a number of the inconsistencies we identified out of the 431,000, i believe we had about 35,000 that involved d tax or ssn inconsistencies, according to irs when we discussed this at length. they told us this was not only important for task compliance,

but to reconcile the advanced tax credits, this is the third main backup control. without that information that's accurate and reliable. i pointed out their job is made much more difficult to not only do the tax return processing, but also reconcile the subsidies. it's a long term problem if it's not addressed. >> what are the most important lessons learned from healthcare.gov. do you think the lessons learned from your case study applied to other large programs and projects that are being planned by the department of health and human services or other government agencies? >> we certainly do. the intersection between policy, technology and management is not

only essential for health care.gov, we believe these lessons will apply to other federal projects and programs. we gleaned ten lessons learned i'll highlight what i team to be the most significant. first is establishing clear leadership. we found the clear leadership and overall responsibility had ripple effects, caused a number of cascading problems across the project. and made problem resolution more difficult. we found the disconnect between those working on the policy and making decisions and those working on the technical aspects of the project created problems at both sides. delays in policy decision making, compressed and tight time frame for achieving the technical build successfully. better integration, policy and technical as well as across government and contractors

through this culture, are some of the keys we sought to correct. and finally, taking a posture of continuous learning, which means being flexible and adaptable especially with a start-up take project, we found that cms got stuck on an unwinnable path and it was too late before they realized and tried to make changes. keeping that continuous learning posture, being innovative and flexible and con stan thely monitoring for problems to adjust plans where needed. >> thank you. >> thank you very much mr. chairman, thank you to both of you. >> i'm wondering, just to start, yes or no question. based on your case study, do you think that health care.gov website should be taken down and completely new website be built?

>> no. >> thank you. like many of my colleagues, we're very frustrated about what happened in the past. clearly you laid out the problems with the launch. i think everyone agrees there were serious problems with the launch. created a lot of difficulties, and certainly for people in michigan to get coverage in 2013. that's 6 years ago, we're now in year three of the affordable care act marketplace celebrations. when we look at the reports, the report looking backwards, we can agree, problems. the question is moving forward, how do we address the fact that over 20 million people received health care coverage, literally saving people's lives. that's not just a rhetorical statement. i talked to people who were able to get surgery or care for their

children they've never been able to receive before. i think that is a good part of things when we talk about the numbers, the real life experiences of people. >> the uninsurance rates are the lowest it's ever been. medicaid expansion has expanded to literally thousands of at-risk families. i want to say i hope all of us will make it better. that's why i appreciate your recommendations as we look forward. not just on this particular website and process, but in others as well. but the question is how do we make it better. we want to make sure we have quality access for every american. whether it's medicare, medicaid,

children's health program, and so on and so on. with that in mind, let me ask about any other recommendations from a gao standpoint that you haven't already spoken of today and how we can make things better. frankly i want over 20 million people that have health insurance today that didn't have it before, and i have the piece of mibd to go to bed at night to know they're going to be able to take their children to a doctor. i'm hopeful we can get as close to zero as possible in terms of the number of people in our country that don't have access. that have access that we can get to zero, the number of people that don't. i'm interested in your recommendations on how we go forward to make this system better. >> sure. thank you, senator stabbenow.

we report, we made eight specific descriptions. we tried to allow cms some latitu latitude. the key recommendation i believe, the big picture recommendation is for cms to conduct a risk assessment sort of top to bottom. identify the vulnerabilities and risks for improper payments and fraud. in that regard, the gao issued in july of 2015, it's framework for managing fraud risk. that's a comprehensive leading practice from the private and public sectors that would provide the agency with quite a

solid road map to perform that risk assessment. everything should flow from that assessment in terms of the types of actions, policy changes, control improvements, and so forth. >> are you working with cms? what is their reaction? are they objective to that? >> no, i think i should give cms credit that they accept all 8 recommendations, including this one, as they say, the proof is in the pudding. they need to execute, do so successfully and achieve results and sustain them all with the long term. this is not a one and done proposition. >> just to be clear, you made the recommendations, they've accepted all eight recommendations and they're in the process of doing that? >> that's correct. we have informal and formal requests. >> thank you, mr. chairman. i want to thank our two

witnesses. lord knows where we would be. if we didn't have gao and inspector generals. the alarming malfeasance and incompetence of the rollout of this plan is just stunning. and here we are. we can't just simply brush it off and say, well, this was a bad start, everything's going great now. cost to the taxpayer probably will never know. thank goodness that we have your organizations providing us information and spurring on seemingly bureaucratic nightmare that exists within the federal government. anybody in the private sector would have been bankrupt. the investors would have lost all their money. it's stunning to continue to

observe what it takes to get these agencies to -- i think they're well intended. just overwhelmed in terms of the complexity of getting this done. i go to the floor of the senate every week and talk about waste of the week and mr. bagdoyan, i've referenced your name, not as part of the problem, but as part of the solution. and the information that you provided here for me continues to stun people when they hear about some of the incompetencies, i was particularly interested. i think it speaks to a bigger problem. was your -- what was called the secret shopper? where you deliberately made

applications as a test. you made applications for appliance with the affordable care act and received subsidies. and 11 of the 12. i think my numbers are right. everything you submitted was fraudulent. 11 of the 12 were accepted. even after it was accepted, the follow-up phone calls, pretending to be that person. who was given notice that they were not eligible were accepted. that percentage is pretty high. if you multiply that out, it makes you wonder if the whole thing wasn't so intent on

providing numbers to make it look successful that we really weren't getting the information, the verification that we needed. and then there was the question with cms. at one point releasing a statement, we're not in the verification business. i think basically on the -- what you just said, they are now taking a different stand on that. i wonder if you could respond to where are we now in terms of verification capacity so that we don't have this fraudulent and wasteful situation moving on. happy to have either one of you or both of you address that. but this social security -- it just seems easy, that -- an evaluation of the social security numbers to determine their value, their validity would make it fairly easy to

make a determination as to whether they qualified or didn't qualify. where is cms in terms of putting that process in place, and what is the success to date of that process. >> sure, if i may. first i appreciate the plug on the floor, senator. >> you keep going to the floor? >> in terms of where cms is with the controls, a series of controls designed to verify information, identify potential indicators of fraud and so forth as our undercover work indicated for 2014 and 2015, where we were equally successful, there are -- there is a semblance of controls in place. >> a semblance? >> a semblance of controls in place, some basic things in place like identity proofing.

in each case, we were able to work around those reasonably easily. and obtain coverage for 2014 and 2015. so the vulnerabilities are still in place. now, with the recommendations we made in this report, actually, in late february. as i explained to senator stabenow, the big one is to perform a comprehensive risk assessment. that's going to take time for cms to absorb the results and then craft hopefully appropriate solutions for the future. so i'm -- this is a long term proposition. it's not going to be an easy fix. >> i think they got a bad start, everything's going great right now. this is going to take a long term effort to try to put these

verification providers in place and to be able to say that we're successfully avoiding fraud and waste. inefficiency and taxpayer cost level that is absolutely astounding. with due respect to my colleagues. to taut this as something that's happened in the past, threatened, sailing into the bright future, i think we have a lot of work to do. thanks, mr. chair. >> thank you, mr. chairman. i want to again say that we said the initial rollout was botched and appreciated the inspector general making clear that a couple months in there was serious progress. so you all reported that after the first open enrollment, the agency demonstrated the strong

sense of urgency to take action. except work processes. they improved the health care.gov website substantially within two months. i think it would be helpful if you could tell us two things. what were the operational and strategic changes that were made arch the first enrollment, do you feel they're better equipped to deal with the challenge now? >> thank you for that question. as we discussed in the case study, some of the key strategic and operational changes that were made as part of the correction were to establish more clear leadership and designate rows and responsibilities. this time they did it in a way that brought together staff and contractors across all of the important business lines that were affected and needed to be involved in the correction. that included the policy people, the technical, the

communications and the contractors, all coming together. with the influx of experts from across government and the private sector, there was the potential that it could become . in fact, we saw the i are verse was true. it was well organized. folks are working together as a team. there was better communication. there was better measurement and monitoring of problems and progress in order to apply solutions more quickly and effectively. >> so, in effect, after the first few months, which everybody has acknowledged your characterization was such well organized. >> it was much better organized. they continue to make progress. >> all right. >> good. i'm probably the biggest users of gao products here in the congress. i admire the professionalism of

the agency. i think you heard me say i don't take a backseat to anybody when it comes to cracking down on actual real world fraud, and my question to you is, isn't it correct that when you testify before the committee last year you stayed at the secret shopper investigation failed to uncover a single real world example of fraud? >> yes, that's what i said, senator wyden. i would couch that very carefully for you and the committee. the intent of that investigation was not to uncover fraud but flag control vulnerabilities as well as identify indicators of potential fraud, which i think we did quite successfully. we want to remain my charge is not to find fraud. fraud is determined through a separate criminal proceeding and

in court toí9ww definitively determine that. so my job, again, is to look for vulnerabilities in controls as well as identify indicators or potential fraud or improper payments. >> so let's go, then, from last year when there was not one single real world example of fraud to where we are now. is it correct to say that the entire investigation failed to identifying any actual fraud? >> well, again, i would refer you to my answer. that was not our intent. if i'm not looking for fraud, i'm not going to find it. what i'm looking for is vulnerabilities in controls and indicators of potential fraud such as the inconsistencies with the social security numbers, as well as in the case of the irs 1.3 million people having potential id theft issues, which

is a significant red flag. >> and i think that as is always the case you all were right to talk about various issues that ought to be part of the debate. that's not going on here. what people are saying is this is fraud. fraud, fraud, fraud. and i appreciate your painting us through this, i think, better balanced view. hhs, you all do audits. oig does audits. have you uncovered, in connection with this, any confirmed cases of fraud? >> no, we have not had any cases that resulted in criminal convictions or civil settlements to date. we do have a few investigations that are ongoing. i can't predict what those outcomes will be. >> and, you know, look.

i don't know how many times i've said in this committee when they're big important issues. certainly the affordable care act is right at the top of it. we need to work in a bipartisan fashion and there isn't a program anywhere in government that you can't find opportunities to work together and be buy partisan. i ticked off a number of them. the chairman and i working together on what i think is the future of the medicare program chronic care. senator grassley and i finishing what i think is a block buster study looking at hepatitis c. it raises the question of when we have cures, will people able to afford them? what i think is important is to do bipartisan work, we've got to move away from first pass because everybody acknowledges the first few months were botched. i don't know how many times you can say it.

i read your comment and said substantial improvements. i think i can come back to it and perhaps read it, you know, one more time. center for medicare services recovered the website for high consumer use within two months. now that's the new news. that's just a few weeks old. that's new news. i want people to hear that. i want people to hear there were no actual real world cases of fraud uncovered. one final question, if i might, for you is do you disagree with the statement they made with

respect to the accomplishments of the affordable care act? that is not your formal role. that's the inspector general. does anything strike you as being inaccurate there with respect to the uninsured rate or anything of that nate nature? >> as an independent oversight agency, we don't take positions on whether particular programs should exist, but we make sure they're operating correctly. >> the question was about the facts. what, i think, again this is a hard fact that is not in dispute the uninsured rate is at or near the lowest recorded level against five decades about 29 million previously uninsured americans gaining coverage since the acts provisions went into

effect. i'll keep the record open so if you or your agency has any information suggesting that's wrong, i sure would like to know about it. okay. >> thank you. i don't have any information suggesting that's wrong. >> wonderful. >> do you have any information suggesting those numbers are right? >> i cannot validate those numbers. i don't have any reason to believe they're not. >> you have no indication either way. >> i have no basis. >> you have no reason to believe it's 30 million. >> i don't have the basis for validating the number -- >> that's great. ranking member asked you several questions about fraud. i certainly understand and appreciate why so many americans look at this process and become disenchanted.

your objective was never to figure out how much fraud was in the system. your objective, appeared to me, to show us how fraud would be -- could happen. >> yeah, essentially, senator, you're correct. the big picture we're looking at is any vulnerabilities in the controls in place and for any indicators of potential fraud that pop up. for example, our ability to circumvent the controls we encounter during our undercover work. for 2014 and repeated that experience in 2015, which case we were successful 17 out of 18 attempts. that would have to caution that, of course, further to the point that senator coats made earlier. that's not a projectable number. we have to be careful that it doesn't represent the actual universal. it's a data set we use to continue our work in this area.

>> yes, thank you very much. no one is going to mistake me a fan of obama or the aca. for many reasons i'm not fan of the website nor the policy -- the legislation. i think of the independent payment advisory board some refer to as a death panel the ability to ration care to the future. this is one of the classic examples why so few americans have the same appreciation that others have talked about of the aca. think about the fact we're talking about taxing americans or the income with a 3.8% tax raising over $120 billion. another reason why so few americans have the same thing we've heard from some of our friends on the other side. the thing about the whole notion how the health care law is going to regulate the calories that pizza parlors, grocery stores,

all over the place. and increasing the price of these groceries, these pizzas and other nonfood items. reducing the number of employees' hours. talking about the impact of middle income america. so many americans losing, perhaps 25% of their income because of the aca. we can see why so many americans have found themselves frustrated with the aca. it's not all news to them. it's not old news, actually, you think about the fact that so many americans are facing higher premiums. we've heard so many different numbers this morning. we know that at least some states, i've seen an increase of more than 25% of the health care costs. two states have seen those numbers go over 35%. that was a real dollars for struggling americans who cannot afford the cost of health

insurance. not only the premiums higher. the deductibles are higher. the out of pocket costs are higher. even one of the most recent democrat town halls, young lady supporting president obama supports the health care law said her premiums doubled and tripled. here is one case example. i hope this no longer happens. young man named tom from el againelgin, south carolina created an account on healthcare.gov. a guy named mr. justin hadley in north carolina did the same thing created an account.

when he found populating his account was information from the other gentleman. he called hhs. he could not get any assistance. finally they called her office and during one of the hearings we were able to get that situation solved or at least the beginning of the situation solved. can you guarantee me that situation is no longer occurring anywhere within healthcare.gov? >> i cannot guarantee that. we've joan receiver the controls to ensure that both the website and other parts of the program and identity verification, eligibility verification are working properly. we have raised concerns about some flaws or weaknesses in those controls similar to gao. i can't make that guarantee. we're certainly working hard to identify where there's a vulnerability of that happening and making recommendations of how to improve it. >> my last question, since i'm out of time here today.

it appeared that as we celebrated the success of improving the system the first couple of months, i will note a new trillion dollar program. one of the recommendations was for clear leadership. thank you. >> senator isaisakson. >> thank you, mr. chairman. i apologize for missing your testimony and apologize for being late. i have one question based on a letter i have sent previously. i want to ask this. you agree that increasing the utilization of existing testing data sources is one easy way that cms to reach the mutual goal of expanding program integrity and management and better assess fraud risk? >> yes, in fact that's one of our recommendations to crps.

to consider doing that on an active basis to capture the data and analyze the data for whatever indicators that they throw off and act upon those, yes. >> when do you have any idea when cms is going to take advantage of that and do it? >> as i stated before in response to several senator's questions. cms accepted those recommendations. they are on record in writing as having done so. and as i said in my opening statement, it is now incumbent on the agency to take action in a timely basis. as i said, it will take time to work through this. it's not an easy fix. it's not a short term fix. it's not a one-and-done fix. >> i apologize for being late. you covered it in your opening statement. there is readily available data that are already under contract to cms this a can enhance the program and uproot fraud easier.

i appreciate your testimony. >> yeah. the data are available. definitely. >> thank you. >> i want to thank our witnesses for appearing today. and the work each of you do is very important, as far as we're concerned. you and your organization. it's vitally important to this committee. we're shrankful for the quality progress that they produce to assist us in our policy making and oversight efforts. i also want to thank my colleagues for their participation in this important hearing. i think the hearing has been enlightening. unfortunately, i think this hearing further revealed that we're only now getting to the level of the care iceberg. it seems to me. as premiums continue to skyrocket and insurance options become more limited an increasing number of americans are being hung out to dry.

to work with me to repeal and replace the so called affordable care act before it's too late. politicking and bickering aside and fine work of a bipartisan solution. there's more we can do. there's more we it seems we have to do. and honestly, i believe we can do it. the american people deserve better than what they have right now and more importantly what they're about to have in the next two years. i encourage each of my colleagues to meet with me and find workable solutions. i encourage