real mayor, he was called away, so they substituted the deputy mayor. putin. and, i was annoyed. because i was not meeting with the mayor. knew that putin had been kgb. i was negative about it all. he came in, he was equally negative, he wanted to meet with -- he did not want to meet with an american woman who ran a business. i think he was suspicious of women. he had no gallantry. and, he was the coldest -- he had the coldest eyes i have ever seen. very big blue, cold eyes. and all i could think of is, i wonder what would happen if he was interrogating me. >> sunday night at 8 pm, eastern, on c-span's q&a. yesterday, officials from the geo health and human services and the centers for medicare and medicaid services

testified on efforts to identify and prevent fraud in medicare. we also touched on the potential repeal of the affordable care act. this runs about 1 hour. good morning. we are going to get started this morning, and thank you for being here. nearly 60 million individuals in the united states rely on medicare for their healthcare. and in my home state of kansas, alone, almost one in five people depend on the medicare program. as one of the government's largest and most complex programs, medicare is highly deceptive -- highly susceptible to fraud, waste, and abuse. because of this, it has been

designated as a high risk program for almost 2 tickets. in 2017, alone, improper payments accounted for nearly $52 billion of medicare spending. fraud in particular is often challenging to identify, and measure due to its deceptive nature. fraud may also be nonfinancial, making it more difficult to measure. the centers for medicare and medicaid services or cms measures improper payments, some of which may result in fraud. however, while cms identifies improper payments through the comprehensive error rate, in the tran28 program, it is difficult to get a clear understanding of which improper payments are a result of fraud and which are mistakes. how much fraud is in the medicare program? right now, there are varying opinions about the bottom line. and what is too much. currently, medicare antifraud efforts focus on identifying fraud after it has occurred in a

pay and chase format. instead, cms should focus on identifying and assessing where there is fraud -- risk of fraud before it happens. which, i understand, cms is starting to do. fraud risk exists when there is the incentive, opportunity, or pressure to commit fraud. by focusing on and mitigating fraud risk in medicare, cms can reduce the likelihood and impact of fraud in the program. preventing it before it occurs. the government accountability office, or g.a.o. developed the fraud risk framework in 2015. in order to guide agency's efforts to combat fraud. congress liked the framework so much that we passed the fraud reduction and data analytics act of 2015 , requiring fellow agencies to incorporate practices from the fraud risk framework. as it stands now, there is no

comprehensive risk based strategy for combating fraud in medicare. and, see of -- cms has not conducted -- that would allow it to discuss such a strategy. without a strategy in place, it is difficult to address fraud. today's hearing will cover ways in which cms can continue to improve its antifraud efforts, including the development of a comprehensive antifraud strategy. the witness panel will provide helpful updates on cms's current efforts, and whether there is room for improvement. the goal today is to understand what needs to be done, to more effectively combat fraud in medicare, and to support those efforts however we can. unfortunately, at cms there seems to be some level of acceptance of the improper payment amount, however, i know some -- this is something every member -- every member of this subcommittee wants to improve,

particularly because every dollar that is lost to fraud is a dollar that could be spent on patients. i want to thank the witnesses, i look forward to their testimony. i would like to yield to mr. lewis for his statement. >> thank you for holding this hearing. i apologize for being a little bit late, the elevators move slowly. i am trying to move faster, but i am delighted to be here. thank you, madam chair, again. thank you for holding this meeting. and thank you to our witnesses for taking the time to be with us today. you are a good-looking group. i look forward to hearing from you. madam chair, this subcommittee's work touches many areas. protecting and preserving medicare is perhaps the most sacred obligation. the fight against fraud, waste,

and abuse, is not a partisan matter. to care covers 58 million elderly and disabled beneficiaries. from every state. from every section. from every quarter of our great country. the subcommittee has a historic track record of bipartisan work. observing the sacred trust of our seniors, the families in need, and people with disabilities. i believe the fight of -- against fraud is central to the premise of medicare. yet, as we recommit to fighting fraud, s take care -- let's us take care, we need to make sure that beneficiaries have access to quality and lifesaving services.

as medicare adopts new payment models, this administration must continue president obama's work to fight new forms of fraud. they must continue the affordable care act investment, and innovation to prevent fraud before it happens. madam chair, i always welcome the opportunity to work with you, to strengthen and protect medicare, just as i did almost 1 year ago today. when this committee held the exact same hearing, --. each day, there are troubled reports about the state of our system. for the past 18 months, the committee on ways and means has made little mention of -- about patient access and care.

the closure of hospitals. or the requirement of prescription drugs. i hope that we can find more areas in which to work and continue our committees bipartisan commitment. thank you, and madam chair, with that, i yield back. >> thank you, mr. lewis, without objection, other members statement will be made a part of the record. today's witness panel includes three experts, seto bagdoyan, director of forensic audits and investigative services at the government accountability office . gloria l. jarmon, deputy inspector general for audit services at the department of health and human services office of the inspector general . alec alexander, director of the center for program integrity at the centers for medicare and medicaid services . the subcommittee has received your written statement.

and they will all be made part of the formal hearing record. you each have 5 minutes to deliver oral remarks, and so we will get started. we will begin with mr. bagdoyan. you may be good when you are ready. >> thank you, madam chairman. chairman c-span, making member list, and members of the subcommittee, i am pleased to appear before you this morning to discuss g.a.o.'s's report on managing fraud risk programs including -- medicare. they totaled about 15% of all federal everett, covering over 58 million beneficiaries. reflecting an aging population and rising per capita health cost, cbo projects these expenditures to rise to more than $1.5 trillion by 2028, or

the equivalent of about 21% of all federal spending. this is an annual average growth rate of 7%. the current projected levels of spending for medicare highlight what is at risk from potential fraud, and why it is imperative for cms to comprehensively address would be fraud risks for the program. illustrating that magnitude and rich -- reach of spending, recently the -- secretary introduced the healthcare spending action, involving 611 defendants across 58 districts, including doctors, nurses, and other licensed medical professionals, for their alleged participation in healthcare fraud schemes totaling more than $2 billion in false buildings, for medically unnecessary treatment, and prescription drugs here, and other things.

relating to medicare, 124 defendants were charged with offenses, relating to various schemes totaling over $337 million. this is in false buildings for services such as pharmacy fraud . with this in mind, i will now focus on four central points from the december 2017 report. first, consistent with g.a.o.'s fraud risk framework, they have demonstrated commits to -- commitments to combating fraud by picking a dedicated entity to lead fraud efforts with a direct reporting line to executive cms management. cms has taken steps to establish a culture conducive to fraud risk management, although it could expand fraud training to include all employees, consistent with tremor, cms has promoted an antifraud culture by

incorporating antifraud features into new program designs. to increase awareness of fraud risk in medicare, cms requires training for stakeholder groups such as providers, but does not require the same training for most of its own workforce. the framework identifies training is one way of demonstrating an agency's commitment to combating fraud. training and education, increasing fraud awareness among employees, those are the key preventative measures to help create a culture of integrity. third, cms has taken some steps to identify fraud risk in medicare, for example, it has identified fraud risk through control activities that target areas. the agency has designated these as high risk, such as home health care providers. however, cms has not conducted a fraud risk assessment for medicare as a whole, or developed a risk based

antifraud strategy. cms has established monitoring for its program integrity activities, that if aligned with antifraud strategies, could enhance the effectiveness of fraud risk management in medicare. cms uses a metric called return on investment, and saving estimates to measure the effectiveness of its program integrity activities, in developing an antifraud strategy, they could include plans for refining and building on existing methods to evaluate the effectiveness of all of its antifraud efforts. in closing, cms has already agreed with the three recommendations in the report. it is essential for the agency to place a high priority on implementing them in a timely fashion, to have better managed fraud risks in medicare. doing so would provide reasonable assurance that the

program expenditures, totaling hundreds of billions of dollars in yet -- annually, will be adequately safeguarded. otherwise, dollars lost to fraud could significantly detract from cms's ability to ensure that individuals who rely on medicare are provided adequate care. lynn jenkins, darin lahood, this concludes my remark. >> mr. chairman, you are recognized. >> good morning, chairman c- span, ranking member 23, and distinguished embers. i am gloria l. jarmon, deputy inspector general for audit services at the department of health and human services office of the inspector general . i appreciate the opportunity to appear before you today to discuss oig's strategy to combat fraud and promote program integrity in medicare. medicare represented more than 50% of all federal spending in 2017. expenditures can be

expected to rise further as the number of beneficiaries increases and the per capita health care costs continue to increase. the -- this makes it more important than ever to protect integrity by fighting fraud and reducing improper payments, a central component of oig's mission. the team conducts audits, investigators -- investigations for identifying payments, and build cases against those who seek to defraud the medicare program. this work has led to numerous fraud convictions, and has generated recommendations for payment recovery, and prevention for future improper payments. oig has long been the forefront of measuring, monitoring, and recommending actions to prevent improper payments. we developed the first medicare error rate in 1986. a time when there were a few error rate models and

government. in this context, it is important to stress that while monetary losses constitute fraud, not all are fraud. this program helps to address multiple sources of improper payments, including fraud. today, i would like to highlight oig's three-pronged approach for protection, and enforcement. the fraud protection prevention system is an important tool for preventing fraud and other types of improper payments. however, oig recommended improvements to this, that would increase this effectiveness. we have recommended that cms assure that the redesign can track savings from individual models. we have also recommended that contractors report only fps

models. to help increase the effect of the fraud detection efforts, oig loses advanced analytics. when suspected fraud is detected, we thoroughly investigate the facts, and aggressively enforce the law when warranted. oig partners with the department of justice, and hhs on -- and other healthcare fraud enforcement activities, through the healthcare fraud and abuse control program. this last month, oig, along with our state and federal law enforcement partners, participated in an -- an unprecedented nationwide healthcare fraud taken -- ticked down. this represented the largest of the agency enforcement operation in history. both in terms of the number of defendants charged, and total

loss amount. i would also like to speak about oig's risk management practices. we integrate these practices into all aspects of our work. this assessment process for our audit work considers a variety of factors, including risk factors based on g.a.o.'s -- framework. information we obtained from risk assessment helps us to prioritize work, and guide us. oig historically publishes a work plan, but we now maintain a dynamic workplan that is updated through the year to keep the public better informed. each year, we also identify the top management and performance challenges facing hhs. while these challenges cover a wide range of critical departmental responsibility, ensuring medicare rupee -- remains a challenge. thank you for the opportunity to testify, and i am happy to

answer questions you may have. >> thank you, mr. alexander, you are recognized. >> good morning, chairman lynn jenkins, darin lahood, and members of the subcommittee. thank you for the opportunity to discuss ongoing efforts to protect taxpayer dollars by protecting the integrity of the program. cms takes very seriously our responsibility to make sure we are paying the right amount, the right party, the right beneficiary in accordance with all applicable laws and regulations. is a former assistant united states attorney who is responsible for getting fraud, i have seen firsthand how medicare fraud can inflict real harm and beneficiaries. when fraudulent providers perform medically unnecessary tests, treatments, procedures, or surgeries, or prescribed dangerous drugs, program beneficiaries are put at risk. when fraudulent providers steal,

and bill for services never rendered, that beneficiary may later have difficulties. strengthening our efforts to protect beneficiaries from harm that fraudulent providers and bad actors might have authorized -- otherwise cost. it safeguards trust fund dollars. we do collaborate closely and on a regular basis with law- enforcement partners. most recently, cms began and is leading important new process prevents we call major case coordination. this innovative initiative provides an opportunity for cms policy expert, law-enforcement, including hhs oig, the department of justice, healthcare strike force, as well as investigators to collaborate before, during, and after the fraud. this involves weekly meetings to discuss and prioritize new

leads, and assign appropriate paths for resolution. this frequent collaboration and coordination maximizes our joint ability to identify and investigate, and pursue people who might otherwise endanger program best -- beneficiaries were still from programs. just last month, as was mentioned, hhs and the department of justice, oig, and other partners, announced the largest ever healthcare fraud enforcement action by the medicare fraud strike force. more than second -- 600 defendants were charged for participating in fraud schemes, involving proximally $2 billion in losses to medicare and medicaid. only 45 days after being referred to the strikeforce, as part of this new coordination effort that i have described, one is reviewed cases was charged as part of the june 28 fraud takedown. cms has been working to identify and prevent fraud for

decades, we truly appreciate the extensive work of the g.a.o. to provide a systemic, framework with which we can assess areas at risk of fraud across programs. we are also strengthening efforts to ingrain fraud risk assessment principles throughout the agency, to cultivate a culture of program integrity, to ensure that this critical work does not occur in the silo. we continue to work closely with g.a.o. as we take steps to expand capacity, to conduct fraud risk assessments, and make the process more standardized and more efficient. cms is also using a number of tools to identify and prevent waste and abuse in our programs. as was mentioned, our prevention system allows us to assess prepayments. it also allows us to better target investigative resources toward suspect claims and

providers, and swiftly imposed under administrative action, law-enforcement referrals when warranted. additionally, when one of the systems, approximately 100 predictive models identifies suspects or activity, the system automatically generates leads for further review and investigation. the fps helped us to identify $27 million in 2016. this reflects the return on investment of $6.30 for every $1 spent. recent work of the oig is helping us in our efforts to continue to improve the fraud it -- prevention system. in addition, we are also taking a number of steps to lower the improper payment rate across our programs. it is important to remember that while all payments resulting from fraud are

improper, most improper payments are not fraud. under the leadership, cms is re- examining existing action, and explore new and innovative approaches to reducing improper payments, while minimizing the burden. because of the actions we are put into place, we are glad to point out the medicare improper payment rate fell from 11% in 2016 to 9.5% in 27, that represents about a $5 billion decrease in estimated improper payments. going forward, we must continue our effort to identify vulnerabilities in the program and payment systems, and create strategies to actively reduce fraud. we share the subcommittees commitment to safeguarding taxpayer dollars, and strengthening the medicare program,

to ensure long-term sustainability for the millions of beneficiaries we are honored to serve. thank you for your interest in our work, i look forward to any questions you may have. thank you for your testimony. each and every one of you. we would like to start with mr. bagdoyan. >> -- it allows cms to meet its mission. there is asymmetry between the two, the antifraud strategy is designed to close the gap in terms of meeting the mission, while also achieving fraud management. now, a strategy is the best way to organize and target the

measures that cms and cpi have in place already, plus any new ones that might be needed. to target those against prioritized risks. it certainly cannot address each and every risk. you have to prioritize them and a strategy provides the best roadmap to do so. >> okay, what would an effective antifraud strategy look like, can you talk a little bit about what other agencies or entities have successfully -- fraud. >> just a follow-up, a strategy is basically the result of performing a risk assessment, in which you identify all of the risks that are facing a particular program. and then you create a risk

profile, which is essentially a documentation from the assessment. there could be various assessments, certainly. and, the profile identifies and -- in priority order, the risks that need to be addressed. and then, the strategy comes in with identifying the existing controls, that are in place, and also identifies any new ones that are needed. any new controls, how they might be sequenced in a particular program, how they work with each other, and essentially it also has performance measures to see whether any of these activities actually move the needle, so to speak, in terms of achieving a reduction in fraud or better management of fraud. in terms of your -- the subpart to your question, the framework has been around for about 3

years, now. and, we have applied it to various agencies. to be candid, most of them are still struggling to come up to speed in terms of fully utilizing the capabilities that are within the framework. so, there are a lot of good faith efforts, we have seen, as i described, within cms, they have a lot to build on. it just needs to be better organized, and focused and targeted. >> thank you. mr. alexander, cms has a number of antifraud initiatives in place. can you describe cms's effort to align it antifraud initiative with g.a.o.'s framework? the fraud risk framework? if you will turn your microphone on. thank you. >> thank you, madam chairman. we are grateful to have the g.a.o. guidance, with respect to the fraud risk framework. we use it, and are using it, every day.

we assess fraud risk, in all of our programs, every day. this is a continuous effort, because fraud and fraud risk evolves. day today. we are also standing up, right now, a vulnerability management process. we are at the end of putting it into place. it will do and incorporate essentially all of the elements of the fraud risk framework that the g.a.o. has outlined. specifically, this is enterprisewide -- a look across the horizon at emerging fraud risks. ring them together, with the entire team, prioritize them, analyze them, score them for likelihood of occurrence and impact if they do occur, attach action plans to them, to ensure, as my colleague indicated, move the needle from red to green. and then attach an outcomes assessment tool at the back. we do that at payment system level on the -- a regular basis. we have done it to the

marketplace and exchanges, but also modeling. we do it at the program level, and more particularly, and granular early, we do it at the issue level. when each of these vulnerabilities are identified, we put it into this vulnerability management, we will be doing a version of exactly what is recommended in each of those. now, the g.a.o. report was thoughtful and -- in observing that because of the size of the program, it makes sense not to try and eat the elephant all at once. we break it into some sub assessments, which is essentially what we are trying to do. but, i want the committee to be aware that we are following exactly what the protocols are. in fact, they mirror pretty standard enterprise risk management practices, that were described a moment ago. >> okay, thank you. finally, ms. jarmon, what role does the inspector general have in managing progress in medicare? >> we have a significant role in managing fraud risk in

medicare, as part of our oversight role, in oig. and due to the large size of the medicare program. about $700 billion. we are continually overseeing how the department is managing medicare and even determining what work we do, whether we do an audit for evaluations, we have to do our own risk assessment to determine what areas to focus on. we have what we call priority outcomes, because of the size of the program, we are responsible for, that continues to evolve. it determines what areas we focus on, medicare, improper payments, home health agencies. we have additional focus on medicare work, looking at claims, we are continuing to do advanced data analytics, four areas we should focus on. we use our own risk assessment

to decide what we should do, and oversee the department. >> okay, thank you. now i will recognize --. >> thank you, the affordable care act included dozens of new requirements and enhanced priorities for cms to combat waste fraud. now, as you know, several states are suing to have the aca overturned, the argument is that the law is not severable, meaning that if they are successful, the enhanced fraud capabilities of cms will be repealed as well. mr. alexander, i want to ask you, if those states prevail in their argument, and the aca is overturned in its entirety, will providers, medicare advantage plans, and medicare prescription drug plans, be required to report and return any overpayment in 60 days?

>> thank you for the question, first of all, i would like to share with the subcommittee that the secretary and administrator have made very clear that we are committed -- >> if this is overturned, that requirement goes away. isn't that true? >> the 60 day rule is a little bit beyond the purview of what i was going to discuss today. but, yes. it would have an impact. okay, thank you. i want to ask, would physicians be required -- referrals which contain a high risk of waste and abuse? something that was required under the affordable care act. >> we have many different sources of information of vulnerabilities in the program. that is one of the. that would go away? >> not necessarily. >> the requirement would go away? and then, would cms have the authority to impose

administrative penalties if a medicare beneficiary or medicaid recipient knowingly participated in a healthcare fraud scheme? >> we have multiple authorities on which to revoke provider billing privileges, or take other measures. >> but the administrative penalty -- that is an authority that was provided under the aca. i want high ladies because i think it is safe to say that a fair number of important fraud prevention tools would be taken out of the cms toolbox if the aca were overturned in its entirety. those are just a few of them, i know there are others that would also be removed, we probably do not have time to mention that here -- mention right here. i also wanted -- almost exactly 1 year ago, this subcommittee held this exact hearing. submitted a question to the record, i have not received a response but i wanted to ask it here, today. this is for you, mr. alexander. certain value based models are

uniquely positioned to identify and report fraud to the center for program integrity. on average, medicare aco's cover 17,000, and require hundreds of clinicians. their success depends on continuously monitoring expenditures. they have asked for a fast track platform, -- so they can report fraud to the agency. it is my understanding that cms has not responded to the request. can you commit to creating a platform for a large value based provider, so they can report fraud to your department? >> thank you, we have multiple ways to receive concerns of vulnerabilities from all of the payment structures and payment programs, and systems that we have. yes, we would make that available. we want to know from every source we can, what are the emergency -- emerging probabilities. >> we will follow-up with you,

thank. -- you. president trump came into office saying that he was going to drain the swamp. but, it did not take long for his appointees to waste taxpayer dollars, in particular on lavish trips, on jets, last week the oig found that secretary price wasted 341,000 taxpayer dollars on trips that did not comply with federal policy. the oig recommended that they begin to recoup funds. have you been supplied a timeframe to recoup the $341,000 -- task -- taxpayer dollars that were wasted. >> i do not believe we have a timeframe, yet. the report was issued last week, and as part of our process, we will be following up with the department, and those recommendations.

we will be following up with them over the next few months, how to implement those recommendations. at some point, we will have a timeframe. >> thank you, i would be interested in the timeframe. i yelled back. >> is my understanding that in order to implement this, -- can you talk about that? >> an assessment is basically a bottoms up buildout, if you will, from looking at all of the various parts, and identifying risks, that are known. and perhaps speculating on ones that are emerging, fraud risk is not static, it is dynamic. it shifts from region to region, state to state, city to city.

counter fraud measures take effect, and those schemes evolved. an assessment is essentially a thoughtful process from all stakeholders to determine essentially a portfolio of risks. and then, also, determine the likelihood and impact, into our risk profile, which is the most formal documentation of an investigation. >> alec alexander, seto bagdoyan, normally we have good-faith efforts around the systems. what steps is cms taking to determine what order medicare programs should develop his point, if you could talk about the fact, is there a timeline when each of these fraud risk assessments are going

grid for which all things will be completed. can you talk about that, of the medicare programs, how this should develop. timeline for looking at these programs? >> as i mentioned, we have been and do fraud risk and profiling as described, for a long time. for example, we've done it in the marketplace, in the exchanges. we are doing it in the modeling. with each of those steps, we are learning and bringing those learnings forwards forward to subsequent programs. would point out as well, each of the programs and payment systems that you would do a risk assessment on have unique -- peculiarities to it. the way we pay for critical access is different for -- from acute care. therefore, each present -- resents a different -- each presents a different risk. imagine building under the framework that g.a.o. is giving us, a monolithic

program integrity wall that would cover the whole program, it is comprised of many different bricks, each containing within it a risk assessment of its own. we are in the process of doing that. as to the timeline, i am not sure when it gets done. i would assure the committee, we do these on a vulnerability by vulnerability, issue by issue basis every day. >> can you ballpark it, for the sake -- are we looking at 2 years, 5 years, 10 years? >> by the fall of next year, we should have a general idea of where we are. we are making progress. i want to reiterate as the vulnerability process i mentioned -- comes into fruition, we are taking each of those vulnerabilities on a weekly basis, performing exactly this process, and assessing it to make sure we are addressing it and measuring the outcome of how we are

doing. moving the needle. generally speaking, probably the fall of next year. i would think we would have something in terms of the overall plan. >> and back to your point, you talked about aca, can you talk about the marketplace progress assessment, and how that means progress assessment for medicare? >> we take marketplace exchange integrity as a top priority. for all of us. we are following the recommendations the g.a.o. has given us, performing risk assessments specific to the exchanges, i am happy to tell you that. that very process has identified -- a particular vulnerability around agents and brokers. that has led to a referral. we have also stood up a contractor that has the sole responsibility of working with us as part of our major case coronation process to look into that. we have referred the first of those cases, there is a criminal trial in september. coming. we are making very important progress.

we will identify additional vulnerabilities in the future. >> thank you. >> you are recognized for 5 minutes. >> i appreciate the opportunity to come together and deal with these important issues. one item i would mention is -- as a side point, is another area of potential oversight would be our committee's responsibility, dealing with the integrity of the american infrastructure system. today, marks the 397th hearing that we have had as a committee in the 7 1/2 years that my republican friends have been in charge. we have had about 1, 5 minutes witness testify about the responsibilities that we have dealing with infrastructure. that has significant impact in terms of the health of our country, the economy, it is sad to me that the ways and means

committee has shirked that responsibility. there will be a wide region -- of opportunities to exercise that. at some point, i hope we own up to the responsibility that we have in that regard. i appreciate the focus on the medicare integrity. you have referenced here that we are already talking about over $700 billion in the next 10 years, if i understand correctly. that is going to double? the integrity of the program is absolutely essential. part of the problem we have in this country where we pay more than anybody else in the world, for mediocre results, overall, on -- for on average, -- americans get sicker, they take longer to get well, they die sooner than other countries. waste is a part of that. i appreciate the effort to look at comprehensive efforts, moving forward.

my friend, suzan delbene, pointed out many tools, which is a comprehensive approach to dealing with america's health. and embedded in that were some elements to be able to have more efficient ways of monitoring, guaranteeing program integrity, we have a long way to go. but, there are goals there. we hope that the administration will take those seriously. unlike some of the other areas, where they appear to be taking part the affordable care act, vote by vote. destabilizing the system, and making things worse. i appreciated the reference here, i believe, $4.20 was returned for each $1 that we invested, in terms of integrity? mr. alexander, i think you mentioned an example that was $6 for every $1 invested?

i am curious if you have some sense here of whether or not we are making adequate investments? if we have the rate of return that is 41, 51, 61. are we making the appropriate investments, to be able to fully capitalize on these approaches? mr. alexander? >> thank you for the question, first of all i believe it is important to note that the committee and subcommittee have been particularly good at providing resources. whether it is small business jobs act, or macro, or any of the tools that you have provided. all of these have served the program integrity functions exceedingly well. i'm not a -- not in a position to request any particular funds. will point out that the president's budget proposal does contain, i believe it is 17 specific program integrity focused proposals. all of which have the capacity

to advance our efforts considerably. a couple, just to mention one or two, we regularly see problems with what we call affiliated entities. eric -- there is a proposal that would allow revocation denial of provider enrollment based on an affiliation with a previously sanctioned entity. as a person who was participating in one of the first strikeforce training classes in 2009, i am very familiar with the fact that fraud organizations will disappear and reappear, reagan -- reorganize themselves in different but related corporate structures that are then untouchable. so, this particular authority is one -- there are several others that i would ask the committee to pay attention to those. >> they connect. i would ask for consent to

enter into the record a statement concerning the failure of the committee to deal with its responsibilities of american infrastructure. >> without objection. >> thank you. >> thank you. brad r. wenstrup you are recognized. >> thank you. thank you for being here today. as we look at this old process and the trends that you may be trying to find, we are looking at crime statistics. it is very similar. i am curious -- i'm going to ask a little bit about types of fraud that you see, and are we looking at breakdowns of the types of fraud. because you have mentioned several different ways that people can go back and commit fraud, the provider, or people that pretend to be providers, etc. and so, i am curious as to where most of the fraud occurs? are you looking at trends like urban areas, or rural areas? certain state? or in certain cities?

the number of occurrences that occur, and the amount of dollars that are involved with these occurrences per capita, and where. do you look at trends like this? and i am also curious how does medicare fraud compare with fraud in the private healthcare sector of insurance, if you will? >> thank you, congresses -- congressman. in collaboration with our law enforcement partners, who are adept and focused on doing what you just said, we look at high concentrations of fraud, geographically, and as a monetary and fiscal matter. where are the dollars going, is that geography particularly prone, for fraud? or susceptible to it? you might see that of the 9-11 current strikeforce jurisdictions, they are located in places where that is occurring. high-volume in a particular

concentration. that is where these 75 or so elite executors, and equal number of agents from the bureau and oig, focus on their work. our case coronation process is locked in with them once a week. we are sitting down with them, looking at the newest leads that are being brought in, to assess them. we make quick decisions as to what proper path they should be in. is this a matter that based -- there should be an administration -- administrative referral? or is more investigation needed? or maybe this is one where a provider is exhibiting a high error rate. but, it is through error. there is no additional fraud, no mal intent. we want that provider to not have a burden sin -- burden sin

-- difficult --. >> -- the actor did not notice that. he saw the lady walk out. they were billed for two exterminates. i called medicare right away, i said we were going to reimburse the $12, because it was miscoded. what i am worried about is the headline that there was some misdeed, here. that happens to people that we know. you know there are cases out there. somebody who did not like one code that he was using, and went into his office, rated his office in the middle of the day, it led to a headline, it led to a divorce, it led to tremendous amount of money in legal fees, to end up finding him $60 for one occurrence. there is a difference between innocent miss coding, and intentional over coding.

and i hope that you are addressing that in a proper way. i am going back a few years from when this happened, it is not recent. but, i think that is important also, from the standpoint of our providers. can we be more parental? if somebody pays, we are not necessarily doing this right, let's correct it. not necessarily raiding the office. if you could talk about how you might compare to the private sector, as far as fraud abuse. >> thank you, congressman. that process i described, i will follow up with you. how it does exactly what you discussed -- described. with respect to the private sector, i would point out that the goal there is to be as quick as we possibly can, not to chase, but instead to prevent a payment from going out. i believe i hear, are we is good it -- at the private

sector? i'm not sure how they measure that. we have several tools that give us the capability of stopping payments before they go out, if they are improper. for example, fraud prevention system allows us to place edits that immediately will deny a claim if it violates a policy. we have the ability to do prior authorization. one of the budget proposals that i referred to is to expand prior authorization, i would ask that you consider that. we also have provider enrollment, payment extensions, and prepayment tools that are designed to stop those payments before they are made. >> if i can indulge for a moment, i would like to get the statistics that you have gathered about the geographic findings that you have. i would like to be able to get those from you. and then, again, also compared to private sector, the amount of fraud that occurs. is there lessen the private sector, and why? if that is the case. yield back .

>> thank you, i want to thank each of you for being here, and for your great work. i would like to ask each of you, are we doing enough? as a nation? and as agencies? protecting the nation from initial medicare fraud? if we are not doing enough, what should be our next step? >> they connect, congressman lewis. i believe that we have resources. i tell my team all the time, we have a $1.3 billion budget to protect $3 trillion of spending. we have the financial resources to do it, although there are always emergency -- emerging responsibilities. we have to bring greater insight to the process. what i have described in this new coordination process is where we bring the inside of all relevant parties along what i call the enforcement continuum,

which starts with education, on one edge. it ends with criminal prosecution and sentencing in hopes that the high end of the guidelines on the other end and everything will be in between -- we need to be assessing these issues, holistically at the beginning, together, to make sure we are making insightful and proper decisions from the beginning. i think we can definitely improve their. we are working to do that. >> i would say there has been progress, like mr. alexander mentioned. the numbers are still large. 11% in 2016, 9.5% in 2017, there is still a lot of fraud out there. but, i think we have made progress, there is a lot that needs to be done, still. i think that some of the things you mentioned are moving in the right direction. coordination with law enforcement, meetings, weekly. and i think better use of analytics, information.

and targeting areas where we need to use our resources, i think we need better use of that. we have made several recommendations related to the system. cms is working on that. more needs to be done in that area. we talked about the recovery, identified recoveries. what actually gets returned to the trust fund is a different amount. so, the adjusted recoveries need to be looked at, to determine how effective they fraud prevention system is. that is different from the other. >> thank you for your question. it is a good question to bring it altogether, basically, picking up on points that mr. alexander may, and ms. jarmon as well.

there is a lot going on from the g.a.o. perspective, as i mentioned before, it needs to be better organized and better focused on prioritizing risks. we cannot fight all of them, all of the time. that is very important. and then, assessments will yield also additional actions that may be required, i think mr. alexander mentioned the presidents budget request, for example, outlining 17 or so programs or activities. that would come into the mix. but, a comprehensive, forward- looking strategy is imperative to make sure that fraud risks are identified and managed in the most effective way possible. >> i would like to discover bad apples, able engaged. they go from georgia to florida , to other states, trying to get away with the same thing. >> in only the 8 or so weeks

that we have run this process, we have seen emerging risks that are both geographically desperate, and tied together. we are seeing through a link analysis that a behavior over here that is particularly problematic is also showing itself here. through this process, we are putting together, we along with our law-enforcement partners are linking those together. we also have a contractor that we have brought in. we call him the supplemental review contractor, they have multijurisdictional actions. we are working on those aggressively. yes. >> thank you. madam chair, i would like to submit for the record a recent story for my hometown newspaper, atlanta journal- constitution. this story tells of a provider

who was defrauding taxpayers and harming the elderly. >> without objection. >> i yield back. thank you. >> i recognize darin lahood for 5 minutes. >> thank you. want to thank the witnesses for your testimony and service. i understand under the fraud prevention system at cms, there have been steps taken to develop monitoring mechanisms to determine return on investment and other savings when combating fraud. but, cms is unable to evaluate all preventative activities without a comprehensive assessment and strategy. recognizing that there are a number of antifraud efforts happening at cms, i want to focus on the health fraud prevention partnership.

the health fraud prevention partnership is a voluntary partnership between the federal government, state, law enforcement, health insurance plans, and others that analyzes the studies -- and studies multiple payer claim data to identify billers with suspect patterns. in my home state, the department of healthcare and family services is a member of the partnership. i think that used in the right way, public partnerships are the rightful.

this is an important collaboration that includes federal, private, entity. this is to identify and manage broad risks that pervade across payers for example. across systems. currently they have 102 members. i was onto inspect the last board meeting. we were there, many of the state representatives and we had talked a great deal about how this datasharing can reveal sorts of fraud schemes. for example if the federal government is aware of a particular provider billing and excessive amount of time a day for a particular theme, then we are able to compare that

through the same provider that may have billed multiple private barriers -- payers at the same day at the same rate. what emerges is an impossible time scenario that is something that can be pursued. that is a simple example of the sort of fruit we see from the datasharing. it's a critical component in identifying risks, not just for the federal programs and also for the state medicaid fraud units or the ministry of programs as well and for the private entities who are exposed for these frauds also. >> do you anticipate growth in the program? >> i noticed just from last year as i prepared for this i believe the number last year for this was 79 last year. i'm pretty sure i heard 102 and recently at the board meeting, so i know it's growing and i know it makes a lot of sense and we are honored to be a part of it and actually coordinate it

and i expect additional growth. >> what about any deficiencies or challenges that you have with the program that need to be worked out?>> i've only been working in this capacity for six months, i'm not aware of any at this moment but i will be glad to follow up and make you aware if i do become aware of any shortcomings that we have. >> you, those are all our questions.>> thank you, you are recognized for five minutes. thank you, mdm. chair, i recognize the witnesses today. south florida bill number one for healthcare flood -- fraud following a massive takedown across the nation. that was the headline last month in the miami herald following the unveiling by the department of justice that 600 defendants are being accused of fraudulently billing $2 billion to medicare, tricare, and private insurance. it has been reported that over $300 million of those fraudulent claims by south floridians word treatment for opioids, home health, and

prescription drugs. i would like to submit into the record what we submitted in june regarding healthcare lot -- fraud in georgia. last year in a hearing before the subcommittee i was asking why we were always chasing so much fraud and we learned that one of the biggest challenges is understanding the cause behind improper payments since it's a not always fraud but also clerical and technical errors that contribute to improper payment statistics. while i am grateful for the work , we still need to do more to cut down on pay and chase methods and focus on prevention measures. i agree with gen. jarman that a comprehensive program integrity strategy that focuses on prevention, detection and enforcement. i worked on a bill my colleagues representatives -- represented

to produce the restart act, this bill would direct them to work with certain entities including quality improvement organizations to engage quality outreach to prevent prescription drug abuse. this is to help people adjust their behaviors and prevent overprescribing. this issues is personal to me because it is no secret that south florida is the medicare fraud capital of the united states, and my constituents no longer want for that to be the case. so my question to you is how does the administration view prescriber education as fitting into an overall antifraud strategy? >> thank you for the question. as you know, first of all the secretary and the administrator

and the president made it absolutely clear that fighting the opioid process is a top priority for the administration and we are working very closely with law enforcement to do that. we are bringing a number of tools to that fight, specific tools that would include the medicare drug integrity contract which provides investigative work and referrals for fraud and other problematic behaviors in that space. the medic is part of the you pick medic major case ordination process i have described, so once every seven weeks and more frequently if needed, the medic is reporting in real time on its current investigation and we are making sure they get where they need to go. we also have projects like the trio project where we are monitoring the prescribing of this particularly deadly trio of substances that are very dangerous for beneficiaries. we have comparative billing reports that we provide to help

us with this. we also will be standing up what is called the preclusion list which is going to place certain problematic prescribers on the list and require the programs to deny payment for claims associated with those particular prescribers. finally the new lock in authority that we have thanks to the congress, we now have the authority to limit high risk beneficiaries to specific pharmacies and specific prescribers. all important tools that we are bringing to that important work.>> thank you mr. alexander, i appreciate your commitment and i am very grateful to the chair, because this is all very demoralizing to american taxpayers and obviously it is unfair to medicare beneficiaries. every dollar that goes into one of these fraudulent schemes is one dollar last that we have for those who have earned

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

friday morning we take you to santa fe new mexico with the national governors association annual summer meeting. coming up we will talk about the future of technology. that is live at 11 am eastern on cspan 2. saturday our coverage picks up on cspan with a look at the international perspective at state and federal collaboration.

join us this weekend for alaska weekend with featured programming on cspan, book tv, and american history tv. we will explore alaska's natural beauty and public all of the issues facing the state. saturday morning washington journal amy harter on the effect of climate change in alaska.

we have a conversation on free speech at colleges and universities across the nation. this runs about an hour and 35 minutes.