House Hearing, 113TH Congress - Medicare Mismanagement: Oversight of The Federal Government Effort To Recapture Misspent Funds

MEDICARE MISMANAGEMENT: OVERSIGHT OF THE
FEDERAL GOVERNMENT EFFORT TO RECAPTURE MISSPENT FUNDS

HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY POLICY,

HEALTH CARE AND ENTITLEMENTS
OF THE
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
MAY 20, 2014
Serial No. 113136

Printed for the use of the Committee on Oversight and Government Reform
(
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
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WASHINGTON
89863 PDF
2014
For sale by the Superintendent of Documents, U.S. Government Printing Office

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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

DARRELL E. ISSA,
JOHN L. MICA, Florida
MICHAEL R. TURNER, Ohio
JOHN J. DUNCAN, JR., Tennessee
PATRICK T. MCHENRY, North Carolina
JIM JORDAN, Ohio
JASON CHAFFETZ, Utah
TIM WALBERG, Michigan
JAMES LANKFORD, Oklahoma
JUSTIN AMASH, Michigan
PAUL A. GOSAR, Arizona
PATRICK MEEHAN, Pennsylvania
SCOTT DESJARLAIS, Tennessee
TREY GOWDY, South Carolina
BLAKE FARENTHOLD, Texas
DOC HASTINGS, Washington
CYNTHIA M. LUMMIS, Wyoming
ROB WOODALL, Georgia
THOMAS MASSIE, Kentucky
DOUG COLLINS, Georgia
MARK MEADOWS, North Carolina
KERRY L. BENTIVOLIO, Michigan
RON DESANTIS, Florida
California, Chairman
ELIJAH E. CUMMINGS, Maryland, Ranking
Minority Member
CAROLYN B. MALONEY, New York
ELEANOR HOLMES NORTON, District of
Columbia
JOHN F. TIERNEY, Massachusetts
WM. LACY CLAY, Missouri
STEPHEN F. LYNCH, Massachusetts
JIM COOPER, Tennessee
GERALD E. CONNOLLY, Virginia
JACKIE SPEIER, California
MATTHEW A. CARTWRIGHT, Pennsylvania
TAMMY DUCKWORTH, Illinois
ROBIN L. KELLY, Illinois
DANNY K. DAVIS, Illinois
PETER WELCH, Vermont
TONY CARDENAS, California
STEVEN A. HORSFORD, Nevada
MICHELLE LUJAN GRISHAM, New Mexico
Vacancy
LAWRENCE J. BRADY, Staff Director

JOHN D. CUADERES, Deputy Staff Director
STEPHEN CASTOR, General Counsel
LINDA A. GOOD, Chief Clerk
DAVID RAPALLO, Minority Staff Director
SUBCOMMITTEE
ON
ENERGY POLICY, HEALTH CARE
JAMES LANKFORD,
PATRICK T. MCHENRY, North Carolina
PAUL GOSAR, Arizona
JIM JORDAN, Ohio
JASON CHAFFETZ, Utah
TIM WALBERG, Michigan
PATRICK MEEHAN, Pennsylvania
SCOTT DESJARLAIS, Tennessee
BLAKE FARENTHOLD, Texas
DOC HASTINGS, Washington
ROB WOODALL, Georgia
THOMAS MASSIE, Kentucky
AND
ENTITLEMENTS
Oklahoma, Chairman
JACKIE SPEIER, California, Ranking
Minority Member
ELEANOR HOLMES NORTON, District of
Columbia
JIM COOPER, Tennessee
MATTHEW CARTWRIGHT, Pennsylvania
TAMMY DUCKWORTH, Illinois
DANNY K. DAVIS, Illinois
TONY CARDENAS, California
STEVEN A. HORSFORD, Nevada
MICHELLE LUJAN GRISHAM, New Mexico
(II)
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CONTENTS
Page
Hearing held on May 20, 2014 ...............................................................................
WITNESSES
Ms. Kathleen King, Director, Health Care, U.S. Government Accontability
Office
Oral Statement .................................................................................................
Written Statement ............................................................................................
Shantanu Agrawal, M.D., Deputy Administrator and Director, Center for
Program Integrity, CMS
Oral Statement .................................................................................................
Mr. Brian P. Ritchie, Assistant Inspector General for Audit Services, Office
of Inspector General, HHS
Oral Statement .................................................................................................
6
8
25
27
39
41
APPENDIX
Statement of the American Orthotic and Prosthetic Association on Combating
Fraud, Waste and Abuse in the Medicare Program ..........................................
Questions for Shantanu Agrawal from Chairman James Lankford ....................
Follow-up question/answer from Brian Ritchie .....................................................
(III)
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102
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MEDICARE MISMANAGEMENT: OVERSIGHT OF

THE FEDERAL GOVERNMENT EFFORT TO
RECAPTURE MISSPENT FUNDS
Tuesday, May 20, 2014
HOUSE OF REPRESENTATIVES,
ENERGY POLICY, HEALTH CARE, AND
ENTITLEMENTS,
COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM,
Washington, D.C.
The subcommittee met, pursuant to call, at 9:34 a.m., in Room
2154, Rayburn House Office Building, Hon. James Lankford [chairman of the subcommittee] presiding.
Present: Representatives Lankford, Gosar, Chaffetz, Jordan,
Woodall, Speier, Norton, Lujan Grisham, Horsford, and Duckworth.
Also Present: Representatives Issa and Meadows.
Staff Present: Brian Blase, Professional Staff Member; Molly
Boyl, Deputy General Counsel and Parliamentarian; Caitlin Carroll, Press Secretary; Sharon Casey, Senior Assistant Clerk;
Katelyn E. Christ, Professional Staff Member; John Cuaderes, Deputy Staff Director; Adam P. Fromm, Director of Member Services
and Committee Operations; Linda Good, Chief Clerk; Meinan Goto,
Professional Staff Member; Mark D. Marin, Deputy Staff Director
of Oversight; Jessica Seale, Digital Director; Tamara Alexander,
Minority Counsel; Jaron Bourke, Minority Director of Administration; Aryele Bradford, Press Secretary; Devon Hill, Minority Research Assistant; Jennifer Hoffman, Minority Communications Director; Una Lee, Minority Counsel; and Donald Sherman, Minority
Counsel.
Mr. LANKFORD. The committee will come to order. Without objection, the chair is authorized to declare a recess of the committee
at any time. We will take this a little bit out of order today. As
we walk through this, we have some of the Democrat members who
are on their way here, but we will have the opening statements,
and a lot of them will be able to catch up.
This is a subcommittee hearing on the Energy Policy, Health
Care and Entitlements called Medicare Mismanagement: Oversight
of the Federal Government Effort to Recapture Misspent Funds.
Id like to begin this hearing by saying the Oversight Committee
mission statement. We exist to secure two fundamental principles.
First, Americans have the right to know the money Washington
takes from them is well spent; and second, Americans deserve an
efficient, effective government that works for them. Our duty on
the Oversight and Government Reform Committee is to protect
SUBCOMMITTEE
ON
(1)
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these rights. Our solemn responsibility is to hold government accountable to taxpayers, because taxpayers have a right to know
what they get from their government.
We will work tirelessly in partnership with citizen watchdogs to
deliver the facts to the American people and bring genuine reform
to the Federal bureaucracy. This is the mission of the Oversight
and Government Reform Committee.
Medicare currently pays one-fifth of all health care services provided nationwide, making it the largest single purchaser of health
care in the country. Unfortunately, every year the Medicare program wastes an enormous amount of money in overpayments,
fraud and unnecessary tests and procedures.
According to the Government Accountability Office, in 2013, $50
billion was lost to improper payments, an increase of $5 billion
from 2012. Medicare fee for service accounted for $36 billion of this
total. GAO has related Medicare as a high risk since 1990, in part,
due to the programs susceptibility to this waste, which make up
a staggering 47 percent of total improper payments identified by
the Federal Government last year.
Growth in Medicare misspending and fraud represents a significant threat, not only to the 50 million beneficiaries who depend on
its services, but also the programs finances. At present, the Medicare trust fund has been in deficit since 2008, and the Medicare actuaries predict the fund will be fully depleted by 2026.
The Centers for Medicare and Medicaid Services has the responsibility to maintain the program integrity of Medicare. To combat
fraud, CMS works in partnership with several outside organizations, like the Health Care Fraud Prevention and Enforcement Action Team, which operates Medicare fraud strike forces to combat
perpetrators who often steal identities and falsify billing documents.
The agency recently implemented a risk-based screening to identify fraudulent Medicare providers and suppliers. In April of 2014,
CMS also announced that fingerprint-based background checks
would be conducted on high risk providers.
Temporary enrollment moratoriums have also been placed on
some new Medicare providers and suppliers in areas that are high
risk for fraud. CMS has even begun administering risk-based private sector technologies, like predictive analytics to identify possible fraudulent claims for review.
CMS also relies on four types of contractors to combat improper
payments. These contractors, such as the recovery audit contractors, or RACs, review claims to identify overpayments and then recover the misspent funds. GAO and others have found that these
contractors efforts sometimes overlap and the requirements to responding to audits are not uniform. This puts a greater burden on
providers. The GAO has recommended that improving consistency
among contractors would improve efficiency of post-payment reviews of Medicare claims.
Once improper payments are identified, CMS may take steps to
reclaim identified overpayments. Providers and beneficiaries are
given an opportunity to appeal these determinations through a
lengthy appeals process. This third level of appeal is administered
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by 66 administrative law judges at HHSs Office of Medicare Hearings and Appeals.
There is currently a massive backlog of over 460,000 pending appeals for ALJ hearings. Due to this backlog, HHS has stated it currently takes up to 28 months for a hearing before an ALJ, during
which, providers have their money held by the government. Not
many businesses can survive having their money held for 28
months while they wait to decide if theyre actually going to get reimbursed.
The committee invited chief ALJ Nancy Griswold to testify today
on these issues, but she was unable to appear, but we will follow
through on that.
Today we have three witnesses: Kathleen King, Director of
Health Care at the Government Accountability Office; Brian P.
Ritchie, Acting Director Inspector General for Evaluation of Inspection at the HHS Office of the Inspector General; and Dr. Shantanu
Agrawal, Deputy Administrator and Director for the Center of Program Integrity at CMS, to discuss how CMS can improve Medicare
oversight and program integrity. I look forward to their testimony.
The American people deserve a government that protects their
tax dollars and uses them wisely. We must do more to strengthen
the integrity of government programs overall, but particularly
Medicare, given its enormous size and scope.
Clearly more needs to be done to improve the Federal Governments efforts to recover $50 billion in overpayments and other improper payments. I hope todays hearing will provide the subcommittee with some clarity about these areas, but the process
cannot drive up the cost of health care for seniors and reduce their
options for care. I look forward to the conversation we will have
today.
With that, I recognize Ms. Lujan Grisham for an opening statement.
Ms. LUJAN GRISHAM. Good morning. Thank you, Chairman
Lankford, for holding the hearing. I agree with the chairman that
reducing waste and fraud and abuse in the Medicare program is
critically important, not only to protect taxpayer funds, but as you
just heard, its also incredibly important to protect the health of
our Nations seniors and disabled adult population. And we have
got a hundredwe have got more than 10,000 seniors aging into
the Medicare program each day this year. It is now more important
than ever that we ensure the integrity of Medicare funds and keep
the Medicare promise alive for generations of future Americans.
Im grateful to have Mr. Ritchie here on behalf of the Departments Office of Inspector General to speak about the OIGs efforts
to do exactly that. The OIG, in conjunction with the Department
of Justice, prosecutes some of the worst instances of health care
fraud, providers billing for non-existent beneficiaries or services
that were never provided, and providers who order unnecessary or,
in fact, harmful procedures.
The health care Fraud and Abuse Program, a joint program
under the direction of the attorney general and the Secretary of the
Health and Human Services Department is a model for inter-agency cooperation and coordination. In fiscal year 2013, the HCFAC
program recovered a record $4.3 billion in health care fraud judg-
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ments and settlements. This is remarkable. I look forward to hearing from the assistant inspector general about how this was
achieved and what can be done to strengthen the program going
forward, but I also think it is important to underscore what weve
heard, is that these bad actors represent a small fraction of all providers.
A vast majority of providers are not fraudsters and are deeply
dedicated to the care of their patients. And given the size and complexity, the theme of Medicare programs, overpayments are going
to occur, and CMS must be vigilant in detecting and recouping
them, but well meaning providers are entitled to have their claims
administered fairly, efficiently and without undue delay so that
they can focus on the core mission of providing care.
And I have some serious concerns that the current system of
post-payment audits by RACs is resulting in a significant burden
on some providers, particularly smaller entities. Smaller providers,
such as durable medical equipment, or DME suppliers, have more
difficulty complying with RAC requests for medical documentation
and may not have the resources to, in fact, even appeal overpayment determinations.
The considerable backlog in the Office of Medicare Hearings and
Appeals only makes these matters worse, as these providers and
suppliers do not have the luxury of waiting months for their appeals to be adjudicated.
I also have concerns about how RAC audits may affect beneficiaries. As a representative of the New Mexicos First District, the
issue of access to care is always paramount in my mind. If a provider or a supplier is forced to cut back services or close its doors
as a result of a RAC audit, I think this is a lose-lose situation for
everyone, particularly as were working to build access to care, particularly preventative care for these populations.
CMS recently announced that it will implement several changes
to the RAC program, which will be effective with the next RAC program contract awards. Now, I look forward to hearing from Dr.
Agrawal about CMSs efforts to improve the oversight of the RACs
in particular.
I hope that you will also address some of the issues weve both
raised, the chairman and I, regarding the burden on Medicare providers, and with a particular focus on some of those smaller providers or providers in rural and frontier States like mine, and the
impact that that has directly on the beneficiaries who are working
to access those services.
I also look forward to hearing from all of the witnesses about
what CMS is doing to move away from the pay-and-chase model to
a more proactive model that identifies improper payments upfront.
Such a model would spare both providers and taxpayers from expending resources that could be much better spent on providing
care, which, in the long-run, shores up Medicare for future generations.
With that, Mr. Chairman, I yield back.
Mr. LANKFORD. Well go to Mr. Meadows for an opening statement.
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Mr. MEADOWS. Thank you, Mr. Chairman, for holding this hearing and thank you for continuing to highlight that we need to make
sure that the American taxpayers money is well protected.
This particular hearing is of importance to me, primarily because
I have some constituents that have been caught up in this ALJ
backlog, and as the ranking member just testified, it can be extremely difficult on small businesses. The request for a particular
company in my district threatens to put them out of business, and
yet all they want is a fair hearing. I shared this with the chairman
and shared some of my concerns that where we are. And in his own
opening statement, he talked about the fact that we have a 28month backlog. Well, actually, its worse than that. If you look at
the real numbers, that today, if we hired, according to the budget
request for CMS, if we hired all the adjudicators, it would take
close to 10 years to work through this backlog, some milliona
million appeals. And if you look at the rateand actually the adjudicators have been improving their efficiency, theyve been getting
better year after year, and yet what we do is we have a policy of
where were saying youre guilty until proven innocent.
And were all against waste, fraud and abuse, but what we must
make sure of is that we do it under the rule of law and that we
have laws that guidethe guidelines that are there. There is law
right now that says that if we askif a constituent asks for a hearing, that the law says that they should have some kind of adjudication and a decision within 90 days, and yet even according to the
website there for CMS, were not even opening the mail for weeks
and months and months and months.
So its not even being put in terms of on the docket where it can
be assigned to a judge for many, many months. Weve got to do better than this and make sure that in this, we dont take those that
are innocent and put them out of business.
Now, I say that because if our overturn rate was not that great,
we wouldnt have a problem, but according to documents, many of
these appeals are being overturned by the adjudicators. Over 50
percent of them are being overturned. So you have over 50 percent
of the people who are innocent, who are having to wait years for
a decision, and in that, we must do better and we must find a better way to address this.
So I look forward to hearing your testimony on all these things.
And I thank you, Mr. Chairman.
Mr. LANKFORD. Thank the gentleman for all of his work and his
research that has gone into this hearing this day, and hes been a
leader in this.
Id be glad to be able to receive the testimony now of our three
witnesses. Pursuant to committee rules, all witnesses are sworn in
before they testify, so if youd please rise and raise your right hand.
Do you solemnly swear that the testimony that you are about to
give will be the truth, the whole truth, and nothing but the truth,
so help you God?
Mr. LANKFORD. Thank you. Let the record reflect all three witnesses answered in the affirmative. You may be seated.
Ms. Kathleen King is the director for Health Care at the United
States Government Accountability Office. Thank you for being
here; Dr. Agrawal is the Deputy Administrator and director for the
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Center for Program Integrity at CMS, and Mr. Brian Ritchie is the
Acting Deputy Inspector General for Evaluation and Inspections at
the Office of Inspector General at HHS.
Thank you all for being here and thanks for your testimony
today. Weve all received your written testimony. That will be a
part of the permanent record. We would now be glad to be able to
receive your oral testimony as well. In order to allow time for discussion, I ask you to limit your oral testimony to 5 minutes. Youll
see the clock there in front of you.
Ms. King, you are first.
WITNESS STATEMENTS
STATEMENT OF KATHLEEN KING
Ms. KING. Mr. Chairman and members of the subcommittee,

thank you for inviting me to talk about our work regarding Medicare improper payments.
CMS has made progress in implementing our recommendations
to reduce improper payments, but there are additional actions they
should take. I want to focus my remarks today on three areas: provider enrollment, pre-payment claims review, and post-payment
claims review.
With respect to provider enrollment, CMS has implemented provisions of the Patient Protection and Affordable Care Act to
strengthen the enrollment process so that potentially fraudulent
providers are prevented from enrolling in Medicare, and higher
risk providers undergo more scrutiny before being permitted to enroll. CMS has recently imposed moratoria on the enrollment of certain types of providers in fraud hotspots, and has contracted for
fingerprint-based background checks for high risk providers; however, CMS has not completed certain actions authorized in PPACA,
which would also be helpful in fighting fraud. It has not yet published regulations to require additional disclosures of information
regarding actions previously taken against providers, such as payment suspensions, and it has not published regulations establishing the core element of compliance programs or requirements
for surety bonds for certain types of at-risk providers.
With respect to review of claims for payment, Medicare uses prepayment review to deny payment for claims that should not be paid
and post-payment review to recover improperly paid claims. Prepayment reviews are typically automated edits and claims processing systems that can prevent payment of improper claims. For
example, some pre-payment edits check to see whether the claim
is filled out properly and that the provider is enrolled in Medicare.
Other pre-payment edits check to see whether the service is covered by Medicare.
We found some weaknesses in the use of pre-payment edits and
made a number of recommendations to CMS to promote implementation of effective edits regarding national policies and to encourage
more widespread use of local policies by contractors. CMS agreed
with our recommendations and has taken steps to implement most
of them.
Post-payment claims reviews may be automated like pre-payment reviews or complex, which means that trained staff review
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medical documentation to determine whether the claim was proper.
CMS uses four types of contractors to perform most post-payment
reviews. We recently completed work that examines CMSs requirements for these contractors and found differences that can impede
efficiency and effectiveness by increasing administrative burden on
providers. For example, the minimum number of days contractors
must give providers to respond to a request for documentation of
a service ranges from 30 to 75 days. We recommended that CMS
make the requirements for these contractors more consistent when
it would not impede the efficiency of efforts to recover improper
payments. CMS agreed with our recommendation and is taking
steps to implement them.
We also have further work underway on the post-payment review
contractors to examine whether CMS has strategies to coordinate
their work and whether these contractors comply with CMSs requirements regarding communications with providers.
Although the percentage of claims subject to post-payment review is very small, less than 1 percent of all claims, the number
of post-payment reviews has increased substantially in recent
years. From 2011 to 2012, the number of these reviews increased
from 1.5 million to 2.3 million. This is one factor contributing to a
backlog and delays in resolving appeals by administrative law
judges.
We have been asked to examine the appeals process, including
reasons for the increase, its effects on beneficiaries, providers and
contractors, and options to streamline the process.
In conclusion, because Medicare is such a large and complex program, it is vulnerable to improper payments and fraud and abuse.
Given the level of improper payments in Medicare, we urge CMS
to use all available authorities for preventing, identifying and recouping improper payments.
This concludes my prepared remarks. Thank you.
[Prepared statement of Ms. King follows:]
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Mr. LANKFORD. Thank you.
Dr. Agrawal.
STATEMENT OF SHANTANU AGRAWAL, M.D.
Dr. AGRAWAL. Thank you. Chairman Lankford, Ranking Member

Lujan Grisham, and members of the subcommittee, thank you for
the invitation to discuss the Centers for Medicare and Medicaid
Services program integrity efforts.
Program integrity is a top priority for the administration and an
agency-wide effort at CMS. We share the subcommittees commitment to protecting beneficiaries and ensuring taxpayer dollars are
spent on legitimate items and services, both of which are at the
forefront of our program integrity efforts.
I view program integrity through the lens of my experience as an
emergency medicine physician, who fundamentally cares about the
health of patients. Our health care system should offer the highest
quality and most appropriate care possible to ensure the well-being
of individuals and populations. CMS is committed to protecting taxpayer dollars by preventing or recovering payments for wasteful,
abusive or fraudulent services, thus helping to extend the life of
the trust fund, but the importance of program integrity efforts extend beyond dollars and health care costs alone. It is fundamentally about protecting our beneficiaries and ensuring we have the
resources to provide for their care.
As part of our responsibility to taxpayers and beneficiaries to see
that resources are used appropriately, CMS has an obligation to
perform audits, medical review and use other oversight tools as a
part of these efforts.
I would like to make three points today about the status of our
efforts: First, we are having real impact in reducing waste, abuse
and fraud in the Medicare program; second, we continuously work
to reduce provider burden while meeting our obligations to the
trust fund; and finally, we continue to improve and innovate to
meet our mission.
On the first point, were seeing success from our efforts to detect
and prevent waste, abuse and fraud. Through medical review activities in fiscal 2013 alone, $5.6 billion in payments were prevented from being paid or were returned to the trust fund. Weve
saved an additional $7.5 billion over the last several years from
payment edits, which prevent bad payments from being made in
the first place. At the direction of Congress, CMS uses the recovery
auditors to perform medical review to identify and correct Medicare
improper payments. Recovery auditors have returned over $7 billion to the Medicare trust fund since the start of the national program in 2010.
Our anti-fraud activities have also had impact. Last year,
HCFAC funding returned about $4 billion to the trust fund, resulting in an 8 to 1 return on investment. We have also revoked over
17,000 and deactivated over 260,000 providers and suppliers since
passage of the Affordable Care Act. At the same time, weve recognized these efforts can impose burdens on providers.
CMS continually strives to carefully balance our responsibilities
to protect the Medicare trust fund with our desire to limit the bur-
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den these efforts can place. To that end, we use tools such as educational efforts, data transparency and significant contractor oversight to minimize burden wherever we can. We also engage in continuous dialogue with provider communities to improve our programs. As one example, during the next round of recovery audit
contracting, CMS is making changes to the program based on feedback from stakeholders and we believethat we believe will result
in a more effective and efficient program with improved accuracy
and more program transparency.
We have also utilized other approaches, such as prior authorization, to reduce improper payments, while granting more security
and assurances to the provider community. We will continue to listen to stakeholders to make improvements to our programs.
Third, we appreciate this committees interest in ensuring that
CMS is improving its program integrity efforts and know that the
Congress and the public expect real and tangible results. To that
end, we are also looking to implement new authorities or improvements which can enhance our efforts and impact.
In July 2013, CMS imposed moratoria for the first time on the
enrollment of certain types of new providers in geographic areas
which have been prone to high amounts of fraud. With the moratoria in place, weve revoked the billing privileges of over 100 home
health agencies in the Miami area and weve revoked an additional
179 ambulance suppliers in Texas. We are also continuing to work
with law enforcement in these hotspot areas.
CMS is also using private sector tools and best practices to stop
improper payments. Since June 2012, the fraud prevention system
has supplied advanced analytics on all Medicare fee-for-service
claims on streaming national basis. In its first year, the FPS
stopped, prevented or identified over $100 million in improper payments, including savings from kicking out bad actors.
Weve also begun to use the common private sector tool of prior
authorization to address an area of high improper payments, the
use of powered mobility devices. In 2012, CMS began a demonstration in seven States to require prior authorization. This demonstration has resulted in a significant decrease in expenditures, over 66
percent in the demonstration States and over 50 percent in the
non-demonstration States.
Support from the provider community has been significant, many
of whom have requested that CMS expand prior authorization to
other parts of the country.
While we know that we have made progress to address areas of
vulnerability, we also know that more work remains to further refine our efforts and prevent improper payments and fraud.
I look forward to answering the subcommittees questions on how
we can improve our commitment to protecting taxpayer and trust
fund dollars while also protecting beneficiaries access to high quality care. Thank you.
[Prepared statement of Dr. Agrawal follows:]
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39
Mr. LANKFORD. Mr. Ritchie.
STATEMENT OF BRIAN P. RITCHIE
Mr. RITCHIE. Good morning, Chairman Lankford, Ranking Member Grisham, and other distinguished members of the subcommittee. Thank you for the opportunity to discuss OIGs work on
Medicare improper payments.
Improper payments cost taxpayers and Medicare beneficiaries
about $50 billion a year. Recovering these lost dollars and preventing future improper payments is paramount. In short, more action is needed from CMS, its contractors and the Department. CMS
needs to better ensure that Medicare makes accurate, appropriate
payments. When improper payments do occur, CMS needs to identify and recover them.
It must also implement safeguards to stop additional overpayments. CMS relies on contractors for many of these vital functions.
This means that ensuring effective contractor performance is essential.
Finally, the Medicare appeals system needs to be fundamentally
changed to ensure efficient, effective and fair outcomes for the program, its beneficiaries and providers.
My written testimony elaborates on OIGs work and recommendations in all of these areas. This morning Ill focus on four
key points that illustrate our work on these issues.
First, CMS must do a better job ensuring the payments are accurate. For example, CMS needs to better protect Medicare and beneficiaries from inappropriate prescribing and billing for drugs. This
is both a safety issue and a financial issue. Weve found that Part
D paid millions of dollars for drugs prescribed by massage therapists, athletic trainers and others with no authority to prescribe.
CMS is working toward implementing several OIG recommendations to tighten up monitoring of billing for drugs.
Second, when improper payments occur, CMS needs to do four
things.
Mr. LANKFORD. Mr. Ritchie, you might check your microphone
there to see if itit clicked off. Is it still lit up there?
Mr. RITCHIE. Thanks.
Mr. LANKFORD. Okay.
Mr. RITCHIE. Second, when improper payments occur, CMS needs
to do four things: Identify, recover, assess and address.
CMS contracts with recovery auditors, or RACs, to identify improper payments. In 2010 and 2011, RAC audits result the in more
than $700 million in overpayments recovered. CMS also assesses
the RAC findings to understand why the overpayments occurred. It
then must address these issues to prevent future improper payments.
My third point is that CMS needs to better ensure that its contractors perform effectively. CMS contractors pay claims, identify
and recover overpayments, and protect Medicare from fraud and
abuse.
OIG has consistently raised concerns about contractor performance and oversight. CMS needs to assess performance more effectively and take action when contractors fail to meet standards.
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And, finally, the Medicare appeals system needs to be fundamentally changed. Even before the recent surge in appeals and subsequent backlog, OIG raised concerns about the administrative law
judge, or ALJ, level. ALJs overturn prior level decisions more than
half the time. ALJs also vary widely amongst themselves in decision-making. This happens partly because Medicare policies are not
clear. OIG recommends clarifying Medicare policies and then coordinating training on those policies at all levels of appeals.
Administrative inefficiencies also contribute to the problem. We
recommend that paper files be standardized and made electronic.
In closing, more needs to be done to reduce and recover improper
payments, ensure effective contractor performance, and improve
the appeals process. OIG is committed to finding solutions to reduce waste, protect beneficiaries and improve the program.
Thank you for your time, and I welcome your questions.
[Prepared statement of Mr. Ritchie follows:]
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51
Mr. LANKFORD. Thank you all. I recognize myself for 5 minutes
for openingfor a first round of questioning, and then well just go
back and forth along the dais here.
Let me set some context for my time thats here. If a provider
will have something reviewedlets talk through the process and
lets set context for everyone on this. Go back to Ms. Lujan
Grishams statement about the pay and chase side of this. So this
is the post-payment has occurred. How will someone find out that
theyre going to be checked, inspected, whatever it may be, postpayment for any kind of claim? Whats the step one? How would
they be notified?
Ms. KING. They get a letter from a contractor.
Mr. LANKFORD. Okay. They get a letter from a contractor; that
being with a RAC audit contractor, or that would be who?
Ms. KING. It could be one of four types of contractors. It would
be MAC, a Medicare administrative contractor; it could be a BRAC;
it could be the CERT contractor, whowhich pulls a sample of random claims to estimate the improper payment rate; or it could be
a ZPIC, a zone program integrity contractor, who is looking specifically for potential fraud.
Mr. LANKFORD. Okay. So lets back up. Lets take a specificlets
take a physical therapy clinic, stand-alone, privately-owned clinic
seeing patients, a mixture of the insurance, private pay and then
also Medicare. Okay. So thatyoure saying that one physical therapy clinic could receive a request to pull a file from any one of
those four, or those four are unique four different entities?
Ms. KING. They arethey could receive a request from any one
of the four.
Mr. LANKFORD. Okay. Is it possible that all four of them will
make requests during the course of a year to pull a file?
Ms. KING. Its not supposed to happen.
Mr. LANKFORD. Is it possible?
Ms. KING. Theoretically, but highly unlikely.
Mr. LANKFORD. Okay. So how are they notified, then, if one of
them does it, or could two of them do it in the course of a year or
could three? Youre saying all four, unlikely.
Ms. KING. The RACs are not supposed to duplicate reviews that
have been done by other contractors.
Mr. LANKFORD. Now, to the same provider or to the same case?
Ms. KING. To the same case.
Mr. LANKFORD. Okay.
Ms. KING. Unless
Mr. LANKFORD. So it could
Ms. KING. A duplicate claim is considered to be the same file for
the same service.
Mr. LANKFORD. Could a provider get a review from all four of
those different folks, different cases, but that provider itself get reviews from four different groups of people from Medicare during
the course
Ms. KING. Its possible, but its unlikely.
Mr. LANKFORD. Okay. So what about from two of those or three
of those? Youre saying four is unlikely. Is it possible from them to
get two of them?
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Ms. KING. Yes. Like, for example, they might get a review from
a RAC and they also might get a review from a CERT, whos estimating the improper payment rate.
Mr. LANKFORD. Okay. So when a RAC contacts them, how many
are they pulling? How many files are they pulling at that point?
Are they pulling one or are they pulling a sampling? How many are
they going to pull?
Ms. KING. If theytheyre pulling one, I believe. You know, overall, the RACs did over a million reviews.
Mr. LANKFORD. Correct.
Ms. KING. But when theyre reviewing, theyyou know, for a
provider, theyre pulling for that service.
Mr. LANKFORD. Right. But theyre pullinggo back to our physical therapy clinic as well.
Ms. KING. Yeah.
Mr. LANKFORD. Theyre not going to reach in and just randomly
grab one case, are they? Are they going to grab a sampling of cases
for them to be able to review?
Ms. KING. No. I dont believe so.
Mr. LANKFORD. So how do they
Ms. KING. I mean, that
Mr. LANKFORD. How do they select whichwhich patients file to
review?
Ms. KING. Well, in the case of a RAC, CMS tells the RAC what
kinds of issues they can look at. They work together with CMS,
and CMS approves the type of issues that RACs are going to investigate.
Mr. LANKFORD. So they go and make the request of a certain
type
Ms. KING. Yes.
Mr. LANKFORD. of client thats there. But Im saying, theyre
not just pulling one patient, are they, from that type? They may
pull 10, they may pull 20? How many do they pull?
Ms. KING. No. I believe the claims are investigated on an individual basis.
Mr. LANKFORD. Right, but the provider, Im saying to the provider, when they get notification from the RAC.
Ms. KING. Yes. Theyll get notification of a claim, investigation
of a claim.
Im sorry. Correction. There could be more than one, but there
is a limit
Mr. LANKFORD. Right.
Ms. KING. on the number
Mr. LANKFORD. Thats what Im tying get, is what is that limit,
how many are they trying to pull? Does anyone else know the number on that? How many theyre trying to pull at one time for a RAC
audit?
Dr. AGRAWAL. So if I might, Congressman, just take a little bit
of a step back, because I agree that there are numerous contractors
that can audit a single provider. Each of those contractors actually
hasyou know, they are set in statute, they are supposed to do the
job that theyre doing.
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Dr. AGRAWAL. The CERT contractors function is different from
the RAC contractor. The CERT contractors function is to go in
there and actually determine the improper payment rate. Its not
primarily looking at the provider. It, of course, has to do the medical record audit to determine whether or not an improper payment
has occurred, but its actually a function to evaluate our services.
So while I agree that numerous contractors can touch providers,
we also do try to coordinate not touching the same claim or not
such the same provider too often.
In answer to your last question, we have set limits for RAC contractors so that they can touch a provider and request a particular
sampling based on the size of the provider themselves.
Mr. LANKFORD. Right. So how large is that sampling?
Dr. AGRAWAL. So just a hypothetical example might be a smaller
provider that sends in, say, 10,000 claims a year, a RAC would be
permitted toto obtain no more than 20 to 25 claims at a time and
no more frequently than, I believe, every 45 days.
Mr. LANKFORD. So they could come in every 45 days and pull 20
to 25, correct, different files and say were not going to pay these
until we get a chance to check them, correct, not correct?
Dr. AGRAWAL. I think conceivably thats correct, but, again, we
do provide oversight to ensure that, you know, we are not burdening individual providers or individual entities during the course
of these processes.
Mr. LANKFORD. Okay. Ive exceeded my time. Well come back to
that. I want to honor everyones time.
I do want to come back to that statement that were not burdening individual providers. I could name you several dozen individual providers in my district that would beg to differ on that
statement.
Now, you will find no greater advocates for the taxpayers and
going after fraud than us at this panel, but were also advocates
to make sure that we dont lose providers, that our seniors still
have access to multiple providers out there, that there arent providers that say this is not worth it and drop out, I wont take Medicare anymore, because its become so burdensome for them. So
weve got to be able to do that.
With that, I recognize Ms. Lujan Grisham.
Ms. LUJAN GRISHAM. Thank you, Mr. Chairman.
And Im going to do a couple of things, assuming I dont run out
of time. I want to follow up on a couple of things that Chairman
Lankford said. That balance is really tricky, and given that this
committee clearly wants to focus on waste, fraud and abuse, even
if the Medicare program and every other health care program was
flush and that wasnt our being efficient and worrying about having services available for a growing population, you know, our job
is to make sure that every tax dollar is being used the way it was
intended, and we want bad actors and bad providers barred from
this system and all others, no question about that. We also recognize that you have to do a due process system, and we appreciate
that, but the due process system is clearly broken, because if youre
waiting years forand without payment, or having a payment removed, thats not due process. And I would agree, too, that weve
created a very burdensome administrative environment. Its not
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just the Federal touches for the Medicare program, although that
is federally operated. Remember that most of these programs take
Medicare, Medicaid, theyre serving dual eligibles. Theyre being
touched, reviewed, audited, administratively regulated by States,
and some States with a whole different variety of private entities.
So these small, sometimes small providers are spending an incredible amount of time being administratively reviewed. And these recovery audits, given that there is a contingency fee where theyre
being incentivized to identify issues and problems, this creates a
pretty ripe environment for what I think you have today, which is
weve nowwith the Office of Medicare Hearings and Appeals,
weve recently announced that were going to suspend the ability of
providers to have their appeals heard by administrative law judges.
The decision is made as a result of a massive backlog of appeals
waiting an ALJ hearing, which by the Medicare Hearings and Appeals own admission has grown from 92,000 to over 460,000 in just
2 years.
Now, Dr. Agrawal, I understand that the Office of Medicare
Hearing and Appeals is not part of CMS. I also understand that
your office oversees these contractors, including the RACs, whose
audits are the cause of many, if not most, of these appeals.
Given the long wait times for getting an appeal heard by
wouldnt it would be prudent for CMS to suspend RAC audits until
the claims backlog is cleared? And I want you to touch, Dr.
Agrawal, on the fact that there are other ways to make sure that
we are preventing fraud more than just the RAC audits.
Dr. AGRAWAL. Sure. Thank you. So II would start at just agreeing with you that it is a real challenge in program integrity to
make sure that we are doing our job protecting the trust fund, and
at the same time, doing as much as we can to lower the burden
on providers and make sure that there are no access to care issues
for our beneficiaries. That is a top priority, its something I said in
my opening statement.
I think its also important to kind of level set a little bit on the
amount of burden that we are placing on the system through our
activities. As pointed out earlier by Ms. King, we audit far less
than 1 percent of the claims that we receive. With respect to RACs
in particular, you know, there are clearly appeals that occur from
RAC audits, but the overall rate of appeals from overdeterminationsIm sorrythe overthe overturn rate from all of the overdeterminations is about 7 percent. Thats in the latest publicly
available data.
If you look at just appeals that are initiated after an overpayment determination by a RAC, theresthe overpayment rate is
about 14 percent out of all appeals that are generated.
So I do think that the appeals process is important for providers.
It allows them an opportunity to represent their claims, to represent their interests, and it provides an important check and balance on our approach.
As far as the third level of appeal that involves the ALJ, as you
pointed out, that is not directly under our control. We have been
working with the Department to devise strategies for that backlog.
Well, what is directly under our control are the first two levels
of appeal, and I can tell you that both the overturn rate is not sub-
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stantially high in those areas, and they are beingand the appeals
are being heard in a timely fashion. There are othernumerous
other kind of strategies that weve taken to try to decrease the appeals. I want to afford you your time, so Im happy to go into them
if youd like.
Ms. LUJAN GRISHAM. And I just want toand I appreciate that,
except that I would certainly make the statement that, and youve
heard this, or heard this theme, I think, throughout this hearing,
we have providers who would differ with you about these administrative burdens and whether 14 percent is reasonable in terms of
what they can manage in terms of cash flow for their patients and
staff.
And I would also say that many of the smaller providers couldnt
afford to appeal, so Im not sure if this data is really relevant, and
what strategies have you undertaken to identify how many providers certainly come to me, those providers, who would love to appeal, because they believe that theyve been wronged or there has
been an administrative error, but dont have the ability to do that.
Also, I would say fear, intimidation and retaliation, and just pay
or do whatever it is that theyre asked to do at the next level.
And Im way over time, so if you could respond to that, and then
Ill come back.
Dr. AGRAWAL. Sure. In addition to appeals, Congresswoman,
there are other controls that we have implemented over our contractors. We do determine what areas RACs can look at. They have
to achievesort of get permission from our board at CMS before
they enter into any particular audit area. That is a type of oversight.
We have an independent validation contractor that looks behind
the RACs themselves to evaluate whether or not they are making
these determinations accurately. And all of the RACs have, through
that validation contractor, achieved well over 90 percent accuracy
rate.
I think the incentive structure itself actually incentivizes getting
it right. So, you know, RACs do get paid on a contingency basis,
as you pointed out, but if they lose on appeal, they lose the contingency fee. I think that is an enormous incentive on the RACs to
make sure that theyre making the right determinations in the first
place.
And let me correct just one factual issue. I said it was a 14 percent overturn rate overall. This is in Part A, since a lot ofa lot
of our issues you identified were in Part A.
Ms. LUJAN GRISHAM. And, Mr. Chairman, if I can, so the answer
is, however, we dont know how many providers are unable to appeal, and theres no test to determineI mean, you have one side
of the data equation, and Im not sure that thats an accurate representation as a result. So I appreciate that youre looking at these
tests.
And Ill yield back, Mr. Chairman, but Id like to explore that
further.
Mr. LANKFORD. Great. We will on the second round. Before I
yield to Mr. Gosar, let me just make one quick statement to Dr.
Agrawal as well. You mentioned that there is athe incentive for
RACs to be able to limit that, because they lose their contingency
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fee if they lose on appeal. The problem with that is, a fishing illustration. Let me give you an Oklahoma illustration. If youre fishing,
you can put one hook in the water or you can put five hooks in the
water, and you may only catch one fish, but youre going to catch
more more often.
And if a RAC decides theyre going to try to just grab 20 different
cases and they hope that they win 10 of them, thats better than
just grabbing 10 of them. And if its close, go ahead and just grab
that file and keep moving from there, and we may win it, we may
not win it. Thats helpful to the RAC in their contingency fee.
Thats definitely not helpful to the provider to then have to go
through all the process. And we can talk about that more in just
a little bit.
With that, I recognize Dr. Gosar.
Mr. GOSAR. Thank you very much, Mr. Chairman.
You know, while you were on that frame of thought, do you have
any differentiation in your facts in regards to small providers, large
providers and their overturn rates?
Dr. AGRAWAL. I dont think the data differentiates it in terms of
the appeals data. Im not aware of data that differentiates between
small and large. I think the point I made earlier is that we do have
different requirements of the contractors when they look to audit
a smaller provider versus a larger one. There is different medical
record request requirements to make sureagain, to try to limit
that burden that is being placed, especially on the smaller providers.
Mr. GOSAR. It would be very interesting to know. Particularly, I
represent rural Arizona, and so I would like to see some type of
movement to try to make that accountable.
You know, when you say the overturn rate, you know, with Part
A, what about Part B?
Dr. AGRAWAL. You know, I am actually not aware ofI dont
have the figure in front of me. We can actually connect with your
office, if thats okay, to get you a Part B overturn rate.
Mr. GOSAR. I think thats very, very important just because most
of those Part B aspects are actually institutions, not individual providers. Would you agree?
Dr. AGRAWAL. I think the Partlet me just make sure I heard
you correct, sir. I believe the Part A claims are the ones that tend
to be more institutional, the hospitals, and then the Part B claims
can tend to be individual providers or groups of providers.
Mr. GOSAR. Okay. Ms. King, from your oversight aspect, do you
see maybe a change that you would recommend for methodology instead of, you know, looking at a provider as being guilty in an aspect, kind of an atmosphere like that? Do you see a better way of
handling this?
Ms. KING. I dont actually think that thethat the post-payment
review starts off with the provider is guilty. I think its notits
not a criminal matter. Its a matter of either an overpayment or an
underpayment. And I do think that CMS has a responsibility, as
stewards of the trust funds, to make sure that claims are paid
properly, and as part of that, I think they need to do as much as
they can effectively on the pre-payment side, but I also think that
they need to look at the post-payment side.
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That being said, we have found some instances in which the requirements are posing administrative burdens on providers, and we
have recommended that CMS reduce, not the requirements, but the
differences across contractors so that providers have a better understanding of what theyre required to do.
Mr. GOSAR. From the standpoint of that process, Dr. Agrawal, is
there a way that we could actually identify maybe frequent fliers?
Do we have a frequent flier list? I mean, State boards kind of do
this. I mean, were kind of replicating something that State boards
do.
Dr. AGRAWAL. Well, I think we take a different approach. So, you
know, the spectrum of program integrity is long, and there are
folks on one side that are totally legitimate providers that are trying to abide by our rules that are honest, and they are the vast majority of providers. On the other side, a much smaller subset are
potential criminals, or people that are perhaps trying to rob the
program.
So we do takeyou know, I would argue that the various approaches that we have to oversee the program integrity issues do
try to take into account where our risk really lies. And I think part
of why we can take an audit-based or post-pay approach for the
vast majority of providers is because they are legitimate and an
audit is a reasonable approach for them.
We do take a much more kind of risk-based approach on the
fraud side that really can ratchet up the intensity of how we look
at a provider based on findings from audits. I think thats really
appropriate for providers that are pushing the line, potentially
even committing, you know, criminal activities.
We try on the other side of the house to take a much more factbased approach. We look at issues that are big national issues
where we know that are improper payments and then, you know,
well do deeper analyses to determine which providers to look at,
but it tends to be focused on where our improper payments are occurring. It isnt sort of a ratcheting up on a single provider.
Mr. GOSAR. But wouldnt it would be more efficient in regards to
looking at the profilehaving some type of a profiling aspect? You
know, in State boards, I mean, you have a list. Most of your problems are with 10 percent of the population.
Dr. AGRAWAL. Right. And I think the comparison to States
boards, I mean, I would just remind you that State boards are
often dealing with the most difficult of cases, theyre the ones on
the right side of the house where, you know, these are providers
that are committing potentially criminal or negligent activities, so
they are dealing with probably the worst orthe worst actors.
Again, we do do that with a similar set of actors. I think what
we are looking at perhaps, and again, to try to decrease the potential burden from these audits is not ratcheting up, but perhaps
looking at solutions that might ratchet down. So as providers get
audited and it turns out that their claims are substantiated, that
there are not a lot of errors, we can perhaps audit them less. Thats
a solution that, for example, were looking into to see if we can implement it.
Mr. GOSAR. Gotcha. Thank you, Mr. Chairman.
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Mr. LANKFORD. Can I just follow up on that as well? As of when?
When will that occur? Because that is one of the recommendations
that hovers out there. How does someone prove basically Im a good
actor, and they dont get someone constantly coming in to check
them all the time?
Dr. AGRAWAL. I think there are a number of solutions that were
looking at. As I think somebody pointed out earlier, the RAC program is currently in a pause state, where we are actually working
on the next round of procurements. As part of that procurement activities, we are looking at the statement of work, taking into account a lot of opinions and input that weve gotten from stakeholders, including providers, and are trying to solution how RACs
can still do their jobs, still meet our obligations, but try to decrease
that burden, and thats one of many solutions were considering.
Mr. LANKFORD. Okay. Let me come back. When?
Dr. AGRAWAL. I couldnt promise you an exact date.
Mr. LANKFORD. Is that something that providers, they can think
about for next year? Is that 2 years? Is that 10 years from now?
Dr. AGRAWAL. Well, I think we are working on the procurement
now and we hope to complete it some time in the next few months,
and so itll beI think it remains to be seen if thats a change that
can be pursued in the near term or potentially
Mr. LANKFORD. That change is still under discussion. Thats not
a definitethats under discussion at this point to try to figure out,
Ive got a good actor there, as Dr. Gosar mentioned.
Dr. AGRAWAL. Yeah. Its one of many solutions that we are looking at. Again, weve heard a lot of input from the provider community, and we are trying to take action where we can.
Mr. LANKFORD. All right. Well come back to that.
Mr. Horsford.
Mr. HORSFORD. Thank you very much, Mr. Chairman.
Listening this morning, it gets a little frustrating when were up
here, because it seems like despite the fact that we all come from
different communities and are sharing very clear examples of why
the approach thats being taken isnt working, we continue to get
pushback and basically reiterating the same points without any
clear determination of when things will improve.
And on behalf of the constituents I represent in Nevada, Medicare is vitally important to their quality of life. Im talking about
the beneficiaries here. And when someone who is Medicare eligible
cant see an OB/GYN in my community because there are no providers who will accept them, because of issues ranging from the reimbursement rate, to the delay in being paid for services rendered,
to other compliance issues, it makes me want to know what can we
do now in the short term to be able to move this forward.
You know, Medicare is a bedrock of our programs. People rely on
these services. We have providers who about a third or more of
their patients are typically Medicare covered. And as my colleague,
Ms. Grisham explained, it also typically includes Medicaid or other
pay sources as well, and so when you layer that burden on the provider, its tough to provide services. Thats what were hearing.
So after speaking to several stakeholders in Nevada, particularly
hospitals and medical providers all around the Las Vegas Valley,
and I also include some of the rural counties in Nevada, which are
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woefully underserved by enough providers, the accountability of the
recovery audit contractor program seems questionable at best, and
I dont understand how you continue something that doesnt even
hasnt even been properly evaluated.
While these programs have a noteworthy mission of seeking out
improper payments of Medicare services, it seems there are potentially perverse incentives to these RACs. In 2010, the RAC program
was expanded to all 50 States and made permanent. Now, again,
I dont know how you start something, dont evaluate it, and then
expand it to 50 States, first of all.
In 2013, over 192,000 claims were filed by these auditors to the
Office of Medicare Hearings and Appeals, contributing to a backlog
of over 357,000 claims. The recovery audit contractor program, as
I said, may have been well intentioned, but there have been unintended consequences.
So, Acting Deputy Inspector Ritchie, in your testimony, you include a long list of policy recommendations for CMS to address.
You reported that 72 percent of denied hospital claims at the third
level of adjudication are overturned ultimately in favor of the hospitals. What recommendations have you offered CMS and this committee to address the concerns that RACs are notno pun intended, dramatically racking up the number of claims backlog?
Mr. RITCHIE. Thanks. I think first weve offered recommendations both in the RAC area and in the appeals area. I think its important, while theyre so intertwined, to consider those separate in
some ways, too.
In our RAC work, it wasall the work that we havethat were
talking about was before this current backlog, but weve see things
that we still think are relevant. In the RAC work, we did see in
2010 and 2011 that they werent helpingas I mentioned in my
testimony. We need to make appropriate payments, and when inappropriate payments are made, they need to be recovered. Only
they did recover $1.3 billion in 2010 and 2011, and 6 percent of
them were appealed. Now, when theyre appealed, theres a very
high overturn rate, so clearly something needs to be done.
Id point to our ALJ work for the recommendations Id push to
the most, because for the system to really work and where the
backlog is, we think the biggest recommendation that we had is
these Medicare policies are not clear. And I think, you know, all
fraud is certainly improper payments, but all improper payments
are not fraud. And most of these providers are not committing
fraud; they just dont understand the complex system and theyre
trying to submit claims thats complicated.
Then we saw in our ALJ work that 56 percent of the ALJs overturned 20 percent of the QICs that the prior level overturned, and
a lot of that was just due to different interpretations of the policies,
different stuff that they were doing there, so our
Mr. HORSFORD. Is there a set of recommendations dealing with
the Medicare policies?
Mr. RITCHIE. Yeah. Our recommendin our recommendations,
because there are so many, its mainly to clarify, select the policies
that need to be clarified, clarify those, and then educate people on
the policies to create less overpayments, less appeals in the process. For instance, in my written testimony, I talk about our home
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health work. We found with the recent face-to-face requirement
that if a physician is certifying that youre eligible for home health,
they have to have a face-to-face encounter. We found $2 billion in
improper payments in 2011 and 2012 and a third of the claims
didnt meet the requirement.
Now, we dont think a third of the claims were fraudulent. Its
because these are complex policies. As people get more used to
them, it will probably go down, but to educate people on the policies, make them more clear, we think is really a key to keeping the
appeals backlog lower.
Mr. HORSFORD. Okay. I know my time is up for this round, so
Ill come back to additional questions.
Mr. LANKFORD. I recognize the chairman of the full committee,
Chairman Issa.
Mr. ISSA. Thank you, Mr. Chairman, and thank you for holding
this important hearing.
The gentleman from Nevada and I dont always agree, but every
once in a while theres a nuance of agreement from this extreme
to that extreme of the dais, and this is one where I think the entire
committee is frustrated. And Chairman Lankfords work on this, in
addition to ENC, I think, really shows how bad things are. And let
me just give you two questions and then well go into comments.
Dr. Agrawal, let me just ask you, and for the IG, Mr. Ritchie,
New York CityNew York State owes us $15 billion in overpayments. They flat-billed more than the CMS maximum for Medicaid
forand we held hearings on that more than a year ago.
What have you done to get $15 billion back while in fact youre
sending out hordes of people to harass doctors with a less than
stellar success rate of success and accuracy in the audits? What
have you done to get back from a State that knowingly billed far
greater than the rate, and its $15 billion? Its 10 years worth of
your recovery. Any answers?
Dr. AGRAWAL. Sir, that is an area that we are looking at now at
the
Mr. ISSA. Youre looking at it. $15 billion, and youre looking at
it.
Dr. AGRAWAL. At the request of the committee, we havewe are
currently taking on an evaluation of theof New York State. Were
waiting to get the findings and then release the results, after which
time I think we can have a conversation about how to proceed.
Mr. ISSA. The newspapers make it abundantly aware the numbers speak for itself, because theyre hard numbers of what was
sent out versus the maximum allowed in law, and youre looking
at it more than a year later.
Dr. AGRAWAL. Sir, I think these evaluations do take time. They
are rigorous, theyre designed to be rigorous. We
Mr. ISSA. Oh, they do. Do you know how many doctors have to
had stop their practices and answer nothing but questions, because
you take their money and then they try to get it back? Isnt that
correct?
Dr. AGRAWAL. I wouldnt characterize it as stopping their practices during
Mr. ISSA. No. Im telling you that doctors, in some cases, have
to stop their practices, because the audits for small practitioners
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are incredible detail, and they dont get their money back until
they prove their innocence through the process.
So let me go through this again. You have the right to stop payments in your State based on a good faith belief they got over $15
billion, and then they can spend legions of time trying to argue
why they should get to keep far more than they were supposed to
receive, couldnt you?
Dr. AGRAWAL. Id have to look into whether or not we have that
authority, sir.
Mr. ISSA. Well, why dont you look into it, Doctor. And while
youre looking into it, pursuant to congressional action under the
Small Business Jobs Act, you owe ENC and subsequently, we get
a copy of it, you owe a report, a second year report on predictive
modeling, dont you?
Dr. AGRAWAL. Yes, we do.
Mr. ISSA. And youve owed it since October?
Dr. AGRAWAL. I believe theI believe the report has actually
been due since earlier this year, but I take your point.
Mr. ISSA. No, you dont take my point. We just did away with a
whole bunch of reports by congressional action, ran it through the
House. Its overI think the Senate may have already acted on it,
because we do ask for reports we dont always need, but we didnt
just ask for this report, we ordered the executive branch to deliver
it. It is extremely important, because the kinds of things that the
gentleman from Nevada were talking about, auditors going out half
you know what, being wrong, and on appeal often being dramatically overturned, even to zero dollars in some cases after physicians
and clinics go through a great process, thatmuch of that would
go away if your predictive modeling went and looked for the fraud
where it was most acceptablemost likely to occur.
Mr. ISSA. Mr. Ritchie, are you concerned that Chase Manhattan
can see your credit card perhaps being misused and calls you, but
the organization that you are auditing has no such capability?
Mr. RITCHIE. That is definitely a concern. I mean, we do think
that the fraud prevention system has taken steps and shows promise.
I knowI am tying to the other question with our RAC work
one of the things that CMS does when they look at the RAC audits
is they identify vulnerabilities, if there is cumulative issues over
500,000, and they need to address those vulnerabilities and then
assess them.
So one of our recommendations was to fully do that because we
had found, you know, once they identify and recover repayments,
you need to set up the safeguards to prevent them from occurring
in the future so you dont have this problem.
Mr. ISSA. And has the IG looked into the excess payments requested by and given to the State of New York that this committee
earlier had as to whether or not any criminal charges could be
brought?
Mr. RITCHIE. I am not aware of that. I dont believe we have
looked at criminal charges. I do know that we have
Mr. ISSA. But they knowingly overcharged more than the maximum and then they cross-funded that payment to other services
not covered by CMS in many cases.
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So the question is: Is it even worth taking a look to see whether
or not the threat of criminal just might get New York to return $15
billion in excess payments, ten times what your audits that we are
talking about here today, in part, are revealing?
Mr. RITCHIE. Personally, yes. I think it is worth it. I am not the
enforcement person, but my office in Auditwe have done a whole
series of audits in New York that we have shared with the committee. And I can go back to the office and talk to our investigators
about this and our counsel and look into it.
Mr. ISSA. Okay. Well, Mr. Chairman, I appreciate your giving me
a little extra time.
I will say that I am deeply concerned that reports required by
Congress that ultimately are necessary in order to improve the system are clearly done, but are being held back so they can be sort
of looked at again and again.
This is the politicking of releases. And I would only suggest to
the chairman that we have the authority to compel the work documents if we need to, if that report doesnt come in a timely fashion
from here on.
And I yield back.
Mr. LANKFORD. Dr. Agrawal, just before I yield, this was a pending question from the chairman: When will that report come? We
know it is months late. When?
Mr. AGRAWAL. So, as you know, the Small Business Jobs Act requires us to not only produce a report, but to have the results
Mr. LANKFORD. When?
Mr. AGRAWAL. certified by OIG.
We are in the process of working with the OIG to achieve that
certification. That is taking some time. I hope to release it as soon
as we can.
Mr. LANKFORD. That doesnt answer a when, does it?
Mr. AGRAWAL. I cannot give you a specific timeframe right now.
Mr. LANKFORD. Can you give meis it a week or is it a decade?
Mr. AGRAWAL. It is less than a decade, sir.
Mr. LANKFORD. Great.
Mr. AGRAWAL. What I can tell
Mr. LANKFORD. How much less?
Mr. AGRAWAL. What I think is
Mr. LANKFORD. This is a report all of us want. It matters to all
of us because it deals with what we are all dealing with with providers. Trying to shift us to where we all want to go.
When? Is it a month? Is it 2 months? This is a simple question
from the chairman. When?
Mr. AGRAWAL. I cannot give you a specific date. However, I think
what is important for the committee and for, you know, the American people and public transparency is that we not only release a
report, but that we release it with certification from the IG so that
people can trust the numbers and base future decisions upon a certified report. I think the importance of that is clear. So we are
working to achieving that.
Mr. ISSA. Mr. Chairman, only because the doctor did say public
transparency, public transparency would be releasing all of the
work documents that show the reason for the delay, the discussion,
the political correspondence, the loop to the White House that oc-
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curs on each of these reports. I rather doubt we will get that transparency.
Mr. LANKFORD. We will want to have that.
Ms. SPEIER. Mr. Chairman, would you yield?
Mr. LANKFORD. I would yield.
Ms. SPEIER. Doctor, you know, it is a pretty simple question. If
you cant give us a precise date, is it 3 months? Is it 6 months?
And what is holding it up?
Mr. AGRAWAL. As I mentioned, you know, again, it is thewe are
working closely with the Office of Inspector General, as required in
the law, to try to achieve certification for this report.
I think the importance of that is very clear so that people can
not only get a report, but can trust the numbers that are in the
report.
Ms. SPEIER. You know, we are not stupid up here. We understand when people are trying not to answer a question.
So if you would be kind enough to answer the question. Is it 3
months away? Is it 6 months away? And what is holding it up?
Mr. AGRAWAL. I cannot give you a specific date. The reason I cannot is because it is a process that is being worked in collaboration
between CMS and the Office of Inspector General.
Ms. SPEIER. Well, you can give us a precise date. You need to
maybe ask someone else, but we expect to know. We have the right
to know. If there is a problem holding it up, we have a right to
know what is holding it up.
Mr. AGRAWAL. It isnt an issue of holding up the report, Congresswoman.
Ms. SPEIER. You have a draft report that is complete.
Is it just being agreed to by various parties that then makes it
available to be released?
Mr. AGRAWAL. Again, I think our
Ms. SPEIER. Just answer that question.
Mr. AGRAWAL. Our objective is
Ms. SPEIER. Answer the question.
Mr. AGRAWAL. We are working with
Ms. SPEIER. Is the draft complete?
Mr. AGRAWAL. There is a draft report that isthat utilizes the
methodology to arrive at savings numbers that the Office of Inspector General is reviewing or is in the process of reviewing.
We hope to be able to release that report in the next month or
two. I cannot be more specific than that because it does depend
Ms. SPEIER. That is helpful. That is a lot better than earlier.
Mr. LANKFORD. Ms. Duckworth.
Ms. DUCKWORTH. Thank you, Mr. Chairman.
I would like to follow up a little bit on what the chairman of the
full committee, Mr. Issa, was talking about, these RAC audits.
I agree that combatting Medicare waste and fraud is a critical
goal. In fact, there are studies that show that as much as $50 billion are wasted each year due to fraud, waste and abuse in both
Medicare and Medicaid. We need to go after that.
But it has also become clear to me that the well-intentioned efforts of CMS to accomplish that goal are not working and are badly
in need of reform.
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I want to talk specifically about how these auditsthese RAC
audits affect the orthotic and prosthetic industry and the patients
that they serve.
I have personally heard from providers all over the country,
many of whom are small businesses, how they are being targeted
by overzealous and misdirected audits that are threatening to put
them out of business.
They are having to wait years and carry hundreds of thousands
of dollars on the books that they are not getting paid for, and these
businesses simply cannot survive this.
Taken collectively, the stain on the industry undermines access
to critical services for patients who have suffered from limb loss or
limb impairment.
Oftentimes, these businesses are the only providers of prosthetics
and orthotics in their local area, which now means that the patients cannot get access and must go without the limbs and medical
equipment they need for their lives.
The volume of audits has led to a huge backlog in appeals for
providers who feel that they have been wrongly denied payment for
very legitimate services.
I am particularly concerned that CMS has chosen to deal with
this backlog by suspending for 2 years the ability of providers to
appeal decisions at the administrative law judge level.
With ALJs siding fully with providers in over half of our decisions and in a context of increasingly aggressive CMS audits, it is
simply unacceptable to deal with the problem by denying the providers due process.
They are continuing the audits. You are taking these peoples
money by not paying them and saying, Now you have no right of
appeal. You are going to have to wait for over 2 years.
That is not the way businesses work. And you are going to drive
these hard-working Americans, these small business owners, out of
business, and you are going to leave all of their patients out there
without the limbs and the equipment that they need toin order
to live their lives.
At the public hearing on this issue, the Chief Administrative
Law Judge Griswold gave an explanation of how the Office of Medicare Hearings and Appeals oftheir position, but really offered no
short-term remedies that would restore the right of a timely due
process to providers.
If you are going to suspend the hearing by 2 years, then suspend
the RAC audits for 2 years. Give them their money back and collect
it 2 years later. It seems blatantly unfair and un-American to take
these folks money and not give them the right to due process.
Mr. Agrawal, does CMS have any plans to restore fairness to the
system for our providers?
Mr. AGRAWAL. So just to clarify at the outset, the third level of
appeals or the administrative law judge level is outside of the jurisdiction and oversight of CMS. It is overseen by OMHA. What we
have direct oversight over is the first two levels of appeal.
Ms. DUCKWORTH. Okay.
Mr. AGRAWAL. Everybody is affordedyou know, any over-determination, whether by a MAC, RAC or other contractor, providers
are afforded the opportunity to use that appeals process as part of
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their oversight of us to make sure that the audits are being conducted appropriately and the right determinations are being arrived at.
Ms. DUCKWORTH. What is the backlog at the first two levels?
How long are they waiting forto get into the appeal process and
getting a result?
Mr. AGRAWAL. At the first two levels, the second of which is an
independent level of appeal or oversight, the OIG has actually published a report that shows that there is no substantial backlog at
the first two levels of appeal. The backlog issue really arrives later.
And, on average, we are within the timeframes that are required
of us.
I would say, you know, in addition, with respect to the orthotics
and prosthetics issue that you brought up earlier, this is clearly an
important area. And if there are, you know, issues of access to care
with respect to specific beneficiaries or companies, I am happy to
work with you on that. That is a priority for us. So I am happy
to work with you on it.
Ms. DUCKWORTH. Excellent. I will have the orthotics and prosthetics industry come in and sit down and talk with you.
Let me ask this: So what you are telling me is the third level of
appeals is holding everything up and they have suspended for 2
years the right to due process and, even though this is being
caused by the RAC audits that CMS is continuing to conduct, it is
not your fault, it is someone elses fault, but you are still going to
shove more people into the system who now have no access to this?
I mean, it is kind of convenient, dont you think, that you are
pushing people into the system with these aggressive RAC audits,
but, on the other hand, you are saying, It is not our fault that
they cant get through the third level? What are you doing to work
with the administrative law judges to fix the delay in the appeal
process?
Mr. AGRAWAL. Sure. So we have taken a number of approaches
to ensure that, number one, the audits are being conducted appropriately and then wherever we can to help address appeals issues.
We are actively working with OMHA on their backlog and trying
to arrive at solutions in conjunction with them.
I think on the front end, where we have, again, more direct oversight and authority, we have implemented certain strategies to ensure that the audits are being conducted correctly, that they are
being achieved with high accuracy.
As just one example in the RAC program, we do have a validation contractor that looks behind the RACs to make sure the RACs
are following CMS requirements, CMS payment rules, CMS guidelines. And all of the RACs have achieved a well above 98 percent
accuracy rate of their findings.
I think that goes a long way to ensuring that the RAC activities
are, in fact, being monitored. And while providers will always have
the opportunity and should have the opportunity to appeal, we
want to make sure that the initial determination is accurate.
Ms. DUCKWORTH. I dont think it is accurate when over 50 percent are being overturned on appeal. I think that that is a pretty
high failure rate of your RAC audits.
I am out of time, Mr. Chairman.
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Mr. LANKFORD. I would like to ask unanimous consent. There is
a statement that has been sent to us by the American Orthotic and
Prosthetic Association. I would like to ask unanimous consent that
this be entered into the record. Without objection.
Mr. LANKFORD. Mr. Meadows.
Mr. MEADOWS. I want to follow up on that because you are acting
like you have nothing to do with this backlog, and I think that that
is an unfair characterization.
Do you not agree? You have nothing to do with the backlog?
Mr. AGRAWAL. I think, you know, clearly providers would not
have a lot to appeal if we didnt enforce our rules and deny certain
payments from being made.
Mr. MEADOWS. Okay. Well, let us look at this, the Inspector Generals report. And they said that the overturn rate at the appellate
level is anywhere between 5-depending on how you read it, between 56 to 76 percent, according to the OIG.
And so those dont get to that adjudication level without you
doing something. Isnt that correct?
Mr. AGRAWAL. We, you know, clearly doI think we have a number of steps that
Mr. MEADOWS. You have to review them first before they get
here.
Mr. AGRAWAL. They do have to be reviewed by a contractor first.
Mr. MEADOWS. And then they get overturned between 56 to 76
percent of the time, according to this OIG report in 2010.
Do you disagree with that?
Mr. AGRAWAL. No, sir. Not only do we
Mr. MEADOWS. So you do have part of the reason why we have
a backlog because it is on the front end. You are just denying
claims and denying claims.
I have talked to physicians. I have talked to hospitals. I have
talked to healthcare providers. And you know what?
They say the first fair hearing they get is at the administrative
law side of things and that what happens is you guys are just denying them and you are saying, It is tough. You have to pay it and
wait for your turn in the queue to get the hearing.
Do you think that is fair?
Mr. AGRAWAL. I dont think that is a correct characterization.
Mr. MEADOWS. Okay. All right. Well, let me ask you another
question. This comes from the hhs.gov Web site. And you all
changed that within the last 30 days. It has been changed.
And what this says is that the average processing time for appeals are decided in 356 days. Would you agree with that for fiscal
year 2014?
Mr. AGRAWAL. Again, sir, if you are talking about the third level
of appeal or the ALJ level, I couldnt comment on their data.
Mr. MEADOWS. Well, this is on your site. Fiscal year 2014, the
average appeals time is 356 days.
Would you agree with that for fiscal year 2014?
Mr. AGRAWAL. I think, if that is what the data shows, then that
is clearly what it shows. I think our number
Mr. MEADOWS. So how do we know that? Fiscal year 2014 hasnt
even ended yet. It doesnt end until September 30. So how would
you know this?
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Mr. AGRAWAL. Sir, I am not exactly sure what data you are looking at or how it reflects
Mr. MEADOWS. It is on your site. I will be gladwe can give you
a copy of it. Somebody in your office knows because you have
changed it within the 30 days.
Because what you were saying is that they were not being assigned for 28and I will give you28 months that they werent
being assigned and that has been changed.
Who changed it?
Mr. AGRAWAL. I think all of the issues that you are describing,
if, hopefully, this is accurate, is that they are really the third level
of appeal or ALJ level sort of issues.
What I stated earlier is that we have oversight of the first two
level of appeals and we are abiding by the time lines required in
those appeals.
Mr. MEADOWS. Let me tell you. Moms and dads back home, they
could care less about the internal divisions. They see it as all part
of CMS. They see it as one in the same. They see it as the government. And so here we are for the budget request that we have got
that says the backlog is going to reach 1 million.
At what point does it become a crisis? At what point? When does
it become a crisis? When do you start putting companies out of
business? Because you already are. When does it become a crisis
that you are willing to do something about? This is your document.
1 million backlog by the end of this year. So is that a crisis?
Mr. AGRAWAL. Well, sir, if there are individual companies that
are being put out of business by these audits, we do have flexibility
in how we achieve
Mr. MEADOWS. But you dont. I have already called on behalf of
some of my constituents, you know. And that would be a great response, but it is not true.
Because you know what? I have dealt with Jonathan Blum. I
have called to make sure that Kathleen Sebelius knew about it. I
have called the White House. And you know what? You say, Too
bad.
So what do I tell the moms and dads who are going to lose their
job because they do not get a fair hearing? What do we tell them?
Mr. AGRAWAL. Well, sir, we are able to do what we are authorized to do. So whether it is an alternative payment arrangement
or something else working with a provider, we can do what we
have
Mr. MEADOWS. All right. So you have got 5 years for an alternative payment arrangement. I know this stuff. I have been studying it for the last 6 months. 5 years.
So if the backlog is 10 years, what do they do? They just pay it?
Because right now, at 1 million peopleat 1 million appeals,
your ratethe best rate that we have had from the adjudicators is
79,000 a year. And even with your budget increase, that would still
be a 10-year delay. That is a taking, in my book.
Would you wait for 10 years for your salary? Yes or no.
Mr. AGRAWAL. Sir, we do whatever we are authorized to do in
terms of working with providers to try to make the system less
burdensome for them.
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We can stretch out payments. We can change things in individual cases. But, again, we cannot overstep the authority that has
been granted to us by Congress.
Mr. MEADOWS. All right. But something changed. Something
changed. Because you know what? The audits went from 1,500 a
week to 15,000 a week. So what did you change?
Because, I mean, it is in your documents. I will be glad to give
you that, too. Actually, it is worse than that. They said it went
from 1,200 and change a week to 15,000 appeals a week. What did
you change?
Mr. AGRAWAL. So, again, I think it is important to level-set on
this. It is our obligation to audit. We have improper payments that
you have heard about from other witnesses, that you have heard
about from the rest of the committee.
It is our obligation to go after those improper payments to try to
reduce the rate and make recoveries where possible or, you know,
where they should be made. That is an obligation created in law.
And to also level-set, sir, on the amount of auditing that we do,
we audit far less than 1 percent of all claims we receive.
In fact, all of the overpayment determinations made by RACs in
the latest available data to the public account for less than 1 day
of claims that come to the Medicare program.
Mr. MEADOWS. All right. My time has expired.
I would like one answer to this: The law says that they need a
decision in 90 days. Is that law being violated? And who makes the
choice on what laws we enforce and what laws we ignore? The law
says 90 days.
Mr. AGRAWAL. I cannot comment on the processes that are outside of the jurisdiction of CMS.
Mr. MEADOWS. This is in your jurisdiction. I will be glad to give
you a copy.
Mr. AGRAWAL. That is at OMHA.
Mr. MEADOWS. No. This actually talks about qualified independent contractors, which is under yours, and then the ALJ is
after that90 days after that.
Mr. AGRAWAL. Great.
So as far as the second level of appeal at the qualified independent contractor level, there is recent reporting from the OIG
that shows that we are remaining on track as far as the expectations of how long it takes to, you know, go through that appeals
process.
Mr. MEADOWS. Jonathan Blum said you changed something in
2012. What did you change?
Mr. AGRAWAL. Sir, I was not a part of that conversation. If you
can
Mr. MEADOWS. Do you know of any changes that happened in 20I am out of time.
I yield back. I apologize, Mr. Chairman.
Mr. LANKFORD. We will come back around in a second round.
I would like unanimous consent to have Ranking Member
Speiers opening statement be entered into the record.
Mr. LANKFORD. Without objection, Ms. Speier, you are recognized.
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Ms. SPEIER. Mr. Chairman, thank you. And I apologize for my
late arrival. We had a memorial service at Arlington Cemetery for
servicewomen and I felt compelled to be there. So I apologize for
not being here for your opening statements.
Let me say at the outset I have had local hospitals that have gotten embroiled in the RAC situation. I have a hospital that is teetering on bankruptcy right now, and the RAC experience has exacerbated it.
But I also think it is really important for those of us who sit on
this committee to recognize that we have an obligation beyond just
beating up on those who come before us like this to recognize that,
if we want to fix the backlog, we have got to pay for it.
There is a backlog because, in 2007, RAC claims amounted to
20,000. Today that number is 192,000 a year. That is 10 times
what it was in 2007, and we have not added one single person to
respond to those claims.
So if we want to deal with this backlog, if we want to erase it,
we have got to recognize that you cannot expect people to do 10
times the work with the same number of work-hours.
Now, let me start with Mr. Ritchie, if I could.
You have had a pretty remarkable run in terms of the efforts by
the Healthcare Fraud and Abuse Program which resulted in $4.3
billion in recoveries to the Treasury in 2013. That represents an 8to-1 return.
Is that the highest level of recovery to date, Mr. Ritchie?
Mr. RITCHIE. Yes. That is.
Ms. SPEIER. And how is that achieved?
Mr. RITCHIE. We partner with our other partners in enforcement
and the HCFAC Program to fight fraud, waste and abuse through
investigations, through audits, through the evaluations that we
have done. The recoveries that were reported in fiscal 2013 were
record recoveries.
Ms. SPEIER. Now, I think in your testimony you reference that
sequestration will result in a 20 percent reduction in OIGs Medicare and Medicaid oversight capabilities. Is that correct?
Mr. RITCHIE. Unfortunately, yes.
Ms. SPEIER. So what does that mean in terms of what you are
going to do and what we are going to see in terms of waste, fraud
and abuse being properly handled?
Mr. RITCHIE. For our office, it isI mean, it is not good. It means
less investigations, less audits, less evaluations.
I mean, I am not the budget expert, but I certainly live this
every day. I work in our audit office and I am acting in charge of
our evaluation office.
At this point, between 2012 and 2014, Medicare and Medicaid
outlays went up 20 percent, and during that same time, my office
has had to reduce our focus on Medicare and Medicaid by 20 percent.
It is really challenging, given we have a $50-billion improper
payment, a 10 percent error rate, that we are dealing with this,
that it means less auditors, investigators, evaluators on the ground
to handle this.
I have been working in IG for 27 years and I can just tell you
personally, I mean, I have never felt quite as challenged looking
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ahead to see with the growing programs and growing responsibility
how we go about doing this because
Ms. SPEIER. So should we just roll out a red carpet for the
fraudsters of this country?
Mr. RITCHIE. I would certainly hope not.
I mean, in our office, we try to do a risk assessment to pick the
best topics. You know, we certainlywe make our budget request.
And for us personally, I mean, the best thing that could happen
would be to fully fund our budget request to try to get us back on
target. It has definitely decreased.
We have gone down by 200 FTEsfull-time employeesover
that time. You know, we have had to stop evaluations and audits.
We have had to stop following up on investigation leads.
Ms. SPEIER. So is it safe to say that, because of the reduction,
there are investigations that havent moved forward that probably
would have resulted in savings to the taxpayers in this country?
Mr. RITCHIE. Yeah. Absolutely. I mean, investigations and audits, both, that we have to make tough choices every day for what
we start in and what we cant start.
I mean, it is been a very difficult time in sort of looking at this.
I think you are making tough choices. With things that look very
good, you do a risk assessment and feel like there is so much to
look at, but you know you only have so many resources and those
resources are declining.
I mean, we have had a hiring freeze for 2 years and people have
left through buyouts. So we have just been consistently reducing.
Ms. SPEIER. So give us an example of the kind of case that you
had to let drop by the wayside. I mean, do you drop cases that are
just so big that it would take so many resources? So are the big
fraudsters getting away with it more than the little fraudsters?
Mr. RITCHIE. Well, I am not in our Audit and Evaluation Offices.
So I am not there. I do know that our Investigation Office told me
that they have closed 2,200 investigative complaints since 2012.
I think it is a mix. I mean, we try to do the best risk assessment
we can and put resources on the biggest cases, but certainly we
cant afford to do all those.
I know our StrikeForce activities have been a big success. In our
StrikeForce cities, we have had a reduction in resources. So it is
been across the board in every aspect of the IGs enforcement.
Ms. SPEIER. All right. My time has expired. I will follow up with
the second round.
Mr. LANKFORD. Mr. Chaffetz.
Mr. CHAFFETZ. I thank the chairman.
And, Ms. King, I appreciate this GAO report that you put out.
I want to go to the first complete page. This is the second paragraph, the latter half of it. I will read it to catch everybody up: For
example, CMS has hired contractors to determine whether providers and suppliers have valid licenses, meet certain Medicare
standards, and are at legitimate locations. CMS also recently contracted for fingerprint-based criminal history checks of providers
and suppliers is has identified as high-risk. However, CMS has not
implemented other screening actions authorized by the Affordable
Care Act that could further strengthen provider enrollment.
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Can you help enlighten me where you think they have not implemented other actions to strengthen the process?
Ms. KING. Yes. I think there are a few things that we point out.
One is in relation to surety bonds, establishing a regulation regarding surety bonds for certain types of providers.
One is in not publishing a regulation that has to do with disclosure of past actions that have been taken against providers, such
as payment suspensions.
Mr. CHAFFETZ. So, Doctor, why not do that?
Mr. AGRAWAL. I think these are great ideas. And we have really
appreciatedthe Agency has appreciated working with the GAO on
ferreting out where our vulnerabilities and weaknesses are and trying to do something about them.
There is, you know, nothing conceptually wrong with these recommendations. We continue to have the conversations. We have to
prioritize changes
Mr. CHAFFETZ. Yeah. But I am just wondering why you havent
done it. I mean, we are trying to get rid of the waste, fraud and
abuse. Right? And it is authorized by the law. Why havent you
done that?
Mr. AGRAWAL. Absolutely. It isnt, I think, you know, a disagreement over the objectives. We have done a lot in the last couple of
years to really, you know, beef up our approach to provider enrollment and screening.
Some of the stuff, like fingerprinting, is just coming online now.
So, you know, there are just bandwidth limitations in terms of
what we can get to and how quickly, based on resources, based on
budget.
Mr. CHAFFETZ. Is there a prioritized list or summary that you
could share with the committee so we can understand what you are
prioritizing, what you are doing and what you are not doing?
Mr. AGRAWAL. Well, I think you are clearly seeing some of the
priorities already occurring.
Mr. CHAFFETZ. I know.
But where do I find that? Where do Iis that something you can
provide the committee?
Mr. AGRAWAL. I dont know that we have a list. I am happy to
have further conversations with the office
Mr. CHAFFETZ. Can you create a list?
Mr. AGRAWAL. Um
Mr. CHAFFETZ. We are trying to get some exposure, some transparency, which you say you are in favor of, of what you are doing
or not doing. The GAO right at the front is saying you are not
doing all that you could do.
I am sure thereyou have got to make some choices. I want to
understand what you have prioritized and what you are doing and
not doing.
Is that fair, to put that on a piece of paper and share that with
the Congress?
Mr. AGRAWAL. Well, I think perhaps it would be useful to get
your insights and, you know, we can continue
Mr. CHAFFETZ. No. No. No. Wait. Wait.
Mr. AGRAWAL. to have conversations with GAO on, you
know
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Mr. CHAFFETZ. If you want me to run your agency, I will run it
for you.
But GAO is making recommendations authorized by the law to
do these things. I just want to see what you are doing and not
doing.
I am not looking for a 700-page report. I am looking for a couplepage summary to understand what you are implementing and what
you are not.
Mr. AGRAWAL. Sure.
Mr. CHAFFETZ. You have got to have some sort of document.
Mr. AGRAWAL. We will work on
Mr. CHAFFETZ. I didnt expect to spend 5 minutes asking you if
you had a prioritized list of what you are working on.
Is that something you can or cannot provide to Congress?
Mr. AGRAWAL. Sure. We will work with your office and we will
provide it.
Mr. CHAFFETZ. When is a reasonable time to get that document?
You come up with a date.
Mr. AGRAWAL. Can you give me a few weeks to do it?
Mr. CHAFFETZ. Sure.
Mr. AGRAWAL. Great.
Mr. CHAFFETZ. Pick a date.
Mr. AGRAWAL. How about a month? We will get it back to your
office within a month.
Mr. CHAFFETZ. The end of June. Hows that?
Mr. AGRAWAL. Perfect.
Mr. CHAFFETZ. Okay. Thank you very much.
One of the things that I have been working on that I am worried
about are these providers.
Are we engaging in allowing people that have serious delinquent
tax debt to be engaged in this process?
This is a big government-wide problem I see, is that we have contractors out there who have serious delinquent tax debt. We, yet,
hand them new additional contracts and allow them to continue to
be involved and engaged.
I would provideand I dont expect you right off the top of your
head to understand the answer to that question, but that is something else that I personally and I think the committee would benefit from understanding.
What are the policies that you have there? What areit should
be a key indicator to me that, if you are unable to pay your Federal
taxes, why do we continue to contract and give you more and more
business?
The President has been supportive of this when he was Senator
Obama. I think this is a very bipartisan thing. This committee has
dealt with a bill very specific to that.
If you could also provide me information about what you do with
that. And the answer may be, We dont do anything with that.
I would just like to know the answer to that question.
Can we also shoot for the end of June that you give me that information? Is that fair?
Mr. AGRAWAL. Yeah. I think that is fair.
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But I think, just to comment on that a little bit, we haveyou
know, there is all kinds of information that we could conceivably
collect from providers.
I think the question often, you know, that we have is: What information can we collect that is actionable for us? So there are
some clear bright lines in the program.
If you dont have the right license to practice medicine in the
State in which you want to enroll, then you dont get to enroll in
that State. There are certain other types of disqualifiers, like certain felony convictions.
So I think, conceptually, it makes a lot of sense to include as
much kind of risk assessment data and analysis as one could to
look at providers.
But, again, I think we have tothere is really just a subset of
those potential risks that pushes us over the line and allow us to
take action. If a provider ends up on, you know, the exclusion list
or the do-not-pay list, that is helpful.
Mr. CHAFFETZ. Well, and I am also worried about the contractors
that you are engaging that are supposed to help ride herd on this,
that are supposed to help you engage these people. Those are some
of the specifics that I would like to see as well.
It is not justI am not talking about the providers as much as
I am the contractors that you are contracting with in order to make
these things happen.
Thank you, chairman. Yield back.
Mr. LANKFORD. Thank you.
I am going to open this up for the second round for questioning.
During this questioning time, there is full interaction on the dais.
You can jump in at any time. There is no clock running this time
period if you have interaction.
Also, for our witnesses, if you have specific things that you want
to get into the conversation, you are free to be able to initiate the
topics in the conversations as well to make sure that you are clear.
Our goal of this conversation is to make sure that we bring all
the issues out, find the areas that need to be resolved and what
is the timeline for resolution on those things. So you are free to be
able to bring the issues up as well to make sure we have clarity
on this.
I want to reaffirm againlet me take first crack at a few things
here.
I want to reaffirm again that this panel, myself included, is committed to how do we deal with fraud. There is $50 billion in unaccounted-for money, possible overpayments in fraud.
We affirm that we are pursuing that fraud. That is the taxpayer
dollar and it is essential both for the solvency of the program long
term and for the taxpayers themselves. So continue to do that.
I think the frustration is the prepayment side of this. We all
know that is the direction it should go so we are not having to
chase. That is why we want to know the report.
We want to know what is happening at this point, how we get
ahead of this in the days ahead, so we are not having to constantly
go back to good providers and to say, We are going to hold some
of your dollars.
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Many of these providers may have a 2 or 3 or 4 percent profit
rate and, for them to have a portion of their cases pulled and not
paid for for an indefinite period of time as they go through the appeals process is untenable to them.
So I want you to hear from me and from us. We are not opposed
to going after fraud. We are opposed to the methods that iscurrently and as it is being executed.
There have been changes in the RAC audit process as CMS has
learned its way through this. We are proposing additional changes
in this to say what can we do to help expedite this process and to
make sure, when it is right and it is overturned in appeals, they
get their money faster and they have fewer people engaged.
So let me run through a couple of these things again.
We have gone through the revalidation process. Is that complete
at this point for providers nationwide where we revalidated the
providers?
I know we have done fingerprinting, we have done background,
they have had to reenroll. Is that complete at this point? What
stage is that in?
Mr. AGRAWAL. So the revalidation process that was initiated
after the ACA puts us on a 5-year cycle. I believe the latest number
is we arewe have revalidated over 770,000 providers at this
point. That puts us on track to be complete in time for the first
cycle.
Mr. LANKFORD. So 2 more years still left of that is what you are
saying or
Mr. AGRAWAL. I think that is about right, yes, if I am remembering correctly.
Mr. LANKFORD. Okay. And then the prepayment pursuit of fraud,
we have a report that is due to us. Obviously, we have already discussed that is coming in the next couple of months to give us the
details and the progress on that.
Then we move into the post-payment. Do you want to make any
comments on the prepayment side?
Mr. AGRAWAL. Well, I think just that, clearly, the Affordable
Care Act did provide us a lot of authorities to make changes on the
prepayment front, such as, you know, payment suspensions, which
we are now able to leverage against the worst actors.
I think the only point that I would make, Congressman, is to differentiate what we do when we are going after potential fraudsters,
sort of criminals, the worst actors.
From those providers, the vast majority that are perhaps producing waste or producing inefficiency in Medicare, not quite following our rules, but have the intention to follow our rules, are trying to actually do their best.
I would just ask us to sort of keep this framework in mind because I think it sort of determines for us what tools we utilize so
that they are not overly pejorative.
I think payment suspension, for example, is a great tool for the
worst actors and, though it is prepayment, it is not a great tool for
legitimate actors because it essentially suspends all the payments
that they would be getting.
Mr. LANKFORD. Right. Well, you are dealing with the same thing.
It is the hammer that is down in the area.
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Even for the high-risk areas where there is a moratorium, some
of those areas may have a deficiency of a number of good companies that are actually providing. And as we continue to have more
people entering into Medicare, there is a need for providers.
And so even, when a moratorium occurs on that, that is a pretty
incredible hammer for that region to say there is lots of small businesses that wont start up during that time period that could be legitimate providers.
Mr. AGRAWAL. It isI agree with you, sir. It is a notable piece
of authority that we implemented with a lot of care and over time.
So it took us years to go from having the authority in the ACA to
actually implementing it for the first time.
I would say the areas that we tried to address, both the geographies and then home health services as well as ambulance services, are areas that we knew there was a lot of market saturation.
There was very little concern, though we have been looking at it
continuously, about access-to-care issues.
You know, home health and ambulance services in Texas and
South Florida are areas of a lot of agreement with the Office of Inspector General, the Department of Justice within CMS, with State
Medicaid agencies, that there is just a lot of market saturation,
sort of three to five times the number of providers than on average
areas.
So while access to care is clearly something we care about and
we are looking at in realtime to make sure the moratorium does
not have negative impact on access, we are currently not seeing it
in those areas.
Mr. LANKFORD. Okay. Let me come back to one last thing. I want
to open this, but I dont want to take all the time on it.
The four appeals that are total, I would like to get just a timeline
for everyone the length of time. You have said they are on schedule.
So lets talk about Appeal Number 1. If someone has a problem
with the RAC audit, Appeal Number 1 is to who and how long does
that take?
Mr. AGRAWAL. Sure. So I believe the first level of appeals providers have 120 days to file the appeal and then there is a 60-day
time limit for the decision to be achieved on the appeal.
Mr. LANKFORD. Okay. So they filed it right away, lets say. Lets
talk about your end of it. Their responsibility is their responsibility.
So you have 60 days to respond. Correct?
Mr. AGRAWAL. Correct.
Mr. LANKFORD. Who is that that is responding to them? They are
appealing to who?
Mr. AGRAWAL. I believe in almost all cases it is the MAC administrative contractor that would handle the first level.
Mr. LANKFORD. Okay. So you have gotthe RAC folks make a
decision and then the MAC folks then are making the response in
the appeal. Is that correct?
Mr. LANKFORD. Okay. So they have 60 days to respond. You are
saying that is on time?
Mr. AGRAWAL. Yes.
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Mr. LANKFORD. They disagree with that. They come back in the
second level.
Who is that? How long does it take?
Mr. AGRAWAL. So the second level goes to the qualified administrative contractor, the QIC. They have, again, 180 days to file the
appealthe provider doesand then we have 60 days to make a
decision on the appeal.
Mr. LANKFORD. And you are saying that is on time as well?
Mr. AGRAWAL. So I have average times that are below the 60-day
mark. Correct. Sort of 53 and 54 days for most appeals.
Mr. LANKFORD. And do you have the overturn rate on both of
those?
Mr. AGRAWAL. It would depend on the specific audit.
So is there a particular audit that you are referring to?
Mr. LANKFORD. Yeah. Either one. The first or the second level.
Mr. AGRAWAL. And RAC audit, sir?
Mr. LANKFORD. RAC audits. Yes, sir.
Mr. AGRAWAL. I would have to look.
Mr. LANKFORD. All right.
Mr. AGRAWAL. So I thinkwhile I am looking, let me just say I
think the overall overturn rate for the RAC audits are, you know,
between parts A and B, about 6 to 7 percent. That is in the latest
data. That is public.
Mr. LANKFORD. But you are not talking through the ALJ process.
You are just talking through the firstthat is what we are trying
to figure out. We are trying to get a cumulative number. We have
yet to see a cumulative number.
Mr. AGRAWAL. No. I believeso I believe that the 6 and 7 percent numbers areall the way through are ever overturned.
Mr. LANKFORD. Okay. I am trying to figure that out because the
latest numbers we have seen on the ALJs are between 56 and 70some-odd percent of overturned just in that level.
Mr. AGRAWAL. Correct. Soif I could perhaps explain it a bit, so
the RACs, you know, make determinations. I think the latest public data is 1.6roughly 1.6 million claims were found to have contained some kind of overpayment.
Providers then make a decision about whether or not to appeal
those overpayment determinations. And, basically, at every level of
appeal, as you go from one, two, and three, the number of claims
going to the next level comes down and the overturn rate might
vary between the levels.
So I am not finding the number right away, but I think at the
first two leveloh. That is very helpful. Thank you.
So at the first two levels, we are seeing a 9 percent overturn rate
for the RACs in specific.
Mr. LANKFORD. Both of them or each one? 9 percent at the first
level and then another
Mr. AGRAWAL. No. At the first level of appeal, 9 percent for part
A.
Mr. LANKFORD. But you dont have part B?
Mr. AGRAWAL. 3 percent.
Mr. LANKFORD. All right. And for the second level of appeal?
Mr. AGRAWAL. At the second level, for part A, it is 14.9 percent.
Mr. LANKFORD. So 15 percent, basically.
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And then part B?
Mr. AGRAWAL. .5 percentno. I am sorry. I am not sure if that
is right. You know, I dont have it called out.
I have just the percentage of RAC appeals that actually make it
to the second level, but I dont have the overturn rate for part B
on the second level. We can get that to you.
Mr. LANKFORD. Okay. That one is unknown.
And then they go toafter that, they have done 60 days in the
first one, they have done 60 days in the second one, and then they
disagree with that as well, and now we are headed to the ALJs,
which, as Mr. Meadows has commented on, now could take 10
years to get to that spot, depending on the perspective you get.
Now, we have heard 28 months, but 28 months is pretty ambitious, based on the number of people that are in the queue and the
number that have been typically handled.
I know you have said over and over again that is not your responsibility. We will visit with chief ALJs on this. But that is the
next level.
Then the fourth level is what after that? If they disagree with
ALJs, then what?
Mr. AGRAWAL. There is another level that they can go to which
is, I think, at Federal District Court level. I am sorry. It is the Departmental Appeals Board and then, after that, it is the Federal
District Court.
Mr. LANKFORD. So that is a fifth level?
Mr. LANKFORD. Okay. Thank you. I wanted to get the context for
everyone.
Jump in at any point.
Mr. MEADOWS. I guess my question is: so lets look at part B,
DME only. What is the overturn rate for that, which would include,
you know, some of the other stuff?
Well, let me askI have got a report here from your office prepared on April 2 of 2014. It says that the overturn rate is about
52 percent. Is that correct? Is this report correct from your office?
Would it be about 52 percent for DME overturn rate?
Mr. AGRAWAL. I think it really depends on what document and
what level you are looking at. If you look at all DME claims, again,
it isabout 7.5 percent of all overpayment determinations end up
in an overturn on appeal.
Mr. MEADOWS. We are talking about on the appellate part. This
is Office of Medicare Hearings and Appeals, their report.
Mr. AGRAWAL. Okay.
Mr. MEADOWS. So those hearings and appeals.
It says that the overturn rate is52 percent is either fully favorable or partially favorable. 24.87 was unfavorable. And so, with
that, it would indicate that the overturn rate is much higher than
what you would indicate on DME.
Mr. AGRAWAL. There is a calculated overturn rate at each level.
So what I just communicated about the first two levels just gives
you the overturn rate for those levels. There is clearly a third rate.
Mr. MEADOWS. Okay. I may not be real sophisticated. So I am
trying to figure outhow does your report say 52 percent here and
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what you testified sayswheres the difference? Help me understand that.
Mr. AGRAWAL. So, generally, as you go up at the various levels
of appeal, providers make a decision at each level about whether
or not they are going to appeal to the next level.
What we see are some general trends. So providers do tend to
the number of claims that are appealed at each level does trend to
drop and the overpaymentor the overturn rate can increase.
So at the third level of appeal, at the ALJ level, the overturn
rate isI can totally agree with what is on your piece of paper,
that it probably does approach 50 percent for DME.
Mr. MEADOWS. All right. So
Mr. AGRAWAL. But at lower levels of appeal, given that there is
more claims that are appealed and fewer are decided in the providers favor, the overturn rate is much lower.
Mr. MEADOWS. That makes sense.
So out of the 1 million in backlog that your budget request talked
about, how many of those would you anticipate, based on this rate,
are going to be overturned out of the 1 million backlogged appeals
going to ALJ?
Mr. AGRAWAL. I think that is an individual case-to-case determination
Mr. MEADOWS. It is. But based on historical evidence, how many
of those would be overturned?
Mr. AGRAWAL. Sir, I cant
Mr. MEADOWS. 520,000 of them. I mean, based on these numbers,
would that not be correct?
Mr. AGRAWAL. Based on those numbers.
Mr. MEADOWS. Okay. So let me ask you one other question.
The American Hospital Associationthey have RAC facts. Per
RAC track, which this is all Greek to me, 47 percent of hospital denials are appealed and almost 70 percent of these appeals are
overturned. Is that incorrect?
Mr. AGRAWAL. I cant really speak to their data, sir. What we
knowwhat wewe track the data, of course, very closely internally.
Our numbers would not agree with that. If you look at the first
level of appeal for part A, we see about a 5 percent actual appeal
rate that makes it to the first level.
Ms. SPEIER. Mr. Ritchie, if I could interject, there is a problem
here.
Why is it that, if you have got enough money to go to the third
appeal with the ALJ, if you could hold out that long, if you are not
a single provider, if you are a big hospitalif you could hold out,
if you go to the ALJ, you have got a 60 to 70 percent chance of winning. Why wouldnt everyone just go to that appeal process if they
can afford it?
So the question I have is: Why the discrepancy? What do you
know about the ALJ system that allows for such huge swings in
the determination?
Mr. RITCHIE. Okay. What we looked at, again, was prior to the
backlog, but I think it is still relevant. We looked at the ALJs and,
at the time, found a 56 percent overturn rate. This was 2010 data.
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For the prior level, the qualified independent contractors, there
was a 20 percent overturn rate.
The big differences that we sawagain, I have mentioned earlier
the unclear Medicare policies we think are a trigger to a lot of this.
At the ALJ level, we found that they tend to interpret them less
strictly than at the prior level, at the QIC level, because they are
confusing, they are complex policies and they are open to different
interpretations.
The other thing, at the QIC level, it is more specialized. They
have specific people looking only at part A, specific people looking
only at part B, and they have clinicians reviewing that.
Whereas, at the ALJ level, they are dealing with DME, part A,
part B, everything that comes their way, and they are relying on
documentation and testimony of the treating physician to make
their decisions. So the process is different.
We have also seen the case files are different. I mean, it is more
of an administrative thing. But the things that they are maintaining and holding in the case files are different from level to level
and I think really creates some of the inefficiencies.
For example, the ALJ level is still on paper. So the QIC has everything electronic. They have to print it out and send it to the
ALJ. They will also get a paper file of the records maybe from the
contractor. So they are trying to sort those two out.
So some of our recommendations are definitely to clarify the
Medicare policies, but also to create one system that is electronic
that can
Ms. SPEIER. So if I understand you correctly, at the QIC level,
they are very specialized, they know precisely what they are looking for, and they make their determination because they are
trained to look for certain things, I guess.
I guess that is part of what you are saying?
Mr. RITCHIE. Correct. We didnt assess and make a judgment of
which level is better. They are just very different.
But at the QIC level, we have seen they have clinicians looking
at it and they are specific. If an appeal comes in specific to part
B, it is going to the QIC. If it comes in to part A, it is going there.
Whereas, the ALJ, they have got everything
Ms. SPEIER. And ALJs arent clinicians.
Mr. RITCHIE. Right.
Ms. SPEIER. And they are using discretion in terms of interpreting the law.
Mr. RITCHIE. In terms of interpreting the law and then they are
relying more on the treating physicians testimony and evidence.
Whereas, at the QIC level, they are relying more on their own clinicians to interpret the documentation.
Ms. LUJAN GRISHAM. Butoh, I am sorry.
Ms. SPEIER. Go ahead.
Ms. LUJAN GRISHAM. If Congresswoman Speier will yield, I
mean, it speaks to a couple of larger issues.
And I want to get back at, you know, what are the real overturn
rates? Are we targeting correctly? And what can we do to improve
the system so that we are not harming good providers and which
means that we are harming just the beneficiaries going after fraudulent and wasteful behavior.
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Medicare is an incredibly complex system and the reality is that,
if we dont start dealing up front with the Medicare complexities,
we are notwe can chase this all day long and go from one extreme to the other and we are going to find significant flaws in our
ability to hold providers accountable and to support providers to do
a better job.
And what we havent done in this conversation isI am as concerned as anyone else about getting it wrong and overpayments.
I am also very concerned that your part A providers are large
providers. Your part B providers, even though we might have, if
you will, hot spots with the DME providers, thatthey cant afford
to go through this process. So, in that regard, your data is skewed
for one group.
And I am not trying to vilify one group over another. But hospitalslarge hospitals and large hospital groups can afford to wait
a decade, potentially. Smaller hospitals, as Congresswoman Speier
identified, my colleague from California, cannot.
I want to get back to maybe a couple of things, oneand then
yield back.
Can you give us some recommendationsyou talked about the
predictive modeling. You said we are identifying prescription practices that are clearly problematic.
Is there a way to be targeting those areas? And is there a way
to start targeting areas where we have got real issues with access?
Because CMS has a responsibility to assure access. We are only
doing one side of this here. We are eliminating potentially access
and no response about that.
Mr. RITCHIE. So I am sorry. Could you clarify? Recommendations
for what?
Ms. LUJAN GRISHAM. Well, a couple.
And the first is you identified in your testimony that there are
areas that you have identified that we could start looking at much
more directly in art. So we could do predictive modeling in terms
of where folks commonly make mistakes and where we have got potential fraud.
And, two, you identified in that discussionI dont know that it
was tied to the predictive modeling, per se, but you have identified
prescription practices that are clearly problematic. You said, I
think, that you have got folks who are not prescribers, as an example, prescribing medications for beneficiaries.
Why arent we focused more in those areas?
And then I wanted either Dr. Agrawal or someone else to talk
to me about what you are doingif you have got hot spots for
fraud, what are you doing to shore up mistakes so that we dont
lose those providers by providing better education and support to
those providers and creating in low access areas, frontier and rural
stateswhat are you doing to ensure you dont lose providers?
Mr. RITCHIE. Okay. Yeah. Thanks for clarifying.
We make those type of recommendations all the time. We have
a series of reports that we call our questionable billing reports, several of which I have referred to in the testimony, finding questionable prescribers, questionable pharmacies and questionable home
health agencies.
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In all of those cases, we take the ones that we have identified
that are extreme outliers, based on a statistical test, and give it to
our Investigations Office to see if they want to further pursue because these look severe.
After that, we send them to CMS and CMS will share it with
their contractors to take appropriate action. And we always recommend that they take the kind of questionable criteria that we
have and implement.
I know the fraud prevention system is starting to build some of
that in. I think specific to the example that is mentioned in the testimonyand you mentioned on the prescriberswe saw, you know,
$5 million in a year prescribed by people without authority to prescribe massage therapists and things.
Just yesterdayI have to look at this because it was late last
night that I got itbut CMS actually issuedor published a final
rule that requires prescribers of part D drugs to enroll in the Medicare Fee-for-Service Program starting next June, June 1 of 2015,
and this is going to allow CMS the plans and the Medicare program integrity contractors to verify that they actually have the authority to prescribe.
Because now they arenta massage therapist isnt billing Medicare, but they could write the prescription for drugs that we found
that were pretty severe. So that problem will be fixed based on this
rule.
So we are working with CMS to get some of the recommendations implemented, but I think it is a combination of doing things
like that and implementing edits on a prepay basis to try to stop
future improper payments.
Ms. LUJAN GRISHAM. I think what we are interested inand I
am taking too longbut it is to get that information to the committee so we know when so that we can weigh in on how you are
balancing these issues.
And if the chairman doesnt mind, can we get something on the
access? What are you doing to assure that small providers arent
discriminated even further in this process because of the size of the
provider and the capacity of the provider?
And have you thought about treating them differently like we
have tiered regulatory environments? What is your thought about
making sure that access is protected?
Mr. AGRAWAL. Againand I appreciate the question. That is an
extremely important area for us.
So as far as tiering providers bywe do currently tier providers
by size. We actually have medical record request limits specifically
for the RAC contractors based on the size of the provider.
I had also mentioned earlier a sort of future solution where we
would ratchet down the number of reviews that a particular provider would face if the reviews are generally in their favor, in other
words, they are basically following the rules. We are putting that
solution into our RAC procurement process right now. So it will be
part of the RACs going forward.
I thinkyou know, in addition to that, we do takeif there are
overpayment determinations, we have a process for the provider to
work with us and change the payment rate in order to still meet
our requirements and still meet the requirements of the law, but
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to be able to afford them a longer opportunity so that we dont put
providers out of business unnecessarily.
I would also say just on the front end we are undertaking a lot
of efforts to better educate providers about our specific payment
policies. You know, I think the DME face-to-faceor the home
health agency face-to-face requirement is a good example of that
where the improper payment rate is very high.
Because of this new requirement, providers need to be brought
up to speed, and we are trying to do both specific audits that will
look at that issue in order to educate both the home health agencies and the related prescribing providers.
We also have just more general educational materials that providers can take advantage of. We also do try to be very transparent
on the front end about what audits we are conducting.
So once a new audit area is approved by CMS, that we put that
information on a Web site that providers can look at, both big and
small, to shore up their own self-audits, make sure that their compliance programs are working and be prepared for audits in those
areas.
We hope that all of this helps to make the process more open
Ms. LUJAN GRISHAM. And if it doesnt, what do you do to assure
access?
Mr. AGRAWAL. Right. So I thinkyou know, part of it is just we
have an open-door policy for providers. So we do want to hear
about the shortcomings of these programs if there is an access
issue or a burden issue.
Ms. LUJAN GRISHAM. And you dont think that providers by and
large are going to be somewhat concerned about that open-door policy, particularly in the context of audits and your efforts for fraud,
waste and abuse?
Because when I was the Secretary of Health and Secretary of
Aging, I was oftenI appreciate that mindset. We are here to help
you. And, by golly, no one believes that.
And so I didnt really find that to be an environment that was
very productive, particularly when somebody came to us and, in
fact, they were fraudulent and we did our job. And so that certainly
precluded that kind of a relationship.
Can you please collect data for us, if you dont already, and provide it to the committee so that I can seewe can see whatthe
percentage of small providers that are engaged in any level of these
appeals versus the large providers?
Mr. AGRAWAL. Yeah. And I thinkwe can do that. And I think
it would be helpful to kind of work out a definition for small provider that we could focus on.
Ms. LUJAN GRISHAM. Yeah. And the last thing I would sayand
I am trying the patience of this committee and, I am sure, our witnesses.
But I wouldagain, this committee wants you to ferret out fraud
and to stop those bad actors and actually move those to criminal
prosecutions and to prevent those folks from ever being able to engage in any of our healthcare systems or any government contracting ever again. We are that serious about fraud.
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Now, we also want waste addressed. But I am getting very concerned really about that access issue and that this is completely
imbalanced.
And I would like you to consider and mitigate that by telling us
what the risks are about changing the withholding of payments for
the third level of appeal, taking into consideration, though, a new
definition potentially or a refined definition for small providers
and to entertain that and maybe come back to us in writing about
what that would look like.
Thank you, Mr. Chairman.
Mr. MEADOWS. Dr. Agrawal, the passion of which you have heard
me today is not meant to be directed at you. It is a passion based
on a number of people back in my district that potentially will lose
their jobs. And I, for one, nor you, do I believe you want them to
lose their jobs because we have a system that is broken.
When the chairman called this hearing, it was really a hearing
about making sure that those who steal from seniorsbecause that
is really what this is about, is fraudthose who steal from seniors
get caught. But in the process, there are a lot of potentially innocent people that are getting caught up in that dragnet that we
have to find a better system to do that.
I would ask for you to submit to this committee, if you would,
two legislative changes. If you are saying that your hands are tied,
what are the legislative changes that you would support and recommend for this committee to perhaps have the chairman introduce where we can fix it to make sure that we do go after waste,
fraud and abuse, but those that are innocent dont have to wait forever to get that innocent verdict and, in the meantime, potentially
go out of business?
And I yield back to the chairman. I thank his patience and his
foresight in having this particular hearing.
Mr. LANKFORD. Let me ask a couple questions still to follow up
on it, and it goes back to what Mr. Meadows was saying as well.
Good actors we want to keep. Our seniors need to know, In my
neighborhood, in my community, in my town, in my county, there
is a good actor that is there.
We have all talked to folks, I am sure you are aware as well, on
several areas. I hadlast weekend I had a gentleman that came
to talk to me that wanted to tell me about the last year of his life
because he was a durable medical equipment provider. Was. He
has now been put out of business.
He was a good guy. He was willing to meet the price that was
out there made publicly available in the competitive bidding process, but was not allowed to actually join into that because, as this
group knows well, when the competitive bid was put out, if you
didnt get the bid, you are out, and not just out, you cant join in
even at the new low price. You are just out the business.
He is one of those that came to me and said, I just want to tell
you about the last year of my life, when my family business went
out of business and closed down a company and laid off employees,
and here is what that looked like.
I have individual providers that come to me and say, I had a
group of files grabbed, not being paid for, that are going through
the appeals process and I am fighting my way through that. And
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then, as I am fighting my way through that, I had another group
of files that was grabbed, and now I am fighting through those, and
I am on a different time period and I am not making payroll.
I understand the comment of saying it is 1 percent or it is 2 percent of files, but if they start getting a set grabbed and then 60,
90 days later, another set grabbed when they are still unresolved
from the previous one, they are not going to make payroll for these
smaller companies. These are very real issues.
We want Medicare providers to be there. We want our seniors to
have access. We want individual healthcare folks to know, If you
take care of seniors, the bills will be paid. That certainty is disappearing at this point, and that is a bad formula for where we are
5 years from now, 6 years from now.
That is why the urgency of this is extremely important, that we
get ahead of fraud rather than constantly chasing it, because, when
we are chasing it, we are also hurting companies that are the good
actors that are trying do it right. We are all for shutting down bad
actors, aggressively going after that.
But when the good actors made a mistake, made an error, but
now they are having a difficult time making payroll on it, we are
losing the good guys in this, and that is going to hurt us long term.
So let me shift a little bit.
With the RAC auditsDr. Agrawal, you and I talked briefly earlier about thisthe incentive for them toif there is a question
that this is going to get lost in an appeal, for them to not pull that,
for them to actually work with them.
I will tell youyou have probably heard the term as wellmany
of the hospitals and providers call the RAC audit folks bounty
hunters. They come in, land, go through stuff until they find something, because they get paid based on what they find.
So the incentive is not to be able to sit down with someone and
say, Hey, you made a mistake on this. Let me show you how to
do this different. The incentive is, I got you and I am going to
get paid. That is a bad relationship that is forming between our
government and the people that we are supposed to serve.
Now we have got to setup environment where the incentive is for
them not to work with someone to find and work this out and how
to learn on it, but to punitively pull a file. That is a whole different
set of relationships there.
So the question is: How do we get back to the incentive with the
RAC folks to be helpful rather than punitive, but we still go after
fraud?
Ms. King, do you have an idea on that?
Ms. KING. Sir, if I might, the other types of contractors that do
post-payment reviewsthe MACs, the CERT and the ZPICsare
not paid on the incentive basis. They are paid on the basis of cost
under contract. The payments for the RACs were actually established by law
Ms. KING. how they were
Mr. LANKFORD. Correct.
Ms. KING. So thatif you are concerned about the incentives, it
is something to consider.
Mr. AGRAWAL. I think that is a very helpful point.
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I would also say, you know, we do provideso I thinklet me
make two points on this.
One is we do provide oversight to the RACs. So, you know, the
characterization that they might be on a fishing expedition or that
they are making judgments just to receive the incentive payment
is, I think, not accurate because we do, again, do that validation
work behind them to make sure their accuracy rate is very high.
That accuracy rate would not be
Mr. LANKFORD. Is there an incentive to be helpful while they are
there, to teach someone how to do this better, or is the incentive
to be able to pull it?
Mr. AGRAWAL. I think there is two kinds of incentives that work
in the favor of providers.
One is the RACs are equally incentivized to find underpayments
to providers. They get the same contingency fee if they return
money to a provider that they deserved as they would when they
make an overpayment determination. That is just one.
The second thing is we have made it a priority in the program
both for RACs and MACs and other auditors to use education as
a tool. So when deficiencies are identified, they can communicate
those to providers and, hopefully, providers can, you know, rectify
that deficiency going forward.
Mr. LANKFORD. Are theyare they paid for that, paid for the
education?
Mr. AGRAWAL. Well, the RACs are not specifically paid for that,
but the MAC contractors do work very closely with providers in all
their regions to, you know, teach them about Medicare policy and
payment requirements.
We also utilize the results of both MAC and RAC audits to alter
our programs, you know, be more specific on policy issues where
necessary, make changes to processes.
So that is a priority for the agency. We do try to use the outcomes of these audits to alter our interactions with providers.
Mr. LANKFORD. So what is the incentive for them to educate?
Mr. AGRAWAL. I think what RACs have been able to do is take
areas that we know have high improper payments in them, again,
differentiating improper payments from fraud.
Mr. AGRAWAL. RACs are not necessarily designed to go after
fraud. Those are other contractors in other areas of work.
What we have asked them to do is focus on areas of high improper payments and make recoveries where appropriate. Along
the way, they do identify educational needs or, you know, clarity
deficiencies that we can address either through other contractors or
directly.
Mr. LANKFORD. Okay.
Mrs. Norton.
Ms. NORTON. Thank you very much. Mr. Chairman, thank you
for this hearing.
Whenperhaps because Medicare is a necessarily costly programand I say necessarilywe do the best we can to provide
the maximum care for the elderly when they are illthere is particularly concern when there are reportsand they are always
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quite sensationalreports of fraud or particular abuses in the program.
I know that the Affordable Healthcare Act gave the CMS several
newor at least expanded authorities to deal with fraud.
And I would be very interested in hearing about how you deal
with those at higher risk, who are they, and how you deal with
them when they applywhen it applies to providers and suppliers
who are newly enrolling and those who want to re-validate their
participation in the program.
Mr. AGRAWAL. Sure. Thank you for the question.
So as a result of the Affordable Care Act, we have been required
to implement a whole new approach to provider enrollment and
screening that takes into account the risk level of that category of
provider.
Higher-risk categories of provider, like, say, newly enrolling
DME or home health agencies, are subject to greater scrutiny.
That scrutiny can includeor, you know, everybody certainly
gets certain dataanalytical work to make sure that, you know,
providers of all types have the right licensure, have the ability to
practice in their provider category.
Higher levels of scrutiny also include site visits, criminal background checks, fingerprinting most recently. As a result of those activities
Ms. NORTON. Had you done fingerprinting before?
Mr. AGRAWAL. Fingerprinting we are just bringing online. We
procured that contractor last month and we are
Ms. NORTON. For all providers or for the high risk?
Mr. AGRAWAL. The highest-risk providers will be subject to the
fingerprinting requirement.
As a result of those activities, we have revokedand through the
re-validation process, we have revoked over 17,000 providers since
the ACA and deactivated an additional 260,000.
Ms. NORTON. For example, for what kinds of abuses or fraud
or is it fraud?
Mr. AGRAWAL. All manner of activities. Really, wherever they do
not meet our requirements. So lack of appropriate licensure would
result in a revocation. The presence of certain felony convictions on
criminal background checks would result in revocation. Failure to
disclose information required on the Medicare application or to report that accurately.
Ms. NORTON. So would these providers be barred, period, permanently barred?
Mr. AGRAWAL. Wethe actions that we take, of course, are governed by the authorities that we have. Revocation allows us to remove these providers for, I thinkI believe up to a maximum of
3 years, based on the infringement.
Beyond that, law enforcement has exclusion authority that lasts
for longer and is more sort of widespread in its impact, and we do
work with law enforcement on utilizing that authority.
Ms. NORTON. Have you had occasion to refer any of these to the
U.S. Attorney or other law enforcement?
Mr. AGRAWAL. Yes. We actively work with law enforcement on
referrals, but, also, even prior to the referral.
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So I think we have given law enforcement an unprecedented access to CMS data, realtime access to our systems, the same that
we utilize in our analytical work.
And then, as cases develop, we are in regular connection with
law enforcement about cases that they may be interested in and ultimately do make formal referrals that they can choose to accept.
We also work with them on the entire investigational process, as
they deem necessary, to provide them additional data or, you know,
any assistance that we can.
Ms. NORTON. I am interested in this temporary moratorium. This
is apparently a new authority under the ACA for new Medicare
providers and suppliers.
What would evoke that? And how does it work?
Mr. AGRAWAL. Sure. So since the ACA, we have implemented essentially two phases of the moratoria essentially against home
health agenciesor newly enrolling home health agencies and
newly enrolling ambulance suppliers in a few different geographies
across the country.
Before implementing that moratoriumthis was a big step because it is aI think a notably important piece of authority that
we were granted.
Before implementing it, we worked very closely with law enforcement to make sure we were looking at the right geographies and
the right provider types.
We worked with State Medicaid agencies and across the Agency,
across CMS, to ensure that we are going after the right areas and,
also, not havingor potentially would have a deleterious effect on
the access to care.
Well, we ultimately chose both the geographies and the provider
types were markets that were saturated by these provider types,
roughly, 3 to 5 percent higher market saturation in home health
agencies and ambulance suppliers than the average, you know, geography across the country.
So far, the moratoria have been in place forthe first phase was
put in in July of last year, a second phase in January. We continue
to monitor both cost issues as well as access to care, and we have
not noted any access issues thus far.
I would say the moratorium has been a useful tool. I believe law
enforcement finds it a useful tool as, essentially, a pause in the
program so that no new providers enter a geography and bad actors can meanwhile be rooted out.
Just as examples of work that we have done, we have revoked
over 100 home health agencies in Miami alone, more than half of
those during the moratorium period, and 170 revocations of ambulance suppliers in Texas.
Ms. NORTON. Now, how do you keep beneficiaries from being affected, particularly with that large number in one location?
Mr. AGRAWAL. Right. That is absolutely a priority of ours. We
started by choosing areas that were very saturated to begin with.
These are not areas where access to home health services or ambulance services was threatened in any way. Even MedPAC had
agreed that both of these provider types, as well as the geographies, were appropriate to go after.
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Since implementing them, we have, you know, stayed in constant
contact with the specialty societies that oversee these areas.
We have worked with State Medicaid agencies, with CMS regional offices that directly receive complaints from either providers
or beneficiaries, to monitor for access-to-care issues. And as I stated earlier, we have not identified those issues so far.
Ms. NORTON. Finally, Ms. King, have you had occasion, since
these are new authorities, to look at their effectiveness and their
implementation?
Ms. KING. We have not. We evaluated the enrollment process
just as these new authorities were going online, but we have not
been back to look at it yet.
But we concur that front-end strategies on the enrollment side
that making sure that the right providers are enrolled and the ones
that are at risk for being fraudulent are prevented from being enrolled is a very effective strategy.
Ms. NORTON. Thank you very much.
Mr. LANKFORD. Let me just run through some quick questions,
and then we are nearing the end. So the end is near.
I want to confirm again the percent of patient files pulled for a
RAC audit. You have used the 1 percent number several times. Is
that accurate, around 1 percent, or you say 1 percent or less?
Ms. KING. The 1 percent actually is not just the RAC audits. It
is all the post-payment audits.
Mr. LANKFORD. Okay. That is in every category, whether that be
durable medical equipment, physical therapy, hospitals, labs, whatever it may be? In every category, it is 1 percent or less?
Ms. KING. Yes.
Mr. LANKFORD. Okay.
Ms. KING. Well, the aggregate number is less than 1 percent.
Mr. LANKFORD. That is what I am asking
Ms. KING. Yes.
Mr. LANKFORD. for each category.
Are there categories that are higherthat are considered more
high risk and, so, there are more that are pulled in in that category?
Ms. KING. I dont know the answer to that.
Mr. LANKFORD. Do you, Dr. Agrawal?
Mr. AGRAWAL. I cant answer the claim question. But in terms
of prioritization, we clearly do focus on high improper payment rate
areas.
I think that is a requirement of the contractor itself, of the program, that we focus on areas where the improper payment rate is
just much higher than in other areas.
So you would expect to see a greater portion of audits in, say,
for example, durable medical equipment or home health agency
services because those are where a lot of the improper payments
are
Mr. LANKFORD. That is what I am trying to figure out.
Is that category higher than 1 percent of what is pulled?
Ms. KING. You know, we can look into this. But I believe that
most of the RAC audits are focused on the part A side, even though
that the ratethe rate of improper payments is higher in durable
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medical equipment and home health providers, but the actual dollar amounts of the improper payments are higher
Mr. LANKFORD. Sure.
Ms. KING. on part A.
Mr. LANKFORD. Where you have larger bills, whether it is part
A, it is going to be larger than what is going to be in part B and
most of the smaller providers. So I would understand that, but it
may be large to them.
So if you have got aagain, going back to the physical therapy
clinic, privately owned, fewer number of patients there, it may be
a very big deal to them to have 2 percent of their files pulled than
it would be to a hospital, as far as just general overhead.
Okay. Dr. Agrawal, you mentioned as well about good actors in
this, the possibilityand I heard a lot of, you know, variances of
that to put it in the maybe is possible. You know, we are looking
at statements in it for good actors that are out there.
Once they have gone through, they have proved it to do well,
they didnt have a lot of inaccuracies, how do we slow down the
process so they are not coming just as fast to them, again, coming
to, again, an entity that is set up to do compliance now more than
it is to take care of people? Where are we on that? Give me the
process.
Mr. AGRAWAL. Sure. So one solution that has been proposed is
to lower the volume of medical record requests that could go to a
provider that in previous requests has actually had a low denial or
overpayment determination rate.
That, I think, is a good idea. We have heard it from a number
of sources, and we are implementing that approach in our next
round of RAC contracts precisely so that providers that have been
audited, that have done well in the audits and shown that they are
following the rules will face fewer audits and lower volumes going
forward.
Mr. LANKFORD. Okay. Is that less frequency of audits or is that
they are grabbing a smaller number of files when they come, they
are coming just as often, they are maybe just doing half of 1 percent rather than 1 percent, or are they coming maybe only once
every 2 years so they are in their building less often?
Mr. AGRAWAL. I would have to confirm. I know the volume, you
know, per audit will be decreased, but I have to confirm if the frequency would also be
Mr. LANKFORD. Okay. I would just recommend to you both are
important, especially to part B folks. They are trying to run a business and, if they prove to be good actors in this, the frequency matters to them.
When they have to stopnow, obviously, the volume that is
being withheld from them, not being paid to them, makes a big difference for them making payroll.
But it is also extremely important they are able to focus on their
business and not every 60 days, 90 days, have to stop and do another one of these if they have already proven they are doing well,
they are following the rules.
So I would recommend to you both, both frequency and number
of files that they are pulling.
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Has there been a study to look at the compliance costs for the
providers?
Mr. Ritchie, you mentioned before around $700 million has been
recovered this year. Is that correct?
Mr. RITCHIE. Yes.
Mr. LANKFORD. Okay. Do we know what the compliance cost is?
Has anyone seen a figure for that?
Ms. KING. Not to my knowledge.
Mr. LANKFORD. Because in most of the regulations that are out
there, when they are promulgated, there is an estimated compliance cost for the promulgation of the rule it has to go through,
based on the number of requirements.
The question is: Do we now know with more certainty what the
actual compliance cost is? Where would I get that?
Ms. KING. I am not aware that such a study has been done. We
have not done one.
Mr. LANKFORD. Okay.
Mr. RITCHIE. We havent either. I am not aware of it.
Mr. LANKFORD. Okay. I can go back and look at the beginning
because, when it was originally promulgated, there would have had
to have been an initial estimate that was put out at that time as
well.
Ill go back and pull that. Well work through that on our side,
since we dont know of another one that has been done since then.
Then last set of questions here on this.
The pausing of the RACs. Administrator Tavenner and I have
had a conversation that, when there is an intermediary change,
very typically when the intermediary changes to a new one, what
happen is the old intermediary starts losing employees quickly and
they are trying to still maintain all the RAC audits during that
time period with fewer and fewer staff, but everyone is leaving because that company is shutting down or shifting to a different spot.
The other company is still trying to fire up and to be able to get
ready. So it is very slow. But the speed of RACs can be the same
across that, though the old intermediary cant keep up and the new
intermediary cant keep up and you have got a drag there in response time.
So my conversation has been, Can we reduce the number of
RACs during that transition time when the intermediary changes?
If the authority exists to do that, where is the authority to also
slow down the process to allow us to catch up on this backlog somewhat, to look at it and say, We are still going to continue to do
this. We have got to slow this down?
Because if we are approaching a million files sitting out there
with more still coming, they will never catch up. It doesnt matter
how much we fund it. We are not going to catch up. And that is
a lot of money to be held from individuals.
What is the conversation out there related to that?
Mr. AGRAWAL. Yeah. So we do realize that, as we procure the
next round of RAC contractors, that there is a sort of transition
issue.
What we have done is paused the RAC program during this transition. What we dont want to happen is for one contractor to ini-
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tiate an audit and for a second contractor to then complete that
audit.
So we are working
Mr. LANKFORD. Happens all the time.
Mr. AGRAWAL. we are working to avoid it this time.
So the last round of audits were initiatedor were permitted to
be initiated at beginning of February. Those audits must be completed in a timely manner so thatand then the RACsthe current batch of RACs can wind down and then the new batch of
RACs can wind up.
During this pause, we are also, you know, using it totaking advantage of it to alter the RAC program based on input that we
have gotten from providers and other stakeholders to make it more
transparent to providers, to provide more education and to make
sure that it is focused on all areas of improper payment.
Mr. LANKFORD. And when will that be public?
Mr. AGRAWAL. The procurement process is going on right now.
We are following, you know, sort of standard Federal procurement
requirements.
There are statements of work that Iyou know, in order to be
to actually get proposals that either have hit or will soon hit, you
know, public transparency and contractors will be able to respond
to.
Mr. LANKFORD. Okay. Any other final comments?
Well, I appreciate
Ms. KING. No, sir.
Mr. LANKFORD. Okay. I appreciate you being here and for the
conversation. Your work is extremely important both in transparency and in helping us deal with improper payments and fraud.
But I think you have heard from this committee pretty clearly
we need a balance. We need providers. Right now with what is
happening in healthcare across the country, we are losing providers, and anything that discourages a provider from continuing
to stay open makes the problem worse.
We have more seniors every day joining into Medicare, and we
have a problem with providers staying in, based on reimbursements and based on just sheer compliance and the frustration of
that.
This is reaching a really bad spot, and we have got to make sure
we are working with providers to keep the good actors and then
weed out the bad actors and educate those that just made a mistake rather than push them out of business.
So, with that, we are adjourned.
Ms. KING. Thank you.
Mr. AGRAWAL. Thank you.
[Whereupon, at 12:01 p.m., the subcommittee was adjourned.]
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APPENDIX
MATERIAL SUBMITTED
FOR THE
HEARING RECORD
(93)
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House Hearing, 113TH Congress - Medicare Mismanagement: Oversight of The Federal Government Effort To Recapture Misspent Funds

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House Hearing, 113TH Congress - Medicare Mismanagement: Oversight of The Federal Government Effort To Recapture Misspent Funds

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MEDICARE MISMANAGEMENT: OVERSIGHT OF THE

FEDERAL GOVERNMENT EFFORT TO RECAPTURE MISSPENT FUNDS

SUBCOMMITTEE ON ENERGY POLICY,

Serial No. 113136

For sale by the Superintendent of Documents, U.S. Government Printing Office

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12:41 Sep 29, 2014

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

LAWRENCE J. BRADY, Staff Director

ENERGY POLICY, HEALTH CARE

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Hearing held on May 20, 2014 ...............................................................................

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MEDICARE MISMANAGEMENT: OVERSIGHT OF

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Ms. KING. Mr. Chairman and members of the subcommittee,

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