[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]









           ASSESSING MEDICARE AND MEDICAID PROGRAM INTEGRITY

=======================================================================

                                HEARING

                               before the

                SUBCOMMITTEE ON GOVERNMENT ORGANIZATION,
                  EFFICIENCY AND FINANCIAL MANAGEMENT

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 7, 2012

                               __________

                           Serial No. 112-176

                               __________

Printed for the use of the Committee on Oversight and Government Reform








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                      http://www.house.gov/reform
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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

   Subcommittee on Government Organization, Efficiency and Financial 
                               Management

              TODD RUSSELL PLATTS, Pennsylvania, Chairman
CONNIE MACK, Florida, Vice Chairman  EDOLPHUS TOWNS, New York, Ranking 
JAMES LANKFORD, Oklahoma                 Minority Member
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
FRANK C. GUINTA, New Hampshire       ELEANOR HOLMES NORTON, District of 
BLAKE FARENTHOLD, Texas                  Columbia














                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 7, 2012.....................................     1

                               WITNESSES

Dr. Peter Budetti, Director of Center for Program Integrity, 
  Centers for Medicare and Medicaid
    Oral Statement...............................................     5
    Written Statement............................................     7
Ms. Ann Maxwell, Regional Inspector General for Evaluation and 
  Human Services
    Oral Statement...............................................    22
    Written Statement............................................    23
Ms. Carolyn Yocum, Director of Health Care, Medicaid, U.S. 
  Government Accountability Office
    Oral Statement...............................................    35
    Written Statement............................................    37

                                APPENDIX

The Honorable Todd Russell Platts, a Member of Congress from the 
  State of Pennsylvania, Opening Statement.......................    89
The Honorable Michele Bachmann, a Member of Congress from the 
  State of Minnesota, Opening Statement..........................    92
The Honorable Gerald E. Connolly, a Member of Congress from the 
  State of Virginia, Opening Statement...........................    93
Statement for the Record submitted on behalf of the Council for 
  Quality Respiratory............................................    94
Statement of the American Medical Association....................    98
Rethinking Medicaid Program Integrity: Eliminating Duplication 
  and Investing in Effective, High-value Tools...................   101
Questions for Dr. Peter Budetti from Rep. Todd Platts............   116
Questions for Dr. Peter Budetti from Rep. James Lankford.........   120

 
           ASSESSING MEDICARE AND MEDICAID PROGRAM INTEGRITY

                              ----------                              


                         Thursday, June 7, 2012

                  House of Representatives,
          Subcommittee on Government Organization, 
              Efficiency, and Financial Management,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 9:40 a.m., in 
Room 2154, Rayburn House Office Building, Hon. Todd Platts 
[chairman of the subcommittee] presiding.
    Present: Representatives Platts, Lankford, Farenthold, 
Towns, and Norton.
    Also Present: Representative Bachmann.
    Staff Present: Ali Ahmad, Communications Advisor; Alexia 
Ardolina, Assistant Clerk; Kurt Bardella, Senior Policy 
Advisor; Molly Boyl, Parliamentarian; Sharon Casey, Senior 
Assistant Clerk; Katelyn E. Christ, Professional Staff Member; 
John Cuaderes, Deputy Staff Director; Gwen D'Luzansky, Research 
Analyst; Adam P. Fromm, Director of Member Services and 
Committee Operations; Linda Good, Chief Clerk; Ryan M. 
Hambleton, Professional Staff Member; Mark D. Marin, Director 
of Oversight; Christine Martin, Counsel; Mary Pritchau, 
Professional Staff Member; Noelle Turbitt, Staff Assistant; 
Peter Warren, Legislative Policy Director; Jaron Bourke, 
Minority Director of Administration; Beverly Britton Fraser, 
Minority Counsel; Ashley Etienne, Minority Director of 
Communications; Devon Hill, Minority Staff Assistant; and 
Safiya Simmons, Minority Press Secretary.
    Mr. Platts. Good morning. This hearing of the Subcommittee 
on Government Organization, Efficiency, and Financial 
Management will come to order. I first apologize to all of our 
guests and our witnesses and my colleagues for the short delay 
in getting started. Given that the delay is my responsibility, 
I am going to abbreviate my opening statement to get us back on 
track, but we are appreciative of everyone's participation here 
today, and especially our witnesses.
    This hearing is focused on the fiscal integrity of Medicare 
and Medicaid and it is our subcommittee's third hearing on this 
issue of helping to ensure that we do right by the American 
people in how we handle their hard-earned dollars that they 
send to Washington. And an important focus of this subcommittee 
for many years, going back to when I first joined it, my first 
term in Congress in 2001 under the chairmanship of Steve Horn, 
is how to prevent the making of improper payments by the 
Federal Government.
    And when we look at Medicaid and Medicare, more than half 
of the most recent years' identified improper payments were 
within these two programs, approximately $65 billion of the 
American people's money that was not properly handled on their 
behalf by the Federal Government.
    Today's hearing is looking at how these programs can do 
better, and we certainly appreciate our witnesses' 
participation and your insights and knowledge that you will 
share with us. As in the past and working with the former 
chairman of the full committee and the chairman of this 
subcommittee, and now-ranking member Mr. Towns, our approach 
has always been a partnership with Federal departments and 
agencies and programs. We are not out to play ``gotcha'' but we 
are simply here to see how can we do better and how can we help 
those involved specifically in the operation of Medicare and 
Medicaid and those who work with us at GAO and the Inspector 
General's Office; how we can improve the effectiveness, 
efficiency of these programs, and ultimately serve the American 
people through these very important programs where the hundred 
million Americans receive health-care benefits but do so in a 
responsible manner where we are certainly getting a good return 
on the investment and properly handling their money.
    So we will look forward to your testimony.
    And with that, I am going to yield to the ranking member 
from New York, Mr. Towns, for the purposes of an opening 
statement.
    Mr. Towns. Thank you very much, Mr. Chairman, and thank you 
for holding this hearing.
    This subcommittee has held several hearings about fraud and 
waste in these critical health-care programs that we must 
continue to do so because we need to answer the question: Can 
we administer these programs more efficiently by reducing 
improper payments and fraud?
    Last year, Medicare covered about 50 million beneficiaries 
and spent approximately $560 billion, which is about 15 percent 
of the total Federal spending. Medicaid likewise provides 
coverage for about 70 million people nationwide and cost the 
government approximately $260 billion last year, about 8 
percent of the Federal spending. These numbers are expected to 
grow as our population gets older.
    This country increases reliance over time on Medicaid and 
Medicare is unfortunately translating into a significant level 
of waste and fraud. Improper payments for Medicare was recently 
estimated to be $42 billion; and for Medicaid, $21.9 billion. 
That is a lot of money. That is the reason why both of these 
programs continue to be on the GAO's high-risk list.
    The Affordable Care Act includes a number of provisions 
that will enhance our efforts to fight waste and fraud in 
Medicare and Medicaid. Eliminating avoidable mistakes and 
cracking down on criminals will be important elements in 
achieving this goal.
    Today we will look at some of the innovative steps that the 
Center for Medicare and Medicaid Services is taking to reduce 
improper payments and fight fraud. We will also examine some of 
the shortcomings that prevent existing programs from reaching 
their full cost savings potential.
    There is no single approach that will result in the 
reduction of waste and fraud in the health-care system. The 
solution requires a multi-tiered approach involving 
stakeholders in Congress, CMS, the private sector, and law 
enforcement all working together in order to achieve this goal.
    I thank our witnesses for their testimony, and I look 
forward to hearing your recommendations and suggestions that we 
might make.
    So on that note, Mr. Chairman, I yield back.
    Mr. Platts. Thank you, Mr. Towns. I appreciate your 
testimony.
    I would now ask unanimous consent that our distinguished 
colleague from Minnesota, the gentlelady, Representative 
Bachman, be allowed to participate in today's hearing for both 
the purpose of questions and an opening statement, and, without 
objection, so ordered.
    I now yield to the gentlelady for her opening statement.
    Mrs. Bachmann. Chairman Platts and Ranking Member Towns, I 
thank you so much for your consideration and graciousness 
allowing me to be able to testify briefly before this committee 
today on this critical program, and I thank you also for the 
bipartisan way in which this committee is moving forward on 
this subject. As we are on the cusp of a major expansion in 
Medicaid in the United States, it is more important than ever, 
and I commend this committee for taking up this important issue 
about saving the expenditure of the people's money. And I thank 
you for that.
    In April, I testified in a joint hearing of two oversight 
committees' subcommittees on the complete lack of reporting, 
collection, and verification of meaningful data in Medicaid. I 
underscore what I just said. That is a breathtaking statement. 
There is a complete lack of reporting, collection, and 
verification of meaningful data in Medicaid. The same is not 
true for Medicare. That is why this is a bipartisan issue and 
one that we hope will focus on helping the needs of the poorest 
among us in the United States who must have these program 
moneys in order to survive.
    The staff report from that hearing stated, ``Minnesota 
provides a stunning example of how States are failing to 
properly ensure the appropriate use of taxpayer dollars spent 
on Medicaid managed care. This is something we are not proud 
of. In order for States to ensure the appropriate use of 
taxpayer dollars, they must be able and willing to collect the 
data that shows how much is paid in a claim, for what, and to 
whom. That is only basic common decency.
    Since the investigation into Minnesota's Medicaid fraud has 
unfolded, several implicated parties have begun to offer up 
excuses.
    According to the trade organization for managed care 
organizations, the Department of Human Services actually has 
the data but not the ability to analyze it. They say the 
State's computer system is too antiquated. But in contradiction 
to this, a DHS assistant commissioner said the data is 
``literally analyzed by DHS on a daily basis and has been for 
years.'' So now, either the trade association representing the 
health plan is fudging or DHS is. We need to find out who. It 
is our job to immediately get to the bottom of this. And I 
thank the committee for what you are doing.
    CMS is already tasked with identifying patterns or 
instances of fraud and abuse in Medicare and Medicaid. That 
much we know, and that much is good. But despite that, they 
require no documented data. Now, the two don't go together. You 
can't do your job if you don't have documented data.
    That is why this month I am introducing a bill that will 
hold CMS accountable to ensure stated audits are conducted 
properly. That is why this is totally bipartisan, a bipartisan 
bill. We just want to know where the people's money is going 
and is it going to help the poor people in this country who 
need these services.
    But because this situation needs immediate attention, I am 
proud to announce that I am sending a letter today to CMS 
calling for an immediate third-party independent audit of 
Minnesota's books. We can't allow taxpayer dollars to flow 
without proper record keeping ever again.
    Thank you again to the committee for your fine work, 
Ranking Member Towns, and also for your fine work, Chairman 
Platts. I am thrilled to be a partner with you in this 
important work that you are doing.
    And I yield back.
    Mr. Platts. I thank the gentlelady for her opening 
statement and her involvement and interest in the issue, as 
well as your focus on the efforts of Minnesota specifically in 
seeking to make sure we do right by all of our taxpayers in 
Minnesota and across this great Nation.
    All members will have 7 days to submit opening statements 
and extraneous material for the record.
    I will now proceed to our panel of witnesses. And we are 
delighted to have a group of distinguished public servants with 
us who bring a welcome knowledge to our hearing today.
    First, we have Dr. Peter Budetti, who is director of the 
Center for Program Integrity at the Centers for Medicare and 
Medicaid Services; Ms. Ann Maxwell, regional inspector general 
for evaluation and inspections in the Office of the Inspector 
General for the Department of Health and Human Services; as 
well as Ms. Carolyn Yocum, who is director of health care for 
Medicaid at the United States Government Accountability Office; 
and Ms. Kathleen King, director of health care for Medicare at 
the United States Government Accountability Office.
    We thank all of our witnesses for being here with us today. 
Pursuant to committee rules, if I could ask all four of you to 
stand and raise your right hand and allow us to swear you in 
before your testimony.
    Raise your right hand. Do you solemnly swear or affirm that 
the testimony you are about to give this committee will be the 
truth, the whole truth, and nothing but the truth? Let the 
record reflect that all four witnesses answered in the 
affirmative.
    We appreciate the extensive written testimony you provided 
us, what I call my homework in preparation for our committee 
hearings, and your doing so certainly allows both members and 
staff to be better prepared to have a good engagement here 
today.
    With your oral testimony here today, if you can seek to 
limit yourself to roughly 5 minutes. You will see the light 
system in front of you. If you do need to go over a little bit, 
that is fine. But for the purpose of allowing members to get 
into exchange and Q&A with you, we will try to limit to 5 
minutes.
    Dr. Budetti, we will begin with you.

                       WITNESS STATEMENTS

                STATEMENT OF PETER BUDETTI, M.D.

    Dr. Budetti. Thank you, Mr. Chairman, and thank you 
Chairman Platts, Ranking Member Towns, and members of the 
subcommittee for this invitation to discuss the Centers for 
Medicare and Medicaid Services program integrity efforts for 
the Medicare and Medicaid programs.
    As I describe in detail in my written statement, the 
administration made important strides in reducing fraud, waste, 
and improper payments. And I draw your attention to this chart, 
which I hope is in a font that at least some of us in the room 
can read, which illustrates the framework within which we have 
taken action over the last 2 years.
    The first point is moving beyond a pay-and-chase approach 
by focusing new attention on preventing fraud. We are adopting 
what we call a twin pillar approach, building upon the 
traditional program integrity efforts that focus on detecting 
and prosecuting fraud.
    We have implemented an approach that involves two pillars. 
One is what we are calling the fraud prevention system, which 
applies predictive analytic technology on claims prior to 
payment to identify aberrant and suspicious billing patterns. 
And the second pillar is the automated provider screening 
system which focuses on identifying ineligible providers or 
suppliers prior to their enrollment or revalidation.
    These innovative new systems are designed to work together. 
They're growing in their capacity to protect patients and 
taxpayers from those intent on defrauding our programs. They 
represent an integrated approach to program integrity, 
preventing fraud before payments are made, keeping bad 
providers and suppliers out of Medicare in the first place, and 
quickly removing wrongdoers once they are detected. These 
complement the traditional program integrity activities which 
continue.
    Second, we would like to emphasize that our work is on a 
risk-based approach. We are not approaching this on a one-size-
fits-all model. For example, in addition to the detailed 
assessment of credentials and other requirements that all 
providers and suppliers undergo through the automated provider 
screening system, we've identified those in a moderate level of 
risk who are now required to also undergo site visits and those 
in the high level of risk who will be subject to fingerprint-
based criminal background checks.
    The fraud prevention system itself, the way it operates, 
represents another example of our risk-based approach. It 
targets our investigative resources to suspicious claims and 
providers, generates alerts in priority order, allowing our 
program integrity analysts to investigate the most egregious or 
suspect aberrant activity.
    Third, innovation. For the first time in the history of the 
program, CMS is using a system to apply advanced analytics 
against Medicare fee-for-service claims on a streaming national 
basis. This has enabled us to identify schemes operating across 
Medicare Parts A and B claims and across the country.
    The fraud prevention system aggregates A and B data claims 
in near realtime, and this has revolutionized our approach. For 
example, our investigators formerly had to check multiple 
systems to determine whether a beneficiary had ever visited a 
doctor who billed Medicare for services and supplies. We've now 
consolidated disbursed pieces of claims data, beneficiary 
visits with the doctor, or orders for durable medical equipment 
and hospital, and other providers and other services provided 
under Part A, enabling our investigators to automatically see 
the full picture.
    Similarly, in the second pillar of our approach, the 
automated provider screening system, this is another 
significant advancement and innovation. We're using advanced 
technology in a way that we are committed to both rooting out 
and screening out the bad guys while making it easier for the 
legitimate providers to enter the Medicare program.
    We expect that our enhancements to the Medicare enrollment 
system will speed up the time for legitimate providers to get 
in and our screening processes will keep out the bad ones.
    The fourth point, transparency and accountability, which 
are high priorities for this administration. We've held a 
number of regional fraud prevention summits around the country 
with a wide range of stakeholders and the general public, and 
we have engaged in a number of efforts to make sure that the 
public is aware of what we are doing to combat fraud and how 
they can join with us in doing that.
    We are engaging the public and private sector more 
extensively. For example, we conducted a month-long fraud 
prevention awareness month in concert with the California 
Medical Association and the State of California, and we've 
involved the private sector, especially the medical community, 
very closely in our remodeling of the enrollment system to 
address needs that they themselves have identified.
    And finally, I'm coordinating and integrating the program 
integrity programs. When Secretary Sebelius created the Center 
for Program Integrity, she brought together the Medicare and 
the Medicaid program integrity activities for the first time. 
This has provided a strong basis now for communication between 
the programs and for aligning as much as possible the fraud 
policy--anti-fraud policies and procedures across Medicare and 
Medicaid, as required in many cases by the Affordable Care Act.
    Mr. Chairman, Medicare and Medicaid fraud, we agree with 
you, they affect every American by draining critical resources 
and contributing to the rising cost of health care. We've made 
a firm commitment in this administration to rein in fraud, 
waste, and improper payments. We have more tools than ever to 
move beyond ``pay and chase'' and implement
    strategic changes in pursuing and detecting fraud, waste, 
and abuse.
    I look forward to continuing to work with you as we make 
improvements in protecting the integrity of the Federal Health 
Care programs, and I very much appreciate your interest in our 
doing so.
    Thank you for this opportunity to speak with you.
    Mr. Platts. Thank you, Dr. Budetti.
    [Prepared statement of Dr. Budetti follows:]




    Mr. Platts. Ms. Maxwell.

                    STATEMENT OF ANN MAXWELL

    Ms. Maxwell. Good morning, Chairman Platts, Ranking Member 
Towns, and other distinguished members of the subcommittee.
    Thank you for the opportunity to testify about the Office 
of Inspector General's evaluations of two national program 
integrity efforts. The national Medicaid audit program and the 
Medicare-Medicaid data match program, typically referred to as 
Medi-Medi.
    Our evaluations reveal that these national integrity 
efforts in many ways resemble a funnel. Significant Federal and 
State resources are being poured in, but only limited results 
are trickling out.
    Both national efforts are required to identify improper 
Medicaid payments for recovery. The National Medicaid Audit 
program strives to do this within States and across States. 
Medi-Medi attempts to detect overpayments in Medicaid and 
Medicare by matching the data across programs to identify 
suspicious patterns. However, both programs had limited success 
in achieving the goal of identifying Medicaid overpayments. As 
a result, both programs had a negative return on investment.
    In 2010, the national Medicaid auto program paid 
contractors approximately $32 million to identify Medicaid 
overpayments of just half that amount. In fact, we discovered 
that 81 percent of the audits assigned in the first half of 
that year did not or are unlikely to find overpayments.
    Medi-Medi also had a negative return on investment. Medi-
Medi was appropriated $60 million over a 2-year period during 
which time it saved $58 million. Of that amount, only one-
quarter, $11 million, was recovered on behalf of the 10 States 
that are participating at the time. The benefits of the 
Medicaid program were so minimal for two States that they opted 
to withdraw from the program. One of the States that withdrew 
from the program stated that it saved $2,000 after investing 
$250,000 of State funds.
    There are a variety of challenges that limit the potential 
of these programs to attack Medicaid overpayments, including 
issues of Medicaid data, poor program administration and the 
lack of contractor accountability. The most fundamental 
challenge is the data.
    National Medicaid data are not current, they are not 
complete, and they are not accurate. In fact, the data is not 
going to capture all of the elements necessary for the 
detection of fraud, waste, and abuse. Due to these data 
problems, the National Medicaid Audit Program wasted resources, 
auditing potential overpayments that were not real. They were 
merely mirages created by the data.
    Due to these data problems, Medi-Medi does not have 
Medicaid data suitable for automated matching with Medicare 
data. CMS has said this matching will not be possible for a 
number of years.
    In addition to these data challenges, CMS' administration 
of these programs was flawed. The National Medicaid Audit 
Program States suffered from inefficient communication between 
contractors and States that resulted in duplication of effort. 
Medi-Medi suffered from a lack of focus on Medicaid program 
integrity at the Federal level. CMS also did not always hold 
contractors accountable from performing each of their tasks 
outlined in their statement of work.
    Our evaluations raise questions about the overall 
effectiveness of the National Medicaid Audit Program and Medi-
Medi. We recognize that CMS has taken steps to improve these 
programs based on recommendations from the OIG, from GAO, and 
CMS' own internal assessment. We recommend that CMS continue to 
evaluate the goals, the structure, and the operation of these 
programs to determine what aspects should be part of a national 
strategy to protect the Medicaid program.
    Further, we believe that more must be done to overcome the 
significant shortcomings in the Medicaid data. Without timely, 
complete, accurate, and standardized Medicaid data, it is 
impossible to effectively detect systemic vulnerabilities that 
span across States and into the Medicare program.
    Thank you again for the opportunity to present this work 
and to be a part of this discussion. The OIG shares your 
ongoing interest in program integrity, and I'd be happy to 
answer any questions that you might have on this topic.
    Thank you.
    Mr. Platts. Thank you, Ms. Maxwell.
    [Prepared statement of Ms. Maxwell follows:]




    Mr. Platts. Ms. Yocum.

                   STATEMENT OF CAROLYN YOCUM

    Ms. Yocum. Chairman Platts, Ranking Member Towns, and 
members of the subcommittee, we are pleased to be here today. 
I'm pleased to be here today with my colleague, Kathleen King, 
as you discuss program integrity in Medicaid and Medicare.
    Our prior work has shown that CMS continues to face 
challenges with fiscal management of these programs which have 
some of the highest--largest estimated improper payments in the 
Federal Government. Both are on GAO's high-risk list in part 
because of concerns over improper payments.
    Our remarks today are focused on CMS' progress and 
important steps that remain to be taken from the perspective of 
four key strategies and recommendations that have been 
identified in GAO's work:
    First, strengthening provider enrollment standards and 
procedures to help reduce the risk of enrolling entities intent 
on defrauding the programs.
    Second, improving prepayment controls to ensure that claims 
are paid correctly the first time.
    Thirdly, improving postpayment review and recovery of 
improper payments.
    And fourth, developing a robust process for tackling 
identified program vulnerabilities.
    With regard to Medicaid, since 2007 CMS has monitored 
States' provider enrollment standards and procedures through 
comprehensive reviews of States. Within CMS' most recent 
comprehensive reviews, we found 230 instances of noncompliance 
with Federal laws or regulations related to States' provider 
enrollment standards and procedures.
    CMS continues to develop better controls to detect improper 
claims before they are paid. In this area, the agency has 
identified--has initiated discussions with and provided 
guidance to States in anticipation of new analytic tools that 
can identify potential vulnerabilities before rather than after 
Medicaid claims are paid.
    Regarding postpayment claims review, the importance of 
coordination with States has grown because of the increased 
number of entities conducting audits, including implementation 
of recovery audit contractors, or RACs. CMS' shift to 
collaborative audits with States should help avoid duplication 
of Federal and State audit efforts.
    That said, CMS has not established a robust process for 
incorporating RAC identified vulnerabilities in State 
corrective action plans. CMS requires State Medicaid agencies 
to have a corrective action process as part of their activities 
to reduce their Medicaid error rates. And information from the 
Medicaid RAC program could be incorporated into these 
processes.
    For Medicare, the Patient Protection and Affordable Care 
Act authorized CMS to implement several actions to strengthen 
provider enrollment. Some of these actions, such as developing 
a final rule on screening providers and suppliers, have been 
completed. But other actions, such as implementing relevant 
statutory provisions and some of our prior recommendations, 
remain incomplete.
    Our prior work found certain gaps in Medicare's prepayment 
controls, and we made recommendations for improvements, such as 
adding controls to identify unusually rapid increases in 
medical equipment billing. We are currently evaluating CMS' 
efforts in this area.
    CMS has also taken steps to improve its postpayment reviews 
and recovery efforts. In March 2009, the agency began the 
National RAC Program for Medicare fee for service. As of May 
2012, the agency reported that just under $2 billion was 
recouped due to these contractors' efforts. While CMS has 
implemented a RAC for its prescription drug program, it has not 
done so for its Medicare managed care plan.
    Lastly, our March 2010 report on CMS' RAC demonstration 
program found that CMS had not established an adequate process 
to ensure prompt resolution of identified vulnerabilities. 
We've recommended that CMS do so, and we are currently 
evaluating the steps the agency has taken to develop such a 
process.
    While CMS has made efforts to improve program integrity, 
further action is needed. We believe that many of the lessons 
learned from our work on Medicare could be applied to 
strengthen the Medicaid program as CMS and the States begin to 
use the additional tools provided through recent legislation.
    Effectively implementing provisions of recent laws and our 
recommendations will be critical to reducing improper payments 
and ensuring that Federal funds are used for their intended 
purpose.
    Mr. Chairman, this concludes our prepared remarks. We would 
be happy to answer any questions you or other members of the 
subcommittee may have.
    Mr. Platts. Thank you, Ms. Yocum.
    [Prepared statement of Ms. Yocum follows:]




    Mr. Platts. And Ms. King, I understand that Ms. Yocum was 
speaking for both of you.
    Ms. King. She is.
    Mr. Platts. Okay. Thank you.
    I will now yield myself 5 minutes for the purpose of 
questions.
    Again, thank each of you for your testimony and your 
insights and look forward to not just today with this hearing, 
but in going forward to continue working with each of you and 
your respective offices as we collectively try to do right by 
the American people and how their dollars are used.
    Dr. Budetti, I would like to start with you. In your 
written testimony here today, you talk about kind of the 
traditional approach and then as you highlighted, a new 
approach, and your written testimony certainly focused 
extensively on new efforts, the fraud prevention services, the 
automated provider screening process.
    And the way I looked at your written testimony's kind of 
view, you have mentioned the more traditional and National 
Medicaid Audit Program, the Medi-Medi program, but you really 
didn't go into a lot of detail on that.
    Should I take from that that there is some maybe 
acknowledgment or understanding that the findings of the 
Inspector General of GAO of the previous programs or the older 
programs focused on program integrity have not been as 
effective as we would like and that you are devoting more focus 
and resources on a new approach to the FPS and the APS?
    Dr. Budetti. The short answer is yes, at least to the 
acknowledgment of the problems. You may not be surprised to 
know that I find very little to disagree with in much of what--
what you've heard by way of testimony by the GAO and the Office 
of Inspector General.
    The current leadership, I'll just focus on the Medicaid 
integrity programs, National Audit Program for a second, 
because I think that is where some of the most difficult 
problems have been identified.
    The current leadership of that program took over in late 
2009 and the program came into the Center for Program Integrity 
in early 2010. It was during that year that we identified 
internally that we were getting the wrong kinds of results--
very limited, very limited results from the way that we were 
going about doing the national audits, and we both embarked on 
a way--a program to develop a new approach and also to cut off 
the old approach.
    So the life history of the audits that were initiated 
under--being based on the inadequate data that you've heard 
described, they started in September of 2008 before we took 
over the program; and the last one, my information is, went out 
in February of 2011. During that time--so we have not sent one 
out since then, that's my understanding. And since then, we 
have been building a new approach which involves working more 
directly and more collaboratively with the States because the 
States do have--although they have it in very different systems 
in some cases and it's not completely easy to get access to--
the States do have, of course, much more complete information 
than we've been getting at the Federal level.
    So we've engaged with them in thus far, I understand, 137 
collaborative audits. Those are taking place in States that 
represent about 53 percent of all Medicaid expenditures, and we 
are looking to expand that substantially over the coming year.
    So we do acknowledge that there have been problems with the 
National Audit Program, and we initiated corrective action 
early on, and we are very much dedicated to improving that 
program.
    Mr. Platts. Specifically on the approach, on the 
traditional approach and acknowledgment of the problems there, 
one that came out in the Inspector General's testimony and the 
written testimony, was the example between the-- disparity 
between the review integrity contractors and the audit 
integrity contractors. And one example highlighted in that 
testimony was that the review contractors identified 113,000 
providers with potential overpayments of $282 million, and then 
when the audit contractors went in and got into that 
information, there was only 25 of these 113,000 were determined 
to have been given overpayments, and only $285,000 actually 
found to have been inappropriate versus the $282 million. That 
is quite a disparity and shows a significant problem with that 
approach.
    Dr. Budetti. That's exactly right. Those are the kinds of 
numbers that caused us to stop that approach and that has 
caused us to look to a new way of doing business.
    One of the things that kept that going was that when the 
review contractors looked at the inadequate data, they made 
projections that looked very promising, and it wasn't until we 
found out that they in fact did not return any results when we 
went out and conducted the actual audits, that we decided that 
this was so problematic that we would stop that and we would 
have a new approach.
    In the meantime, the Federal Government, as you've heard, 
does not have yet all of the data that are necessary for us to 
do the audits ourselves, and so we believe that for now the 
best way to go about this is to build up the collaborative 
audits, working closely with the States who do have the proper 
data.
    Mr. Platts. A quick follow-up before I yield to the ranking 
member.
    On that, so today are we still paying any review audit 
contractors going forward, or the audit integrity contractors 
under the old system?
    Dr. Budetti. So we have existing contracts. We have some 
audits that are out there that have yet to be completed, and we 
are at this very moment, we are looking at the restructuring of 
our entire audit program so that we can use those resources in 
a much more effective way, and that also will tie in, if I have 
time later, I can talk about how that--we're exploring how that 
will tie into the use of our Medi-Medi resources as well.
    Mr. Platts. That is a concern of those existing contracts 
and what we are paying out still, when clearly the results 
versus a collaborative approach and the new systems is night 
and day.
    Dr. Budetti. We're directing them to new tasks that are 
still within the scope of their existing contracts, and we're 
exploring the way of--and we're exploring how to completely 
restructure our approach.
    Mr. Platts. Okay. Thank you.
    I now yield to gentleman from New York for the purpose of 
questions.
    Mr. Towns. Thank you very much, Mr. Chairman.
    Let me just begin by saying I am impressed that there is 
collaboration with CMS with the Inspector General's Office and 
the Department of Justice in law enforcement in recent years, 
which I understand has resulted in more than 600 criminals 
being successfully prosecuted for fraud against Medicaid and 
Medicare, and more than 500 of whom were serving prison 
sentences of over 42 months.
    How many would that--I am trying to get the conviction 
rate. Would anybody know in terms of that number how many 
actual indictments?
    Ms. King. Sir, that is work that we are currently 
conducting, and we'll have the answer to that later this year.
    Mr. Towns. Okay. Well, we would like to get the 
information.
    Ms. King. Both on the civil and the criminal front.
    Mr. Towns. The reason I raise that is because the Inspector 
General indicated that there was a situation where you spent 
$250,000 to collect $2,000. You know, I just think we need to 
look at every area to make certain that there is not waste, 
fraud, and abuse.
    Let me ask, do you think the fact that these systems do not 
talk to each other? I mean, what is the problem? And as the 
chairman had mentioned earlier on, this is not one of those 
committees where we ``got you.'' We want to help. We recognize 
how important it is today more than ever that we save money and 
make certain that it is being used and used properly. So we 
want to be helpful.
    But is it the fact that you do not have the money to put 
the system in place to be able to get the information that is 
necessary to be able to adjust? And let me say why I raise this 
question.
    I was in bed one night, and at 1:30 in the morning I get a 
call from American Express; said to me that somebody was making 
a big purchase in the bar on my credit card, you know, and they 
said they hated to bother me so, but the point was that this 
was so unusual, I guess because my bar bill is like $5 I guess, 
I don't know. But I am not sure as to why it was so unusual. 
But anyway, the point was that they reached out to me to make 
certain that there was no fraud. I mean, they wanted to make 
certain that they took care of it right away. I mean, why can't 
we look and find a technique, a method to be able to do the 
same thing?
    Dr. Budetti?
    Dr. Budetti. Mr. Towns, I'm happy to report that under our 
new fraud prevention system, since as of the end of April, our 
investigators have conducted 1,541 interviews with 
beneficiaries that really are parallel to the call that you 
got, unfortunately, in the middle of the night from American 
Express, where we check to see whether or not beneficiaries can 
confirm that they have received the services that they may or 
may not have received. So that's very much built into part of 
what we're doing now.
    Mr. Towns. How long has that been in place?
    Dr. Budetti. This system went into place the end of June of 
last year. And so as of April of this year, we have counted 
1,541 such interviews.
    Mr. Towns. Okay.
    Dr. Budetti. On the broader question of resources, we're 
very grateful to the Congress for the resources that have been 
provided. As you may know, the President has also asked for 
some additional resources in this area. I think that at the 
Federal level, we have had very good access to the kinds of 
data that we need and it is a question of putting the systems 
in place to deal with the information that we generate 
properly. I think a lot of States would tell you that they do 
face some resource constraints, notwithstanding that a lot of 
their expenditures would be covered by the Federal Government. 
So there are some ongoing discussions with States about that as 
well.
    Mr. Towns. I really, I think my question is, is it the fact 
that you do not have the kind of resources that would make it 
possible for you to put a plan in place that will help you to 
be able to evaluate and to see in terms of what is really going 
on? You know, I sort of get the feel that the technology in the 
system is not in place to do that. And I know it takes some 
money to do that, and sometimes I think that instead of putting 
the money in, you know, we just sort of try and make do and 
then we end up spending more by trying to make do.
    Dr. Budetti. We're very pleased that under the Small 
Business Jobs Act of 2010 and also under the additional funding 
that was provided in the Affordable Care Act, that we have very 
substantial resources. The Small Business Jobs Act is what 
specifically called on us to go ahead with what we were 
intending to do, which is to put into place the advanced 
technologies that I was talking about, the fraud prevention 
system, and that is in place and it has been up and running now 
since the end of June of last year.
    So we believe on the Medicare side, we have the technology, 
we have the systems in place. They're going to grow and 
continue to grow and become more and more sophisticated over 
time. So I think that on that side, I think--I think we're in 
good shape. I do think we face the challenge that we're facing 
up to of translating that advancement on the Medicaid side.
    Mr. Towns. I see my time has expired.
    Mr. Platts. I thank the gentleman.
    I now yield to the gentleman from Oklahoma, Mr. Lankford.
    Mr. Lankford. Thank you, Mr. Chairman. And I would say to 
the ranking member, I am very pleased to hear that the pastor--
it is rare for him to be in a bar late in the evening, so much 
so that American Express calls him and says it is a rare event. 
So glad to be able to hear that.
    Let me bounce a couple of questions off of you as well, and 
I have some real concerns on the RAC audit process. If there is 
any one thing that I hear from hospitals, providers, and folks 
the most, it is the full-body cavity search that has become the 
RAC audit process.
    I have several concerns. One begins just with the process 
of it. As a Federal Government, we are designed to serve the 
people, rather than them serve us. And the RAC audit process 
seems to have put the whole process on its head, that they 
exist there to serve us, and we are going to stay long enough 
until we find some fraud.
    The contingency fee process part of it, my fear is it's 
turning this into a bounty hunter process, that we have outside 
contractors that are coming in and they're going to stay until 
they get paid, until they find something there.
    That moves the system significantly towards we are going to 
find more fraud, but it also moves the system significantly 
towards a hostile, not helpful, environment in that.
    Saying all of that, that is where we are, I feel. I don't 
know if anyone disagrees with me on that. I have yet to find 
anyone that disagrees with that. And I have had multiple 
conversations with that sense, if you have got a disagreement, 
I would like to hear about it.
    But I also would like to hear how are we preparing people 
for these RAC audits and what process is occurring currently so 
when people arrive, it is an environment where we evaluate, as 
we should, we should hold people to account. But this should 
not be a hostile event.
    Ms. King. Representative Lankford, as you may know, the RAC 
program started with a demonstration.
    Mr. Lankford. Right.
    Ms. King. And we evaluated that demonstration, and we did 
find a number of areas for concern. And there were some 
missteps on the part of CMS in terms of the issues that were 
explored there and, you know, perhaps overaggressiveness.
    And I think that CMS, in implementing the national program, 
took a lot of those concerns into account, and they devised a 
system at CMS where all of their central players in the 
operation would get together and agree on what kinds of 
situations the RACs could look into, rather than having them 
just go out on their own. So in the national program, I think 
that part has been smoother.
    Mr. Lankford. Still paying people a contingency based on 
what they find?
    Ms. King. That's the way the program was set up.
    Mr. Lankford. The way it is set up.
    Ms. King. To pay on--to pay on contingency.
    But, you know, one more thing I might add about that is the 
RAC program is designed to identify overpayments and 
underpayments, and it is not specifically designed to look for 
fraud. It's really looking at cases in which the agency has 
paid too much or too little.
    Mr. Lankford. Right. But a lot of the underpayment, I mean, 
what do we have, a 4 percent national rate for underpayment?
    Ms. King. The vast majority are overpaid.
    Mr. Lankford. Yeah. They are really going in looking for 
overpayments, obviously, on that. And it becomes an issue of 
what is an overpayment and how complex this is.
    My assumption is it is typically we overpaid you because we 
shouldn't have paid you at all for this, because we disagree. 
You shouldn't have had them in the hospital 2 nights, or we 
disagree this shouldn't have been an overnight stay at all, or 
this procedure or this coding.
    So agree or disagree on that?
    Ms. King. I agree, but they are following Medicare policy 
when they're doing the audits.
    Mr. Lankford. When the hospital responds back to it, when 
there has been a denial, my understanding is there is about a 
75 percent rate of turning that over. Am I correct or 
incorrect?
    Ms. King. When we did our work, we didn't have the 
information about what the overturn rate is.
    Mr. Lankford. The appeal rate seems to be extremely high 
when we are looking for fraud, and we are fighting back and 
forth on whether this should have been through the process or 
not, whether it should have been a 1-night or 2-night or 
overnight at all, or whatever it may be. And then they appeal 
it and have a 75 percent appeal success rate. That tells me 
there is still an issue. There is still a problem hovering out 
there somewhere that we have got to be able to resolve, because 
we are creating a hostile environment with providers.
    This is someone we should be serving. We should hold people 
to account, but we should also be serving them rather than 
creating an environment where they are spending tens of 
thousands to hundreds of thousands of dollars defending 
something that was valid.
    Ms. King. You know, we haven't looked at the implementation 
of the national program, so I really don't know there whether 
the appeal rate has gone down. And we did not have access to 
the appeal data during the course of our work. So you're 
raising valid concerns, but I don't know the answer.
    Mr. Lankford. Mr. Budetti, you were going to say something.
    Dr. Budetti. Yes, I would. I would just add a couple of 
things to that. One, I would echo what Ms. King said, but I 
would also add that CMS is listening to those kinds of concerns 
that you've identified. We've certainly heard them as well. We 
have put into place a demonstration project in order to work 
with hospitals when there is a question as to whether or not 
the patient should have been an in-patient or an out-patient, 
instead of a demonstration where hospitals can rebuild, if that 
is the determination, so that they don't lose the entire 
payment, as they have under standard operating procedures that 
have been in place.
    We are also very much looking at all of those concerns, and 
they're a matter of a great deal of internal discussion in the 
agency at this time.
    Mr. Lankford. I would encourage you to keep it as a matter 
of a great deal of internal discussion so we can try to 
evaluate it, because this obviously is an issue. I know this is 
a project you are trying to launch on it, but we have got to be 
able to resolve this.
    With that, I yield back. Thank you.
    Mr. Platts. I thank the gentleman. I now yield to 
gentlelady from Minnesota, Mrs. Bachmann.
    Mrs. Bachmann. Thank you again, Mr. Chair, and also Ranking 
Member Towns.
    One area to look for fraud is with the Medicaid providers 
and others with the Medicaid--or the managed-care 
organizations.
    And this would be a question for Dr. Budetti, if you will. 
And just briefly based on the concerns that the managed-care 
organizations are using Medicaid premium dollars to cross-
subsidize other non-Medicaid State health plans, could you tell 
the committee what data you are gathering to combat these 
allegations, if any?
    Dr. Budetti. Congresswoman, I think that you're aware that 
in your State, Minnesota, that after discussions with CMS that 
have been ongoing recently, that Minnesota has recently agreed 
to repay to CMS the appropriate Federal share of the amount of 
money that was contested. And we're currently reviewing the 
State's submission on that matter and have every intention of 
collecting the appropriate Federal share.
    We are also----
    Mrs. Bachmann. But if I could ask, Dr. Budetti, how are 
they coming to the conclusion of what number? Because my 
question is about what data are you gathering so that we can be 
confident that States aren't taking Medicaid dollars and then 
using them for a cross-purpose to subsidize a non-Medicaid, 
non-Federal Medicaid State health plan. What specific data are 
you asking the States for, so we can be assured this isn't 
going on?
    Dr. Budetti. I think that that question is very well taken. 
I think that we need to continue to build our capacity to 
collect the appropriate data on managed-care operations.
    Mrs. Bachmann. So we aren't collecting any data to that 
effect today?
    Dr. Budetti. The emphasis has been on the fee-for-service 
side, I agree with you on that.
    Mrs. Bachmann. So we need to do better, it sounds like.
    Dr. Budetti. We do need to do a better job in terms of 
getting that degree of oversight, and we are engaging in doing 
that.
    Mrs. Bachmann. Thank you. I agree. I think that shows a big 
hole that we have, because we are not even asking the right 
questions. I think that goes to Ranking Member Towns. The right 
question was asked of him at 1:30 in the morning. That is what 
we need to be doing, asking the right question. And clearly we 
are not.
    Let me ask you also, Dr. Budetti, since 2006, CMS has now 
spent over a hundred million dollars developing the one program 
integrity system to merge Medicare and Medicaid data, and the 
Medicare data has been collected, but to date the Medicaid data 
has not been included. Now, this is significant. It has been 6 
years.
    Why is that, that the Medicaid data is not included, and 
what role should the States play in--or are they, perhaps, in 
delaying the collection of this data and are States withholding 
information from CMS?
    Dr. Budetti. We certainly recognize that the data that we 
have been getting from the States are not adequate, and that's 
been at the core of our restructuring of the National Audit 
Program. We've been working very diligently over the last 
couple of years to improve that situation and to get the right 
kind of data.
    There's a demonstration project going on with 10 States 
that's designed to look at the data that we're currently 
collecting, to identify the data that we do need to do proper 
oversight, and as well as a number of other program operation 
requirements at the Federal level, and then to get those data 
from those 10 States and to use that as a model for improving 
the flow of data from the States.
    Mrs. Bachmann. I would agree, but that doesn't answer my 
question why for 6 years we have Medicaid--Medicare data, but 
we don't have Medicaid.
    Dr. Budetti. Yes.
    Mrs. Bachmann. There is just an absence. So the question 
is, is the State holding out on us? Are they not getting the 
data? Are we not holding them accountable?
    So if you could get back to the committee and answer that 
question. I just have one question----
    Dr. Budetti. Sure.
    Mrs. Bachmann. --for Ms. Yocum, if you could answer that 
also in the brief time I have.
    The GAO lists Medicaid as a high-risk program, and GAO has 
previously issued reports that addresses CMS' lack of oversight 
into Medicaid managed-care rates. So given that we have three-
fourths of Medicaid beneficiaries enrolled in some form of 
managed care, could you speak to the data that is used by GAO 
and CMS to address this aspect of Medicaid?
    Ms. Yocum. Certainly. Right now, one of the big issues 
across the Medicaid program are the different data systems and 
the extent to which they actually talk to each other. There are 
two different ways that managed-care data may be collected. One 
is through its expenditure system. The second is through a 
separate accounting system that looks at the managed-care 
reporting itself.
    Our work that we looked at on an actuarial soundness in 
Medicaid managed care, we ended up going back to State plans 
and to States' contracts with managed-care plans in order to 
understand CMS' review and oversight in that area.
    Mrs. Bachmann. Mr. Chairman, I thank you for indulging me 
to be with the committee. It seems to me that there is a real 
problem in that we aren't asking the right questions. And I 
think we would be a lot farther down the road if we asked the 
right questions. That is the purpose of my legislation that I 
will be introducing shortly. But I thank the committee so much 
for graciously allowing me to be here today, and I thank Dr. 
Budetti for getting the answers to the committee to the 
question that I asked.
    Mr. Platts. I thank the gentlelady.
    And Dr. Budetti, if you would follow up in writing to the 
committee for the record in response to Representative 
Bachmann's questions.
    And I think the focus that you have touched on here, and 
the ranking member and I were speaking about, it is so 
important that unless we have that data, we really won't be 
able to get to the root causes. And, you know, when I talk 
about internal controls, ultimately our goal is to get to the 
root causes of the improper payments, the fraud, the misuse of 
funds, but without the data, it is hard to know exactly where 
that is. So that focus, especially on the Medicaid side, is 
going to be so important to ultimately reducing the improper 
payment numbers for both Medicaid and Medicare.
    I thank the gentlelady for participating.
    I now yield to gentleman from Virginia, Mr. Connolly, for 5 
minutes.
    Mr. Connolly. I thank the chair.
    And I might ask my colleague who has joined us, and welcome 
her to the subcommittee--she indicated that we are not asking 
the right questions. Because I'm late, if you would indulge me, 
what pray tell is the right question?
    Mrs. Bachmann. I think the question is we want to have an 
independent third-party audit of where the payments are going. 
We today----
    Mr. Connolly. You mean the improper payments?
    Mrs. Bachmann. Thank you. That is a better way to phrase 
it, and I thank you for that correction for the gentleman.
    We have not conducted for decades independent third-party 
audits of the States. We aren't asking the meaningful data. In 
our State of Minnesota, for instance, a bill has been presented 
from managed-care organizations to our State of Minnesota. The 
State pays it. It is almost like if you went to the grocery 
store and you had maybe what you thought was $35 worth of 
groceries in your grocery cart, and then the cashier said, 
Please give me $300. And you said, Well, let me see the grocery 
tape so I know what I'm paying for. And the cashier says, No, 
I'm not going to give you the grocery tape. Give me $300.
    We at the Federal Government aren't demanding the itemized 
statement of what the managed-care organizations are charging 
the States, and then the States are passing that bill on to the 
Federal Government----
    Mr. Connolly. I thank my colleague.
    Mrs. Bachmann.--and we are just paying it. So thank you.
    Mr. Connolly. Thank you very much. I appreciate it.
    Dr. Budetti, maybe start with you. What is your response to 
our colleague's concern certainly with her home State of 
Minnesota, and I am sure other States as well, this idea that I 
am paying $300, and I can't get the itemized bill to justify 
why I am paying $300, for example, at the grocery store. Is 
that applicable?
    Dr. Budetti. We have acknowledged that the existing data 
that are reported by the States in this area to the Federal 
Government have proved to be inadequate for conducting Federal 
audits. I would point out that there's two ways to think about 
this. One is the Federal Government gets the data and does the 
audits or has people do the audits. The other is the Federal 
Government works with the States to make sure that the right 
data are available and works collaboratively with the States to 
do the audits.
    The first model we're not--has not proved to be workable 
with the data sets that the Federal Government has been 
getting. We're working to improve those data sets. We're not 
abandoning that approach. We're working very hard to improve 
them.
    But in the meantime, we know the States do have the data, 
and so we are embarking on a new approach with collaborative 
audits so that we will use our resources, with the States, to 
audit the data that are in the States. So we're approaching it 
from both sides. We don't want to wait until some future date 
when the Federal Government has perfect data from the States. 
We need to keep an eye on things right now, and that's what 
we're doing with the States.
    Mr. Connolly. Could I ask, given Medicare--we are talking 
about Medicare?
    Dr. Budetti. So for Medicare, of course----
    Mr. Connolly. No, no. Wait.
    Dr. Budetti. For Medicaid we don't have the data. The 
States do.
    Mr. Connolly. But Medicaid is not a new program.
    Dr. Budetti. No, sir.
    Mr. Connolly. And obviously the problem did not occur only 
on this administration's watch. Why is it taking us so long to 
sort of figure this out and try to figure out systems to put in 
place to correct this defect?
    Dr. Budetti. My understanding is that the current data set 
that's collected was designed for the use of the program. It 
was being used in other ways, and it has not proved to be 
adequate for the way that we need to use it now. I'm not an 
expert on the history of Medicaid's statistical information 
system, however. But I'd be happy to get you some background.
    Mr. Connolly. I think the subcommittee would appreciate it 
on both sides of the aisle.
    Let me ask you this. I am under the impression that U.S. 
attorneys offices are focusing increasingly on Medicare fraud 
and recovering sizable amounts of money from fraud from 
vendors, medical practitioners, and the like. Is that a fair 
characterization of sort of this administration's decision to 
crack down on that fraud and trying to recover as much as 
possible?
    Ms. Maxwell, did you want to comment on that? It looked 
like you were getting ready to comment.
    All right. Dr. Budetti.
    Dr. Budetti. I would be happy to yield to Ms. Maxwell. Sir, 
there are fraudsters who stay in business after we catch them, 
and they have assets that we can go after and recover. And in 
that case, as you know, there have been substantial recoveries 
in recent years. The most recent year was over $4 billion that 
was returned from a variety of different approaches.
    Then there are fraudsters who, of course, disappear as soon 
as we identify what they are doing. They have no assets for us 
to go after. We still want to catch them. We still want to 
throw them in jail if we can. But that is why we need to 
build--that is why we are building our system that is designed 
to prevent fraud from occurring in the first place, because 
many of those fraudsters we will never recover anything from.
    Mr. Connolly. Right. Mr. Chairman, I know my time is up. 
And all of us on the subcommittee have been very focused on 
improper payments under your leadership. But fraud is an 
important subset, obviously, and making sure we have the focus 
of the Federal Government and the resources. And I must say I 
am impressed that the Obama administration has taken it very 
seriously. And I think the 99 U.S. attorneys offices are 
important allies in this particular component. So the more 
information I think we could get on that would be appreciated. 
I thank the chair.
    Mr. Platts. I thank the gentleman. We will proceed with a 
second round of questions, and I yield myself 5 minutes for 
that purpose.
    Dr. Budetti, you talk a lot in testimony, written and oral 
here today, about the automated provider screening process. And 
in your written testimony you give a number of examples of how 
it is helping to, you know, screen out either new applicants, 
new provider applicants that are illegitimate, inappropriate, 
as well as going back, and with a goal by 2015, to review all 
existing 1.5 million Medicare suppliers and providers. When I 
look at the numbers, and I have tried to on page 6 of your 
testimony combine them, you talk about an initial review that 
kind of knocked out 13,000 deactivations of providers. And then 
you talk about an additional round, a second round that knocked 
out approximately another 10,000, 11,000. If I total those up, 
I come up to about 23,000, 24,000 providers in the review of 
existing--that 1.5 million. And, again, from your testimony 
apparently there has been about 275,000 existing providers, 
suppliers, who have been rescreened.
    And so if my numbers add up correctly, we are talking 8 to 
10 percent of existing providers and suppliers, that when we 
went back and looked at them, we knocked out for some reason as 
not appropriate and were eligible for taxpayer funds. If that 
number, 8 to 10 percent, is accurate, we are talking 120,000, 
130,000 or more providers, if you translate that over 1.5 
million. I mean that is obviously very disconcerting. Am I 
looking at that accurately, that that is perhaps the scale of 
the problem we are facing?
    Dr. Budetti. So even one would be disconcerting as far as I 
am concerned, Mr. Platts. So I would share your concern. I will 
tell you that we started out with identifying the highest-risk 
providers. So our initial efforts were focused on people that 
we considered to be the highest risk. And those included people 
that we had reason to believe were not licensed to practice in 
the States in which they were eligible for Medicare, or they 
were not in the national database, they were only in the local 
systems. There were a number of criteria that we used to 
identify them.
    So we started out by running all 800,000 physicians who 
were in the national database through the automated provider 
screening system to identify the ones who did not appear to be 
licensed in the place in which they were allowed--in which they 
had Medicare billing privileges. And so we examined those. And 
those represented a fair number of the ones----
    Mr. Platts. Of that 800,000, about how many of the 800,000 
came back as not being licensed?
    Dr. Budetti. It was a fairly significant--I don't have it 
in front of me, but I would be happy to get it to you.
    We then proceeded to run all 1.5 million providers and 
suppliers through the automated provider screening system to 
establish a baseline for future analysis, because we are doing 
several things. Not only are we in the process of revalidating 
all 1.5 million providers and suppliers, but we are also in the 
automated provider screening system putting into place an alert 
system. And the alert system will tell us between times, not 
just at enrollment, not just at revalidation, but if somebody 
dies, if somebody is convicted of a felony that is relevant for 
our concerns, if somebody loses their license, we will get pop-
up alerts to that effect so that we can take action without 
waiting for the revalidation period. This is all new.
    Most of what was done in the past was being done manually, 
and was substantially less efficient, I would say. So now at 
the same time that we are enrolling our new applicants, because 
we do get approximately 20,000 new applicants per month to be 
providers and suppliers of Medicare and Medicaid--in Medicare, 
we are also engaged in the revalidation process that has gone 
on, as you said. So the numbers may be a little different when 
we have finished with everybody because we started with the 
highest-risk weight.
    Mr. Platts. So that 8 to 10 percent probably is high 
because you were specifically targeting the high risk.
    Dr. Budetti. Yes.
    Mr. Platts. But as you say, even if it is 1 percent, 
15,000, it is still a huge----
    Dr. Budetti. We should do something about it. Know about it 
and do something about it.
    Mr. Platts. Yeah. That use of technology in the screening 
and the rescreening and those flags that go up that if there is 
a delicensing I think is critical to ultimately getting to 
where we want to be.
    Ms. Maxwell, in your testimony you talk about States that 
have participated with CMS on Medicaid not very effectively, 
and you reference two States that have withdrawn, and one in 
particular that in participating in the partnership had only 
recovered a minimal amount, a couple thousand dollars, but when 
they withdrew they recovered about $28 million. Are you able to 
identify which State that was that withdrew and what did they 
do different, to the best of your knowledge, that was so much 
more effective?
    Ms. Maxwell. I am able to identify that State. It is the 
State of Washington. And it is my understanding that the $28.9 
million that they recovered was part of their ongoing State 
Medicaid program integrity efforts.
    Mr. Platts. Are you aware of what their efforts were that 
were so different that they succeeded significantly better than 
in the partnership with CMS?
    Ms. Maxwell. No, I am not aware of what they were doing 
that was different.
    Mr. Platts. Why I ask that is that seems like that is an 
example of a State that has a good State-based program in place 
that, perhaps with the Medicare Integrity Institute at CMS, 
that we would want to look at to try to share that approach 
with other States--maybe will match up, maybe not, depending 
upon the comparison of States--but that we learn from those 
best practices out there and get that information shared.
    So Dr. Budetti, are you familiar with what the Washington 
State had done and whether that has been looked at to replicate 
elsewhere?
    Dr. Budetti. I can't speak exact precisely to that, but I 
can tell you that we have put into place a system of 
identifying best practices and sharing that among all of the 
States. We have an active process for doing that, as well as 
bringing people together. We have now passed the 3,000 State 
employees who have been trained down at the Medicaid Integrity 
Institute. And one of the activities that goes on certainly is 
networking and sharing of best practices. If you would like a 
little more information on the Washington program, I would be 
happy to get it for you. But I do know that we do certainly 
work our program integrity. Our Medicaid program integrity 
activities certainly have been very supportive for all the 
States, including Washington.
    Mr. Platts. If there is any information that you have 
available regarding Washington State and perhaps what they did 
different that seemed to be much more effective than what had 
been done in that partnership, that would be great.
    I see my time has well expired. So I yield to the ranking 
member for questions.
    Mr. Towns. Thank you very much, Mr. Chairman. Let me begin 
with you, Ms. Maxwell. Does OIG use any cutting-edge technology 
tools of its own to help fight fraud?
    Ms. Maxwell. Yes. The Office of Inspector General has 
increasingly used a data-driven approach. We have developed our 
own data warehouse that allows for the collection of data 
across the Medicare programs, and we mine that. In particular, 
we have used that approach in our strike force efforts. Since 
2009, HHS and DOJ have created rapid response investigative 
teams in nine cities around the country, and those cities are 
targeted through the use of data.
    Mr. Towns. Could you comment on the effective tools that 
CMS is using in terms of tools they have in place and they are 
using, and the new ones that have been implemented? Could you 
comment on that?
    Ms. Maxwell. The study that I am prepared to speak on 
focused primarily on Medicaid program integrity. And the tools 
I believe you are referencing are on the Medicare side, so I 
don't have any comment on those.
    Mr. Towns. All right. Let me ask you, Ms. Yocom or Mrs. 
King, is it necessary to have so many categories of 
contractors? Can't we consolidate some of the roles and still 
reach our objective?
    Ms. King. I think on the Medicare side, since its inception 
Medicare has largely been run by contractors. There has been 
some significant consolidation on the Medicare side. It used to 
be that there were organizations called carriers and 
intermediaries that processed Medicare fee-for-service claims. 
They have been consolidated into the Medicare administrative 
contractors. And now there are many fewer of them. And also the 
program safeguard contractors have been consolidated up to the 
same level as the Medicare administrative contractors.
    That said, there are still different types of contractors 
that have specific functions. But you know, I don't know that 
that is--it is not something that we have looked at, but I 
don't know on its face that that would be inappropriate.
    Ms. Yocom. Sir, on the Medicaid side, GAO does have some 
ongoing work that is looking at some of the contractors that 
are participating in the Medicaid integrity group. And that 
will be out this summer.
    Mr. Towns. All right. Let me ask this. When you make 
recommendations, do they follow it?
    Ms. King. Largely. That is something that we keep track of. 
And we go back once a year and we look at that. And I think 
that our track record is many more recommendations are adopted 
than not, of those that the agency agrees with.
    Ms. Yocom. Overall, it is about 80 percent of our 
recommendations get acted on by the agencies that we review.
    Mr. Towns. Are the ones that they do not adopt, are they 
saying that it is a lack of resources?
    Ms. Yocom. I think it would be hard to describe at a global 
level what the reasons are. Sometimes it may be resources, 
sometimes it may also just be that they disagree and they don't 
believe it is a high enough priority.
    Ms. King. Sometimes I think it is conflicting priorities. 
The agency has a lot of work to do, and we make 
recommendations, and they are in agreement with them, but they 
have higher priorities that bump them.
    Mr. Towns. Right. Let me conclude, Ms. Maxwell, with you. 
How widespread is the problem of lack of oversight of 
contractors? And what is the ultimate effect on program 
integrity?
    Ms. Maxwell. Speaking with respect to the Medicaid program 
that our reports touch upon, we did find instances of lack of 
contract oversight by CMS, as I had mentioned. The contractor 
was not held accountable to all the tasks in its statement of 
work. On the Medi-Medi side, the annual assessment of the 
Medicaid--the Medicare program integrity contractor that runs 
that program did not actually assess all of the variables in 
that task order.
    Mr. Towns. I see, Mr. Chairman, my time has expired, so I 
yield back.
    Mr. Platts. Okay. I thank the gentleman. Just a quick 
follow-up before I go to the gentleman from Oklahoma. On that 
failure to fulfill all the task orders, all the requirements, 
was there any consequences for not doing that that you are 
aware of?
    Ms. Maxwell. No. What we were told is that at the time--
which was early in the program--CMS did not expect for the 
contractors to fulfill these particular aspects of their 
statement of work. It is my understanding that they have 
changed, and they are now holding the contractors more 
accountable to all the tasks in their contract.
    Mr. Platts. Thank you. Yield to the gentleman from 
Oklahoma.
    Mr. Lankford. Thank you. Let me do a quick follow up 
statement, finish out talking about the RAC audits. I do have a 
statement from the AMA about the RAC audits I would like to be 
added into the record.
    Mr. Platts. Without objection, so ordered.
    Mr. Lankford. Questions and issues that they had as well. 
Is there a system in place--still with coding and billing, some 
of those things are automated. Obviously, when they go through 
an audit they can get a chance to look at those, and those will 
bounce up. When I do my taxes, I go through a program, at the 
end of it, it comes back and does a red flag for me on 
everything and says, okay, double-check and make sure this is 
contract.
    For providers, do they have any system like that so that 
before someone comes in and does a RAC audit, someone is 
checked and rechecked locally, this might come up as a 
question? This is not consistent with typical billing. Is there 
anything like that that is in place for the providers?
    Dr. Budetti. I do know that there are a number of reasons 
why claims are not accepted the first time around and providers 
get information back on the claims. But I really can't speak to 
that, exactly that point in detail.
    Mr. Lankford. This is submitted online. It is submitted 
through a program, right?
    Dr. Budetti. Most of those are now, yes.
    Mr. Lankford. Right. That is what I assume. So what I am 
asking, is there a way to be able to set that up so it is built 
so it checks it locally before they ever submit it, that there 
is a quick verification of that to say double-check this line 
was left out, this code seems to be inconsistent with this one?
    Ms. King. That is not something that we have ever looked 
at. But my understanding is that the providers do use software 
billing programs that would enable them to check for those 
kinds of things.
    Mr. Lankford. Okay. But you are saying that is not 
something that----
    Ms. King. That we have looked at.
    Mr. Lankford. They purchase a separate one that actually 
attaches to a third-party software somewhere that does that?
    Ms. King. Yes, sir.
    Mr. Lankford. Because obviously the goal of this is that it 
is right the first time, not that we are paying chasing, and 
not that we are trying to do a RAC audit to be able to come 
down on someone on that.
    Ms. Yocom. Our statement does talk about CMS's efforts on 
the Medicaid side in this area looking for prepayment edits. 
CMS has to date looked primarily just at the process for doing 
this, not necessarily at the content of the individual edits. 
They have identified some notable practices, some of which sort 
of stop the claim and identify what information is necessary.
    Ms. King. And on the Medicare side, we are doing a 
significant amount of work on Medicare prepayment edits so that 
Medicare would not pay claims that are not in conformance with 
its policies or for providers who are not eligible. But I think 
that you were asking questions that, you know, on the provider 
side, what do they do so that by the time they submit a claim 
it is clean.
    Mr. Lankford. That is correct. The goal is that when it is 
submitted it is clean, it has been checked and rechecked, and 
then they have some confidence that this is going through on 
it.
    Ms. Maxwell, I am very concerned on the data matching, the 
Medi-Medi program, in your testimony that in previous years we 
spent $60 million on a program that recouped $57.8 million. 
That doesn't seem like a real great investment in the process. 
The question is, is this a program that can be improved? Is 
this a program that needs to be terminated? Are there ideas 
that have been submitted to what to do with it at this point?
    Ms. Maxwell. The core issue that I bring up in the 
testimony today is the fact that the program is supposed to be 
matching Medicare and Medicaid data, and yet it doesn't have 
the Medicaid data to match. So it is perhaps not surprising 
that they are not finding as much as they would expect. And 
certainly they are finding very, very little on the Medicaid 
side for that reason as well. So to improve that program, as 
well as the MIC program that we talk about, really it goes back 
to the Medicaid data. We absolutely need national standardized 
Medicaid data to make these programs worthwhile.
    Mr. Lankford. Is there a reason that the Medicaid data 
can't be standardized to the Medicare data as far as how it is 
drawn in from a provider--obviously, most providers do both 
anyway--that those systems can't be consistent?
    Dr. Budetti. Just to engage this a little bit, Mr. 
Lankford, the Medi-Medi program operates on a State-by-State 
basis, so that the contractors who are actually the Medicare 
investigative contractors work with the State. And as I said 
before when I was talking about expanding our collaborative 
audits, we believe that this is a framework that we can use for 
enhancing our ability to work with the individual States. We 
have some 15 States now, representing well over half of all 
Medicaid expenditures, that are in the Medi-Medi program. A 
couple of those State's, or one in particular we believe, has 
recently shown that with appropriate use of the Medi-Medi 
approach, it can have very substantial returns. And so we 
believe that this is a way for us to build out part of our 
collaborative approach with the States because of being onsite 
with the States, working directly with them, and engaging them 
with both the Medicare and Medicaid data.
    Mr. Lankford. So what is an appropriate return? Obviously, 
you know, spending as much as you get back in is not an 
appropriate return.
    Dr. Budetti. No. The return that we are seeing in more 
recent times is much higher than that. I don't have the numbers 
in front of me, but I would be delighted to share them with the 
committee, because we believe they are very positive. But we 
don't--we think there is more to do. There is definitely still 
more to do.
    Mr. Lankford. Thank you. With that, I yield back.
    Mr. Platts. Thank the gentleman. I have just a couple final 
questions I want to try to get into the record, and then I 
apologize, I have got a markup going on down the hall in Ed & 
Workforce, and have amendments I need to get there to offer. 
But a quick follow-up on the Medi-Medi issue and the States' 
compliance or provision of data.
    Ms. Maxwell, in your testimony you reference that while 
there is Medicare Part A, B, and D information in, when it 
comes to Medicaid, the projected time frame is another 3 years, 
2015.
    And Dr. Budetti, would you agree with that projection? And 
if so, why another 3 years before--you know, that is 3 more 
years of lack of information to act on to prevent fraud and 
improper payments.
    Dr. Budetti. Our current target is 2014, not 2015, I 
believe, for the full--for getting the Medicaid data into the 
integrated data repository, which then is accessed through the 
One PI system. But I agree with you that we can't just sit and 
wait for those data to be available. That is why we have our 
pilots underway, to identify the best way to do this, and to 
get States actively pursuing doing this, and why we are also 
engaging the States in a hands-on collaborative way so that we 
are not just dependent on the data that flow to us.
    Mr. Platts. Right. Is there a point where--and maybe you 
are already thinking of this or looking at this--where you look 
at the Medi-Medi system and IDR versus your FPS and your APS 
systems that you have now put in place and say Listen, we have 
just got to cut our losses and move onto what apparently 
appears to be more effective, as opposed to trying to fix what 
has been going on for years in these older systems?
    Dr. Budetti. Thank you for raising that question, because 
that is actually a very important aspect of the fraud 
prevention system is that it involves streaming data, live 
data. It is as if you were, I don't know, looking at all of the 
publications that were coming out every day and screening 
through them for certain problems. Whereas the IDR is more like 
the Library of Congress that has all of the reserve data in it, 
which is extremely important for a number of purposes, not just 
program integrity purposes, but a number of different 
activities in CMS depend upon and use the IDR. But the IDR is 
also the warehouse, the data warehouse upon which our models 
for the fraud prevention system are based. Because if you have 
5 or 6 years' worth of data, we can build very sophisticated 
models, and then we put them into place to catch the streaming 
data on the fraud prevention side.
    So the two go hand in hand. One is not replacing the other. 
In fact, they are very much a combined approach. And both are 
extremely relevant. And the IDR for many aspects is an 
extremely valuable tool that gets more important all the time.
    Mr. Platts. So if you get that State data in there on the 
Medicaid side, the IDR, all the more effective the traditional 
approach is going to be to allow that One PI system to better 
work. But also your new approach----
    Dr. Budetti. Yes.
    Mr. Platts. --and developing those analytics to really say, 
you know, what is the pattern of fraud that we then try to put 
in those flags in going forward.
    Dr. Budetti. That is exactly right. They are intimately 
related. The one is kind of the cornerstone of the other. It 
also allows us to test the models ahead of time, before putting 
them into place, by looking at historical data.
    Mr. Platts. Great. I won't be in this chair a year from now 
or 2 years from now, where hopefully all of this is more 
fulfilled. Whether that is a colleague on my side of the 
aisle--I am biased that we stay in the majority--or Mr. Towns 
returns to the chair, as he and I have switched positions here 
a number of times--remains to be seen. But I am certain whether 
it is under the leadership of Chairman Issa and the full 
committee, or Mr. Towns on the Democratic side, the importance 
of these issues are going to continue to be looked at by this 
subcommittee, whoever is in this chair. And we certainly want 
to have success in going forward.
    A final question, and I have got probably 12 more I would 
like to ask but not the time to do so. And I am going to 
conclude with I am going to say two quick ones, and I will say 
quick.
    But first is Dr. Budetti, with getting that State data in, 
I mean the way I read it is there are regs and requirements in 
place that the States have not adequately complied with as far 
as providing the data that they are supposed to. Is that a fair 
statement? And if so, what, if any, consequences have been 
threatened to the States to help ensure compliance? Because we 
are giving them one heck of a lot of money. And if they don't 
want to comply with what we think is necessary oversight and 
protection against fraud and misuse, you know, they need to 
understand that they can't just continue on.
    Dr. Budetti. So the States have been cooperating with the 
existing requests which constitutes the Medicaid Statistical 
Information System data. What we need to do now is to flesh out 
exactly what data elements and what formats and what 
periodicity, and so all the details of reporting data from the 
States that we need to put into the new data that we are going 
to be collecting from the States. And that is a work that is 
taking some time. The States have different data systems. They 
have different ways of handling the data. And so we need to 
build that out extensively. But we do anticipate that we will 
learn from the transformed Medicaid Statistical Information 
System project, and we will then be able to do that.
    Yes, Mr. Platts, under the Affordable Care Act we can hold 
the States accountable for doing that. We want to make sure 
that we are doing it in a way that is supportive for them and 
for us, and to get it done in a way that is not disruptive.
    Mr. Platts. Certainly the carrot versus the stick approach 
hopefully is effective. But the States, are they being made 
aware that yes, you will comply with this? We want to work hand 
in hand with you, but ultimately if you don't, there is a stick 
available as well to ensure compliance in some form?
    Dr. Budetti. The Affordable Care Act spells that out quite 
nicely, yes.
    Mr. Platts. Final question to Ms. Yocom and Ms. King. You 
know, GAO over the years has made a lot of recommendations, 
some of which have been embraced, others that haven't. If you 
had to highlight one or two of your recommendations that you 
would see as most important to ensuring program integrity and 
what you would estimate the effectiveness of those 
recommendations would be in reducing that $65 billion improper 
payments number, what would that one or two recommendations be?
    Ms. Yocom. Well, on the Medicaid side some of our 
recommendations are yet to come, and will be forthcoming soon. 
I think the big areas where CMS needs to focus are on 
continuing to work with the States on the data, continuing to 
collaborate with States on program integrity issues. And the 
collaborative audits are a very promising approach. We do think 
that their refocused view is a good one.
    Mr. Platts. And certainly in the testimony, the 
collaborative approach has had much greater success than the 
prior efforts kind of going----
    Ms. Yocom. That is correct. Yeah.
    Mr. Platts. Yeah. Ms. King?
    Ms. King. And on the Medicare side, I think that we believe 
that CMS has taken some very important steps in the last couple 
of years. Certainly the new provider enrollment screening 
measures, the implementation of the fraud prevention system, 
which we are currently evaluating. And we are also looking at 
prepayment edits. So we will have more to say about that later. 
But certainly we see a positive direction.
    Mr. Platts. Okay. Thank you. Mr. Towns?
    Mr. Towns. Let me begin by thanking you, Mr. Chairman, for 
saying that I might be in the chair. But I need to let you know 
I am retiring after 30 years.
    Mr. Platts. Actually, Mr. Towns, I apologize. We are both 
going to be gone. So somebody will be in both of these chairs.
    Mr. Towns. I just want to make that clear. Thank you so 
much. But let me also ask, Mr. Chairman, that we hold the 
record open to get the information that we requested in 
reference to the indictment and conviction numbers. I would 
like to get that to see in terms of what the rate, you know, of 
conviction is versus indictment.
    And of course I wanted to say again, Mr. Chairman, that I 
really feel that we still have a lot of work to do. And I think 
that my question at this point in time would be what can we do 
on this side that might be helpful to you? You know, sometimes 
as legislators, we just point our finger and point our finger 
and point our finger. But we want to really, really come up 
with a solution. So if there is something that we need to do, 
let us know. I mean you can say it now or you can put it to us 
in writing. Because we would like to just correct it. Because 
there is still some serious problems. And the fact that--I 
think that information in is important. And if you are not 
getting the proper information in, then it is not going to help 
you in the end. So if you have suggestions to us as to what we 
might be able to do, I entertain that in my next few seconds.
    Ms. King. Mr. Towns, if I just might clarify, we are 
working to identify the rates of investigations and convictions 
in both the criminal and civil fraud matters. And we have taken 
2005 as a base year, and we are comparing it to 2010. That work 
is not quite done yet, but will be done later this year.
    Mr. Towns. Okay. Fine. So we should not hold the record 
open, you are saying, to get the information. I mean, what are 
you saying?
    Ms. King. No, don't hold the record open because it is not 
done yet. But we are close to finishing it.
    Mr. Towns. But you will give us the information before I 
retire?
    Ms. King. Yes, sir.
    Mr. Towns. Thank you. Thank you, Mr. Chairman.
    Mr. Platts. Thank the gentleman. We will keep the record 
open for 2 weeks for that follow-on information that has been 
requested. Certainly appreciate that.
    Also, I would ask unanimous consent, I have a statement for 
the record from the National Association of Medicaid Directors 
that focuses on their concern about the duplication of efforts 
at the Federal and State level, and the importance of a 
seamless coordination so we are not spending money on 
replicating what either we are already doing at the Federal 
level or at the State level or vice versa. So without 
objection, so ordered.
    I want to thank all of our witnesses again. And you know, I 
think that as I read through the testimony in preparation for 
the hearing, and the staff's leg work in preparing and what we 
heard today, is there are a lot of concerns about what has 
transpired in the past and the ineffectiveness of program 
integrity efforts. And as Mr. Lankford identified, one example 
where $60 million spent to recoup less than that, obviously 
that is not a good cost-benefit to the American taxpayers. But 
I also think that what comes through is that CMS, in 
conjunction with the Inspector General's Office and GAO, is 
working forward in a way that is learning from the mistakes of 
the past and learning what worked in the past, such as 
collaborative efforts versus other approaches, and seeking to 
put in place a truly effective program integrity system that 
will bring down that improper payments number hopefully 
dramatically in the years ahead. Because in doing so, we help 
us address both the debt that we have as a Nation, but also 
those dollars are truly benefiting those in need of these 
health-care services, whether it be Medicaid or Medicare, as 
opposed to lining the pockets of criminals and wrongdoers. So I 
am encouraged that we are headed in the right direction, as we 
need to.
    The ranking member and I do have about 7 months left, so 
that gives us 7 more months to work with, not torment you in 
this partnership approach. And we look forward to that 
continued dialogue as we go forward. So this hearing stands 
adjourned.
    [Whereupon, at 11:14 a.m., the subcommittee was adjourned.]




                                 
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