[Senate Hearing 112-661]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 112-661

     SAVING TAXPAYER DOLLARS BY CURBING WASTE AND FRAUD IN MEDICAID

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


                                HEARING

                               before the

                FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT
                   INFORMATION, FEDERAL SERVICES, AND
                  INTERNATIONAL SECURITY SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 14, 2012

                               __________

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri           ROB PORTMAN, Ohio
JON TESTER, Montana                  RAND PAUL, Kentucky
MARK BEGICH, Alaska                  JERRY MORAN, Kansas

                  Michael L. Alexander, Staff Director
               Nicholas A. Rossi, Minority Staff Director
                  Trina Driessnack Tyrer, Chief Clerk
            Joyce Ward, Publications Clerk and GPO Detailee
                                 ------                                

 SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, 
              FEDERAL SERVICES, AND INTERNATIONAL SECURITY

                  THOMAS R. CARPER, Delaware, Chairman
CARL LEVIN, Michigan                 SCOTT P. BROWN, Massachusetts
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
CLAIRE McCASKILL, Missouri           RON JOHNSON, Wisconsin
MARK BEGICH, Alaska                  ROB PORTMAN, Ohio

                    John Kilvington, Staff Director
                William Wright, Minority Staff Director
                   Deirdre G. Armstrong, Chief Clerk















                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Carper...............................................     1
    Senator Brown................................................     5
Prepared statements:
    Senator Carper...............................................    39
    Senator Brown................................................    43

                               WITNESSES
                        THURSDAY, JUNE 14, 2012

Peter Budetti, M.D., J.D., Deputy Administrator and Director for 
  Program Integrity, Centers for Medicare and Medicaid Services..     8
Douglas Porter, Director, Washington State Health Care Authority.    11
Douglas Wilson, Inspector General, Health and Human Services 
  Commission, State of Texas.....................................    12
Carolyn Yocom, Director, Health Care, U.S. Government 
  Accountability Office..........................................    14
Ann Maxwell, Regional Inspector General for Evaluation and 
  Inspections, Office of the Inspector General, U.S. Department 
  of Health and Human Services...................................    15

                     Alphabetical List of Witnesses

Budetti, Peter, M.D., J.D.:
    Testimony....................................................     8
    Prepared statement...........................................    45
Maxwell, Ann:
    Testimony....................................................    15
    Prepared statement...........................................    74
Porter, Douglas:
    Testimony....................................................    11
Wilson, Douglas:
    Testimony....................................................    12
    Prepared statement...........................................    58
Yocom, Carolyn:
    Testimony....................................................    14
    Prepared statement...........................................    68

                                APPENDIX

Chart referenced by Senator Carper...............................    85
Chart referenced by Senator Carper...............................    86
Chart referenced by Senator Carper...............................    87
Chart referenced by Dr. Budetti..................................    86
Questions and responses for the Record from:
    Dr. Budetti..................................................    89
    Mr. Wilson...................................................   102
    Ms. Yocom....................................................   103
    Ms. Maxwell..................................................   105
CMS Settlement Issues............................................   106

 
     SAVING TAXPAYER DOLLARS BY CURBING WASTE AND FRAUD IN MEDICAID

                              ----------                              


                        THURSDAY, JUNE 14, 2012

                                 U.S. Senate,      
        Subcommittee on Federal Financial Management,      
              Government Information, Federal Services,    
                              and International Security,  
                      of the Committee on Homeland Security
                                        and Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:04 a.m., in 
Room SD-342, Dirksen Senate Office Building, Hon. Thomas R. 
Carper, Chairman of the Subcommittee, presiding.
    Present: Senators Carper, Brown, and Coburn.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Good morning, everyone. The hearing will 
come to order. Actually, the hearing is in order. This is the 
quietest group I have seen or heard in quite a while. In fact, 
I hear nothing out there. If I closed my eyes, I would think I 
was here by myself. But we are glad you are all here; 
especially I want to welcome our witnesses.
    As you know, today's hearing will focus on one of our 
Nation's critical safety net programs, and that is Medicaid--
the partnership between our States and the Federal Government--
and the steps that must be taken to help further reduce waste 
and fraud and improve efficiency and effectiveness as well.
    A combination of Federal and State funding, as we all know, 
pays for Medicaid, though States take the lead in administering 
the program. Over the last year, State governments paid 
approximately $404 billion to care for some 70 million 
beneficiaries. These numbers are expected to grow in the coming 
years as the Affordable Care Act expands access to Medicaid for 
millions of additional Americans. And as we all know, both the 
Federal and State governments have struggled with record budget 
deficits in recent years. Today our national debt stands at 
just a bit over $15 trillion, well over double what it was just 
a decade ago.
    The last time that our Nation's debt was this high, I 
think, as a percentage of the gross domestic product (GDP) was 
at the end of World War II. That level of debt was not 
sustainable then, and we all know that it is not sustainable 
today.
    In order to address the burden this debt places on our 
country, we need to look, as my colleagues have heard me say 
again and again, in every nook and cranny of the Federal 
Government, all programs of Federal spending, large and small, 
and make certain the resources that we are investing are being 
spent efficiently and effectively. We need to demand results 
and focus the scarce resources that taxpayers entrust us with 
on what works. We need to find out what works and do more of 
that. And across the Federal Government, program managers need 
to sharpen their pencils, and stop making the kinds of 
expensive, avoidable mistakes that lead to improper payments.
    The bad news is that the Government Accountability Office 
(GAO) tells us that last year improper payments were $115 
billion. That is the bad news. The good news is that a year 
earlier it was $119 billion, and even with more programs 
covered, by the estimate it is coming down, so that is 
positive. But it is still way too high. With Medicaid, a 
significant amount of taxpayer dollars are unfortunately lost 
to waste and to fraud. Those resources could and should instead 
be used to help States provide quality health care to some of 
the most vulnerable citizens among us.
    According to GAO, Medicaid made an estimated $21.9 billion 
in improper payments in 2011. I think we have a chart\1\ over 
here. What does it say? It is hard to read over here. No, it is 
easy to read: $21.9 billion. I think if you add that to 
Medicare improper payments of about $40 billion, and that is 
with the Medicare prescription drug program added in for the 
first time--and the Medicare number is actually coming down a 
little bit despite the addition of the Part D. But that is 
still way too much. We can do better than that, and we have to 
do better than that.
---------------------------------------------------------------------------
    \1\ The chart referenced by Senator Carper appears in the appendix 
on page 85.
---------------------------------------------------------------------------
    I think the Administration has indicated that their goal 
in, I know, Medicare--not in Medicaid as well, but their goal 
in Medicare is to bring almost down by half I think by the end 
of next year the improper payments in Medicare. We need to make 
great progress as well in Medicaid. And to the extent that we 
do in reducing improper payments in Medicaid, we help not just 
the Federal Government and the Federal deficit but we, frankly, 
help the States as well, because almost half the money that is 
involved there is theirs.
    Medicaid continues to be on GAO's list of Government 
programs at a high risk for waste, fraud, and abuse, as it has 
been for many years. Now more than ever, it is urgent for us to 
step up our efforts to eliminate the problems that lead to 
waste and fraud across the government. Success in doing so will 
help us as we work to curb our debt, and in the case of 
Medicaid, as I said earlier, to help States, one of which I 
used to be Governor. But ultimately all of us--Congress, the 
Administration, and the States--want to improve program 
integrity in Medicaid to ensure that the program has the 
resources that are necessary to provide critical services to 
those in need, to the least among us.
    That is why I was encouraged to learn that in 2011 we saw a 
decline in the level of improper payments in Medicaid compared 
to more than $22 billion estimated that we saw there in 2010. 
So you may recall Dr. Coburn, Senator Coburn and I authored 
legislation signed by President Obama in 2010 that said, 
Federal agencies, not only do you have to figure out what your 
improper payments are, you have to stop making them, you have 
to go out and recover them, and we are going to evaluate 
supervisors within the Federal agencies in part on how well 
they comply with that law. And the next year, 2011, we saw some 
drop in the overall improper payments from $119 billion to $115 
billion, and even in Medicaid, this number has dropped from a 
little over $22 billion to $21.9 billion. Is that enough? No. 
Can we do better? Sure. But it is progress, and for that we are 
grateful.
    But the Centers for Medicare & Medicaid Services (CMS) and 
State governments are clearly beginning to make some progress. 
However, as I said, more work remains in our efforts to curb 
improper payments and reduce the amount of taxpayer dollars 
lost to errors, waste, and fraud. I want to encourage CMS to 
continue to partner closely with the States to take advantage 
of every opportunity to prevent, identify, and recover improper 
payments. We cannot afford not to.
    Fortunately, Congress and the Administration have made 
reducing Medicaid waste and fraud a high priority and are 
taking important steps to improve its management of this 
critical program. And the Affordable Care Act, enacted in 2010, 
includes a number of provisions, as some of us know, aimed at 
enhancing our efforts to fight waste, fraud, and abuse in 
Medicaid and Medicare. These provisions aim to eliminate 
avoidable mistakes and crack down on criminals. They are 
critical to our broader efforts of achieving better healthcare 
results and improving access to affordable, quality healthcare. 
We are also looking at additional steps that the Federal 
Government should take.
    Senator Coburn--and there is his name again--Dr. Coburn, 
who is not only a doctor and Senator, but he is also, it turns 
out, an accountant. What do they say in baseball, that you are 
a five-tool player? He is at least a three-tool player here in 
the U.S. Senate. But Dr. Coburn and I along with dozens of our 
Senate and House colleagues, including the fellow to my right 
here, have put forward legislation to fight fraud, waste, and 
abuse in Medicare and Medicaid programs a couple of times, but 
most recently in something called the Medicare and Medicaid 
Fighting Fraud and Abuse to Save Taxpayer Dollars Act (FAST). 
That is what we call it, but it is Medicare and Medicaid 
Fighting Fraud and Abuse to Save Taxpayer Dollars Act. I do not 
know how you get FAST out of that, but someone has figured it 
out.
    It takes some of what we already know works to decrease 
waste and fraud in the private sector or what we have seen 
beginning to work elsewhere in government. We apply those 
lessons and those ideas to Medicare and Medicaid. Our bill 
includes a wide range of initiatives. Among other things, the 
legislation would increase anti-fraud coordination between 
Federal and State government. That is good. It would increase 
criminal penalties for fraud. That is good. It encourages 
seniors to report possible fraud and abuse in Medicare through 
the Senior Medicare Patrol. That is good. We have also changed 
the language, the way the messaging goes to seniors, and they 
want to actually see copies of the bills that are being paid 
for them for Medicare services. Actually, it is now being 
written in ways they can actually read and understand so they 
can actually be a better partner with the Senior Medicare 
Patrol. That is good. And deploy cutting-edge data analysis and 
technology, some of which we are actually borrowing from the 
credit card industry where they do a better job of combating 
fraud than we do in Medicare and Medicaid.
    Our legislation addresses loopholes in fraud prevention 
efforts that have been exploited to an alarming degree over the 
years. For example, there are the glaring problems of dead 
doctors who still manage to charge us for care they provide to 
patients live and dead--obviously a form of fraud. This is 
disturbing; it is also unacceptable. And our bill would require 
that the Federal Government and law enforcement take steps to 
curb the theft of physician identities.
    I often say there is no silver bullet for fighting waste 
and fraud, but this bipartisan bill provides--I think we have 
over 35 cosponsors. That is good, too. I would like to have a 
few more. But this bipartisan bill provides a lot of smaller 
proven, common sense solutions, and it builds on 
recommendations by the Office of the Inspector General (OIG), 
by GAO, and other smart people to improve on our current work, 
Program Integrity at CMS, which, as I have mentioned, already 
has made some important progress in reducing waste and fraud in 
these programs.
    All right. I am almost done. One more chart.\1\ Even as we 
look ahead to implementing additional tools to help improve 
efficiencies and effectiveness in Medicare and Medicaid, we 
also need to evaluate the effectiveness of the current tools at 
our disposal and identify what is working and where we need to 
improve our efforts.
---------------------------------------------------------------------------
    \1\ The chart referenced by Senator Carper appears in the appendix 
on page 86.
---------------------------------------------------------------------------
    Today our witnesses from GAO and the Office of Inspector 
General will help us in that effort by describing weaknesses in 
the two primary Medicaid anti-waste and fraud systems now 
utilized by the Federal Government. According to GAO, one 
program that relies on Medicaid integrity contractors only 
identified about $20 million in overpayments since 2008. Yet we 
spent $102 million to operate the program during the same 
period.
    I actually read that twice to make sure I had that right, 
and I am going to read that again. It says: According to GAO, 
one program that relies on Medicaid integrity contractors only 
identified about $20 million in overpayments since 2008. Yet we 
spent $102 million to operate the program during that same 
period of time.
    We clearly need to identify ways to improve our return on 
investment here. And what do they say? A picture is worth a 
thousand words. There is a picture: cost, $102 million; return, 
about $20 million. So instead of saving money for the 
taxpayers, it looks like we lost about $80 million, and that is 
not good.
    Finally, there are similar problems with the second Federal 
anti-waste and fraud programs. It is called Medicare-Medicaid 
Data Match Program, where Medicare and Medicaid data are 
compared with each other to spot duplication and other 
problems. Over a 2-year period of time, the program received 
some $60 million in funding but only prevented or recouped 
about $58 million in improper payments. That is better than 
what we see in this chart\2\ to my left, we lost money there as 
well rather than reducing costs.
---------------------------------------------------------------------------
    \2\ The chart referenced by Senator Carper appears in the appendix 
on page 87.
---------------------------------------------------------------------------
    But there have also been some successes, to be fair, and 
earlier this year, the Administration announced another record-
breaking year in joint Federal and State efforts to identify 
and prosecute health care fraud, with more than $4 billion in 
recoveries from Medicare, Medicaid, and other Federal health 
care programs. I think that might be a record. I think it was 
maybe a record 2 years in a row, and we applaud that there is 
still a lot of fraud out there, so we need to continue those 
efforts and strengthen them.
    In addition, stronger steps have been taken to screen 
physicians and other providers in order to avoid physician 
identity theft and other fraudulent activities that can lead to 
drug diversion and fraud. In fact, CMS announced last week this 
new automated screening process has already purged the provider 
database of more than 20,000 providers that were ineligible to 
participate in Medicare and Medicaid due to death, licensing, 
and other problems. That is an important step forward, and we 
applaud that.
    I look forward today, we look forward today to hearing from 
Dr. Budetti, head of CMS' program integrity efforts in both 
Medicaid and Medicare, about how he and his team intend to 
build on what has worked so far and improve the performance of 
those initiatives that have not worked as well as any of us 
would like. And I also look forward to hearing from the State 
agency representatives we have with us today about their 
experiences in curbing Medicaid waste and fraud. And we are 
here in large part today because we have a moral imperative to 
ensure that both present and future Medicaid beneficiaries 
continue to have access to quality care. At the same time, we 
must also ensure that scarce taxpayer resources we invest in 
the program are being spent as effectively as possible.
    Now I would like to turn to Senator Brown, welcome him 
here, to make any comments that he would care to make. Senator 
Brown, good to see you.

               OPENING STATEMENT OF SENATOR BROWN

    Senator Brown. Good to see you, too, Mr. Chairman. Thank 
you.
    I am not sure about you, but I am tired of seeing these 
numbers. Every time we come to one of these hearings, we see 
more numbers. I would note that it cost $6 billion to extend 
the student loan interest rate at the level that we have it, 
yet according to the chart you just had, I thought it was--I do 
not want to misspeak, but I thought it said $21.9 billion in 
improper payments were made in the fiscal year. I have a bill, 
as you know, Mr. Chairman, that will take some of those savings 
to pay for that interest staying the same and using that money 
that is already within the system instead of taxing our 
Subchapter S job creators, not only in Massachusetts, but 
throughout the country.
    As we all know, the Supreme Court will decide the fate of 
the Patient Protection and Affordable Care Act (PPACA), and it 
is expected any day now, as we know and you referenced. I think 
it is more important now than at any time since I have been 
here, certainly, to start to find a bipartisan solution to 
address our Nation's most pressing problems like health care. I 
believe a crucial step in maintaining the viability of health 
care programs like Medicaid and Medicare is to ensure that 
these programs are not weakened by the waste, fraud, and abuse. 
As you referenced, there is going to be a lot more folks coming 
onto the system, and as a result of that, there is even more of 
an opportunity for that fraud, waste, and abuse that we have 
already seen.
    As our Nation ages, and the economic stagnation continues, 
these health care programs continue to put pressure on our 
Nation's tough fiscal situation. We are not going to be able to 
tax our way out of this mess into prosperity. That is why this 
morning's hearing on curbing the billions of dollars, 
potentially, of waste, I just find mind-boggling, and we cannot 
afford this business as usual approach.
    I have been honored to be on this Subcommittee this past 
year, and I know we are getting toward the end of the 
legislative session. However, the things we have done and 
brought to the attention of folks who are basically driving the 
trains I think has been a good thing. We brought this up. Some 
of them have tried to do yeoman's work to fix it. However, I do 
not think others give much credence to what we have said and 
how they are addressing these problems.
    We are going to turn our attention to the Medicaid program, 
which is timely, as you know, because the PPACA will expand 
potentially Medicaid coverage by an estimated 16 million people 
by 2019. That is a 32-percent increase. The cost of the 
expansion is going to exceed $430 billion over the next 10 
years, and the government is responsible for paying over 90 
percent of these increased costs. I do not know where the money 
is coming from, but this is on top of the $404 billion in 
Medicaid costs for Fiscal Year (FY) 2010, of which the 
government's share was $271 billion.
    So we will explore what the Center for Medicare & Medicaid 
Services is doing to confront the menace of fraud in Medicaid. 
Measuring, obviously, fraud in Medicaid is difficult, but CMS 
estimates, as we referenced, almost $22 billion in improper 
payments in Medicaid in Fiscal Year 2011. Once again, I believe 
the Congress has been complicit for far too long in this 
business as usual. This kind of go-along/get-along mentality 
where it really does not matter, a billion here, a billion 
there. It is mind-boggling, as I have said.
    I look forward to continuing to play a role in finding ways 
to improve the coordination between the Federal Government and 
the States and improve coordination across States. I believe we 
need to do a better job in leveraging the IT to prevent the 
fraud. It seems to be, once again, a no-brainer. We need to 
know if a doctor is dead and you should report if a doctor is 
dead. There should be a central database, and immediately tied 
into a lot of the prescription pharmacy outlets, and it should 
be a red flag. It should be immediately stopped. The person 
should be arrested for perpetrating a crime, and we need to 
really do it better.
    I came to Washington to work in a bipartisan manner as many 
of you know, and I am going to continue to do that, and I look 
forward to hearing the testimony. Thank you.
    Senator Carper. Thank you, Senator Brown.
    Dr. Coburn, before you arrived, there was some mention of 
your name with respect to improper payments and the notion that 
we are actually making a little progress since our 2010 law was 
signed into law. I described you as a ``three-tool player''; in 
baseball parlance, you are a five-tool player. As you know, you 
are exceptional.
    I said, ``He is not just a Senator, he is not just a 
physician, he is not just''--``Now I know he is an accountant, 
but he is also a husband, and this weekend I think a father on 
Father's Day. So that is five tools. That is not bad. So thanks 
for all your work on this stuff, and you are recognized, 
please.
    Senator Coburn. I will pass on an opening statement so we 
can hear our witnesses.
    Senator Carper. OK, fair enough.
    Some other breaking news. Dr. Budetti, I am told by Peter 
Tyler, who sits over my left shoulder, that in an interview 
last night, you indicated taking some strong, decisive measures 
to get the Medicaid Integrity Contractor (MIC) Program on a 
more positive track, and I do not want to steal your thunder, 
but I would characterize those moves as positive and an 
encouraging example of the Administration trying to ensure that 
curbing waste and fraud in Medicaid continues to be a priority, 
and we look forward to hearing more about that in the course of 
your testimony. Just very brief introductions. I am just going 
to make this real brief.
    Peter Budetti, M.D., J.D., Deputy Administrator and 
Director for Program Integrity, Center for Medicare & Medicaid 
Services, a visitor here and witness before us previously. We 
are delighted that you are back here today.
    One of two Douglases, the first is Douglas Porter, the 
State of Washington Health Care Authority. Who is your Governor 
now? Is Christine Gregoire still the Governor?
    Mr. Porter. Yes, sir.
    Senator Carper. For another 6 months or so?
    Mr. Porter. She has another 6 months to sprint to the 
finish.
    Senator Carper. All right. If you ever see her, give her my 
best.
    Our second witness is Douglas Porter, Director of the 
Health Care Authority for Washington State, which is their 
Medicaid agency. He spent almost 10 years working for the State 
of Washington as well as previous work with Medicaid agencies 
in California and Maine. We thank you for joining us today.
    The second Douglas here is Douglas Wilson, and Mr. Wilson 
is the Inspector General for Health and Human Services 
Commission in the State of Texas. Most of those jobs down there 
are elected. Are you elected?
    Mr. Wilson. No, sir, I am not.
    Senator Carper. OK. All right. Mr. Wilson has over 25 
years' experience in State government with expertise in 
auditing, accounting, grants and contracting, investigations, 
licensing, compliance and enforcement. You are a five-tool 
player as well, I would say, with that introduction. Before his 
appointment, Mr. Wilson served as the Deputy Director of the 
Texas Attorney General's Medicaid Fraud Control Unit (MFCU). We 
want to thank you for being with us today all the way from 
Texas.
    Next, Carolyn Yocom, Director of the Health Care team for 
GAO. Ms. Yocom has worked on a variety of issues related to 
health care, particularly Medicaid and State Children's Health 
Insurance Program (SCHIP). She has been at GAO for 20 years and 
has testified numerous times before Congress. We thank you for 
testifying here today and for the good work that you and your 
colleagues at GAO do.
    And, finally, last but not least, Ann Maxwell, who is the 
Regional Inspector General with the Office of Evaluation and 
Inspections at the Department of Health and Human Services. Ms. 
Maxwell has worked for 15 years for the Inspector General. She 
has directed national studies in Medicare and Medicaid and 
public health and in child welfare. We thank you for your work. 
Thank you for being with us today.
    Dr. Budetti, you are recognized. Everyone, your whole 
statements will be made part of the record, so if you want to 
summarize, you are welcome to do that. Try to stay as close to 
5 minutes if you can. If you get way beyond that, we will have 
to rein you in. Thank you so much. Dr. Budetti, you are 
recognized. Welcome.

TESTIMONY OF PETER BUDETTI,\1\ M.D., J.D., DEPUTY ADMINISTRATOR 
  AND DIRECTOR FOR PROGRAM INTEGRITY, CENTERS FOR MEDICARE & 
                       MEDICAID SERVICES

    Dr. Budetti. Thank you, Chairman Carper, Ranking Member 
Brown, Dr. Coburn. Thank you for this opportunity to discuss 
the Centers for Medicare & Medicaid Services' program integrity 
efforts for the Medicaid program.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Budetti appears in the appendix 
on page 45.
---------------------------------------------------------------------------
    As you know, the Administration has made important strides 
in reducing fraud, waste, and improper payments across the 
government. We have implemented powerful new anti-fraud tools 
provided by Congress that are enabling us to move beyond ``pay 
and chase'' to preventing fraud. Simultaneously, we are 
building on the many accomplishments of the Medicaid Integrity 
Program by making substantial improvements to certain parts of 
the program, in particular the National Medicaid Audit Program 
(NMAP).
    Just a little background on the Medicaid Integrity Program. 
It was established under the Deficit Reduction Act (DRA) of 
2005, and it is the first comprehensive Federal strategy to 
prevent and reduce provider fraud, waste, and abuse in the 
Medicaid program. Our Center for Program Integrity (CPI) in the 
Centers for Medicare & Medicaid Services became responsible for 
the operation of the Medicaid Integrity Program in April 2010.
    CMS has two broad statutory responsibilities under the 
Medicaid Integrity Program. The first is the one that is the 
main topic of our discussion today, the National Medicaid Audit 
Program, in which the CMS contracts with private sector 
entities to review Medicaid provider activities, audit claims, 
identify overpayments, and educate providers and others on 
Medicaid program integrity issues.
    The second statutory responsibility is providing technical 
assistance and support to the States in their efforts to combat 
Medicaid provider fraud and abuse. I think you are well aware--
and it is in detail in my written testimony--that the Medicaid 
Integrity Program has had a number of clear successes. I think 
you are very familiar with the Medicaid Integrity Institute 
(MII) that now has had over 3,000 students from State 
government pass through and has repeatedly been praised as 
making a substantial contribution to State efforts to combat 
fraud and improper payments.
    We have also provided boots on the ground for specific 
projects in a number of States to carry out targeted anti-fraud 
action.
    We have special contractors who are engaged in educating 
providers and beneficiaries on program integrity efforts. We 
also conduct triennial comprehensive reviews of each State's 
program integrity activities and disseminate best practices 
across the States. Further, we conduct annual State program 
integrity assessments to collect standardized national data on 
the State Medicaid program integrity activities. So all of 
these are very strong accomplishments of the Medicaid Integrity 
Program.
    One major area has not been as successful as anticipated, 
and that is the National Medicaid Audit Program. CMS has 
identified redundant, ineffective, and inefficient practices in 
the existing program. As a result, over the course of the past 
2 years, we have made changes in the National Medicaid Audit 
Program and initiated a redesign of the program that involves 
developing new approaches with States to provide for more 
effective and less burdensome audits of Medicaid providers, 
including expanding collaborative audits, and also at the same 
time we are working on modifying the Medi-Medi program, better 
identifying audit targets, and overhauling our contracting 
structure.
    The original approach implemented shortly after the start 
of the Medicaid Integrity Program in 2007 created two types of 
Medicaid integrity contractors for the National Medicaid Audit 
Program: review contractors analyzed Medicaid data to assist 
with the identification of audit targets, and audit contractors 
went out and conducted audits of the providers. During the test 
phase, the review contractors relied on data from the States' 
full Medicaid Management Information Systems (MMIS), and that 
led to positive findings. With full implementation, however, 
the review contractors conducted their analyses based on a more 
limited data source because it was the only nationwide Medicaid 
claims and beneficiary information source reported to the 
Federal Government.
    The first audits were assigned in September 2008 based on 
these analyses. By mid-2010, the full impact of the limitations 
of the data available for selecting audit targets became 
available. At that time CMS began to explore options to a 
different approach to auditing providers and began a State 
collaborative audit concept with a small number of States 
beginning in January 2010. As of February 2011, CMS 
discontinued assigning new targets through the traditional 
audit process based solely on reviews of the national data set 
and focused the audit processes instead on expanding additional 
collaborative audits with States and other direct interaction 
with the States. So the first audit targets went out in 2008, 
in September, and as of February 2011, we discontinued that 
specific model and moved toward a more collaborative model and 
much greater interaction with the States.
    We are fundamentally changing the design and operation of 
the program to improve its overall effectiveness. We are 
incorporating lessons that we have learned from our early 
implementation efforts and from our initial success with 
collaborative audits. We are paying close attention to 
recommendations such as the ones you will hear today from the 
Office of Inspector General, the Government Accountability 
Office, and also from the National Association of Medicaid 
Directors (NAMD) and the Medicaid and CHIP Payment and Access 
Commission (MACPAC). And we are pleased to see that many of 
these recommendations complement the efforts we already have 
underway.
    There are two main prongs of our new approach: working with 
States on expanding collaborative audits and developing more 
viable options for sharing data at the State and Federal level. 
Since the first collaborative audits were begun in 2010, we 
have worked with States to--we now have 137 collaborative 
audits in 15 States representing approximately 53 percent of 
all Medicaid expenditures. CMS is currently in discussion with 
15 additional States to expand the use of collaborative audits.
    As we change our approach, we are also determining options 
for the existing Medicaid program integrity contractors going 
forward. And as you noted, Mr. Chairman, we have had five 
active task orders for reviewing Medicaid providers for 
anomalies for billing. We intend now not to exercise the 
renewal option on three of those five task orders because the 
original focus of the work is no longer consistent with our 
redesign efforts. We are currently reassessing our approach, 
and we have redesigned the review contractors' work away from 
the focus of identifying audit targets based solely on the 
national data set.
    In addition to building the collaborative audit program, we 
are also committed to pursuing alternative sources for audit 
quality data. We are working very closely with States to 
identify the data elements that would be satisfactory for 
multiple Federal purposes. A pilot of the new data reporting 
system began in May 2011, and since then, test data has been 
received, and the proof of concept is targeted for completion 
this summer.
    I will summarize very quickly by identifying our plan of 
action in engaging the States to work with us, that even as we 
reconfigure the National Medicaid Audit Program in a State and 
Federal partnership and enhanced Medi-Medi, we will also expand 
our efforts to work with States in other areas that are of 
importance to the States and also to expand the Medicaid 
Integrity Institute.
    I would like to let you know that we have identified five 
action items.
    One is discontinuing the assignment of new audit space 
solely on the earlier data set and analysis. As I said, that 
began in February 2011. We have been realigning the tasks of 
the contractors, and we have now chosen not to exercise the 
option years on three of the five review contractors' task 
orders.
    The second point is to develop and expand our collaborative 
audits to go beyond the 137 we have now. We are looking to 
expand to an additional 15 States by the end of 2013 and 
continue the expansion in particular with high Medicaid 
expenditure States by the end of 2013.
    No. 3, to develop and implement enhanced data reporting by 
the States to fill gaps in the data set that had been reported 
to the Federal Government, and we intend to continue that 
through 2012 and finish that initial stage this year.
    No. 4, we are reconfiguring the Medi-Medi program that will 
serve as a complement to the collaborative audit program.
    And, finally, we will continue to monitor the return on 
investment of both the old and the new approach to the National 
Medicaid Audit Program.
    I appreciate the opportunity and your indulgence in going a 
little over my time limits, Mr. Chairman, to describe the major 
changes that we are undertaking, and I will be happy to answer 
any questions. Thank you.
    Senator Carper. Well, you have a lot to say, and we are 
pleased that you have had the chance to say that, and we look 
forward to asking some questions.
    Mr. Porter, welcome. Thanks for joining us.

  TESTIMONY OF DOUGLAS PORTER,\1\ DIRECTOR, WASHINGTON STATE 
                     HEALTH CARE AUTHORITY

    Mr. Porter. Thank you, Mr. Chairman, members of the 
Committee, for this opportunity to testify. For the record, my 
name is Doug Porter, director of the Washington State Health 
Care Authority, and I am here to discuss the State and Federal 
efforts to reduce fraud, waste, and abuse in the Medicaid 
program, and specifically I will speak to the State's 
perspective on what is working, what is not working, and where 
we see room for improvement.
    What is working? I am happy to report that the partnership 
between the State and Federal officials in program integrity is 
a good one. Our interests and incentives to be good stewards of 
the taxpayers' money are closely aligned. I will cite just a 
few examples of this solid working partnership.
    I have been associated with the Medicaid program for about 
20 years or so and served on various technical advisory groups. 
In my opinion, the Fraud and Abuse Detection Technical Advisory 
Group is one of the most productive and the best functioning 
TAGs in recent memory and a solid collaboration between State 
and Federal officials.
    As Dr. Budetti just mentioned, the Medicaid Integrity 
Institute is a huge new asset for State program integrity staff 
to develop skills and share best practices, and we welcome the 
openness on the part of CMS to make available Medicare data to 
States. We think this is a big opportunity not only for program 
integrity enhancements, but also to improve care coordination 
for those clients who are eligible for both Medicare and 
Medicaid.
    What is not working? Three major challenges on that front: 
The erosion recently of State resources, the layers of outmoded 
or ineffective programs that we have had to contend with, and 
bad data.
    On the erosion of State resources, I will give you my own 
personal story. Over the last 4 years, since 2008, I have lost 
20 percent of my workforce due to budget cuts. Our State 
legislature much prefers to eliminate administrative costs 
rather than program costs. I now have only 40 staff assigned to 
program integrity efforts to oversee over $5 billion a year of 
health care expenditures, and that is just not enough of a 
resource to do the job right.
    On the continuance of ineffective programs, I would list, 
as you have already heard, the Medicaid integrity contractors, 
and the Medicaid Eligibility Quality Control (MEQC), the 
Payment Error Rate Measurement Program (PERM), and the 
Medicare-Medicaid Data Match Project. These programs all draw 
resources away from activities that in our State would yield a 
better return on investment and detract from our ability to 
generate even more savings than we have to date.
    On the data front, there is a lot of data, very little good 
information, as Dr. Budetti just indicated. Poorly collected 
and organized data is what is giving us a problem. The Medicaid 
Statistical Information System is not uniformly reported on by 
all States, making apples-to-apples comparisons very difficult. 
And the Medicare data that we are getting access to date has 
been difficult as it comes--Medicare Part A, B, and C comes in 
six different file formats for both ongoing and historical data 
and makes it very difficult if not impossible to merge with our 
existing Medicaid database.
    Opportunities for improvement, let us build on what works. 
I would like to suggest that State efforts be supported and 
reform that a 75-25 matching fund be available to State program 
integrity staff such as is currently available to Medicaid 
fraud control units around the country.
    Also, if we could do one thing I think would take a big 
burden off States, it is to create a national level provider 
enrollment capacity that would screen out bad providers on the 
front end. In the process of getting a national provider 
identification number, that would be the start and then have 
them re-enroll every 3 years. That way a central observation 
could be made on the databases that currently exist as to who 
the bad actors are out there.
    I think the Medicare database, as I said, could be improved 
by having a single documented file format and one single set of 
confidentiality and privacy requirements. And we should use a 
return on investment analysis to evaluate the effectiveness of 
programs and fund them accordingly.
    I would make a pitch finally to further enhance the 
Medicaid Integrity Institute by using distance education and 
involving Webinars to reach more State staff around the 
country. And I would suggest the establishment of a national 
certification process to credential State program integrity 
staff.
    That concludes my prepared remarks, and I thank you very 
much for the opportunity to be here today, and I would be glad 
to answer any of your questions.
    Senator Carper. Good. That is a real interesting to-do 
list. Thank you.
    Mr. Wilson, welcome. Please proceed.

 TESTIMONY OF DOUGLAS WILSON,\1\ INSPECTOR GENERAL, HEALTH AND 
           HUMAN SERVICES COMMISSION, STATE OF TEXAS

    Mr. Wilson. Good morning, Chairman Carper, Ranking Member 
Brown, and Dr. Coburn. For the record, my name is Douglas 
Wilson, and I serve as the Inspector General for the Texas 
Health and Human Services Commission. I appreciate the 
opportunity to be with you today to offer testimony from the 
Texas perspective regarding program integrity challenges, 
opportunities, and successes.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Wilson appears in the appendix on 
page 58.
---------------------------------------------------------------------------
    Over the past year, we have worked in Texas to reform and 
refocus the Office of Inspector General. We have shifted 
resources internally to target our efforts to the cases with 
the greatest potential for recovery, increased the number of 
case investigations, shortened our investigative timeframes, 
and we are on track to increase the identification of 
potentially recoupable dollars.
    We recognize the importance of positive relationships 
between the States and CMS, and our experience with CMS has 
been positive. We primarily work with the Medicaid Integrity 
Group, and we have experienced cooperation at all levels. 
Through our attendance at the Medicaid Integrity Institute, we 
have greatly benefited from the ability to work through current 
and emerging issues and to discuss challenges and opportunities 
faced by other States with similar responsibilities.
    The ability to share information and knowledge at the 
Federal, State, and local level is very important to our 
collective success. In our experience, more data is better. 
Whether the data comes from Medicaid, Medicare, the 
Supplemental Nutrition Assistance Program (SNAP), the Women, 
Infants and Children's Program (WIC), the Temporary Assistance 
for Needy Families (TANF), Craig's List, county property lists, 
or nearly any other source, all of this data can help us to 
identify patterns of behavior and billings which may lead to 
the faster identification of intentional or inadvertent 
overbilling and overpayments. Usable access to the Medicare 
claims and payment data would be greatly beneficial to us.
    Texas OIG has spent a lot of time meeting with companies to 
discuss information technology solutions designed to improve 
the probability of detecting schemes and patterns sooner. We 
believe we have identified pattern recognition technology that 
identifies patterns and connections between seemingly unrelated 
events and individuals. Thus, data queries that might normally 
take hours or even days to run can be completed in minutes or 
even seconds. The ability to partner with the Federal 
Government to assist with the cost of this type of software is 
important to our anticipated success.
    Today, interdiction and recoupment efforts are a two-edged 
sword. States work to identify potential overpayments, and 
after due process steps we have to worry about potentially 
having to repay CMS more than we can ever hope to collect.
    Unfortunately, this process builds in disincentives to the 
States to be active in identifying and publicizing anti-fraud, 
anti-overpayment activities. In Texas, we are currently in the 
midst of investigating a small number of orthodontists who 
collectively have overbilled the State potentially hundreds of 
millions of dollars over the past 5 years. We find ourselves 
making tough decisions regarding aggressively pursuing 
overpayments while at the same time working with the Medicaid 
program to ensure we do not create access to care issues and 
leave Texas children at risk.
    In summary, we believe there is a solid foundation for the 
CMS-State relationship but also that the environment in which 
that relationship exists needs to change to improve. An 
attitude of cooperation and assistance is already evident but 
needs to extend further, to data access and resource 
development.
    I appreciate the efforts of CMS, and in particular I am 
grateful for the efforts this Subcommittee and the efforts that 
you continue to make. The Texas OIG looks forward to partnering 
with CMS and other Federal, State, and local agencies involved 
in the fight to rid our programs of fraud, waste, and abuse.
    I am happy to answer any questions you may have. Thank you 
for inviting me.
    Senator Carper. Thanks so much. Thanks for joining us from 
Texas and for your testimony.
    Now we will turn to Ms. Yocom. Ms. Yocom, welcome. Good to 
see you.

 TESTIMONY OF CAROLYN L. YOCOM,\1\ DIRECTOR, HEALTH CARE, U.S. 
                GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Yocom. Chairman Carper, Ranking Member Brown, and 
Members of the Subcommittee, I am pleased to be here to discuss 
the National Medicaid Audit Program. My statement will 
highlight key findings from a report prepared at your request 
which focuses on the effectiveness of the MIG's implementation 
and subsequent redesign of the National Medicaid Audit Program.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Yocom appears in the appendix on 
page 68.
---------------------------------------------------------------------------
    In brief, our work found that the majority of the audits 
that the MIG conducted were less effective than its initial 
test audits and the more recent collaborative audits, primarily 
because they use Medicaid Statistical Information System (MSIS) 
data. MSIS data are an extract of States' claims data, and they 
are missing key elements such as provider identifiers that are 
important for identifying appropriate targets.
    Since Fiscal Year 2008, just 59 of the 1,550 MSIS audits 
identified $7.4 million in potential overpayment. Of the 
remaining MSIS audits, over two-thirds did not identify 
overpayments, and the remaining audits, 27 percent, were 
ongoing. In contrast, the 26 test audits and the 6 
collaborative audits which used States' more robust claims data 
and allowed States to select audit targets together identified 
more than $12 million in potential overpayments. Moreover, the 
typical amount of the potential overpayments for MSIS audits 
was smaller than the amounts identified through other audit 
approaches. Our review found that MSIS audits averaged $16,000 
in potential overpayments compared with $140,000 for test 
audits and $600,000 for collaborative audits.
    The MIG has reported it is redesigning the National 
Medicaid Audit Program, but it has not provided the Congress 
with key details about the changes that it is making. In 
particular, CMS has not provided details or information on why 
it changed to collaborative audits, the new analytical roles 
for the contractors, and plans for monitoring and evaluating 
the performance of this redesign.
    In looking at CMS' redesign, our work suggests that 
collaborative audits are more likely to result in increased 
findings and will allow States to leverage the MIG's resources 
to augment their own program integrity capacity. It is less 
clear, however, whether the new analytical role for its 
contractors, some of which are just underway, will ultimately 
improve the selection of audit targets.
    Finally, the lack of a published plan detailing how the MIG 
will monitor and evaluate the National Medicaid Audit Program 
is a concern. Without appropriate tools in place to evaluate 
progress and assess adjustments that need to be made, CMS risks 
wasting Federal dollars and missing potential findings of 
improper payments.
    Given that the National Medicaid Audit Program has 
accounted for more than 40 percent of MIG expenditures, 
transparent communications and a strategy to monitor and 
continuously improve the program are essential components of 
any plan seeking to demonstrate the MIG's effective stewardship 
of the resources provided by the Congress. As a result, we are 
recommending that the Acting Administrator of CMS ensure: 
First, that the MIG's planned update of its comprehensive plan 
provide key details about its redesign of the National Medicaid 
Audit Program; second, that the MIG's future annual reports to 
Congress clearly address the strengths and weaknesses of the 
audit program and its effectiveness; and, third, that the MIG's 
use of program contractors supports and expands States' own 
program integrity efforts through collaborative audits.
    In conclusion, we look forward to working with the 
committees, with CMS, and with others to continue to improve 
efforts to ensure program integrity in Medicaid.
    This concludes my prepared remarks. I would be happy to 
answer any questions you may have.
    Senator Carper. Good. Thanks, Ms. Yocom.
    Ms. Maxwell, please proceed.

  TESTIMONY OF ANN MAXWELL,\1\ REGIONAL INSPECTOR GENERAL FOR 
 EVALUATION AND INSPECTIONS, OFFICE OF THE INSPECTOR GENERAL, 
          U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Ms. Maxwell. Good morning, Chairman Carper, Dr. Coburn. 
Thank you for the opportunity to discuss the Office of 
Inspector General's recent evaluations of two national program 
integrity efforts: The National Medicaid Audit Program and the 
Medicare-Medicaid Data Match Program.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Maxwell appears in the appendix 
on page 74.
---------------------------------------------------------------------------
    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. The 
Medicare-Medicaid Data Match Program attempts to detect 
overpayments in Medicaid and in Medicare by matching data 
across these programs to identify suspicious billing patterns. 
Both programs had limited success in achieving the goal of 
identifying Medicaid overpayments. As a result, both programs 
yielded a negative return on investment.
    In 2010, the National Medicaid Audit 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 discover any overpayments 
at all.
    The Medicare-Medicaid Data Match Program also had a 
negative return on investment. This program, as you know, 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 saved on behalf of five States.
    There are a variety of challenges that limited the 
potential of these programs to detect Medicaid overpayments. 
The most fundamental of these is the data. National Medicaid 
data are not current, they are not complete, and they are not 
accurate. In fact, the National Medicaid----
    Senator Carper. Would you just repeat that last sentence 
again, please?
    Ms. Maxwell. The National Medicaid data are not current, 
they are not complete, and they are not accurate. In fact, the 
National Medicaid data does not capture all the elements 
necessary for the detection of fraud, waste, and abuse. Missing 
data include elements as basic as beneficiary name and address 
and as technical as very specific billing information.
    Now, more current and accurate Medicaid data does exist, 
but it is captured in systems maintained by the States, and 
these systems are not standardized across States. For example, 
data elements that might be captured by one State might not 
even exist in another State's data system.
    Due to these data problems, the National Medicaid Audit 
Program wasted resources, auditing potential overpayments that 
were not real. They were simply mirages created by the data. 
Due to these data problems, the Medicare-Medicaid Data Match 
Program does not provide electronic access to matched Medicare 
and Medicaid data.
    For these programs to be successful, they need better 
access to better data. In the short term, we recommend that 
they rely on the more timely and accurate State-specific 
Medicaid data, but it is not enough to stop there. We believe 
more must be done to overcome the significant shortcomings in 
the National Medicaid data. A recently launched pilot project 
to improve this data certainly holds promise, but it will 
require sustained focus and resources at the Federal and State 
level to deliver on that promise. Past initiatives to improve 
National Medicaid data have not delivered.
    We recommend that the Centers for Medicare & Medicaid 
Services devote the resources necessary to transform the 
National Medicaid data into a resource that helps protect the 
Medicaid program.
    In conclusion, without timely, complete, accurate, and 
standardized Medicaid data, it is impossible to effectively 
detect systemic vulnerabilities that cross State lines and 
cross Federal health care programs.
    We appreciate and share your interest in protecting the 
Medicaid program. I am happy to be of assistance if you have 
any questions. Thank you.
    Senator Carper. Dr. Coburn, do you want to go first?
    Senator Coburn. No. I will wait.
    Senator Carper. OK. There is some good news here, and there 
is some really troubling news here. What I would like to do 
with a hearing of this nature is to look for consensus to 
figure out how we can do a better job. I want to commend the 
efforts that are underway, that have been underway that are 
producing some results. But as I said, everything we do, I know 
we can do better. We have to do better here. The amount of 
money that is being misspent is still way too much.
    Ms. Maxwell, if you were ever here and you were wearing Dr. 
Budetti's hat--not that he would ever give it up or that you 
would want it, but if you were wearing his hat, what would you 
do? What would you do about this stuff?
    And the second question is: If you were wearing the hat of 
Dr. Coburn, Senator Brown, or myself, what would you do if you 
were sitting in our seats? What would you do about this to make 
it better?
    Ms. Maxwell. Our findings that indicate negative return on 
investment necessitate a serious reassessment of these 
programs, and that is precisely what we recommend in these 
reports. We recommend that CMS take stock of both these 
programs to determine what elements, if any, of these programs 
should be part of a national strategy to protect the Medicaid 
program.
    I think the goal that they embody, the goal of having a 
national presence in Medicaid program integrity is a goal that 
is important, and it is important to get right.
    So as I said in my oral statement, I would focus in the 
short term on using the data that is available which is more 
accurate at the State level, but I would not stop there. I 
would continue to push for more timely, accurate, and complete 
Medicaid data at the national level to support a national 
strategy.
    Senator Carper. Dr. Budetti, would you react to that? And I 
want Ms. Yocom to react to that as well, please.
    Dr. Budetti. I think if you are looking for a consensus, 
Mr. Chairman, I think you are going to find quite a bit on this 
side of the table this morning. We have recognized the problems 
with these programs, and we are looking to solutions.
    As far as the availability of data, we absolutely agree. 
There are two ways to go about doing these--carrying out the 
Federal responsibility for oversight. One is for Federal 
entities to do the audits. The other is for Federal entities to 
work very closely with the States in doing the audits. The 
second is our current mode of emphasis. We are working toward a 
collaborative approach in which we are all satisfied about what 
the audited targets are and what the data are for doing that 
and how to go about conducting the audits and using Federal 
resources to assist the States in that way. We still have a 
ways to go before we have a full menu of all of the 
collaborative audits that we hope to have in place across the 
States.
    The other approach of the Federal entities doing audits and 
other kinds of oversight based upon adequate data is also a 
goal, and that involves also working very closely with the 
States so that we can identify precisely what the useful data 
elements would be and how the States would go about reporting 
them. That is the core emphasis of our current pilots, to work 
with the States, to identify that, to see what elements they 
can report and what elements they would need to create the 
capacity to report and to have a uniform set of data that would 
then be available for us to see the spectrum of activities at 
the right level of detail.
    So I agree with what Inspector General Maxwell just 
mentioned, and I think that those are the directions that we 
are moving in.
    Senator Carper. Ms. Yocom, I would like to hear your 
reaction as well, please.
    Ms. Yocom. I do agree there is a lot of agreement. Focusing 
on the collaborative audits----
    Senator Carper. A lot of agreement and some progress, but 
not nearly enough.
    Ms. Yocom. That is right. There is more to be done, and the 
collaborative audits are promising, but I believe that one of 
the key things that needs to happen is more effective and 
frequent communications.
    Senator Carper. Among whom?
    Ms. Yocom. Among CMS in terms of reporting findings and 
what is going on in the program. Dr. Budetti mentioned that the 
MSIS audits were discontinued in February 2011. It is June 
2012, and we are just now finding information and data about 
those results. So communicating specifically what is happening 
and what needs to be different I think is very important.
    Holding hearings I think is one way of getting to this 
information. Reporting out in its annual reporting requirements 
are another.
    Senator Carper. All right. Thank you.
    When I was Governor of our State and involved in the 
National Governors Association (NGA), we always used to say 
States are laboratories of democracy, let us use them in that 
capacity. And this is a great opportunity because of the unique 
partnership in Medicaid between State and Federal Government. 
What can we learn from our States? You have already spoken to 
this in part, but I want you to reiterate some of what you 
think the most important points are in terms of what can we 
learn from our 50 laboratories of democracy. And I asked my 
staff, I said, ``Why do we have the folks here from Washington 
State and the State of Texas?'' And they tell me because you 
guys are good at this and that is why you are here. So let us 
hear your thoughts further. Go ahead.
    Mr. Porter. We are very encouraged by the direction Dr. 
Budetti is talking about with these collaborative audits. We in 
the State of Washington are looking forward to the first time 
being able to audit hospitals once every 3 years. We have not 
been able to do that to date. That is where a lot of the 
expenditures sit. And this capacity----
    Senator Carper. Why haven't you been able to audit 
hospitals?
    Mr. Porter. Lack of resources, Senator. As I said earlier, 
whenever we have a budget problem at the State level, law 
makers are loath to go in and deprive vulnerable citizens of 
services or programs or benefits and are more likely to take a 
harsher budget ax to State employees.
    Senator Carper. OK.
    Mr. Porter. And that hurts.
    Senator Carper. All right. Proceed. I interrupted your 
thought.
    Mr. Porter. That is quite all right. I was talking to our 
staff about how the Medicaid Integrity Institute could be 
improved, and as you heard in my remarks, they were suggesting 
that you make that resource available--that CMS make that 
resource available to more State staff.
    I come from the State of California, where they had 800 
auditors and investigators in their shop for the Medi-Cal 
program. It would be virtually impossible for them all to get 
to South Carolina to go through the excellent course work that 
is being offered there. The extent to which distance education 
could be made available, I think it would be very helpful. I 
cannot underscore enough that if I have somebody who is funded 
75 percent by the Federal Government, as the Medicaid fraud 
control units do, I am much less likely to put their positions 
on the table because the State legislature is only interested 
in saving State general funds, and by cutting one FTE that if 
funded at 75-25, you only save 25 cents on the State dollar. It 
is a means of protecting a valuable asset.
    Senator Carper. My time has expired, and, Mr. Wilson, I am 
going to come back to you with the same question when we go for 
a second round. But let me yield to Senator Brown. Thanks.
    Senator Brown. Thank you, Mr. Chairman. I am bouncing back 
and forth between meetings, and I did catch it on TV.
    Dr. Budetti, you see the chart\1\ over there. It costs $102 
million to get back a little under $20 million, so we lost 
$82.1 million. I understand you fired the contractors. I would 
think you would do so based on that type of performance. Did 
you fire them as a result of the hearing today? I mean, weren't 
they just fired like yesterday or something?
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    \1\ The chart referenced by Dr. Budetti appears in the appendix on 
page 86.
---------------------------------------------------------------------------
    Dr. Budetti. Senator, I do not want to necessarily impugn 
the contractors. I think it is the data that we asked the 
contractors to analyze that was the cause of the problem. They 
were analyzing data that were absolutely not appropriate for 
the task. They produced some leads that looked extremely 
promising, but in the course of actually going out and 
conducting the audits by the other contractors, they proved to 
be not nearly as promising--in fact, in many cases zero.
    So we just simply do not need those contractors doing that 
work anymore because we are shifting to a new approach, and we 
have spent a number of months working on the redesign of our 
program. I think it is clear----
    Senator Brown. So when did you fire them? When did you let 
them go?
    Dr. Budetti. We are in the process of doing that. Under 
Federal acquisition rules and regulations, we have certain 
procedures that we have to go through. We have to figure out 
what the best way to go about this is so that we do not lose 
more money in terminating a contract than we otherwise----
    Senator Brown. Did you actually spend $82.1 million? Is 
that what the taxpayer money was actually spent to collect 
that?
    Dr. Budetti. I have no reason to doubt that those are the 
correct numbers. But I would point out, Senator, that, as I 
said in my statement, the first audits went out--were assigned 
in 2008, in September, and by February 2011, we recognized the 
problem and we shifted.
    Senator Brown. OK. So 2008, 2009, 2010, 2011, you 
basically--at some point, I would think you would say, oh, my 
goodness, we are not getting a good value for our dollar, not 
getting a good return----
    Dr. Budetti. Absolutely, and that----
    Senator Brown [continuing]. And it has taken like 4 years, 
5 years.
    Dr. Budetti. Well, it took from September 2008 until----
    Senator Brown. Well, those numbers are from June 2007 to 
February 2012, those numbers right now.
    Dr. Budetti. Right, overall.
    Senator Brown. You just said in your earlier testimony that 
those were accurate. So I am just presuming----
    Dr. Budetti. Right. I believe they are.
    Senator Brown [continuing]. That the GAO is accurate.
    Dr. Budetti. I am not challenging those numbers at all, and 
I am saying that we did----
    Senator Brown. Well, I am challenging them because it just 
makes no sense. I am challenging the whole concept that we 
spent $82 million to get back 20. Only in the U.S. Government 
do we do that.
    Dr. Budetti. Sir, I am not disagreeing----
    Senator Brown. I mean, it is $102 million.
    Dr. Budetti. I am not disagreeing with you. That is why we 
are----
    Senator Brown. It is 102.
    Dr. Budetti. That is exactly----
    Senator Brown. We lost $82 million.
    Dr. Budetti. That is exactly why we are changing direction.
    Senator Brown. It only took, what, 3 or 4 years. It is 
unbelievable. And that being said, as we are approaching the 
50th anniversary of Medicare and Medicaid with both programs on 
GAO's high-risk list as a result of some of the things we are 
hearing and the fraud, waste, and abuse, we are also facing 
PPACA expansion in Medicaid, as I said in my earlier opening 
statement, in 2014, a 32-percent increase over the current 
enrollment. Based on CMS' prior success in eradicating waste, 
fraud, and abuse, or lack thereof, how can you assure the 
American people that CMS will be ready for the expansion in 
Medicaid?
    Dr. Budetti. I believe that we are ready for that----
    Senator Brown. Based on what?
    Dr. Budetti. Based on the program integrity arena, based 
upon our assessments, our open and candid assessments of the 
lack of results from our oversight--from this particular 
program.
    Senator Brown. See, I look at that and I say, well, we are 
down $82 million right now, so we are already in the hole $82 
million. So you basically--in my mind, we have to find $82 
million and then find some more.
    Dr. Budetti. Senator, if I could just say something about 
the broader Medicaid integrity program, you have heard very 
positive comments, for example, about the Medicaid Integrity 
Institute. We do not measure the financial impact. We do not 
measure the return on investment in dollars of all of the work 
that----
    Senator Brown. Because it is not your money. It is not your 
money. It is the taxpayers' money.
    Dr. Budetti. Yes, sir.
    Senator Brown. We need people to actually measure those. It 
is all about dollars and cents. When we are talking about $6 
billion to pay for keeping student loan interest rates low we 
could use that money. We could use that $82.1 million. We could 
use other--it is all about the money. That is all we are 
talking about up here, is money, money, money. How are we going 
to pay for A, B, C, and D? Dr. Coburn is legendary in 
identifying a lot of these things, and I commend him for that.
    Let me just shift gears. What are your savings goals for 
this year and next so we can ultimately track your progress? 
And would we have statements or some type of way to measure 
that success or lack thereof?
    Dr. Budetti. I believe you heard from both the GAO and the 
IG about our need to specify what our targets are, what our 
goals are, but also to report on our progress. Our goals are, 
of course, always to have a positive return on investment of 
the taxpayers' dollars. We believe that there is a sufficient 
problem in fraud and overpayments, that is the least that we 
can expect. We believe we are moving in that direction 
certainly with the Medi-Medi program and also with the redesign 
of the Medicaid Audit Program to the collaborative models that 
we have talked about. So we do believe that we have every 
reason to expect a positive return on investment.
    Senator Brown. And, Mr. Porter, you actually withdrew from 
the Medi-Medi program. Why was that?
    Mr. Porter. We had some frustration with the contractor 
that was assigned to our State. We felt that they did not 
understand Medicaid data, although they were pretty--they were 
very conversant with Medicare data and were trying to treat our 
Medicaid data the same way. They also took very much a criminal 
justice approach and a fraud-oriented approach to the program 
where we saw much more opportunity in the waste and abuse 
portions of our expenditures.
    The bottom line, with the 40 staff that I have and the 
other opportunities we saw to save our program money at the 
local level, we opted to withdraw from the program and redirect 
our resources in a more productive venue.
    Senator Brown. So how helpful would it be for you to have 
access to real-time provider screening data from the Medicare 
provider screening contractors? Would it also be helpful to 
expand access to Medicare data for your State's program 
integrity efforts?
    Mr. Porter. We think Medicare data could be extraordinarily 
valuable. As I said in my earlier remarks, our problem is the 
format in which the data is made available. It is very 
difficult to manage the merging of that with our Medicaid data, 
and also there appear to be a number of barriers on the 
confidentiality and privacy front that restrict how we can use 
it and with whom we can share that data. We would very much 
like to work with CMS to reduce some of those barriers.
    Senator Brown. Yes, we would like to know what those are so 
we can provide guidance and effectuate that streamlining.
    Thank you, Mr. Chairman.
    Senator Carper. You bet. Dr. Coburn.
    Senator Coburn. The one question I have for Dr. Budetti is 
not about that you let that contractor go. Did you let the 
person or people who made the decision to contract that go? In 
other words, what we are seeing is the Pentagon all over again. 
One system does not talk to another system. There is no 
communication. We have had testimony, we have six different 
sources of information, and each one in a different format, and 
you have to go buy somebody to program it to where you can be 
able to utilize the information. Correct? And each one of those 
are six different types of data. So the right hand is not 
talking to the left hand.
    We also had testimony on MSIS audits that they do not 
include provider identification. These audits are worthless if 
you cannot source data to the provider, because that is where 
it starts. That is where the fraud or the overpayment or the 
abuse, or whatever it is, starts.
    So what I see is the same thing. If you go back, the 
Deficit Reduction Act passed in 2005, 2006 to 2008 to get the 
audit started, 2008 to 2010 to see there was a problem, and 
from 2010 to now to redesign the program. So we are 6 years 
out, and we really have not accomplished anything in terms of 
savings. And that is the problem. I have a lot of questions 
that I think I will submit for the record because they are 
pretty detailed.
    I think what Senator Brown touched on is important, if 
Texas and Washington could get easily accessible data without 
all the rules and regulations that mean nothing in terms of 
true results--in other words, clean it up to where you have 
limited common sense regulations controlling the security of 
the data. If you could get that data and merge it, is there any 
question in your mind that you could do a much better job in 
terms of overpayments, fraud, and abuse on Medicaid payments? 
Whether it is provider data or trend data or whatever it is, is 
there any doubt in your mind that you could save a lot of money 
for Texas and Washington State?
    Mr. Wilson. From the Texas perspective, there is no doubt 
at all that we could do a much better job at identifying fraud, 
waste, and abuse. I think Senator Brown was very much on point 
in terms of saying it is all about the money. In Texas, we have 
been very clear about suggesting that or saying that right to 
our staff. It is all about the money. In these times, when 
Medicaid in our State is about a third of the State budget and 
estimates are, arguably, that as high as 10 percent or so of 
that or more is potentially fraud, waste, and abuse, it is all 
about the money. We are working diligently to stem the tide. 
Obviously, the great challenge is getting access to the data. 
But when you get the data, having the tools that can quickly 
look through that data and identify the patterns and trends 
that you want to target to go after. Today I said in my written 
testimony I visited with a number of companies that say they 
can help us. The challenge that we find is these companies have 
yet to do business with anybody in a large number in any other 
States. The hesitance is this: Every State knows we need help, 
but the cost to secure that type of software is there. If you 
make the wrong decision and do not get the right company and 
get the results that you need, then you are criticized. In our 
State, I am suggesting that we cannot sit paralyzed for fear of 
being successful. We have to identify the software that we 
think can help us and let us move toward it in that direction. 
And it is not extremely costly, but someone has to take the big 
plunge, and let us start identifying it sooner than later.
    I mean, as I have talked about in our State, we have a 
number of issues right now that we are facing, and the dollars 
at risk are huge. It is most unfortunate. We are being 
aggressive in trying to collect those dollars. But when you 
are--it has been my experience in this business that when you 
see people that are taking money they are not entitled to, they 
are not taking it to save it or hold on to it. So when I 
identify it and I say that I want to get that money back, it is 
a process. It takes time for me to work through that.
    Senator Coburn. Does Texas have a predictive analytics 
program?
    Mr. Wilson. Texas has a system that is known as Medicaid 
Fraud and Abuse Detection System (MFADS), which is sort of more 
known for models and targeted queries that we can build and run 
that allows us to identify outliers, people that have maybe 
aberrant billing patterns or behaviors that suggest we should 
take a look at them.
    What Texas does not have is a system that can look within 
the data itself and on its own identify things that are 
questionable, like five providers in your database of 50,000 or 
more providers have the same exact address or the address is 
within a mile of each other and they are making referrals and 
billings all the time and it is accounting for X percent of 
dollars. Those are things that take human intelligence today to 
get to.
    In our visits with the various companies, we are learning 
that there is software that does that type of analysis, that 
can identify unknown trends or behaviors and patterns that we 
otherwise would not see, and that allows us to then say let us 
take a look at what that is and let us go identify it sooner 
than later.
    In many cases, by the time we notice the aberrant billing 
pattern, it has been a little time that it has been going on.
    Senator Coburn. The money is out the door. This is not 
reinventing the wheel.
    Mr. Wilson. No, sir.
    Senator Coburn. The private insurance industry has all this 
predictive analytics. They are using it. We contracted at the 
Federal Government to create a new program, which I was very 
much against reinventing the wheel. I saw a demonstration of 
the Fraud Prevention System (FPS)--and, Dr. Budetti, I thank 
you for giving us the time to do that. But we do not need to 
reinvent the wheel. It is out there. And I just think our whole 
approach--I mean, 6 years to get to somewhere where we are not 
there yet, and I will go back. Dr. Budetti, the people who made 
the decisions on this to go this direction, are they still with 
you?
    Dr. Budetti. Senator, those decisions were made some years 
ago, and I am not sure whether----
    Senator Coburn. I do not care which Administration. I am 
talking about the individual that was responsible for making 
those decisions, are they still with you?
    Dr. Budetti. I would have to go back and check and see 
whether they are still with us. We have completely reorganized 
a number of times since then, as you know, sir.
    Senator Coburn. Well, I think that tells us one problem: No 
accountability, no responsibility, no consequence for failure. 
That is a principle that this Government cannot live with 
anymore. And it is fine to get rid of something that is not 
working, but the question ought to be: Who made the deductive 
reasoning that said this was the way to go? And why did they do 
it? It is not about second-guessing. It is about holding people 
responsible.
    Ms. Yocom, CPI or CMS utilized its moratorium authority at 
all in areas where there are known rates of high fraud and 
significant market saturation of providers or suppliers?
    Ms. Yocom. I cannot answer that. I am sorry, sir. I do not 
know.
    Senator Coburn. Does anybody know the answer to that 
question?
    Dr. Budetti. Yes, sir, I do. We are very much interested in 
using that authority. We believe that we should combine the use 
of the moratorium authority with all the other appropriate 
tools that we have. A moratorium is just that. It just tells 
people they cannot get into the program. It does not do 
anything about the bad guys who are already in there. We have 
been undergoing extensive analysis to pinpoint the ways in 
which that moratorium authority is most appropriate for us to 
use it, and we will be using that tool when we believe that it 
is appropriate.
    Senator Coburn. And how long has CMS had that authority?
    Dr. Budetti. Since the implementation of the Affordable 
Care Act.
    Senator Coburn. OK. And so you have Miami-Dade County, 
which we know is a big hotbed of fraud.
    Dr. Budetti. Yes, sir.
    Senator Coburn. And yet we still do not have a moratorium.
    Dr. Budetti. We do not have a moratorium. We have lots of 
other activities that are going on, for example, revoking 
building privileges, getting people out of the program, 
stopping payments. We do want to use the moratorium authority 
when we believe that stopping new providers and suppliers from 
getting into the program is an effective part of our overall 
strategy. Yes, sir.
    Senator Coburn. I want to ask the two State directors. You 
have difficulty getting access to a list of bad players on the 
Federal level. Is that correct? In other words, Medicare knows 
these are bad players, but that is not accessible to you. Is 
that correct?
    Mr. Wilson. Senator, partially, yes. I think in the Medi-
Medi program, in some cases we are made aware when there is a 
bad player in the Medicaid side. For us, in some cases that 
just means a crossover claim is being paid.
    Senator Coburn. Yes.
    Mr. Wilson. So, in other words, it may be 20 percent of 
that claim. On the Medicare side, it could be a lot of dollars 
at risk. For our State, it may or may not be a number of 
dollars at risk.
    Senator Coburn. But, specifically, can you go to CMS and 
say we want to know the names of everybody that is on your 
watch list, your fraud list--in other words, all these provider 
numbers, can you go and say we want to know who to look at 
harder in Texas based on what CMS has discovered?
    Mr. Wilson. Not to my knowledge, sir.
    Senator Coburn. OK. Well, there is a big problem, and the 
question is: Why not? I mean, we are going to spend all this 
money at the Federal level to identify these bad actors, and we 
are spending a ton of money, and you do not have access to it, 
and what portion--60 percent of the portion on Medicaid in the 
State of Texas is funded with Federal dollars?
    Mr. Wilson. Yes, sir.
    Senator Coburn. Why don't they have access to everything 
CMS has access to in terms of providers? And if the rules are 
too hard, why don't we change the rules? And if there is a 
Federal law that limits the ability to have common sense rules, 
why don't we change those laws?
    The point is that we are running around in a circle and the 
problem is getting bigger rather than smaller. And so I guess 
the question for Dr. Budetti or for General Maxwell is: What is 
the problem? Format aside, why can't the States have access to 
the information of the bad players in their State that Medicare 
has already identified?
    Ms. Maxwell. I know the Office of the Inspector General has 
been on the record in support of transparency to the extent 
that the policymakers and lawyers provide, and we consider it 
to be a healthy development to have more transparency in the 
data.
    Senator Coburn. But it is still not there. I have been in 
the Senate almost 8 years. I was in the House 6 years. These 
are the same problems we were talking about 16 years ago. I 
mean, I can recall hearings in the Commerce Committee where we 
were raising this same question with CMS. There is no answer, 
or the answer is incompetence.
    I will submit the rest of my questions for the record, Mr. 
Chairman. Thank you for holding this hearing. This is a big 
issue.
    I would make one last comment. If we were to block grant 
Medicaid to the States, making them fully responsible--not 
taking away any of their dollars, making them fully 
responsible, take the Federal laws, let them do it, what we 
will see is some States very successful and some States not. 
And one of the things that can happen, I guarantee you, if 
Texas--I know Texas because they are my neighbor. We have great 
admiration for the things that happen in Texas in terms of 
their government. I guarantee you, they would save a whole lot 
more money. They will be a whole lot more efficient with the 
Federal dollars that we send because they are spending so much 
of their own.
    I appreciate your time.
    Senator Carper. And we appreciate your dogged persistence 
on this issue.
    I just want to say on a brighter note--you said we have 
been working on this forever and not making a lot of progress. 
One of the things that Senator Roth when he was in the Senate 
and when I was in the House, I think in my last year, we worked 
on legislation with a number of our colleagues to require that 
every Federal agency of any consequence have a Chief Financial 
Officer and also that they develop auditable finances. And it 
has taken a long time to get there, but everybody is basically 
doing that now, except the Department of Defense (DOD). And 
Leon Panetta has assured us that they will be auditable prior 
to their deadline of 2017, so that is good.
    Ten, 15 years ago, nobody was thinking about improper 
payments, no discussion really of improper payments that I ever 
heard of. And today there is a whole lot of discussion on 
improper payments. We have a good law in effect thanks to your 
efforts, and we are making progress.
    Senator Coburn. And let me differentiate between improper 
payments and fraud. They are cumulative. They are not the same.
    Senator Carper. So the glass is not entirely empty, at 
least half-full, and we have just to fill the rest of it up 
here. Fortunately, we have some water here so we can do that.
    I want to go back to Mr. Wilson, and I said the reason why 
we asked you and the other Douglas, Douglas Porter, to come is 
because you guys do a good job at this. And my question was: 
What can the other States learn from you down in Texas and 
maybe what can we learn here from what you all are doing?
    Mr. Wilson. In our State, we have become a lot more 
aggressive in working these cases. I think the challenge that I 
walked into when I assumed the responsibility of Inspector 
General was initially some hesitance on our part to pursue 
cases where it was a question of medical necessity.
    On the program integrity side of the house, that is a big 
part of what we do, determining whether or not the client 
recipient actually needed the service or not. There are 
definitely challenges because we are dealing with medicine, a 
discipline where there is built-in expectations and respect for 
the people that we are in many cases challenging and pursuing 
to get dollars back from.
    Our approach since I have hired my new deputy, Jake Stick, 
Deputy of Enforcement, has been we have a number of medical 
consultants on our staff now that we have contracted with to--
once we see behaviors that we believe do not fit, that are not 
right, that look suspicious----
    Senator Carper. They are not employees that you consult 
with, you contract with them?
    Mr. Wilson. We would love to have employees, but as my 
counterpart here, Douglas Porter, has indicated, there are 
always challenges with the budget. It is better for me at this 
point to contract with them to give us some of their time on a 
case-by-case basis, once we go pull the records and we suspect 
we have seen fraud, waste, or abuse, to have them come in and 
take a look to verify what my guys think they know. We have had 
great success with that, especially in the area of orthodontia 
for the cases----
    Senator Carper. Especially where?
    Mr. Wilson. Orthodontia. The orthodontist problem we have 
in Texas. Great success with it. Extremely high error rates 
from what we are seeing from our specialists, as high as 90, 95 
percent in many cases of what has been billed to our program.
    The challenge--because, as you know, there is a due process 
right there--is once we say, ``You owe us money,'' they are 
going to say, ``No, we do not.'' And then we are having to 
contend with contested case hearings, the dueling medical 
professionals, our attorneys saying, ``You are guilty,'' their 
attorneys saying, ``They are not.'' And in many cases, if we 
have identified a number that we believe is due back to the 
State, we may get some, or even all of it, but then our ability 
to collect once a favorable decision is rendered then becomes 
the next challenge, because, as I said before, no one is taking 
the money to hold on to it and save it. They are actually 
spending it. So our ability to negotiate as we deem 
appropriate, that is in the best interest most definitely of 
our State, but also the Federal Government, is tantamount to 
our success, to sit down with them and say--because it leaves 
me with a couple of choices. I can put you out of business if 
you cannot repay me, which means I get nothing, but it helps me 
because I do not have to pay anything back to CMS. Or if you 
can remain viable--and in some cases, we have some cases where 
the dentist or the perpetrator who was actually committing the 
fraud, waste, and abuse is no longer with the company because 
we are looking at a time certain, and there is no ownership, 
let us say, and they have made improvements, but it is still 
under the same name. We are pursuing them saying, ``You owe us 
money back.'' ``Well, a lot of dollars we are talking about. We 
cannot pay it all, but here is what we think we can pay.'' And 
negotiating those kinds of settlements when I identify an 
overpayment, as the system works today, I am on the hook for 
about 50 percent of what is identified, not what is collected.
    It is a huge challenge for us. It forces us to make tough 
decisions. We are very appreciative of the changes that were 
made in the timeline from 60 days to 1 year. I cannot speak for 
other States, but in the State of Texas, there was much 
rejoicing around that additional time that was provided. I 
think the more time that is provided, that gives us the 
flexibility to work out repayment agreements that are viable 
for the States and for the Federal Government to see some 
return of those dollars that we are talking about on that board 
over there is absolutely essential.
    Senator Carper. Yes, interestingly enough, I think the idea 
for providing the 1-year extension that you just alluded to 
actually came out of a hearing right here where Ms. Yocom is 
sitting. I think it was the Medicaid Director from the State of 
New York who suggested that, and we folded that into our law.
    Mr. Wilson. Awesome change. Thank you.
    Senator Carper. Good. Thank you. I will mention that to 
another Peter back here who worked on that for us.
    Did you have something else, Mr. Porter?
    Mr. Porter. Yes, I would say, Senator, we have done three 
things in our State that have amped up our performance 
considerably. The leadership issue would be the first one. The 
second one would be a focus on improving our own data. And the 
third would be investing in the tools that help us do a better 
job.
    When I got to the State of Washington, the culture, the 
organizational culture, was such that there was a reluctance to 
antagonize the provider community. There was a premium placed 
on access, and there was a fear that if you made payment review 
too burdensome, you would push people out of the program. So it 
was the Secretary of Health and Human Services, Dennis 
Braddock, who really brought in a new crew to focus on payment 
review and program integrity and take on some of the tough 
constituents at the State House level, a very unpopular move 
with doctors and hospitals and nursing homes, but there was the 
political will to move forward, and that was very important.
    On the data piece, we had all different silos of data, bad 
data, conflicting data that prevented us from moving forward 
and getting folks around the table to really define what you 
are going to use the data for, so how should you better collect 
and organize that data and have that drive your decisions was a 
key factor in success.
    And then, finally, investing about 5 years ago in a new 
Medicaid Management Information System that had a more robust 
capacity for edits and audits on the front end so that you were 
not paying money out to fraudulent or abusive providers in the 
first place and then having to chase it afterwards.
    The combination of those three aspects I think have made 
our program as successful as it is today.
    Senator Carper. OK, great. Thank you for those.
    I have a couple of questions my staff has been good enough 
to help prepare, and I am going to go ahead, and before we 
close out, give you at least one of those. But while I do 
that--and one of the questions is for Dr. Budetti. A guy I 
sometimes like to quote is another doctor, Dr. Alan Blinder. He 
has a Ph.D. in economics. He teaches at Princeton. He used to 
be Vice Chairman of the Federal Reserve, and he testified 
before the Finance Committee last year that in terms of reining 
in the growth of health care costs and trying to make sure it 
did not eat us alive in States' Medicaid and Federal Government 
Medicare and really companies trying to compete with other 
companies around the world whose health care costs were a lot 
less. And he said that what we should do in order to rein in 
the growth of health care costs is find out what works, do more 
of that. And I said to him, ``Do you mean find out what does 
not work and do less of that?'' And he said, ``Yes.''
    So before we leave, that is going to be my last question, 
name one thing that is working that we ought to do more of and 
one thing that is not working that we ought to do less of. So 
while all of you are thinking about that, I will pick on Dr. 
Budetti for a minute. I want to ask you a question about 
recovery audit contracting, one of our favorite subjects. As 
you know, recovery audit contracting is a form of post-payment 
auditing in which private companies are employed to review 
payments, supporting documents, and other information in an 
effort to try to identify overpayments and underpayments. We 
used them in the State of Delaware Division of Revenue to 
recover monies, tax revenues that we were not recovering, and 
to compensate the folks who did the actually recovering, they 
would retain a percentage of what they collected.
    But recovery audit contracting has been used by CMS to 
review Medicare payments since, I think, 2005. They recouped, I 
am told, a little more than $2 billion during the last couple 
of years. In the Affordable Care Act, we expanded the use of 
recovery audit contractors to all of Medicare and to Medicaid 
as well. And I understand that as of April of this year, 26 
States had operational programs. We are at about the halfway 
point, and that is good.
    First, let me say that we are pleased to see the program up 
and running, and, Dr. Budetti, when do you think we will see 
all 50 States participating? And when will we begin to see the 
numbers on the success of the program showing the amount of 
dollars recovered?
    Dr. Budetti. Yes, sir. The Recovery Audit Contractor 
Program, as you know, expanded under the Affordable Care Act to 
Medicaid and also to Parts C and D of Medicare. All 50 States 
have submitted State plan amendments laying out their intention 
to proceed with putting recovery audit contractors in place. I 
believe the last numbers I have are that more than 30 of them 
now actually have signed contracts with recovery audit 
contractors, and they are gearing up.
    Just as we did with the Medicare program under Parts A and 
B, we expect to see returns even in the first year of 
operation. So as those recovery audit contractors become 
operational in the States, we would expect to see some 
recoveries beginning this year.
    Senator Carper. Good. Thank you.
    Dr. Budetti. Mr. Carper, I would also like to add one 
thing, which is that our discussion about the movement to 
collaborative audits really has a side benefit, which is that 
we believe that the collaborative audit approach with the 
States is also going to be a very effective tool for 
coordinating the audits that will be done under the Recovery 
Audit Contractor Program with the audits that would be done 
under the Medicaid Integrity Program so that they will not 
overlap and duplicate each other to any great extent, because 
if we are working with the States to select the audit targets 
and they are also working with their recovery audit contractors 
to identify the audit targets, we ought to be able to keep 
duplication to an absolute minimum.
    Senator Carper. That is a good point. And you may have just 
said this in a different way, but one of the things we have 
learned in Medicare where the recovery audit contractors have 
been working is that they are helpful in helping us move away 
from ``pay and chase'' where we pay the bills in Medicare and 
then have to chase the money, because we learned through the 
recovery audit contractors, they are like a passthrough. They 
come back and say to the Federal Government these are the 
places where we are seeing fraud occur, so rather than continue 
to make those mistakes, let us fix them in the front end. So 
there is a double benefit there. But, anyway, that is good. We 
have 30. That is good. We have 20 more to go, and we will not 
be home free, but we will be on our way.
    This is a question, if I can, for Mr. Wilson and Mr. Porter 
dealing with the Public Assistance Reporting Information System 
(PARIS) and cross-State checks for beneficiaries. I would like 
to ask the panel about a specific challenge for Medicaid, and 
under Medicaid rules, a beneficiary can only be enrolled in one 
State's Medicaid program. Is that correct? I think that is 
correct.
    Mr. Wilson. Yes, it is, sir.
    Senator Carper. OK. If a beneficiary is enrolled with the 
Delaware Medicaid program, that beneficiary cannot be enrolled 
in Maryland, our neighbor to the west, or Pennsylvania, our 
neighbor to the north, or New Jersey, our neighbor to the east. 
However, I understand that there is not a systematic process 
for cross-checking between States to try to identify duplicate 
enrollees. This seems to us to be a significant problem to 
address waste and fraud.
    In March, our Subcommittee held a hearing on improper 
payments, and we heard about a system called the Public 
Assistance Reporting Information System, which, of course, has 
the acronym PARIS, as in France. But it is the Public 
Assistance Reporting Information System. It is run by the 
Department of Health and Human Services. The system has the 
ability for States to do such cross-State beneficiary checks of 
individual enrollees. However, we learned that Medicaid State 
agencies are not fully utilizing the system, nor does CMS 
perform these cross-checks.
    I would just ask our friends from Washington and from 
Texas, could you comment on this specific challenge and how 
Congress and the States and maybe CMS can work together to 
ensure that beneficiary enrollments are not duplicated in other 
States?
    Mr. Wilson. Sure. For Texas, we have actually found benefit 
in using----
    Senator Carper. Is there a Paris, Texas?
    Mr. Wilson. There is a Paris, Texas. Yes, there is a Paris, 
Texas. It is not much to see, Senator, but there is a Paris, 
Texas.
    Senator Carper. The other one is worth seeing, the big one.
    Mr. Wilson. Yes, sir, it is.
    We have gotten benefit from the PARIS system. Texas has 
been part of that system for a while, and through that process 
we do identify recipients attempting to get access to Medicaid 
services in our State that may be receiving them in another 
State. We have recently been using it to identify recipients 
that are on the Medicaid rolls in our State but are also 
expending the benefits in another State, almost any of the 
other 49 States, to be quite candid with you.
    In some respects, we have learned in working with the 
Federal Government that people travel, they go out of town, 
things happen, so we have been trying to sort of tighten down 
that window in Texas. If you are on the Medicaid program in 
Texas but you have expended your benefits on your SNAP card in 
Oklahoma or Maine somewhere for 6 months, that may be an 
indication that you have actually physically moved and you are 
no longer a resident of our State.
    There has been hesitance to allow us to make those changes 
because ultimately it is a Federal program. They are eligible 
in Texas. They will probably be eligible in whatever State they 
are actually in. From our perspective, though, they are on our 
rolls. It looks like that person is receiving or needs Medicaid 
benefits in our State when they actually do not.
    But those are the kinds of things that we are working 
through. We think that PARIS absolutely does have utility. We 
have had to my knowledge no issues getting that data and trying 
to use it in helping us work recipient cases.
    Senator Carper. All right. Thank you. Mr. Porter.
    Mr. Porter. We have had great success using the PARIS 
system in the State of Washington, but primarily for 
identifying those individuals who are on the Medicaid program 
who are actually entitled to veterans benefits and hooking them 
up with another payer, if you will, for things like longterm 
care and other health benefits that the VA offers. And that 
helps get people off of our rolls or at least not put as much 
demand on our Medicaid program when they are entitled to other 
benefits. So it has been quite helpful there.
    We have used it to monitor what you are talking about, dual 
enrollment, but we have not--we actually have a specific focus 
on our sister State to the south, the State of Oregon. They do 
not have a sales tax where the State of Washington does. 
Washington does not have an income tax like the State of Oregon 
does. So we are always mindful that people might be crossing 
the border to try and game those two systems. And we did some 
driver's license checks in addition to the PARIS checks, but we 
find that is at least not a very big problem at all in our 
State, having people travel to a border State.
    Senator Carper. OK, good. Thanks.
    A question for Dr. Budetti, and then I will go back to the 
question inspired by Dr. Alan Blinder. Last year, at about this 
time, our Subcommittee held a hearing that discussed the 
Integrated Data Repository (IDR). I have another Subcommittee I 
chair. We have been exploring repositories for spent nuclear 
fuel, so I am really focused on repositories this year. But the 
Integrated Data Repository refers to an existing database of 
all Medicare claims, including prescription drug claims, and 
providing access to State Medicaid agencies for program 
integrity purposes was one of the original ideas, I believe, 
for the Integrated Data Repository. I am told that no States, 
though, have been granted access, and I would just ask, Dr. 
Budetti, when do you think the States will have gained access? 
Are there any challenges that you can describe which prevent 
sharing this data with States?
    Dr. Budetti. Senator, I think, as you know, the Integrated 
Data Repository is far advanced from what it was when we 
discussed it last year. It has a lot more data and also now has 
some pre-pay data in it, as we had intended all along. One of 
the big gaps still is getting the Medicaid data in there, and 
that is something we are working on.
    But as far as State access to data, I think you are aware 
that last week CMS announced a new initiative to make data 
sharing a major activity of the Centers for Medicare & Medicaid 
Services, and we are currently looking at all of the--States 
can get quite a bit of the data right now, but as you have 
heard before, there are restrictions in the way that they can 
use it, and some constraints and inefficiencies in the ways 
that they get access to it. All of those are things that are 
currently under very intense discussion, and we anticipate 
having some major steps forward on that front very soon in 
terms of making the data available to the States, the 
appropriate data available to the States, while we continue to 
protect, of course, legitimate privacy and confidentiality 
interests. So that is something that we look forward to having 
major progress in the near future on.
    Senator Carper. Good. Well, we will keep following up with 
you. Thank you.
    Ms. Maxwell, you get to be the lead-off hitter on our last 
question. Again, the idea is to find out what is working in the 
realm of issues we are discussing here today and what should we 
be doing more of and maybe give us one good idea. Then we will 
come back to you to ask for an example of something that is not 
working and we ought to do less of that. Please proceed.
    Ms. Maxwell. Based on our evaluations, we found that the 
partnerships with the States really were more successful than 
the MSIS audits. We found that----
    Senator Carper. Say that again. The partnership with the 
States----
    Ms. Maxwell. The collaborative audits that the----
    Senator Carper. Were more successful than?
    Ms. Maxwell. Were more successful. Ninety percent of the 
identified overpayments came from seven collaborative audits. 
An additional 35 regular audits only uncovered $700,000 in 
identified overpayments.
    Senator Carper. That is interesting. Why do you suppose 
that is?
    Ms. Maxwell. We believe that is because they were able to 
partner with the States from the very beginning through the 
whole process, so that allowed them to access State knowledge 
based on States' understanding of where the fraud might be most 
problematic. It also allowed them access State knowledge in our 
program policies so they can interpret the data. And, most 
importantly, it allowed them to access that more accurate and 
more timely State-specific Medicaid data.
    Senator Carper. OK. Well, good. Thank you.
    Ms. Yocom? And it is OK to say the same thing that someone 
else has said. Repetition is not bad.
    Ms. Yocom. That is good to know because I was going to. 
[Laughter.]
    Senator Carper. Good. And in NASCAR, they call this 
``drafting'' the car in front of you.
    Ms. Yocom. We had slightly different time periods, but our 
results were the same. The collaborative audits looked to be 
very promising, and as Dr. Budetti said, the cooperation and 
the coordination that happens with the States I think is a very 
effective outcome as well.
    One thing that I would do more of is about transparency. 
The more transparent CMS is, the more transparent the States 
are about the issues they are facing and ways to combat them, 
the more we have a feedback loop in the process and we can make 
progress more quickly.
    Senator Carper. OK, thanks. Mr. Wilson.
    Mr. Wilson. I would echo what the previous two have just 
said. I think that collaboration is key. It has been said that 
if you have seen one State Medicaid program, you have just seen 
one State Medicaid program. I think the collaboration works 
because each State knows its program best, and we can help you 
understand what our policies and rules mean and pursue the 
money much more aggressively.
    I also believe that aggressively pursuing these cases from 
my agency, changing our mind-set about how we approach the 
case, was----
    Senator Carper. Sorry. Changing your mind-set about?
    Mr. Wilson. How we approached our cases, giving my staff 
the courage to say, ``I know you are the doctor, but we think 
you did something wrong. Let us go after him.'' Having clean 
data that we could utilize and then having good investigations 
being conducted, and then having other professionals, medical 
professionals, come in and verify what we think we know to be 
accurate for us has been very successful.
    I think--and I circled what Carolyn said. I had on there 
for what could be improved is definitely the transparency. 
Texas wants to be transparent. I want to show what I think I 
know and what I do know, but I want to do that without fear of 
reprisal. I do not want to have negative consequences to my 
State for being aggressive and doing the right thing we believe 
was best for not only Texas but also for the Federal 
Government, who we partner with in these programs. We 
understand that. We are committed to that. They have 
commercials there that say, ``Do not mess with Texas.'' We are 
serious about that when it comes to our Medicaid money. So we 
absolutely do want to work with everyone here.
    I think the other thing that is working good now is 
absolutely the ability to dialog with others, both at the State 
and Federal level. I am listening to Mr. Porter next to me, and 
I am almost thinking he has moved to Texas and just has not 
told me. Some of the things he is talking about I echo almost 
verbatim. It is sort of the same experience. And I think we 
would find that nationally, that everybody is fighting the same 
types of battles and we are looking for the same kinds of 
solutions, and collective knowledge is priceless.
    Senator Carper. All right. Thanks so much.
    Mr. Porter, are you thinking of moving to Texas? Is there 
anything to that?
    Mr. Porter. I have been to Maine, California, Washington. 
Texas could be next on my itinerary.
    Senator Carper. A great place.
    Mr. Porter. What works in medicine is prevention, and I am 
going to take this opportunity to make another pitch for a 
national enrollment, Level one enrollment where 50 States do 
not have to comb through the Federal databases, that we would 
oblige our providers to get enrolled in Medicaid via a 
centralized national screening process. States would be free to 
add additional criteria before they would admit providers to 
their Medicaid programs, but at least there would be one place 
where an entity could see across State lines, see where people 
had been, and if they were excluded in one State, they would 
know not to allow them to enroll in another State, and then re-
enroll them every 3 years.
    Senator Carper. Could you just stop right there? Would 
others in the panel just briefly comment on that, about his 
point? Ms. Maxwell, do you have any thoughts on what he just 
said?
    Ms. Maxwell. That is not an issue I am particularly 
informed about. I could certainly have our office get back to 
you.
    Senator Carper. That is OK.
    Ms. Yocom, any thoughts on what Mr. Porter just said?
    Ms. Yocom. We have not studied it either, but I would say 
that in concept it makes a lot of sense. We may have 56 
programs reinventing the wheel to investigate providers.
    Senator Carper. Mr. Wilson, would you comment on that?
    Mr. Wilson. I believe in my written testimony we make 
comments regarding provider enrollment, and I would echo what 
he is saying exactly. We are enrolling a number of providers in 
our States, and the Affordable Care Act requires us to go out 
here recently and conduct actually onsite visits of all those 
providers, in the first year just for one provider type, which 
I have met up with 6,000 visits we have to conduct, many of 
whom are also in the Medicare program. So I think the ability 
to leverage that common information, that common knowledge, and 
share it freely helps everybody. So I totally support what Mr. 
Porter is saying.
    Senator Carper. Dr. Budetti, would you react to that?
    Dr. Budetti. Thank you for asking that question, Senator 
Carper. Yes, we are, in fact, right now talking to States about 
applying the automated provide screening system that we have 
put into place for the Medicare enrollment of providers and 
suppliers and applying that to the Medicaid provider and 
supplier community. As you know, there is a great deal of 
overlap--not 100 percent overlap--between providers and 
suppliers in the Medicaid program. There are some that are 
unique to Medicaid, and the States will have to apply the 
screening for that separately, or we can work with them to 
figure out ways to use our technology. But in terms of using 
what we are doing for Medicare, since the States can accept the 
same screening for enrollment in Medicaid, we are currently 
developing pilots with States to do exactly that so that we 
could implement one-stop shopping for provider screening.
    Senator Carper. OK. Thanks very much.
    See what you started here, Mr. Porter?
    Mr. Porter. I am keeping my hopes up.
    Senator Carper. Good. OK. Did you have any other point?
    Mr. Porter. On what is not working----
    Senator Carper. Hold that one and we will come back to you.
    Dr. Budetti, give us one good example of what is working 
and we need to do more of.
    Dr. Budetti. Well, I think you have heard very extensive 
comments that were very supportive for the Medicaid Integrity 
Institute and all of the incredible work which I wish we could 
quantify the results of, and we are looking for ways to 
quantify the results of, but at least we are gratified that the 
qualitative results and the testimony we get from people who 
have used the system and their supervisors is all very 
positive. We are indeed working to expand the use of it 
through--we are looking at ways to do remote learning, distance 
learning, and other approaches to expand the use of it.
    I think the other thing that is----
    Senator Carper. In fact, could I interrupt for just a 
second?
    Dr. Budetti. Sure.
    Senator Carper. There is a fair amount of focus on distance 
learning with respect to VA benefits and with respect to 
Department of Defense benefits, and there are concerns that in 
some cases some of the folks in proprietary colleges and 
universities are doing distance learning with folks in the VA 
program, the GI bill program, and tuition assistance. Some of 
them do a great job, a terrific job. Some of them do not. And 
we are trying to put a lot of pressure on those who are not 
doing a very good job and are taking advantage of the veterans 
and the taxpayers, and the quality of their program or lack of 
quality in their program, we are trying to ferret those out and 
get them to change their ways.
    In terms of being able to take a program that--it sounds 
like people go to South Carolina to the institute to actually 
participate in it, but to be able to do that from their home 
States is--you may want to think about some of the distance 
learning colleges and universities, if you will, training under 
these, they are doing a really good job, and see if there might 
be some way to do a competition with them to help them come in 
and do the same kind of thing with the institute.
    Dr. Budetti. Thank you for that. Yes, sir, I have been 
engaged in quite a bit of distance education in my time, and I 
agree that there are good ways to do it and not so good ways to 
do it, and we do not want to ruin something that is very good. 
We will continue the onsite education because the networking, 
the interaction, the ability to share best practices, all of 
that is a whole level----
    Senator Carper. I am sure it is.
    Dr. Budetti [continuing]. That you will not get through the 
distance learning.
    Senator Carper. I am sure it is. OK.
    Dr. Budetti. Do you want something else that is working?
    Senator Carper. Please.
    Dr. Budetti. One of the things that is working, I think, I 
would like to mention, which does address one of Dr. Coburn's 
questions, which is that the technology that we have built in 
the fraud prevention system on the Medicare side that you are 
familiar with, we are required under the Small Business Jobs 
Act to apply that to Medicaid. And so we are very much 
interested in doing the kinds of things that you heard from our 
colleagues in both State programs about using the technology 
that we already have at the Federal level, that is expanding, 
and that is being enhanced all the time, applying that to the 
Medicaid program. So I think the fact that we have a 
collaborative relationship and we are developing pilots to do 
exactly that, I think that is something that is--it is a work 
in progress, but I believe it is working.
    Senator Carper. OK. Good things.
    All right, Ms. Maxwell, back to you. Something that is not 
working that we need to do less of?
    Ms. Maxwell. I would say what is not working is----
    Senator Carper. Are you going to say these hearings? 
[Laughter.]
    Ms. Maxwell. No; that is very effective. I would say what 
is not working is an underinvestment in creating a National 
Medicaid data set. With a National Medicaid data set, we would 
be able to detect billing patterns that cross State lines, that 
cross Federal health care programs, and we would be able to do 
that more quickly, and we would not leave the States in the 
position of trying to chase dollars that are difficult to 
collect.
    Senator Carper. All right. Thank you.
    Ms. Yocom, something that is not working that we need to do 
less of?
    Ms. Yocom. To go back to transparency again, the more 
transparency, the less duplication. We have some duplication in 
our system right now that is not serving us well, and we need 
to do less of it.
    Senator Carper. Any particulars you want to mention with 
respect to duplication?
    Ms. Yocom. Some of the algorithms run at the Federal level 
have been the exact same ones that the States have run. At 
times, States have had to take time to train the Federal 
Government about their systems rather than collaborating with 
the someone who already knows their own systems. Those are two 
examples.
    Senator Carper. Thanks. Mr. Wilson
    Mr. Wilson. I would say what is not working is the current 
process for repayment where a State may be at risk for repaying 
dollars that there is no chance they could possibly collect. I 
find that to be a disincentive at this point for my State.
    Senator Carper. OK. Thank you. Mr. Porter.
    Mr. Porter. I think what has not worked in our State is 
adopting vendor-driven solutions to things that are kind of 
prepackaged.
    Senator Carper. Explain what that means in English.
    Mr. Porter. Well, I will speak to what has been mentioned 
earlier on predictive modeling. When we were pursuing better 
care coordination for chronic illnesses, we had a lot of 
national vendors come forward talking about their predictive 
modeling capacity, and when we looked under the hood, we did 
not see a whole lot there. A lot of marketing, not a lot of 
product. And we are very closely watching what is going on with 
the Medicare efforts under predictive modeling and trying to 
resist the many vendors coming into our State saying to the 
legislature, ``You should adopt this proven technology.'' And 
we are there saying, ``It is not proven yet.'' And we would 
like to see the results. We would like to not be in a position 
where I am defending how much money I spent on something that 
has no track record and has no evaluation and no proven results 
or return on investment before I buy into it.
    Senator Carper. Good. Thank you.
    Dr. Budetti, the last word, or the next to the last word.
    Dr. Budetti. I think the one thing that we all agree has 
not been working is the way that we have gone about the 
National Medicaid Audit Program with reliance on an inadequate 
database and with contractors who were not working in an 
interactive and collaborative way with the States. And so I am 
very pleased to say that we are moving away from something that 
is not working.
    Senator Carper. OK. Thank you.
    I think that is probably it for today. I think we are 
making some progress here, and I think you are helping us to 
make some more, not just for the Federal Government but for all 
of our States.
    Coincidentally, the next Chairman of the National Governors 
Association is a fellow named Jack Markell, who is the Governor 
of Delaware, and he will become Chairman of the National 
Governors Association I think sometime this summer, and I think 
he will be a very good one because he is a very good Governor.
    I was once, a dozen or so years ago, privileged to hold 
that position when I was Governor of Delaware, and I think for 
the year that he is Chairman, there may be an even better 
opportunity to partner in some of these areas and to get better 
results for less money. And we will look forward to trying to 
use our personal relationship and friendship and close working 
relationship in Delaware on all things Delaware and to be able 
to see if we cannot use that as a springboard to greater 
results on some of the issues we are talking about here today.
    I want to thank you all for coming. Some of our colleagues 
who did not come missed a good hearing. A lot of them, I am 
sure, were glued to their televisions so they could watch it on 
TV, and certainly their staffs were. Some may have some 
questions, and what do they have, Peter, a couple weeks?
    Mr. Tyler. Two weeks.
    Senator Carper. They have 2 weeks to produce those 
questions and provide them to you. When you get them--and you 
will get some from us as well--I would just ask that you 
promptly respond to them.
    My guess is that somewhere down the line we will have 
another hearing. I do not know that we will trouble each of you 
to come, but we might, and this has been a very productive 
hearing, and we are grateful for your preparation and the great 
travel from as far away as Washington State and Texas. When I 
was a naval flight officer, I left Pensacola on my way to 
Southeast Asia, and I was stationed for a while in Corpus 
Christi Naval Air Station. I have just wonderful memories of 
being in Texas.
    I would ask again, Mr. Porter, that you give my best to 
Governor Gregoire as she winds up her service there.
    All right, everybody. That is it. With that, this hearing 
is adjourned. Thanks so much.
    [Whereupon, at 11:56 a.m., the Subcommittee was adjourned.]

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