[Congressional Record (Bound Edition), Volume 156 (2010), Part 9]
[Senate]
[Pages 12995-12996]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           IMPROPER PAYMENTS

  Mr. CARPER. Mr. President, only this morning I was standing here and 
the Senator from New Mexico was presiding over the Senate. I got 
through half of my remarks and had to yield to the Senator from 
Maryland. Now that no one is on the floor, I wish to take maybe 5 or 10 
minutes and finish what I started this morning. I was talking earlier 
today about how to reduce the amount of overpayments--we call them 
improper payments--the Federal Government makes. Last year they added 
up to almost $100 billion, not counting the Department of Defense, not 
counting part of Medicare, not counting part of the Department of 
Homeland Security--a lot of money.
  I also added that Federal agencies are doing, for the most part, a 
better job of estimating and identifying costly mistakes of improper 
payments. I think the White House deserves credit. Not only this 
President but his predecessor George W. Bush deserve credit for, not 
only in the case of George W. Bush, saying: We ought to have improper 
payments in the law and we ought to make this a priority, but also for 
President Obama and his team who are beginning to scour Federal 
programs for improper payments and also taking strong steps to try to 
eliminate them in the future.
  White House Budget Director Peter Orszag noted that agencies employed 
stricter standards for identifying improper payments, resulting in much 
of last fall's reported improper payments increase. I remember maybe 5 
years ago, when Senator Coburn and I were working on this issue, we 
found there was maybe $40 billion worth of improper payments being 
reported by Federal agencies. Last year it was about almost $100 
billion. So it sounds as if we are going in the wrong direction.
  As it turns out, what has actually happened is more agencies are 
reporting it. Initially, not very many agencies were reporting it, but 
as we have fuller reporting by all the agencies, we find we have a 
better idea of how big the problem is. It is not so much that it is 
getting worse, it is just that we are having better reporting from the 
agencies.
  Now that we are having that, the key is to make sure the agencies 
that are making improper payments make fewer of them, and then that we 
go out and recover the moneys that have been improperly paid.
  The White House announced this winter--earlier this year--an 
executive order to not only improve the collection of improper payments 
data, but to also improve our ability to avoid making improper 
payments, and to increase what I think is important, the use of 
recovery auditing. I say the words ``recovery auditing''--postaudit 
cost recovery. I think for most people, their eyes kind of blur over 
and they tune out. We are talking about $100 billion here, money that 
is going out, most of it improperly, a lot of it overpayments. We are 
talking about a country where our deficit is over $1 trillion. If we 
are going to have the ability to reduce our deficit, it is not going to 
come from any one silver bullet or any one particular approach. But 
this is an approach that can help.
  I applaud the administration's concrete steps to improve transparency 
and make agencies and agency leadership more accountable.
  Still, there is a lot more we can do, which is why our legislation 
currently on its way to the President's desk is so important in order 
to take the next steps, especially when it comes to actually going out 
and recovering the money we lose every year to avoidable errors and 
preventable fraud.
  As I often say to my staff--they have heard me say this more times 
than they care to remember--if it is not perfect, make it better. 
Everything that I do, I know I can do better. That includes making sure 
we are making the appropriate payments to the right entity, for the 
right amount of money.
  All of us in Congress share this responsibility to do that; that is, 
if it is not perfect, to make it better. We all share a responsibility 
to do that in curbing waste and fraud.
  The legislation that I think the House is going to pass later today, 
and hopefully the President will sign later this month, is called the 
Improper Payments Elimination and Recovery Act. It is the result of a 
6-year journey. During the last Congress, I introduced an earlier 
iteration of this bill with Senator Claire McCaskill of Missouri. Over 
the last several years, I have chaired hearings on the issue of 
improper payments, waste, and fraud. Since then, we have worked with 
the Office of Management and Budget, the Congressional Budget Office, 
many other inspectors general, and many other experts to refine and 
strengthen our legislation.
  The most recent version of that legislation was introduced last 
summer--about a year ago--along with Senator Lieberman, who chairs our 
full committee, Senator Collins, the ranking member of the Homeland 
Security and Governmental Affairs Committee, Senator McCain, and 
Senator McCaskill. It was approved by the Committee on Homeland 
Security and Governmental Affairs late last year and was approved by 
the full Senate in June of this year. A companion bill was also 
introduced in the House by Representative Patrick Murphy from 
Pennsylvania, our neighbor to the north.
  This legislation, I believe, is a perfect example of bipartisan 
common sense and bicameral common sense. And actually when you consider 
Senator Lieberman is an Independent, it is tripartisan--Democrat, 
Republican, and Independent.
  I think the bill makes a number of key reforms. First of all, it 
improves transparency by lowering the threshold whereby agencies are 
supposed to report improper payments. This will better inform the 
public about where their taxpayer dollars are going, and it will help 
us in Congress find ways to fix the problems that lead to waste.
  The second key reform in this legislation is it requires agencies to 
produce

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audited corrective action plans with targets to reduce waste. It is all 
well and good that we report improper payments or wasteful payments. 
The key is to stop doing it, to not just report it but to go after it 
and stop repeating the same mistakes.
  A third reform is that this legislation increases the recovery of 
overpayments by requiring all agencies that spend more than $1 million 
a year to perform recovery audits on all their programs.
  Finally, fourth and last, the legislation penalizes agencies that 
fail to comply with Federal financial management and accounting laws 
and would make sure that progress in eliminating improper payments is 
part of senior agency officials' performance evaluations. So you say to 
somebody who is like a leader or supervisor in these Federal agencies: 
Part of your evaluation is going to be whether you are doing a good job 
of stopping overpayments, going out and making sure you do not make 
more of them, and going out and collecting money that is being 
``mispaid'' or overpaid.
  I am particularly pleased with the provision in the bill requiring 
major agencies to make greater use of tools that many private sector 
business use to recover overpayments when they make them. When agencies 
have used these tools, they have had some success, some real success.
  About 7 years ago, 2003, Congress mandated what was at the time 
described as a pilot Recovery Audit Contractor Program to examine 
Medicare fee-for-service payments. In other words, Congress said: OK, 
Medicare, when you are making these fee-for-service payments to 
doctors, hospitals, and nurses, we want you to do, in three States--
California, Florida, and New York--we want you to look at those three 
States and see if we are overpaying money. If we are making mistakes in 
Medicare, go get it.
  I think a year or so later, we added to the initial three States 
Massachusetts and South Carolina. During the first year of this 
demonstration program, about $50 million was recovered and returned to 
the Medicare trust fund. In the second year, about a quarter of a 
billion dollars was recovered, returned to the Medicare trust fund. I 
think if you add the total for the 3-year pilot program, which ended up 
in five States, they recovered about $1 billion. They recovered about 
$1 billion. It is real money.
  One of the reasons why the Medicare trust fund is running out of 
money is because of fraud. Some people may have seen--I think it was on 
``60 Minutes'' a year or so ago. Mr. President, ``60 Minutes'' did a 
special where they focused on a bunch of doctors' offices in some town 
in south Florida. The doctors' offices had three things in common: One, 
they had no patients; two, they had no doctors; three, they had no 
nurses. All they were were like a billing operation on Medicare, to 
defraud money from Medicare and take it from the Medicare trust fund.
  Last year, we were looking at the Medicare trust fund running out of 
money in about 8 years. That is untenable. With the changes we have 
made in the health care reform legislation, I think we pretty much 
doubled that life to maybe closer to 15 or 20 years, but we still have 
a problem. With all the money that is defrauded from Medicare, we want 
to recover as much of it as we can and put it back into the program.
  But in any event, the pilot program--which started in three States 
and expanded to five States--this year we are expanding it to all 50 
States.
  There is also a provision in the recently enacted health care law--it 
is called the Patient Protection and Affordable Care Act, it is the 
health care reform legislation adopted earlier this year--but there is 
a provision that says to the folks who run health care at the 
Department of Health and Human Services that they have to expand this 
program, this cost recovery program, to include Medicare Advantage, to 
include the Medicare prescription drug program, and also to include 
Medicaid. As money is recovered from fraud and overpayments and missed 
payments in Medicaid, that money will be split between the States and 
the Federal Government.
  The sooner the full program is up and operating, the sooner we can 
recover even more money--I think probably billions of dollars--in 
additional overpayments.
  There is an added benefit to an expansion of recovery auditing. The 
Recovery Audit Contracting pilot program has identified dozens of 
vulnerabilities in the Medicare payment system that can lead to 
additional waste and fraud.
  According to the Centers for Medicare and Medicaid Services--that is 
the entity that oversees Medicare and Medicaid--the contractors hired 
to recoup overpayments identified ongoing vulnerabilities that could 
lead to future overpayments totaling about a third of a billion dollars 
more. So not only did the contractors recover about $1 billion in 
overpayments in the 3-year pilot program, they also identified 
additional problems in the systems they looked at, which, if we will 
address them, will reduce and avoid errors in the future.
  Tomorrow--what is today, Wednesday?--tomorrow, Thursday--I think 
tomorrow afternoon--the Subcommittee on Federal Financial Management, 
which I am privileged to chair, will hold a hearing, and that hearing 
will examine the history and the opportunities for the Medicare 
Recovery Audit Contracting.
  In conclusion, the Improper Payments Elimination and Recovery Act, 
which again, hopefully, the House will pass today--the Senate has 
already passed it; and hopefully the President will put his ``John 
Henry'' on it later this month--that legislation will allow us to make 
even greater strides in curbing waste and fraud in the work of Federal 
agencies during the years ahead. Given the size of the budget deficits 
we face, we need to do that.
  Enactment of this legislation is not the last step, but it is an 
important step. I look forward to seeing this important legislation 
signed into law and to working with my colleagues and with the 
administration on its successful implementation.
  A lot of times people say to us: Why don't you do something about 
waste, fraud, and abuse? They are convinced that a lot of their money 
ends up being misspent, improperly spent, overpaid in some case. The 
people, or entities, businesses, should not get any of this money. 
Somebody ought to do something about it. With the legislation that will 
be on its way to the President, hopefully tomorrow, we are going to do 
something about it. We already are doing some pretty good things about 
it. We are going to do more, and we need to build on that record.
  Thank you very much, Mr. President.
  The ACTING PRESIDENT pro tempore. The Senator from Montana is 
recognized.

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