Afternoon on the pluto flyby this week. Officials were released more pictures and discuss the new horizons space craft. That reading is at 1 00 eastern. This weekend, politics books, and American History. Wrote to the white house coverage features nearly all the president ial candidates and begins tonight in iowa. At 8 00 eastern, were live from cedar rapids iowa for the Democratic Party hall of fame dinner. All day saturday starting at 11 00 eastern, were live in ames iowa for the family leadership summit. A little after 8 00 p. M. Eastern. First, senator Lindsey Graham and then Ohio Governor john kasich it on book tv, were live from new york city for the 17th annual harlem book fair with author talks and panels on economics, africanamerican identity, and race and politics. Sunday night at 10 00, and coulter says the greatest issue stating the u. S. Is immigration. On American History tv on cspan3, were live at the warren g. Harding symposium for modern first ladies. Speakers include historian and dunlap any National First lady library director. A little after 9 00, j of the National Archives of kansas city showed how the government used propaganda and world war ii to persuade citizens to buy war bonds and keep national secrets. Get our complete schedule at cspan. Org. The Government Accountability office says that healthcare. Gov the website where americans can Purchase Health insurance signed up 11 fake accounts. The Senate FinanceCommittee Held a hearing about that yesterday. This is about an hour. The committee will come to order. Good morning, everybody. Todays hearing will address controls of health care. Gov. We will hear from the Government Accountability office. Sato bagdoyan if im saying that right led to undercover secret shopper investigation to test the internet controls of healthcare. Gov interview the centers this best centers of medicare and medicaid handling of the program. This investigation was designed and determined to the federal Health Insurance exchange can protect against fraudulent applications. What happens when advocates provide false information and documentation and whether the controls are successful in dealing with irregularities. Perhaps i should say spoiler alert before this next part. Today, the director will explain how the federal exchange failed spectacularly virtually on all relevant accounts tested by g. A. O. Created fictitious. For this investigation, g. A. O. Created fictitious identities to apply for federal subsidies. We learned last year, 1112 fake applications were approved. The cms accepted fabricated documentation with these applications without attempting to verify its authenticity and handing out thousands of dollars in tax subsidies. A year later, g. A. O. Has reported that nothing has changed and that, if anything, there are more problems. Worst of all, the administration has known about these problems for over a year now and hasnt taken the necessary steps. While c. M. S. Says it is balancing consumer access to the system with Program Integrity concerns, i think its pretty clear whats going on here. Since the federal exchange was first implemented, success has been measured by a number of applicants that have signed up for insurance. Sen. Hatch indeed, last year when the administration reached its initial enrollment goal, critics were told we had been wrong all along and that the law was despite all the evidence to the contrary, working just fine. However, with these findings from g. A. O. , it seems obvious, at least to me, that the administration has been preoccupied signing up as many applicants as possible, ignoring potential fraud and integrity issues along the way. Now supporters of obamacare says its the law of the lands and congress should work to improve rather than repeal it. On the first point, these proponents are unfortunately correct. For the foreseeable future, the Affordable Care act is the law of the land. On the second point, republicans in congress continue to work toward the repeal of misguided law and mandates, regulations, penalties and taxes and replace it with patientcentered reforms that puts patients in charge of their health care decisions. However, needless to say, that day will not come until a president comes who shares our goal. Obamacare will remain in place. Congress has to maintain rigorous oversight in invitation of the law implementation of the law and protect beneficiaries and taxpayers from its negative consequences. Thats what todays hearing is about. We are here today to get an account on how things are working on the federal Insurance Exchange and what we have thus far is not reassuring and doesnt speak well of c. M. S. s management, the protection of taxpayer dollars, or the experience of and release. Enrollees. The g. A. O. s investigation exposes not only huge gaps, but also flaws in how the exchange and cms contractors treat americans who are trying to correctly file legitimate applications. The g. A. O. Team sent questions only to have it ignored or have the exchange respond. The fact that g. A. O. Encountered mindboggling levels of incompetence and inefficiency at every turn does not bode well for the experience of your average honest enrollee. I look forward to todays hearing and what i hope will be a good discussion of Program Integrity. Before i conclude, i want to note even though this investigation was requested by this committee, c. M. S. Was less than cooperative. Indeed throughout the entire endeavor, officials appear to be dragging their feet, blowing past deadlines and good faith attempts to to put forward this work. No federal agency could stand in the way of that work. By delaying the g. A. O. And hampering their efforts, c. M. S. Has delayed this committees work and hampered our efforts. This is unacceptable and despite promises of increased transparency and cooperation from agencies throughout this administration, this type of stonewalling of legitimate oversight efforts is far, far too common. Acting c. M. S. Administrator who is now the president s nominee to run the agency was personally involved in this process. As the Committee Considers his nomination, i look forward to seeing asking about this investigation and why c. M. S. Has been interfering with our oversight efforts. That will all have to wait for another day and another time. Today, we have our hands full as we hear testimony. So with that, i will turn it over to senator wyden. Sen. Wyden thank you very much mr. Chairman. On this side of the aisle, we do not take a back seat to anybody in fighting fraud and protecting taxpayer dollars. One dollar ripped off is one dollar too many, but lets be very clear this morning. The report up for discussion today is not about any real world fraud. The study looks at a dozen fictitious cases and not one of them was a real person who filed taxes or got medical services. No fastbuck fraudster got a government check sent to their bank account. Moreover, the government auditors acknowledge today, and i want to quote here, their work cannot be generalized to the full population of applicants or any enrollees. None of the fictitious characters in this study step foot in a hospital or a doctors office. The fact is when you actually show up for medical services its a lot harder to fake your way into receiving taxpayer subsidized care before services are delivered, providers ask for a photo i. D. And if you have stolen identity there is , probably a medical history belonging to someone else that ought to set off alarm bells. If you are a real person signing up in the insurance marketplace, you have to attest under penalty of perjury that the information you provide is correct. And if you falsify the application, you face the prospect of a fine of 250,000. Another major antifraud check went untested in this study. That is squaring up tax returns with the information from your insurance application. The General Accounting Office testimony today and i quote calls it a key element of backend controls. If your tax return and personal information dont match, the game it is up, but the study before us today ignores that antifraud check. It only looks at a part of the picture when it comes to stopping fraud. As i noted at the beginning, there are always methods of strengthening any program and rooting out the fraudsters and ripoff artists. Part of any smart ferocious strategy against fraud is drawing a distinction by going after the ripoff artists and on the other, not harming a lawabiding american who has made an honest and often technical mistake. A retiree nearing medicare age shouldnt get kicked to the curb because he or she submitted a n incorrect document. A transgender american should not Lose Health Care after a name change because forms dont match. I cant imagine that anyone in the congress or on this committee wants a system that mixes nixes the Health Insurance coverage of americans because of those kinds of issues. I wrap up by saying a recent gallup report stated that the rate of americans without Health Insurance is now the lowest that they have ever measured. This is the First FinanceCommittee Hearing on health care since the supreme courts landmark decision that upheld the law that made that possible. The fact is the Affordable Care act has extended Health Care Coverage to more than 16 million real people who use their Insurance Coverage to see real doctors. Now at some point down the road, the g. A. O. Is expected to complete their report. At that time, lets work on a bipartisan basis how this committee can work together. Thank you, mr. Chairman. Sen. Hatch thank you, senator. The witness today is sato bagdoyan. He is assistant director for Homeland Security and justice. In his career, he has served on the office of congressional relations and the assistance on congressional details with the Senate Finance committee and the committee on Homeland Security. In his private sector career, he has held a number of senior positions in consultancies and most recently focusing on Political Risk and Homeland Security. He earned a b. A. Agree in International Relations in economics from Claremont College and an m. B. A. In strategy. We welcome you to the committee and we are interested in your statement here today. Mr. Bagdoyan thank you, mr. Chairman. Chairman hatch, Ranking Member wyden, and members of the committee. Im pleased to be here today to discuss the final results of g. A. O. s undercover test addressing the emerald controls of the marketplace set up under the Affordable Care act of 2010. As you mentioned, we reported our preliminary results during testimony in july of 2014. We performed 18 undercover tests, 12 of which involved phone or online applications. Our tests were designed specifically to identify indicators of potential control weaknesses in the marketplaces and enrollment processes specifically for plan year 2014 and to inform our ongoing Forensic Audit of these controls. I would note that our tests, while illustrative and as Ranking Member wyden mentioned cannot be generalized to the publication population of enrollees. Further, we shared details of our observations with c. M. S. During the course of our tests to seek its responses to the issues we raised. In this regard, c. M. S. Officials stated they had limited spacity capacity to respond to attempts of fraud and must balance consumers ability to access coverage with Program Integrity concerns. Without providing details on how and when, these officials stated that they intend to assess the marketplaces eligibility determination process. In terms of context, Health Coverage offered through the marketplace is a significant expenditure for the federal government. Levels of coverage involved several million enrollees, about 85 of whom are estimated to be receiving subsidies. C. B. O. Pegged costs for f. Y. 2015 at 28 billion and 850 billion for fiscal years from 20162025. A program of this scope and scale is inherently at risk for errors, including improper payments and fraudulent activity. Accordingly, it is essential that there are effective enrollment controls in place to help narrow the window of opportunity for such risks, hence the importance of our undercover tests. Witness as backdrop, i will discuss some of our test results. The marketplace approved subsidized coverage for 11 of our 12 fictitious applicants. These applicants obtained about 30,000 in total advanced annual tax credits and eligibility for lower cost at time of service. For seven of the 11 applicants, we intentionally didnt submit all required documentation and didnt cancel coverage or reduce or eliminate subsidies for these applicants. I would note that while subsidies including those granted to our applicants are not directly to enrollees, they nevertheless represent the financial benefit to consumers and a cost to the government. As part of its verification process, the marketplace didnt accurately record all inconsistenties which occur when Applicant Information does not match information from marketplace verification sources. Also the marketplace resolved , inconsistencies from our fictitious applications. The marketplace didnt term nays terminate any kind of coverage for several types of inconsistencies including Social Security data. We found errors in information reported by the marketplace for tax filing purposes for three of of our 11 enrollees such as , incorrect coverage periods or subsidy amounts. Under the aca, filing a federal tax return is a key control element designed to ensure that premium subsidies granted at time of application are appropriate based on reported applicant earnings during the coverage year. The marketplace automatically reenrolled coverage for all 11 applicants for plan year 2015. Later based on what it said were new applications our enrollees had filed, but which we hadnt actually made. The marketplace terminated coverage for six of the 11 enrollees, saying they hadnt provided necessary documentation. However for five of the six terminations, we subsequently obtained reinstatements. Including increases in monthly subsidies averaging about 10 . In closing, our test results highlight the need for c. M. S. To have controls to reduce the risk for potential improper payments and fraud, however there are such risks to be embedded early in a major new benefits program. We plan to include initial recommendations for controls and a forthcoming report could mr. Mr. Chairman this concludes my , statement and i look forward to the committees questions. Sen. Hatch its come to my attention that the g. A. O. Had difficulty getting enrollment and related data from c. M. S. To conduct a full analysis of what really happened to enrollees from 2014. Now this would have been helpful to g. A. O. In providing explanation for things like those who were supposed to get dropped for failing to provide documents to clear inconsistencies among other things. Can you provide us with more detail about the difficulties g. A. O. Had in obtaining that information from c. M. S. And i expect g. A. O. Has the data and expect c. M. S. Works with you and the committee tore make that to make that happen. Any information you can provide as to the problems experienced and what the committee can do to help address them would be helpful to us and the committee now. Mr. Bagdoyan thank you for your question, mr. Chairman. I will lay out in a general sense our experience in obtaining data. In the beginning i would like to , establish a context as i mentioned earlier why we did our uncover testing was to flag indicators of potential control weaknesses and at the same time, we had designed our Forensic Audit which relied on the data base in order for us to map out what we were finding in the controlled environment against the actual enrollees that Ranking Member wyden mentioned earlier. That said, we began our informal meetings in consultations with c. M. S. In april of 2014. We requested various data tests. We had some success in obtaining information. And when we focused on the enrollee data base, we submitted a written letter requesting that database in august of 2014 and then we subsequently engaged in additional conversations as they expressed some concerns about what we were asking and what we planned to do with the data as well as how the data would be safeguarded. Upon subsequent discussions through early part of 2015, we submitted another letter to then our current acting administrator in april of 2015 as of a couple of days ago we were in contact with cms, who advised that we should expect the data some time next week, which is very good news for us and our ability to continue the work. We look forward to obtaining the data and seeing if it is what we asked for. And then conducting additional tests to determine whether the data. Apologize for the long story but that gives you a context. Sen. Hatch i understand that the marketplace invoked the socalled good faith exception for plan year 2014 and not pursuing the documentation to reconcile inconsistencies they provided and that available to the marketplace or government sources. Could you describe what the good faith exemption is all about whether it has any basis in the a. C. A. , Affordable Care act, or its implementing regulations an