Transcripts For CSPAN3 Medicare Fraud And Abuse 20141015 : v

2014 coverage, follow us on twitter and like us on facebook, to get debate schedules, video clips of key moments. Cspan is bringing you over 100 senate, house and government debates, and you can instantly share your reactions to what the candidates are saying. The battle for control of congress. Stay in touch and engaged by following us on twitter, at cspan, and liking us on facebook, at facebook. Com cspan. In kansas, incumbent senator pat roberts is facing independent challenger greg orman in a close race. Were covering that debate from wichita kansas, 8 00 p. M. Eastern on cspan. According to a government report, improper medicare payments totaled 50 billion in 2013. Up next, the House Oversight Committee Investigates Medicare Fraud and abuse. This hearing from earlier this year is about 2 hours 20 minutes. Congressman darrell issa of california chairs this committee. The hearing will come to order. Without objection, the chairs authorized to declare a recess of the committee at any time. Well take this a little bit out of order today. Some of the Democrat Members will be here later today. The subcommittee hearing on health care entitlement, oversight of the federal government effort to recapture misspent funds. We secure two fundamental principles. Americans deserve an effective government that to protect these rights. The solemn responsibility is to hold government accountable to the taxpayers. We will work tirelessly as citizen watchdogs to deliver the facts to the American People. This is the mission of the committee. Medicare currently pays onefifth of all Health Care Services provided nationwide, making it the largest single purchaser of health care in the country. Unfortunately, every year the Medicare Program wastes an enormous amount of money in overpayments, frauds and unnecessary tasks and procedures. In 2013, 50 billion was lost to improper payments. An increase of 5 billion from 2012. Medicare fee for service accounted for 36 billion of this total. Gao has related medicare as a high risk since 1990. In part due to programs to the waste, which make up a staggering 47 of total improper payment identified by the federal government last year. Misspending and fraud represents a significant threat to the 50 million beneficiaries who depend on its services, and also the programs financing. The trust fund has been in deficit since 2008. The medicare actuaries predict it will be fully depleted by 2026. The centers for medicare and Medicaid Services have the responsibility to combat the fraud from the outside organizations. To combat perpetrators who steal identities and falsify billing documents. There is a riskbased screening for providers and suppliers. In april of 2014, cms announced fingerprint based background checks will be provided. Moratoriums are placed on medicare providers and suppliers in the areas that are high risk for fraud. Cms has begun administering private Sector Technology to identify possible fraudulent claims for review. Cms also relies on four types of contractors to combat improper payments. These contractors such as the recovery audit contractors, review claims to overpayment and recover the misspent funds. Gao and others found these efforts sometimes overlap and the requirements are responding to audits are not uniform. This puts a greater burden on providers. The gao has recommended that improving consistency among contractors would improve efficiency of the medicare claims. Once the improper payments are identified, they will try to reclaim the overpayments. This third level of appeal is administered by 66 Administrative Law judges at hhss office of hearings and appeals. Theres currently a massive backlog of over 460,000 pending appeals for alj hearings. Due to this backlog, hhs stated it could currently take up to 28 moiths months for a hearing before an alj. Not many businesses can survive having their money held for 28 months while they wait to decide if theyre actually going to get reimbursed. Nancy griswald was asked to testify on this issue, but she was unable to appear. The Government Accountability office for hhs office of the Inspector General, and the director for the senator of integrity at cms. Well discuss how cms can address oversight. I look forward to your testimony. The American People deserve a government that protects their tax dollars and uses them wisely. We must do more to strengthen the integrity of Government Programs overall. But particularly medicare given the enormous size and scope. Clearly more needs to be done to improve the federal government efforts to recover 50 billion in overpayments and other improper payments. I hope todays hearing will provide the subcommittee with clarity about these areas. The process cannot drive up the cost of health care for seniors and reduce their options for care. I look forward to the conversation well have today. I recognize miss grisham for an Opening Statement. I agree with the chairman that reducing waste and fraud and abuse in the Medicare Program is critically important, not only to protect taxpayer funds, but as you just heard, its also incredibly important to protect the health of our nations seniors and disabled adult population. Weve got more than 10,000 seniors aging into the Medicare Program each day this year. It is now more important than ever that we ensure the integrity of the medicare funds and keep it alife for the generations of future americans. Im grateful to have mr. Ritchie here for the office of the Inspector General to talk about the oigs efforts to do exactly that. The oig in conjunction with the department of justice prosecutes some of the worst instances of Health Care Fraud. Providers billing for nonexistent beneficiaries or services that were never provided, and providers who order unnecessary or in fact harmful procedures. The Health Care Fraud and abuse program, a joint program under the direction of the attorney general, and the secretary of the hhs, is a model for interagency cooperation and coordination. In fis kalg year 2013, that program recovered a record 4. 3 billion in Health Care Fraud judgments and settlements. This is remarkable. I look forward to hearing from the assistant Inspector General about how this was achieved and what can be done to strengthen the Program Going forward. I also think its important to underscore what weve heard, that these bad actors represent a small fraction of all providers. The vast jors of providers are deeply dedicated to the care of their patients. And given the size and complexity of the Medicare Programs, overpayments are going to occur. And cms must be vigilant in detecting and recouping them. But wellmeaning providers are entitled to have their claims administered fairly, efficiently, and without undue delay so that they can focus on the core mission of providing care. I have some serious concerns that the Current System of postpayment audit is resulting in a significant burden on some providers, particularly smaller entities. Smaller providers, such as herbal or medical equipment, may not have the resources to in fact appeal overpayment determinations. The considerable backlog in medicare hearings and appeals only makes these matters worse, as these providers and suppliers do not have the luxury of waiting months for their appeals to be adjudicated. I also have concerns about how rac audits may affect beneficiaries. As a representative of new mexicos first district, care is always paramount in my mind. If a provider or a supplier is forced to cut back services or close its doors as a result of a rac audit, i think this is a loselose situation for everyone. Particularly as were working to build access to care, particularly Preventive Care for these populations. The cms recently announced that it will implement several changes to the rac program, which will be effective with the next rac Program Contract awards. I look forward to hearing from dr. Agrawal about the efforts to improve the oversight of the rac in particular. I hope that you will also address some of the issues we both raised, the chairman and i, regarding the burden on medicare providers, and with a particular focus on the smaller providers, or providers in rural and frontier states like mine. And the impact that that has directly on the beneficiaries, who are working to access those services. I also look forward to hearing from all the witnesses about what cms is doing to move away from the pay and chase model, to a more proactive model that identifies improper payments up front. Such a model would spare both providers and taxpayers from expending resources that could be much better spent on providing care. Which in the long run shores up medicare for future generations. With that, mr. Chairman, i yield back. An Opening Statement. Thank you, mr. Chairman, for holding this hearing. And thank you for continuing to highlight that we need to make sure that the american taxpayers money is well protected. This particular hearing is of importance to me, primarily because i have some constituents that have been caught up in this alj backlog. And as the Ranking Member just testified, it can be extremely difficult on Small Businesses. The request for a particular company in my district threatens to put them out of business. And yet all they want is a fair hearing. I shared this with the chairman, and shared some of my concerns about where we are. And in his Opening Statements he talked about the fact that we have a 28month backlog. Well, actually, its worse than that. If you look at the real number, that today if we hired, according to the budget request for cms, if we hired all the adjudicators, it would take close to ten years to work through this backlog. A million appeals. And if you look at the rate, and actually, the adjudicators have been improving their efficiencies. Theyve been Getting Better year after year. And yet what we do is we have a policy of where were saying, youre guilty until prove eninnocent. And were all against waste, fraud and abuse. But what we must make sure of is that we do it under the rule of law, and that we have laws that the guidelines that are there. There is a law right now that says that if we ask if a constituent asks for a hearing, the law says that they should have some kind of adjudication, and a decision within 90 days. And yet, even according to the website there for cms, were not even opening the mail for weeks and months, and months and months. So its not even being put in terms of on the docket where it can be assigned to a judge, for many, many months. Weve got to do better than this. And make sure that in this, we dont take those that are innocent and put them out of business. Now, i say that, because if our overturn rate was not that great, we wouldnt have a problem. But according to documents, many of these appeals are being overturned by the adjudicators. Over 50 of them are being overturned. So you have over 50 of the people who are innocent, who are having to wait years for a decision. And in that, we must do better, and we must find a better way to address this. So i look forward to hearing your testimony on all these things. And i thank you, mr. Chairman. Thank the gentleman for all his work and research that has gone into this hearing. Hes been a leader in this. Id be glad to be able to receive the testimony now of our three witnesses. Pursuant to committee rules, all witnesses are sworn in before they testify. So if you would please rise and raise your right hand. Do you solemnly swear or affirm the testimony youre about to give is the truth, the whole truth and nothing but the truth, so help you god . Let the record reflect all three witnesses answered in the affirmative. You may be seated. Kathleen king, thank you for being here. Dr. Agrawal is the director for the center for Program Integrity at cms. Mr. Brian ritchie is the acting deputy Inspector General at the office of Inspector General at hhs. Thank you all for being here. And thanks for your testimony today. Weve all received your written testimony. That will be a part of the permanent record. We would now be glad to receive your oral testimony as well. I would ask to limit it to five minutes. Youll see the clock in front of you. Miss king, you are first. Mr. Chairman, and members of the subcommittee, thank you for inviting me to talk about improver payments. Cms has made progress in implementing recommendations to reduce improper payments. I want to focus my remarks today on three areas. Provider enrollment, prepayment claims review, and postpayment claims review. With respect to provider enrollment, cms has implemented provisions of the Patient Protection in the Affordable Care act to strengthen the enrollment so the providers are prevented from enrolling in medicare and higher risk providers undergo more scrutiny before being permitted to enroll. Theres more moratoria on the certain types of providers, and has contracted for finger print based background checks for highrisk providers. However, cms has not completed certain actions, which would also be helpful in fighting fraud. It has not yet published regulations to require additional disclosures of information regarding actions previously taken against providers, such as payment suspensions, and it has not published regulations establishing the core element of compliance programs, or requirements for surety bonds for certain types of atrisk providers. With respect to review of claims for payment, medicare uses prepayment review to deny payment for claims that should not be paid. And postpayment review to recover improperly paid claims. Prepayment reviews are typically automated edits in claims Processing Systems that can prevent payment of improper claims. For example, some prepayment edits check to see whether the claim is still bild properly and that the procedure is enrolled in medicare. Other prepayment edits check to see if the service is covered by medicare. We found some weaknesses in the use of prepayment edits, and made a number of recommendations to cms. To promote implementations effective of edits regarding national policies, and to encourage more widespread use of local policies by contractors. Cms agreed with our recommendations, and has taken steps to imme meant most of them. Postpayment claims reviews may be automated, like prepayment reviews are complex. Which means that trained staff review medical documentation to determine whether the claim was properly. Cms uses four types of contractors to perform most postpayment reviews. We recently completed work that examined cmss requirements for these contractors, and found differences that can impede efficiency and effectiveness by increasing Administrative Burden on providers. For example, the minimum number of days contractors must give providers to respond to documentation of a service ranges from 30 to 75 days. We recommend that the cms make the requirement for these contractors more consistent, when it would not impede the efficiency of efforts to recover improper payments. Cms agreed with our recommendations, and is taking steps to implement them. We also have further work under way on the postpayment review contractors, to examine whether cms has strategies to coordinate their work, and whether these contractors comply with cmss requirements regarding communications with providers. Although the personal of claims subject to postpayment review is very small, less than 1 of all claims, the number of postpayment reviews has increased substantially in recent years. From 2011 to 2012, the number of these reviews increased from 1. 5 million to 2. 3 million. This is one factor contributing to a backlog and delays in resolving appeals by Administrative Law judges. We have been asked to examine the appeals process, including reasons for the increase, its effects on ben fishsaries, providers and contractors, and options to streamline the process. In conclusion, because medicare is such a large and complex program, it is vulnerable to improper payments and fraud and abu abuse. Given the level of improper payments in medicare, we asked cms to use all available authorities for preventing, identifying and recouping improper payment. This concludes my prepared remarks. Thank you. Thank you. Dr. Agrawal. Thank you. Chairman langford, Ranking Member and members of the subcommittee, thank you for the invitation to discuss the Program Integrity effort. Its a top priority for the administration and agencywide effort for cms. Were at the forefront of our integrity efforts. I view Program Integrity through the lens of my experience of an emergency medicine physician who fundamentally cares about the health of patients. Our Health Care System should offer the highest quality and most appropriate care possible to ensure the wealthiest of individuals and populations. Cms is committed by preventing recovering payments for wasteful abuses. Helping to extend the life of the trust fund. The importance of the efforts extend beyond dollars in Health Care Costs alone. It is fundamentally ensuring we have the resources to provide for their care. As part of our responsibility to taxpayers and beneficiariebenefs has an obligation to perform audits, medical review and use other oversight