Transcripts For CSPAN2 Medicare Fraud And Abuse 20140825

Africanamerican voters and also africanamerican candidates . Let me share with you, jesse holland, this is from a democrat, he worked for president bill clinton as a speechwriter and he says to t Voting Rights nationwide on heading on inattention by the American People, emboldened by the recent Supreme Court case limiting the reach of the Voting Rights act, they have worked weeklyo cut voting samed is not a paradox because often the africanamerican voters are those who cast their ballots early according to a number of studies. Guest that is a paradox. You would think someone is trying to recruit voters would want to make it as easy as possible those people to vote. Now, a lot of republican opportunists will tell you that even africanamericans are concerned about voter fraud and thats one of the issues that they tried to point at when you look at voter id law. However, one of the practical effect of voter id laws obviously is that make it makest harder for some people to vote. Now, one of the things that weve been looking at is whether this effort can boomerang. If someone sees you, if so i think youre trying to take away their power to vote, that may make it even, make them even more intent to make sure they vote. So some people say that these voter id efforts could actually boomerang and bring more people to the polls to exercise their rights than they would have otherwise. So thats one of the things will have to keep our eyes on when the Elections Come around in november. Host jesse holland, thanks to much for getting it early on a monday morning and adding your perspective to these issues. We appreciated. Guest thank you. Cspan to provide live coverage of u. S. Senate floor proceedings and key Public Policy event. Every weekend booktv now for 15 years the only Television Network devoted to nonfiction books and authors. Cspan to greater by the cable tv industry and brought you as a Public Service by your local cable or satellite provider. Watch us in hd, like us on facebook and follow was on twitter. Next, House Oversight and government reform subcommittee hearing on medicare oversight and management. According to the Government Accountability office, improper payments in the Medicare Program cost taxpayers almost 50 billion in 2013. Witnesses include officials from cms, the gao, and the department of health and Human Services. This is just over two hours and 20 minutes. The meeting will come to order. Without objection pictures offers did the recess of the committee at any time. We will take this all but out of order today as we walked to this. With some of the democratic members were on the we are but we begin with Opening Statements and they can catch up. The subcommittee hearing on health care entitlements. I like to begin by stating Oversight Mission statement. We exist to secure to from the principles. First american the right to know the money washington take someone is well spent. Americans deserve an efficient and effective government that works for them to our duty on oversight and Government Reform Committee to protect these rights. Are so responsibly still government a couple because taxpayers have right to know what they get from the government but we will work tirelessly in partnership with watchdogs to the facts American People and bring genuine reform to the federal bureaucracy. This is our mission. Medicare currently pays onefifth of all Health Care Services provided nationwide making it the largest single purchaser of health care in the country. Fortunately, every year the Medicare Program wastes enormous amount of money and overpayments, fraud and unnecessary tests and procedures. According to jail, in 2013, 50 billion was lost to improper payments, an increase of 5 million in 22 but medicare feeforservice care for 36 billion of the total. Gao has related medicare as a high risk since 1990. In part to the programs successfully to this ways which makes up the a staggering 40 some of total improper payments identified by the federal government last year. Wrote with significant threat not onto the 59 beneficiaries who determine its services but also the programs finances. At present the Medicare Trust fund has been in deficit since 2008. The medicare actuaries predict the fund will be fully depleted by 2026. Cms has responsibly demand in the Program Integrity of medicare. To combat fraud, seen as works in partnership with outside organizations like the Health Care Fraud prevention enforcement act which operates the Medicare Fraud strike force to combat perpetrators who often steal identity and also by billing documents. Been submitted to a riskbased screening to identify fraudulent medicare providers and suppliers. In april 2014 seamless announced fingerprintbased background checks will be conducted on highrisk providers. Temporary enrollment moratoriums have been placed on new medicare providers, suppliers interest at high risk for fraud. C s has begun administering riskbased private Sector Technology like Predictive Analytics identify possible fraudulent claims for review. Cms also relied on oversight of contractors to combat improper payments. These contractors such as recovery audit contractors, or racs, we declined to give a overpayments and recover misspent funds. Gao undoes have found these contractors effort sometimes overlap and requirements respond to audits are not uniform. This puts a greater burden on providers. Gao ezra committed to improving consistency among contractors would improve the efficiency of post payment reviews of medicare claims. Was improper payments identified cms may take steps to reclaim identified overpayments. Providers and beneficiaries are given opportunity to appeal the determination through a lengthy appeals process. This third level of appeal is a measure by 66 administered law judges and hhs office of medicare hearing and appeal. Theres a massive backlog of over 460,000 pending appeals for alj hearings. Digitus backlog, h. S. Can probably pick up to 28 months for a hearing before an alj during which providers have their money held by the government. Not many businesses can survive having their money held for 28 months while they wait to decide if they will actually get reimbursed. Nancy griswold will testify that she was unable to appear. We will follow through on the. Today with three witnesses. Kathleen king, director of health care at Government Accountability office. Brian ritchie. Brian ritchie, acting director Inspector General or evaluation of inspection hhs office of Inspector General. And shantanu agrawal, debbie of measure and director for the center for Program Integrity at the cms to discuss how seniors can put medicare oversight and Program Integrity. I look forward to the testimony. The American People deserve a government that protects their tax dollars and use them wisely. We must do more to strengthen integrity of Government Programs over all the particularly given its enormous size and scope. Clearly, more needs to be done to improve the federal governments efforts to recover 50 billion in overpayments and other improper payments. Todays hearing will provide subcommittee with clarity about these areas. The process cannot drive up the cost of health care for seniors and reduce the options for care. I look forward to the conversation well have today. With that i recognize Ranking Member grisham. Good morning. Thank you, chairman lankford, for holding the hearing. I agree with the chairman reducing waste and fraud and abuse in the Medicare Program is critically important not only to protect taxpayer funds that as you just heard, its also include important to protect the health of our nation seniors and disabled adult population. Weve got more than 10,000 seniors aging in the Medicare Program each day this year. It is now more important than ever that we ensure the integrity of medicare funds and keep the medicare promise alive for generations of future americans. Im grateful to have mr. Ritchie on the other Departments Office of Inspector General to speak about the oigs efforts to do exactly that. The oig in conjunction with the department of justice prosecute some of the worst instances of Health Care Fraud. Providers buildings were nonexistent beneficiaries or services that were never provided, and providers to order unnecessary or in fact harmful procedures. The Health Care Fraud and abuse control, a joint program under the direction of the attorney general and the secretary to health and Human Services department is a model for interagency cooperation and coordination. In fiscal year 2013 the hcfac program recovered a record for . 3 billion in Health Care Fraud judgments and settlements. This is remarkable and 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 we heard that these bad actors represent a small fraction of all providers. Investment go to a providers are not fraudsters under deeply dedicated to the care of their patients. Given the size and complexity, the theme of Medicare Programs, overpayments are going to occur. Cms must be vigilant in detecting and recouping them, but will many 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. And i have some serious concerns that the Current System of post payment audits by rac is resulting in a significant burden on some providers, particularly smaller entities. Smaller providers such as Durable Medical Equipment or dna suppliers have more difficulty complying with rac request for medical documentation and may not have the resources to, in fact, even appeal overpayment determination. A considerable backlog in the office of 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, the issue of access to care is always paramount in my mind. If a provider or supplier is forced to cut back services or close its doors as a result of iraq audit, i think this is a loselose situation for everyone, particularly as we are working to build access to care particularly Preventive Care for these populations. Cms recently announced it will increment several changes to the rac program which will be effective with the ram contract. I look forward to hearing dr. Agrawal about cms efforts to improve the oversight of iraq in particular. I hope that you also address some of the issues we both race, the chairman and i, regarding the burden on medicare providers and with particular focus on some of those smaller providers on providers in rural and frontier states like mine. And ly on the beneficiaries who are k forward to hearingo access th. From all of the witnesses about what cms is doing to move away from that day 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 of medicare for future generations. With that, md back. Mr. Meadows, 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 could be extended 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 that women are, and in his Opening Statement he talked about the fact that we have a 28 month backlog. Well actually its worse than that. If you look at the real numbers that today if we hired according to the budget request for cms, if we hired all the adjudicators, it would take close to 10 years to work through this backlog. Some million, a million appeals, and if you look at the rate, actually the adjudicators have been improving their efficiency. They have been Getting Better year after year, and yet we do is we have a policy of where we are saying youre guilty until proven innocent. Now, 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 guide, the guidelines that are there. There is a long right now that says that if we ask, if a constituent asks for a hearing, that the law says that they should have some kind of adjudication and a decision within 90 days. And yet even according to the website 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 could be assigned to a judge for many, many months. We have 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 reading your testimony on all these things, and i thank you, mr. Chairman. Thank the chairman for all of his work and his research that its gone into this hearing this day, and hes been a leader in this. Ill be glad to be able to receive the tests were now of our thre three witnesses. Pursuant to Committee Rules all witnesses are sworn in before they testify, so if you could please raise and rise in racial right hand. And raise your right hand. [witnesses were sworn in] thank you. Let the record reflect all three witnesses answered in the affirmative. Ms. Kathleen king is right for health care at interest is Government Accountability office. Thank you for being here. Dr. Agrawal is the deputy administrator after for the center for Program Integrity at the cms and mr. Vine which is acting deputy Inspector General for evaluation inspection at the office of Inspector General at hhs. Thank you all for being here. Thanks for testament to the. Weve all received a written test and. That would be part of the public record. We now would be able be glad to receive your oral testimony. You will see the clock in front of you. Ms. King, your first. Mr. Chairman, and members of the subcommittee, thank you for inviting me to talk about our work regarding medicare and proper payments. Cms has made progress in implementing our recommendations to reduce improper payments, but there are additional actions they can take. I want to focus my remarks today on three areas, provider enrollment, prepayment claims review, and post payment claims review. With respect to provider enrollment, cms has implement it provisions of the Patient Protection and Affordable Care act to strengthen the enrollment process so that potentially fraudulent providers are presented from enrolling in medicare, and highrisk providers undergo more scrutiny before being permitted to enroll. Cms has recently imposed moratorium on the enrollment of certain types of providers and fraud hotspots and is contracted for fingerprintbased background checks for highrisk providers. However, seanez has not completed certain actions to authorize in ppaca which 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 is not published regulations establishing the core element of compliance programs, or requirements for surety bonds for certain types of that risk providers. With respect to review of claims for payment, medicare uses prepayment for claims that should not be paid, and post payment review to recover improperly paid claims. Prepayment reviews are typically automated edits in claims Processing Systems that can prevent payment of an improper claims. For example, some prepayment edits check to see whether the claim is filled out properly and that the provider is enrolled in medicare. Other prepayment edits check to see whether 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 implementation of effective regarding National Policies and to encourage more widespread use of local policies by contractors. Cms agreed with our recommendations and has taken steps to implement most of them. Post payment claims reviews may be automated like prepayment reviews, or complex, which means that trained staff review medical documentation to determine whether the claim was proper. Cms users for types of contractors to perform most post payment reviews. We recently completed work that examines cms requirements for these contractors and found differences that cant impede efficiency and effectiveness by increasing Administrative Burden on providers. For example, the minimum days, number of days contractors must give providers to respond to a request for documentation of the service ranges from 3075 days. We recommend that seanez make the requirements 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 underway on the post payment review contractors to examine whether cms has strategies to coordinate their work, and whether these contractors comply with cms requirements regarding communications with providers. Although the percentage of claims subject to post payment review is very small, less than 1 of all claims, the number of post payment reviews has increased substantially in recent years. From 20112012 the number of these reviews increased 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 beneficiaries, 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 abuse. Given the level of improper payments in medicare, we urge cms to use all available authorities for preventing, identifying and recouping improper payments. This concludes my prepared remarks. Thank you. Thank you. Dr. Agrawal. Thank you. Chairman lankford, Ranking Member grisham, and members of the subcommittee. Thank you for the invitation to discuss the center for Medicare Services Program Integrity efforts. Program integrity as a top worry for the demonstration and an agencywide effort at seanez. We share the subcommittees commitment to protect beneficiaries and ensuring taxpayer dollars are spent on legitimate items and services. Both of which are at the forefront of our Program Integrity effort. Id Program Integrity through the lens of experience as an emergency medicine physician who fundamentally cares about health of patients. Our Health Care System should offer the highest quality and most appropriate care possible to ensure the well being of individuals and population. Cms is committed to protecting taxpayer dollars by preventing a recovering payments for wasteful abuses or fraudulent service. Helping to extend the life of the trust fund. The importance of Program Integrity efforts extend beyond dollars and Health Care Costs alone. It is fundamentally about protecting our beneficiaries. As part of our responsibility to taxpayers and beneficiaries to see that resources are used properly, cms has an obligation to perform audits, medical review and use other oversight tools as a part of these efforts. I would like to make three points today about the status of her efforts. First we are having real impact in reducing waste and abuse in front in the Medicare Program. Second we continue to work to reduce provider burdens on meeting our obligations to the trust fund and finally we continue to improve and innovate to meet our mission. On the first point we are seeing success from our efforts to detect ways, abuse and fraud. We save an additional 7. 5 billion over the last several years from heyman at its which prevent bad payments from the made in the first place. At the direction of congress the misuse of the recovery auditors to perform medical reviews to identify and correct medicare improper payments. Payments. Recovery auditors are returned over 7 billion to the Medicare Trust fund since the start of the National Program in 2010. Our antiproductivity some also had impact. Last year hcfac funny returned about 4 billion to the trust fund, resulting in an eight to one return on investment. We have revoked over 17,000 to activate over 260,000 providers and suppliers in the passage of the ford will correct. At the center we recognize these efforts can impose burdens on providers at seanez continues tries to give about a responsibility to protect the Medicare Trust fund with our desire to limit the burden of these efforts can play. To that end we use tools such as educational efforts, data transparency and significant contractor oversight to minimize burden wherever we can. We engage in continuous dialogue with provider communities to improve our program. As once supported the next round of recovery audit contracting, cms of making changes to the Program Based on feedback from stakeholders and we believe that we believe will result in a more effective and Efficient Program with improved accuracy and more program transparency. Weve also utilize other approaches such as prior authorization to reduce improper payments while granting more security and assurance as to the Provider Community. We will continue to listen to stay close to make improvements to our program. Third and we appreciate the committees interest in ensuring that cms is improving its Program Integrity efforts and know that the congress and the public expect real and tangible results. To that end we are looking to implement new authorities or improvements which can enhance our efforts and impact. In july 2013 seen us impose moratoria for the first time on the enrollment of certain types of new providers into graphic is which have been thrown to high amounts of fabric with a moratoria in place weve evoked the privileges of over 100 Home Health Agencies in the miami area and we wrote an additional 179 ambulance suppliers in texas. We are continue to work with Law Enforcement in these hotspot areas. Cms is using private sector tools and best practices to stop improper payments. Since june 2012 the Fraud Prevention system as applied advanced analytics on all medicare feeforservice claims, on streaming national base. In his first year they stop, prevent or identified over 100 million in improper payments including savings from taking out bad actors. We begun to use the common private sector to of prior authorization to address an area of hype improper payments to use a powered mobility devices. In 2012 seen us begin a demonstration in seven states to require prior authorization. This demonstration is resulted in a significant decrease in expenditures. Over 66 in the demonstration states and over 50 in the nondemonstration state. Support from the Provider Community has been significant, many of whom have requested that cms expand prior authorization to other parts of the country. While we know we have made progress to address areas of will and ability we also know more work remains to further refine our efforts and create prevent improper payments and for the other for to answering the subcommittees questions on how we can improve our commitment to protecting taxpayer and trust fund dollars also protecting beneficiaries. Thank you. Mr. Ritchie. Good morning, chairman lankford, Ranking Member grisham, and other distinguished members of the subcommittee. Thank you for the opportunity to discuss oigs work on medicare improper payments. Improper payments cost taxpayers and Medicare Beneficiaries about 50 billion a year. Recovery is lost on a preventing future improper payments is paramount. In short more action is needed from cms, its contractors and the department. Cms needs to ensure that medicare makes accurate, appropriate payments. When improper payments to occur, cms needs identify and recover those. They must also government safeguards to stop additional overpayments. Denaturalize on contractors for many of these vital functions. This means that ensuring effective contractor performance is essential. Finally, the medicare at kills estimates to to be fundamentally changed to ensure efficient, effective and fair outcomes for the program, its beneficiaries and providers. My written testimony elaborates on oigs work and recommendations in all these areas. This morning of focus on four key points to go to our work on these issues. First, cms must do a better job to ensure the payments are accurate. For simple cms needs to better protect medicare and beneficiaries from inappropriate prescribing and billing for drugs. This is both a safety issue and a financial issue. We found that part d paid millions for drugs prescribed by massage therapist, athletic trainers and others with no authority to prescribe. Cms is working towards and limiting several oig recommendations to tighten up monitoring, and billing for drugs. Second, when you might check your microphone. Is the still lit . Thanks. Second, improper payments occur cms needs to do four things. Identify, recover, assess and address. Cms contracts with recovery auditors, or racs conduct in the improper payments. In 2010 and 2011, rac audits resulted in more than 700 million in overpayments recovered. Cms also assess his iraq findings to understand why the overpayments occurred. It then must address these issues to prevent future improper payments. My third point is that cms needs that ensure that contractors perform effectively. Cms contractors pay claims, identify and recover overpayments and protect medicare from fraud and abuse. Oig is consistently raise concerns about contractor performance and oversight. Cms needs to assess performance more effectively and take action when contractors fail to meet standards. And filing the medicare appeals system needs to be fundamentally change. Even before the recent surge in appeals and subsequent backlogs, oig raise concerns about the Administrative Law judge, or alj level. Alj overturned prior level decisions more than half the time. Aljs also vary widely among themselves in decisionmaking. This happens partly because medicare policies are not clear. Oig recommends clarifying medicare policies and coordinating training on those policies at all levels of appeals. Administrative inefficiencies also contribute to the problem. Would recommend that paper files be standardized and make electronic. In closing more needs to be done to reduce and recover in improper payments, answer effective contractor performance, and to prove the appeals process. Oig is committed to find solutions reduce waste, protect beneficiaries and approve the program. Thank you for your time and i welcome your questions. Thank you all. We will go back and forth along the dice. Let me set some context during my time. If a provider will have something reviewed, lets talk of the process and set context for and going on this. Toback to Ranking Member grishams statement. So this is the post payment has occurred, how will someone find out that theyre going to be checked, expected, whatever it may be, post payment for any kind of claim . How will they be notified . They get a letter from a contractor. Okay, they get a letter from a contractor. That being with a rac on a contractor speaks it could be one of four tight. It could be amec, medicare administered contractor. It could be abroad, to be the sort contractor which pulls a sample of random claims to estimate the improper payment rate, or could be a zone Program Integrity contractors looking specifically for potential fraud. Lets back it. Lets take a specific physical therapy clinic or standalone privately owned, seeing patients picture of Insurance Private pay and then also medicare. So you were saying that one physical therapy clinic could receive a request to pull the file from any one of those four are those for our unique, for different entities . They could receive a request from any one of the four. Is it possible that all four of them will make requests during the course of a year to pull the file . Not supposed to have a. Is a possible . Theoretically, but highly unlikely. So how are they notified event if one of them does it come or go to the good in the court of your, or could three . You are saying all for unlikely. The racs are not supposed to duplicate reviews that are been done by other contractors. Can the same provider or to the same taste . The same case. A duplicate claim is considered to be the same file for the same service. Code a provider get a review from all four of those different folks, Different Cases, but the provider itself get reviews from four different groups of people from medicare . Is possible but unlikely. What about from to put those are three of those . You are saying for is unlikely. Is it possible to get two of them . Yes. For example, they might get a review from a rac at it may also get a review from a search who is estimating the improper payment plan spent when rac contacts them, how many files are they pulling at the point . One or a sampling . They are pulling one, i believe. You know, over all the racs get over a million reviews. Correct. But when they are reviewing for a provider their polling for that service. Go back to her physical therapy clinic as well. They are not going to region and just randomly grab one case, i the . They are going to grab a sampling of cases to be able to reduce . No, i dont believe so. How do they select which patient file to you . In the case of rac, cms tells the racs what kind of issues they can look at. They Work Together with cms and cms approves the type of issues that racs are going to investigate. They make the request of a certain type of client that is there. They are not just pulling one patient, are they, from that type . In april 10, the maple 20. How many . I believe became the claims are investigate on an individual basis. The provider when they get notification. Yes. They will get notification of a claim, investigation of a claim. [inaudible] im sorry, correction. That could be more than one but there is a limit on the number. What is that limit . Does anybody else know the number on that . How many other trying to put one time for rac audit . Take a bit of a step back because i agree there are numerous contractors that can audit a single provided at each contractors, they are set instead you are supposed to do the job theyre doing. Assert contractors on these differ from the rocket contractor. The cert contractors for kids to go in there and determine the improper payment rate. Its not privately look at the provider. It has to do the medical record audit to determine whether not an improper payment has occurred. Its a function to evaluate our services. So while i agree that numerous contractors content providers would also do try to courtney not touching the same claim for not touching the same providers too often. In answer to your last question, we have set limits for rocket contractor so that they can tie to provide and request a specific simply based on the size of the provider themselves. How large of a sampling . A hypothetical couple might be a smaller provider that sends and say 10,000 times a year. Rac would be permitted to obtain no more than 2025 claims at a time, and no more free goalie that i believe every 45 days. So they could come in every 45 days and pull 2025, correct, different files and say were not going to pay these into we get a chance to check them, correct . Not direct . I think it conceivably thats correct, but again we do provide oversight to ensure that we are not burdening individual providers or individual entities during the course of these processes. Ive exceeded my time. Will come back to that. I want to build on it was time. I do want to come back to that statement that we are not burdening providers. I can provide you several in my digit that could beg to differ. We are also advocates to make sure that we dont lose providers that our seniors still have access to multiple fighters out there that arent providers who say this is not worth it and drop out. I wont take me to any more because it is so burdensome. Weve got to build do that. Thank you, mr. Chair been. And im going to do a couple of things, someone i dont run out of time. I want to follow up on a couple of things that chairman lankford said. That balance is really tricky, and given that this committee could he wants to focus on waste and fraud and abuse, even if the Medicare Program and every other Health Care Program was flush, and that wasnt, being deficient in worrying about having Services Available for a growing population. Our job is to make sure that every tax dollar is being used the way it was intended. We want that actors and bad providers barred from the system, and all of us. No question about that. We also recognize that you have to do a due process system and we appreciate that. The due process is escorted broken because if youre waiting years and without payment, having payment removed, thats not due process and i would agree that we have created a very burdensome administrative environment. Its not just a federal touch is for the Medicare Program, although that is a federally operated. Remember that most of these programs take medicare, medicaid. They are serving dual eligibles. Theyre being touched, reviewed, audited, regulated by states and some states with a whole different varieties of private entities. So these small, sometimes small providers in incredible amount of time being administratively reviewed, and these recovery audits given that there is a contingency fee where they are being incentivized to identify issues and problems. This creates the environment for what i think we have today, which is weve now with the office of medicare hearings and appeals, weve recently announced that were going to suspend the ability of providers to have their appeals heard by Administrative Law judges. The decision was made as a result of a massive backlog of appeals awaiting in alj hearing, which by the medicare hearings and appeals own admission has grown from 92000 over 460,000 in just two years. Dr. Agrawal, i understand that the office of medicare hearings and appeals is not part of cms. However, i also understand that your office oversees these contractors, including the racs, whose audits are the cause of many if not most of these appeals. Given the long waiting time for getting andy pilgrim wouldnt be prudent for cms to suspend rac products and tell the claims backlog is cleared . I want you to touch, dr. Agrawal, on the fact that there are other ways to make sure that we are preventing fraud more than just the rac audits. Sure. Thank you. So i would start by just agreeing with you that this is a real challenge and Program Integrity to make sure that were doing our job, protecting the trust fund and at the same time doing as much as we can to lower the burden on providers and make sure that there are no access to care issues for our beneficiaries. That is a top prior to, something i said in my Opening Statement. I think its also important to level that a little bit on the amount of burden that we are placing on the system to our activities. As pointed out by ms. King, we audit far less than 1 of the claims that we receive. With respect to rac in particular, there are clearly appeals that occur from rac audits but the overall rate of appeals from overdetermination, im sorry, the overturn rate from all of the overdetermination is about 7 . Thats in the latest publicly available data if you look at just appeals that are initiated after an overpayment determination by a rac, the overpayment rate is about 14 out of all appeals that are generated. So i do think the appeals process is important for providers. It allows them an opportunity to represent their claim, to represent their interests, to provide an important check and balance on our approach. As far as the third level of appeal that involves the alj, as you pointed out that is not directly under our control. We have been working with the department to devise strategies for the backlog. What is directly under our control on the first two levels, levels of appeal and i can say that both the overturn rate is not substantial high in those areas, and the appeals are being heard in a timely fashion. There are other numerous other kind of strategies that weve taken to try to decrease the appeals. I want to afford your times im happy to go into them if you would like. I just want, and i appreciate that, except that i would certainly make the statement, and you heard this theme i think that this hearing, we have providers who would differ with you about these Administrative Burdens and whether 14 is reasonable in terms of what they can manage in terms of cash flow for the patients and staff, and i would also say that many of the smaller providers couldnt afford to appeal. So im not sure if this data is really relevant, and what strategies have you undertaken to identify how many providers certainly company, those providers who would love to appeal because they believe that theyve been wronged or theres been an administrative error but dont have the ability to do it. Also i would say fear, intimidation and retaliation, and just pay, or do whatever it is theyre asked to do at the next level. And im way over time so if you could respond to that and then i will, back. Sure. In addition to the appeals, there are other controls that we have implemented over our contractors. We to determine what areas racs can look at. They have to achieve sort of get permission from cms before the entry into any particular audit area. That is a type of oversight. We have an independent Foundation Contractor that looks behind the racs themselves to evaluate whether or not they are making these determinations accurately. And all of the racs have to that Foundation Contractor received over 90 accuracy rate. I think the incentive structure itself and some devices getting it right. Racs to get paid on a contingency basis as you pointed out, but if they lose on appeal they lose the contingency fee. I think that is an enormous incentive to make sure theyre making the right determination in the first place. Let me correct one factual issue. I said it was 40 overturn rate over all. That is in part a in a lot of our issues. Mr. Chairman, if i can, so the answer is, however, we dont know how many providers are unable to appeal and theres no test to determine, i mean, you have one side of the equation and im sure thats an accurate representation as a result. I appreciate that youre looking at these tests and i were you back, mr. Chairman, but id like to explore that further. Before i yield, let me make one quick statement to dr. Agrawal as well. You mentioned the incentive for racs to bill to limit that because they lose their contingency fee if they lose on appeal. The problem with that is a fishing illustration. Let me give you an oklahoma illustration. If youre fishing you can put one out in the water or you can put firefox in the water. Unit only catch one fish but youre going to catch more more often. If a rac decide that going to try to grab 20 Different Cases and the help they went 10 of them. Thats better than just grabbing 10 of them. If its close go ahead and grab that file and keep moving further and we may win it, we may not when it. Thats helpful to the rac in the contingency fee. Thats not helpful to the provided who has to go through the process and we can talk about that. While you were on the frame of thought, do you have any differentiation in your facts in regard to small providers, large providers in terms of overturn rich . I dont think the data differentiates in terms of the appeals of david. Im not aware of data that differentiates between small and large but i think the point i made earlier is that we do have different requirements of contractors when they look to audit a smaller provider versus a large one. There is different medical records request requirements to make sure again to try to limit the burden that is being placed especially on smaller providers. I represent rural arizona, and so i would like to see some type of movement to try to make that accountable. When you said and overturn rate with part a, what about part b . You know, i am actually not aware of, i dont have the figure in front of me. We can connect with the office if its okay to get you a part the overturn rate. I think thats important because most of those part b aspects our action is occasions and not providers. Would you agree . I think the part let me just make sure i heard you correct. I believe the party claims are the ones that tend to be more institutional, the hospitals, and in the part b claims can tend to be individual providers or groups of providers. Ms. King, from your oversight aspect, do you see may be a change that you would recommend for methodology instead of, you know, looking at a provider as being guilty in an aspect, kind of atmosphere like that . Do you see a better way of handling this . I dont actually think that the post payment review starts off with the provider is guilty but i think its not a criminal matter. Its a matter of either an overpayment or an underpayment. And i do think that cms has responsibility, stewards of the trust fund to make sure that claims are paid properly. As part of that i think they need to do as much as they cant effectively on the prepayment side, but i also think that they need to look at the post payment site. That being said, we have found some instances in which the requirements are posing Administrative Burdens on providers and we recommended that cms reduce not the requirements, but the differences across contractors so that providers have a better understanding of what they are required to do. From the standpoint, that process, dr. Agrawal, is there a way that we could actually identify maybe frequent fliers . Do we have a frequent flier list . On me, state boards kind of do this. We are kind of replicating something that state boards do. Well, i think we take a different approach. So, you know, the spectrum of Program Integrity is long, and there are folks on one side that are totally legitimate providers that are trying to abide by the rules that are honest and the other passengers of providers. On the other side, a much smaller subset are potential criminals or people that are perhaps trying to rob the program. So we do take, you know, i would argue that the various approaches that we have two overseeing the Program Integrity issues do try to take into account with a wrist really lies. Anything part of why we can take an audit base or postpaid approach for the past winter to provide good because they are legitimate and an audit is a reasonable approach for them. We do take a much more kind of risk based approach on the frontside that really can ratchet up the intensity of how we look at a provider base and find some auto. I think its appropriate for providers that are pushing the line, potentially committing criminal activities. We try to come on the other side of the house, to take a much more factbased approach. We look at issues that a big National Issues with windows our improper payments, ma and then will do deeper analyses to determine which provider to look at. It tends to be focused on were our improper payments are occurring. It is inserted to ratcheting on a single provider. But wouldnt it be more efficient in the cards to looking at, having some type of a profiling aspect . In state boards, i mean, you have a list, most of your problems are with 10 of the population. Right. I think the comparison to state boards, i would remind to the state boards are often given with most difficult of cases. Theyre the ones on the right side of the house where, you know, user providers that are committing potentially criminal or negligent activity. They are dealing with probably the worst actress. Again we do do that with a similar set of factors. But i think we were looking at perhaps, and again to try to decrease the potential burden for these audits is not ratcheting up but perhaps looking at solutions that might ratchet down. So as providers get audited and it turns out that the claims are substantiated, that there are not a lot of haters. We could perhaps audit them less. That solution were looking into. Thank you, mr. Chairman. Followup. When . Thats where the recommendations that covers out there. How does someone prove basically im a good actor and i dont get ssome and possibly coming in to check on . A number of solution were looking at. Somebody pointed out earlier rac program is currently in a poll state where were working on the next round of procurement. As part of that activity we are looking at the statement of work taking into account a lot of opinions and input weve gotten stakeholders including providers and are trying to solution iraqs can still do the job, meet our obligations but try to decrease the burden. Thats one of many we are considering. Let me come back. When speak was i couldnt promise you an exact date. Is a something providers can think about for next year . Two years, 10 years from now . Well, i think we are working on the procurement now and we hope to complete it this summer and in the next few months. So i think it remains to be seen if thats a change they can be pursued in the nearterm or potentially that change is still under discussion. Thats not a definite, thats, ive got a good actor there as doctor kosar mentioned. Its one of Many Solutions were looking at. Again, weve heard a lot of input from the Provider Community and were trying to take action. Will come back to that. Thank you very much, mr. Chairman. Listening this morning, it gets a little frustrating when we are up here because it seems like despite the fact that will come from different communities, and are sharing very clear examples of why the approach thats being taken isnt working, we continue to get pushback, and basically reiterating the same points without any clear determination of when things will improve. And on behalf of the constituents i represent in nevada, medicare is finally important to the court of law. Im talking about the beneficiaries here. And when someone who is medicare eligible cant see an ob gyn in my community because there are no providers who will accept them because of issues ranging from the reimbursement rate to the delay in being paid for services rendered, the other compliance issues. It makes me want to know what can we do now in the short term to be able to move this forward. You know, medicare is a bedrock of our programs. People rely on these services. We have providers who, about a third or more of their patients, are typically medicare covered, and as my colleague, ms. Lujan grisham explained, it also typically includes medicaid or other paid sources as well. So when you layer that burden on the provider, its tough to provide services. Thats what we are hearing. So after speaking to several stakeholders in nevada, particularly hospitals and medical providers, all around the las vegas the holy, and i also include some of the Rural Counties in nevada, which are woefully underserved by in of providers, the accountability of the Recovery Audit Contractor Program seems questionable at best. And i dont understand how you continue something that doesnt even come hasnt even been properly evaluated. While these programs have a noteworthy nation of seeking out improper payments of Medicare Services, it seems there are potentially perverse incentives to these racs. In 2010, rac program was expanded to all 50 states and made permanent. Again, i dont know how you start something, dont evaluate it and then expanded to 50 states, first of all. And this committee to address the concerns that racs are not, no pun intended, dramatically racking up the number of claims backlog . I think, first the, weve offered recommendations both in the rac area and in the appeals area. I think it is important while theyre so intertwined to consider those separate and some ways too. The rac work, what were talking about is before the current backlog. We are seeing things relevant in the rac work. We saw in 2010 and 2011 that, they were helping, as i mentioned in my testimony. We need to make appropriate payments and appropriate payments are made they need to be recovered. Only, they have did recover 1. 3 billion in 2011 and 6 of them are appealed. When there is appeal, very high overturn rate. Clearly something need to be done. I would report to our alj work as the recommendations i push for the most. For the system to really work and backlog is, we think the biggest recommendation is medicare policies are not clear. I think, you know all fraud is certainly improper payments but all improper payments are not fraud. Most of these providers are not committing fraud. They dont understand a complex system. They try to submit claims that are complicated. We saw alj work, 60 of the aljs were overturned and lot was due to different interpretations of the policies, Different Things they were doing there so our are there a set of recommendations dealing with the medicare policies. Yeah. Our recommendations, in our recommendations because theyre are some, it is, mainly to clarify, select the policies that need to be clarified. Clarify those and educate people in the policies to create less overpayments and less appease in the process. For instance in my written testimony i talk about our home health work, we found with the recent facetoface requirement, if a physician is certifying that youre he will babble for home health they have to have a facetoface encounter. We found 3 billion improper payments in 11 and 12 and a third of claims didnt meet the requirement. We dont think a third of the claims are fraudulent. They are complex policies. As people get more used to them they will probably go down. To educate people on policies and make them more clear is the key to keeping the appeals backlog lower. My time is up for this round. So i will come back to additional questions. Chairman of the full committee, mr. Issa. Thank you, mr. Chairman. Thank you for holding this important hearing. The gentleman from nevada and i dont always agree but every once in a while there is nuance of agreement from this extreme to that extreme of the dais, this this is one where i think the ebb entire committee is frustrated and chairman lankfords work on this, in addition to enc really shows how bad things are, and let me give you two questions and well go into comments. Dr. Agrawal, let me ask you, and for the ig, mr. Richie. They owe us billions in payments. What have you done to get 15 billion in fact while youre sending out hoards of people to harass doctors with a less than stellar success rate. Of success and accuracy in the audits . What have you done to get back from a state that knowingly billed far greater than the rate and it is 15 billion . It is 10 years worth of your recovery. Any answers . So that is an area that we are looking at now. Youre looking at it . 15 billion youre looking at it . At request of the committee we have, we are currently taking on an evaluation of the new york state are. Were waiting to get findings and release the results after which time i think we can have a conversation how to proceed. Newspapers make it abundantly aware the numbers speak for itself, because theyre hard numbers of what was sent out versus the maximum allowed in law and youre looking at it more than a year later . Sir, i think these evaluations do take time. They are rigorous. Theyre designed to be rigorous. Oh, they do . Do you know how many doctors have had to stop their practices and answer nothing but questions because you take their money, and then they try to get it back, isnt that correct . I wouldnt characterize it as stopping their practices no, im telling you doctors in some cases have to stop their practices because audits for small practitioners are incredible detail. They dont get their money back until they prove their innocence through the process. Let me go through this again. You have the right to stop payments in new york state based on good faith belief they got over 15 billion. They can spend, liege shuns of time trying to argue they should keep far more than they were supposed to receive, couldnt you . I would have to look into whether or not we have that or the, sir. Why dont you look into, doctor. While youre look into it, pursuant to congressional action under the Small Business jobs act, you owe enc and subsequently we get a copy of it, your report a second year report on Predictive Modeling, dont you . Yes, we do. And you voted since october . I believe, i believe the report is actually been due since earlier this year but, i take your point. No, you dont take my point. We just did away with a whole bunch of reports by congressional action, ran it through the house. It is over, senate may have already acted on it because we do ask for reports we dont always need. But they didnt just ask for this report. Which ordered executive branch to deliver it. It is extremely important because the kind of things that the gentleman from nevada were talking about, auditors going out, half you know what, being wrong. On appeal often being dramatically overturned even to zero dollars in some cases after physicians and clinics go through a great process. That much of that, would go away if your Predictive Modeling looked for fraud where it was, most likely occur. Mr. Ritchie, are you concerned that chase manhattan can see your credit card, perhaps being misused and calls you but the organization that youre auditing has no such capability . That definitely a concern. I mean we do think that the Fraud Prevention system has taken steps and shows promise. I know, tying into the other question with our rac work, one of the things that cms does when they look at the rac audits, they identify vulnerabilities and cumulative issues over 500,000 and address vulnerabilities and assess them. One of our recommendation was to, once they identify and recover, the pates you need to set up safeguards to prevent them from occurring in the future so you dont have this problem. As the ig looked into excess payments requested by and given to the state of new york for the, that this Committee Earlier had, as to whether or not any criminal charges could be brought . Im not aware of that, i dont believe we have looked at criminal charges. I do know we have but they knowingly overcharged more than the maximum in they cross funded that payment to other services not even covered by cms in many cases. So the question is, is it worth taking a look to see whether or not the threat of criminal just might get new york to return 15 billion in excess payments, 10 times what your audits that were talking about here today in part are revealing . Personally, yes, i think it is worth it. Im not the enforcement person but my office in audi, weve done a whole series of audits in new york we shared with the committee and i can go back to the office and talk to our investigators about this and our counsel and look into it. Well, mr. Chair, i appreciate you giving me a little extra time. I will say that im deeply concerned that reports, required by congress that ultimately are necessary in order to improve the system are clearly done but are being held back so they can be, sort of looked at again and ben. This is the politicking of releases. And i would only suggest to the chairman that, we have the authority to compel the work documents if we need to, if that report doesnt come in timely fashion from here on. I yield back. Dr. Agrawal, before i yield this was a pending question from the chairman, when . Will that report come . We know it is months late. When . So, as you know the Small Business jobs act requires us not only to produce a report but have results certified by oig. When . We are in the process of, working with the oig to achieve that certification. That is taking some time. I hope to release it as soon as we can. That doesnt answer a when, does isnt. I can not give you specific time frame right now. Can you give me is it a week or a decade . It is less than a decade, sir. Great, how much less . What i can this is report all of us want. It matters to all of us because what were all dealing with providers trying to shift us where we all want to go. When . Is it a month . Is it two months . This is simple question from the chairman, when . I can not give you a specific date however i think what is important for the committee and for you know, the American People and public transparency we not only release a report but that we release it with certification from the ig so that people can trust the numbers and base their decisions upon a certified report. I think the importance of that is clear. So we are working to achieving that. Mr. Chairman . Mr. Chairman . Only because the doctor did say public transparency. Public transparency would release all the work documents show reason for the delay, the discussion, the political correspondence, the loop to the white house that occurs on each of these reports. I rather doubt well get that transparency. Want to have that. Mr. Chairman, would you yield . I would yield. Doctor, it is Pretty Simple question. If it is not, cant give us precise date, is it three months . Is it six months . And what is holding it up . As i mentioned, you know, again, we have working closely with the office of Inspector General, as required in the law, to try to achieve certification for this report. I think the importance of that is very clear. So that people can not only get a report but trust the numbers in the report. You know, were not stupid up here. We understand when people are trying not to answer a question. So if you would, be kind enough to answer the question. Is it three months away . Is it six months away . And what is holding it up . I can not give you a specific date. The reason i can not because its a process is, work, worked in collaboration between cms and office of Inspector General. You can give us a precise date . Maybe ask someone else but we expect to know. We have the right to know. If there is a problem holding it up we have a right to know what is holding it up. It isnt holding up the report, congresswoman. Do you have a draft report . Agreed to by various parties makes it available to be released . Again i think just answer that question. Answer the question. We are working is the draft complete . There is a draft report that is, that utilizes the methodology to arrive at savings numbers that the office of Inspector General is reviewing or is in the process of reviewing. We hope to be able to release that report in the next month or two. I can not be more specific than that. Because that is helpful. A lot better than earlier. Miss duckworth. Thank you, mr. Chairman. I would like to follow up a little bit on what the chairman of the full committee, mr. Issa, was talking about, these rac audits. I agree that combating medicare, waste and fraud is critical goal. In fact there are studies that show as much as 50 billion are wasted each year due to fraud, waste and abuse in both medicare and medicaid and we know to go after. That it is also clear to me, wellintentioned efforts of cms to accomplish the goal are not working and in badly need of reform. I want to talk aboutistic specifically, how the rac audits affect the orthotic and prosthetic industry. I heard from providers, many Small Businesses, how theyre being targeted by overzealous and misdirected audits that interest threatening to put them out of business. Theyre waiting years and carry hundred of thousands of dollars on the book theyre not getting paid for and these businesses simply can not survive. Taken collectively the stain on the industry, undermines access to Critical Services for patients that suffer limb loss or limb impairment. Often times these businesses are only providers of at not ticks and protest sticks in their area. They can not get access and go without the limbs and medical equipment they need for their lives. The volume of audits led to huge backlog in appeal for providers who feel they are wrongly denied payment for very legitimate services. Im particularly concerned that cms chosen to deal with the backlog but suspending two years the ability of providers to appeal decisions at the Administrative Law judge level. With alj siding fully with providers in over half of all decisions and context of increasingly aggressive cms audits, it is simply unacceptable to deal with a problem by denying the providers due process. Theyre continuing the audits. Youre taking these peoples money not paying them and saying now, you have no right of appeal. You will have to wait over two years. That is not the way businesses works and drive these hardworking americans, Small Business owners out of business and youre going to leave all of their, all of their patients out there without limbs and equipment they need to in order to live their lives. At the public hearing on this issue the chief Administrative Law judge, griswold, gave an explanation of how the office of medicare hearings and appeals of their position but really offered no shortterm remedies that would restore the right of a timely due process to providers f youre going to suspend the hearing by two years, then suspend the rac audits for two years. Give them their money back and collect it two years later. Seems blatantly unfair and unamerican to take these folks money and not give them the right to due process. Mr. Ing a grawe walled, does cms have any plans to restore the fairness to the system for our providers. To clarify at outset, third level of appeals, administrate stiff law judge level is outside cms it is overseen by omaha. We have oversight over first two levels of appeal. Any overdetermination by a mac, rac or other contractor providers are afforded opportunity to use that appeals process as part of their oversight of us to make sure that the audits are being conducted appropriately and right determinations are being arrived at. What is backlog at first two levels . How long are they waiting to get into the appeal process and getting resolved. At first two levels, second of which is independent level of appeal or oversight, the oig is published a report that shows that there is no substantial backlog at the first two levels of appeal. The backlog issues arrives later. On average we are within the time frames that are required of us. I would say, you know, in addition with respect to the orthotics and prosthetics issue you brought up earlier this is clearly an important area and if there are, you know, issues of access to care, with respect to specific beneficiaries or companies im happy to work with you on that. That would, that is a priority for us. So excellent. I will have orthotics and prosthetics industry come in and sit down and talk with you. What youre telling me, the third level of Appeals Holding things up and suspended for two years the right to due process. Even though this is being caused by the rac audits that cms is continuing to conduct, it is not your fault, it is someone elses fault but youre still going to shove more people into the system who now have no access to . I mean it is kind of convenient dont you think youre pushing people into the system with aggressive rac audits, but on the other hand youre saying it is not our fault they cant get through the third level . What are you doing to work with Administrative Law judges to fix the delay in the appeals process. Sure, so weve taken a number of approaches to insure that number one, the ad ditz are being conducted appropriately. Wherever we can to help address appeals issues. We are actively working with omaha on their backlog and trying to arrive at their solutions in conjunction with them. I think on the front end where we have more direct oversight and authority, we implemented certain strategies to insure that the audits are being conducted correctly, that theyre being achieved with high accuracy. Just one example in the rac program, we do have a validation contractor that looks behind the races to make sure the races are following cms requirements. Cms payment rules, cms guidelines and all of the races achieved well above 90 accuracy rate of their findings. I think that goes a long way to insuring rac activities are being monitored. While monitors will provide opportunity and should have opportunity to appeal we want to make the initial determination is accurate. I dont think it is accurate when over 50 appealed overturned on appealed. Illim out of time, mr. Chairman. There is statement by the american or not ticker and prosthetic association. Entered into the record without objection. I want to follow up on that, because youre acting like you have nothing to do with this backlog. I think that sun fair characterization, do you not agree . You have nothing to do with the backlog . I think, you know, clearly providers would not have a lot to appeal if we didnt enforce our rules and deny certain payments. Lets, lets look at this. The Inspector Generals report. And they said that the overturn rate at the appellate level is, is anywhere between 50, depending how you read it, between 56 to 76 , according to the oig. And so, those dont get to that adjudication level without you doing something, isnt that correct . We, we, clearly do a, we have a number of steps. You have to review them first before they get here . If they get overturned between 56 to 76 of the time according to this oig report in 2010 . Not only do you agree with that. No, sir. Not only so you do have part of the reason why we have a backlog because it is on the front end . Youre just denying claims and denying claims. Ive talked to physicians. Ive talked to hospitals. I have talked to health care providers. And you know what they say . The first fair hearing they get is at the Administrative Law side of things. Then what happens is, you guys are just denying them and youre saying it is tough. You have to pay it. And wait for your turn in the queue to get the hearing. Do you think that is fair. I dont think that is correct characterization. Okay. Let me ask you another question. This is comes from the hhs. Gov website. Yall changed that within the last 30 days. It has been changed. And what this says is, that the average processing time for appeals are decided in 356 days. Would you agree with that . For fiscal year 2014. Talking about the third level of appeal or the alj level i couldnt comment on their data. This is your site, fiscal year, 2014, the average appeals time is 356 days. Would you agree with that, for fiscal year 2014. I think if that is what the data shows that is clearly what it shows, i think our numbers how would we know that . Fiscal year 2014 hasnt even ended yet. It doesnt end until september 30th. How would you know this . Sir, im not exactly sure what data youre looking at on your site. We can give you a copy of it. Somebody in your office knows because you have changed it within 30 days. What you are saying they were not being assigned for 28, and i will give you, 28 months. They werent, assigned. That has been changed. Who changed it . I think all of the issues that youre describing, if, hopefully this is accurate, is that they are really the third level of appeal or alj levels sort of issues. What i stated earlier we have oversight of first two level of appeals and we are abiding by timelines required in those appeals. Let me tell you, moms and dads back home, they could care less about internal divisions. They see it as all part of cms see it one as the same. See it as the government. Here we are for the budget request that weve got, that says the backlog is going to reach one million. At what point does it become a crisis . At what point . When does it become a crisis . When do you start putting companies out of business because you already are . What does it become a crisis that youre willing to do something about . This is your document. One million backlog by the end of this year. So is that a crisis . Well, sir if there are individual companies that are being put out of business by these audits we do have flexibility and how you but dont. I already called on behalf of some of my constituents. That would be a great response but it is not true. You know what . Ive dealt with jonathan blum. I called to make sure that Kathleen Sebelius knew about it. I called the white house. And you know what . You say too bad. So what do i tell the moms and dads who are going to lose their job because they do not get a fair hearing . What do we tell them . We, sir, we are able to do what were authorized to do. Whether it is alternative payment arrangement or Something Else working with provider we have you have five years for alternative payment arrangement. I know this stuff. Ive been studying last six months, five years. So if the backlog is 10 years, what do they do, what do they do . They just pay it . Because right now, at a million people, at a million appeals, your rate, the best rate that weve had from the adjudicatetores is 79,000 a year. Even with your budget increase, that would still be a 10year delay. Thats a taking in my book. Would you wait for 10 years for your salary . Yes or no . We do whatever were authorize to the do working with providers to try to make the burden system less burdensome. We can not overstepped authority granted to us from congress. Something changed, something changed. Because you know what . The audits went from 1500 aweek, to 15,000 a week. So what did you change . Because i mean it is in your documents. I will be glad to give you that too. Worse than that, they said it went from 1200 and change a week to 15,000 appeals a week. What did you change. I think it is important level said on this it is our obligation to audit. We had improper payments you heard about from other witnesses and heard about from the rest of the committee. It is our obligation to go after improper payments and reduce the rate and make recoveries where possible or where they should be made. That is obligation created in law. Of also level set on amount of auditing that we do, we audit far less than 1 of all claims we receive. All of overpayment determinations made by races in the latest available data to the public, account for one days claims. My time expire. The law says they need a decision in 90 days. Is that law being violated and who makes choice what laws we enforce and when laws weeing for . The law says 90 days. I can not comment on the processes that are outside of the jurisdiction of cms. This is in your jurisdiction. No, sir, that is omaha. No, this actually talks about qualified independent contractors which is under yours. And then the alj is after that. 90 days after that. Great. So as far as the second level of appeal at the qualified independent contractor level, there is recent reporting from the oig that shows we are remaining on track as far as expectations of how long it takes to, you know, go through that appeal. Jonathan blum said you changed something in 2012. What did you change . Sir, i was not part of that conversation. Do you know of any changes that happened in im out of time. I yield back. I apologize, mr. Chairman. Come back around in a second round. Like to unanimous consent to have Ranking Members spiers statement into the record. Mr. Chairman, thank you. I apologize for my late arrival. We had a Memorial Service at the, at Arlington Cemetery for servicewomen and i felt compelled to be there. So i apologize for not being here for your Opening Statements let me say at the outset, i have had local hospitals that have gotten embroiled in the rac situation. I have a hospital that is teetering on bankruptcy right now. And, the rac experience has exacerbated it. But i also think it is really important for those of us who sit on this committee to recognize that we have obligation more than beating on those that come before us. If we want to fix the backlog, we have to pay for it. There is a backlog because in 2007, rac claims amounted to 20,000. Today that number is 192,000 a year. That is 10 times what it was in 2007 and we have not added one Single Person to respond to those claims. So, if we want to deal with this backlog, if we want to erase it, weve got to recognize that you can not expect people to do 10 times the work with the same number of work hours. Now, let me start with mr. Ritchie, if i could. Youve had a pretty remarkable run in terms of the efforts by the Health Care Fraud and Abuse Program which resulted in 4. 3 billion in recoveries to the treasury in 2013. That represents an 8 to 1 return. Is that the highest level of recovery to date, mr. Ritchie . Yes, that is. And how was that achieved . Well, we partner with, with our other partners in enforcement in the program to fight fraud, waste and abuse through investigation, through audits, through the valuations that weve done evaluations, the recoveries reported in fiscal 13 were record recoveries. I think in your testimony you referenced that sequestration will result in 20 reduction in oig and medicare and medicaid oversight capabilities, is that correct . Unfortunately, yes. What does that mean in terms of what youre going to do and what were going to see in terms of waste, fraud and abuse being properly handled . For our office, its, i mean it is not good. It means less investigations, less audits. Less valuations. Im not a budget expert. I live this every day. I work in the audit office and acting in charge of valuation office. Between 2012 and 2014, medicare outlays went up 20 , at the same time our office had to reduce our focus on medicare and medicaid by 20 . It is challenging we have 50 billiondollar improper payment, 10 error rate, means less auditors, investigators, evaluatetors on the ground to handle this. Ive been working in ig 27 years, i tell you personally i never quite felt as challenged looking ahead to see what the growing programs and growing responsibility, how we go about doing this. Should we just roll out a fred carpet for the fraudsters in this country. I would certainly hope not. In our office we try to do Risk Assessment to pick the best topics. We certainly, we make our budget requests and for us personally, i mean the best thing that could happen to be fully fund the budget request to get us back on target. Definitely decreased. Weve gone down by 200 ftes, fulltime employees over that time. You know, weve had to stop valuations and audits. We had to stop following up on investigation leads. So, is it safe to say because of the reduction, there are investigations that havent moved forward that probably would have resulted in savings to the taxpayers of this country . Yeah. Absolutely. I mean, investigations and audits both that we have to make tough choices every day for what we start and what we cant start. It has been a very difficult time and sort of looking at this. I think youre making tough choices with things that look very good. You do a Risk Assessment feel like there is so much to look at. You have so many resources and resources are declining. We had a hiring freeze two years. People left through buyouts. Weve been consistently reducing. Give us example of the kind of case that you had to let drop by the wayside. I mean do you drop cases that are just so big that it would take so many resources, so are the big fraudsters getting away with it more than the little fraudsters . Im not, in our evaluation offices i do know that the Investigation Office told me they closed 2200 investigative complaints since 2012. I think it is a mix. We try to do the best Risk Assessment we can and put resources on biggest cases. Certainly we cant afford to do all of those. Our strike force activity has been a big success. In our strike force cities weve had reduction in our resources. It has been across the board in every aspect of igs enforcement. My time expired. I will follow up with a second round. Mr. Chaffetz. I thank the chairman. Miss king, i appreciate that gao report you put out. I want to go to the First Complete page. The latter half of it, i will read to catch it up for example, cms hired contractors to determine whether providers and suppliers have valid licenses, meet certain medicare standards and are at legitimate locations. Cms contracted for fingerprint based criminal history checks as suppliers and providers identified as highrisk. However cms have not implemented screening actions authorized by the Affordable Care act to further strengthen provider enrollment. Can you enlighten me where you dont think they have considered other actions to strengthen implementation . One i think is related to surety bond. Establishing regulation regarding surety bonds for certain types of providers. One not publishingregulations against providers and payment suspensions. So, doctor, why not do that . I think these are great ideas. When we have appreciated agency, working with gao ferreting out where our vulnerabilities and weaknesses are trying to do something about them. There is nothing conceptually wrong with these recommendations. We continue to have conversations. We have to prioritize wait a minute. Were trying to get rid of waste, fraud and abuse authorized by the law, why havent you done it . Absolutely. It isnt, i think, a disagreement over the objectives. We have done a lot in the last couple of years to really, you know, beef up our approach to provider enrollment and screening. Some of the stuff like fingerprinting is just coming online now. There are just bandwidth limited stations what we can get to and how quickly based on resources and budgets. Is there prioritized list or summary you could share with the committee so we understand what you are right advertising, what youre doing, what youre not doing . I think youre clearly seeing some priorities occurring. Where do i find that . Where do i, is that something you can provide the committee . I dont know we have a list, happy to have further conversation. Create ad list . Were trying to get exposure, some transparency youre say youre in favor of what youre doing or not doing. Gao at the front is saying youre not doing all that you could do. Im sure you have to make some choices. I want to understand i have prioritized and is that fair, to put that on a piece of paper and put that in congress . Useful to get insights and gao on you. Want me to write your agency, i will run it for you. Gao making recommendations, authorized by the law to do these things. I want to see what youre doing, not doing. Not looking for the 200 page report. Looking for a summary to understand what youre implementing and what youre not have to have some sort of document . I dent expect to spend five minutes if you had a prioritized list what youre working on. Is that something you can or can not provide to congress. Sure well work with your office to provide it. What is reasonable time to get that document . You come up with the date. Can you give me a few weeks to do it . Sure. Pick a date. How about a month. Get back to your office within the month. End of june, how is that. Perfect. Thank you very much. One of the things that im working on worried about these providers. Are we engaging and allowing people to have serious delinquent tax debt to be enchanged in this process. This is big governmentwide problem i see. That we have contractors out there who have serious delinquent tax debt. We hand them new additional contracts and allow them to continue to be involved and engaged. I would, and i dont expect you right off the top of your head to understand the answer to that question but that is Something Else that i personally and i think committee would benefit from understanding. What are the policies that you have there . What are, it should be a key indicator to me, if youre unable to pay your federal taxes why are we continuing to contract and give you more and more business . The president has been support of this when he was president senator obama. This is bipartisan thing. The committee dealt with that. The answer may be we dont do anything with that, i would just like to know with the answer to that question. Can we also shoot end of june you give me that information . Is that fair . I think that is fair. Just do comment a little bit, we have all kinds of information we conceivably collect from providers. I think the question often we have is what information can we collect actionable for us. There are clear bright lines in the program. If you dont have the right license to practice medicine, in the state which you want to enroll, you dont get to enroll in that state. There are certain other types of disqualifiers, like certain felony convictions. So i think, conceptually makes a lot of sense to include as much Risk Assessment data and analysis as one could to look at providers. We have to, there is really just a subset of those potential risks that push us over the line and allow us to take action. If provider end up on exclusion list or do not im worried about the contractors youre engaging that are supposed to ride herd on this and engage with these people, those are some of the specific i would like to see as well. Im not just talking about the providers as i am the contractors that youre contracting with in order to make these things happen. Thank you, chairman. Yield back. Thank you. Second round for questioning. During this questioning time there is full interaction from the dais. There is no clock running. If you have interaction. For our witnesses if you have specific things you want to get into the conversation youre free to initiate topics of conversation as well to make sure youre clear. Our goal of this this is to make sure we have all the areas to be resolved and timeline on resolution. Youre free to bring up issues as well. I want to reaffirm. Take first crack at a few things. I want to reaffirm, this panel, myself included how do we deal with fraud. There are 50 billion in unaccounted for money, possible overpayments in fraud. We affirm were pursuing that fraud. That is the taxpayer dollar and it is essential both for solvency of the program longterm and for the taxpayer themselves. So, continue to do that. I think the frustration is, the prepayment side of this, we all know that the is direction it should go. So were not having to chase. That is why we want to know the report, we want to know what is happening at this point, how we get ahead in days ahead so were not constantly going back to good providers to say well hold some of your dollars. Maybe providers may have 2, 3, 4 profit rate and for them to have a a portion of their cases pulled and not paid for for an indefinite period of time as they go through the appeals process is untenable to them. I want you to hear from me and from us. Were not opposed to going after fraud. As have been executed there are have been changes in the rac audit process as cms learned its way through this were proposing additional changes to this, saying what can we do to help expedite this process and make sure when it is right. Overturn the appeals and get money faster with fewer people engaged. Let me run through a couple of these things again. Weve gone through the revalidation process s that complete at this point for providers nationwide, revalidated providers and i know weve done fingerprinting, background, reenroll. Is that complete at this point, what stage is that in. So the revalidation process that was initiated after the aca puts us on a fiveyear cycle. I believe latest number, we have revalidated over 770,000 providers at this point. That puts us on track to be complete in team for time for the first cycle. Two more years left of that is what youre saying . I think that is about right, if im remembering correctly. Prepayment pursuit of fraud, we have a report that is due to us obviously. Weve discussed that. Coming next couple months to give us details and progress on that. We move into post payment. Any comments on prepayment side . Clearly the Affordable Care act did provide as you lot of authorities to make changes on the prepayment front such as payment suspensions wee were able to leverage against the worst actors. I think only point i would make, congressman, to differentiate what we do, after going after potentially fraudsters and criminals, worst actors, from those providers, vast majority, perhaps producing waste or inefficiency in medicare, not quite following our rules but have intention to follow our rules, trying to actually do their best. I would ask us to keep this framework in mind because i think is sort of determines for us what tools we utilize so that theyre not overly pejorative. Payment suspension for example, is a great tool for worst actors. Though it is prepayment it is not a great tool for legitimate actors, because it essentially suspends all payments they are getting. Do the same thing. Hammer down in the area. Even for the highrisk areas where there is moratorium . Some of those areas may have a deficiency of number of Good Companies that are actually providing. As we can see, more people entering into medicare, there is need for providers. So even when a moratorium occurs on that, that is pretty incredible hammer for that region to say lots of Small Businesses wont start up during that time period that could be legitimate providers. It is, i agree with you, sir. Its a notable piece of authority that we implemented with a lot of care over time. So it took us years from having authority to go through the aca to actually implementing it tore the first time. I would first say areas we tried to address as geographies and Ambulance Services, areas we knew there was a lot of market saturation, there is very little concern, though looking at it continuously about access to care issues. You know, home health and Ambulance Services in texas and south florida are areas of a lost agreement with the office of Inspector General, the department of justice, within cms, with state medicate agencies, that there is just a lot of market saturation for, three to five times the number of providers than on average. Areas while access to care, clearly something we care about, and we are, looking at in real time to make sure the moratorium does not have negative impact on access were currently not seeing it in those areas. I dont want to open this and take all the time on it. Four appeals that are total, get a timeline for everyone the length of time. You said theyre on schedule. Talk about appeal number one. Someone has a problem. The rac audit, appeal number one is to who and how long does that take . Sir, so i believe the first level of appeals, providers have 120 days to file the appeal. Then there is 60day time limit for the decision to be achieved on appeal. File it right away. Talk about your end of it. Their responsibility is their responsibility. So you have 60 days to respond, correct. Correct. Who is that that is responding . Theyre appealing to who . I believe in almost all cases mac, administrative contractor that would handle the first level. The rac folks make a decision and the mac folks make response on appeal, is that correct . Correct. So there are 60 days to respond. Youre saying that is on time . Yes. They disagree with that they come back in the second level. Who is that, how long does it take . The second level goes to qualified administrate contractor, the qic. They have 120 days to file appeal, provider and we have 60 days to file on the appeal. That is on time as well. I have average times below the 60 days correct. 53, 54 days for most appeals. Do you have the overturn rate on both of those . It would depend on the specific audit. Is there a particular audit that youre referring to . Either one. The first or second level. Rac audits, sir. Rac audits. I have to look, sir. While im looking overall overturn rate for the rac audits, parts a and b, 6 or 7 . That is latest data that is public alj process. Were trying to get cumulative number. Yet to see cumulative number . No, i believe, i believe the 6, 7 numbers are all the way through that are ever overturned. Im trying to figure that out. Latest numbers on aljs are 56 and 70 some odd overturned discuss in that level . Correct. If i could perhaps explain it a bit. The races make determinations i think latest public data is. 6, roughly. 6 million claims were found to have 1. 6 million claims were found to claim some overpayment. for per se. Emperor p. . 3 . All right. And for the secondlevel appeal . At the secondlevel for part a is 14 . So 15 basically. And then perv be part b . I dont have the called out. I have just the percentage that make it to the secondlevel, but i dont have the overturned rate. We can get back to you. The that is unknown. After that they been six days in the first one come effect one come a second one and then they disagree with that as well. And now we are headed to the 79, which could take years to get to that spot. Weve heard 28 months in 20 months its ambitious space on the number of people that typically been handled. You said over and over again its not your responsibility. We will visit with the aljs on this. The fourth level is what . They disagree with aljs and then what . There is another level they can go to which is i think a Federal District court level. Im sorry, the the departmental pills board and then after that the district level. Said that his fifth level . Yes. Thank you. I wanted to get the context for everyone. I guess my question is lets look at part b only. What is the overturned rate for that . Which would include some of the other stuff. I got a report here from your office on april 2nd 2014 bits as the overturned rate is about 52 . Is that correct . Is the report correct for their off this . Would be about 52 for dme overturned rate . It depends what level you are looking at. If you look at all dme claims, it is about 7. 5 of all overpayment determinations. We are talking about on the appellate part. Said those hearings and appeals says the overturned rate is 52 is either fully favorable or partially favorable. 24. 87 was unfavorable. And so with that he would indicate the overturned rate is much higher than what you would indicate. Theres a calculated overture and rated each level. So what ive communicated about the first two levels just gives you the overturned rate for those levels. Im trying to figure out how to serve reports a 52 of what you just testified . Where is the difference . Generally as you go at the various levels of appeals, providers make a decision at each level about whether they will appeal to the next level. With the general trends. The number of claims appealed at each level does tend to drop any overpayment the overturned rate can increase. So at the third level appeal at the alj model, the overturned rate i can agree with what is under piece of paper that he probably does a perch 50 for dme. A lower levels of appeals, give it more claims appealed if you are decided in the providers favor, the overturned rate is much lower. That makes sense. Thought of the 1 million backlog at your budget request talked about, how many of those which you anticipate based on this radar going to be overturned under the 1 million backlog appeals going to alj . Thats an individual case to case. Is on historical evidence, how many would be overturned . 520,000. Based on these numbers. Would that not be correct based on those numbers . Okay. So let me ask you another question. Is the American Hospital association, they have rac facts, per rac track, 30 of hospital denials are appealed. 40 of these appeals are overturned. Is that incorrect . I cant speak to their data, sir. Retract the data very closely internally. Our numbers would not agree with that. If you look at the first level is appealed for par day, we see a 5 appeal rate that makes it the first level. Mr. Ritchie, if i could interject, there is a problem here. Why is it if youve got enough money to go to the third appeal with the alj, if you can hold out that long come if youre not a single provider, if youre a big hospital, a few holdout, go to the alj come you got 60 to 70 chance of winning, why wouldnt everyone just go to that appeal process if they can afford it . The question i have is why the discrepancy . What do you know about the alj system that allows for such huge settings in the determination . What we looked at again was prior to the backlog, but its still relevant. We looked at the aljs and found a 6 over rate. This is 2010 data. For the prior bubble that qualified independent contractor, theres a 20 overturned rate. The big difference we saw come i mentioned earlier the unclear policy that are triggered to a lot of days at aljs level, they interpret them less strictly than the prior level because they are confusing, complex policies and open to different interpretations. The other thing is the quick levels more specialized. The specific people looking up our day, only the king of part b in commissions review is not, were at the company do a hard day, per b and rely on documentation testimony to make their decision. The process is different. Weve also seen a case files are different. Its more of an administrative thing that thinks they maintain are different from level to level a amnesty create some of the inefficiencies. Her example, the alj model is still on paper so it has everything electronic. They have to send it to the alj. They will also get the records from sorting those two out. Some of our recommendations are definitely too clarified medicare policies but also creates one system that is electronic. If i understand you correctly at the quick level, they are specialized to know precisely what theyre looking for and they make the determination because they are trained to look for certain things i guess. I guess thats part of what youre saying. Correct. We didnt make a judgment of bush level of his battle. Weve seen that clinicians looking on it and they are specific if an appeal comes than appeal comes in specific twopart b, whereas alj they have and marroquin missions. And they are using discretion in terms of interpreting the law. In terms of interpreting a lot and relying on the physician testimony and evidence where is the quick level they would lie on their own clinicians to interpret the documentation. Go ahead. At the congresswoman will yield. It speaks to the larger issues. I want to get back at the overturned rate spirit are retargeting correctly and what can we do to improve the system so we are not harming the providers, which means the beneficiaries going after fraudulently full behavior. Medicare is an incredibly complex system and the reality is if we dont start dealing up from the medicare complexity, if we can chase this all day long from one extreme to the other, we are going to find significant flaws in our ability, the whole provide providers accountable to do a better job. But we havent done in this conversation and im as concerned about anyone else about getting it wrong and overpayment. Im also concerned your party providers, youre part of b providers, even the hotspots with the dme providers, that they cannot afford to go through this process. In that regard, your data is skewed for one group and im not trying to vilify one group over another, but hospitals, large hospitals and groups can afford to wait a decade potentially. Smaller hospitals congressmen speier has identified, cannot. Am i to get back to a couple things and then yelled at. Can you give us some recommendation. Utah about to predict is modeling. He said we are identifying prescription practices that are clearly problematic. Is there a way to be targeting those areas and is there a way to start targeting areas where we have got real issues because cms has a responsibility to assure access. We are only doing one side. We are eliminating potential access. No response about that. Im sorry, could you correct recommendations for what . A couple. First is you identified in your testimony areas youve identified that we can start looking that much more direct ways. We can do predict is modeling in terms of where folks commonly make mistakes and where weve got potential fraud and you identified in that discussion, i dont know if there was tied to the Predictive Modeling per se, but youve identified prescription practices that are clearly problematic. He said i think youve got folks who are not prescribers as an example, prescribing medications for beneficiaries. Why are we focused more in those areas and then i wanted dr. Dr. Agrawal or someone else come if you are doing hotspots for fraud, what are you doing to short mistakes that we dont does providers that provide better education and support and creating low accessories for interior to ensure you dont does providers . Inks for clarifying. We make this type of recommendations all the time. We have a series of reports of which ive referred to in a testimony finding questionable prescribers, questionable questionable pharmacies and Home Health Agencies and all those cases we take the once weve identified that are extreme outliers based on statistical tests and get tests and guitar Investigations Office to see if they want to pursue because after that we send them to cms and cms will share with their contractors to take appropriate action and we always recommend they take the questionable criteria we have been implemented and other prevention system starting to build some of that name. Specific to the example mentioned in the testimony and you mention not prescribers we saw 5 million by people without authority and therapists and things. Just yesterday, it was late last night that i got it, but cms actually issued or published a final rule that requires prescribers apart he drugs to admiral of the medicare feeforservice programs starting next june, june 2015 to allow cms the plants in the Medicare Program contract yours to verify that they actually have the authority to prescribe because now and massage therapist isnt the medicare but they can write the prescription for drugs that we found that were pretty severe. So that problem will be fixed based on this rule. So we are working with cms to give recommendations implemented but its a combination of things like that in implementing the base is to try to stop future improper payment. I think what we are interested in and im taking too long, but you get the information to the committee so we know when so we can weigh in on how you balance the issues that the chairman doesnt mind, can i get something on the access . What are you doing to assure small providers arent discriminated because of the size of the provider and the capacity of the provider and have you thought about treating them differently like we have cheered regulatory environments. What is your thought about making sure accesses protected . Again, appreciate the question. Thats an extremely important area for us. As far is tearing providers, we currently do to your providers by. We actually have medical record request limit for the contractors based on the size of the provider. Ive also mentioned earlier is sort of future solution where we would ratchet down the number of reviews a particular provider would face if the reviews are generally in their favor. In other words following the rules. We are putting the solution into our procurement process right now so it will be part of the rac going forward. In addition to that, would you take a fair overpayment determination, we have a process for the provider to work with us and change the payment rate in order to meet requirements of the law, but to afford them a longer opportunity so we dont put providers out of business unnecessarily. I would also say on the front and we are undertaking a lot of efforts to better educate providers about our specific event policies. You know, the dma facetoface with a Home Health Agency facetoface requirement is a good example of that would be improper payment is high because of this requirement, providers need product to speed and we are trying to do specific audits that look at the issue in order to educate the home Health Agents descended related prescribing providers. We also have more general educational materials providers can take advantage of. We try to be transparent on the front end about what audits for your conduct team. When senior audit areas approved by cms that we put the information on a website that providers can look at both big and small to shore up their own audits and make sure compliance programs are working to be prepared for audits in those areas. We hope all this helps to make the process roping. And if it doesnt . What you do to assure access . Right. Part of it as we have an open door policy so we want here but the shortcomings of the programs if there is an access issue. You dont think providers via michael be somewhat concerned about the open door policy particularly the concept of audits in your efforts for fraud waste and abuse because when i was the secretary of health and secretary of aging, and i appreciate that my dad. We are here to help you. By golly, no one believes that. So i didnt really find not to be an environment that is very forgot is, particularly when someone came to us and they were fraudulent and we did our job. That certainly precludes that kind of relationship. Can you please collect data for us to be gone already and provided to the committee so that i can see, we can see the percentage of small providers engaged in a level of these appeals versus large providers . Yeah, we can do that and it would helpful to record a definition for a small provider we can focus on. The last thing i can say and im trying the patience of this committee and i am sure our witnesses, but again, this committee wants you to fair out fraud and stop the stack errors and move those to criminal prosecutions and prevent the folks from ever being able to engage in any of our Health Care Systems or government contract never again. We also want ways addressed. I am getting very concerned about that access issue and this is completely invalid. I would like you to consider and mitigate that by telling us what the risks are about changing the withholding of payments for the third level of appeals taken into consideration of a new definition potentially or refined definition for small providers and to entertain not, come back and write about what that would look like. Thank you, mr. Chairman. Dr. Agrawal, this is a passion based on a number of people back in my district that potentially will lose their jobs and i for one up for you, i believe you want them to lose your jobs because where the system broken and the chairman called this hearing. It was a hearing about making sure that those who steal from seniors because that is what this is about as fraud. Those who steal from seniors get caught. Then the process, there arent a lot of potentially innocent people getting caught up in the dragnet that we have to find a better system. To do that, i would ask you submit to this committee if you would to legislative changes. If you are a stain your hands are tied, what are the legislative changes he would support and recommend for this committee to perhaps have the chairman introduced where we can fixate to make sure we do go after waste product abuse, but those that are innocent dont have to wait forever to get that innocent burbach unit and in the meantime, potentially go out of business. I yield back to the chairman. I think his patience and foresight in having this particular hearing. Let me ask a couple questions to follow up and it goes back to what mr. Met is the same as well. Good actors we want to keep. Our senior. Our seniors get to know in my neighborhood, community, tom, there is a good actor that is fair. We have all talked to folks, i am sure you are aware as well on several areas. Last week and a gentleman came to talk to me the bonnet to tell me about the last year of his life because he was in medical equipment provider, wes. He has not been put out of business. He was a good guy. He was willing to meet the price that was out there make publicly available the competitive eating process but was not allowed to join into that because as this group as well in the competitive did was put out if you didnt get the bid, you are out. And not just how come you cant join him even at the new low price. You are just out of business. He is one of those that came to me and said i want to tell you about the last year of my life when my Family Business went out of business and close down the company and laid off employees, what that looked like. I have individual providers that come to me and say i have a group of files grabbed, not been paid for that are going through the appeals process and in fighting my way through that and as i way through that, id another group of files of his grabbed a nonfighting through those and im in a different time. And im not making payroll. I understand scene is 1 or 2 of the files. If they start getting 60, 90 days later and they still havent resolved the previous one, they are not going to make payroll, the smaller companies. These are very real issues. We want medicare providers to be here. We want seniors to have access. We want individual health care folks to know if you take your seniors bills will be paid. That certainty is disappearing at this point and that is a bad formula for where we are fighters are now comes six years from now. Thats why the urgency is extremely important that we get ahead of fraud rather than chasing it because when we chase it, we are also hurting companies that are the good actors that are trying to do it right. We are all for shutting down bad actors and aggressively going after that. Was it good actors in a mistake, air and have difficulty making payroll on it, we are losing the good guys and thats a nice going hurt us longterm. So let me shift a little bit. With the rac, dr. Agrawal cover you and i talked about this. The incentive that there is a question that this is going to get lost in a deal for them to not pull back. I love how you youve probably heard the term as well hospitals and providers of the rac audit bounty hunters. They come in and go through stuff until they find something because they get paid based on what they find. So the incentive is not to sit down and say you made a mistake on this. Let me show you how to do this different. The incentive is i got you and im going to get paid. That is a bad relationship forming between our government and the people we are supposed to serve. Now weve got a setup environment for the incentive is for them not to work with someone to work this out, but to punitively pulled the file. That solo different set of relationships they are. The question is how do we get back to the incentive with the rac folks to be helpful rather than punitive but so go after fraud. Serafin mei, the other contractors to do postpavement reviews, they are not paid on the incentive basis. They are paid on the basis of cost under contract. The payment for the rac were established by law. So if you are concerned about the incentives, something to consider. I think that is a very helpful point. I would also say, you know, we do provide let me make two points. One is we do provide oversight to the rac. It might be on a fishing expedition are making judgments just to receive the incentive payment is not accurate because we do do the validation work he hired them to make sure their accuracy rate is very high. Is there an incentive to be helpful while they are there, to teach someone how to do this better or is the incentive to pull it . To incentives work. One is they are incentivized to provide under payments to providers. They get the same contingency fee if they return money to a provider to reserve as if they make an overpayment determination. That is just one. Who admitted a priority for auditors to use education as a tool. So when deficiencies are identified, they cant communicate those to providers and hopefully providers can write by the deficiency going forward. Are they paid for the education . The rac are not pay for that, but the contractors to work closely with providers about their regions to teach them about medicare policy and payment requirements. We us to utilize the results of those mac and rac were prograndson specific policy issues for necessary and make changes to processes. So that is a priority for the agency. We try to use. We tried uco. We try to use the outcomes to alter interactions with providers. So what is the incentive . I think what rac has been able to do is take care as we know have high improper payments again differentiating improper payments not necessarily designed to go after fraud. Those are other contractors and other areas of work. What we passed them to do is focus on high improper payments to make recoveries were appropriate. Along the way they identify Educational Needs or clarity deficiencies we can address either through other contractors or directly. Mr. Norton. Thank you very much. Chairman, thank you for this hearing. Perhaps because medicare is necessarily costly program, we do the best we can to provide maximum care for the elderly when they are ill. There is particular concern when there are reports and they are always quite sensational once theres fraud or particular pieces of the program. I know the Affordable Health care at jade cms gave at least expanded authority studio is fraud. I would be interested in hearing how you deal with those at higher risk and how you deal with them when they apply when it applies to providers and suppliers who are newly enrolling and those who want to revalidate their participation in the program. Chair, thank you for the question. As a result of the Affordable Care act, we been required to implement a whole new approach to provider enrollment and screen that takes into account the risk level of that category of provider. Higher risk categories and Home Health Agencies are subject to greater scrutiny. That scrutiny can include for everybody like ads certain data or analytical work to make sure that providers of all types have the right licensure for the ability to crack this in their provider category. Higher levels of scrutiny include background check, fingerprinting most recently. As a result of those that todays had the gun fingerprinting before . We just bought it online. We procure that contractor last month. All of the providers are high risk . The high risk providers will be subject to the fingerprinting requirement. As a result of those that committees through the revalidation processes the over 17,000 providers in the aca deactivated an additional 204 or what kinds of abuses or fraud . All manner of activities where they do not be required. Lack of appropriate licensure would result in revocation. Criminal background checks would result in revocation. Failed to disclose information required in the medicare application or to report that accurately. So these providers are criminal . The actions we take are governed by authorities we have. Revocation allows us to remove providers for the lead up to max another three years years based on the infringement. Beyond that come along for his men as exclusion authorities that lasts for longer and is more widespread in its impact. We do work with Law Enforcement utilizes out. Has you had occasion to refer a number of these to the u. S. Attorney or other long for his lives . As comeau actively work on referrals, but even prior. So weve given Law Enforcement and unprecedented access to cms data and rail access to our system, the family utilizing our analytical work and asked cases develop im aware regular connection about cases they may be interested in them ultimately to make formal referrals they can choose to accept. We also work on the entire investigational process. As they deem necessary to provide Additional Data or any assistance we can. Im interested in this temporary moratorium. This is apparently a new authority under the aca for new medicare providers. What would evoke that and how it worked quite sure, since the aca, we have implemented to agencies of the moratoria against Home Health Agencies are newly enrolling Home Health Agencies and ambulance suppliers in a few different geographies across the country. Before implementing it, was a big step because it is a notably important piece of authority we were granted. Before implementing, we worked closely with Law Enforcement to look at the right geographies and provider types. We work with medicaid agencies and across the agency to ensure we are going after the right areas and also not having are potentially have a deleterious effect on access to care. We ultimately chose the provider types for market saturated by these provider types. Roughly 3 to 5 higher market saturation and Home Health Agencies and ambulance suppliers than the average geography across the country. So far the moratoria have been in place for the first days in july of last year, second base in january. We continue to monitor cost issues as well as access to care and we have not noted any access issues thus far. I would say the moratorium has been a useful tool. Lawenforcement finds it is a positive programs are a positive program senator providers century geography and back areas can meanwhile be rooted out. Just as examples of work we have done, we have revoked over 100 Home Health Agencies in miami although. More than half of those during the moratoria. At 170 revocations of ambulance suppliers. Had you keep it from being affected reticular live at the large number in one location . Right, that is absolutely a priority of ours. We started choosing areas that were very saturated to begin with. These are not areas for Home Health Services for Ambulance Services were threatened in any way. Even at pak agree both of these provider types as well as geographies were appropriate to go after. Since implementing nonammonia stayed in Constant Contact with the societies that oversee these areas. We work with state medicaid agencies, cms regional offices they receive complaints from providers or beneficiaries to monitor access to care issues. As i stated earlier, we have not identified this issue so far. Finally, ms. King, have you had occasions that the new authorities to look at their effectiveness and implementation . We have not. We evaluate the enrollment process just as the new authorities for going online, but we have not been back to look at a guy. But we concur that the front end strategy on the enrollment side that making sure the right providers are enrolled in the ones at risk for being fraudulent are prevented from enrollment is a very effective strategy. Thank you area much. Just a friend through some quick questions. The end is near. I want to confirm again the percent of patient files pulled for a rac audit. Ub is the 1 number. Is that 1 or less . 1 is not just the rac audits. Its the postpavement audits. Physical therapy, hospitals, labs, whatever it maybe is 1 or less . Yes. Okay. The aggregate numbers less than 1 . For each category, are there categories considered more high risk in that category . I dont know the answer to that. I can answer the claim question, but in terms of prioritization, we clearly focused on high payment rate areas. I think that is a requirement of the contract or is though of the program that we focus on areas where the improper payment rate is much higher than in other areas so you would expect to see greater portion of odd is this a Durable Medical Equipment or Home Health Agency services because those are where a lot of the improper payments thats what im trying to figure out. Is it higher than 1 . You can look into this, but i believe most of the rac audits are focused on part a side, even though the rate of improper payments is higher in medical equipment and home health providers. The actual dollar amount are higher. Part a will be larger than it is going to be in part b, so i would understand that. But it may be lurched down. Sophie go back to the physical therapy claim, if your number patients they are it may be they just have 2 of their files pulled that it would be to a hospital or general overhead. You mentioned as well to adapt your thinness. The possibility and i heard a lot of variances to put in the maybe its possible. We are looking at statements in africa that is better out there. Once theyve gone through, proved it to do well, they didnt have a lot of inaccuracies, resort on the process of a are coming just fast, again coming to an entity set up to do compliance now more than to take care of people. Where are we on that process . Sure, one solution proposed is to lower the volume of medical record requests that go to a provider than in previous request has actually had a low denial or overpayment determination way. That is a good idea. Weve heard from a number of sources and we are implementing the approach in the next round of rac providers that have done well and show they are following the rules will face fewer audits of our vibes going forward. The lowest frequency of oddest of grabbing a smaller number of files when they come . They are coming just as often come and maybe doing half of one or sent rather than 1 were they coming every two years as they are in the building less often . I have to confirm. The volume per audit will be decreased, but i have to conclude. You both are important. They are trying to run a business and a business and if they prove to be good at your of frequency matters to them. Obviously the volume being withheld makes a big difference for that making payroll. But its also extremely to focus on the business and not every 60 days, 90 days have to stop and do another one of these is a party proven they are doing well and following the rules. I would recommend you go to examine frequency and numbers. Has there been a study to look at the compliance cost for the providers . Around 700 million has been recovered. Is that correct quite yes. To rebut the compliance cost is quite thats my knowledge. Most of the regulations promulgated heaven Compliance Costs for the promulgation of the rule to go through based on the number of requirements. The question is do we now know with more certainty what the actual compliance cost is . Where would i get that . I am not aware such a study has been done. We have not done one. We have neither. Im not aware of it. I can look at the beginning because when i was originally promulgated it wouldve been initial initial estimates put at that time as well. We work through that on our side since we dont know if an element done since then. Last set of questions on this. Deposing the rac. When theres an intermediary change, very typically when the intermediary changes to a new one, what happens is the old intermediary of the intermediary of the system plays quickly and they still maintain all the rac audits, but the company is setting down or shifting to a different spot. The other companies tried to fire a end to get ready so its very slow. But the speed can be the same across that. The old intermediary cant keep up in the intermediary cant keep up and youve got a dragon response time. A conversation husband can we reduce the number during the transition time with the intermediary changes . At the authority exists, where is the to slow down the process to allow us to catch up on the backlog to look and say we still continue to do this. Weve got to slow this down because if we approach a million files sitting out there with more so coming, theyll never catch up. It doesnt matter how much we fund it. We will not catch up. What is the conversation out there related to that . We do realize as we procure the next round of rac contractors that what we have done is cause the program during this transition. What we dont want to happen is for one contractor to initiate an audit and for a second contractor to complete the audit. We are working to avoid at this time. The last round of audits were initiated were permitted to be initiated at the beginning of february. Those audit must be completed in a timely manner and then the current batch of rac can wind down and the new batch could wind up. During this process, we have also using it to take advantage of it to alter the Program Based on input was gotten from providers that stakeholders to make it more transparent to providers to provide more education and make sure it is focused on all areas of improper payments. When will that be popular . The procurement process is going on right now. There are statements of work in order to actually get proposal that will hit public transparency and contractors will be able to respond to. Okay, any final comments . I appreciate you being here and for the conversations. Your work is important transparency and improper payments and fraud. I think you heard from the committee clearly. We need providers. Right now with health care across the country, we are losing providers and anything that is courage is a provider from continuing to stay open make the problem worse. We have more seniors every day joining in the medicare and we have a problem with providers based on sheer compliance and the frustration of that. This is reaching a really bad spot with got to make sure we work with writers to keep the good at yours and we got the bad actors and educate those that just made a mistake rather than push them out. So with that, we are adjourned. [inaudible conversations] in the next election. We spoke with a reporter who covers race and politics to weigh in. Jesse holland is following all of this to the associated press. He recently wrote a story the republican struggles to recruit black voters and candidates. He is joining us live on the phone on this monday morning. Thank you for being with us. Guest good morning, thank you. Host by the democrats. Caller following the election of barack