The issue of wait times, when it comes to emergent care, canadians are not waiting substantially longer than our peers in other countries including the United States. Unfortunately, it was true that has not been the case for medical care such as nondiagnostic imaging. A great deal of work was underway to address this challenge. And indeed, waits have been decreasing over the last decade. It is important to note that moving away from a single payer model would likely exacerbate our wait time challenge rather than alleviate it by drawing Critical Health Human Resources out of the public system. This is bourn out by International Evidence from other jurisdictions such as australia. The canadian system is proof that Public Health Care Insurance need not be provided federally in order to achieve the benefits of the single payer model. In canada, each province provides Public Health Care Insurance to its residents with minimum standards set at the federal level. Furthermore, moving to single payer insurance as youve heard does not necessarily mean moving to the direct provision of Health Care Services by government or socialized medicine. Although our provincial Health Insurance plans in canada are financed publicly, almost all Health Care Services are delivered by private entities. This includes our hospitals, which are mostly independent, not for profit entities, and also our providers, most notably physicians who are not employees of the state, but rather independent contractors who happen to bill a public Insurance Plan for their services. I want to reiterate my thanks to the committee for giving me the opportunity to present to you today. I look forward to your questions and engaging in dialogue. Thank you very much. Senator byrd, do you want to introduce your other guest . Thank you, mr. Chairman. Id like to introduce to my colleagues, dr. David hogeberg at the National Center for Public Policy research here in washington, d. C. Thank you for joining us today. I look forward to your testimony and thoughts as we examine the Lessons Learned from other abroad countries in order to strengthen our own Health Care System here at home, the mike is yours. Chairman sanders, Ranking Members burr, members of the committee. Thank you for this opportunity to testify before you. My name is david hogberg. I think the most important lesson we can learn from other nations is that we should avoid putting more and more of our health care. A substantial impact on policy. Reelection chances are more likely to get good treatment under government run Health Care Systems. Groups that lack such cloud are more likely to be neglected by politicians and receive inferior care. Too limited to have much impact on elections. Second, they are too sick to engage in the type of political activity such as organizing, protesting and so forth. Those with the most medical need are those most likely to have the difficulty getting the care they need. Denmark and france provide good examples of this. Could be described as single payer with over 85 of health care expenditures. Largely free at the point of consumption. This has consequences for how Health Care Resources are allocated. If patients pay nothing at the point of consumption, theyll overusE Health Care putting strain on government budgets. Health care systems must be Health Care Must be rationed in another manner. 48 days to get a herniated disk repaired. 37 days for a Knee Replacement and 81 days for cataracts treatment. By the time of treatment. However, a 2010 study found that head or neck cancer were treated within that national standard. About 3. 7 . Now, looking to the french system, health care in france is financed heavily through the government also has an extensive market that covers copayments and services the government does not cover. When a patient visits a physician in france, he must pay the cost directly. Hes reimbursed by the government and the private insurer. Must cover any cost that is not reimbursed. The method of payment and the extensive system of private finance is what allows france to avoid using wait times to ration care. Running a deficit since 1988, as a result, the Health Care System in france has used other methods to ration care. One rationing method is limiting investment in new medical technology. Among industrialized nations, france has one of the lowest numbers of cat scanners, pet scanners and mri machines per million population. Rationing pharmaceuticals is another method. In brief, the french government often refuses to pay for drugs that are incremental improvements over existing drugs. Such rationing has consequences. According to one study, only about 1 4 to 1 3 of alzheimers patients rationing technology and medication or using waiting times falls hardest on people with serious illnesses. They do not cause trouble for politicians since the people selected seldom are a political force. The chief benefit of an examination of other nations Health Care Systems discover what policies we should avoid. It would be productive if we instead studied other markets rather than other nations. There you will find markets in which government tax policies havent distorted the purchase of goods or tax policy and regulation. And consumers are not prohibited from buying goods and services out of state. As a result, these markets reduce the cost of goods and services while also improving quality. It is in these markets we should look for guidance in reforming the u. S. Health care system. Thank you very much. Thank you very much. Our last but not least witness is jacob kelberg. Mr. Kelberg, thank you very much for being with us. Thank you, chairman sanders. And Ranking Member burr. The members of the committee. I would like to thank the opportunity to participate in this hearing. Ive been asked to give an overview of the danish Health Care System. The danish Health Care System is an example of comprehensive and universal coverage for all patients. No patients may be denied services on the basis of health care, employment status, age or Health Status. Most patients in denmark are listed with a gp of their choice. And the use of all Specialized Health services is free with a referral from the gp. Patient could also choose group two Health Insurance and specialized treatment directly. People are generally quite satisfied with the gp system. If referred to hospital, patient may choose among all Public Hospitals offering the relevant treatment. All hospital treatment is free, including all hospital drugs. Patients may choose among private hospitals in denmark or abroad if the waiting time exceeds one or two months depending on the condition. Many patients prefer to stay with a local hospital therefore median wait cant be longer than the waiting time guarantee. But its a choice. If cancer is suspected, we offer twoweek waiting time for examination and treatment. It has previously been a problem as you mentioned. To finance the Health Care System, the state collects the necessary revenue through general taxation. Funds the region on basis of objective criteria. This ensures equal opportunity across the country. The simplicity of the financing structure also keeps the administrative costs low. Only 4. 3 of the total Health Spending is used for administration. The Public Sector finances about 85 of the total health expenditure. Mainly covers out of pocket payments for primary sector pharmaceuticals, dentistry and Optical Services like glasses and contact lenses. About half of the population has supplementary Health Insurance to cover the out of pocket payments. Now all the supplementary Health Insurances where you can Access Health care quicker than one month or two month waiting time guarantee or free access. But the supplementary Health Insurance covers less than 1 of the total health care budget. But its a choice. Can be characterized being good. 85 of the population perceived their own Health Status as excellent or very good. The Life Expectancy is on average 80. 1 years. Historic high smoking rates is relatively low Life Expectancy in denmark compared to other nordic countries, not the system or the health system. The european Consumer Power house ranks all the european Health Care Systems. And here the danish Health Care System ranks second in europe. A system ranks second in europe. High on patient rights, range and Services Provided and information. Low in preventionnd health in denmark, when you look at the statistics. However, denmark has a practice of reporting for social care as health expepdatures, if the costs were reported in line with most other countries, it is kig santly below average. To sum up, the system is an example of a transparent Health Care System that provides comprehensive and use of universal coverage and high levels of patient satisfaction. The simplicity of the system keeps low cost and makes it easy for the patient to Access Health care. I would be happy to answer any questions you might have. Thank you for the attention. Thank you very much, mr. Hav kelberg. Now well begin with questions and comments and let me let me begin let me begin by asking all of our distinguished panelists a very simple question. In the United States today, we are the only nation that does op not guarantee People Health care is a right. Le h and we still have the numbers have gone down since the e Affordable Care act. But we still have many, many afd millions of people who have no Health Insurance at all. Others have highmill p copaymen deductibles. Let me ask all of the panelists a simple question. Be should health care be a right of all people regardless of incomes yes, no, maybe . Should health care be a right of all people . I think it should. I think it should because it is it is a sign, an expression of a civil society. Okay. The brief answers. As health care, their income a right in our constitution. Ght in okay. Miss pipes . No, were entitled to life, r liberty and thede pursuit of happiness. How do you determine which right is worth more . Do we have a right to housing . A right to food . A a right to health care . How do you measure which is the appropriate level . So, no. Okay. Thank you. Dr. Martin . Yes, access to health care i . A human right. And i i know that the vast majority of canadians in poll after poll feel the same way. Mr. Kelberg. Yes, i believe that access to health care should be a right. Dr. Hogberg . Ld b yes, i believe it should be a right in the classic liberal asa notion that rights that government should not interferen congress should make nogr law ao so forth. So, yes, everyone should have the right to health care in that sense. An doctor . We have a right for health carerigh in the United States fi emergency care. I believe that should be extended to primary care, as ed to okay. Pr let me state on that point, maybe get to dr. Hogberg. Olberg you indicated you thought health care should be a right, a government should not be involved in that process. Its a moot point. No, its not. But im asking you as an academic. Youre not youre right, its a Popular Program. Is but if you say government shoulf not be involved in health care and medicare is a Government Health care program in your judgment i and the best of all a yourre possible worlds, should vote to get rid of medicare . Some people think we should. Sho . Its a moot point, its here to stay. I believe we are not going to get rid of medicare. Medicare is a program for our seniors. I believe we have severe problems. The medicare trusteeesoble saidt medicare would be bankrupt by 2024. At a cost of over 1 trillion. I wanted to ask you a simple question. Government is medicare is a government run program. Nt as dr. Hogberg indicated. I think its a Popular Program. My question is, should, in yourr judgment, we abolish this we governmentrun Medicare Program. Not entirely. Me medicare should be there for those people who truly need it. A the problem is truly needed. But not as it is right now. A lot of people wealthy can e afford care. Well, not a lot of people cost pressure on the system. Paul ryan let me congressman ryan, i think has very good ideas. He would transform medicare into a voucher program. Let me ask you a question. Despite the fact that our Health Care Outcomes are not particularly good. Of in terms of Life Expectancy, ths United States ends up spending twice as much money per person on health care as any other nation. Why is that . And im going to leave you well give senator byrd additional time, as ll. Why is that . We spend more for several reasons. First, our prices are higher than all other wealthy oecd we nations. If a woman has birth in thiss country compared to france, how much more does it cost . Or give me some examples . Ared it can cost different priceso for all to see. Ne so price is very important. V prices of drugs, prices of how do drug prices compare in the United States compared to other countries . So if i needed a cancer drugi in the United States,s why is i more expensive here than it is in canada or france . Ada you have regulated prices for these drugs and people have access to them. That interferes with the freo market system. Is that a good idea . Of course it is. That is operational and works. Its a fine idea in theory. But i challenge anyone to give me one, one concrete example. All the evidence suggests that it does not work. Okay. Canadian doctors exiting the public system for the private sector has had the effectively increasing waiting. Why are doctors exiting the public system in canada . Thank you for your question, senator. If i didnt express myself in a way to make myself understood, i apologize. What i did say was that the solution to the wait time challenge that we have in can a canada, which we do have a ich we difficult time with waits for elective medical procedures doe not lie in moving away from our single payer system to a multipayer system. Multip and thats bourn out by the experience of australia. Paye andr a very well known study wa tracked. What took place in terms of waik times in australia as the multipayer system was put in place. And what they found was in thosh areas ofat australia where prive insurance was being taken up and utilized, waits in the public system became longer. What do you say to an elected official who goes to florida and not the canadian system to have a heart valve replaced . Well, its interesting, the people who are the pioneers of that particular surgery which premier williams had and had the best outcomes in the world for that surgery. So what i say is sometimes, sometimes people have a perception. M i believe this is actually eptin fueled in part by media discourse. That going to where something where you pay more for something that necessarily makes it that better. Necessar but its not actually bourn outr by the evidence on outcomes. One would believe the outc American People prefer their system because they know consciously they pay more. I think its because they judge quality and judge innovation. P they feel their health is at stake. A lot of people in canada come to the u. S. For mris, ct scans. There are many examples in the a media of people like brian mcekreath came to the u. S. Because he was told he might pa have a brain tumor but the wait for an mri was very long. He spent the 1,000, came to the u. S. , paid out of pocket. In a way thats equitable for all. What length of time do you consider to be equitable when waiting for care. Benchmarks across a variety of different diagnoses of whats a reasonable period to wait. We found that actually working within the single payer system,t we can reorganize things, you e know, ive waited more than 30 minutes at the security line to3 get into this building today. And when i arrived in the lobby, i noticed across the hall, there was a second entry point with no line up whatsoever. Sometim in order to use your cues most effectively. And we believe when you try to address wait times, you should n do it in a way that benefits everyone, not just people who can afford to pay. How many patients on a o waiting list die each year. Howm i know there are 45,000 in america die waiting because they dont have insurance at all. The american system has access for everyone. Its called the emergency room. Now, we dont admit that clearly because were lobbying for a particular angle. Amer the primary care and i would agree with you, that we ought to theres a medical home for everyone we can place. Its an absolute necessity to wellness. Mr. Kelberg, how many danish citizens have supplemental Health Insurance policies. And why has that number been increasing in recent years . In about half the population got a copayment, copayment insurance, and increased dramatically over the last yea r because the family, children were included and that brought out the numbers quite significantly. But the number of policy holderi havent really changed much. Half the population has supplemental insurance. Copayment insurance. And then many people in the labor market also as part of a benefit package offered Health Insurance so you can have faster access to elective care. Access they can actually buy their way to faster access. Faster private hospitals, you can buy any hospital services. So they have options, choices. They have choice. Yeah. Dr. Robwyn, in your testimony you note that expenditure targets are set each year. If a hospital or physician exceeds their target or expenditure by billing for higher than projected volume of services, prices are negotiated downwardds for the following ye. Beyond volume or utilization of services, are there Quality Metrics that the french used to determine reimbursement for physicians or other providers in order to incentivize quality care for patients. To ensure patients are receiving quality care . This is a science thats not well developed, neither in our country nor in france. But they are working on this very question , which is very timely right now. That is the negotiations focus certainly on volume but now on theres a program which will s physicians in place if they staa followrd certain standards of preventive care. Hey but theyre penalized in the next year by a reduction to reimburse. Every year, sir, theres a negotiation to set these rates a and if the volume goes up, then the following year, the prices, thats the practice, performin standard. Thank you, doctor. Thank you mr. Chairman. Ch i want to thank the distinguished panel for all the information that theyve providedd pa. Itsdi a little different than session senator kennedy and i ld held several years ago. But first of all, i want to thak thank ms. Pipes for being here. She wrote a book in 2010 that predicted what was going to pr happen with our Health Care System. As it is now. And then more recently, shes written something called the cure for cobamacare. And its not even copyrighted. But its an outstanding book on what we could do to repair the damage thats been done on our present system. We and i thank you for your effort on that and hope i can get a few more people to read them. P i mentioned senator kennedy andd i. When i was the chairman and he was the Ranking Member, we went to a system called a round table. And this is very similar. Mb ais except that at a round table, w, had, again, 8 to 10 people, and they were all practitioners of s some sort in the Health Care Area rather than people who wer, studying the Health Care System. And he and i would come up with the questions for the panel as well as total agreement for who should serve on it as opposedo w who would do panels the way we do them now. Which is the chairman gets to pick everybody. 4 5 of every panel and the Ranking Member gets to pick another one or two. An and then we all come and beat up on the witnesses. So at a round table, the senators really didnt speak much. But one of the questions we ked isrs, will universal single pay Health Care Work in america . And the first person was an n engineer for hospitals and he ps wasnt sure. But the other practitioners wont settle for single pay health care. At the end olf that hearing, tht round table senator kennedy came to me and said, i guess we better take a look at some of the things youve suggested like Small Business health plans and being able to sell across state lines and things like that. Andmal, i think one of the of of the things this panel points, out, most of you are talking whose population is in size in some cases is relative to our states. Each state. Has and each state has health care plans. And they do it differently. But what will work in canada with a smaller population or po denmark with apu smaller pulati population or france with ona mr smaller population might not work in the United States. I especially under the form of government that we got. The im pretty sure that the th Affordable Health Care Initiative was designed to failt and he thought they would come t up with a system that would fail. Pt for except for one thing, the debacle with the design of the exchange reminded people in america what happens when our ia federal government tries to handle everything for this w va United States with one plan am were trying to work with another one of those government agenciesnd thats called a postf office. And thats another example the people use of what might happen if we went to universal singlepay health care. Lot of theyre proud of their system. I asked how they took care of ad that vast of a population. Of and they said, well, our doctors see 200 patients a day. , if people were given another option, i think theyd go with g another option. Too many people in america right no w that are seniors at least know somebody that tried to seeo a sdoctor. And the doctor said im not seeing any medicare patients. So medicare is not the best example of how to get health care in america. America. Ive almost used up my time up without asking a question. Im the accountant on the panelu in fact,t im one of three accountants in the United States senate. And so the questions i have are really kind of technical and get down to some of thes in costs. So ill submit those in writing and would appreciate it if youd answer the questions. Swer t thank you. He thank you, mr. Chair. Thank you, senator. Senator . Well, i too want to thank the panel and thank you, mr. Chairman, for holding this hearing. Seems to me that the entire question here has been summed up by the chairman does the government, if we have a government guarantee of health care as a rightes t, he posed t question. And then with questions, senator enze and senator bar have ave po pointed out is a right to a a waiting list. Actually, i think that is the statement by ms. Pipes. Iss and ms. Pipes, my deep regrets iff for the loss of your mother. How long did she have to wait . Went to her general ce fis practitioner in june and she was admitted to the general hospital, which is one of the largest hospitals in canadane i late november. Late november. And then you lost her after twon weeks. Did you saylo you could get a h replacement for a dog in a week but couldnt get a hip replacement for an individual for x number of years . T for two years. Yes, the wait for orthopedics is one of the longest waits in canada. St and membership friend dr. Brian day who is an Orthopedic Surgeon made that statement to the new york times. A dr. Day who runs the clinic is being sued by the British Columbia government for operating a clinic that is considered illegal in British Columbia. The interesting thing is, he rih told me the other day, the government keeps postponing theo case, i think its becausest hi practice is so busy with peoplep getting hip eoreplacements, kne replacements, that theyre afraid of the backlash that will happen because of that. I have legislation las. Im not going to get into the rationing boards. To address some of the concerns about the government controls and where we are with the cont Affordable Health care act. Le ht im trying to get ahead of that curve. By the way, i dont know dr. Martin. Does Prime Minister harper, do s he change the rules and delay implementation of the system every week like we see going on with the Affordable Health care act . Chsee im not sure that you want mt to answer that y question, sir. I dont completely understand what youre saying. Well, im saying that the rim Prime Minister of canada i dont think changes that the national Health Care Act that we have in place which i think is basically a first step w towards single payer. And i think that was the intent of it. Sintent the president of the United States has changed thE Health Careni about every friday. We have what we call a ev regulation dump, okay. A consortium of unions indicatef they would like a big change ind the Affordable Health care act. Hes going to have a carve out for them. On the other side of the fence, 27 members of the finance , some on this committee wrote to the head of e the centers of medicare and Medicaid Services to say, whoa,a dont change the Medicare D Program that we have in this country. A very Popular Program under budget used by senior citizens. And t if we hadnt written a letter and there hadnt been a backlash to save Medicare Part a d, it wouldnt have happened. Were writing this thing as we go along. Ened. Except the president doesnt come to us and ask us to help ce him do that with each individuat change. Im wondering with the problems you have up in canada, who makev the change. If, in fact, there needs to be a change. Well, i suppose theres an answer to your question comes in two parts. The first is inacknowledgment of what senator enze was saying was earlier on, like the United States, canada is a huge country. And our Health Insurance is actually not provided at the d national or federal level, its provided at the provincial level or the equivalent of your states. The notion that something can le begin in one subnational jurisdiction and then spread is, in fact, exactly how we came to have 13 separate single payer systems in the 13 provinces and territories of canada. T and sohe, the first part of the answer to your question is, no,t we dont see that kind of cn those kind ofge changes being me to Health Care Legislation at the national level. But the second part of the answer to your question is that n is t it is widely known in canada lyo that the public commitment to our single payer medicare systt is so strong that for a prime rm minister of any political stripe to try to alter that and undermine it in any way would be political suicide. You mentioned the fact that weve got to keep the politicians out. And weve just had two changes, Medicare Part d and then alsoc a carve out for thear unions. Is that an example of what were talking about . E talkin and 33 other changes, by the way, and thats the last count i have. St well, theyre very good examples of groups that have political clout can keep, you know, changes from happening that they dont want to see. Unions and seniors certainly have plenty of clout up here on capitol hill. And if i would you mind if i would take a second to talk to about some of the Outcome Measures here . Meas well, im already over time. All right. Will ill ask the permission of the chairman if that would be possible. Seconds. Nother 30 thank you, sir. Youve got 30 seconds. Se yeah, first of all, with regard to Life Expectancy and infant mortality. Using those as measures to tell you something about health ce system is a bit like using t batting average and on base bit percentage to tell you something about football. T Life Expectancy and infant mortality, there are so many factors that go into the outcomes that are not related to the Health Care System but the Health Care System has no control over. Had that they are not Good Measures fore a telling you the quality the Health Care System. One other problem is that many of theseelli measures are not measured the same frome countrya to country. Infant mortality being the. Well, thank you for that. The chairman has already gavelled. Hit the gavel. The my main question is access to care. And denial of that care. What other what o alternative a person were going to have a single payer system. E were going to have another round of questions. A g this is a great panel. I think theyre good questions. Let me pick up on a point. My turn now. Po pick up on a point that dr. Martin raised. I was going to ask the same question. I live one hour away from the canadian border. Canadians watch american television. Canadians are very familiar with our political system, probably know more about politics in america than most americans is doctor is your Prime Minister a socialist . Than no, sir. Our Prime Ministers quite prie conservative. Conservative. Yes, nsindeed. So obviously as a conservative, he wants to implement the american Health Care System that the canadians are very aware of. I gather that was probably the first thing he did when he took power, is that right . Not exactly. Why not . Support for single payer medicare in canada goes across all politicalcro stripes. Quite famously we had the leader of the most right wing party in the canadian federal debate on television hold up a sign in th, middle of the debate on which fh hed writtene in marker no two r tier as ait means of trying to reassure the canadian public that if elected he would not dismantle in other words, you have a nation bordering on the United States, two nationsel that are probably close together in so many respects as any two nationy in the world. A conservative Prime Minister, and yet there is no effort to move to an american Health Care System. I would say to my colleagues moo theres not a better example of maybe how people feel about two systems. They know the esystem. They have a conservative Prime Minister. They can move in ourster direct but for whatever reason. And i think sensible reasons, they understand that a system rn thats, guarantees health care ta all of theirt people and, of course, is the way they want too stay. Ms. Pipes, let me ask you that question, why do the canadians not come to the american Health Care System . Well, as i mentioned,e about 42,000 canadians come to the u. S. And pay out of pocket. Tion. That wasnt my question. Fo no, i wanted to make that point first. The second, canadian government this startedd th 1974. A lot of people in canada have e no idea of an alternative system. Oh, my goodness. They live an hour away from me in burlington, vermont. No they have no idea what goes on n in the United States of americaf that is a little bit hard for me to believe. I would say that canadian th people areat very, very nice people theyre not impatient like americans. Other my mother said i hope youre not becoming an impatient american. G i am an impatient american. I think the answer is pretty clear. Erican the canadians have seen the american system. And i want to focus on that picture over there. I know its hard to believe, and i mean this quite seriously. This is the United States of america. This is not a third world developing country. States this is a town called wise, virginia, and i dont mean to rd pick on virginia. Because i think the same story can be toldto all over america. N so when we talk about access, what were looking at here is that a number of times of year, people working class people who have no Health Insurance at all are given Free Health Care epsodic care, and in today, sa thousands of people line up because this is thE Health Care they get. This takes place in a field in wise, virginia. I think its a stadium in los pc angeles where something similae takes place. Now, if this is the kind of Kid Health Care that we are proud of in the United States of americat well, some of us haveat some strong disagreements about that. I want to get back to another point which to me is very important. Getck s it is, and id like dr. Martin to comment on this, as well. To get good health care, you need medicine very often. If i go into a french hospital,o i leave the hospital and im sick, how much does my medicine costi . Under French National Health Insurance, theres. Very high a levels of pharmaceutical coverage. Meaning what . Medicine is free or virtually free . 90 , 70 dr. Martin . T those prescriptions are cut because theyre ineffective. Dr. Martin . S so interestingly, this is an area where we made a mistake ina the design of our Single Payer Program in canada at the time that medicare, canadian medicar, was designed in the 1950s and 60s. Medication was not a big part of the way we treatedn disease. Wy and medicines were left out of s coverage. So the Single Payer Program in canada does not include incl medications. And as a result, 1 in 10 canadians today fails to fill a prescription or take their medicine as prescribed because of concerns about cost. Thank you. Mr. Kelberg. What about Prescription Drugs in denmark . Ib if Prescription Drugs are needed, you have maximum copayment a year about 600. Okay. In taiwan, how much do Prescription Drugs cost . , how it is covered by the nhi. Cov but patient have to pay some copayment up to exceeding abouto 10. Up to 10. And each year it adds up to be the ceiling including to hospitalization, the ceiling will be 1,000. Whats your view on Prescription Drugs . Hos Prescription Drug use in ther United States, in fact, is low , compared to total Health Spending. Relatively speaking in europe a well as in taiwan, the percent ofl money spent on drugs in ters of total Health Spending is a h much higher percentage. Ch example, in the french system its roughly 25 . In taiwan, 25 of total health m spending is on drugs. So they have much greater accesr to drugs. Thats number one. Number two, the reason why the drug price over. Oh, i apologize. My time has gone over. Senator murphy has joined us. And senator murphy, you have dy some questions you wanted to ask. Thank you very much, mr. Chairman. I thank you for this hearing. Sorry i had to step out for a i few moments. I guess i had one broad question for the panel. I think its come up in some of the testimony, especially, i think, from ms. Pipes and dr. Martin. Im alwaysalwa fascinated by thn intersection between convenience and quality. And the extent to which metrics like wait times often dont automatically translate into differences in outcomes. Often, they do. Of there are some services in which if you dont get it right away y its going to have a pretty e severe consequence on your ha health and the amount of money youre going to spend later on. L but, you know, there are parts of this country, for instance, that have enormous convenience e that you cant drive more than m couple of miles outside your ndn door and without finding an mri machine or a dialysis center. And you know, theres health care all around you. An and, yet, that doesnt seem todg be adding to quality that seems to be adding to convenience. The similarly, i hear all of the stories from canada that ms. Pipes talked about in terms of n wait times. And yet, when we look at the underlying data, it tells us iny the end, a lot of the diseases g where you have wait times that might cause you to question the system, the outcomes are the u fundamentally better than they the United States from Heart Disease tono cancer. At w so thats note to say we lo shouldnt sort of look at issues of convenience and issues of wait times and your proximity y either spatially or temporarily to services. Kind but i wanted to kind of, i mean, specifically kind of asking dr. Martin and ms. Pipes not to ask about this. And others who have thoughts about this with your experiences to talk about how in other countriesbout where there may b less easy access to health th services, not as much health it care ased we have in the United States. We have tons of it. Ns as to whether that actually has a trueth relation all the time the outcomes that we get. Tin, h dr. Martin, happy to have you a start. Nk thank you, its a really qu thoughtful question. Es and i guess, i might reframe ite slightly by saying what you refer to as convenience, i would refer to as Patient Experience. And so when we talk about care quality in, health care, the a socalled triple aim. The notion of quality having three dimensions. One is Population Health on outcomes on which single payer countries like canada fair, in fact, quite well. Anot and another aspect of the triple aim is cost per capita and the third is Patient Experience. And, of course, patienten experience is important. And so,id you know, i said i wasnt here to be an apologyist about every single thing. Es for but were waiting because we believe Patient Experience matters, but youre beright, t our outcomes are very good. And i think its critically important for the committee to understand that singlepayer does not equal wait times. Eard u we heard our colleagues from taiwan tell us quite clearly ine they have a single payer systemt with virtually no wait times, with 99. 6 coverage of the , entire population. And of course, we should consider all aspects of the triple aim when we talk about ud quality. But we should not we should avoid over simplifying the message and equating a single payer model with wait times, nt that simply is not the case. Well, madame justice who retired in 2012 from the Supreme Court in that hearing in 05 said the idea of a single payer Health Care System without waiting lists is an oxy moron. And the canadian Supreme Court. Is not a conservative court by any stretch of the imagination. The United States. A point about Life Expectancy and the w. H. O. , World Health Organization says United Statest ranks 37th out of 190 countriesn well, as professor steven wolf who was the lead author as the institute of medicine study which was based on Life Expectancy and infant mortalitye rates. He said Life Expectancy and other noted Health Outcomes are determined by much more than health care we have a huge e obesity problem, homicides and c car accidentap deaths at a much higher rate. Ed state the United States ranks number one in the world on 13 of the 16 most popular cancers. Most you have to be careful when youre doing statistics that youre comparing apples to es. Apples. Thank you very ou vmuch, my has expired, mr. Chairman. Ch senator burr. Fore thank you mr. Chairman, let f me say before i ask the second round of questions, theres beeo a lot of reference to medicare and single payer system. Wor medicare forki working lifetimei pay into a system. Nance to finance part there is a government share. When i become a senior. And i go and get part d coverage which is the physician side. I pay a premium for that. O when i go to get drug coverage, i pay a premium for that. You cant look at medicare and say this is like the single payer system in taiwan where the government picks up the entire a tab. Health cares not free. O we all know careut is not free,w that. It d comes out of general taxes. Theres a difference for seniors in america that they are ve personally invested in in a system. They have choices. They can choose a medicare advantage. At least they could before ldd obamacare and now thats getting knocked out. S they can choose, as a senior, to buy medigap insurance. Hing they can buy their way out of t skinning the game. Po the thing i heard is everybody,d exception taiwan has some degre. Of copay. France does. Canada doesnt, but they do as. It relates to drugs because they are on their own for drugs. I want to talk about drugs. You are from taiwan and said int his testimony patients in taiwas can experience delays for drugsr and new technologies from two to five years from adoption of the United States. Missn chen you talked on Prescription Drug prices. Most countries enjoy the benefits of americas developments but they dont pay their fair share for the immense involved in the development of the therapies, these countries are free riders on the United States by enacting price controls on drugs and devices. How would sharing the financials burdenav that comes with this affect comparison between the s United States and ththe countri we are discussing today . Thats for you miss chen. Ion. Thank you for this question. First of all, yes, the United States does fund a whole lot of rnd in the pharmaceutical end oh the erdevice and innovations. But, in so doing, we are also helping to make the american Health Care System that much , o more expensive. F in fact, so expensive we are pricing people out of thE Health Care all together. The United States is, you know, so in terms of rnd in single ayr pair systems. I think it is the governments of these systems can set aside specific rnd funds to help with rnd for innovations. Miss chen, in the u. S. Syste when we shifted from exclusively doing bypass surgery for heart blockage and went to th cathization. Do you consider a that to be a d cost savings to the United States or the expense of a new innovation . Um, if it is done on the at h right patients at the right time, yes, it is cost saving innovation and application of that innovation. Think however, with the United States health care, theres a very serious issue, which has not been addressed, which is overuse of services. My we have, here in my testimony, n the in that the risk of letting the American People choosE Health Care and having a marketplac e versus having where government, dictate, what, wher, when and how much . Its not a its not a matter of letting people decide, in the marketplace where to go or what to choose, what to have. We over prescribe grossly in the United States. Why . Becausice the american patient n the right to go in and ask theiy doctor and because of liabilityr exposure, the doctorip feels se compelled tos. Write the scriptn the United States. I would tell you thats a lot of thE Health Care, a lot of the drug cost. May i just say this . Yes, maam. Ead. In the institute of medicine book, in fact i brought it, it says this overuse of everything, services, devices, drugs, it m. Causes waste in the american ii Health Care System. According to this institute of t medicine book, about onethird of u. S. Health care is waste. On 750 billion a year. Off that, Unnecessary Services 2 accounts for 210 billion of the 750 billion. Ith i agree with the conclusion. I have one last question and i its to the doctor. Ontras in contrast, what i have just talked about with miss chen, price controls overseas dont reward innovation. If ther United States were to follow the price control model,o what would happen to patients innovative treatments in america as well as over seas . To in the long run, less access to innew, innovative drugs. Its that simple. If, in fact, we eliminated innovation, in many cases n innovation that takes somebody ountt of a hospital setting, th are r treated, they no longer hf the risk of infection or the , t days in the hospital. Thats not only been beneficiala to the cost in health care, its beneficial to the quality of the outcome. Sure. We have looked at this ex extensively. He e estimated for every dollar was put in pharmaceuticals, you save 3 in hospital costs. The price controls have one or two impacts. If you have price control, itss lower than the marketee price, h see a shortage. Ught above the market price, you see a sorry, im losing my trainn of thought here, you see a h surplus. That is what you are going to end up with with price controlsk i thank you. I thank the witnesses. I ask the chairman for consent s to allow us to submit questions for all the witnesses for the purpose of the record. Absolutely. This has been let me thank ko all of you for being here. Questn i want to apologize, we want toi stay for more questioning, but we have votes takings place. Ver this has been a thoughtful and vigorousad discussion. I thank you for being here. This hearing is adjourned. Tonight on cspan 3, programs on campaigning and voting. Well hear about the latest innovations in social media. A recent debate on Campaign Finance laws and an event focusing on voter id laws at 8 00 p. M. Eastern. Our campaign 2014 coverage continues with a week full of debates. On cspan today at 7 00, coverage between rick scott and former governor Charlie Crist. At 8 00, live coverage of the u. S. Debate between pat roberts and greg orman. Thursday at 8 00 p. M. Eastern on cspan, live coverage of the third and final debate between bruce and state senator jonierness. Friday at 9 00, the wisconsin governors debate between scott walker and mary burke. Cspan campaign 2014. More than 100 debates for the control of congress. Just a reminder today at 7 00 p. M. Eastern on cspan, well show you a florida governors debate between rick scott and Charlie Crist. Here are recent ads from that race. As governor, Charlie Crist costs florida over 800,000 jobs. On the other hand, rick scott creates hundreds of thousands of jobs and will create 1 million by 2018. A vote for rick scott is a vote for more employed florida yans. Rick scott, for jobs, for governor. Rick scott is blaming me for the financial crisis . Thats ridiculous. Heres the truth. The recession wasnt caused by me or you. Greedy wall street bankers and takeover artists. In other words, guys like rick scott. They xhited outright fraud. Guys like rick scott crashed our economy. Im Charlie Crist. I work for you, the people. Always have and always will. This isnt just a doorway to a school, it was my doorway as a Public School kid to opportunity. I want to make sure every child has that chance for a better life. Rick scotts education cuts are closing that door on florida kids. Spending 200 less than when i was governor. When i was governor, we brought both parties together to open the doors of opportunity, not close them. Together, we can do it again. Sponsored by lets get to work. Just the other day do you think nothing about obamacare has harmed people in florida in any way . I dont think so at all. Its been great. Great . 300,000 health plans canceled. Pay shenlts may lose their doctors. The federal government says lets work for american jobs. I think its been great. Great, charlie . It may be great for his political career, but not the rest of us. Recent polling listed that florida governors race as a toss up. See the debate live at 7 00 p. M. Eastern on cspan. According to a government report, improper medicare payments totalled 50 billion in 2013. Up next, the House Oversight committee invest mlts Medicare Fraud and abuse. This hearing is about 2 20. Co congressman darrel issa of california chairs the committee. Come to order. We will take this out of order today as we walk through this. Of we have Democrat Members on the way here. Well begin with the beginning statements and allow them to catch up. The subcommittee hearing on entitlements called medicare mismanagement. I want to begin by saying the statements. We exist to secure two principl principles. The money washington takes from them is well spent and they deserve an effective government that works for them. Protect the duty is to protect these rights. Hold the government accountabler tonm taxpayers. Taxp they have a right to know what they get for their government. E we will work tirelessly and deliver the facts to the American People and bring reform. This is the figs mission of the committee. Ys medicare currently pays one fifth of all Health Care Services provided nationwide, making it the largest single purchaser of health care in the country. Tes an unfortunately, every year the n program wastes an enormous amount of money on fraud and test procedures. In 2013, 50 billion was lost t5 improper payments, an increase in 5 billion from 2012. 36 billion of this total. Dicare they have related medicare as a high risk since 1990 due to thep subjectibility of the waste, that make up a staggering 47 of payments identified by the government last year. Growth and medicare misspending and fraud represents a threat ts beneficiaries who depend on so services and the programs has finances. 08. At presence, they have been in deficit since 2008. They predict the fund will be depleted by 2026. They have a responsibility to maintain the Program Integrity e of medicare. The partnership of several outside organizations like the Fraud Enforcement Action team that operates fraud strike tratr forces and perpetrators who steal identity and falsify billing documents. Risk they have a risk base screening0 in april14 of 2014, cms announc fingerprint based background ch checks will beec done. Are plac temporary enrollment moratoriumt on providers and suppliers in areas that are high risk for fraud. Technologies like analytics to identify fraudulent claims for s review. Types cms realizing four types of contractors to combat improper a payments. Ntractor the contractors review claims ti identify overpayments. Found they have found these forts contractors efforts sometimes rn overlap and the requirements responding to audits are not uniform. This puts a burden on providers. Improving consistency improves efficiency and reviews of claims. Once the proper payments are identified, they may take steps to reclaim the payments. Reclai they are given them opportunity to appeal through a lengthy appeals process. Ve law j this is add min strited at hhs offices and appeals. Theres currently a massive backlog of 460,000 pending alj appeals for alj hearings. Due to this backlog, they could take up to 28 months for a f hearing before ano alj, where providers have their money heldt by the government. Not many businesses can surviveh havingel their money held for 2o months while they wait to decide if they are going to get reimbursed. Committee invited nancy to testify but she was unable to appear. We will follow through on that. Today, we have three witnesses. Kathleen king, brian richie and deputy administrator and director for integrity to discuss how cms can present ove sight. Wee must do more to strengthen t theic Government Programs but d particularly medicare given thee size and scope. Clearly, more needs to be done to improve the efforts to recover 50 billion in over payments and other payments. Todays hearing provides clarity about the areas. E pro the process cannot drive up the cost of health care for seniors and reducefo their options for o care. I lookk forward to the conversation well have today. With that, i recognize christensen for the statement. Morning. Thank you chairman for holding the hearing. An i agree with the chairman, reducing waste and fraud and is abuse in the Medicare Program iy critically important, not only to protect taxpayer funds, but as you heard, its important to protect the health of our nations seniors and disabled wv adule t population. We have more than 10,000 seniore aging into the Medicare Program each day this year. Tant it is now more important than ever we ensure the integrity of medicare funds and keep the medicare promise alive for generations of future americanse im grateful to have mr. Richey here to speak about the oigs efforts to do that. The oig in conjunction with thet department of justice prosecutes some of the worst instances of E Health Care fraud. R Services Never provided and providers who ordee unnecessary or harmful a joint procedures. The healther care fraud and abuy program under the attorney general and secretary, the modl health and Human Services is a model for inner agency fis k cooperation. In fiscal year 2013, the program recovered a record 4. 3 billion in Health Care Fraud judgments and settlements. This is remarkable. I look forward to hearing from the assistant inspector generale about how this was achieved and what can be done to strengthen the program. I think its important to underscore the bad actors represent a fraction of all providers. The vasted majority are not. Fraudsters and dedicated to their patients. F the given the size and complexity of the Medicare Program, c overpayments are going to occur cms must be dinlg lent in are detecting and recooping them. Well meaning providers are entitled to have claims fairly, e fesh ently and focus on the cs care. Concern that is ystem the Current System of post payment audits is resulting in a significant burden, particularle smaller entities. Smaller providers such as dme suppliers have more difficulty replying and may not have the resources to appeal over paymena determinations. The bac backlog in the office o medicare hearings and appeals makes these matters worse. Suppl the providers and suppliers do not have a luxury of waiting months for appeals to be ajoouf kated. I also have concerns about how the audits may affect beneficiaries. As a representative, the issue , of access to care is paramount in my mind. If a provider or supplier is forced to cut back services or close doors as a result of the audit, this is a lose lose situation for everyone as we build accessive to care, prevens care for the populations. Cms announced it will implement several changes to the program,a which will be affective with the next programming. I look forward to hearing about cms efforts to improve the oversight of it in particular. I hope you will address the airn issues we both raised, the chairman and i regarding the edr burden oen medicare providers ar with focus on the smaller providers or providers in rural and frontier states like mine. The impact that has directly ono the beneficiaries working to access those services. I alsohe lookar forward to hear from the witnesses about what cms is doing to move away from e the pay and chase model. To a more proactive model that a identifies improper payments up front, such a model would spare providers and payers from expanding resources that could be much better spent on providing care. In the long run, shores up medicare forge future generatio. With that, mr. Chairman, i yield back. Opening statement. St thank you,a mr. Chairman, fo holding this hearing. Thank you for continuing to re highlight that we need to make sure the american taxpayers money is well protected. Parti this particular hearing is of p importance tori me primarily se because i have some constituents that have been caught up in this alj backlog. As the Ranking Member just extrl testified, it can be extremely difficult on Small Businesses. The request for a particular te company in my district threatened to put them out of a business. Yet, all they want is a fair hearing. I share this with the chairman and shared some of my concerns where we are and in his openinh statement, he talked about the fact that we have a 28 month backlog. Well, actually, its worse than that. If you loothkat at the real num, that today, if we hired according to the budget request for cms, if we hired all the adjudicators, it takes ten years to work through the backlog. Mil a million appeals and if you look at the rate and actually, the adjudicajudicators are gett better year after year. Yet, what we do is we have a yi, policy of where we are saying you are guilty until proven innocent. We are all w against waste, frah abuse. What we must make sure of is that we do it under the rule of law and that we have laws that the guidelines that aret there. There is a law right now that says if we ask if a constituent asks for a hearing, then the law says they should have some kind of adjudication and a decision within 90 days. Yet, even according to the website there for cms, we are not even opening the mail for ms weeks and months and months and months. Its not even being put in term of oben the docket where it cou be assigned to a judge for manyb many months. An we have got to do better than this and make sure that in this, we dont take those that are not innocent and put them out of ne. Business z. That, now, i say that because if our overturn rate was not that a great, we wouldnt have a problem. According to documents, many of these appeals are being he overturned by the adjudicators. N over 50 of them are being of 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 dr better and we must find a better way to address this. I look forward to hearing your testimony. I thank you, mr. Chairman. Ge thank the gentleman and his research thats gone into this hearing and being ad leader in this. Gladof o to receive the testimon thees witnesses. All witnesses are sworn in before they testify. Ease r please rise and raise your right hand. Ear do you solemnly swear or affirm the testimony is the truth, the whole truth and nothing but the truth so help you god . All thank you. You may be seated. Kathleen king is the director ka for healthth care at the United States accountability. Thank you for being here. Agrawa the doctor is the deputy administrator for integrity and cms and richey is the deputy for evaluations and inspections at hhs. Thank you all for being urhere. Thanks for the testimony. That is a part of the permanent record. We are now glad to receive the oral testimony as well and alloo time for the oral discussion. Limit it to five minutes. Miss king, you are first. M thank you for inviting me tou talkbc about our work regarding medicare improper payments. Cms has made progress in implementing our recommendations to reduce the payments. There are additional actions on they should take. I want to focus remarks on thre areas, provider enrollment and s post payment claims review. With respect to provider im enrollment. Ions cms implements provisions of the Patient Protection and Affordable Care act to strengthen the progress so providers are prevented from ad enrolling in medicare and highek risk providers undergo more scrutiny before being permittedl to enroll. Ther cms imposed mor tore ya on the enrollment of providers and fraud hot spots and contracted c forkgro fingerprint based backgd checks for highrisk providers. However, cms has not completed n it. Itghti would be helpful in figh fraud. It has not yet published regulations to require n r additional disclosures of information regarding actions previously taken against providers such as payment d suspensions and it has not published regulations and the ci core element of compliant re programsqu or requirements for surety bonds for certain types of atrisk providers. C with respect to review of claime for payment, medicare uses shoud premamt to deny payment for claims that should not be paid and post payment review to imp recover roimproperly paid claim. Prepayment reviews are typically automated edits in claims Processing Systems that can prevent payment of improper ple, claims. For example, some prepayment check to see if the claim is filled out properly and that th provider is enrolled in s check medicare. Other prepayments check to see c whether the service is covered by medicare. We found weaknesses in the use e and made a number of promo recommendations to cms to fecti promote implementation and t regarding National Policies and to encourage widespread use of local policies by contractors. Cms agreed with our recommendations and is taking 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 wast proper. Cms uses four types of m most contractors to perform post. Payment reviews. Mplete wed recently completed work tha examines cmss requirements and found differences that impede efficiency and effectiveness increasing a burden on providers. For example, the minimum days, number of days contractors must give providers to respond to a request for documentation ranges from 30 to 75 days. Cms we recommended cms make the requirements for these contractors more consistent when it would not impede the er efficiency o f efforts to recover improper payments. Cms agreed with our recommendation and is taking steps to implement them. Po we have further work on the posr payment review of contractors to examine whether cms has whe strategies to coordinate the work and whether they comply with cmss requirements regarding communications with providers. Although the percentage of claims is very small, less than 1 of all claims, the number of post payment reviews increased substantially in recent years. From 2011 to 2012, the number of these reviews increased 1. 5 million to 2. 3 million. This is one factor of b contributing to a backlog and delays in resolving appeals by Administrative Law judges. We have been asked to examine o, the appeals process, including reasons for the increase, its sb effects on beneficiaries, providers and krakcontractors a options to streamline the process. Because its a long, complex program, it is vulnerable to fraud and abuse. Given the level of improper payments in medicare, we use al available authorities for preventing, identifying and recooping improper payments. This concludes my prepared remarks. Thank you. Chai thank you. Lang chairmanfo and ranking membe as members of the subcommittee. Thank you for this Program Integrity efforts. Its a priority and agency wided at cms. We share the commitment to protecting beneficiaries and ensuring taxpayer dollars are fe spent on legitimate services. They are at the forefront of our efforts. The lens of my experience as an emergency medicine physician who cares about the health of qua patients. We should offer the highest quality and most appropriate care possible. Cms is committed to protecting taxpayer dollars, wasteful abusive or Fraudulent Services e helping to extend the life of the trust fund. The importance extends beyond dollars and Health Care Costs alone. Insuring we have the resources c to provide for their care. Sibili as part of our responsibility to taxpayers and beneficiaries to see that resources are used per appropriately, cms has on ov obligation to perform audits. Te i would like to make three o points about the status of our efforts. First, we are having real impacd in reducing waste, fraud and abuse in the program. Urden wh we work to reduce burden by meeting our obligations. On the first point, we are pr seeing success to prevent wastew abuse and fraud. In through medical abuse and paym activities in fiscal 13 alone, payments were not paid or returned to the trust fund. Evera we saved 7. 5 billion from the payment edits that prevent bad y payments in the first place. We use the auditors to perform medical review and identify improper payments. Ion to recovery auditors returned overr 7 billion to the medicare trus fund since the start of the program in 2010. Our antifraud activities had bi impact. Re funding returns 4 billi 4 billi the trust fund. We have revoked over 17,000 and deactivated 260,000 of providers. At the same time, we recognize the efforts impose a burden. Cms strives to carefully balanc responsibilities to protect the trustth fund with the desire to limit the burdens they place. Oos to that end, we use tools such p as educational efforts and significant contractor oversight to minimizecont burden where we. We have dialogue with communities to improve our programs. Onext example in the round of discontracting, based on eholdes feedback from steak holders we believe willef result in a mored Effective Program with improvedo accuracy and program transparency. We haverior utilized approachesh as authorization, granting more security. We will continue to listen to stake holders to make ird, w improvements to thee programs. N third, we appreciate the interest in ensuring cms is hat improving efforts and know tha the congress and the public ende expect rreal, intangible resulr we looking to implement improvements to enhance our efforts and impact. Ti july, 2013, cms used in the geographic arias prone to high amounts of fraud. Ked th with it in place, we revoked the privileges of Home Health Agencies and roped 179 ambulance suppliers in texas. Areas. We are continuing to work with Law Enforcement in the hot spot areas. St cms is using the tools and besti practices to stop improper pr payments. Since june, has 2012, they have provided advanced analytics on a streaming, national basis. They stopped, prevented or impr identified 100 million in. Improper payments including use savings. He we have begun to use the common sector of prior authorization to address an area of high imprope payments, the use of power mobility devices. A in 2012, a demonstration in seven states. That r this demonstration resulted in a significant decrease in expenditures. 66 in the demonstration states and 60 in the nondemonstratioe states. R many of whom have requested cmse expand authorization to parts of the country. A we know we have made progress to address vulnerability, more work remains for efforts and fraud. O i look forward to answering the subcommittee questions while tig protecting beneficiary access t Higher Quality care. Thank you. Mr. Richy. Good morning, chairman, hed e Ranking Members and other s distinguished members of the committee. Thank you for this discussion. Improper payments cost taxpayers and beneficiaries 50 billion a year. Recovering these lost dollars and preventing future improper m payment. Cms needs to better ensure that medicare makes accurate, appropriate payments. When improper payments occur, ty cms needs to identify and recover them. They must implement safeguards o tors stop additional overpaymens many vital functions. This means ensuring contractor performance is essential. Sy the medicare appeals system en needs to be changed to ensure r, efficient, effective payouts for the program and beneficiaries and providers. This morning, ill focus on four key points that illustrate our work on these issues. First, cms must do a better job, ensuring payments are accurate. Cms needs to better protect medicare and beneficiaries from overprescribing drugs. We found part d paid millions of dollars of drugs prescribed by athleticg t trainers and to therapists. Recommendations to tighten up se monitoring. Secon second. Check your microphone. It clicked off. Thanks. Er second, improper payments occur, cms needs to do four things, identify, recover, assess and r address. I cms racks to identify improper 0 payments. In 2010 and 2011, rack audits tn resulted in more than 700 erpam million inen overpayments e recovered. Cms assessed the findings to ot understand why the overpaymentss occurred. It then must address the issues to prevent future improper stop payments. The third point is cms needs to better ensure contractors perform effectively. The cms pay claims, protect medicare from fraud and abuse. Oig raises concerns. Tak assess performance more effectively and take action when they fail to meet standards. A finally, the medicare appeals system needs to be fundamentall changed. Before the recentan appeals and subsequent backlog, oig raised concerns about the alj level. They have overturned decisions half the time. Alj is widely amongst themselves in decision making. This happens because medicare policies are not clear. Dicare oig recommends clarifying the policies and coordinating training on the policies at all levels of appeals. So con administrative inefficiency is part of the problem. O in closing, more needs to be re done to reduce and recover improper payments, ensure contra effective contractorct performaa and improve the appeals processg oig is committed to finding impv solutions to find beneficiaries and improve the program. Thank you for your time, i welcome your questions. Thank you all. For we are going to give five we minutes for the first round of e questioning, then go backt andn forth. Let me set context for my time. If a provider will have to something treviewed, lets tal through the process and set context for everyone on this. Go back to the statement about the pay. This is the post payment has occurred. How will someone find out they are going to be checked, inspected, whatever it may be, post payment, for any kind of i . Claim . What is the step one . How will they be notified . A they get a letter from a ntrr contractor. With okay, they get a letter a contractor. Ld who . E one of four contractors. It could be a medicare administrator, rack, cert contractor that pulls a sample r of random claims to estimate the improper rate or a zpic, zone integrity contract looking for potential fraud. Ts take lets back up. Take a physical therapy clinic. N a stand alone clinic seeing a mixture of insurance, private pay and medicare. Okay . You are saying that one physicas therapy clinic could receive a request to pull a file from anyn one of those four or they are a unique to four entities . They could receive a requesth from any one of the four. Is it possible all four will make a request in the course of a year . Not supposed to happen . Is it possible . Theoretically, but highly unlikely. How are they notified if onee of them does it or could two do it or three . You are saying four are unlikely. Racks are not supposed to duplicate reviews done by other contractors. To the same provider or the same case . The same case. A duplicate claim is considered to be the same file for the same service. Could a provider get a reviet from all four of those different folks, different cases, but that provider itself get r reviews fm four different groups of people from medicare . Possible, but unlikely. What about from two or threer of those . You are saying four is unlikely is it possible to get two . Yes. M foigr example, they might get aa review from a rack and from a cert, estimating the improper payment rate. Files how many are they pulling . How many files are they pullingu at that llpoint . Are they pulling one, a sampling, how many . They are pulling one. U know i believe. You know, overall, the racks give over a million reviews. Ut n correct. Ing, but, when they are reviewing, for a provider, they are pullin for thatth service. They are pulling go back e to the physical therapy clinic. D they are not going to reach in o and grab one necase, are that . A they are going to grab a sampli sampling of casesng to review . O no, i dont believe so. They how do they select which patient well in the case of the rack, cms tells them what kind of issues they can look at. They Work Together with cms and cms approves the type of issuesg they are going to investigate. So, they go in and make the e request of a certain type of client thats there. Yes. Theyre they are not just pulling ont patient are they, from that ten . Type . They they may pull ten, they may pull 20 . I believe the claims are investigated on an individual n base. Imth saying to the provider. When they get notification. They will get notification of a claim. The investigation of a claim. Ere im sorry. Correction. One, imd be more than but there is a limit. Thats what im trying to get. What is the limit . Does anyone know the number on a that . How many are they pulling for a rack audit. C if i may, congressman, take a step back. Nume i agree there are numerous contractors that can audit a s single provider. Each contractor has, they are ed set ino statute. They are supposed to do the job they are doing. The cert contractor is different than the rack contractor. The cert goes in and finds the s improper trate. He they are not looking at the impr provider. They are to determine if improper payment occurred. Its a function to evaluate ouro services. I agree c numerous contractors g touch providers, we do not touch the same provider too often. We set limits for contractors s they can touch a provider and request a particular sampling vr based on the size of the provider themselves. How large is that sample . L just a hypothetical example might be a smaller provider that sends in 10,000 claims a year. Ac a rack would be permitted to obtain no more than 20 to 25 claims at a time and no more frequently than every 45 days. Le so, they could come in every 45 days and pull 20 to 25, and correct . Different files and say we are not going to pay these until we get a chance to check them . Correct . Not , correct . But conceivably, its correct. Enu again, we provide oversight to i ensure we are not burdening individual providers during the course of the processes. Well come back to that. The i want to honor everyones time. I want to come back to not burdening individual providers. I can name several providers in. My district that beg to difr on that statement. You will find no greater fraud advocates for the taxpayers and going after fraud than us on s o this panel, but we are advocates to make sure we dont lose providers that are seniors, havr access to multiple providers that say this is not worth it e and drop out. I wont take medicare because its burdensome. Thank you mr. Chairman. Im going to do a couple things assuming i dont run out of time. I want to follow up on a couple s re things the chairman said. The balance is tricky. Given that this committee clearly wants to focus on waste, fraud and abuse even if the Medicare Program and every other Health Care Program was flush g and that wasnt our being efficient andwo worrying about e having Services Available for a growing population. Is our job is to make sure every g tax dollar is being used the wa it was intended. We want bad actors and bad providers barred from this system and all others, no reco question about that. We also recognize that you have to do a due process system. Th weat appreciate that. The due process system is clearly broken because if you are waiting years without ymento payment, or having a payment removed, thats not due processc i would agree, too, we have created a burdensome administrative environment. Its not just the federal touches. That is a federally operated. Ts remember that most of these programs take medicare, servin medicaid, they are serving dualg eligibles. They are beinged touched, reviewed, audited, regulated by states and some states with a whole different variety of private entities. These small, sometimes small providers are spending an incredible amount of time being administratively reviewed and recovery audits, given there is a contingency fee to identify issues andvi problems. This creates a ripe environment for what you have today, which is, we have now, with the office of medicare hearings and an appeals, we have recently d th announced we are going to suspend the ability of providery to have their appeals heard by Administrative Law judges. The decision was made by a lj backlog of appeals in a hearings which, by the medicare hearings and appeals own admission has grown from 92,000 to over 460,000 in just two years. Doctor, i understand that the hn office of medicare hearing and appeals is not part of cms. Verse is also understand your office oversees the contractors and nm racks whose audits are the cause of many, if not most of the get appeals. Given the long wait times for getting an appeal heard, wouldnt it be prudent for cms to suspend rack audits until the claims backlog is cleared . I want you to touch on the factt there are other ways to make sure we are preventing fraud more than just the rack audits. Sure, thank you. T i would start at just agreeing a with you thatt it is a real chae challenge in programng integrit to make sure we are doing our a job, protecting the trust fund and doing as much as we can to lower the burden on the s providers and make sure there are no access to care issues fod beneficiaries. Ng it is a top priority. I think its important to leveln set a little bit on the amount of burden we are placing on the system through activities. Y m as pointed out earlier by miss r king, we audit less than 1 of the claims we receive. Ur fro there are clearly appeals that t occur from rackhe audits. From the overall rate of appeals im sorry, the overturn rate is about 7 . Publ thats in the latest publicly t available data. J if youus look at just appeals tn are initiated after an overpayment determination by a rack, theres the overpayment o rate is 14 out of all appeals that are generated. I do think the appeals process the important for providers. It allows them the opportunity i to represent their claim and an interest. Itach. Provides an important ch and balance on our approach. As far as the third level of appeal that involved the alj, that is not directly under our control. We have been working with the department to device strategiese for thect backlog. What is directly under our control are i the first two levels. I cathne tell you both the overe rate is not substantially high in those areas. They are theng appeals are heard in a timely fashion. Tegiet there are numerous other strategies we have taken to try to decrease the appeals. Im i want to forge your time, so im happy to go into them, if you would like. Iate t i appreciate that, except that i would certainly make the statement that, and you have heard this theme throughout thew hearing, we have providers who would differ with you about the burdens and whether 14 is ter reasonable in terms of what the canth manage for cash flow for patients and staff. S i would say many of the smaller providers couldnt i afford to s appeal. Im not sure if the data is ken relevant and what strategies have you undertaken to identifyo how many providers come to me e who wouldal love to appeal becae they believe they have been on wronged or an error but dont y have the ability to do it. Also, fear, intimidation and retaliation and just pay. Or do whatever it is they are asked to do at the next level. Im way over time. Pond t so, if you could respond to l that, then ill come back. Add sure. In addition to appeals, congresswoman, there are other controls we have implemented over our contractors. What a we do determine what areas theyv can look eat. They have to achieve sort of get permission from a board at cms t before they enter into an audit area. We have an independent validation contractor that lookt behind the racks themselves to evaluateoor n whether or not the making the determinations accurately and all the racks have, through that validation contractor, achieved well over 90 accuracy rate. I think the incentive structure itself incentivises getting it right. Theys. Get paid on a contingenc. If they lose on appeal, they lose the contingency. Plac i would be remiss, let me correct one factual issue. I said 14 overturn rate. That is in part a since a lot of our issues were. Hairma if i can, the answer is, t however, we dont know how many providers are unable to appeal and theres no test to th determine i mean we have one side of the data equation. Im not sure thats an accurat h representation. I appreciate you are looking at the aitests. Like i yield back, mr. Chairman, butt id like to explore that further. Let me make one statement as well. You t mentioned there is a te incentive for racks to limit that because b they lose their contingency fee if they lose on appeal. The problem is, let me give youo an oklahoma illustration. If you arer fishing, you can p one hook in the water or five hooks. You may only catch one fish, but if a rack decides to grab 20 gr2 different0 cases and hope they win ten of them, thats better than just grabbing ten of them. If its close, go ahead and gra that file and keep moving from there. We maythto win it, we may not w it. E. Its helpful to the rack, not o help to the provider who has ton go through the process. We can talk about that more in a bit. Thank you mr. Dchairman. While on that frame of thought, do you have differentiation between the providers and overturn rate . I dont think the data differentiates in terms of not appeals data. Im not aware of data that differentiates between small and large. The poinist i made is we have el different requirements of the contractors when they look to audit a smaller provider. Theres different medical eques records, requests to make sure to try to limit the burden thaty is o placed on the smaller ider. Provider. Be interesting, i represent i rural arizona. I would like to see some type oy movement to try to make that accountable. You know, when you said overturi rate with part a, what about noi part b . You know, i am actually not n aware of i dont have the t figure in front of me. Et we can connect with your off fis to get the part b overturn rate. Itsal p important. Most of them are institutions, . Not individual providers. Would you agree . I think the part met me i make sure i heard beyou. The part a claims tend to be t more institutional, the hospitals and the part b claims are individual providers or kin, groups of providers. Aspect miss, king, from your oversight aspect, do you see maybe a change you would recommend for methodology ou instead of, you know, looking at a provider as being guilty in aa aspect, kind of an atmosphere no like that, y do you see a bette way of handling this . I dont actually think that r the post payment review starts off with the provider is guilty. I think its not a criminal pay matter. Its a, matter of either an t overpayment or underpayment. I do think that cms has a responsibility as stewards of the trustth funds to make sure that claims are paid properly. Nd as part of that, i think they need to do as much as they can effectively on the prepayment side, but i also think that they need to look at the post payment side. That being said, we have found some instances in which the requirements are posing e have administrative f burdens on providers. We havemi recommended that cms reduce not the requirements, but the differences of cross contractors so providers have aa better b understanding of what e they are required to do. From the standpoint of that process, doctor, is is there a way that we can actually identify maybe frequent fliers . N do we have a frequent flier i mn list. Stateind boards do this. We are replicated what state boards do. I think we take a different approach. So, so, the spectrum Program Integrity is long. There are folks on one side. They are the vast majority diffr providers. On the other side, a smaller subset are potential criminals i are trying to rob the program. Ar we do take, you know, i would argue that the various pr approaches we have to ogoverseek thee, issue, the program integrt issues, try to take into account where the risk lies. Part of why we can take an audit base approach is because they are legitimate and an audit is a reasonable approach for them. We do take a much more risk based approach on the fraud side that really can ratchet up the intensity of how we look at a provider based on findings frome audits. Thats appropriate for providers that are pushing the line and committing criminal activities. T we try,s on the other side of e house to take a more fact based approach. We look at issues that are big, National Issues where there are improper payments and do deeperh analysis to know which providero to look at. Where o its focused on where improper payments are occurring. Its not ratcheting up on a single provider. Wouldnt it be more efficient to have a profiling aspect . Ve as you know, in state boards you f have a list t of most of your problems with with 10 of the population. Right. I think the comparison to state boards, i would just remind youo state boards are often dealing with the most difficult of cases. They are on the right side of the house where, you know, these are providers that are committing criminal or negligen activity. They are dealing with the worst actors. Again, we do do that with a similar set of actors. Pe what we are lookingrh at, againl to try to decrease the potential burden from the audits is not h ratcheting up, but ratcheting t down. As. Substantiated, perhaps we could audit them less. Audi thats a solution that we are looking into to see if we can implement. Thank you, mr. Chairman . As of when . That is one of the recommendations that hovers out there. How does someone prove, basically, im a good actor, and dont get someone constantly coming in to check them all the time . Ca there are a number of solutions were looking at. The . As someone pointed out earlier, rac is currently in a paused state where were working on the next round of procurements. Xt rd as part of that procurement tiv activity, were taking into account a lot of opinions, from eholde stakeholders, including providers, and trying to solution how racs can still do their job and meet their obligations but decrease that burden. En thats one of Many Solutions were considering. Thats that when . T i couldnt promise an exact date. And is that two years, ten years from now . I think we are working on the procurement now and we hope to complete it now in the next few monthsle. Ext ive heard that. Re it remains to be seen if ma thats a change that can be pursued in the near term. Thats still under discussion . Stscussion thats not a definite ive got a good actor there, as dr. Gosar had mentioned . Its one of many exclusions we are looking at. Weve heard a lot of input from the Provider Community and where trying to take action where we can. O that. Well come back to that. Thank you very much, mr. Chairman. Listening this morning, it gets frustrating up here. Despite the fact that we all come from different communities and are sharing very clear examples as to why the approach thats being taken isnt wh working, we continue to get be pushback and reiterating the same points without any clear idea of when things will improve. On behalf of the constituents i represent in nevada, medicare is vitally important to their quality of life. Im talking about the beneficiaries here. Llbenefi 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 to 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 medicare covered. As my colleague miss grisham explained, it also typically includes medicaid or other paid sources as well. And so when you layer that layeh burden on the provider, its tough to provide services. Thats what were hearing. So after speaking to several stake holders in nevada, akin particularly hospitals and medical providers, all around the las vegas valley, and i also include some of the Rural Counties in nevada, which are woefully underserved by enough providers, the accountability of the Recovery Audit Contractor Program seems questionable, at best. And i dont understand how you continue something that doesnt even hasnt even been properly evaluated. While these programs have a note Worthy Mission of seeking out improper payments of medicare services, it seems there are , s potentially perverse incentives to these racs. Eerv in 2010, the rac program was expanded to all 50 states and made permanent. Again, i dont know how you start something, dont evaluatei it, then expand it to 50 states, first of all. In in 2013, over 192,000 claims were filed by these auditors toi the office of medicare hearingsp and appeals, contributing to a backlog of over 357,000 claims. The recovery audit contractor pa program, as i said, may have been well intentioned, but there have been unintended consequences. So acting Deputy Inspector richie, in your testimony, you e include a long list of policy , recommendations for cms to address. You re you reported that 72 of denied hospital claims at the third att level of adjudication are overturned, ultimately in favor of the hospitals. At what recommendations have you wc offered cms and this committee to address the concerns that racs are, no pun intended, dramatically racking up the numbers of claims backlogged . I think, first, we offered recommendations both in the rac area and in the appeals area. I think its important while so intertwined to consider those separate, in some ways, and a rac work, that was all the work that we have that were talking about was before this current backlog. G abou weve seen things that we think are relevant in the rac work. Let we did see in 2010 and 2011, tht that they were helping as i t mentioned in my testimony. We need to make appropriate payments and when inappropriate payments are made, they need to be recovered. Only they did recover 1. 3 billion in 2010 and 11. 010 ed. And 6 were appealed. Ealed, t when theyre appealed, theres a very high overturn rate. Clearly something needs to be done. I point to the alj work for the recommendations that i push to the most. Do for the system to really work and where the backlog is, we think the biggest recommendation we had is that medicare policies are not clear. Recomm and i think, you know, all fraud is certainly improper payments. But not all improper payments are fraud. And most of the providers are not committing fraud, they simply dont understand a complex system and are trying to submit claims that are complicated. Sysa we saw in the alj work that 56 of aljs overturn 20 of the prior level overturned. Rn a lot was due to different interpretations of the policies. Are there a set of recommendations dealing with the medicare policies . Yeah. Medica in our recommendations, because there are so many, its mainly to clarify select the there policies that need to be clarified. Clarify those and educate the people on the policy to create less overpayment. Less appeals in the process. In my written testimony, i talk about our home health work. Ten test with the recent face to face requirement if a physician is certifying youre eligible for home health they have to have a facetoface encounter. We found 2 billion in improper payments in 2011 and 12. A third of the claims didnt meet the requirement. We dont think a third of the claims were fraudulent. Lent. Its because they are complex policies as people get more used to them. It will probably go down. To educate people on the policies, make them more clear we think is really a key the key being the appeals backlog lower. I know my time is up for this round. Ill come back to additional questions. Recognize the chairman of th full committee, chairman issa. Thank you, mr. Chairman. Roun. Thank you for holding this important hearing. Ck t the gentleman from nevada and i dont always agree. Every once awhile, theres a nta nuance of agreement from this extreme to that extreme of the diaz. Emen this is one where i think the entire committee is frustrated. I and chairman langfords work on this, in addition to enc, reall. Shows how bad things are. And let me just give you two giy questions, and then well go into comments. Dr. Agrawal, let me just ask te you and for the ig, mr. Richie, new york city new york state owes us 15 billion in overpayments. They flat billed more than the cms maximum for medicaid and we held hearings on that more than a year ago. What have you done to get 15 billion back while, in fact, you send out hordes of people to harass doctors with a less thanf stellar success rate of successc in accuracy in the audits . What have you done to get back from a state that knowingly billed far greater than the rate . Do and its 15 billion. Its ten years worth of your recovery. Any answers . Th of so, that is an area were looking at now. N area youre looking at it . Ing at 15 billion and youre looking at it . D yo at the request of the committee, we have we are currently taking on an currentl evaluation of new york state. Evi were waiting to get the findings and release the results, after which time i fins think we can have a conversation about how to proceed. The newspapers make it a conv abundantly aware the numbers speak for itself. They are hard numbers of what was sent out versus the maximumm allowed by law and youre looking at it more than a year later . Seey a sir, i think these evaluations do take time. They are rigorous. Theyre designed to be rigorousi oh, they do . Me do you know how many doctors have had to stop their practicer and answer nothing but questions because you take their money and then they try to get it back . Dok isnt that correct . Ng but q i wouldnt characterize it as stopping their practices. No. Im telling you that doctors in some cases have to stop their practices because the audits for small practitioners are isnt incredible detail. N they dont get their money back until they prove their innocence through the process. Pr let me go through this again. Eye you have the right to stop payments in your state based ont a good faith belief that they got over 15 billion. And then they can spend legions of time to argue why they should get to keep far more than they