Medicare Program Official Confirms that Administration Failed to Meet Its Key Goals to Reduce Waste, Fraud, and Abuse

June 25, 2014

WASHINGTON, DC – The House Energy and Commerce Subcommittee on Oversight and Investigations, chaired by Rep. Tim Murphy (R-PA), today held a hearing, “Medicare Program Integrity: Screening Out Errors, Fraud, and Abuse,” to discuss what steps need to be taken to eliminate the waste of tens of billions of taxpayer dollars and strengthen the Medicare program.  Members heard testimony from administration officials from the Centers for Medicare and Medicaid Services (CMS), the Department of Health and Human Services Office of Inspector General (HHS OIG), and the Government Accountability Office (GAO).

During questioning, Deputy Administrator and Director at the Center for Program Integrity at CMS, Shantanu Agrawal, M.D., admitted to Murphy that the administration has failed to meet its target goal of a reduced improper payment rate for Medicare fee-for-service and that the improper payment rate had actually worsened over the last fiscal year.

Witnesses also confirmed to Murphy that there are gaps in the legal authority to prevent bad actors - including those convicted of crime - from receiving Medicare payments in the first place. Murphy requested that the witnesses provide the committee with a complete list of data that would help improve preventative efforts. Murphy also noted, “Earlier this year one news outlet reported that several doctors who had lost a medical license were still able to bill the Medicare program for millions of dollars. Committee staff has identified more problems as well: at least 14 individuals convicted of FDA-related crimes – health providers that have been debarred by the FDA – do not appear to be excluded from the Medicare program. Worse, 6 doctors debarred by the FDA were paid over $1 million in Medicare payments in 2012.”

Full committee Vice Chairman Marsha Blackburn (R-TN) showed a template of a Medicare card, noting that the claim number is the same as the patient’s social security number, creating serious risk of identity theft. Witnesses from both the GAO and HHS OIG identified fixing this social security number issue as an important step in preventing Medicare fraud. Dr. Agrawal from CMS acknowledged the problem but did not commit to making this change. 

Rep. Renee Ellmers (R-NC) underscored the problems with the systems currently in place to audit certain providers. “There is fraud, we all know that there is fraud and abuse of the system, but you are going after the good guys to make up the dollar difference. You are not addressing the real fraud issues. You are not taking recommendations and applying them, your own recommendations.” 

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