<DOC>
[107th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:86610.wais]
MEDICAID CLAIMS: WHO'S WATCHING THE MONEY?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT EFFICIENCY,
FINANCIAL MANAGEMENT AND
INTERGOVERNMENTAL RELATIONS
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
JUNE 13, 2002
__________
Serial No. 107-201
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
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WASHINGTON : 2003
____________________________________________________________________________
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COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
ILEANA ROS-LEHTINEN, Florida EDOLPHUS TOWNS, New York
JOHN M. McHUGH, New York PAUL E. KANJORSKI, Pennsylvania
STEPHEN HORN, California PATSY T. MINK, Hawaii
JOHN L. MICA, Florida CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
BOB BARR, Georgia DENNIS J. KUCINICH, Ohio
DAN MILLER, Florida ROD R. BLAGOJEVICH, Illinois
DOUG OSE, California DANNY K. DAVIS, Illinois
RON LEWIS, Kentucky JOHN F. TIERNEY, Massachusetts
JO ANN DAVIS, Virginia JIM TURNER, Texas
TODD RUSSELL PLATTS, Pennsylvania THOMAS H. ALLEN, Maine
DAVE WELDON, Florida JANICE D. SCHAKOWSKY, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
ADAM H. PUTNAM, Florida DIANE E. WATSON, California
C.L. ``BUTCH'' OTTER, Idaho STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia ------
JOHN J. DUNCAN, Jr., Tennessee BERNARD SANDERS, Vermont
JOHN SULLIVAN, Oklahoma (Independent)
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
James C. Wilson, Chief Counsel
Robert A. Briggs, Chief Clerk
Phil Schiliro, Minority Staff Director
Subcommittee on Government Efficiency, Financial Management and
Intergovernmental Relations
STEPHEN HORN, California, Chairman
RON LEWIS, Kentucky JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California MAJOR R. OWENS, New York
ADAM H. PUTNAM, Florida PAUL E. KANJORSKI, Pennsylvania
JOHN SULLIVAN, Oklahoma CAROLYN B. MALONEY, New York
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
J. Russell George, Staff Director and Chief Counsel
Bonnie Heald, Deputy Staff Director
Justin Paulhamus, Clerk
David McMillen, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on June 13, 2002.................................... 1
Statement of:
Calbom, Linda M., Director, Financial Management and
Assurance, U.S. General Accounting Office, accompanied by
Kimberly Brooks, Assistant Director, Financial Management
and Assurance, U.S. General Accounting Office.............. 4
Maddox, Charles C., inspector general, District of Columbia,
accompanied by Sidney Rocke, director, District of Columbia
Medicaid Fraud Control Unit................................ 47
Mangano, Michael F. Principal Deputy Inspector General,
Office of the Inspector General, Department of Health and
Human Services, accompanied by John Hagg, Audit Manager,
Office of the Inspector General, Department of Health and
Human Services............................................. 35
Smith, Dennis, Director, Centers for Medicaid and State
Operations................................................. 24
Letters, statements, etc., submitted for the record by:
Calbom, Linda M., Director, Financial Management and
Assurance, U.S. General Accounting Office:
Information concerning adopted sanctions................. 66
prepared statement of.................................... 6
Horn, Hon. Stephen, a Representative in Congress from the
State of California, prepared statement of................. 3
Maddox, Charles C., inspector general, District of Columbia,
prepared statement of...................................... 51
Mangano, Michael F. Principal Deputy Inspector General,
Office of the Inspector General, Department of Health and
Human Services, prepared statement of...................... 37
Schakowsky, Hon. Janice D., a Representative in Congress from
the State of Illinois, prepared statement of............... 059
Smith, Dennis, Director, Centers for Medicaid and State
Operations, prepared statement of.......................... 26
MEDICAID CLAIMS: WHO'S WATCHING THE MONEY?
----------
THURSDAY, JUNE 13, 2002
House of Representatives,
Subcommittee on Government Efficiency, Financial
Management and Intergovernmental Relations,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:02 a.m., in
room 2154, Rayburn House Office Building, Hon. Stephen Horn
(chairman of the subcommittee) presiding.
Present: Representatives Horn, Sullivan, and Schakowsky.
Staff present: J. Russell George, staff director and chief
counsel; Bonnie Heald, deputy staff director; Rosa Harris, GAO
detailee; Justin Paulhamus, clerk; Chris Barkley, staff
assistant; Michael Sazonov, Sterling Bentley, and Freddie
Ephraim, interns; David McMillen, minority professional staff
member; and Jean Gosa, minority clerk.
Mr. Horn. A quorum being present, the Subcommittee on
Government Efficiency, Financial Management and
Intergovernmental Relations will come to order.
Each year, the Federal Government spends billions of
dollars to provide health care for the Nation's most vulnerable
people, the poor and the disabled. This assistance is provided
through the Government's Medicaid program. Although it is a
Federal program, Medicaid is administered by the States through
56 separate and distinct programs. The program's considerable
cost is shared by the State and Federal Governments. Last year,
the Federal Government spent an estimated $125 billion on the
program. States contributed an additional $95 billion.
Overall, Medicaid is the Federal Government's third largest
social program. Despite the size of this program, the Federal
Government's lack of financial oversight has left it highly
vulnerable to waste, fraud, and abuse. The Office of Management
and Budget recently reported to Congress that the Government
had made $20 billion in erroneous payments last year. That
amount included $12.1 billion in the State and Medicare
payments. As appalling as that figure is, no one can even
calculate the amount of erroneous payments that have been made
in the Medicaid program.
Today, we will examine the extent of these problems and
what steps need to be taken to resolve them. The Federal
Government
must do a better job of ensuring that the billions of dollars
dedicated to the Medicaid program are being appropriately
spent. We owe it to the American taxpayers who provide that
hard-earned money, and we owe it to those who depend on this
life saving program.
[The prepared statement of Hon. Stephen Horn follows:]
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Mr. Horn. I welcome each of our witnesses today and look
forward to their testimony. I will now swear in those that are
both making a presentation to us as well as their assistants.
[Witnesses sworn.]
Mr. Horn. We have eight who took the oath, and the clerk
will note who did. And that is just so we don't have a problem
in questioning by the staff. It's so we don't have to take
special oaths simply because we didn't do it to start with.
We will start with the General Accounting Office and the
very fine document they have for us. And it is Linda Calbom,
the Director, Financial Management and Assurance, U.S. General
Accounting Office. Please present it.
STATEMENT OF LINDA M. CALBOM, DIRECTOR, FINANCIAL MANAGEMENT
AND ASSURANCE, U.S. GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY
KIMBERLY BROOKS, ASSISTANT DIRECTOR, FINANCIAL MANAGEMENT AND
ASSURANCE, U.S. GENERAL ACCOUNTING OFFICE
Ms. Calbom. Thank you, Mr. Chairman. I am pleased to be
here today to discuss the results of our review of CMS'
oversight of Medicaid financial management. My testimony today
summarizes our report that we issued in February for this
committee, which discusses the need to improve Federal
oversight of State Medicaid finances.
As you well know, the Federal Government and States share
responsibility for financial management of the jointly funded
Medicaid program. States are really the first line of defense
in safeguarding Medicaid finances, since they are responsible
for making proper payments to providers, recovering misspent
funds, and making accurate reports of their cost for Federal
reimbursement. CMS, at the Federal level, is responsible for
overseeing State financial activities and ensuring the
propriety of expenditures reported by States for Federal
reimbursement.
You asked that we review how well CMS is carrying out its
responsibilities for financial oversight of the Medicaid
program. We found that the CMS financial oversight process has
weaknesses that leave the program vulnerable to improper
payments.
The root cause of improper payments is breakdowns in
internal control. The Comptroller General's Standards for
Internal Control in the Federal Government require that agency
managers perform risk assessments, take actions to mitigate
identified risks, and then monitor and communicate the
effectiveness of those actions. In addition, the Standards
provide that agencies should ensure their organizational
structure is designed so that authority and responsibility for
internal controls are clear.
The first chart on my right, and I think it is in your
packet, Mr. Chairman, shows how all of these areas are key in
effectively managing proper payments.
CMS oversight had weaknesses in each of these areas, which
I will now just very briefly describe. First, our review found
that CMS had only recently begun to assess areas of greatest
risk for improper payments and, thus, did not know the full
nature and extent of its risks, or the most efficient and
effective controls to mitigate those risks.
CMS also was not effectively mitigating the controls it did
have in place. For example, analysts across the 10 regions did
not consistently conduct focused financial reviews that are
beneficial in identifying unallowable costs in specific
Medicaid service areas. Only eight of these reviews were
conducted in fiscal year 2000 as compared to 90 reviews in
fiscal year 1992. CMS attributed this decline to lack of
resources.
The other chart we brought today demonstrates this. It
shows that from 1992 to 2000, regional staff responsible for
Medicaid financial oversight declined by 32 percent, while
Federal Medicaid expenditures increased by 74 percent.
Recognizing its oversight deficiencies and resource
constraints, CMS began efforts in April 2001 to develop a risk-
based approach and revise its control activities. These efforts
did not, however, integrate information available from State
financial oversight program activities or consider other
control techniques that could enable CMS to carry out its
oversight responsibilities more efficiently and effectively.
Our review also found that CMS had few mechanisms in place
to continuously monitor the effectiveness of its oversight.
Managers had not established performance standards for
financial oversight activities, and limited data were collected
to assess regional financial analysts' performance in carrying
out these activities. In addition, the CMS audit resolution
procedures did not collect sufficient information on the status
of audit findings or ensure that they were resolved in a timely
manner.
We further found that the CMS organizational structure
created roadblocks to effective oversight because of unclear
lines of authority and responsibility between the regions and
headquarters. As a result, CMS lacked consistency in its
approach to establish and enforce standards, evaluate regional
office oversight, and implement changes to improve financial
oversight.
In closing, Mr. Chairman, I want to emphasize that while
CMS is taking positive steps to improve its financial oversight
of the Medicaid program, the increasing size and complexity of
the program, coupled with diminished oversight resources,
requires a new approach. Our report recommends ways CMS can
revise its risk assessment efforts, restructure its financial
control activities, improve monitoring, and address
accountability and authority issues posed by its organizational
structure.
CMS' ability to make the kind of changes we are
recommending will require top level management commitment, a
comprehensive financial oversight strategy that is clearly
communicated, and clear expectations for implementation of the
changes.
That concludes my statement, Mr. Chairman.
[The prepared statement of Ms. Calbom follows:]
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Mr. Horn. Thank you very much. Our next presenter is Dennis
Smith, the director of the Centers for Medicaid and State
Operations.
STATEMENT OF DENNIS SMITH, DIRECTOR, CENTERS FOR MEDICAID AND
STATE OPERATIONS
Mr. Smith. Thank you, Mr. Chairman. Our deputy
administrator and chief operating officer, Ruben King-Shaw, was
not available today because of a personal medical emergency. I
will do my best to fill his shoes.
Thank you very much for the opportunity to discuss some of
the things that we are doing at CMS. I appreciate the
opportunity to have the benefit of the experts on both sides of
me, the GAO and the OIG, and some of our partners out there.
Again, as GAO explained, the first line of defense really
is the States themselves that administer the program and are
responsible for setting reimbursement rates, for monitoring
those, etc.
I think a large part of the stepped-up efforts that you
have seen really came out of, in large part, the Y2K efforts as
well. As States were updating their computer systems, they were
also taking the opportunity to update their MMIS systems and
their service systems, which is the utilization review. It
really is the first line of defense in making sure those
payments are accurate from the very beginning, having systems
in place where you can identify the outliers, and then followup
to make sure that where there have been overpayments those are
investigated for the reasons why.
As you know, there can be a number of different ways that
inappropriate payments can be made: An individual is not
eligible, services are billed for that were not really provided
in the first place, etc. Those things really have to be
identified at the State level, and we have seen improvement
over the past couple of years where States have improved their
systems, upgraded their computer systems. As you know, the
Federal Government pays an enhanced match for States as they
upgrade their systems, and those Federal funds, clearly, are
very important to updating those systems themselves.
The States also operate the Medicaid fraud control units
out of, I believe, almost all States are operating their
systems out of their Attorney General's offices. Having those
strong enforcements at that State level, obviously, is also
very critical to it to know that where there has been fraud
found that those cases will be prosecuted.
In terms of the strengthening of the management systems, we
appreciate GAO's guidance. We also appreciate what I think are
some very positive findings in terms of getting our feet on the
ground, and I don't think that you will find any daylight
between the administration and the GAO in terms of commitment
to updating the financial integrity of this system. The
administration has, maybe a little too quietly, put some new
controls into place, doing a number of things that are just
good sound management tools to make sure that we are
monitoring.
When you have the hearing next year, I think that you will
hear about and see a great deal of improvement as we have put
these systems into place. We have structured work plans and we
have done risk-assessments. The regional offices have done
risk-assessments: where is the greatest risk out there? What
should we be targeting? Etc. The work plans themselves are now
in effect, and, again, the monitoring, I can assure you that we
take this very seriously.
I think also a year from now, when we look back in terms of
what the GAO has referred to in the previous report in terms of
the decline in disallowances that were taken previously, those
deferrals and disallowances are now up considerably. And,
again, the will is there and the commitment is there to make
certain financial integrity is well-grounded out there in terms
of the managers and staff understanding the commitment to
financial integrity.
So I am pleased to hear some of the positive comments that
we are making progress, and, as I said, a year from now I think
you will see a great deal more progress.
There are a number of commitments that are summarized. I
won't go through them all in terms of your having a large panel
here, but our written statement for the record describes a
number of the initiatives that we have.
In particular, in your own State, Mr. Chairman, we are
doing data matches between the Medicaid and the Medicare
systems themselves. If you find a provider who is ripping off
one program, chances are pretty good they are ripping off the
other program as well. So getting the two different programs to
talk to each other is, we believe, a great potential for
success. So we have a pilot program going on.
We also have pilot programs with nine States that are going
on, and we think that will grow in terms of payment accuracy.
We are very pleased to have our State partners join us in that
and believe that also will yield a great deal of benefits.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Smith follows:]
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Mr. Horn. Thank you, that is a thorough presentation.
Let me move now to Mr. Mangano, the Principal Deputy
Inspector General, Office of the Inspector General for the
Department of Health and Human Services.
STATEMENT OF MICHAEL F. MANGANO, PRINCIPAL DEPUTY INSPECTOR
GENERAL, OFFICE OF THE INSPECTOR GENERAL, DEPARTMENT OF HEALTH
AND HUMAN SERVICES, ACCOMPANIED BY JOHN HAGG, AUDIT MANAGER,
OFFICE OF THE INSPECTOR GENERAL, DEPARTMENT OF HEALTH AND HUMAN
SERVICES
Mr. Mangano. Thank you, Mr. Chairman, I am pleased to be
with you here this morning to describe how our office is
working with the States and the Centers for Medicare and
Medicaid Services to protect taxpayer dollars against Medicaid
fraud, waste, and abuse. My written testimony focuses on how we
are joining forces with the State Medicaid Fraud Control Units
to fight fraud, with the State auditors to identify suspected
cases of abuse, and three recent reviews we have completed on
State abuses with Medicaid payment systems, and Medicaid
prescription drug pricing.
Each State is required to have a program integrity unit
dedicated to detecting and investigating suspected cases of
Medicaid fraud. Most States fulfill this requirement by
establishing a Medicaid Fraud Control Unit, which I will call
MFCU for short. Our office has the responsibility to oversee
the grants to and the operations of these units.
As the chart in my testimony demonstrates, in the last
fiscal year those units accounted for over 1,000 convictions
and a total of $253 million that was recovered back to the
Medicaid program. Our office also conducts joint investigations
with MCFUs. Last year, we worked together on 179 criminal and
41 civil cases, and achieved 47 convictions.
Over time, we have learned the same abuses perpetrated
against Medicare are often committed against Medicaid, so we
have launched another important cooperative program to partner
with State auditors. This program allows us to provide broader
coverage than our resources would allow us to do by sharing our
methodologies and experiences in investigating the Medicare
program with State auditors who are looking at the same kind of
issues in the Medicaid program. Our role ranges anywhere from
sharing methodologies with the States that they can use
themselves in their Medicaid fraud investigations, up to
joining those teams ourselves and becoming a full-fledged
partner in doing a particular audit.
To date, we have ongoing partnerships with 25 States, and
we have identified over $246 million of misspent funds. Some of
the reviews focused on issues like unbundling clinical
laboratory services, outpatient physician services, hospital
transfers, durable medical equipment, and managed care.
Our office also conducts a number of audits and evaluations
in areas of suspected abuse. One recent series of reviews
examined the use of States' manipulating schemes that exploited
a loophole in Medicaid's upper payment limit regulations. This
manipulation used intergovernmental transfers to artificially
generate excessive Federal matching funds for enhanced payments
to certain providers.
Very briefly, the States were able to pay nursing homes,
hospitals, and certain other health care providers up to the
amount that Medicare pays for the same service. But in six of
the States that we examined, they required the city and county
nursing homes to transfer back to the State most, if not all,
of that enhanced payment. When it was returned, some went back
to the general fund for the State; some of it was used for
Medicaid. And when it was, it also generated additional Federal
matching funds. And some of it was used for other purposes. But
practically none was kept by the nursing homes to increase the
quality of care for the beneficiaries it was intended to serve.
A related abuse we are now examining involves Medicaid
disproportionate share payments to hospitals that provide care
to a large number of Medicaid beneficiaries and uninsured
people. We found that some of the hospitals that did get to
keep some of their enhanced payments did not receive or were
required to return their disproportionate share payments back
to the State. We are currently reviewing this problem in 10
States.
Finally, our recent work on the Medicaid prescription drug
pricing clearly shows that Medicaid is paying far too much
compared with other payers. Most States pay pharmacies an
average of 10 percent below the average wholesale price, which
we call AWP, plus an additional fee for the cost of dispensing
the drugs. We found, however, that those pharmacies actually
paid an average of 22 percent below AWP for the brand name
drugs and 66 percent below AWP for the generic drugs. Had the
State Medicaid agencies actually paid at these lower rates,
they would have saved the program $1.5 billion a year.
Mr. Chairman, fraud and abuse practices are harming the
Medicaid program. We pledge our commitment to work with our
partners at the State and Federal levels to root out these
problems and ensure that taxpayer dollars are spent on high
quality services for the benefits they are intended to serve.
This concludes my testimony, and I will be happy to answer
any questions at the appropriate time.
[The prepared statement of Mr. Mangano follows:]
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Mr. Horn. Thank you. We will wait until two more presenters
have finished, and then we will open it up to the ranking
member and the questioning.
So let us start with the next presenter. I believe we also
have a new Member also wish us, Mr. Sullivan, who we are
delighted to have with us. He is a new Member from Oklahoma
here, and I am sure that in Oklahoma and other places that your
constituency will have some of these problems. So we are glad
to have you here.
Mr. Sullivan. Thank you.
Mr. Horn. We will now go then to Mr. Maddox, who is the
Inspector General of the District of Columbia, and he is
accompanied by Sidney Rocke, Director of the District of
Columbia Medicaid Fraud Control Unit.
So Inspector General.
STATEMENT OF CHARLES C. MADDOX, INSPECTOR GENERAL, DISTRICT OF
COLUMBIA, ACCOMPANIED BY SIDNEY ROCKE, DIRECTOR, DISTRICT OF
COLUMBIA MEDICAID FRAUD CONTROL UNIT
Mr. Maddox. Thank you, Mr. Chairman, Mr. Sullivan. It is a
pleasure to testify before the subcommittee today regarding the
oversight role of the D.C. Office of the Inspector General in
deterring waste, fraud, and abuse in the Medicaid program.
Because we conduct our oversight through a combination of
investigations, audits, and inspections, the OIG has a unique
perspective about the challenges that States must overcome in
order to ensure that the Medicaid program does not lose funds
needlessly. In addition, our experience also has taught us
important lessons about ways that oversight entities can be
most helpful to administrators and to the legislation. I am
pleased to say the D.C. OIG has enjoyed an extremely
constructive partnership with local executive and legislative
branches of the D.C. government to achieve a measure of
progress that I believe establishes the Nation's Capital as a
leader in finding new ways to address waste, fraud, and abuse
in this most important program.
Consistent with several key findings published in the
General Accounting Office's recent report on Medicaid financial
management and the need for better oversight of State Medicaid
claims, we have used our audits, inspections, and
investigations divisions to accomplish four objectives:
Developing a comprehensive oversight strategy, identifying
problems and performing risk assessments, taking action to
mitigate risk, and monitoring the effectiveness of those
actions.
We have developed a comprehensive oversight strategy by
deploying the resources of three distinct divisions: For
instance, in 1999, our audit division found that the D.C.
Public School System was not in compliance with Federal or
District regulations with respect to the way Medicaid records
were maintained. Because this problem continues to interrupt
the flow of reimbursement of Medicaid payments to the District,
we will conduct another audit in fiscal year 2002 focusing on
chronic problem areas, such as transportation of special
education students.
Another example of our team approach is our 3-month
inspection of our District's surveillance and utilization
review unit, which is part of the Department of Health, that is
responsible for monitoring the Medicaid claims processing
system for indications of fraud and abuse. We have made several
recommendations for improvement of this critical link between
governmental units that process bills and those that prosecute
false claims.
Although our auditors and inspectors review issues that are
related to effectiveness and efficiency of Medicaid program
management, our Medicaid Fraud Control Unit [MFCU], carries the
primary responsibility of working with the District's agency,
the Medical Assistance Administration [MAA], which is
responsible for administering the program. The MFCU's mission
is to investigate and prosecute financial fraud committed
against the Medicaid program by large health care providers as
well as solo practitioners.
I am proud to say that after a 17-year hiatus in the
District of Columbia Mayor Anthony Williams and former U.S.
attorney Wilma Lewis joined me to create the MFCU. With strong
legislative support from the City Council, we have been able to
seek enforcement using criminal, civil, and administrative
remedies.
The MFCU receives a variety of leads, tips, and
intelligence regarding possible fraud in the Medicaid program.
We build on this information through extensive use of data
mining techniques. The MFCU can manipulate extensive claims
data to look for aberrational patterns that may indicate fraud.
For example, a small pharmacy that is responsible for filing a
highly disproportionate amount of prescriptions may warrant a
greater scrutiny. Of course, this capability requires an
investment in manpower, training, and technology, but we
believe the effort is worthwhile in the long run.
In working individual cases, our MFCU remains sensitive to
the need for systemic reform. In fact, the two are often
intertwined. For example, the MFCU recently investigated
allegations of fraud in the Medicaid taxi voucher program. We
discovered that the program rules were incomplete and out of
date and lacked internal controls. This can greatly undermine
any attempt to prosecute for intentional fraud, since money is
paid in a seemingly improper way, but a prosecutor may have
difficulty showing a deceptive act that violates a particular
government expectation.
However, difficult terrain for a prosecution can often be
fertile ground for an audit. With this in mind, the MFCU
referred the matter to the OIG's audits division for a
comprehensive audit of the program.
In all our reports, we require that affected agencies
comment on our recommendations and begin implementation of
corrective action within a designated timeframe. Within the
last year, we have begun a process for tracking compliance on
priority recommendations, and we will direct our findings to
the Mayor's office for continued monitoring.
Moreover, we are providing these services based, in part,
on feedback we solicit from District leaders. As a result of
this communication, we are better able to use our limited
resources to address priority issues.
Both locally and nationally, experience has shown that
fraud cases are lengthy and give the target ample opportunity
to hide or spend all of the stolen funds. Although the
government may eventually obtain a restitution order or
judgment, this is of little practical value if no assets can be
located. Payment suspensions can be a vital safeguard in
preventing this outcome.
Our MFCU strives to keep the Medicaid program informed of
the progress of the cases. Whenever appropriate, we provide
information about overpayments we have calculated and evidence
of fraud against the program. As a result, an appropriate MAA
can suspend payments to the provider for the duration of the
case. In this way, we mitigate damages by preventing further
losses during the pendency of the case. Naturally, we are
careful to avoid undermining the fraud investigation in any
way.
Experience has taught us that agencies make optimal
progress when top-level managers are committed to preventing
waste, fraud, and abuse of the Medicaid program. We have taken
several steps to ensure ``buy-in'' at every stage of our
investigations, audit and inspections. Our most successful
effort has been to secure a Mayor's order requiring agency
heads to respond within a certain timeframe to our report
recommendations and to any OIG referrals sent to them regarding
noncriminal allegations. As a result, many agencies are much
more responsive in terms of timelines and substance. In
addition, our auditors and inspectors engage top-level
management from the beginning to the end of each of our
reviews.
Furthermore, the MFCU has provided training to the MAA on
the basics of health fraud prosecutions and audit techniques.
We share our expertise, and, in so doing, cultivate improved
working relations among agencies.
Although the GAO report did not recommend specific actions
regarding provider relations, I would like to comment on the
importance of conducting regular outreach to the provider
community. In the MFCU, our outreach is premised on the belief
that the vast majority of providers are honest and want to see
a Medicaid program free of fraud and abuse. We meet with
provider groups and trade associations to explain the
government's concerns and to provide some basic advice on
avoiding problems.
We also encourage buy-in by underscoring common interests
in the fight against fraud. For example, many Medicaid programs
nationwide are being hard hit by false claims for OxyContin.
This issue encapsulates many of the problems facing government
health care. Patients will often pretend to be in pain to
obtain a prescription for this powerful narcotic. They may
alter or forge any prescription they get and then sell the
narcotics on the street. Sometimes they steal prescription pads
off of doctors' desks. Sometimes they conspire with doctors to
dispense the drugs illegally. In the latter case the physicians
may receive payment from Medicaid for medical exams that never
occur or are very unnecessary.
The vast majority of physicians are outraged at this abuse,
but are also determined to preserve their ability to prescribe
OxyContin when necessary. We wrote a letter to the Medical
Society of D.C. stressing our common ground on this issue. Our
letter was reprinted in the Society's newsletter and
distributed to doctors throughout the District. In this way, we
believe we have addressed a problem in a proactive fashion
before it becomes an epidemic.
In conclusion, taken together, our strategic allocation of
resources to assess risk, monitor corrective actions, and
engage top-level management has brought much-needed focus to
our oversight efforts. In fact, most of these efforts were
initiated only since my tenure as Inspector General in 1999.
With the continued cooperation of the City's leaders and the
diligent work of the OIG, I am extremely optimistic we will
realize even more cost savings, restitution payments, and
prosecutions that will improve the fiscal integrity and
financial management of the District's Medicaid program.
This concludes my statement, sir.
[The prepared statement of Mr. Maddox follows:]
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Mr. Horn. Thank you. Mr. Rocke, do you have anything to add
to that, or are you going to be doing so in the question
period?
Mr. Rocke. Precisely. I would be happy to address any
questions you may have, but I have no additional comments at
this point.
Mr. Horn. OK, I now yield to the ranking member, Ms.
Schakowsky.
We have a vote on the floor. Both of us will have to be
over there and then recess. So you will have your opening
statement right now, and then, if you would like, you might
want to just start with some of the questions and I will try to
get over, vote, and get back, so we don't keep you all morning.
Ms. Schakowsky. Thank you, Mr. Chairman, and thank you
panelists. I appreciate your testimony and the work that went
into it.
I share everyone's concern about the financial management
of the Medicaid program, and the reason is that every single
dollar of improper payment to a health care provider is a
dollar that is not spent on those who most desperately need our
help and need health care.
Medicaid is a critical piece of our public safety net.
However, it is a safety net with a lot of holes for people to
fall through. The public thinks of Medicaid as a low-income
health insurance program, but it is really not. If you are not
poor and disabled, poor and old, or poor and pregnant, you
don't qualify. Only 40 percent of those in poverty qualify for
Medicaid. Nonetheless, Medicaid is critical to those who do
receive it.
Twenty-five percent of children under 5 rely on Medicaid
for health care coverage. I think that is a really stunning
number in the United States, meaning that many children live in
poverty and can't afford other kinds of health insurance.
Eighteen percent of children between 5 and 18 rely on Medicaid
for health insurance. Over 15 million children in total rely on
Medicaid. Without those services, those children would go
without health care.
These are the same children who are often forced to skip
meals, because there is no food in the house, and who sleep in
apartments with inadequate heat and no air-conditioning. These
are the children who are the most likely to need health care.
On the other side of this equation are a few doctors and
hospitals who are either too inefficient or careless to avoid
billing twice for services or providers who scam the system by
billing for services never performed. Choosing between the two
is an easy call. The problem is, what do we do about it?
The decentralized nature of the Medicaid system means
efforts to address the problem will always be uneven. Half of
the States spend no more than one-tenth of 1 percent of program
expenditures on anti-fraud activities. There is more Federal
money available, but that would require the State to spend more
of its funds as well. If the Federal Government is paying 50
cents of every Medicaid dollar, as it is in Illinois, there is
little incentive to spend money on fraud.
I hope our witnesses--well, this statement was to be given
prior to your testimony--tell us what can be done to reduce the
level of improper payments and what you are doing.
Medicaid fraud threatens the welfare of the patient and
strains the capacity of the doctors and hospitals providing
services by taking dollars away that would otherwise be
available for patient treatment. States struggle with the
increasing costs of medical services, severe constraints on
reimbursable costs, and ever-declining allocations for
administrative expenses.
Just last month, the House passed a welfare reform bill
that cut the administrative funds for Medicaid. That means less
money for eliminating improper payments and less money for
benefits. That just does not make sense.
I would like to thank you all for taking the time to be
here today.
[The prepared statement of Hon. Janice D. Schakowsky
follows:]
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Ms. Schakowsky [presiding]. I will ask one question. I am
sorry, is it Calbom?
Ms. Calbom. Yes, Calbom.
Ms. Schakowsky. Maybe you said this, I heard the rest of
the testimony, but what is the estimate not of what we have
recovered, but what is the potential for cost recovery in the
Medicaid program; in other words, an assessment of the level of
fraud that is out there?
It appears to me, and Mr. Mangano mentioned a dollar
figure, that is a tiny percent of the Medicaid cost, and it
seems like an underestimation or an understatement of what is
really out there.
Ms. Calbom. I think that is one of the big issues, that
there has not yet been an estimate of what the amount of
improper payments is in the Medicaid program. Of course, there
has been an estimate in Medicare but not yet on Medicaid.
I know that CMS is working on some pilot programs, Mr.
Smith was mentioning that, and trying to come up with a way to
do this. Because the programs are all different, it can be
difficult, they tell us, to come up with an assessment that can
be used across the States. Right now, there isn't an
assessment.
You cannot figure out how to tackle the problem if you
don't know how big it is, and you don't exactly know where all
your pockets are, where the biggest problems are. So we think
that is the first thing that needs to be done.
Ms. Schakowsky. There is no effort under way currently, or
dollars allocated or assignments given, to making that
assessment yet?
Ms. Calbom. There are some efforts under way, and Mr. Smith
might want to expound upon that.
Ms. Schakowsky. I would appreciate it.
Mr. Smith. Thank you very much. Medicaid now is spending
about $240 billion. So even if it is only 1 percent, that is
$2.4 billion. If it is the error rate that Medicare is, and
Medicare is about 6 percent, so assuming a 5 percent error rate
is talking about real money.
Ms. Schakowsky. But are there efforts to not just come up
with an aggregate figure but understand where most of the fraud
occurs, etc?
Mr. Smith. I want to reiterate one of the other points as
well. The fraud in the system you are going to find by a
handful of people. The vast majority of the providers, the
doctors, the hospitals, the nurses, the therapists who
participate in the Medicaid program are good, honest people who
are----
Ms. Schakowsky. Let us take that for granted, OK.
Mr. Smith. Again, I don't know that we have a nationwide
estimate on the percentage of providers that have had claims
disallowed, under appeal, etc. There is also a great deal of
difference between fraud and errors.
Ms. Schakowsky. And that is why I am asking the question.
What are you doing to distinguish between the last two points
that you made and to determine just exactly what is going on?
Mr. Mangano. If I might add, I think I can get to your
point. Over the last 2 years, the CMS has been putting together
a demonstration project. Right now, I believe in this year, it
is up to nine States, where they are trying to come up with a
methodology to identify what the improper payment rate is for
that particular State. Next year, I believe the plan is to go
to 15 States.
The difficulty here is that every State is a little
different in the Medicaid program. So coming up with a
nationwide figure on what the abuse level is, is very
difficult. They are trying to work on some methodologies that
will come up with some models for all States to use. So over
time, I believe they will coming up with the answer you are
looking for, and that is what is the error rate or the improper
payment rate across the country. But right now, it is in the
early stages of that.
Mr. Smith. And to followup and to be clear, there is no
national Medicaid error rate at this point. But in our nine-
State pilot we hope to come up with a payment accuracy
measurement that would give you what you are looking for. Right
now, we have nine and we intend to expand it to 15 States next
year.
Ms. Schakowsky. I am going to have to go vote, but I would
say that I am interested in that figure only to the extent that
it is helpful, then, for us to develop a plan on how to address
it. I really am much more concerned about the plan and how to
stop it. But it does seem, as Ms. Calbom said, as a first step
we have to know how big is this problem.
I thank you, and I am going to have to go vote, so this
committee stands in recess.
[Recess.]
Mr. Horn [presiding]. The subcommittee will come to order,
and the two votes we just finished probably will not occur
again, and so I thank you for your patience.
Let me just ask you a few questions and then others, I'm
sure, will have other questions. In terms of the GAO report,
which is very fine, what can the Centers for Medicare and
Medicaid Services do to improve its oversight of Medicaid
expenditures?
Ms. Calbom. Mr. Chairman, again, if you look at this little
chart you have in front of you, I can speak to it along those
lines because this is really the model for what you need to do
to manage improper payments, and there is something in each of
these areas that we have found that needs to be done.
I will start with the risk assessment area. As I was
mentioning when you were voting, the biggest thing that needs
to be done is find out how big the problem is. They need to
measure their improper payments in the program. I know you have
introduced some legislation that has been supportive along
these lines. If you don't know how big the problem is, you
don't know what kind of resources you should devote to trying
to fix it.
Also, in the risk assessment area, there are a lot of
things that the States have been doing to measure their risks,
too, and we would like to see CMS take a look at what the
States have been doing and factor that into their own risk
assessments.
Control activities are what you need to do to try to manage
the risks. And you have to know where the pockets of the
problems are so that you can put more of your resources there.
You need to know what kind of programs have the highest risk so
that then you can put the controls in place that specifically
focus on those programs. And there are some really good new
techniques out that I know the IG has used, and Mr. Maddox was
talking about as well, where you can use computerized
techniques to look at huge data bases of information. You can
match it against other data bases to look for improper
payments, or even erroneous payments. Those kinds of tools
would help CMS, in light of the fact that they have such
limited resources in particular.
Information and communications. One of the things we found
is that this whole risk assessment activity that CMS has been
trying to carry out at headquarters has not been communicated
to the field. Now Mr. Smith is saying that is starting to
happen, and we are happy to see that, because you have to get
everybody on board with it.
The next area is monitoring, which is absolutely critical.
If you don't take a look at whether or not your activities are
helping, then it doesn't make any sense to put the money into
it. And that gets back to measuring. How large are improper
payments, are the activities we are carrying out helping, are
they lowering improper payments? If they are not, we can do
something different. But it is a whole cycle that is
continuous.
And then what encircles the whole thing is the control
environment. What you need there is the tone at the top.
Everybody has to know this is a big priority. Everybody has to
be held accountable for it. And it should be, frankly, part of
their performance assessment. So we would like to see some
performance measures put in place. We would like to see the
lines of accountability between headquarters and the field. Not
that there should be a direct line, but people have to know
they are accountable for doing these activities to help manage
these improper payments.
Mr. Horn. And you are touching on this, but can you
elaborate on why it is important to estimate the level of
improper payments in the Medicaid program; and can you tell me
the difference between improper and erroneous?
Ms. Calbom. I'll take the second question first.
I think those two terms are fairly synonymous. I think OMB
uses ``erroneous payments,'' we use ``improper payments.''
Improper is meant to mean both fraudulent-type activities as
well as inadvertent-type errors.
But as far as why we need to measure it, you know----
Mr. Horn. Well, why would the U.S. attorney want to do
anything? I'm looking for language and wondering--because some
of the U.S. attorneys don't do much of anything.
Ms. Calbom. Well, where there is fraud, that gets turned
over to the U.S. attorneys ultimately. We have seen cases where
the U.S. attorney has declined to prosecute because the dollar
amount is too small. We hate to see that----
Mr. Horn. What is their idea of small?
Ms. Calbom. I believe it differs depending on what
jurisdiction you're in.
Mr. Horn. What's the worst case that you know of that GAO
sent over to the U.S. attorneys?
Ms. Calbom. I don't have an example of that because,
typically, what happens is we find some fraud, we turn it over
to the IG investigative group, and then they would typically be
the ones that followup. So I haven't seen a particular case how
it came to its outcome. I don't have a good example.
Mr. Horn. Well, let's ask the IG, Mr. Mangano.
Mr. Mangano. First of all, these cases can be prosecuted
either in Federal court, which the U.S. attorney would have
responsibility for, but many of the cases that are investigated
by Medicaid State fund control units are tried in local courts
as well, State courts and local courts. So there is the two
venues. When we do get the allegations from either the General
Accounting Office, or from other sources, we will conduct the
investigation and work with the proper legal authority--for us,
it is always the U.S. attorney--and bring those cases to trial.
If the U.S. attorney believes that the case is too small or
they have other priorities at the time and can't get to it, we
have other authorities that we can use to administratively
adjudicate the case. If the U.S. attorney believes that they do
not want to continue with it, they would decline that case and
give it to us. We would pursue it administratively, and we have
done that a number of times.
Mr. Horn. Well, what is the worst decision in your--you
don't have to tell us which U.S. attorneys, but did you feel
this was wrong? Because, obviously, deterrence is helpful here.
Mr. Mangano. I would say that the way I would answer it is
not a threshold of money, because money differs depending on
the judicial district that's involved. What might be a small
case in California might be a huge case in Utah because the
dollars are different. But I think where we have been
disappointed, and only a very few instances of it, is where a
U.S. attorney decided to not continue with a case. Either they
felt the evidence wasn't strong enough or were not in a
position at that time to pursue the case. That gets under our
craw a little bit, particularly if the case isn't declined so
that we can take it up.
If the U.S. attorney holds on to a case too long, the
statute of limitations runs out; and, therefore, there is
nothing that we can do.
Mr. Horn. What is the statute of limitations on those?
Mr. Mangano. Most of them are 5, 6 years. So from the time
the incident occurred. But I have to hasten to say, though,
there are very few instances that are like that.
Mr. Horn. Mr. Maddox.
Mr. Maddox. Yes, Mr. Chairman. One of the unique situations
we have in the District--I mentioned in my testimony when we
started in the District is that I worked very closely with the
mayor and the council and, in particular, the former U.S.
attorney Wilma Lewis. To speak to the issue which we were just
talking about, whether or not the U.S. attorney would find
interest in a particular case, whether it was a large dollar
amount or de minimis amount, that we agreed that, to avoid
that, the U.S. attorney allowed us to incorporate our MFCU
authorities to prosecute our own cases; and the majority of our
employees in MFCU are attorneys and have been deputized as
special assistant U.S. attorneys.
So, regardless of the dollar amount, if we think that the
issue is egregious enough and if we want to send a message, we
don't have a problem of whether or not the U.S. attorney finds
the case effective to prosecute.
Mr. Horn. Thank you.
Based on your knowledge of other Federal programs, how
costly is it to estimate improper payments? What else comes
under your jurisdiction there?
Mr. Maddox. With respect to----
Mr. Horn. Different programs.
Mr. Maddox. Different programs.
Mr. Horn. The way it is done another way. Social Security
might be one way, so forth.
Mr. Maddox. I'm not sure I understand where you are going
with the question, Mr. Chairman. How costly it would cost to
prosecute it or----
Mr. Horn. Well, I'll go down to GAO and the knowledge of
other Federal programs. You have a broad gaze across the
executive branch, and some are done in other ways. So I'd just
be curious whether that ought to be put into the Medicaid
operations.
Ms. Calbom. You're asking about estimating the level of the
problem in the program?
Mr. Horn. Well, that's OK, too. But is there other ways in
the executive branch where they can either disbar someone from
having the--whatever you want to call it. You can call it
permitting, if the doctor is the problem, and often it is, and
if the person is just a group----
I remember when this committee went up to New York in 1994,
and it was just one big mess all over New York. And that was--
the U.S. attorney did take that one. Because it was so blatant
they couldn't do anything, and they did do it, and a few people
are in jail.
But I'm thinking of just other ways, Federal benefit
payments go out and are misused. Are there any agencies where
there might just be an administrative action rather than going
into the judicial arena and the U.S. attorney?
Ms. Calbom. I guess the types of actions that I can think
of that agencies take--of course, it is a little different with
Medicaid because you have the providers, but if it is something
that is an internal thing you ought to get rid of the people.
That's the bottom line there.
As far as when you're dealing with third parties, you know,
I'm not sure. I'd have to think about that.
Mr. Smith. Mr. Chairman.
Mr. Horn. We will be glad to have a little space in the
record for your thoughts. So take your time.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED] T6610.047
Mr. Smith. Mr. Chairman, in terms of the Medicaid program
itself, the States certainly can take action--the State and
Medicaid program can take administrative action against the
provider. All providers have to sign the provider agreement,
and if you find that--so the State itself can terminate that
provider agreement.
In the case of different types of provider, there are
different levels of sanctions that you can take against a
provider without going into the court system themselves.
Generally, there are appeals that a provider can have an
appeal, etc. But the Medicaid program you can take
administrative action.
Mr. Horn. Do you see any difference in the States on the
percent that they put up to match to Medicaid? Is it any higher
in fraud or anything or misuse or however you want to call it?
Mr. Smith. Mr. Chairman, I really could not--we would have
to take a look at that State by State at this point. I don't
have the comparisons that I could offer to you.
Mr. Horn. Well, let's just go back and take a look at it.
I'm not looking for some huge thing.
Mr. Smith. Be happy to, Mr. Chairman.
Mr. Horn. Is there a feeling there that the more money they
put in, the more the fraud is?
Mr. Smith. Again, certainly that would be the suspicion so
you would look at the cases--you would look at the States with
the highest Medicaid expenditures--New York, California, Texas,
Illinois. Nine States spend more than half the Medicaid money.
Also, as I suggested, cross-matching with the Medicare program
where, if the provider is taking advantage of one program, the
likelihood is pretty good that they are taking advantage of
that other program as well. So having matching between the
programs would be--we think has great potential.
Mr. Horn. Information provided the General Accounting
Office in this recent study indicated that staff resources
devoted to Medicaid financial oversight has declined
significantly over the past decade, even though the program
continues to grow. How are you addressing that problem?
Mr. Smith. Mr. Chairman, that is an area that we are
looking at and have already taken some steps. A couple of
different things, and one I also believe in, looking at where
all the people are, rather than just automatically assuming you
need more.
First, let me point out that my partner is the Inspector
General's Office, because in fact they do a lot of work for us
that does not show up in our FTE levels. So looking at the
whole picture, I would like to include what the IG is doing.
Second, we have taken a couple of steps internally too--we
have formed what we call the National Institutional
Reimbursement Team. This team of eight people, four from
central office, four from regional office, that this group now
is looking at all of our institutional State plan amendments,
whereas that had been scattered through the regional office.
But that team has a number of advantages to it.
First, consistency in making our decisions about State plan
amendments. So we are being more consistent. No doubt you have
heard concerns from States that there have been regional
variations, that sort of thing. So having formed the National
Reimbursement Team also then frees up personnel in the regional
offices and central office as well.
So we want to make sure we are using all the resources that
we have at our disposal first. But I certainly can assure you
that the Administrator and Secretary will make certain that we
have the resources that we need to address the effort.
Again, I think we've already seen a lot of progress in just
the Office of the Director itself. But a couple of--Bill
Osowski, who is background and financial management, is now
directly in my office. We have done a lot to strengthen the
financial management team itself. A lot of it is simply to
assure people in central office and in the regional office and
the States that financial management is important and a
priority, and I think we have very strongly signalled that by
the personnel that we have to oversee and hold people
accountable. So we are getting that message out there and will
continue to press that message.
Mr. Horn. In your testimony, you noted the nine States that
were involved in the pilot programs to develop a method of
estimating improper Medicaid payments. Are any States now using
that developed methodology?
Mr. Smith. No, sir. There are two efforts going on at the
same time. One--we are developing one for the fee for service
and managed care. The Lewin Group has a contract with us to
develop that. The other nine States, they are looking at their
own methodologies so, at this point in time, we don't feel we
can assume that there is one way to do it. So we are looking at
different options and trying to sort of prime the pump in terms
of encouraging States to come up with different methodologies
that then we can test out. But we are still at the beginning of
that.
Mr. Horn. Which State Medicaid agencies are doing a good
job of ensuring that claims are paid properly and which are
not?
Mr. Smith. Well, as a former Medicaid director of Virginia,
I would like to say that Virginia does a very good job.
Mr. Horn. We will consider that, and I think it would. So
go ahead.
Mr. Smith. I really couldn't give a rundown State by State.
I think, for my own personal experience, Medicaid directors
themselves are deeply committed to combating fraud and abuse in
the system. They understand how it hurts the program when you
do have abuse in the system.
Again, there are other partners to bring into it, also.
Looking at the fraud control units at the State levels, States
have single State auditors as well, so--again, oftentimes
independent of the administration at the time. So we have
another level of accountability there.
I would--again, there are pockets--and that's part of what
our risk assessment has been about, to identify areas. So I
think that you look at particular areas that have kind of had
outliers or specific problems and then you look at those
particular problems. So I think that the States themselves
across the board, when you--they have also joined our efforts
in that reform of financial management technical assistance
group with the States, so the States have been very willing
partners looking for new, improved ways.
Again, commitment of resources is often at the heart of it.
In today's technology, the commitment to update your
surveillance utilization programs, etc., those are resources
that you have to ask your State legislatures for. So it's hard
to measure why--so the commitment isn't just the Medicaid
director or the Medicaid program. You have to bring the other
partners into it as well.
Just to be fair to the States, often these are not their
decisions alone on how to target resources or not.
But we've been very pleased with the reception that we have
gotten from the State Medicaid directors in terms of
participation with our financial management tag. We have a
fraud and abuse tag, the alliance for program integrity. We
have enthusiastic support from the States, in my opinion.
Mr. Horn. Let's just pick on one State where the claims are
paid appropriately or inappropriately, and that's the State of
California, of which I am a citizen. I won't get bent if there
is something wrong there, so you will make brownie points.
Mr. Smith. Well, in California, I'm very pleased that
California is joining us in the pilot to match claims with the
Medicare program. So, again, I've--you know, I think all States
are looking for ways to improve their systems. There are many
upon different decisionmakers in how to target resources. And I
think every State would say, yes, we know that we can do
better. That's the best I can do for you.
Mr. Horn. What does the General Accounting Office think of
California?
Ms. Calbom. We haven't really done any specific work
looking at the particular States, Mr. Chairman, on this.
Mr. Rocke. Mr. Chairman, I don't know if you are interested
in hearing any more on the original alternative remedies,
alternatives to prosecution, but there are a few points we
could make if you are interested.
As Mr. Maddox pointed out, one of the unique things about
our unit is that we're trying to break the mold and do some
things that are different from Medicaid fraud units across the
country. When we receive a case from a tip or referral from
another agency, we don't view it as a criminal case or a civil
case or administrative case. It is simply a case, and we see
where the case takes us. We are very comfortable with bringing
cases criminally in court when that's appropriate or civilly
for civil damages, or using the administrative remedies that
are available both in the District and federally.
Sometimes that's the quickest and easiest way to stop the
flow of blood. Even if you don't necessarily get the money
back, at least you stop the damages from being aggravated.
One of the other unique things is we're comfortable with
doing all of these things at once, simultaneously, as a
parallel case.
Earlier this year I made a presentation to the Medicaid
fraud control units around the country pitching the idea of
parallel cases. The reception was a generally positive one,
although there was some hesitancy. There are some folks who
say, ``I do criminal cases and nothing but that.'' There are
folks who see things only through the prism of the
administrative process. What we like to think is that the best
approach is that you have a number of arrows in your quiver and
you reach back and pull whichever one is appropriate for that
case--sometimes two or three of them at the same time. It is a
unique approach and, frankly, has been successful so far.
Mr. Horn. Well, that's very good.
How much did the District of Columbia's Medicaid Fraud
Control Unit collect in the fiscal year 2001?
Mr. Rocke. 2001, I believe about $250,000, off the cuff.
The important thing to keep in mind, I have to say out of
fairness, is that we were just created in fiscal year 2000, so
we spent the previous 6 months getting carpets and other
materials.
We were very successful that year. We gained even more in
restitution and recoveries in the following 6 months. And,
quite frankly, we are confident that we were going to do quite
well. I wish I could tell you about the cases that are in the
pipeline right now. It is a long pipeline in terms of fraud
cases. Typically they take 3 years.
Mr. Horn. Were there any convictions after the $250,000?
Mr. Rocke. We've had a number of convictions, and I have to
be clear on that. We've had five convictions. Four of them have
been patient abuse convictions.
One of the things I was very----
Mr. Horn. I'm sorry, what's that?
Mr. Rocke. Patient abuse.
Mr. Horn. What do you mean by that?
Mr. Rocke. We prosecute cases in which the residents of the
nursing home have been physically attacked or financially
abused by the employees of that nursing home. Frankly, I was
very pleased with Mr. Mangano's testimony that he pointed out
that a lot of the work that we do doesn't bring back a dime to
the system but it protects some of our most vulnerable
citizens. There is a financial aspect to it because, if an
elderly resident is being beaten up, that is not good care and
not a good use of taxpayer money to pay for that caregiver.
In today's Post, one of our cases is featured. We got a
conviction yesterday--to bring you up to speed--yesterday we
had a conviction of a caregiver in a group home who took a 69-
year-old retarded woman, threw her to the floor, bashed her
face in essentially; and she had to go to the hospital and get
stitches. It was a horrible incident, regardless of who the
victim is, made even worse by the fact that Medicaid dollars
are funding these sorts of situations.
So we have had four of those kinds of convictions because
we have also had a fraud conviction. The pipeline is usually 3
years. I found that unacceptable when we established our unit
because we knew that nobody would hear from us basically for 3
years. So what we did was look for some smaller cases, cases
that traditionally would fall under the threshold that we have
been talking about before.
We found an instance of an optometrist in the District of
Columbia that had been ripping the system off for years.
Unfortunately, most of the claims had been lost due to the
statute of limitations. We were still able to rescue about
$1,000 worth of theft, and we prosecuted him for that.
Mr. Horn. Well, could you pull the plug of the benefits
going out to some of these people that misuse the whole system?
Mr. Rocke. Sure. That was one of the reasons why we
prosecuted him, was the criminal sanction. Because we wanted
the word out that even if you steal $1,000 in Medicaid you are
putting your license in jeopardy.
But automatically, by law, once you are convicted of
stealing from the Medicaid program, even a nickel you are
excluded from the program for 5 years. So not only do we not
have to face claims from this provider, but he can't go across
the river to Virginia or to Prince George's County, Maryland.
He was excluded from the program nationwide.
So these are the approaches that Mr. Maddox and I have
tried to implement that we think are a little different. And
the cooperation of the U.S. attorney's office, they understood
that sometimes it is not just the numbers that are important,
it is the deterrent effect. It is making the statement. And I
believe every optometrist in the District of Columbia has heard
about this case. We'd like to think they take it to heart.
Mr. Horn. Well, just a few more examples and maybe they
will.
Mr. Rocke. We are trying; and, as I said, we have a number
of cases in the pipeline. I'd like to talk about them, but I'd
be in trouble if I did.
Mr. Horn. Yeah, well, you are on the right track, no
question about it.
When you look at those typical kind of cases, does it
really--you said it yourself, and I see it all the time with
the IRS, that you have got somebody that gets away with murder,
in fiscal matters or whatever, and just goes somewhere else, as
you said, but you have apparently closed that plug up. Was that
a matter of law or--when you said they can't get away with
going into Virginia or Maryland once they've been taken care of
in the District of Columbia?
Mr. Rocke. It is. It is a part of the Social Security Act.
By operation of law, when you are convicted of stealing from
Medicaid or Medicare program, the minimum exclusion is 5 years.
In fact, we work very closely with HHS IG's office because they
help maintain the actual physical files printed in the Federal
Register when you're excluded, when you're known as an excluded
provider.
The good thing about that is every program is aware of it
theoretically across the country, and employers should be
checking that list. That is one of the things that I do. I do a
lot of outreach to the industry and make sure they check these
lists look to see what the background is of the employees they
are hiring, see if they are excluded.
Obviously, you shouldn't hire anyone who is on that list.
Most providers don't want to. Sometimes they don't do their
homework, and that is one of the things that we accomplish
through outreach.
Mr. Horn. Do some try to change their name or get a
relative or uncle or cousin or something and they do the dirty
work and they are told ``how I did it in the District of
Columbia?''
Mr. Rocke. Are you sure you haven't prosecuted fraud
before? That is exactly what they do. They will use a straw
man. They will use a front.
As a matter of fact, I had a conversation with our single
State agency just last night about an individual whose provider
number was shut down because of suspected fraud. Now his
brother is billing for similar services from the exact same
location. It doesn't take Sherlock Holmes to realize what is
probably going on there, and we are trying to urge them to take
this into account and shut down that particular provider
number.
One of the frustrating things as a prosecutor is you can
lead a horse to water but you can't always make it drink. We
provide information when we can to the various State agencies
to take action. We can't require people to do the right thing.
We urge them to; and, frankly, we think that some progress is
being made. But, as Mr. Maddox pointed out in his testimony,
buy-in is critical. People have to take fraud seriously and
have to take steps to address the issue in a very serious way.
Mr. Horn. In Mr. Maddox's testimony, he mentioned that the
Medicaid program is inundated with false claims for a pain
medication called OxyContin. Is that about what it is?
Mr. Rocke. Yes.
Mr. Horn. What is the Medicaid Fraud Control Unit doing to
address this problem?
Mr. Rocke. OK. Well, what we are trying to do is, frankly,
get ahead of the curve. OxyContin is a problem nationwide. It
is a part of the drug diversion problem. Percocet, Dilaudid,
other narcotics that are diverted from legitimate uses into
drug abuses, into illegal narcotics sales. OxyContin is just
the latest twist on this. There is nothing new about it except
it is much stronger than Percocet, much more prone to addiction
and much more prone to abuse.
What we have tried to do is make sure it did not reach an
epidemic here in the District of Columbia. Unfortunately, in
parts of our neighbors--Virginia, West Virginia, rural areas of
Pennsylvania--it is a very, very serious problem.
We addressed the District of Columbia Medical Society and
talked about the fact that we're doing our statistical analysis
to look for anomalies, warn them about the fact that a lot of
patients are out there malingering, pretending to have this
particular pain or some sort of an ailment that would require
the prescription. They get the prescription, and then they sell
it, and they go to four, five, other particular doctors and do
the same thing.
Another variation is the scheme that they work with doctors
sometimes--and that's a very unfortunate situation that rarely
happens, but when it happens it does a lot of damage. If a
corrupt doctor who is known throughout the county to simply
write scripts--what we thought we would do is work with the
Medical Society of D.C. and explain this problem. They are
mortified by it. Let them know that these fraud schemes are out
there, not to be taken advantage of, and to give implicitly the
message to the few bad doctors that are out there that we're
looking at this issue.
We are aware of the fact that there are patients out there
who strike a deal with the doctor and say you can pretend to
examine me if you write a script. That is the worst of all
worlds. The illegal drugs are getting on the street, and the
Medicaid program is paying for a bogus exam.
We wanted that word out there. I was pleased with the
reception we got from the Medical Society. They printed our
letter in their newsletter. They invited me to discuss the
issue with their executive board.
We think that is the important thing that we're doing that
is different. We try to get ahead of the curve instead of
simply reacting to these fraud cases.
Mr. Horn. Mr. Mangano, anything to add as Inspector
General?
Mr. Mangano. In terms of the OxyContin case, we have a
number of cases in primarily the Northeast as far down as the
District of Columbia. I think we have had an arrest or
conviction of 27 people for this. Our investigations are
focusing not just on the people, the Medicaid recipients who
get these scripts and sell them, but also the physicians that
are actually writing the script and the pharmacists involved in
it who are actually filling the orders of the persons that they
know are improper. So the OxyContin one is fairly significant.
With respect to the operation of the exclusion list, every
year we compile this list. We have a total list of all those
persons who have been convicted of fraud against the Medicare
Medicaid program, and they are included in our exclusion list.
Last year, we added 3,700 new names to that list of persons who
were excluded. That list is made available to all the Medicare
insurance carriers.
Mr. Horn. 3,700 you said?
Mr. Mangano. 3,700 new ones, 3,770. Those are distributed
to the Medicare contractors who have it available to them.
We also distribute the list to every State. The Medicaid
agencies have it, etc. It is a ready list of persons who
shouldn't be doing business with the Medicare and Medicaid
programs.
I think one of the good pieces of news is that about a year
ago we conducted a program evaluation, and we took all the
persons that had been convicted of crimes in the Medicare
program and Medicaid on that exclusion list and matched them
against persons who were submitting bills to the Medicare and
Medicaid program and only found a handful of individuals who
were on both lists, which told us that, unless some other
nefarious means were being used, that the Medicare-Medicaid
programs were doing a pretty good job of keeping those persons
out of the program.
Mr. Horn. Can you explain the ``upper payment limit'' and
the intergovernmental transfer mechanism being used by the
States?
Mr. Mangano. Sure. What had happened was the Medicaid upper
payment was a device that was given to the States to enable
them to pay more than they would ordinarily pay into the
Medicaid program for services. The upper payment limit is the
amount that Medicare pays for that service. In every State in
the country that I can think of, Medicare pays more than
Medicaid does for the same service. That service is available
for nursing homes, hospitals and certain other providers in the
State.
If you like, I would be happy to go through the State of
Pennsylvania and explain how it works.
Mr. Horn. Don't whisper it in my ear. Just put it on the
record.
Mr. Mangano. The State says we need to increase the quality
of care in nursing homes or hospitals, so what we're doing to
do is increase the payment to the amount that Medicare pays.
Sounds good. Here is how the pool of money then works.
The State of Pennsylvania took every nursing home in the
State--private, State operated, and nonstate operated, which
were generally county nursing homes--and they said, OK, in our
State we are paying an average of $146 a day for a Medicaid
patient. We are going to raise that up to the Medicare level.
So we will add up every Medicaid beneficiary in our State and
figure out what is the incremental amount needed for everyone.
We will put them in the pool of money that says this is how
much money we need to raise that enhanced payment for the
hospital or the nursing home.
Let's just take nursing homes in Pennsylvania. That's the
scheme they used. What they did then was said now we have this
money. We do not have to, under law, distribute it to every
nursing home. We can pick and choose who we're going to send it
to. So they decided to send it just to the nursing homes that
were operated by the counties. There were only 23 of them in
the State. The State had 670 nursing homes; 23 were county
operated. So you might say, why would they do that? Why would
they only give it to the county nursing homes? They had a deal
worked out with the county administrators that they would get
the money back to the State.
In my testimony, I have the appendix of how this Ponsi
scheme worked. What would happen is that these 20 counties that
ran these nursing homes would figure out--they would ask the
State for X amount of dollars, which would use up the entire
State-enhanced payment amount on these 20 homes. They went to a
bank, the same bank in the State, they got a bank note to cover
it. In this case, it was just under $700,000,000. They took
that amount and gave it to the State. They gave it to the
Department of Public Welfare.
The Department of Public Welfare then transferred back to
the county within 24 hours the same amount of money, plus $1.5
million more to cover their interest payments and the payments
they needed to make to the county commissioners association.
They submitted a bill to the Medicaid program federally and the
Medicaid program had to pony up their 54 percent share for $393
million. The county, which had gotten their full payment back
from the State, went back and paid off their bank notes.
Now the State has all this money that they got from the
Federal Government. So one might think, did they distribute
that to the nursing homes? No, what they did was put it into
several pockets. Half went to Medicaid purposes in the State.
Once they put it into the Medicaid program, they can match
additional Federal money. Twenty-one percent was spent for
nonMedicaid services, and about 29 percent was spent for we
don't know what. It went into the general fund. We don't know
how they used that money.
By doing this, the State effectively changed their State
Federal match from 54 percent to 65 percent. This was free
money from the Federal Government to do this. From 1992 to
1999, the State came up with $5.5 billion of enhanced payments
of which $3.1 billion was Federal money.
Now there is a happy ending to this, and that is that I
have to compliment CMS because they did take a good, quick
action on that. There has been a series of regulations produced
over the last year in which, by closing off most of this
scheme, it will save the Federal taxpayers about $79 billion
over the next 10 years. So the happy ending is that most of it
is cutoff.
The only thing that is not cutoff is that the States still
don't have to use the money for the intended purpose that it
was put together for.
Mr. Horn. Fascinating. If you put it in fiction, nobody
would believe it. It's amazing.
Is anybody else trying to be like Pennsylvania? Or have you
taken that little turn?
Mr. Mangano. When the scheme came to light in 1993, there
were 12 States that were doing this. As soon as word got out,
by the year 2000, 28 States were involved with it. As it became
public what the scheme was about and that we and CMS were
working hard to resolve it, States became aware of it. They all
started submitting amendments to their State plan to do exactly
the same thing. So that, in the year 2000, the States had
submitted bills for $10 billion on which the State was only on
the hook for $5.8 billion of it.
Mr. Horn. Well, did the disease get cured? Nobody is doing
that now?
Mr. Mangano. Mostly. It is because the CMS in their
regulations came up with a plan to phase this out over time.
There are three--actually, now four--different pay pools that
have been put together.
CMS said that we realize that by allowing people have a
pool that included all of the private providers, all of the
county and city operators and State and we had that big pool of
money, it is too much money. What it said was they were going
to narrow the pools down so that the only pool would be either
all privates, all counties or all States. And then there was a
phasing process.
Actually, the Congress acted to give these States who were
in this scheme the longest period of time to get out of it.
They gave them an 8-year transition period.
CMS came up with two different phases. Those who were in it
before October 1999 would have 5 years, and those that were in
it after that would have 2 years, and there was one additional
one that allowed the people that came in right on the
borderline, to have actually only 1 year to participate in the
scheme. So most of this problem has been solved.
The only thing we would like to have seen gone further was
the requirement that the money be actually used for the
beneficiaries for the purpose it was actually intended to. So
if the money was to be derived from nursing home patients, the
money would actually have to be used on the nursing home
patients. But the States have a great deal of flexibility in
this program, and they can determine its use.
Mr. Horn. In your testimony, you stated the revised
regulations involving the upper payment would save about $55
billion in Federal Medicaid funds over the next 10 years.
What's being done to ensure that those savings are realized?
Are there additional further reforms needed?
Mr. Mangano. That was based on the projection of those
people who were in the system as well as those who would have
come into the system over time. As I recall, it was the CBO
that came up with those projections for the next 10 years--I'm
sorry, it was the CMS actuary that came up with that
projection.
The way that it will be enforced, I believe, and Mr. Smith
can correct me if I am wrong, is that the State plans have to
be approved by CMS and they will be casting a watchful eye over
anything that looks like this in the future.
Mr. Smith. That's correct, Mr. Chairman.
Again, I mentioned our National Institutional Reimbursement
Team. So all State plan amendments dealing with institutional
payments, of which a UPL amendment would fall into that
category, would be reviewed by the team. And any State plan,
the regulation--the final regulation is now in effect. So any
plan amendment has to be in compliance with the new regulation.
If it's not in compliance, it would be disapproved.
I think another one of the reforms that I think has been
very important is that States are now not able to draw down
Federal funds until their State plan amendment is actually
approved. They can only go back to the first day of the
quarter.
One of the problems historically has been States would send
in State plan amendments and action was not really taken on it.
That put everybody in a very difficult situation. The State
thinks that it's OK and goes ahead and changes its program
accordingly, and at some point in time CMS at the time might
have come back later and questioned the State plan amendment.
We have instituted processes in the system now to assure
that doesn't happen again, to where they are handled within a
certain period of time and specific action is taken.
On UPL, California is one of those States, Mr. Chairman,
that had been using UPL through a waiver and is on one of the
longer transition periods. So California will continue to draw
Federal funds under UPL that will be phased out over an 8-year
period of time.
Mr. Horn. Well, take me through this a little more,
California, UPL. Get it in the record.
Mr. Smith. I'm sorry. The upper payment limits that allowed
the States to draw funds--not only what Medicare would pay but
in fact above what Medicare would pay--in many respects, as Mr.
Mangano was describing to you, California had been using that
through a waiver that had been granted. I can't tell you the
precise date, back to the early 1990's.
But, again, now all States have to come into compliance
with the final regulation. California will have the benefit of
the 8-year transition, though, because they had gotten into the
system so early. The rationale there was that State budgets had
been already based the assumption that those funds would be
available to them. So the States that had relied on them for
some time had longer transition periods.
But when California received it--I believe California is
unique in the respect that it was through a waiver that--what
they called in California the ``selective provider contracting
program.'' It is a specific waiver that allows them to contract
with hospitals in California. But, as I mentioned, that program
will be phasing out as the State comes into compliance.
Mr. Horn. Now, most Governors are having financial problems
now just because of various and sundry things, not Medicaid
necessarily. But I suspect they will start moving around, doing
creative ways of moving the dollars from one place to the other
place to try and get a balanced budget, which most of them have
to have under their constitutions. So are we looking for that
and seeing anything here that would--where they would want to
move Medicare funds, Medicaid funds and balance things out?
Mr. Smith. We are looking, Mr. Chairman. Again, I think
that the strength of our reimbursement team will help us to
identify those early on.
Again, in the past, part of this would start to occur, but
because it might have been disbursed--the plans were disbursed
among the regional office, you might not have picked up the
pattern until it was established. So the review team will help
us identify early on whether or not it is simply moved to
another area. But we are--we have some ideas about where that
might move to, and we are certainly looking for them.
Mr. Horn. Mr. Maddox, in your Inspector General level with
the District of Columbia, let me get a few things on the record
here. In your testimony you stated that lengthy fraud cases
give guilty defendants time to hide or spend all of the stolen
funds. To combat this problem, provider payments can be
suspended until the case is resolved. How often is this
mechanism used?
Mr. Maddox. I will let Mr. Rocke address that question, Mr.
Chairman.
Mr. Rocke. Right now, we have about four cases where that
issue is coming into place. It is a case-by-case decisionmaking
process.
One aspect that's very, very important to us is, as I said
before, is to stop the flow of bad money. But there are some
countervailing points. We may have an undercover investigation
ongoing. We may have other police or legal aspects of the case
that a suspension would interfere with. So it is always a case-
by-case decision as to whether we can effectively cutoff the
flow of money without alerting the target of the investigation
or undermining our case.
But what I try to do is always keep that option in the
forefront as a possibility, keep the single State agency
informed of the progress of the case so that, if they choose to
go forward with a suspension, they are given all the evidence,
all the ammunition to support that suspension. At the same
time, they're very careful to talk with us and work with us to
make sure that they don't take any steps that would undermine
our case.
Mr. Horn. Well, I don't want to uncover your thing. God
bless you for cleaning house.
Mr. Rocke. We are trying.
Mr. Horn. Are there any legislative actions that Congress
should consider that would restore Medicaid's financial
integrity? All of you down the line, anything you see or have
heard this morning that maybe there is a weakness here
somewhere in Congress and should we do anything more about
restoring Medicaid's financial integrity? How about the General
Accounting Office?
Ms. Calbom. I think, Mr. Chairman, the action that you have
taken already introducing legislation to require improper
payments to be reported is a huge first step, because that
really is what you need to do, as I said earlier, to know how
big your problem is and what kind of resource you need to throw
at that problem to take care of it.
Mr. Horn. Yes, that's H.R. 4878; and we haven't got it on
the books yet. It's going through the process. And you think
that will help on improper payments by Federal agencies?
Ms. Calbom. I think that would be a tremendous help.
Mr. Horn. OK. Well, we will take your word for it and see
if we cannot use you as a bat on the head to some of our
colleagues. So thank you.
Mr. Smith? What's your opinion?
Mr. Smith. Mr. Chairman, I don't have any recommendations
for you today. We do have tools out there. We do have Medicaid
as a matching program. It does require the States to put their
dollars up so the money doesn't flow unless the State is
willing to put its resources into it. But we do have a lot of
tools out there. We are trying to improve coordination and
communication so that all the parties who are involved in these
discussions are talking to each other and taking advantage of
it.
A part again of our approach has been to be out there in
the States and be visible to the States to know that we are
watching and, certainly, if we come back to you at a later time
with other recommendations for legislation.
Mr. Horn. Mr. Mangano, Inspector General, do you see any
more legislative actions Congress should consider?
Mr. Mangano. I don't think so at this time.
The fundamental issue here is the difference between
Medicare and Medicaid programs. Medicare is a national program
with national rules and regulations, and the CMS can have
people tow the line in terms of reforms that are needed.
Medicaid, being a jointly funded Federal-State program but
managed by the States, in many of the cases CMS can only
provide an encouragement factor.
As an example, in the testimony I talked about Medicaid
drug pricing. Clearly, the States and the Federal Government
are getting fleeced on the amount money that we are paying for
drugs, but every State can decide how much they are going to
pay for those drugs. So we are in a position and CMS is in a
position to encourage them to make those changes and reduce
those price, etc.
Given that kind of scenario, I think the kinds of reforms
that Mr. Smith and Ms. Calbom have talked about in terms of you
actually manage the program and getting better information,
getting that information analyzed at a national level, as well
as at the State level, and acting on that information, is
probably the best way to go at this point.
Mr. Horn. I want to put in the record to back you up, this
is entitled Outrageously High Drug Prices. The source is the
Life Extension Network 2002, and let me just give you an
example: U.S. price, Cipro, $87.99; European price, $40.75.
Paxil, $83 U.S. price; $49 in Europe. And Prozac, $91 U.S.
price; and $18 European price. And on and on and on. We'll put
this in the record just because it's enough to make us all mad.
Of course, a lot of pharmaceutical people will come in and
cry and whine and say, oh, everything costs $300 million to get
our research and so forth. They've got to wake up on this, and
we have to get that law moved this next few months in terms of
the Federal Government subsidizing those things.
Of course, a lot of it is just overuse; and I don't know
how you stop that. When a professional says, gee, we have to
have this, or the patient is sitting in the office and sees the
big, huge ads in medical journals, health journals, you name
it, or they go to the doctor and say, why can't you do it for
me, that's supposed to be the best thing since sliced bread,
and that kind of thing.
I just have one more question; and that is, you are doing
the match between Medicaid and Medicare. Who provided the
software for that? Did the agencies here, or how do you--and is
it comparable?
Mr. Smith. Mr. Chairman, I believe that we had developed
the software through a contract; and that was funded with
Medicare funds.
Mr. Horn. So there is comparability across the States.
Mr. Smith. Yes.
Mr. Horn. I'm all for it.
I remember 20 years ago I made that suggestion on another
Federal program and said, for Heaven's sake, just get them the
new software and see if they can work with it and not just have
it hung out there.
So I thank you all for what you have done and keep up the
good work. With that----
Mr. Maddox. Mr. Chairman?
Mr. Horn. Yes.
Mr. Maddox. Mr. Chairman, I have one question you asked
about Federal legislation. As you know, many of the Federal
laws that apply to Federal agencies also apply to the District
of Columbia. There are two such laws that I think would be very
beneficial to us, one being obstruction of an audit, which is a
felony.
Mr. Horn. I'm sorry. I missed the first part.
Mr. Maddox. Obstruction of an audit. It's not a felony in
the District, and I think that would go a long way in helping
us complete our audits. The other is false statements. Title
18, USC 1001, applies to the Federal side but not to the
District. Those are two investigative tools that are badly
needed.
Mr. Horn. So we need to expand that to----
Mr. Maddox. The District of Columbia.
Mr. Horn. We did not treat it like a State in terms of
Medicaid?
Mr. Maddox. Not in those two instances. The false statement
act with regard to the District is a misdemeanor. It is only
written a statement where there is a warning. Otherwise----
Mr. Horn. Get us a letter from you on that situation so we
can talk to people around here.
Mr. Maddox. I certainly will. Thank you, sir.
Mr. Horn. OK. That is a good suggestion.
Let me thank the individuals who have been responsible for
this hearing. The staff director and chief counsel is doing
other things right now, J. Russell George.
Bonnie Heald is the deputy staff director. Put your hand
up, Bonnie.
Then the individual that has really struggled with this and
done a great job as usual, and that is Rosa Harris who is a GAO
detailee. It's great having her here.
Then Justin Paulhamus is the majority clerk. He is right
back there with all the equipment.
Chris Barkley is part of our new subcommittee staff.
Michael Sazonov, subcommittee intern; Sterling Bentley,
subcommittee intern; Freddie Ephraim, subcommittee intern.
The minority staff here is out 100 percent: David McMillen,
professional staff, and Jean Gosa, the minority clerk; and we
thank you both for all you have done.
The court reporters, Pam Garland and Joe Strickland, we
thank you for all your fine catching the language, which is
very difficult for us to hear, so we can read it from you.
I want to thank you all again; and, with that, we are
adjourned.
[Whereupon, at 12:05 p.m., the subcommittee was adjourned.]
[Additional information submitted for the hearing record
follows:]
[GRAPHIC] [TIFF OMITTED] T6610.048
[GRAPHIC] [TIFF OMITTED] T6610.049
[GRAPHIC] [TIFF OMITTED] T6610.050
[GRAPHIC] [TIFF OMITTED] T6610.051