WASHINGTON, D.C. – Today, Congressman John Joyce, M.D. (PA-13), Chairman of the Subcommittee on Oversight and Investigations, led a hearing titled Protecting Patients and Safeguarding Taxpayer Dollars: The Role of CMS in Combatting Medicare and Medicaid Fraud.

“Taxpayers are being defrauded of outrageously large amounts of money,” said Chairman Joyce. “For too long, states have been permitted to run Medicaid programs with weak guardrails, making them easy targets for criminals to exploit. While states have a duty to steward federal and state taxpayer dollars responsibly, federal oversight is necessary to root out systemic fraud, waste, and abuse.”

Watch the full hearing here.  

Below are key excerpts from today’s hearing:

Congressman Brett Guthrie (KY-02): “How does the Fraud Defense Operation Center work?” Ms. Brandt: “The way it works is we get a mix of fraud investigators, lawyers, law enforcement, HHS, OIG, DOJ, and medical professionals all together, and we look at the data again, it's all data driven. We look at real time Medicare claims data and determine where we see big spikes in the data. For instance, on skin subs last year, one of the cases we saw was an 89-year-old woman who it showed that she had had 5,029 claims for skin subs submitted on her behalf and she was on hospice. Obviously, that's a pretty clear indicator of fraud.” Guthrie: “Is that improper payment or fraud?” Ms. Brandt: “That would be fraud. And she would be mummified if that was actually the case.”

Congressman Randy Weber (TX-14): “In Texas, $65 million was paid in fraudulent Medicare claims related to genetic testing that was never even requested on behalf of the beneficiaries. It seems like you're aware of that, what have you observed with respect to their lab schemes involving fraudulent or unnecessary lab testing? How do you get to that? What's the process?” Ms. Brandt: “It's very difficult, sir, and we have observed it. In fact, as I mentioned to you with our fraud detection war room that we have of the $1.8 billion we stopped last year, $100 million+ of it was related to just those types of laboratory services. And unfortunately, what that means is then when those services get billed—even if they're not provided—they go on the patient's medical record and it precludes them from being able to get that type of testing in the future when they might need it for a cancer diagnosis or something more serious.” Weber: “So, our great citizens are the brunt of that, really, while the thieves are making way with the taxpayer dollars?” Ms. Brandt: “Correct.”

Congressman Troy Balderson (OH-12): “Across many states, Medicaid providers have been found billing for services supposedly delivered to patients who were deceased, hospitalized, incarcerated, or living abroad. For example, in Massachusetts, a transportation company billed for nearly 17,000 rides, including 100 for patients already confirmed dead. In Colorado, a defendant billed $165,000 for rides for a beneficiary who had passed. In New York, investigators identified 25 transportation companies billing for rides for patients confirmed deceased or hospitalized. What mechanisms does CMS currently have to cross-check active claims against death records, hospital admission records, and incarceration records before approving payment?” Ms. Brandt: “We have a data matching agreement with SSA to be able to do a cross reference to something called the Death Master File, and in the Death Master File, all of the localities report all deaths. And as a result, we are able to run both providers and beneficiaries against that—to not only ensure that we aren't paying for dead people, but we aren't paying dead people, and that is what we do on the federal side. On the state side, it's more complicated because for states, they each have to do that on their own. I can't speak to what each state would do, and that is responsible for several of the cases that you just referenced.”