House Energy Subcommittee Holds Hearing On Medicaid Fraud

[20:57] The Subcommittee on Oversight and Investigations will now come to order. [21:01] The chair now recognizes himself for five minutes for an opening statement. [21:05] Good morning and welcome to today's hearing titled State Medicaid Program Integrity, [21:11] Examining Fraud Risks and Oversight Deficiencies. Today's hearing will examine Medicaid program [21:18] integrity in four states, Minnesota, California, New York, and Ohio. For the first time in years, [21:27] state Medicaid directors are testifying before Congress to share what they are doing to address [21:32] rampant fraud in government health care programs. Let me be clear, fraud is not isolated to these [21:40] four states. As we have discussed in two previous hearings before this subcommittee, Medicaid fraud [21:46] is a real problem. It happens in every single state, red and blue, and has been harming patients [21:54] and draining taxpayer resources for decades. In Minnesota, a recent $90 million Medicaid fraud [22:02] takedown brought charges in autism therapy services, housing support, home health care, [22:09] and personal care services. This was just the latest set of charges in ongoing fraud investigations [22:15] occurring there. In California, a man recently pleaded guilty to $270 million [22:21] in fraudulent prescription drug claims to Medicaid. Earlier this year, charges were filed against 21 [22:29] suspects for defrauding Medicaid hospice benefits of $267 million. In New York, $226 million [22:39] in social adult daycare fraud has been charged in 2026, just so far this year. Millions of dollars have [22:47] been implicated in non-emergency medical transportation fraud schemes in recent years. [22:53] In Ohio, a $42 million Medicaid fraud implicated nine defendants in connection with therapeutic behavioral [23:03] health services for children and young adults. Recently, there were also charges made in connection [23:10] with hundreds of thousands of dollars in in-home service fraud. These fraud schemes harm patients. [23:18] When services are billed but not rendered to vulnerable Medicaid recipients who are dependent each and every [23:24] day on this support, the consequences can be severe. And unfortunately, sometimes those consequences can be fatal. [23:33] Elderly and disabled patients in need of in-home care do not receive the help that they need to [23:39] live the lives that they have with dignity. Children who have benefited from essential therapies [23:46] often don't receive them. Those who rely on transportation assistance to attend medical appointments miss [23:53] the preventative care and treatments that they need to stay healthy. This morning's hearing is a culmination [24:00] of months-long investigation led by this subcommittee into Medicaid fraud with the goal of strengthening [24:06] the program integrity. After two hearings, letters to 11 states requesting documents and information [24:14] and reviewing over 90,000 pages of documents and information produced to this committee. It is clear [24:22] that some states are not doing enough to safeguard the Medicaid program, and gaps remain in program [24:28] integrity requirements that are opening the door far too wide to fraud. Thankfully, fraud is finally [24:36] getting the attention that it deserves. I commend this administration for surging resources to the war on [24:43] fraud by forming a task force to eliminate fraud. Additionally, CMS and the Office of the Inspector General are [24:51] leveraging their authorities to hold states accountable when they are not meeting the mark. We are seeing [24:57] accountability for the first time in far too long. But more remains to be done. We can no longer tolerate [25:05] criminals taking advantage of the Medicaid system. Fraud is not and should not be the cost of doing business. [25:13] It is preventable, and we have a duty to help rein it in. It is no longer sufficient to do the bare minimum. [25:21] States must rise to the occasion and tackle fraud head-on. Our Medicaid program and the patients that [25:28] rely on that to be healthy each and every day of their lives, they depend on it. I want to thank all of [25:35] our witnesses for being here today. We look forward to hearing from you and learning more about the steps [25:41] that your state is currently taking to address Medicaid fraud. With that, I now recognize our ranking [25:48] member of the subcommittee, Ms. Clark, for her opening statement. Thank you very much, Mr. Chairman, [25:54] and I'm glad to have another opportunity in the subcommittee to discuss the partisan actions that [25:59] the Trump administration has taken against state Medicaid programs under the guise of fighting fraud. [26:05] Democrats have been raising concerns about CMS's threats of funding cuts to blue states, which are [26:11] destabilizing programs and risk further cuts to health care in states led by Democratic governors, [26:18] leaders who President Trump sees as political enemies. The administration's partisan motivations [26:24] are clear. In January, amidst terror and chaos in Minnesota caused by the Trump administration, CMS announced [26:33] it would withhold up to $2 billion from 14 of Minnesota's health care services. Days later, [26:42] on the heels of the killing of an innocent American citizen by ICE agents, President Trump threatened [26:48] Minnesota with a quote, day of reckoning and retribution, unquote. When CMS Deputy Administrator [26:55] Brandt testified before this subcommittee in March, I asked her when a hearing would be scheduled on CMS's [27:03] decision to withhold more than $500 million in quarterly Medicaid funding from Minnesota. She said [27:10] that CMS had been stayed from scheduling a hearing, which proved to be entirely false. When we asked for [27:18] correction or clarification of her false testimony, Deputy Administrator Brandt did not provide one. [27:25] We cannot conduct oversight if CMS is going to lie about its actions. CMS has also deferred [27:34] $350 million in Medicaid funding for Minnesota for two consecutive quarters in sweeping cuts to entire [27:42] service categories, but has not provided Minnesota with a meaningful or consistent guidance on how to [27:49] address CMS's concerns. In California, CMS has put $1.3 billion in Medicaid funding in jeopardy through a [27:58] deferral for home health care service payments. CMS Administrator Oz proudly announced that this was the [28:06] largest deferral ever by the agency. He fails to acknowledge the impact that these overbroad indiscriminate [28:14] actions will have, and he has refused to accept California's explanations for the growth in those [28:20] services, which are due to longstanding efforts by the federal government and states to keep patients out of [28:27] institutions and in their homes and in communities. The need for home health care does not disappear [28:35] when funding is suspended, and California patients are terrified of losing care at home and being forced [28:44] into institutions. CMS has also threatened my state, New York. When it began investigating New York's program, [28:53] it touted clumsy and entirely inaccurate math, which ultimately overstated the number of New Yorkers [29:00] receiving home health care services by nearly 11 times. Even though CMS admitted its error, the Trump [29:08] administration has not let up on its threat to rob New Yorkers of Medicaid for their health care. We have [29:15] also heard that the way CMS treats state officials in some blue states has completely changed. CMS seems to be [29:25] looking for reasons to cut funding to certain states rather than ways to preserve it. Administrator Oz and [29:33] Vice President Vance have held numerous press conferences to hastily to announce hastily determined funding [29:40] cuts that harm patient access to health care. They have clearly prioritized headlines over health care and [29:49] partisanship over people. The administration has repeatedly treated blue states as enemies rather than [29:57] partners. HHS Inspector General March Bell has also joined this campaign against blue states by [30:04] decertifying Hawaii's Medicaid Fraud Control Unit, cutting three million dollars for the entity that [30:12] is responsible for finding and prosecuting Medicaid fraud and patient abuse or neglect. This is [30:19] particularly ironic as just the other day the Department of Justice touted numerous arrests and charges for [30:25] health care fraud and buried in the DOJ press release is a shout out to the Medicaid Fraud Control Unit of [30:33] Hawaii as one of the many agencies responsible for prosecuting the cases in the crackdown. One day [30:41] they're being denied recertification. The next day they're part of a major operation that the [30:48] administration wants all the credit for. Which is it? The answer is that this administration will do [30:55] anything to cover up for the massive Republican cuts to health care. Enrollment in Medicaid and the [31:02] Affordable Care Act are dropping precipitously. More than five million people just over the past year. CMS [31:10] and states should work together to address fraud just as they always have getting actual fraud out of [31:17] the programs and holds actual fraudsters accountable but wagging a politically motivated assault against [31:26] wait excuse me waging a politically motivated assault against the sick the disabled the blue states and [31:33] taking health care away from millions of Americans is not fighting fraud. That's just using fraud as a [31:41] convenient excuse to carry out the president's harmful agenda with the most vulnerable individuals in [31:48] our country paying the price. With that Mr. Chairman I yield back. Thank you. The chair now recognizes the [31:55] chairman of the full committee Mr. Guthrie for five minutes for an opening statement. Thank you Mr. [32:00] Chairman I thank you for holding this important hearing. I want to thank all of our witnesses for [32:04] being here. I know some came in challenging situations and we really appreciate you being here today. [32:10] This hearing is about accountability and what all of us can do moving forward to strengthen the Medicaid [32:16] program integrity. We have a duty to do everything possible to protect the Medicaid program for fraud [32:23] and preserve it from those who need it most. Each state administers its Medicaid program and is [32:29] responsible for making sure that fraud prevention and enforcement mechanisms are effective. Unfortunately this [32:36] is not always the case. Fraud is not a victimless crime. Not only does it squander taxpayer dollars but [32:43] it harms vulnerable patients. Fraudsters are blatantly lining their pockets with taxpayer dollars [32:49] often at the expense of the elderly, the disabled and young patients that are receiving substandard or no [32:56] medical care. Americans are tired of seeing their hard-earned tax money end up in the hands of criminals. So we can't deny this is happening. [33:04] It's amazing that it just seems like this isn't happening. We have a California man Paul Randall who [33:10] pleaded guilty to 270 million dollars in Medicaid fraud. So instead of going to help the most vulnerable [33:18] and the disabled, where did the money go? He bought luxury cars, rare sports memorabilia including Mickey [33:24] Mantle rookie baseball cards and game worn sneakers by Kobe Bryant. These are facts. This isn't something that's just [33:31] that that that came from this administration. These are facts in law. Similarly in Ohio, [33:36] law enforcement recently seized 14 luxury vehicles owned by defendants in a 30 million dollar [33:43] Medicaid or Medicaid behavioral health case fraud. Just this week the Department of Justice announced [33:49] two in 2026 national health care fraud takedown which charged 455 defendants with over 6.5 billion in [34:00] health care fraud. This takedown was a collaborative effort between federal state and international [34:05] partners include fraud schemes in Medicare and Medicaid. This is another example of how big this [34:11] problem is. Through more rigorous oversight and enforcement we can stop these brazen criminal [34:17] criminal schemes and make the Medicaid program stronger and ensure its stability for the future. [34:22] So my friend from New York commented on and brought up that that the administration just ceased payments and [34:28] said because you have fraud you're ceasing payments on all these other programs. Well let me say what [34:33] happened with that. We had over 400 home health providers so we do want them out of the nursing [34:41] homes and in their home. 400 over 400 home health care providers providing services in LA County. They knew [34:51] there was rampant fraud and they couldn't figure out which ones were legit which weren't. So let's just [34:55] suspend payments. So if you perform the service your payment was suspended. If you were cheating your [35:03] payment was suspended. Those who 12 companies out of over 400 called and said where's the money for the [35:10] what we served. 12 legitimate companies out of over 400 in LA County. So it's not the administration [35:18] that was just represented here saying that we're just going to hold we're going to hold blue states [35:22] uh we're going to we're going to punish blue states because they're blue states. What is this [35:27] administration making the decision that we have rampant fraud it's ripping off the taxpayers it's [35:33] it's it's it's cheating the most vulnerable some who are in the audience today the elderly the disabled [35:39] and those who need Medicare the Medicare and Medicaid the most and so they're using the tools available [35:45] and I will tell you the 12 people who 12 companies who legitimately performed those services [35:52] did get paid and the other 400 who were cheating never got their money because they didn't do the [35:59] services and so I will defend that I think your taxpayer dollars the most vulnerables need to most [36:05] vulnerables need to be defended as well I will defend that and we look forward today to kind of frame [36:10] this debate to understand what has happened how we're going to deal with it and how we make sure that [36:17] the American people who are generous with their tax dollars as we had some debates on Medicaid talked to a [36:21] lot of people about Medicaid the American people want this program to work they want the most vulnerable [36:26] to be taken care of but they also want to know that people care about their money as well and so that's [36:32] what this hearing is about that's what we're going to fight for on our side of the aisle if you're [36:36] cheating the system we're going to come after you and we're going to make sure if you're the in the most [36:41] vulnerable you're going to be taken care of and that's our task and I will yield back the gentleman yields [36:47] the chair now recognizes the ranking member of the full committee Mr. Pallone for five minutes for an [36:52] opening statement thank you Mr. Chairman nearly a year ago Republicans passed their big ugly bill [36:58] that included the largest health care cuts in American history Republicans cut health care by [37:03] a trillion dollars which is expected to rip health care away from 15 million Americans according to a [37:09] recent study 5 million Americans have already lost their health insurance as a result of these cuts [37:14] and unfortunately this is just the beginning during the markup of the big ugly bill committee [37:18] Republicans repeatedly insisted that the cuts wouldn't hurt patients and would only affect [37:23] waste fraud and abuse in the program but that has proven to be completely false and they knew that [37:29] you cannot cut health care by a trillion dollars and not impact millions of people's health care [37:34] earlier this month the Trump administration released a rule showing just how burdensome and cruel [37:38] the new requirements to receive care through Medicaid would be that rule includes a provision that those [37:44] receiving ongoing treatment for cancer could lose their Medicaid coverage if they don't jump through [37:49] all the hoops and red tape that Republicans put in their way even cancer patients are under attack [37:54] by Republican cuts to their health care the Republicans big ugly bill was never going to strengthen [37:59] Medicaid as they claimed it was just another step in the Republican campaign to dismantle it [38:05] and now as Republicans try to figure out a way to pay for President Trump's reckless war of choice with Iran [38:11] through another partisan reconciliation bill they're reportedly considering even more cuts to Medicaid [38:17] more than 70 million Americans who are disabled or chronically ill elderly or children rely on [38:22] Medicaid for their health care the Trump administration and Republicans in Congress continue to find [38:27] ways to endanger or take away that care they've decided that if they simply say they're eliminating Florida [38:33] Medicaid then they can get away with eliminating Medicaid well they're wrong we're not standing for that [38:38] the attacks on health care don't stop with the big ugly bill the Department of Justice just ripped [38:43] up decades worth of guidance and precedent that helped keep those with disabilities out of institutions [38:48] and the Centers for Medicare and Medicaid Services has selectively abandoned its practice of working [38:54] in partnership with states to administer the Medicaid program it's becoming increasingly clear that [38:59] under Dr. Oz CMS does not intend to work with states in good faith particularly states that do not vote [39:05] or did not vote for President Trump in California for example CMS has deferred 1.3.4 billion dollars in [39:12] quarterly payments to the state mostly for home and community-based services solely based on how [39:18] quickly the program has grown if the goal was finding fraud CMS would identify specific concerning [39:24] charges and work with the state to resolve them it would not threaten to defer payments to all in-home [39:29] supportive services for an entire quarter and then have the vice president hold a celebratory press conference [39:35] CMS continues to hold hostage funding to Minnesota repeatedly making demands of that state with short [39:41] deadlines only to move the goal posts when the state meets them and CMS sent a letter to New York [39:46] making outlandish allegations about that state's Medicaid program accompanied by a bombastic social media [39:52] post from Dr. Oz claiming that I quote nearly three-fourths of the state's 6.8 million Medicaid enrollees [39:59] receive personal care services but Dr. Oz and CMS had to walk back those claims after it was [40:04] pointed out that they had committed obvious errors in math that grossly inflated the number of [40:09] enrollees receiving those services now I'd say if Republicans are really interested in looking into [40:14] waste fraud and abuse they should look no further than the actions of the Trump administration and [40:20] the president it I mean talk about ripoff the American taxpayers are ripped off every day by Trump's [40:26] policies and personal you know effort to try to make a profit for him and his family why don't you go [40:32] after them why don't you go after the administration but it's outrageous to watch the Trump administration [40:38] going after state Medicaid programs while it's engaged in reckless war of choice that is costing [40:43] the American people 132 billion dollars tanking the economy and fueling inflation that the president says [40:50] he loves he loves inflation Republicans also had no problem supporting a 1.8 billion dollar slush fund [40:56] to reward Trump's friends and insurrectionists who assaulted police officers on January 6th you think [41:02] that's not a waste of money huge waste of money the combination of the Republicans big ugly bill and [41:08] the politically motivated cuts by CMS put states in an impossible situation and patients are already paying the [41:14] price playing politics with Americans health care is cruel and dangerous unfortunately that is what [41:20] we're repeatedly seeing from Republicans here in Washington and with that Mr. Chairman I yield back [41:24] the balance of my time the gentleman yields that concludes members opening statements the chair would [41:31] like to remind members that pursuant to the committee roles all members written opening statements will [41:36] be made part of the record we want to again thank our witnesses for being here today taking time to testify [41:42] before the subcommittee you will have the opportunity to give an opening statement followed by a round of [41:48] questions from members today's witnesses are Mr. John Connolly Temporary Commissioner and State Medicaid [41:55] Director Minnesota Department of Human Services Mr. Tyler Sadwith State Medicaid Director for the [42:01] California Department of Health Care Services Mr. Amir Busiri State Medicaid Director of New York State [42:08] Department of Health and Mr. Scott Partika Director of Ohio Department of Medicaid [42:14] We appreciate all of you being here today and I look forward to hearing from each of you [42:19] you are aware that the committee is holding an oversight hearing and when doing so has the [42:23] practice of taking the testimony under oath do you have an objection to testifying under oath [42:31] seeing no objection we will proceed the chair advises that you are entitled to be advised by counsel [42:36] pursuant to house rules do you desire to be advised by counsel during your testimony today seeing none [42:44] please rise please raise your right hand do you promise to tell the truth the whole truth and [42:51] nothing but the truth so help you god seeing the witnesses answered all in the affirmative you are [42:59] now sworn in and under oath subject to the penalty set forth in title 18 section 1001 of the united [43:05] states code with that i will now recognize please be seated with that i will now recognize mr john [43:12] connelly for five minutes to give your opening statement thank you chairman joyce ranking member [43:18] clark and members of the subcommittee thank you for the opportunity to be here today first of all [43:23] and for your continued focus on the important issue of medicaid integrity the programs we administer at [43:29] minnesota's department of human services are essential to the health stability and economic [43:33] security of communities across minnesota they help children families seniors and people with disabilities [43:40] access health care and other essential services every day these programs are lifelines relied upon [43:46] by over a million minnesotans in communities large and small as is the case with government [43:51] funded programs throughout the country and in fact across all health care payers including private [43:57] insurance bad actors have tried to take advantage of our well-intended services but let me be clear [44:02] the minnesota department human services and minnesota government have a zero tolerance policy for any fraud [44:09] within our government programs we take attempts to undermine the integrity of these programs [44:13] very seriously we are taking aggressive measures to secure our medicaid programs and here are just [44:19] a few recent examples minnesota dhs has conducted over 4 000 investigations and identified more than 50 [44:27] million in recoveries since 2020 resulting in over 1 150 cases referred to law enforcement state and [44:34] federal last year we hired a new inspector general with a decade-long record of prosecuting medicaid fraud [44:40] and we have also increased his staff to enhance oversight and accountability we have expanded our [44:46] prepayment review protocols to grow our capability to block payments to fraudulent providers on the [44:50] front end rather than paying them out and trying to recover those funds later we have aggressively [44:56] moved to stop payments to providers upon credible evidence of fraud we designated 14 medicaid benefits [45:03] as high risk determining that these benefits warranted heightened levels of scrutiny [45:07] and controls under medicaid's regulatory framework ultimately we took decisive action to terminate one [45:13] of those benefits and to impose licensing for service providers in another we recently completed a [45:19] five-month comprehensive review of almost 5 600 high-risk medicaid providers to ensure they meet [45:25] rigorous eligibility and compliance standards in appropriate cases we issued disenrollment notices and stop [45:32] payments we've been doing this work since long before the recent headlines and we will continue doing it [45:38] every day there is no finish line when it comes to protecting the integrity of our programs importantly [45:43] however our work is always done with beneficiaries in the broader public in mind we strive to enhance [45:50] program integrity while also providing access to care and continuity of service so for example when we [45:55] disenroll providers we work closely with counties and in some cases reach out directly to affected [46:00] minnesotans to help beneficiaries connect with alternative providers and resources in pursuing these dual [46:06] objectives of program integrity and responsible delivery of services we welcome opportunities for [46:11] dialogue with congress the centers for medicare and medicaid services and our fellow states we all have [46:17] valuable lessons to learn from each other we all know that our decisions as well as those of our [46:22] federal and state partners have real world impacts medicaid in minnesota serves approximately 1.16 [46:29] million people again children families seniors people with disabilities those with serious mental health needs [46:36] and others who depend on care to remain safe and stable in their homes and communities moreover medicaid [46:41] is a foundation for our entire health care delivery system including hospitals and nursing facilities [46:47] and major funding losses threaten to destabilize care for all minnesotans recent federal deferrals of [46:53] medicaid payments to minnesota have put our residents at severe risk this is not an accounting dispute on [46:58] a spreadsheet these decisions affect minnesotans with significant needs people for whom a missed appointment [47:04] a gap in treatment or an interrupted support service can quickly become a crisis this is not an either [47:10] or decision we can protect program integrity while still operating these programs effectively we can [47:16] root out fraud fraud waste and abuse while still caring for those in need and we can protect [47:21] taxpayer dollars while simultaneously directing them to their intended beneficiaries it is our job that we [47:27] share with our federal partners i believe strongly in public service and i'm proud of the work [47:32] minnesota dhs has done to strengthen program integrity combat fraud and ensure that we continue [47:37] to secure the federal funding that is crucial to our programs and to minnesotans i welcome and [47:43] encourage continued dialogue with you all as we continue these efforts thank you again for the [47:47] opportunity to share the work we're doing in minnesota to protect medicaid program integrity i look [47:52] forward to your questions thank you the chair now recognizes mr sadwith for five minutes for an opening [47:59] statement chairman joyce ranking member clark and members of the subcommittee thank you for the [48:05] opportunity to testify my name is tyler sadwith and i am the medicaid director for california a position in [48:11] the california department of health care services i want to be clear from the start we take program [48:17] integrity seriously and work hard every day to protect california's medicaid program from fraud [48:22] so taxpayer dollars can go to health care services for eligible patients who need them [48:27] i would like to touch on three areas first i want to highlight california's program and the [48:32] people we serve second i'd like to demonstrate our unwavering commitment to combating fraud waste and [48:38] abuse finally i want to emphasize our valuable partnership with the federal government and make [48:45] very clear our ongoing commitment to collaborating with our federal partners at cms the centers for [48:50] medicare and medicaid services medi-cal is california's medicaid program it provides health care [48:57] services to approximately 14 million vulnerable americans including pregnant women seniors children [49:03] and people with disabilities california is the country's most populous state it is the fourth [49:08] largest economy in the world this means we support more health care services for more vulnerable [49:14] individuals than any other state medicaid program in the country this is a responsibility we take [49:20] seriously and it is a vital part of our mission to protect this program california is wholly committed to [49:26] combating fraud safeguarding taxpayer dollars and holding bad actors accountable to meet these [49:31] commitments the department prioritizes program integrity at all stages from provider screening and [49:36] eligibility determinations to claims processing to back-end analysis and investigations approximately [49:43] 20 percent of staff are dedicated exclusively to program integrity we have strong policies and [49:49] protocols that are designed to prevent identify and block fraud waste and abuse a comprehensive [49:55] oversight oversight oversight strategy includes robust provider vetting that exceeds federal [50:00] standards provider suspensions including approximately 5 000 over the past five years [50:05] and secured fraud recovery totaling more than 1 billion dollars over the past five years [50:10] california is one of only two medic two states with a medicaid agency that employs armed sworn peace [50:17] officers with the legal authority to execute search and seizure warrants our teams of auditors [50:23] investigators investigators clinicians and data scientists conduct top to bottom reviews of providers [50:28] our strong partnerships with district attorneys medicaid fraud control units and federal law [50:33] enforcement and investigators are critical to our success but we must remain vigilant because we know [50:39] bad actors seek to exploit medicaid medicare and private health insurance that is why we continue to [50:45] strengthen our program in higher risk areas such as hospice care we are implementing new safeguards to [50:51] ensure appropriate use of services such as applied behavioral analysis and transportation we're proud of our [50:57] program but i want to emphasize the importance our partnership with cms plays in ensuring medical [51:03] operates with accountability transparency and in compliance with federal requirements we value that [51:10] partnership and our shared commitment to protecting taxpayer dollars and maintaining public confidence in [51:15] medicaid a productive relationship with cms is a key ingredient for continued success and cms recognizes [51:23] california as a national program integrity leader across bipartisan administrations cms's medicaid integrity institute [51:31] and the national association for medicaid program integrity have highlighted our advanced data analytics and [51:37] investigative strategies california's program integrity leader recently served on the executive board of the health care fraud prevention [51:44] partnership a cms convened body working across public and private sector to fight fraud we will be most [51:51] successful in keeping bad actors out of the program if we continue working closely with cms and other [51:57] federal partners i know this from my own experience at cms where i served seven years across bipartisan lines [52:04] the vast majority of medical providers follow the rules rooting out unscrupulous providers is critical to [52:12] safeguarding taxpayer dollars and ensuring medical can fulfill its mission to serve the children pregnant [52:19] women and other vulnerable other vulnerable californians who rely on it i assure you california is [52:25] committed to this important work and unwavering in our efforts to combat fraud thank you and i look forward [52:30] to your questions thank you the chair will now recognize mr basiri for five minutes to give an opening statement [52:38] chairman guthrie ranking member pallone subcommittee chairman joyce ranking member clark and members of [52:48] the subcommittee thank you for the opportunity to testify today regarding new york new york's medicaid [52:55] program and our efforts to combat fraud race and abuse my name is amir basiri i'm deputy commissioner [53:02] and the medicaid director at the office of health insurance programs at the department the new york [53:07] state department of health i've devoted my career in public service service to helping ensure that [53:13] government programs are effective accountable and worthy of the trust that the taxpayers put in [53:20] place in them i entered this role with a clear responsibility to do what is in the best interest [53:26] of new york's medicaid program including the safeguarding of taxpayer resources with strong oversight [53:34] and program integrity so that services are maintained for those who need them the most new york's medicaid [53:41] program is one of the largest in the country serving more than 6.4 million residents including over [53:49] 2 million children approximately 100 000 pregnant women and 1.5 million aged blind and disabled residents [53:59] given the magnitude and overall scope of our program we work every day with state and federal partners [54:05] law enforcement and oversight entities to prevent detect and address broad waste and abuse we also engage [54:14] regularly with the center for medicare medicaid services on program integrity matters and we sincerely [54:22] value that partnership as a critical component of our ability to strengthen program integrity efforts the [54:28] state recognizes the importance of technology and has made a considerable number of investments [54:34] in modernizing key technology to both support the consumer and provider experience as well as improving data [54:42] interoperability and accountability across the delivery system new york's approach to program integrity [54:50] relies on multiple state agencies working in close coordination this provides complementary points of [54:56] accountability and redundancy and responsibilities to ensure no single point of failure this structure [55:04] creates several layers of accountability including provider monitoring and screening to audits investigations [55:12] and coordinated enforcement action this approach has produced measurable results the state continuously [55:21] enhances its efforts to prevent and detect broadly sin abuse and in 2024 the office of the medicaid inspector general [55:29] completed more than 2500 audits and investigations referred over 450 matters for criminal prosecution [55:38] and generated approximately 4 billion in recoveries these outcomes reflect years of sustained work across [55:47] agencies to identify improper activity recover funds and hold bad actors accountable we are proud of these [55:56] results but we also recognize that a program of this size and complexity requires constant vigilance and [56:02] continuous improvement under governor hochel's leadership new york has pioneered a myriad of [56:10] reforms in high risk areas to safeguard taxpayer resources this is most evidenced by the state's right sizing of the consumer [56:18] directed personal assistance program a program that allows medicaid members to hire their own caregivers [56:25] by transitioning from a system of over 600 fiscal intermediaries to one single statewide fiscal intermediary [56:34] thereby reducing administrative costs in the program while establishing a stronger and more consistent [56:40] overnight mechanism with full accountability in addition a result of enhanced screening and oversight [56:47] of the non-emergency medical transportation program was done through the creation of a statewide [56:54] transportation broker nearly 800 providers were terminated or rejected from the network as a result of this [57:03] transition to the broker mitigating opportunities for improper billing while preserving access to this critical service [57:11] i'm proud of the work we've done to protect both the integrity of the medicaid program and the [57:17] millions of new yorkers that depend on it protecting the integrity of medicaid requires collaboration [57:23] transparency and a shared commitment to fiscal stewardship of taxpayer dollars we deeply value our partnership with [57:30] federal agencies on this effort and i appreciate the test the opportunity to testify today [57:36] and prepare to answer the subcommittee's question thank you the chair now recognizes mr partika [57:43] for five minutes for an opening statement apologies and members of the subcommittee on oversight investigation [57:57] my name is scott partika and honored to serve as the director of ohio medicaid represent all of [58:02] ohio medicaid team who wake up each and every day with a passion to serve those in need support our [58:07] providers especially our direct caregivers and execute the program at the highest level of program [58:13] integrity each and every day since joining the department in november 2025 i found myself laser focused on [58:19] program integrity to secure this vital program addressing fraud waste and abuse within ohio medicaid [58:24] program has always been a focus of the dewine administration and our work has especially [58:29] sharpened and expanded in response to recent program trends noticed in ohio and our work is far from [58:35] over ohio has implemented a series of system reforms over the last five years to add operational [58:41] efficiencies through administrative consolidation new advanced i.t infrastructure and the results of that [58:47] are growing transparency and additional tools for accountability that are just now beginning to bear fruit [58:53] key program concerns of previous years include payment accuracy member eligibility and concurrent [58:59] enrollment in other states as well as broader program spending in certain areas ohio has taken [59:04] steps each concern head-on including reducing the perm finding to two percent adding new supports for [59:11] county caseworkers to increase accuracy and efficiency of applications and increasing data transparency [59:16] along the way that has helped guide policy making for the administration and ohio legislature other [59:23] ongoing initiatives include rule and policy updates enhanced provider screenings new um practices and [59:30] targeted provider audits these and other activities have helped us address concerns highlighted by state [59:35] partners and partners at cml when looking at federal initiatives to combat program integrity concerns it's [59:42] important to recognize the working families tax cut legislation which dramatically increased the level of program [59:48] oversight and elevated program integrity priorities in state medicaid programs including addressing [59:54] concurrent enrollment across states ensuring deceased individuals are no longer on the rules increased [1:00:00] emphasis of audits and subsequent corrective action increased frequency of eligibility determination [1:00:06] mandating community engagement requirements to help facilitate people moving up and off the program [1:00:11] these efforts are helpful and we believe our federal partners can and should continue to improve [1:00:16] protection and oversight of state programs now to ohio troubling data in home health space was uncovered [1:00:23] at ohio late last year we began investigating the information in conjunction with ohio auditor keith faber [1:00:28] and former attorney general davio shortly thereafter the result culminated in new actions and [1:00:33] initiatives to address areas of weakness combat the fraudsters attempt at exploiting these critical programs [1:00:40] in recent weeks governor dewine announced several new initiatives aimed at curbing that trend [1:00:44] a six-month moratorium on new home health providers increased frequency of provider revalidations new [1:00:49] rules to conduct provider payment suspensions during periods of investigations and updating ohio's [1:00:55] electronic visit verification rules additionally the ohio legislature passed senate bill 315 which [1:01:00] includes a myriad of reforms to the integrity of the ohio medicaid program including increased penalties [1:01:06] for fraud violations expanded oversight of provider ownership structures enhanced provider enrollment [1:01:11] requirements and expanded use of electronic visit verification work to strengthen other high-risk [1:01:16] programs is also underway is a full press forward to address fraud waste and abuse through a thorough [1:01:22] policy review across the agency through these efforts we have identified certain areas such as ohio's [1:01:28] nursing facility ventilator program for improvements private room compliance monitoring oversight of certain [1:01:34] behavioral health services home health and skin substitute coverage are just a few where we are making [1:01:40] policy updates moving forward one area we believe believe the federal government and states could [1:01:45] partner is through improved data sharing and tracking of provider ownership and affiliation across state lines and [1:01:51] programs as we continue our program integrity work it is critical that we are able to [1:01:56] systematically root out bad actors and not leave the door open for any exploitation of [1:02:00] this program if somebody is taking advantage of our program in northwest ohio i certainly want to ensure our [1:02:07] partners across the state lines in michigan are aware of that as well the department is committed to [1:02:13] ensuring ohioans receive health care in accordance with the law and rooting out fraud [1:02:17] waste and abuse to protect this vital and critical program for the people who need it [1:02:22] chairman joyce vice chair balderson reiki member clark members of the committee thank you for [1:02:26] having me today i look forward to your questions and continued work moving forward thank you [1:02:31] i thank you all for your testimony we will now move to questioning and i will begin and recognize [1:02:38] myself for five minutes director sadworth california has a large medicaid program spending more than [1:02:47] 4.7 billion dollars in 2025 on home and community-based services alone fraud in these services as you [1:02:56] would recognize is a serious matter in some cases across the country patients have died when fraudsters [1:03:02] bill medicaid for services that were needed but never provided your office has stated in correspondence with [1:03:10] this committee and cms that california goes beyond federal requirements for providing screening and [1:03:17] enrollment if that is the case why has your medicaid agency classified all medicaid only providers as [1:03:26] limited risk a classification that comes with less stringent oversight standards do all of california's [1:03:33] medicaid providers being considered as limited risk really reflect what you're seeing in these programs [1:03:42] thank you chairman for the question and thank you again for the opportunity to be here today home and [1:03:48] community-based services are a vital program in california we know for example that they're they're [1:03:57] cost-effective reflecting a prudent use of taxpayer dollars one year of receiving in-home supportive [1:04:03] services saves federal and state taxpayer dollars approximately hundred thousand dollars compared to a [1:04:09] a stay in a nursing facility we are absolutely committed to ensuring the integrity of these [1:04:14] vitals but by classifying all medicaid only programs as limited risk are you seeing that all of these [1:04:21] programs really show the limited risk as far as fraud goes thank you for the question um so the um [1:04:29] risk classification categorical risk level classification is one of many tools that we use to assess program [1:04:35] risk is this adequate when you put when you paint with one brush all of those as limited risk which [1:04:42] requires less oversight are you missing fraud we employ a number of safeguards to prevent bad actors from [1:04:50] entering the program for in-home supportive services specifically we do conduct fingerprint and criminal [1:04:57] background checks which is one of the features of a high risk categorical level designation so even though [1:05:04] is that at this high risk but we're talking about limited risk which you ascribe to all medicaid only [1:05:10] providers does that catch all the fraudsters or should this be more of an individualized approach [1:05:16] and not painting just with one brush is there an opportunity to really read to weed out the fraud at [1:05:22] its beginning stages i absolutely share your focus have you previously designated any medicaid only [1:05:29] provider types that were classified as moderate or high risk to my knowledge we have not classified any [1:05:38] medicaid only provider types we have gone above and beyond historically the federally designated in california [1:05:47] are you reassessing any provider risk designations in the state thank you we are actively assessing [1:05:54] opportunities to strengthen program integrity in key areas this includes but is not limited to [1:06:01] the categorical risk level designation we do have other tools that we use to go after higher risk areas [1:06:08] we have developed provider risk profilers for services you know such as hospice care such as dental care [1:06:17] and other other areas that are on our radar that we use you know in conjunction with you know [1:06:23] comprehensive okay so you brought you brought into this conversation now home health and hospices [1:06:28] am i correct the california license home health and hospices before they can operate in the state [1:06:36] thank you for the question um this is a really important issue that i'm happy to talk about um it's [1:06:41] really please do yeah the partnership between the state of california and the federal government is [1:06:48] paramount to making sure bad actors stay out of the program when it comes to hospice care and home health [1:06:54] um just as context medicare the federal program is the primary payer for hospice care in california [1:07:01] the state department uh california department of public health my sister state agency does perform [1:07:07] licensure for hospice providers and the state has acted swiftly to root out bad so before they can [1:07:14] operate in california this is just a simple yes no do you allow this hospice organization to operate with or [1:07:23] or without a california license is that required before they can operate in california yes or no [1:07:31] the californian department of public health has imposed a licensure moratorium that was enacted in [1:07:36] 2021 and just this week implemented new regulations strengthening the standards for licensure for [1:07:42] providers to be able to obtain so prior to just this week your words you could operate a hospice in [1:07:49] california without a license is that what you just said to me pardon me i respectfully disagree with [1:07:56] the framing i'm actually not um an expert on that specific okay so let's let's move on director basiri [1:08:03] personal care and home health aids are the largest and fastest growing job category in new york and [1:08:08] according to cms accounted for more than 44 billion dollars in total payments between 2023 and 2025. [1:08:16] i understand based on information that new york provided to the committee just yesterday even [1:08:22] though it was requested in march the new york state department of house is in the process of designating [1:08:28] wavered personal care services as a high-risk program given that cdpap which is a self-directed [1:08:35] personal care service waiver program is provided in home private homes with minimal oversight what safeguards [1:08:43] currently exist to verify the services are billed actually and delivered thank you for the question [1:08:50] chairman i'm going to ask you my time has expired i'm going to ask you to respond to that in writing [1:08:55] and with that i will yield to the ranking member for her five minutes of questioning thank you very [1:09:01] much mr chairman under the partisan leadership of donald trump and dr oz cms's use of its authority to [1:09:08] withhold and defer medicaid funding for minnesota and california is extreme and unprecedented [1:09:14] and the cms threat against new york based on basic math errors are an embarrassment under the [1:09:21] leadership of administrator oscms no longer supports all states in administering their medicaid programs [1:09:28] instead it seems to be looking for ways to undermine these programs cms is demanding that states solve [1:09:35] problems in their medicaid programs without defining what the problems are or in the case of new york cms has [1:09:42] based its scrutiny of medicaid spending on an embarrassing misinterpretation of its own data [1:09:48] mr basseri dr oz sent you a letter on march 3rd that stated that nearly three out of every four [1:09:55] medicaid beneficiaries received personal care services from 2023 through part of 2025. dr oz posted that [1:10:04] letter on social media along with a media a video threatening new york's medicaid funding mr basseri was [1:10:10] the statement that dr oz made about the number of medicaid beneficiaries receiving personal care [1:10:17] services accurate thank you for the question reagan member clark that information that was reported [1:10:26] was inaccurate we did confirm and state that and the administration confirmed there are for the 450 [1:10:36] 000 new yorkers that receive some form of personal care services including consumer directed and licensed [1:10:43] home care it is not the four million that was referenced it's a little under five percent mr basseri [1:10:51] do you know about how far off dr oz was from the actual number i think you just stated it a minute ago [1:10:59] thank you for the follow-up the discrepancy was between 4 million and 450 000 so yikes this is not a [1:11:09] minor rounding error this is a fundamental misunderstanding of medicaid programs and basic math and it is [1:11:16] not it is shameful to be that far off and think that it is new york that has the problem setting aside [1:11:25] the egregious misrepresentation of the facts mr basseri were you aware that one of the footnotes in [1:11:32] the same letter shows that cms apparently used chat gpt to find an article on cms's own data thank you for [1:11:42] the question i had not been aware of that yeah i think this is relevant because it demonstrates that cms [1:11:48] is not taking the time to assess its data to identify specific program integrity concerns and it's [1:11:55] clear that president trump and dr oz decided to go after new york and then try to manufacture the basis [1:12:02] for doing it mr sandwith in response to cms's determination in may to defer 1.34 billion dollars [1:12:12] from your program you said cms has used what was once a routine payment reconciliation process with [1:12:18] states to undermine exactly what federal hcbs policy has long sought to achieve helping more people [1:12:25] remain safely at home rather than enter institutions for long-term care can you explain how the may [1:12:32] referral announced by cms defers excuse me differs from your from prior deferrals thank you ranking member [1:12:42] i'd be happy to um you know first of all we value transparency and we do value the review process [1:12:48] with cms some of the deferrals in that deferral are actually a result of california proactively reaching [1:12:55] out to cms and disclosing concerns and issues we had identified and seeking partnership with cms to [1:13:01] ensure federal appropriate claiming however the 1.1 billion dollar deferral for our in-home supportive [1:13:08] services is unprecedented we began addressing cms questions before the deferral was ever issued they [1:13:16] reviewed intensively and we value that partnership we explained the growth we explained that intentional [1:13:23] policy choices reflecting long-standing federal policy and federal authorities to expand home and [1:13:30] community-based services and keep vulnerable americans at home saving taxpayer dollars was part of our [1:13:37] strategy part of our policy we explained what drove the growth and cms decided to defer the payments [1:13:45] and they have not provided any instances of fraud waste or abuse as part of their review does an [1:13:52] extended delay in releasing federal funds threaten accessibility of services for patients we are continuing [1:13:59] to monitor the impact on access to patients as a result of this deferral and working steadfastly to [1:14:05] continue responding to every question cms asks us very well mr chairman i yield back thank you gentlemen [1:14:13] general lady yields the chair now recognizes chairman of the full committee mr guthrie for five minutes of [1:14:18] questioning thank you so first for director basiri new york has failed to provide certain information [1:14:24] response to our to the committee's letter for example you've not provided simple information such as all [1:14:29] the state's designated risk levels for medicaid only providers types also note that you only provided the [1:14:34] basic information that was requested about the frequency of on-site visits in nearly improper [1:14:39] payment recovery efforts the day before why have you been unable to provide that information to the [1:14:44] committee thank you for the question chairman uh we have been as responsive as we can we're handling [1:14:52] many inquiries from both the committee um the center for medicare medicaid services and hhs oig but i'm [1:14:59] happy to take that back and we brought this up to you on june march the third is now june 25th uh if your [1:15:06] agency doesn't have this information readily accessible that's a that's a problem in itself [1:15:10] but the committee and the american people deserve to have transparency how new york and all states [1:15:14] are operating in their program and uh will you commit to providing that information to this committee [1:15:19] that we've requested thank you for the follow-up we uh agree that transparency is paramount uh i can't [1:15:26] commit to that here but i'm happy to take that back and get back to you as soon as possible you can't [1:15:30] commit to providing the disinformation i just laid out i think we've been i'm happy to take that back and get [1:15:37] back to you well thank you so so director sat with kind of uh same same committee requested documents [1:15:44] information from your agency on march 3rd including all audits related to fraud waste and abuse in the [1:15:49] state's medicaid programs including audits completed by third-party contract auditors from january 1st 2021 [1:15:56] to present i think that's about the time you said the licensing was ceased i think i said i might have [1:16:00] said in home i think it was hospice care when i was referring earlier based on the information that has [1:16:05] been provided to the committee we know that california has conducted such audits but the [1:16:08] committee did not receive a single audit document from california until 7 p.m last night do you believe [1:16:16] that providing more than 1300 pages of documents on the eve of a hearing is fair to this committee [1:16:23] thank you chairman and i acknowledge the frustration we have been working with committee staff to produce [1:16:30] uh information and address the questions including the list of 26 000 audits and investigations that we [1:16:37] have conducted over the past five years um last night we provided um some audits related to transportation [1:16:46] and mental health that the uh committee had indicated were there are also others that that we've requested do [1:16:52] you commit to providing that what we've requested to this committee in a timely manner thank you chairman [1:16:58] there are ongoing law enforcement investigations that would be impacted by those specific audits that [1:17:07] were requested we're happy to provide the appropriate information at the appropriate time let me say it [1:17:12] just seems unfair to us and to prepare for a hearing that you've sent everything at 7 pm last night it [1:17:17] almost seems like that was intentional uh it appears that way so uh commit temporary commissioner connelly [1:17:23] the early intensive development behavioral intervention program which provides autism therapy [1:17:28] services in minnesota is currently experiencing unprecedented levels of fraud exemplified by a recent [1:17:33] fraud takedown in minnesota charged by doj totaling 46.6 million one of the largest in history in [1:17:40] this scheme it is alleged that the defendants pay kickbacks to parents to bring their children to [1:17:44] autism centers where children were diagnosed with autism regardless of the medical necessity what are you [1:17:50] doing to restore the early intensive development and behavioral intervention program to provide [1:17:55] these service to those who it's intended for thank you chairman guthrie for the question so we are [1:18:00] engaged in a number of efforts related to the uh the autism services benefit in minnesota and certainly [1:18:06] uh significant fraud happened and i am not here to minimize that however as the fraud became apparent [1:18:12] to us based on the information we were able to collect through investigations and through data [1:18:16] analytics we took a number of actions i think one of the first was in october of 2024 uh our staff did an [1:18:23] on-site audit of all autism service providers in the program across the state later it was designated [1:18:29] as a high-risk service so that comes with uh enhanced fingerprint background checks unannounced site [1:18:35] visits a more frequent revalidation those providers are also included in the the revalidation of the 5600 [1:18:42] providers that i described in my opening comments we also implemented pursuant to the direction of the [1:18:46] legislature a new licensing uh framework for uh autism service providers that is being implemented [1:18:53] now it's being phased in we have a provisional licensure framework um that providers uh the vast [1:18:59] majority of providers have applied for and then full licensure will come into place uh in 2027. [1:19:04] well thank you my my time is running out i just want to say you said significant fraud has was [1:19:08] been committed and you're not you're not denying that or downplaying that i think that's the word you [1:19:12] said which i appreciate that i think hopefully all of you would admit to that and my wish is that in a [1:19:18] bipartisan way all of us on here instead of well the administration did this and fraud and whatever [1:19:23] there's significant fraud in the programs that not just the four of you representing [1:19:27] i think if you look across i don't know every i'm not going to say every state because i don't know [1:19:30] that but i think it's absolutely significant and it just seems like this is one thing we could all agree [1:19:36] that we should fight the fraud of significant levels you said significance the word that you use [1:19:41] and i want to ask you my time's now up but i think this is uh just something that's frustrating that [1:19:46] we're not this isn't a bipartisan effort to root out fraud uh i'll yield back the gentleman yields [1:19:51] the chair now recognized the ranking uh member of the committee mr pallone for five minutes of [1:19:56] questioning thank you mr chairman the republicans big ugly bill cut health care by a trillion dollars [1:20:02] and then the trump administration launched a campaign to cut health care to blue states even more [1:20:07] on february 26 just two days before trump began his reckless war of choice with iran vice president vance [1:20:14] announced a deferral of 250 million in medicaid funding to minnesota so i want to ask dr connelly [1:20:20] actually i'm going to go to each of the three state representatives uh so you know if you could [1:20:24] just respond in a minute or so so dr connelly you've described the deferral as a quote catastrophic [1:20:30] funding loss for minnesota and the children families and seniors that rely on the program so [1:20:36] what does an unprecedented deferral this size mean for minnesota children and families and has cms [1:20:42] given you any indication of whether these deferred payments will be released or when so the size of [1:20:50] both the deferrals which are roughly 350 million dollars on top of the two billion dollar roughly [1:20:55] annual withholding associated with cms's compliance action that is a significant amount of money when the [1:21:02] entire program is roughly 20 billion dollars in entire federal and state spend so that is a very large [1:21:08] sum of money that threatens the state's ability to finance the services and benefits that are part of the [1:21:13] the program in addition we have a structural budget deficit in minnesota we've had that for a [1:21:19] couple of years now and so we are already struggling uh to maintain the services the payment levels for [1:21:25] providers across the state the eligibility levels that we have in the program so this adds another [1:21:31] layer of pressure and risk to those those realities um with respect to cms and us working with them [1:21:36] we have done everything since december 5th and the notification that they were requiring a [1:21:42] corrective action plan of us that they have asked um we've uh revised it once um provided that timely [1:21:48] on time and have implemented every step in milestone in that corrective action plan since we submitted it [1:21:54] any indication of whether these payments will be released or when i'm just trying to move on [1:21:58] none yet representative pallone thank you i appreciate it i'm just trying to get all of you in [1:22:03] in california cms has targeted home and community-based services or hcbs cuts to hcbs mean medicaid [1:22:11] recipients will end up in institutions rather than get care in their homes or receive no care at all [1:22:16] possibly so mr sadwith if hcb if hcbs are cut and patients are forced into institutions what are the [1:22:24] consequences for patients their families and taxpayers in about a minute if you don't mind [1:22:31] thank you for the question um representative so i'd like to take a minute just to talk about [1:22:37] what these services are and who's receiving them to put a human face on them so in-home supportive [1:22:43] services are provided to some of california's most vulnerable residents including children with [1:22:48] disabilities adults with disabilities and seniors who cannot live safely at home all in-home supportive [1:22:55] services recipients meet institutional level of care which means that they qualify to be admitted and to [1:23:02] live in facilities and institutions ihss services assist people with living safely at home these services [1:23:10] include you know things like helping with bathing with grooming with hygiene with meal preparation and [1:23:17] paramedical supports such as changing colostomy bags injections medication administration and driving [1:23:25] recipients to doctor's appointments so without these services children would be living in facilities [1:23:32] and adults and seniors would also be living in facilities and these are also cost effective [1:23:38] services it's a good use of taxpayer dollars to invest in these services every year that we provide [1:23:45] in-home supportive services and keep someone out of a nursing facility we save state and federal [1:23:50] taxpayers approximately a hundred thousand dollars i appreciate it and i you know institutionalization [1:23:57] is not only terrible but costs so much more money so mr basiri you said the effects of paper [1:24:02] work requirements could be quote catastrophic for new york what impact will these requirements have [1:24:07] on patients and providers in new york's medicaid program and you've only got about 45 seconds to answer [1:24:13] thank you for the question ranking member pallone um yeah i believe you're referring to the implementation [1:24:20] of community engagement requirements which we are set to do on january 1st of this year [1:24:25] um i think the the biggest challenge is communicating effectively and accurately with our members about [1:24:31] the changes that are forthcoming and the the very nature of those changes at different time periods [1:24:38] we are incurring about a 20 percent increase in administrative costs to accommodate some of the [1:24:45] implementation requirements to mitigate from consumers but we are taking proactive steps to make sure [1:24:52] we're we're making sure people are aware of the changes we don't want any disruptions and continuity [1:24:57] of care and that's where our focus has been thank you thank you miss thank you mr chairman yield that [1:25:02] the gentleman yields the chair now recognizes the vice chairman of the subcommittee mr balderson [1:25:08] for his five minutes of questioning thank you mr chairman and i thank all of you for being here today [1:25:13] this is a very challenging subject to talk about and um i reiterate what the chairman said [1:25:19] during during his statement so relax breathe a little bit all of you and uh just let's do the [1:25:26] best we can here and work together um mr bartika uh november 2025 seven months into this this has been [1:25:35] quite a uh interesting challenge for you and i appreciate the work that you've done in the great [1:25:40] state of ohio and the state that i am blessed and fortunate to to represent um this committee [1:25:46] implemented robust medicaid program integrity reform and last year's working families tax cut [1:25:51] legislation you mentioned some of that can you share how the ohio department of medicaid has benefited [1:25:58] from these reforms so far i think you congressman uh yes the as referred to in my uh testimony around [1:26:07] the benefits from that uh one of the frequent audit findings we had was inner accuracies around member [1:26:14] the working family tax cut legislation increased the frequency of those [1:26:18] redeterminations of individuals which will increase the accuracy of our rules as well as work requirements [1:26:23] and additional supports around identifying individuals enrolled in in multiple states which [1:26:29] as we look across the board is producing a significant savings to the ongoing state budget as we move [1:26:34] forward okay thank you ohio recently announced steps to build a national model of federal and state [1:26:41] cooperation on fraud enforcement what does this federal state partnership look like could you explain a [1:26:47] little bit yes congressman uh yes the the uh the effort i think is a great reflection of the [1:26:53] long-standing work that ohio has had between the department from the administrative perspective and [1:26:58] our law enforcement partners at the attorney generals and at the federal level a long-standing history of [1:27:04] of convictions over 2 000 individuals since 2011 have been convicted um upon recent trends um that we have [1:27:11] found in this area uh we've started to move from this cotton stopped policy to say how can we go up [1:27:16] uh upstream and start to close doors before broadsters enter our program in the wake of recent trends we [1:27:22] have seen we were collaborating very closely with our partners at cms um from new data sharing agreements [1:27:28] to having robust conversations around how to handle a provider suspension uh to stop the bleed where [1:27:34] appropriate but also be cognizant and aware of of individuals who need to continue to receive care [1:27:40] uh that all has culminated into the recent efforts um most uh recently the federal government has been [1:27:47] rolling out a new dashboard that compares states and compares risk of certain services that is serving [1:27:53] for a good guiding tool as we look and say what are the anomalies in ohio is that inconsistent with what [1:27:58] we're seeing across state lines which is a new way of looking at things it's evolving and we plan to continue [1:28:04] to respond as we move forward all right thank you well done um particular a recent article explained [1:28:11] how ohio's medicaid paid more than five million to a company whose president had a daycare shut down [1:28:17] because of signs of fraud and her husband has a felony conviction for billing for non-existent elder [1:28:24] services how is ohio reforming its provider enrollment and revalidation process to detect known criminals [1:28:31] that may be operating in concert with medicaid providers uh congressman as mentioned recent [1:28:38] legislation increased the frequency of those revalidations as one particular tool i know in [1:28:44] instances where we find individuals have committed a past violation that was was not captured upon [1:28:49] enrollment um is one of the areas i think from a data sharing perspective across state lines [1:28:54] would be incredibly helpful to know from across multiple programs not just medicaid but also medicare [1:29:01] in ohio we are proactively starting to share this information with our partners at other state [1:29:06] agencies not to to determine if there is a potential for fraud waste and abuse in other programs as we [1:29:12] see individuals involved in not just medicaid services but perhaps uh daycare services and the like [1:29:18] okay we're down about 50 seconds mr partita um what what considerations are being made in ohio if any to [1:29:26] reassess medicaid only provider categorically risk types after fraud allegations and charges that have [1:29:33] recently been made congressman one of the uh our revalidation plan that we have submitted to cms in [1:29:40] particular um looking at the categories of risk but also looking at how can we do a data dive to not [1:29:46] just determine what type of provider they are but what is the behavior of that provider what are the [1:29:50] billing patterns are they massive outliers from others and moving them into high risk category based on [1:29:55] behavior moving into a high risk category of course does not mean you are fraudulent on on its face [1:30:00] it means you require additional investigation and oversight on a more frequent basis all right thank [1:30:05] you very much mr chairman i yield back thank you all for being here the gentleman yields the chair [1:30:10] now recognizes mr gett for her five minutes of questioning thank you so much mr chairman and i want [1:30:15] to thank the witnesses for being here all of you are taking time out of your busy schedules and we [1:30:20] appreciate it because you don't have an easy job i would imagine that a large part of what you do [1:30:27] is try to integrate your programs with cms and the other executive branch agencies and i would imagine [1:30:35] it would help if it was that collaborative so i have a long list of questions i would appreciate yes [1:30:41] or no answers and you do not need to thank me for the questions mr partika i want to start with you [1:30:48] um has cms been collaborative with ohio in pursuing anti-fraud initiatives yes ma'am earlier this month [1:30:57] doj announced a collaborative federal state partnership with ohio to combat fraud is that correct yes [1:31:05] and during this administration has cms sent ohio a formal inquiry regarding the state's anti-fraud policies [1:31:16] has cms sent ohio a formal inquiry regarding the state's anti-fraud policies and i will have to [1:31:23] confirm we've had various inquiries from oh you don't know okay dr connelly on december 5th 2025 [1:31:30] cms sent minnesota a letter demanding a corrective action plan is that correct uh you need to turn your [1:31:38] mic on yes you submitted a corrective action plan to cms by the deadline they provided and then your office [1:31:45] met with cms on january 6th to discuss that plan is that correct i'd have to confirm the date of the [1:31:51] meeting but yes yeah you met with them later that same day on january 6th administrator oz announced [1:31:57] cms would withhold up to two billion dollars from minnesota did the agency give you any indication [1:32:04] it was about to make a significant funding threat just hours later not in advance of the meeting in [1:32:10] january thank you and also dr connelly is it true that after receiving additional questions from cms [1:32:17] minnesota submitted a revised corrective action plan january 20th and met with cms on february 3rd [1:32:24] february 10th february 17th and february 24th yes i believe that's true and on february 25th after [1:32:32] four weeks of refusing to provide minnesota feedback on its plan administrator oz announced he was deferring [1:32:39] 259 million dollars in medicare funding during your four meetings dr connelly with cms in february [1:32:46] alone did the agency ever provide notice that it was planning to defer nearly a quarter billion [1:32:53] dollars in funding i personally was not given that information you don't think so right i personally [1:33:01] was not aware of that coming okay mr sadworth california had a 1.3 billion dollar deferral from cms [1:33:08] did cms provide you with any notice of the incoming deferral or any concrete things [1:33:14] you could do to prevent it cms asked questions and we responded to them but they didn't tell you [1:33:21] what to do right correct has cms told you anything about what your state needs to do to get that [1:33:28] critical funding released cms continues to pose questions to us and we can so they haven't told you [1:33:34] what you need to do to get it released yes or no no and is this a departure from how cms in california [1:33:40] have collaborated in the past yes thank you um so cms in my view is going out of its way to blindside [1:33:49] blue states while pampering red ones in fact cms has sent letters investigating medicaid programs [1:33:56] in new york california maine minnesota and florida florida's letter is a fig leaf to pretend the agency's [1:34:03] investigations were not partisan coming minutes before cms leadership was to set to appear to [1:34:10] before this subcommittee soon after sending the letter to florida however dr oz took to social media [1:34:17] to praise the desantis administration only blue states have had their medicaid funding deferred [1:34:23] or threatened and cms has shown no evidence that these states are worse actors frankly unfortunately [1:34:30] this is a staged performance to target blue states not a genuine fraud investigation it's [1:34:35] exemplary of how this whole administration works and how hollow the administration's focus on fraud [1:34:41] really is donald trump has pardoned or commuted the sentences of several convicted fraudsters who seem [1:34:49] to be his supporters lawrence duran stole 205 million dollars from medicare and was sentenced to 50 [1:34:56] years in prison sentence commuted paul walczek stole money from the employees of his nursing home president [1:35:03] trump pardoned him in april 2025 after his mother attended a million dollar person fundraiser at mar-a-lago [1:35:12] we can figure this out i'm reminded of an old phrase that sums up everything this administration is all [1:35:18] about amicus omnia intemesis legis to my friends everything to my enemies the law i yield back general [1:35:29] lady yields the chair now recognizes mr palmer for his five minutes of questioning my first three [1:35:34] questions are yes or no answer you do not have to thank me for the question uh given that providers [1:35:40] engaged in fraud waste abuse that may involve being enrolled in both medicare and medicaid does your [1:35:47] state share information between the two programs prevent enrollment of bad actors uh mr connelly [1:35:53] i'm sorry could you are we sharing information with the medicare program to ensure that you don't [1:36:00] have a fraud fraudulent dual enrollment medicare and medicaid we are sharing information weekly with [1:36:05] the centers for medicare and medicaid services it's a yes mr sadwick yes we share information with cms [1:36:12] mr basseri yes we sure mr patricka uh yes sir okay does your state share information with the treasuries [1:36:20] do not pay system or other federal databases mr connelly i'm sorry could you repeat the question [1:36:26] i know i have a southern accent i'll i'll try to speak a little clearly does your state share this [1:36:32] information with the treasuries do not pay system i'd have to confirm whether or not we've done mr [1:36:38] sadwick our state collaborates with cms shares tax information sounds like you don't even know what [1:36:44] i'm talking about mr basseri i am happy to take that back and can okay find out mr patricka i'm sorry [1:36:53] sir i'll have to provide follow-up on that question okay does your state work to share this [1:36:58] information across state lines to ensure that you don't have people enrolled in your states that are [1:37:02] enrolled in other states mr connelly yes that is part of a regular thank you mr sadwick we share [1:37:10] information on eligibility that is it sounds like you don't know mr basheri we do uh thank you mr [1:37:17] trica i apologize sorry i'd have to confirm that okay thank you share with cms mr connelly cms asks that you [1:37:30] revalidate all providers in the 14 high risk medicaid programs there's nearly 5 600 providers [1:37:36] after the initial revalidation your office reported disenrolled more than 3 400 providers that's 60 [1:37:43] of those enrolled however last week it appears your agency restored the billing privileges for over 2 100 [1:37:49] that submitted the appeals what what's going on with this revalidation process and how are you making [1:37:54] sure that providers were restored pending appeal or filing legitimate claims in the meantime [1:38:00] to preserve continuity of service for the beneficiaries what are you doing to make sure [1:38:05] that they're not filing illegitimate claims all of those services are subject to enhanced prepayment [1:38:11] review and all of the the high-risk designation requirements that are associated with it of the [1:38:17] 3 400 providers who were initially disenrolled when were those providers last revalidated was it [1:38:23] within the last five years yes all providers have to revalidate within within five years it's also been [1:38:29] reported that many of the providers that were disenrolled had been flagged by your agency before [1:38:34] is that true i'm sorry could you repeat the question it's also been reported that many of the providers [1:38:41] that were disenrolled had been flagged by your agency before in other words there was some suspicion is is [1:38:48] is that true had they been flagged before i'd have to confirm the details of that for you all right when [1:38:56] you um did your agency ascertain whether the providers that were disenrolled when re-enrolled [1:39:02] pending appeal for providers that had been previously flagged for fraud uh providers that are flagged for [1:39:09] fraud uh have a payment withhold applied and uh are sent that those cases are sent to law enforcement so [1:39:15] you're saying that none of the ones that um have had their billing privileges restored were were flagged for [1:39:23] fraud in the past if we are aware our inspector general is aware of a credible allegation of fraud [1:39:28] there would be a payment withhold and they would be referred to law enforcement for investigation and [1:39:32] prosecution can you confirm that your agency is conducting this real validation uh in a thorough [1:39:38] manner and that no providers being revalidated are fraudulent or have been flagged as potentially [1:39:43] fraudulent our team is being very exacting making sure that providers meet all the compliance requirements [1:39:50] the thing i want to make certain here is that none of us on this side of the aisle are want to deny [1:39:58] services to anybody who legitimately needs it what this is really about is that there have been [1:40:04] billions of dollars stolen from state and federal programs that should have gone to help people who [1:40:10] legitimately need them that's the shame of this that's the tragedy of this is that there there are people [1:40:17] who need these services that don't that are having to to have limited uh compensation limited access [1:40:24] because so much money has been stolen that's what this is about and that's why we're going to get to [1:40:29] the bottom of it correct it so that people who should be getting the funding for these services get what [1:40:35] they're supposed to get i yield back the gentleman yields the chair now recognizes mr tonko for his five [1:40:42] minutes of questioning thank you mr chair um we've heard all of you express how your state [1:40:51] value the federal state collaboration to manage your medicaid programs and we've heard the same [1:40:57] from other witnesses on this topic in prior hearings it is clear that the medicaid program cannot work [1:41:03] without a productive partnership between the federal government and the states but cms has abruptly [1:41:10] shifted from providing support to states toward creating obstacles for them or at least for certain [1:41:16] states that did not support the president in the last election so mr basiri new york has [1:41:22] received scrutiny and threats directly from dr oz about its medicaid funding it turns out that cms [1:41:29] had an analysis that led to these threats and questions uh uh in questions and it was completely faulty [1:41:38] however mr basiri how important is it to state anti-fraud efforts to have cms operate as a good faith [1:41:44] partner rather than a bad faith antagonist thank you for the question congressman partnership is paramount to [1:41:54] addressing and combating fraud waste and abuse um i think our work with cms does uh is ongoing and in is [1:42:03] focused on high risk areas um however i think it's important to note that the working relationship is [1:42:10] necessary to systematically root out any fraud waste and abuse and ensure that that fraud doesn't persist [1:42:17] elsewhere we do have complex programs um and as others have mentioned on the panel it's not just one [1:42:23] area things can be in multiple areas so that federal partnership is key and critical to our ability [1:42:30] to successfully address program integrity thank you and dr connelly your department has been in talks [1:42:36] with cms for over six months regarding the cms withholding of your state's corrective action plan [1:42:43] and subsequent deferrals of funding in april you said about these talks and i quote the goalposts keep [1:42:49] moving rather than work with us to fight fraud while protecting programs cms is taking actions [1:42:55] that punish minnesotans who need these services since that statement cms has taken yet another deferral [1:43:02] against your state's medicaid program so can you explain what your interactions have been like [1:43:07] with cms regarding your program integrity efforts and whether cms has been consistent and clear [1:43:14] and what it needs you to provide in order to release the deferred funds so we've been engaged very [1:43:21] regularly with cms since december 5th the initial letter from administrator oz requesting really [1:43:27] directing us to develop a corrective action plan that was submitted after the first draft was submitted [1:43:33] on the 31st of december 2025 at the end of january in 2026 we met for multiple months weekly with cms [1:43:42] to make sure that we were fulfilling their requirements providing deliverables meeting [1:43:47] milestones on time and our team has worked days nights weekends holidays to do that [1:43:54] in addition beyond the first corrective action plan direction the second required revision of the [1:44:00] corrective action plan and the compliance action in january there was as you noted the the deferral [1:44:05] issued in the focus review initiated in february so there have been multiple different [1:44:11] additional actions after the first in december and we continue to work with them uh continuously and [1:44:19] at their request to meet all of the milestones provide all of the deliverables meet the marks so [1:44:24] that we can uh be released from those compliance uh actions and deferrals but the consistency and clarity [1:44:31] here are important obviously uh in order for the partnership to work on behalf of the consumer and the [1:44:37] the taxpayer uh in your testimony you note that your state's anti-fraud policies have been mixed [1:44:43] characterized by federal officials and that those public statements erode trust in the federal state [1:44:48] partnership and carry risk to to uh to care so dr connelly have you tried to correct the mischaracterizations [1:44:56] with cms and if so what has been the reception from cms officials thank you for the question [1:45:04] representative tonko we uh continuously try to correct mischaracterizations both through uh public [1:45:10] statements but also through uh written statements in addition to our program integrity dashboard and [1:45:16] website on our department's website and how do you respond to remarks that secretary kennedy [1:45:22] administrator oz and vice president vance have made that minnesotan that minnesota has not been [1:45:28] cooperating with the federal government to fight medicaid fraud i would say that we [1:45:34] reached out proactively to cms when we decided to designate programs or benefits high risk in the [1:45:41] first half of 2025 we also then engaged them to partner on terminating taking the painful step of [1:45:49] terminating the housing stabilization services benefit that was at our initiative as a state [1:45:54] they worked with us on that it was executed by the end of october we also designated the full 14 [1:46:00] services as high risk at our initiative and again that's something that cms provides the framework [1:46:05] for we've continuously worked with them and that was well in advance of the december 5th letter from [1:46:11] administrator oz okay mr chair i have other questions that i'll get to the committee subcommittee uh but [1:46:17] with that i thank you and yield back the gentleman yields the chair now recognizes mr allen for his five [1:46:23] minutes of questioning thank you chairman and thank you for being here today and uh uh informing us on [1:46:31] what in the world is how this uh took place i i the first question i have i think all of you have [1:46:38] admitted that you have significant waste fraud and abuse in these programs in your states is that correct [1:46:45] would anyone dispute that i think the question here is should taxpayers continue to pay and be put on [1:46:57] the line for this waste fraud and abuse or should the taxpayers say okay you fix it and then we'll be [1:47:05] glad to fund those who by law allowed to use these programs that's the question and that's the difference [1:47:12] of opinion here in my in my mind uh for all the witnesses ongoing criminal uh investigations in many [1:47:20] states have identified shared ownership or affiliations where individuals are enrolled in [1:47:25] perpetrating fraud in numerous medicated medicaid services what exactly is your state doing to more [1:47:34] closely examine currently enrolled medicaid providers to identify shared ownership or affiliations with [1:47:41] excluded providers that have previously perpetrated fraud that is your responsibility tell me what you're [1:47:49] doing there and i'll start with mr connelly thank you representative allen so the first thing i would [1:47:56] point out uh is that fraud is unacceptable we agree with that um and we have fought very hard to root [1:48:02] out fraud in our programs um with respect to different steps taken to uh can to find connections among bad [1:48:08] actors or criminals in our program whom we hope are prosecuted and go to prison because of the fraud [1:48:14] they're committing uh we have initiated of course the revalidation effort uh among the high-risk [1:48:19] providers providers that we designated so 14 services as i said were were designated high risk they were [1:48:26] all uh subject to that revalidation that off-cycle revalidation that i mentioned the 5600 and part of that [1:48:32] work is to identify through the fingerprint background check through the the site visit and the review of [1:48:38] credentials and documentation who those providers are led by what ownership is and do analysis with the [1:48:45] appropriate databases and work with law enforcement to understand what connections there may be among [1:48:50] bad actors and criminals yeah um so we are taking that action i think principally okay but also we do [1:48:56] work with federal and state law enforcement i got three more i need to get to so if we can make our [1:49:00] answers short and i'm gonna have a follow-up question as well is are there any elected political [1:49:06] officials in your state that are doing everything they can do to keep you from uncovering this fraud waste and [1:49:14] abuse and of course now i'll go to the next witness thank you so to adjust your first question um [1:49:22] fighting fraud is a top priority for our department and we know fraud is not unique to medicaid or even [1:49:27] medicare it's also in private health insurance and that's why we have to work together to protect [1:49:32] taxpayer dollars making sure that we crack down on bad actors who have um uh you know use uh business [1:49:41] structuring to conceal um uh their illicit activity is a top priority for california we collect uh [1:49:49] comprehensive disclosure ownership and control interest information from every provider applying [1:49:56] we check those against federal and state exclusionary database lists we also uh check those lists for [1:50:04] subcontractors of those providers and other business entities that they have a significant business [1:50:09] relationship with is it okay mr becerra thank you uh for the question congressman what um and last year [1:50:20] under governor hochel's leadership we really prioritize the development and implementation of a provider [1:50:25] services portal which is a new provider enrollment system and putting that in place um it is slowly [1:50:33] rolling out now and as part of the revalidation plan being requested by cms we are sort of expediting [1:50:40] that implementation plan um we are adding new medicaid only providers to high-risk designations [1:50:46] and pursuing moratoriums or applicable uh we completely agree that the front door to the [1:50:51] program is very important safeguard good mr uh yes congressman in ohio when we've identified [1:50:57] shared ownership okay indictment of fraud will take action recent improvements have helped that [1:51:03] as folks continue to conceal their ownership and control of entities that is a challenge that i think [1:51:08] states and federal government will be tasked and yes or no this all happened in the last year uh when [1:51:15] this was brought to the public eye it's been a year and my question is did the biden administration [1:51:22] notify you of any of these issues uh uh when they were uh when they were in charge of cms uh did you get [1:51:33] any uh requests for them for identification of waste fraud abuse these processes have been in place for in [1:51:42] california they're not new and yes we did collaborate with the center for program integrity at cms [1:51:47] but it was not publicly known at that time i don't believe is that correct okay well i'm out of time [1:51:54] and i'll yield back mr chairman the gentleman yields the chair now recognizes miss trahan for her five [1:51:59] minutes of questioning thank you mr chairman and thank you all for being here today uh republicans have [1:52:05] made state medicaid programs nearly impossible to administer their so-called efforts to root out waste [1:52:12] fraud and abuse have only created more bureaucracy more costs and more money diverted from patient care [1:52:19] meanwhile hospitals across the country continue to close providers worry about making payroll and [1:52:25] americans with disabilities wonder whether they'll be able to get the care that they need [1:52:29] this year cms was has attacked providers of home and community-based services sending shock waves for [1:52:36] caregivers and patients across the country in the district i represent umass memorial has worked [1:52:43] with mass health to help patients with acute care needs receive inpatient level care at home improving [1:52:49] outcomes and freeing up sparse hospital beds state medicaid agencies should be supporting these programs [1:52:56] but instead they're being forced to spend their time and money complying with new federal mandates [1:53:02] that will result in fewer people receiving health care mr basseri last year new york state comptroller [1:53:09] dean dean napoli stated that the total cost of the republicans big ugly bill to new york state [1:53:15] would be 13 billion dollars annually including the administrative cost of implementation the medical [1:53:21] society of new york projected that the bill will increase administrative costs to the state by at least 20 [1:53:28] 20 is it fair to say that the administrative burdens of implementing hr1 uses time and resources that [1:53:35] could otherwise be used to deliver health care and fight fraud thank you for the question congresswoman [1:53:44] first and foremost when we overseeing the medicaid program we do take compliance and [1:53:51] implementation of federal legislation very seriously and as part of the passage of hr1 we are committed to [1:53:58] doing that in an efficient and time effective way you are correct that the administrative cost associated [1:54:05] with that implementation is significant it's the largest um administrative cost the state has [1:54:11] incurred since the implementation of the aca but i don't necessarily can't really speak to whether we [1:54:19] would be using our time differently or elsewhere i think we are very very committed to well what resources [1:54:26] has your state had to deploy to ensure that medicaid beneficiaries aren't thrown off their care [1:54:32] because of hr1 we have had to incur a range of costs both from a media marketing outreach just [1:54:40] informing people of the changes we've been implementing in new eligibility and enrollment systems so that the [1:54:46] process for consumers and providers or their caregivers is simple and transparent yeah and then we've been [1:54:53] augmenting our county staff i appreciate all that but like resources are not infinite which is why i [1:54:59] asked the question i think democrats warned that the red tape requirements in the big ugly bill will [1:55:05] divert millions of dollars from health care to administrative overhead mr chair i'd like to submit a [1:55:10] document for the record thank you last year the gao published a report investigating georgia's medicaid red tape [1:55:18] requirements program they found that since georgia first received federal approval to implement its [1:55:24] medicaid red tape requirements nearly 70 of all spending in that program has gone to administrative [1:55:31] costs rather than to health care and 88 of those administrative costs were paid by federal taxpayers [1:55:38] dr connelly last august minnesota's department of health of human services shared that new requirements [1:55:44] from the big ugly bill could potentially increase state local and tribal administrative spending by 165 million [1:55:51] dollars annually what do patients lose when federal medicaid dollars are diverted from health care to [1:55:57] setting up new administrative requirements so i think there thank you for the question representative [1:56:03] tran i think there are two main considerations here and worries number one is of course the people who [1:56:08] would lose coverage because of the new requirements that is of course the principal concern that we have and [1:56:12] that we've we've talked about in minnesota and the second of course is that we as i stated earlier have a [1:56:18] structural budget deficit that we have to solve for and so when additional uh requirements are placed on [1:56:24] the state to administer that that that piece of the program or that piece of the federal legislation that [1:56:28] does of course require resources from the state um which we are already struggling to find at a time when [1:56:34] cms is adding insult to injury deferring 350 million dollars in medicaid payments to minnesota [1:56:42] republican policies are increasing medicaid administrative costs to states leaving fewer resources for care [1:56:48] reducing access for patients and kicking people off their coverage and cms is piling on by threatening [1:56:54] funding and issuing endless requests to states that did not support the president sadly it's patients [1:57:00] and families across the country who will have to bear the consequence it doesn't have to be this way [1:57:05] mr chair we can target waste fraud and abuse in our health care system we all want to do that [1:57:10] but we have to do it in a way that doesn't threaten the care that the americans desperately need [1:57:15] thank you i yield back the general lady yields the chair now recognizes the general woman from [1:57:20] tennessee dr harshberger for her five minutes of questioning thank you mr chairman and thank you [1:57:25] to the witnesses for being here today um i'm going to start with mr connelly and go down the line and [1:57:30] if you could be brief it'd be awesome when your agency receives reports of suspected fraud [1:57:36] or comes across suspicious behavior what's your preliminary investigation process entail start with you [1:57:42] sir there's an intake process uh if it meets the evidence meets a certain threshold then it's [1:57:47] considered a case the case is reviewed if there's a credible evidence of fraud then it is reviewed to [1:57:52] both the attorney general's office the medicaid fraud control unit as well as in in many cases the us [1:57:57] attorney's office okay yes sir thank you representative we receive um referrals and complaints from a [1:58:04] variety of sources including plans providers members and internal referrals from data analytics when we [1:58:11] receive a complaint we review it across a number of different criteria including comprehensiveness of [1:58:16] information credibility impact etc we then place these complaints in a risk queue based on prioritization [1:58:24] and then as uh warranted investigations are open through a multi-disciplinary investigation [1:58:29] process with financial auditors sworn peace officers investigators data scientists and clinicians [1:58:35] to develop a comprehensive credible allegation of fraud that is referred to the california department of [1:58:40] justice okay all right thanks thank you for the question um similar to what you've heard we have [1:58:46] an intake process um what we do in in new york is my office who is primarily responsible for attempting [1:58:52] to prevent we'll do an investigation um we then work with our office of medicaid inspector general [1:58:59] who can make that credible allegation of fraud and then depending on the outcome of that we will take [1:59:05] uh payment sanction routes or we will be referring it to federal law enforcement okay yes sir [1:59:10] uh congressman similar to whether shared we have an intake process uh those are uh reviewed by a [1:59:16] multi-disciplinary team that includes people from our department as well as our attorney general [1:59:21] mafuku unit those are reviewed and then referred to appropriate law enforcement as needed for additional [1:59:26] investigation yes sir so they are they're all about the same but what point is the case referred to the [1:59:31] medicaid fraud control unit so in minnesota thank you for the question we refer to the medicaid fraud [1:59:40] control unit when the case reaches the threshold of a credible allegation of fraud okay it's the same [1:59:46] for you yes representative okay same thing same uh and i'll ask all of you the same this question on [1:59:56] average how long does it take your state to move from identifying a credible fraud allegation to payment [2:00:02] suspensions and if there is a delay what's the primary cause of that delay in any timeline yeah thank you [2:00:11] representative harshberger so in minnesota that occurs as promptly as possible sometimes within days or [2:00:15] weeks depending on how quickly we can implement that uh but we do that now very very uh immediately [2:00:21] okay sir so it is um dependent on the circumstances california is one of the few states with the ability to [2:00:30] stop payments even before the level of a credible allegation of fraud is reached at which point payment [2:00:36] suspensions are typically put into place at some points in time however the medicaid fraud [2:00:41] control unit will request good cause exemptions so that they can continue to build their criminal or [2:00:47] civil prosecution case without interfering so that could be a factor yes sir uh thank you for the [2:00:54] question it is dependent on both um the type of allegation fraud but also um to the extent um it [2:01:02] goes beyond medicaid or just uh the public programs it does vary and it can be relatively um quick [2:01:10] depending on how credible that allegation is weeks you know maybe a couple of months but it can take a [2:01:17] long time as well it's very variable depending on okay congresswoman uh similar to theirs ours varies [2:01:23] uh depending on the allegation and depending on our de-confliction with our law enforcement partners [2:01:28] to ensure we are not uh we are not conflicting with their investigation okay when a provider's uh allowed to [2:01:34] continue receiving payments under a good cause as you you mentioned determination during [2:01:40] investigation what's the average duration of continued payment for final suspension or corrective [2:01:46] action is implemented and anybody can answer that start with you mr carl so if i understand the [2:01:54] question you're you're asking what is the duration of time between those two things happening yeah if [2:01:58] you suspend i mean if you're receiving payments under a good cause determination i think i'd have to take [2:02:05] that back and get details for you it varies but we have been engaging our medicaid fraud control unit [2:02:12] um to um reduce the number of good cause exemptions that they request okay it varies um and it's very [2:02:21] important for us to prioritize continuity of care or ensure that access can be provided if an instance [2:02:27] like that is okay hers varies however we have made recent efforts to improve that well that's all i got [2:02:34] to mr chairman so my time's up and i'll yield back the general lady yields the chair now recognizes [2:02:39] ms fletcher for her five minutes of questioning thank you chairman joyce and thank you to our witnesses [2:02:47] for your time here today um fraud is a genuine problem in federal programs including in medicaid [2:02:56] that is why congress and many past administrations have worked to pass laws and develop procedures to [2:03:05] investigate document and remedy it and federal law has well developed procedures for how agencies must [2:03:15] address fraud and that includes requirements that agencies identify a credible basis for suspecting [2:03:22] fraud before pausing funds provide notice and an opportunity to be heard impose penalties that [2:03:29] are proportionate to their findings they are tools that many administrations have used of both parties uh for [2:03:38] many many years in fact under president george w bush there was a medicare fraud strike force that charged [2:03:45] thousands of defendants and recovered tens of billions of dollars doing it the right way and that's the key [2:03:52] here this issue is not new but this is the third subcommittee hearing that we have had in this congress on [2:04:01] medicaid fraud in state programs and we have not had hearings on so many other areas in the government where fraud [2:04:12] is not only possible but appears to be happening right in front of our eyes so one of them i think appears to be [2:04:22] the Trump administration's claim of waste, fraud, and abuse indiscriminately to cut funds from [2:04:31] states and from programs that it doesn't like or it doesn't understand. We don't need to look a lot [2:04:41] further than Doge's cuts to the screwworm research programs to see that when they don't [2:04:48] understand what the government's doing, they would cut it. Or cutting funds and using these claims [2:04:56] because it appears to them that it benefits their perceived political opponents. That is what is [2:05:06] going on here. And this Congress has been a willing partner in that effort, repeating waste, fraud, [2:05:14] and abuse ad nauseum to justify cutting health care funding and food assistance, taking care away from [2:05:24] people who are sick and taking food away from people who are hungry. And, you know, the purported concerns [2:05:34] about waste fraud and abuse that we keep hearing are really belied by the facts of the last year and a [2:05:41] half. President Trump has pardoned, according to the New York Times, at least 70 allies, donors, [2:05:53] and other people who have been convicted of fraud, including convicted of defrauding the United States [2:06:01] government through Medicaid fraud. The president is pardoning them. People who defrauded the United [2:06:10] States and took away the very services that we've been hearing about throughout this hearing from the [2:06:16] people who were gathered in this room who deserve to receive them. The president is pardoning those people. And we [2:06:24] also see not only has that increased since the first term, there have been nearly three dozen pardons and [2:06:33] commutations of people who've been accused of fraud. And of course, this administration has dismantled the [2:06:43] agencies and the the organizations that are designed and that have been created to investigate [2:06:49] fraud and to root it out. For example, the 20 inspectors general that President Trump fired or [2:06:56] demoted that identified more than 50 billion dollars in waste and abuse in the 2024 fiscal year. These [2:07:04] things don't add up with the stated purpose of rooting out waste, fraud and abuse. Don't be fooled about what is [2:07:13] going on in this administration and what is going on in this Congress. We know that hundreds of billions [2:07:20] of dollars in funding for people across this country flows from the federal government to the states [2:07:27] through programs like Medicaid and SNAP. And we know that by invoking fraud as a grounds for freezing states [2:07:37] funds, this administration is extracting its retribution against its perceived enemies. Do not [2:07:45] be fooled by it and don't be used by it and don't look away from the other waste, fraud and abuse that [2:07:52] is happening before our eyes. Thank you. And I yield back. [2:07:55] General Lady yields the chair now recognizes the gentleman from Ohio, Mr. Rulli for his five minutes [2:08:01] of questioning. Well, I appreciate that, Chairman. And I think there is a lot of fraud in these states at [2:08:06] local levels. And my attention goes to Mr. Partika from Ohio. I also want to thank Keith Faber from Ohio for [2:08:14] actively investigating discrepancies that we found implemented in the Medicaid expansion program of [2:08:20] the state of Ohio. HCBS services allow seniors in the state of Ohio with disabilities to receive [2:08:28] care at home rather than an institution. This is on the core, a beautiful thing where we could have a [2:08:34] family member stay at home and take care of their loved ones, which is everyone's ideal situation. The [2:08:40] problem that we find out is sometimes you have three or four family members that are all staying at home [2:08:46] and the family's bringing 150 or $200,000 of money to that family by them all staying at home and doing [2:08:51] nothing. The program wasn't built for that. And that's not what it was supposed to be about. However, [2:08:57] fraud diverts resources away from patients who truly need that care. And in Ohio, when I was a state [2:09:03] senator, Ohio's fourth in the country for Medicaid expansion. We have a 93 billion dollar budget in the [2:09:09] state of Ohio, which is every bipartisan, which is every by two years that it runs on 93 billion [2:09:15] dollars. And we're using almost half of that for Medicaid expansion. In Ohio, we correct our wrongs. [2:09:21] I saw Governor Walz, whose state is the number one worst fraud in the entire country, gallivanting [2:09:27] all over the country trying to attack Republicans. When he was at home, he should have been at home [2:09:33] correcting this fraud. So my question to you, director, is I know that your administration has already been [2:09:38] working. Can you go through some of the fraud that you already discovered? And more importantly than [2:09:42] that, can you go through the fraud that you think you might find? Congressman, thank you for the [2:09:49] question. And we share at Medicaid your sentiment towards the meaningful intent of many of these [2:09:55] programs, which is why we find anyone defrauding them, insulting and needing addressed so that we can [2:10:01] provide that long term stability. As we talked about in the home health safety space, we've identified [2:10:08] abnormal trends in different parts of our state, abnormal billing patterns that we are now working [2:10:12] to address. We, as I've identified and has been in the news, the 42 million dollar finding on the [2:10:18] behavioral health services providing our community, that we've been working on making policy changes, [2:10:23] including prior authorizations, reviewing our enrollment process, and identifying high risk providers [2:10:29] in each of those areas. The critical challenge as we do this work moving forward is making sure we are [2:10:34] doing it in a way that is responsible and does not punish the hardworking providers that are doing [2:10:40] it the right way each and every day so we can fulfill that commitment to provide those services to those [2:10:45] that are truly intended and needing that care. What was exciting for me, director, is when I realized [2:10:51] that we had the attorney general and we had the auditor working with your office. Because you know what, [2:10:56] in life sometimes we're not perfect. And the wonderful story about America is like, and you look at our history, [2:11:02] we correct our wrongs like we do in Ohio. So we're not all full of ourselves that says that we're perfect [2:11:07] in the state of Ohio. We know that we're flawed. But I like the idea that the three branches over there, [2:11:13] you've got the attorney general's office, you've got the Ohio auditor, and then you have you that are [2:11:18] all working together to make it better. When you're fourth in the country for Medicaid expansion, we want [2:11:23] to make sure that our people have their services. Now, in the next year or two, how do you think this [2:11:29] partnership that you have with the attorney general's office and the auditor's office is going to look like? [2:11:34] Do you think we're going to really be able to get down into the nitty-gritty and even get a lot more [2:11:39] fraud in the next six months, the next two years? How do you think this is all going to play out with that union [2:11:44] of your three different branches helping each other? Congressman, as you stated, that partnership [2:11:51] over the years spanning multiple administrations has been incredibly valuable. Many of the findings the auditor has [2:11:56] had have directly correlated improvements to the Medicaid program. I expect that to continue. [2:12:01] The work with our attorney general and our new attorney general, Andy Wilson, I expect to be [2:12:06] incredibly powerful. As the teams work together, the newfound partnership of not just looking at [2:12:12] each individual case and where we're identifying trends to identify new investigations, but bringing [2:12:16] that back to our team and saying, here are potential risks from a policy standpoint in the administration of [2:12:21] that program. I'm incredibly hopeful that we continue to make improvements moving forward, [2:12:25] much thanks to that expertise that those multiple teams bring. [2:12:29] I really appreciate it. It gets exciting thinking that when we discover something like that and just [2:12:34] saying how horrific it is, when we can look at the future and preserve these wonderful institutions, [2:12:39] like when you have a Medicaid or Medicare or even Social Security, if we're able to find this fraud, [2:12:43] we will preserve these so they can last for generations for our grandkids and our great grandkids. [2:12:47] I appreciate all the work you do for the fine state of Ohio. And with that, I yield my time, Chairman. [2:12:52] The gentleman yields. The chair now recognizes the gentleman from California, [2:12:55] Mr. Mullen, for his five minutes of questioning. [2:12:58] Thank you, Mr. Chairman. Thank you to the witnesses for your testimony today. [2:13:02] The Medicaid program embodies a deep and longstanding partnership between the federal [2:13:07] government and the states. Every individual has a right to health care, so thank you for working [2:13:11] to ensure the most vulnerable in our communities can also benefit from that right. This is the third [2:13:18] Medicaid fraud hearing. The Republican majority has held this year, despite their presenting zero, [2:13:22] I repeat, zero evidence of widespread fraud. At the same time, they have led the Trump [2:13:28] administration, Fire Inspectors General and others actually doing the work to address the narrow cases [2:13:34] where fraud does exist. President Trump has been using the guise of investigating fraud as a smoke [2:13:41] screen to punish the states he does not politically agree with. This administration is putting the health [2:13:47] coverage of millions at risk in states like California, all to score political points. [2:13:52] While the majority is politicizing this vital health care program, hardworking public servants [2:13:57] like Director Sadwith aren't focused on cheap headlines. He's working to ensure Californians have [2:14:03] health care coverage and that public dollars are being spent responsibly as intended. So Director Sadwith, [2:14:09] you mentioned in your testimony that Medi-Cal goes above federal standards to screen providers [2:14:14] before they gain access to the program. Can you please explain how California is exceeding federal [2:14:20] requirements to prevent bad actors from ever gaining access to Medi-Cal? Thank you, Congressman. I'd be happy [2:14:26] to. So when providers initially screen, we collect and review information that CMS doesn't require. [2:14:33] These include state-specific standards around established place of business. So for every single provider site [2:14:39] that enrolls, we look at leases, business licenses, general liability insurance, and so forth. We also [2:14:47] require our managed care plans to conduct monthly screening against state and federal exclusionary lists [2:14:54] and databases just to further ensure there are no bad actors in our program. We also exceed requirements [2:15:02] regarding how frequently we revalidate providers. And revalidating is, in effect, rescreening against all [2:15:09] databases and checking to make sure that they're legitimate. Anytime a provider in California adds a [2:15:15] new location, changes their address, or changes ownership, that triggers a full revalidation which [2:15:20] often happens more frequently than every five years as federally required. So thank you for that [2:15:25] explanation. Your testimony today is vital for us to parse between false claims about Medicaid and [2:15:30] what is actually happening on the ground in my home state of California. The administration has been [2:15:35] laser-focused on the IHSS program in Medi-Cal, which allows elderly and disabled individuals with [2:15:41] long-term care needs to remain in the comfort of their homes. Based almost solely on growth in the [2:15:46] program, the Trump administration recently deferred over $1 billion for that IHSS program. So, [2:15:52] Director Sadwith, what are the reasons for IHSS program's growth and cost increases that you have [2:15:58] explained to CMS? And what are the impacts of this billion-dollar deferral on Medi-Cal and how are you [2:16:05] working to ensure that beneficiaries still have access to those services? Thank you, Congressman. [2:16:11] The intentional investment in our in-home supportive services program reflects a long-standing [2:16:18] partnership with the federal government, including Congress and CMS, who have consistently over the [2:16:24] past quarter century promoted and expanded the use of home and community-based services. That is [2:16:30] because these are the services that are best for individuals who depend on them. It's also better for [2:16:34] taxpayers. We know these are cost-effective. CMS asked about our growth. We explained that, [2:16:41] you know, several years ago, the California State Auditor, an independent fiscal watchdog, [2:16:47] reviewed our IHSS program. And while they found no program integrity concerns, the audit did have one [2:16:53] recommendation. They recommended we increase reimbursement rates so we can expand the IHSS workforce to meet the [2:17:00] needs of California's aging and growing population. So we did that. We increased payment. We increased [2:17:06] caseloads so more people can get these services. And as a result, the program grew. This is a concerning [2:17:13] deferral, and we are working steadfastly with CMS to respond to all their questions, provide all the [2:17:19] information they need so they can release the deferral and recipients can get the care they need. [2:17:23] So let me just conclude that Medicaid is a lifeline for millions of Americans. Rather than using [2:17:33] California as a political punching bag, we need to be focusing on our efforts to strengthen this [2:17:38] important federal-state partnership. And with that, Mr. Chair, I yield back. The gentleman yields. The [2:17:43] chair now recognizes the gentleman from Texas, Mr. Weber, for his five minutes of questioning. Thank you, [2:17:48] Mr. Chairman. I'm late because of science-based and technology. We had a markup they had to participate in. I [2:17:53] walked in on a bunch of claims from our colleagues across the aisle there. Mr. Chairman, it's not that [2:17:59] they're ignorant. It's just that so much of what they know ain't so. So let me go to you, Mr. Connolly. [2:18:05] Thank you for your testimony. The level of fraud that has been unearthed in Minnesota's Medicaid [2:18:10] program is alarming. In what ways is the Department of Human Services revising the state's previous [2:18:16] Medicaid provider enrollment process for new providers in the 14 high-risk programs to improve [2:18:22] provider screening going forward? Thank you, Representative Weber. And we agree the fraud [2:18:29] that has occurred is unacceptable, and that's why we worked hard on provider enrollment and compliance. [2:18:33] Directly to your question, we have designated 14 services as high-risk, 13 remaining, and part of that [2:18:41] involves provider enrollment and compliance action that has escalated. So there's an unannounced site [2:18:48] visit that could occur, that does occur rather, in addition to a fingerprint background check [2:18:53] and more frequent revalidations. And all of those providers have been revalidated within the past five [2:18:59] months as well in partnership in completing that corrective action plan at the direction of CMS. [2:19:05] So these are targets, these 14 services were targets for the fraudsters. Is that low-hanging fruit? [2:19:12] Why do you think that is? Could you repeat the question one more time? [2:19:15] These 14 services were targets for the fraudsters. Is that because of low-hanging fruit? We're not [2:19:22] fruit? We're not paying enough attention? What do you think? Why do you think that is? [2:19:25] Thank you for the question, Representative Weber. So I think it's for a variety of reasons, and [2:19:29] we've demonstrated in our actions what we think those reasons were. So it starts with the design and the [2:19:34] policy around the program. So are there different requirements that need to be escalated? New billing [2:19:40] parameters, for example. We implemented enhanced prepayment review to vet claims before they go out [2:19:45] to providers so we don't pay and then have to recover if there's fraud. We also do post-payment [2:19:51] activity often in the form of investigations. We have data analytics that also inform referrals to our [2:19:57] inspector general for investigation. And then, of course, if those cases rise to the level of a [2:20:04] credible allegation of fraud, we then refer promptly to federal and state law enforcement for further [2:20:08] investigation and prosecution if they deem that necessary. Do you keep a list of all the fraudsters [2:20:13] and their procedures so that you can recognize that going forward? Yes. As a part of our investigations, [2:20:19] we have a list of all of the providers that have risen to the level of a credible allegation of fraud, [2:20:25] and certainly we're paying attention to any announcement of charges with respect to law enforcement. So [2:20:31] we do look at the behaviors and the different things that we found in terms of how they've built and [2:20:36] behaved, and we do keep that intelligence. So if there's any cracks in our walls, you're able to go back and fix those cracks? [2:20:44] Yes, exactly. So if there is a pattern or a concerning issue that we identify, that does inform [2:20:49] perhaps administrative changes in policy. We might also engage legislators to make changes to those [2:20:54] programs, which we've done in the last two sessions, as a good example. All right, thank you for that. [2:20:58] Mr. Sadwith, is it Sadwith? Is that how that's said? Yes, sir. Sadwith. Okay, have you had that name long? [2:21:04] Excuse me, sir. I'm just messing with you. Your written testimony highlights that Medi-Cal has, [2:21:12] quote, strong policies that are designed to prevent, identify, and block the fraud, waste, [2:21:17] and abuse we were just talking about. Below this, your testimony cites that California's Medicaid [2:21:24] Fraud Control Unit, MFCU, received 700 credible fraud allegations over the last five years, [2:21:31] dollars, while fraudulent hospice billing in Los Angeles County alone is estimated at $3.5 billion, [2:21:40] with a B dollars. That accounts for 18 percent of all national hospice billing. Would you say [2:21:49] California's MFCU was effective in preventing that abuse? Thank you for the question, and this is an [2:21:56] incredibly important issue, and it underscores the need for collaboration, continued collaboration, [2:22:02] between states and the federal government. In California, the primary payer for hospice care is [2:22:07] Medicare. In Medicaid, which the Medicaid Fraud Control Unit sort of prosecutes, we've referred over 300 [2:22:16] credible allegations of fraud to the MFCU over the past five years for the purposes of investigating and [2:22:22] cracking down on hospice fraud in the Medi-Cal program, the state program that I oversee. But [2:22:28] that's why it's important to work in partnership with the federal government and CMS, which is [2:22:33] responsible for oversight of Medicare. Yeah, but you said 300, and I cited 700. That's not even a 50 percent [2:22:40] of success rate, is it? So we view the 300 referrals as a strong commitment to California's rooting out [2:22:48] bad actors in our Medicaid program, and we, just like Medicare and CMS, we have experienced issues [2:22:55] in hospice and have taken comprehensive steps to protect the program, protect the Medicaid program [2:23:01] through new requirements and new safeguards, and institute licensure moratoriums, institute new [2:23:07] regulations. We've criminally charged over 100 individuals in the past few years. We've set up a [2:23:13] statewide hospice task force. We've revoked over 300 licenses, and we have over [2:23:18] 300 licenses that are ongoing. Well, I'm going to have to yield back, [2:23:23] but I assist that's a little short of the target. I yield back, Mr. Chairman. The gentleman yields. [2:23:27] The chair now recognizes the gentleman from Ohio, Mr. Landsman, for his five minutes of questioning. [2:23:32] Thank you, Mr. Chair. Thank you all for being here. A couple questions. One is, it seems based on the [2:23:41] testimony that you all have provided, one of the biggest ways in which you are getting fraud, tackling fraud, [2:23:52] is the investments that you're making, right? So whether it's technological investments, staffing, [2:23:59] I mean, the more, you know, cops on the beat, so to speak, the more fraud you're going to get. And [2:24:05] I'm hoping that each one of you could just list out the investments that you all have made [2:24:12] in going after fraud. I'll start with Minnesota. Thank you, Representative Landsman. So I'll start with [2:24:20] Governor Walz's Executive Order 2510 in September of 2025, directing the state to take a number of [2:24:26] actions to strengthen its anti-fraud efforts. And of course, the Department of Human Services, [2:24:31] as the Medicaid agency, was front and center in that. And as I described earlier, and I appreciate [2:24:37] the opportunity to say more, many different policy changes were made as a result of that. We implemented, [2:24:43] of course, the high-risk designations, which heightens provider compliance. Just list the top [2:24:51] three or four investments. What new things are in place? You bet. So I'll start with enhanced [2:24:57] prepayment review. That is a new process that's entirely new. We have, you know, external vendors [2:25:03] helping us with that and staff working on that. We had 450 new staff given to us as a result of the [2:25:11] legislation passed this year to enhance program integrity in addition to new data analytics [2:25:16] capacities. I'll stop there. That's significant. I mean, that's a lot of new staff. California. Sorry. [2:25:23] Thank you, Congressman. So just as a baseline, approximately 20 percent of our staff are [2:25:30] dedicated exclusively to program integrity. We've made several new investments to strengthen the [2:25:35] integrity of the program based on lessons learned. One example is strengthening our eligibility [2:25:41] determination processes based on our experience with the stolen identities of individuals being [2:25:48] used to enroll. So we have multiple new residency safeguard checks as well as new technology [2:25:54] to detect bad actors trying to mask their identity. So remote spoofing detection, virtual private networks, [2:26:01] etc. Another example is a new investment in sophisticated data analytics in our pharmacy benefit in [2:26:08] particular, partnering with our vendor using Google Cloud Platform and machine learning to not just have [2:26:17] static rules-based prepayment, but this is training based on our data to actively learn, adapt, and evolve [2:26:23] in real time based on the patterns in the data. Samar, New York. Thank you for the question. Similar to what [2:26:30] you've heard, we've made investments in people and program integrity staff over the years at the Office of [2:26:36] Medicaid Inspector General. We've also staffed up, as I mentioned before, on implementation of HR 1, [2:26:43] and a lot of that includes program integrity related or managed care oversight related staff, technology [2:26:49] on eligibility and enrollment system, new provider enrollment system, and data analytics to do more [2:26:58] risk-based stratification, identify providers before the fraud occurs, and try and proactively address that. [2:27:05] Ohio. Congressman, thank you. To your point, the investments in those data infrastructure have [2:27:11] been incredibly helpful, not just for fighting fraud, but for also identifying areas of waste and [2:27:15] abuse. The move to a single pharmacy benefit manager in Ohio, as well as building out a single fiscal [2:27:20] intermediary, has been incredibly helpful, not just from observing fraudulent trends, but when making [2:27:25] policy decisions to be able to dive deep into the data. We've frequently been told by policymakers and [2:27:30] legislators just how incredibly helpful that has been, as we have navigated difficult decisions to tackle [2:27:36] waste and where dollars maybe are spent, not as intended, to be able to really drill down and see [2:27:40] where those are going has been incredibly helpful to all of our conversations. [2:27:45] And this is just maybe a yes or no, because I only got 40 seconds left. Do you think Congress is providing [2:27:52] enough support investments? Let me ask this in a less leading way. Same leading, but maybe it's a little [2:27:59] easier to answer. Could Congress be investing more in states and their ability to go after fraud? [2:28:07] Yes or no? Yes, absolutely. Yes, there are a few key areas where Congress could enhance states and [2:28:14] better equip them in this space. Yes. Yeah. Yes, we would never turn down additional help. Yeah. [2:28:21] If you see, 10 seconds, it seems like the states that are really good at this have invested a lot [2:28:28] of resources into it, and that's what we should be doing. Among other things, it's helping states [2:28:34] invest in those efforts to go after fraud. Thank you, Jovec. [2:28:38] Gentleman yields. The chair now recognizes the gentleman from Florida, Mr. Bill Arrakas, [2:28:42] for his five minutes of questioning. Thank you, Mr. Chairman. And I want to thank you for holding this [2:28:48] this hearing, very important hearing, protecting patients and safeguarding taxpayer dollars. Thank you for [2:28:54] allowing me to wave on, too, and I appreciate the testimony. Every dollar lost to improper payments [2:29:02] is a dollar that cannot be used to support seniors, children, individuals with disabilities, and other [2:29:08] vulnerable populations who rely on these very critical programs. That's why I'm pleased to introduce the [2:29:16] Medicaid RAC Improvement Act. This week, alongside with Senator Scott, who is introducing the companion in the Senate. [2:29:25] Recovery adult contractors have served as an important payment integrity tool for Medicaid, [2:29:33] but Medicaid itself has changed significantly since these programs were first established. [2:29:39] Today, much of Medicaid spending flows through managed care, while oversight has struggled to keep pace. [2:29:46] My legislation implements recommendations made by the Government Accountability Office [2:29:52] by strengthening CMS oversight of Medicaid RAC programs, improving transparency and accountability, [2:30:00] and helping ensure the payment integrity efforts appropriately reflect the modern Medicaid program. [2:30:08] I appreciate the committee's continued focus on program integrity, and I thank the witnesses again [2:30:14] for being here today. We really appreciate you all. You're adding so much to the discussion. [2:30:21] So my first question is for Director Sadwith and Director Basiri and Temporary Commissioner Conley. [2:30:30] So does your state have Medicaid recovery audit contractor programs? Does it have a program that [2:30:38] currently reviews payments made through Medicaid managed care organizations, or is it just fee for service? [2:30:48] We'll start with Director Sadwith. Thank you, Representative. [2:30:54] My understanding is that our RAC program is limited to fee for service. [2:30:58] We have a number of additional tools in place to perform sort of integrated analytics to identify risk [2:31:04] trends and patterns in our managed care delivery system as well. [2:31:07] Thank you. Now Director Basiri, please. [2:31:10] My understanding is that our RAC program is also specific to fee for service, but we have other [2:31:18] oversight, overpayment, and improper payment mechanisms for managed care, particularly third-party liability. [2:31:25] Thank you. Commissioner Conley. [2:31:27] Thank you, Representative Boracus, for the question. My understanding, I would have to confirm on the [2:31:33] managed care side. My understanding is we absolutely, I can confirm, have a recovery RAC contractor for [2:31:40] the fee for service program, and we also implemented new managed care contract requirements with respect [2:31:45] to staffing that they have for program integrity recovery timelines, in addition to payment withhold [2:31:51] timelines as well that are required in that contract. Okay, the follow-up question. How often do you audit or [2:31:58] validate whether encounter data submitted by managed care organizations accurately reflects actual [2:32:05] payment made to providers? And we'll start again with Director Sadweth, please. [2:32:11] Thank you, Representative. So we have a number of processes in place to validate managed care [2:32:17] and counter data, both internal processes as well as processes in place with external entities. [2:32:24] Thank you. Director Boracus. We have several mechanisms in place, [2:32:28] including state laws and penalty programs, to ensure completeness and accuracy of our managed [2:32:33] care encounter data, and we use that encounter data for as much in race setting as the actuary will allow. [2:32:39] Very good. And Commissioner Conley. [2:32:43] Similarly, we have very complete claims data from managed care plans that we use to analyze [2:32:49] trends and different issues with those claims. Very good. Another question, follow-up question. [2:32:55] If managed care payments are excluded from RAC audits, how are you independently validating [2:33:03] the accuracy of those payments? And again, you touched on it, but let's elaborate if possible. [2:33:10] If you don't mind, we'll start with Director Sadweth. Thank you, Congressman. So we do have a number of [2:33:16] processes in place to validate the accuracy and completeness of encounter data. We have been working [2:33:24] with plans to sort of increase the rate to which encounter data are incorporated in managed care [2:33:31] rate setting processes, and we have a stoplight program that provides feedback and corrective action [2:33:36] plans to improve their manner managed care and counter data submissions. This is an ongoing process [2:33:43] that's absolutely key to quality measurement, to data accuracy, and to rate setting. Very good. [2:33:48] In addition to what I mentioned before with the statute and penalty programs to ensure compliance, [2:33:58] we have a very, our Medicaid model contract has a number of provisions around third-party liability, [2:34:04] and our Office of Medicaid Inspector General works very closely with the plans to ensure [2:34:10] appropriate coordination of benefits. Thank you. Commissioner Conley. Thank you. Similarly, we have [2:34:15] requirements with respect to claims and data collection from the plans. Our Inspector General [2:34:21] also works very closely with the plans and their program integrity staff to follow up on credible [2:34:26] allegations of fraud. Thank you very much. I have a question for Director for TIPCOG, but I'll submit it [2:34:32] for the record. I appreciate it. I'll yield back, Mr. Chairman. Thanks for giving me the extra time. The [2:34:37] gentleman yields. Seeing there are no further members wishing to ask questions, I would like to thank our [2:34:42] witnesses again for being here. I ask unanimous consent to insert into the record the documents [2:34:48] included on the staff hearing documents list. Without objection, so ordered. Pursuant to committee rules, [2:34:54] I remind members that they have 10 business days to submit additional questions for the record, [2:35:00] and I ask our witnesses to submit their response within 10 business days upon receipt of those questions. [2:35:06] Members should submit their questions by the close of business day, Friday, July 10th. Without [2:35:12] objection, the subcommittee is adjourned.