▶ 0:13:22This will now come to order. The chair now recognizes himself for five minutes for an opening statement. Good afternoon and welcome to today's hearing titled protecting patients and safeguarding taxpayer dollars the role of cms in combating medicare and medicaid fraud. Today, we are continuing the subcommittee's ongoing examination of medicare and medicaid fraud.
▶ 0:13:45Kim brandt from the centers for medicare and medicaid services is here today to discuss that very real and very harmful issues that we know address both medicare and medicaid fraud that are occurring right now in the united states and what cms is doing to address this widespread fraud in medicare sectors such as durable medical equipment, genetic testing, skin substitutes, home health and hospice are all
▶ 0:14:16Experiencing high rates of fraud in medicaid. Schemes are running rampant in a variety of programs, from non-emergency medical transportation to personal care services and substance use disorder treatment. These crimes are despicable, yet we are seeing them occur time and time again across this country. In minnesota, it's medicaid, aba services. In california, it's medicare hospice services in florida, it's medicare durable medical equipment.
▶ 0:14:46Once caught, fraudsters might be stopped, but they are always looking for their next scheme. The tentacles of these criminal of these criminal schemes are long, and they reach into many different areas of health care. And many of these fraud schemes target vulnerable individuals such as the elderly, individuals with disabilities, the homeless and people struggling, struggling, struggling with substance use disorders.
▶ 0:15:15Moreover, taxpayers are being defrauded of outrageously large amounts of money. Pennsylvania's governor, josh shapiro, during his time as pennsylvania's attorney general, stated at a 2020 press conference, it's possible, no likely, that pennsylvania is losing $3 billion a year to fraud. And that's just one state, and that's just in one year.
▶ 0:15:41For too long, states have been permitted to run medicaid programs with weak guardrails, making them easy targets for criminals to exploit. While states do have a duty to steward federal and state taxpayer dollars responsibly, it is federal oversight that is necessary to root out systemic fraud.
▶ 0:16:03As president trump made clear during his recent state of the union address and executive order establishing the anti-fraud task force, he is serious about the war on fraud under the leadership of vice president and anti-fraud czar jd vance, and under the leadership of doctor mehmet oz, this administration is taking bold steps to stop this fraud more than any other presidential administration before it.
▶ 0:16:31It is critical that fraud in government health care programs like medicare and medicaid are addressed to ensure that these funds, these adequate funds to maintain programs that are for those who are in need and not for fraudsters to steal.
▶ 0:16:48As this committee builds upon medicaid program integrity efforts that we advanced last year in hr one, it is important that we continue to identify ways to address fraud, to secure the financial stability and the longevity of these programs. The elderly, individuals with disabilities, pregnant women and children all rely on these programs to receive the health care that they need and the health care that they deserve.
▶ 0:17:19We owe it to them to protect and preserve these programs, rather than allowing it to serve as a gold mine for criminals. I want to thank deputy administrator brandt for being here today. We are looking forward to hearing about the important work that you and your team are already doing at cms. Under the leadership of administrator doctor mehmet oz, to protect, to protect and to preserve medicare and medicaid.
▶ 0:17:44With that, I now recognize our ranking member of the subcommittee, miss clark, for her opening statement. >> thank you, Mr. chairman, and good afternoon, everyone. At last month's hearing in this subcommittee, democrats expressed our deep concerns with the reckless way the administration was using claims of fraud in health care programs to justify its violent immigration operation in minneapolis, where two americans exercising their first amendment rights were killed by dhs officers.
▶ 0:18:16President trump has weaponized the entire government to punish states and political leaders. He does not like, and agency leaders are complying with his retaliatory agenda. Unfortunately, it includes the centers for medicare and medicaid services. In january, cms notified the state of minnesota that it was acting to withhold about $2 billion in funding for 14 medicaid services over the next year.
▶ 0:18:45This threatened funding cut will affect home and community based care for older americans and the disabled. Services for people with substance abuse use disorders and services for children with autism. Minnesota health officials are pushing back on this threat, saying these cuts would be, quote, disastrous, end quote, for medicaid beneficiaries in the state.
▶ 0:19:07One day after president trump declared a war on fraud at the state of the union, vice president vance and cms administrator oz held a press conference to announce additional medicaid funds would be held from minnesota, which could result in as much as $1 billion in additional cuts, taking billions of dollars from the state of minnesota and treating the state like an enemy rather than a partner, will not make its medicaid
▶ 0:19:38Program any less vulnerable to fraud. What it will do is hurt hundreds of thousands of minnesota residents who rely on medicaid services to live independent and healthy lives, and cms is expanding its so-called investigations to more states california, maine and my home state of new york. It is painfully obvious why these states in minnesota have been targeted.
▶ 0:20:02They are all states led by democratic governors that president trump lost in the 2024 presidential election. And in the case of minnesota, the governor was the democratic nominee for vice president. He pointed out that that the president and the people around him are weird. And now the president is taking away health care from his state's residents.
▶ 0:20:24These are the petty reasons why the entire trump administration is going after certain states, and why we can expect they will continue to follow the same playbook elsewhere around the country. And just minutes before the hearing started, the cms inquiry has expanded to florida. Politically motivated enforcement has real consequences for our constituents. Medicaid is a lifeline for more than 70 million people in this country.
▶ 0:20:55Patients pay the price when billions of dollars are withheld from. For entire categories of services, rather than specific claims. Cms and congressional republicans want us to believe that the cuts only hurt fraudsters, but in reality, they are intentionally tearing down the medicaid program. These cuts to medicaid funding are just the latest republican efforts to reduce health care services. I don't want to see that happen in new york, minnesota and elsewhere in the country.
▶ 0:21:24Democrats want to improve access and affordability of health care for everyone and strengthen the federal health care system so it is efficient and sustainable. The abuse of taxpayer dollars is coming from the president of the united states, who is using government resources as his personal revenge fund to punish his political enemies.
▶ 0:21:46Congress should not sit by while cms abuses congressionally appropriated funding to take vital services away from people. We don't need to choose between consistent funding for medicaid and combating fraud. We can and must do both. If we repair the damage being done by this administration and the congressional majority.
▶ 0:22:10To start, we need to restore the nearly $1 trillion republicans cut from medicaid in their reconciliation bill last summer. Today, we want answers from the cms deputy administrator about the attack on health care in minnesota. Any similar plans for other states and the impact of these attacks on the health of medicaid beneficiaries?
▶ 0:22:37Deputy administrator brandt, I hope that this is an opportunity for all of us to finally get some real transparency and specifics from an expert at cms, rather than the rudderless partizan attacks that we have seen from doctor oz and vice president vance as friendly news programs or at press conferences. With that, Mr. chairman, I yield back. >> thank you. The chair now recognizes the chairman of the full committee, Mr.
▶ 0:23:05Guthrie, for five minutes for an opening statement. >> thank you, chairman. Thank you for the recognition. Thank you for being here. Uh, to our witness, and good afternoon to everybody. Um, gosh, the center for medicare and medicaid services, they safeguard our taxpayers. That's what you're here for. And, and you would think if anything could be bipartisan in this, this committee would be when people do fraud, they take away resources for people that really need them. I mean, people really need medicaid. It is important that they have.
▶ 0:23:37And when, uh, fraud just robs them of that. And, and there are people that set up these groups that aren't just overcharging or miss miss billing, which was brought up the other day, improper payments. We're talking people that set up fraudulent businesses to take money away from the people that need them the most, and not only money away from people who need them most, taking them out of the the the pockets of hard paying taxpayers. It is frustrating. This can't be bipartisan. And florida is now you just noticed florida is under investigation. I just saw governor desantis.
▶ 0:24:08He's not a democrat, I can promise you that. The other I know that I sent a letter to nebraska. So we're going to follow where the fraud is. And if the fraud is in democrat governors, we're going to hold them accountable for it. If it's republican governors, we're going to hold them accountable for it, because the people that need this program the most are the ones who are are most vulnerable. You think about who's vulnerable to fraud as a, you know, we, we, we have a behavioral analysis for children with autism there, there, we have those kind of programs.
▶ 0:24:36Non-emergency medical transportation has been enthralled. Those programs, substance use disorder treatment, people who really need those programs are being robbed because people are robbing the hard paying tax dollars. And so you know, it. You know, for example, just last month, the russian citizen was charged in an alleged $3.4 million fraud scheme involving medicare claims for durable medical equipment.
▶ 0:25:00Uh, today's hearing provides an opportunity to examine how much cms is strengthening its efforts to detect fraud sooner, prevent fraud or fraudulent payments, and improve coordination with states and law enforcement agencies. It is also an opportunity to identify reforms that can further strengthen program integrity, while protecting access to care for millions of americans who rely on medicaid and medicare. And I look forward from hearing from you today how we're going to deal with it.
▶ 0:25:27And gosh, if you if you think anything could be bipartisan, it's when people defraud the taxpayer that work hard for the money, who generously through the programs, give it to people who are the most vulnerable and they're being taken advantage of. They're being taken advantage of when people don't take this seriously as well. And I will yield back. >> the gentleman yields the chair now recognizes the ranking member of the full committee, Mr.
▶ 0:25:57Pallone, for five minutes for an opening statement. >> thank you, Mr. chairman. The trump administration and congressional republicans are continuing their crusade of ripping health care away from the american people while they spend billions of dollars on an unnecessary war in iran that is jacking up gasoline prices for an american public that cannot afford it. From the very beginning of this trump administration, there's been a lot of big talk about fighting fraud.
▶ 0:26:24But in reality, president trump has pardoned fraudsters and fired the very people in our federal agencies who fight fraud. Right out of the gate, president trump fired hhs inspector general christi grimm, who had overseen massive successful investigations and prosecution of fraudsters, and federal prosecutors in minnesota have been working with the state to fight fraud. Resigned in protest of the trump administration's lawless rampage in minneapolis, which left two innocent americans dead.
▶ 0:26:52Let me put this simply democrats want to fight fraud because we want to ensure every dollar is going to the people that need essential services. We believe that states and the federal government must be partners in fighting fraud. It's the only way to do it. It's time for republicans to drop the pretense that this is all about fraud. It is not. Instead, it is about covering up for their terrible healthcare policies that are stripping health care away from millions and driving up costs that make health coverage out of reach for millions more.
▶ 0:27:22There are $1 trillion in health care cuts, will also shutter hospitals and nursing homes, and make nursing homes less safe by dramatically reducing staffing and safety standards. Now, the republican assault on health care will rip health care away from 15 million americans and has already up monthly health care premiums for 20 million americans, in some instances, either double or triple the prices that they were paying.
▶ 0:27:46Instead of spending billions of dollars on the iran war, they should use the money to bring back the aca enhanced premiums tax credits, which they let expire over the past, uh, two, I would say now, over the past two months, uh, the, the administration, the trump administration has acted to withhold billions of dollars of federal medicaid funding in minnesota for services like the home health care services for the elderly and disabled people rely on supports for autistic
▶ 0:28:16Children services that help people suffering from a substance use disorder recovery. And they're now preparing to go after more states for no other reason than they are run by democrats. The trump administration has sent letters seeing a teeing up similar actions in california, maine and the ranking member of the subcommittee mentioned now florida. Unfortunately, the trump administration is not acting alone. Committee republicans are now supporting these intimidation tactics by launching a scattered investigation, 11 of 11 states.
▶ 0:28:45Instead, we should be investigating war profiteering by the president's friends, the oil companies who are making more money by jacking up oil prices. It does not matter that minnesota has taken extensive efforts to crack down on the bad actors that perpetrate fraud.
▶ 0:29:01Instead of being a partner in anti-fraud efforts, the trump administration, centers for medicare and medicaid services has refused to collaborate with the minnesota and is continually moving the goalposts, threatening to cut off all the funding the state receives for 14 critical health services.
▶ 0:29:17Meanwhile, doctor oz is painting all somali americans as fraudsters in minnesota and points to armenian americans in california with the same brush and the hands doctor oz is handing is basically taking data from cms and sending it over to ice so they can basically go over and continue their racist policies against latino americans. I mean, the list goes on, and I don't even know where to begin.
▶ 0:29:43But the bottom line is, the only fraud here is by the trump administration and congressional republicans who refuse to take care of people, refuse to lower health care costs or improve people's lives while they continue an irresponsible war and immigration policies that are simply wrong. That's the fraud. The fraud is on them. I yield back. >> the gentleman yields. That concludes members opening statements.
▶ 0:30:08The chair would like to remind members that pursuant to the committee rules, all members written opening statements will be made part of the record. We want to thank our witnesses for being here today and taking time to testify for the. Before the subcommittee, you will have the opportunity to give an opening statement, followed by a round of questions from members. Our witness today is kimberly brandt, deputy administrator and chief operating officer, officer, office of the administrator, us centers for medicare and medicaid services.
▶ 0:30:39We appreciate you being here today, and I look forward to hearing from you. You are aware that the committee is holding an oversight hearing, and when doing so, has the practice of taking the testimony under oath. Do you have any objection to testifying under oath? No. Seeing no objection will proceed. The chair advises that you are entitled to be advised by counsel pursuant to house rules. Do you desire to be advised by counsel during your testimony today? >> um, my counsel with me.
▶ 0:31:08>> so we will then ask you to please rise. Raise your right hand. Do you promise to tell the truth, the whole truth and nothing but the truth, so help you god? Yes. Seeing that the witness is answered in the affirmative, you are now sworn in and under oath, subject to the penalties set forth by title 18, section 1001 of the united states code. And with that, we will now recognize deputy administrator brandt for five minutes to give your opening statement.
▶ 0:31:39>> thank you, Mr. chairman. Chairman joyce, chairman guthrie, ranking member clark and ranking member pallone, as well as members of the subcommittee. I want to thank you for having the opportunity to discuss cms work to combat fraud, waste and abuse in our programs. The centers for medicare and medicaid services is entrusted with overseeing programs that provide health coverage to more than 170 million americans and accounts for nearly $1.8 trillion in annual federal spending. In fact, cms was a country.
▶ 0:32:07It would have the 16th largest gdp in the world. With that responsibility comes a clear moral mandate protect taxpayer dollars and protect the beneficiaries who rely on those programs. Fraud is not a victimless crime, and we have an ethical obligation to address it. It siphons resources from critical health services. It undermines trust in our programs. And most importantly, it puts patients at real risk.
▶ 0:32:33Just this past week, doctor oz and I were in los angeles, continuing our efforts to look at hospice fraud there. As part of that visit, we visited residential homes, allegedly providing care for indigent seniors, including some who purportedly were providing hospice services. Sadly, these homes were not providing any of those services. And in fact, law enforcement had to raid one of those homes because the residents were malnourished and improperly cared for. The conditions were appalling.
▶ 0:33:01Unclean living conditions, moldy food and most importantly, no caregivers present. Yet the owners of these homes were receiving $6,000 a month per resident, 36,000 total for six residents for services that were clearly never rendered and yet taxpayers were footing the bill. This is unacceptable and why cms is so focused on stopping these egregious behaviors to ensure the health and safety of our beneficiaries, in addition to real, immediate harm experienced by patients, fraud can leave lasting damage.
▶ 0:33:33Fraudulent claims inserted into the medical record can make it so that people can have their future medical decisions influence. It can have them denied insurance coverage, and it can impact the type of care they receive years later, sometimes in ways that are difficult to undo. In addition to putting patients at risk, fraud is deeply harmful to taxpayers. Every fraudulent claim diverts limited medicare and medicaid dollars away from people who genuinely need care.
▶ 0:33:59It drives up program costs and premiums, and it undermines public trust in the health care system. And that is why cms is taking an aggressive, data driven approach to crushing fraud before it starts, and stopping it quickly when it occurs. Prevention is our first line of defense. However, based on my 20 years of experience working on fraud, waste, and abuse issues in government, the biggest impact we can make is building strong safeguards into both provider enrollment and beneficiary eligibility systems.
▶ 0:34:28This is a central part of cms efforts to move away from the pay and chase approach of the past to a more aggressive stop and approach. This starts immediately when a provider goes to enroll in medicare using new algorithms. We can compare new enrollees with the characteristics of all the bad actors that we previously terminated from the program. We then put these new high risk providers on enhanced watch lists, monitoring their data and doing unannounced site visits.
▶ 0:34:52Recent efforts in california for 177 newly enrolled hospices resulted in 60% of those being revoked within six months, and 35% of the remaining ones being subject to corrective action. These efforts help ensure that only qualified, legitimate providers can build the program, and at the same time, on the beneficiary side, we partner with states to strengthen eligibility checks for enrollees and data matching to make sure that we are protecting taxpayer dollars and preserving the benefits for those that truly qualify.
▶ 0:35:22The fraudsters in their tactics are becoming increasingly sophisticated, and cms must constantly adapt to keep pace. We are investing in advanced analytics and predictive modeling to identify suspicious billing patterns in real time. These findings are used to target our oversight resources on areas where risk is highest and will have the greatest impact.
▶ 0:35:42It is these findings that helped us identify skin substitutes and other emerging scams imperative to our efforts, our collaborations with law enforcement and other federal agencies through close coordination with our law enforcement partners, we're quickly able to identify credible allegations of fraud, support investigations with data analysis, and take swift administrative action when necessary.
▶ 0:36:02In just the last year, our fraud war room or the fraud defense operations center, has resulted in stopping over $2.1 billion in medicare payments across over 350 providers and suppliers. I want to thank congress for their work to safeguard cms programs and the people they serve under the working families tax cut act included significant medicaid eligibility and financing reforms, including changes which aim to ensure lawful enrollment and reduce financing loopholes.
▶ 0:36:28It also includes provisions to help cms address concerns about concurrent enrollments and improper payments tied to deceased beneficiaries and providers. Cms looks forward to continuing our work with congress and stakeholders to improve access to care for society's most vulnerable populations. When fraud diverts resources, it threatens the sustainability of those programs. When fraud compromises care, it threatens patient safety. We have a moral obligation to protect both.
▶ 0:36:55Cms remains committed to strengthening oversight and using every available tool to safeguard these programs. Crushing fraud is not simply about recovering funds after the fact. It's about preventing harm, preserving trust, and ensuring that these programs remain strong for current and future generations. Thank you, and I look forward to your questions. >> I thank you for your testimony, and we will now move to questioning. I will begin and recognize myself for five minutes.
▶ 0:37:22Deputy administrator brandt in january, we wrote a letter to hhs inspector general march bell expressing our concern about disturbing patterns in provider enrollment and suspected fraud in home health and hospice companies in la county, california. In addition, a recent cbs news investigation of hospice fraud in los angeles county also found alarming patterns.
▶ 0:37:46I ask unanimous consent to enter cbs news article entitled we visited ground zero for hospice fraud. Los angeles, california, dated march 10th, 2026. For the record, without objection for the so ordered, cbs found that 89 hospice organizations were registered to one single address in van nuys.
▶ 0:38:12In addition, 700 of the roughly 1800 hospice agencies in la county trigger multiple red flags for fraud as defined by the state of california. They also found that 42% of hospice companies having multiple red flag indicators are still in operation there. None of the hospices flagged by cbs news in california's enforcement actions database.
▶ 0:38:39Deputy administrator brandt, what's cms doing right now to address the very real concerns surrounding hospice fraud in los angeles? >> we share your concerns, chairman joyce, and I appreciate you raising this. As I mentioned, doctor oz and I were just in los angeles the second visit this year, and we've taken a number of approaches. First, as I indicated in my oral testimony, we are becoming much more aggressive in our follow up efforts with new enrolled hospices.
▶ 0:39:06We're doing site visits, we're doing data analysis, and we're striving to make sure to take them out. If they are not performing as a legitimate hospice when they're enrolled. We're also looking at the buildings that you mentioned in the companies that you mentioned that are in these facilities, where you can have up to 100 or maybe 300 of these hospices all enrolled at a single location.
▶ 0:39:25As a result, we are upping our enforcement efforts to suspend or potentially revoke the numbers for the people in those buildings and to be able to validate their legitimate services are being provided because we don't want to stop that, but we want to make sure that they are stopped when they aren't legitimate. Lastly, we have sent thousands of letters to people who have been enrolled in hospice to ask them to verify that they've actually been enrolled.
▶ 0:39:50The cbs news piece that you mentioned had the example of a woman who was enrolled in hospice and didn't realize it until her physical therapy claims were denied as a result. Now she would get a letter and she would know that and be able to come back to us and say, hey, I'm not in hospice, I'm a healthy pickleball player. So that's what we are attempting to do. And our hope is to take those 700 plus fraudulent hospices you're talking about down to zero before the end of the year.
▶ 0:40:16>> I think you would agree with me that all fraud is egregious, but as a doctor, hospice fraud in particular is egregious and interrupts medical care and actually can cause a patient harm. As you have been out fighting fraud with doctor oz, can you talk about what you have learned about the harm specifically to medicare beneficiaries that has resulted from that hospice fraud? >> certainly, we've heard several heartbreaking stories.
▶ 0:40:44Several of them have involved people signed up for hospice or their loved ones signed up for hospice without their knowledge. We talked to one woman whose brother had had a stroke, was not entirely mentally capable. So was living in an assisted living type of situation.
▶ 0:40:57People came by and seemed nice to him, seemed like they wanted to befriend him, got him to sign up for hospice, gave him a 40 inch tv, and then he was signed up for hospice benefits, which when he then came out with a serious illness that required hospice several months later, threatened his ability to get signed up for appropriate hospice to actually treat the illness, which he was then diagnosed with terminally.
▶ 0:41:19>> when a fraudulent claim is paid out, whether to a bad actor in a hospice or in home health, or in durable medical equipment or any other sector. What is cms recovery rate on those on those dollars that go out? >> unfortunately, it's very low. We don't have an exact estimate, but I would say probably 10%, which is why we need to shift our approach. >> that's nominal compared to what it could be if we stopped that money from going out in the first place.
▶ 0:41:46Since cms has turned the spotlight on certain states, increasing the necessary oversight has fraudulent claims. Have you seen a decrease? >> well, as I mentioned, I can't speak to the specific states because most of those efforts are relatively new. But with our fraud detection operations center that I mentioned in my oral testimony, we've stopped over $2.1 billion from going out the door just since the end of march last year.
▶ 0:42:11>> I thank you for your vigilance on behalf of the patients who are being defrauded, on behalf of the taxpayers who are paying for this. We appreciate the efforts. We look forward to working with you. I now recognize the ranking member of this committee, uh, miss clark, for her five minutes of questioning. >> thank you very much, Mr. chairman. In addition to the billions of dollars that cms is threatening to cut off to minnesota, the agency has initiated investigations in california, maine, and most recently new york.
▶ 0:42:40Miss brant, which individuals at cms were involved in the decision to select these particular states and what was the process? >> thank you for your question, miss clark. The answer is that it is entire team of people within the center for program integrity. >> hold on one moment. I asked which individuals? Not the team. >> uh, that would be myself as well as the career heads of the team. >> and what was the process?
▶ 0:43:10>> the process is we use a data driven approach. We are constantly using heat maps and data analysis to be able to look and see where we think the largest shifts are. For instance, in minnesota, what we saw was an increase in the adult companion service providers by over 131%, with a corresponding increase in medicaid payments of 234%, while the number of actual beneficiaries remained fairly stagnant, at around an increase of just 24% during that period of time.
▶ 0:43:39>> you mentioned that you were one of the individuals involved in the decision. Were you personally involved in drafting, reviewing and approving the letters? >> I was personally involved, yes. >> administrator oz has indicated that other states will receive similar inquiries from cms. Can you confirm administrator oz's public comments that other states should expect letters from cms? >> we continue to look at other states and just sent a letter to florida today.
▶ 0:44:07>> and what data is cms using to determine which state should be, uh, should should be investigated, and how many more does it intend to investigate? >> we use the medicaid data, the data which is reported by the states and we mine that data also recently has become publicly available so others can mine it as well. And that is the data that we use to be able to decide where to focus. I cannot give you an exact answer on the number of additional states, because that will depend on what the data shows us.
▶ 0:44:36>> other states are understandably watching how cms is treating minnesota. In january, cms notified the state of minnesota that the corrective action plan to address health care fraud was insufficient, and the agency was prepared to withhold more than 500 million in quarterly medicaid funding. The state requested a hearing on cms decision on january 9th. It is now march 17th, and the cms has still not scheduled a hearing about these massive cuts.
▶ 0:45:03When will the hearing be and why has it taken cms this long to schedule it? >> um, in answer to your question about when the hearing will be, we have been stayed from actually planning the hearing because of subsequent litigation that the state initiated against the agency.
▶ 0:45:21>> while this process remains stalled, vice president vance and cms administrator oz announced that minnesota will be subject to an additional medicaid funding deferral of $260 million a quarter, or up to $1 billion over the next year. The state also asserts that cms has not provided specific details that would justify this deferral. Did cms staff conduct a full audit of quarterly medicaid?
▶ 0:45:48Uh, excuse me, medicaid claims from minnesota before making the decision to defer nearly $260 million of reimbursements to minnesota's minnesota state medicaid agency. >> yes. In fact, that number was reached after a very thorough financial review of the cms 64 forms, which minnesota provided to justify why they were entitled to those dollars. >> how long did it take? How long was the audit? How long did it take to do that?
▶ 0:46:17>> the audits can take anywhere from 30 to 60 days. >> okay. So do you recall specifically minnesota, how long it took? >> I don't recall exactly how long, but it would have been between 30 to 60 days. >> why has the cms refused to fully explain and discuss the deficiencies you found in the audited claims with the state of minnesota? >> that is incorrect, because our team has been meeting with the state on a regular ongoing basis.
▶ 0:46:41We get weekly data feeds from the state, and up until a week ago had been having weekly calls with the state and in fact, have sent teams to the state three different times. >> there's been no negotiated settlement or, uh, improvement, if you will. >> there has been ongoing discussions about their corrective actions, what they're doing and the timeline by which they are going to complete those actions.
▶ 0:47:02>> so these further deferral actions on top of what is already been withheld is, uh, what is it, a motivational thing? What is it? Why is that required if you're in negotiation? >> so there are two separate actions.
▶ 0:47:18Um, ma'am, the first is a financial audit based on claims submitted that they need to be able to look to show that there is financial, financial justification and appropriate documentation for how it is that they are going to be able to show why the claims that they submitted need to be reimbursed at that level. The second is an ongoing discussion about program integrity actions, which is separate and distinct from the financial piece. >> thank you, I yield back. Mr. chairman. >> the ranking member yields.
▶ 0:47:45The chair now recognizes the chair of the entire committee, Mr. guthrie, for his five minutes of questioning. >> uh, thank you, Mr. chair. And it just still amazes me. We're not all here unified, just, uh, amazed at the fraud that we're uncovering and and just robs people who need medicaid. And so, so doctor oz recently said that in south florida. And I know you just sent a letter to south to florida. I know florida was a state that president trump won, if I'm correct.
▶ 0:48:11And the republican there, who's a friend of mine is governor and the governor's republican, which they said they only do on democrat governors, that's just that's just not accurate. Um, so doctor oz recently said that in south florida, there is twice as many durable medical equipment companies as there are mcdonald's in la county, california, 89 hospice companies are registered to a single address in van nuys. Are there patterns? So I don't know why this doesn't offend everybody, but I don't know.
▶ 0:48:42It's just a different world, it appears here. Are there patterns in geographic concentration of medicare fraud that cms is seeking and tracking or seeing and tracking? >> absolutely. In fact, we see very much different geographic patterns and pockets across the country. South florida has traditionally always been a hotbed or epicenter of fraud. One of the reasons that the mcdonald's stat that doctor oz is so fond of remains accurate.
▶ 0:49:07The fact of the matter is, there's always a high number of durable medical equipment suppliers in that area, largely because you have a beneficiary population that is not always as familiar with the benefit. English is not their first language. They are more easily taken advantage of by these fraudsters. And so as a result, we see a higher percentage of all types of fraud. Similarly with los angeles, with texas, particularly harris county and other parts of southern texas, we see the migratory patterns to many other areas of the country.
▶ 0:49:35Hospice, home health, durable medical equipment are the top three areas that we typically see this happening. And when we shut it down in one area, it's like whack a mole. It pops up in another. >> thank you. So also, cms has historically relied upon paying chase model processing claims first and pursuing fraudulent payments later.
▶ 0:49:55Given that recovering funds from bad actors is often costly, time consuming, and or unsuccessful, can you walk us through what cms is doing to shift resources towards prepayment review and front end fraud detection? >> absolutely. We're using a variety of tools for this, and this is one of the things that I am personally most excited about, having done this for several years and had to spend time chasing after that money.
▶ 0:50:19We can now stop it on the front end, and we're doing it not only through the war room that I described earlier, where we're looking at the most egregious of providers, at least five a day. And we've managed, as I mentioned before, to stop over $2 billion to date. We're also now using new algorithms that we can get, using machine learning and artificial intelligence, to be able to run edits, to be able to stop payments from going out the door.
▶ 0:50:41Some of the new edits that we've used, we are able to see millions of dollars a week that we were able to stop before those claims even get paid, and that's where it's going to make a huge difference going forward. >> so in the last hearing we had on this, the minority brought a witness that tried to define difference between fraud and improper payments, uh, and saying these were improper payments, not necessarily fraud. That's what the witness was trying to bring forward.
▶ 0:51:05If you have 89 hospice companies registered to one address in van nuys, california, what is the probability that's not fraud? >> it's a very low probability would be my estimate. And what we've seen is when we go to validate that, it ends up being that the majority of them are fraudulent. These are not improper payments. And improper payment is when you have a documentation error or when you have something that is billed incorrectly.
▶ 0:51:31Fraud is when you are deliberately and intentionally seeking to defraud the federal government. And that's what we're seeing in these companies that have 80 plus in one building and where people are taking advantage of our most vulnerable citizens. >> so that's what you said when defraud the federal government, you're defrauding the taxpayer and you're defrauding the people who receive these benefits. >> you're you're hurting everyone.
▶ 0:51:51The more dollars that go away from our ability to take care of people, like in the house that I described in florida or in california, we saw last week, that's dollars that should be taking care of them, not dollars that should be going overseas or to fraudsters to buy houses on the beach. >> well, I know california does. I pointed out florida does have a democrat governor, but people should still be offended by this fraud, wouldn't you say? >> as a taxpayer, everyone should be offended by this fraud. >> so how's the fraud defense operations center work? I got 30, we got a half a minute to kind of explain. >> um, sure.
▶ 0:52:21Um, the way it works is we get a mix of fraud investigators, lawyers, law enforcement, hhs, oig, doj, um, medical professionals all together. And we look at the data again, it's all data driven. We look at real time medicare claims data and determine where we see big spikes in the data. So for instance, on skin subs last year, one of the cases we saw was an 89 year old woman who it showed that she had had 5029, um, claims for skin subs submitted on her behalf and she was on hospice.
▶ 0:52:50So obviously that's a pretty clear indicator of fraud. >> is that improper payment or fraud? >> that would be fraud. Um, and she would be mummified if that was actually the case. And so at the end of the day, what we're looking to do is to use the fraud defense operations center to go after these and to determine where we're seeing things like genetic testing or other types of emerging frauds so that we can stop them before they become a bigger issue. Catheter fraud is a great example of that. You may recall that issue.
▶ 0:53:18Cms was actually able to stop over 90% of that before they even went out the door. And that was huge because that was billions of dollars that was being organized by deliberate groups that were seeking to defraud the government and send that money overseas. >> tough to defend the indefensible. My time is, uh, is expired and I yield back. >> the gentleman yields the chair now recognizes the ranking member of the entire committee, Mr. pallone, for his five minutes of questioning. >> thank you, Mr. chairman.
▶ 0:53:45I, I heard my chairman guthrie say that he wanted us to be unified. But I have to tell you, that's very difficult with doctor oz at the head of cms. Uh, I don't know why he isn't here today, to be honest, but in all honesty, I don't trust him. I don't think he acts in good faith. And I think he's just a grandstander who likes to go on tv, uh, but doesn't really do anything.
▶ 0:54:11Um, you know, substantively that's meaningful to help, uh, medicare and medicaid recipients. So I just want to lay that out. I'm being honest. I, I'm going to use minnesota as an example of what I just said. Cms sent a letter to minnesota on december 5th, 2025, meaning that the state takes certain steps, including submitting a corrective action plan by december 31st, 2025.
▶ 0:54:35And then minnesota discussed its plan corrective action plan with cms on december 30th, which was new year's eve, and then submitted it on the following day, which was the deadline provided by cms. Minnesota then met with cms on january 6th of, you know, about a few days later and according to the cms, did not provide minnesota any substantive feedback on the corrective action plan at that meeting.
▶ 0:55:01But later that day, doctor oz went on fox news to announce that cms would withhold $515 million in medicaid funding per quarter. That's about 20% of the state's medicaid funding and cold minnesota's proposed corrective action plan, and I quote, completely insufficient while complaining that it was sent to him on new year's eve. So minnesota basically submits the corrective action plan on the deadline that cms gives them.
▶ 0:55:29And then only two business days later, doctor oz trashes it, of course, by going on fox news and grandstanding on tv. This is my point. This is what he does now. Miss brandt, who reviewed the corrective action plan in the two business days between december 31st and january 6th that I mentioned and determined that it was, as doctor oz said, completely insufficient, as he told fox news, who reviewed it. In those two business days.
▶ 0:55:58>> a team of experts from the center for program integrity and the center for medicaid and chip services. >> okay. In those two business days, between minnesota submitting its corrective action plan and cms issuing its noncompliance notice, did cms provide any substantive feedback to minnesota or give minnesota any opportunities to amend it before withholding more than half $1 billion in health care funding?
▶ 0:56:24>> to make clear no funds were actually withheld as a result of the corrective action plan until we had a chance to thoroughly review it. The 259 million which was referenced by your colleague, um, the ranking member is actually what the actual funds were that have been withheld. Doctor oz said that cms could take action to withhold up to the 500 million that you're referencing, but no actual action was taken at that time until we reviewed the corrective action plan in more detail.
▶ 0:56:54And then I personally sent an email back to the state about a week later after january 6th, giving them detailed feedback on the corrective action plan. And then doctor oz and myself, along with a couple of other people, went and met with the state in person. >> all right. That was after the tv grandstanding. Now, historically, cms has only withheld funds as a last resort. If a state is refusing to cooperate with the agency. But it seems to me that minnesota did a lot.
▶ 0:57:21And you were still meeting with them, as you said, after doctor oz was on tv. And then, um, in december, uh, on the december 5th letter that you sent, you asked that minnesota provide weekly updates to cms, impose a six month moratorium on providers, establish off cycle revalidation for all provider enrollments, and submitted a corrective action plan. It appears to me that minnesota did all these things.
▶ 0:57:45My whole point is he he goes on tv, he says within two days that this plan is insufficient. Okay. You met with him a few days later, but it wasn't long before you, you know, before the ax came down. And that's not what normally happens. So let me ask you, do you agree that minnesota took all four steps that you requested in your december 5th letter?
▶ 0:58:08>> as I mentioned to the ranking member, I would distinguish between the two actions, the corrective action plan and the program integrity actions that you were discussing that were the subject of the december 6th letter. We're focused on program integrity, guardrails and the various issues that they needed to take to ensure that they were making appropriate payments. The cms 64 financial audits, which is based on actual deliverables and actual receipts provided by the state to cms, is what is the focus of. >> yeah, I don't buy it.
▶ 0:58:37I think the cms is not working in good faith with minnesota, and I worry the cms is going down the same path of weaponizing health care funding for states and governors that the president doesn't like or is feuding with. That's what's happening. But I yield back. Mr. chairman. >> the gentleman yields the chair now recognizes the gentleman from texas, Mr. weber, for his five minutes of questioning. >> thank you. Sir. Uh, deputy administrator, we're glad that you're here. How long have you been in this role? >> I've been in this role since january of last year.
▶ 0:59:07>> and you were there in the trump administration in a similar role. >> this is my third tour at cms. >> yeah. Yeah. You seem very knowledgeable about this, I appreciate that. Um, I want to talk about my own home state of texas. And in the home in texas, $65 million was paid in fraudulent medicare claims related to genetic testing that was never requested, even requested on behalf of the beneficiaries. What have you? Are you it seems like you're aware of that.
▶ 0:59:35Have you observed with respect, have you observed to their lab schemes this involving fraudulent or unnecessary lab testing? How do you get to that? What's the process? >> it's very difficult, sir, and we have observed it. In fact, as I mentioned to you with our fraud detection war room that we have of the 1.8 billion we stopped last year, 100 million plus of it was related to just those types of laboratory services.
▶ 0:59:59And unfortunately, what that means is then when those services get billed, even if they're not provided, they go on the patient's medical record and it precludes them from being able to get that type of testing in the future when they might need it for a cancer diagnosis or something more serious. >> so our great citizens are the brunt of that, really, while the thieves are making way with the taxpayer dollars. Correct. I appreciate what you all are doing.
▶ 1:00:23Uh, programs like medicare and medicaid are designed, as we would say, for the no, for the most vulnerable populations in our country, such as the elderly. These populations are also the most given to healthcare scams, as you well know, given the essential role cms plays in our health care system, how do you educate some of those elderly population to to stay away from those scams? >> it's a great question, something we are continuing to work even more on right now. We have several different things.
▶ 1:00:51We've been doing various videos that doctor oz has been posting telling people, if you see something, say something, call one 800 hhs tips, call one 800 medicare. Contact your senior medicare patrol.
▶ 1:01:03The hospice fraud that we've been looking at in los angeles, a big part of how we've been able to really successfully go after it is because we are partnering with the state officials for the senior medicare patrol and for the organizations that are protecting medicare and medicaid beneficiaries in la, and really using them to help us identify where this fraud is occurring, and to then educate their members and the beneficiaries they serve about what to do.
▶ 1:01:28It's really important to us that seniors understand that they should not fall victim to these schemes or give their information out to people. It's when they do that these types of harms occur. >> well, your lips to god's ears. I appreciate you all doing it. This just to me, I'm just a simple guy. I own a company business for 35 years, but math I can do. Seems like you ought to go to the states. And you ought to. You ought to say which ones are the first. You're going to look at. You look at the number of the population.
▶ 1:01:57Look at the number of the medicaid. I'm talking about the whole population in the state, the medicaid recipients, the amount of federal and state tax dollars being spent or medicaid dollars, and then the method of recovering, if any, of the fraudulent dollars cms claims by state. So identify the first state first. Are you doing that or are you giving states priority to those you have the most amount of fraud in said state? How do you do that? >> it's a combination of things. As we mentioned, or as I mentioned earlier, we really do use a data driven approach.
▶ 1:02:25For instance, some of our recent actions which led to the letter to new york state was because in new york, what we found was that their spending for medicaid beneficiaries was 36% higher than the national average. And we were trying to get a better sense of why that is, particularly because of the fact there were several particularly fraudulent types of services, such as adult daycares, which seem to be funneling a lot of these dollars away from. >> legitimate thing. You know, you'll have daycares in minnesota, they get paid millions and millions of dollars for keeping care of kids, and they don't.
▶ 1:02:54Did I say that out loud? >> and they also they also have autism services where there were kickbacks of several thousand dollars paid to patients or to parents for bringing their children in to claim they had autism and to seek those services which were never provided. >> so how do you and so when you say new york was 36% higher than the other? >> yeah. The average spending on each beneficiary for new york medicaid is 36% higher than the national average. >> do they seem willing to work with you and to find out why that is, and to.
▶ 1:03:23>> well, that is why we sent them a letter, and we are hoping to get a response so that we can better understand using the information they provide, why that's happening. I will say with minnesota, we've been able to come to a much better understanding of what some of the issues were that drove that spike in spending, and we're working with the state to hopefully get better program integrity safeguards. >> yeah. Well, there's a lot of waste, fraud and abuse out there, isn't it? >> there is. It's not just out and out fraud. There's also a lot of waste people billing for services that at a higher level than necessary.
▶ 1:03:52Um, there's also a lot of abuse in that people are just taking advantage and billing for things that just aren't necessary at all. And then that puts beneficiaries at harm too. >> well, thank you. Our most vulnerable americans are paying that price, aren't they? Mr. chairman, I yield back. >> the gentleman yields the chair now recognizes the gentlelady from massachusetts, miss trahan, for her five minutes of questioning. >> thank you, Mr. chair. So rooting out fraud in medicaid and medicare is essential. It protects patients.
▶ 1:04:21It preserves the integrity of these programs and ensures taxpayer dollars are spent on the folks in our communities who actually need the help. That's something I think every member on this committee can agree on. And central to that mission is the hhs office of inspector general. The oig identifies fraud, it investigates cases and serves as a critical watchdog over these programs. It seems like a valuable position as we talk about fraud, waste and abuse. That's why it remains so confusing to so many of us.
▶ 1:04:50Why donald trump unilaterally fired the hhs inspector general immediately after taking office, contradicting his claim that combatting fraud is a central goal of this administration.
▶ 1:05:04Not only did the president move the leading official for detecting fraud in medicare and medicaid, but he left the role unfilled for almost an entire year to then fill it with a partizan loyalist, miss brandt, the hhs office of inspector general, recovered roughly $30 billion for taxpayers since 2020 by identifying fraud, waste and abuse in medicare and medicaid.
▶ 1:05:28If combating fraud is truly a priority for this administration, why remove the independent watchdog responsible for recovering those billions and replace them with a partizan loyalist? >> I was not involved or responsible for that decision, so I cannot speak to that. But I can tell you that the hhs oig is a valued partner of us at cms and our fight against healthcare fraud, and we work with them very every day. >> and we sort of trust that those those watchdogs are going to be independent.
▶ 1:05:57Now, I've seen the chairman's letter to massachusetts regarding our mass health program. And I want to be clear, fraud cases should absolutely be investigated and prosecuted. And here's the thing. The cases that are cited in that letter, we know about them precisely because massachusetts has strong safeguards in place. Our system identifies fraud. We hold bad actors responsible, and we work to close the door on future abuse. That's a system that's working.
▶ 1:06:27That's what good oversight looks like. And if this committee is serious about fraud, and I hope it is, then consistency in enforcement matters. And that means we shouldn't just be targeting a handful of states that happen to have democratic governors. We need to shine a light on the actions of this white house, too. Miss brown, do you know who lawrence duran is? >> I do not. >> well, Mr.
▶ 1:06:50Duran pleaded guilty to stealing $87 million from medicare and was sentenced to 50 years in prison for his crimes. But in may of last year, donald trump commuted his sentence. Are you aware of that, miss brant? >> I am not. >> in fact, president trump has pardoned or commuted the sentences of multiple individuals convicted of defrauding federal health care program programs.
▶ 1:07:14Philip esformes, who was convicted of orchestrating one of the largest medicare and medicaid fraud schemes in history, stealing approximately 1.3 billion from these programs, had his sentence commuted by president trump. President trump also pardoned five individuals convicted of stealing roughly $35 million from florida's medicaid program. William q todd farha, thaddeus hamadeh, paul behrens, and peter clay.
▶ 1:07:40These cases involved large scale fraud against taxpayer funded health care programs intended to serve seniors, people with disabilities and low income families. And the president of the united states freed every single perpetrator of those crimes. It's it's maddening. I will close with this. Protecting medicare and medicaid from waste, fraud, and abuse is one of the most important things this committee can do.
▶ 1:08:05If this committee is serious about that effort, we're here to work together on strong solutions like strengthening provider screening in medicaid, addressing how some medicare advantage insurance gained this payment structure by overdiagnosing patients to inflate reimbursements and targeting the areas experts have flagged as the highest risk. Not what we're doing by targeting democratic states. Thank you. And I yield back.
▶ 1:08:33>> the gentlelady yields the chair now recognizes the gentleman from georgia, Mr. allen, for his five minutes of questioning. >> thank you, chair, for holding this important hearing. Uh, I want to thank the witness for testifying. And, uh, in your, uh, good, precise answers to these questions, obviously, the rise in cases of fraud within medicare and medicaid is causing significant burdens for millions of american patients and seniors.
▶ 1:09:01That's why I'm glad we're having this hearing to explore solutions to the cost of care for americans. And I thank you for your willingness to do such a great job of analyzing this. Uh, and, uh, I don't guess you made any of the recommendations, uh, to president trump over those pardons, did you? >> he did not consult me. >> he didn't ask you. Okay.
▶ 1:09:25Uh, deborah brandt, administrator brandt, when we talk about medicare and medicaid fraud, can we get caught up in the sheer dollar amounts and forget about the real beneficiaries that harmed in many of these cases? You talk about the harm that fraud causes to those beneficiaries out there who truly deserve this. Uh, what congress intended for medicare, medicaid. >> I'm sorry, can you repeat the question that they opened the door? It was a little loud.
▶ 1:09:55>> okay. Sorry. Uh, yeah. Can you, uh, tell us who really has been, uh, adversely affected, uh, by this fraud in medicaid? In other words, those who deserve the care, who have not gotten the care because someone is defrauding medicaid. >> absolutely. Um, hundreds of thousands of beneficiaries are impacted by this every single day.
▶ 1:10:21We see this with people who are contacted about getting, um, for instance, a motorized scooter when they might enjoy having a motorized scooter, but they don't meet the requirements for actually needing a scooter and then they get it. But then when they actually need a true wheelchair that is needed for their medical condition, they have already used their limit of being able to get that type of device. Um, those are the types of things that we see all the time is that fraudsters take advantage of these people. Um, chairman guthrie was asking about the genetic testing.
▶ 1:10:50A great example. A lot of these people will call beneficiaries, ask them for their medicare number. Unfortunately, the beneficiaries give it to them, and then they send them a test that isn't even a real test. It's not even a covid test, maybe. And then as a result, then it says on their medical record that they've received this genetic test. So when they need it to be able to determine if they have markers for cancer or other things, they no longer are able to get it. And we have to work to clean their record of that for them to get it.
▶ 1:11:17And that costs time, which can cost them harm for their program. >> our constituent services team, the 12th district of georgia, is well aware of that because we're getting tons of denials. And so what you're saying is that's fraudulent denials in in most cases. >> in many cases, the denials are fraudulent or they're because there isn't appropriate documentation to show that it's meeting the level of service that's being billed for.
▶ 1:11:43>> uh, there are documented cases of state medicaid officials failing to follow federal requirements to independently monitor their medicaid program. What authorities do cms have to address states that fail to follow federal statutory and regulatory requirements in the medicaid program. >> so cms is required to ensure that states and the providers that work with states follow all the requirements for those programs.
▶ 1:12:09>> um, what tools does cms currently have to ensure states are meeting program integrity, integrity requirements? That is an area. >> yeah, that is an area where we continue to work with states. Traditionally, we've done audits of state billings, both at the provider level, and then we've done financial audits of the state submitted financials, which are the cms 64 audits that I referenced earlier.
▶ 1:12:32But most importantly, we work with states to ensure that they're doing things like screening providers appropriately, making sure that they're doing their own audits, and they're doing their own reviews to ensure that claims are paid properly. And then we're working to create, by the end of the year, a 50 state medicaid program, integrity playbook, which hopefully will have best practices from across all 50 states to help states be able to learn from each other about what's really working well in some states, so that the states who don't have as great a resources can hopefully implement some of those ideas.
▶ 1:13:03>> well, thank you so much for your service to our country and to this agency and the great work that you're doing there. And, uh, you know, I'm behind you 100%. So keep up the great work. Thank you. I yield back. >> the gentleman yields the chair, recognizes the gentleman from oklahoma, Mr. mullen, for his five minutes of questioning. >> I am the other mullen, the one from california probably. >> did look a little different. So. Yes. >> thank you, Mr. chair.
▶ 1:13:33Thank you, deputy administrator brant, for appearing. Uh, we all want to combat fraud, uh, where it exists. Yet cms is unprecedented action and withholding up to $2 billion from minnesota's medicaid program is deeply troubling to me. Thousands of individuals within the state are at risk of losing access to essential services that the state cannot finance on its own. Your agency cut entire categories of services in minnesota.
▶ 1:14:00As I understand it, it didn't target specific providers. It didn't target specific claims. Most disturbingly, there's nothing that indicates your agency put thought toward how those cuts would impact the public itself. So before it moved to withhold up to $2 billion from minnesota, did cms complete any analysis of how many seniors, children, or people with disabilities would lose care if the funding was withheld?
▶ 1:14:31>> so, in fact, we did a detailed financial analysis of that through our centers for medicaid and chip services and determined that there were adequate funds in minnesota to be able to sustain the continuity of care. If we were to withhold the entirety of the money. In fact, we only withheld the 260 million to date. >> and was that an internal analysis by the department? >> uh, it happens within the financial group, the financial management group within cms and our medicaid services.
▶ 1:15:01>> and would you be willing to share that information with the committee? >> we can follow up with the committee. >> on january 27th of this year, cms sent a letter to my home state of california launching its investigation of medi-cal, the state's medicaid program, using the same tactics used against minnesota, cms is targeting programs that provide critical services, including early childhood intervention for kids with autism and in-home care for the elderly and disabled.
▶ 1:15:26I'm extremely concerned that cms is using the pretext of rooting out fraud to defund these essential services. For seniors. In particular, these services are the difference between whether they can live and age at home instead of an institution. One senior in my district wrote to me saying, quote, for families like mine, these programs are not just a safety net, they are a lifeline.
▶ 1:15:49Given how cms has handled minnesota's medicaid medicaid program, I'm worried that you're about to withhold billions of dollars of funding from california. Next, without any real justification, due process, or an effort to protect vulnerable patients. So, miss brandt, before cms issued its january 27th letter to california, which I have a copy of, did cms conduct any assessment of how many californians receive care through the programs that you deem as high risk for fraud, and what the impact would be if you withhold funds?
▶ 1:16:21>> we did an analysis of how many beneficiaries were receiving those in california, and what we determined was for the in-home supportive services or the ihs services that we targeted in the letter. Part of our concern was that over a ten year period of time, california had experienced a 340%, 38, 348% sorry, tongue tied there, 348% increase in spending for those services without a relatively equal rise in the number of people receiving those services, which is what
▶ 1:16:51Prompted our desire to send the letter. >> but you do believe that the impacts of withholding medicaid funding, particularly when it comes to possibly limiting patients access to services, should be considered before doing so 100%. >> in fact, one of the things that I have stressed throughout my testimony today, and that we continue to have as a guiding light at cms, is the whole goal of our fraud and abuse efforts is to make sure we are keeping money to be able to provide services for the seniors who need it.
▶ 1:17:18The example I gave in my oral of the people in california that we saw in the residential home, where they were getting $36,000 per month from the medi-cal program for people to be living in squalid conditions, that's unacceptable. They deserve better. And we as taxpayers deserve better. >> we are all against fraud. Let me be very clear about that. That's not what this is really about. I'm afraid I will continue to stand against these extreme actions that are selectively targeting states with democratic leadership.
▶ 1:17:44My constituents deserve better than to have their life saving healthcare used as a political pawn. With that, I yield back. >> the gentleman yields the chair now recognizes the gentlelady from tennessee, doctor harshbarger, for her five minutes of questioning. >> thank you, Mr. chairman, and thank you for being here today. Um, what recourse does cms have to stop or pause, uh, suspicious payments that are attributable attributable to fraudulent claims before they're paid?
▶ 1:18:14>> we actually have a great deal of authority in that regard, and we're exercising it more than ever. In fact, as I mentioned a couple of times, we've been using it through the fraud war room, but we're also now using it, for instance, for these types of entities that the chairman mentioned in his opening statement, where you have multiple entities existing within a single office building or when you have, um, areas with a extraordinarily high number of potentially fraudulent entities. Our goal is to suspend payments until we can determine that those are legitimate services.
▶ 1:18:44And that's an important tool. >> huge red flag, huge red flag. So, um, what authorities do cms have to direct states to recoup fraudulent medicaid payments? Because I've talked to hhs about this. >> yeah. So, um, we have a few authorities. Um, again, if we can determine that a state has had payments that have gone out for inappropriate payments, in fact, um, a couple of recent audits we had, we found hundreds of those instances.
▶ 1:19:09We go to the state and we pointed out to them and they had to recoup it either from the providers or pay it back directly. >> what are the chances they're going to recoup any of that money, though? If you've got deceased patients, deceased providers that they are fraudulently billing, how are you going to recoup that? >> well, that's why we're trying to go to stop and court versus paying tracey mann. That's the real focus of that. We want to use data analysis and more advanced analytics to really be able to look at that data.
▶ 1:19:37Our challenge on the medicaid side is the data that we have is state reported medicaid data, which is often 3 to 4 months old and doesn't allow us to be able to see it. >> exactly right. That's exactly right. Um, how to see how cms coordinate with federal and state partners, including hhs, office of inspector general, the department of justice, and state medicaid fraud control units, and other law enforcement entities. When investigating those fraud schemes. >> we operate lockstep.
▶ 1:20:03Part of the war room is that we have all those people in the same room talking with each other so that we can actually impose a payment suspension on the spot. If we see something in the data analysis that day, we can put a stop on immediately, and then our law enforcement partners can possibly even start investigating that day. And that's a huge shift from where we used to be. >> yeah. I mean, how do you have everybody the same darn office building and following these claims?
▶ 1:20:28It's just, um, you know, it goes to my next question, how cms working with law enforcement to crack down on transnational criminal, criminal perpetrators of medicaid and medicare fraud. >> and that is one of the more tricky areas that we work on. As we've seen, unfortunately, there are foreign entities that have infiltrated the country by buying sham operations.
▶ 1:20:49Many of these buildings that we know of that have multiple entities in them that do not appear to be real entities, are owned by various foreign national interests. And as a result, we've been working very closely with law enforcement to determine are those legitimate or not? And then, if so, to hopefully stop any payments from being made, because once they go out the door, they get funneled back overseas and it's nearly impossible for us to catch them.
▶ 1:21:14>> yeah, it's almost impossible to recruit, recoup anyway, um, program integrity efforts vary significantly from state to state. Are there best practices from certain states that you can highlight that cms believes should be adopted more broadly? >> absolutely.
▶ 1:21:29In fact, part of the goal of a lot of the letters that we've sent out and the reason we asked the questions we did is because we wanted to develop a 50 state playbook by the end of the year, which will highlight a lot of these best practices and help us understand which states are able to use things, the states where their data shows that there's high instances of fraud. What is it that's working? What is it that's not working? And how can we help them to learn from others? Or how can we help other states to be able to build better safeguards? That's the goal. >> you don't have to reinvent the wheel. Just do it right.
▶ 1:22:00And you've got states that are doing it right. Um, let me make sure I've got time. Uh, the cms have the capability to use its data to flag anomalies, such as 89 hospice companies registered to the same building in van nuys, california. And if cms has capability, what actions are taken to determine whether the company's registered in that building are legitimate businesses? >> so we do two things. We do data analysis to watch, to see what types of billings are happening for those entities. And then secondly, we do on site visits to determine if they're real.
▶ 1:22:30>> on site visits. >> they're the on site highly intensive and require a lot of resources, but they pay dividends because what we've seen is where we do them. We have high rates of revocations. Yeah. >> I don't tell people when I'm showing up to do something either. So it's better to keep it a secret. Uh, I've got 14 seconds. What medicare provider and supplier categories are experiencing the most fraud today? >> well, it was until january. That was our biggest area that we had seen a huge growth.
▶ 1:22:58But now genetic testing, hospice, home health and dme remain our big four. >> yeah, I got that because I get complaints every day about that. So thank you. And I yield back. >> the gentlelady yields votes have been called. We will recess the hearing and reconvene ten minutes after the last vote. The subcommittee stands in recess.
▶ 2:20:36The chair now recognizes the gentleman from new york, Mr. tonko, for his five minutes of questioning. Thank you, Mr. chair, and thank you, ranking member clark. Um, thank you, miss brant, for joining here. During his state of the union address on february 24th, president trump announced that vice president j.d. Vance would be leading the so-called war on fraud.
▶ 2:20:58The next day, cms administrator oz appeared at a press conference alongside vice president vance and said, and I quote, the president announced last night that he is appointing our vice president to lead the war on health care fraud. A wise choice. Minutes later, however, the president vice president announced that he was, quote, tightening the screws, unquote, on the state of minnesota, a major action against the state medicaid program.
▶ 2:21:23Since then, the administration has attempted to narrow the vice president's role in a march 9th, 2026 filing in federal district court. The department of justice stated that, and I quote, vice president vance holds no delegated medicaid related authority, unquote, and characterized his posturing as nothing more than political rhetoric. So on one hand, the administration told the federal district court that the vice president is just playing politics.
▶ 2:21:51On the other hand, president trump and administrator oz said that vice president vance will be leading the administration's anti-fraud efforts. So, miss brant, given the contradiction here, I'm hoping you can clear this up for us. What role does vice president vance play in cms anti-fraud efforts?
▶ 2:22:13>> well, for the regular fraud efforts are led by doctor oz as our administrator of cms and then obviously, the vice president as the head executive within the office of the president, as designated by the president, works very closely with doctor oz to coordinate those efforts. >> so with that being said, what actual authority does vice president vance have in relation to cms anti-fraud work?
▶ 2:22:37>> well, again, working in the executive office of the president, he helps work with all senate confirmed political appointees, including doctor oz. >> well, let me ask some specific questions here to try to get some clarity. Was vice president vance involved in deciding any of the actions that have been taken against minnesota? >> cms has been directly involved in working with the state to advance those actions.
▶ 2:23:04>> but has vice president vance been involved in any of the efforts? >> not in the day to day, but again, in his advisory role from the white house, he remains involved in all of our anti-fraud efforts. >> so was vice president vance involved in selecting the states of california, new york, maine, or minnesota for the cms inquiries that were sent over the past months?
▶ 2:23:28>> as I stated earlier, those decisions were driven entirely by data analysis performed by cms, based on the spending and the number of beneficiaries in those states and what we determined to be program integrity weaknesses. >> so how does he function within that whole framework then? If is he is he involved with some substantive assignments?
▶ 2:23:51I mean, some of these calls seem like as you're indicating, they're made by cms, by doctor oz. But so at what point does he enter in in what is his role? What is his responsibility? >> he's been designated by the president to serve as the departmental wide agency wide government wide lead on anti-fraud efforts.
▶ 2:24:14And as such, our office, as well as all other offices across government, are coordinating with him in the new office that he has been entitled to head to work on efforts to crush fraud across the whole agency, not just in healthcare. >> so can he challenge any of the decisions made by doctor oz if he's the agent of anti-fraud? >> many of our efforts have dated predated when the vice president was named to that role.
▶ 2:24:41As you said, that was just in the state of the union three weeks ago. And a lot of our efforts have been ongoing since well into last year. >> so is that going to slide over to his assignment area rather than doctor oz, or are they going to. >> be we will remain committed at cms to doing healthcare fraud. The vice president has been named to head fraud across all government entities and agencies, of which cms is obviously one of them.
▶ 2:25:06We will continue to do our part and our responsibility to safeguard the 170 million americans and 1.8 trillion in cms. >> well, does he have involvement then, in selecting future states for cms inquiries or investigations? >> cms will continue to be the one to make data driven and fact based determinations as to which states we will act upon, and we will notify the vice president as part of his new responsibilities.
▶ 2:25:32But we will be the ones who will continue to drive that using our fact based, data driven approach. >> I have a number of other questions that I'll get to you via the subcommittee, but, um, just trying to define his role here. So with that, I yield back, Mr. chair. The gentleman yields the chair now recognizes the gentleman from idaho, Mr. folger, for his five minutes of questioning. >> thank you, Mr. chairman. Miss brant, thank you for your testimony today and just the overall information flow, which is very, very helpful.
▶ 2:26:02This hits home for me and for idaho. There was a significant, highly visible case in the northern part of our state where there was a conviction of a of a physician that was falsely billing for medical equipment, mainly for durable medical equipment. And, and as a function of that. Just a couple of questions.
▶ 2:26:26When medicare or medicaid fraud is convicted of fraudsters convicted, does the doj claw back any of those proceeds? >> yes. In fact, the department of justice helps determine what type of restitution is needed. In those cases, it can be up to what they call treble damages, or three times the amount of what was stolen from the programs. >> so do you have any idea how much may have been collected over the last, say, five years or whatever period of time you might be aware?
▶ 2:26:56>> I can't speak to the totality of the five years, but I can tell you that each of the last years, the department of justice with the partners at oig, and then entities like cms and the fbi have collected billions of dollars in each year. The amount gets even greater. >> billions with a b. >> billions with a b, right. >> thank you. I'm not sure that's. >> it's not a. >> good I. >> don't I don't say thank you. It's better than not having it recovered. But we'd rather not have it to begin with. >> yeah, I understand.
▶ 2:27:25Uh, let's talk about financial institutions for a second. Do you think that, uh, do financial institutions, first of all, do they have an obligation to report any suspicious activity that could be linked to medicare or medicaid that you're aware of? >> it's a great question, actually, something where we have been recently working very closely with our colleagues at the department of treasury focused on just that, how we can help make it so that banks can let us know when they see suspiciously large deposits or when new accounts are opened that have large dollars associated with them.
▶ 2:27:55It helps us to know that those might be the subject of health care fraud, and then we can monitor the payments to them. So yes, banks have a responsibility much like the average person. If they see something, they should say something. >> there's there's not an obligation. But you're thinking that that might not be a bad idea to require. >> I'm not aware of a direct obligation, but we have been working with them to ensure that there is certainly a moral obligation. >> great. Okay. Thank you.
▶ 2:28:19Uh, does cms conduct greater scrutiny on providers who specialize in durable medical equipment? That's the issue that we had in my state was primarily with that like prosthetic devices, orthotics, that type of thing. >> well, durable medical equipment is consistently one of our highest areas of fraud. As I mentioned, just with the war room that we've had of the 1.8 billion we stopped last year, 1.5 of it was related to durable medical equipment.
▶ 2:28:44In general, durable medical equipment is one of our highest rates of improper payments in fraud. Of all the categories of payments that we have across cms. >> you notice trends in different demographics where you're you're, you're catching into to some of these major fraud activities. You need common themes for demographics. >> yes. There are in fact, um, just again, as I mentioned, I've been doing this now for 20 years through three tours at cms. And when I started, it was wheelchair fraud.
▶ 2:29:13Um, back in the day, um, everybody was getting a wheelchair. Everybody that saw an ad on tv called in and they could get a wheelchair. And that was a multi-billion dollar fraud. Um, more recently, we've seen frauds in durable medical equipment involving things like continuous glucose monitors or cpap machines or other types of durable medical equipment where they're either prescribed unnecessarily or given to people that don't actually need them. >> well, listen, thank you for your work and once again, for your input. And, Mr.
▶ 2:29:43Chairman, I think that does it for me. I yield back. >> gentleman yields. The chair now recognizes the gentleman from ohio, Mr. balderson, for his five minutes of questioning. >> thank you, Mr. chairman. Um, thank you for being here, deputy administrator. I appreciate that. Um, deputy administrator brand, are you our provider? Verification methods such as identity verification, fingerprinting, unannounced site visits and background checks and effective tool to reduce the enrollment of fraudulent providers.
▶ 2:30:15>> we have found them to be a very effective tool and in particular the on site visits and doing the background checks, especially the fingerprinting, has helped us to be able to find unsavory characters participating in our programs. >> thank you. Cms using technical tools to improve and streamline provider enrollment. >> we are in fact, as I mentioned in my beginning statement, we have a really cool series of algorithms that we're now using that operates like netflix. So it'll say, um, congressman balderson, you really like to watch action movies.
▶ 2:30:45And as a result, um, this allows us to put all the bad actors that we've had that we've taken action against into this algorithm. And then as a new enrollee comes in, we run them against it. And much like netflix tells you what movie to watch, it tells us these are high risk people. You want to keep an eye on them. And as a result of that, we've been able to do more targeted site visits, more targeted follow through along the types that you were mentioning, and be able to kick out an even higher percentage of people within the first six months of their participation. >> thank you. I'll follow up to that.
▶ 2:31:15If so, do you have an estimate of cost savings that have resulted in cms using these tools. >> so far? With our enhanced site visits, we've been able to assume at least $250 million just over the past couple of months for using these enhanced site visits to be able to keep out providers, and we hope eventually it will be in the billions. >> thank you.
▶ 2:31:35Um, across many states, medicaid provides providers have been found billing for services supposedly delivered to patients who were deceased, hospitalized, incarcerated, or confined to living abroad. For example, in massachusetts, a transportation company built for nearly 17,000 rides, including 100 for patients already confirmed dead. In colorado, a defendant billed 165,000 for rides for a beneficiary who had passed.
▶ 2:32:04In new york, investigators identified 25 transportation companies billing for rides for patients confirmed, deceased or hospitalized. What mechanisms does cms currently have to cross-check active claims against death records, hospital admission records and incarceration incarceration records before approving payment.
▶ 2:32:25>> I can speak primarily to the deceased individuals that you referenced, sir, and that we have a data matching agreement with ssa to be able to do a cross reference to something called the death master file and into the death master file. All of the local localities report all deaths. And as a result, we are able to run both providers and beneficiaries against that to not only ensure that we aren't paying for dead people, but we aren't paying dead people. And that is what we do on the federal side.
▶ 2:32:52On the state side, it's more complicated because for states, they each have to do that on their own. So I can't speak to what each state would do. And that is responsible for several of the cases that you just referenced. >> okay. Thank you.
▶ 2:33:04Federal law enforcement has documented a pattern in which foreign organized crime networks deliberately seek out and purchase already enrolled, legitimate medicaid, medicare, excuse me, provider businesses such as durable medical equipment companies, which we just talked about previously, specifically because these businesses carry active billing credentials, claim payment histories and established relationships with medicare. Because in these situations, fraud begins after acquisition acquisition rather than during enrollment. Standard provider screening does not detect it.
▶ 2:33:36What federal requirement currently exists, if any, that obligates revalidation of providers in the course of ownership changes? And is that requirement equivalent in rigor to what is applied at initial enrollment? >> it's a great question, and one that we are working to continue to tighten up. Currently, there is a 3 or 5 year revalidation requirement, meaning that any supplier or provider in the program has to revalidate their credentials on either a 3 or 5 year basis, depending on the type of entity they are.
▶ 2:34:04If they have a change of ownership, they are required to report that to us and they have to do that. I believe that's within six months. I'm not recalling the exact time frame, but there is a requirement that they have to give us the change of ownership notification. And then from there, we follow up. One of the things that has been most challenging, though, is that many of these entities use shell corporations or shell entities. And even when we cross-reference them, they look like they're legitimate entities.
▶ 2:34:31So under our new crush, rfi, the comprehensive regulation for uncovering suspicious health care, we're asking for comments until march 30th on just those types of things. Should we do higher surety bonds? Should we have more rigorous screening provisions? What should we do to make sure to further clamp down on change of ownership? So we welcome you and everyone to give us your comments on that. >> thank you very much. Well done, Mr. chairman, I yield back.
▶ 2:34:57>> the gentleman yields the chair now recognizes the gentlelady from texas, miss fletcher, for her five minutes of questioning. >> well, thank you, chairman joyce, and thanks to you and ranking member clark for holding today's hearing. Thank you, miss brant, for your time today.
▶ 2:35:11As I've said before, I think that this subcommittee in particular has an important job to protect our communities and the rights of our fellow citizens, including by making sure that the executive branch is doing what it should, is not overreaching, and is not violating the rights of americans. And on that point, I have serious concerns around how americans personal information is currently being used or misused in the federal government.
▶ 2:35:40And we've seen a few lawsuits and some recent reporting on the issue of citizens data being used improperly by federal government employees, particularly in connection with the doge effort and elon musk. Um, and on march 6th of this year, the social security administration's inspector general notified some members of congress that it's reviewing a whistleblower complaint related to the potential misuse of social security administration data by a former
▶ 2:36:10Employee. The washington post reported that this investigation stemmed from a whistleblower complaint that a former software engineer at the social security administration claimed to have retained copies of sensitive databases filled with personal information on almost every living american. It is hard to describe.
▶ 2:36:28I don't know that I have the words to describe what an incredible abuse of power that is, but the unfettered access to american sensitive personal data that we have seen by officials in this administration, um, particularly by the doj's staff, is is incredibly alarming. And the firewalls that I've understood to be in place between agencies and preventing access to information seem to have come down.
▶ 2:36:55So just last month, uh, doge decided to post a whole database of cms medicaid provider spending without clear guardrails on its use or an explanation of its limitations. And the hhs doj's twitter slash x account, um said that using this data set, it would have been possible to easily detect the large scale autism diagnosis fraud seen in minnesota.
▶ 2:37:21That data set has since been pulled down, uh, with the website saying now that it's being updated. So, miss brant, I want to ask you about this in particular. Did you approve of this medicaid data set being posted or assist doge with collecting and posting this data in any way? >> are you referring specifically to the hhs data that you just referenced? >> yes. To the to the data set of cms, medicaid data that doge posted.
▶ 2:37:48Were you involved in that collection of data or, or approving that? >> no, I was not involved in the collection or the approval of the posting. >> okay. And do you agree with their statement that large scale fraud was easily and they said, easily detectable using the data set. And if if you do agree with that, then why didn't cms catch it? >> I, I would agree that data can be used to be able to find those types of fraud. I couldn't comment as to how easily that is available.
▶ 2:38:16I can say that our team used the same data sets to be able to drive a lot of our program integrity oversight that we have been doing, and we also discovered that there were issues with autism fraud, both in minnesota as well as elsewhere in the country.
▶ 2:38:30>> and so in that process, if you didn't approve the doge collection or use of this, and it may be true that you can use data sets, of course, I think we would all agree with that, that data and and having fact based evidence and data is what we need to, to use to make decisions. Um, did anyone in the doge effort at hhs consult to your knowledge, ask about how this was used?
▶ 2:38:59Um, or why safeguards that data are so important because putting it out there on x seems like not what we should be doing with sensitive data without any guardrails. I mean, was there any awareness on your end that something like that was going to happen with their access to this data?
▶ 2:39:20>> again, I can't speak to what doge knows or doesn't know or how their decision making process works, but I can tell you that it seems we take very seriously our privacy responsibilities and our responsibility to make sure that we are safeguarding people's data. >> well, and I appreciate that, and that is absolutely essential to your charge. Americans across the country are trusting that when they share this information, whether it's with cms, whether it's with social security, whether it's with the irs, that this data is protected.
▶ 2:39:48And I think you've answered my next question. Um, you're not aware of what has been shared with doge, but you agree with me that there are safeguards that exist to prevent it from misuse. And this committee should make sure that those safeguards are followed. >> we are always doing that at cms. >> okay. Well, I have used up my time, so I thank you very much for your testimony. And, Mr. chairman, I yield back. >> gentlelady chair uh, gentlelady yields the chair now recognizes the gentleman from georgia, Mr. carter, for his five minutes of questioning.
▶ 2:40:19>> thank you, Mr. chairman, and thank you for being here. Deputy administrator. Um, miss brant, professionally, I'm a pharmacist, so I've I've dealt extensively with medicaid and medicare and particularly with reimbursement, having on my own business for so many years, 32 years. And I know that firsthand how important the dollar spent and making sure that they are appropriately spent to support legitimate care for the patients who truly need it.
▶ 2:40:44Unfortunately, we've seen a lot of fraud schemes and they continue to evolve, and they often target areas of the program where reimbursement is high or oversight may be more challenging. One area that's seen dramatic growth, dramatic growth in medicare spending in recent years has been the use of skin substitute products for wound care. It's very important. We need that. We need skin substitute products for wound care.
▶ 2:41:10But what we've seen is obviously been been out of control. And I applaud the agency for addressing that. But these products do play an important role in treating chronic wounds. And but the rapid spending growth, as I say, and the unusual billing patterns, have raised concerns that some providers might be over utilizing these products or billing for services that may not be medically necessary. Can you answer me this?
▶ 2:41:37Medicare claims for skin substitutes since they've grown so dramatically, what are the most common waste, fraud and abuse indicators that cms has identified in this area? >> well, what we've seen is an exorbitant rise in the number of claims submitted for those. Um, I gave an example earlier, but in the fraud war room, we've actually seen numerous examples of beneficiaries who have had thousands of skin substitute claims submitted just for one beneficiary, which would mean that that was practically impossible. They would be covered in skin.
▶ 2:42:07>> it's been pretty obvious is what you're telling me. Correct. And I would agree it has been. But but again, there's there's we gotta be careful because it is important. We don't want amputations, particularly in, in patients, as we all know, diabetic patients get a wound on a, on their lower extremity. That's it's going to be, it's going to be awful and it's going to result in a lot of times an amputation.
▶ 2:42:30But, um, what kind of countermeasures are cms implementing to reduce the wasteful and sometimes medically unnecessary use of the skin substitutes? >> well, there's a couple of different things that we've done because we agree with you. We want the people who need those services to be able to get them. I have family members who are diabetic who have had wounds that have required those. I know how vitally important they can be. However, what we have done is we changed the payment structure for skin subs, which starting january 1st.
▶ 2:42:58Under the new payment rules, we've seen a 99% reduction in billing for skin subs. We have not seen a correlative rise in people coming to us and saying they don't have access to skin subs. We've also done letters to hundreds of skin subs providers where we sent them letters saying, hey, doctor carter, did you know that your billings were ten times more? Four times more? What those of your colleagues are? You should just be aware that we're keeping an eye out of it.
▶ 2:43:22As a result of those letters that we sent out, we had an over 60% rate of people just dropping out immediately and not billing for skin subs anymore. The remainder stopped billing for everything, stop billing for skin subs, but kept billing for everything else. >> and that's great. And I, and I applaud you for that. That's what you ought to be doing. That's what we're expecting you to do. Have we had any results in in in seeing more amputations? I mean, is there any way how are we ever going to quantify that?
▶ 2:43:53>> so we have not seen a correlative rise in the number of people that need or are expecting to receive skin substitute as a result? And as I said, once we have changed the payment structure as of january 1st, we have received, to my knowledge, no pushback from the beneficiary community saying that they don't have access to being able to get that care. We, you know, continue to work with and would obviously respond if those beneficiaries would come forward and could point to us where those problems were occurring, and then we would obviously revisit our approach.
▶ 2:44:24But as of right now, we're good. >> okay. Well, I know you find it hard to believe, but I got a bill that addresses this. >> I'm shocked. >> by that. It is the skin substitute access and payment reform act, and it would modernize the payment system for skin substitute products. I'm just worried we swung the pendulum too far. I know it's got to swing back, but I. I'm just scared we may have swung it too far and that we're going to get adverse effects as a result of that.
▶ 2:44:48But it, um, my bill puts an end to runaway prices and inappropriate prescribing by implementing new program integrity reforms and ensuring that patients that need receive affordable, accessible and high quality care. So I invite all my colleagues to sign on to it. I hope you all will look at it. And I know that the agency is I've been in touch with them and we're trying to address this. Just I I'm running out of time. But I want to mention also in my practice of pharmacy, I was very involved in hospice care.
▶ 2:45:17And I can tell you, I saw the proliferation of hospices as a result of, of, of overbilling and, and, and just the fact that there was a lot of problems in that area. So I appreciate your attention to that as well. >> you're welcome. It needs to be very much focused on. >> well, and please understand I'm not criticizing you on the skin products. I'm just saying we gotta find a happy medium there. Okay. >> we understood. >> okay. Thank you, I yield back.
▶ 2:45:43>> the gentleman yields the chair now recognizes the gentlelady from washington, doctor schreyer, for five minutes of questioning. >> thank you, chairman joyce and ranking member clark. And thank you to our witness for being here today to take our questions. I'm really glad that we're discussing fraud. It is an issue that we all want to crack down on. Fraud and abuse, hurts patients, hurts honest providers, and of course, hurts taxpayers. And this is not a partizan issue.
▶ 2:46:13Uh, fraudsters need to be prosecuted. Um, but the reality is that right now, fraud is being weaponized by republicans to mainly target states run by democrats. And recently, the energy and commerce republicans sent a letter to my state of washington with questions about fraud in our medicaid program, which, by the way, our state caught. Um, Mr. chairman, criminals should be prosecuted, whether they're in blue states or red states.
▶ 2:46:41We need equal opportunity prosecution of fraud. And I am so ready to work with you to make sure we are rooting out fraud everywhere. Um, but it turns out that other than when it's politically convenient, this administration has actually made it much harder to investigate fraud in medicare and medicaid.
▶ 2:46:59Uh, just four days into his presidency, president trump illegally fired 17 inspectors general, the very people responsible for rooting out fraud and abuse in government programs. These are the watchdogs who protect taxpayers. He's also pardoned several criminals convicted of ripping off taxpayers and committing health care fraud.
▶ 2:47:23And here's just a few, uh, lawrence duran pleaded guilty to stealing $87 million from medicare. Miss brant, does that sound like fraud to you? >> if he was convicted of fraud, yes. >> he pleaded guilty. Uh, president trump, who republicans keep referring to in this committee hearing as the president who is waging the toughest ever crackdown on fraudsters, pardoned him.
▶ 2:47:49Uh, philip esformes was convicted of stealing $1.3 billion from medicare and medicaid. Does that sound like fraud to you? >> again, if he was convicted. >> he was convicted indeed. Uh, well, it turns out president trump commuted his 20 year sentence. And then, uh, a whole group.
▶ 2:48:10William cahill, todd, farhad, thaddeus baird, paul behrens, and peter clay conspired to steal $35 million from florida's medicaid program, and they were convicted. Uh, miss brandt, again, does this sound like fraud to you? >> again, assuming they were convicted. >> and again, uh, president trump pardoned them. There is a definite pattern here.
▶ 2:48:32And so I'm wondering about this pattern, miss brandt, what message does it send to fraudsters or would be fraudsters when they see the president of the united states? Pardon? People convicted of stealing money from taxpayers? >> I certainly can't speak to the president's actions because I'm not involved in those at all. But what I can say is that at cms, we have been focused from the very first day of the administration on going after health care fraud. >> the question is a little different what message does it send?
▶ 2:49:00This is not a comment about what the president did, because we all just heard that he pardons fraudsters. What message does it send to other potential criminals or to other fraudsters or potential fraudsters? Um, when they see fellow fraudsters being pardoned by the president? >> I certainly can't speak to that. >> okay. I think everybody listening could draw their own conclusions about what that what message that might send.
▶ 2:49:23And then of course, what do you think about president trump's decision to fire the nonpartisan hhs inspector general and then wait a whole year to replace him with a partizan hhs inspector general with his own history of ethics violations? >> again, I can't speak to the president's actions, but I can say that we partner very closely with the hhs inspector general's office. >> I'm glad that you do.
▶ 2:49:47And thank you for making sure that you do that and making sure that you do that in a bipartisan manner and crack down on fraud in all states. Um, I just want to say that when I think about this, uh, this new inspector general, maybe he's doing his job, maybe he's doing it fairly.
▶ 2:50:05But I will tell you that as we are hearing about this so-called president who is cracking down on fraud, the stories that we are hearing about pardoning fraudsters sure does not sound like a president cracking down on fraud. It sounds like a president who sweeps fraud under the rug. Uh, I have 30s left, so I'm just going to mention the wiser program.
▶ 2:50:27There's a pilot program that cms launched earlier this year that essentially is using ai to bring in prior authorization to traditional medicare. It's been a disaster, by the way, in medicare advantage, and has specifically been modeled to deny or delay coverage to seniors. And, um, I am just going to express that ai can be used and dialed up for, for good or bad.
▶ 2:50:52And I am very concerned about bringing the wiser program into traditional medicare, because the incentive structure will be used to deny care because, uh, they are incentivized in terms of payment to be paid according to how much they save or do not pay out or do not, uh, offer services to seniors. So please reconsider. And I have a letter to you asking for that very thing to not implement the wiser program. Thank you.
▶ 2:51:22Yield back. >> gentlelady yields. The chair now recognizes the gentleman from ohio, Mr. landsman, for five minutes of questioning. >> I thank you, Mr. chair. And I'm going to ask about something totally different. Not fraud, but I have a constituent and a very close friend who has tb, and he.
▶ 2:51:42And I've been working on a bill that would ask for study so that we can get the data back on ensuring that everyone who is who has tb is a rare disease that affects the skin. And you're concerned you need. >> to ask what it was because I wasn't familiar. >> with it. Yeah, I apologize, uh, it's it's oftentimes referred to as the worst disease you've never heard of.
▶ 2:52:08It's or the butterfly disease where the skin just does not work. Right? I'm sitting next to a pediatrician, so I've, pardon my language, you know, I or my epidermal. Yeah. No, no. Yes. But I but but in terms of explaining it. Yeah. The, the it's a rare disease that affects the skin. In any event, the bandages are incredibly expensive and families spend a lot of money. Our bill, which is named after him, shane, would, uh, help families pay for that, uh, entirely.
▶ 2:52:37Uh, because it does reduce one. They need it, but two, it reduces infections and hospitalizations and ultimately saves medicaid, uh, money. Um, so cms has focused a lot this year on waste, fraud and abuse, especially in the wound care space. Cms even removed local coverage determination for skins substitutes to curb high spending. We talked a little bit about that.
▶ 2:53:03Or you have a patient like shane requires the use of very expensive bandages just to keep him comfortable and has very few alternatives for care. Really nothing else. Uh, wound care alone for an outpatient can be millions of dollars per year, making it more difficult for patients to get the treatment they need.
▶ 2:53:22Um, so our bill again, would create a two year pilot program at hhs to study the cost of medicaid, paying for wound care to reduce hospitalizations for tb patients. Uh, just a couple of questions. One, do you know what the annual cost of these bandages would be for medicaid to cover any? Be patient. >> well, first of all, I'm very sorry for your friend and the challenges he and his family have.
▶ 2:53:49Um, I do not know the cost of that, sir, but I would be happy to follow up. >> that would be. We just we want to work together on this. Um, do you have a sense of what the challenges would be that come from providing hospital level care for a patient that has significant wound care needs? >> we certainly have seen at cms several examples of people who have challenging needs that need additional coverage. And that's part of why we always try to factor that in when we're making coverage decisions.
▶ 2:54:17>> would it be cost saving to provide the wound care needs to these patients, rather than pay for the hospitalizations due to lack of care? >> I don't know the exact dollars, so I can't speak to it. But again, be happy to follow up with our team and talk to your staff. >> uh, and then lastly, would what would it take for cms to launch a pilot program to study the impact of providing wound care to patients and preventing hospitalizations? I mean, we have the bill, but I'm just curious.
▶ 2:54:43>> I think we would be happy to look at what that would take and follow up with your staff to provide any input that we could. >> okay, shane, there are lots of young people that have this, uh, is, is an incredible human being, uh, one of the smartest, bravest people I've ever met in my entire life. And he's been an advocate for rare disease work and eb his entire life. He's had like 150 surgeries. I mean, he's been through everything and he's battling cancer probably for the last time.
▶ 2:55:11Um, so this would be really important, uh, to try to get as much traction on this as we can. And so we'll follow up with your, with your team. >> I'll make sure my team follows up with you. And again, and best wishes for you and your friend. >> thank you. I yield back. >> gentleman yields. Seeing that there are no further members wishing to ask questions, I would like to thank our witness again for being here today. I ask unanimous consent to insert in the record the documents included on the staff hearing documents list.
▶ 2:55:39Without objection, so ordered pursuant to committee rules, I remind members that they have ten business days to submit additional questions for the record, and I ask that the witness suspend submit their response within ten business days. Upon receipt of the questions, members should submit their questions by close of business day on tuesday, march 31st. Without objection, the subcommittee is adjourned.