Protecting Patients and Safeguarding Taxpayer Dollars

The subcommittee on oversight and investigations 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

Mm-hmm.

Sectors such as durable medical equipment, genetics, skin substitutes, home health, and hospice are all experiencing 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. Once caught, fraudsters might be stopped, but they're always looking for their next scheme. The tentacles of these criminals 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. homeless and people struggle struggling with substance use disorders. Moreover, 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 twenty twenty press conference, "It's possible, no, likely, that Pennsylvania is losing three billion dollars a year to fraud." And that's just one state. And that's just one state. For 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. As President Trump made clear during his recent State of the Union address, and executive order established He is serious about the war on fraud. Under the leadership of Vice President and Anti-Fraud Czar J. D. 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. It is critical that fraud in government health care programs like Medicare and Medicaid are addressed to ensure that they funds, these adequate funds to maintain programs that are for those who are in need, and not for fraudsters to steal. As this committee builds upon Medicaid program integrity efforts that we advanced last year in H R 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. We 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. With that, I now recognize our ranking member of the subcommittee, Miss Clark, for her opening statement.

Thank you, Mister 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. President 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 two billion dollars for fourteen Medicaid services over the next year. This 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 ser- 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. One 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 one billion dollars 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 program 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. They are all states led by Democratic governors that President Trump lost in the twenty twenty-four presidential And in the case of Minnesota, the governor was the Democratic nominee for vice president. He pointed out that pres- that the president and the people around him are weird. And now, the president is taking away health care from his state's residents. These 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 C. CMS inquiry has expanded to Florida. Politically motivated enforcement has real consequences for our constituents. Medicaid is a lifeline for more than seventy million people in this country. Patients 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. Democrats 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. Congress 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. To start, we need to restore the nearly one trillion dollar 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. Deputy Administrator Brandt, I hope that this is an for all of us to finally get some real transparency and specifics from an expert at CMS, rather than the rudderless partisan attacks that we have seen from Doctor Oz and Vice President Vance as friendly news programs or at press conferences. With that, Mister Chairman, I yield back.

Thank you. The chair now recognizes the chair of the full committee, Mister Guthrie, for five minutes for an opening statement.

Uh, thank you, uh, Chairman. Thank you. Thank you for the recognition, thank you for being here, uh, uh, to our witness and good afternoon to everybody. Um, gosh, the Center for Medicaid 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, it is important that they have. And when, uh, uh, fraud just robs them of that. there are people that set up these groups that aren't just overcharging or mis- misbilling, which is brought up there, the 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 it the most, take them out of the the talk the pockets of hard-paying taxpayers. It it is frustrating that this can't be bipartisan. And Florida is now, you just noticed Florida is under investigation. I just saw Governor DeSantis. He's not a Democrat, I can promise you that. The other uh, I know that I sent a letter to Nebraska. So we're gonna follow where the fraud is. And if the fraud is in Democrat governors, we're gonna hold them accountable for it. If it's Republican governors, we're gonna hold them accountable for it. Cuz the people that need this program the most are the ones who are are most vulnerable. You think about who's vulnerable to fraud is uh um you know, we'd we'd we have behavioral analysis for children with autism. There there we have those kind of programs. Not emergency medical transportation's been in fraud. Those programs. Substance use. people who really need those programs are being robbed because people are robbing the hard-paying tax dollars. And so, you know, it it you know, for example, just last month a Russian citizen was charged in an alleged three point four million dollar fraud scheme involving Medicare claims for durable medical equipment. Uh, today's hearing provides an opportunity to examine how much CMS has strengthened its efforts to detect fraud sooner, for a fraudulent payments and approved 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 to from hearing from you today how we're gonna deal with it. And gosh, if you if you think anything could be bipartisan, it's when people defraud, the taxpayers 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, Mister Pallone, for five minutes for an opening statement.

Thank you, Mister Chairman. The Trump administration and congressional Republicans are continuing their crusade of ripping healthcare away from the American people while they spend billions 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. But 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 christy grimm, who had overseen massive successful investigations and prosecution of fraudsters. And federal prosecutors in Minnesota who 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. Let 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 It is not. Instead it is about covering up for their terrible health care policies that are stripping health care away from millions and driving up costs that make health coverage out of reach for millions more. Their one trillion dollars 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 fifteen million Americans and has already jacked up monthly health care premiums per twenty million Americans in some instances either double or triple the prices that they were paying instead 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 did let expire over the past uh two I would say now over the past two months uh the the administration the Trump administration is active 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 children, 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 uh 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 eleven of eleven states. Instead, 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, the perpetrate fraud. Instead of being a partner in anti-fraud efforts, the Trump administration's Centers for Medicare and Medicaid Services has refused to collaborate with the Minnesota, and has continually threatening to cut off all the funding the state receives for fourteen critical health services meanwhile 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 america. I mean, the list goes on and I don't even know where to begin. But 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. The chair would like to remind members that all members' written opening statements will be made part of the record. We wanna thank our witness 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 Ops Officer, Office of the Administrator, US Centers for Medicare and Medicaid Services. We appreciate you being here today.

No.

Seeing no objection, we'll 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, I have my counsel with me, so.

We will then s uh,

Yes.

Seeing that the witnesses had answered in the affirmative, you are now sworn in and under oath subject to the penalties set forth by title eighteen section ten O one of the United States Code. And with that, we will now recognize Deputy Administrator Brandt for five minutes to give your opening statement.

Thank you, Mr. Chairman. Chairman. Chairman Guthrie, Ranking Member Clark, and Ranking Member Poulon, as well as members of the subcommittee, I wanna thank you for having the opportunity to discuss CMS's work to combat fraud, waste, and abuse in our programs. The Centers for Medicare and Medicaid Services is interested with overseeing programs that provide health coverage to more than a hundred and seventy million Americans and accounts for nearly one point eight trillion dollars in annual federal spending. In fact, if CMS was a country, it would have the sixteenth 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. Just this past week, Doctor Oz and I were in Los Angeles continuing our uh efforts to look at hospice fraud. As part of that visit, we visited residential homes allegedly providing care for n- 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. Unclean living conditions, moldy food, and most importantly, no caregivers present. Yet the owners of these homes were receiving six thousand dollars Thirty-six thousand 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. Fraudulent claims inserted into the medical record can make it so that people can have their future medical decisions influenced. It can 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. It 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 twenty 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. This is a central part of CMS's efforts to move away from the pay and chase approach of the past to a more aggressive stop and caught 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 have 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. Recent efforts in California for a hundred and seventy-seven newly enrolled hospices resulted in sixty percent of those being revoked within six months and thirty-five percent 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. The fraudsters and 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, have the greatest impact. It is these findings that helped us identify skin substitutes and other emerging scams. Imperative to our efforts are 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. In just the last year, our Fraud War Room, or the Fraud Defense Operations Center, has resulted in stopping over two point one billion dollars in Medicare across over three hundred and fifty 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. It 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 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. CMS 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 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. Deputy Administrator Brandt, in January we wrote a letter to HHS Inspector General March Bell, expressing our concern about disturbing patterns in provider enrollment in suspected fraud in home health and hospice companies in LA County, California. In addition, a recent recent CBS News investigation of hospice fraud in Los Angeles County also found alarming patterns. I ask unanimous consent to enter CBS News article entitled "We visited ground zero for hospice fraud, Los Angeles, California" dated March tenth, twenty twenty-six for the record. Without objection for the uh so ordered. CBS found that eighty-nine hospice organizations were registered to one single address in Van Nuys. In addition, seven hundred of the roughly eighteen hundred hospice agencies in LA County trigger multiple red flags for fraud as defined by the State of California. They also found that forty-two percent of hospice companies having multiple red flag indicators are still in operation there. None of the hospices flagged by CBS News and California's enforcement actions database. Deputy Administrator Brandt, what's CMS doing right now to address the very real concerns surrounding hospice fraud in Los Angeles?

We share your concerns, uh 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. We're doing site visits, we're doing data analysis, and we're striving to make sure to 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 and the companies that you mentioned that are in these facilities where you can have up to a hundred or maybe three hundred of these hospices all enrolled at a single location as 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 wanna stop that but we wanna 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. The CBS News um 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 were trying to do and our hope is to take those seven hundred plus fraudulent hospices you're talking about, down to zero before the end of the year.

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 har- harm specifically to Medicare beneficiaries that has resulted from that hospice fraud?

Certainly. We've heard several heartbreaking stories. Um, several 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 a assisted living type of situation. People came by and seemed nice to him, seemed like they wanted to befriend him, got him to sign up for hospice, gave him a forty 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.

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's recovery rate on those do- on those dollars that go out?

Unfortunately, it's very low. We don't have an exact estimate, but I would say probably ten percent, which is why we need to shift our

That th- That's nominal compared to what it could be if we stopped that money from going out in the first place. Since 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 have stopped over two point one billion dollars from going out the door just since the end of March last year.

I thank you for your vigilance on behalf of the patients who are being frauded, 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, Ms. Brandt, which individuals at CMS were involved in the decision to select these particular states, and what was the process?

Thank you for your question, Ms. Clark. The answer is that it is entire team of people within the Center for Program Integrity.

Uh, 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?

Uh,

You mentioned that you were

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?

You continue to look at other states and just send a letter to Florida today.

And what data is CMS using to determine which state should be uh should inve- should be investigated, and how many more does it intend to investigate?

We use the Medicaid data, the TMSIS data, which is reported by the states, and we mine that data. It 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'll depend on what the data shows us.

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 five hundred million in quarterly Medicaid funding. The state requested a hearing on CMS's decision on January ninth. It is now March seventeenth, and the CMS has still not scheduled a hearing about these massive cuts. When will the hearing be, and why has it taken CMS this long to schedule?

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.

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 two hundred and sixty million dollars a quarter, or up to a billion dollars over the next year. The state also asserts that CMS has not

Yes, in fact, that number was reached after a very thorough financial review of the CMS sixty-four the CMS sixty-four forms which Minnesota provided to justify why they forms which Minnesota provided to justify why they, were entitled to those dollars.

And how how long did it take how long was the audit? How long did it take to do that audit?

Uh, the audits can take anywhere from thirty to sixty days.

OK, so do you recall specifically Minnesota how long it took?

I don't recall exactly how long, but it would have been between thirty to sixty days.

Why has CMS refused to fully explain and discuss the deficiencies you have found in the audited claims with the state of Mon- Minnesota?

That is incorrect because our team has been meeting with the state on a regular ongoing

And 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 time line by which they are going to complete those actions.

And so these uh further deferral actions on top of what has already been withheld, is uh or what uh is it a motivational thing? What i- what is it why is that required if you're in negotiation?

So there are two separate actions. Um, 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 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.

Thank you. I yield back, Mr. Chairman.

The ranking member yields. The 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 it 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 don't know Florida was the state that President Trump won. if I'm correct, and the Republican there whose friend of mine is governor. I mean, it was 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's twice as many durable, medical equipment companies as there are McDonald's. In in LA County, California, eighty-nine hospice companies are registered to a single address in Van Nuys. Are there patterns? It's I don't know why this doesn't offend everybody. But I don't know, uh it's just a different world it appears here. Are there patterns in geographic concentrates or Medicare fraud that CMS is seeking and tracking or seeing and tracking?

Absolutely. In fact, we see very uh 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 uh remains accurate the the fact of the matter is there's always a high number of durable medical equip 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. Hospice, home health, and durable medical equipment are the top three areas that we

Thank you. So uh also CMS has historically relied upon pay in chase model, processing claims first and pursuing fraudulent payments later. Given 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?

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. We 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 two billion dollars 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

So in the 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. If you have eighty-nine hospice companies registered to one

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. An improper payment is when you have a documentation error or when you have something that is built incorrectly. Fraud 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 eighty plus and one building

So that's what you're saying, when you 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. Uh, the more dollars that go away from our ability to take care of people, like in the house that I described in Florida, the 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

As a taxpayer, everyone should be offended by this fraud.

So how's the Fraud Defense Operations Center work? I got thirty, we got a half a minute to kinda explain.

Um, sure. Um, it wou 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, was an eighty nine year old woman who had showed that she had had five thousand and twenty nine um claims for skin subs submitted on her behalf and she was on hospice. So 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 fraud. 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. CMS was actually able to stop over ninety percent of that before it 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 res res is expired and I yield back.

The gentleman yields. The chair now recognizes the ranking.

Thank you, Mr. Chairman. I I heard uh 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 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 um 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 gonna use minnesota as an example of what i just said cms sent a letter to minnesota on december fifth twenty twenty five demanding that the state take certain steps including submitting a corrective action plan by december thirty first twenty twenty five and then minnesota discussed its planned corrective action plan with cms on december thirtieth and then submitted it on the following day, which was the deadline provided by CMS. Minnesota then met with CMS on January sixth of, you know, about a a few days later, and according to the state, CMS did not provide Minnesota any substantive feedback on the corrective action plan at that meeting. But later that day, Doctor Oz went on Fox News to announce that CMS would withhold five hundred and fifteen million dollars in Medicaid funding per That's about twenty percent of the state's Medicaid funding. And called 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 their corrective action plan on the deadline that CMS gives them and 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, Ms. Branson, Who reviewed the corrective action plan in the two business days between December thirty-first and January sixth that I mentioned, and determined that it was, as Doctor Oz said, completely uh insufficient, as he told uh Fox News? Who reviewed it in those two business days?

A team of program 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

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 two hundred and fifty-nine million, which was referenced by your colleague, um, the ranking member, is actually, um, what the actual funds were that have been Doctor Oz said that CMS could take action to withhold up to the five hundred million that you're referencing, but no actual action was taken at that time, until we reviewed the corrective action plan in more detail. And then I personally sent an email back to the state about a week later, after January sixth, 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.

Alright, that was after the TV grandstanding. Now historically, CMS is only with health 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, and you were still meeting with them as you said after Doctor Oz was on TV. And then um in December uh on the December fifth letter that you sent, you asked that Minnesota provide weekly updates to CMS, impose a six month moratorium on high risk providers, establish off-cycle revalidation for all provider enrollments,

As I mentioned to the ranking member, I was

Mm.

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 sixth letter were focused on program integrity guardrails and the various um issues that they needed to take to ensure that they were making appropriate payments. The CMS sixty-four financial audits, which is based on actual deliverables and actual receipts provided by the state to CMS is what is the focus of the program integrity.

Yeah, I I I don't buy it. I think the CMS is not working.

The gentleman yields, the chair now recognizes the gentleman from Texas, Mister 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 have been in this role since January of last year.

And you were there in the Trump administration in a similar role, but uh,

This is my third tour at CMS.

the first Yeah, yeah. You seem very knowledgeable about this. I appreciate that. Um, I wanna talk about my own home state of Texas. And in the home in Texas, sixty-five million dollars was paid in fraudulent Medicare claims related to genetic testing that was never request even requested on behalf of the beneficiaries. What have you or you seems like you're aware of that. Have you observed with respect, have you observed to their lab schemes that's 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, um, the one point eight billion we stopped last year, a hundred million plus of it was related to just those types of laboratory services. And unfortunately what that means is then when those services get billed, even if they're not provided, they go on the patient's medical record and it precludes them from being able to get that.

So our great citizens are the brunt of that really, while the thieves are making away with the taxpayer dollars. I appreciate what you all are doing. Uh, programs like Medicare and Medicaid are designed, as we would say, for the most, you know, for the most vulnerable populations in our county, 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 healthcare 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. We've been um doing various videos that Doctor Oz has been posting, telling people if you see something, say something. Call one eight hundred HHS tips. Call one eight hundred Medicare. Contact your senior Medicare patrol. The 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

Well, you live to God's. I appreciate you all doing it. This, just to me, I'm just a simple guy. I owned an air company business for thirty five 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, or the first you're gonna look at, you look at the number of the population, look 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 states to identify the first state net first are you doing that? Are you giving states priority to though you have the most amount of fraud in said state? How do you do that?

It's a combination of things, as we mentioned uh or as I mentioned earlier, we really do use a data driven approach. For 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 thirty-six percent higher than the national average and we were trying to get a better sense of why that is particularly

Next 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. Did 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 into 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 thirty-six percent higher than the other states.

Yeah, the average spending on each beneficiary um for New York Medicaid is thirty-six percent higher than the national average.

Did they seem willing to work with you and to find out why that is and to m

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 s- spike in spending. And we're working with the state to hopefully get better program integrity.

Yeah, well there's a lot of waste, fraud and abuse out there, isn't it? And I

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. Um, 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? Uh, Mr. Chairman, I yield back.

The gentleman yields, the chair now recognizes the general lady

Thank you, Mister Chair.

Thank you, yes.

So, rooting out fraud in Medicaid and Medicare is essential. It protects patients, it preserves the integrity of these programs, and insures taxpayer dollars, or spends on the folks in our communities who actually need the help. That's something I think every member on this committee can uh agree on. And central to that mission is the HHS Office of Inspector General. Uh, the OIG identifies fraud. It investigates as a critical watchdog over these programs. 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 why Donald Trump unilaterally fired the HHS Inspector General immediately after taking office, contradicting his claim that combating fraud is a central goal of this administration. Not only did the president move the leading official for detecting fraud in Medicare and Medicaid, but he They left the role unfilled for almost an entire year to then fill it with a partisan loyalist. Miss Brandt, the HHS Officer Inspector General recovered roughly thirty billion dollars for taxpayers since twenty twenty by identifying fraud, waste and abuse in Medicare and Medicaid. If combating fraud is truly a priority for this administration, why remove the independent watchdog responsible for recovering those billions and replace them with a partisan 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 in our fight against healthcare fraud and we work with them very every day.

Yeah, it And we sort of trust that those um those watchdogs are going to be independent. Now, I've seen the chairman's letter to Massachusetts regarding our MassHealth program. And I wanna 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. That'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

I do not.

Well, Mister Duran pleaded guilty to stealing eighty-seven million dollars from Medicare and was sentenced to fifty years in prison for his crimes. But in May of last year, Donald Trump commuted his sentence. Were you, are you aware of that, Miss Brandt?

I am not.

In fact, President Trump has pardoned or commuted the sentences of multiple convicted of defrauding federal health care program programs. Philip Esformes, who was convicted of orchestrating one of the largest Medicare and Medicaid fraud schemes in history stealing approximately one point three billion from these programs had his sentence computed by President Trump. President Trump also pardoned five individuals convicted of stealing roughly thirty five million dollars from Florida's Medicaid program. William Kao, Todd Farha, Thaddeus Baraday, Paul Behrens and Peter Clay. These cases involve 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. If 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 gain this payment structure by overdo diagnosing 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.

The general lady yields, the chair now recognizes the gentleman from Georgia, Mister Allen, for his five minutes of questioning.

Uh, Thank you, Chair, for your voice for holding this important hearing. Uh, I wanna thank the witness for testifying and uh and your uh uh uh good precise uh answers to these questions. Obviously, the rising uh cases of fraud within Medicare and Medicaid is causing significant burdens for millions of American patients and seniors. That's why I'm glad we're having this hearing to explore solutions uh to the cost to care for Americans and I thank you for your uh willingness.

He did not consult me.

He didn't ask you? Okay. Uh, uh, uh, uh, Brant, Administrator Brant, 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 uh what Congress intended for uh medic uh Medicaid yeah oh okay sorry uh yeah can you uh tell us uh

I'm sorry, can you repeat the question, that they opened the door, it was a little loud.

who really has been uh adversely affected uh by this fraud in uh Medicaid. In other words, those who deserve the care who have not gotten the care because someone is defrauding medic uh Medicaid.

Absolutely. Um, hundreds uh of thousands of beneficiaries are impacted by this every single day. We see this with people who are contacted about getting um, for instance, a motorized scooter when um 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, a 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 the 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

Right. Well,

Mm.

our constituent services team in the twelfth 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, um, the denials are fraudulent or they're because there is an appropriate documentation to show that it's

Uh-huh. 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 uh federal statutory and regulatory requirements in the Medicaid program?

So, CMS is required to ensure that um states and the providers that work with states follow all of the requirements for those programs.

Um, what tools the CMS currently have to insure states are meeting program interity integrity requirements

That is an area yeah,

on oversight?

that is an area where we continue to work with states. Traditionally we've done audits of state um billings, both at the provider level and then we've done financial audits of the state submitted financials which are the CMS sixty-four audits that I referenced earlier. But most importantly we work with states to insure that they're doing things like screening providers appropriately making sure that they're doing their own

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 a hundred percent. So keep up the great work. Thank you.

Thank you.

I yield back.

The gentleman yields. The chair recognizes a gentleman from Oklahoma, Mister Mullen, for his five minutes of questioning.

I am the uh other Mullen, the one from California, proudly.

Did look a little different, so yes.

Thank you thank you, Miss Chair. Uh, thank you Deputy Administrator Brandt uh for appearing. Uh, we all wanna combat fraud, uh, where it exists. Yet CMS's unprecedented action in withholding up to two billion dollars 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. As I understand it, it didn't target specific providers. It didn't target specific claims. Most disturbingly, there's nothing that indicates your agency's put thought toward how those cuts would impact the public itself. So, before it uh moved to withhold up to two billion dollars from Minnesota, did CMS complete any analysis of how many seniors, children, or people with disabilities would lose care if the funding was withheld?

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

And was that an internal analysis by by the department?

Uh, it happens within the financial group, the financial management group within CMS and our Medicaid services.

Okay. And would you be willing to share that information with the committee?

We can follow up uh with the committee.

On January twenty seventh of this year, CMS sent a letter to my home state of California, launching its investigation of Medical, 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. I'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 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. Given how CMS has handled Minnesota's Medic- 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, Ms. Brandt, before CMS issued its January twenty-seventh letter to California, which I have a copy of, did CMS

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 IHSS services that we targeted in the letter, part of our concern was that over a ten year period of time, California had experienced a three hundred and forty percent, thirty eight, three hundred and forty eight percent three hundred and forty-eight percent increase in spending for those services without a correlatively equal rise in the number of people receiving those services, which is what prompted 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.

A hundred percent. 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. The example I gave in my oral of the people in California that we saw in the residential home where they were getting thirty six thousand dollars 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. But that's not what this is really about, I'm afraid. I will continue to stand against these extreme actions that are selectively targeting the states with democratic leadership. My constituencies are better than to have their life-saving health care used as a political pawn with that, I yield back.

The gentleman yields, the chair now recognizes a general lady from Tennessee, Doctor Harshberger, for her five minutes of questioning.

Thank you, Mister Chairman, and thank you for being here today. Um what recourse does CMS have to stop or pause uh suspicious payments, that are attributable uh attributable to fraudulent claims before they're paid.

We actually have a great deal of authority in that regard, and we're exercising it more than ever. In fact,

Yeah.

um, 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

Yeah.

high number of potentially fraudulent entities. Our goal is to suspect spend payments until we can determine that those are legitimate services,

Yeah.

and that's an important tool for us.

There's a huge red flag, huge red flag. So um what authorities does 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 um for inappropriate payments. In fact, um a couple of recent audits we had, we found hundreds of those instances. We go to the state and we point it out to them and they have to recoup it,

Yeah.

either from the providers or pay it back directly.

What are the chances they're gonna recoup any of that money, though? If you've got deceased patients, deceased providers that they are fraudulently billing, how are you gonna recoup that?

Well, that's why we're trying to go to stop and cop versus pay and chase, ma'am.

Yeah.

That's the real focus of that.

Yeah.

We wanna use data analysis and more advanced analytics to really be able to look at that data. Our challenge on the Medicaid side is the data that we have is state Medicaid data, which is often three to four months old and doesn't allow us to be able to see it in real time.

That's exactly right. That's exactly right. Um, how does CM how does CMS coordinate with federal and state partners, including HHS, Office, 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. Um, part of the war room is that we have all those people in the same room,

Yeah.

talking with each other so that we can actually impose a payment suspension on If we see something in the data analysis that day, we can put a stop on immediately,

Yeah.

and then our law enforcement partners can uh possibly even start investigating that day and that's a huge shift from where we used to be.

Yeah. Yeah. I mean, how do you have everybody in the same darn office building? And and filing these claims is just um you know, it g goes to my next question, how's CMS working with law enforcement 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 um that

Yeah.

have infiltrated the country by buying um sham operations. Many 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

Yeah.

foreign national interests and as a result we've been working very

Yeah.

closely with law enforcement to determine oh are those legitimate or not, and then if so to hopefully stop any payments from being made,

Yeah.

'cause once they go out the door they get funneled

Yeah.

back overseas and it's nearly impossible for us to catch them.

Yeah. Yeah, yeah, it's almost impossible to recoup 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. In 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 wanna develop a fifty state playbook by the end

Mm-hmm.

of the year which will highlight a lot of these best patterns.

Yeah. Yeah, you don't have to reinvent the wheel. Just do it right. And you've got states that are doing it right.

Exactly.

Um, let me make sure I've got time. Uh, does CMS have the capability to use its data to flag a uh anomalies such as eighty-nine hospice companies registered to the same in Ben Niles, California. And if CMS has the capability, what actions are taken to determine whether the companies registered in that billing are legitimate businesses?

So we do two things. We do data analysis to watch to see what types of billings are happening for those

Mm-hmm.

entities and then secondly we do on-site visits to determine if they're real.

Yeah. Who's on-site visits? They're pretty revealing.

And the on-site visits are highly intensive and require a lot of resources,

Yeah.

but they pay dividends because what we've seen is where we do them,

Yeah.

we have high rates of

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 fourteen seconds. What Medicare provider and s and supplier categories are experiencing the most fraud today?

Well, it was until January skin subs. That was our biggest area that we had seen a huge growth, but now genetic testing, hospice, home health and DME remain our big four.

Yeah. Yeah, I got that, cuz I get complaints every day about that. So thank you and I yield back.

The general lady yields. votes have been called, we will recess the hearing and reconvene ten minutes after the last vote. The subcommittee stands in recess. Clark? I'll even share my pretzels with you. I'll even share my pretzels with you. The committee will now reconvene. The chair now recognizes the gentleman from New York, Mister Tonko, for his five minutes of questioning.

Thank you, Mister Chair, and thank you, uh, Ranking Member Clark. Um, thank you, Miss Brandt, for, uh, joining here. During his State of the Union address on February twenty-fourth, President Trump announced that Vice President J. D. Vance would be leading the so-called war on fraud. The 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. Since then, the administration has attempted to narrow the Vice President's role. In a March ninth, twenty twenty six filing in federal district court, the Department of Justice stated that, and I quote, " Vice President Vance holds no delegate and 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. On the other hand,

Well, for um the regular fraud efforts are led by Dr. 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's antifraud work?

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

cms has been directly involved in working with the state to advance those actions.

But has Vice President Vance inva been involved in any of the uh 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,

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 assignment? I mean, the, some of these seem like, as you're indicating, they're made by CMS, by Doctor Oz, but so at what point does he enter, and and 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, and as such, our office, as well as all other offices across government, are re-coordinating with him in the new office that he,

So can he challenge any of the decisions made by Doctor Oz? If he's the agent of f- anti-fraud?

Many of our efforts have dated predated when the Vice President was named to that role as he 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 gonna slide over to his assignment?

We will remain committed at CMS to doing health care fraud. The Vice President has been named to head fraud across all government entities and agencies, of which CMS is obviously one of them. We will continue to do our part and our responsibility to safeguard the hundred and seventy million Americans and one point eight trillion in CMS.

Well, does he have involvement then in selecting future states for CMS inquiries or investigations?

CMS will

Well, I've had a number of other questions that I'll get uh to you uh via the c subcommittee, but uh I'm just trying to define his role here. So with that, I yield back, Mister Chair.

The gentleman yields. The chair now recognizes.

Thank you, Mr. Chairman. Miss Brandt, thank you for your testimony today and just the the overall information flow, which is very, very helpful. And it's it's home for me and for Idaho. There was a significant highly visible case in uh the northern part of our state, where there was a uh conviction of a of a physician that was falsely billing, uh, for medical equipment, mainly for durable medical equipment. And as a function of that, uh, just a couple of questions. When Medicare or Medicaid fraud is convicted or a fraudster is 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 the, 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,

I can't speak to the totality of the five years, but I can tell you that each of the last years, um, the Department of Justice with the partners at OIG and then, um, entities like CMS and the FBI have collected billions of dollars and each year the amount gets even greater.

Billions with a B.

So. Billions with a B.

Right, thank you. I'm not sure that's

It's not a good number to have necessarily,

Thank you. I d I don't I don't say thank you in that sense.

but it's better than not having it recovered, but we'd rather not have it.

Right. Yeah, I understand. Uh, let's talk about financial institutions for a second. Do you think that uh um 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 open. that have large dollars associated with them. It 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.

True.

Much like the average person, if they see something, they should say something.

But there there's there's not an obligation, but you you're thinking that that might not be a bad idea to require.

I am 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. Uh, does CMS conduct greater scrutiny on

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 one point eight billion we stopped last year, one point five of it was related to durable medical equipment. In 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.

You notice trends in different demographics, I mean, uh, uh, where you you're you're catching into the to some of these major fraud activities. You need common themes for demographics?

Yes, there are, in fact, um, just again as I I mentioned, I've been doing this now for twenty years through three tours at CMS, and when I started it was wheelchair fraud. Um, 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. Um, more recently we've seen frauds in durable medical equipment involving things like continuous glucose monitors or um 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 uh once again for your input and Mister Chairman I think that does it for me I yield back.

Gentleman yields, the chair now recognizes gentleman from Ohio, Mister Boss.

Thank you, Mister Chairman, um thank you for being here Deputy Administrator, appreciate that. Um Deputy Administrator Brand, are you are provider verification methods such as identify verification, fingerprinting, unannounced site visits, and background checks an effective tool to reduce the enrollment of fraudulent providers?

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. Is CMS using technical tools to improve and streamline provider enrollment?

We are. In fact, as I mentioned in my beginning um 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 and as a result um this allows us to put all the bad actors that we have had that we have taken action against into this algorithm, and then as a new

Thank you. I'll follow up to that if 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

Thank you. Uh, 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 billed for

Mm.

seventeen thousand rides, including one hundred for patients already confirmed dead. In Colorado, a defendant billed one hundred and sixty-five thousand for rides for a beneficiary who had passed. In New York, investigators identified twenty-five transportation companies billing for rides for patients confirmed deceased or hospitalized. What mechanisms does CMS currently have to cross-check active claims against death records, hospital admission records, and incarceration records? before approving payment.

Well, I can speak primarily to the deceased individuals that you referenced, sir, in that we have a data matching agreement with s 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 insure that we aren't paying for dead people, but we aren't paying dead people. And that is what we do on

Okay, thank you. Federal law enforcement has documented a pattern 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

It's a great question and one that we are working to continue to tighten up. Currently there is a three or five year revalidation requirement, meaning that any supplier or provider in the program has to revalidate their credentials on either a three or five year basis, depending on the type of entity they are. If 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 I am 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, many of these entities use shell corporations or shell entities, and even when we cross-reference them, they look like they're legitimate entities. So, under our new Crush RFI, the Comprehensive Regulation for Uncovering Suspicious Healthcare, um, we're asking for comments until March thirtieth 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.

Thank you very much. Well done. Mr. Chairman, I yield back.

The gentleman yields, the chair now recognizes the general lady 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. As 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, um, in the federal government. And 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 sixth of this year the Social Security Administration's Inspector General notified some members of Congress that it's reviewing a whistle-blower complaint related to the potential misuse of Social Security Administration data by a former Doge employee. The Washington Post reported that this investigation stemmed from a whistle-blower complaint that a former Doge 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, I 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 Doge staff is is incredibly alarming. And the fire walls that I've understood to be in place between agencies preventing access to information seem to have come down. So just last month, uh, Doge decided to post a whole database of CMS's Medicaid provider spending without clear guardrails on its use or an explanation of its limitations. And the HHS Doge'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. That The data set has since been pulled down uh with the web site saying now that it's being updated. So Miss Brent, I wanna 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. Were 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. I can say that our team used the same data sets to be able to drive a lot of our program integrity over.

And so in that um process, if you didn't approve the Doge folks' collection or use of this, and it may be true that um you can use data sets, of course, I think we would all agree with that, that data and and having fact-based evidence in 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, um, or why safeguards to 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 gonna happen with their access to this data?

Again, I can't speak to what Doge knows.

Well, and I appreciate that, and that is absolutely essential to your charge.

Yes.

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. And I think you've answered my next question, um, you're not

We are always doing that at CMS.

OK, well, I have used up my time, so I thank you very much for your testimony and, Mister Chairman, I yield back.

General Lady chair uh General Lady yields, the chair now recognizes a gentleman from Georgia, Mister Carter, for his five minutes of questioning.

Thank you, Mister Chairman, and thank you for being here, Deputy Administrator. Um, Miss Brandt, 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, thirty-two years. And I know that um firsthand how important the the dollars spent and making sure that they are appropriately spent to support legitimate care for the patients who truly need it. Unfortunately, we've seen a lot of fraud schemes, and they continue to evolve and they often target areas of a program where reimbursement is higher, 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, but what we've seen has obviously been been out of control, and I applaud the agency for addressing that. But these products do play an important role in 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 ne- medically necessary. Can you answer me this, Medicare 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. 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 sub

It's been pretty obvious, is what you're telling me.

Yeah.

And and and I would agree, it has been.

Correct.

But but again, there's there's we gotta be careful, because it is important. We don't want amputations, particularly in in patients, uh, as we all know, diabetic patients, if get a wound, on a on their lower extremity, that's it's gonna be it's gonna be awful, and and it's gonna result in a lot of times in amputation. But um what kind of countermeasures are is 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, so 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 first, under the new payment rules, we have seen a ninety-nine percent 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 or four times more, what those of your colleagues are?" You should just be aware that we're keeping As a result of those letters that we sent out, we had an over sixty percent rate of people just dropping out immediately, and not billing for skin subs anymore. The remainder stopped billing for everything, stopped billing for skin subs, but kept billing for everything else.

Yeah, and that's great. And I and I applaud you for that. That's what you oughta be doing. That's what we're expecting you to do. D have we had any re results in in in seeing more amputations? I mean, is there any way how are we ever gonna quantify that?

So we have not seen a correlative rise in the number of people that um need or are expecting to receive skin substitute um as a result and as I said once we have changed the payment structure as of January first we have received to my knowledge, no push back from the beneficiary community saying that they don't have access to being able to get that care. We um you know continue to work with and would obviously respond if those um beneficiaries would come forward and could point to us where those problems were occurring, and then we would obviously

Okay. Okay. Well, I know you find it hard to believe, but I got a bill that addresses this.

I am shocked by that, sir.

It is the Skin Substitute Access and Payment Reform Act,

Yeah.

and it would modernize the payment system for skin substitute products. I I'm just worried we swung the pendulum too far. I know it's gotta swing back, but I I I'm just scared we may have swung it too far, and that we're gonna get adverse effects as a result of that. But it um my bill puts an end to runaway prices and inappropriate prescribed by implementing new program integrity reforms and ensuring that patients in 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 wanted to mention also in my practice of pharmacy, I was very involved in hospice care. And I can tell you, I saw the proliferation of hospices as a result of of of over billing and and and, and, and just the the fact that there was a lot of problems in that area, so I appreciate your attention to that as well.

You're welcome.

Thank you.

It needs to be very much focused on. Thank you.

Well, and please understand, I'm not criticizing you on the skin products, I'm just saying we gotta find a happy median there, okay?

We understand.

Okay, thank you.

Thank you so much.

I yield back.

The gentleman yields, the chair now recognizes the general lady from Washington, Doctor Schreier, for five minutes of questioning.

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. Uh, it is an issue that we all want to crack down on. Uh, fraud and abuse hurts patients, hurts honest providers, and of course hurts taxpayers, and this is not a partisan issue. Uh, 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, Mister Chairman, criminals should be prosecuted whether they're in blue states or red states. We 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 other than when it's politically convenient, this administration has actually made it much harder to investigate fraud in Medicare and Medicaid. Uh, just four days into his presidency, President Trump illegally fired seventeen 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

If he was convicted of fraud, yes.

Mm.

He 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. Uh, Philip Esformas, was convicted of stealing one point three billion dollars from Medicare and Medicaid. Does that sound like fraud to you?

Again, if he was convicted.

He was convicted indeed. Uh, well, turns out President Trump commuted his twenty year sentence. And then, uh, a whole group, William Cale, Todd Farhad, Thaddeus, uh, Baraday, Paul Barons and Peter Clay conspired to steal thirty five million dollars from Florida's Medicaid program, and they were convicted. Uh, Ms. Brandt, Does this sound like fraud to you?

Again, um, assuming they were convicted.

And again, uh, President Trump pardoned them. There is a definite pattern here, and so I'm wondering about this pattern, Ms. 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 ab

The question's a little different. What message does it send? This is not a comment about what the president did, cuz 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.

OK, I think everybody listening could draw their own conclusions about what that, what message that

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, and thank you for um making sure that you do that and making sure that you do that in a bipartisan. and crack down on fraud in all states. Um, I just wanna say that when I think about this, uh, this new Inspector General, m- maybe he's doing his job, maybe he's doing it fairly, but I will tell you that as we are hearing about the 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 thirty seconds left, so I'm just gonna mention the WISER program. There's a pilot program that CMS launched earlier this year that essentially, uh, 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 w- am just going to express that AI can be used and dialed up for for good or bad. And I am very concerned about bringing the WISER program into traditional Medicare, because the incentive structure uh will be used to deny care because uh, they're incentivized in terms of uh payment to uh be paid according to how much they save or do not pay out or do not uh 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.

General Lady yields, the chair now recognizes a gentleman from Ohio, Mister Lansman, for five minutes of questioning.

Uh, thank you, Mister Chair, and um I'm gonna ask about something totally different, uh not fraud, uh but I have a constituent and a and a and a f- very close friend uh who has EB and uh he and I have been working on a bill that would ask for a study so that we can get the data back on uh ensuring that everyone who is who has EB, it's a rare disease that affects the skin and you're you you you need a ton of

I was going to ask what it was, because I wasn't familiar with it.

Yeah, I I apologize. Um,

No problem.

it's it's oftentimes referred to as the worst disease you never heard of, it's or the butterfly disease where the skin just does not uh work right. I'm sitting next to a pediatrician, so I've pardon my language. You know, I I or my

Epidermalis escalosa.

Yeah, no, no. Yes, but I but but in terms of

Whispers.

Yeah, the the it 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, uh would uh help families pay for that uh entirely uh because it does redu one, they need it, but two, it reduces infections and hospitalizations and ultimately saves uh Medicaid uh money. Um So CMS's focused a lot this year on waste, fraud and abuse, especially in the wound care space. CMS even removed local coverage determination for skin substitutes to curb high spending. We talked a little bit about that, or you have. A patient like Shane requires the the use of uh very expensive bandages just to keep him comfortable, and has very few alternatives for care, really nothing else. Uh, wound care alone for an EB patient can be millions of dollars per year, making it more difficult for EB patients uh to get the treatment Um, 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 EB patients. Uh, just a couple of questions. One, do you know what the annual cost of these bandages would be for Medicaid to cover an EB patient?

Well, first of all, I'm very sorry for your friend and the challenges he and his family have. Um, I do not know the cost of that, sir, but I would be happy to follow.

That would be, we just, we wanna 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.

Would it be cost saving to provide the wound care needs to these patients rather than pay for the hospitalizations?

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 womb care to EB patients and preventing hospitalizations? I mean, we have the bill, but I'm just curious.

I 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 a hundred and fifty surgeries, I mean he's been through everything and he's battling cancer probably for the last time. Um so this would be really s 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, Best wishes for you and your friend.

Thank you. I go back.

General and 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. Without objection, that is 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 or 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 thirty-first. Without objection, the subcommittee is adjourned.