Full Committee Hearing on Protecting Patients and Taxpayers: Cracking Down on Medicare Fraud

The committee will come to order. When the Medicare program was created, it was intended to provide affordable health insurance to Americans over the age of 65. Medicare was a promise that Americans will be able to get the care that they need when they need it. Now Medicare is one of the largest programs in the federal government, totaling over $1 trillion annually. Medicare is not a handout, it is a benefit earned by Americans who work their whole lives, paid into the system, and played by the rules. We must ensure it is there for them when they need it. That's why the reports of the ongoing theft of healthcare benefits by fraudsters, illegal immigrants, and even transnational criminal organizations that have come to light in recent months are so shocking. Videos by citizen journalists in Gavin Newsom's California show people hiding the dirty conditions of neglected or wholly nonexistent facilities, all while driving away in luxury vehicles and refusing to answer questions. How can it be that these journalists keep finding hospice facilities that appear busy on paper, but in reality are nothing more than an empty office space collecting millions of taxpayer dollars? The answer, of course, is fraud. And the alarm bells are ringing very loud and clear. Open border states led by Democrats like Minnesota, New York, and California are the epicenters, the epicenters of fraud in this country. In Los Angeles County alone, 700 of the 1,800 hospice companies located there have displayed at least one red flag that signals that they may be conducting fraudulent practices. LA County had a 1,500 percent rise in the number of hospice facilities from 2010 to 2022. One building in the county is allegedly the home of 89 different hospices. At one of these scam hospice providers, a social worker wrote about a family's grief after a patient had died. And yet that patient didn't ever exist, and there was no evidence they had ever passed. Why has this occurred? Because California turned off a fraud prevention tool and opened the door for millions to be stolen. But it's not just in California. Healthcare and social services fraud is a nationwide problem. In Minnesota, federal investigators estimate that more than half of roughly $18 billion spent across several public programs have been lost to fraud, either through sham daycare centers linked to the Somali community, pandemic food aid fraud, and government-funded housing services and autism therapy where providers billed for services that were never delivered. In Mayor Zohran Mamdani's New York, fraudulent home health aides are the number one new job in the state by a mile. Millions of taxpayer dollars are being spent on fake adult daycare centers, increasing 100 percent just this year alone. Look at the fraud convictions handed down just last week. A pharmacist in New Jersey was sentenced to prison for bilking Medicare $2.5 million for medication he never used and spent some of the stolen taxpayer funds on luxury vehicles. A Michigan surgeon was sentenced to prison for stealing $7 million in Medicare funds for mental health services that were never provided. In Miami, foreign nationals from Cuba are fraudulently billing Medicare millions of dollars for durable medical equipment that was never delivered to beneficiaries using their stolen information. And sadly, that's just one instance of the 24 percent of the DME dollars that is improperly paid, including fraud. For many Americans, including one of our witnesses today, healthcare fraud has serious health consequences. Victims with legitimate healthcare claims seek treatment only to find out that they are unable to use their benefits because every, every single dollar was already stolen. Leaving Medicare fraud unaddressed risks that health and safety of more seniors. Every single year Medicare loses roughly $60 billion to fraud, waste, and abuse. That's $858 per beneficiary that could be helping to shore up the program's finances or improve benefits. That is staggering. Democrat governors in states have let these and other fraud schemes fester and even encouraged them for years. When the truth about the systemic fraud came out, they questioned why it was their states that were under investigation. The real question is why Democrat governors like Gavin Newsom and Tim Walz allowed Medicare beneficiaries to become easy targets for fraudsters for so long. The Trump administration, on the other hand, has made fighting fraud a top priority. Taxpayer money is being recovered, fraudsters are being stopped, and criminals are going to jail. President Trump's 2025 National Healthcare Fraud Takedown saved taxpayers nearly $15 billion and charged more than 300 bad actors with criminal crimes. To date, Dr. Oz and CMS have shut down 450 hospices with none of those companies asking why, why their payment stopped arriving. Why? Because they were all fake. We are holding this hearing because the American people are demanding answers about the theft of their tax dollars and their Medicare benefits. To the fraudsters, your time operating in the dark is way over. You will be held responsible and we will restore the promise of Medicare and what rightfully belongs to the American taxpayer. I'm pleased to now recognize Mr. Doggett of Texas to provide his opening statement.

Thank you, Mr. Chairman. I think a hearing on fraud before this committee is years overdue. Tough talk is just not a substitute for an effective congressional response and effective enforcement. I want to thank particularly those witnesses who are here today who have been working to detect and report fraud themselves. Your efforts are all the more important because of how little the Trump regime and this Congress has done to prevent fraud, instead so often coddling the criminals. Following last week's pitiful performance by Secretary Kennedy with his complete inability to answer any of my questions concerning his reinstatement of 850 agents and brokers who had been suspended by the Biden administration for suspected fraud, I once again renewed immediately my written request to CMS Administrator Dr. Oz requesting an overdue answer to my December inquiry about his soft-on-fraud approach, a request that, of course, has once again been met with silence. They either don't know or they don't want to say. Both Secretary Kennedy and Mr. Oz, Dr. Oz are unable to confirm whether these brokers were ever investigated at all or monitored after their sudden reinstatement. Let me be clear about the significance of this lack of accountability. On December 3, the Government Accountability Office responded to a joint request from Chairman Smith and Budget Chairman Arrington. They declared when they got that report that it was a smoking gun with much the same rhetoric that you've just heard. That it showed extensive fraud in the Affordable Care marketplace, so much fraud that they claimed they were well justified in terminating premium tax credits, credits that have cost, the lack of them have cost millions of Americans their access to a family physician. Yet the fraud, if you read the report, was not committed by some mother desperate to get care for her sick child. No, all the fraud was perpetrated by the agents and brokers who illegally enrolled people into health coverage without their knowledge. And this committee is yet to do anything about it or even have a hearing on it. It seems to have adopted the same permissive attitude toward healthcare fraud that it has so consistently displayed with regard to tax fraud. Meanwhile, President Trump continues his soft-on-crime approach toward fraud for the wealthy and the powerful. He has pardoned more fraudsters than any president in American history, allowing the criminals to walk free and denying their victims millions of dollars in restitution. The chair has refused to address that issue, but also the issue of Medicare fraud. Since March 28 of 2023, repeated again that year, in 2024, last year in 2025, I have sought a hearing on Medicare fraud and suggested specific approaches to address it, some of which our witnesses will be raising today. And after these requests, the committee, I'm pleased, is showing some interest in this. After Mr. Musk and DOGE initiative last year failed so miserably in tackling fraud, ultimately it has now been submitted to Vice President Vance. Previously the Trump administration has pardoned these healthcare criminals, fired the taxpayer watchdogs at each of the relevant agencies who detect and prevent fraud, dismissed a number of employees at CMS responsible for policing fraud, and cut essential programs that millions of Americans rely upon. Outrageously, when anti-fraud provisions and proposals run up against some special interest that have a generous lobbyist, the anti-fraud provisions are ignored and consumers and taxpayers pay as a result of it. There are reasonable solutions to stop fraud. Instead of hiring AI companies to add prior authorization requirements to traditional Medicare as has been done in a demonstration project that will only delay and deny care, let's use the technology to detect when the same Social Security number is fraudulently used to enroll someone into 125 different healthcare plans as GAO exposed in that December report. Let's ensure that CMS has the full scope of authority to prevent fraud and actually uses its authority. One modest example is the legislation that I introduced back in 2023 and have been unable to get a hearing on that would allow CMS to deactivate national provider identifier numbers for convicted fraudsters so they can't bill Medicare again. Mr. Chairman, that concludes my statement, but I would ask unanimous consent to place a number of important records into into our record, a number of important documents. The first of these is a new report out today, The Real Fraud: Trump Pardoned the Nation's Biggest Healthcare Fraudsters, and I would ask unanimous consent to make it part of the record.

Without objection.

And then I have your press release concerning the GAO report in December, the Smoking Gun press release. I would ask unanimous consent to place your press release in the record.

Without objection. Thank you for doing something I don't have to do now.

Okay. And then there are the letters that I sent to Dr. Oz two days after your smoking gun asking him questions, extensive questions, but easy to answer questions about the source of this fraud, the agents and brokers, and the letter that I sent him last week after Secretary Kennedy said he hoped something had been done about this but couldn't answer any of the questions. I would ask those two letters go into the record.

Without objection. If you have other things entered, just ask for them to be entered and I'll do it.

I'll just summarize them, my letters to you of March 28, 23, May 31, 23, February 8, 24, and March 4, 25, asking for a hearing on Medicare fraud and mentioning specific solutions.

Without objection, your time has expired.

Thank you.

Thank you, Mr. Doggett. I will now introduce our witnesses. We have Dr. Lynn Ianni is a Medicare beneficiary and Medicare fraud victim. We have Ms. Sheila Clark is the president and CEO of California Hospice and Care Association. We have Mr. David Klebonis is the chief operating officer at Palm Beach ACO. And we have Mr. Christopher Deery is the director of corporate and financial investigations at Independence Blue Cross. And we have Ms. Christy Martin is the principal at Highway 136 Consulting. I want to thank you all for joining us today. Your written statements will be made part of the hearing record and you each have five minutes to deliver remarks. Dr. Ianni, you may begin when you're ready. The statements will be made part of the hearing record and you each have five minutes to deliver remarks. Dr. Ianni, you may begin when you're ready.

Thank you, Chairman Smith, Ranking Member Neal, and distinguished members of the committee, I appreciate the opportunity to speak with you today. My name is Dr. Lynn Ianni, I am a licensed psychotherapist with nearly Thank you, Chairman Smith, Ranking Member Neal, and distinguished members of the committee. I appreciate the opportunity to speak with you today. My name is Dr. Lynn Ianni. I am a licensed psychotherapist with nearly 40 years of clinical experience specializing in trauma-informed care. Over the course of my career, I have worked with individuals, couples, and families across a wide range of settings. I come before you today not only as a clinician, but as a Medicare beneficiary and a victim of fraud. In early 2024, I suffered a shoulder injury while playing pickleball and was referred by my primary care provider to physical therapy. I began treatment twice a week and initially everything proceeded as expected. My provider billed Medicare and my supplemental insurance and payments were processed without issue. But in July, at what was supposed to be my final appointment, everything changed. I was called to the front desk and told that Medicare had denied my claim. The reason? According to their records, I was enrolled in hospice care. At first we laughed. It seemed like an obvious clerical error, surely something that could be quickly corrected. But that assumption could not have been more wrong. That day we called Medicare. It seemed what should have been a simple fix turned into an hours-long call ending only with the suggestion that I file an appeal. My provider did so as well. And then, silence. Weeks turned into months. I called Medicare repeatedly, often waiting on hold for hours, only to be told over and over again that no one could access my appeal, track its status, or provide any timeline for resolution. I received no acknowledgment that my appeal had even been received. Meanwhile, my complaints continued to be denied. My provider understandably needed to be paid. One Medicare agent even suggested I seek private legal counsel, warning me that the appeals process could take a year or two with no guarantee of resolution. At the same time, I was required to continue paying my Medicare premiums or risk losing coverage entirely and permanently. And perhaps most alarming of all, I was locked out of receiving any medical care because I had been falsely classified as a hospice patient. Imagine being told in effect that you are at the end of your life when you are not and then being denied access to care because of that error. It was not just frustrating, it was terrifying. Desperate for answers, I began investigating on my own. A Medicare representative gave me the name of a hospice where I was supposedly enrolled. I looked it up. It appeared legitimate on the surface, listed on Medicare's own website with an NPI number, a named CEO, and an address. But the address led to what looked like a strip mall. The phone number went unanswered. As a clinician myself, I checked the NPI number of the physician listed with the hospice. I contacted his office. They were shocked. He was a surgeon in Santa Monica and had no connection whatsoever to this hospice. His identity had been used without his knowledge. Despite uncovering clear evidence of fraud, again, nothing changed. It wasn't until I found an advocacy organization by chance that I was connected to California's Senior Medicare Patrol. I shared my documentation with them and after six months I finally received a new Medicare card in the mail. No explanation, no acknowledgment, just a quiet correction. Eventually and thankfully, Medicare paid my provider and removed the fraudulent hospice election designation. I was fortunate. I had the training, persistence, and resources to keep pushing, but many others do not, and that is why I came today. This is not just my story, it is evidence of a systemic failure, one that allows fraud to occur, has been preventing timely correction, and leaves vulnerable people without care, without answers, and without protection. The system designed to safeguard our health instead created fear, confusion, and harm. I urge you to consider what this experience would be like for someone older, unwell, or less able to advocate for themselves. How many people are currently trapped in similar situations without the means to escape them? You have the authority to address and remedy this. Please, strengthen fraud detection, improve responsiveness within the appeals process, ensure accountability, and most importantly, make the system navigable for the people it is meant to serve. Medicare is not just a program, it is a lifeline. It must function with integrity, efficiency, and compassion. Please work together. Thank you for listening to my story. I urge you to act, not just for me, but for the countless others who depend on you to protect their care, their dignity, and their lives. Thank you.

Thank you, Mr. Deery.

Chairman Smith, Ranking Member Neal, members of the committee, thank you for the opportunity to appear here before you today. My name is Chris Deery, I serve as a director

Thank you. Ms. Clark.

Thank you, Chairman Smith, Congressman Doggett, and members of the committee for the opportunity to be here today. My name is Sheila Clark. I serve as president and chief executive officer of CHAPCA, the California Hospice and Palliative Care Association. We represent more than 250 hospices and home health providers in more than 2,000 clinicians. My central message today is this: hospice and home health fraud is not merely billing problems. They are beneficiary protection failures. Fraud exposes beneficiaries to exploitation, can deny them access to appropriate care, and undermines trust in the Medicare program. When scammers are allowed to enter the system, remain in the system, and corrupt it, beneficiaries and taxpayers everywhere pay the price. In hospice, fraud can mean enrolling someone without informed consent, misrepresenting what hospice is, or billing for services that were never, ever provided. In home health, it can mean billing that is completely disconnected from clinical reality and cycling beneficiary numbers through networks of sham entities. A single claim may not look suspicious in an isolation, but when you follow the beneficiary over time, that picture changes. You see the admissions, you see the discharges, the attending physician networks, the cycling across fraudulent networks of billing entities disguised as hospice and home health providers. Following the beneficiary's journey reveals the fraud. The problem grew because protective regulatory and oversight structures failed at every stage. They failed at licensure, they failed at certification and accreditation, they failed in enrollment in Medicare, and in oversight when a beneficiary complains and that did not trigger timely intervention. California is the clearest case study. In Los Angeles, home health payments reached $1.7 billion in 2024, about double the 2018 level. The number of agencies billing Medicare in LA grew from 655 to 1,800. In hospice, total payments nearly tripled while the number of hospices billing Medicare grew from 460 to 1,356. These are not normal market growth trends tied to beneficiary growth. They are warning signs of a systemic failure that has national consequences. And when California imposed a moratorium on new hospice licensure, the fraud did not stop. It shifted into home health licensure. In 2025 alone, 310 home health agencies enrolled in Medicare in LA County. Let me be clear, this is not organic growth. It is fraud displaced from one Medicare benefit to another. CMS must take aggressive action to shut down the criminal fraud networks, but enforcement alone is not enough if payment policy continues to rely on a fraud-saturated claims data. And when legitimate providers are caught up in enforcement actions, there must be clear and timely process to correct the record. Program integrity requires decisive action and fairness. There is also one point that is often overlooked when targeting fraudulent hospices. One of the clearest indicators of fraud in hospice is not live discharges. It is little to no deaths. Sophisticated criminal networks can manipulate many traditional fraud indicators, but they can easily hide from the fact that hospice serves people at end of life. The expected outcome is death. That's why the beneficiary-level claims data analysis matters so much. So let me close with two recommendations. First, create a federal pathway to unwind fraudulent hospice elections so beneficiaries are not left trapped in the system, unable to get the care that they need. Second, ensure that fraud-saturated claims data is not used to shape federal payment in hospice and in home health. It is polluted. Beneficiaries and legitimate hospice and home health providers should not pay the price for fraud they did not commit. I want to acknowledge the committee's work on hospice reform, including more frequent surveys of newly enrolled hospices, withholding payment from hospices that fail to submit required quality data, and the proposed at-home respite benefit. These are important beneficiary-centered reforms, but they will only succeed if they only rest on oversight and data that is not polluted and distorted. Thank you and I look forward to your questions.

Thank you, Mr. Klebonis.

Chairman Smith, Ranking Member Neal, and members of the committee, thank you for the opportunity to testify today in this hearing addressing fraud in Medicare. My name is David Klebonis. I'm here representing Palm Beach Accountable Care Organization in West Palm Beach, Florida. We are a leading organization in fraud submission. We provide independent physicians with tools, support services, and incentives to thrive without giving up control of their practice. We partner with over 15,000 clinicians across 30 states to coordinate for more than 825,000 beneficiaries. We are one of the largest organizations of our type in the country. I'm also a member of the National Association of ACOs and participate in Medicare's Health Care Fraud Prevention Program. Thank you for that. The Medicare Shared Savings Program has strengthened both quality and cost accountability across the country. It has aligned incentives for primary care providers and improved outcomes for Medicare beneficiaries. However, recent gaps in program integrity, particularly related to fraud in certain payment policies, have begun to erode stakeholder trust. In one case, I publicly shared a single beneficiary associated with over $9.8 million of Medicare paid claims for anonymous billing. This was not a life-threatening clinical treatment, but rather a vulnerability in payment policy. High-risk areas like DME also reveal a clear pattern of abuse. Newly formed companies, often within the last 12 to 24 months, bill a narrow set of high-reimbursement items at massive volume with little clinical justification, and then they just disappear. When claims are checked against medical records, they often don't match, billing for supplies or equipment that patients don't need and they don't qualify, or they were never prescribed by a legitimate provider. At the same time, primary care providers are facing compliance security for relatively small utilization patterns like office visits and annual wellness visits. So you have $9.8 million claims that go unscathed and then physicians receiving scrutiny for office visits. That can't happen. The government is losing credibility at a tenor that I've never seen before in my career. As stated earlier, I'm representing Palm Beach ACO. I'll say it plainly: I ride the coattails of objectively the best physicians in the country. Our ACO has generated over $936 million in savings for Medicare since inception. That is the most in all states, all years, the most in the country ever. This is a clear example of when public policy and the private sector execution work together effectively. The government does a little and we do a lot. Our physicians have also taken an active role in identifying fraud to law enforcement. This includes submitting over $122 million in Part B claims that were suspected of fraud. This includes submitting 48,000 billed and paid CPT codes of fraud across 289 entities. And we also submitted 1,705 signed beneficiary attestations. That's a lot of signatures. And despite all of this, our providers were still held accountable for nearly $112 million in fraudulent DME expenditures. After all those submissions, less than 18 percent of the reported fraud was reversed or removed from ACO expenditures. And this is before we talk about other waste and abuse in the system. I've had to look over a dozen physicians in the eyes and say that they are not receiving any shared savings this year. And it wasn't because of their performance, it wasn't because of things out of their control, it wasn't even things that actually happened. It was because of fraudulent claims that were billed and paid by Medicare. That's a really difficult message and one that undermines the confidence of the system. We have supported law enforcement, submitted detailed reports, and engaged national media because credibility matters to our physicians and to the Medicare beneficiaries that we serve. We ask for your partnership. First, strengthen payment safeguards. This administration can be a watchdog for the American people and ensure that virtually no sham company is able to bill and be paid by Medicare. No paper-only company should be paid by Medicare. Second, protect ACOs from the impact of fraud outside of their control. We should not have reduced shared savings or shared losses because of fraud that we're tracking, reporting, and trying to stop. We would rather operate within a system defined by accuracy and accountability. On behalf of our 15,000 affiliated providers, we must regain and preserve the trust in the program. We've done our part and we stand ready to support you in doing yours. Thank you, I look forward to answering your questions.

Thank you, Mr. Deery.

Chairman Smith, Ranking Member Neal, members of the committee, thank you for the opportunity to appear here before you today. My name is Chris Deery. I serve as the Director of Financial Investigations at Independence Blue Cross, a mission-driven health plan serving nearly three million members, including approximately 175,000 Medicare Advantage and Medicare supplement benefits in the Philadelphia region. As a health plan deeply embedded in our community, we see firsthand the impact of health care fraud, particularly when it infiltrates critical benefits like hospice and home health services. Fraud in these spaces divert resources away from legitimate providers, inflate system-wide costs, and most importantly, exposes vulnerable patients to inappropriate unnecessary care. At Independence, I lead a multidisciplinary team of investigators, analysts, and auditors responsible for protecting patients and safeguarding health care dollars across both the commercial and Medicare markets. Our work focuses on the identification, investigation, prevention, and reporting of fraud, waste, and abuse, and includes several core functions. We analyze claims data on a daily basis, leveraging machine learning and other data analytic techniques, as well as payment dashboards to identify and flag suspicious patterns as they emerge. Our team proactively contacts providers, members, and other stakeholders to validate billed services and confirm the clinical appropriateness of them before improper payments escalate. In addition, we perform fieldwork when appropriate and consistent with regulatory requirements to confirm the legitimacy of addresses associated with enrollees and providers. We work in ongoing partnership with federal, state, and local law enforcement to share intelligence, support investigations, and strengthen enforcement efforts. We also require annual fraud, waste, and abuse training for all employees and key partners to ensure early detection and consistent reporting across the organization. Today, our investigations at times uncover coordinated networks involving providers, marketers, and patient recruiters operating through multiple entities to obscure ownership and evade oversight. In many fraud schemes, patients are treated as nothing more than a vehicle for generating improper claims rather than individuals receiving medically necessary care. Members are often unaware that services are being billed in their names or that they were never clinically appropriate candidates in the first place. Increasingly, they are targeted through deceptive telemarketing and social media campaigns, which have only accelerated through the use of artificial intelligence. Their insurance information and their medical information have become some of the most valuable data available for sale on the dark web. The Department of Justice's Operation Goldrush indictments announced last summer confirm what many of us in the industry had been sensing for years. The scale, complexity, and velocity of modern health care fraud far exceeds anything seen before. Our health care system has become a routine target for transnational criminal networks seeking large and fast returns. These networks are exploiting a simple reality: the structure of fee-for-service Medicare system makes it inherently vulnerable to fraud. While CMS and its contractors do important work and have made significant strides in recent years, payments in the traditional medical space largely mirror the pay-and-chase model that pays the claim first and recovers the payment later, if ever. While payers like Independence Blue Cross have invested heavily in advanced analytics, provider monitoring, and clinical validation, we continue to face structural barriers and data sharing remains constrained by regulatory and operational limitations that can slow the timely exchange of actionable information. From our experience, meaningful progress in the traditional Medicare program would be supported by three key actions. One, shifting to proactive monitoring for fraud detection. Earlier and smarter intervention, including enhanced pre-payment review and real-time utilization monitoring, is needed, especially in the highest levels of fraud. Better coordination among payers at all levels of government. Stronger coordination is needed across CMS, state agencies, private payers, and law enforcement, especially in sharing actionable intelligence on emerging schemes. Public-private efforts such as the Health Care Fraud Prevention Partnership should be strengthened to ensure that actionable information can be shared responsibly as soon as possible. Participation in organizations like the National Health Care Anti-Fraud Association is essential with all stakeholders. We also recommend enhanced oversight in the National Provider Identification System, as many of these schemes exploit that system. Protecting our members and safeguarding our health care dollars, particularly in hospice and home health care, is not about limiting access. It is about ensuring program integrity so that these vital services remain available, trusted, and effective for the patients who truly need them. Thank you for your leadership on this issue, and I look forward to your questions and continued collaboration.

Thank you, Ms. Martin.

Chairman Smith, Ranking Member Neal, and members of the committee, thank you for the opportunity to testify today on fraud, waste, and abuse in Medicare and on how we can better protect both beneficiaries and taxpayers. My name is Christy Martin and I am here on my personal capacity and the views I express today are my own. I spent more than a decade working in the federal government, including several years at the Centers for Medicare and Medicaid Services. Most recently, I served as the chief of staff to the director of the Center for Medicare. Our mission was straightforward: serve Medicare beneficiaries, be responsible stewards of taxpayer dollars, and ensure the long-term sustainability of the Medicare program. Nearly 70 million Americans rely on Medicare, and it accounts for one-fifth of all Medicare spending. Because of its size and importance, it is essential that Medicare is well-designed, carefully administered, and protected from wasteful spending, fraud, and abuse. During my tenure at Medicare, one of our central priorities was lowering prescription drug costs. The Inflation Reduction Act made historical progress toward the goal. We lowered the cost of out-of-patient out-of-pocket drug costs for Medicare beneficiaries. In addition, we made significant progress toward redesigning the Medicare benefit to align incentives for plan sponsors to manage their drug costs. And most importantly, the law created the inflation rebate program and gave Medicare the authority to negotiate prices of prescription drugs. Together, these reforms are delivering results. Inflation rebates have generated billions in payments to Medicare when manufacturers have raised drug prices faster than inflation. Drug price negotiations have produced nearly 19 billion in savings in just two years. The law addressed structural flaws that once encouraged higher prices and excessive spending. However, even with these reforms, there is more work needed to address wasteful spending. Pharmacy benefit managers or PBMs remain a critical and unresolved source of waste and opacity in Medicare. PBMs sit in the center of prescription drug supply chain, negotiating prices and rebates, designing formularies, and setting pharmacy reimbursement. The PBM market has become highly concentrated and vertically integrated with Medicare Advantage insurers and the pharmacies. This integration has allowed profits to be shifted within corporate families in ways that undermine Medicare safeguards. Payments from a plan to its affiliated pharmacy or affiliated PBM count as medical spending under the Medicare's medical loss ratio rules, and even when those prices are inflated. As a result, plans can appear compliant with MLR requirements while shifting profits elsewhere, weakening one of Medicare's core protections against excessive spending. PBM practices have also raised concerns about patient access and competition. Reports suggest independent pharmacies have been reported steering out of networks and reimbursed below cost, contributing to pharmacy closures, particularly in rural and underserved communities. Another area of serious concern for this committee to consider is the administration's use of confidential most favored nation agreements and the Trump RX initiative. In 2025, the administration announced agreements with drug manufacturers claiming significant savings and using international reference pricing for Americans on drug pricing. Yet these agreements themselves have never been released. To date, there is no public evidence that these agreements have lowered drug prices or reduced spending for patients or taxpayers. The only information we have is what drug manufacturers have disclosed through press releases, earnings calls, and SEC filings. On the most recent earnings calls, many state that these agreements will not have a material effect on their revenues. That should alone raise red flags in the stated purpose to lower drug prices. These concerns are only magnified by the implementation of Trump RX. Trump RX was announced as a platform that would deliver massive and immediate savings, but when it launched earlier this year, it offered a small number of drugs. Today, it still only covers a small fraction of the drugs people use the most. Many Trump RX prices are higher than prices that are already available in the U.S. market and often higher than those that are paid in other countries. In some cases, introductory discounts are followed by sharp price increases. Taken together, this creates a serious risk of misleading the consumers. And finally, the lack of transparency around the back end operations of Trump RX combined with reported connections to private pharmacy platforms raises concerns about conflicts of interest and compliance with federal law. In closing, the MFN agreements and Trump RX rely on confidential arrangements, lack of transparency and have not demonstrated clear benefits for patients or taxpayers. I would encourage Congress to look to focus on expanding policies that do work, extending negotiated Medicare drug prices to the commercial market and the uninsured, allowing Medicare to negotiate unaffordable drugs sooner and applying inflation price protections to the commercial market. I urge this committee today to demand transparency, exercise strong oversight and build on proven reforms that lower drug costs, protect beneficiaries and safeguard taxpayer dollars. Thank you again for the opportunity to testify and I look forward to your questions and working with you on these critical issues.

Thank you. We will now proceed to the question and answer session. The Medicare program loses $60 billion annually to fraud, waste and abuse. But the American taxpayer isn't the only one that's harmed in the process. Innocent beneficiaries are used and manipulated by bad actors and in many cases are denied legitimate medical services because the fraud scheme depleted their allowable coverage. Dr. Ianni, I can only imagine the shock and frustration and confusion that you and others have had to suffer at the hands of fraudsters. It's a complete shame that the prior administration was asleep at the wheel and allowed such fraud to occur. What is your message? What is your message for policy makers in Sacramento and in Washington, D.C. who ignored victims of health care fraud for way too long?

Sorry. My message is simply because you here have the capacity and the ability, I would like to entrust you with the responsibility as well to take action by working together to solve this problem. I think it's really easy to find blame in so many places when there's a situation that works like this. But if we rise above the level of the problem to the level of the solution and work together, I believe you can make a difference, which is why I was hoping to make some small difference today by sharing my story with you.

It's perfect. Home health and hospice fraud accounts for 10 percent of Medicare improper payments. In Los Angeles County alone, there is an estimated $3.5 billion worth of hospice fraud. Ways and Means Republicans have been sounding the alarm for years and in 2023 and 2024, Republicans on this committee questioned Biden's HHS Secretary Xavier Becerra about rampant hospice fraud in California. That was in 23 and 24. Ms. Clark, clearly the issue is not new and you have been on the forefront for years. Did you flag this fraud with California officials and the previous administration?

Yes, we've been flagging this since 2019 with our state lawmakers, Senate, Assembly, Department of Public Health, Department of Health Care Services. In 2024, September 24, we had two high level officials down into our state for two days and showed them everything that we were seeing. And they also met with the Department of Public Health, the Department of Health Care Services.

So President Trump and Dr. Oz are not letting this to persist. They have shut down 450 different hospices in L.A. alone and are holding states accountable. How do these anti-fraud actions allow you and your legitimate hospice providers to focus on improving patient care and quality of life during their final days?

How I can explain this is that our providers since this all started, they have it's their normal. They had to work within the fraudulent scammers, right? These people that were taking advantage. And what we've been able to do now with we see the enforcement and that we see action being taken, we have hope that they're going to get these scammers out because if we don't, we are rebuilding California home health and hospice. If we don't do that, it will collapse. They have taken over L.A. County and are proliferated through the rest of the state. We need to act. They have taken over LA County and are proliferated through the rest of the state. We need to act.

Hopefully Governor Newsom is listening and can learn a thing or two from the Trump administration on how to seriously address the issue. Last week, HHS Secretary Kennedy testified in this committee to how the Trump administration has turned the page on the Biden administration's pay and chase model of combating fraud, basically paying fraudsters and then hoping to catch them later to one that stops fraudulent payments from going out the door in the first place. Mr. Deery, can you describe the technology private insurers are deploying to stop fraud in real time and how can Congress improve coordination between Medicare and private insurance to combat fraud while not harming patients in need of legitimate care?

Congressman, thanks for your question. Technology is a multiplier in this space and there are amazing tools out there that allow us to look at these larger data sets in meaningful ways to make sure we're much more effectively and efficiently looking at the data through tools like machine learning and other things like data visualization to get us as close to the point of payment as possible and in theory, pre-payment would be the best before the dollar goes out the door. So there are incredible technologies out there, but the truth is we're not going to technology our way out of this problem. At the end of the day, we need people that are educated that can look at that data to make sure that AI is making us more effective and efficient, but that we have a human at the helm to look at it, to analyze it and to make decisions. In reality, we also need buy in from our beneficiaries and members because at the end of the day, in many cases, we need to go to them and we need to question if they actually received services before we can actually take action. So I think there's legs to this. The technology's fantastic. We want to make sure we're always in a place the technology is making us more efficient and effective and not being the decision maker. But there's also a very human element to this to make sure that care is being delivered that's appropriate and actually is being delivered.

During last week's hearing, HHS Secretary Kennedy also commented that there are more durable medical equipment suppliers operating in South Florida than there are McDonald's restaurants. What is worse, nearly one in every four Medicare payments to these DME suppliers are improper. Mr. Klebonis, fraud, waste and abuse harms patients and medical providers leading the way with value based care. In your testimony, you say that fraud directly diverts resources away from patient care, which cuts access to medical services, especially in rural areas. Can you tell us more about the burden this puts on patients and providers like you who work on the front lines to report fraud when you see it?

Yes, Chairman. We have a whole department that works on fraud detection, documentation and submitting. If we prevent $100,000 worth of fraud, that is the same resources that we could use to prevent six or seven readmissions. It would sadden the American people to know that we're working on paper initiatives rather than life saving initiatives.

Thank you. I'll now recognize Mr. Doggett for questions. Thank you so much. Let's review each of these troubling areas of fraud that our witnesses have described, beginning with the matter of the alarming hospice fraud. Two years ago, the Inspector General from Health and Human Services, two years ago this month, came to this committee and briefed us on this problem and the need for additional resources to address it. Other than perhaps asking some questions, I can't find that the committee has done anything in response to that report. We have had hundreds of fraudulent hospice programs registered at the same address. We've had the cases of the kind of experiences that Ms. Ianni, that you had, of consumers enrolled in hospice without their consent. And this program of the Inspector General was initiated under President Biden. The Inspector General in fact had an amazing record in this area and others at Health and Human Services, having about a 10 to one return on investment for her work and saving taxpayers almost $10 billion during fiscal year 2024. The very effort that Dr. Oz is now bragging about is the effort that that Inspector General began and it is the result of course of her good work and the work of other Inspector Generals of course, as you know, is that she was fired by President Trump. The same story applies to the skin substitute fraud that has been raised today. After a March 2023 Inspector General report by the fired Inspector General and the work of ACOs like the one represented by Mr. Klebonis, they identified a 2024 bill to Medicare for $10 billion worth of bandages. And the Biden administration proposed a number of payment reforms that went through rulemaking, adopted new rules, but after receiving a $2 million campaign contribution from one of these bandage companies, what did President Trump do? He postponed the rule for one year instead of addressing the fraud in a timely way and using the tools that he had been given by the Biden administration. Mr. Klebonis, is it correct that your association estimates that during 2025 about $16 billion was spent by Medicare on skin substitutes?

Yes, Congressman.

And so basically the taxpayers could have lost up to $16 billion as the price for President Trump satisfying and appeasing one of his campaign donors. Let's turn then to durable medical equipment on which I offered legislation three years ago to try to address some of the problem in this area. And let me ask you about it, Mr. Deery. The National Provider Identifier number. I read a report back in December 22 by Kaiser Health News and was alarmed to find that the Medicare fraud that they could not in Medicare do anything about this problem once someone had maybe even been convicted of Medicare fraud. I authored the Medicare Fraud Detection and Deterrence Act to allow CMS to deactivate these provider identifier numbers for any provider that was convicted of waste, fraud and abuse and to have that person added to the wrongdoer list that the Inspector General maintains to be excluded from Medicare. Remarkably, these NPIs are not deactivated following conviction, and Kaiser identified instances where Medicare continued to be defrauded. Mr. Deery, do you agree that CMS should have the authority to deactivate National Provider Identifier numbers for these convicted fraudsters?

Makes sense to me.

Thank you. Well, it makes sense to Kaiser in its objective report, to me, but apparently it hasn't made sense to this committee. Even without that additional tool, the Biden administration on its own initiative made a number of payment reforms and suspended some DME suppliers suspected of fraud from the Medicare program. Meanwhile, Republicans took credit for Justice Department prosecutions that were years in the making and relied on the HHS Inspector General that President Trump fired. At the same time that Trump hands out these get out of jail free cards to healthcare criminals and denies victims millions in restitution, he's been firing the cops, not only that Inspector General at HHS, but in all 17 independent Inspectors General, and specifically as it relates to Medicare, has also fired 200 staff members at CMS who are the very people that were responsible for fighting fraud in the ACA marketplace. For all of our witnesses, if I could just get a simple yes or no question, do you agree that convicted healthcare fraudsters should be held accountable and pay any court-ordered restitution? Dr. Ianni?

Yes, absolutely.

Ms. Clark?

Yes, absolutely.

Yes, I do.

Yes.

Yes, I agree.

Do you agree that CMS is ultimately responsible for detecting and preventing fraud and that it needs sufficient staffing and an Inspector General to fulfill its anti-fraud responsibilities?

Yes, I do.

Yes, I do.

Yes.

So I'd say CMS is definitely part of the solution, and I think we would encourage that all entities that are, we would advocate that all entities that are attempting to address fraud are funded at appropriate levels.

Yes, CMS, OIG, and DOJ should be appropriately staffed and funded.

Your time has expired, Mr. Doggett. Mr. Buchanan is recognized.

I want to thank the Chairman and thank our witnesses. It's always shocking to me, I've been on the committee for 15, 16 years and the top of my, I look back, is what the money that we're spending, deficits and debt. And just as you probably most of you know, we're spending 5 trillion, we're taking in seven, or we're spending 7 trillion, we're taking in 5 trillion. Two trillion of that is healthcare. When you add on healthcare in general, it's up to 4 trillion or $5 trillion. Not billions, but trillions. And I just want to get a better sense of your thoughts and ideas about how do we get this start getting this under control a little bit better. I know it's we're not going to resolve it in a few minutes, but the bottom line, Ms. Clark, I'd like to better understand it's so massive. I thought some of these other areas are bad, but it's so over the top, it's unbelievable that we've allowed it to get to that point, you know, from a state and federal level. And what else can you add to the conversation? I mean, there's I'm sure there's a lot of things that we could do that would make it start making a big difference.

Thank you for your question. We need better enforcement on entry. We need better enforcement at licensure at the state level. We need it at the certification, the accreditation agencies. We're not going to convict our way out of this. We have to stop them from entering the system.

Mr. Klebonis, being from Florida myself and you're in Florida, why have you had, it seems like, appears like, pretty good success where a lot of the other ones are struggling, there's a lot of fraud in your specialty and other things? Give us a thought about what you the difference that you're making that's making having a positive impact.

Yes, Congressman. I wish I could take more credit, but we really rely on the expertise and boots on the ground reinforcement from our physicians. More than you and I, they actually know the treatments that patients require and they know when treatments look out of line, and they're really the lifeblood to make these submissions and fight fraud. So it's really the physicians that have given us an advantage.

Mr. Deery, you mentioned you're with Blue Cross, did you say, or?

Yes, Congressman, Independence Blue Cross out of Philadelphia.

Okay. Well, how are other Blue Cross doing in general compared to what you guys are doing there?

So I'd say the entire Blue Cross Association...

I mean, do they have the same focus and intensity as you guys appear to have?

We do, and we work in a very collaborative way, right? So we come together and share information, and not just within the Blue Cross system. Collaboration is the key in this, right? So collaboration between government entities, between commercial insurers, Medicare insurers. There are vehicles which we do that, the National Anti-Fraud Association is a great public partnership that we can share information back and forth. There's also the National Fraud Prevention Partnership, which is a codified government entity that attempts to do that as well. So collaboration is the key, right? So when I find out about something in Philadelphia that may or may not affect others, we need to communicate that in a responsible, ethical way, whether it be at the scheme level or specific to a specific...

Do you work with Florida Blue Cross?

I do.

Okay. Because a lot of conversations are going there, or you spend much time with that relationship?

So I work for Independence Blue Cross and yes, it is a focus of what we do on a daily basis. Fraud has our attention. It's not a shrinking issue, it's a growing issue.

Thank you, and I yield back.

Mr. Thompson.

Thank you, Mr. Chairman, and thank you for having this hearing. I think this is an important matter and it's something that we should devote a lot of our time to. And thank you to all the witnesses for being here. I don't think I'm the only one on this dais who believes that fraud is wrong. I think we would all agree on that. And we know it's against the law. This isn't some, you know, bureaucratic misstep, it's against the law. The people who do this are breaking the law. And I know there's been a lot of focus on what's happening right now in California, and I think there was some discussion about Minnesota. But here's the deal. There's fraudsters in all 50 states. All 50 states, people are breaking the law when it comes to fraud and other things as well. And we should be doing everything we can to ferret out the fraud, to find those responsible, to prosecute them, and if they're convicted, they need to be held accountable. In other words, to the fullest extent of the law. Not only are they making people's lives miserable, not only in this instance causing people to not get healthcare services that they need, but they're ripping off the American taxpayer. And this should be something that everyone of us on this dais should be holding hands and jumping for joy to go after. It shouldn't be focusing on just the blue states or just the red states, we should be focusing on people who are committing fraud. And we should figure out what we need to do to make sure that we catch them and we put them in jail and we get back the money that they stole from the American people. And that's something that would, I think, go a long way in establishing some good bipartisan credit that we really want to, we want to help folks. And the, and I just don't think you can focus on what's happening right now in California and then not suggest that there's some liability from the federal government, from this administration, when they fire all the Inspectors General. And this has been going on for a while. I've got a letter, Mr. Chairman, I'd like to invite everybody to sign on to it. I sent it on 10/23/25 to then Attorney General Bondi, asking her about the enforcement actions related to waste, fraud, and abuse that have been alleged by the administration. And all we heard is waste, fraud, and abuse this, waste, fraud, and abuse that. I just asked what's happening with the Attorney General? Are they looking into this? Have they found any? Have they prosecuted anybody? Please send me the information. And there's nothing. I think everybody on the committee should join and try to get to the bottom of that. We should also look at why the Inspectors General have all been fired. That seems to me to be a starting place if you want to find out where the waste, fraud, and abuse is, we ought to have the Inspectors General to be able to go through and point this out. And it's been mentioned before in this hearing and others of all the fraudsters that this President has commuted their sentence or pardoned them. And the ones that I have, like Philip Esformes, is a Florida guy, not a California guy. Salomon Melgen, Florida guy, 17 years prison sentence, he ripped $42 million in taxpayer money away from the taxpayers. He got pardoned. A billion three for Esformes, and John Davis was convicted of Medicare fraud and a kickback scheme, 70 million bucks, and also excused from his wrongdoing. That's wrong, and we should be focusing in. I have a question for Dr. Ianni, I hope I get that right. Did they catch the criminal ring or the person who defrauded, who used your information to defraud taxpayers?

Well, that's an interesting question. I actually found out who the NPI belonged to of that fraudulent association and I did that investigation independently. Well, that's an interesting question. I actually found out who the NPI belonged to of that fraudulent association, and I did that investigation independently once Medicare gave me the name of it. So I was able to contact the person whose NPI was also taken, and he removed himself. Subsequently, someone else picked that up. That organization was still operational when I did the first interview about what had happened to me a month or so ago.

And these people should be caught, they should be put in jail, they should be forced to give the money back. In the part of the rural California that I'm from, we call these sons of bitches, and they ought to be put behind bars. And Mr. Chairman, I'd like to submit this information for the record. There's indication of the Inspector Generals that were fired, and here's a list of the fraudsters that have been excused from their criminal liability. Thank you.

Without objection. Thank you all very much. Mr. Smith.

I definitely think people who are being fraudulent and hurting other people accordingly should be punished or there should be consequences established that not only deal with removing them from the system but also reestablishing some kind of benefit for the benefit

Thank you, Mr. Chairman. Certainly thank you to our witnesses here today. I appreciate the fact that there seems to be agreement across the dais that we've got a problem here on our hands. As a family member who has appreciated the services of a hospice program previously, it breaks my heart that others would exploit such a valuable service to families and individuals. And that it seems obvious that there's a glaring problem here, so I'm glad that we are able to hopefully move forward here on preventing fraud rather than, as was mentioned before, rather than paying fraudsters and then trying to chase them down later. But certainly the numbers are compelling. $60 billion per year, I mean, it seems staggering to describe it at least that way. We know there are various programs across healthcare that we've got duplication. I'd like to know if a plan provider knows that there's duplication and intentionally enrolls even knowing that that is a duplicate enrollment, sounds to me like there's some opportunity to prevent some of that as well. And certainly, Dr. Ianni, really appreciate your being here today and demonstrating the damages that are done to you as an individual, seeing the resources that are utilized, yours personally, but the entire system as a whole. And so I am glad that, like I said, that you're here today and that we can move forward in moving to prevent the fraud from occurring. I want to take a little closer look perhaps at the Accountable Care Organizations. We know they're a little bit different than others, and I'm just wondering, Mr. Klebonis, could you talk a little bit more about how the fraud affects ACOs and then the incentives that an ACO has for actually mitigating the fraud?

Yes. Accountable Care Organizations are held accountable for fraudulent payments. It comes out of performance payments, and if it exceeds a certain threshold, Accountable Care Organizations have to pay losses. And we're very thankful to the data that's shared with ACOs, and the way that we fight fraud is we share that data with physicians who are the boots on the ground, and then they are able to address anomalies, and we're able to efficiently submit that and cooperate with law enforcement to be successful.

Okay, I appreciate that. Mr. Deery, from your perspective, what can Congress do to discourage Medicare fraud through actual program design or incentive realignment?

Thank you for the question, Congressman. I think there's two key elements you need to commit Medicare fraud. You need an NPI number to do it, and you need beneficiary information to bill for services that aren't rendered. As much as we can do to protect those two pieces of information, I think that's the key to really attacking a lot of this. Looking into what do we do when an NPI is transferred from ownership to ownership? How difficult should it be when an NPI is actually obtained? And then the Medicare beneficiary information, like I said, is among the hottest information in terms of value for sale on the dark web. We've got to find out a better way to protect it, and that might be a technological solution at some point, some way to protect it so that it's not as available to folks who want to do harm with it.

You touched again on technology and the actual role, but that human intervention is still necessary. I'm intrigued, do you think we're utilizing currently available technology enough to try to track down and or prevent the fraud?

I would say we've come a long way as an industry, and the government entities have come a long way. The folks that we are fighting are not tied to the same regulatory and frankly moral compass that we are in using that technology, so they are ahead of the game in terms of how they use it against us. We need to be smarter in how we use it, but it provides an incredible opportunity to more efficiently and effectively identify credible allegations of fraud at the point of payment or before the point of payment, so that a human can then intervene and use that information more effectively to address a lot of what we're talking about here today.

I appreciate that. Might there be any private sector examples or models that we could look more closely at to pattern some prevention efforts?

I think there's opportunity in areas like data visualization. So each day I go in and look at a data dashboard to see where every dollar in my organization went the previous day. Given the government's a much larger scale, I get that, but the opportunity to see that $100,000 went to a provider that we've never heard of before in an area that has been identified by Health and Human Services as a high-risk area gets our attention on day one, and we're able to address it in a much more meaningful way. I would think opportunities like that, also machine learning has some interesting opportunities where you can take providers that you've had issues with in the past, feed it into the data to show you other providers that meet that similar profile. Once again, we're not using that as a decision point, but it's an effective way to look at patterns to then allow a human to look at it and investigate it as the professionals on both the government and the civilian side are very capable of doing.

Thank you, I yield back.

Thank you. Now recognize Mr. Larson from Connecticut for five minutes.

Thank you, Mr. Chairman. And again, I want to thank the committee for having this hearing and especially our witnesses, because I think you speak truth to power. Are any of you familiar with Representative Sánchez's Hospice Care Act?

Yes, I am.

What do you think of that?

Well, as I said in my opening statement, I think that it's a step in the right direction.

Do you think it deserves a hearing?

Yes, I do.

Do you think that there should be open discussion? I know, Ms. Ianni, you, is it Ianni or Ianni or neither?

It starts like with an I, but it's actually pronounced like a Y, so it's Yanni.

Yanni, okay. Well, Dr. Yanni, what you said before earlier is essential, that fraud, as and I associate myself with the remarks of Mr. Thompson, isn't Democrat or Republican or independent. It's something that's going on in all 50 states, and no one on this dais, Democrat or Republican, should tolerate fraud, and I don't believe they do. And yet, we only have selective hearings. How many of you are familiar with a resolution of inquiry? It's a tool that the minority has to bring forward people under oath to testify before the committee. Last week, we just voted in the House of Representatives to suspend that and not have that anymore, because on this side of the aisle, we've been calling for people to come forward. How many are you familiar with DOGE? Should DOGE be in all of our agencies unvetted and have unlimited access to people's Medicare and Social Security records? Yes or no? Should they, Mr. Deery?

Congressman, I'm not familiar enough with that.

Okay, that's understandable, that's fair. Yes?

I'm not familiar enough.

I am familiar with it, and I believe in some cases it can have a positive outcome.

And when they're caught by their own administration, by the Judicial Department, and called out by whistleblowers, should they come before this committee and testify under oath?

Yes.

Yes. Do you agree with that, Dr. Yanni?

I'm not familiar with it enough to comment.

Every American should, it's been on the books since 1789, but was recently suspended to prevent us from bringing witnesses before here. I don't know what there is to hide. If someone's done wrong, it just wrongdoing doesn't happen only in California and Minneapolis. Wrongdoing, as Mr. Thompson said, is happening all across the country, and not just in Medicare. In Social Security that has over 330 million people, is it okay that DOGE should go in and have access to those records and then place them in an insecure cloud? How dangerous is that, Mr. Deery, that the private they could sell these to private sector individuals, all the information and data on every single American individual? Or let me ask this one instead. Do you think it would be essential to have them come before us and testify what they've done? Mr. Deery?

Congressman, I'm not familiar with what they've done. I would just say safeguarding medical information is a priority at Independence, and I would hope it is across everyone that maintains it.

Mr. Klebonis?

I would say that common sense analytics and common sense access should be a priority.

Should they come before us and testify?

I think sharing information would be important to this committee, yes.

Ms. Clark?

I think information should be protected, absolutely. And I believe in transparency.

Right. All of you do. And so I think in order to move forward, I think the my takeaway from this hearing is that we don't need to have a hearing and say that with the conclusion that Joe Biden is at fault for everything. What we need is more information and data, and what we need to do is expose the fraudsters, and what we need to do is have a direct vote. We can't have that if we won't even take up if we do away with resolutions of inquiry that make people come and testify under oath, and without having bills that address the very issues that you're bringing forward like Ms. Sánchez's bill that never get heard. What's up with that? I yield back.

Thank you, Mr. Larson. Now I recognize Mr. Kelly from Pennsylvania for five minutes.

Thank you, Chairman, and thank you all for being here today. I've said this many times and I really do believe it, I don't think anybody should be in an elected office unless they've actually worked in the private sector and worked in commission only and lost their job at least once through no fault of their own. This is the worst run business that anybody could possibly imagine. In all these things we're talking about, the Biden administration, Trump administration, we're going to go back and forth about whose fault it is for not having any oversight. So if anybody sitting here in the dais today or who sits in the House with us today could look and say, okay, I'm tell you what, it depends who's sitting in the big seat and that's who we're going to go after. So Medicare loses $60 billion annually to waste, fraud, and abuse. We keep going over this waste, fraud, and abuse, waste, fraud, and abuse. This is the only business in the world that there's no penalty for waste, fraud, and abuse. I'm an automobile dealer. We have something similar to Medicare and Medicaid, it's called warranty. In our dealership, people from General Motors, Toyota, Hyundai, Kia, they come in every month to look at repair orders that were warranty claims for which we did the work, we put the parts on, but the manufacturer paid us back to do that work. When these people come into your dealership to look at these things, if they find that you didn't do the work that you put on there or you didn't put the parts on, you're in danger of losing your franchise. This is the only place in the world I know you can do things that are wrong all the time and depending on who's in what seat, you know, it just depends whose bull's getting gored as to whether we get excited about it or not. This has been going on for so long, it's almost like, yeah, well, you know, you've just got to expect that, you know, and only an outfit that's $39 trillion in the red would accept that type of a principle. You all came here today, you left your private lives to come here. I'm fascinated sometimes by the questions that go back and forth. So who's to blame? All of us. All of us. This isn't something that just started with the Biden administration or the Trump administration, whether you start with the first Trump administration or the second Trump administration. I wish politicians would quit being politicians and start being people who actually look at things of who's, who's really getting hurt in this and these are taxpayers. These are taxpayers. $39 trillion debt and we're looking at a system that has so much fraud in it and it's like, yeah, but you've got to understand it's not just blue states, it's also some of those red states. Let's just face this, this whole program is so fraught, there's so much fraud in it. So I just ask each of you, Dr. Ianni, starting with you, what do you think we should be doing today? I know it's nice to have a hearing and to stand up here and hopefully some, some newspaper will get a hold of your, some little bit of news or you can stand on the front steps of the Capitol and say, if it's up to me, I'm going to stop it. I've been here since 2011, I haven't seen us do anything to stop it. So Dr. Ianni, starting with you, you're in the business, tell us, what should we be doing and who should be held accountable and when they are held accountable, should they actually be held accountable?

I definitely think people who are being fraudulent and hurting other people accordingly should be punished or there should be consequences established that not only deal with removing them from the system but also reestablishing some kind of benefit for the beneficiaries that have been harmed on a financial level potentially. Beyond that, I think a really important step in the process might be to shore up the boards that are governing the NPIs and allow them to take action much more readily in the context of being able to withdraw that NPI number as being valid so it won't ever go into a situation where somebody's being defrauded. Lastly, I think if they allowed themselves to connect the dots between the front portion of Medicare, the part that we deal with as beneficiaries and the back office, that would be very beneficial and probably easy to accomplish because in every time I spoke to an agent who was very empathic and understanding, they could not give me any information about what was happening, what was the status of my claim, what was going on. So those are small changes on a very sort of minimal level that I hope would make a significant difference. And I agree 100 percent that it has to be a process of no blame, just working together to identify possible solutions that we all can agree on and then create a mechanism to achieve them.

Well, we're going to run out of time but I couldn't agree more with all of you. You know, we talk about about who's responsible for this, the answer is all of us. We're all responsible for it. I can't believe that, well, you couldn't do it in the private sector, right? Nobody could be $39 trillion in the red and feel good about it. I appreciate you all coming in today and what you go through. It must be really difficult to go up and go to work every day and know that your whole day is going to be spent on trying to find out how much fraud is out there and who's actually picking up the tab on it and the answer is hard-working American taxpayers. I think that's the saddest part of all. It's not a Republican problem or Democrat problem, independent or whatever the heck you want to identify us today, but it is the American taxpayer that's funding all of this fraud and it is absolutely criminal that we've allowed it to go on this long and say, well, if we get in office, we're going to fix it and you know in maybe slightly less than a year right now, we could have a complete change of what goes on up here and all of a sudden what was important then is no longer important now, but we'll get to it sometime. This getting to it is absolutely disastrous and in the private sector, it means you go out of business. I don't know of anybody should be sitting in this dais and being comfortable with the direction the United States of America is going and the fraud that's taking place and it's responsible, we're held responsible by the people who actually fund it all and that's taxpayers. Thanks so much.

Thank you, Mr. Kelly. Now I recognize Mr. Davis from Illinois for five minutes.

Thank you, thank you, Mr. Chairman. And I too want to thank all of our witnesses for coming and sharing your experiences and your expertise with us. Ms. Martin, let me ask you, would you agree that a significant driver of fraud in Medicare and Medicaid is what I call the pay-and-chase model? That is where claims are paid before improper payments are identified and recovered.

Yes.

And so if one believes in that and if one trusts the effectiveness of that, let me ask, I've always been told that an ounce of prevention is worth more than a pound of cure and is more impactful. Are there specific policies, operational or technical, that you would recommend for strengthening program integrity and preventing fraud before it occurs or providing even an incentive or some type incentive for those who would perpetrate it not to do it?

Yeah, thank you for that question. So when I was at CMS, we started to in 2022 look at to revitalize the program integrity program and move from a pay-and-chase model to a stop-and-verify model, which Mr. Deery alluded to earlier, where we were actually starting to use analytics to identify patterns in the data so that we could start to prevent fraud, waste, and abuse from happening. So I think moving more to that model, using data analytics to try to address the issues and then working also with private sector to do that so that we can get ahead of the fraud instead of being behind it.

I get a lot of cases where either clinics, individuals, physicians get charged and of course it's always, oh, it's frustrating to sometimes know and see what occurs. And so is there any educational approaches perhaps that could be used as part of the prevention method or prevention approach to trying to just help prevent it from ever taking place?

Yeah, when we were at working at CMS under Administrator Brooks-LaSure, we were actually working with our Office of Communications and most of those people have actually been fired from the agency or have left the agency recently on communications and media campaigns to help them identify when their information has been stolen or how to prevent their beneficiary information from being stolen. So really trying to help them understand how they can protect that information. We were also working on how to make sure that providers understood on how to identify fraud. So I think there are educational campaigns that can be done. We were doing the part of that while I was at CMS.

Thank you very much. I yield back, Chairman.

Thank you. Now I recognize Mr. Schweikert from Arizona for five minutes.

Thank you, acting chairman. Members, I'm sorry but, you know, we're having a hearing here on things that we've all talked about for years. Okay, here's the Wall Street Journal report, remember it was a five-part series. This is from 2024 and the headline should insurers pocket $50 billion for rating someone in MA with diseases they don't have. And there's some great stories in here of, you know, the woman diagnosed with blood clots and things that she didn't have. But, but this goes so much further. If you care about hospice fraud, within those articles they were talking about the dumping in hospice. Here is the California hospice licensing overview, which actually talked about these very problems. The problem is this is from 2021 data and it's a 2022 report that have been sitting on my desk. I'm really glad we're finally getting around to this. CMS to take action to address benefit integrity in hospice care, except the problem is this is a 2023 report and article. You know, 447 hospices, okay, $600 million fraud, okay, great. It was actually an AI, a data program that discovered this one. Here are the MedPAC reports that basically will tell you that Medicare Advantage Part C has almost $2 trillion and for everyone, particularly the lobbyists sitting in the back, CBO's model on Medicare over the next seven years, it goes from $1 trillion to $2 trillion in spend and the trust fund is empty in about six years and four months, meaning everyone that gets money from the Medicare Part A trust fund gets a 12 percent cut. The wheels are falling off, people, and we're engaging in, you know, we've introduced legislation from my office written by the Joint Economic healthcare economists, you know, I have two guys with PhDs and one a healthcare statistician, we've worked on this. Our preliminary CBO score is $1 trillion, 840 billion over 10 years in savings. I can't get a single other member of Congress to sponsor the bill because it has the word Medicare on it. And some of us vehemently disagree with each other. We actually believe there's data models that would identify the fraud. It's not a building full of auditors. It's not a building full of lawyers. We've already seen our greatest success so far have been data scientists identifying patterns. You know, you need actually to revolutionize the way we code and have licensing coding and those things because it's exploited. Patients' information, well, we already see it in the, in the reports and data and our own research. You can't have this disease and then not have the treatment for it. I beg of you, how do I get my brothers and sisters, you in the industry at the Medicaid level, the Medicare level, the things we see in VA, the things we see up and down the healthcare stack, when we're being told repeatedly there's trillions of fraud in a system that this year's going to spend a trillion dollars, in seven years it's going to spend $2 trillion. It's the biggest fraud in world society. And yet a month or so ago we brought in some of the healthcare CEOs and the discussion were things that ultimately are rounding errors. And I know I'm just rambling but my intense frustration, I wish you're all wonderful people but it should be a panel of data scientists telling us saying none of these things align. I know you say there needs to be people but the problem is every time we put the people in it goes too slow and the pay-and-chase model has to come to an end because, you know, Justice Department has how many criminal, not civil, criminal investigations going on for years from the last administration to this administration and we're never going to collect back a dime. It's time we develop a model that's database that the money never, ever, ever, ever, ever goes out the door. And so we can stop having hearings so we can tell each other how wonderful we are about how we're going to go after waste and fraud and then we never enact the bills that do it. Yield back.

Thank you. I now recognize Ms. Sánchez from California for five minutes.

Thank you, Mr. Chairman. I want to thank our witnesses for being here and testifying today. By quick show of hands, very quickly, how many of you think that Medicare fraud only happens in blue states? Let the record reflect that nobody raised their hand. And how many of you by show of hands think that it happens in every state? Let the record reflect that everybody agrees it happens in all states. There are many unscrupulous actors all over the United States and in Texas is one example. The HHS OIG found that a hospice executive was guilty of falsely enrolling Alzheimer's and dementia payments, telling them that they had mere months to live. Now end of life care is very personal to me because I was a caregiver for both my father and mother who died from Alzheimer's, and it's unfortunately one of the most common diagnoses for patients who have elected the hospice benefit. And I can tell you that the hospice benefit is a critical support not just for the patient but for their caregivers who have a huge burden. But that benefit needs to be updated because over the past 10 years public trust in that benefit has eroded. Currently hospices are paid for each day of care whether actual care is even provided. Now a few weeks ago, and we've been talking about let's do some solutions, I introduced the Hospice Care Act and that legislation cleans up rampant fraud in the industry and reforms the payment system and enhances the benefit for families and their loved ones. Ms. Clark mentioned in her testimony that California's beneficiary notification letter has been effective and that seems like a pretty simple solution to me. Dr. Ianni, who has personal experience with this, what state are you from, Doctor?

The experience happened in California.

And would it have been helpful if you had received a notice from CMS notifying you that you were enrolled in hospice care?

Absolutely.

Excellent. I'm glad to hear that because my bill requires the Secretary to provide notice of the hospice election within 15 days. Now that one policy change isn't going to save the entire industry, but it's one of many reforms included in the Hospice Care Act. And there are many other reforms that Ms. Clark noted that I was excited to see that I actually agree with. Things like temporary enrollment moratoria, enhanced and more intensive screening of new hospices, increased survey frequency for flagged hospices. Ms. Clark, you weighed in on the Hospice Care Act last Congress when Mr. Blumenauer introduced it, isn't that right?

I did to his office specifically, yes.

And do you think there's anything in the legislation that is politically divisive?

No, I do not.

Thank you. You know, my Republican colleagues and I disagree on a lot, but I have often found that there is usually consensus and agreement in issues of healthcare and this issue should be no exception. Medicare fraud is not a red state versus blue state issue. It is a very troubling issue for all of our constituents. That's why when I redrafted the Hospice Care Act, I reached out multiple times to Republicans to work to try to find a path forward. But rather than working across the aisle to legislate on an issue that we both agree is a very pressing issue, it seems like Republicans are only using fraud as another political football. I hope that my colleagues on the other side of the aisle will see the need to move forward on the Hospice Care Act so instead of just bellowing about waste, fraud, and abuse, we have a chance to actually implement policies to combat fraud. And with that I yield back the balance of my time.

Thank you. I now recognize Mr. LaHood from Illinois for five minutes.

Thank you, Mr. Chairman. I want to thank our witnesses for your valuable testimony today for this hearing. As we all know, the title of today's hearing is Protecting Patients and Taxpayers: Cracking Down on Medicare Fraud. And as was alluded to in opening statements, Medicare is obviously one of the highest contributors to federal spending, serving 68 million Americans. We must ensure that every dollar spent in this program goes towards the needs of patients. And I have been a long-time supporter of what we call accountable care organizations, ACOs, and that was alluded to a little earlier and many of my colleagues up here on the dais too. These are of course groups of medical providers that assume risk to treat patients and since 2021 ACOs have generated $6.5 billion in net savings for Medicare while providing high-quality, well-coordinated and cost-effective comprehensive care. And I and many others view value-based care as a commitment to providing healthcare that is not only effective for the patient but also sustainable in the long term. Mr. Klebonis, as you know, ACOs operate on a performance-based system. I'm curious, would you say that the risk-based performance models of ACOs motivate them to detect fraud more aggressively than traditional fee-for-service providers who might not have the same financial consequences?

Yes, Congressman. In 2022 our ACO was affected by fraud. Our revenue went down 26 percent. We took that very seriously. As a result we had to lay off staff, we had to discontinue programs, and we had to realign resources to prevent future fraud. So absolutely as a downside risk organization, we take fraud very seriously.

And I'm curious your opinion on how CMS can better utilize ACOs as frontline fraud detection partners and if you have suggestions on that and what specific authorities would improve your ability to act on suspicious billing in real time?

Currently we submitted $109 million of suspected fraud and only 18 percent was acted on. This committee has an opportunity to prioritize submissions from ACOs as well as give additional prepayment authorizations to organizations like yours so we can better prevent fraud.

And I'm curious whether anybody else has can answer that same question on suggestions on how CMS can better utilize ACOs? Mr. Deery?

I would just say at Independence we're very supportive of the value-based model.

Thank you. Ms. Clark?

I'm not familiar enough with the process with ACOs.

Gotcha. And our last witness over there, Doctor?

I'm not familiar with the process either.

Gotcha. And Mr. Klebonis, as we look at legislation here in Congress, I just want to mention I've introduced a bipartisan bill, the Preserving Patient Access to Accountable Care Act, which provides 3.5 percent incentive payment for ACOs and freezes the qualifying thresholds increase. Are you familiar with that or that proposed legislation?

Yes, Congressman.

Okay. Any comment on that incentive payment model?

That incentive attracts significantly more providers to value-based care than absent that measure. When that incentive was discontinued, we saw hundreds of physicians leave the program because they felt like it wasn't for them. And so the proposal that incentive literally will attract cardiologists, nephrologists, hospitalists to the cause that wouldn't otherwise participate.

Thank you. I yield back, Mr. Chairman.

Thank you. I now recognize Mr. Neal from Massachusetts for five minutes.

Thank you and I want to thank our witnesses today for this helpful dialogue. So let me disabuse all in the room today of the following. I'm not aware of anybody here who's for fraud. I think that's pretty safe assumption. Do we need unanimous consent on that or is that just the basic notion that we can all adhere to? So having said that, I've watched over a long career where frequently the term waste, fraud, and abuse becomes a veneer for cutting spending. So if we disagree with something, we say that it's fraudulent. Well, we do have a Justice Department where the President has mistakenly noted and believed that the Attorney General of the United States is his personal attorney. But we do have a U.S. Attorney's offices for the purposes that you have described here today correctly and that's going after fraud. We're all for getting rid of fraud. But I've not heard one word from our colleagues and friends on the other side about the ability to pardon individuals who are found guilty of Medicare fraud, $205 million in one case, $38 million in another, 50-year prison sentence, pardoned. And the silence is deafening. So let me suggest that I can speak for the Democratic side here, we're against fraud. We want the Justice Department to pursue fraud. It subtracts from the benefit in Medicare that is earned over the course of a career as is the case with Medicaid. So we had Secretary Kennedy last week, we discussed fraud with him, we want it to be a bipartisan issue for sure, aggressively and assertively to root out fraud. But the President is handing out these pardons to people who have been found guilty of fraud. What does that say to the next individual who might be designing a fraudulent scheme that they might well be pardoned down the road despite the abuse? Ms. Martin, do you think that fraudsters who are ripping off Medicare should be pardoned because they have connections to the White House?

No, not at all.

Thank you. So let me proceed with that. Over the past few months, the President has announced a number of deals with prescription drug companies where he claimed huge price reductions, in some cases claiming the deals will reduce prices by 1,500 percent. Congress to this moment has never gotten a copy of any of these deals or agreements. We have gotten press releases. Ms. Martin, you're an expert on prescription drug policy, please tell me what's the result of these deals and have drug prices been lowered across the board under this administration?

No, not at all.

So it seems to me that what we're doing here is a bit of a sham as it relates to consumers and Americans are being told the costs are being lowered. The patients aren't seeing that. These deals, like a lot else of what has been done, it's much more with the press release frequently throughout the day as it relates to these issues. So let me give our other members on both sides an opportunity to talk about fraud as they describe it and know it. We are against fraud. That's what the Justice Department is for. That's what the U.S. Attorney's offices are for. The notion that it's all about waste, fraud, and abuse is, again, a superficial suggestion. When candidates are frequently asked on the campaign trail, where would you cut? They always rally to waste, fraud, and abuse. It's an easy but superficial slogan. Generally doesn't have much merit to it. The examination comes based upon what we're doing here today. Democrats on the committee safely can say, and my Republican colleagues safely can say, we're against fraud. What to do about it does not include offering pardons to people who have fraudulently secured enormous benefits from Medicare in particular. Yield back my time.

Thank you. And now I recognize myself for five minutes. Thank you for all our witnesses for being here today. You know, the sheer scale of fraud within traditional Medicare is staggering. Every year, Medicare loses roughly $60 billion to waste, fraud, and abuse, a magnitude of complete theft that is completely unacceptable to the hardworking taxpayers of South Central Kansas. And as part of this fraud happening, we need to make sure that it gets prosecuted and those found guilty are punished for that. It's not just a financial issue. It's a critical patient safety issue. As mentioned by several of our panelists earlier, across the country, sham operations are unknowingly trapping non-terminal individuals in hospice care. Sometimes accounting for 97 percent of an organization's patients, preventing them from receiving the life-saving treatments that they actually need, as Ms. Ianni mentioned in her particular case. Or excuse me, Dr. Ianni. Furthermore, in the Fourth District, where our rural and community health providers have faced immense financial strain, we absolutely cannot afford to let criminal enterprises divert a single dollar away from legitimate institutions fighting to keep Kansans healthy and alive. What is particularly frustrating is that we are still relying on an antiquated pay-and-chase model. If Kansas businesses operated with this level of vulnerability, they would not survive. We must abandon this reactive approach and pivot towards serious process improvements and modernized data structure to stop this fraud proactively. While I commend the Trump administration for establishing a task force to eliminate fraud and successfully take down transnational criminal organizations, Congress must ensure CMS is fundamentally fixing its vulnerabilities on the front end. Ms. Clark, Medicare fraud is not a new problem. As mentioned previously, you know, Congress has passed several anti-fraud laws over the past three decades, but fraudulent losses continue to climb. Can you describe some of the gaps in oversight or loopholes in the Medicare program, particularly hospice and home health, that allow this fraud to persist?

We need to have better data analytics. And as I mentioned in my opening testimony, they're looking at it from a provider perspective. Your hospice that Dr. Lynn was enrolled in. And if you would have looked at it from a different lens and went down to the beneficiary level and you track it that way, you see a much different picture and how these beneficiaries are trafficked from hospice to hospice to home health on multiple, multiple benefit periods. I'm not sure somebody mentioned this where you see a beneficiary who is on hospice and the diagnosis is congestive heart failure, but they've never had any claims or services for that. So we have to change the way that we're looking at it through the data. And that's what we've been able to do.

So, you know, as you mentioned, I mean, the federal government collects enormous amounts of Medicare claims data, but a lot of times critics argue that CMS data systems are fragmented and outdated, limiting the ability to spot fraud patterns, whether it's looking through a provider lens versus a recipient, a patient lens. And that gets spread across different geographies and patients. I don't know if anybody else wants to chime in on the current state of CMS data and the infrastructure and issues that they've seen in their particular work that they're doing. Mr. Klebonis?

I'd like to make a comment is right now fraud pays. There are not enough safeguards to prevent sham agencies to become Medicare providers and bill for services. We submitted 289 agencies to law enforcement that didn't provide a single appropriate claim ever. And we need to have appropriate safeguards. You need to have site visits so that sham companies can't be accepted. You need to have beneficiary satisfaction surveys so that it reveals sham companies. You need to have very common sense use of data to catch anomalistic claims. And please, please listen to the ACOs that are cooperating with law enforcement and that are finding these fraudulent agencies.

Well, thank you all for being here today. I mean, you may have hit the nail on the head just with that that phrase is that maybe the title of this hearing as we wrap up is that it is unfortunate that fraud pays and that we need to correct that. Thank you for your time for being here. I now recognize Ms. Sewell from Alabama for five minutes.

Thank you, Mr. Chairman. And I want to thank our witnesses for being here today. You know, the topic of fraud, I think, is both timely and bipartisan. We should all be able to agree that fraud in our healthcare system is unacceptable and must be ferreted out. When bad actors are allowed to steal taxpayer dollars and rip off patients, it undermines the trust in our healthcare system and it takes essential resources away from those who actually need it. Unfortunately, we've seen a double standard in the Trump administration. On the one hand, President Trump and my Republican colleagues are more than happy to point to fraud as a justification to cut over $1 trillion from Medicaid and $500 billion from Medicare in order to give tax cuts for billionaires and to spend money to support ICE agents and to build inhumane detention centers. Yet Republicans remain silent. As Ranking Member Neal said, deafening silence. While Trump has pardoned over 20 people convicted of healthcare fraud. If they were serious about fraud, they would go after the real source and not pardon thousands, I should say dozens, of convicted Medicare, Medicaid fraudsters that have stolen billions of dollars from our taxpayers. You know, this question is really for all of the witnesses today. Can you raise your hand if you oppose President Trump's pardon of individuals convicted of healthcare fraud? I'd like to see with just a simple show of hands. There were two witnesses that did not agree with that statement and I'd like to ask why. Do you support President Trump's pardon of convicted fraudsters? Ms. Clark? a pardon of convicted fraudsters. Ms. Clark.

I don't know. I don't know enough about it.

Well, isn't I think it speaks volumes for the fact that that a citizen that citizens of our own peers sit in judgment and convicted these people from fraud. Does that change your mind, the fact that they were convicted by a jury of their peers?

I think that if you're convicted by a jury of your peers, unfortunately, when it goes to the pardon, I don't have the information to make an informed decision.

Mr. Deery? You did not raise your hand.

Yeah, I'm just not familiar with the cases enough, Congresswoman, to speak to them.

Well, listen, I think that it speaks for itself that they were convicted by a jury of their peers. Not for one count, but for multiple counts of fraud. I hope that my Republican colleagues in Ways and Means would condemn President Trump's decision to pardon healthcare fraudsters because fighting fraud should be bipartisan. Sadly, to my knowledge, none of my Republican colleagues have spoken out against these egregious pardons. Not one of my Republican colleagues spoke out when Trump pardoned Florida nursing home owner Phil Esformes, who was sentenced to 20 years in prison for defrauding taxpayers to the tune of $1.3 trillion. $1.3 billion, to be corrected. At the time, the Justice Department called it the largest single criminal healthcare fraud case ever brought against any one individual. None of my colleagues, my Republican colleagues, were willing to defend Trump's decision to pardon Judith Negron, who ran a mental health company and was convicted of submitting more than $205 million worth of fraudulent claims to Medicare. Judith should be in the middle of serving a 35-year sentence, but instead she is walking free after President Trump granted her clemency during his first term. You know, this is a hearing about healthcare fraud. But for those watching at home, my guess is that they that that you will not hear a peep from my Republican colleagues about President Trump's actions to let fraudsters go free. In fact, no one has done more to encourage healthcare fraud than the man who sits in the Oval Office. To be clear, I am against all fraud. But what my constituents in Alabama will not stand for is using fraud as a justification to strip away essential healthcare. Healthcare that they need, healthcare that they deserve, healthcare that they've worked lifetime for in order to get. It's simply unacceptable, especially while the wealthy and well-connected can funnel money to President Trump and buy pardons. The fact that both parties cannot condemn the blatantly corrupt pardons while we are having a hearing on fraud should alarm every American. I think the American people can see the hypocrisy. And before I yield back my time, I'd like to acknowledge the Ranking Member Neal, who would like to submit something for the record.

Thank you, Ms. Sewell. Mr. Chairman, I'd like to submit for the record my opening statement.

Without objection.

Thank you, Mr. Chairman. To Mr. Arrington's point and I know he feels passionate about this, I think it's worth just spending a little time for listeners who may not be aware of what we're talking about to sort of explain that. And I'll go back to a comment that the ranking member made in regards to slogans like campaign slogans that are easy and he used the word superficial. And I understand the point with that. But what we're talking about here isn't superficial. And in fact, it's not we're not even talking about individuals who deserve benefits through hospice or any of the other program Medicare, any of the programs that we're talking about. We're talking about actual criminals. And someone else had mentioned, I think Mr. Kelly, like in any other setting, what we're talking about here would like blow people's minds. And I think that's why you saw Mr. Arrington so passionate. So I'll just read back a few of the statements that you've all made. You said these are fraudulent agencies that do not look or operate like legitimate providers. They don't maintain websites. They they provide clustering at common addresses, which means they are fake addresses for multiple criminal organizations that at the same address. Large scale criminal fraud, alarming trends, products that are completely unnecessary being paid for multiple large scale instances. 289 companies, not just individuals, but companies that are suspected fraudulent. Dramatic rise in Medicare payments for specific in this case skin substitutes, way beyond what you would expect medically. Massive transnational scheme. Criminal organizations. When we're talking fraud, waste, and abuse, we're not talking about an individual going to the government and asking for a handout that they don't deserve. We're talking about criminal organizations knowing how to essentially infiltrate and game the system in some way to take hundreds of billions of dollars of taxpayer dollars that should be going to people who really need it. That's what we're all talking about, right? And so I think listeners really need to get that perspective that I can tell you I didn't have until I came here and started seeing this. And by the way, we're seeing this across multiple federal programs, not just what we're talking about today. And so I am glad when Democrats on the other side of the aisle today are talking about fraud, but my question would be how would you address it? Because when we looked at SNAP, we saw states, we do something called improper payments where an audit organization or some organization looks at payments that went out from state agencies on federal programs after the fact and it's called improper payments. And we tried to we did put in the one big beautiful bill a provision that said if a state that is who is responsible, the state's responsible to ensure that people are get that get the dollars deserve it and are eligible. And if they're doing that poorly, then they should pay a higher portion of of the SNAP dollars rather than the federal government. So for instance, Alaska had very high improper payments. When we put that in the bill, Democrats didn't join us. They accused us of taking money from taxpayers who or individuals, Americans who really needed it. Couldn't be further from the truth. We tried to do the same thing in Medicaid where some states and this is if I have time I want to talk about states as well because there are huge variances in how states are implement implementing these programs. But some states are doing a very poor job of ensuring that recipients are eligible for Medicaid dollars before the dollars go out. We also think some individuals who are on Medicaid should be working to receive that. When we put those provisions in place that would have prevented fraud, would have provided for more better use of taxpayer dollars to ensure that people really need it, Democrats all they're doing is accusing us of taking money from individuals who need it. Couldn't be further from the truth. So I am glad to hear that today they're talking about fraud. We really should work together and realize that this is a $100 billion problem. They also criticized DOGE now, unfortunately DOGE wasn't a success as as as successful as I hoped it had been, but I think they were successful at pointing out some of the problems that we have. So let's really work together, let's try to let's figure this out. There are a lot of things that we can do before the dollars go out to ensure that the dollars are going to people who truly need it. So Democrats are talking finally about acknowledging that there are instances of fraud and we've always been talking about that. So I really hope that they're sincere about this and that we can work together to really address this. It's a it's a massive issue that would help to ensure taxpayer dollars are spent wisely and the dollars are really going to individuals in need.

Thank you.

I yield back.

Mr. Arrington.

Ms. Martin, you answered the question that the Ranking Member asked you that if somebody's connected to the White House, does that justify a pardon? You said no. Is that correct? Should someone get a pardon if they're connected to the White House? That was a question you were asked and you said no. My question to you is, does that include Hunter Biden, convicted of a felon of multiple felonies and pardoned by his dad as President of the United States? Does that apply to that as well? I just want to make sure we're all being consistent here with our principles.

I didn't say connected to the White House. The question was if they're convicted of fraud.

Raise your hand, excuse me for interrupting, raise your hand if you feel like President Biden pardoning his son convicted of multiple felonies was a bad message to the American people, that he doesn't play by the same rules and that that was a miscarriage of justice across this country to every law-abiding citizen or citizens who've had family members that were administered and received their fair justice. Raise your hand if you think that was an unjust thing to do by the President. So all of y'all thought that was fair and good and right? Wow. I almost want to stop right here and not say anything else. You all thought it was okay for the President of the United States to pardon his son. Where do the people in Plainview, Texas go to get their pardons? By the way, I'm disappointed by pardons on both sides of the political spectrum and both and in many presidents. Let's talk about let's go to fraud for just a minute since that is the topic. I don't want to get too sidetracked. Dr. Ianni, is that how you say it? Do you think it's a fair expectation that people who are legally eligible receive the benefits in these entitlement programs that you would have to be legal legally eligible to receive those benefits?

I'm not familiar with the entitlement programs, so I would...

No, okay. Medicare, Medicaid, SNAP. There are 80 entitlement means-tested entitlements across the federal government. About $1.5 trillion are spent, including with Medicare. Now, separate from Medicare, $1 trillion for Medicare. Do you think it's a fair expectation that the federal government would only pay you if you were legally entitled for to those payments?

I'm not comfortable answering that question. It feels like it's...

This is the problem. I'm just telling you. We can't even agree that that pardoning people who are connected simply because they're connected is is not a fair and just thing on behalf of the American people. And we can't even agree that if you're not legally eligible to receive benefits, that you shouldn't receive the benefits. We don't we can't even get the agreement from our panel of witnesses.

Would the gentleman yield?

Please.

I am in favor of withholding benefits for people who don't deserve them and are fraud are embrace fraudulent behavior.

Well, we wrote the law so that certain people would be entitled to certain benefits and if they're not legally eligible, why would we give them benefits? We just drain the safety nets of their resources to provide for the people who we articulated in law would need them. We identify the vulnerable, the poor, and the needy and and those who would require the safety net, not so that every Tom, Dick, and Harry could get in line and take the moneys away because every dollar they take away who are not eligible are taking away from those who are eligible. Do you think Miss Yanni, I'll just stay with you, I'll take a chance, maybe we get maybe we can have an agreement on this. Do you think people who are in this country illegally should be able to benefit from the taxpayer funded social services programs, Medicare, Medicaid, including Medicare, which is the topic of discussion today?

I'm I'm not comfortable answering that question.

That's why our country is screwed. Let me just tell you, our country is so in trouble because we can't even get the witnesses and I suspect she's a Republican witness, Mr. Chairman. I'm done. I yield the remainder of my time. This is probably the first time I've given you my time back. I have some good points here to make about how fraud is rampant in the COVID era expansion of Obamacare, the enhanced tax credits. And we heard over and over from Democrats, we got to pass this, it's the right thing to do. And we said every watchdog group says there are tens of millions of dollars in fraud. We said I mean, I'm sorry, billions, let me just finish please, Mr. Ranking Member. Billions of dollars in fraud, millions of people, tens of thousands of dead people social security numbers were used to rip the government off and my Democrat friends shut the entire government down on account of not passing what would be making permanent essentially the COVID era extension. There wasn't a single reform to that. And we're talking about there's not a difference between Democrats and Republicans and they're not blue and red states. The proof's in the pudding, man. The proof's in the pudding. I've just got 13 seconds, I've got to you I've got to make this point. Finally, Republicans stood up and said no more. And in the big beautiful bill, we had a trillion dollars of savings because we said if you're not eligible, you're not getting it. If you're here illegally, you're not getting it. And if you're able to work and you're not working, you're not getting it. God bless the folks from the red states who are up here trying to actually steward tax dollars and not let them be fleeced on account of the fraud. I'm embarrassed. I'm embarrassed that we can't get an agreement on baseline expectations for the American people to prevent fraud, Mr. Chairman.

Mr. Smucker. Recognize the ranking member.

Thank you, Mr. Chairman, just for 10 seconds. Let me put on the record, anybody who fraudulently secured pandemic relief dollars should be fully pursued and prosecuted by the Justice Department, period.

Ms. Chu.

Well, I want to start by stating that Democrats have strongly and believed that fraud in Medicare is real, that it is unacceptable, and that we have a responsibility to root it out whenever it occurs. And we have believed this for a long time. Dr. Yanni, thank you for being here and for sharing your story. I'm so sorry for what you went through. I think it's absolutely outrageous that you were wrongly enrolled in hospice and locked out of care, it should never have happened. But what your story shows is how serious these failures can be for patients. Unfortunately, there are far too many cases like this where these failures lead to devastating outcomes. That was a case for Doris Colson. Doris was a retired cardiac nurse who spent her life caring for others. Later in life, she developed Parkinson's disease and was admitted to a nursing home and her medical records were clear. She was not supposed to be given food by mouth because she could choke. But after her nursing home was taken over by a large rapidly expanding chain, things began to deteriorate. And then one day, a nursing assistant found her unresponsive, hanging off the side of her bed, barely breathing. She was rushed to a hospital in a coma and she tragically died a few days later. Her family sued the nursing home and a judge awarded them nearly $19 million in damages. But they have never been able to collect this money because the owner, Joseph Schwartz, had already moved assets, unraveled the business, and left families with nothing. That same owner later admitted to a $39 million fraud scheme where he withheld money from workers and taxpayers and a federal judge sentenced him to three years in prison. But this fraudster only served three months of his sentence. That's because President Trump gave him a full pardon in November of 2025. A woman is dead, a family wins in court but gets nothing. Workers and taxpayers are defrauded and the person responsible walks free. I don't see how anyone could defend that. So Miss Martin, over his two terms, President Trump pardoned at least 70 fraudsters that were convicted, 7-0. How can this administration claim to be serious about cracking down on fraud when it is excusing it at the scale?

I think it's a contradiction. You know, and it's also, it's hard to say you're going to crack down on fraud and hold people accountable and ensure that there's repercussions for those actions when there's no repercussions at all. I also think it erodes public trust as well as hurts the public trust, hurts the trust of those who are pursuing those fraud cases, such as the people at CMS, the people at OIG, and the attorneys at the DOJ that are prosecuting.

Thank you. The, I am against fraud, of course, but I'm also against something as pernicious, which is corruption. The other thing that I'm concerned about is what seems to be a pay-to-play or friends and family attitude in the Trump administration, particularly at the FDA. STAT News is reporting that drug companies are now using their relationships with the Trump administration to influence the FDA approval process. And in fact, now, instead of lobbying FDA scientists, they're actually lobbying the White House. And, and it seems to be influencing these FDA decisions. For instance, the FDA initially declined to review a new flu shot application for Moderna, but reversed course after company lobbyists escalated concerns to the White House. The FDA should be reviewing and approving drugs that come to market based on science, not using the drug approval process to reward supporters. With the new fast-track vouchers, Trump is handing out political favors to those who reward him. Ms. Martin, have you heard about this and what do you think is going on here?

Yes. Congresswoman, I'm very concerned about the political interference with the Food and Drug Administration, with and with the White House and the administration. You know, the Food and Drug Administration has experienced a lot of instability over the last year with the reduction in force, with the shift toward, you know, their losing so much of their leadership. I think they've lost over 75 of their career political leadership. I think that's indicative of the agency just not holding to its clear standards of scientific rigor and having complete independence on its decisions from that political interference. These MFN deals have been reported to have incentives in them that are promising them priority review vouchers, promising them relief from the tariffs that have been suggested that they're going to be imposed. So I am very worried that there are being, you know, favors given for FDA approvals or guarantees. In addition to that, we have seen an increase in lobbying firms that have no experience with the Food and Drug Administration that are being hired, but they do have ties to the White House or they have ties to the previous Trump campaign.

Thank you. I yield back.

Mr. Kustoff.

Thank you, Chairman Smith, for calling the hearing today, and thank you for the witnesses for appearing. Mr. Deery, if I could, I'm going to ask you a question in a moment, but Mr. Chairman, if I could, I'd like to submit for the record an article from the Wall Street Journal from December of 2005 titled, Pharmacies Flood Medicare Patients with $3 Billion of Extra Drugs.

What paper was that article?

Wall Street Journal.

Oh. With out objection.

Thank you, Mr. Chairman. If I could, Mr. Deery, I'd like to read a portion of this article to you and get your thoughts and your comment. This article is actually dated December 26, 2025. United Healthcare Group's pharmacy mailed Medicare recipient Bill Zelinsky so many refills of the cholesterol drug atorvastatin that his unused stash could last a year on the pill-a-day regimen his doctor ordered. Excessive refilling is a common practice at U.S. mail-order pharmacies, a Journal analysis of Medicare prescription data found, flooding the homes of seniors with extra drugs. Too frequent refills by all U.S. pharmacies cost Medicare and patients $3 billion between 2021 and 2023, the analysis found. If I could just, just briefly, couple of more passages from the article. Quote, it's awful how much waste that is, said Pamela Schweitzer, a pharmacist and former assistant U.S. Surgeon General. And for seniors, she said, it is a terrible idea to have all that medication sitting around that you're not taking. Some of the extra pills, which include millions of doses of muscle relaxants and antipsychotics, could lead to accidents, such as taking too much of a medication or taking the wrong one, pharmacists said. The article goes on to say Medicare spends more than $1 billion a year on drug benefits. The Journal's analysis showed substantial excessive refilling of several common drugs. In the three-year period, pharmacies dispensed to Medicare patients more than 30 days of extra diabetes treatment, Jardiance, almost 200,000 times, costing taxpayers and patients $111 million. Goes on to say cheaper generics added up too, with extra atorvastatin supplies costing $15.6 million. In your position, doing what you do for the Independence Blue Cross, have you observed patterns of excessive refilling and if you have, what have you found?

Thank you for the question, Congressman. I observe it in my own household with my father who is sitting in Bonita Springs, Florida this morning, and the number of pills that he has on his counter makes me wonder, you know, does he know exactly what he's taking and why is he getting all these? So understand that on a personal level as well. There is a, there is a, a seesaw there with convenience in terms of getting medication and signing up for refills, and then also, you know, getting things you're not going to use. I guess why it's critical that we find a way to interact with our members to ensure that they're getting the care that they actually want. We have, we have piloted some activity. Communicating with the members is difficult, right? Getting a member to, to talk to you over a phone about what they truly want, what they truly need, not knowing who you are in this age is difficult. But definitely patterns we look for in terms of medication that doesn't necessarily map to the actual treatment that's going on with the member at that time. And then we also do do proactive outreach in situations to confirm that members are actually receiving what they want and are actually being billed for what they're receiving.

Thank you. In terms of the excessive refilling, do you notice or do you study any difference between those who are on Medicare Advantage versus traditional fee-for-service Medicare, or would you know that?

So, Congressman, I wouldn't know exactly. I don't have access to the fee-for-service Medicare data, so I wouldn't know that. I would just say it's a, it's an issue that we see across all of our lines of business. Anywhere there is a benefit that's available and it's a rich benefit, it's generally targeted for schemes like this.

Thank you, Mr. Deery. Mr. Chairman, I'll yield back.

Thank you, Mr. Fitzpatrick.

Thank you, Chairman Smith. Estimates suggest that Medicare loses $60 billion annually to fraud. This fraudulent activity diverts essential resources and directly harms the patient, many of whom are our most vulnerable patients. Diverting resources and time from the mission of patient care is a serious problem for legitimate providers and can have incredibly harmful repercussions for patients. Mr. Deery, first I want to thank you and Independence Blue Cross for working with our local law enforcement in Bucks County, Pennsylvania, my hometown, to address fraud, specifically fraudulent opioid prescribing and exploitative addiction treatment scams. In one case, patients in my community were being trapped into addiction treatment overbilling for thousands of unnecessary lab tests, which kept the revolving door of patients in addiction. Mr. Deery, given your work in the, on the ground in the Philadelphia region, can you provide an update if you are still seeing instances of addiction treatment fraud and what policies or steps do you recommend that we take here in this committee and in this body, or in the administration to address this kind of fraud?

Thank you for your question, Congressman. And yes, appreciate all the coordination and collaboration through the years with, with Bucks County and at the federal level as well. We truly have a productive model in the Eastern District of Pennsylvania to address in a collaborative model to address these kinds of things. I'd like to say we made a dent in the opioid issue. I think we are seeing positive trends in terms of the number of pills that are out in the street that are likely not being used for the the best reasons or appropriate reasons. Substance abuse disorder treatment is still a significant, significant piece of what we look at and abuses within that, within that process. Not necessarily specific to Medicare, but to our commercial lines of business and specifically ACA line of business. We have significant concerns about schemes in the substance abuse disorder world and would really urge that we really look at strengthening program integrity efforts around eligibility and enrollment. We operate in a state that's a state-based exchange. We need to make sure and we're working with with the state to make sure that the integrity of the enrollment into those products is as strong as it can be and the guardrails are as strong as it can be.

And how is IBX adapted your internal procedures and protocols to constantly keep up with the evolving schemes?

I think we've invested heavily in technology. And as I said before, technology is, is crucially important in this. But at the end of the day, you know, we're in the health business. So I never want the answer to a treatment or an enrollment decision sped up by a computer. We need a human that is looking at it to make sure that it is accurate and that it's a trained human, right? I employ a team of investigators, former law enforcement agents, certified coders, nurses, folks that know what right looks like and can look at the data, look at the leads that data produce and say this doesn't look right and allow us to dig deeper. But we're built on a system, frankly, that anytime you push pause in that process, people get really uneasy because they take, they think we're trying to deny care. In reality, what we're trying to do is protect, protect the health and well-being of our members.

Thank you, sir. We look forward to continuing to work in partnership with you in Bucks and Montgomery Counties. Appreciate it. Mr. Chairman, I yield back.

Thank you very much. The gentlelady from Wisconsin, Miss Moore, is recognized for five minutes.

Thank you so much, Mr. Chairman, and let me just join in with everyone on two points. First of all, I want to welcome you. We always appreciate your expertise. This is the most important committee in Congress, but we do learn so much from the people who sit in your space. And also, I want to join all of my colleagues in decrying Medicare fraud. The program is already threatened because of its high cost and we can little afford to pay for fraud. It's not a minor thing and I appreciate the chairman and the members for calling, lifting this up. Ms. Clark, let me just start with you. You talked about a streamlined process because what we don't want to do is cut off services to people who actually need it. I mean, I've known people who were in hospice care for 24 hours. You don't want to, we don't want them going through rigmarole where it's so hard to get enrolled when you really need it. And then there are people who get the hospice care and voila, they live for nine months instead of the six months. So do you have any specific suggestions for us about how to increase surveillance of the program without it, without cutting people off from services who need it desperately?

So if we look at a streamlined process, I think what the question you're asking is how can we ensure the six-month prognosis if the disease takes its normal course and not having these live discharges?

Right, right, right. Yeah. And I get your point because you're further on and I just want to pivot to Ms. Martin and I'll use part of what you said to do that. You know, Ms. Clark talked about really being able to surveil the Medicare program by looking at death rates. You're in hospice, nobody dies, what's up with that? Mr. Deery pointed out medications that you would expect hospice patients to get are not being ordered. These are ways that they can sense whether or not there's any fraud. And I would, I would ask you to layer that model onto my question here. We, you know, the fact is the president has said that there's been a 1,500 percent decrease in drug prices. We don't see that show up in actual drug prices to the consumer. There's 16 medications in particular he says that he has negotiated and we don't see that in pricing. So where else could we see this? You mentioned tariff relief, construction of manufacturing facilities, maybe what other provisions and terms and deliverables and contingencies that we ought to be looking for to find out where this money is going from? If this money is indeed being generated, where is it going? Ms. Martin, please.

Well, with all due respect, Congresswoman, 1,500 percent reduction would actually mean we would all be getting checks. That's mathematically impossible. But you know, there has been commitments for domestic manufacturing. Actually, most of those commitments were made previously before this administration. They were actually made in, some of them were actually made even eight, 10 years ago. And so they're now announcing commitments that were made much longer ago. So we're seeing some of those domestic reshoring of manufacturing. So those are some of those commitments are just being reannounced. Some of them are new. The tariff, you know, tariffs have not actually never been imposed on these prescription drugs yet. So saying that there's tariff relief when there hasn't been tariffs imposed on these drugs is, you know, really hard to calculate, you know, what the savings could be. And when it comes to the Trump RX, you know, most of those drugs that are on Trump RX are not the ones that are most used by people in the U.S. They're not available with people who have coverage, which would be about 310 million Americans. And most of, most of them actually have generic alternatives, so much cheaper versions of the drug. So it's really hard to quantify any savings that are actually going to the American people or to taxpayers.

Well, it's one of two possibilities. You know, it's either one, there's money going somewhere and we just don't know where it's going, or it's just blarney.

Well, we do know from some of the SEC filings and the shareholder calls from the pharmaceutical companies that they are saying that they, you know, they are getting the relief from the tax or from the tariffs of up to three years if there are tariffs imposed. We do know that they are getting from their shareholder calls and the SEC filings potential exemptions from any mandatory models from the CMS Innovation Center that may be put into place. And we also know from those reports that a lot of these companies are going to have record profits this year. In particular, Johnson & Johnson has said on their quarterly call earlier this year that they are going to make $100 billion, which would be a record set for any healthcare company in the world ever.

Thank you so much, Ms. Martin. My time is expired.

Thank you, Ms. Moore. The gentleman from the great state of Florida, Representative Steube, is recognized.

Thank you, Mr. Chairman. Thank you to the witnesses for your testimony. The concerns around hospice fraud in California are valid and well-documented and continued federal attention to the program integrity in that market is warranted. However, these fraud concerns are not nationwide and we must distinguish those dynamics from conditions in Florida, where the regulatory and oversight environment differ significantly, especially when it comes to hospice. I'm pleased to tell you there's no evidence that Florida has hospice fraud and abuse and it's because of the significant oversight and regulatory environment that we have in Florida. Florida's Agency for Health Care Administration surveys all hospice programs regularly. Because of Florida's certificate of need law, we get a new hospice when and where we need it based upon projected data-driven need. And AHCA has vetted and evaluated each hospice program before they open for business. Florida's hospice programs are nationally known and respected and the teams that run them are national leaders in the hospice space. I'm pleased to enter a letter, please to enter a letter to Dr. Oz co-signed by the CEO of the Florida Hospice and Palliative Care Association and other state associations supporting data-driven oversight of hospice.

Without objection.

Thank you, Mr. Chairman. Ms. Clark, I'd like to start with you. What is your opinion of CON or certificate of need laws?

I think that the CON works well in Florida. And in California, we have based on the state auditor's report that was mentioned earlier, we have emergency hospice regulations that were supposed to go into effect January 1. They were pulled down December 19, we do not know why. And within those regulations, we had that a need must be proven in the application that if you, if you want to open up a hospice in California, you have to prove need. So a pseudo CON, if you will. And we have that now with our moratorium, our licensure moratorium. You have to submit an application and prove need. So I think the CON works and it works well in Florida and I actually authored a paper for the lawmakers in Florida to say keep that CON.

Given your experience in California, are there other ways for Congress to do oversight of that benefit?

Yes. We need stronger, as I mentioned earlier, we need stronger entry point both at the state level and the federal level. We need stronger accountability from our accreditation organizations and from CMS, they can always do better. We need stronger guardrails.

Is, is LA County just an outlier or are there similar fraud networks operating in other sanctuary cities or states?

I can only speak for California and I can tell you that Los Angeles, it has spread. We call it over the grapevine where you have hospices in Los Angeles that are fraudulently enrolling beneficiaries 300, 400 miles away.

What is the federal government doing to identify and shut down these networks?

We, we have given them, CHAPCA has given them recommendations. We've done that at the state level and also to CMS.

Can you speak to how these dangerous networks recruit and operate within the healthcare fraud space?

So for recruiting patients, beneficiaries, they have brokers that will go out and pay anywhere we've heard from $500 to $2,000 per Benny and they broker them. They are like cattle.

So how can CMS and the states work with law enforcement entities to improve coordination amongst themselves to prevent fraud on the front end?

On the front end, we need stronger vetting and we need stronger, as in Sanchez's bill, we need more frequent surveys. Hospice providers, if they're, they, if you're going to go out and you're going to find them, okay, they're going to open the door, you're going to survey them. You'd be amazed at how many hospices you, the door you can walk up to in California and there is nobody there. There is five months' worth of mail that you can see stacked up from CMS and nobody's there. And, and that passed a survey. How did that happen? How do you put a hospice in a burrito stand in California? How do you put a hospice in a tire store in California? That all had to be vetted through licensure and through certification and accreditation.

How does that happen? My time's expired. Thank you for your testimony.

Ms. Tenney.

Thank you so much, Mr. Chairman, and thank you to the witnesses. We really appreciate this hearing and obviously it's become a huge topic. And I'm from New York, so there is, we are no stranger to fraud and bad actors taking advantage of government programs to siphon off resources intended for the most vulnerable. And I can't think of an instance quite as severe as what's happening in California, but we haven't really delved into New York yet, especially when it comes to home health and hospice fraud. Last fall I wrote to Administrator Oz to blow the whistle on suspicious billing activity, including one doctor that billed CMS for over 600 million between 2020 and 2024. That outreach helped prompt enforcement action and I'm glad some action was finally taken, but one fraud buster arrest does not solve a systemic problem. Health admissions have fallen by nearly 40 percent since 2018. Last year nearly half of patients who were referred to home healthcare never actually received it. Fraud is not just stealing taxpayer dollars, it's driving payment cuts. It's forcing legitimate providers into closure and creating an access crisis for seniors and people with disabilities who really truly need the care at home. And I want to ask Ms. Clark, since you're the president of, of the hospice and thank you for what you do. My aunt devoted her life to helping people in hospice as a volunteer and it's just a really important, important service that we can provide to people in really truly end of life. So Ms. Clark, your testimony focused primarily on hospice, but the fraud dynamics that you described, including the sham providers, creating an incredibly hospice at a burrito stand, stolen identities, data contamination, all track close onto what we're seeing in home healthcare as well. Are legitimate home health providers facing the same kind of market distortion and access that you were talking about? And is this, and honestly, is this fraud isolated or or not or how do we attack this large-scale criminal activity? And I know you've answered this before, but I mean, especially when it's so huge in Medicare, can you exactly, can you give us an answer on that?

Well, we keep talking about okay, we need stronger guardrails. Specifically to home health and to answer your question there, what has happened, LA has over, they have put more home healths in LA and you see the rest of the country implode.

So I've got numbers on it. It says since 2020 more than 1,400 new home healthcare agencies have entered that market. Right. It now accounts for 12 percent of all Medicare home health spending nationwide. Right. Despite only having a small, small fraction of the Medicare beneficiaries.

Exactly.

It's incredible. So my second question, I want to get back in and try this again. I think the biggest issue is the fraud and that it's also that it's being treated like normal activity. I know my colleague Mr. Arrington got upset about this, and it's worthy of getting upset. I know taxpayers in New York are struggling and suffering and paying high taxes, high rates. You know, Medicare recipients are paying even more, even their Social Security doesn't really, you know, as they get a little benefit in Social Security, they get even more in Medicare. What happens when CMS uses the data that includes fraudulent or anomalous billing to set payment rates for the entire health system?

You cannot use contaminated data that includes all these fraudulent claims to set rates. You cannot use it. It is polluted, it is wrong, and if you try and set rates based on that, it's what's happened in home health.

So same thing as you said with hospice and home health. In my district, nearly half the patients referred to home health never actually receive it. And so my district has 265,000 Medicare recipients, including me. I'm a new eligibility. And this is just incredible that we are not able to attack this fraud abuse in ways, and we appreciate your efforts in doing that. And I just wanted to just say thank you to the panel. I don't have other questions for you other than I think we need to continue to fight this and we need to continue to stand up, but we appreciate all that you do.

Well, I want to thank you for your letter and bringing down Mr. Gilbert.

Hopefully we'll get this in New York and other states that are, and by the way, interesting in that letter that it was a foreign cartel that was actually taking advantage of Medicare and taking advantage of that doctor. So what a terrible situation and how harmful it was that we allowed this across our borders. So hopefully we'll put an end to that, but thank you so much for what you do. Appreciate it.

Thank you.

Mr. Beyer.

Mr. Chairman, thank you very much. And thank all of you for being with us, an important and an enlightening day. I'm glad to see this committee focusing on rooting out real fraud and waste, but I'm deeply concerned that the White House has made it much more difficult, if not impossible, to tackle this problem. Over the last year, 3,300 Justice Department attorneys have either been fired or pushed out. And without those lawyers, the Department of Justice has been forced to close more than 23,000 criminal cases without charge. And many of these cases include investigating fraud. One was at a Tennessee hospital chain that was tracking the use of Medicaid funds. The agency reportedly closed more than 100 other healthcare fraud cases citing prioritization of resources and interests. We have an administration that's basically explicitly telling fraudsters that stopping them isn't a priority. And its refusal to tackle white-collar crime is matched only by the White House's own brazen corruption. The President is using the White House to enrich himself and his family. Trump's crypto scams have generated more than $800 million in cash for him and his family and allowed foreign governments to blatantly funnel him illegal gifts. He's making taxpayers pay to upgrade his Qatari jet, which will eventually become his personal property. He's selling pardons to the highest bidder. He's doing all this while raising prices, and every day Americans are struggling to pay for gas, groceries, electricity, while the President pockets, one story says, $1.4 billion so far. A flagrant abuse of taxpayer money like nothing we've ever seen before. It's fraud, and it's just like the healthcare fraud the administration has gone out of its way to shield its own corruption from accountability. We see this with the Inspector General. The Inspectors General play an essential independent role in preventing healthcare fraud. They exist to guard against waste, fraud, and abuse. But right now, the independent HHS Inspector General is a former Virginia official with a personal track record of ethical misconduct at the expense of Virginia taxpayers. T. March Bell was previously forced to resign from a Virginia agency after he directed improper payments to a former colleague with no documentation. And Virginia reporting described an agency-wide pattern of thinking the law doesn't apply to them. Right before taking this HHS job, Bell again profited from Virginia taxpayers by taking a $125,000 salary from the Secretary of Public Safety. But we know nothing about that position because he secured the Governor's support in blocking the release of any information about his taxpayer-funded job. And that attitude is clearly at odds with an office intended to protect against fraud at the expense of taxpayers. Ms. Martin, it's a long lead-in to the simple question: are qualified independent watchdogs an important part of the federal government's efforts to prevent fraud at the expense of taxpayers?

Yes, a very important effort.

If we want to talk about one of the best ways to fight fraud is with claims data. This is very bipartisan. When we have claims data, we can actually understand dollar flows, outliers, specific site changes, general trends. This data can be used to understand outcomes and how to improve care, but also help us follow how spending patterns differ, whether that be as an outlier or at a higher price point. That's why so many states, Republican and Democratic, have all-payer claims databases. But they don't have full claims data information because of federal limitations. We have a bill on federal all-payer claims database. I hope it will be bipartisan. Ms. Martin, can you talk about the success of the APCD model and why it could be beneficial for improving healthcare and rooting out fraud?

Yeah, so the missing data is really the ERISA data, the employer data that is self-insured. And I think like when you have a full picture, you can actually see every payer in the system and you can have a full, more robust. Most people in the United States who have private health insurance do have employer-sponsored insurance. So having more data and more robust full picture will help you to root out that. And as we mentioned before, having a stop-and-verify approach, a proactive approach to fraud is the best way to prevent it.

Thank you very much. You know, many of the people have talked on the dais already about ghost hospices and the challenge of the hospice care, the Taco Bells and the tire stores. Dr. Ianni, thanks for sharing your story with us. Hospice care is vital. I've seen it with my father and my mother and my sister. But we also know that the whole note of incentives for enrolling healthy people in hospice is awful. How do we change that? What should we be doing in terms of this incentives for enrolling in hospice?

To be honest, I don't know the process of enrolling people through incentives sufficiently to be able to comment on that adequately. I do think Sheila probably does. But my situation was just random. I have no idea how they got my Medicare number. I have no idea who, you know, set it up in the system. I don't have, I didn't even have any information about what the name of the hospice was until I did a little bit more digging. So I'm sorry, but I can't address that.

That's all right. And my time is up, but thank you all very much. And I yield back.

Ms. Fischbach.

Thank you, Mr. Chair. And thank you to all the witnesses for being here. And Ms. Tenney mentioned New York, we've been talking about California. Well, I'm from Minnesota. So you can guess that fraud is a huge concern of mine. And it has been a hot seat of large amounts of fraud, and we've uncovered it in various programs throughout the state. But fraud in federal programs really amounts to theft from the American taxpayer because that's who's footing these bills for this theft. And I've joined my Minnesota GOP colleagues and my Ways and Means colleagues in working to hold those in charge accountable by demanding answers. Over the past few months, I have introduced several pieces of legislation that all share a common goal in fighting fraud. The Federal Funds Whistleblower Protection Extension Act to safeguard taxpayer dollars by expanding federal whistleblower protections for those who report fraud, waste, and abuse. And this came after I participated in an oversight committee hearing with Minnesota state officials who revealed that they had tried to expose the fraud in Minnesota state-run federal programs, but they were retaliated against and silenced. I also recently introduced the Preventing the Repatriation of American Benefits Act, and this legislation is designed to ensure that federal assistance remains within the United States by restricting the amount of money non-citizens receiving federal benefits can send abroad. Investigations have also revealed that stolen dollars have been sent overseas, including to terrorist organizations. And finally, just last Thursday, I introduced the Immigrant Resettlement and Welfare Abuse Prevention Act. This legislation would require nonprofits to disclose information about their facilitation of resettlement and welfare assistance for non-citizens in the U.S. While I understand these bills do not solely target Medicare fraud, but they are a start towards uncovering and stopping fraud in our federal programs. Dr. Ianni, I am so glad you're here. Too many across the aisle, victims of fraud are hypothetical. We don't really know them. And that's, their names are only paper and just a name on a list. But you were a victim of Medicare fraud. Your presence helps make the reality by allowing the fraud to continue. We are allowing real people to be hurt. And so I'm just wondering, Doctor, as someone who experienced the nightmare of the fraud, being a victim of fraud, what principles should Congress keep in mind as we consider how to ensure victims have the resources they need to get back to living their lives?

I think compassion and connection and communication would be the most specific things that I would hope that would be sort of the conduits to get to the place that you talked about and achieve the goals that it sounds like we all share. It's just really difficult when it becomes divisive or confrontational instead of collaborative and solution-oriented. So I do think even on the patient's part of it, I didn't receive an apology, I didn't receive a note from Medicare, I didn't even receive an acknowledgment other than way later after I got a new Medicare card, I simply saw something that said your election from hospice has been removed. That was it. And that felt terrible because even if there was some degree of acknowledgment like we're sorry we made a mistake, let's make it up to you in some way or is there something we can do, maybe even just recognizing the fact that I had been paying all those premiums for all those months without any possibility of getting any care. Like something that they could do for the victims that would help them then restore or at least remedy some of their own negative experiences.

So be more responsive.

Exactly.

Communication with the victim and not just like treat it as a name on a piece of paper, but treat them like human beings that have been wronged.

Exactly. And as soon as they identify the fraud, like you know when your credit card company, you call them if there's a fraudulent charge and immediately they put it in dispute, you don't have to worry about it, they're going to do the investigation and take care of it. That alone would help a dramatic amount because in the interim while you're waiting for some resolution that you're not sure will ever come, you're also liable to the provider for all those funds, like I was, where I was, you know, they actually threatened me to collections at one point. I was like please understand, they knew me well enough not to do that and knew I would make good on it if I wasn't able to remedy it some other way. But that would also help, just giving the victims a chance to say this is the department we're going to get you in touch with and you can communicate with them so we'll help you through this process. That would make a dramatic difference.

Well, thank you for being here and I apologize that that happened to you because it shouldn't. And I am sorry it did and sorry to all of the folks that it has happened to because this fraud is wrong and we need to get a hold of it. And so thank you for being here and with that I yield back.

Thank you. Mr. Feenstra.

Thank you, Chairman Smith, and thank you Ranking Member Neal. I want to thank the witnesses for testifying today. It's great to hear from you. We got a problem, people. We got a significant problem. And I want to clarify something that this is taxpayer dollars. It's not federal dollars, it's not public dollars, it's my dollars and your dollars and every constituent and every citizen in America, it's their dollars. And these states have to be prosecuted. You know, I think after the border has been open, millions of illegal immigrants have gotten all this money. I mean, I look at states of California, Minnesota that have allowed non-citizen fraudsters to blow through billions and billions of taxpayer dollars. Again, your money, my money, U.S. citizens' money. There is no magic public tree or or government tree that this money comes from. No, it's ours. Estimated $3.5 billion of fraud came out of just one California county alone, 3.5 billion. It's unacceptable, absolutely unacceptable. So I want to talk about what we can be, what we can do. We're seeing a lot of fraud actors on online in online vending. We have to root out these people, these bad actors from participating. It's important that we recognize that we're losing many of our brick-and-mortar suppliers to in rural communities because people are using these online vendors and getting ripped off. I worry about how we can protect we the citizens from from getting our product. Mr. Klebonis, CMS has provided the idea of a gold card or gold carding for durable medical equipment, suppliers who have a good record of compliance. Do you think this concept would work and and how could we reward good behavior?

Thank you, Congressman. I think that we need to come up with a variety of programs to reward legitimate providers and to create penalties for illegitimate providers. Furthermore, you could set up roadblocks to, you know, make it harder for illegitimate providers or online-only providers to be live with Medicare. But we absolutely would support the gold card as being one of those incentives to reward legitimate providers.

Do you see how we can protect good providers? I mean, right now it seems like, you know, everybody just is going out there and, you know, sometimes you're going to get screwed and other times you're not. How do we stop that from happening?

Well, right now, for better for better or for worse, uh this government appears to be soft on fraud. Whether it's policy, whether it's um pardons, um that's the message that's going out to the public. Uh, I don't want to go back on history, but I think this government in the future needs to send the message that we are hard on fraud.

Well, I agree. Mr. President, President Trump has done an absolutely great job. Uh, he's created a task force to eliminate fraud, a new interagency effort to coordinate fraud prevention and enforcement across federal government. I applaud that. Ms. Clark, uh what agencies are represented in this task force and how is it structured to avoid the failures that we have seen that have allowed fraud to persist over the decades across agency silos?

The California task force? Is that what you're...

Yeah, the the Trump task force to eliminate fraud. President Trump created this task force to coordinate fraud prevention.

Okay. Um, well, we we we have been working with them um regarding like looking at the data and who to identify. Um...

Is it going to work?

It's working so far. Uh, what we've seen, we've seen results. Um, something as simple as the beneficiary letter that um Sanchez mentioned. That was put into production. That is going to have real uh benefit. What Dr. Lynn was talking about, she didn't know that she was in hospice. They don't get their statements for months and months. If that letter goes out and the the they put that into production literally within weeks, she would have been notified months and months before she had no services or they threatened to, you know, send her to collections. That task force put that into production.

Well, well thank you. I worry at the state level. I mean, why is it, how is it that a state like California can have $3 billion be absconded in one county? To me it's bizarre. I see this in Minnesota right across the border from me. All this money that's being absconded from we the taxpayer. It's appalling. And I look to an end. Thanks and I yield back.

Mr. Evans.

Thank you, Mr. Chairman. I want to start by emphasizing how important the goal of combating fraud in our healthcare system is. And I don't think there's anybody in this room who disagrees. However, it's hard to believe that this Republican Congress actually cares about solving this issue. Medicaid Republicans support a president who has pardoned people who convicted in fraud schemes. If my colleagues if they were serious about holding this fraud accountable, they would start at the very top and help this administration be accountable. So Ms. Martin, I would like to ask you a question. The city of Philadelphia is facing more serious disruptions in healthcare services and research because of the withheld grants and unnecessary budget cuts. Respond to that.

Yeah, I think that with the Medicaid budget cuts that are going to happen, especially in the next year due to the tax cuts from last year, I think that there's going to be a lot of disruption. I think with that disruption will become instability in some of these programs. And unfortunately, I think that'll kind of make some of these problems even worse over time. I also believe that we're going to have millions of people, up to 15 million people according to Congressional Budget Office, that are going to lose care and that is also going to contribute to more significant problems over time.

Additional question. Ms. Martin, can you explain how throughout this healthcare system will affect the ability of Medicare patients are receiving care?

I think it'll end up delaying their care. I think that people will, you know, we saw this before the Affordable Care Act passed that when people delay care, they end up entering the system at much worse, more serious health conditions. They end up costing the system more money. They end up with higher debt. They likely will file bankruptcy because of the medical debt. And then unfortunately, they're more likely to die of their condition when they don't have access to care.

Ms. Martin, can you explain what the federal government's responsibility is in for medical for medical research grants?

I'm not as familiar with that area.

Why would grants have been awarded to be withheld?

Again, that's not my my area. I'm working coverage in Medicare.

I'd like to thank you and I'd like to yield back to the chairman.

Now Mr. Evans, that is truly yielding back time. So thank you. We appreciate that. Ms. Miller.

Thank you, Mr. Chairman. Both patients and taxpayers are paying the price for serious vulnerabilities in Medicare's fee-for-service system. Particularly in hospice care. As we've seen, hospice services account for a significant share of improper payments and bad actors are exploiting these benefits not just to defraud the system, but to take advantage of vulnerable patients at some of the most critical moments in their life. What is especially alarming is this is not just a financial fraud, it is deeply personal, harmful, and destructive to the lives of the people who get caught up in these schemes. Once a patient elects hospice, Medicare generally stops covering most of the other treatments. Fraudulent hospice providers are enrolling individuals who are not terminally ill and those patients are effectively cut off from curative treatments that could extend their lives or improve them. We've seen reports of patients being unknowingly enrolled and trapped in hospice care, which prevents them from accessing cancer treatments, cardiac procedures, and other necessary things to improve their lives, other services that they could use. This raises serious concerns about whether our current enforcement framework is adequately addressing the full scope of harm that is being done not just to the Medicare Trust Fund, but to the patients themselves. Ms. Clark, are you aware of whether any of the recent fraud busts have included elements related to patient harm, not just financial implications?

Yes, some of the um hospices and home healths that have been deactivated or their payments have been suspended, yes. I know the name. I know their names well. My colleague behind me from Senior Medicare Patrol, we know their names well. And I have one beneficiary that I'm working with right now who is liable for three months of dialysis claims. I was able to get her off of hospice through the rapid disenrollment process that is working really well and but she still under that uh benefit period, she still owes and they're suing her to pay for her they want her to pay for her own her dialysis. She was signed up by an LA provider and she lives in Fresno. And that's like three for if you don't know California, that's like three three 300 miles away. So there is I can I know the names and they're being suspended. And I say suspend some more.

Well, building on that, what more can Congress and CMS do to strengthen patient protection so that beneficiaries can more easily identify the fraudulent enrollment, exit sham hospice arrangements quickly, and then regain access to the care they need just like you're talking about?

Okay. So the first thing is getting um the word out. And I always use uh my colleagues' from Senior Medicare Patrol guard your card. So giving the beneficiaries the information on when to and how to respond if something is is going wrong like what uh Dr. Lynn went through. We have to educate them. And we've done that with the Senior Medicare Patrol on hospicefraudprevention.com. We have a plethora of resources out there. We did hundreds of hours of listening sessions. So the education is key to our Medicare beneficiaries first and foremost. We have to do that. And then um with CMS, we just need stronger guardrails and we need to work with at the both the state level and the federal level to come together and solve these problems because you have licensure, the state gives a license and the federal government certifies that license. And we have to work collaboratively to make sure that these these scammers are out of the system.

Thank you. I yield back my time.

Thank you, Dr. Murphy.

Thank you, Mr. Chairman. Thank you guys, witnesses, for coming today. I think this is a very a very salient meeting as we're trying to fix a very, very broken healthcare system. Fraud, as we all know it, is the deliberate act or omission designed to dishonestly obtain an unauthorized benefit. You know, when I said I I came here to Congress, I was going to be an equal opportunity offender when it came to healthcare. That meant insurance companies, it meant hospitals, it meant pharmaceutical companies, and even physicians, of which I'm one still practice. There's so many different things within those categories which, frankly, I'm embarrassed to even talk about. We had a hearing a few months ago on the uh issues that happened with our insurance industry. I'm not so sure fraud is really a good term we can use in pharmaceuticals, I'm not sure. Uh, we're having one on hospitals next week where we're going to look and see some of the fraud that's going on there, the 340B program, the rural to to urban uh exchange, what's what's going on. And then here we are dealing some things with physicians. You know, uh we're sitting here bantering back and forth between which administration is doing this, that, and the other thing. 2019, the Obama administration suspended auditing eligibility requirements for Medicaid. This led to over $75 billion in improper payments, about a quarter, a little bit less than a quarter of Medicaid spending. The pause in oversight led to a sharp increase in the number of ineligible individuals. And if you add adding 15 to 20 million people to a population, um fraud, I think that fits that category well. So improper payment rose from 6 to 20 percent. So that's an entire administration that's culpable. During the last administration, both Biden and Obama gutted the regulatory investigators within CMS and they're trying to build that back. So I I think if we're going to actually look at the reality of things, let's look at see where where where we're going after. You know, it's obvious this horrible disaster that's occurred in Los Angeles. How that happened is beyond me. We had a we had a disaster in eastern North Carolina. Fortunately, Steve Knuckles in in New Bern and their ACO picked up on the catheter fraud of billions of dollars. Why we're not picking up on things, why we were not picking up on things, again is beyond me. I think with the onset of AI, it's going to be critical that we use that tool to pick up on this nonsense that's affecting us. Let let me just ask one other question or one question, uh Mr. Deery. You know, traditional Medicare's pay and chase model of fraud uh ensures a failure of oversight. It's a challenging environment. And look, I'm in the world of physicians, believe me, I will happily go after physicians who are abusing this system. But let me ask you something about the Medicare Advantage realm. One of the major problems that we have with Medicare Advantage and again, my favorite company to pick on is United Healthcare because they're the easiest one to pick on because in my opinion they're committing fraud in the upcoding of uh diagnoses. Do you believe that upcoding when it comes to Medicare Advantage is fraud?

Well, thanks for that question, Congressman. My work at Independence really focuses on the investigation of healthcare providers and other billing entities that are billing us. Opining on risk adjustment or broader MA reform is really outside the scope of that.

Ah, come on. You can do better than that.

Listen, that being said, listen, I think the folks at Independence, our Medicare Advantage team, has been very forward-thinking in terms of advocating for sensible risk adjustment reforms. And I am not a person that's ever going to, whether it's dealing with a partner or dealing with whatever we're going to talk about here today, you know, fraud is a criminal matter that is settled in courts. So for me to to opine, no matter what the issue is...

Well, but a definition is not hard. It's either yes or no. Doing something that is wrong, erroneously, medically or or in any other realm, that knowingly deceiving, especially the federal government, is fraud. It's illegal.

And I'll I'll leave it to the courts to decide that because that's that's where that's where that's where we leave it. We we ask the courts to to weigh in on civil and criminal fraud.

Yeah, and that's why United is under investigation for these things. Back in my home state of North Carolina, United is now trying to basically bankrupt the major system in eastern North Carolina, squeezing pennies off of things that don't exist. And so it is fraud. Upcoding is fraud. They've taken a system, and this goes for all Medicare Advantage providers, they've taken a system and they've used it to their own advantage adding diagnoses to people that don't exist and charging the federal government for these things. That's no different than the skin care substitutes charging things where where they don't use the correct size, etcetera. It's no different than charging for catheters. It's no different for charging for hospice services that don't exist. This is fraud. And I'm happy that this administration is trying to revamp what's going on at CMS and going after these individuals because the American taxpayer and the American patient now is paying for this, and we cannot afford it any longer. Thank you, Mr. Chairman. I'll yield back.

The gentleman yields. The gentleman from Illinois is recognized, Mr. Schneider.

Thank you, Mr. Chairman. I want to thank the witnesses. I think one thing we can all agree on both sides here is that fraud is illegal, that we should pursue it in every case, that we should do everything we can to prevent it, and when we do find it, the perpetrators should be held to full account. I think also we can agree that healthcare in this country is a right that every American should be able to count on. Access to quality, affordable care from providers they know and trust when and where they need it. Our Medicare system is not perfect, but we can't let perfect be the enemy of good. I firmly believe that it is our obligation to take care of generations that came before us. For more than 60 years, Medicare has provided a lifeline to protecting American seniors. It's a straightforward promise. If you spend a lifetime contributing to the economic backbone of the United States, you deserve nothing less than to age with dignity and security, knowing your health insurance is covered. This is not an entitlement. It's an earned benefit. Protecting Medicare is the obligation of this committee and our government as a whole. We cannot talk about protecting the promise of Medicare without discussing the threat fraud poses. Medicare fraud is not a victimless crime, as we've talked about earlier. It's a direct assault on the solvency of the program and a cruel exploitation of our most vulnerable citizens. It is a problem that is costing the American taxpayers billions of dollars every year and compromising their access to quality care and and recovery. Let me ask the panel a couple questions. Does anyone know who Willie Sutton is?

Yes.

Willie Sutton was a bank robber. Thank you, Doc. Famously attributed to Willie Sutton when he was asked why he robbed banks, he's reported to have said because that's where the money is. So next question is, do you know how much we spend each year in healthcare in the United States? It's a lot. It's 18 percent of our GDP, more than $5 trillion, 5,000 billion dollars each year. And Medicare is about $1.1 trillion of that. So why are fraudsters attracted to Medicare? Because it's where the money is. That kind of money, like the banks a century ago, will of course attract unethical people seeking illicit profits. Now earlier, my friend Representative Kelly talked about fraud in car repair, also involving insurance. As a nation, we spend about $100 billion in fraud repair, less than a tenth than what Medicare spends. And it's estimated that $20 billion of that is lost to fraud, 20 percent. As Chairman Smith noted, Medicare fraud is about $60 billion, a massively large number, but that's less than 6 percent of the total spend. It's still way too much. We should be working to reduce that number to zero, and that's what this committee should be talking about. But it's important to recognize that fraud is not unique to Medicare. My Republican colleagues are correct when hammering the point that waste, fraud, and abuse are never acceptable. We all agree, especially within such an important program. Sadly, there are countless numbers of bad actors taking advantage of seniors and abusing Medicare. Some of the examples we've heard of today, in 2019, the Justice Department found Philip Esformes, a healthcare executive and nursing home owner, guilty of submitting more than $1.3 billion in fraudulent Medicare and Medicaid claims in southern Florida. In 2011, also in Florida, Lawrence Duran and Judith Negron were sentenced to 50 and 35 years in prison respectively and ordered to pay $87 million in restitution for defrauding Medicare of more than $200 million. In 2024, Paul Walczak, a nursing home executive, pled guilty to tax crimes he committed when he withheld more than $10 million from the paychecks of nurses, doctors, and others who worked at his facilities. Like I said, we need to prosecute and hold to account all the fraudsters. But these individuals all have one important thing in common. Each and every one of them were pardoned by President Trump. These criminals have their freedom, but their victims will never get the $2 billion in repayment that they are owed. And Medicare will never recover the fraudulent overpayments. Trump's pardons are yet another example of this administration not caring about waste, fraud, and abuse in healthcare delivery system. American taxpayers are losers here, and what we're seeing is a promotion of a culture of corruption. If we want to stop fraud, we need to come down to three basic things. First is establishing a culture with zero tolerance for fraud. Second, we need to build the systems, processes, and procedures that root out potential fraud and abuse before it happens and prosecute it when it does. And third is making sure we have credible leadership in place and holding our leaders accountable for reinforcing the culture and in following those policies and procedures. In my last few seconds, I want to just highlight one of the things we are doing to address it. Full risk accountable care organizations are an example of moving forward. We've talked a little bit about it here. And I'm proud that with my Republican colleague, Representative Tenney of New York, we've introduced legislation to establish new full risk ACO programs under Medicare. There are things we can do if we work together. We need to stop beating each other over the head as if we don't care about fraud, waste, and abuse. We all do, those of us on both sides of this dais and all of those people here on this panel. I thank you for sharing your insights and perspectives. I wish I had time to ask you questions, but this is an important issue that we need to work together on. I yield back what's not left of my time.

I thank the gentleman for yielding back what he doesn't have, right? It's good to see you all today. I'm going to recognize myself for five minutes. From the great state of Oklahoma, in which we have over 800,000 Medicare beneficiaries, so I know how important it is to protect Medicare for our senior population. There is no question that Medicare waste, fraud, and abuse steals critical resources away from our most vulnerable and drive up costs for all, patients, providers, and taxpayers. Fraudulent activity is surging among home health and hospice providers, including billing for services never rendered and schemes to bill taxpayer for ghost patients. These deceptive practices hurt honest providers and harm patients. I frequently hear from providers and patients back home about how fraud drives up premiums and out-of-pocket costs and diverts taxpayer dollars away from real care for our seniors. At the same time, honest providers face growing administrative red tape and regulatory burdens. In partnership with my colleague from Alabama, Congresswoman Sewell, we introduced the Home Health Stabilization Act to create a more sustainable payment system for Medicare home health agencies, ensuring patients have access to rehabilitative care in their homes. That said, it is difficult to enact meaningful payment reforms when fraudulent agencies skew data and stain the industry as a whole. Ms. Clark, I know you have seen similar situation play out in the hospice space. Can you walk us through the financial effects legitimate providers face when their industry is rife with fraud?

Absolutely. When you have a beneficiary that is enrolled into a hospice fraudulently, like Dr. Lynn, what happens is there is a cap, an overall hospice cap in the lifetime under Medicare that they will pay a provider. Right? And she has had that spend applied to her account, her her MIB number. Okay? And what we're seeing, what's happening in California is because of all these go these synthetic patients that were enrolled in hospice, they were not they didn't they didn't need it, they were they didn't know it. And then when you have a patient like my members back here that needed hospice, they walk in, this gentleman is in pain, he needs care, only to find out he's already been on hospice. And this was in October of 25. They enrolled him in July of 25. They bill for those services, that amount of money is gone. It is capped out. Now, my members that are sitting behind me, they picked up this patient that needed care, and they will, when we call the cap report, when they true up that cap at the in every February, I believe, they'll have to pay that money back that they were given to treat this patient, to treat this Medicare beneficiary. And this is happening time and time again in California because of all these fraudulent elections. So that is what will happen to a good provider. They will be on the hook.

So Oklahoma's taking some strong action at the state level. Just this last month, Oklahoma's Medicaid fraud control unit concluded Operation Sooner Shield. Operation Sooner Shield spanned 10 counties resulting in dozens of arrests and more than 1.5 million in recovered in restitution and fines. If that much fraud and abuse was found in one short operation, I can only imagine how much more is still to uncover. This operation shows that what a real partnership between a state and local law enforcement can achieve. Medicare fraud often crosses federal and state lines and bad actors try to exploit gaps in coordination. In fact, last week at our hearing, Secretary Kennedy discussed the work that HHS and CMS are doing to catch the fraudsters who have stolen hundreds of millions of dollars of taxpayer dollars. Ms. Clark, continue with you with the remaining time I have. How can Congress better support partnerships between agencies, state AGs, and local law enforcement to root out fraud more effectively and more adequately dismantle the networks rather than simply prosecuting individual fraudulent agents? Additionally, what tools or authorities would help scale up efforts like Operation Sooner Shield nationwide?

That's a great question. So if we work collaboratively together at the state level and the federal level, there's a plethora of data that is seen and developed. We have a task force in California. It was mandated by the California auditor's report. They said, you will sit down at a table and discuss all this. The OIG, the AG, DHCS, CDPH. And if we can do that at the federal level and share that information and be able to take out these fraudsters quickly and execute what is happening at a state level and I know at the federal level that they are doing their thing, they're investigating these sham operations. And if we're sharing that information, then we will get these guys much quicker.

Thank you again, I appreciate your responses and now recognize the gentlelady from New York, Ms. Malliotakis.

Thank you very much. I appreciate all the witnesses coming here because Medicare fraud is a serious issue. I mean, it weakens vital safety net that millions of our seniors depend on and when criminals exploit the system, it's real. This is a real problem and seniors can lose access to their care, they face bills that they do not owe, they spend months or even years trying to fix problems that they didn't create and the fraud directly harms them. The Trump administration, House Republicans have made combating fraud a priority not only to protect taxpayer dollars, I mean these are again tens of billions of dollars as high as maybe $100 billion a year that's being fleeced, but to ensure that seniors receive the care and coverage that they paid into over a lifetime of work. The reality is that the mission is critical because those committing these crimes are not just stealing money, they are in effect taking healthcare away from our parents, our grandparents, and our elderly neighbors. At the same time, this fraud also harms providers who are acting in good faith, safety net hospitals and independent physicians like those in my district in Staten Island and Brooklyn who are already facing financial pressure from low reimbursement rates and consolidation in the healthcare system. Fraud diverts resources away from these providers and undermines their ability to serve our community. In 2025, we did see HHS under the new administration take action to go after fraudsters. We saw criminal charges against 324 defendants totaling $14.6 billion. That's a record more than doubling the previous record of fraud crackdown. Estimates suggest that Medicare loses between $60 billion and $100 billion each year to fraud, waste, and abuse. In New York, we have seen repeated examples of how widespread and damaging this problem can be. Just this February, a Brooklyn banker pleaded guilty to laundering more than $8 million in Medicare fraud proceeds through a U.S. bank on behalf of a transnational criminal organization. That same organization is alleged to have submitted over $10 billion in fraudulent Medicare claims by stealing the identities of more than one million Americans, including elderly and disabled individuals in every state. In that same month, two men from Queens were charged with turning a pharmacy and an adult daycare center, facilities meant to support our seniors, into a $120 million Medicare and Medicaid fraud scheme. And in December of last year, a doctor from Queens was sentenced to seven years in prison for submitting more than $24 million in fraudulent claims for medically unnecessary tests and equipment. In my district, my office has assisted seniors who were billed for medical devices that they never ordered or those whose personal information was stolen and used to submit claims for services they never received. For these individuals, the process of correcting these issues is very confusing, it's very time consuming, and it's very stressful. My first question is for Ms. Clark. Medicare beneficiaries who receive fraudulent bills for equipment or services they've never ordered are often elderly and on fixed incomes and many simply pay the bill out of fear of debt collectors and coverage loss. Is Medicare doing enough to proactively communicate with beneficiaries about how to identify a fraudulent bill and what more can this committee do to ensure seniors are aware of these risks and have access to a simpler, less burdensome process to resolve fraud?

I think we need to strengthen the 800 Medicare lane and have them be able to provide resources like the Senior Medicare Patrol, Cal Health Advocates in California, getting the information out there and being able to fund Senior Medicare Patrol so they can go out and teach our Medicare beneficiaries and their caregivers, their family, on what to look for, what to watch for. And when we did our listening sessions in Colton, California, we asked that question because this was our collaborative work and we asked them, do you know how to report fraud or if you're scammed or if you have questions, do you know who Senior Medicare Patrol is? And the answer around the table was a collective no. So being able to get that word out is so, so important.

And obviously you've seen a lot of seniors who have suffered from the issue of fraud. Are there any particularly egregious examples that you would like to share with the committee and any ideas on some of the newest schemes that these fraudsters are using?

Well, there's the old schemes that we talk about where they give them TVs, shoes, computers, pedicures, things like that, but it has real consequences. And I have had my first beneficiary that I worked with, he called me and his wife needed cataract surgery. And he said, you know, we found you and it was interesting, 800 Medicare had referred them to us to CHAPCA. And I worked with Earl and I said, well tell me what's going on and they said, she's on hospice. She's not on hospice, she just needs her cataract surgery done but they won't do it. And I said, okay, so I worked with Senior Medicare Patrol, it was very early on and so I'm trying to help them and going through it. I follow up two days later with them to say, hey Earl, this is what I found out. Earl is out of breath and he says, Sheila, she fell. And I'm like, Earl, what's going on? He goes, Sheila, she fell, she can't see, she didn't wake me up to go to the bathroom and she fell and she broke her hip. And they pinned it and she went into a nursing home and all of you medical, you know that when you're 80 and you break a hip, you're done. And she died two months later in a skilled nursing facility. That did not need to happen. She just needed her cataract surgery, but she was denied that because of a scammer hospice selection.

Thank you for sharing that and sadly there are many seniors that are facing that same type of consequences.

More than you know.

And that's what we're here to crack down on that and to make sure that seniors like that get what they need and they're not victims of fraud.

Mr. Panetta.

Thank you, Mr. Chairman, and thank you all of the witnesses who have been here for going on a few hours now. So I appreciate that and I appreciate your ability to convey through your testimony and your answers how serious this issue is, especially with fraud. As we know, this type of fraud is real and as you've heard and as you believe, it's unacceptable and it's far too common. But one thing it's not is partisan. It's not about one state or the other, it's not about blue states or red states and unfortunately it happens in all states and that means all of our constituents can be victims. As a former prosecutor, it didn't matter to me whether or not you're Republican or Democrat, it mattered whether or not you are a criminal. For years, I have worked with my colleagues on both sides of the aisle, especially right here on this committee, to confront fraud, especially when it comes to hospice. As we heard from our witnesses and as I know, it's a problem not just in California but affects seniors and others nationwide. The fraud isn't just a financial crime, it's personal when criminals defraud these types of programs, they're stealing from taxpayers, they're stealing from seniors and from the future care that I think all Americans rely on. Now six years ago, in February of 2020, this committee unanimously passed my bipartisan Hospice Act to beef up accountability for hospice fraud. It's a bill which President Trump signed into law that December requiring stronger oversight of hospice programs and created a special focus program at CMS to police potential bad actors. However, last February, shortly after taking office, the Trump administration then suspended the special focus program. He said that he would get back to us or the administration said that they'd get back to us this year, but unfortunately we have not heard a thing about the methodology, excuse me, methodology that they want to use at this point. We will be following up with them with a letter asking what is going on. Now Ms. Clark, I want to appreciate your sincerity and sentiment about what you've been talking to us about and I want to make sure that initiatives like the special focus program are effective as possible, not just to punish bad actors, but to help seniors and their families pick good programs. Besides not canceling these types of special focus programs, do you have any recommendations about how we can improve a special focus program to ensure that it is working as intended?

I'm not as well versed in the special focus program and the methodology that they were using, their algorithms, so I really can't comment on it. I can tell you that we need to do, there needs to be guardrails at entry, at licensure, at certification, the accreditation organizations, we need stronger guardrails. And we are ready to work and we're working with this administration and you know we had given information to the prior administration. We need stronger guardrails.

And has the administration contacted you or have you worked with them at all on those type of guardrails?

Yes, I am working with the Center for Program Integrity, CPI, on entry point and what we've done in California. If we can get our emergency regulations to be released, they were supposed to be released January 1st, we will have more stringent oversight in California than at the federal level. And we as an industry, we self-regulated ourselves and we said we need this in order for hospice care to survive in California.

Exactly, exactly. Well I look forward to working with you on that if possible.

I would love your help on it.

Thank you, be happy to do that. I have a few more questions, only have 42 seconds, I know I have other members that are going to do that. I'm going to yield back, but before I do that I want to thank all of you for being here and highlighting, like I said, this bipartisan issue when it comes to making sure that we prevent fraud in our healthcare industry. Thank you, I yield back.

Thank you, Mr. Panetta. Mr. Carey, you're recognized.

I want to thank you and also would like to thank the chairman and the ranking member for holding this and I echo my colleague from California's statement on this very bipartisan issue. Earlier this year, CMS issued the proposed rule for fiscal year FY 2027, which included the new Hospice Service and Spending Variation Index or SSVI. The SSVI would combine nine different claims based measures that represent both hospice utilization and non-hospice spending into a single source that can signal potential concerns around inappropriate use, quality, and of course compliance. So Ms. Clark, and I appreciate your testimony with my colleague from the great state of New York, but Ms. Clark, do you believe that the SSVI as currently designed in the current format would be able to capture all the hospice fraud and support the CMS enforcement entity?

No.

Do you want to go into that a little more?

Well I think that's self-evident with we did look at it and the files were published, the files were taken down, republished and now they're down again. There's they need to re-look at it.

Okay. I appreciate that. So last year also, CMS launched the Fraud Detection Operation Center to lead their charge to fight fraud, waste, and abuse in federal health programs. The FDOC, also known as the quote-unquote fraud room, uses artificial intelligence to detect fraudulent claims in real time and identify high-risk providers and bad actors to prevent fraud on the front end while keeping the human in the loop. CMS has reported that a successful pilot for this program prevented over 105 million in fraudulent payments between late March and May of just last year. Following that initial success, CMS and the FDOC permanent and reports that it saved an estimated $2 billion by February of 2026, less than one year after the initial launch. So Mr. Deery, your work in the private market to identify the fraudulent fraud, have you interacted with the FDOC in any of your work?

Thank you for the question, Congressman. Yes, we interact with CMS's Center for Program Integrity on a fairly regular basis of a collaborative responsibility.

So can you elaborate on are you familiar with how the system works in this process?

So I'm not familiar with the exact tools they're using. I'm aware that they are over some of the AI vendors they're working with, the well-respected vendors in the space. And I would say that the collaboration with CPI between CPI and the commercial plans at least has never been better.

So what kind I mean in in in your, you know, and obviously you're working with this, what kinds of patterns of anomalies does do you think this AI is looking for and how quickly can it be flag or put a pause on any suspicious payment or any money that's going out the door?

So generally you're looking for significant spikes in billings for entities that you haven't done business with in a long time or new entities. Hopefully entities that have changed transfer of ownership. We talk a lot about the NPI number. The NPI number is really the nexus by which the bills come in. So to the extent that we can examine the history of that NPI, spikes in billings, if there's a change in ownership, you want to observe that for a period of time. If it's a newly formed NPI, if it's an NPI in a zip code or an area we have other known areas. But the power of AI is taking then what you can determine as yes, this is a problem, and feeding it back into the system to find others that meet those same characteristics. That's where it becomes a multiplier and then put that information in the hands of humans, and I don't necessarily love humans, but put those hands back in the in the hands of humans who can then make decisions about where to prioritize resources. But CPI's moved the ball a long way on that. I would also just commend them for the first time CMS's shared with everybody a suspended provider list. So they've they've shared with us information on providers that they suspended with a credible allegation of fraud. That is a big deal because now that is visible, we can take that and do, you know, take a look at it on our own. It's a big movement forward and we appreciate the collaboration.

Well, my time is up. I want to thank all of you in the panel. I also again want to thank our leadership in on both sides this bipartisan issue. Thank you for your time and thank you for all the energy and information that you've provided to this committee. With that I yield back.

Mr. Moore, you're recognized.

Thank you, Chairman. I'm going to continue along some of the discussion about fraud and AI and would love a little bit more perspective. Trump administration's been forward-thinking on artificial intelligence throughout all federal agencies. So Ms. Clark, I'll gear this take this question to you first. HHS is no different. Secretary Kennedy told us last week that HHS is using AI technology to detect fraud and then he's ending the pay and chase system that has drained the system for years. Can you discuss how the use of AI at at Health and Human Services can reduce fraud and preemptively stop payment to bad actors before the money actually goes out the door? As well as what kind of involvement HHS staff have in verifying that flagged accounts are are truly fraudulent. I think being able to get this systems payment piece right, which is so basic for many companies, is one of the biggest areas of of potential that nobody on any aisle in any spectrum politically could ever disagree with. Can you expand on that a little bit?

Absolutely. I have not had direct experience with HHS, but in my state of California in working with our plans, what we have done for AI is you have a hospice patient that and I'd mentioned this earlier that has end-stage pulmonary disease. And that that that election is submitted, end-stage pulmonary, but they are on no medications, no ER visits, no hospitalizations, no specialist visits. And that is the stop right there to say, wait a minute, you're saying this patient is end-stage, but they have no history, no claims, no nothing. And that we have been able to stop it at the front door and say, no. No. And then when we work together, we call the patient and they're like, no, I don't even know I don't know who this hospice is, I'm perfectly fine. So being able to get at that information and it is all there. The claims data is there, the information is there. You just need to look for it. That's why I say look at the beneficiary level, start there.

Love it. And I think that can be broadly applied across multiple agencies and different disciplines across our world.

Yes, absolutely. Yes. And different not just hospice.

Yeah, I appreciate that and I think it's excellent to be able to identify how a success that we've had can permeate through other areas. And with that, Mr. Chairman, I will yield back my time.

Mr. Horsford.

Thank you to the chairman and to the ranking member. If I had to summarize this hearing in one word, it would be this: agreement. Neither Democrats nor Republicans support waste, fraud, or abuse, and we all must do more to stop it any way that we can. And at the same time, while we fight fraud, we cannot do it at the expense of patient care. The real challenge before this committee is ensuring that the systems within our jurisdiction actually work for the people who need it in real time when patients need care, not after the fact. So as we move forward on this front, hopefully in a bipartisan manner, we must ensure that any policy we put forth does not move us away from patient care and towards a more bureaucratic system, especially at the expense of seniors, including people like my own mother. Like many on this dais, I'm part of the sandwich generation, supporting college-age children while also helping to care for an aging parent who's enrolled in Medicare. Navigating Medicare on her behalf has made one thing clear: the challenge isn't just fraud. It's whether care is accessible, coordinated, and whether it's even there when it's needed. And when it's not, it's families who are the ones left to fill the gaps with their loved one. So Ms. Martin, I want to ask, what safeguards are in place to ensure that efforts to prevent fraud do not delay or disrupt care for seniors who depend on it in a timely manner? And what reforms would both strengthen fraud prevention and improve care coordination so families are not left navigating this system on their own?

Thank you for the question. I think that Congresswoman Sanchez brought up her bill earlier and that would be a good balanced approach to both protect program integrity and also support caregivers. It puts in new safeguards into the Medicare program. For example, it puts a temporary moratorium on new providers in the hospice program, but also puts into place special protection so if there is an access to care need, providers can be enrolled. In addition to that, it provides respite care for caregivers, which is very important as you know, that sometimes the caregivers also need care.

Thank you. Ms. Ianni, your testimony highlights a deeply troubling reality. Many patients don't even realize that they've been victimized until long after the fraud has occurred. Your experience underscores a critical gap in our system. Victims often lack the resources, the guidance, and support that's needed to identify fraud and to take action. Given that, shouldn't we be investing more in victim assistance, not only to help individuals recognize when they are being defrauded, but also to ensure that they know where to turn for help once that's occurred?

Absolutely. And as Sheila mentioned earlier, the Senior Medicare Patrol was truly the thing that resolved my situation. I couldn't do that independently and I am relatively capable and a decent advocate for myself, but I had no means except for what that provided. And I would never have known about it had it not just been for a Google accident. So thank you for mentioning that.

Thank you to all of our witnesses. This has been a very informative hearing and it's an area where there is agreement. So I hope that we will work together in a bipartisan way not to just talk about a problem, but to actually work to address it. With that, Mr. Chairman, I yield back.

Ms. Van Duyne, you're recognized.

Thank you very much, Mr. Chairman. Since joining the Ways and Means Committee, I have made it a priority to focus on protecting Medicare from fraud and abuse, specifically in hospice care, where patients and families are at their most vulnerable. This is not this has been, by the way, a bipartisan effort. Last Congress, I had the privilege of working with former Congressman Blumenauer to raise bipartisan concerns, to conduct oversight, and to push for stronger accountability at CMS. Because at the end of the day, protecting patients and preserving the integrity of Medicare should never be partisan. Medicare is a commitment, and when fraud enters the system, that commitment's broken, not just for taxpayers, but for the individuals and for the families who depend on honest and appropriate care. We have seen bad actors that are exploiting gaps in oversight, enrolling patients in services that they don't need, and diverting resources away from those who truly rely on them. Ms. Clark, what are the top three changes that you think Congress and CMS could make to ensure that beneficiaries who have been victims of fraud can quickly correct the situation and have access to the care that they actually need?

We need to do more education up front to teach them when an election is made, how who to contact, as Dr. Lynn said, they have to know where to go to. Who do I go to when I have this problem? And if it's 800-MEDICARE, 800-MEDICARE gets them over to Senior Medicare Patrol. So giving them the information to make that informed decision is so important. But then, once it's identified, we need to immediately make them whole again. And they need to be and we are at 24 to 48 hours now with the rapid disenrollment program. Once we identify it, either Senior Medicare Patrol or CHAPCA, we work in tandem and we get that information up to CMS CPI and they they get this beneficiary's life back. And they get them their their services that they need. What we need to do better is how do we figure out then that there's a consequence there? As I had mentioned, you have that spend on that beneficiary. And we need to we need to get that record back to zero when it when that beneficiary says, I have been scammed, I do not know who they are. That they are made whole, but then that that beneficiary's cap needs to be set back to zero. Because if we don't, who's going to take care of them?

Last week I asked Secretary Kennedy about the steps that HHS and CMS are taking to crack down on fraud and that cost taxpayers just hundreds of millions of dollars. And I was encouraged that he at least recognized the building that housed over 100 hospice providers, something that by the way, Secretary Becerra was unable to do. Looking back, you mentioned that officials from the Biden administration met with you for two days. What came out of those meetings?

The well as I mentioned, the first day we had we had given them a plethora of information on what we were seeing and stories similar to what Dr. Ianni had and had them work with the Department of Public Health, work with the Department of Health Care Services. They said it's some of the best meetings they've ever had. They downloaded everything that we were seeing in California.

Well and just to clarify, I mean HHS had authority to notify the beneficiaries when they enrolled in hospice, but they did not do so under the previous administration. So now under Dr. Oz, that notification is being implemented, but do you know why that action wasn't taken earlier?

I have no idea.

So I'm working on legislation to actually help CMS better target oversight using some data signals. So I'm just going to kind of give you just four just questions and if you can just say yes or no, should certain red flags automatically trigger increased scrutiny? So a hospice that fails to submit quality data.

Yes.

Rapid or recent change in ownership.

Yes.

Provider overdue for required surveys.

Yes.

One with an unusually high rate of live discharges.

Yes and no. I would look at the hospices that nobody dies.

Okay. And do these indicators suggest potential fraud and should CMS be using them more aggressively to target oversight?

When used appropriately and in the right way, yes. You can identify the the scammers and the bad actors. Yes, used appropriately.

Awesome. Thank you very much for your testimony. I yield back.

Thank you for all you've done for hospice.

Mr. Moran.

Thank you, Mr. Chairman. To all the witnesses, thank you for your time today. Today's hearing highlights the startling reality that we must do more to protect the Medicare program for those who need it, while stopping the fraud for those who are trying to abuse it. As noted today, estimates range from $60 billion to $100 billion are lost to fraud, waste, and abuse in the Medicare program alone every year. Every dollar lost to waste, fraud, and abuse is a dollar diverted away from legitimate care for patients. I believe that addressing waste, fraud, and abuse is critical to supporting the longevity and the integrity of the healthcare programs that are actually intended to help Americans that were originally intended to benefit from those programs. In particular today though, I want to address my focus on questions related to fraud around durable medical equipment, which has been identified over the past couple of years as an area littered with fraud and growing each year. Dr. Ianni, I want to start with you. The OIG alongside other law enforcement agencies launched an investigation known as Operation Brace Yourself, uncovering an estimated $1.2 billion in Medicare losses tied to medically unnecessary off-the-shelf braces. In addition, the OIG identified nearly $16.7 million in improper payments for braces that were either not medically necessary or not supported by patient records. So what does this mean for patients? It means fewer resources are available for those who actually need the care. Funds that should be used to strengthen patient access and outcomes are instead being siphoned off through fraud. Let's be clear, this is not just a patient issue, it points to systemic vulnerabilities within the Medicare program that make it far too easy for bad actors to exploit it. Dr. Ianni, from your perspective, what impact does waste, fraud, and abuse like the example I just gave in the Medicare program have on patient care?

I actually think Sheila would be the best one to answer that because I only know my own personal circumstance and it didn't include medical equipment.

Ms. Clark, I'm coming to you and then Mr. Klebonis, I'm coming to you also with a question on this.

So specifically for the DME and the services, we we do get calls for that. We refer them over to Senior Medicare Patrol and it's I never I never ordered this. Somebody called me and said would I like this? And then all of a sudden it ends up on my doorstep. And we you know, we go back, well did you talk to your physician? And it was always no. I just or somebody in a grocery store approached me.

It's confusing and complicated to the patient. It's confusing to the patient and it's complicated to unwind that once it gets started, correct?

It is. To we call it unraveling that that service and it takes a lot of time and patience and you have to have a lot of time and patience with the family, the family members, the you know, the the mom, the dad, the it is you literally have to get everybody involved because we're all trying to figure out how on the heck did this happen.

Yeah. And so not only are we dealing with the fraud and the money that's gone out the door, but now we're we're telling people you're going to spend hours on the phone and days associated with what otherwise could be productivity in the marketplace. Now you're stuck trying to unwind this fraud in your own life. Mr. Klebonis, a recurring pattern in DME fraud involves telemarketing operations that contact Medicare beneficiaries, obtain their Medicare numbers under false pretenses, and then use those numbers to bill for equipment that the patient never requested. Ms. Clark just mentioned this. What are ACOs doing to combat these telemarketing-based fraud schemes?

Congressman, I want to answer it slightly differently is the we clearly have a claims issue. And there's an opportunity to engage our Medicare administrative contractors, which are very large and sophisticated organizations and they technically have their hands tied behind their back. They're they're employed to pay claims and not hold them up. And I urge this committee to look at creative ways to empower MACs, to hold them accountable, and even offer penalties to make sure that they combat and and not pay fraud before it actually happens.

Ms. Clark, I want to follow up with you. In your testimony you write, quote, fraud does not only injure the individual beneficiary, it poisons public confidence in the benefit. It undermines legitimate providers and forces honest organizations to operate in a system where criminal conduct can distort the rules under which everyone else must function. I completely agree. This has real consequences for honest providers as well. Just weeks ago in my home district, I met with Dr. Mack and founder and president of Prosthetics and Orthotics Association. He shared his frustration that widespread fraud undermines the credibility of legitimate providers like like him who are delivering medically necessary care and operating in good faith. Ms. Clark, as providers grow frustrated, what can they do to work with this administration to help root out that waste, fraud, and abuse?

They can be part of the solution and if you can talk to a legitimate provider, they will tell you. I mean they they say come on into my office, you know, look, I'm here, I'm legitimate, please, you know, don't just sit outside and take pictures of my door. That I'm a legitimate provider, come in and see that I am a legitimate provider. And you're right, they are having to distinguish them against us. When you have a hospice and you're in front of a patient and family and you've got to defend all of the rhetoric all of everything that they're seeing out there, they're not even sure if they want hospice. Who am I choosing? Is it is it a good guy? Is it are you actually they say are you one of them?

Thank you again to all of you for coming today to help us root out the waste, fraud, and abuse, find it, and to get rid of it. Mr. Chairman, I yield back.

Mr. Suozzi, you're recognized.

Thank you so much, Mr. Chairman. First of all, thank you to the witnesses. I really appreciate the time that you've all taken to be here like this. I know that I think you came from California, Dr. Ianni, and Ms. Clark came from California, and Klebonis came from Palm Beach, and I don't know where did you come from, Mr. Deery?

The fine city of Philadelphia.

Philadelphia. And Ms. Martin, you're down here in Washington?

I'm in DC.

Well I want to thank all of you for spending so much time with us here today on this very important topic. When we kicked off the hearing today, the chairman of the committees talking about this is a Democratic problem in Democratic states. And then you've heard a bunch of a bunch of Democrats talking about, well President Trump is pardoning all these fraudsters and you know, hundreds of millions of dollars of fraudsters have been pardoned. And you've heard different things about Democrats and Republicans and you've had a lot of heard a lot of my colleagues talk about this is not a Democrat or Republican problem. This is a problem we all share in common that we have to work together. So Dr. Ianni, would you say this is a Democratic problem or Republican problem or is it something we all share?

Absolutely we all share.

Ms. Clark?

We all share it 150 percent.

Mr. Klebonis, what would you say?

Congressman, we all share.

Mr. Deery?

It's a problem for the taxpayers of this country.

Okay. Ms. Martin?

It's a problem for the taxpayers and the beneficiaries.

Okay. So this is a problem that Democrats and Republicans, I think most of us are concerned about this and if we work together, we'll be more likely that we can get something done instead of just pointing fingers at each other. So let's I'm happy to hear that you all agree with that basic sentiment. So the we've heard today about problems related to hospice, home healthcare fraud, durable medical equipment, prosthetics, orthotics, and clinical laboratory test, skin substitutes, and Medicare Advantage problems related to upcoding and prior authorization. So why do you think, you know, first of all this all involves seniors, right? Medicare is senior citizens. These people are vulnerable often, vulnerable people who are being taken advantage of and people are looking for ways to make money by taking advantage of vulnerable people in a big bureaucratic system. Why do you think it's these areas that they're picking on? Why is it hospice? You you got nailed in a hospice scam, Dr. Ianni. Why do you think hospice is something that's so vulnerable to this?

Well I think it's easy because it's not been like policed sufficiently enough so that it's not very difficult to do. And they can they have been getting away with it for a long time and it's been extremely successful and extremely profitable.

A long time, right. This is not this administration or the previous administration, it's been going on for a long time. So Ms. Sanchez you heard earlier today talked about a bill that she has that she picked up that was also previously done by a colleague of ours called the Hospice Care Accountability Reform and Enforcement Act. Are you familiar with that bill, Dr. Ianni?

No, not until today.

Ms. Clark, are you familiar with that bill?

Yes I am.

And do you like that bill or do you?

I think there's some very good points in there. One of them that for me is the you know, payment is based on if you submit quality data. Why is it that we allow hospice providers to opt out and take a 4 percent hit? They don't care about the 4 percent. They just I'm not going to do it and why why would we allow a provider that is going to take care of our most vulnerable to say, heh, I'm not going to do it.

So it's a good bill probably, some good things in it. We should work on it as a bipartisan group to try and get something like this done. Mr. Klebonis, are you familiar with that bill?

I'm not an expert on the bill, no.

Mr. Deery?

I am not.

Ms. Martin?

Yes.

And do you like that bill?

Yes, it has program integrity provisions as well as access to care provisions.

So I've had instances, I'm well aware of the home health care fraud thing that's going on. That's a very big problem that's going on in my state of New York, where people are scamming the system right now. I'm sure it's a problem in many other states. Regarding durable medical equipment, I've had a some constituents call me about their this whole catheter scam, which is hard to imagine that you know, people are engaged in this type of defrauding of the public. Have you guys have anyone here familiar with any existing legislation that you think we should really be pushing on a bipartisan basis that you've heard of or any efforts we should be pushing? Okay, so we need more bipartisan efforts, right? So maybe if we could stop pointing fingers at each other and start working together to address these very real problems that cost taxpayers billions of dollars and spend our time working together. This is hard work this is complicated stuff. You cannot solve complicated problems in an environment of fear and anger where everybody's just yelling at each other. It's impossible. You need people of goodwill to sit down and say I think this, well I think that, well how about this, well how about that and then try to come together to find some common ground to move forward to solve the problems that we all share in common. And this goes not just with this issue this is every single issue we face in our country. So I want to thank all of you again for being so reasonable for taking so much time out of your personal lives to come here and to help us and I want to encourage all of you to hold people like me and the other people on this dais accountable and say listen stop the BS start working together and start solving the problems. Thank you very much Mr. Chairman and I yield back.

Mr. Yakym.

Mr. Chairman thank you for holding this hearing and thank you to our witnesses for being here today. Improper payments are irresponsible. They're a blatant waste of taxpayer dollars. Each year Medicare loses $60 billion to waste fraud and abuse. That includes an estimated $3.5 billion of fraudulent payments for home health and hospice services in Los Angeles County alone. These figures are alarming and we need to do more to uncover fraud hold perpetrators accountable and prevent fraud from occurring in the first place. Ms. Clark Medicare losing $60 billion to fraud annually is a staggering figure and represents real dollars stolen from real seniors and taxpayers. Can you help us understand the scope of the problem and why California is such a fraud hotspot?

It goes back to entry licensure certification holding the both at the state and the federal level holding them accountable. You mentioned home health I've heard it mentioned a few times. LA County has beheaded the home health payment model. LA County alone has beheaded. LA County has beheaded the home health payment model. LA County alone has beheaded.

How so?

The fraudulent activity that's going on there unchecked and it's polluted the the payment model where the lower 48 states they they are leaving in droves and LA County replaced them all. So it looks if you look at the number in total oh yeah it looks good we're no we're not. And then you know home health I was about a year ago listening to a MedPAC call doing you know my job and one of the analysts you know the the commissioner said yeah what's what's going on in California with with home health and the analyst said yeah you know if you if you lift off LA County it looks normal but man when you lay LA County data over there it's just bad it's bad. And I'm like okay finally.

Do you believe that the administration is properly focused on addressing this massive amount of Medicare fraud?

I think they need to do better.

Mr. Deery Medicare Advantage plans spend substantially less on fraud prone categories than traditional Medicare. What specific fraud prevention technologies and data analytics are Medicare Advantage plans using that CMS is not currently deploying in traditional Medicare?

Thank you for your question. You know I don't have the luxury of knowing exactly what CMS is using but what I can say is that we're we have aggressively invested in technology that gets us visualization and and notification when payment spikes happen as close to the point of payment as possible. I have a dashboard that I look at on a daily basis that shows where every dollar the organization spent the previous day went in terms of claims. I have an army of people that do that and when we see unusual things we hit the pause button understanding that anytime you hit the pause button it has real effects on people so we we're really thoughtful when we do that but we're also not looking to chase money all over the world.

Is there any reason that you're aware of Mr. Deery that the federal government cannot adopt these same tools?

Well I think they are. I think the Center for Program Integrity as I said before is making significant strides in that you see some of what they did last year with their their AI chili cook off where they brought a bunch of vendors in to to really examine that data and take a look at it so I think that ball's being moved. I think the ball's also being moved at HHS OIG you just sense through what they share with us in terms of the fraud briefs they provide to the commercial plans each week each excuse me each month that tell us not necessarily what their targets are but the trends that they're seeing. So I think we're moving the ball in the right direction but the reality is we are you know hamstrung a little bit by regulatory issues that allow us to not necessarily share information in the same ways that the actors are sharing information.

Tell me a little bit more about those regulatory issues. What regulatory or legal issues prevent CMS from using some of these real time analytics and predictive AI tools that private insurers routinely employ?

So I don't think I'm not aware of regulatory requirements or or acts that prevent them from using those tools. What I would say is that data sharing and collaboration is critical up and down the aisle. When I see something in Independence in Philadelphia that may be affecting our members clearly it's affecting other members throughout the country. So I would ask any opportunity to kind of responsibly claw back our ability to collaborate in meaningful ways is is useful for both the taxpayer and for commercial.

Thank you Mr. Deery. The Trump administration has taken meaningful steps to combat fraud across the entire federal government. Last year their national health fraud takedown resulted in the arrest of 324 defendants that was responsible for schemes totaling $14.6 billion. Combating fraud in Medicare is essential to protecting seniors supporting providers and being just good stewards of taxpayer resources. I thank you and Mr. Chairman I yield back.

Thank you Mr. Bean.

Thank you very much Mr. Chairman. Good afternoon to you and good afternoon to our all star panel. This will be the day that you will always remember that day that I testified for over four hours to the Ways and Means Committee. It was about four hours ago that somebody said something I'm not going to tell you on which side of the aisle it came from but I think we know when they said Elon Musk and DOGE came up short in their effort. The record needs to be reflected Elon Musk was right about everything and that little chunk of ice that we saw in the ocean that he's that some would said that's fraud he said it's a whole iceberg underneath and indeed it is and that is what's led us to this hearing today to focus on fraud. I'm chair of the DOGE caucus in the House and you can see that's fired me up and it's fired everybody up. Dr. Ianni your situation which is tragic reminded me of a call that I received on one of my telephone town halls where a constituent said hey why can't why can't my Medicaid bill be like my credit card where every month I at least get to look at the charges and to find out I didn't order the lobster nor the hospice service nor the COVID test and we could fix it right then. What if what if you could review your Medicare charges every month? Would that be a good idea Dr. Ianni?

Absolutely.

Very good you've just I've just described the PROMPT Act. I have filed this bill just last month that says Medicare hey how about sharing all of the claims that were filed on your on your behalf. So we've done that and hopefully you can help me sell that to my colleagues and it sounds like Mr. Suozzi's ready to jump on some bipartisan fraud bills. Ms. Clark we sign up anybody to the that wants to be a provider in Medicare. I would say our our threshold is that you have to fog a mirror but fogging a mirror would be much too high a bar because you don't even have to show up in person you can get online say that you're a Medicaid provider or you're whatever your specialty are and you get a little text back here's your billing number go get them whether you're a good guy or or bad guy. What say you? Do we need a little more attention in signing people up to provide services to the American people?

Yes we do.

What should we do? What do you think? Should we at least verify that you're a licensed doctor or that you're not that you're unlike the you know like the Dr. Ianni's found her doctor was identity was being stolen. Would that be a good idea Dr. Clark miss Ms. Clark?

Yes and you'd be surprised how many beneficiaries I talk to and the attending physician lost their medical license years before. There was no check on that.

It's nuts I know it's nuts. Guess what I got good news Bean has filed the Medical License Verification Act. It just takes a little bit extra time to call or or check to see who indeed is wishing to to bill us. And I've listened to Mr. Deery and you on the private sector it seems like no one in the in their right mind would act the way that we do as the federal government pay and chase we pay anybody and then huh they are shocked when we find out that they ripped us off or something. So you guys in the private sector do a little bit more investigation you get information on who could be a bad guy and then what do you do with that information? How do you use it before you write a check?

So I think we've actively actively and aggressively invested in technology to to allow us to do that. You know stopping the claim or stop a payment is something we take seriously. So but we do have trained professionals that are looking at it across both clinical and investigative ways to make sure that we're protecting the premium dollar that our members are paying to us.

Amen brother. How long would a private insurance company be in business if they operated like the federal government pay and chase? How long would you be around if you paid and chased?

Not long.

Not long. Would you say not long?

I would say not long.

Thank you Mr. Bean. I'd like to thank our witnesses for appearing before us today. Please be advised that members have two weeks to submit written questions to be answered later in writing those questions and your answers will be part of the formal hearing record. And with that the committee stands adjourned.

Not long is the right answer. Yet the pay and chase for those that are watching maybe somebody's watched on C-SPAN we pay these bills without any verification we're very prompt payers. Mr. Chairman give us credit maybe our credit score is going up because we pay anybody that bills us without any common sense without any little just curiosity what did they do are they real or or what not. So thank you all for being up here you came up here on your own dime. We appreciate it your grandchildren will appreciate it because if we can make changes to preserve this very precious healthcare system that we have to ensure that it's a true safety net then your time that four hours was well worth it today. With that Mr. Chairman I yield back my last two seconds.