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ICYMI: Toomey Chairs Hearing on Improper Medicaid Payments

October 30, 2019

Washington, D.C. - U.S. Senator Pat Toomey (R-Pa.), chairman of the Senate Finance Committee Subcommittee on Health Care, convened a hearing today on improper Medicaid payments.

Nearly 10 percent of Medicaid payments have been reported as improper in recent years. However, absent accurate and robust eligibility reporting, this estimate could be much larger.

Below are select excerpts from today's hearing, which can be seen in its entirety here.


Senator Toomey and GAO Health Care Director, Carolyn Yocom: Watch

Toomey: "Ms. Yocom, could you explain to us a little bit about the payment error rate measurement, known as PERM audits, what they accomplish. The current status of those audits, and whether and if so why you believe they're important?"

Yocom: "Sure. For the Medicaid program there are three components that are measured. One is fee for service. The second is managed care. And the third is eligibility determinations. 17 states a year do these analyses, and they are done on a rotating basis. So every three years you've covered all 51 states, if you include counting the District. And there's concerns in each of the areas. With eligibility in particular, we just don't know the answer yet and we haven't known it since 2014."

Toomey: "And why is that?"

Yocom: "CMS made a choice to not publicly report any eligibility measures. They used a different system instead and worked internally with the states."

Toomey: "My understanding is that that portion of the PERM audit has resumed and we expect a report relatively soon. Is that your understanding?"

Yocom: "Yes. Our understanding is usually it comes out sometime in November."

Toomey: "In the absence of that report, do we have less comprehensive, less accurate information about eligibility?"

Yocom: "Yes."

Toomey: "So it's plausible that the improper payment rate, which has been estimated at $36 billion, could actually be higher than that?"

Yocom: "Yes. It could. We just don't know."

Senator Toomey and Louisiana Legislative Auditor, Daryl Purpera: Watch

Toomey: "In your home state of Louisiana, as I understand it, you uncovered 1,672 enrollees with over one hundred thousand dollars in annual income, and according to your testimony, in each case these individuals self-reported their income. Do you think there's any chance there's any fraud involved in the 1,672?"

Purpera: "Yes sir, I do think there is a chance. My office is currently investigating some of those situations as we speak. That work was our Department of Revenue came up with that number. State auditors cannot use tax information, but I was able to get my Department of Revenue to reveal or compare their taxing information to the database of the Health Department, and 1,672 I believe it was had income of over one hundred thousand dollars."

Toomey: "If a state allows individuals to self-attest to their own income, what mechanism do they have to stop people from any level of income from signing up for Medicaid?"

Purpera: "The self-attestation is not the problem if the income is strictly wage income. When an individual works for a wage, they get a W-2, that information is reported to the Department of Labor in every state. The problem is, that is only a piece of the puzzle you still got self-employment, rents, royalties, you've got interest incomes, you got many different types of incomes that wage information does not cover. You have to use tax information. You have to use other sources about getting that income."

Dr. Bill Cassidy (R-La.) and Louisiana Legislative Auditor, Daryl Purpera: Watch

Cassidy: "Just an incredible number of people receiving taxpayer benefits, middleclass taxpayers paying for them, and yet they shouldn't. Mr. Purpera, you and I had a conversation earlier, I think you mentioned one person on Medicaid was actually a Medicaid provider who had received four million dollars in Medicaid payments as a provider, do I remember that correctly?"

Purpera: "Yes sir you do remember that correctly."

Senator Steve Daines (R-Mont.) and HHS Assistant Inspector General for Audit Services, Brian Ritchie: Watch

Daines: "The case of Montana where there was an audit done, there were discrepancies that were found, but there was not follow up to resolve the discrepancies. I was in the private sector for twenty eight years, the audit is step one, but that leads to really the outcome, which is to identify the action plan and resolve the discrepancies."

Ritchie: "Yeah, it's not worth doing if you're not going to follow through on it. You have to identify it, follow through with the action plan and do that. That's what we're hoping to see. In our report we make recommendations to the states and then follow up with them. I know some of ours are still recently out, but we've seen in both Kentucky reports and in one of the New York reports where they've actually implemented policies and procedures to follow up on those and make changes. We're hoping to see that in each of them and we're hoping that our reports have a more sentinel effect and other states will see this and do it too because we saws consistent human and system errors that they can implement also."