Strengthening Fiscal Oversight of Medicare and Medicaid

WASHINGTON, D.C. – Congressman Todd Platts (PA-19) continues his push to make the federal government more accountable to taxpayers, chairing a hearing today to evaluate efforts to improve the fiscal integrity of Medicare and Medicaid.  Medicare and Medicaid spending reached an estimated $820 billion in Fiscal Year (FY) 2011, which is approximately 23 percent of all federal outlays. This is the third in a series of hearings that the Subcommittee on Government Organization, Efficiency and Financial Management, chaired by Congressman Platts, has held this Congress focusing on issues within Medicare and Medicaid. 

The size and scope of Medicare and Medicaid make them highly susceptible to waste, fraud, mismanagement and improper payments.  At a February 7th subcommittee hearing, it was revealed that the federal government reported an estimated $115 billion in improper payments in Fiscal Year 2011 – more than half of which came from Medicare ($42.9 billion) and Medicaid ($21.9 billion). 

 “The American people deserve a government that safeguards their tax dollars and spends them wisely,” says Congressman Platts.  “Unfortunately, CMS has not effectively overseen Medicare and Medicaid, which has led to billions of dollars of waste each year.  We must do more to strengthen the integrity of these programs and increase the accountability of government spending.”

The Centers for Medicare and Medicaid Services (CMS) is responsible for ensuring the fiscal integrity of both Medicare and Medicaid.  Since 1997, Congress has provided funding to CMS to detect and prevent fiscal vulnerabilities in these two programs.  The Health Care Fraud and Abuse Control (HCFAC) program received $1.4 billion in FY2011 and the recent health care law provides an additional $350 million over ten years. 

Despite these outlays, fiscal integrity issues in Medicare and Medicaid persist. The Government Accountability Office (GAO) noted in March 2011 that preventing and identifying improper payments and fraud in those programs are “continuing challenges” for CMS.  A variety of persistent information technology and data related issues have contributed to these challenges.  CMS continues to utilize outdated and uncoordinated data systems that harm the integrity of both programs due to a lack of accountable data.  For example, since 2006 CMS has spent more than $100 million developing the One Program Integrity System (One PI) to integrate Medicare and Medicaid data.  To date, Medicaid data has not been included, and One PI is expected to be completed in 2015 - four years behind schedule.

 There are problems with state-reported data as well.  Many states are not reporting all required data, and there are often lag times of up to a year between when states report data and when CMS receives and verifies it.  The Office of the Inspector General for the U.S. Department of Health and Human Services also found that much of the information that was reported in these systems is not useful for fraud, waste, and abuse detection.

The subcommittee will continue its ongoing review of Executive Branch financial management and accountability issues throughout the remainder of the 112th Congress.  Recent hearings have examined financial management deficiencies at the U.S. Department of Defense, improving data protection at the U.S. Department of Homeland Security, and reviewing Internal Revenue Service policies regarding tax identity theft.