At E&C Hearing, CMS Touts Medicare FPS Savings; OIG and GAO Recommends SSN Removal, Additional Provider Screening

Today, at a hearing of the House Energy and Commerce Subcommittee on Oversight and Investigations, members discussed the Administration’s efforts to curb fraud, waste, and abuse in Medicare. The Subcommittee heard testimony from witnesses at the Centers for Medicare and Medicaid Services (CMS), the Department of Health and Human Services’ Office of Inspector General (HHS-OIG), and the Government Accountability Office (GAO) on recommendations that program integrity officials are implementing, and outstanding requests that CMS has yet to act on.

Members from both parties testified that CMS should act quickly to remove beneficiaries’ Social Security number from their Medicare card, but the agency testified that additional resources would be necessary to implement the change. Also, while there was bipartisan interest in encouraging CMS to adopt more recommendations from OIG, some Republicans were hesitant to support additional funding for program integrity.

Republicans on the Committee also expressed concern that overly-aggressive auditing practices are stifling payments to providers, although CMS noted that these post-payment audits would not interfere with a provider’s up-front reimbursement. Looking to identify other sources of waste in the program, several Democrats argued that private Medicare Part D plans should be authorized to negotiate drug prices similar to Medicaid.

On the Medicare Part D drug pricing front, Democratic members including Rep. Waxman (D-CA) and Rep. Jan Schakowsky (D-IL) highlighted Medicare Part D drug pricing as “the single biggest source of the waste of taxpayer funds in Medicare.” Rep. Waxman, former chairman of the influential Energy and Commerce Committee, said that he recently requested a hearing on the implications of the high cost on the Medicare Part D program of Sovaldi, a recently-approved Hepatitis C drug. Waxman said that Part D plans are not able to effectively negotiate for lower prices for drugs, despite the fact that the manufacturer provides substantial discounts on the drug in other countries, and for the VA and the Medicaid program. Rep. Schakowsky invoked similar sentiments, also citing the costs of Sovaldi – an estimated $1,000 per pill and +$80,000 for a 12-week treatment regimen.

Witnesses invited to testify at today’s hearing included:

• Dr. Shantanu Agrawal, Director of the Center for Program Integrity at CMS, testified to the positive impact that new program integrity efforts have had in reducing fraud and waste in the program. According to a new report released ahead of today’s hearing, CMS’ Fraud Prevention System (FPS) saved taxpayers $211 million in fiscal year (FY) 2013.
• Gary Cantrell, Deputy Inspector General for Investigations at HHS-OIG, testified that more funding is required to identify fraud as bad actors continue to evolve as program integrity efforts become more sophisticated.
• Kathleen King, Director of Health Care at GAO, testified that CMS could improve its program integrity efforts in a number of areas, including issuing a rule to require additional provider and supplier disclosures of information, such as any suspension of payments from a federal health care program, and removing Social Security numbers from beneficiaries' Medicare cards.

If you are interested in a comprehensive summary of today's hearing, please contact Shea McCarthy (smccarthy@thornrun.com.)