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Herger Statement: Hearing on Reducing Fraud, Waste, and Abuse in Medicare

June 15, 2010

Thank you, Mr. Chairman.

There is broad agreement that the Centers for Medicare and Medicaid Services (CMS) needs to do far more to combat waste, fraud, and abuse in Medicare. 

In fact, fraud is such an issue in Medicare that the Chief Counsel to the HHS Inspector General, who is testifying on the second panel today, said that, “a lot of career criminals and organized criminals have decided that building a Medicare fraud scam is far safer than dealing in crack or dealing in stolen cars, and it’s far more lucrative.  …Right now, it’s a good bet that you can take millions from us, and chances are you’re not going to get caught.”

It is clear more must be done to ensure that taxpayer dollars and seniors’ premiums are being used wisely and efficiently. 

That is why I am hopeful that the provisions intended to combat waste, fraud, and abuse will succeed.  These are some of the few provisions in Democrats’ health law that I agree with. 

In fact, a number of these policies reflect reforms contained in the alternative health reform proposal put forward by House Republicans, which I was proud to vote for and have offered as legislation to replace this seriously flawed new law.

But I would like to take issue with the oft-repeated claim made by Democrats that their $1 trillion health care overhaul was financed by eliminating waste, fraud, and abuse in Medicare. 

The independent Congressional Budget Office (CBO) notes that the anti-fraud provisions in the health law will save $5.8 billion over the next ten years.  That’s a far cry from the one-half trillion dollars in Medicare cuts passed by the Democrats.

Since we will be discussing Medicare waste this afternoon, I’d like to remind the members of this Committee that the House-passed “Extenders” bill contains $175 million in taxpayer money to “reprocess” claims.  The Extenders bill currently being debated in the Senate has the same provision. 

The need for this money results from Congressional irresponsibility and is a wasteful use of the taxpayer dollar, pure and simple. 

Because the majority has missed numerous payment deadlines and structured other policies to extract money from health providers retroactively, CMS was forced to reprocess a significant number of claims. 

This comes with a cost, which in this case totals $175 million dollars.  It’s like the Majority decided to buy a gift the day after Christmas and forced the taxpayers to cover the expensive overnight shipping costs. 

Lastly, I’d like to remind the Chairmen that Committee Republicans have formally submitted two requests to Chairman Levin to hold a hearing with Chief Medicare Actuary Richard Foster to present his analysis of the new health law.  I know that Chairman Stark valued Mr. Foster’s views when he was in my position. 

Given Mr. Foster’s warning that the one-half trillion dollars in Medicare could jeopardize seniors’ access to providers, I believe it is of utmost importance that the Committee hear from Mr. Foster so that we can attempt to avoid such impacts. 

I hope that my colleagues on the other side will join us in this request.

I yield back the balance of my time.