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All right, thanks. Beyond government operations
will come to order and I want to welcome everyone to this, what I
think is going to be an important bipartisan hearing
today. Without objection, the Chair
made a clear recess at any time and I recognize myself for
making an opening statement to our witnesses that are here
today into the people who have taken time to come here to see
today, as well as my colleagues. I want to really dispense with
my opening statement and without objection, I'll enter that into
the record. But what I'd like to say is, is
that this is a follow up to the meetings which we have held for
the last few years, where there was active discussion, not just
about what we were going to do to recognize what might be
considered waste, fraud or abuse.
Or money that was spent by the federal government that did not
equal that which it was intended to do, which kept money away
from the real recipients. And for people who would have
benefited with congressional intent.
As you will recall, last year we held what was a meeting in
October whereby we had GAO and others who came to speak with us
and they came up with a what might be a three-year number of
their ideas about inappropriate payments than waste, fraud and
abuse. But things that were paid that
we felt like we're not permissible or following the
intent of the law or the needs of the money.
Mr. Mfume and I at that time looked at each other and said we
are going to work together. We are going to challenge GAO to
come back to us. We are going to find within the
government other particular people who have talent, data,
information and can lead us to a better solution.
I'm pleased to say, Mr. Infume, I believe this is the beginning
of that, turning the corner to where we will then not just work
together but try and discover the things that reside within
the government to gain the information is necessary.
And I think today's hearing will prove that in.
So I'm delighted that you were here.
I'm going to put my opening statement on the record, but
that is what I want to say. This is about identifying,
preventing fraud, improper payments in federal programs.
And we're going to learn today how we're better prepared if we
work together, if we find a way. And I think we will not just
work together, but to use the important elements of this
government for data, information and lessons learned.
And I would say thank you for being here.
Distinguished gentlemen wish to have time for an opening
statement. I do Gentleman's recognized.
I do. Mr. Chairman, thank you very
much. Good morning to you.
Good morning to our witnesses who are here.
And I want to just personally thank Chairman Sessions for the
manner in which we continue to meet each other halfway, even
though we're on different sides of the aisle, to come together
to find a way at least to release the federal government
of some of his ailments, particularly this whole notion
of improper payments, waste, fraud and abuse.
We did that throughout the 118th Congress and my colleagues and I
on this subcommittee all remain laser focused on combating those
matters. And I think we also have always
agreed that this is a non partisan matter.
No matter where we are in our country or philosophically, we
agree that every dollar directed to every program ought to go to
the intended purpose. From the very beginning of this
President's term, the so-called Department of Government
Efficiency, and some of you know that I have referred to it as
the Department of Government evil for my own particular
purposes because of the way it's affected working men and working
women and their families across this country.
I think hard working, dedicated men and women exist in every
Congressional District throughout the country.
And while there is still no full complete public accounting on
all of them who have been dismissed, other than numbers,
we don't know the names and the faces and the families, the
children and the mortgages and everything else.
It's been disrupted by this. I've got no doubt that among the
hundreds of thousands of federal employees affected by the fork
in the road e-mail and the mass firings and a probationary
staff, that many, many are experienced in the pain that we
do not feel right now. And that's not to even mention,
as I'm sure the chairman would mention also, the 18 inspector
general's that have been dismissed.
They were like the sheriff's that were running the town and
doing a damn good job at it and reporting back to this committee
and both the chairman, Sessions and myself on real clear ways of
trying to move us forward deliberately and focused.
And I commend their work. I look forward hopefully to the
return of some of them, and I know that their role cannot be
understated. We're already in a situation
where 10 of 24 agencies subject to the Payment Integrity
Information Act we're not fully compliant with improper payment
reporting requirements as of 2022.
It is the furthest thing from common sense, in my opinion, to
fire the inspector generals who have a real set of experience
and a body of experience addressing this problem.
As witnesses have discussed in many of our previous hearings on
this issue, particularly last September, combating fraud,
improper payments abuse is not as simple as waving a magic wand
or a chainsaw. Real progress relies on access
to quality data. It means thoughtful partnership
with agency leaders, and it means investments into the
technology and the staff needed to create proper internal
controls to prevent improper payments and fraud.
I was proud to join with many of my colleagues on the Oversight
Committee and introducing recently the Taxpayer Funds
Oversight and Accountability Act, which in many respects
would make important strides in adjusting these challenges.
Simply put, I think we have a real challenge before us, not to
mention the fact that sometimes we're not focusing on some of
the real issues. I would call everyone's
attention to the fact that the largest agency and with the
largest budget is still the Pentagon and we have witnessed
seven straight audits that have failed because of problems at
the Pentagon. I don't know how you can fail
seven straight audits and not become the focus of waste, fraud
and abuse. That's another story, perhaps
for another time, but it is something that continues to cry
out for very real attention. The GAO reported recently a
total of 162 billion in improper payments and government wide
matters in fiscal 24 and that marks a significant reduction.
It's almost embarrassing to say that that's a significant
reduction from the 236 billion in improper payments in fiscal
2023. In recognition of the shared
challenge, Chairman Sessions and I, on a bipartisan way, work to
discover real pathways to reducing fraud and to reducing
improper payments. This past October, both he and I
sent a joint letter to the GAO requesting that they review, as
was mentioned earlier, $2.7 trillion and improper payments
and fraud that have occurred since 2003 and provide
actionable recommendations before this committee.
So, as I conclude, I must mention the importance of
staying grounded in the scope and the breadth and the depth of
this problem. While improper payments and some
fraud exists, that does not mean that the bedrock of social
safety net programs like Medicaid, Medicare, and Social
Security should be cut or privatized.
The existence of these problems does not justify in any way mass
firings of workers, failures to pay nonprofit organizations.
It does not justify the fact that the government owes for
work done in so many instances and that the effort really is
moving to destroy many of the federal agencies as we come to
know them. Even despite the claims that
Social Security is rife with fraud and fraudulent payments
due to quote, long dead individuals who are about 133
years of age, that program has a payment accuracy rate of over
90%. And that's according to the
Center for Budget Priorities. So as we move forward, as
together, hopefully with our own differences of opinion, but in
an effort to move forward together to combat waste, fraud
and abuse as we know it and as we are defining it.
I hope that we as a Congress will remember that the purpose
of this weighty task is not to exploit these problems or to
destroy the federal government in the process, but to work for
a better country. And to do that, as the chairman
has said, hand in hand, working together despite our
differences, to come up with a consensus.
That's what we really want, consensus approaches that are
not on the extreme left or the extreme right, but in the middle
where most people are and in the middle where the problems are,
so that we can deal with this issue in a very responsible sort
of way. And to be able to report back to
the American people that we really have made an impact in
dealing with the issues of waste, fraud, and abuse.
Again, I cannot say enough about the Chairman Sessions work in
this regard. In this committee's work, we
didn't get a lot of attention, but we were in the forefront for
the last two or three years. So it's good to know now that
people are paying attention. We just have to make sure that
we are doing this the right way and in a way that is
responsible. Thank you, Mr. Chairman, and I
would yield back. I appreciate the gentleman's
dialogue. I want to say that maybe 10% or
more, I think more of the American people want, expect and
need us to work together. And you have my promise that it
will continue to be done and we will work together.
I you have a strong voice, you have a strong idea of what
you're after. But what we're dealing with here
is something that must be overtaken.
We have to win on this. And it will be a bipartisan
effort. And I think the two with the
three witnesses that we have today are shining examples that
can lead the way, not the partisanship, but the answers.
And I think that's what we seek. I want to thank your
conversation today. And I think that we'll see that
also. Sir, thank you.
I want to request unanimous consent that the gentleman, Mr.
Moskowitz from Florida, be waived on today's hearing for
the purpose of asking questions. That objection, so ordered.
OK. We're now going to get to the
big deal and the big deal is our witnesses who takes seriously
not only that effort that you and I in this subcommittee
share, but also ideas and answers for leading us to that.
I'd first like to introduce Kristen Cokie Leak serves as the
managing director, financial management assurance team at the
GAO. In her role, she overseas issues
involving accountability, professionalism, auditing
standards and DoD financial management and improper
payments. Please know that you are being
heard as well as your party when there are conversations about
DoD. Next we have Mr. Dieffenbach.
Ken was appointed to the Pandemic Response Accountability
Committee in June of 2024. He brings over 28 years of
experience in the oversight community and served in various
roles related to investigation and data analytics.
We also have Jennifer Wagner. She joined the Center for Budget
and Policy Priorities in 2015. She focuses primarily on
Medicaid eligibility and enrollment issues, which
certainly highlights some of the discussions that the American
people want us to delve into. I'm delighted that all three of
these witnesses here. I would now ask that all the
witnesses rise pursuant to Committee Rule 9.
G. The witnesses will stand as
required. Raise their right hand.
Do you solemnly swear or affirm that the testimony they're about
to give is the truth, the whole truth, and nothing but the
truth. Truth so help you God if the the
workers show that the witnesses answered in the affirmative.
Thank you very much. You may now take a seat.
I tried to keep my comments short.
The stream fume did same, but we speak from one voice.
We are both delighted that you're here today.
So let me remind the witnesses that we have your written
statements and I would encourage each of the the staff and the
members who are here to look through this if they have not up
to now, data and information about actual data and actual
solutions is what today's hearing is going to be about.
So I want to first make sure that we go right to this.
I'll let everybody turn to their information that they've got
there. Mr. Miss Key Co Key leak.
I didn't get it right yesterday and I'm not going to get it
right today. Please correct me.
Co select. Co select a bill had me say Co
select five times yesterday. That was not today.
We're delighted that you're here.
Please know this that we traditionally will follow the
five minute rule as we always have.
But I think that as we go through there, if you want to
finish questions or or the statements you want to make.
But as we get into questioning, I'm very interested in both
sides, the members and our our witnesses getting to where they
want to get. And without a further
discussion, we will recognize Miss Coakley.
Thank you. Good morning, Chairman Sessions,
Ranking Member and Fume, and members of the subcommittee.
Thank you for the opportunity to be here today to discuss the
long standing and pervasive issue of improper payments and
fraud in the federal government. Whether it involves an
established program or one created to respond to an
emergency, improper payments and fraud erode the public trust in
government and result in hundreds of billions of dollars
lost. Improper payments and fraud are
two distinct concepts. They're related, but not
interchangeable. Simply put, improper payments
are payment errors, payments that should not have been made,
or payments that were made in the incorrect amount.
These could be overpayments, underpayments, or payments to
ineligible recipients. Fraud involves obtaining
something of value through willful misrepresentation.
Individuals or organizations deliberately lying to defraud
the federal government. While all fraudulent payments
are considered improper, not all improper payments are considered
fraud. That's right.
Since 2003, federal agencies have made an estimated $2.8
trillion in improper payments, including an estimated $162
billion in fiscal year 2024. Since these year to year
estimates are based on a subset of government programs, 68
programs in 2024, the actual improper payments amount may be
significantly higher. Last April, we estimated that
based on data from fiscal years 2018 to 2022, the federal
government annually lost between 233 and $531 billion or about 3
to 7% of federal spending to fraud.
Our fraud estimate includes all federal programs and the wide
range reflects the different risk environments during the
five year period, including normal operations and COVID-19
relief programs and spending. Fraud at this level indicates
the importance of fraud risk management.
However, most government spending is not fraudulent.
While my written statement more fully covers GA as wide body of
work in these areas, I will focus this morning on how
agencies and the Congress can work to better prevent improper
payments and fraud. The best way to reduce improper
or fraudulent payments is to not make them.
Preventive controls, as their name implies, are meant to stop
improper and fraudulent payments before they occur.
One key government wide preventive control is the use of
Treasury's Do Not Pay system. Do Not pay consolidate much of
the data matching agencies have done individually to flag
potentially improper or fraudulent payments.
Federal agencies and some state programs can and should leverage
Do Not Pay to ensure program integrity.
Another important action agencies can take is to assign
assign responsibility for tackling improper payments and
fraud to senior level officials. This helps establish
accountability and endows those officials with the authority to
lead and make change. In our March 2022 testimony
before the Senate Committee on Homeland Security and
Governmental Affairs. We recommended 10 actions that
Congress could take to increase accountability over improper
proper payments and fraud across the federal government.
As of today, these recommendations to Congress
remain unaddressed. To improve transparency and
accountability over fraud management, we recommended that
Congress reinstate the requirement that agencies report
on their anti fraud controls and fraud risk management efforts in
their annual financial reports. And to better prepare for future
emergencies such as hurricanes, wildfires, or pandemics.
We recommended that Congress require OMB to provide guidance
for agencies to proactively develop internal control plans
that will be ready for use in future crises and require
agencies to report these plans to OMB and Congress.
Finally, to facilitate data access and data sharing, which
is key to effective prevention, we recommended that Congress
consider amending the Social Security Act to explicitly allow
the Social Security Administration to share its full
death data with Treasury's Do Not Pay system.
In December 2020, Congress passed legislation requiring the
Social Security Administration to share its full death data
with Treasury's Do Not Pay system for a three-year pilot
period. This requirement is set to
expire in December 2026, and we think Congress should make it
permanent. Earlier this year, Treasury
reported that data sharing during the pilot had led to $31
million in improper payments prevented and recovered over its
first five months, and the pilots projected net benefit is
over $215 million for the full three years.
Congress can make an immediate impact by ensuring the Do Not
Pay system continues to have access to the Social Security
Administration's full death data.
Continued congressional oversight is critical to
ensuring that agencies address improper payments and fraud in
their programs. Along with the actions detailed
in my written statement, Congress can use a variety of
tools such as hearings and the appropriations, authorization
and oversight processes to incentivize agencies to improve
program integrity. This concludes my opening
statement and I will be happy to answer questions.
Thank you very much, the distinguished gentleman.
Mr. Deffenbaugh, you're recognized.
Thank you, Chair Sessions, Ranking Member and fume members
of the subcommittee. It is an honor to be here today
to talk about the critically important topic of preventing
fraud in federal programs. This subcommittee has been at
the forefront of bipartisan efforts to find solutions to
reduce fraud and other types of improper payments.
Today's hearing comes at a critical time because unless
Congress takes action, one of the most significant tools it
has created to improve program integrity will be lost.
As the executive director of the Pandemic Response Accountability
Committee, or PRAC, an entity Congress created almost five
years ago to oversee $5 trillion in relief funding, I can point
to untold examples where fraudsters stole hundreds of
billions of dollars from taxpayers and the intended
beneficiaries of these programs. As a federal law enforcement
officer who has spent over 28 years bringing to justice
fraudsters who stole from federal programs, I know first
hand that unless we invest in cross agency prevention and
enhance data sharing, we will continue to be victimized by
increasingly sophisticated and well resourced bad actors.
Pay and Chase is not the solution, Prevention is.
To be clear, agencies have the primary responsibility to
prevent fraud. But the PRAC in the OA GS also
play an important role. Since its formation in 2020, the
PRAC has time and again alerted federal agencies, Congress, and
the American public to the lessons learned from the
pandemic and our recommendations to help strengthen federal
programs. For example, we issued a fraud
alert on the use of suspicious Social Security numbers in
obtaining over $5.4 billion in SBA relief programs.
We've not only identified potential fraud, but we're also
actively working to recover stolen funds.
We are partnering with 48 federal law enforcement agencies
to support over 1000 investigations related to over
$2.4 billion in potential losses.
As we will discuss today, the time to prepare for the next
disaster is now, not when new funds start flowing.
We must act on these lessons learned.
For example, we must address obvious anomalies such as Social
Security numbers that have never been issued or were issued to
people who are now deceased, dates of birth indicating an
applicant is 10 or 110 years old, applicants who have already
applied in five other states, or applicants who use names like
Charlie Chaplin, Abraham Lincoln, or Foghorn Leghorn, as
at least three people did in pandemic programs.
Those three were stopped before the money was dispersed.
Let me assure you, the government must pause and more
closely review suspect claims before money is dispersed.
We must look across multiple programs for red flags, as
fraudsters do not follow our government organizational
charts. They steal from wherever it is
easiest to steal. We must also responsibly
leverage more data, especially data already in the possession
of the government, to identify suspicious patterns and trends
indicative of fraud schemes. Today, the PRAC has the
capacity, infrastructure, relationships and talent to
conduct pre award vetting and the more complex network and
trend analysis. We know from our work that
fraudsters can apply to all 50 States and territories from
behind one keyboard. They can hit multiple federal
programs using the same false information.
They can outsource these tasks to artificial intelligence and
bots. But the PRAC is scheduled to
sunset in September of 2025, and we're only two months away from
having to begin deleting our data that we have collected and
curated over the last five years.
This includes over 60 major data sources and some 1.7 billion
data points. We're also concerned about
losing more of our staff whose outstanding analytical expertise
is in great demand. We will soon reach the point of
no return, in which rebuilding this capacity would take several
months, if not years, and a significant new investment of
taxpayer dollars. the US General Accountability Office has
expressed strong support for the PRAC.
An estimated their analytics capability could result in an
annual financial benefit of a billion dollars or more a year
if the PRAC ceases operations in September.
The next time the government responds to a natural disaster
and economic crisis, or another event where we are quickly
dispersing benefits to people in need, fraudsters will again
swoop in and steal. We will then inevitably ask
ourselves, how did we lose so much money to fraud?
If this happens, it will be because we chose not to be
prepared, and we chose not to invest in fraud prevention and
increase data sharing. Instead, we should continue the
investment that Congress has made to the prac in the PRAC
which is proven, which has a proven track record and a
demonstrated return on investment.
American taxpayers deserve nothing less.
I look forward to your questions.
Thank you very much for the audience that may be watching,
that is the Pandemic Response Accountability Committee that
was referred to as PRAC. Thank you very much, Miss
Wagner. You're now recognized.
Chairman Sessions, Ranking Member and FUME, and members of
the Government Operations Subcommittee, I am honored to be
here today to discuss something I've spent over 20 years working
on, improving government systems to get the right benefits to
eligible people in a streamlined and accurate way.
I started my career as a food stamp caseworker in North
Carolina and then worked for the Illinois Department of Human
Services before joining CBPP. I'm going to focus today on
Medicaid and SNAP, specifically on three key points.
First, Medicaid and SNAP have a rigorous eligibility
verification process, and the vast majority of people are
eligible for the benefits they receive.
Mistakes are made, but most improper payments are paperwork
issues, not fraud. Second, running an accurate
program means making sure eligible people can get and keep
benefits. When we talk about program
integrity and accuracy, we need to talk about how adding red
tape can harm eligible families. And 3rd, there are effective
ways to reduce improper payments and improve program integrity,
but some of the solutions proposed don't match the
problems. They don't solve improper
payments and will increase errors.
Let's dig in. First, nearly all of the people
enrolled in SNAP and Medicaid are eligible for their benefits.
Applicants fill out complex forms with details about their
household expenses and income. Agencies verify that information
against federal, state, and commercial databases.
If the application and database don't match, the applicant must
send verification like a pay stub.
Improper payments are not the same as fraud and are primarily
caused by paperwork errors. For example, a Medicaid worker
might check a database to verify an applicant's eligibility, but
not capture and retain the data viewed in that moment.
When a reviewer comes and looks at that case months later, they
can't confirm the case is correct because they can't see
what the worker looked at when the case was improved was
approved. There's no indication that the
applicant isn't eligible, but since the paperwork is missing,
it's considered an improper payment.
This is a technical problem, not a fraud problem.
Second, it is important to acknowledge 1 shortcoming of
improper payment measures. They only consider those who
receive benefits. They don't consider those who
are eligible but couldn't enroll due to confusing notices or
agency mistakes. We must keep this in mind when
in when evaluating solutions to improper payments.
Which brings me to the my Third Point.
Many proposed solutions don't match the problems and won't
reduce improper payments or improve accuracy.
For example, requiring Medicaid renewals every six months
instead of every year will cause more problems than it solves.
More paperwork will lead eligible enrollees to miss out
on benefits for procedural reasons, not because they don't
qualify for the program, but because they don't receive or
return a notice or the agency doesn't process that paperwork
timely. And more work for already
overwhelmed state staff will lead to more mistakes and more
improper payments. So what would work?
The Government Accountability Office identified 2 strategies
that have been successful in reducing improper payments,
establishing accountability and facilitating internal
collaboration, and providing technology tools and training
targeted to root causes. Federal agencies overseeing SNAP
and Medicaid need sufficient staff in key roles to make this
happen, such as Inspectors General to audit eligibility
determinations and staff to provide technical assistance and
hold states accountable for fixing the issues that are
discovered in audits. We saw this approach work.
Federal agencies recently helped states better implement the
requirement to conduct ex parte renewals, which happened when
data sources confirm ongoing eligibility and enrollees don't
have to fill out complex paperwork to renew.
The United States Digital Services worked with States and
more than 5 million people were renewed for coverage with less
red tape last year. Another solution is the Medicaid
Eligibility Enrollment Rule, finalized in April of 2024,
which updates outdated regulations on case record
maintenance and will substantially reduce the
frequency of improper payments resulting from inadequate
records. It's not an easy task to address
improper payments in large programs serving millions of
people. Proposals that suggest billions
of dollars can easily be saved don't address improper payments
and would result in cutting eligible people off from vital
help. But embracing solutions that
match the actual problems can bring us closer to the goal of
getting the right benefits to eligible people in a streamlined
and accurate way. Thank you for the opportunity to
testify and I look forward to your questions.
Thank you very much Mr. Fume. You heard me say that I felt
like our witnesses all were not only vital to our decision
making, but have appeared in a way to give us answers to these
problems. Thank you very much.
Want to thank each of our witnesses.
I'm first going to go to the distinguished gentlewoman from
North Carolina, Chairwoman Virginia Fox.
Gentleman's recognized. Thank you, Mr. Chairman, and I
thank our witnesses for being here today.
Miss Kosilek. The Payment Integrity
Information Act codified the Do Not Pay Initiative, which
provides agencies with access to certain databases that can
assist in preventing improper payments and requires a review
of the available databases prior to the release of funds.
Despite this requirement, it is unclear that agencies are
utilizing the Do Not Pay system. For example, the Department of
Transportation Inspector General reported in November 2023 that
the agency did not use the Do Not Pay portal in prepayment
processes as the law requires. In your opinion, why do agencies
not use all the tools at their disposal to prevent improper
payments? And do you believe that there
are ways to improve the Do Not Pay system?
Thank you. Yes, I think there are ways to
improve the do not pay system. As I mentioned, making sure that
full death master file is in there and that all relevant data
sources are in there is is key to making sure that that source
of information is as complete and reliable as it can be.
A way that you to encourage agencies to use it is really to
think about how you would do reporting.
I think right now agencies kind of report on the back end of
what went wrong. Thinking about how you would
have agencies report about preventing.
So for instance, the Do Not Pay system and Treasury payment
integrity tools can flag payments that potentially would
have indicators that they may be improper.
However, as noted, it really is up to the agencies to make
decisions about whether a payment will be made.
You could consider having agencies report on when those
flags are not upheld. For example, if something is
flagged and do not pay, but a payment is made anyway.
Having agencies track that, identify that, and report back
when that is happening would help folks determine if there
there are instances where the payment should go ahead anyway,
or if truly that payment should have been stopped.
Let me follow up with another question for you and Mr.
Dieffenbach. Once an improper payment is
made, what can an agency do to recover the payment and how much
does it cost in human hours and dollars to recoup an improper
payment? First, you Miss Kosilek.
Sure. There are requirements for
agencies to attempt to recover improper payments and I believe
it's up to the agencies to determine when it's cost
beneficial to do so. So there it can be instances
where an agency may determine it is not cost beneficial to pursue
all avenues in recovering that you would hope that agencies
would, but I think it's left to their determination to determine
when it's cost beneficial. Thank you for the question,
Congresswoman. Agencies have a number of
options for trying to recover improper payments.
There are administrative possibilities, the options the
Congress did just pass the Administrative False Claims Act
in December, which is a significant new tool for
agencies and OGS to work with jointly that allows agencies to
go through a very rigorous process where they can then
recover funds and damages in some instances.
But to your point, recovering funds through through the
judicial system, the pay and Chase model we have now is
exorbitantly expensive, which is why we and others in this
hearing are focused on the prevention piece, because it is
very expensive to do any of those recovery actions.
So what investments could agencies take to prevent
improper payments? Could investments in artificial
intelligence help lower the improper payment rate?
What? Again, what we want to do is not
have the payment go out to begin with by using what's available
to the agencies now. So I'll start with you, Mr.
Diefenbach. Yes.
So technology is part of the solution.
Another piece of it is culture is ownership, and the Inspector
General Act was passed in 1978 to create this community of
watchdogs to prevent fraud. However, before 1978 and today,
the agencies have the primary responsibility to do those
things, to resource things properly, to exploit technology
as you just mentioned, and to ensure that they're doing good
risk assessments and they're following through on those to
make sure they're mitigating the biggest risks in their programs.
Miss Kozilek, any further comments?
Yeah. So as as you mentioned,
prevention is really the key in this and having the right data.
So artificial intelligence can be helpful if you have the right
data in the system. So we do have recommendations to
encourage agencies to collect all the necessary information
that is needed to ensure the databases are complete, that
they're accurate. If you're using artificial
intelligence and other data mining mining tools, but you
have inaccurate or unreliable data in the systems, that is not
going to be very helpful. Thank you, Mr. Chairman.
I yield back. Thank you very much.
Shell woman yields factors time, Mr. Mfume Jones recognized.
Thank you again, Mr. Chairman. I'm got a couple of quick
questions. I know we were a smaller
committee and I'm hoping that we might even get a second round.
And I want to obviously defer to both of the members here on my
side of the aisle. I do want to be redundant, maybe
deliberately redundant about a few things.
Number one, I appreciated the testimony that nearly all
Medicare and SNAP recipients are eligible for benefits, which
would explode the myth that's been circulating that people are
getting things that are not eligible.
I want to under score again, what I heard was that most
improper payments are due to paperwork, paperwork errors and
not necessarily conniving persons trying to find a way to
get a a check. However, what I think I want to
stop on more than anything else is the notion that was just
enunciated that we've got to stop it before it starts.
And Mr. Diefenbach, I appreciate your comments that we can't play
the game of of pay and chase that will go on forever deplete
resources and frustrating everybody.
I do want to ask if the 10 ready recommendations that you.
Presented in your Senate, testimony can be made available.
I don't know that I have them, but I'd, I'd like very much to
see them. And one overarching question.
And then I'm I'm going to get out of the way and yield to some
of my colleagues. Mr. Chairman, can all of you,
individually or collectively give me your assessment of what
has happened and what will happen now that all these
inspector generals are no longer in place to do the good job that
they were doing? To point out the crooks and the
bad guys and follow up with bodies like this, both in the
House and Senate that would allow us the ability to do what
we've been able to do in a bipartisan way?
I just, I need, I know, I think what the effect is, but I need
to hear it from the three of you, any of you.
Sure, I can start. So certainly the Inspectors
General play a key oversight role.
They have responsibilities related to improper payments.
Beyond that, they do audits of the programs day in and day out
and can be very helpful in identifying some of the root
causes that may lead to improper payments in the programs.
And then also they are really helpful in coming up with
solutions once they identify those root causes, identifying
recommendations that the agencies can take.
So certainly the lack of their lack of their presence in some
of the agencies would have a significant impact on.
And in many of the agencies, and I'm, I'm just trying to figure
out now that they're gone, what do we do?
I mean, what's, what are agencies faced with?
And is there a greater propensity for the kind of fraud
and abuse that we've seen? So Congressman of whom may the,
the loss of the inspectors general was a great loss on a
leadership level, on a, on a productivity level.
Our vice chair of the prac, Paul Martin was the USAID Inspector
General who's dismissed and we we greatly miss his leadership.
I think the biggest thing for the Congress is you're going to
have less transparency, less visibility on what's actually
occurring in agencies, because that's one of the the hallmark
principles when Congress set up the Inspector General Act was to
give you and the taxpaying public more visibility and
transparency on an objective view of what exactly is going
on. So I think you're going to have
reduced visibility. Miss Wagner.
And just to add an example to what my colleagues have said
here, the HHSOIG is really important in supporting and
funding state Medicaid fraud control units that investigate
and prosecute Medicaid provider fraud.
As I indicated, beneficiary fraud is very low in this these
programs, but provider fraud is common.
In FY23, these units recovered $1.2 billion in criminal
penalties and civil judgments and also the IGS and HHS would
in audit eligibility determination processes.
And they were very effective in identifying major issues in
states such as duplicate payments to managed care
organizations in incorrect interpretations of federal
policy and caseworker errors. So identifying these problems
and working with them, working with the states to get them
addressed is really a key role that is diminished right now.
Yeah. I think it would be fair to say
that their dismissal has clearly exacerbated a problem that is
clearly out of control now. Mr. Chairman, I yield back.
Thank you very much. Let me ask you question.
Question. One moment please, Sir.
Thank you very much. Does gentlemen have a question?
Well, no, I just, I was wondering if I could yield Mr.
Mafumi a minute of my time. I was.
Enjoying his line of questioning.
As soon as we get to you, I bet he will take that and even more.
OK. I just want to make sure I
didn't. I'm sorry.
Yes. Sir, as the gentleman does know,
the Chairman wants us to get to the bottom of this, and I do not
intend to cut us off. As long as we're staying in the
margins, I think we're better off.
I think we're better off when Someone Like You does yield time
to learn more about what's on someone else's mind.
Thank you very much. I've now moved to No, you're
great, you're great. I'm just saying I do want to.
When we get to the gentleman, Chairman Palmer is recognized.
Thank you, Mr. Chairman. Mr. Kosilek.
In 2002, Congress passed Improper Payments Information
Act. In 2010, Congress passed the
Improper Payments Elimination and Recovery Act.
In 2012, Congress passed two more bills, the Improper
Payments Elimination Recovery Improvement Act and the Improper
Payments Transparency Act. Yet GAO said that the federal
government's losing between 233 to 521 billion per year.
If you just split the difference, that's $377 billion
over a 10 year, 10 year window, that's 3.7 trillion not counting
the interest that we're having to pay.
And in regard to the Inspector general's, it sounds like we're
not going to miss Inspector General.
I, I don't mean to be dismissive that I, I have great high regard
for the Inspector General's, but in terms of actually lowering
our improper payment rate, we, it's, it keeps going up year
after year. How do you explain that?
Oh, sorry, I'm looking at the wrong person.
I can't, I need to sit up straight so I can see the names.
OK, go ahead. I think we really need to get
back to basics and having internal control in payment
processes. As you noted, there's been
numerous amounts of legislation adding on requirements,
reporting improper payments. But we really need to get back
to the fundamentals of having internal controls in payment
processes, understanding what the root causes are for the
improper payments going out and focusing on on that, requiring
agencies to report their plans for prevention to you and having
accountability for having those prevention plans in place.
Isn't the problem though, the here the failure to have
enforcement in any of these bills there?
I, I've been working on since I've been in Congress.
I believe I, I might have been the first one to, to get the
Budget Committee to, to really take into account and proper
payments and working with the, with Mr. Dodero this whole time
on it. And it, it's, it's not getting
better. As a matter of fact, there's in,
in fiscal year 24, there's 16 agencies that reported a total
of about $162 billion and improper payments.
And when you, when you dig down into it, about 5455% of the
improper payment problem is administrative air, failure to
verify eligibility and antiquated data systems.
Which brings me to Mr. Musk and I, I know there's a lot of
consternation about what they're doing, but literally he's
brought in some, some computer experts with 21st century
technology and done better oversight of, of the federal
government in the last six weeks and we've done the last 40
years. I mean, isn't that one of the
biggest problems we have with improper payments is we've got
antiquated data systems? We don't we don't have the 21st
century technology. We need to do oversight, proper
oversight. Having reliable data is is very
important. Having accurate, reliable,
complete data in the systems to be able to do those integrity
checks is is critical, yes. Well, after we did pass the
Improper Payments Elimination Recovery Improvement Act, and I
know of one outside company that was brought in that did some
analysis of, of Labor Department of Labor contracts and found
millions of dollars in fraud under overpayments, other monies
that should have come back to the federal government through
credits that were not recovered. And, and when this was
disclosed, the Department of Labor at that time basically
waved off as disinterested. Isn't that a problem?
The pay and chase model is a problem.
Trying to recover the payments after the fact is much less
effective. That So what we need to do is
focus on stopping it on the front end and that's where where
we need the improvements in technology, where we need the
investment in technology. And this is a huge issue when
when you're reporting 16 agencies are accounting for 162
billion ten year window, that's $1.6 trillion and we're running
a deficit of over 2 trillion every year.
If if you just look at the the totality of it, 3.77, 377
billion, that's 3.773, not counting the interest we're
paying on that money because every dollar we send out
improperly is a borrowed dollar. Mr. Chairman, I yield back.
At this time, thank you very much as things gentlewoman from
Washington DC is recognized. Thank you, Mr. Chairman, for
days. Just days after he took office,
the President Trump summarily fired 17 inspectors general
across 18 positions in the dead of the night.
Inspectors generals fulfill a vital oversight and
accountability function in the government, including through
identifying and preventing improper payments.
I GS are also responsible for keeping Congress informed of
fraud and other serious problems and informing us about progress
in implementing solutions. As we consider, as we consider
ways to attack the problem of improper payments, it is
critical that we do not undermine these officials who
serve as our partners in this fight.
Miss Wagner, I am aware that much of your work has focused on
the challenges that states may have in complying with complex
requirements for federal payments program programs.
How do inspectors general help to identify and address these
problems? Inspectors general play a
critical role in auditing state operations.
States are trying to run an accurate program, but they have
many pressures on them and they sometimes make mistakes in their
policy and their operations and their systems.
And audits through inspectors general and others come in and
identify these mistakes and lift them up and hold the state
accountable for addressing these.
So it's really a critical role. And we're looking to improve
improper payments and to get benefits to eligible people.
Thank you Miss Co Select How does the firing of Inspectors
General Inspector General affect Inspector General Office's
ability to prevent and address improper payments?
The, the role the Inspector General plays is critical.
One of the other things they're they're often the first line of
defense in investigating allegations of fraud and
improper payments. So without having, you know,
strong Inspector General presence in there, that could,
that can certainly be an impediment.
They're also an objective voice in identifying problems and
doing investigations. So certainly having a very
strong Inspector General role is critical.
Inspectors general are rigorous evidence based use rigorous
evidence based approaches to target fraud.
This import this is important because a reckless approach to
fighting fraud risks collateral damage.
It could keep general federal assistance from from from going
to those who most are in need of it.
GAO's Fraud Risk Management Framework notes that agency
should consider the cost of fraud controls when designing
systems, including potential delays for a legitimate
applicants. Miss Koseley, how does the work
of Inspectors General ensure that people get the benefit for
which they are eligible? Certainly the the role they play
in in a doing the various program audit.
So certainly they have a role in improper payments, but they also
as I mentioned, you know do program audits throughout
throughout the year. Looking at the operations of the
various programs, are they being executed efficiently and
effectively to make sure that the proper recipients are
receiving the benefits that they are entitled to?
Mr. Dieffenbach, the Inspectors General serving on the Pandemic
Response Accountability Committee have done great work
in identifying improper payments throughout our pandemic
response. What has been the impact of
President Trump's purge of so many inspectors general been on
the committee's work and capacity going forward?
Well, we have lost again the leadership, the institutional
knowledge of individual inspectors general, but the
offices of inspectors general still exist and are fully
functioning. We work with them day in, day
out on investigations and we are of course, an independent
committee within the oversight community, the PRAC that does
operational data analytics literally every day to support
investigations, to proactively find problems and to issue
reports on lessons learned and preventative measures that
agencies can follow going forward.
So we are continuing to do our important work to support the OI
GS and to be a centralized hub, if you will, for analytics to
support the OI GS that are smaller.
They don't have their own capabilities.
Thank you and I yield back. Thank you very much, the
distinguished old woman. We're delighted that you're
here. And as you have proved in your
service, we all want to as well. Mr. Infamain, your side want to
stop improper payments and move to the areas that they would be
needed. We now would move to
distinguished gentleman Mr. Gill from Texas.
You're recognized. Thank you, Mr. Chairman.
Thanks for holding this hearing today.
Miss, Miss Co Select, thank. Thank you for being here as
well. Could could you remind us in
fiscal year 2024 what was the the amount of improper payments
that were sent out? $162 billion.
OK. And and which agencies were the
were primarily responsible for that?
Some of the programs that had the largest dollar amounts were
Medicare, Medicaid, Earned Income Tax Credit, some of the
larger ones. And, and how much do you guys
at, at the GAO estimate we lose in fraud every year?
We did a fraud estimate for looking at data for years 2018
through 2022 and we came up with an estimate of 230 to $250
billion. In in what agencies do you
primarily see fraud? That estimate was based across
all programs. OK, got it.
So if I'm in let's just use a a specific example.
If I'm a a fraudster and I want to collect unemployment checks
that that I shouldn't be receiving and I steal somebody
else's identity to do that, and I apply and apply to the
Department of Labor, what are the processes that that you
would expect to see the Department of Labor go through
to ensure that I don't improperly or fraudulently
receive a check? So unemployment insurance is an
interesting one. It's a federal state partnership
program. So there are responsibilities at
the federal level. And at the state level, as I
mentioned, really having those preventative controls in place,
doing those data matching checks are some of the the key controls
that you could expect to see to have an entity have in place.
And in this case, you need to have those types of controls in
place at the state and at the federal level.
What? What do we actually see on a on
a on a realistic basis? How?
How often are some of these checks actually applied?
We have seen instances and had recommendations for
unemployment, I believe where there could be additional use by
the states of some of those data checks.
And I believe we have some recommendations that there could
be requirements to have the states be required to do that
data match. Right now it's encouraged, but
there are, we have found instances where in all cases
that is not being done and that can be a root cause of some of
these improper payments. So, so in other words, we're
we're mailing out checks without verifying who they're going to.
In some cases. Got it.
And and what are the consequences for agency heads as
they're mailing out American taxpayer dollars without without
verifying who they're going to? The consequence is that the
anytime there's improper payments or fraud or money going
out for not the intended purpose, that's money that could
be going to rightful recipients and used for other purposes.
Right. But I mean from a, from an
incentive standpoint at at on the agency level, is there any
consequence for for either employees at the agency or
agency heads for mailing out checks fraudulently?
One of the things we have recommended is having an
accountable official at the agencies.
As opposed to the recommendations right now, are
there? Is there anything to hold these
people accountable? Agencies are supposed to have an
accountable official to to but we've.
But but what? What is the accountability
structure? Do they do they receive less
bonuses? For instance, are they fired?
What it What is the? What's holding them accountable?
I think that is determined by the agency as to how that
mechanism is, is 100% set up. But certainly Congress can have
accountability. Mechanism.
What do you see? Do you see?
Have you ever seen an agency head get fired, for instance,
for mailing out billions of dollars in fraudulent checks?
I have not seen that. Got it.
OK. And once we once we mail these
checks out, is there any way to of clawing this money back and
and holding the fraudsters accountable?
That's what you're saying that the pay and chase model is is
not generally effective. There are requirements that
anytime there is an improper payment, agencies are supposed
to attempt to get that money back.
But we have found that the percentage that you get back
when you're when you're following that model as opposed
to not having to go out preventing it, is, is by far
much more effective. Right, right.
Completely agreed. I mean it.
It seems to me that we've got a an overextended, bureaucratic
administrative leviathan that is mailing out American taxpayer
dollars fraudulently with virtually no and no
accountability at all, bankrupting the American people
with impunity. And this is from a federal
government that ostensibly works in the interests of American
citizens, is instead wasting our taxpayer dollars on a on a scale
that is difficult to fathom. I think this is precisely why we
need those so badly to get this nonsense under control.
And with that, Mr. Chairman, I yield back and thank you very
much. Appreciate the gentleman's
questions. The distinguished gentleman from
Washington, Miss Randall, is recognized.
Thank you so much, Mr. Chair, and thank you as well to our
witnesses for taking the time to be here today and share your
expertise. You know, I've been pretty open
about sharing my sister Olivia's story.
She was born with really complex disabilities and was able to
receive the care she needed because of Medicaid.
And she was one of an estimated 2.4 million Washingtonians
enrolled in Apple Health, our state Medicaid program.
And so ensuring that we are protecting that program is, is
very important to me, not just personally, but on behalf of all
my constituents. And I think I share the goals of
so many of my colleagues here to ensure that we are using
taxpayer dollars efficiently to provide essential services to
our neighbors who need them. But what we may have some
disagreement on is how to make the federal government and our
programs work better for the American people.
You know, my colleague talked about fraudsters and certainly
there is some fraud in some of our programs, some improper
payments, but I think what we also have to under score is the
individual people that are trying to access these programs.
And we had a subcommittee hearing on healthcare and
financial services a week or two ago in which we collectively
bipartisanly discussed and understood the barriers that
exist for many families trying to access Medicaid, including
and especially those married couples that have a hard time
getting the healthcare that they need to be successful.
But I want to reiterate the difference between fraud and
people perpetuating fraud and the improper payments.
And Miss Wagner, could you reiterate, is it true that the
vast majority of of improper payments are paperwork issues,
not fraud? Yes, that is correct.
It's usually a mistake in the process.
When you talk about a program like Medicaid, it could be an
mean and eligibility worker didn't follow correct procedures
or the participant was issued the wrong amount of benefits.
But it's often an error and inadvertent error by the
household or a mistake by the agency staff or system.
The incidence of fraud, which is intentional to seek to gain a
benefit, the incident of beneficiary fraud is very low on
these programs. Yeah.
Thank you. You know, you know, I
experienced in my family and heard so many anecdotes from
Washingtonians, particularly parents of severely disabled
children who have this like, stack of paperwork on their
counters, who feel like they need to be attorneys in order to
access a system to provide healthcare for their kids.
And who are overwhelmed so often with late nights, little sleep,
worry about what, you know, new medication their kids need to be
on, what specialist appointment they need to get into.
Who spends so many hours on the phone appealing denials of
claims, trying to get into an appointment with someone, trying
to get answers for their kid and take care of them while many of
them also have another day job? This, you know, to characterize
these parents as fraudsters or to try and lump in, you know,
individuals who are just trying to stay alive in so many cases
feels really challenging to me. And, you know, I talked to the
healthcare authority in Washington, our agency
responsible for administrating Medicaid.
And because of Washington's fraud abuse detection system,
which I supported funding for as a member of the state Senate,
they have uncovered 35 to 40 credible allegations of fraud.
That's 35 to 40 out of 20 million claims that they receive
a year. And to do that math for us, it's
.0002% of fraudulent claims. And, you know, none of us are
claiming that no fraud exists. But I think we need to keep in
mind the scale of the problem here and who is perpetrating the
incorrect payments. I also want to raise one thing
that the Health Care Authority suggested might be helpful as we
talk about efficiencies in government.
And they said that there is a a federal system to which they, as
states, don't have immediate access to understand whether
folks are concurrently enrolled in Medicaid programs from one
state to the other. I know you know, there is.
We will have in the next couple of years some changes to that
database to monitor when someone moves and changes their address.
But it doesn't allow agencies like the healthcare authority in
Washington to track whether there's concurrent enrollment.
And that would be something that I'd love the chance to work on
with my colleagues and I yield my time.
Joe Woman yields back her time. Thank you very much.
We've moved to distinguished gentleman from Tennessee, Mr.
Burchett. Thank you, Mr. Chairman, and
thank you, ma'am, for sharing that story about your sister.
I did not know that. That gave me a lot to think
about. Miss Koshiya Lek.
Is that correct? And I get that close.
You got Kwas and the Fumi and Tim Burchett up here.
We can. Nobody gets our names right.
And I probably didn't get his name right.
So let me ask you a question, ma'am.
If I can see through this big head of hair right here in front
of me, what, what are some of the key issues that prevented
these agencies from prioritizing prevention of improper payments
and fraud? And I wish you'd also talked a
little bit about just human error, how that plays into this.
Yeah. So there's something that can be
human error and I just want to clarify the fraud to be sure,
fraud is a big problem. The fraud numbers that we
estimated over those years was about 3 to 7% of of the funding.
But to be sure, as we noted, you know, any amount of fraud is, is
money not going to the intended purpose.
So some of the key issues I think that prevent folks from
being able to effectively put the right controls in place does
have to do with some data sharing, some access, having
truly understanding the eligibility requirements, the
data attributes that should be checked and then having that
right information to be able to do that.
Checking to make sure that the payments are valid.
Going to the right person is really what's critical and can
be some of the key challenges and issues that agencies face.
The agencies in 2024 fiscal year 2424, they collectively
estimated approximately 161.5 billion in improper payments.
Do you think Congress can can get to the point where we can
stop that? I think the goal is to reduce
that. You'll probably never get rid of
the risk of fraud. It's innate in all programs.
But there should be a concerted effort to have that as low as
possible and and have the right preventative controls in place
to not leave so much money on the table to that.
I guess in this case it's the original sin, so to speak, Yeah.
How many agencies and programs are using the GA OS fraud risk
framework now? And why aren't they using it?
The ones that aren't just. You know, I don't know if we
know the, the, the true reason why not all of them are using
it. We do certainly have a
recommendation to Congress to require agencies to use that.
We think it's a critical. And and they're currently not
required. They're not required to follow
that. Not specifically.
OK. Thank you.
What can we do to enable that these agencies recover over
payments or are they just gone? I always hear people say, oh,
we're going to call that back. I was in the legislature in
Tennessee for 16 years and I never saw.
I mean, it's hook or crook, you know, it's a bogus corporation
or something, got money somehow or some criminal and they're in
jail. They're not paying it back.
They're getting $0.20 an hour stamping out license plates.
And that's the challenge. In many cases, it's not easy to
get that money back. OK, Thank you.
I need and I want to yield the rest of my time to my dear
friend, Mr. Mafumi, if that's all right.
Thank you, Mr. Chairman. Well, I want to thank the
gentleman for yielding. Totally unnecessary, but you're
not making any points calling me a gentleman.
Mr. Burchett and myself were like a guitar and a fiddle.
We both have strings, but we make different sounds and we've
worked together whenever we can. Usually we're 100% on different
sides of the aisle, but at moments like this, on something
like this, I appreciate the gentleman for yielding,
appreciate his sense of humor and the ability to work with
him. I do want to just go to two
quick things that I heard that I don't want to have fall to the
wayside and get out of the way for the other members,
particularly Mr. Frost on our side and whoever, Mr. Chairman,
you have next. Coming up, Mr. Palmer made a
good point, and I'm really sad that he's not here because he
talked about this whole enforcement mechanism and
whether or not there is any enforcement mechanism.
And without an enforcement mechanism, how can you expect
agencies or agency heads to do anything at all if we're not
going to enforce existing law or practice?
And the other interesting thing was Mr. Gill mention
consequences to agency heads, which I think is something that
we ought to talk about, particularly the flip side of
that, which is incentives to agency heads.
And I don't know if we are providing them right now.
So if I'm running agency AB or CI, see a problem and I work my
tail off to get it fixed so that improper payments are not going
out, seems to me there ought to be some incentive there for
agency heads to do that. And there ought to be a hammer
on the other side for agency heads who fail to do it at all.
So I just wanted to go back to both of those points.
I want to thank the the gentleman, I'll call him a
gentleman again from Tennessee, Mr. Perchard, for yielding this
time. And I yield back, Mr. Chair.
Mr. Bircher yields back his time.
Thank you for the distinguished gentleman.
We'd now recognize the seniors gentleman from Georgia, Mister
Jack. Thank you very much, Mr.
Chairman. And first and foremost, if I
could follow on that effective line of of of statement from Mr.
Mufume and that potential line of questioning.
I was also inspired by Mr. Palmer's statements as relates
to enforcement. If I could just go down the the
line, what say you about enhancing the enforcement
capability, whether through legislative action or executive
action? Yeah.
So I think holding people accountable is critical for
doing anything. But in this case particularly,
certainly I think agencies should have accountable
officials and hold those people accountable.
And like I mentioned, Congress can have an accountability role
too, through the appropriations process, through having agencies
and and officials report on their preventative controls that
they're putting in place to hold them accountable and demonstrate
how they are doing that. Thank you, Mr. Difenbach.
Thank you for the question. So we spent the last five years
at the prac developing and learning lessons learned.
We put out a program for Blueprint for program integrity.
So agencies need to to operationalize that and follow
that. We have perfected ways to find
simple frauds and more complex frauds.
So I think one of the answers is they need to have the tools to
be able to detect again the simple non eligibility issues,
but also the more complex hidden criminal enterprise, sometimes
International Criminal enterprises, which we've done a
good job, I think a phenomenal job of of finding new ways to do
that with big data. One of them Miss Wagner.
The key to preventing improper payments, reducing fraud is
information and technical assistance to the states.
States are trying to run a good program.
They don't want headlines, they don't want their their money
going to the wrong people. And so by supporting them in
these efforts with funds, with federal support, we can go much
further penalizing them. Massive cuts to these programs
will actually go against this purpose and will lead to
increased improper payments. Thank you all just for in
closing, a lot of my colleagues have asked very effective
questions today, but I love history and I would love if I
could miss Kosciolek. I think we've, we understand
since 2004, 2003, we've seen 2.8 trillion in improper payments.
I think that's from GAO. Is that correct?
And would you say has there been an influx in recent years if you
were to try to catalog year by year?
I mean, it's trying to understand the history of of of
how this ramped up. And, you know, is this something
that was happening the 40s, fifties, 60s?
Have you seen it just really skyrocket as government's grown
and government programs have grown?
Would love for you to just offer some thoughts on the history of
how we got here. Yeah, I think certainly some of
the challenges and and as we mentioned, the importance of
having really foundational good internal controls is critical so
that over the years as emergencies are going to arise,
you have those foundational controls in place, you have
plans and controls ready to go. I think, you know, as agencies
and the government is forced to function in dynamic ways, if you
don't have those foundations in place, that's when I think you
see that fluctuation and that just exacerbates the problem.
Sir, if you want to comment on the history of how we got here.
Please. The threat is always evolving.
The friction for getting public benefits is gone.
Anyone with a computer anywhere in the world can apply for
public benefits. Some of those programs have a
lot of protections in place as we found a pandemic for our
work. Many did not.
So it really takes a big data approach using all the tools
available to find the hidden connections that you can't find
manually. We're working on, we're aware of
142,000 known pandemic fraud cases and they have a
fingerprint. And we've been able to figure
out that fingerprint. And our hope is to be able to
continue our work to help people proactively defend against these
things and prevent them early, because you cannot fight today's
fraud issues with yesterday's tools.
Wonderful Miss Wagner. So Medicaid and SNAP are a
little bit different than some of the other programs that are
more recent or were really ramped up during the pandemic.
They have a long history of working to reduce improper
payments. They were challenged during the
pandemic by some new programs, by increased demand and by
reduced staffing. So now we really need to kind of
look at the other side of that and stabilize the workforce,
improve the IT systems to continue reducing those rates.
I'd like to thank all three of the witnesses for appearing
before us today. I want to thank the Chairman for
calling this hearing. And with that, I yield my
remainder 30 seconds to the Chairman.
Thank you. Appreciate the distinguished
gentleman and welcome him not just to the subcommittee but
really to Congress with an eye towards as a new member as well,
some other people, including Mr. Frost.
Mr. Moss was making sure that their words that they say back
home are met with the reality of other senior members working
with you to achieve those things.
And I think that that's the sense that I get that it's a
100% buy in that we have about the problem.
Mr. MFU Mayor, want to come to a 100% working towards that answer
and I want to thank the distinguished gentleman.
Thank you, Mr. Chairman. The same gentleman from Florida
is recognized. And good to see you, Mr. Frost.
Thank you. Thank you.
Thank you, Mr. Chairman. Hello.
Thank you so much for for being here today.
You know, when I was back home and in the District over the
weekend, everywhere I went to grocery store, walking around
the park, doing anything, people were coming out to me asking
about Social Security. And I think a lot of people are
worried and scared right now. I think part of it has to do
with a lot of the myths and disinformation that's going
around. I mean, we've heard this
constant lie from Elon Musk that 10s of millions of dead people
are getting Social Security paychecks.
Claiming fraud. And Social Security, I think is
one way that folks are going to justify cutting it, pocketing
the benefits for billionaires, privatizing it.
Miss Kosilek, Elon Musk is now calling Social Security a Ponzi
scheme. How concerned are you that
Social Security is a Ponzi scheme?
I don't think we have seen indications in our work that
that is the case. Musk is calling it a Ponzi
scheme as an excuse to destroy it.
In my opinion, Americans earn Social Security, three years of
hard work, and it's a good investment.
It could be a better investment for Black men because we're
pretty much donors because we live less time.
But that's another conversation for another time.
It's one of the most popular government services.
And most people support more funding for Social Security, not
less. Miss Wagner, You know, people
want shorter wait times, payments processed more quickly.
But at the same time, the administration wants to cut 7000
employees from the administration.
Yesterday somebody from my office called Social Security 30
days to process something on retirement, 30 days on Medicaid,
230 days as it relates to disability.
What would be the effects of these cuts to the Social
Security Administration right now?
When staff shrinks, there are fewer people to take
appointments, to answer phones, to process applications for
different benefits, and that hurts people nationwide.
And in addition to their own staff, Social Security
Administration funds state Disability Determination Service
employees who decide whether applicants disabilities are
severe enough to qualify for benefits.
Their processing time was already at a record high of
seven months, and we expect cuts will have further impact.
In addition, 7 in 10 of Social Security staff do serve the
public directly, so this will. Will have a major impact on
customer service. Thank you.
It's and it's not just, you know, billionaires like Elon
Musk who are going around attacking it.
My own Florida Senator, Rick Scott, the richest person in
Congress, which on the topic of fraud, you know, my senator made
history. He's the man responsible for the
largest Medicare fraud in the history of this country, $1.7
billion. He says that Republicans are
going to have to cut Social Security and quote, why are they
doing this? Well, to take money from Social
Security to use it for tax cuts for people who are too rich to
need it. House Republicans plan to make
$880 billion in cuts to healthcare.
This means cuts to Medicaid and Medicare, too.
Miss Wagner, Four and eight American children are Medicaid
recipients, including over 60,000 people in my district
alone. For an Orlando family currently
receiving Medicaid, what could be the financial fallout from
losing access to Medicaid? Well, first, when states are
forced to cut back on funding, they are going to cut back on
who's eligible and the benefits they receive.
But cuts will have broader impacts than just those who are
no longer eligible. They will directly or indirectly
affect the amount of funds available for state staff, for
IT systems that support Medicaid.
And they'll probably lead to more improper payments and
reduce program integrity. And it will impact people who
even whose eligibility isn't cut longer call center wait times,
more errors, uncertainty, stress, and possibly not be able
to get approved for benefits or losing coverage at renewal even
though they remain eligible. Thank you.
You know, before coming to Congress, I worked in
organizations and one of the proudest things I did was work
at March for Our Lives. They came after the shooting
that happened in Parkland. I traveled this country speaking
with people that disagreed with me on the issue of gun violence.
But it made me a better person. And something I learned during
my travels is in order to speak about something in a bipartisan
way, I think it's really important to make sure people
are coming at this on the right foot in good faith.
And I'm all for the modernization of our government.
I think it's really important. And I say that's the youngest
person in the United States Congress.
I think it is very important. But when I see the people
leading the effort, like Elon Musk call something like Social
Security a Ponzi scheme, and I hear crickets on the other side
of the aisle, I have a really hard time taking any of this
seriously. When I go home and I have people
coming up to be in the grocery store who are living paycheck to
paycheck asking me, what are you going to do to protect Social
Security? So thank you so much and I yield
back. Jim and yields back his time.
Distinguished gentleman from Florida, Miss Moskowitz, who's
asked to be waved on this committee server.
Delighted Chair. Gentleman's recognized.
Thank you, Mr. Chairman, Thank you for granting my waiver.
I, I appreciate it. You know, I've been committed to
helping the government become more efficient, save dollars, go
after fraud, waste, abuse. I was the first Democrat to join
the DOGE caucus, which by the way, hasn't done anything and
has not been included in anything Elon Musk has done.
But you know, it's nice that we have a we have a caucus.
And so this is this is a bipartisan effort.
Like the chairman mentioned, we do want to get at waste, fraud
and abuse. But I do think the spelling,
miss, the spelling fact from fiction is important.
And I want to drill down real quickly first on what my
colleague from Florida, Mr. Frost, said.
And I'm going to be even more direct because I think it's
important. We'll just go down the line.
So you gave a, an answer on whether Social Security is a
Ponzi scheme. The answer is no, right?
It's not a Ponzi scheme. We have not reported that it's a
Ponzi scheme. Right, so it's not a Ponzi
scheme. I'm not aware that it's a Ponzi
scheme. OK, agreed.
OK, so Mr. Musk is wrong. No one, no one's going to get
fired for saying it, right? He's wrong.
You can say it. It's not a Ponzi scheme.
I'll say it for you. It's not a Ponzi scheme.
It's not a Ponzi. OK, He's wrong.
I know we're afraid to say it. And see, that's part of the
problem. We're afraid to say that Elon
Musk is wrong. That's what Mr. Frost was
talking about. When he says he hears crickets
from my colleagues, we hear crickets from the witnesses
because everyone is afraid. When Elon says something, if
it's patently false, we're afraid to say it's false.
All right, let's talk about something else.
The the IG is getting fired. You support the IG is getting
fired at me. I got to imagine if you're
interested in getting rid of fraud, waste and abuse.
They're the people. Trying to get rid of fraud,
waste and abuse. So they got fired from
Agriculture, Interior, HUD, Department of Defense, the EPA,
the State Department, HHS, Veterans Affairs, Labor,
Transportation. You support that in the mission
of getting rid of fraud and waste and abuse.
The Inspector General committee is is critical.
There are certainly an. An administration can give.
No opinion whether that was good or bad.
Again, I we won't say Elon's wrong.
I know you you won't go there, but was that the right decision?
You did lose institutional knowledge.
Certainly administration has a right to change the inspector
generalist. There are reporting mechanisms
of. These weren't necessarily in
like in like let's use numbers, let's use data.
So like 514951 bad idea. That was a bad idea.
I'm trying to. The proper protocols weren't
followed in. Oh, we know it was illegal.
Don't get me wrong, I didn't. I didn't want to make you say
that. I appreciate you saying that on
the record. It was illegal.
The proper protocols weren't filed.
But is it good policy if you want to go after fraud, waste
and abuse? Was that good policy?
To lose institutional knowledge. No, not good.
Good policy. I don't think it improves the
ability to fight fraud waste. Abuse, not good policy.
Not good policy. OK, right.
And if you're telling the American people that this is a
focus of your administration and then you go fire all of the AGS,
that doesn't seem to compute. OK.
Lastly, did fraud and an improper payment start with Joe
Biden in his administration? Was that the first time the
government has experienced that? That is not the first time no
fraud was reported. First time, no.
So we got to depoliticize this
stuff because all we're heated hearing is what happened in the
last four years and the last four years in 2017, $140 billion
of improper payments that's inaccurate in. 2024 we reported
162 billion. No, no, hold on.
In 2017, 140 billion in improper payments, In 2018 a $150 billion
of improper payments, In 2019, 174 billion of improper
payments, and in 2020, two 106 billion of improper payments.
Those are GAO numbers. So let me just do some math.
In the first Trump administration, there were $670
billion of improper payments. I'm not blaming him, but he is
blaming Joe Biden, and so is Elon Musk blaming for the
improper payments for what happened in the four years of
Joe Biden. My point is, Mr. Chairman, if we
do want to solve this on a bipartisan basis, then we got to
separate fact from fiction. We got to depoliticize it, $670
billion of improper payments and fraud, waste and abuse in the
first Trump administration. Isn't that correct?
Correct. Isn't that correct?
I don't have any reason to dodge your math.
OK. Isn't that correct?
I believe? So perfect.
Thank you, Mr. Chairman. Does gentleman seek to give back
his time, or is gentleman? Mr. Chairman, I had no time
back, but I will. I'm happy to give you.
The gentleman your ranking member has asked if we would
have a second round. Distinguished Gentleman's
recognized Mr. Vome well. Thank you very much, Mr. Chair.
I want to thank Mr. Mark Goods and I to the gentleman from
Florida. I will say Elon Musk is a lie on
the record, which I've said many times.
So I guess he's coming after me. One of the things we want to do
here is to allow everybody freedom of expression.
This is an issue particularly for the chairman and I.
We've been working this for a long, long time, and getting to
the root of this by implementing what we're hearing today and
what we've learned from previous hearings is extremely, extremely
important. I don't want to be redundant,
but again, this whole notion about do we have an enforcement
mechanism in place when agency heads just watch this sort of
thing occur under their tenure and do nothing about it, or
watch it and feel like they can't do anything about it?
And for those brave souls who do, how do we reward them?
And what what do we do as a Congress to make sure that we
were tightening up their spine and that they're doing the right
thing? I think it's fair to say that
there will be legislation coming out of this hearing at some
point in time. I know the chairman has
expressed an interest that I hope to join him in that regard.
If we don't do anything else, once the shouting and everything
else is over with, we've got to find a way to make sure that
dollars that could be used to help people in this country
actually get to people. If we're able to slow down this.
I can't call it a trickle of fraud, waste and abuse.
An avalanche that has been going on.
And I've been looking at the GAO numbers going all the way back
to 2003. So Mr. Markowitz was right, it
didn't start under Joe Biden. This has been going on and on
and on, and I think we will have a gross failure on our part if
we don't find a way in this committee with this win to our
back to do something about it. I it's, it's going to take calm,
clear thinking, a resolute determination to make sure that
whatever legislation we are able to come up with jointly over and
over again that passes really does get us to where we want to
be. I would think that everybody in
this country is appalled to know that there are crooks out here
who feed on the government, who lie, who cheat, who steal, who
deliberately find a way to get around the law.
And I don't know that there's any safe haven for those
individuals wherever they are. I do know that we've got to
bring the hammer down on them, which is why I'm so dismayed
that the inspectors general are not in place to do just that.
They had started a process and it was yielding results.
So I'm going to yield back to our our chairman.
My commitment is to work through these issues, to work in a
bipartisan way where possible. And I hope that's very possible.
And to keep saying what we've been saying over and over again,
which now is starting to get some sort of audience just
because I guess Elon Musk has a bigger bullhorn than my
microphone here. But we've been at this.
This is not new. And we've got to find a way to
do it in a way that is surgical, deliberate, verifiable, and
allows for due process. With that, I'm going to yield
back. Thank you, Mr. Chairman.
I appreciate the time. Thank you very much.
And also, if the gentleman does, I don't know if that was your
closing comments. OK, then I'm going to yield
myself my time and then I probably will can put those
together with my closing comments and then we'll get out.
I want to thank the not only the witnesses who are here today,
but some of the other who are others who are in the audience.
I think today you saw a very classic events that happen
almost every day on the Hill and that is people miss the opening
statements, they miss some of the Nuggets of information that
each of you gave. But what resides in each of us
is a desire. When we hear the term $800
billion, whether it's waste, fraud or abuse or unintended
payments, what whatever you would want to put that term
with, it is frustrating. It's frustrating for us.
It's frustrating for you. I will tell you that I think
what Mr. Imphume described was the two of us when he said the
answer needs to be, I think the answer needs to be a bipartisan
answer. I think it needs to be looking
at this together. I think it needs to be this
subcommittee through his leadership and perhaps hopefully
through mine, that we can guide us to decision making, that his
strong voice, my voice, can move us where we need to go.
Where is it that we need to go? I think today that we heard
about the pandemic Responsible Accountability Committee is one
of those answers. It is an answer that it
currently exists and it was a bipartisan answer.
It still maintains a good bit of data, but it was done just for
the pandemic. It was not done for other
programs that would reside across the government.
I think that the expertise that Mister Deffenbaugh spoke to me
about yesterday when I met with him for a good period of time
was that he sees that they could be a potential front side answer
to not just waste, fraud and abuse, but on an individual
basis for the various organizations, Social Security,
Veterans Affairs, IRS. We spoke about how 18F us for
some time provided some assurance that they would know
who a person was on coming in, but we now recognize it didn't
quite work that way. But the Pandemic Response
Accountability Committee has effectively been able to prove
that the work that they have done.
And so a piece of legislation, I spoke to Chairman Comer about it
this morning, will be in order within two weeks.
We're going to go to a markup. We are going to work together.
We're going to, I think, see the same answer.
And that is we think that you worked, Mr. Deffenbaugh.
We think that that answer is an upfront answer.
And we will then have to find a way to mirror not only what you
do, but find a way to bring the avenues of data and information
upfront and apply those same principles to the biggest
problem. I don't think that we'll go
overnight directly to you. I don't think your staff for
that. I don't we'll work together.
But I do think that the answer lies in upfront gaining the
information. If the members had all been here
upfront, they would have heard all three of you concur on that.
They would have said, well, we need to do this on an upfront
basis as a person goes through this process, in particular,
before we send out billions or trillions of dollars to people,
which is something that I've tried to echo.
Our government is not prepared to send money out on a mass
basis at this point. We are not prepared.
And I'm not trying to disappoint anybody in this administration,
but we're not prepared for it. We need to get prepared.
And I believe that Mister Infume and I, who've been given this
authority and responsibility, will continue to work with you.
I'll be quite honest, I was delighted with what I heard
yesterday from GAOI think that they have provided us a lot of
information which is allowing us to hone in not only on the
problems but the answers. And I think if we move our self
to answers through a process that people understand and
expect, it will mean that a lot of people gain confidence in not
only the federal government but the workforces that are there.
Lastly, I don't want to do this necessarily because the
gentlemen are not here, Mr. Frost, Miss Moskowitz, but it I,
I think might be slightly a revision to what he said about
their hearing. Crickets.
In fact, the $800 billion is a 10 year number.
These will be votes that will be taken.
And we have already seen where these numbers which are being
looked at by this Doge organization.
O MB, O MB in the government is reporting that they believe the
huge numbers of quote cuts could be achieved by reducing the
amount of unintended payments and we could look back.
I did not do that to to line up whether it's Medicare, whether
it's Medicaid, whether it's VA, whether it's SBAI did not look
at that from the information that GAO has given us.
What I will tell you is, is that people like me, and I think
people like Mr. Infume want to do something about it.
People like me, I am a Republican, believe that we can
get credit for cutting waste, fraud and abuse.
And we have laid down the gauntlet to say we are going to
do the things that would be necessary to cut unintended
payments, and we're going to work those into the government.
And we're going to make sure this happens.
And that will be done on a bipartisan basis.
But for us to assume that we cannot make this better by
growth, that we would make it better by growing the
organization, I would submit to you, I don't agree with that.
I don't agree that we can do it by keeping workers at home
rather than in the office, working with databases and
figuring out who wants to get committed.
And this is where I saw the process that is political, where
the president said if you don't choose not to want to come back,
He understood that he would offer a buyout plan that was
immediately attacked. We live in a political world and
there are people who will attack President Biden or President
Trump just from their word go, the word go of their name.
So I would submit to you that I think that we are not having
crickets. We are having a plan that we're
laying out. I've got to do a better job as
one of the Co chairman of DOGE. It is my opportunity and my real
need to talk to the American people with clarity.
But as the father of a Down syndrome young man who is 31
years old, I too have been through and seen how our
services that we offer to those people who cannot take care of
themself and their families should not be the ones that find
themselves on the wrong end of these changes.
It is true what was stated to hear today that families that
have disabled people, disabled children, disabled adults,
people they care for have a higher threshold of frustration
of working through the system. And I think that system will get
better as we hone ourself through the work that would be
done on a bipartisan basis and less fear.
The fear that people have about losing Social Security is in
fact not true. It would not be true.
It is not the goal of Elon Musk or of this government, and I do
recognize there have been some words stated about their
problems with what they see as an aggregate amount of
unintended payments. But I will tell you that there
is more than enough room to stop the unintended payments that
would equal the amount of money that is almost destined to be
cut. We deal with 10 year numbers,
not one year numbers. We deal with numbers that are
exponentially high. And it sounds almost like, Oh my
gosh, they're going to shut down the program.
In fact, there needs to be thought process behind it.
I am no way am afraid of a town hall meeting of explaining what
we're doing. But as a member of Congress, if
we accept that where we are and where we have been is acceptable
to our future, we are missing the boat.
So I would ask that each of you know that you got asked tough
questions today. Doesn't bother me.
But to have the confidence that if we move forward together,
including Mr. Mfume and myself, that we can end up in a point
where we look at each other and say we made this better, We
saved the money that was actually destined for people
that it was intended to, and then we'll see what the score
is. I have great confidence we can
do this. So I do not want to a
conversation that they hear crickets to be part of this.
There are not crickets. There is a really daunting task
of us to take this $1.7 trillion or $2.7 trillion, whatever the
amount was that is laid in front of us.
And we were never talking about cuts that were bigger than that.
We were talking about cuts that are way less.
But that makes sense. So I want to thank each of you
for being here today. I think each of you did well
enough to be invited back. But perhaps more importantly, we
would like to work with you and Mr. Mfume and I are going to
deal with this and legislation will pass it to you and also see
if you would, what your opinion might be for that.
But I want to thank you each for being here today.
The gentleman Does the gentleman wish to further time?
Just to thank our witnesses. We do thank our witnesses and
that they stick around a second. Mr. Mfume and I are going to end
this hearing and come and thank you for being here.
This concludes the hearing today.
I want to thank the witnesses and you're now excused.
My script, right? Whoops, we will.
Where's the five day? Well, hold on just a second.
I'm sorry. We will.
Without objection, we will extend to where's the statement
you want me to read The five days?
It's all 5 legislative days for people to ask for questions and
to receive information. Where is that bill?
Where is it? I don't see it, and I apologize.
It's a normal thing we do. There you go, Crystal.
All right. That's unanimous consent that
all numbers. For our phone, yeah, I've.
Legislated. Yeah, I know what it says, but
I'm going to read. Oh, there it is.
With all that said, without objection, all members will have
5 legislative days within which to submit additional written
questions for witnesses, which before did the witness for their
response. There's no further business.
Without objection, Subcommittee stands adjourned.
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