Dear Senator Carper and Senator Coburn:
Onbehalf of the 362,000-member National Taxpayers Union (NTU), I am pleased tooffer our praise and support for the many fiscal reforms contained in the“Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers’ DollarsAct,” or FAST Act. This legislation would introduce vital and long-overdue pro-taxpayeradministrative and accountability measures to the federal government’s twomajor health programs.
Althoughlaws such as the Improper Payments Elimination and Recovery Act have beenhelpful in the ongoing struggle to improve the financial management of Medicareand Medicaid, these two programs alone made a combined $70.5 billion inerroneous payouts last year, according to testimony given in March from theGovernment Accountability Office. Owing to their very structures, which involvemultiple layers of bureaucracy and vast networks of third-party payers, thesesystems are among the most susceptible in the entire government to waste,fraud, and abuse. Nonetheless, this should not serve as reason to simply acceptabsurd levels of squandered tax dollars as the “price” for providing thesebenefits.
TheFAST Act would take numerous steps to improve the fiduciary practices behindMedicare and Medicaid. Among the reforms NTU strongly supports is a more formalprocess for addressing vulnerabilities in payment transactions identified byRecovery Audit Contractors (RACs). In August 2008 comments to the SenateCommittee on Finance, NTU supported what was at the time more limited pilotprograms allowing RACs to identify savings in certain parts of Medicare. Theseprograms, which we called “remarkably cost efficient,” have over time createdan equally remarkable archive of institutional knowledge that could helpprevent improper payments before the fact, not merely identify and recover themafter the fact. Your bill would hold the Department of Health and HumanServices more accountable for embracing this “learning curve,” which could alsopotentially benefit providers by giving them more concrete claims processingguidance in advance. The cause of “payment education” will be admirably servedthrough additional sections of the FAST Act requiringexpanded prepayment review of Medicare claims (and better tracking of rejectedones), along with special review procedures for durable goods – an area thatexposes taxpayers to a high degree of risk. Another cornerstone of the FAST Actrelates to improvements in data-sharing among federal and state agencies (aswell as oversight contractors) to improve record-matching and pattern-detectionprocedures. These provisions too will begin transforming the managementcultures at Medicaid and Medicare to ones more intensely committed topreventative, as opposed to reactive, fiscal stewardship. New technologies theFAST Act proposes, such as pilot programs using smart cards, offer furtherpromise of such a transformation.
Ultimately,other fundamental reforms to Medicare and Medicaid must be undertaken toprotect taxpayers from trillions of dollars in unfunded liabilities. Theseshould include concepts that more actively empower beneficiaries to controltheir health care spending, and strengthen the relationship between patient andprovider. Other government-wide proposals to reduce waste, fraud, and abuse,such as legislation offering better protection for whistleblowers, could be ofgreat value to taxpayers as well. For too long, however, Medicare’s andMedicaid’s bureaucracies have been slow to accept their responsibility forabsorbing cost-control techniques that at least some of the other entitiesinvolved in these systems (such as RACs) have begun to adopt. Many provisionsof the FAST ACT can aid this evolutionary fiscal process, and NTU looks forwardto working with you and your colleagues in ushering them to passage.
Sincerely,Pete SeppExecutive Vice President