MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE:
I APPRECIATE THE OPPORTUNITY YOU HAVE GIVEN ME TO PROVIDE A STATEMENT FOR THE RECORD TO ADDRESS THE ISSUE OF PRIVACY AND CONFIDENTIALITY OF MEDICAL RECORDS. AS INSPECTOR GENERAL AT AN AGENCY THAT OVERSEES THE FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM (FEHBP), WHICH IS THE THIRD-LARGEST HEALTH CARE EXPENDITURE PROGRAM FOR THE UNITED STATES, I BELIEVE THERE NEEDS TO BE STRONG RECOGNITION OF THE UNIQUE NEEDS OF FEDERAL LAW ENFORCEMENT OFFICIALS WHEN CONSIDERING LEGISLATION GOVERNING ACCESS TO MEDICAL INFORMATION. AT THE SAME TIME I STRONGLY SUPPORT MAINTAINING APPROPRIATE SAFEGUARDS TO PREVENT UNLAWFUL AND UNAUTHORIZED DISSEMINATION OF INDIVIDUAL MEDICAL RECORDS.
I AM PROUD OF THE FACT THAT MY OFFICE HAS BEEN INCREASINGLY RECOGNIZED BY THE LAW ENFORCEMENT COMMUNITY AS HAVING A MAJOR INVESTIGATIONS AND AUDIT ROLE WITH REGARD TO FINDING AND PROSECUTING HEALTH CARE FRAUD. WE HAVE WORKED HARD TO EARN THIS RECOGNITION. WHEN MY OFFICE BECAME A STATUTORY ENTITY IN 1989, WE ASSUMED RESPONSIBILITY FOR PERFORMING AUDITS OF THE FEHBP AND, FOR THE FIRST TIME, ALSO PROVIDED CRIMINAL INVESTIGATIONS OF FRAUD, FALSE CLAIMS, AND OTHER PROGRAM- RELATED OFFENSES. IN 1993, WE DEVELOPED AND IMPLEMENTED A DEBARMENT ACTIVITY THAT REMOVES FROM FEHBP PARTICIPATION HEALTH CARE PROVIDERS WHO HAVE ACTED IMPROPERLY AGAINST FEDERAL PROGRAMS. BECAUSE OF THESE EFFORTS, WE HAVE COMPILED A SUBSTANTIAL RECORD OF ACCOMPLISHMENTS THAT PROTECT THE HEALTH CARE INTERESTS OF ITS SUBSCRIBERS AND DIRECTLY BENEFIT THE FINANCIAL INTERESTS OF FEHBP TRUST FUNDS AND THE AMERICAN TAXPAYER. FOR EXAMPLE, DURING THE PAST THREE FISCAL YEARS, OUR AUDIT AND INVESTIGATIONS PROGRAMS HAVE GENERATED $249 MILLION IN NET SAVINGS WITHIN THE FEHBP TRUST FUND. SINCE THE INCEPTION OF OUR ADMINISTRATIVE SANCTIONS ACTIVITIES, WE HAVE DEBARRED 5,200 PROVIDERS. REMOVING FRAUDULENT PROVIDERS FROM THE PROGRAM LIMITS DISBURSEMENTS TO THESE INDIVIDUALS WHICH PRODUCES CORRESPONDING REDUCTIONS IN FEHBP PREMIUM COSTS FOR THE GOVERNMENT AND PROGRAM SUBSCRIBERS, IN ADDITION TO ELIMINATING PROVIDERS WHO CONSTITUTE THREATS TO THE PHYSICAL WELL-BEING OF SUBSCRIBERS. ALONG WITH FINANCIAL RECOVERIES FOR THE FEHBP, THESE EFFORTS PROVIDE A STRONG SENTINEL DETERRENT TO WRONGDOING BY PROVIDERS, INSURANCE CARRIERS AND SUBSCRIBERS.
IN ADDITION TO BEING THE THIRD-LARGEST FEDERAL HEALTH CARE PROGRAM AFTER MEDICARE AND MEDICAID, THE FEHBP IS THE LARGEST EMPLOYEE EARNED HEALTH BENEFITS PROGRAM IN THE WORLD. IT PROVIDES HEALTH COVERAGE TO APPROXIMATELY 9.1 MILLION FEDERAL EMPLOYEES, RETIREES AND THEIR DEPENDENTS THROUGHOUT THE COUNTRY UNDER CONTRACTS NEGOTIATED BY OPM. THERE ARE CURRENTLY 374 HEALTH INSURANCE CARRIERS RECEIVING TOTAL ANNUAL PREMIUM PAYMENTS UNDER THESE CONTRACTS IN EXCESS OF $17.2 BILLION WITH APPROXIMATELY $16 BILLION IN BENEFIT PAYMENTS MADE IN FISCAL YEAR 1996 ON BEHALF OF FEDERAL SUBSCRIBERS/BENEFICIARIES. THROUGH A STATUTORY FORMULA, THE COSTS OF COVERAGE ARE SHARED BY THE GOVERNMENT AND THE INDIVIDUAL PROGRAM PARTICIPANTS, WITH THE FEDERAL PAYMENT AMOUNTING TO 71 PERCENT, OR OVER $12.2 BILLION FOR THE CURRENT CONTRACT YEAR. ALL PROGRAM-ASSOCIATED FUNDS, FROM BOTH AGENCIES AND PARTICIPANTS, AS WELL AS A DIRECTLY APPROPRIATED PAYMENT FOR ANNUITANTS, ARE PAID INTO A TRUST FUND ADMINISTERED BY OPM AND HAVE ALWAYS BEEN CONSIDERED TO BE FEDERAL FUNDS IN THEIR ENTIRETY.
THE FEHBP DIFFERS FROM THE OTHER FEDERAL HEALTH CARE PROGRAMS IN THAT, INSTEAD OF BEING A THIRD-PARTY PAYOR ITSELF, IT CONTRACTS WITH THIRD PARTY PAYORS. DESPITE THIS FACT, FRAUD AGAINST THE FEHBP IS ACTIONABLE UNDER FEDERAL STATUTES BECAUSE OF THE FEDERAL MONEY INVOLVED.
MY OFFICE HAS ACCESS TO CERTAIN MEDICAL CLAIM INFORMATION BECAUSE OF THE CONTRACTUAL RELATIONSHIP BETWEEN THE HEALTH INSURANCE CARRIERS AND THE AGENCY. ALONG WITH INVESTIGATIONS OF HEALTH INSURANCE CARRIERS PARTICIPATING IN THE FEHBP, MANY OF OUR INVESTIGATIONS INVOLVE THIRD-PARTY PROVIDERS WITHIN THE PROGRAM WHO HAVE COMMITTED OFFENSES SUCH AS BILLING FOR UNNECESSARY SERVICES, CHARGING FOR SERVICES NOT RENDERED AND BILLING FOR PROCEDURES OUTSIDE OF THE SCOPE OF THE CONTRACT. HOWEVER, DURING THE COURSE OF THESE INVESTIGATIONS, MY OFFICE ALSO UTILIZES ADDITIONAL MEDICAL INFORMATION OBTAINED BY OIG SUBPOENA, GRAND JURY SUBPOENA AND SEARCH WARRANT.
ALTHOUGH IT IS USUALLY NOT NECESSARY TO EXAMINE PATIENT TREATMENT RECORDS, THE ADDITIONAL INFORMATION OBTAINED THROUGH THESE LAW ENFORCEMENT TOOLS ARE AN INTEGRAL PART OF ANALYZING AND BUILDING A SUCCESSFUL CASE. WE MUST USE PATIENT RECORDS TO DETERMINE WHETHER THERE IS A FRAUDULENT PATTERN OF BILLING OR USE OF PATIENTS IN SCHEMES TO OBTAIN BENEFITS FOR UNNECESSARY SERVICES. MY OFFICE RECOGNIZES THE CONCERNS OF THE PUBLIC WITH RESPECT TO CONFIDENTIALITY OF MEDICAL RECORDS AND MANDATES A POLICY TO LIMIT OUR REQUESTS TO ONLY INFORMATION NECESSARY FOR THE INVESTIGATION. WE CONSIDER ALL LEGAL SAFEGUARDS BEFORE DISCLOSING ANY MEDICAL INFORMATION TO OTHER FEDERAL AGENCIES OR OTHER INDIVIDUALS.
WITH THESE PROCEDURES IN PLACE, ANY INCREASED RESTRICTIONS SUCH AS A PROBABLE CAUSE AND NOTICE REQUIREMENT FOR SUBPOENAS CONTAINED IN RECENT LEGISLATIVE PROPOSALS INCLUDING H.R. 52, THE FAIR HEALTH INFORMATION PRACTICES ACT OF 1997, WOULD CREATE WHAT I BELIEVE TO BE AN UNNECESSARY AND INSURMOUNTABLE BURDEN ON THIS OFFICE OF INSPECTOR GENERAL. WITH A LIMITED STAFF, ADDING ADDITIONAL HURDLES BEYOND THE PRESENT STANDARD OF RELEVANCY TO THE PROCESS FOR ACCESSING MEDICAL INFORMATION WOULD INCREASE THE LIKELIHOOD OF LITIGATION AT AN EARLY INVESTIGATIVE STAGE AND WOULD THEREFORE CONSIDERABLY LIMIT THE ABILITY TO EFFECTIVELY AND EFFICIENTLY INVESTIGATE, PROSECUTE AND DETER HEALTH CARE FRAUD. OUR OFFICE RELIES MOST HEAVILY ON THE OIG SUBPOENAS AND IMPLEMENTATION OF ADDITIONAL DUE PROCESS PROCEDURES WOULD SEVERELY DIMINISH THE UTILITY OF THIS INDISPENSABLE TOOL.
SECTION 119 OF H.R. 52, COVERING LAW ENFORCEMENT, CONTAINS AN EXCEPTION WHICH WOULD ALLOW A "HEALTH OVERSIGHT AGENCY" TO RECEIVE INFORMATION FROM A "HEALTH INFORMATION TRUSTEE," WHICH INCLUDES HEALTH CARE PROVIDERS, TO OBTAIN MEDICAL INFORMATION WITHOUT ADHERING TO THE MORE RESTRICTIVE COMPULSORY PROCESS REQUIREMENTS. HOWEVER, IT IS UNCLEAR WHETHER LAW ENFORCEMENT PERSONNEL AND SPECIFICALLY OFFICES OF INSPECTOR GENERAL FALL WITHIN THE DEFINITION OF HEALTH OVERSIGHT AGENCY.
AS A RESULT, I AM HOPEFUL THAT THE COMMITTEE WILL STRONGLY CONSIDER SPECIFICALLY INCLUDING OFFICES OF INSPECTOR GENERAL WITHIN THE DEFINITION OF HEALTH OVERSIGHT AGENCY AS PART OF ANY LEGISLATIVE PROPOSAL GOVERNING ACCESS TO INDIVIDUAL MEDICAL RECORDS. THIS EXCEPTION WOULD PRESERVE THE EXISTING LEGAL STANDARDS THAT ARE PRESENTLY IN PLACE FOR INVESTIGATORS, INCLUDING OFFICE OF INSPECTOR GENERAL SPECIAL AGENTS.