[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]




    HEARING ON REMOVING SOCIAL SECURITY NUMBERS FROM MEDICARE CARDS

=======================================================================

                             JOINT HEARING

                               before the

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                  and

                         SUBCOMMITTEE ON HEALTH

                                 of the

                      COMMITTEE ON WAYS AND MEANS

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             August 1, 2012

                               __________

                        Serial No. 112-SS19/HL14

                               __________

         Printed for the use of the Committee on Ways and Means







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                      COMMITTEE ON WAYS AND MEANS

                     DAVE CAMP, Michigan, Chairman

WALLY HERGER, California              SANDER M. LEVIN, Michigan
SAM JOHNSON, Texas                   CHARLES B. RANGEL, New York
KEVIN BRADY, Texas                   FORTNEY PETE STARK, California
PAUL RYAN, Wisconsin                 JIM MCDERMOTT, Washington
DEVIN NUNES, California              JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington        XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana  LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois            MIKE THOMPSON, California
JIM GERLACH, Pennsylvania            JOHN B. LARSON, Connecticut
TOM PRICE, Georgia                   EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida               RON KIND, Wisconsin
ADRIAN SMITH, Nebraska               BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois               SHELLEY BERKLEY, Nevada
LYNN JENKINS, Kansas                 JOSEPH CROWLEY, New York
ERIK PAULSEN, Minnesota
KENNY MARCHANT, Texas
RICK BERG, North Dakota
DIANE BLACK, Tennessee
TOM REED, New York

         Jennifer Safavian, Staff Director and General Counsel

                  Janice Mays, Minority Chief Counsel

                                 ______

                    SUBCOMMITTEE ON SOCIAL SECURITY

                      SAM JOHNSON, Texas, Chairman

KEVIN BRADY, Texas                   XAVIER BECERRA, California
PATRICK J. TIBERI, Ohio              LLOYD DOGGETT, Texas
AARON SCHOCK, Illinois               SHELLEY BERKLEY, Nevada
RICK BERG, North Dakota              FORTNEY PETE STARK, California
ADRIAN SMITH, Nebraska
KENNY MARCHANT, Texas

                                 ______

                         SUBCOMMITTEE ON HEALTH

                   WALLY HERGER, California, Chairman

SAM JOHNSON, Texas                   FORTNEY PETE STARK, California
PAUL RYAN, Wisconsin                 MIKE THOMPSON, California
DEVIN NUNES, California              RON KIND, Wisconsin
DAVID G. REICHERT, Washington        EARL BLUMENAUER, Oregon
PETER J. ROSKAM, Illinois            BILL PASCRELL, JR., New Jersey
JIM GERLACH, Pennsylvania
TOM PRICE, Georgia
VERN BUCHANAN, Florida










                            C O N T E N T S

                               __________

                                                                   Page

Advisory of August 1, 2012 announcing the hearing................     2

                               WITNESSES

Tony Trenkle, Chief Information Officer and Director, Office of 
  Information Services, Centers for Medicare and Medicaid 
  Services, Department of Health and Human Services, Baltimore, 
  MD.............................................................     8
Kathleen King, Director, Health Care, accompanied by Daniel 
  Bertoni, Director, Education, Workforce, and Income Security, 
  Government Accountability Office...............................    21

 
    HEARING ON REMOVING SOCIAL SECURITY NUMBERS FROM MEDICARE CARDS

                              ----------                              


                       WEDNESDAY, AUGUST 1, 2012

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:36 a.m., in 
Room 1100, Longworth House Office Building, the Honorable Sam 
Johnson [chairman of the subcommittee] presiding.
    [The advisory of the hearing follows:]

HEARING ADVISORY

   Chairmen Johnson and Herger Announce a Hearing on Removing Social 
                  Security Numbers from Medicare Cards

Wednesday, August 1, 2012

      
    House Ways and Means Social Security Subcommittee Chairman Sam 
Johnson (R-TX) and Health Subcommittee Chairman Wally Herger (R-CA) 
today announced that the Subcommittees will hold a joint hearing on 
removing Social Security numbers from beneficiaries' Medicare cards. 
The hearing will take place on Wednesday, August 1, 2012, in 1100 
Longworth House Office Building, beginning at 9:30 A.M.
      
    In view of the limited time available to hear from witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Committee and for 
inclusion in the printed record of the hearing. A list of invited 
witnesses will follow.
      

BACKGROUND:

      
    In 2010, according to the U.S. Department of Justice, seven percent 
of households in the U.S., or about 8.6 million households, had a least 
one member age 12 or older who experienced identity theft. Of these 
households, over 1 million were headed by seniors, age 65 and older. 
The Social Security number (SSN) is especially valuable to identity 
thieves as it serves as the key to authenticating an individual's 
identity in order to open accounts or obtain other benefits in the 
victim's name.
      
    The Government Accountability Office (GAO) first recommended 
removing the SSN from government documents in 2002. In 2007, President 
George W. Bush's Identity Theft Task Force found that the SSN is ``the 
most valuable commodity for an identity thief'' and its first 
recommendation was to reduce the unnecessary use of SSNs. That same 
year, the White House Office of Management and Budget issued a 
directive to all federal agencies to develop a plan for reducing the 
use of SSNs in government transactions and to explore alternatives to 
their use. In 2008, the Social Security Administration (SSA) Inspector 
General found that displaying SSNs on beneficiary Medicare cards 
unnecessarily places millions of Americans at risk for identity theft 
and recommended that the SSN be removed from Medicare cards. Also in 
2008, the House of Representatives passed H.R. 6600, the ``Medicare 
Identity Theft Prevention Act of 2008,'' introduced by Representatives 
Lloyd Doggett (D-TX) and Sam Johnson (R-TX), directing the Secretary of 
Health and Human Services (HHS) to establish cost-effective procedures 
to ensure that SSNs are not included on Medicare cards moving forward. 
This legislation passed the House by voice vote on September 28, 2008. 
Unfortunately, the Senate did not act on this legislation.
      
    Today, nearly 50 million Medicare cards display SSNs, the main 
component of the health insurance claim number (HICN). The SSA and the 
Railroad Retirement Board assign HICNs to eligible Medicare 
beneficiaries. The HHS Centers for Medicare and Medicaid Services (CMS) 
administers the Medicare program and relies on the HICN for 
administering Medicare benefits, including requiring beneficiaries to 
present the HICN to document eligibility for Medicare services and 
requiring approximately 1.4 million providers to use the HICN for 
billing services.
      
    To date, CMS has not developed a plan for removing the SSN from the 
Medicare card to protect beneficiaries from identity theft and protect 
taxpayers from fraudulent billing. In response to a July 2010 
bipartisan request from the Committee on Ways and Means, CMS reported 
in November 2011 its estimates of three potential options for removing 
SSNs from Medicare cards, each projected to cost more than $800 
million, nearly triple the amount the agency had preliminarily 
estimated in 2006. CMS also estimated that the change would take four 
years to test and implement and cited the risks to its systems and 
those of its provider and health care partners if the necessary 
resources were not provided. On September 13, 2011, Chairman Sam 
Johnson and Congressman Lloyd Doggett asked GAO to examine the lessons 
learned from the efforts of the Department of Defense and Veterans 
Affairs to remove SSNs from their identification cards and later asked 
GAO to review CMS's 2011 report, including the options and their 
estimated costs.
      
    In announcing the hearing, Chairman Johnson said, ``Seniors are 
urged not to carry their Social Security card to protect their Social 
Security number, but at the same time are being told they must have 
their Medicare card with them at all times in order to get health care. 
This makes no sense. Many agencies in the public and private sector 
have removed the Social Security number from their benefit or ID cards 
to protect people, yet CMS refuses to protect the 48 million Medicare 
beneficiaries from ID theft by doing the same. That's why Congressman 
Lloyd Doggett and I have introduced H.R. 1509, removing the Social 
Security number from the Medicare card and reducing the ID theft danger 
that CMS has long ignored.''
      
    In announcing the hearing, Chairman Herger said, ``It is puzzling 
why CMS has not taken commonsense steps to protect Medicare 
beneficiaries from preventable identity theft by removing Social 
Security numbers from their Medicare cards. Other federal health 
programs and private health insurance plans invested in these changes 
years ago. This hearing enables the Subcommittees to explore whether 
CMS has a plan to remove Social Security numbers from beneficiary cards 
and determine whether its previous analysis in this area is reliable.''
      

FOCUS OF THE HEARING:

      
    The Subcommittees will examine options for removing SSNs from 
Medicare cards, including the cost and impact of doing so, along with 
why CMS has failed to develop and execute a plan to remove the SSN from 
beneficiary Medicare cards.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage,http://waysandmeans.house.gov, select 
``Hearings.'' Select the hearing for which you would like to submit, 
and click on the link entitled, ``Click here to provide a submission 
for the record.'' Once you have followed the online instructions, 
submit all requested information. ATTACH your submission as a Word 
document, in compliance with the formatting requirements listed below, 
by the close of business on Wednesday, August 15, 2012. Finally, please 
note that due to the change in House mail policy, the U.S. Capitol 
Police will refuse sealed-package deliveries to all House Office 
Buildings. For questions, or if you encounter technical problems, 
please call (202) 225-1721 or (202) 225-3625.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any supplementary materials submitted for the 
printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
guidelines will not be printed, but will be maintained in the Committee 
files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word format and MUST NOT exceed a total of 10 pages, including 
attachments. Witnesses and submitters are advised that the Committee 
relies on electronic submissions for printing the official hearing 
record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. All submissions must include a list of all clients, persons and/
or organizations on whose behalf the witness appears. A supplemental 
sheet must accompany each submission listing the name, company, 
address, telephone, and fax numbers of each witness.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://www.waysandmeans.house.gov/.

                                 

    Chairman JOHNSON. Good morning. We welcome our colleagues 
from the Subcommittee on Health, who join the Social Security 
Subcommittee, today to focus on the importance of removing 
Social Security numbers from the Medicare cards.
    For many years now, protecting the Social Security number 
has been a priority of the Ways and Means Committee that both 
sides agree on. So far this session, we have had numerous 
hearings on the role of Social Security numbers and the growing 
crime of identity theft. We have learned how identity thieves 
prey on anyone, including those most vulnerable, like seniors 
and children, even children who have died.
    According to the Government Accountability Office, Social 
Security numbers are the identifier of choice, and are used for 
all sorts of financial transactions. In an April 2007 report, 
President Bush's Identity Theft Task Force identified the 
Social Security number as the most valuable commodity for an 
identity thief. It is no wonder the Department of Justice 
reports that 7 percent, or 8.6 million households had someone 
over the age 12 experience identity theft.
    We all know Americans are told not to carry their Social 
Security cards to protect their identity in case a wallet is 
lost or stolen. Yet seniors are told they must carry their 
Medicare card, which displays a Social Security number. Not 
only does this make no sense, it puts Medicare beneficiaries at 
risk.
    In 2007, the White House Office of Management and Budget 
issued a directive to all federal agencies to develop plans for 
reducing the use of Social Security numbers--2007; remember 
that date.
    The Department of Defense and Veterans Affairs are now 
phasing out the use of Social Security numbers on their ID and 
Medicare cards. I applaud them for taking this action and for 
taking this action on their own. And some of our largest 
federal agencies, along with the most private insurance 
providers, can stop public display of Social Security numbers. 
The Centers for Medicare and Medicaid, or CMS, should too.
    If CMS won't do what is right for America's Medicare 
beneficiaries, then Congress must act. That is why, along with 
my fellow Texan and Subcommittee on Social Security member, 
Congressman Lloyd Doggett, I have introduced legislation H.R. 
1509, the Medicare Identity Theft Prevention Act of 2011. Our 
bill directs the Secretary of Health and Human Services to 
remove Social Security numbers from Medicare cards. A similar 
bill of ours passed the House with overwhelming bipartisan 
support in 2008 on a voice vote.
    I thank my colleague from Texas for his work on this 
important issue, and all my committee colleagues for their 
support. I hope we will soon get this important legislation 
behind us. I thank each of our witnesses for sharing their 
findings and recommendations, and look forward to hearing your 
testimony.
    I now recognize the Ranking Member, Mr. Becerra, for his 
opening statement.
    Mr. BECERRA. Mr. Chairman, thank you very much. Identity 
theft is a serious problem, and seniors and disabled Americans 
are particularly vulnerable. Nearly nine million Americans a 
year have their identities stolen. According to the Federal 
Trade Commission, a typical theft costs a victim somewhere 
around $500. That is a significant loss to someone who might be 
living on a fixed income. In a worst case scenario, thieves 
often will steal an average of about $13,000 from a victim. And 
those victim spend about an average of 130 hours trying to 
clear their credit and prevent additional theft.
    Seniors and disabled Americans are particularly vulnerable 
here. First, of course, we know that they have low incomes, so 
even a modest theft can be devastating. The median income of 
seniors in America, a senior household, would be somewhere 
around $25,000 a year. And more than half of disabled Americans 
receiving Social Security and Medicare live in poverty, even 
with their Social Security benefits included.
    And, of course, secondly, we know that seniors and disabled 
Americans often carry their Social Security numbers on their 
person. That makes them, of course, more available to thieves. 
I support removing the Social Security number from the Medicare 
card, which too many of our seniors carry on their person.
    But making seniors more secure will require resources. 
Although it may sound simple, giving 49 million Americans new 
Medicare ID numbers and making sure that they can still fully 
access their benefits is a big job. The job is made more 
difficult because a series of Republican budget cuts has left 
the Centers for Medicare and Medicaid Services and the Social 
Security Administration struggling to keep up with their basic 
work just as the Baby Boomers, of course, are reaching their 
retirement age.
    Since 2010, the Social Security field offices which take 
Medicare applications, issue Medicare cards, and provide in-
person customer service to Medicare beneficiaries have lost 
nearly 2,300 employees, about 8 percent of their total staff, 
to budget cuts. Social Security offices are closing to the 
public half an hour early. And waiting times for phone service 
and initial disability benefits are rising.
    Here in the House, the Republican Majority recently 
proposed cutting Social Security's fiscal year 2013 budget by 
nearly $800 million below the 2012 levels. Short-changing 
Social Security makes it likely that the agency will have to 
furlough or lay off staff, and may create a backlog of 
retirement applications for the first time in our history.
    Similarly, CMS funding has failed to keep up with their 
growing responsibilities. Their per-beneficiary operating 
budget has declined by 14 percent since 2004. Once again, any 
cuts in any House budget to CMS's funding could lead to more 
devastating impact for those Medicare beneficiaries. And 
funding we see may actually reduce by about $400 million in the 
House Republican budget.
    We need to provide the resources so that CMS can better 
protect seniors from identity theft. The Bush Administration, 
back in 2004, failed to solve this problem when GAO first 
identified it. And it is still not solved, despite strong 
support in our committee and the House, passing Chairman 
Johnson and Mr. Doggett's bill, H.R. 6600 back in 2008.
    Congress first directed HHS to address this issue in 2005 
in the Labor, Health and Human Services, and Education 
appropriations bill. In 2007, the Bush Administration failed to 
make CMS comply with an executive order to eliminate 
unnecessary use of the Social Security number. And, most 
recently, CMS produced a cost estimate for removing the Social 
Security number from Medicare cards, as we requested. But as 
GAO has pointed out, there may be significant flaws in that 
estimate.
    I hope that CMS is ready to partner with us to solve this 
problem, starting with providing a comprehensive and reliable 
cost estimate.
    Mr. Chairman, this is an issue that we have been working on 
for some time. I hope that we are able to work together with 
the Administration to get this done, because millions of 
Americans depend on getting their Social Security and Medicare 
benefits, and none of them should be facing the possibility of 
theft, simply so that people can steal their Social Security 
number and take advantage of them.
    And so, with that, I am pleased to have our witnesses here, 
and I look forward to the hearing. And with that, I yield back 
the balance of my time.
    Chairman JOHNSON. Thank you, Mr. Becerra. I now recognize 
the chairman of the Subcommittee on Health, Mr. Herger, for his 
opening statement.
    Mr. HERGER. Thank you. I am pleased the subcommittees are 
meeting today to discuss what I consider to be a commonsense, 
bipartisan idea that will help protect our nation's seniors, 
brought before the committee by Chairman Johnson and 
Congressman Doggett.
    Medicare beneficiaries from across the United States are 
affected by fraud and identity theft, including those in 
California, where nearly 100,000 beneficiaries have had their 
Social Security numbers compromised, according to CMS data. I 
am sure I am not the only member of this committee who has 
received letters for congressional action to remove Social 
Security numbers from Medicare cards.
    A constituent of mine wrote about an interaction with CMS 
where he was told, after asking about removing Social Security 
numbers from Medicare cards, ``We have always done it that way, 
and we don't intend to change it.'' He went on to state, ``With 
identity theft running rampant in this country, it seems 
ridiculous that Medicare would refuse to stop this practice.'' 
I couldn't agree more.
    While challenges lie ahead for the agencies involved in the 
process of removing Social Security numbers from public 
documents, I am very disappointed with the lack of leadership 
and interest in this issue at the Centers for Medicare and 
Medicaid Services. To date, CMS has offered little beyond 
excuses and questionable reports. Interestingly, CMS did not 
appear too concerned about the cost and efforts involved with 
removing Social Security numbers when it mandated that private 
Medicare plans do so years ago.
    When the Office of Management and Budget, under the 
previous Administration, issued a 2007 directive to all federal 
agencies to develop a plan to remove Social Security numbers, 
the Department of Defense and Veterans Administration acted. As 
a result, they are well underway toward full implementation of 
their plans. Presumably, these departments had the same 
logistical challenges that CMS faces, but they did not offer 
excuses. They offered a plan. And not only did they have a 
plan, but they also found a way to do it with existing funding.
    CMS doesn't even have a plan to move forward, despite being 
directed to do so five years ago, and now professes to need 
nearly $1 billion in additional funding to do so. The validity 
of the latest CMS cost estimates has been questioned by GAO. 
The new estimate is nearly three times more expensive, despite 
taking half as long to implement than it was predicted just a 
few years ago. It is becoming clear to me that CMS simply isn't 
interested in taking this commonsense approach to protect 
seniors and people with disabilities from identity theft. Or, 
perhaps there is another reason.
    As we all know, there is a key development that took place 
between the first estimate and the second estimate: the 
enactment and initial implementation of Obamacare. It has been 
widely reported that significant CMS resources, both financial 
and staffing, have been diverted from the Medicare program to 
implement non-Medicare Obamacare provisions such as exchanges 
and mandated health benefits. I can't help but wonder if this 
new cost estimate reflects just how thin Medicare has been 
stretched because of Obamacare, or perhaps that some in the 
Obama Administration recognize this as an opportunity to grab 
more money to implement Obamacare.
    As you may know, the independent Congressional Budget 
Office has repeatedly stated that the Democrats' health care 
law drastically underfunded implementation efforts. If this is 
a simple money grab, perhaps that is why CMS has been unable to 
provide sufficient data or other information to support the 
cost estimates in its report. It is clear that a more complete 
and thorough cost analysis by CMS is necessary, one that is 
held to the standards we have come to expect in reports to 
Congress by federal entities. If CMS does not want to 
responsibly act, then Congress will require them to. Business 
as usual should not trump protecting Medicare beneficiaries.
    Thank you, Chairman Johnson, and I yield back.
    Chairman JOHNSON. The gentleman's time has expired. Thank 
you. I now recognize the Ranking Member on the Subcommittee on 
Health, Mr. Stark, who is also on the Ways and Means Social 
Security Subcommittee. Thank you.
    Mr. STARK. Thank you, Mr. Chairman. And thank you for your 
work in this area, and you and my colleague, Congressman 
Doggett, for addressing a serious problem. Happily, I don't 
have this problem.
    A lot of the question is what kind of an identity you have. 
Mine was stolen a while back, and that guy that stole it called 
me shortly thereafter and asked if I would please take the 
identity back, and--he was having trouble with it.
    [Laughter.]
    Mr. STARK. So, one way to do away with this problem is to 
sort out what kind of an identity you wish to have stolen. But 
we haven't done ourselves any good by coming up with a wide 
variety of estimates. As you indicated, three--or Mr. Herger 
indicated, between $300 million and $800 million. And GAO has 
criticized some of these analyses. And it will cost money. It 
will take a bit of bureaucratic effort to come up with a 
problem that doesn't sound--a solution to the problem. And I 
hope that we can proceed. It is a danger. And as the Internet 
and these world of social connections become broader, this 
problem will spread. And it is--I think we should encourage and 
support, with adequate funding, a means for our government 
agencies to tackle this problem as promptly as they can.
    Thank you for the hearing, and thank Mr. Doggett for his 
work in this area.
    Chairman JOHNSON. Thank you, Mr. Stark. As is customary--
any Member is welcome to submit a statement for the hearing 
record.
    Before we move on to our testimony today, I want to remind 
our witnesses to please limit your oral statements to five 
minutes, please. However, without objection, all the written 
testimony will be made part of the hearing record.
    We have one panel today. Seated at the table are Tony 
Trenkle, Chief Information Officer and Director, Office of 
Information Services, Centers for Medicare and Medicaid 
Services, Department of Health and Human Services in Baltimore, 
Maryland. You could have more titles, could you?
    Next is Kathleen King, Director, Health Care, accompanied 
by Daniel Bertoni, Director, Education, Workforce, and Income 
Security, Government Accountability Office.
    Welcome, Mr. Trenkle. You may proceed.

   STATEMENT OF TONY TRENKLE, CHIEF INFORMATION OFFICER AND 
DIRECTOR, OFFICE OF INFORMATION SERVICES, CENTERS FOR MEDICARE 
AND MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES, 
                      BALTIMORE, MARYLAND

    Mr. TRENKLE. Thank you. Chairman Herger, Chairman Johnson 
and Herger, Ranking Members Becerra and Stark, and 
distinguished Members of the Subcommittees, I am pleased to be 
here today on behalf of the Centers for Medicare and Medicaid 
Services to discuss the use of the Social Security numbers on 
the Medicare identification cards.
    CMS supports protecting beneficiaries from fraud and abuse 
and identity theft, and we understand the concerns that the use 
of the SSN causes for some beneficiaries. As a personal note, a 
couple weeks ago my aunt passed away suddenly. And as the 
executive of the estate, I had to go through the house and 
clear it out. And part of that was looking at her wallet. And 
in the wallet was both her Social Security card and her 
Medicare card. So I understand, from a personal basis, what the 
risks are of carrying that in a public location by a person who 
is 89 years old.
    CMS is happy to work with Congress to develop an approach 
for removing SSNs from the Medicare cards. And, depending on 
the time frame, reprioritizing work that Congress has given us. 
To that end, CMS has provided Congress with a cost estimate for 
removing SSNs from Medicare cards in 2006 and 2011. And I know 
some concerns have been expressed about the difference in cost 
between the 2006 and 2011 estimates. However, the 2011 estimate 
was updated to reflect additional options, a new time for 
implementation, a much more comprehensive review of impacted 
CMS systems, and an estimate for Medicaid costs, which was not 
in the 2006 report.
    This update provided a rough order of magnitude of the cost 
to remove the SSN from the Medicare card, and clearly 
demonstrates that any change in the current system for 
beneficiary identification requires substantial investment of 
time, resources, and staff. We appreciate the analysis that our 
colleagues from the GAO conducted on our report and cost 
estimates. And we concur with the recommendation that we re-
estimate the cost of removing the SSNs from Medicare cards, 
using a more rigorous and detailed approach. We have already 
begun work on that effort. We have identified staff to work on 
it, and also will be shortly awarding a contract to support 
that work.
    It is important to remember--there was a question raised 
about the difference between us and DoD and VA--it is important 
to remember that we are much more intricately linked with SSA 
and the SSN. I worked in both agencies, and I know how tightly 
linked the two agencies are because it is a basis for 
identity--beneficiary authentic identification, fundamental to 
multiple systems, required to process and track beneficiary 
claims and enrollment, to conduct our anti-fraud and quality 
improvement offices and coordinate with SSA, Railroad 
Retirement Board, and state Medicaid.
    As a health care organization, we annually process 1.3 
billion Medicare claims from about a million providers on 
behalf of 50 million Medicare beneficiaries. Any change to 
Medicare card would impact each Medicare beneficiary, along 
with providers, health insurers, states, operations and systems 
of the primary agencies involved in the administration of 
Medicare.
    CMS is determined that changes to Medicare card would 
involve 50 CMS systems and require sufficient planning and 
resources to ensure that beneficiaries and providers would not 
experience major disruptions. We believe, of the three options 
presented, the option to replace with a new identifier best 
meets the goals of reducing the risk of identity theft and 
preventing fraud, while minimizing the burden on beneficiaries 
and providers.
    We share the concerns of the committee and others about 
potential identity theft and schemes that target Medicare 
beneficiaries. Given the budget and logistical challenges of 
removing the SSNs from Medicare cards, we have already taken a 
number of steps to protect beneficiaries from identity theft. 
We have removed the SSNs from the Medicare summary notices that 
are mailed to beneficiaries on a quarterly basis. And we have 
prohibited private Medicare, health, and prescription drug 
plans from using SSNs on enrollees' insurance cards.
    We are engaged in education effort to provide beneficiaries 
with information on how to prevent medical identity theft and 
Medicare fraud, which includes educating them about steps to 
prevent identity theft and fraud, including posting information 
on the CMS website, and adding information to the Medicare 
handbook. We encourage our beneficiaries to review their 
billing statements and other medical reports to spot unusual or 
questionable charges.
    So, in closing, I appreciate the concerns expressed by 
Congress and beneficiaries regarding the continued use of SSNs 
on Medicare cards. And I can assure you that CMS will work to 
protect beneficiaries from fraud, abuse, and identity theft, 
wherever possible. The Administration is happy to work with 
Congress to develop an approach to remove SSNs from the 
Medicare card. We pledge to continue our efforts to safeguard 
beneficiary identification numbers, maintain dialogue about 
options that Congress may wish to consider, ensure there is no 
disruption in beneficiary access to their Medicare services.
    Though the costs and challenges of the Medicare cards that 
CMS has identified are real, these challenges can be mitigated 
with thoughtful planning. I appreciate the committee's ongoing 
interest in this issue, and can assure you that CMS is 
committed to working with Congress to identify ways to best 
protect beneficiaries' privacy. Thank you.
    [The prepared statement of Tony Trenkle follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Chairman JOHNSON. Welcome, Ms. KING. You are recognized. Go 
ahead.

STATEMENT OF KATHLEEN KING, DIRECTOR, HEALTH CARE; ACCOMPANIED 
 BY DANIEL BERTONI, DIRECTOR, EDUCATION, WORKFORCE, AND INCOME 
           SECURITY, GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. KING. Chairman Johnson, Chairman Herger, ranking 
Members of the Subcommittees, and other Members of the 
Subcommittees, we are pleased to be here today to discuss our 
review of the options presented in the 2011 Report to Congress 
by CMS for removing Social Security numbers from Medicare 
cards, and the agency's cost estimates for these options.
    More than 48 million Medicare cards display an SSN as part 
of the health insurance claim number, or HICN. The HICN plays 
an essential role in the administration of the Medicare 
program, and is used by CMS to interact with beneficiaries and 
providers, and by other agencies that play a role in 
determining an individual's eligibility for Medicare. For most 
people, the Social Security Administration is responsible for 
determining Medicare eligibility and assigning the HICN.
    In response to a congressional request from some members of 
these subcommittees, CMS presented three options for removing 
the SSNs from Medicare cards. All three options would generally 
require similar efforts, including coordinating with 
stakeholders, converting information technology systems, 
conducting provider and beneficiary outreach, training of 
business partners, and issuing new cards.
    Of the three options in CMS's report, we found that 
replacing the SSN with a new identifier for use by both 
beneficiaries and providers offers beneficiaries the greatest 
protection against identity theft, because the SSN would no 
longer be printed on the card. In addition, because providers 
would not need the SSN to interact with CMS, they would not be 
required to collect or maintain this information, reducing 
beneficiaries' vulnerability in the event of a provider data 
breach. This option may also prevent fewer burdens for 
providers, because they would not have to query a CMS database 
or call CMS to obtain beneficiaries' information.
    CMS estimated that implementation would cost between $803 
million and $845 million over 4 years, depending on the option 
selected. Approximately two-thirds of the total estimated cost 
are associated with modifications to state Medicaid IT systems 
and CMS's and its contractors' IT systems. We have four key 
concerns regarding the methods and assumptions CMS used to 
develop its cost estimates that raise questions about their 
reliability.
    First, CMS did not use any standard cost estimating 
guidance in developing their estimates. Second, the procedures 
used to develop the estimates for the two largest cost 
categories, the Medicaid IT systems and the CMS IT systems, are 
questionable and not well documented. Third, we identified some 
inconsistencies in the assumptions used by CMS and SSA in 
developing the estimates. Finally, CMS did not take into 
account other factors, such as possible efficiencies that could 
be realized by combining IT modifications required to remove 
SSNs with related IT modernization efforts, or consider 
potential savings from not having to monitor compromised SSNs.
    While CMS has identified options for removing the SSN from 
Medicare cards, the agency has not committed to a plan for this 
removal. Lack of progress on this key initiative leaves 
Medicare beneficiaries exposed to the possibility of identity 
theft.
    In a report we are releasing today, we have recommended 
that CMS select an approach for removing the SSN from the 
Medicare card that best protects beneficiaries from identity 
theft and minimizes burdens for providers, beneficiaries, and 
CMS.
    We have also recommended that CMS develop an accurate, 
well-documented cost estimate using standard cost estimating 
procedures.
    Mr. Chairman, this concludes my prepared remarks. Happy to 
answer any questions.
    [The prepared statement of Kathleen King follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Chairman JOHNSON. Thank you, ma'am. I thank you both for 
your testimony. We will now turn to questions.
    And as is customary for each round of questions, I will 
limit my time and will ask my colleagues to limit their 
questioning time to five minutes, as well.
    Mr. Trenkle, do you speak for CMS?
    Mr. TRENKLE. Do I speak for CMS?
    Chairman JOHNSON. Yes. Can you make a statement on their 
behalf?
    Mr. TRENKLE. I can certainly make statements on their 
behalf to some extent. Obviously, I am a career employee of 
CMS; I am not a political employee. So I can only speak at a 
certain level.
    Chairman JOHNSON. Well, that shouldn't matter. On behalf of 
the one million Medicare beneficiaries, I am a little bit 
upset. First, CMS responded to a bipartisan letter from 
leadership of this committee over 12 months after the deadline. 
And I think it is unfair. But how dare CMS treat this 
committee, this Congress, and our nation's seniors with such 
contempt?
    Second, despite the fact that this committee's bipartisan 
letter asks for detailed estimates and justifications for all 
costs, we now learn from GAO that your cost estimates aren't 
credible.
    Finally, despite a decade of instruction from the Congress 
to take Social Security numbers off Medicare cards, CMS has not 
committed to a plan for such removal. And you are probably 
aware that the health organizations around the country took 
them off, and that the military has been taking them off.
    Mr. TRENKLE. Right.
    Chairman JOHNSON. And if they can do it, and you were asked 
to do it some many years ago, I don't understand what is taking 
so long.
    In your testimony you say CMS takes seriously the risk of 
identity theft for Medicare beneficiaries, and that it 
appreciates the concerns expressed by Congress, and 
beneficiaries, regarding the continued use of serial numbers on 
Medicare cards. Do you believe this?
    Mr. TRENKLE. Yes, I do. I can certainly understand your 
frustration and other frustrations of the committee and 
subcommittees regarding where we have gone over the last seven 
years with the two cost estimates and the other work that is 
being done by federal agencies.
    Chairman JOHNSON. Well, it is all of us, both the Democrats 
and Republicans working together on this committee that have 
become upset about empty words. And it is outrageous that you 
are kind of thumbing your nose at Congress and seniors.
    I can only conclude that CMS is busy doing other things 
besides protecting the privacy of seniors and the integrity of 
Medicare. So, it seems it is going to take an Act of Congress--
another one; we already made one--to make CMS remove the Social 
Security numbers.
    Mr. Trenkle, is it true that CMS requires that cards issued 
by Part C, Medicare Advantage, and Part D, prescription drug 
benefits, do not display a Social Security number?
    Mr. TRENKLE. Yes, that is correct.
    Chairman JOHNSON. Aren't you being hypocritical, asking 
your service providers to do what you won't do?
    Mr. TRENKLE. I don't believe it is hypocritical. I think, 
as part of the changes in the OMB directive, we made a number 
of changes over the last several years. That was one that we--
as we implemented the Part C and D plans, that we made that 
change. And, as you say, that was done by the private insurers.
    However, to do something on the scale of what we are 
talking about for CMS and Medicare, we are talking about a much 
larger effort that is much more intertwined with other federal 
agencies. I mean the Medicare Advantage is probably about 25 
percent of the overall Medicare. So if we are talking, say, 50 
to 52 million Americans, that is 13 million, as opposed to 39 
million, plus the connections with SSA----
    Chairman JOHNSON. Well, let me just interrupt you and say 
GAO talks about the Department of Defense and Veterans Affairs 
efforts to remove the Social Security numbers from their ID 
cards. Have you even talked to them to find out how they did 
it?
    Mr. TRENKLE. We have talked to them, and we have also 
talked to the private insurers, as well.
    It is good to keep in mind--and I am not--let me just first 
state up front I am not making excuses. I certainly want to 
work with Congress, and we want to work with you all to look at 
the various priorities that Congress has asked us to do, and 
see how we can work this in with the other priorities for the 
Medicare program. So I don't want to make excuses.
    But I do want to say that there are differences between the 
DoD and VA. One is the scale; our scale is much larger. The 
second is that VA is a closed system. DoD is a partly closed 
health care system. So--and they are certainly not as entwined 
with Social Security.
    If you remember, Social Security really works as our arm of 
operations for this program. So it is not to trivialize the 
work that they have done, but just to say that it is going to 
be a massive undertaking if we go down this road.
    Chairman JOHNSON. Well, they did it because they were able 
to and willing to make the change as they print new cards. You 
print new cards in millions. And I don't understand why we 
can't get something going. It has been too many years behind.
    And I will stop there and question some more later. And I 
yield to my compadre, Mr. Becerra.
    Mr. BECERRA. Mr. Chairman, thank you. And thank you to the 
three of you for your testimony. And I hope that this is just 
the beginning of a process to get us to the point where we are 
able to remove that Social Security number from the Medicare 
cards.
    Mr. Trenkle, let me ask a couple of questions. In terms of 
the implementation of the different services that CMS and 
Medicare provide to the millions of Americans who are 
beneficiaries of Medicare services, having paid into the system 
to earn those benefits, Medicare doesn't have any local offices 
to administer the services that seniors and others who receive 
Medicare benefits need. Right? They don't have their----
    Mr. TRENKLE. That is correct.
    Mr. BECERRA. When a senior applies for Medicare, that 
senior doesn't go to a Medicare office, but he or she must go 
to a Social Security office. Is that correct?
    Mr. TRENKLE. That is correct.
    Mr. BECERRA. That means that taking in an application for 
benefits, or responding to inquiries regarding Medicare 
benefits is done--if it is done directly to an office, it is 
done to a Social Security office.
    Mr. TRENKLE. That is correct.
    Mr. BECERRA. Who issues Medicare cards?
    Mr. TRENKLE. The cards are--the numbers are actually--SSA 
actually does the enumeration, and we actually issue the 
Medicare cards.
    Mr. BECERRA. So, Social Security is part of the process of 
issuing these cards to seniors, the Medicare cards?
    Mr. TRENKLE. That is correct, except I also want to mention 
in the case of the Railroad Retirement Board, they actually do 
it for the Railroad Retirement Board retirees
    and----
    Mr. BECERRA. And if a senior needs to have a Medicare card 
replaced, they go to a Social Security office.
    Mr. TRENKLE. That is correct.
    Mr. BECERRA. Okay. Who collects the premiums, the Medicare 
premiums, from seniors?
    Mr. TRENKLE. It is part of the Social Security--it comes 
out of the Social Security check.
    Mr. BECERRA. And if a senior wants to talk to someone in 
person, has a question about his or her Medicare benefits and 
wants to speak to someone in person, they are confused about 
their benefits, they don't believe they got their correct 
service out of Medicare, they go to a Social Security office, 
do they not?
    Mr. TRENKLE. That is correct.
    Mr. BECERRA. So while I know you are here with CMS and not 
with the Social Security Administration, it is clear that the 
Social Security Administration will have a large role to play 
in whatever we do with removing the Social Security number from 
the Medicare card.
    Mr. TRENKLE. Yes, that is correct. And as I mentioned 
earlier in my testimony, I worked at both places, so I 
understand that the--impact this will have on the field offices 
at Social Security.
    Mr. BECERRA. And while we are hoping to get a more accurate 
estimate of the cost of removing that number from the Medicare 
card, it is clear that it is going to cost some money.
    Mr. TRENKLE. That is correct.
    Mr. BECERRA. And there--we have got estimates. Early 
estimate in 2005, 2006 was somewhere over $300 million.
    Mr. TRENKLE. That is correct.
    Mr. BECERRA. A 2011 estimate was somewhere over $800 
million. We are talking in the hundreds of millions of dollars, 
likely, to remove the card and secure the safety of that--
excuse me, remove the Social Security number from the card and 
to secure the safety of that number for our Medicare 
beneficiaries.
    Mr. TRENKLE. That is correct. And also, there is going to 
be considerable outreach required, because of the fact that we 
will need to educate the beneficiaries and their families on 
the changes that are being made to that card, as well as the 
provider community. The provider community, this will be a 
major change for them, as well.
    Mr. BECERRA. So this is not something that the Social 
Security Administration or CMS, which helps administer 
Medicare, currently is being funded to do.
    Mr. TRENKLE. That is correct.
    Mr. BECERRA. And so, either you receive resources to try to 
compensate for the hundreds of millions of dollars it will cost 
to make this change to secure the Social Security number for 
seniors on their Medicare card, or you have to shift your 
resources from other current services in order to pay for the 
cost of this transition.
    Mr. TRENKLE. Yes, that is correct.
    Mr. BECERRA. What types of services might be affected if 
you have to take from existing resources and--existing services 
in order to cover the cost of transitioning to a Medicare card 
without a Social Security number?
    Mr. TRENKLE. Well, I can't really speak to that today, 
because part of it is--as you know, most of the work that we do 
is based on congressional legislation, and we follow out the 
wishes of Congress. So if we are going to make some changes and 
it would impact priorities, we would need to work with you and 
others and determine which priorities would need to be shifted 
to enable us to fund that out of our existing resources.
    Mr. BECERRA. Well, I hope you are able to give us some 
clear guidance on what might happen if we instruct CMS and 
Social Security and Medicare programs under HHS to move forward 
with this transition without providing you with the resources. 
Because I can assume that it can only get worse for seniors who 
are right now trying to get their Social Security services. 
They have already seen, as a result to the budget cuts to 
Social Security Administration's budget, reduction in the 
number of hours that their offices are open. There are longer 
wait times now when people call the 1-800 number to get Social 
Security services. We understand that the Social Security 
Administration has had to reduce the size of its staff.
    And so, more and more, what we are talking about is short-
changing Americans who work very hard to pay for their Social 
Security and Medicare services. And I would hate to see that we 
instruct you to do something that is absolutely essential to 
provide protection against identity theft, but we do at the 
cost of providing good service to those who worked so hard to 
earn those services.
    So, I thank the three of you for your testimony. I look 
forward to working with you in the future.
    Mr. TRENKLE. Thank you.
    Mr. BECERRA. Thank you, Mr. Chairman. Yield back.
    Chairman JOHNSON. Thank you. Chairman Herger, you are 
recognized for five minutes.
    Mr. HERGER. Thank you, Chairman Johnson. And, Mr. Trenkle, 
I am pleased to hear that under questioning from Chairman 
Johnson you indicated that you are not here to make any 
excuses.
    More than one decade ago, GAO first recommended removing 
Social Security numbers from government documents. CMS failed 
to act. More than five years ago the OMB issued a directive 
telling all federal agencies to develop a plan for reducing 
unnecessary use of Social Security numbers and explore 
alternatives. Again, CMS failed to act.
    Now, I know CMS claims that Social Security numbers are 
important to carrying out program functions. But I have to 
imagine it was also important to the DoD, the VA, and they are 
well on their way to removing Social Security numbers. I also 
imagine it was important to private insurance companies before 
they removed Social Security numbers, replacing them with 
unique identifiers. I am sure the same can be said for Medicare 
Advantage and prescription drug plans.
    The Social Security Administration inspector general 
states, ``Medicare cards unnecessarily place millions of 
individuals at risk for identity theft. We do not believe a 
federal agency should place more value on convenience than the 
security of its beneficiaries' personal information.''
    After more than 10 years, CMS has failed to lead and failed 
to act. And, as a result, nearly 50 million Americans are at 
risk. In fact, were it not for a directive from Congress, I 
wonder if CMS would have even considered removing Social 
Security numbers from the Medicare card.
    Mr. Trenkle, does this Administration believe Social 
Security numbers should be taken off of the Medicare 
identification cards to protect our seniors?
    Mr. TRENKLE. Thank you, Chairman, for your remarks. And as 
I said earlier to Chairman Johnson, I understand your 
frustration. And I----
    Mr. HERGER. And if you could give me a yes or no, does the 
Administration feel the numbers should be taken off?
    Mr. TRENKLE. As I mentioned earlier, we do feel that the 
option one that GAO spoke of, which was replacing the number 
with a new identifier, would offer the greatest protection 
against identity theft.
    Mr. HERGER. Then why hasn't CMS acted?
    Mr. TRENKLE. Well, as I mentioned a few moments ago, we 
have a number of congressional mandates around the Medicare 
program that we are trying to implement. And this will be an 
extensive undertaking, regarding of how you look a the cost 
numbers. It will be an extensive undertaking. So we need to 
work with you and others in Congress to reprioritize, or look 
at the other priorities, to determine how this will be taken 
care of, if additional appropriations are not given to us for 
this.
    Mr. HERGER. And, Mr. Trenkle, are you aware that the 
Department of Defense and Veterans Administration did not 
require new funding to remove Social Security numbers from 
their membership cards? They use existing funding?
    Mr. TRENKLE. I heard that this morning, and I am not really 
aware of how they did the change and how they made the 
necessary budget adjustments to do that. So I would certainly 
be interested in talking to them more about how they managed to 
do that within their existing budgets.
    Mr. HERGER. Now, I know that Medicare has far more 
beneficiaries, but I also know that CMS administrative budget 
is quite large. Why is it that CMS can't follow in the 
footsteps of DoD and VA, and use existing money to implement 
this long overdue and needed change?
    Mr. TRENKLE. Well, as I said earlier, it is not exactly 
comparing apples to apples, because they do have a different 
type of setup, in terms of the--how its--how the operations are 
done, that they operate mostly within closed systems, and that 
they have different types of arrangements, in terms of funding, 
than we do. So I can't say they can do it this way and we can 
do it that way.
    But at the same point, I understand what you are saying. It 
is a large budget, and we do an awful lot of work with that 
budget, as you know, because a lot of legislation comes out of 
Congress each year that impacts us.
    So, as I have said earlier, we will commit to looking at 
that in our new and more rigorous cost estimate, and see where 
there--if we cannot get additional appropriations, how we can 
work with Congress to reprioritize some of the mandates that 
you have asked us to achieve.
    Mr. HERGER. And I might just close with how can you expect 
Congress to provide additional funding when your agency, 
according to GAO, is unable to produce a credible estimate?
    And I yield back.
    Chairman JOHNSON. Thank you. Mr. Stark, you are recognized.
    Mr. STARK. Thank you, Mr. Chairman. I want to thank the 
panel for their enlightenment this morning.
    The--Mr. Trenkle, I guess GAO has had two recommendations. 
And what--which one would--approach would you prefer for 
removing the Social Security numbers?
    Mr. TRENKLE. I guess I mentioned that just a moment ago, 
that we think that the one that would provide the best--we 
would like to re-estimate all three options, but the one that 
we feel that would provide the best protection against identity 
theft would be replacing the number with a new number, which is 
our option one.
    Mr. STARK. Could you state today a timeline, an estimate 
within a couple of months, one way or the other, as to what it 
would take to complete this--the contractor, and have it 
completed?
    Mr. TRENKLE. To re-do the estimates? I think we could do 
that within the next six months. Certainly without--let me----
    Mr. STARK. Yes.
    Mr. TRENKLE. The only caveat would be the Medicaid costs, 
which may require more research to make sure that we have them 
correct. But I think we can leverage the work we have already 
done, do the more rigorous cost estimating work with our 
colleagues from GAO, and bring another contractor. I feel that 
we can do that within the next six months.
    Mr. STARK. Great. Thank you very much.
    Mr. TRENKLE. Thank you.
    Mr. STARK. Thank you, Mr. Chairman.
    Chairman JOHNSON. Thank you, Mr. Stark. Mr. Reichert, you 
are recognized.
    Mr. REICHERT. Thank you, Mr. Chairman. Mr. Trenkle, have 
you been a victim of identity theft?
    Mr. TRENKLE. I have not, personally, although I know others 
who have.
    Mr. REICHERT. So you have visited with people who have been 
victims of identity theft?
    Mr. TRENKLE. I know people who have been victims of 
identity theft, and it is not a trivial matter that it happens, 
yes.
    Mr. REICHERT. Have you had an opportunity to visit with 
some of the constituents that you serve through your job, 
current job, regarding identity theft and the impacts on 
American citizens?
    Mr. TRENKLE. The ones who have had identity--have had--have 
been victims of identity theft?
    Mr. REICHERT. Yes. Have you had the opportunity to visit 
with any of the beneficiaries who have been victims?
    Mr. TRENKLE. Not personally, no.
    Mr. REICHERT. So when you say you understand the concerns, 
what are you--I don't know what you really understand about 
identity theft.
    I was a police officer for 33 years, and I dealt with 
people who lost their identity. And it was one of those events 
that can be traumatic enough to turn your life upside down. 
Lose your home, lose your car, lose your--everything you own.
    So, do you believe that it--10 years has been mentioned. 
Personally, do you believe that is--you should have had this 
solved by then, by now, 10 years later? Or--I mean do you think 
that is too long, or do you think you are just about in the 
ballpark where you need to be, or----
    Mr. TRENKLE. Well, let me----
    Mr. REICHERT. I just was wondering personally how you felt 
about--I mean you are a part of the system. Ten years to solve 
this problem. I am just wondering how you personally feel about 
having worked on this--you feel some frustration?
    Mr. TRENKLE. I understand your frustration.
    Mr. REICHERT. No, I am asking you if you feel frustration.
    Mr. TRENKLE. Right. Yes. Yes.
    Mr. REICHERT. What is the sort of the--what happens to you 
or other members of CMS if they don't accomplish this task? 
What is the hammer? What is the outcome for you? I mean you get 
to work every day. You get your job, right?
    Mr. TRENKLE. Right.
    Mr. REICHERT. What is the outcome for Americans if you 
don't get it done? They become victims of identity theft and 
they lose their homes.
    Mr. TRENKLE. Well, I think----
    Mr. REICHERT. What is your motivation to get this 
accomplished?
    Mr. TRENKLE. The motivation to get it accomplished is that 
I feel that it is one of the potential ways that there can be 
identity theft. There is much more ways of that happening than 
through the Medicare card. And we are here to serve the 
Americans every day, not only because I have family members, 
but because I----
    Mr. REICHERT. If I could--Mr. Trenkle, 10 years.
    Mr. TRENKLE. Yes.
    Mr. REICHERT. The American people don't understand why it 
takes 10 years to accomplish this. And what I hear from you--
and I--you know, your statement about congressional mandates, 
and we need to reprioritize congressional mandates, can you be 
specific about what those mandates--what kind of mandates are 
you talking about?
    Mr. TRENKLE. Well, there is many changes to the Medicare--
--
    Mr. REICHERT. For example?
    Mr. TRENKLE. For example? There is changes in payment 
schedules that occur each year. There is changes in----
    Mr. REICHERT. Those are congressional mandates, or that is 
just part of your daily routine?
    Mr. TRENKLE. Often changes in--yes.
    Mr. REICHERT. Are the congressional mandates that you are 
speaking about, are they associated with the new health care 
law that we are in the middle of implementing?
    Mr. TRENKLE. That is certainly one of the congressional 
mandates, yes.
    Mr. REICHERT. So how could we alter the current health care 
law to help you keep Americans from suffering the victimization 
that identity theft brings? How can we change this 
implementation process to help you get that done?
    Mr. TRENKLE. Well, as I said earlier, I am happy to work--
--
    Mr. REICHERT. Just one idea?
    Mr. TRENKLE. I am not really--I really don't----
    Mr. REICHERT. Mr. Chairman, I yield back.
    Chairman JOHNSON. Thank you. You know, how many millions of 
cards do you produce a year?
    Mr. REICHERT. We produce millions of cards a year. I could 
get you the number.
    Chairman JOHNSON. It is close to three million, I think.
    Mr. REICHERT. Yes, it--well, it is actually higher than 
that now. And about 10 percent of them are actually--have to be 
replaced each year, either because they are lost, or because 
there is other reasons why. Someone changes their name, or----
    Chairman JOHNSON. Yes. Well, you see, the Defense 
Department solved this issue by putting a new number on the new 
cards they issue. Why in the world can't you guys do that?
    Mr. TRENKLE. It can be done. That is one option.
    Chairman JOHNSON. Well, why haven't you done it?
    [No response.]
    Chairman JOHNSON. I mean I don't think you guys are into 
this issue like you should be, to protect the United States 
citizen. Wow.
    Mr. McDermott, you are recognized. What, did he leave? Oh, 
wake up down there.
    [Laughter.]
    Mr. MCDERMOTT. I didn't think you would jump past all those 
worthies down there.
    Chairman JOHNSON. Thank you.
    Mr. MCDERMOTT. Do you know that there is an election some--
are you aware of that?
    Mr. TRENKLE. I have heard something about that.
    Mr. MCDERMOTT. And occasionally there are hearings that 
sort of strike one to be a little bit political. I--we have 
nine legislative days left, so I don't know if we are going to 
get down to this. But I was trying to figure out practically, 
following up on those last questions, there are 50 million 
people participating in Medicare. Now, it shouldn't take you 
much more than a week to print 50 million cards and put them in 
envelopes and send them on out to these people. Should it?
    Mr. TRENKLE. Well, it would probably take a little bit 
longer than that.
    Mr. MCDERMOTT. Well, let's say a month. Let's say a month. 
I mean that is--we do political campaigns and we send out 
millions of pieces of information to folks. And you could just 
put it in an envelope and send it on out. So you could send out 
50 million in a month. Or maybe two months. Let's do it that.
    Now, what kind of chaos do you think that would create in 
the system for the providers? Because I am looking at it--I 
hear Mr. Reichert talk about he is a police officer. I am a 
doctor. So now I got all these seniors coming in. What kind of 
chaos are you going to create for the providers by putting out 
50 million new cards and new numbers to put on all the forms?
    Mr. TRENKLE. It would create quite a substantial change for 
the providers. There is no doubt about that.
    Mr. MCDERMOTT. So you think that the chairman is thinking 
about the providers when they are talking about changing this 
number? Do they just think this is something--they are only 
thinking about the seniors' votes, but not the providers' votes 
when this chaos is created?
    Mr. TRENKLE. I can't speak for the chairman. I don't know. 
I do know that will be an impact on--that certainly will be a 
major impact on the providers.
    Mr. MCDERMOTT. How does that number get--I mean how does 
the doctor get the number that he is supposed to put on the 
form?
    Mr. TRENKLE. Gets it from the card.
    Mr. MCDERMOTT. And so, if these 50 million members now have 
a new card, and they have got to bring it into their doctor and 
say, ``Doctor, here is my new number, don't put that old 
number, you won't get paid,'' right, how many--what would you 
just guess is the percentage that would not get that number in, 
or wouldn't have the card in their pocket when they got sick or 
got hit by a car, or whatever?
    Mr. TRENKLE. Oh, I can't even estimate that.
    Mr. MCDERMOTT. But it would--you would suspect there would 
be a sizeable number of people.
    Mr. TRENKLE. It would certainly have the potential to 
impact a great number of people, yes.
    Mr. MCDERMOTT. You know, I refinanced my house the other 
day. And the lady on the phone said, ``Give me the last four 
digits of your Social Security number.'' Now, are the banks 
allowed to use that as an ID number?
    Mr. TRENKLE. Yes, they do that quite often with the last--
--
    Mr. MCDERMOTT. The banks can do it.
    Mr. TRENKLE. Yes.
    Mr. MCDERMOTT. Well, why don't you give me a special number 
so I can have my American number, so I can give that to them 
and get rid of that Social Security number so nobody can find 
out what I am doing?
    I mean you are going to keep a record of these numbers, 
right?
    Mr. TRENKLE. Correct.
    Mr. MCDERMOTT. And so I--instead of having 358-28-7705, I 
am going to have 779-16-4382. Right?
    Mr. TRENKLE. That is correct.
    Mr. MCDERMOTT. Somewhere, that list will be with that--
right?
    Mr. TRENKLE. Yes.
    Mr. MCDERMOTT. How do these people lose their identity? How 
does somebody get my number and pull it out and start fiddling 
with my financial stuff at the bank?
    Mr. TRENKLE. I don't feel qualified to speak to all the 
ways that identity can be compromised. There are certainly a 
number of ways it can be compromised.
    Mr. MCDERMOTT. Does your fraud division use--does the CMS 
fraud division use that Medicare number?
    Mr. TRENKLE. Yes, they do.
    Mr. MCDERMOTT. So we got to make sure we get this to them 
so they can trace these fraudulent operators who are operating 
these places down in Florida and Texas, where they are just 
rolling in dough with people who aren't receiving benefits. You 
need a number for those kind of fraud investigations.
    Mr. TRENKLE. That is correct.
    Mr. MCDERMOTT. So this number, this new number, I am going 
to be carrying a card in my pocket with it on it. Right?
    Mr. TRENKLE. Correct.
    Mr. MCDERMOTT. Presumably.
    Mr. TRENKLE. Presumably, yes.
    Mr. MCDERMOTT. I mean I have my--I was looking here at my 
Medicare--or my cards here from my insurance from the 
legislature, from the Congress. And I have got a number on 
there. It is not my--it is not that old Social Security number, 
but it is a number. So somebody can get a number for me and 
plug in some way--I understand there is people who hack into 
computers. Is that right?
    Mr. TRENKLE. I have heard of a few who have, yes.
    Mr. MCDERMOTT. Have any of them gone to jail?
    Mr. TRENKLE. I presume so, yes.
    Mr. MCDERMOTT. Have some of them taken money out of 
Medicare?
    Mr. TRENKLE. Yes.
    Mr. MCDERMOTT. So they hacked into a computer where there 
was a list of numbers, right?
    Mr. TRENKLE. I really can't--I don't feel like I can really 
get into a whole lot of detail on that subject. But I mean 
there is certainly possibilities for hackers to get into 
systems of any organization. I mean----
    Mr. MCDERMOTT. Do you think it is possible in this 
electronic world we have today to give people 100 percent 
certainty that they are not going to lose their identity 
through this method?
    Mr. TRENKLE. No, I don't believe so.
    Mr. MCDERMOTT. I yield back the balance of my time.
    Chairman JOHNSON. Thank you. The gentleman's time has 
expired.
    Mr. STARK. Mr. Chairman.
    Chairman JOHNSON. Yes?
    Mr. STARK. Yield for a second to ask the gentleman from 
Washington?
    If you--when Bubbles sends you that email and asks if you 
want a good time and just send her your Social Security number, 
if you don't do that, then she won't have your Social Security 
number. Okay?
    [Laughter.]
    Chairman JOHNSON. I am not sure I understood that. But Mr. 
Berg, you are recognized.
    Mr. BERG. Well, thank you, Mr. Chairman. You know, one of 
the things that we do is we learn from other agencies and how 
they have gone through this. You know, as we sit here and 
listen to the frustration, I, you know, go back to 2002, I 
think, when GAO first came out and made this recommendation.
    Really, Mr. Bertoni, if we could kind of get to, you know, 
what steps DoD took and the VA to remove Social Security 
numbers from the membership cards, and tell us, you know, what 
those agencies do well. Is there anything that Medicare can 
learn from this and implement, as we are here today?
    Mr. BERTONI. I think, first and foremost, they recognized 
it as a priority. And whether it be in response to directives 
from the outside, or just the basic cultural shift in this 
country, that we need to remove SSNs from massive use and 
display and then move forward in trying to use appropriate 
technology in house--I mean within their budget--to redact and 
remove these SSNs.
    So, the first step was to get them off the cards. So I 
would say that was a great effort. Now these SSNs and other 
information are embedded in the mag strips and the bar codes 
behind--within the card. The agencies, both DoD and VA, are 
realizing that that is first generation technology, and they 
are already looking forward to what they need to do to further 
protect that card, which is to remove the SSN information and 
replace it with a non-SSN-based identifier. So, clearly, CMS 
is--if they move forward, we prefer it to head in that 
direction. So that is a lesson learned. You want to get the 
card--the number off the front, and off any bar code or mag 
strip or anything in the card.
    Certainly DoD piggy-backed off of existing IT adjustments. 
They were able to leverage resources to make the changes in 
accordance with other adjustments. So I think that would be--
CMS might want to talk to them about.
    And lastly, I think this cost is high in some respects 
because it is a rapid-phase-in. It is a one-year period. They 
are going to run dual systems for one year. But after that it 
is going to go to a single system, and they are going to have 
all these people issued new cards. There may be some 
opportunities to leverage resources to look at, if they ran 
dual systems for the second year or third year, would that 
counteract any additional costs that they are claiming would be 
encountered if they ran dual systems for more than a year. I 
don't know if that analysis has been done. I think they could 
reach out to DoD and VA to see how that worked and what the 
cost savings were.
    Mr. BERG. Well, thank you. And that is really my only 
question we have part of the same family here. Let's use the 
best practices and implement them.
    I will yield back, Mr. Chairman.
    Chairman JOHNSON. Thank you. Appreciate that. Mr. Doggett, 
you are recognized.
    Mr. DOGGETT. Mr. Chairman, thank you. And I want to express 
my full agreement with the comments that you have made here 
this morning, and that you have made here in the past 
concerning this very serious matter of identity theft, and the 
failure of CMS to live up to its responsibilities to address 
it.
    This is not a matter of frustration. It is a matter of the 
proper oversight of this committee over the actions of CMS. We 
have had bipartisan agreement about the severity of this 
problem and the need to address it. And we have also had 
bipartisan inaction at CMS. This began during the 
administration of President Bush. It has continued under the 
administration of President Obama. Under neither administration 
has CMS been responsive on this matter.
    When we together, Mr. Chairman, introduced the legislation 
that Congress passed way back in 2008, it was not a smooth 
process. CMS resisted in every way our approval of that 
legislation. And to address the concerns that CMS voiced then 
about the legislation, we amended it to provide that they did 
not have to achieve all aspects of this until necessary 
appropriations were made available. They came in with what I 
considered at that time--and this was under the Bush 
Administration--an estimate that was very high, as we were 
about to get the legislation passed, as a way to discourage 
approval of the legislation.
    The problem is that CMS never agreed that this was a 
priority, or that it needed any attention. They didn't agree 
with what I think was the very proper recommendation of the 
Office of Management and Budget under the Bush Administration. 
The CMS part of the bureaucracy didn't think it was something 
that needed to be done. We finally got it passed after it was 
delayed here in the House until very near the end of the 
session. And the continued resistance of CMS managed to get 
this bill stopped in the Senate.
    Since that time--the reason we have a GAO report today in 
the first place is that we gave up on trying to get a straight 
answer from CMS as to the basis for their cost estimate. And 
it--finally, in desperation, we turned to the Government 
Accountability Office to try to get a straight answer. And now, 
years later, all we find out really is it will cost some money, 
and we don't have a straight answer.
    And if I understand your testimony this morning, Mr. 
Trenkle, you are saying that in another six months you are 
going to contract out with someone else to do the estimate that 
my office started trying to get from you back in about 2007 or 
2008? Is that what this contract is about?
    Mr. TRENKLE. We will use a contractor to help support the 
effort.
    Mr. DOGGETT. Well, I guess I can't argue, after all this 
time, that maybe we are going to get a straighter and more 
complete answer from a contractor than we have gotten from CMS.
    But the notion that this morning CMS thinks that, well, 
maybe after all these years it is time to talk to DoD or VA 
about how they accomplished it without spending $800 million, 
and get an accurate estimate, I find truly amazing that it 
would--that at this late date, years later, we would have no 
plan, no ability to estimate internally what the cost will be 
that is credible, and now we are going to spend money to have 
some outside source tell us what we should have been told at 
the time that Chairman Johnson and I introduced this 
legislation back in 2007 or 2008.
    I believe, Mr. Chairman, that until we go ahead and pass 
legislation on this, we are not going to get the action that is 
necessary. I don't agree with Chairman Herger, that this has 
anything to do with the Affordable Health Care Act, because it 
has been going on so long, and the unresponsiveness has been so 
consistent between administrations, that I think it takes some 
congressional action. I don't believe that this can be done for 
free. There are some appropriations that will be necessary. But 
those appropriations have to go hand in hand with a new 
attitude that is more responsive about the severity of this 
problem than we have had over the course of the last decade.
    And I yield back.
    Well, if I might, Mr. Chairman, if I still have a moment, 
let me just ask the folks, Ms. King and Mr. Bertoni, do you--
were you able to get any indication, even if they did it within 
their existing appropriations, of what this costs to do at 
either the VA or the Department of Defense?
    Ms. KING. We did ask them that. But we are not totally 
confident of the answer, because it is not a process that we 
looked behind to verify.
    Mr. DOGGETT. There were some costs associated with it.
    Ms. KING. Yes.
    Mr. DOGGETT. But they accommodated this on a gradual basis, 
and as they were making some other technology changes.
    Ms. KING. Yes.
    Mr. DOGGETT. I guess it is hard to break it down.
    Ms. KING. Yes.
    Mr. DOGGETT. Thank you very much.
    Chairman JOHNSON. Well, that is true. But they also replace 
those cards periodically, too. But so does CMS.
    Looks like Mr. Berg is gone, so how about--yes, Mr. 
Gerlach, you are recognized.
    Mr. GERLACH. Thank you.
    Chairman JOHNSON. Yes, sir.
    Mr. GERLACH. Mr. Trenkle, I am really stunned, too, by the 
lack of responsiveness by CMS on this issue over the years, to 
follow up on Mr. Doggett's commentary.
    Can you give us a concise and specific explanation for that 
lack of responsiveness beyond your testimony that just says, 
``given the budgetary and logistical challenges of removing 
Social Security numbers.'' Can you give us more specificity and 
conciseness as to why there is this internal, departmental lack 
of responsiveness to the need to do this?
    Mr. TRENKLE. I don't think there is a lack of 
responsiveness to do this. I personally have only been involved 
in this for the past year.
    But I think there is other--as I said before, there is 
other priorities that we are dealing with in the Medicare area. 
And that has been where we have been looking at over the past 
two cost estimates. People have looked at the costs and have 
looked at other priorities, and have said that this will take a 
significant number of resources, time, and effort to do.
    Mr. GERLACH. How much money do you think would be saved in 
savings from improper payments that occur within the system, 
which is--the GAO has estimated in this most recent report $48 
billion a year of improper payments in Medicare each year--how 
much of that $48 billion can be saved if there is more security 
around the beneficiaries' cards, their identification, their 
identity? How much can be saved if this were fully implemented?
    Mr. TRENKLE. I am not prepared to answer that question.
    Mr. GERLACH. Why not?
    Mr. TRENKLE. Because the----
    Mr. GERLACH. Why haven't you estimated that? Congress has 
told you repeatedly, year after year, that this has to be done. 
And there is tremendous savings that would result from it. Why 
haven't you figured out what that number is?
    Mr. TRENKLE. As I----
    Mr. GERLACH. Do you care? Do you really care about saving 
the identity and the taxpayer's funds that go into this 
program? Do you really care?
    Mr. TRENKLE. Yes, I care, and----
    Mr. GERLACH. Then how do you demonstrate it? You are the 
Office of Information Services. In your request to your 
superiors for this year's budget, you make a request from your 
office to your superiors that ultimately winds up through OMB, 
that then becomes part of the President's request to Congress. 
Have you asked for a specific line item in your budget that you 
can use to go out and implement this program?
    Mr. TRENKLE. Well, the budget includes more than IT. It 
includes other costs.
    Mr. GERLACH. Have you requested from your office to your 
superiors, ``Give me X number of dollars this year, so I can 
implement this program immediately''?
    Mr. TRENKLE. No, I have not.
    Mr. GERLACH. Why?
    Mr. TRENKLE. As I----
    Mr. GERLACH. You know Congress wants to get this done. Why 
haven't you done that?
    [No response.]
    Mr. GERLACH. You don't care, obviously. Until you put in 
writing what you want to do, ``This is my priority, I am in 
charge of this office of information services, Congress needs 
to get this--wants us to get this done, we need to get it done, 
here is my request for that amount of money, let's get it 
done,'' you obviously don't care.
    So, the next question is when are you going to start 
caring? Will this hearing help you start caring? That is a yes 
or no answer. Will this hearing help you start caring?
    Mr. TRENKLE. Well, as I say, we are going to go back and do 
the re-estimate and work with Congress to reprioritize if there 
needs to be--this needs to be done, and if we don't get 
additional appropriations.
    Mr. GERLACH. You don't need additional appropriations, 
necessarily. You haven't even identified how much money you 
really need to start the process. And, therefore, how do you 
know if you have it or not within your budget?
    And if you do think you need extra money, where is the 
request of this--to this Congress for that money?
    [No response.]
    Mr. GERLACH. Well, obviously, I am frustrated. I apologize 
for how I have questioned you today. I usually don't question 
witnesses in this manner. But hopefully you can understand how 
frustrated many of us are. And if you don't have the resources 
needed to get this done as soon as possible, I hope you will 
talk to your superiors at CMS to create a special line item 
request in your next budget proposal to make this happen. Do I 
have your assurance you will do that?
    Mr. TRENKLE. As we do the new estimate, that is certainly 
something that I can talk to our leadership at CMS about.
    And I do understand your frustration and others. I know 
this has been a process that has occurred over many years. And 
hopefully, at this point, with the new estimate, we can move 
forward to work with you and others to prioritize this along 
with other priorities.
    Mr. GERLACH. All right. Thank you, Mr. Chairman.
    Chairman JOHNSON. Thank you. It might not cost anything, if 
you take a good look at it.
    Mr. Pascrell, you are recognized.
    Mr. PASCRELL. Mr. Trenkle, you would have to agree that it 
gets frightening and weird and scary when both sides agree in 
this Congress.
    [Laughter.]
    Mr. PASCRELL. Holy mackerel. I looked up both the CMS 
budget over the last four years, five years, and Social 
Security Administration budget. And not only have we flatlined 
it, but there have been hiring freezes--there has been in many 
agencies. Social Security, I think, closed 300 small field 
offices. When you look at both of these agencies, which will be 
intricately involved when this ever happens, we need to take a 
look at their budgets.
    I think the question is quite appropriate. Did the agency 
ask for more money?
    The Social Security number, though, Mr. Chairman, is not 
confined to the issue of Medicare, whether it is on our 
Medicare cards. Social Security number is a problem across the 
board for most Americans. Let's address is. We don't want to 
address it. We only want to address it in the areas that are 
appropriately political. But the average American goes through 
a tremendous amount of nonsense, whether it is through their 
credit card, whether they are going for credit in a store, 
about giving up their Social Security number. And I think we 
need to take a look at that. Because no one on this side of the 
dais up here at the dais would admit or agree, rather, that 
this is confined to simply those people primarily over 65 years 
of age.
    We have a very serious Social Security number problem, and 
we are not addressing it, Mr. Chairman. And we don't address it 
at our own peril. Wouldn't you agree? And we need to do 
something about that. Because the American people are very 
frustrated, the average American, if you ask them about this. 
You know, ``What's your Social Security number?'' Whatever we 
do nowadays. They will be asking for our Social Security 
numbers when we walk into theaters soon. Don't--you know, don't 
be surprised. Because go back 25 years and see how much more 
intrusive that has become in America.
    I am very concerned about that, very concerned. I think it 
is just as big a problem as cyber security is on a national 
security level. And if we don't address it, it only brings the 
average citizen to have less faith in their government. And 
having someone over your shoulder.
    And, by the way, most of these numbers are not used in the 
final analysis to take money from people fraudulently. It is 
used by commercial interests. They sell these numbers. Isn't 
that interesting? Why aren't we up here talking about that? 
Well, it is not our issue here. But the point of the matter is 
I think that is a bigger concern to us on a day-to-day basis. 
You would be shocked to know where your Social Security winds 
up--your number winds up, rather.
    So, on an issue that we may debate as to whether we should 
privatize it or demonize it or eradicate it all together, that 
number becomes very valuable to commercial interests. Wouldn't 
you say, Mr. Trenkle?
    Mr. TRENKLE. Yes, I would agree. It is certainly used in a 
number of areas. I know with my aunt, as I mentioned, closing 
out her estate, until we had the Social Security number none of 
the banks would even work with us to work on closing out the 
estate.
    Mr. PASCRELL. What--how long do you think these changes are 
going to take, the ones that have been recognized today, eight 
years ago, five years ago? How long is it going to take? Mr. 
Bertoni or Mr. Trenkle, how long will it take to implement 
these specific changes? Whether you are going the first method, 
the second method, or the third option?
    Mr. TRENKLE. Well, we estimated in the latest cost estimate 
that it would take four years: three years for planning, and 
then a year to issue the new numbers to each of our 
beneficiaries.
    Mr. PASCRELL. Well, you are talking about issuing new cards 
as well, correct?
    Mr. TRENKLE. That is correct. It would require new cards, 
as well.
    Mr. PASCRELL. And would the cards necessarily have new 
numbers on them?
    Mr. TRENKLE. If we moved to a new identifier, yes, they 
would have the new identifier.
    Mr. PASCRELL. Might those numbers be hidden from the 
general public or anyone else, rather than simply pronounced on 
the card?
    Mr. TRENKLE. That is one option.
    Mr. PASCRELL. I don't see that option here.
    Mr. TRENKLE. That is correct.
    Mr. PASCRELL. So the issue about--and I will end on this 
point, Mr. Chairman--the issue about, you know, where are we 
really in this cost estimate and trying to get something done 
at the request of the Congress of the United States is a very 
serious question. The folks on both sides of this aisle have 
asked that question. And I don't think you come up with a 
pretty solid answer.
    And I don't mean this as a criticism so much as you 
appreciate the frustration, but we are talking about pretty 
serious stuff here. And I would think that your association 
need not get back to us two years from now, but it needs to get 
back to us, your agency, pretty quickly.
    Mr. TRENKLE. I certainly take it seriously. As you know, 
the 2006 estimate was done under the previous administration.
    Mr. PASCRELL. Right.
    Mr. TRENKLE. The 2011 one was done under this 
administration.
    Mr. PASCRELL. Right.
    Mr. TRENKLE. And I understand there is bipartisan support 
for doing that. And as I have said, I have committed today to 
going back and re-doing the estimate, getting it to you within 
the six months, with the possible caveat about Medicaid, and 
working with the committee and others to reprioritize if we 
don't get additional appropriations to work with you towards a 
solution on this.
    Mr. PASCRELL. Mr. Chairman.
    Chairman JOHNSON. Thank you.
    Mr. PASCRELL. Would it be too much to ask before we leave 
our general meetings this year, that we get a report in 
September----
    Chairman JOHNSON. Well, I was going to suggest why does it 
take six months for an estimate, let's try one month. Can you?
    Mr. TRENKLE. Well, here is--I--we can certainly give you an 
estimate within a month. But as several of you members have 
said, and as the GAO said, they had concerns about how we did 
the analysis. So, in order to do an analysis correctly, I think 
we need to go back and look at how it was done, apply more of 
the rigor that GAO has suggested, and come forward to you.
    There may be parts of this analysis we can get to you 
sooner than six months. But what I am just saying is I want to 
go back and do this in a way that satisfies our colleagues from 
GAO and satisfies all of you that we have done the rigor that 
you feel is necessary.
    Chairman JOHNSON. Okay, thank you. The gentleman's time has 
expired. Mr. Smith, you are recognized.
    Mr. SMITH. Thank you, Mr. Chairman. Mr. Trenkle, if we 
could perhaps reflect a little bit on the fact, I believe, that 
the Railroad Retirement Board uses non-Social Security 
beneficiary numbers for some of its members. Is that accurate?
    Mr. TRENKLE. Yes, that is correct.
    Mr. SMITH. And can you reflect a bit on how that can be, 
and yet it seems to be such a heavy lift for the rest of CMS to 
use similar software and other means to accomplish moving 
beyond the Social Security number identity?
    Mr. TRENKLE. I can't speak for the Railroad Retirement 
Board. I know, in terms of scalability, the Railroad Retirement 
Board retirees are a small fraction of the number of Medicare 
beneficiaries. I believe they are in the hundreds of thousands, 
as opposed to 50 million.
    Mr. SMITH. Okay. So if the GAO folks would reflect on that, 
perhaps, do you have any input?
    Ms. KING. Yes. I think there are about 550,000 Railroad 
Retirement beneficiaries, so a much larger number. And I think 
probably one of the key differences is that the Medicare number 
is used by every provider for billing. And those billing 
systems are--some of them are legacy systems, some of them are 
antiquated, and it is a very complex network. And when you are 
changing the number, you have to change it throughout the 
system. So, I think that is where a lot of the complexity comes 
in.
    Mr. SMITH. But the software and the infrastructure to carry 
that out is already existent. Is it not?
    Ms. KING. I can't quite answer that, because I don't know 
exactly what the Railroad Retirement Board is doing.
    Mr. SMITH. Mr. TRENKLE.
    Ms. KING. But I think they are one system, compared to--CMS 
has almost 50.
    Mr. TRENKLE. Yes, they have a much smaller IT 
infrastructure, and we are talking about many more systems 
within CMS. And much of the Railroad Retirement Board IT work 
is supported by SSA a lot more closely than what it is with 
CMS. And, of course, you know with CMS we have quality areas 
that we support. We have the program integrity and a number of 
other areas that impact the use of the number throughout our 
various systems.
    Mr. SMITH. And I don't want to over-simplify the issue, but 
it would seem to me that if it is possible to have a fairly--I 
mean smaller number, but still sizeable, to implement that 
conversion, I would hope that it could be done on a larger 
scale.
    And on that similar issue, though, it looks like the CMS 
report suggests that it would cost roughly $68 million to 
replace the 47 million cards at about $1.44 per card. Is that 
accurate?
    Mr. TRENKLE. Yes, that is accurate.
    Mr. SMITH. Okay. And a little research would show that some 
private insurance companies did voluntarily remove the numbers, 
Social Security numbers, from their beneficiary cards over the 
last 10 years. And research shows that that costs about $.70 to 
$1, including shipping and handling. Can you elaborate on the 
difference between those costs?
    Mr. TRENKLE. No, I can't. I would have to look at the 
assumptions used to derive their costs, as opposed to deriving 
our cost. So I can't comment on that here.
    Mr. SMITH. Okay. I would be interested to know more, 
actually, in terms of how there could be such a difference 
between those numbers.
    Thank you. I yield back.
    Chairman JOHNSON. Thank you. Mr. Blumenauer, you are 
recognized.
    Mr. BLUMENAUER. Thank you, Mr. Chairman, and I appreciate 
Mr. Smith's admonition he didn't want to over-simplify it. And 
I think that is important.
    Is there any comparable system, in terms of number of 
participants, number of individual vendors, and scale, that 
would be--could--that you can return to that is anything like 
what you are being asked to do?
    Mr. TRENKLE. Not in--well, certainly not in terms of scale 
and the tie-ins with the other major benefit programs that we 
have.
    Mr. BLUMENAUER. Well, I mean, I think this is--I mean I 
want us to pursue progress in this. But I--one of the things 
that concerns me when people are talking about $.70 to print a 
card, or $1.50 to print a card, we are talking about over 52 
million senior citizens. And millions--or not millions, but 
over a million small businesses, some of whom are--you know, we 
are trying to nudge into the world of electronic records 
keeping.
    It has taken the Federal Government a long time just to get 
to the point where Veterans and the Department of Defense have 
systems that can talk to each other. And those are, you know, 
pretty self-contained, part of the same family.
    And I do think we ought to pause for a moment and think 
about the scale of what is being asked. Not that we shouldn't 
have more progress, not that I excuse what Mr. Doggett pointed 
out in terms of foot-dragging in the Bush Administration or 
failure in the Obama Administration to make progress, but there 
is a lot on the table. And this isn't an insurance company 
reprinting cards. This--I can just imagine the outrage that we 
would have in hearings if, all of a sudden, 52 million voting 
senior citizens get something that was screwed up.
    So, I want to talk just for a second about--where are you 
in the organization? You are not the director. Is there anybody 
between you and the top?
    Mr. TRENKLE. Yes, yes. I am a career----
    Mr. BLUMENAUER. A career professional.
    Mr. TRENKLE. Yes, correct.
    Mr. BLUMENAUER. You care about your job, you show up?
    Mr. TRENKLE. Absolutely.
    Mr. BLUMENAUER. I wanted to just make sure that you had a 
chance to say that.
    But do people in your position throughout the Federal 
Government freelance and interpret congressional priorities or 
budget priorities to put in--insist upon things that are going 
to be in your budget, or do you respond to priorities from OMB 
and from the administrator of the agency?
    Mr. TRENKLE. It is the latter, yes. We respond to that.
    Mr. BLUMENAUER. Okay.
    Mr. TRENKLE. As, of course, obviously, a
    congressional----
    Mr. BLUMENAUER. And if we had hundreds of people like you 
throughout the Federal Government who thought that this was a 
good idea, or thought that the Federal Government should do 
this, or that Congress was saying that, we would have kind of a 
chaotic budget process, wouldn't we?
    Mr. TRENKLE. Yes.
    Mr. BLUMENAUER. Have you ever experienced Congress speaking 
with different words and having different priorities, and 
asking one thing and not funding it as a priority? Have you 
ever seen that in your public service career?
    Mr. TRENKLE. Yes, I have.
    Mr. BLUMENAUER. Mr. Chairman, I think we ought to cut slack 
for career civil servants who are doing their job. And I resent 
somehow an implication that people who are doing their job and 
following priorities that have been in Republican and 
Democratic administrations, somehow they don't care, that 
somehow, because they haven't arrested somebody for identity 
theft, that they are not aware of it and concerned about it. I 
just am concerned about the tone and nature of this.
    Because I think we ought to make progress. I think that it 
is hopeless--it is very complex. I have had, in a prior life, a 
little experience with personnel systems and data processing. 
And so I am not excusing what prior administrations have not 
done, or what prior congresses have not done to stay on top of 
it and fund it. But I would just hope that we are a little more 
respectful for the men and women who are professionals, doing 
their job, and trying to follow what they are told to do, not 
freelancing. And I think we would have people here outraged if 
folks were freelancing interpreting what the Congress did.
    We have got a little legislation, Mr. Gerlach and I--who is 
a little agitated, and I appreciate that--but we have 
legislation that would establish a pilot project, H.R. 2925, 
that would have a secure piece of identification, to see if we 
could have something that would enable a better way of paying, 
a better way of securing identity, getting numbers off, making 
it individual so that CMS and others could track compliance, 
but would be easy for providers.
    Is there some way that we could explore something along 
this line, as a constructive alternative to meet both these 
objectives?
    Mr. TRENKLE. I am assuming you are talking about the use of 
smart cards, or----
    Mr. BLUMENAUER. Yes, sir.
    Mr. TRENKLE [continuing]. Or other types of technology.
    Mr. BLUMENAUER. Yes, sir.
    Mr. TRENKLE. I certainly think that is something worth 
looking into. I think that I have had a fair amount of 
experience working with smart cards over the last 15 years, and 
I know there are some issues around scalability, particularly 
as you can think about the number of cards that we have to 
replace on a monthly basis.
    Mr. BLUMENAUER. Right.
    Mr. TRENKLE. Also, the number of providers we have to deal 
with who would have to get readers. But I certainly think it 
does offer some possibilities, it and other technologies.
    Mr. BLUMENAUER. I see my time has expired, Mr. Chairman. 
But I would just put that on the table, that Mr. Gerlach and I 
have legislation that would have a pilot project to be able to 
answer some of these questions, to test it, that might be 
easier for 52 million senior citizens, and get at that big 
fraud number in a way that isn't just reprinting cards, but 
really gets at the system.
    Chairman JOHNSON. Okay, thank you.
    Mr. BLUMENAUER. Thank you. I appreciate your courtesy.
    Chairman JOHNSON. Thank you for your comments. Mr. Bertoni, 
decades ago we co-opted the Social Security number, using it 
for all kinds of non-Social Security purposes. And recently, 
both the private and the public sector are moving away from 
these numbers. What can you tell me about this trend, and why 
has it occurred? And what are some of the entities that have 
reduced or eliminated their use or display of Social Security 
numbers?
    Mr. Bertoni. Actually, in preparing for this, I went 
through a number of our prior GAO reports, and actually have a 
long list of folks who have made progress.
    I think that the issue of use and display, first of all, we 
have come to where we are because, as some of you have said 
today, using the SSN is easy. It is convenient. It is tied to 
so many life transactions, it is a way for both public and 
private sector entities to determine who you are, and 
especially the private sector, to determine whether they want 
to do business with you.
    So, from a use standpoint, I think both public and private 
sector, the SSN continues to be pervasive. And I don't believe 
there has been much progress in there. We have the OMB 
memorandum, of course, we had some other initiatives. But I 
still think the use of the SSN is as pervasive as it was 
several years ago.
    But when you get to the area of display, I do believe there 
has been a lot of progress. I think that is the easy part. 
People realize that we can't have these SSNs emblazoned on 
documents, on cards. And there has been a movement over the 
last decade or so to remove them.
    Now, starting with the higher education, we no longer have 
SSNs on student IDs. Easy to do. The 50 states, when--at one 
time the SSN was on every driver's license, per the direction 
of the Congress. The states have now redacted all of those. We 
have had state and local governments who are--many of which are 
engaging in pretty aggressive initiatives to remove Social 
Security numbers from state and local public records. And 
certainly we have the large federal agencies like DoD and VA 
getting out on this issue. And lastly, the private insurance 
companies, getting SSNs off the cards.
    I do believe I will say that a major outlier is CMS. They 
are behind the curve on this with 48 million cards on the 
street. I think it is time that they have caught up with the 
rest of the world and started moving to an environment where 
the SSN is not on the card. Most people don't know how their 
identity was stolen. Sixty-five percent of people don't know 
how that happened, or who did it. But in the 35 percent of the 
population of the victims that know it the second most frequent 
source of identity theft is a stolen wallet, a stolen purse, or 
interception in the mail. And you are going to find Medicare 
cards in all three of those places.
    Chairman JOHNSON. Thank you. I appreciate that comment.
    Mr. Becerra, do you have a closing comment?
    Mr. BECERRA. I do, Mr. Chairman. And it is inspired by some 
of the things that Mr. Bertoni just said, as well.
    Mr. Trenkle, I think, as you noticed, there is complete 
bipartisan agreement that we have got to get the number off of 
the card. And there may be a bit of a breakdown, as I think Mr. 
Blumenauer tried to point out, about how we get there. But I 
don't think there is any doubt that, at least in this House--
and I got to believe our colleagues in the Senate would agree--
that it really is time, as Mr. Bertoni said, for CMS to catch 
up and remove the number from the card.
    But, Mr. Chairman, let me suggest something to those of us 
who have taken an interest in this issue here in Congress. I 
agree with you that I think the re-estimate shouldn't take six 
months. You have done some work, both in 2004/2005 and 2010/
2011 to come up with that estimate. You don't have to re-invent 
the wheel to come up with an estimate.
    But let me suggest as well that if we work closely with 
GAO--and, Mr. Chairman, I think you are as interested in this 
as any, as Mr. Doggett and others have proven by authoring 
legislation--if we take it upon ourselves to bird dog this with 
CMS so that CMS understands how critical we think this is, and 
that we can have some bipartisan consensus about how to get 
this done, including dealing with the resources issue, then 
maybe what we can do is accelerate their time frame to get us 
an estimate, having participated with them in the process of 
coming up with this estimate, working with GAO and others who 
could do the non-partisan oversight.
    Maybe what we can do is, when they issue their finding 
about what it would cost, we are prepared to act because we 
will have been monitoring this all the way through, versus 
going through a process of holding hearings and have a hearing 
or a conversation or a disagreement about what it would take to 
get there.
    And my sense is that there is no lack of enthusiasm on the 
part of Democrats or Republicans to get this done. It is going 
to be more an issue of how we actually implement whatever a 
reasonable estimate says we should do. And so I would hope that 
maybe what we can do is--to show our bonafides on this side of 
the dais--is keep tabs of CMS in a friendly way, but keep tabs 
and ride herd on you. And hopefully, with GAO's participation, 
come up with those answers that we still don't have: the 
resources, how quickly can you reprioritize, how much will you 
need in new additional resources, what will be the impact on 
current activities.
    And if we can do that, Mr. Chairman, I think we can save 
ourselves a lot of problems and bickering about how to actually 
get it done, and do it a lot faster than if we just allowed the 
bureaucracy to move this forward.
    So, I just offer that in the spirit of bipartisanship, to 
try to get this done, and also to let CMS know that we hope 
that they are hearing this clearly, that this is something that 
we want to really monitor with them.
    Yield back.
    Chairman JOHNSON. Thank you. I appreciate your comments. 
And I thank you all for your participation today. It is a joint 
effort. It is not one party or the other.
    Thank you all for being here today and for your testimony. 
I look forward to continuing working with my colleagues to 
protect seniors from identity theft.
    With that, this joint hearing stands adjourned.
    [Whereupon, at 11:14 a.m., the subcommittee was adjourned.]
    Member Questions For The Records



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