[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
MAKING MEDICAID WORK FOR THE MOST VULNERABLE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
JULY 8, 2013
__________
Serial No. 113-65
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
RALPH M. HALL, Texas HENRY A. WAXMAN, California
JOE BARTON, Texas Ranking Member
Chairman Emeritus JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania GENE GREEN, Texas
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee LOIS CAPPS, California
Vice Chairman MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin
BILL CASSIDY, Louisiana Islands
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia JERRY McNERNEY, California
CORY GARDNER, Colorado BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas PETER WELCH, Vermont
ADAM KINZINGER, Illinois BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
Subcommittee on Health
JOSEPH R. PITTS, Pennsylvania
Chairman
MICHAEL C. BURGESS, Texas FRANK PALLONE, Jr., New Jersey
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan LOIS CAPPS, California
TIM MURPHY, Pennsylvania JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee JIM MATHESON, Utah
PHIL GINGREY, Georgia GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey JOHN BARROW, Georgia
BILL CASSIDY, Louisiana DONNA M. CHRISTENSEN, Virgin
BRETT GUTHRIE, Kentucky Islands
H. MORGAN GRIFFITH, Virginia KATHY CASTOR, Florida
GUS M. BILIRAKIS, Florida JOHN P. SARBANES, Maryland
RENEE L. ELLMERS, North Carolina HENRY A. WAXMAN, California (ex
JOE BARTON, Texas officio)
FRED UPTON, Michigan (ex officio)
C O N T E N T S
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Page
Hon. Joseph R. Pitts, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 1
Prepared statement........................................... 2
Hon. John P. Sarbanes, a Representative in Congress from the
State of Maryland, opening statement........................... 4
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, opening statement.............................. 5
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 6
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 71
Witnesses
Nina Owcharenko, Director, Center for Health Policy Studies,
Heritage Foundation............................................ 8
Prepared statement........................................... 11
Answers to submitted questions............................... 92
Alan Weil, Executive Director, National Academy for State Health
Policy......................................................... 17
Prepared statement........................................... 19
Answers to submitted questions............................... 96
Tarren Bragdon, President & Chief Executive Officer, Foundation
for Government Accountability.................................. 39
Prepared statement........................................... 41
Answers to submitted questions............................... 99
Submitted Material
Statement of the American Academy of Pediatrics.................. 73
MAKING MEDICAID WORK FOR THE MOST VULNERABLE
----------
MONDAY, JULY 8, 2013
House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 4:00 p.m., in
room 2123, Rayburn House Office Building, Hon. Joseph R. Pitts
(chairman of the subcommittee] presiding.
Present: Representatives Pitts, Burgess, Gingrey, Cassidy,
Griffith, Bilirakis, Ellmers, Dingell, Barrow, Christensen,
Castor, Sarbanes, and Waxman (ex officio).
Staff Present: Clay Alspach, Chief Counsel, Health; Matt
Bravo, Professional Staff Member; Sydne Harwick, Legislative
Clerk; Monica Popp, Professional Staff Member, Health; Andrew
Pawaleny, Deputy Press Secretary; Noelle Clemente, Press
Secretary; Alli Corr, Minority Policy Analyst; Amy Hall,
Minority Senior Professional Staff Member; Elizabeth Letter,
Minority Assistant Press Secretary; and Karen Nelson, Minority
Deputy Committee Staff Director for Health.
OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Pitts. The time of 4:00 having arrived, we will call
the subcommittee to order. The chair will recognize himself for
an opening statement.
Today's hearing is the third in a series examining the
current Medicaid system and ideas for reform. It builds on the
subcommittee's March 18 hearing, ``Saving Seniors and Our Most
Vulnerable Citizens From an Entitlement Crisis,'' and our
hearing of June 12, ``The Need For Medicaid Reform: A State
Perspective.'' It also complements the Energy and Commerce
Committee's ``Medicaid Check Up'' report from March,
Representative Upton and Senator Hatch's May report, ``Making
Medicaid Work,'' and the committee's recent Idea Lab on the
program.
Medicaid was designed to protect the most vulnerable
Americans, including pregnant women, dependent children, the
blind, and the disabled. Nearly one in four Americans was
enrolled in the Medicaid program at some point in 2012, making
Medicaid the largest government healthcare program, surpassing
Medicare. We have an obligation to ensure that the program
provides quality health care to beneficiaries and has the
flexibility to innovate to better serve this population.
As we have seen, we are failing on both counts. Only 70
percent of physicians are accepting Medicaid patients, leading
to problems with accessing care and scheduling follow-up visits
after initially seeing a provider. Medicaid beneficiaries often
lack access to primary care and preventive services and are
twice as likely to visit the emergency room. In some cases,
outcomes for Medicaid patients are worse than the outcomes of
those who have no insurance at all.
Regarding flexibility, instead of encouraging States to
pursue new and innovative models of care, we have locked them
into a one-size-fits-all program dictated by Washington. When
States do try to modernize and tailor their programs to the
individual populations they serve, they often spend years
waiting for the Centers for Medicare & Medicaid Services, CMS,
to approve their waivers. Before we implement a Medicaid
expansion which, if fully adopted, would add another 26 million
Americans to the program, we must first address these issues in
the current program.
I look forward to hearing from our witnesses today about
ideas to strengthen this vital safety net, and I welcome all of
them to our subcommittee.
And I yield the balance of my time to the gentleman from
Louisiana, Dr. Cassidy.
[The prepared statement of Mr. Pitts follows:]
Prepared statement of Hon. Joseph R. Pitts
The Subcommittee will come to order.
The Chair will recognize himself for an opening statement.
Today's hearing is the third in a series examining the
current Medicaid system and ideas for reform. It builds on the
Subcommittee's March 18 hearing, "Saving Seniors and Our Most
Vulnerable Citizens from an Entitlement Crisis," and our
hearing of June 12, "The Need for Medicaid Reform: A State
Perspective."
It also complements the Energy and Commerce Committee's
"Medicaid Check Up" report from March, Rep. Upton and Sen.
Hatch's May report, "Making Medicaid Work," and the Committee's
recent Idea Lab on the program.
Medicaid was designed to protect the most vulnerable
Americans, including pregnant women, dependent children, the
blind, and the disabled. Nearly 1 in 4 Americans was enrolled
in the Medicaid program at some point in 2012, making Medicaid
the largest government health care program, surpassing
Medicare.
We have an obligation to ensure that the program provides
quality health care to beneficiaries and has the flexibility to
innovate to better serve this population.
As we have seen, we are failing on both counts.
Only 70% of physicians are accepting Medicaid patients,
leading to problems with accessing care and scheduling follow-
up visits after initially seeing a provider. Medicaid
beneficiaries often lack access to primary care and preventive
services, and are twice as likely to visit the emergency room.
In some cases, outcomes for Medicaid patients are worse
than the outcomes of those who have no insurance at all.
Regarding flexibility, instead of encouraging states to
pursue new and innovative models of care, we have locked them
in a one-size-fits-all program dictated by Washington. When
states do try to modernize and tailor their programs to the
individual populations they serve, they often spend years
waiting for the Centers for Medicare and Medicaid Services
(CMS) to approve their waivers.
Before we implement a Medicaid expansion, which, if fully
adopted, would add another 26 million Americans to the program,
we must first address these issues in the current program.
I look forward to hearing from our witnesses about ideas to
strengthen this vital safety net, and I welcome all of them to
the Subcommittee.
Thank you.
Mr. Cassidy. Thank you, Mr. Chairman.
The current debate over reforming the Medicaid program
brings to mind--and I am paraphrasing Samuel Johnson--no one
likes change, even from worse to better.
Even those who support Obamacare and Medicaid, the Medicaid
component, said that they never would design Medicaid today as
it was designed 50 years ago to meet today's needs. Now, there
are many issues with the current Medicaid program. It serves a
diverse group of people--children, adults in long-term care,
the disabled, pregnant women, and now able-bodied adults. If
the intent of Medicaid is to take care of the most vulnerable,
I raise issue with the child or individual with traumatic brain
injury having to compete for limited Medicaid funds with a
healthy childless adult.
There is also great variability in how much Federal money
each State receives per Medicaid beneficiary. As evidence, the
five wealthiest States receive almost twice as much in Federal
Medicaid contributions toward the care of their low-income
residents than those living in the five poorest States. If the
intent of Medicaid is an implicit Federal guarantee to provide
a baseline of coverage for the most vulnerable, why should a
disabled Medicaid recipient living in New York receive twice as
much Federal Government aid as a disabled person living in
California?
Other problems include quality and access to doctors. The
chairman referenced a recent study that found that Medicaid
patients have longer hospitalization, higher cost, and worse
outcomes than even the uninsured. Yet despite being a high-cost
program for States, Medicaid frequently pays below a
physician's cost to see a patient, which effectively denies
them access. Medicaid, as I like to say, is the illusion of
coverage without the power of access.
I applaud the chairman and the committee for holding this
hearing. We can't just simply add or subtract cash from the
Medicaid system and call it reform. We have to be willing to
reexamine the effectiveness of our Medicaid structure. I think
that all the members of this committee can agree Medicaid
should be structured in a way that provides benefits to
individuals in the most efficient and effective way. I also
would like to add that I recently introduced the Medicaid
Accountability Care Act, which I hope can also be considered.
I yield the balance of the time to Dr. Gingrey.
Mr. Gingrey. Mr. Chairman--and I thank the gentleman for
yielding--our Medicaid program has continually underperformed
for our most needy population. Instead of focusing Medicaid
dollars on new, healthier people, as in the President's health
care law, we should be directing more attention to improving
the health outcomes of the existing populations. We must allow
the States the ability to experiment with their programs to
approve our results. An outdated and overly bureaucratic waiver
process does not allow the proper freedom to develop new
methods to deliver care to our poorest and most vulnerable.
Mr. Chairman, it is past time to repeal the maintenance of
effort provisions in Obamacare and release the States to
investigate novel ways to improve on a system that currently
fails its participants. And thank you for the extra time, and I
yield back.
Mr. Pitts. The chair thanks the gentleman.
Recognize the gentleman from Maryland, Mr. Sarbanes, who is
filling in for the ranking member today.
OPENING STATEMENT OF HON. JOHN P. SARBANES, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MARYLAND
Mr. Sarbanes. Thank you, Mr. Chairman. I appreciate your
convening this hearing on the very important subject of the
Medicaid program.
As you, yourself, said, Medicaid is an important program.
We view it as a critical safety net that provides healthcare
coverage for those individuals who have been shut out of
private insurance, either because that is unaffordable to them
or it is unavailable or it doesn't cover the benefits that they
need.
It is important to recognize that when we talk about the
Medicaid program, we are not just talking about a program that
covers low-income families. We are talking about a program that
covers children and adults with disabilities, and pays for
nearly half of all long-term care services.
I had the privilege for 18 years of representing a number
of health care providers as an attorney, in particular those
who provide services to our elderly, and I understand how
critical the support from the Medicaid program is for a lot of
the services that are provided to those most in need among our
elderly. And so it is important for us to understand the full
dimensions of the Medicaid program. We are talking about home-
and community-based services, we are talking about
rehabilitative therapy, and we are talking about adult daycare
and caregiver respite.
In 2011--and you mentioned this yourself--the Medicaid
program provided healthcare assistance for almost one out of
every four or five people in the country, including 30 million
children. That is why it is so critical to make sure that this
program remains strong and that we build upon the most
important elements of it.
I am particularly focused on how we can bring this kind of
coverage to bear where people are. It is what I call place-
based health care. I have championed efforts, particularly with
respect to young people, to make sure that those who are
eligible for Medicaid can get that care wherever they may be
and where it is easiest for their families to receive it,
including in their schools and in school-based health clinics.
The coverage for children under Medicaid is really one of
the most important aspects of the program. And I would like to
enter into the record, without objection, testimony from the
American Academy of Pediatrics on this issue of why it is so
important both to pediatricians and obviously to children as
well. This is from Robert Hall with the American Academy.
Mr. Pitts. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Sarbanes. The Affordable Care Act, as we know, includes
an expansion of the Medicaid program to include more low-income
adults, taking it up to 138 percent of the poverty rate. Half
of today's uninsured have incomes below the new Medicaid limit.
So they stand to benefit from this adjustment going forward.
Unfortunately, we do have States across the country who so far
have declined to become partners in this effort, take advantage
of the Medicaid expansion. The result of that is that you will
have many low-income adults who will likely remain uninsured,
with predictable results both for them and for our society.
We also have to look at this through an economic lens. And
as the economy continues to improve, more and more people are
still finding themselves in need of this very important
healthcare safety net. If you cut Medicaid, that is essentially
cutting jobs. Medicaid stimulates the economy. Every dollar
spent is good economics. According to one study by the Kaiser
Family Foundation, every dollar cut from Medicaid means up to
$2.76 cut from the State economy in which that occurs. The loss
of Federal Medicaid dollars means a loss of healthcare jobs and
healthcare economic activity across the country, which means
you are moving States in exactly the wrong direction that we
want to be pushing them in terms of our economic recovery.
States and the Federal Government need to focus on creating
jobs, on incentivizing economic growth, not on cutting the most
vulnerable programs, such as Medicaid. So I believe the
expansion of the Medicaid program under the Affordable Care Act
is not only something that makes tremendous sense for the
health of vulnerable populations across the country, but for
State economies as well. And I look forward to hearing from our
witnesses today as they discuss this critical program and how
we can all continue to push for quality affordable health care
for all our citizens.
With that, I yield back.
Mr. Pitts. The chair thanks the gentleman.
And now yields to the vice chair of the subcommittee, Dr.
Burgess, for 5 minutes for an opening statement.
OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. Burgess. I thank the chairman for yielding.
As we meet here today to discuss Medicaid, recognize that
it was created to protect and care for some of the poorest and
most needy in our Nation. However, in reality, the program,
because of weak oversight, chronic underpayment of providers,
lack of coordination of benefits, ends up being only another
empty promise made by the Federal Government. The ability of
Medicaid to provide healthcare coverage for the most vulnerable
is further threatened by the Affordable Care Act and the
drastic expansion of the program to nearly 72 million Americans
in 2014.
Medicaid currently consumes almost a quarter of States'
budgets, surpassing expenditures on education, transportation,
and emergency services. Many States have been forced to cut
Medicaid reimbursement rates to providers as a way to address
budget shortfalls.
Look, as someone who has provided services to Medicaid
beneficiaries, I understand firsthand that coverage does not
guarantee access. Medicaid low reimbursement actually creates
increased barriers to care, limiting beneficiaries' access to
services because Medicaid pays less for comparable service than
private insurers or, in some instances, even Medicare itself,
making finding providers and appointments hard and sometimes
impossible. Escalating costs and shrinking access are symptoms
of the greater systemic problems within the Medicaid system.
And look, we need to move beyond small reforms and instead
address the underlying system's structural problems. We sat
here this very room with a Health Subcommittee hearing in 2008
and talked about this very problem. Many of you will remember,
it was the day that Lehman Brothers collapsed and the economy
was headed for a crisis. We heard in that hearing that day that
if you wanted to do health care reform on the cheap you just
expand Medicaid. You are not really paying the providers to see
the patients but, after all, that is not really what is
critical, it is critical that we provide the coverage.
Well, anyone who has practiced in the Medicaid system will
tell you that the ability to meet the cost of providing the
care is critical for a hospital, for a clinic, for a doctor's
office. And if you can't meet that, your doors will quickly be
closed. But as we sat here in that room that day in September,
we never even asked ourselves, is the best we can do Medicaid?
And wouldn't we be better to reform the program before we
expanded it? But unfortunately, those questions were never
answered.
So I would submit today, it is time for us to get back to
the basics. We need to ask ourselves, what was Medicaid created
to do, and is it doing the best it can do under the
circumstances? We know the structural and fiscal problems in
the healthcare system. How long will America tolerate staring
at these problems without fixing them for future generations?
It is time not just to reform Medicaid. We actually need to
reboot the entire system. As we have seen from the events of
the last week and a half, the problems in the Affordable Care
Act are beginning to mount. They are reaching critical mass.
This subcommittee has within its power to take up this issue
and act.
I thank the chairman. And I will yield the balance of my
time to the full committee chair, who is not here, so I will
yield back my time.
Mr. Pitts. The chair thanks the gentleman.
Now recognize the ranking member of the full committee, Mr.
Waxman, 5 minutes for an opening statement.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you very much Mr. Chairman.
The hearing today is called ``Making Medicaid Work For the
Most Vulnerable.'' I think that is a good topic. But I do want
to talk about what the Republicans have proposed. They have
proposed making Medicaid a block grant. So the States would be
told, this is the amount of money you would get, no more, no
less, you don't have to do anything, no requirements, do the
best you can. And if you can't afford to do what you have been
doing, well, you do less. That is up to you.
What the Republicans, in effect, are proposing is to shift
the responsibilities to the States, the cost to the patients
and providers, and avoid continuing a Federal responsibility.
Block grants, or per capita grants, increases in beneficiary
premiums and copays do not reduce healthcare costs, but simply
shift the cost onto the beneficiaries, providers, and States.
And they make it less likely that people will be able to access
care when they need it.
Are there things we can do to improve the program?
Certainly. One thing we could do is to make it a Federal
program, not have State differences, have a Federal Medicaid
program, guarantee that providers will get the same
reimbursement rates as the Medicare providers get paid. That
would improve the program. But I don't think that is something
that we are likely to hear much support for from the majority
party that is in control.
I think this is a good hearing to have. I know we have a
number of witnesses. I am particularly interested in hearing
from Mr. Weil on what the States have been able to do to make
the program innovative, effective, and efficient, cover low-
income beneficiaries within the flexibility afforded the State
Medicaid programs right now. Things the States can do today. I
believe Mr. Weil will tell us that States continue to advance
their Medicaid programs by implementing innovations, such as
the multipayer collaboratives to improve access to primary,
well-coordinated care; efforts to increase access to higher-
quality, lower-cost developmental and oral health services; and
others for the prevention of chronic disease.
Due to efforts like these, multiple studies have shown that
Medicaid enrollees have comparable access to care as those with
private coverage and much more reliable access than to those
who are uninsured. When we hear complaints about Medicaid, the
Republicans are forgetting that before Medicaid these people
were uninsured and didn't have access to any care. And under
the Medicaid program, if beneficiaries can get access with
lower cost sharing, if we make very poor people--which is the
bulk of who the Medicaid patients are--have to come up with
more money out of pocket, they just won't have access to care
because they can't afford it. Not only does the Medicaid
program ensure equal access to care, it operates with
efficiency. Medicaid costs are nearly four times lower than
average private plans.
And there are other proposals that I think will streamline
State payment systems, improve provider reimbursement
timelines, ultimately increase their participation in State
programs. One thing that I am very proud of is that at least we
are going to, for a couple of years, require that preventive
and primary care providers be paid the same rate as Medicare.
But we didn't make that a permanent change, which would make a
lot of sense. We put it in for a couple of years only in hopes
that after it is in, people will--either at the Federal level
or the State level--will try to keep it in place because it
makes a lot of sense. If we can't afford to pay everybody a
Medicare rate who serves Medicaid patients, at least pay those
for whom we would like people to have access the most, and
those are people who will provide primary and preventive care.
The Affordable Care Act expands the Medicaid program. I
think this is a good thing to do. And I am proud of the
Affordable Care Act. I think it is going to mean for millions
of people they are going to have access to care, access to
health insurance, whether it is through Medicaid, if they are
lower income, or through the purchase of a private health
insurance plan in the marketplace exchanges.
Let's stop complaining, let's make this law work because
the Republicans don't have anything to offer but driving costs
and shifting them over to people who can't afford to pay them
and thereby denying them the services they need.
Thank you, Mr. Chairman. Yield back my time.
Mr. Pitts. Chair thanks the gentleman.
That completes the opening statements of the members. We
have one panel today. I will ask them to take their seats at
the table. And I will introduce them at this time.
First we have Ms. Nina Owcharenko, director, Center for
Health Policy Studies of the Heritage Foundation. Secondly we
have Mr. Alan Weil, executive director of the National Academy
for State Health Policy. And finally, Mr. Tarren Bragdon,
president and CEO, Foundation for Government Accountability.
Welcome. Thank you for coming today. You will each have 5
minutes to summarize your testimony. Your written testimony
will be entered into the record. And so at this time, Ms.
Owcharenko, we will recognize you for 5 minutes for your
opening statement.
STATEMENTS OF NINA OWCHARENKO, DIRECTOR, CENTER FOR HEALTH
POLICY STUDIES, HERITAGE FOUNDATION; TARREN BRAGDON, PRESIDENT
& CHIEF EXECUTIVE OFFICER, FOUNDATION FOR GOVERNMENT
ACCOUNTABILITY; AND ALAN WEIL, EXECUTIVE DIRECTOR, NATIONAL
ACADEMY FOR STATE HEALTH POLICY
STATEMENT OF NINA OWCHARENKO
Ms. Owcharenko. Chairman Pitts, Ranking Member Waxman, and
members of the committee, thank you for having me today.
As has already been well noted, the challenges facing the
Medicaid program are not new. These challenges are unavoidable
and raise serious concerns about whether Medicaid will be able
to meet the needs of those who are enrolled in the program
today, especially the most vulnerable.
The program serves a very diverse group of low-income
people: children, pregnant women, disabled, and the elderly.
The Affordable Care Act adds to this growing government health
program by expanding eligibility to all individuals with
incomes below 138 percent of the poverty level. And unlike
traditional Medicaid, eligibility will be based on income
alone.
I see three major challenges facing Medicaid in the future:
demographic, structural, and fiscal.
The demographic challenges. With in the addition of the new
Medicaid expansion, the Centers for Medicare & Medicaid
Services' 2011 Actuarial Report on Medicaid projects that
nearly 80 million people--one in four--will be on Medicaid by
2021. By enrollment alone, children will remain the largest and
primary category of Medicaid enrollees, although it is worth
noting that as a result of the Affordable Care Act, the able-
bodied, non-elderly adults will be a very close second. But
while only 16 percent of total enrollment, 64 percent of
spending in 2011 was for the aged and disabled. As these
competing trends continue, Medicaid will be more diverse and
more complex to administer.
Structural challenges. Payment rates are one of the key
indicators for access and physician participation in Medicaid,
it has already been noted today. In its annual report to
Congress, MACPAC notes that while varying by State, Medicaid
fee-for-service payments to physicians are on average two-
thirds those of Medicare and even worse for primary care
services. A 2006 published survey found that 21 percent of
physicians reported that they were not accepting new Medicaid
patients while only 4 reported not taking new privately insured
patients and 3 percent reported not taking new Medicare
patients.
While the Affordable Care Act did provide Federal funding
to boost Medicaid payments for primary care physicians, that
funding, as has been noted, is temporary. And also as noted by
the MACPAC report, several States have already indicated that
it is unlikely that they will be able to maintain those new
rates. Therefore, access and quality issues will remain a
challenge for Medicaid beneficiaries in the future.
Fiscal challenges. Entitlements, including Social Security,
Medicare, and Medicaid, are fueling this country's spending
crisis. These three programs represent 62 percent of the
Federal budget in 2012 and will absorb all tax revenue by 2048.
By 2021, total Federal and State spending on Medicaid alone is
projected to reach $795 billion and 3.2 percent of GDP by 2021.
For States, which have to operate under a real budget, the
fiscal situation is no better. When the Federal contributions
are included, Medicaid is the largest budget item for State
budgets, representing 24 percent. In its recent fiscal report,
the GAO warned that absent any intervention or policy changes,
State and local governments would face an increasing gap
between receipts and expenditures in the coming years. This is
due in large part to rising healthcare costs for Medicaid, as
well as health benefits for government employees and retirees.
Although these fiscal challenges are well established, the
lack of action only makes the future outlook worse for Medicaid
and its beneficiaries. I suggest there are a few basic
principles that should guide efforts to addressing the key
challenges facing Medicaid.
One, meet current obligations. Rather than expanding to new
populations, attention should be given to ensuring that
Medicaid is meeting the needs of existing Medicaid
beneficiaries. Moreover, population should be prioritized based
on need first.
Two, return Medicaid to a true safety net. Medicaid should
not be the first option of coverage but a safety net for those
who cannot not obtain coverage on their own. Careful attention
should be given to transitioning those who can into the private
insurance market.
Three, integrate patient-centered, market-based reforms.
Efforts to shift from traditional fee for service to managed
care have accelerated at the State level, but more should be
done. Empowering patients with more choices and spurring
competition among providers, including insurers, will help to
deliver better quality of care at a lower cost.
Four, ensure financial sustainability. Similar to other
entitlement reforms, the open-ended Federal financing model of
Medicaid means reform. Sound budgeting at the Federal and State
levels should provide a predictable and sustainable path for
the program and taxpayers alike.
In conclusion, I think it is encouraging to see efforts
both in the House and in the Senate that are aimed at
addressing these serious challenges facing Medicaid's future.
With Federal and State policymakers working together,
meaningful change in Medicaid will ensure that the most
vulnerable are not left behind.
Thank you.
Mr. Pitts. The chair thanks the gentlelady.
[The prepared statement of Ms. Owcharenko follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. Now recognizes Mr. Weil for 5 minutes for an
opening statement.
STATEMENT OF ALAN WEIL
Mr. Weil. Thank you, Mr. Chairman, members of the
committee. I appreciate the opportunity to appear before you
today.
I am the executive director of the National Academy for
State Health Policy, a nonprofit, nonpartisan organization that
works with State leaders to promote excellence in State health
policy and practice. My own experience includes a cabinet
position in Colorado running the Medicaid agency.
Ten years ago I wrote that Medicaid is the workhorse of the
American health care system, and that characterization remains
true today. Unambiguous evidence demonstrates Medicaid's
success in providing access to care and relieving the financial
burdens associated with that care.
My testimony is a report from the field where I observe a
Medicaid program that is dynamic, continually evolving to meet
the changing needs of vulnerable populations, leading how care
is structured and delivered, and participating in
transformations of care delivery that are occurring around the
country.
For example, Medicaid has led the way in promoting the use
of developmental screening methods to identify children who
would benefit from early intervention services. The percentage
of children receiving such screening has grown from under 20 to
more than 30 percent. In North Carolina, it is 75 percent.
Nationwide, children with public health insurance are actually
more likely to receive critical developmental screenings than
children with private health insurance.
In 2000, Surgeon General David Satcher called poor oral
health America's silent epidemic. Medicaid programs around the
country are actively pursuing efforts to ameliorate this crisis
through early interventions in medical practices, not just in
dental offices. Washington State and Maryland, among others,
have innovative programs designed to increase access to dental
care for vulnerable children.
Medicaid is the Nation's primary payment source for long-
term services and supports, and now States are spending more
than a third of their long-term service budgets on home- and
community-based supports that meet people's needs more
effectively and more humanely.
In the area of eligibility and enrollment, Louisiana has
led the way in streamlining processes for Medicaid applicants
and those seeking to renew their coverage. Oklahoma launched
the Nation's first online realtime enrollment system for
Medicaid.
But some of the most exciting work in Medicaid is how it
works with other private and public programs. All but three
States now rely on managed care for delivering care to at least
some of their Medicaid enrollees. Two-thirds of Medicaid
enrollees receive most or all of their benefits in managed
care. And States are increasingly relying on mandatory managed
care programs in Medicare for more complex populations, such as
children with special healthcare needs and people of all ages
with a variety of disabilities.
Medicaid has been a leader in promoting the development of
patient-centered medical homes; 29 States have launched one or
more programs in Medicaid or the Children's Health Insurance
Program to promote patient-centered medical homes. In 18 of
those States, public and private payers and purchasers are
working together to support these medical home projects. And in
15 of those initiatives, Medicare is also a participant.
The health home model is an extension of the medical home
that integrates physical health, behavioral health, long-term
services and supports to meet the needs of the most complex
populations. A dozen States are pursuing these integrated
models with support from the Federal Government under the
Affordable Care Act.
Back in 2006, when Massachusetts reformed its healthcare
system, it took a blended personal health and public health
approach to smoking cessation services for Medicaid enrollees.
In Massachusetts, smoking prevalence among Medicaid enrollees
dropped by 26 percent in just 2 years, with significant health
cost savings as an added benefit.
Around the country, Medicaid programs are pursuing new
models of accountable care that encourage health care providers
to organize and coordinate care as they accept financial risk
and accountability for health outcomes. The structure of these
programs is as varied as the States that are pursuing them: New
Jersey, Minnesota, Illinois, Colorado, Oregon. The States are
taking approaches that meet their own needs. Twenty-five States
have received support to test or further develop comprehensive
multipayer payment and delivery system reforms through funding
from the Centers for Medicare & Medicaid Innovation State
Innovation Model cooperative agreements. These States are
pursuing the shared aim of better care and improved population
health at a lower cost, using their Medicaid programs as a
catalyst for system improvements that embrace not just
Medicaid, but Medicare and private payers and private providers
as well.
Medicaid is surely a complex program, but it is also a very
dynamic program. It is also surely open to improvement, as is
anything that we have created. But fundamentally, as I look out
at the experience of the States and what is going on out in the
field, I see a program that works for America's most
vulnerable.
Thank you, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman.
[The prepared statement of Mr. Weil follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. And now recognize Mr. Bragdon for 5 minutes for
an opening statement.
STATEMENT OF TARREN BRAGDON
Mr. Bragdon. Thank you, Mr. Chairman, members of the
committee. I serve as the CEO of the Foundation for Government
Accountability. We are a Naples, Florida-based free market
think tank specializing in State health and welfare policy
solutions.
Medicaid in its current form, or Old Medicaid, represents,
as you have heard, the single largest and fastest growing line
item in State budgets, consuming about one in four State
dollars. At the Federal level, Medicaid spending represents
about a quarter of deficit spending and is projected to double
over the next decade.
Given these cost projections, Medicaid is failing the
American taxpayer. But more importantly, it is failing the
patients that it is supposed to represent. Poor access to
specialists, the inability to personalize care, and perverse
eligibility requirements keep too many Americans poor and sick
and rob them of the hope of a better life. And for many
Americans, Old Medicaid is not a safety net, but it is a
tightrope, and patients are falling off every day.
Because of the Affordable Care Act, many States are
debating whether or not they should expand their broken Old
Medicaid systems. This debate is a misguided priority. The real
priority for States should be not expansion, but rather to make
Medicaid work for the most vulnerable. And Congress can help
State leaders by creating more flexibility at the Federal level
to do that.
When States have flexibility to innovate and reform Old
Medicaid, truly patient-centered care can be a reality. And one
of the many pro-patient strategies working in the States are
giving Medicaid patients the power to choose from several
different competing private plans. Old Medicaid typically
forces patients into one or two government-run plans, and this
government-centered approach ignores that Medicaid patients
have unique needs and individual concerns. But in States where
Medicaid patients have a robust choice of plans, such as
Florida, Kansas, and Louisiana, patients are our priority. For
example, in Florida's Medicaid Reform Pilot, patients can
choose from 13 different private plans and 31 different
customized benefit packages. A commonsense funding formula in
these States features risk-adjusted capitated rates so these
private plans earn more money to enroll sicker patients and
have the incentives to improve health and disincentives to
cherry-pick.
Because plans compete for patient enrollment, they also are
constantly striving to improve access to specialists, offer
more specialized services, and enhance their customer service.
And patients like this choice, with 70 to 80 percent of
Medicaid patients proactively choosing a plan rather than being
automatically assigned to one.
This choice structure also promotes better health outcomes.
Again, in Florida's Reform Pilot, the private plans in the
reform outperformed Old Medicaid on 22 of 33 widely tracked
health outcomes, and 94 percent of those health outcomes had
improved since 2008. And when this reform goes statewide in
Florida, taxpayers will save a billion dollars a year. And
similar savings are occurring in Kansas--a billion over 5
years--and Louisiana--$150 million in the first year. My
written testimony includes details of other strategies that
States have embraced, including integrating work with health
outcomes, promoting specialty plans, and unleashing innovation
to better serve patients.
But Federal rules and regulations can make it difficult for
States to innovate, including the slow and inflexible waiver
process, new taxes on private Medicaid plans, and additional
cost shifts to the States. Luckily, this committee is exploring
ways that Congress can make State reform easier and grant
additional flexibility, and many of these reforms are detailed
in my testimony, including allowing proven waivers to become
seamlessly incorporated into State plan amendments, providing
greater flexibility on mandatory and optional services, and
creating an off-ramp that lets patients safely transition off
Medicaid toward self-sufficiency in the hope of a better life.
To make Medicaid work for the most vulnerable, Congress
should recognize that proven pro-patient, pro-taxpayer
solutions are out there. And there are strategies that can make
it easier for State leaders and for patients to make Medicaid
work for both patients and taxpayers. And I am happy to discuss
that more in the questions. Thank you.
Mr. Pitts. The chair thanks the gentleman and thanks the
witnesses for their opening statements.
[The prepared statement of Mr. Bragdon follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. We will now begin questioning. I will recognize
myself 5 minutes for that purpose.
For the Nation's vulnerable citizens, having Medicaid does
not always result in good health care. Studies have shown that
while enrollment is growing rapidly, with more than 70 million
Americans enrolled in Medicaid at some point in 2012, access to
quality care is still a struggle for most. The new health care
law proposes the largest expansion of Medicaid in history, an
expansion that is clearly built on a framework that is already
failing to meet current obligations in helping our most
vulnerable citizens.
Mr. Bragdon, in your testimony you note that States should
be cautious in opting into Medicaid expansion. At this point,
the majority of States are either not expanding or are still
undecided. What are some considerations you would raise with
States that are still deliberating the decision to expand in
2014?
Mr. Bragdon. Thank you for the question.
When you look at States that have expanded Medicaid in the
past, the two States that have most closely replicated the
expansion of the Affordable Care Act are Maine and Arizona. And
the realities of those States were much higher per-person cost,
much higher per-enrollee cost, and many more people enrolling
than originally projected. And what happened was, as that
safety net was stretched further and further, those States
proposed and did cut services to the most vulnerable. Arizona
stopped covering heart and lung transplants. Maine proposed
cutting services to folks with brain injury and stopped paying
their hospitals altogether, mounting $400 million in unpaid
bills dating back over 5 years.
So what happens as States expand is the most vulnerable,
who tends to be higher cost, as was mentioned, the services are
cut back on those individuals first.
Mr. Pitts. Ms. Owcharenko, would you respond to that
question as well?
Ms. Owcharenko. Sure. I think the primary caution I would
give to the States is you have to take the long view of what
the future of Medicaid is going to look like versus just the
short view. I think the temptation of the bump in Federal
dollars to the States is a tempting offer, but it has a very
short-term impact. And I think States need to take the longer
view, not only for their own State taxpayers, but for Federal
taxpayers who their constituencies are as well. So looking at
what are the implications at the Federal level, understanding
that our country cannot survive on the spending path that we
have today.
Mr. Pitts. Now, in your testimony you mention some of the
innovations States are pursuing. From your experience, what are
some of the barriers that States face in pursuing new
innovative delivery models, such as those outlined in your
testimony?
Ms. Owcharenko. Well, I think one of the things that has
been mentioned by many of the folks here is the lack of
flexibility at the Federal level. Too many times the States
have to figure out which holes to jump through, how to get
things done. Even if we think that they are making progress
today under current rules, imagine what States could do if they
had greater flexibility to do more innovative projects without
having to have the constraint of all the Federal requirements
on there. I think that would probably be the best direction for
the States to take and the Federal Government to enable them
to.
Mr. Pitts. Each of you have highlighted the value of
managed care and increased care coordination in the Medicaid
program that moves us away from Medicaid's flawed fee-for-
service history, and it improves care and reduces costs. If
given one opportunity, what would be an important policy reform
to pursue that would allow for States to more easily pursue
managed care models for Medicaid? If each of you would respond.
Start with you, Ms. Owcharenko.
Ms. Owcharenko. I think expanding without having to do so
many waivers on the populations that could be included. I would
argue that the States know best when they are trying to develop
and deliver care to the most vulnerable, which groups they
think are best suited for the managed care approach.
I would also note, though, that it is not just good enough
to have one managed care plan. What you want is insurers
competing against each other. And so making sure that there is
competition and giving the patients the choice to choose I
think will alleviate concern that there may not be a plan that
is best suited for the most vulnerable.
Mr. Pitts. Mr. Weil.
Mr. Weil. The rapid movement of States in their Medicaid
population toward managed care makes it hard for me to see that
there is a major Federal barrier to reliance on managed care.
The primary area that remains a challenge is integration with
the Medicare program. We do have some demonstrations going on
right now designed to enable alignment of managed care plans
between Medicare and Medicaid. I think we are going to have to
see how that evolves. But that, to me, is the population that
faces the largest barriers in that movement.
Mr. Pitts. Mr. Bragdon.
Mr. Bragdon. Thank you. I think there are a few different
things. One, looking at the robust competition among private
plans. Nobody is suggesting that Medicaid not set the floor of
benefits that should be available in those private plans. But
as the plans build on top of that, you can provide much more
comprehensive care that Old Medicaid does not. For example,
Kansas added a dental benefit when they moved to a private
plan. GED services so that individuals could ultimately get the
best safety net, which is a good-paying job. Florida shows how
when you give people choice and choice counseling, which I
think is an important component, so that patients understand
the differences among those private plans.
I think lastly, there is this debate over mandatory versus
voluntary private care. But when you look at how patients vote
with their feet, patients appreciate having robust choices of
several different private plans. In Kansas, Native Americans
are given a choice of whether to choose from one of the three
different private plans or opting back into Old Medicaid. Out
of 4,000, only 12 stayed in Old Medicaid. Louisiana, 0.3
percent of people voluntarily chose Old Medicaid versus five
different private plans.
Mr. Pitts. Thank you.
The chair recognizes the ranking member, Mr. Sarbanes, for
5 minutes for questions.
Mr. Sarbanes. Thank you, Mr. Chairman. I want to thank our
panelists today.
Mr. Weil, Ms. Owcharenko mentioned challenges to the
Medicaid program. And I didn't hear that that necessarily
formed an indictment of the program overall, but it just laid
out what some of the challenges are. I wanted to get maybe your
reaction to those challenges, whether you think the Medicaid
program can handle them.
So the first one obviously is the demographic challenge
that is coming at us, particularly the baby boomer generation
and the implications that has for the Medicaid program, and
this notion of competition within the diversity of the pool of
beneficiaries that is covered by the Medicaid program. These
are realities we are going to have to deal with. My sense is an
expanded Medicaid program that we are trying to make better
every day is going to be best equipped to handle that
challenge.
She spoke of structural challenges--for example, relating
to payment rates. Did acknowledge that in 2013 and 2014 there
is an attempt made to achieve 100 percent parity with Medicare
rates for primary care. That is a good step in the right
direction. And then spoke of the fiscal challenges ahead of us,
with entitlement programs or, as I often refer to them, earned
benefit programs in some instances.
But your testimony suggested that in some ways Medicaid is
on the cutting edge with respect to innovations that not only
can improve care, particularly care that one might put under
the heading of sort of public health. When you look at
children, developmental screening, where what the Medicaid
program does is really cutting edge, ahead of both the
commercial arena and potentially even Medicare there. The
dental care for children and patient-centered medical homes.
Among many examples you gave, these are things--particularly
the last one I mentioned--that can improve efficiencies and
save costs over the long run. And it is really because of ACA
that we are going to see some opportunities for that.
So can you address these challenges, the demographic,
structural, fiscal, and other challenges you see, and why an
expanded Medicaid program in some ways may be best equipped to
handle them?
Mr. Weil. Thank you, Mr. Sarbanes, for the question.
The demographic challenges are real. They affect Medicare
as well as Medicaid. We can't ignore the reality that we are
aging and they will increase the average cost per person.
But I think against that backdrop it is worth noting that
despite aging of the population, the Medicaid nursing home
census has stayed flat despite the aging of the population,
that our use of home- and community-based services grows, and
some leading States have really shown us how to not just
prevent people from going into nursing homes in the first place
but help them come home even after they have been resident
there for some time. Washington State is a leader in that
regard.
With respect to your question about expansion, I think we
need to be careful about what I heard the repeated use of the
term able-bodied adults, as if somehow they don't need health
insurance. If they are not sick, then the good news is they
won't cost us any money. So we shouldn't be so worried about
providing them with coverage. But everyone gets sick, sometimes
more than others, or they may have chronic conditions that are
untreated, that getting them early care will actually reduce
the overall cost. And we know there is growing prevalence of
chronic conditions, particularly among the target populations
in the Medicaid expansion.
The issue here is, are we going to move this population
into a system where there is someone responsible for managing
their care, a State and Federal Government responsible for
paying, and usually a private plan--and I should note, most
States offer their Medicaid enrollees a choice of plans--a
private plan that is interested in maintaining health or do we
just leave them the alternative? The only alternative I am
aware of is that they are uninsured and no one is accountable
for improving results.
And similarly, I will readily admit that Medicaid payment
rates are below commercial and in some instances below Medicare
rates. But again, I think we have to ask, compared to what?
These are people who would otherwise be uninsured. There would
be no payment source for them. There are mission-driven
providers and other providers that have a broad cross-section
of patients that understand that they are going to subsidize
care for some in order to serve others. And Medicaid helps
alleviate the burden, although it does not completely eliminate
it.
So these are challenges. But my experience is that States
observe them, look ahead, and are doing what they can to tackle
them within the design of the current program.
Mr. Sarbanes. Thank you very much. I yield back.
Mr. Pitts. The chair thanks the gentleman.
Now recognize the vice chairman, Dr. Burgess, for 5 minutes
of questioning.
Mr. Burgess. Thank the chairman for the recognition.
Ms. Owcharenko, let me ask you, we have heard it mentioned
several times in the opening statements and I believe in your
testimony about low provider rates and how that affects access
for Medicaid patients. So low provider reimbursement rates.
Medicaid is a shared Federal and State responsibility. So how
can the Federal Government ensure provider rates are set at
levels that will encourage participation?
Ms. Owcharenko. Well, I think one of the points is that you
have to contrast it with the fiscal challenges. So if you have
provider payment issues, you are not paying providers enough,
then the easy solution is to say, well, just pay them more.
Well, to pay them more you have to pay for that, and so someone
is going to have to pay for that. The States have decided in
many instances they are not willing to spend the money to the
Medicare levels; otherwise, they wouldn't have had the Federal
Government come in for the temporary boost.
The challenge is, what happens when that boost is gone? Can
the Federal Government continue to provide that type of a level
of reimbursement? I think that is the whole problem we have
with Medicaid in the long term, is it sustainable from a fiscal
standpoint?
Mr. Burgess. Well, let me just ask you, for that 2-year
interval, who is responsible for paying those increased rates?
Ms. Owcharenko. Well, the Federal Government. Well the
Federal taxpayers are paying that.
Mr. Burgess. Then past 2015?
Ms. Owcharenko. It will go back to the States. And as the
MACPAC study said, many States are already saying that it is
doubtful that they will be able to keep and sustain that level.
So the challenge will be, the States will be back here in
Washington saying, we need more Federal dollars, and we don't
want them temporary, we want them permanent. Well, then, the
Federal Government is going to have to find the money, if they
are going to go down that road. And I just would argue that the
Federal Government doesn't have the money today to be
continuing that type of spending.
Mr. Burgess. We have actually seen that movie before. The
stimulus, in February of 2009, provided an 18-month bump-up in
Medicaid reimbursement rates, as it was about to run out in
August of 2010. As I recall, we had to have an emergency
meeting of Congress in the middle of the August recess--one of
the few times that has happened, except for war and
pestilence--and the purpose of that was to pass a supplementary
stimulus bill to augment those Medicaid rates. For the record,
I voted against it both times.
Let me just ask you a question, because we are looking at
the--you have States that have agreed with Medicaid expansion
and some that have not. Now, the Supreme Court in their wisdom
said that you could not make acceptance of the standard
Medicaid, regular Medicaid contingent upon the acceptance of
the expansion. So States actually have some leeway there. The
deadlines for the exchanges, since this expansion of Medicaid
was not set in Federal statute but rather by a court directive,
there are no dates, there are no drop dead dates for the
States. So actually, wouldn't a State be well advised to see
what happens in a few other States before they jump into this?
Ms. Owcharenko. I think with the complexity that we see the
healthcare law facing, I think it would be wise for States to
think again for the long term and see how this plays out. I
think this will be an annual debate I think moving forward as
well.
Mr. Burgess. But at this present time, there is no penalty
for a State that says, not now.
Ms. Owcharenko. That is correct. That is correct.
Mr. Burgess. And they can always revisit it in subsequent
legislative sessions in the future.
Ms. Owcharenko. That is correct.
Mr. Burgess. When you get back to getting the providers to
get back into the system, I can remember in Texas in the early
1990s, the State said, look, we will cover your first $100,000
in medical liability claims for Medicaid patients if you agree
to see a certain number. That program did not last very long. I
presume it was a cost-related factor. But it seems that
something along those lines, to encourage providers to come
back into the system, would make a great deal of sense.
Is there flexibility built into this Medicaid expansion
that would allow States to do that?
Ms. Owcharenko. I am not familiar with any at this time.
But the other panelists may know more than I do on that.
Mr. Burgess. Mr. Weil, let me ask you a question, because
you mentioned something about the Center for Medicare &
Medicaid Innovation and the use of--what did you describe it
as, multipayer systems? Could you provide us a reference for
that? I would be interested in what the data was that CMMI used
to make that determination, how much money was forwarded in
those grants. Do you have that information available? If not
today, could you make it available to us?
Mr. Weil. Yes, Mr. Burgess. I would be happy to. That is
public information. We are quite early in these cooperative
agreements. But the States that were awarded them, what they
intend to do with the funds, that is all public. It is
available from CMS, and I am happy to supply it to you.
Mr. Burgess. All right. I would appreciate you making that
available. My experience with CMMI has not been that great. It
seems to be a bureaucracy that not even a bureaucrat could
love. But I would be interested in what you base those
statements on.
Thanks, Mr. Chairman. I will yield back.
Mr. Pitts. Chair thanks the gentleman.
Now recognize the distinguished ranking member emeritus,
Mr. Dingell, 5 minutes of questions.
Mr. Dingell. Mr. Chairman, I thank you for your courtesy,
and I commend you for holding this important hearing today.
Medicaid is a critical program. It provides health
insurance to the most vulnerable in our society. Many States,
including my own State of Michigan, are currently deciding
whether to expand their Medicaid programs under the Affordable
Care Act. I believe expanding the program was the right thing
to do because it is going to expand health care to millions of
Americans who desperately need it.
These questions are for Mr. Weil of the National Academy
for State Health Policy.
Mr. Weil, in your testimony you note that Medicaid is a
source of insurance coverage for one out of three children. Is
that correct? Yes or no?
Mr. Weil. Yes, sir.
Mr. Dingell. Now, Mr. Weil, children and their parents
account for 75 percent of Medicaid enrollees. Is that correct?
Yes or no?
Mr. Weil. Yes, that is correct.
Mr. Dingell. And this population accounts for only 34
percent of the spending in the program. Is that correct? Yes or
no?
Mr. Weil. Yes.
Mr. Dingell. One area where Medicaid has been very
innovative is the area of developmental screening for children
which helps promote early detection and prevention of
healthcare problems? Mr. Weil, how many States require Medicaid
providers to perform developmental screenings on children as a
part of routine exams? I believe the number is 14. Is that
right?
Mr. Weil. That sounds right.
Mr. Dingell. They are not, however, required to require
this kind of work. Is that correct?
Mr. Weil. That is right.
Mr. Dingell. Now, Mr. Weil, recently we have seen the
national percentage of children receiving developmental
screening rise from 19.5 percent in 2007 to 30.8 percent in
2012. Is that correct?
Mr. Weil. Yes, sir.
Mr. Dingell. This is a great improvement, and I believe
Medicaid's innovation in this area has helped increase the
number of children that undergo developmental screening tests.
Mr. Weil, is it correct that a child with public health
insurance is now more likely to receive a developmental
screening than a child with private insurance? Yes or no?
Mr. Weil. Yes, it is.
Mr. Dingell. Now, Mr. Weil, oral health is another area
where State Medicare programs are successfully implementing
innovative programs and are seeing positive results. Isn't that
so?
Mr. Weil. Yes, it is.
Mr. Dingell. Now, Mr. Weil, do you believe that the reforms
in North Carolina and Washington, with which I think you are
familiar, which you described in your testimony, have led to
positive health outcomes and are models for other States to
follow. Is that right or wrong?
Mr. Weil. Yes, it is.
Mr. Dingell. Now finally, a recent study in the New England
Journal of Medicine studied the impact that expanding Medicaid
has on mortality rates. So, Mr. Weil, do you agree with the
conclusion of this study that expanding Medicaid will lead to
lower rates within the States that do it? Yes or no?
Mr. Weil. I believe the strongest evidence says that
expanding Medicaid will reduce mortality. That is correct.
Mr. Dingell. I very much thank you for this.
I believe Medicaid brings real health benefits to our
vulnerable populations. The States are currently coming up with
new, innovative strategies to improve access to care.
As States across the Nation, including my own State of
Michigan, are debating whether to expand Medicare or not, I
hope they will look at this evidence as how the program is
working to improve health outcomes for millions of Americans.
States should also consider the financial benefits for
expanding Medicaid as well. Michigan alone could save $1
billion over the next 10 years if they chose to expand
Medicaid, which I hope they will do.
I hope this committee will continue to examine this issue
in a bipartisan manner.
Mr. Weil, you have been most helpful to us.
Thank you, Mr. Chairman. I yield back 1 minute and 15
seconds.
Mr. Pitts. The chair thanks the gentleman. I now recognize
the gentleman from Georgia, Dr. Gingrey, for 5 minutes for
questions.
Mr. Gingrey. Mr. Chairman, thank you.
Let me--I want to address the first question to Ms.
Owcharenko. Much has been said that the Medicaid waiver program
offers States all the flexibility that they need to improve and
reform their programs, the existing waiver program.
As you know, this administration is a strong supporter of
the Medicaid population expansion, you said up to 138 percent
of the Federal poverty level. May there be an opportunity for
the administration to intentionally withhold waiver
determinations if the State does not get with the program and
expand?
Ms. Owcharenko. I can't speculate, but we do know the
waiver process is long and cumbersome, and you don't know when,
there is no time limit on how long a process may take or the
complexity of the waiver. But we also need to recognize, too,
that the waiver is dictated by the statute. There are only
certain things that can be waived and so to the point that you
want to do something above and beyond what the statute allows
you to, that still is a limitation, but I can't speculate.
Mr. Gingrey. Well, Mr. Chairman, we have seen this
administration continually use almost coercive methods to aid
implementation of the law. Allowing Medicaid waivers as the
only process for States to innovate seems to offer the
administration a situation ripe for abuse. This is why we need
to repeal the Medicaid and CHIP maintenance of effort
provisions and give States a chance to truly innovate.
Continuing along that line, the maintenance of effort
provisions in Obamacare have not only been costly, but they
have been a barrier to reforms. That is why I introduced H.R.
1472, the State Flexibility Act to repeal PPACA Medicaid and
CHIP provisions in the President's health care law, repeal the
maintenance of effort.
In these difficult fiscal times, States often must make
cuts to other non-mandated programs, such as education, because
they don't have the flexibility to improve their existing
Medicaid programs. In other words, get rid of people that are
on the rolls that shouldn't be there that maybe 2 years ago, 3
years ago, prior to PPACA, these people were eligible but now
they are making $75,000 a year, and they are frozen on the
program.
Would you please explain to the panel how these provisions
increase costs to both the States and the Federal Government
and actually hamper patient outcomes?
Ms. Owcharenko. I would say that the maintenance of effort
freeze really does take a tool out of the toolbox that States
have to work within their budgets within their means and within
their budgets to provide the care to who they feel are the most
vulnerable and the most needy. Again, getting back to the
flexibility for the States, I think the closer the policymakers
are to what is going on on the ground at the State level, the
better are suited in deciding who should get the care, where
the adaptation should be, where we can scale back maybe, or
where policy should be increased.
Mr. Gingrey. Well, I'm just thinking that if they didn't
have that maintenance of effort provision and they were able to
kind of clean up the rolls, if you will, then maybe some of
these States would be willing to expand, because they wouldn't
be throwing money at people that really don't need it. Mr.
Bragdon, would you care to comment on that as well?
Mr. Bragdon. Thank you. I think that you are touching on an
important point that when you look at how States can customize
their Medicaid programs, that you need different solutions for
different populations, and you also need a very dynamic
toolkit, if you will.
In Florida, for example, the average single mother who is
on welfare, or on TANF and receiving Medicaid is on the program
for 5 months. And so for those individuals, it is also about
creating some sort of off-ramp, because what happens now is you
are on Medicaid, you may be in a private plan you like, but
there is no ability to keep that private plan once you go off
the program, there is no ability to even become aware of what
is available to people----
Dr. Gingrey. I'm going to interrupt you because I just have
30 seconds left. I want to make this comment. And I thought
about this of course 3 \1/2\ years ago right here when we were
in the minority on the side when this bill was being developed,
and this Medicaid expansion, up to 138 percent of the Federal
poverty level, where would those people get their care if they
were not eligible for Medicaid? They would get it on the
exchanges and the provision that goes to them would be all
Federal dollars. They wouldn't be State dollars. So it is
really a game of moving the hat around to see where the pea is.
You clearly, that was a setup so that there would be less
Federal costs and more burden on the backs of the States. And I
yield back.
Mr. Pitts. The chair thanks the gentleman.
The chair now recognizes the gentlelady from Florida, Ms.
Castor.
Ms. Castor. Thank you very much, Mr. Chairman.
Thank you to the panel.
This is a very important topic, and as Mr. Weil testified,
there are so many exciting innovations going on all across the
country when it comes to Medicaid that is the lifeline for
families and seniors and children and disabled.
I have wanted to, I think it is very important that we
share and understand what is happening in these innovations. We
do this on a regular basis for those that are interested in the
children's health care caucus that I co-chair with Republican
Congressman Dave Reichert from Washington State where we
educate staffers across Capitol Hill, other policymakers,
Members, and we have another of our Medicaid matters for kids
sessions this Friday here in the Rayburn building at 12
o'clock, and I would like to thank First Focus Campaign For
Children, all the children's hospitals across the country, the
pediatricians, the Kaiser Family Foundation for helping to
organize these very important Medicaid educational sessions.
The one on Friday is called ``Unlocking Ideas to Improve Care
For Kids on Medicaid.''
One of the most exciting innovations I know of in Florida
in my home town at St. Joseph's Hospital is their complex,
their chronic complex clinic for children. It has been running
for 12 years now. It provides continuous comprehensive and
coordinated care for the most medically needed children in our
community. The clinic was organized after years and years of
watching children cycle through the emergency room without a
real focus on their ongoing health care needs. The hospitals
desperately wanted someone to provide them with coordinated
care. So the clinic came together. It now serves over 1,000
children in the Tampa Bay area with a great team of
pediatricians, pediatric nutritionists, nurses, social workers
and many others. The families in my area love this clinic. And
we also appreciate the fact that it saves $6,000 per patient
per year in hospital costs alone and some national studies say
that we are saving closer to 10,000 a year. That is one of the
innovations that I am excited about.
Mr. Weil, name another one where you, where things are
going right under Medicaid, this important Federal/State
partnership.
Mr. Weil. Well, I think some of the most exciting work is
in the area of patients in medical homes and health homes where
what we are trying to do is take a health care system, not just
in Medicaid but in the system at large that primarily sends its
resources to the most expensive settings for care for
hospitals, for institutional care and build out, as you
described in the scenario you described, build out an
infrastructure of the kind of care people need at a better
touch, it is closer to the community, it is less expensive, it
is less episodic, it is more continuous, and also, and I think
some of the best innovations going on now are about bringing in
mental health into how we think about delivering health care.
We have traditionally had very strong lines and barriers
between these systems, different funding streams, different
programs, and we are understanding that people with untreated
mental health conditions cost more in physical health, and that
the relationship between the two requires a different model of
care. We are seeing it in oral health. I including included a
few examples in my written testimony.
And what is great about these kinds of innovations is that
Medicaid is a part, sometimes it is a leader, sometimes it is a
follower, but most providers of services within Medicaid also
provide services to privately covered folks, and if they are,
if it is not pediatric care, they are usually in Medicare as
well.
So the interesting exciting innovation, the most
interesting exciting, from my perspective, is when Medicaid is
part of a broader conversation across public and private payers
and providers, physicians and hospitals and others to
fundamentally rethink how people get care, and then pays in a
way that supports that as opposed to just writing checks for
services that people need.
Ms. Castor. I think you are right. I think you are right.
And Mr. Bragdon, I know you did not mean to mislead this
committee by heralding the great success of Florida's Medicaid
privatization. The statewide waiver was just approved a couple
of weeks ago. So be careful when you testifying in front of
Congress. And then the pilot program of Medicaid privatization
was known as a real disaster. The State's own study condemned
the results. We had patients unable to gain access. We had
providers, private providers leave the State.
So be careful when you testify before Congress and saying
this is a great success when the evidence and everyone across
the board has really condemned what has happened. We are more
hopeful with the new waiver and privatization, it is like night
and day. There are broad new conditions for consumer
protections. Providers, if they back out and leave, are going
to be penalized, their medical loss ratios.
So those are some of the innovations that can happen with
that important Federal/State partnership. But you have got to,
you really have to do your homework on what has happened in the
past and what is actually happening moving forward. Thank you.
Mr. Pitts. The gentlelady's time has expired. The chair
recognizes gentleman from Louisiana, Dr. Cassidy 5 minutes for
questions.
Mr. Cassidy. Thank you, Mr. Chairman. Mr. Weil, I am a
doctor who takes care of Medicaid patients in a public hospital
clinic, so I am very familiar that Medicaid can actually have a
beneficial effect. But I think there are some things kind of in
the interest of Ms. Castor's kind of fact check sort of thing.
Let's first talk about the paper that Mr. Dingell
referenced that showed an all-cause decreased mortality after
Medicaid expansion. Now, I happened to have read that article
and I happened to know and I looked it up just to confirm. In
Maine, actually mortality increased after Medicaid expansion.
The authors point out only in New York was there a
statistically significant effect of decreased mortality, and
that overwhelmed the increased mortality in Maine and the no
significant effect in Arizona.
So would you disagree with that table which I am looking
straight at or would you acknowledge that, indeed, it is only
one-State specific and indeed, if we were to look at Maine, we
would actually see an increase in mortality after Medicaid
expansion?
Mr. Weil. I will happily defer to you looking at the table
and say that as you know as a clinician, you never want to take
your conclusions too far based on one or two studies and I
think we are right now in an environment where people are
looking at one or two studies and using it to caricature a
program. So I appreciate your clarification very much.
Mr. Cassidy. Secondly I also point out and you were very
careful in your testimony to say that Medicaid prevents people
from having financial duress, but you did not make the claim
that it improves health. And again, as you and I both know the
National Bureau of Economic Research found in their Oregon
study that when, and I am quoting from their conclusions, this
randomized controlled study showed that Medicaid coverage had
generated no significant improvements in measured physical
health outcomes in the first 2 years, but it did reduce
financial strain.
So it also makes it clear that the best study from NBER has
shown that Medicaid expansion did not improve health outcomes.
And lastly I will say that in your--by the way, I enjoyed
everybody's testimony and I don't mean to challenge, I am just
trying to point this out, you seem to suggest in your testimony
that the choice is dichotomous, either somebody is uninsured or
they are on Medicaid. But then I will quote another National
Bureau of Economic Research study, again, by Mr. Gruber, who is
a big backer of Obamacare, who points out that 60 percent of
the children that go on to a public insurance program actually
formally had private insurance but the expansion of the public
insurance crowded out, if you will, the private insurance so it
is not the employer or the family paying the bill, it is now a
taxpayer paying the bill. And that is 60 percent.
Any comments upon that because again, it is not--you know
where I am going with that.
Mr. Weil. Well, I do have to begin by commenting on your
characterization of the first study. First of all, there were,
as you know, demonstrated positive effects on depression, so
the physical health word is important. But I don't think it
shows that it did not improve outcomes. I think it didn't show
that it improves outcomes. And I think those are actually quite
different. We don't----
Mr. Cassidy. But if questions take the no hypothesis we
really cannot claim a benefit unless the benefit was shown.
Mr. Weil. I completely agree with you. We cannot claim a
benefit unless the benefit is shown. That does not equate with
the absence of benefit, it simply means we were unable to show
a benefit. And since you are being very careful, I am going to
ask that we be equally careful in that regard.
The literature on crowd-out which used to be a very hotly
debated topic and has faded from view for some time has great
complexity about what you count as the numerator and the
denominator. We know that low and moderate income people and
families, their income fluctuates and they do gain different
sources of coverage, although the prevalence of private
coverage----
Mr. Cassidy. I only have a minute left.
Mr. Weil. I am sorry. My sense would just be, I don't think
that we can state on the basis of the Gruber study that 60
percent of those children would still have private coverage if
they did not public coverage.
Mr. Cassidy. Maybe. I will say they had 400,000
observations, and Gruber obviously is, one, respected and, two,
a big backer of the Obamacare, so it is not like he is trying
to find something to trash himself.
Lastly, is there a philosophical difference if a State is
going to manage care and they are going to capitate payment to
the insurance plan, is there any difference in facts that if
the Federal Government gives only a set amount of money to the
State, which, in turn, gives a set amount of money to the
insurance plan? Is there any kind of difference in that?
Mr. Weil. Well, yes, a plan organizes and finances the
delivery of care. A State organizes the policy environment for
that finance and delivery, so they are akin, but I think they
have different effects.
Mr. Cassidy. But if you give $100 to the State to care for
somebody and the State gives $90 to the insurance plan, that
really is the same mechanism, the capitated payment in each
case.
Mr. Weil. If 100 percent of the cost were through
capitation, and it was just who wrote the bill, then I would
agree it is the same, but that is not how I see the program.
Mr. Cassidy. OK, that may be an issue of perception. I
yield back.
Mr. Pitts. Mr. Bragdon, did you want to respond to Ms.
Castor's remarks regarding Florida reforms? I apologize that
she had to leave, but I wanted to give you an opportunity to
respond quickly. Please.
Mr. Bragdon. Thank you, Mr. Chairman, I appreciate the
opportunity.
In my testimony, I referred to the Florida reform pilot.
The facts are very clear: The Florida reform pilot outperformed
on health outcomes in 64 percent of the cases. It had higher
levels of patient satisfaction in 82 percent of the cases. But
perhaps the best validation of how this approach of patient-
centered pro-patient/pro-taxpayer is working is the fact that
the Obama administration approved the waiver.
This is a proven bipartisan approach that saves money,
improves health and produces more satisfied patients. And would
be happy to provide further information to the Congresswoman so
she can understand that.
Mr. Pitts. The chair thanks the gentleman. The chair now
recognizes the gentlelady from Virgin Islands, Dr. Christensen,
for 5 minutes for questions.
Mrs. Christensen. Thank you, Mr. Chairman, and thank you
for the hearing, and welcome to our panelists.
And Mr. Weil, my first question was really about Medicaid
flexibility, but I think your testimony and the answers that
you have given really have demonstrated that flexibility and
innovation are not only possible, but they are happening in
different States across the country and improving access and
actually in some of the cases you cited, improving outcomes as
well. Improved outcomes is what we are all looking to achieve
here.
I am sure that all of you are familiar with the 2002 IOM
Report on Unequal Treatment, a report that demonstrated bias
and discrimination in health care, in the health care of racial
and ethnic minorities, still in other studies, more recent
studies since that have demonstrated the same as it relates to
cardiac care and other medical conditions.
We know that racial and ethnic minorities make up at least
58 percent of non-elderly Medicaid enrollees. And in addition
to that, the prior low reimbursement rates, limited accesses to
providers, and even when there were providers, some of the
needed ancillary services were not available in the
neighborhood because of how Medicaid was paid for before the
Affordable Care Act.
So Mr. Weil, don't you think these factors have some impact
and import on whether, even with Medicaid being available and
access to health care being available, don't those factors
parallel? We haven't even talked about the socio and economic
determinants of health that are not changing in those
communities.
Mr. Weil. Well, I appreciate the question and the
observation. I am struck by how frequently I hear people repeat
the phrase that Medicaid is a lousy, broken program because
people on it, and then they fill in the blank. The people on it
are poorer and sicker and disproportionately nonwhite, and as
you indicated there is a strong evidence based in all of those
areas that health outcomes are worse regardless of source of
coverage, and very rarely do people make an effort to actually
control for it, because it is impossible to control----
Mrs. Christensen. Even regardless of income level and
education level.
Mr. Weil. So we know, for example, that lower income
Americans are less likely to use health care services whether
they have private or public coverage because they are less
comfortable--on average, they are less comfortable with the
system, less able to navigate it, and providers seeking payment
are less likely to locate in the places where they live. To
indict the Medicaid program for the outcome of that seems to me
a bit odd.
Mrs. Christensen. I agree and thank you because when those
inequities are addressed then the socioeconomic determinants of
health when they are addressed in poor and racial and ethnic
minority communities and rural communities, and some of the
reforms that you have cited in the different States are more
widely adopted, I think we will see those changes. And we are
seeing changes where those things are happening. They are
really making a difference in improved care for vulnerable
patients for whom Medicaid has been their lifeline.
The Affordable Care Act recognizes that we needed to begin
to make Medicaid a stronger safety net. The law, along with
State changes, is already beginning to make a difference. The
Republican-recommended reforms really are not designed, as I
see it, and I am a practice, I was a practicing family
physician to help the vulnerable. I think they run the risk of
reducing access to care and leaving some of our most vulnerable
out of the health care system entirely.
Let me see if I can fit in one other question.
The Affordable Care Act includes a provision which will
provide additional payment to certain Medicaid providers for
primary care services. What impact on access to primary care do
you believe that this policy will have? And what other steps
can we take to improve access to these important services for
our most vulnerable? Dr. Weil.
Mr. Weil. Well, higher payment is certainly a positive,
although its temporary nature I think is going to limit the
behavioral response on the part of physicians. It is unlikely
they are going to fundamentally change where they practice or
how they practice for an incentive that they know will last a
short period. I think it is important to think of that as a
step, as an imperfect step in broader efforts to reorient
health care system spending toward primary care and it, in and
of itself, is not going to achieve fundamental----
Mrs. Christensen. It is 2 years probably because we had to
reduce the cost of the bill, and we had to reduce the cost of
the bill because we could not score the prevention, the savings
from prevention which is something we still need to do. Thank
you, Mr. Chairman.
Mr. Pitts. The chair thanks the gentlelady and now
recognizes the gentlelady from North Carolina, Mrs. Ellmers for
5 minutes for questions.
Mrs. Ellmers. Thank you, Mr. Chairman, and thank you to our
panelists today. I do want to talk a little bit about the North
Carolina programs that are moving forward. I am very proud of
the work that they are doing in North Carolina. Over, it has
grown 90 percent over the last decade from less than 8 billion
annually just a decade ago to more than 14 billion annually as
of 2012. North Carolina spends more per person on Medicaid than
any of its Southern State neighbors. Recognizing North
Carolina's Medicaid failures, Governor McCrory has proposed
reforms outlining the State's partnership for a healthy North
Carolina. And I commend him for his work, and also, North
Carolina Health and Human Services chairwoman, Dr. Aldona Wos,
for the work that she has done, and I echo the words of
Representative Bert Jones in North Carolina calling it a win-
win-win situation because it benefits the patients, it benefits
the health care providers, and the taxpayers of our State.
With that, I do want to expand a little bit on the Florida
issue, because North Carolina is looking at Florida.
And I do have a question, Mr. Bragdon, for you in relation
to some of the discussion that has already gone on. Is it not
true that Florida's Medicaid reform demonstration was approved
8 years ago, but only last month did the State receive final
approval to go forward with the State reforms? Is that part of
the situation that we are talking about?
Mr. Bragdon. Thank you for the question, Congresswoman.
Florida started a reform pilot in five counties, it covered
300,000 individuals, moms and kids as well as those who are on
SSI. And then 2 years ago, the legislature voted and the
Governor submitted a waiver to expand that reform pilot to all
67 counties.
Mrs. Ellmers. So it was expansion?
Mr. Bragdon. Correct.
Mrs. Ellmers. Great. So basically obviously we are talking
about tough times here, scarce resources, drastically growing
enrollment levels. States need to know that they can move
forward with reforms, and I know that is part of the discussion
that we have been having today.
Unfortunately, they are currently forced to live under the
``maybe'' or wait-and-see approval Federal agency process that
takes years to find out whether or not their demonstration
projects can be approved.
From your perspective, Mr. Bragdon, what can be done to
improve the Medicaid reform review process by CMS? I am sure
that is kind of a broad answer, but if you can give a couple of
pointers.
Mr. Bragdon. Thank you for the question. I think first and
foremost, States need predictability. You have in the State
plan amendment, which is an administrative filing, you have
predictability, there are set time frames, if the Federal
Government does not act, it is deemed approved. What happens
with a waiver is there is no time limit and therefore CMS can
drag its feet. In the case of Kansas, CMS approved the waiver 2
days before implementation began.
So what we are seeing is States are playing a game of
chicken with the Federal Government moving forward with
implementation with the hope that CMS will act at the last
minute, otherwise there will be all this wasted effort.
Mrs. Ellmers. Ms. Owcharenko, I have been practicing your
name. Do you want to expand on that at all? Is there anything
that you would like to add to that?
Ms. Owcharenko. I think that Tarren made a great point
about predictability, and I think that this is one of the
things that does have bipartisan or nonpartisan issue which is,
how can you improve the innovations that are happening in the
State faster so that you get more results so that people can
study the results to say does this work? Does this not work?
And I think that that is one thing I think that people can come
together to look at is how do you speed up the process, and
allow a lot more innovation at the State level without having
the barriers.
Mrs. Ellmers. Keeping that in mind, right now with Medicaid
enrollment at over 70 million, one in four Americans expected
to become a Medicaid beneficiary as a result of the ACA, do you
believe there are measures in place to ensure proper eligib--
after a week being back in North Carolina I can't speak today--
eligibility verification?
Ms. Owcharenko. I think that it is actually even before the
Affordable Care Act, the trend has been going in the opposite
direction with presumptive eligibility, express lane
eligibility, those things kind of move in the opposite
direction. I think with the massive complexity of this health
care law, I think it is important that there are some stronger
eligibility processes in place, not only for Medicaid, but on
the exchange side as well.
Mrs. Ellmers. Thank you so much. Mr. Bragdon, I have about
one second. Is there anything you would like to add?
Mr. Bragdon. Ditto.
Mrs. Ellmers. Thank you, and I yield back the remainder of
my time.
Mr. Pitts. The chair thanks the gentlelady and now
recognizes the gentleman from Florida, Mr. Bilirakis.
Mr. Bilirakis. Mr. Chairman, I thank you for holding this
hearing, and I thank the panel for the testimony.
Mr. Bragdon, under the current law the system seems to be
rigged to maintain the status quo in my opinion. If a State
tries to reform the system to increase outcomes and reduce
costs, they typically don't see most of the savings. How can we
transform the system to incentivize States and allow them a
greater share of the savings?
Mr. Bragdon. Thank you for the question, Congressman.
I think that this is really a key factor that is holding
States back from innovating. States get to keep only about 40
cents of every dollar that they save, or in the case of
expansion, 10 cents out of every dollar that they save. What I
think would be a better approach to promote innovation would be
to have shared savings. One of the things that private Medicaid
plans do is they share the savings that coordinated care
contributes with providers, so providers have an incentive to
save money as well as the plan.
It should be the same with the Federal Government to
States. Why not allow the States to keep one out of every
three, or one out of every two Federal dollars that they save
through innovation?
Mr. Bilirakis. Very good. For the panel, what reforms are
needed to help beneficiaries transition off Medicaid and on to
private insurance? What are the challenges that beneficiaries
face? For the panel.
Ms. Owcharenko. I would say, first of all, it is
prioritizing the population that not everyone on Medicaid is
treated the same, and I think that is for a benefit for the
beneficiary. The higher up the income scale, the more access
you would likely have to private health insurance and that
should be encouraged. The same rules that apply at the higher
income should not apply at the lower income and vice versa.
Mr. Weil. I would agree that Medicaid's reliance on private
plans makes that transition easier when it occurs, and that
States are currently making significant efforts to try to
ensure smooth transitions between Medicaid and the exchange.
Unfortunately, the biggest barrier to transitioning smoothly
from Medicaid into private coverage is that the jobs most
people move into when they move off of Medicaid don't offer
health insurance. And so in the absence of that, there is
nothing to transition to.
Mr. Bragdon. I would agree with both responses. I think
that you, it is very important to look at for individuals who
are on Medicaid, many of them are on Medicaid for a short
amount of time, and yet those private plans are prohibited from
marketing to them or reaching out to them and just making them
aware of here are other options that are available.
And States need to be more creative to create transition
products that aren't quite Medicaid private plans but aren't
quite private insurance to give people some protection to not
only catastrophic coverage, but also preventive services.
Mr. Bilirakis. Is it a good idea to provide diversity of
plan options to consumers?
Mr. Bragdon. Thank you. Yes. And I think that the most
strong evidence of that is consumers voting with their feet.
When you give them a diverse group of plans with meaningful
differences, 70 to 80 percent voluntarily pick a plan different
than the one they were defaulted into.
Mr. Bilirakis. Mr. Weil?
Mr. Weil. I certainly see advantages to plan choice. It
think there are two constraints I would put in that comment.
One is that in less populous areas of the country, plan choice
doesn't really mean anything because the real challenge is
finding providers and having different administrative
structures over them doesn't really provide any value.
And the second constraint is that unfettered choice or
unstructured choices can be very hostile, actually, to
consumers. The private industry knows very well how to
structure choices in ways that help people make choices and not
bewilder them. But in general, certainly choice is a key
component of the drive to quality.
Mr. Bilirakis. Ms. Owcharenko.
Ms. Owcharenko. I would agree with the panelists and just
say, though, that a slight difference a choice of the same
product across without any differentiation is kind of choice
with no choice, you are not really choosing anything different.
So I do think there needs to be some sort of diversification or
ability for insurers to offer different types of plans with
additional benefits, et cetera, in order to really have what
choices.
Mr. Bilirakis. Thank you. One last question if I may, Mr.
Chairman. Mr. Bragdon and Ms. Owcharenko, the administration
seems focused on expanding Medicaid as you know.
How many people are Medicaid eligible and are not enrolled?
Shouldn't we focus on getting care to those groups before we
focus on expanding Medicaid?
Also, this expansion of patients will increase the patient
load on the Medicaid system. Has there been an influx in
doctors taking Medicaid? I don't think so. What will this
patient surge do to the system? And we will start with Mr.
Bragdon, please.
Mr. Bragdon. I think there are--absolutely there are real
challenges to access for individuals. A card is not access. And
we need to look at can you actually provide access to care?
Ms. Owcharenko. I would just point out that with the
question of there are many out there, knowing children, many
children that are eligible but not enrolled in the program,
raises the question of what is it that keeps those children
out? Is it that they--it is obvious they are eligible. They
would qualify. The question is do their parents see that there
is value in getting the Medicaid program. As Tarren has pointed
out having a card may not be the type of care that best suits
them.
Mr. Bilirakis. Thank you very much. I yield back.
Mr. Pitts. The chair thanks the gentleman. The chair now
recognizes the gentleman from Virginia, Mr. Griffith, for 5
minutes.
Mr. Griffith. Thank you, Mr. Chairman. I appreciate it
greatly. Mr. Bragdon, I was looking at your written testimony,
and on pages 7 and 8, you go through a process--you may want to
refer to it, although you probably know it like the back of
your hand--where some of the Medicaid programs that rely on
some private programs are going to be hit with the tax inside
of Obamacare. Could you explain that to us more fully than just
a one- or two-paragraph response might give to the American
people?
Mr. Bragdon. Sure. One of the new funding mechanisms for
Affordable Care Act is a new tax on private plans which falls
on those private Medicaid plans as well. And so you have this
perverse dynamic where the Federal Government is, on one hand,
taxing itself and then at the same time, taxing States to raise
revenue.
And what is going to happen is States either need to come
up with the money or they have to cut services for individuals
to pay the tax.
Mr. Griffith. Explain how that works if you can, because I
was not here when the bill was passed and I have always been
under the impression this was on the wealthier people and on
plans that were private plans. Is this because some States
have, or work with private-type plans to provide the coverage
for their citizens?
Mr. Bragdon. This is not the tax on Cadillac plans. This is
a different tax that is essentially a premium tax for private
health plans, but those private plans within Medicaid are
included within that tax, and that tax over the next decade is
going to raise costs from 37 to $42 million for those private
Medicaid plans only.
Mr. Griffith. And the number in your report said something
like one-fifth of all the money raised by this new tax included
in the Obamacare plan is actually a tax that we paid by
Medicaid?
Mr. Bragdon. Correct.
Mr. Griffith. OK. I appreciate that.
Virginia is looking at a lot of reforms and things before
they do the expansion. They set up a special committee, et
cetera. And amongst those, I am going to go to a specific
question instead of just reciting again the different things
that Virginia is looking for, although I think those are good,
but one of them is value-based purchasing, and I kind of like
that idea that they are looking at. And I think we need to do
this in an efficient way that it saves money and provides a
greater flexibility to our States. Now obviously, there has to
be a balance because you don't want to put a co-pay into that
value pricing that keeps people from using services that they
may need. So I would ask all of you, from your experience,
where have States been able to use that successfully and where
has it been not successful?
Mr. Bragdon start with you and then we will just go down
the table.
Mr. Bragdon. I think it is key for States to look at value-
based purchasing not only innovative things working directly
with providers in how do you get better care for individuals,
and there are great examples of States doing that to promote
more providers participating in the Medicaid program, where you
have private plans they pay if the Medicaid patient no-shows,
or in some States the plan itself coordinates travel to make
sure the patient can actually get to the doctor, but it also
add benefits to attract patients. So for example, adding dental
benefits, all within that same fixed price, but really creating
taking Medicaid like a floor and building on top of it, which I
think is really key.
You have to also look at, are individuals actually getting
healthier? Because that is what we want the safety net to do,
is take somebody who is poor and sick and make them healthier
so they have the hope of a better life. So ultimately, value
based should look at, is it improving health?
Mr. Griffith. Absolutely. Mr. Weil.
Mr. Weil. States use their flexibility to set payment rates
to promote plans that can demonstrate higher value through
standard measures of quality and measures of access.
There is also movement towards what is known as value-based
insurance design which is a specific form of value purchasing
design to make it less expensive, for example, for people to
get maintenance drugs for a chronic condition, maybe even free,
because it is actually cheaper to give them free medication
than to have them not take the medicine because of a $3
copayment. There is a whole center at the University of
Michigan that is helping States and private payers in that
area. It is a very active area.
Mr. Griffith. Obviously not easy answers.
Mrs. Owcharenko.
Ms. Owcharenko. Thank you. I think that it actually what
has been said is great, and what it shows is that Medicaid has
seen kind of the failure of its past in trying to find ways to
be more innovative and in doing things in a more efficient way.
But I would caution like in the State of Virginia that those
reforms should take place and those results should come through
before deciding whether to now add a new expansion population
into that making further the complexity of what reform is
intended to achieve.
Mr. Griffith. Particularly in light of the fact that the
Federal Government is going to reduce the amount of money it
gives back to the States for the expansion as time goes by. I
do appreciate that.
Mr. Weil, I also appreciate the fact that you are concerned
about rural districts. I have a rural district, and while I
like the idea of having multiple plans, if folks can't get
there it doesn't do us any good. So I do appreciate all of your
testimony this afternoon.
And with that, Mr. Chairman, I yield back.
Mr. Pitts. The chair thanks the gentleman. That concludes
the questions from the members. Thank you very much, very
informative testimony today. There will be questions that
members have that will be submitted to you in writing. We ask
that you please respond promptly to those questions.
I remind members that they have 10 business days to submit
questions for the record, and members should submit their
questions by the close of business on Monday, July 22nd.
Without objection, the subcommittee is adjourned.
[Whereupon, at 5:40 p.m., the committee was adjourned.]
[Material submitted for inclusion in the record follows:]
Prepared statement of Hon. Fred Upton
Today's hearing is the third in a series of subcommittee
hearings on the current challenges facing Medicaid programs
across the country. I want to thank Chairman Pitts for his
leadership on this issue and want to welcome today's witnesses.
Through the Committee process, we can continue to have a
valuable discussion about the strengths and weaknesses of the
current Medicaid program. As we move toward reform, I hope we
will continue to gather the most relevant and timely data and
state input, and continue these important discussions with
Medicaid stakeholders and patients.
The Medicaid program is extremely complex and its operating
structure and equally complex financing framework are often
topics for reform. Many have said that if you see one Medicaid
program, you still only know one Medicaid program--as every
state is quite different.
Before we move forward, we must understand not only who
Medicaid is currently serving, but better appreciate how well
Medicaid is doing in accomplishing its goals.
Reform must ensure the path forward for a modern Medicaid
program that is strong enough to face the challenging realities
of scare federal and state resources. Reform must empower
states and Medicaid stakeholders with the necessary flexibility
to make Medicaid more than just a coverage program or card
without access.
Surprising to most, Medicaid today covers more Americans
than any other government-run health care program, including
Medicare.
While Medicaid covered approximately four million people in
its first year, there were more than 72 million individuals
enrolled in the program at some point in Fiscal Year 2012--
nearly 1 in 4 Americans.
Those enrollment figures on their own, and their potential
drain on the quality of care of the nation's most vulnerable
folks is cause for alarm. But once the president's health care
law is fully implemented, another 26 million more Americans
could be added to this already strained safety net program.
Medicaid enrollees today already face extensive
difficulties finding a quality physician because, on average,
30 percent of the nation's doctors won't see Medicaid patients.
Studies have shown that Medicaid enrollees are twice as likely
to spend their day or night in an emergency room than their
uninsured and insured counterparts.
Instead of allowing state and local officials the
flexibility to best administer Medicaid to fit the needs of
their own populations, improve care, and reduce costs, the
federal government has created an extensive, ``one-size fits-
all'' maze of federal mandates and administrative requirements.
With the federal debt at an all-time high, closing in on
$17 trillion and states being hamstrung by their exploding
budgets, the Medicaid program will be increasingly scrutinized
over the next 10 years.
Its future ability to provide coverage for the neediest
kids, seniors, and disabled Americans will depend on its
ability to compete with state spending for other priorities
including education, transportation, public safety, and
economic development.As I noted at the opening, Energy and
Commerce Committee Republicans remain committed to modernizing
the Medicaid program so that it is protected for our poorest
and sickest citizens. We will continue to fight for those
citizens because we believe they are currently subjected to a
broken system.
The program needs true reform, and we can no longer tinker
around the edges with policies that add on to the bureaucratic
layers that decrease access, prohibit innovation, and fail to
provide better health care for the poor. In May, Senator Hatch
and I introduced Making Medicaid Work--a blueprint and menu of
options for Medicaid reform that incorporated months of input
from state partners and policy experts from a wide range of
ideological positions. My hope is that this morning's hearing
is the next step in discussing the need for reform so that we
can come together in finalizing policies that improve care for
our most vulnerable citizens. Washington does not always know
best--we have a lot to learn from our states and should better
understand the challenges facing our current programs before we
consider any expansion of the program.
Thank you, Mr. Chairman and I yield my remaining time to --
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