[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

MEDICAID AT 50: STRENGTHENING AND SUSTAINING THE PROGRAM

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

HEARING

BEFORE THE

SUBCOMMITTEE ON HEALTH

OF THE

COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS

FIRST SESSION

__________

JULY 8, 2015

__________

Serial No. 114-63

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Printed for the use of the Committee on Energy and Commerce
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COMMITTEE ON ENERGY AND COMMERCE

FRED UPTON, Michigan
Chairman

JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey
Chairman Emeritus Ranking Member
ED WHITFIELD, Kentucky BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania ELIOT L. ENGEL, New York
GREG WALDEN, Oregon GENE GREEN, Texas
TIM MURPHY, Pennsylvania DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee MICHAEL F. DOYLE, Pennsylvania
Vice Chairman JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington KATHY CASTOR, Florida
GREGG HARPER, Mississippi JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky PETER WELCH, Vermont
PETE OLSON, Texas BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia PAUL TONKO, New York
MIKE POMPEO, Kansas JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida KURT SCHRADER, Oregon
BILL JOHNSON, Ohio JOSEPH P. KENNEDY, III,
BILLY LONG, Missouri Massachusetts
RENEE L. ELLMERS, North Carolina TONY CARDENAS, California7
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota

Subcommittee on Health

JOSEPH R. PITTS, Pennsylvania
Chairman
BRETT GUTHRIE, Kentucky GENE GREEN, Texas
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois LOIS CAPPS, California
TIM MURPHY, Pennsylvania JANICE D. SCHAKOWSKY, Illinois
MICHAEL C. BURGESS, Texas G.K. BUTTERFIELD, North Carolina
MARSHA BLACKBURN, Tennessee KATHY CASTOR, Florida
CATHY McMORRIS RODGERS, Washington JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey DORIS O. MATSUI, California
H. MORGAN GRIFFITH, Virginia BEN RAY LUJAN, New Mexico
GUS M. BILIRAKIS, Florida KURT SCHRADER, Oregon
BILLY LONG, Missouri JOSEPH P. KENNEDY, III,
RENEE L. ELLMERS, North Carolina Massachusetts
LARRY BUCSHON, Indiana TONY CARDENAS, California
SUSAN W. BROOKS, Indiana FRANK PALLONE, Jr., New Jersey (ex
CHRIS COLLINS, New York officio)
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

(ii)

C O N T E N T S

----------
Page
Hon. Joseph R. Pitts, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 1
Prepared statement........................................... 2
Hon. Gene Green, a Representative in Congress from the State of
Texas, opening statement....................................... 3
Prepared statement........................................... 4
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 6
Prepared statement........................................... 7
Hon. G.K. Butterfield, a Representative in Congress from the
State of North Carolina, prepared statement.................... 95

Witnesses

Vikki Wachino, Deputy Administrator and Director, Center for
Medicaid and CHIP Services, Centers for Medicare & Medicaid
Services....................................................... 8
Prepared statement........................................... 11
Answers to submitted questions \1\........................... 139
Carolyn L. Yocom, Director, Health Care, Government
Accountability Office.......................................... 29
Prepared statement........................................... 31
Answers to submitted questions \2\........................... 140
Katherine M. Iritani, Director, Health Care, Government
Accountability Office \3\
Answers to submitted questions \2\........................... 140
Anne L. Schwartz, Ph.D., Executive Director, Medicaid and CHIP
Payment and Access Commission.................................. 49
Prepared statement........................................... 51
Answers to submitted questions............................... 145

Submitted Material

Chart, ``FY2014 Total Spending $3.5 Trillion,'' Congressional
Budget Office, submitted by Mr. Shimkus........................ 74
Statement of 3M Company, July 8, 2015, submitted by Mr. Pitts.... 96
Statement of the National Association of Chain Drug Stores, July
8, 2015, submitted by Mr. Pitts................................ 99
Letter of July 7, 2015, from Stephen B. Calderwood, President,
Infectious Disease Society of America, to Mr. Pitts and Mr.
Green, submitted by Mr. Pitts.................................. 103
Statement of the Office of Inspector General, Department of
Health and Human Services, July 8, 2015, submitted by Mr. Pitts 108
Article, ``Early Medicaid Expansion in Connecticut Stemmed The
Growth In Hospital Uncompensated Care,'' by Sayeh Nikpay, et
al., Health Affairs, July 2015, submitted by Mr. Pallone....... 116
Article, ``MetroHealth Care Plus: Effects Of A Prepared Safety
Net On Quality Of Care In A Medicaid Expansion Population,'' by
Randall D. Cebul, et al., Health Affairs, July 2015, submitted
by Mr. Pallone................................................. 127

----------
\1\ Ms. Wachino's response to submitted questions for the record has
been retained in committee files and also is available at http://
docs.house.gov/meetings/IF/IF14/20150708/103717/HHRG-114-IF14-Wstate-
WachinoV-20150708-SD002.pdf.
\2\ Ms. Yocom and Ms. Iritani provided a joint response to submitted
questions for the record.
\3\ Ms. Iritani submitted a joint statement for the record with Ms.
Yocom but did not submit an oral statement.

MEDICAID AT 50: STRENGTHENING AND SUSTAINING THE PROGRAM

----------

WEDNESDAY, JULY 8, 2015

House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:14 a.m., in
room 2322 of the Rayburn House Office Building, Hon. Joe Pitts
(chairman of the subcommittee) presiding.
Members present: Representatives Pitts, Guthrie, Barton,
Whitfield, Shimkus, Murphy, Burgess, Blackburn, Lance,
Griffith, Bilirakis, Long, Ellmers, Brooks, Collins, Green,
Capps, Schakowsky, Butterfield, Castor, Sarbanes, Matsui,
Lujan, Schrader, Kennedy, Cardenas, and Pallone (ex officio).
Staff present: Graham Pittman, Legislative Clerk; David
Redl, Chief Counsel, Communications and Technology; Michelle
Rosenberg, GAO Detailee, Health; Krista Rosenthall, Counsel to
Chairman Emeritus; Heidi Stirrup, Policy Coordinator, Health;
Josh Trent, Professional Staff Member, Health; Traci Vitek,
Detailee, Health; Christine Brennan, Democratic Press
Secretary; Jeff Carroll, Democratic Staff Director; Tiffany
Guarascio, Democratic Deputy Staff Director and Chief Health
Advisor; Una Lee, Democratic Chief Oversight Counsel; Rachel
Pryor, Democratic Health Policy Advisor; and Samantha Satchell,
Democratic Policy Analyst.
Mr. Pitts. Good morning, and welcome to this hearing,
entitled Medicaid at 50: Strengthening and Sustaining the
Program. Subcommittee will come to order. Chairman will
recognize himself for an opening statement.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

At the end of this month, Medicaid will turn 50 years old.
It was created as a joint Federal/State program to provide
healthcare coverage to certain categories of low-income
Americans. But today Medicaid is now the largest health
insurance program in the world. Now more than 70 million
Americans are covered by Medicaid, which is more than are
covered by Medicare. No doubt Medicaid is a critical lifeline
for some of our Nation's most vulnerable patients. Medicaid
provides health care for children, pregnant mothers, the
elderly, the blind, and the disabled. It is safe to say that
every member of this committee wants to see a strong safety net
program that protects the most vulnerable, regardless of how
they feel about its recent expansion.
But, as we all know, the current trajectory of Medicaid
spending is problematic. In the next decade, program outlays
are set to double. That means that, in a decade, Medicaid is
going to cost Federal taxpayers what Medicare costs today. And
that is not even counting the fact that the Medicaid program is
already the fastest growing spending item in most State
budgets. So, without Congressional intervention, Medicaid will
continue to consume a larger and larger portion of Federal and
State spending. This is not ideology. This is arithmetic.
According to CBO data, by 2030, the entire Federal budget will
be consumed with spending on mandatory entitlements and service
on the debt.
And this is not only a budgetary problem, though such
levels of spending would crowd out funding for other important
Federal and State policy priorities. This is also not only a
fiscal problem, though CBO has warned that running up our
national credit card could trigger financial crisis. Perhaps
most importantly, this spending trajectory threatens the
quality and access of care for the millions of vulnerable
patients who depend on Medicaid.
But reaching the breaking point is entirely preventable.
Policymaking is about setting priorities and making choices,
and that is why, and many of my colleagues were dismayed by
some of what we learned at a recent Health Subcommittee hearing
regarding some of the projects funded through waivers. With
budgets growing, is it too radical to suggest we simply
prioritize needed medical care over lower priority projects?
Since 2003 Medicaid has been designated a high risk program
by the GAO because of its size, growth, diversity programs,
concerns about gaps, and fiscal oversight. More than a decade
later, these issues are amplified by recent changes to the
program. Our aging population will also increase demands on the
program. But today Federal oversight of the program is more
imperative than ever.
Each administration has a responsibility, with Congress, to
ensure that taxpayer dollars used for Medicaid are spent in a
manner that helps our neediest citizens. Thus, I am pleased
that we have a distinguished panel of witnesses today to help
inform us on the challenges facing Medicaid in the coming
decade. I am especially pleased that CMS, who was unable to
attend--to join us for our recent hearing is here today, along
with GAO and MACPAC.
In order to preserve and strengthen this vital safety net
program for the most vulnerable, I believe that Congress will
be increasingly forced to take steps to modernize the Medicaid
program. So we are eager to hear our witnesses' recommendations
for ideas, and any efforts underway to enhance Medicaid program
efficiency, reduce program costs, and improve quality.
[The prepared statement of Mr. Pitts follows:]

Prepared statement of Hon. Joseph R. Pitts

At the end of this month, Medicaid will turn 50 years old.
It was created as a joint Federal/State program to provide
healthcare coverage to certain categories of low-income
Americans.
But today, Medicaid is now the largest health insurance
program in the world. Now more than 70 million Americans are
covered by Medicaid--which is more than are covered by
Medicare.
No doubt, Medicaid is a critical lifeline for some of our
Nation's most vulnerable patients. Medicaid provides health
care for children, pregnant mothers, the elderly, the blind,
and the disabled. It is safe to say that every member of this
committee wants to see a strong safety net program that
protects the most vulnerable--regardless of how they feel about
its recent expansion.
But as we all know, the current trajectory of Medicaid
spending is problematic. In the next decade, program outlays
are set to double. That means that in a decade, Medicaid is
going to cost Federal taxpayers what Medicare costs today--and
that's not even counting the fact that the Medicaid program is
already the fastest growing spending item in most State
budgets.
So, without Congressional intervention, Medicaid will
continue to consume a larger and larger portion of Federal and
State spending. This is not ideology, this is arithmetic.
According to CBO data, by 2030, the entire Federal budget will
be consumed with spending on mandatory entitlements and service
on the debt.
This is not only a budgetary problem--though such levels of
spending would crowd out funding for other important Federal
and State policy priorities. This is also not only a fiscal
problem--though CBO has warned that running up our national
credit card could trigger another financial crisis. Perhaps
most importantly, this spending trajectory threatens the
quality and access of care for the millions of vulnerable
patients who depend on Medicaid.
But reaching the breaking point is entirely preventable.
Policy-making is about setting priorities and making choices.
That's why I and many of my colleagues were dismayed by
some of what we learned at a recent Health Subcommittee hearing
regarding some of the projects funded through waivers. With
budgets growing, is it too radical to suggest we simply
prioritize needed medical care, over lower-priority projects?
Since 2003, Medicaid has been designated a high-risk
program by the GAO because of its size, growth, diversity of
programs, and concerns about gaps in fiscal oversight. More
than a decade later, these issues are amplified by recent
changes to the program. Our aging population will also increase
demands on the program.
But today, Federal oversight of the program is more
imperative than ever. Each administration has a responsibility,
with Congress, to ensure that taxpayer dollars used for
Medicaid are spent in a manner that helps our neediest
citizens.
Thus, I am pleased that we have a distinguished panel of
witnesses today to help inform us on the challenges facing
Medicaid in the coming decade. I am especially pleased that
CMS, who was unable to join us for our recent hearing, is here
today, along with GAO and MACPAC.
In order to preserve and strengthen this vital safety net
program for the most vulnerable, I believe that Congress will
be increasingly forced to take steps to modernize the Medicaid
program. So we are eager to hear our witnesses' recommendations
for ideas and any efforts underway to enhance Medicaid program
efficiency, reduce program costs, and improve quality.

Mr. Pitts. And, with that, I yield back and recognize the
ranking member, Mr. Green, 5 minutes for his opening statement.

OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS

Mr. Green. Thank you, Mr. Chairman, for holding the
hearings, and I too want to welcome our panel. It is not very
often that we get an all-female panel. I appreciate you all
being here.
The Medicaid program has served as a critical safety net
for the American public since its creation in 1965, 50 years
ago this month. Today, over 70 million low-income Americans
rely on Medicaid for comprehensive and affordable health
insurance. It is a lifeline for millions of children, pregnant
women, people with disabilities, seniors, and low-income
adults. Medicaid covers more than one in three children, pays
for nearly half of all births, accounts for more than 40
percent of the Nation's total costs for long-term care. One in
seven Medicare beneficiaries are also Medicaid beneficiaries.
The Medicaid accounts for a quarter of behavioral healthcare
services.
The Affordable Care Act expanded coverage, made
improvements to promote program integrity, transparency, and
advanced delivery system reform. Since the enactment of the
Affordable Care Act, the overall rate of healthcare spending
growth has slowed, reducing projected growth in Medicaid
programs by hundreds of billions of dollars, according to the
Congressional Budget Office. This is primarily due to lower
than expected growth in costs per Medicaid enrollee.
The need to address the growth of healthcare spending is an
issue, we all agree. We must remain committed to building on
the progress made by the ACA in ensuring patients have access
to quality, affordable care, and that we are getting the best
value for our healthcare dollars. Medicaid is an extremely
efficient program, covering the average enrollee at a lower
cost than most comprehensive benefits, and significantly lower
cost sharing then private insurance. 95 percent of Medicaid
beneficiaries report having a regular source of health care, a
medical home in today's terms, which they consistently rate as
highly as private insurance.
As we examine ways to further strengthen and improve the
program, we need to advance policies that better leverage
dollars to pay for value, promote efficiency and transparency,
and advance delivery system reforms, and extend innovative
strategies within Medicaid, and across the healthcare system.
For example, one improvement would be for the Centers of
Medicaid and--Medicare and Medicaid Services to finalize the
agency's proposed regulation that would better enforce the
Medicaid's equal access provision. This provision ensures that
care and services are available to Medicaid enrollees, and that
providers are paid a fair Medicaid reimbursement rate.
Another one would be the require 12 month continuous
enrollment--eligible Medicaid and CHIP beneficiaries to address
the issue of the churn, a concept that MACPAC has supported in
several reports to Congress. Churn is bad for patients,
providers, and health plans, and wastes taxpayers' dollars. I
worked with my colleague Joe Barton for several Congresses on
this legislation--on this issue, and I thank him for his
leadership, on behalf of low-income Americans.
Today we look at a broad--look at the Medicaid system, the
past, present, and future. Throughout its 50 year history,
Medicaid has served as an adaptable, efficient program that
meets the healthcare needs of millions of Americans. I want to
thank our witnesses again for their ongoing efforts and
recommendations for additional ways to advance the program. I
look forward to working with my colleagues on the committee to
strengthen the program in key areas, including the enrollment
process, delivery system reforms, managed care, data
collection, and behavioral health.
[The prepared statement of Mr. Green follows:]

Prepared statement of Hon. Gene Green

Thank you, Mr. Chairman, for holding this hearing.
The Medicaid program has served as a critical safety net
for the American public since its creation in 1965, 50 years
ago this month.
Today, over 70 million low-income Americans rely on
Medicaid for comprehensive, affordable health insurance.
It is a lifeline for millions of children, pregnant women,
people with disabilities, seniors, and low-income adults.
Medicaid covers more than 1 in 3 children, pays for nearly
half of all births, and accounts for more than 40 percent of
the Nation's total costs for long-term care.
One in seven Medicare beneficiaries is also a Medicaid
beneficiary, and Medicaid accounts for a quarter of all
behavioral health services.
The Affordable Care Act expanded coverage, made
improvements to promote program integrity and transparency, and
advanced delivery system reform.
Since the enactment of the Affordable Care Act, the overall
rate of healthcare spending growth has slowed, reducing
projected growth in the Medicaid programs by hundreds of
billions of dollars according to the Congressional Budget
Office.
This is primarily due to lower than expected growth in
costs per Medicaid enrollee.
The need to address the growth of healthcare spending is an
issue on which we all agree.
We must remain committed to building on the progress made
by the ACA, ensuring patients have access to quality,
affordable care, and that we are getting the best value for our
healthcare dollars.
Medicaid is an extremely efficient program, covering the
average enrollee at a lower cost with more comprehensive
benefits and significantly lower cost-sharing than private
insurance.
Ninety-five percent of Medicaid beneficiaries report having
a regular source of health care, which they consistently rate
as highly as private insurance.
As we examine ways to further strength and improve the
program, we need to advance policies that better leverage
dollars to pay for value, promote efficacy and transparency,
advance delivery system reforms, and extend innovative
strategies within Medicaid and across the healthcare system.
For example, one improvement would be for the Centers for
Medicare and Medicaid Services (CMS) to finalize the agency's
proposed regulation that would better enforce the Medicaid's
equal access provision.
This provision ensures that care and services are available
to Medicaid enrollees, and that providers are paid a fair
Medicaid reimbursement rate.
Another would be to require 12-month continuous enrollment
for eligible Medicaid and CHIP beneficiaries to address the
issue of ``churn,'' a concept MACPAC has supported in several
reports to Congress.
Churn is bad for patients, providers, and health plans, and
wastes taxpayer dollars.
I have worked with my colleague, Joe Barton, for several
Congresses on legislation on this issue, and I thank him for
his leadership on behalf of low-income Americans.
Today, we will take a broad look at the Medicaid system:
its past, present, and future.
Throughout its 50-year history, Medicaid has served as an
adaptable, efficient program that meets the healthcare needs of
millions of Americans.
I want to thank our witnesses for their on-going efforts
and recommendations for additional ways to advance of the
program.
I look forward to working with my colleagues on the
committee to strengthen the program in key areas, including the
enrollment process, delivery system reforms and managed care,
data collection, and behavioral health.
Thank you, and I yield the balance of my time to my
colleague from California, Congresswoman Matsui.

Mr. Green. With that, Mr. Chairman, I would like to yield
the balance of my time to my colleague from California,
Congresswoman Matsui.
Ms. Matsui. Thank you very much for yielding to me, and I
would like to welcome our witnesses here today also. This year,
as we know, we celebrate the 50th anniversary of both the
Medicare and Medicaid programs, essential programs for the
security of our Nation's seniors, people with disabilities,
children, and families. The Affordable Care Act took vital
steps to reforming our healthcare system by increasing coverage
and moving toward rewarding value, instead of volume. We know
the ACA made improvements in the private insurance market, and
it also made improvements for public programs like Medicaid.
Now is the time that we need to build upon those improvements,
and keep the momentum going for our healthcare system, and for
the millions that rely on Medicaid as an important safety net.
Thank you, and I look forward to hearing from our witnesses
today, and I yield time to whoever needs it.
Mr. Green. Anyone else want 40 seconds, or--I yield back.
Mr. Pitts. The gentleman yields back, and now the Chair
recognizes the ranking member of the full committee, Mr.
Pallone, 5 minutes for an opening statement.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY

Mr. Pallone. Thank you, Mr. Chairman. I just want to say,
obviously, this is a very important topic. Medicaid's 50 years
of efficient, comprehensive, and sometimes life-saving health
coverage of our most vulnerable populations is certainly
something that is crucial. A fiber, you know, basic fabric of
our healthcare system.
As Members of Congress, I believe the Government can help
all Americans succeed, including seniors and low-income
families, and improving and strengthening Medicaid for
generations to come continues to be a primary goal. Medicaid
provides more than one in three children with a chance at a
healthy start in life, and one in seven Medicare seniors are
also actually Medicaid seniors. In fact, the overwhelming
majority of the 71 million current Medicaid beneficiaries are
children, the elderly, the disabled, and pregnant women.
We often talk about Medicaid as an entitlement program,
though I don't believe this is true--a true reflection of the
program. Medicaid is a bedrock safety net that ensures all
Americans have protection against the negative economic effects
that undisputedly come with lack of health coverage. Medicaid's
inherent structure was designed to ensure that health coverage
will be there for those who need it, when times are hard, jobs
are lost, or accidents strike. And the fundamental tenet of the
program is that it can expand and contract according to need.
In fact, Medicaid was first proposed as part of a set of
economic policies by President Truman.
And the Affordable Care Act built on these same goals by
strengthening Medicaid and expanding its coverage, and States
that have expanded Medicaid have already realized significant
qualitative and economic benefits as uncompensated care rates
drop, and more people gain coverage. Meanwhile, Medicaid
coverage lowers financial barriers to healthcare access,
increases use of preventative care, and improves health
outcomes. In addition, States have been successful in managing
their Medicaid programs through broad latitude and flexibility
to ensure access to critical healthcare services for their
populations at low cost.
No program is perfect. For instance, I believe that we need
to remain vigilant on access to specialty and dental care, and
we continue to refine transparency and evaluation of Medicaid
waivers, and ensure that Medicaid is successfully integrated
with Medicare in the health insurance marketplaces. We should
think more about how to advance some of the innovations in
delivery systems reform. The Medicaid program has some of our
best successes, with some of the toughest to treat populations.
Mr. Chairman, I hope to hear--to not hear more today of the
same assaults on the Affordable Care Act or Medicaid.
Inaccurate and ideological representation of what Medicaid is
and who it serves I think are outdated. Instead, I believe that
there are many policy areas in Medicaid where members on both
the Democrat and Republican sides could share an interest, and
I look forward to learning about ways that Congress can help to
build on an already strong Medicaid program, refining and
modernizing this critical safety net for the next 50 years and
beyond.
[The prepared statement of Mr. Pallone follows:]

Prepared statement of Hon. Frank Pallone, Jr.

Thank you, Mr. Chairman, for convening a hearing on this
timely and important topic--Medicaid's 50 years of efficient,
comprehensive, and sometimes lifesaving, health coverage of our
most vulnerable populations. As a Member of Congress, I believe
that Government can help all Americans succeed, including
seniors and low-income families, and improving and
strengthening Medicaid for generations to come continues to be
a primary goal of mine.
Medicaid provides more than 1 in 3 children with a chance
at a healthy start in life. And 1 in 7 Medicare seniors are
actually also Medicaid seniors. In fact, the overwhelming
majority of the 71 million current Medicaid beneficiaries are
children, the elderly, the disabled and pregnant women.
We often talk about Medicaid as an entitlement program.
Though I don't believe this is a true reflection of the
program. Medicaid is a bedrock safety net that ensures all
Americans have protection against the negative economic effects
that undisputedly come with lack of health coverage. Medicaid's
inherent structure was designed to ensure that health coverage
will be there for those who need it when times are hard, jobs
are lost, or accident strikes. The fundamental tenet of the
program is that it can expand and contract according to need.
In fact, Medicaid was first proposed as part of a set of
economic policies by President Truman.
And the Affordable Care Act built on those same goals, by
strengthening Medicaid and expanding its coverage. States that
have expanded Medicaid have already realized significant
qualitative and economic benefits as uncompensated care rates
drop and more people gain coverage. Meanwhile, Medicaid
coverage lowers financial barriers to healthcare access,
increases use of preventative care, and improves health
outcomes.
In addition, States have been successful in managing their
Medicaid programs through broad latitude and flexibility to
ensure access to critical healthcare services for their own
populations at low costs.
No program is perfect; For instance, I believe that we need
to remain vigilant on access to specialty and dental care,
continue to refine transparency and evaluation of Medicaid
waivers, and ensure that Medicaid is successfully integrated
with Medicare and the health insurance marketplaces. We should
think more about how to advance some of the innovations in
delivery system reform-the Medicaid program has some of our
best successes, with some of the toughest-to-treat populations.
Mr. Chairman, I hope to not hear more of the same assaults
on the Affordable Care Act or Medicaid today. Inaccurate and
ideological representations of what Medicaid is and who it
serves are tired and outdated. Instead, I believe that there
are many policy areas in Medicaid where members on both sides
could share an interest. I look forward to learning about ways
that Congress can help to build on an already strong Medicaid
program, refining and modernizing this critical safety net for
the next 50 years and beyond.

Mr. Pallone. I would like to yield the 2 minutes--or the
remainder of my time to Mr. Lujan.
Mr. Lujan. Thank you very much, Mr. Chairman and Ranking
Member Pallone, for scheduling this hearing. And I am glad that
we are here, coming together to reflect on the success of this
program as we celebrate its 50th anniversary.
Medicaid is a critical program across the Nation, and
especially in my home State of New Mexico, where we have had a
53 percent increase in enrollment since we expanded Medicaid.
This represents 240,000 additional people who have gained
coverage as a result of the Affordable Care Act's Medicaid
expansion in New Mexico. Behind each of these statistics are
real stories of New Mexicans whose lives have improved because
of Medicaid. I believe deeply in Medicaid's mission of
improving access to health care, better health outcomes,
greater financial security, and that we have a responsibility
to ensure that our constituents are not only covered, but also
receive quality care.
I look forward to the testimony and discussion about how we
can continue to enhance this program for the next 50 years and
beyond, and I also have some very serious specific questions
about New Mexico's behavioral health program, and I look
forward to exploring those as well. So, Mr. Chairman, Ranking
Member Pallone, I thank you for the time, and I yield back.
Mr. Pitts. Chair thanks the gentleman. As usual, all the
members' written opening statements will be made part of the
record. I have a UC request and would like to submit the
following documents for the record: statements from 3M, the
National Association of Chain Drugstores, the Infectious
Disease Society of America, and U.S. Department of Health and
Human Services Office of Inspector General, HHS/OIG. Without
objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Pitts. We have one panel today, and let me introduce
them in the order of their presentations. First, Vikki Wachino,
Deputy Administrator, Centers for Medicare and Medicaid
Services, CMS, and Director of the Center for Medicaid and CHIP
services, CMS. Then Carolyn Yocom, Director, Health Care,
Government Accountability Office, accompanied by Katherine
Iritani, Director of Health Care, GAO. And finally, Anne
Schwartz, Executive Director, Medicaid and CHIP Payment and
Access Commission, MACPAC.
So thank you all for coming. Your written testimony will be
made part of the record, and you will each be given 5 minutes
to summarize your testimony. So, at this point, Ms. Wachino,
you are recognized for 5 minutes for your summary.

STATEMENTS OF VIKKI WACHINO, DEPUTY ADMINISTRATOR AND DIRECTOR,
CENTER FOR MEDICAID AND CHIP SERVICES, CENTERS FOR MEDICARE &
MEDICAID SERVICES; CAROLYN L. YOCOM, DIRECTOR, HEALTH CARE,
GOVERNMENT ACCOUNTABILITY OFFICE, ACCOMPANIED BY KATHERINE
IRITANI, DIRECTOR, HEALTH CARE, GOVERNMENT ACCOUNTABILITY
OFFICE; AND ANNE SCHWARTZ, PH.D., EXECUTIVE DIRECTOR, MEDICAID
AND CHIP PAYMENT AND ACCESS COMMISSION

STATEMENT OF VIKKI WACHINO

Ms. Wachino. Chairman Pitts, thank you. Ranking Member
Green, thank you. Thank you, members of the subcommittee. I am
happy to be with you here today to talk about the importance of
the Medicaid program, and its success in meeting the needs of
the low-income population over the past 50 years. Pleased to be
joined here today by my colleagues from MACPAC and GAO, whose
work helps us to continue to strengthen the program for the
future.
I am Vikki Wachino, and I will introduce myself, building
on the chairman's introduction, as Deputy Administrator and
Director of the Center for Medicaid and CHIP Services. Since it
is my first appearance here before the subcommittee, I have
served in this role since April, and really look forward to
working with the subcommittee going forward to make the program
as strong as possible.
As you well know, Medicaid provides health insurance
coverage to more than 70 million low-income Americans, and the
beneficiaries we serve are children, low-income adults, people
with disabilities, seniors, and pregnant women, some of
America's most vulnerable populations. We work in partnership
with States, and, as a partnership, both we and States have
vital roles as program stewards in ensuring the program's
future. Within Medicaid's structure, Medicaid provides vital
financial support, and also significant flexibility within
program rules that help us and States continue to improve and
innovate in the program for the future.
The impact and success of Medicaid coverage is clear from
the research. Just last month researchers at the Commonwealth
Fund found that adults covered by Medicaid coverage
continuously for a year have very high rates of obtaining
regular sources of care. We also know, from research released
earlier this year, that children who are covered by Medicaid or
CHIP earn higher wages when they grow into adults, and those
examples make both the health and the economic impact of
Medicaid coverage clear.
There is a lot more we can do, though, and are doing, in
our work with States to strengthen the program for its next 50
years and beyond. As many of you have noted, the Affordable
Care Act gives States the opportunity to provide Medicaid
coverage to low-income adults in their States, at their option,
and supported by a substantially enhanced Federal matching
rate. 28 States and the District of Columbia have worked with
us to provide Medicaid coverage to these low-income adults, and
the benefits of that expansion are clear. And we are prepared
at CMS to work with every State to develop an approach to
expansion that works for the State, meets its specific needs,
and meets the needs of its low-income residents as we work
together to close the coverage gap and insure more low-income
Americans.
The need for modernization in our eligibility enrollment
process was clear to us several years ago, and we have
modernized it. We have made it substantially easier for people
to apply using a single streamlined application, the same
application that people applying for marketplace coverage use,
and we have supported that with electronic verification. And as
a result, States are able to make eligibility decisions that
are fast, and accurate, and in close to real time.
Another major area of our focus is delivery system reform,
and working with States to promote innovations that achieve
better health, and better care, at lower cost. We carry that
work out through a variety of mechanisms. Whether it is major
delivery system reform initiatives, like Strong Start that is
aimed at improving prenatal and maternal health, new
authorities, like Health Homes for people with chronic
conditions, new models, like the State innovation models that
help States undertake multi-payer delivery system reforms, or
pioneering delivery system reforms through our 1115
innovations. In addition to that, a year ago, at the
recommendation of the Governors, we launched the Innovation
Accelerator Program, which is designed to continue to advance
in as many States as care to work with us, payment and delivery
system reform.
As has been referenced, we have proposed major advances in
managed care. Medicaid is no longer a fee-for-service delivery
system. Managed care is the delivery system that provides care
to the majority of our beneficiaries, and we want to maximize
its potential to ensure coordination and quality of care. Our
regulations had not been updated in more than a decade, and in
May we proposed to update them to strengthen quality,
accountability, transparency, the beneficiary experience, and
also to align our roles with those that work in Medicare
Advantage and in the private market, and that rule is out for
public comment now.
We have been substantially advancing the ability of fragile
seniors and people with disabilities to live in their
communities and to self-direct their care. And underpinning all
of these improvements are a commitment to program integrity
that we have advanced over the past 5 years, and that span a
range of mechanisms from reviewing States' program integrity
programs to ensure that they are strong, to ensuring that
States, and we, dedicate our resources and coordinate our
resources to screen out high risk providers.
With that I will conclude, and again thank the subcommittee
for your interest in the Medicaid program, and to state once
again how much I am looking forward to working with each of
you.
[The prepared statement of Ms. Wachino follows:]

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Mr. Pitts. The Chair thanks the gentlelady. I now recognize
Ms. Yocom, 5 minutes for your opening statement.

STATEMENT OF CAROLYN L. YOCOM

Ms. Yocom. Chairman Pitts, Ranking Member Green, and
members of the subcommittee, I am pleased to be here today with
my colleague, Katherine Iritani, to discuss the key issues that
are facing the Medicaid program. Today Medicaid is undergoing a
period of transformative change as enrollment grows following
the passage of the Patient Protection and Affordable Care Act.
Under this Act, more than half of the States have elected to
expand their Medicaid programs and cover low-income adults who
were not previously eligible for the program.
At the heart of Medicaid is a Federal/State partnership.
Both the Federal Government and the States play important roles
in ensuring that Medicaid is fiscally responsible and
sustainable over time, and effective in meeting the needs of
its population that it serves. We designated Medicaid as a
high-risk program in 2003, and our statement highlights some of
the significant oversight challenges that, based on our work,
exist today.
Our statement highlights four key issues: First, access to
care; second, transparency and oversight; third, program
integrity; and fourth, Federal financing. Congress and HHS have
taken some positive steps related to these four key issues, and
continued attention is critical to ensure that the Medicaid
program is effective for the enrollees who rely on it, and also
accountable to the taxpayers who pay for it. Accordingly, our
work recommends additional steps to bolster efforts in each of
these areas.
First, maintaining and improving access to care is critical
to ensuring that Medicaid operates effectively. Our analysis of
national survey data suggests that access to care in Medicaid
is generally comparable to that of individuals with private
insurance. However, our work also shows that Medicaid enrollees
can face particular challenges accessing certain types of care,
such as mental health and dental care.
Second, increased transparency and improved oversight can
help improve the Medicaid program. For example, CMS lacks
complete and reliable data about the sources of funds that
States use to finance the non-Federal share of Medicaid, and it
also lacks complete data on payments to providers, which
hinders oversight. Gaps in HHS' criteria, process, and policy
for improving State spending on demonstration projects also
raises added questions about tens of billions of dollars in
Federal spending.
Third, improving program integrity can help ensure the most
appropriate use of Medicaid funds. Improper payments are a
significant cost to Medicaid, totaling an estimated 17.5
billion in fiscal year 2014. Our work suggests that an
effective Federal/State partnership is a key factor in improper
payments and combating them, not only to oversee spending in
both fee-for-service and managed care, but also to set
appropriate payment rates for managed care organizations, and
ensure that only eligible individuals and providers participate
in Medicaid.
Fourth, since its inception, efforts to finance the
Medicaid program have been in odds with the cyclical nature of
its design and operation, particularly during national economic
downturns. We suggested that Congress consider enacting a
Federal funding formula that would provide automatic, targeted,
and timely assistance to States during national economic
downturns. We have also described revisions to the current
Federal funding formula that could more equitably allocate
Medicaid funds to States by better accounting for each State's
ability to finance the program.
In conclusion, continued focus on these challenges is
critical to ensuring that continued access to care for the tens
of millions of Americans who are in the Medicaid program. It is
also critical to ensuring the sustainability. Chairman Pitts,
Ranking Member Green, and members of the subcommittee, this
concludes our prepared statement. We would be pleased to
respond to any questions you might have.
[The prepared statement of Ms. Yocom follows:]

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Mr. Pitts. The Chair thanks the gentlelady. And, again, as
noted, Ms. Yocom's accompanied by Ms. Iritani, who testified
before us a couple of weeks ago. She is back to help answer
questions for GAO.
The Chair now recognizes Dr. Schwartz, 5 minutes for an
opening statement.

STATEMENT OF ANNE L. SCHWARTZ

Dr. Schwartz. Good morning, Chairman Pitts, Ranking Member
Green, and members of the Subcommittee on Health. I am Anne
Schwartz, Executive Director of MACPAC, the Medicaid and CHIP
Payment and Access Commission. As you know, MACPAC is a
Congressional advisory body charged with analyzing and
reviewing Medicaid and CHIP policies, and making
recommendations to Congress, the Secretary of HHS, and the
States on issues affecting these programs. Its 17 members, led
by Chair Diane Rowland and Vice Chair Marsha Gold, are
appointed by GAO. The insights I will share this morning
reflect the consensus views of the Commission itself, and we
appreciate the opportunity to share MACPAC's views as this
committee considers the future of Medicaid.
As others have already noted, Medicaid is a major and
important part of the U.S. healthcare system, covering 72
million people, and almost half of the Nation's births. It pays
for more than 60 percent of national spending on long-term
services and supports to frail elders and other people with
disabilities, and it accounts for more than a quarter of
spending on treatment for mental health and substance use
disorders. In total, it accounts for about 15 percent of
national health expenditures, 8.6 percent of Federal outlays,
and 15.1 percent of State spending.
While we often compare Medicaid's performance as a payer
with other sources of coverage, it is important to recognize
Medicaid's unique roles. In addition to providing health
insurance to individuals who otherwise might not have access to
coverage, it is also a major source of revenue for safety net
providers serving both Medicaid beneficiaries and the
uninsured. It covers enabling services, such as nonemergency
transportation and translation services, which help
beneficiaries access needed health services, and it wraps
around other sources of coverage, including both employer
sponsored insurance and Medicare, in its role for 10.7 million
dually eligible beneficiaries.
Since the early 1990s the Medicaid program has changed in
significant ways. During this time period the country weathered
two economic recessions, and States responded to budgetary
pressures by undertaking modernization efforts and cost
containment strategies. As a result, as has been noted, managed
care has now become the dominant delivery system, with more
than half of all beneficiaries enrolled in comprehensive risk-
based managed care arrangements, and another 20 percent
receiving benefits through a more limited managed care
arrangement.
The Olmstead Decision, requiring that people with
disabilities be served in the least restrictive environment,
resulted in a major shift in the provision of long-term
services and supports from nursing facilities to home and
community-based settings. Congressional action in the 1990s
brought in children's coverage through Medicaid and CHIP, and
encouraged States to reach out to people who are eligible, but
not enrolled in coverage. And, of course, more recently the
Affordable Care Act created new dynamics not just by allowing
States to expand coverage to certain nondisabled adults, but
also by providing new options to States for the delivery of
home and community-based services, and by changing eligibility
processes to allow for one-stop shopping for individuals
seeking healthcare coverage.
The 20 years ahead are likely to be similarly dynamic as
States experiment with different approaches to delivery system
reform and payment, and seek to provide care more efficiently
and effectively to high cost, high need individuals. Pressure
on Federal and State budgets create challenges to ensuring the
sustainability of the program, as well as to ensuring that
beneficiaries have access to high value services that promote
their health and their ability to function in their
communities.
MACPAC's analytic agenda for the year ahead reflects
several of these challenges. We will extend the work published
in our recent June report on Medicaid's role for people with
behavioral health disorders, focusing on how to improve
delivery of care. We will continue to focus on understanding
the impact of value-based purchasing initiatives, and the
extent to which these bend the cost curve and improve health.
In the area of access, we will be determining how to
effectively measure access and looking closely at the extent to
which different groups of Medicaid beneficiaries are at risk of
access barriers, and the extent to which such barriers can be
addressed through Medicaid policy. Our analyses on the impact
of the ACA will include, at the request of Congress, a study to
model the impact of DSH payment cuts, and we will also consider
how different approaches to Medicaid expansion affect
expenditures and use of services. At the request of members of
this committee and others in Congress, we will analyze spending
trends and evaluate policy options to restructure the program's
financing, and we will be moving ahead to the next chapter of
our work on children's coverage, looking ahead before CHIP
funding expires in fiscal year 2017.
Finally, we will continue to highlight the importance of
having timely and complete data for both policy analysis and
program accountability. MACPAC has also expressed concerns
about administrative capacity constraints that affect the
ability of both Federal and State administrators to meet
program requirements, provide oversight, and promote value to
beneficiaries, and to the taxpayer.
Again, thank you for this opportunity to share the
Commission's work with the subcommittee, and I am happy to
answer any questions.
[The prepared statement of Ms. Schwartz follows:]

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Mr. Pitts. The Chair thanks the gentlelady. That concludes
the opening statements. We will begin questioning, and I will
recognize myself for 5 minutes for that purpose.
Ms. Wachino, the part of the Federal statute on the 1115
waivers is very short, just four pages. So the Secretary of HHS
has tremendous latitude under the law to fund some
demonstration projects, while denying others. It is well known
that some States get CMS approval for a specific proposal,
while CMS will deny another State for a very similar proposal.
My first question is, Are there any statutory criteria
requiring consistency related to the Secretary's review and
approval of demonstration projects?
Ms. Wachino. Chairman, thank you for the question. CMS
works with all States in the 1115 process, and outside of it,
to develop approaches that meet the objectives of the Medicaid
program, and take into account State-specific needs in
surveying and meeting the needs of their low-income population.
We approach that process consistently across States, and we
work with each State to identify the extent to which their
proposal meets the objectives of the program, and improves the
health of lower/low-income residents.
We have been very transparent in our decision-making on
1115s. We issued transparency regulations implementing
provisions to the Affordable Care Act several years ago, and
have been posting all of our approval documents on medicaid.gov
for States to see, and we welcome proposals from additional
States, and will consider them on their merits.
Mr. Pitts. The question was, are there any statutory
criteria requiring consistency?
Ms. Wachino. The statutory criterion is that a proposal
meet the objectives of the Medicaid program.
Mr. Pitts. Does CMS have regulations or guidance to ensure
that it is being consistent and equitable?
Ms. Wachino. We have guidance implementing our transparency
requirements. Those were regulations that were implemented in
2012. We identified, subsequent to the GAO report, broad
criteria that we used in considering every State's waiver to
determine whether it meets the objectives of the Medicaid
program, and those were criteria like expanding access to
coverage, strengthening delivery systems. So, yes, we have
developed a set of principles by which we review 1115
demonstrations.
It is also important to us, though, to be able to take into
account State-specific circumstances. States come to us with a
wide array of proposals, and if you look across waivers you
will see that they serve purposes as diverse as expanding
eligibility to new populations, to providing limited benefits,
like prescription drugs, to reforming State delivery systems.
Mr. Pitts. Dr. Schwartz, in April several chairmen of the
committees of jurisdiction sent you a letter requesting that
MACPAC undertake serious and sustained analytical work to
advise Congress about potential policies and needed financing
reforms and incentives to ensure the sustainability of
Medicaid. Can you please explain to the committee, in specific
detail, how you are responding to that request, and when you--
we can expect to start seeing the results of your work?
Dr. Schwartz. Yes. Since the Commission received the letter
in April, we have had one public meeting in May. At that May
meeting we presented analyses that were already underway on
Federal and State spending trends that we are currently turning
into a publication that should be out later this summer.
We are now currently determining our next agenda for the
next report cycle, bringing to fruition work on understanding
innovative approaches that States are taking to build more
sustainable programs. For example, the use of accountable care
organization, bundled payments, patient-centered medical homes,
managed long-term services and supports, and trying to look at
these designs and see what the potential is for savings in both
the short and the long term.
Specifically to the items mentioned in your letter, we do
have analyses underway to review the past work of blue ribbon
commissions and think tanks so as not to reinvent the wheel,
and we will use those to inform our analyses of technical and
design issues associated with some of those proposals, as well
as more recent approaches that have been put forward by members
of this committee and others.
So the letter speaks to a sustained work plan, and you can
expect to see some of this work coming together over the course
of the fall to inform our March and June reports, and follow-
ons after that.
Mr. Pitts. Thank you. Ms. Wachino, has CMS determined an
eligibility error rate for the Obamacare expansion population,
and how does the error rate vary for those determined Medicaid
eligible through the Federally facilitated marketplace versus
those whom States determine eligibility?
Ms. Wachino. Mr. Chairman, within CMS there are other parts
of the organization that have responsibility for the error rate
measurement. I can say that I know that we have piloted
approaches to measuring eligibility errors with States in order
to ensure that we are measuring eligibility effectively as we
move to the new rules under the ACA, and we would be happy to
get back to you with a report out for the record on what we
know from those pilots so far.
Mr. Pitts. Thank you. My time is expired. The Chair
recognizes the ranking member, Mr. Green, 5 minutes for
questions.
Mr. Green. Thank you, Mr. Chairman. This year marks the
50th anniversary of Medicaid. It is a vital program that is
served as a lifeline for millions of Americans that--when they
need it the most. It is important to recognize the successes
that it made, innovations that are working well, and
improvements that could be implemented. We have seen some
outstanding success ensuring the overwhelming majority of
Medicaid beneficiaries have access to primary care. More than
95 percent of the Medicaid beneficiaries not only have access
to primary care, but are satisfied with that care.
The committee has made substantial investments in the
Community Health Center Program, particularly when it comes to
grant funding intended to cover the uninsured. One aspect that
is not talked about as frequently is that of the unique role
and intertwined nature of community health centers and
Medicaid.
Ms. Wachino, could CMS comment on the role that community
health centers, and--a crucial source of primary care have
played to bring along--about the level of success of Medicaid
beneficiaries?
Ms. Wachino. Thank you for the question. Community centers
play a really vital role in serving our populations and meeting
the needs of a diverse range of Americans, particularly focused
on primary care. Community health centers are playing a growing
role in meeting low-income Americans' oral healthcare needs,
which are important to us, and we continue to work with them to
make their payment systems as strong as possible.
Mr. Green. OK. Thank you. And I know we still have work to
do on--to ensure equal access to dental and specialty care. In
particular, access to behavioral health providers is an issue
this committee has considered, and all three of our witnesses
know well.
Ms. Wachino, CMS is working hard with States to promote
innovative care delivery, integrating physical and mental
health, or promoting oral health, as part of the comprehensive
primary care. Can you provide the committee with a few examples
of how CMS work on Medicaid delivery system reform is helping
to promote access to these specialty providers?
Ms. Wachino. Sure, I would be happy to, thank you. Through
our Innovation Accelerator Program, which, as I mentioned
earlier, is our new delivery system reform initiative aimed at
providing program support to States that would like to improve
their payment and delivery system, we identified four areas
that were established with the input of States and stakeholders
that were priorities of our program, substance use disorder,
physical and behavioral health integration, community
integration, moving away from institutional care to community
care, and meeting the needs of complex, high cost
beneficiaries.
The first two I think, Ranking Member Green, are responsive
to your question. And the area in which we have done the most
work so far in this new program is substance use disorder, and
we are working actively right now with seven States to help
expand the range of providers who can provide substance use
disorder supports, and we expect to bring a similar approach to
physical and behavioral health to really help ensure that there
is access to community-based mental health services for the
people who need it.
Mr. Green. OK. I was impressed to see provisions on
adequate--or quality and actuarial soundness and network
adequacy in the new Medicaid managed care regulation. Can you
describe how, if CMS' proposed managed care regulation would be
implemented, access to quality care would improve beneficiaries
in the managed care?
Ms. Wachino. Sure. I will highlight a couple of examples of
how our new proposed rule could improve quality and actuarial
soundness and access for our populations. With regard to
quality, there are a number of provisions. I think one of the
most significant is giving Medicaid beneficiaries the ability
to understand how quality compares across plans through a new
quality rating system, so that beneficiaries can shop, and they
can form choices about their plan selections.
As you referred to, Ranking Member Green, we also
substantially have improved our approach to ensuring that plan
rates are actuarially sound. There is a body of work reviewing
those rates that is going on now, even in advance of the
regulation, to really make sure that we are paying the right
amount to ensure adequate access to Medicaid beneficiaries, and
ensuring appropriate stewardship of funds.
And with respect particularly to access, the proposed rule
establishes for the first time--or proposes to establish that
there will be State-developed network adequacy standards for
many key services for the Medicaid population, which, given
that, as recently as 3 years ago, nearly 60 percent of our
beneficiaries were enrolled in managed care, I think is a
really substantial advance in access for our program.
Mr. Green. OK. Mr. Chairman, I have one last question for
Ms. Schwartz. Has MACPAC looked at how changes to streamline
eligibility have improved the continuity of care?
Dr. Schwartz. We have not specifically analyzed that issue.
It is one we are very interested in, and the data are not yet
available for us to do so. And as data become available, that
is something that we will be keeping our eye on.
Mr. Pitts. The Chair thanks the gentleman. I recognize the
chair emeritus of the full committee, Mr. Barton, 5 minutes for
questions.
Mr. Barton. Thank you, Mr. Chairman, and thank you for the
hearing. These microphones kind of have an echo to them. I will
be as softly as I can.
Ms. Wachino, could you give us the status of the Texas
request for re-approval of its 1115 waiver?
Ms. Wachino. Yes, I can. The Texas waiver expires next
year. I know that the State has been working on a request to
extend that demonstration, which we approved in 2011, but they
have not sent it to us yet. We have had some initial
conversations with them, but are waiting for them to submit
their full request, and look forward to working with them on
it.
Mr. Barton. So there have been some rumors that because
Texas is such a red State that that application is going to be
frowned upon. That is just rumors? There is no validity to
that?
Ms. Wachino. Congressman Barton, we work with all States
through the waiver process to try to achieve the objectives of
the Medicaid program and try to take into account State-
specific needs, and we are looking forward to reviewing with
the State of Texas how the initial demonstration went. There
were some areas of their programs that were new to us when we
initially approved it. We will want to review very closely with
them how the different provisions of the waiver are working.
And we are looking forward to that discussion.
Mr. Barton. With Mr. Green here, my ally, make sure we are
bipartisan, you will----
Mr. Green. Would you yield to me just for a minute?
Mr. Barton. I will be happy to yield.
Mr. Green. Even though we are a red State, we sure have a
lot of poor people, and Medicaid is for that, whether you are
red or blue, or----
Mr. Barton. That is true.
Mr. Green [continuing]. Whatever. Thank you, Joe, for your
leadership on what we are trying to do.
Mr. Barton. Of course, those of us that are red, in that
sense, you know, if they would listen to us more, we would have
less of those people. See, we would get them into where they
didn't need to be a part of it, but that is a different
discussion.
So we have your word that the Texas 1115 waiver application
is going to be fairly reviewed?
Ms. Wachino. Again, we work with all States, you know, and
we apply the same process to all States. We look to review the
extent to which a waiver achieves the objectives of the
Medicaid program and how it is advancing the health of the low-
income population in the State. And I----
Mr. Barton. So that is a yes?
Ms. Wachino. I know that the team in Texas is working hard,
and we are looking forward to working with them.
Mr. Barton. OK. I am going to take that as a yes. We are
going to put it in the record as a yes, that it is going to be
fairly reviewed.
Let us look at a program, Ms.--that Ms. Castor and I are
very supportive of, the Ace Kids Act. It would allow States to
set up programs across State lines for special needs children,
create a medical home in these anchor children's hospitals,
where a parent could bring a child, and if the child qualifies,
they get the full range of services, whatever those services
need to be. This is a bipartisan bill. We have got--I can't
remember how many co-sponsors, but it is well over 100. Are you
familiar with that bill?
Ms. Wachino. Congressman Barton, I can't say that I have
looked at the particulars of that bill, but clearly approaches
that advance the quality of care and coordination of care for
children particularly are of interest to us, so I am happy to
take a look at it, and CMS stands ready to provide any
technical assistance to you on it.
Mr. Barton. Well, the advocates of it, and I am an advocate
for it, believe that it would save money for Medicaid. You
wouldn't have to have a parent try to create their own network,
and in some States you don't even have the type of care that
that child needs. So it has got a lot of support, and I would
encourage you and your staff to take a look at it, and
hopefully, at the appropriate time, be supportive of it. And
with that, Mr. Chairman, I yield back.
Mr. Pitts. The Chair thanks the gentleman. I now recognize
the gentlelady from California, Mrs. Capps, 5 minutes for
questions.
Mrs. Capps. Thank you, Mr. Chairman, and I appreciate the
presence of our witnesses today, and your testimony. It is very
appropriate that we are here during this anniversary year to
talk about the largest source of health coverage in our
country, Medicaid, and the Children's Health Insurance Program,
CHIP. These programs now provide health care--or opportunities
for health for over 70 million Americans, and I am happy that
our committee was able to ensure that CHIP is re-authorized for
2 more years, and I hope that we continue to actively support
and ensure the continuation of something I have known, as a
school nurse, as an incredibly successful program.
As a committee, we have a responsibility to make our best
faith effort to build upon the success of these programs.
First, it is important to recognize how far the Medicaid
program has come in the last 50 years. It is remarkable.
Perhaps most notably, in the past few years, the program has
been very much strengthened through the provisions in the
Affordable Care Act based on the needs of our communities.
Medicaid is a safety net, of course, for these people who
are otherwise shut out of private insurance, either because it
is unaffordable, or is unavailable to them. And thanks to
Medicaid expansion in the States where they have access to it,
the program could be there for any of us, including here, in
this room, who fall down on our luck and needed support.
Most people in the coverage gap are working. They are
working poor, employed either part time or full time, but still
living below the property line. While the promise of coverage
is there, unfortunately, nearly four million hard-working low-
income Americans cannot receive the health coverage they need
because they live in States that have chosen not to expand
Medicaid, despite the economic benefits that are now
demonstrated, well demonstrated, of doing so. However, for
those who do have Medicaid coverage, there have been
substantial changes to the delivery of Medicaid that aim to
increase access, and also quality of care. I am particularly
proud of all the progress in my home State of California made
in the areas of patient-centered medical homes and care
coordination.
This has been discussed by you already in a response to a
question, but can you talk about, Ms. Wachino, some of the
other new and innovative delivery system reforms that you have
seen States starting to take up, and have been working with
States to make sure it happens?
Ms. Wachino. Sure, I am happy to, thank you. We have a
variety of really promising work underway with States to
strengthen their delivery systems. And, as I said briefly in my
oral testimony, there are many different modalities.
Mrs. Capps. Um-hum.
Ms. Wachino. Some States, you know, use existing State plan
authority. States like Arkansas are taking up shared savings
for their providers, building off of a Medicare model. Missouri
is using our new health homes option, created under the
Affordable Care Act, to really move forward with improvements
for people with chronic diseases. And in Missouri we have seen
reductions in the use of hospital care, and improvements in key
measures, like measures of diabetes care, which are very, very
promising.
There are other States who have taken even more far-
reaching approaches. Oregon, under 1115 authority several years
ago, launched coordinated care organizations, which were
designed to be community rooted approaches to coordinating the
entire spectrum of care for Medicaid beneficiaries and piloting
new approaches, like using community health workers. Other
States have created delivery system reform incentive payments
to really propel movement forward on key payment goals. We
approved New York last year for a new 1115 waiver, and New York
is committed to very concrete and measurable objectives for
increasing the number of their providers who are using value-
based payments.
Mrs. Capps. Thank you.
Ms. Wachino. So I think we are changing the landscape of
Medicaid care delivery in a number of ways.
Mrs. Capps. I don't mean to cut you off, but I think you
could go on and on, and maybe you would like----
Ms. Wachino. I am afraid I can, so I thank you for the
stop.
Mrs. Capps. You could submit any other examples you would
like for the record, because, as we have discussed in this
community 2 weeks ago, we have seen over 300 State flexibility
waivers to create State solutions within the Medicaid
framework. And that--this is an exciting time to see those come
forward. There is substantial State flexibility. I think it is
important to recognize this innovation and flexibility, what it
looks like. Before considering any changes to our program, we
must be mindful about what exactly--who will be impacted by the
decisions that we might make, and if we are truly improving
care, or just passing the buck to States.
So we want to be working with you--with the different
States with respect to persons with disabilities, seniors, and
struggling families. Right now we know that the Medicaid
program works. Individuals with Medicaid are more likely to
receive preventative health care, which is cost savings, and
less likely to have medical debt than their underinsured
counterparts.
Dr. Schwartz--I will have to save that question for another
panel--another round. Thank you.
Mr. Pitts. Or you can submit it in writing. Thank you. The
Chair thanks the gentlelady. I now recognize the vice chair of
the subcommittee, Mr. Guthrie, 5 minutes for questions.
Mr. Guthrie. Hey, thank you. Thank you all for coming this
morning. And, first, to either Ms. Yocom or Ms. Iritani, I hope
I said that correctly, in your testimony you noted that CMS
lacked complete and reliable data about the sources of funding
States used to finance the non-Federal share of Medicaid, which
can shift costs to the Federal Government. What information
have you recommended that CMS collect, and how will having this
information help CMS monitor the program to ensure the
appropriate use of Federal funds?
Ms. Iritani. Yes, we have made recommendations that CMS
develop a data collection strategy regarding sources of funds
that States use for financing the non-Federal share. We have
recently surveyed States about how they are financing the non-
Federal share, and identified that States are relying more
heavily on providers, such as through provider taxes, and local
governments, through intergovernmental transfers, for example.
Provider taxes, I think, doubled during the course of the
2008 to 2012 time period that we looked at, and these can shift
costs to the Federal Government and to providers. We think it
is important that CMS have data needed for oversight.
Mr. Guthrie. OK, thank you. And, Ms. Wachino, I have
introduced a bill H.R. 1362, which would require States to
report how they finance. I know you share that we need more
transparency in the way States report how they finance
Medicaid. And what actions has CMS taken in response to the GAO
recommendations?
Ms. Wachino. Mr. Guthrie, thank you for the question, and
for your interest in transparency and accountability. I think
GAO's work in this area has been very helpful, and we are
making improvements, and continue to make more. We are looking
much more closely at the sources, and reviewing more closely
the sources of the non-Federal share. We are working on getting
additional levels of data for a variety of different kinds of
payments, and we are conducting more active oversight. We have
also issued several forms of guidance to States, making sure
that our rules are clear with respect to provider taxes and
donations. So I think we are strong in this area, and continue
to get stronger.
Mr. Guthrie. Yes, and I used to be in State Government,
before I got here on the Budget Committee, in Kentucky, which
has a substantial Medicaid population. Actually one out of four
now are on Medicaid, and so I understand that States are being
creative because of the budget pressures they are facing, so
that is something we all need to work together to move forward.
And, Ms. Wachino, in your written statement you described
numerous CMS initiatives aimed at innovation in achieving
better health outcomes at a lower cost. And how is CMS
assessing these--or evaluating these initiatives to determine
if they are meeting goals?
Ms. Wachino. A lot of these delivery system reforms are
very important to us, and we want to know how they work for
ourselves, as stewards of taxpayer dollars, and also to inform
developments in other States. We are evaluating many of the
delivery system reform improvements that we undertook with
States through our 1115 waivers. Right now that is very
important to us. MACPAC's also done some very helpful work in
this area. And we also will be evaluating the effectiveness and
results of the work we are doing through our Innovation
Accelerator Program in areas like substance use disorder,
promoting community integration, improving physical and
behavioral health, and meeting the needs of complex, high cost
populations. And, again, all of that is designed to help us,
and to help States be smarter and better purchasers of care.
Mr. Guthrie. Well, good. Is there some timeframe when some
of the original--or early evaluations will come forward?
Ms. Wachino. You know, I can get back to you on that
question for the record.
Mr. Guthrie. All right, thanks. And then one more. I
understand that OIG has found significant and persistent
compliance, payment, and fraud vulnerabilities related to the
provision of personal care services in Medicaid, and--including
payments for services not rendered. Has CMS taken action to
address the OIG recommendations to improve integrity in
personal care services?
Ms. Wachino. Yes. Thank you for the question, and for the
work that IG and GAO have done looking at our personal care
services. We have taken steps to ensure the integrity of
personal care services. We recently engaged a contractor to
look at data and provider compliance----
Mr. Guthrie. Um-hum.
Ms. Wachino [continuing]. In that area. We issued a quality
informational bulletin with respect to personal care services
in our 1915(c), which, apologies for the jargon, are home and
community-based services waivers. And also, as I think staff of
this committee knows, we have made a very substantial effort in
data systems modernization. We call it our TMSIS System, and
that is going to provide us a level of programmatic data that
we are very eager for, and will help our program integrity,
program management, ability to evaluate States in a number of
areas, including for personal care services.
Mr. Guthrie. Thank you, my time has expired. I appreciate
your answers. Appreciate your answers.
Mr. Pitts. The Chair thanks the gentleman. I now recognize
the gentlelady from Florida, Ms. Castor, 5 minutes for
questions.
Ms. Castor. Well, thank you, Mr. Chairman, and thank you to
all of our witnesses for being here today to discuss Medicare
on its 50th anniversary. You know, the passage of Medicare and
Medicaid 50 years ago, through amendments to the Social
Security Act, really are something to celebrate. They are
landmark safety net laws in this country that really
demonstrate our values. In Medicare, you work hard all of your
life, and you retire, you are not going to fall into poverty
because of a health condition. The same with Medicaid. Under
Medicaid, we are not going to allow children across America, no
matter what station they are born in in life, to suffer the
consequences of a debilitating disability, or just being able
to see a doctor.
So we have something to celebrate here. And then when you
add on the impact of the Affordable Care Act, feels like we are
kind of out of the woods, and now we can begin to work on
bipartisan solutions to improve it together. I think the future
is bright so--this is also an important time for Medicaid,
because at this point in time we are dealing with Medicaid
expansion and delivery system reform, and that will help
improve the lives of so many of our neighbors all across the
country. So I look forward to hearing your thoughts on these
transformations.
I want to especially thank Ms. Wachino for her extensive
work with the State of Florida over the past few months, few
years. We had a very contentious legislative session, where we
had Republican State Senators, and the business community,
hospitals, clamoring for a coverage model in Medicaid
expansion. We had a Governor who flip-flopped. He was for
Medicaid expansion when he ran for re-election, then he changed
after the election. He devised a budget with certain low-income
pool monies that were--he was on notice that--just weren't
going to happen, and you came through it very well. We still
have challenges in Florida. I hope we can move to Medicaid
expansion. But you stayed true to the values and the intent of
the Medicaid program, so thank you very much.
I would like to ask about the agency's proposed rule for
Medicaid managed care organizations that were issued earlier
this year. Given the growing number of Medicaid beneficiaries
who receive care through managed care arrangements, it is
crucial that we strengthen Federal oversight of these programs
to ensure that Federal dollars are being spent wisely. This has
my attention especially because a Federal Court Judge in
Florida found that Florida's Medicaid program was in violation
of Federal law because of low reimbursement rates, failure to
provide prompt service and adequate service, failure to provide
outreach services as required by the law. Then you had a
Supreme Court Decision involving the State of Idaho that said
that you can't--private providers cannot challenge low
reimbursement rates. So that puts the impetus on HHS to follow
through with oversight.
Ms. Yocom, GAO has issued a number of recommendations to
CMS to improve Federal oversight of the managed care rate
setting process, is that correct? And why does this feel--why
does GAO feel that this is necessary?
Ms. Yocom. Well, it goes back in part to transparency
issues, understanding where the money is going and for what
purposes. We also did do work just recently that spoke to the
fact that neither the Federal Government nor the States in our
sample were actually conducting audits of Medicaid managed care
organizations, and we recommended that that be changed, that
CMS require States to conduct audits both to and by managed
care organizations.
Ms. Castor. And Ms. Wachino, do you agree?
Ms. Wachino. I think GAO's concerns helped us really inform
some of our thinking about our proposed rule. Ensuring
accountability in managed care is vitally important to us
because it is where most of our beneficiaries get their care.
Medicaid is no longer a fee-for-service program, and managed
care has great potential to offer care coordination and meet
the needs of low-income Americans, but we really want it to be
as strong as possible.
So, to Ms. Yocom's point, part of the proposed rule does
include greater auditing by Medicaid managed care plans. We
have also proposed new rules with respect to provider
enrollment to ensure that providers go through the same
screening process when they enroll in a Medicaid managed care
plan that they do in a fee-for-service program. And we are
making substantial advances in the soundness of the rates that
States pay plans.
Ms. Castor. Yes. For example, the Federal--I will--I am
going to submit these further questions into writing, Mr.
Chairman, and I would also like to thank Chairman Emeritus
Barton for raising the issue of the Ace Kids Act, and we will
look forward to working with CMS on a medical home for children
with complex conditions. Thank you very much. I----
Mr. Pitts. The Chair thanks the gentlelady, and now
recognizes the gentleman from Kentucky, Mr. Whitfield, 5
minutes for questions.
Mr. Whitfield. Thank you very much, and thank the four of
you for joining us today, and we appreciate your
responsibilities and involvement in the healthcare delivery
system in America. As you know, or maybe you don't know, there
are about 67 different programs in the Federal Government
relating to climate change. And whenever--EPA has been
particularly active in that area, and on their regulations they
talk about some of the primary benefits relate to health care.
Asthma conditions, premature deaths, whatever. And we know that
Medicare, 500 billion a year, Medicaid, 330 billion a year,
community health centers, around 5 billion a year, I don't know
what the cost of Tricare is, but it is primarily about access
to health care, which is vitally important.
But one area that I have been reading more and more about
recently that disturbs me a great deal relates to antibiotic
resistant bacteria. And it is turning out that it is a more
significant issue not only nationally, but internationally. And
I read an article recently that last year alone in America
there were 37,000 deaths relating to infections that could not
be treated by antibiotics. And some of the experts are saying
that that figure is much lower than reality because the
identification system is not sophisticated enough to determine
when someone has died because of the bacteria being resistant
to antibiotics.
And I have been told that 44--that hospitals in 44 States
have had outbreaks of bacteria resistant to antibiotics. Even
NIH, our premier research and development institute, has had
deaths because of this issue. And I would like to know--you all
are involved in the very core of CMS, and HHS, and CDC. Are you
aware of some specific programs that are trying to address this
problem that faces the American people today?
Ms. Wachino. Congressman Whitfield, thanks for raising the
concerns. I think that HHS shares your concern about making
sure that people remain healthy. I would like to go back and
consult with my colleagues, particularly in CDC, and get back
to you for the record about what they are doing, because I
think when it comes to things like surveillance, that is really
a primary responsibility of theirs, with Medicaid coverage
supporting people, when they unexpectedly fall ill, to make
sure they get the services----
Mr. Whitfield. But you--well, I appreciate that, because I
tell you, I do get upset about it, because we see a plethora of
executive orders and regulations relating to asthma, and other
things like that, but I am not aware of one executive order or
regulation to address this issue, and this is an issue that can
really destroy a lot of people in this country and around the
world. And the experts that I have heard from, the hospitals
that I have talked to, and others, say that this is an epidemic
that can be quite serious not only for America, but for the
world.
Ms. Wachino. Thank you for the concern. I am happy to go
back and consult with our experts and circle back with you to
provide you more information with how we are approaching it.
Mr. Pitts. The Chair thanks the gentleman, now recognize
the gentlelady from California, Ms. Matsui, 5 minutes for
questions.
Ms. Matsui. Thank you, Mr. Chairman. As we know, California
is the forefront of innovation of many areas, not the least of
which is health care. California was an early implementer of
Medicaid expansion, and the first State to implement the
delivery system reform incentive payment. As we know, Medicaid
is a State/Federal partnership, and the ability for the State
to implement pieces of the program as it sees fit within
Federal guidelines is essential to its success. Of course, the
main way that States are able to exercise this flexibility is
through the waiver process.
Now, just 2 weeks ago California was the first State to be
approved for a 5-year renewal of a different waiver, for
specialty mental health services. Previously these types of
waivers were only allowed to be renewed in 2-year intervals,
but the ACA changed that to allow for 5-year renewals. This is
a huge step forward for the nearly one in six California
adults, and one in 13 California children with mental health
needs.
I am also so pleased that California is also moving forward
to apply for new community behavioral health funding in the
Medicaid program, which will be available in the form of
demonstration projects based on the Excellence in Mental Health
Act that I co-authored with my colleague on this committee,
Representative Leonard Lance. This demonstration will support
California's efforts to integrate mental and physical health.
This is so important, as we all know that the head is connected
to the body, and we need to treat it that way.
Ms. Wachino, how is a Medicaid program, especially through
waivers and demonstration projects, making a difference in the
mental health system?
Ms. Wachino. Thank you for the question. We are working
actively on supporting mental health services in a number of
areas, and thank you for mentioning the community mental health
services program that we released the planning grant
announcement for just a few months ago. We were very happy to
have that legislation. As you well know, it allows us to pilot
approaches in partnership with health centers to advance
community-based mental health care, and we are very much
looking forward to seeing States apply for those grants. We
have had a high interest level so far, and we will look forward
to continue working with them.
I think, in addition to that, we have a number of
initiatives underway, and a very strong interest level from
States in moving towards greater physical and behavioral health
integration, and clearly community-based mental health care is
a key part of that, and we will be working actively with
California, and with other States, to ensure appropriate
provision of community-based care.
Ms. Matsui. Well, thank you. Now, Ms. Wachino, under your
leadership CMS recently released the first major proposed
update to Medicaid and CHIP managed care rules since 2003, and
one of the provisions of the proposed rule would provide
flexibility for Medicaid managed care on the so-called IMD
exclusion, which prevents Medicaid from paying for inpatient
mental health services and facilities with more than 16 beds.
Can you please elaborate on that policy, and how it is intended
to strike the right balance between the ability to provide
inpatient services and emphasis on community-based care?
Ms. Wachino. Thank you for the question. We have spent a
lot of time thinking, and I know many members of Congress have
as well, about how to ensure access to mental health services,
particularly community mental health services, and we have
become aware of a growing need for access to mental health
services.
However, we are also trying to approach it cautiously and
are very aware of the risk that if we move too far forward, and
too fast in moving forward, in terms of allowing Medicaid
funding for services to adults in institutions of mental
disease--which, as you know, Congresswoman Matsui, is
prohibited by statute--that we would risk undermining the
progress we have made in serving Medicaid beneficiaries in
communities rather than institutions. So our proposed rule
tries to strike the balance by proposing to allow States and
plans to cover, as part of their capitation rates, short-term
stays in institutions of mental disease.
Ms. Matsui. OK. Thank you. Dr. Schwartz, during your
testimony today you noted the importance of Medicaid on our
health system safety net. I was particularly interested in your
comment that Medicaid often acts as a wraparound insurance for
long-term services and supports, as well as employer sponsored
insurance and Medicare. Can you please expand on this
wraparound role that you described in 10 seconds?
Dr. Schwartz. Yes. I think the primary way is Medicare does
not cover long-term services and supports, although it is the
primary source of coverage for medical care for the elderly and
disabled. Those services have very few sources of private
coverage, and Medicaid plays a key role for those populations.
It also provides wraparound services for employer-sponsored
coverage, primarily for children with disabilities, who have
very high costs, particularly for prescription drugs, that may
be beyond what their parents' plans pay for.
Ms. Matsui. OK. Thank you, and I will submit my other
questions.
Mr. Pitts. The Chair thanks the gentlelady. I now recognize
the gentleman from Illinois, Mr. Shimkus, 5 minutes for
questions.
Mr. Shimkus. Thank you, Mr. Chairman, and welcome--we have
two competing, as you probably heard, hearings going up and
down, so I apologize for missing some of the testimony. But to
my friend from Kentucky, we do have 21st century cures. Bill is
going to be on the floor. Adapt is part of that. It is going to
build on gain. This is on the antibiotic resistance issues,
which we hope to get, you know, more drugs into the--or to be
able to compete. So I do think there is a legislative response.
I think his issue was, you know, where is the Government's
response? So--but I just throw that out there for information.
Ms. Wachino, in 2008, Mr. Waxman, Dingell, and Mr. Pallone
sent a letter to GAO expressing concerns on CMS' implementation
of its own policy on 1115s, and we have talked about these
today, demonstrations that they be budget neutral. Years later
those concerns are still there. GAO has found billions of
dollars in increased costs to the Federal Government as a
result of waivers that were not budget neutral, a concern that
crosses party lines. Can you please explain CMS' process for
assessing the budget neutrality of waivers, and how the CMS
actuaries are involved in this process?
Ms. Wachino. Sure. Our approach to budget neutrality,
which, as you know, is designed to ensure that costs with the
waiver are not higher----
Mr. Shimkus. Well, the States have been making promises
that they are going to have this new ramped up program that is
actually going to be a savings, and we are finding out that
they are not.
Ms. Wachino. Yes. As we work with each State, we try to
find a solution. As we have worked them, particularly on budget
neutrality, we have made our 1115 waiver approval process more
transparent. We have improved our monitoring and evaluation.
And particularly with respect to transparency, we put all of
our approval documents on medicaid.gov. We also, as you
probably know, developed a template for waiver applications
that includes a structure for budget neutrality reporting, and
we have worked to be consistent in our approaches to budget
neutrality across States.
Mr. Shimkus. Wouldn't it be prudent to have you all and
your actuaries sign off on each demonstration to ensure that it
is budget neutral?
Ms. Wachino. I think we have worked hard to ensure
consistency in budget neutrality, and will continue to work
hard.
Mr. Shimkus. So that brings me to H.R. 2119, which is the
bill I dropped, just to really say sign off on it. Have your
actuaries actually sign on the dotted line, and put their
reputation on the line that, based upon the analysis they have
in front of them, that this is going to be--right now, yes, you
could put all this stuff out there, but it is not a strong
enough signal to say--because we--it is been proven it has not
been working. I mean, we are just spending more than what the
projected savings would be on the program.
Let me go to one last issue, which I do have time for. If
the staff would put the chart up?

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Mr. Shimkus. I talk about this all the time. CBO recently
issued a 2015 long-term budget outlook, and has noted that, in
a little more than a decade, all the Federal budget will be
consumed with entitlements and service on the debt. With
respect to Medicaid it said many State Governments will respond
to growing costs for Medicaid by restraining payment rates to
providers and managed care plans, limiting the services that
they choose to cover, or tightening eligibility for those
programs so that it serves fewer beneficiaries than it would
have otherwise.
This reaffirms a long-term concern of mine that our biggest
threat to access to care for our Nation's most vulnerable is
the budgetary pressures that States and the Federal Government
face in financing our entitlement programs. Yet, in your
testimony today, you did not mention the fiscal sustainability
of the program at all. Aren't you concerned that unless we make
changes our fiscal situation will put beneficiaries' access to
care at risk, or do you agree with--disagree with CBO's
warnings?
Ms. Wachino. We are very committed to being strong fiscal
stewards of the Medicaid program. I think Medicaid has proven
to be a very cost-efficient program. As you saw in some of my
colleagues' testimony----
Mr. Shimkus. But the point is this, here--that is our
budget.
Ms. Wachino. Um-hum.
Mr. Shimkus. The red is mandatory spending. One of those is
Medicaid. And the CBO says it is going to grow, so it is going
to keep shrinking the blue, which is the discretionary budget,
which is all these other things we do, NIH, and all these other
things. The CBO report also says that States--and we have seen
this. This is not new. States, when they are in budgetary
pressure, they start restricting access to Medicaid. Isn't that
a threat that you ought to be mentioning when we are doing this
let us talk about Medicaid hearing?
Ms. Wachino. Congressman, we work, again, actively to
ensure the sustainability of the program so that it----
Mr. Shimkus. So what proposals are you going to provide to
us to make this program sustainable?
Ms. Wachino. Congressman, in the President's budget we
proposed proposals around changing the drug rebate----
Mr. Shimkus. And that is not in your testimony.
Ms. Wachino. That is right. My testimony did not address
every proposal in the President's budget, but I think it is
important to note for the record that there are proposals with
respect to changes for durable medical equipment, and to
spending for prescription drugs. And we think approaches like
that, together with our approaches to strengthening delivery
system reforms, are the ways to ensure the sustainability of
the program for the future.
Mr. Shimkus. Thank you, Mr. Chairman. I will just say
actuary changes in entitlement programs. You have to make
actuary changes, not nibbling around the edges. And I will
yield back my time.
Mr. Pitts. The Chair thanks the gentleman, and now
recognize the gentleman from New Mexico, Mr. Lujan, 5 minutes
for questions.
Mr. Lujan. Thank you very much, Mr. Chairman. Ms. Wachino,
as you are aware, I have had conversations with you and with
Secretary Burwell about concerns with the behavioral health
system in New Mexico. At the moment is CMS concerned that New
Mexicans enrolled in Medicaid have adequate access to
behavioral health services?
Ms. Wachino. Congressman, thank you for working with us and
for your continued interest in this issue, and you know that we
share concerns about ensuring appropriate access to behavioral
health services in New Mexico. We have worked very closely with
all States, including New Mexico, to ensure appropriate access
to behavioral health care. Specifically, with respect to New
Mexico, as you and I have discussed previously, we are working
with the State to develop a comprehensive plan to continue and
to ensure access. The State has provided us data, which we are
reviewing now, and we hope to be able to report out on it soon.
Mr. Lujan. So, Ms. Wachino, in 2013 CMS asked the State of
New Mexico for a network development plan. Is that the plan you
are referring to?
Ms. Wachino. We asked them for a plan. We have actually
taken a step back and asked them to go a little bit further
than that, and to go review their past plans and their future
plans, and provide to us a plan that provides us an assurance
that there will be adequate access to mental health services
throughout the State.
Mr. Lujan. So in 2014 you followed up with a request
letter, the same one that you submitted in 2013 to the State of
New Mexico, reminding them--it says, we remind the State to
submit a network development plan. Has that plan been submitted
to CMS?
Ms. Wachino. I will have to go back and check, and I could
submit that for the record. I can tell you, Congressman, that
we met with the State as recently as June to talk about the
need to continue progress forward in this effort. We still have
some additional information we are awaiting for the State, and
we continue to work with them actively, and look forward to
having more to report to you soon.
Mr. Lujan. So I appreciate very much that CMS shares
concerns. It is also stated in your 2013 letter that CMS
continues to be concerned about the transition of behavioral
health providers and centennial care. In 2014 the State again
worked with the State of New Mexico to ask for some data to be
released associated with behavioral health stakeholders.
And there was a letter that was sent to the State of New
Mexico in which the State of New Mexico's behavioral health
responded to CMS, September 23, 2014. In the letter it says,
``As we discussed in our meeting with CMS''--and I am quoting
--``and the BHS stakeholders, HSD is anxious to share BH
utilization data with the public, but we need to be sure that
the data we report is accurate. We are close to confirming the
utilization data, and within the next few weeks we expect to
release BH utilization data for the first two quarters of
centennial care. We understand the importance of data
transparency.'' So it said within the next few weeks. Again,
this letter was written September 23.
In an article in the Albuquerque Journal, which is a local
paper, published September 24, which is the next morning, at
12:02 a.m.--and I know the press is good, but they can't write
an article in a minute, so it probably was written the day
before--the spokesperson for HSD says that the data will be
presented to the Legislative Finance Committee today. Was
someone not being honest with CMS when they sent this letter to
you on September 23?
Ms. Wachino. Congressman, we continue to work as closely as
we can with the State to ensure adequate access to behavioral
health services. I can go back with my staff and review what
the State submitted, and report back to you.
Mr. Lujan. Ms. Wachino, has CMS been receiving adequate
data yet?
Ms. Wachino. We have a variety of data sources from the
State. We are comparing them to each other, and trying to
identify trends and issues with respect to access to behavioral
health care.
Mr. Lujan. Did CMS receive the data that was publicly
reported in the Albuquerque Journal, that was also shared with
the New Mexico Legislative Finance Committee on September 24 of
2014? Has CMS received that data?
Ms. Wachino. Congressman Lujan, I know that we have
received data, including data that is reported to the
legislature from the State. As you know, many of the
developments that you have just informed me of precede my
tenure at CMCS, so, if I could, I would like to go back and
examine the record with my staff who have been working on this.
Mr. Lujan. And, Ms. Wachino, with all due respect, these
issues were brought up with the meeting with the delegation 6
weeks ago. This is--these are not new questions. The reason I
am asking them in this hearing today is because we have not
received any answers, and it is frustrating. Especially when it
seems that the paper has more access to data than the
delegation and CMS does, at least than what is--reporting to
us. The way that this information came out was through a FOIA
request through a local network of individuals that were
concerned in New Mexico. Do--does--do members of Congress have
to seek Freedom of Information Act requests to Federal agencies
to get data?
Ms. Wachino. Congressman, as we have committed to you, we
would--we are obtaining data from the State, and we have agreed
to make it transparent for everyone. And let me say again, we
met with the State as recently as early June to try to ensure
continued progress in this area, and we are going to continue
to work with them and with you to ensure appropriate provision
of behavioral health services in the State.
Mr. Lujan. All right. Mr. Chairman, I--as you can see,
there is some frustration from the delegation in the State of
New Mexico in this issue, and it is one that we hope that we
can continue to work with the staff and everyone that--from CMS
that has been working with us recently. But we need to get
these answers to questions that have been asked, and to try to
get to the bottom of what is going on. And I certainly hope
that you can share with us.
I will submit into the record more questions, Mr. Chairman.
A deadline that has been established for when this report
were--in 2013--2014. It is now 2015. When is a deadline going
to be established to get this report in? So I thank you, Mr.
Chairman, for your indulgence, and I yield back.
Mr. Pitts. The Chair thanks the gentleman, and now
recognizes the gentleman from Pennsylvania, Dr. Murphy, 5
minutes for questions.
Mr. Murphy. Thank you, and good morning. I am going to
follow up on some of the questions my colleagues and friends
have asked from New Mexico and California, the behavioral
thing. I know the GAO report said that behavioral health is a
serious problem.
Ms. Wachino, you made reference to the word progress. What
progress is being made on the IMD exclusion issue?
Ms. Wachino. We have been looking very carefully at this
issue from the standpoint of wanting to ensure that there is
appropriate access to inpatient mental health services and at
the same time trying to arrive at an approach that doesn't
undermine the progress that we have made----
Mr. Murphy. That is what I am asking----
Ms. Wachino [continuing]. Supporting people in the----
Mr. Murphy [continuing]. What you mean by progress----
Ms. Wachino [continuing]. Communities.
Mr. Murphy [continuing]. Is what----
Ms. Wachino. The most tangible sign of progress is in our
proposed managed care rule, where we have proposed to give
States the flexibility, and plans the flexibility, to cover,
through their capitation rates, short-term stays in their----
Mr. Murphy. ``Short-term'' meaning?
Ms. Wachino. ``Short-term'' meaning--I think the standard
is up to 15 days. I can tell you that we reviewed preliminary
data from the Medicaid emergency psychiatric demonstration,
which I know you are familiar with, and use that to base the
standard for the short-term stay.
Mr. Murphy. Some things about that have been--I am
concerned that a short-term stay of 15 days is insufficient,
because it may take a couple weeks to get off of one
medication, couple weeks to get back on another one. But we
don't--but that is different from residential care. I am
looking at things that I think are valuable at a less than 30
days average rate.
But when you are looking at these issues, and helping
States do that, are you looking at other dependent variables,
such as suicide rates, drug overdose rates, arrests,
incarcerations, homelessness, ER boarding costs, are any of
those things you are looking at?
Ms. Wachino. I think, Congressman, your question points
to--at the end of the day we should be looking at health
outcomes.
Mr. Murphy. Um-hum.
Ms. Wachino. When we fund Medicaid services, I believe that
the evaluation of the Medicaid emergency psychiatric
demonstration will inform our policy in this area
significantly. We don't have evaluation results yet.
Mr. Murphy. And I just want to make sure, as you are
pursuing that--and this is what I want to find out, what your
dependent variables are in your study. A recent report that was
just--I just read from the Arkansas legislature, might want to
look that up. It looked at States like Oregon, Georgia, Texas,
and found that the rates--the cost of incarcerating someone
with mental illness could be 10 times higher than the rate of
serving them in the community.
Obviously this would be a huge issue, especially if you
have the revolving door of people in and out of jails, show up
in emergency rooms, back in the community, we are not serving
anybody well that way. I am sure you would agree. That is
heartless, and that is--we don't do that in this country.
Unfortunately, we do that, but it is a serious concern.
But with regard to that, I also want to talk about
legislation I have that this committee has been dealing with my
legislation, Helping Families in Mental Health Crisis Act. We
are trying to reform the whole system. And one of the ways that
we look at this is to help--is through promoting stronger
enforcement of mental health parity. And recently CMS proposed
a rulemaking that would apply purely to beneficiaries served by
Medicaid and managed care, which have far reaching positive
implications, if complied with.
On another area, though, I have strong concerns about the
proposed rule's exclusion of long-term care services from
MHPAEA, parity protections. Long-term care services, inpatient
and community based, are critical to many individuals with
mental health and substance abuse disorders, particularly the
medicated CHIP population. And CMS has clear authority and
statutory obligation to apply parity to all covered benefits
under these programs, yet the proposed rule doesn't even define
long-term care services, or identify the types of services that
apply. Can you address this flaw in the proposed rule with
regard to the definition of that?
Ms. Wachino. As you know, the comment period on our
proposed mental health parity rule, which we think is a very
substantial advance in coverage of mental health services in
the Medicaid program, just recently closed. We are reviewing
the comments now, and I would fully expect that the question of
whether these protections also extend to long-term services is
something that we will receive a lot of comments on, and that
we will actively consider as we finalize the rule.
Mr. Murphy. Thank you. I hope--what is important to all
these rules, in looking at behavioral health, is when--you also
talk about progress in this issue is--I think we are also--so
all--you have the IMD exclusion. A lot of people can't get care
for the crisis, period. We don't want people--we don't ever
want to bring back the asylums, but we want people to have an
option for crisis, instead of being boarded in an emergency
room. We have had testimony in my Oversight Committee that
boarding would take place for hours, days, weeks, and months.
Terrible place for a person to be strapped to a gurney as these
things go on.
But part of the concern also is that there are just simply
not enough providers. Not enough psychiatrists, not enough
clinical psychologists, not enough clinical social workers, who
deal with the severely mentally ill. And so I am hoping that is
also something you are looking at as well. It has an impact
upon the reimbursement and--provision of these. As you are
looking at working out these partnerships with States, we have
to have ways of getting more people out there, because nothing
is worse than telling someone, there is just no room for you,
and there is no one to see you. I yield back.
Mr. Pitts. The Chair thanks the gentleman. I now recognize
the gentleman from Oregon, Mr. Schrader, 5 minutes for
questions.
Mr. Schrader. Thank you, Mr. Chairman, I appreciate it. Ms.
Wachino, could you comment a little bit on Medicaid spending
per beneficiary compared to private insurance over this past
decade?
Ms. Wachino. Sure. Thank you for the question. When you
look at per capita--per beneficiary costs, Medicaid costs have
been recently growing more slowly than the per beneficiary
costs in private insurance. And I believe I saw in my
colleague's testimony projections that, on a per beneficiary
basis, Medicaid costs are expected to grow more slowly than
private insurance. Of course, we are putting a number of tools
in place focused on delivery system reform to ensure that we
continue to do the best possible job of maintaining Medicaid's
cost efficiency.
Mr. Schrader. CBO would apparently agree with you on that.
Ms. Yocom, just a quick comment. I--as we celebrate the 50th
anniversary of Medicaid, the program is changing. We are moving
past the old fee-for-service--pay for, you know a widget or a
particular service--and going to this managed care type of
model, where we are treating the whole patient a little bit, I
think to answer Dr. Murphy's concerns, and others. Is GAO
prepared to audit outcome-based results versus just how the
money is spent?
I mean, in our last hearing Ms. Iritani and others in GAO
talking about how the money is spent. And certainly when you
are just monitoring, you know, individual dollars going out,
that is appropriate. But, as a policymaker of the 21st century,
I would rather monitor outcomes. I am not sure I can evaluate
the appropriateness of an expenditure, but I can evaluate
whether or not we are getting results. Is GAO prepared to work
along those lines?
Ms. Yocom. We would be glad to work with you on putting
together work in that area. We have also done some work looking
at managed care utilization rates, and did find a wide variety
of utilization rates across the 19 States that we looked at.
And some of this did appear to be related to whether or not a
beneficiary was enrolled in Medicaid for the full year versus a
partial year.
Mr. Schrader. All right. That will be fun to work with you
on. I know my own State, much like I guess Kentucky, the
Medicaid expansion--what was occurring before this was going
on, before the ACA, and with the ACA, last year and a half we
added 400,000 people to the Medicaid rolls. Big active outreach
by folks in our State. We also have 25 percent of our
population on Medicaid. It is not a--at least they have
access--that great a portion of the population, I think.
Ms. Wachino, pleased to see you reference Oregon's program
in your testimony. It is a fairly innovative outcome-based
approach, where we are trying to keep costs down. Actually,
half of the projected rate for Medicaid growth nationally, from
4 percent down to 2 percent, in the same time get better
outcomes.
I commented last year about results from a year ago, and I
guess just recently new data came out, with emergency room
visits down 22 percent amongst these coordinate care
organizations that deal with mental health, hopefully dental
health, as well as the fiscal health of the people. Short-term
complications from diabetes down 27 percent with this
coordinated care approach. Hospital admissions from COPD,
chronic obstructive pulmonary disease, down 60 percent. You
know, and that is one of the long-term cost drivers,
unfortunately, of a lot of health care in this country, whether
you are on Medicaid, Medicare, or private insurance. Can you
comment a little bit on what CMS may be learning from what you
are seeing in Oregon, and how you might evaluate future waivers
from different States?
Ms. Wachino. Sure. I think we will be looking very
carefully at the results of the Oregon demonstration. And I am
not yet familiar with the results you just shared, so thank you
for that, and improving the population health. Oregon Committed
is part of the 1115 waiver to very robust cost quality goals.
And as we review the success of the waiver with them and of
their coordinated care in serving Medicaid beneficiaries, we
will want to look at cost, and quality, and how it is achieving
those goals.
Mr. Schrader. Good, good. Well, I think it is the future of
medicine. Frankly, the future of Federal budgeting in general,
rather than trying to dictate to different agencies or
different providers around the country how to do things. Let us
talk with them, share concerns about outcomes and where we are
trying to go, monitor those and spend money there, hopefully a
little more efficiently. With that I yield back. Thank you, Mr.
Chairman.
Mr. Pitts. The Chair thanks the gentleman. I now recognize
the gentleman from New Jersey, Mr. Lance, 5 minutes for
questions.
Mr. Lance. Thank you very much, and good morning to you
all. And I apologize for shuttling between two subcommittees. I
think this is a very interesting hearing, and I want to learn
more about Medicaid.
To Ms. Wachino, when the program began 50 years ago, I
assume that greater expenditures were in Medicare than
Medicaid, is that accurate, 50 years ago?
Ms. Wachino. Congressman, I would have to go back and look
at the history----
Mr. Lance. Well----
Ms. Wachino [continuing]. To----
Mr. Lance. Well, perhaps someone else on the panel. I
presume at some point the line crossed, and the greater
expenditure was on Medicaid than Medicare. Can anybody on the
panel enlighten me on that?
Ms. Yocom. I know that--and I attended a conference a
couple of years ago where it was mentioned that combined
Federal and State spending on Medicaid had just exceeded that
of Medicare, total Medicare spending, and that would have been
maybe a year or two ago.
Mr. Lance. Combined Federal/State on Medicaid?
Ms. Yocom. Correct.
Mr. Lance. Whereas Medicare, of course, is primarily a
Federal program. I wonder whether this was anticipated. The
figures I have is that 70 million people utilize Medicaid, is
that right, in this country? We have 310, 315 million people?
Is that right? Seventy million people?
Ms. Yocom. Yes.
Mr. Lance. And has that increased because of the terrible
recession? I know it increased as well because of the ACA. I am
familiar with that, and the fact that some States have expanded
Medicaid, and others have not, and that is a great debate in
this country. And New Jersey is one of those States with a
Republican Governor that expanded Medicaid. But do you think
that the numbers have increased as well due to the fact that we
are not in as robust economic times as we all would like?
Ms. Yocom. We have done work looking at the effects during
the economic downturns, and Medicaid enrollment does go up
during an economic downturn. It also recovers--it is related to
unemployment, of course----
Mr. Lance. Yes.
Ms. Yocom [continuing]. And unemployment, it tends to be a
lagging indicator, so the recovery is also slower. And so you
tend to get people on Medicaid more quickly, and they stay
longer.
Mr. Lance. Now, the unemployment rate is whatever it is,
5.3 percent. It is lower than it was. Is there a correlation as
well with the labor participation rate?
Ms. Yocom. Yes, there is.
Mr. Lance. Um-hum.
Ms. Yocom. Yes.
Mr. Lance. Yes. I mean, people cite the lower unemployment
rate. I think that is half the picture. There is also a
dramatically lower labor participation rate in this country. So
there would be a correlation between Medicaid and the labor
participation rate?
Ms. Yocom. Right. Our work relied on the employment-to-
population ratio.
Mr. Lance. Um-hum. And that is significantly lower than it
has been in the last 50 years. Would that be an accurate
statement?
Ms. Yocom. I couldn't answer that.
Mr. Lance. I think it is the lowest it has been since at
least 1980, something like that. Thank you. Well, I want to
learn more about this, because it is such an important part of
the public policy of this country for the last 50 years.
To CMS in particular, and this is a long and complicated
question, and has lots of jargon in it, CMS has indicated the
oversight of a program the size and scope of Medicaid requires
robust, timely, and accurate data to ensure efficient financial
and program performance, support policy analysis and ongoing
improvement, identify potential fraud, waste, and abuse, and
enable data driver decision making.
Work conducted by the OIG in 2013 raised questions about
the completeness and accuracy of the Transformed Medicaid
Statistical Information System, TMSIS, data upon national
implementation. CMS has since stated its goal of having all
States submitting data in the TMSIS file format by 2015. Could
you please describe the actions you are taking to ensure that
this occurs?
Ms. Wachino. Sure. If it helps with the jargon,
Congressman, we call it TMSIS, and it is a data----
Mr. Lance. TMSIS?
Ms. Wachino. TMSIS.
Mr. Lance. I have learned something this morning.
Ms. Wachino. And it is CMS' investment in getting stronger,
better, more comprehensive, and faster data, and how our
program is working.
Mr. Lance. Um-hum.
Ms. Wachino. We have made substantial advances in TMSIS
implementation this year. Our first State started submitting
data in May, and we expect to have nearly all States submitting
data by the end of the year. So we are moving forward and very
eager to start sharing the data with external stakeholders for
analysis, and using it for our own program management.
Mr. Lance. Thank you. My time has expired, and I look
forward to working with all of you.
Mrs. Ellmers [presiding]. The Chair now recognizes Mr.
Sarbanes from Maryland for 5 minutes.
Mr. Sarbanes. Thank you, Madam Chair. Thank you all for
your testimony. I am very interested in the money following the
person initiative, and I wanted to hear a little bit more about
that. When I was in private practice as a healthcare attorney,
I had the opportunity, in Maryland, to work on a program where
Medicaid--the Medicaid program assigned a certain number of
slots where assisted living facilities could qualify for
Medicaid reimbursement, which doesn't typically happen when you
have skilled nursing care, which is covered, but doesn't extend
into the assisted living arena.
But the observation was there were sort of people in that
inner section who could actually be treated in assisted living
facilities, as opposed to going into skilled nursing, and
could--that could be done at much less cost, and so why not try
and explore that opportunity, potentially broaden it. And if we
can continue to design that expansion or initiative going
forward, it could produce tremendous savings, as well as being
better for patients. And that can include exploring what sorts
of treatments or reimbursement can occur in the home, right? So
you are not even getting into institutional care of any kind.
So I was just curious, what is the status of exploring
this--what I consider a new frontier, particularly as the
demographics of the wave of our seniors is coming at us full
force?
Ms. Wachino. Congressman, thank you for the question. We
have spent a lot of time at CMS moving towards approaches that
promote care--the most community-based care possible. And there
is, as you note, a spectrum of different types of providers
that can serve those individuals. Money Follows The Person is
one vehicle by which we have worked with States towards that
goal. We also have worked with them through the balancing
incentive programs, and through their home and community-based
service waivers.
Currently, we have been assessing some of the things we
have learned from our work with States through Money Follows
The Person, and similar programs, and using it to inform our
efforts with all States moving towards greater community
integration, and would be happy to follow up with you on some
of the particular things we have learned, and in particular the
interaction with assisted living facilities.
Mr. Sarbanes. Are you--I mean, are you seeing some real
potential savings opportunities there?
Ms. Wachino. I would like to look back more carefully at
the fiscal impacts. I can say with certainty that we are seeing
high rates of satisfaction from our beneficiaries as they move
forward with greater community care. So we will circle back
with you and provide evidence and impact on the cost.
Mr. Sarbanes. I would love to get more information about
that, and maybe collaborate with you----
Ms. Wachino. We will follow up----
Mr. Sarbanes [continuing]. Going forward.
Ms. Wachino [continuing]. With you. Thank you for the
question.
Mr. Sarbanes. Thank you very much. I yield back my time.
Mrs. Ellmers. The gentleman yields back. The Chair now
recognizes Mr. Bilirakis from Florida for 5 minutes.
Mr. Bilirakis. Thank you, Madam Chair. I appreciate you
very much, and I want to thank you for your testimony.
Ms. Yocom, in your statement you--for--to your report
titled Medicaid Demonstrations, Approval Criteria and
Documentation Needs To Show How Spending Furthers Medicaid
Objectives, you highlight how HHS has approved questionable
methods and assumptions for spending estimates without
providing adequate documentation. You also mentioned HHS does
not have explicit criteria explaining how it determines how
spending in the demonstration program furthers Medicaid
objectives.
You also note their approval documents are not always clear
on what expenditures are for, and how it will promote Medicaid
objections--objectives. Can you talk about what recommendations
have GAO made in this area that have not been accepted or
implemented by HHS or CMS?
Ms. Iritani. I will answer that question. Yes, we have made
several recommendations to CMS around those issues that you
point out. One is to issue criteria regarding how CMS assesses
whether or not approved new spending under demonstrations will
further objectives. A second is to apply that criteria in the
documentation and make the documentation transparent. And a
third relates to providing assurances in the documentation that
approved spending will not duplicate other Federal funding
sources. CMS agreed with the latter two and partially agreed
with our recommendation to issue criteria on how they assess
spending.
Mr. Bilirakis. Have these recommendations been implemented,
and then why not, Ms. Wachino?
Ms. Wachino. We have implemented the GAO's recommendations
with respect to ensuring our approval documents are clear with
respect to the criteria we use, with ensuring that there is no
duplication of Federal fundings, and ensuring that we are
consistently and clearly articulating when we determine that a
particular authority meets the objectives of the Medicaid
program.
We moved forward with that implementation, with
implementing those policies while the report was still in
draft, and so have worked very actively over the past several
months to ensure that our approval documents are clear.
Mr. Bilirakis. Ms. Yocom, what do you have to say about
that? Do you agree?
Ms. Yocom. I really have to defer to Ms. Iritani. She is
the expert in this area from GAO.
Mr. Bilirakis. Please.
Ms. Iritani. We have not reviewed the changes that Ms.
Wachino has said that they have made, so we would need to do
that in order to see how they are documenting their approvals.
That said we still feel strongly that there should be more
transparent criteria for how they assess whether or not new
spending will further Medicaid objectives.
Mr. Bilirakis. OK. Please get back to our committee after a
review of these objectives, OK? Please. I am sure most of the
committee is interested in this, not all.
Ms. Wachino, you probably know about Puerto Rico's
financial challengers, which are rather severe, I am sure you
will agree. A recent morning consult story highlighted the
contrast in treatment that Puerto Rico receives under Federal
healthcare programs. For example, Puerto Rico has a rather low
spending cap on its program. Are you monitoring the rate at
which Puerto Rico is spending its Medicaid funds, and do you
worry it will exhaust those funds well before 2019?
Ms. Wachino. We are looking very closely at the overall
situation in Puerto Rico, including its Medicaid spending, very
aware that there are a bunch of very strong concerns about the
finances of Puerto Rico, and considering what approaches we
might take. Last year, in approving some of their benefits, we
offered flexibility, and they took us up on it, and--with
respect to their administration, and we are continuing to look
at the spending in the program, and options for assisting the
Commonwealth.
Mr. Bilirakis. In your estimation, will they exhaust the
funds before 2019?
Ms. Wachino. I would have to go back and look at that,
Congressman, but I am happy to submit a response for the
record.
Mr. Bilirakis. Thank you. Ms. Wachino, CMS proposes to
develop the Medicaid managed care quality rate system for
managed care organizations in all States, which would
presumably be similar to the Medicare Advantage five-star
rating system. However, research shows that CMS' current start
system undervalues care provided to beneficiaries with low
socioeconomic status. This is an area of growing bipartisan
concern. So how does CMS plan to address this issue, especially
since all the Medicaid beneficiaries are presumably low-income?
Ms. Wachino. Congressman, thank you for the question. Our
proposal to implement the quality rating system is designed to
make sure that low-income people are able to compare quality
across plans and select plans in the same way that individuals
in the private market and in Medicare Advantage can. We think
that is a substantial advance in quality for our program, and
an assist to our consumers.
We do plan on--should we finalize the rule, which, as you
know, is out for public comment now, we propose to have pretty
lengthy implementation schedules, and a very substantial public
input process so that we could identify the strengths of other
quality rating systems, bring them to bear in ours, and make
any needed adjustments that we need to to account, to your
point, for the low-income nature of our populations, and the
fact that our populations differ in some very important
respects from those of Medicare and commercial insurers.
Mr. Bilirakis. OK. Thank you very much, and I yield back,
Madam Chair.
Mrs. Ellmers. Thank you. The gentleman yields back. The
Chair now recognizes the gentleman from California, Mr.
Cardenas, for 5 minutes.
Mr. Cardenas. Thank you very much, Madam Chairwoman.
Appreciate the opportunity for us to dialogue with the
witnesses. I just wanted to remind all of us that one of the
main points of Medicaid was to eventually get to the point
where we have protection or security against the economic
effects of sickness for all Americans. In addition to that,
President Truman, one of his statements included the line that
talks about health security for all.
On that note, as a result of the Affordable Care Act, our
country currently holds the lowest rate of the uninsured in the
history of this Nation. In 2014 alone Medicaid helped reduce
the number of uninsured Americans from 43 million to 26
million. Is that about right, Ms. Wachino?
Ms. Wachino. I do know that we have made really--very
substantial advances in reducing the uninsured rate, and it is
an accomplishment we are very proud of.
Mr. Cardenas. OK. Well, I would like you to take it back to
all of the hard working folks within your department, to let
them know how much not only do those 43, down to 26, Americans
who now have health care appreciate all of your good hard work,
but also at the same time that it is a vision that hopefully we
can see in our lifetime, where we could see that 26 million go
down to nothing. In addition to that, one of the things that I
noticed, as a politician myself, is that many people try to use
the word entitlement program as though it is a bad word. But
yet, at the same time, I prefer to call it a safety net, which
is a good thing, because it brings dignity, and actually saves
lives for many Americans, especially hard working poor
Americans.
Speaking of the hard working poor, my first question goes
to you, Dr. Schwartz. Thank you very much for your testimony
today. One of the issues that is very important to my
constituents is the availability of health care to all
constituents in my district. But my district being 70 percent
Latino, a disproportionate representation of uninsured is
within the Latino community in my district, and around the
country. And this is despite the fact that among these
uninsured Latino households, 82 percent of those households are
part of a hard working employed family.
So we are not talking about people who choose not to work,
we are talking about people who are the working poor, which
it--which, in my opinion, is part of the backbone of what makes
this country great, people willing to go to work every single
day and be able to work for whatever meager means people are
willing to pay them, yet at the same time they do it every
single day, and then have to worry about whether or not
somebody is going to get sick in their family, and if they are
going to have a catastrophic change to their entire finances
for maybe one or two generations to come.
On that note, has MACPAC undertaken any work looking
specifically at barriers to enrollment that may still exist in
the Latino community?
Dr. Schwartz. No, we haven't. We have done work looking at
the experience of different minority communities in accessing
services, and I believe Medicaid mirrors much of the rest of
the health system in that different minority populations do
experience higher barriers to care. And that is an area, as I
said in my written statement, that we are interested in the
experiences of groups within the Medicaid population, because
they are so diverse, and how their different experience of care
relate, and what policy solutions might be appropriate, given
the different experiences.
Mr. Cardenas. OK. Please keep in mind at all times that it
is not just language barriers, cultural as well are some of the
barriers out there.
Ms. Wachino, what types of initiatives are underway to help
ensure that we reach Latino and other minority communities
where individuals may be eligible for coverage, particularly in
the wake of Medicaid expansion?
Ms. Wachino. Thank you for the question. I think we are
very interested in making sure that Latino residents across the
country get coverage. And, clearly, one way to do that is by
taking up Medicaid expansion, as California has. We also are
working actively to ensure that eligible Latinos, working
families, I mean, the Latino community, enroll in coverage.
And, frequently, that requires outreach and application
support, so we work with programs like our navigator programs
to make sure that people have support in applying for coverage,
provide the information they need to to get an eligibility
determination and enroll.
Mr. Cardenas. OK. Thank you. Ms. Wachino, with over 25
million low-income Americans nationwide who are unable to see a
primary care physician, I believe telemedicine could provide an
incredibly effective way to improve the healthcare system for
everyone. Could you expand on the particular benefits for using
telemedicine with dual eligibles who are unable to visit their
doctor due to illness or immobility? And not just in rural
areas, but also in higher populated areas as well.
Ms. Wachino. We have moved forward with telemedicine in a
number of states. It is an approach that a State can take to
promote access to care without even seeking a State plan
amendment from us. I can look at the particular use of
telemedicine for the dual eligible population and circle back
with you, and provide information for the record about
specifics to that population.
Mr. Cardenas. Thank you very much.
Mrs. Ellmers. Thank you. The gentleman yields. The Chair
now recognizes the gentlelady from Tennessee, Mrs. Blackburn,
for 5 minutes.
Mrs. Blackburn. Thank you, Madam Chairman, and I am going
to make Mr. Pallone's day, because I am going to say TennCare,
and talk about TennCare with you all. And I know you are very
familiar with it, Ms. Wachino. There is a lot of frustration
with that program, but embodied in that in part is frustration
that some of the States who have been under the waivers for
years, and doing the same thing for decades, have to keep
coming back to you every 3 to 5 years for permission once
again. So would it not make sense to start to grant the States
a longer reprieve, and give them a longer path to certainty or
permanence on these issues?
Ms. Wachino. Thank you for the question, Congresswoman
Blackburn. As you know, we work very actively with each State
to try to develop----
Mrs. Blackburn. This is a yes or no.
Ms. Wachino [continuing]. For the State. We have been
looking very actively, and I think Secretary Burwell spoke with
the Governors about this in February, about streamlining our
renewal process. It is very important----
Mrs. Blackburn. OK, it is a yes or a no question.
Ms. Wachino. I think that there are ways, and we are
working on them now----
Mrs. Blackburn. OK.
Ms. Wachino [continuing]. To----
Mrs. Blackburn. Thank you.
Ms. Wachino [continuing]. Streamline----
Mrs. Blackburn. Ms. Yocom----
Ms. Wachino [continuing]. Renewals.
Mrs. Blackburn [continuing]. You want to weigh in on that?
No? OK. All right. Well, maybe you want to weigh in on this
one. CMS has all these rules--and again, this comes from my
guys at the State level--on transparency and required
timeframes for the States when they are applying for their
waivers, but then CMS doesn't hold themselves to this own
standard, and sometimes it can take forever to get an answer
from you. So should you not be held to the same standard that
you are foisting on the States, to meet deadlines and timelines
and to give some certainty?
Ms. Wachino. Congresswoman, we are very committed to
working with States quickly to evaluate waiver requests----
Mrs. Blackburn. OK, let us pick up the pace, then.
Ms. Wachino. May I----
Mrs. Blackburn [continuing]. Yocom--no, ma'am. Ms. Yocom,
you want to--or Ms. Iritani? Yes. I am just short on time. You
can expand in----
Ms. Wachino. I will.
Mrs. Blackburn [continuing]. Form. Thank you. Ms. Iritani?
Ms. Iritani. Yes, we have heard concerns from States about
the lengthy time to get waivers----
Mrs. Blackburn. Yes.
Ms. Iritani [continuing]. Renewed and approved, and we have
seen wide variation in approval times. You know, our concern is
around the lack of standards and criteria, and we think that
those would help bring more transparency----
Mrs. Blackburn. So, to be more definitive, lay out a
timeline, give the States some certainty, and maybe not make
them come back every 3 to 5 years. That makes some sense,
doesn't it?
Ms. Iritani. We believe that there is more need for
oversight----
Mrs. Blackburn. OK.
Ms. Iritani [continuing]. So there is the----
Mrs. Blackburn. Let me go to a question on enrollment.
States are required to enroll applicants who attest to being
citizens, or to having legal immigration status, and then are
thereby eligible for Medicaid. States receiving Federal
matching funding for the care during this reasonable
opportunity period. But, as a result, and I am hearing this
from some of my State legislators, individuals who are not
citizens or eligible permanent residents may be enrolled, and
receiving Medicaid. So does CMS think it is appropriate for
Federal taxpayer Medicaid dollars to be expended on individuals
who are neither citizens nor eligible residents? Ms. Wachino?
Ms. Wachino. Congresswoman, we think it is very important
for us to make accurate eligibility determinations. When people
apply for Medicaid coverage, they attest to their citizenship.
We verify that electronically through the hub, which is a major
advance for us in making accurate eligibility determinations.
If someone is not able----
Mrs. Blackburn. OK.
Ms. Wachino [continuing]. To----
Mrs. Blackburn. Then let me ask you this. Should we not
withhold those benefits until such time as their--certainty and
a verification process is completed?
Ms. Wachino. Congresswoman, the--under the statute,
individuals have a reasonable opportunity----
Mrs. Blackburn. OK.
Ms. Wachino [continuing]. Period. They attest to
citizenship, and then we, during that period, verify it.
Mrs. Blackburn. OK.
Ms. Wachino. If they are found to be ineligible, they are
determined ineligible.
Mrs. Blackburn. OK. Let us look at billing privileges. And
Obamacare explicitly requires that States suspend the billing
privileges of most providers that have been terminated or
revoked by another State, or by Medicare. However, more than 5
years after enactment, banned providers are still receiving
many of these Medicaid payments. So what steps is CMS taking to
ensure, once again, that taxpayer dollars are not going to
those that are prohibited, should be prohibited, from receiving
this money? And are you taking steps to recoup Federal dollars
paid to prohibited providers by State Medicaid programs?
And, in the same vein, how are you dealing--how does CMS
deal with companies that have been found guilty of fraud and
should not be receiving taxpayer dollars, but they go out and
they sell themselves so they can be renamed, and still get
taxpayer dollars? I would like to hear from you on this, and,
Ms. Yocom, I would also like to--Ms. Yocom, let us start with
you, as a matter of fact.
Ms. Yocom. Certainly. We have done work in this area, and
we did identify, in terms of providers, issues where
individuals who did have suspended or revoked licenses were
receiving payments. We also have identified some providers who
are dead who are receiving payments.
Mrs. Blackburn. And erroneous payments amounted to how much
last year?
Ms. Yocom. I would have to get back----
Mrs. Blackburn. OK.
Ms. Yocom [continuing]. With you on that. Yes.
Mrs. Blackburn. OK.
Ms. Yocom. Yes.
Mrs. Blackburn. OK. Ms. Wachino, you want to comment on
that?
Ms. Wachino. Yes, Congresswoman. It is very important to us
that we ensure that the providers serving Medicaid
beneficiaries are appropriate, both so that they get the care
they need, and so that we are ensuring----
Mrs. Blackburn. That is not the question that I have asked
you. I have asked you what you are doing about it. So why don't
you submit for the committee an answer about what you are doing
about erroneous payments, and what you are doing about
providers that are not eligible getting this money. I yield
back my time.
Mr. Green. Madam Chair, can I just have 30 seconds? Ms.
Wachino, I understand that under law that--and California is
the only State that expanded Medicaid to undocumented children,
and--but they don't get the Federal match. Is that true? If it
is a State decision?
Ms. Wachino. I am not familiar with the particular
circumstances in California, but Medicaid generally does not
provide comprehensive coverage for immigrants. There is a
limited provision for emergency care only.
Mr. Green. OK. Thank you.
Mrs. Ellmers. I would just ask that you provide us with the
accurate documented material----
Ms. Wachino. I will happy to do that----
Mrs. Ellmers [continuing]. To the committee, since this
issue has been raised. Thank you.
Ms. Wachino. I will happy to do that for the record, as
well as to respond to----
Mrs. Ellmers. Thank you.
Ms. Wachino [continuing]. Ms. Blackburn's question----
Mrs. Ellmers. Thank you.
Ms. Wachino [continuing]. About provider enrollment.
Mrs. Ellmers. Thank you. The Chair now recognizes Mr.
Pallone from New Jersey for 5 minutes, the ranking member of
our committee.
Mr. Pallone. Thank you, Madam Chairwoman. I was going to
ask unanimous consent to include in the record two new health
affair studies that just came out that found evidence that
Medicaid expansion has made patients' and hospitals' bottom
lines healthier. I think you have copies of them.
Mrs. Ellmers. We have not had a chance to review that, so I
reserve----
Mr. Pallone. Let me hand them over to you, then, take a
look.
Mrs. Ellmers. We will consider at a later date, before the
hearing adjourns.
Mr. Pallone. OK, thanks. I was going to say to Ms.
Blackburn that I hadn't--she left, but that I hadn't heard
about TennCare so often that I actually forgot about it, but
she brought it up again, but she is not here, so, sorry.
All of our witnesses here today have an important and
different perspective to share about Medicaid and its 50th
anniversary. I wanted to ask first, Ms. Wachino, as we reflect
on Medicaid's 50th year, what do you see as the most
significant changes to the program from the standpoint of low-
income consumers?
Ms. Wachino. Well, Medicaid has grown and evolved over
time. I think some of the biggest change--we have seen over
time its role expand for a variety of populations: coverage of
pregnant women to ensure access to strong prenatal care and
promote lower rates of infant mortality, expansions to coverage
of people with chronic conditions, like HIV.
I think if I had to choose two developments just to single
out, the first would be the coverage of low-income children,
that I know was led out of this committee, through both
Medicaid expansions, and later CHIP, which really built on
that. And if you look at the record on the impact of that
coverage, it has clearly been a critical support for low-income
families through thick economic times and thin.
The second would be the coverage expansion for Medicaid to
low-income adults under the Affordable Care Act, which I think
really solidifies Medicaid's role as the base for a strong
system of health coverage in the United States. And I think, as
we work with more States to implement it, we will see that base
firmly solidified.
Mr. Pallone. Thank you. And then, Dr. Schwartz, MACPAC was
formed fairly recently, but the Commissioners and MACPAC staff
have already proven to be an invaluable resource to both sides
of the aisle. What, in your opinion, have been some of
Medicaid's greatest advancements?
Dr. Schwartz. I think, to follow up on Ms. Wachino's
comments, the program has really transformed over its lifetime
from a program that provided medical care to a very small group
of low-income families who were receiving cash assistance to a
much larger program that takes a much more proactive role in
delivery system design, in payment initiatives to improve the
delivery of care to a broader set of populations: children,
pregnant women, adults, and, of course, people with
disabilities.
I think the other is the very significant shift in the
delivery of long-term care from institutions into homes and
communities, allowing people with disabilities to remain in
their homes and active in their communities.
Mr. Pallone. Thank you. Could I just ask, Ms. Wachino, if
you would take--I have just got about a minute and 20 seconds
of my time. Could you just talk about CMS' work over the last 5
years on program integrity as a result of the Affordable Care
Act tools?
Ms. Wachino. Yes. We take our program responsibilities very
seriously. I participate in them. They are led out of our
Center for Program Integrity, but we work in concert. We have
worked actively over the last 5 years on a comprehensive
Medicaid integrity plan. We have worked to do program integrity
reviews of each State, because program integrity in Medicaid is
a shared State and Federal effort. We both have
responsibilities.
But one of the most tangible things we have done is improve
the process of ensuring that high risk providers do not enter
into our programs. We have employed and worked with States on
high risk provider screening, and we have given States access
to the same data to screen out providers that Medicare uses. So
I think we have made very substantial advances. I think some of
the data you heard about earlier is from 2011, and predates
some of our recent accomplishments.
Mr. Pallone. All right. Thank you very much. Thank you,
Madam Chairwoman.
Mrs. Ellmers. Thank you to the ranking member, and, without
objection, the documents that you provided will be submitted
into the record.
[The information appears at the conclusion of the hearing.]
Mrs. Ellmers. The Chair now recognizes myself for 5
minutes. Thank you to our panel for being here. Ms. Wachino, in
the most recent actuarial report on the financial outlook for
Medicaid, CMS reports that the projected annual growth rate for
Medicaid expenditures is faster than the projection of annual
GDP growth. The actuary noted that, ``should these trends
continue as projected under current law, Medicaid's share of
both Federal and State budgets would continue to expand,
despite any other changes to the program, budget expenditures,
or budget revenues.''
As a representative from a State that has not expanded
Medicaid, in North Carolina, I have two questions. Given that
this would crowd out other important fiscal priorities for both
State and Federal Government, don't you think that there are
changes that need to be made to the program to alter this
current trend?
Ms. Wachino. Congresswoman Ellmers, thank you for the
question. We have worked very actively to ensure that the
program is on a sound fiscal footing----
Mrs. Ellmers. Um-hum.
Ms. Wachino [continuing]. Generally, and, you know, with
respect to expansion in particular. I think we have put in
commonsense reforms to ensure accountability of funds through--
--
Mrs. Ellmers. Um-hum.
Ms. Wachino [continuing]. Activities like reviewing our
rates and ensuring that we are not overpaying for services. I
think, in addition to that, you see from the administration
proposals like changes to the drug rebate that are designed to
ensure that some of the major cost drivers in our program are
addressed. So I think we can work, and we do work, and we look
forward to working with you for really----
Mrs. Ellmers. Um-hum.
Ms. Wachino [continuing]. Putting the program on a sound
fiscal footing.
Mrs. Ellmers. Well, thank you for that. I would like to
ask, have these changes, or proposed changes, resulted in any
decreases in spending up to this point?
Ms. Wachino. We do know in some States that have embarked
on delivery system reform that there have been reductions in
things like hospitalizations----
Mrs. Ellmers. Um-hum.
Ms. Wachino [continuing]. That have resulted in cost
savings. There are a couple of----
Mrs. Ellmers. How many States would you say that is?
Ms. Wachino. I think I can give you some State examples.
The actual models used by States vary. States have significant
flexibility in using things like health homes, the way----
Mrs. Ellmers. Um-hum.
Ms. Wachino [continuing]. Missouri did----
Mrs. Ellmers. Um-hum.
Ms. Wachino [continuing]. Where they saw improvements in
clinical outcomes and reductions in costs.
Mrs. Ellmers. OK.
Ms. Wachino. So I can give you the examples of models that
have worked.
Mrs. Ellmers. OK. Ms. Yocom, would you like to expand on
that as well, or comment on the same from your perspective?
Ms. Yocom. Well, our work has focused primarily on areas
where transparency and better data are important.
Mrs. Ellmers. Um-hum.
Ms. Yocom. I think some of CMS' challenges are around not
having accurate information with which to gauge the success of
the program, and to gauge--to fine tune--where improvements
need to be made.
Mrs. Ellmers. Um-hum. So you see an effort for more
transparency and more efficiency and accuracy to be moving
forward?
Ms. Yocom. I think we have seen progress, particularly in
efforts to control----
Mrs. Ellmers. Um-hum.
Ms. Yocom [continuing]. Improper payments. There----
Mrs. Ellmers. So you have seen progress in that area?
Ms. Yocom. Right.
Mrs. Ellmers. OK. Great. Ms. Wachino, CMS authorized
Federal Medicaid funding in five States for more than 150 State
programs. Based on their names, many of these programs appear
to be fully worthwhile causes. However, it is difficult to see
how other funded programs promote Medicaid objectives. Let me
ask just a few questions. There are a couple States--and I
asked Ms. Iritani, when she was with us a couple of days ago--
one of these issues, the licensing fees for Oregon, how does
that affect patient care in regard to Medicaid? Do you see that
as a worthwhile funding issue?
Ms. Wachino. Congresswoman, it is really important to us
that we ensure that the spending we authorize promotes Medicaid
objectives. As I had the opportunity to speak to earlier this
morning, we have fully responded to many of GAO's
recommendations, in terms of wanting to be very clear and
straightforward in our approval documents when we determine
that a program supports Medicaid objectives. I can't speak to
the particulars of every program, but I do know that my staff
has provided to the committee extensive detail on the programs
we----
Mrs. Ellmers. OK. Well, then, what I will just say, the
licensing fees in Oregon, the fishermen's partnership in
Massachusetts, and the health workforce retaining in New York,
if I can get a response on how those actually are effective
measures, that would be great, and I would appreciate it in
writing. Thank you.
Ms. Wachino. I would be happy to do----
Mrs. Ellmers. And I will yield back, and I now recognize
Ms. Schakowsky from Illinois for 5 minutes.
Ms. Schakowsky. [Inaudible.]
Ms. Wachino. Yes, thank you for the question. As you spoke
to, Medicaid is the Nation's leading source of financing for
long-term care in the country. We pay for 64 percent of all
nursing home residents in the United States, and we work very
actively with States to ensure the quality of nursing home
care. Because these are, as you know, very frail--some of the
Nation's frailest residents and citizens, people who could have
limited mobility, and a lot of complex health needs. We are
working not just to ensure quality nursing home care, but also
ensuring that people, whenever they are able to, are able to be
cared for at homes and in their communities, to really remain
active participants in their communities.
Ms. Schakowsky. I wanted to ask about that. One of the most
important elements of long-term care has been community-based
care, and that does allow many elderly and disabled to remain
in their home, or in assisted living facilities, rather than in
institutions. In recent years CMS has worked to reduce its
reliance on institutional care and transition individuals to
community living. In fact, as you have mentioned earlier today,
51 percent of long-term care spending under Medicaid is spent
on community-based services, compared to 10 years ago, when
community-based services only made up 33 percent of spending.
So why is it important, as you just said earlier, it--that
community-based care be available to Medicaid beneficiaries?
Ms. Wachino. We hear consistently from beneficiaries that
they want to remain in their communities, they want to remain
active, and they want to remain with their families as much as
possible. And we are lucky to have a number of tools in the
Medicaid program to help support that. Things like home and
community-based waivers, and giving beneficiaries the ability
to self-direct their care, to hire their direct service
workers, and to fire their direct care service workers if they
are not happy. And if you look across the States, we see nearly
every State is moving forward with some option.
But the proof is in the pudding, as you say, and seeing the
equalization of spending on institutional care versus home,
community-based care is a very major advance in modernization
in our program, and we are going to keep at it, and move the
needle further.
Ms. Schakowsky. All right. And, finally, as you mentioned
in your testimony, since the beginning of ACA's first
enrollment period, 12.3 million people have gained coverage
through Medicaid or CHIP. According to The Urban Institute, the
current uninsured rate nationwide for nonelderly adults is 10
percent down--10 percent, which is down from 17.8 percent,
before the implementation of the ACA. Even more impressive,
States have expanded Medicaid--that have expanded Medicaid have
an uninsured rate of 7.5 percent compared to 14.4 percent in
States that have not expanded Medicaid. Can you explain how
Medicaid expansion helped to drastically reduce the uninsured
rate?
Ms. Wachino. Well, I think we know that many low-income
Americans fall into the coverage gap that is created when
States have expanded Medicaid, and one of the things that we
can do as a country to make further advances in covering the
uninsured, and to see even progress beyond what you have just
described is to work with States on Medicaid expansion. And we
are very committed to working with every State to finding an
approach that provides its lowest-income citizens access to
needed health care so we could start improving their quality,
and so that those people can benefit.
Ms. Schakowsky. It seems to me the Medicaid expansion,
because it was so public, also helped other enrollment, that
people became more aware of Medicaid, so I think it even went
beyond the new population.
Ms. Wachino. That is right. The benefits of expansion go
beyond the newly eligible population because States that cover
Medicaid expansion are able to convey a clear message to their
lowest-income residents that you are eligible for coverage. And
we know that when there is that message, eligible people come
and enroll, and get the health care they need.
Ms. Schakowsky. Thank you so much. I yield back.
Mrs. Ellmers. The gentlelady yields back. And, with that, I
think we are finishing up. I would like to thank our panel for
being with us today. I would like to remind members that they
have 10 business days to submit questions for the record. And I
will say to the panel, I know there are some very, very
specific questions that members are going to be proposing in
written form, and we would very much like to have very specific
answers to these questions. You know, as we are addressing
Medicaid and Medicare issues, we have to remember that these
are taxpayer dollars that we are spending, and so we need very
specific answers on those questions, and in a prompt fashion,
if you can accommodate us on that.
I would like to also say members should submit their
questions by the close of business Wednesday, July 22. And,
again, thank you very much for being with us today, and to
everyone who was here for the hearing. And I call this
subcommittee hearing adjourned.
[Whereupon, at 12:33 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]

Prepared statement of Hon. G.K. Butterfield

Chairman Pitts, thank you for holding this hearing to
commemorate the 50th anniversary of Medicaid and to discuss
improving health care for vulnerable populations. More than one
out of every four people in the eastern North Carolina district
I represent live in poverty--it is one of the poorest
Congressional districts in the country. Even more alarming is
the fact that more than 40 percent of the children in North
Carolina's First District live in poverty. Medicaid is
absolutely critical to my constituents. It is especially
important to children, since 75 percent of children who live in
poverty in this country depend on Medicaid. The benefits of
Medicaid cannot be overstated--more than 71 million Americans
rely on this program.
Democrats on this committee have done our part to
strengthen Medicaid for millions of Americans. Many of us here
today helped author the Affordable Care Act, which has helped
reduce the number of uninsured Americans by 17 million due in
large part to Federal support to expand Medicaid.
But many States--like my home of North Carolina--have
declined to expand Medicaid. According to the North Carolina
Justice Center, an additional 500,000 North Carolinians would
be eligible for Medicaid if our Governor would expand the
program. My State's Governor has blocked more than $2.7 billion
in Federal funds that North Carolinians have paid taxes for and
rightly deserve. In fact, the North Carolina Justice Center
estimates that 43,000 jobs would be created in 5 years if our
State would expand Medicaid.
The ACA represents the largest step forward for Medicaid
since the program's inception. Improved transparency,
additional safeguards against fraud and abuse, and delivery
system reforms have benefitted constituents and saved money.
But our work is far from done. I will continue to fight to
expand Medicaid in each and every State.

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Ms. Wachino's response to submitted questions for the
record has been retained in committee files and also is
available at
http://docs.house.gov/meetings/IF/IF14/20150708/103717/HHRG-114-IF14-Wstate-WachinoV-20150708-SD002.pdf.

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