[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                  STRENGTHENING HEALTHCARE IN THE U.S. 
                TERRITORIES FOR TODAY AND INTO THE FUTURE

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 20, 2019

                               __________

                           Serial No. 116-50

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

      Printed for the use of the Committee on Energy and Commerce
                  govinfo.gov/committee/house-energy
                        energycommerce.house.gov

                              __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
40-616 PDF                 WASHINGTON : 2022                     
          
-----------------------------------------------------------------------------------                          
                        
                    COMMITTEE ON ENERGY AND COMMERCE

                     FRANK PALLONE, Jr., New Jersey
                                 Chairman
BOBBY L. RUSH, Illinois              GREG WALDEN, Oregon
ANNA G. ESHOO, California              Ranking Member
ELIOT L. ENGEL, New York             FRED UPTON, Michigan
DIANA DeGETTE, Colorado              JOHN SHIMKUS, Illinois
MIKE DOYLE, Pennsylvania             MICHAEL C. BURGESS, Texas
JAN 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                BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland           PETE OLSON, Texas
JERRY McNERNEY, California           DAVID B. McKINLEY, West Virginia
PETER WELCH, Vermont                 ADAM KINZINGER, Illinois
BEN RAY LUJAN, New Mexico            H. MORGAN GRIFFITH, Virginia
PAUL TONKO, New York                 GUS M. BILIRAKIS, Florida
YVETTE D. CLARKE, New York, Vice     BILL JOHNSON, Ohio
    Chair                            BILLY LONG, Missouri
DAVID LOEBSACK, Iowa                 LARRY BUCSHON, Indiana
KURT SCHRADER, Oregon                BILL FLORES, Texas
JOSEPH P. KENNEDY III,               SUSAN W. BROOKS, Indiana
    Massachusetts                    MARKWAYNE MULLIN, Oklahoma
TONY CARDENAS, California            RICHARD HUDSON, North Carolina
RAUL RUIZ, California                TIM WALBERG, Michigan
SCOTT H. PETERS, California          EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan             JEFF DUNCAN, South Carolina
MARC A. VEASEY, Texas                GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
LISA BLUNT ROCHESTER, Delaware
DARREN SOTO, Florida
TOM O'HALLERAN, Arizona
                                 ------                                

                           Professional Staff

                   JEFFREY C. CARROLL, Staff Director
                TIFFANY GUARASCIO, Deputy Staff Director
                MIKE BLOOMQUIST, Minority Staff Director
                         Subcommittee on Health

                       ANNA G. ESHOO, California
                                Chairwoman
ELIOT L. ENGEL, New York             MICHAEL C. BURGESS, Texas
G. K. BUTTERFIELD, North Carolina,     Ranking Member
    Vice Chair                       FRED UPTON, Michigan
DORIS O. MATSUI, California          JOHN SHIMKUS, Illinois
KATHY CASTOR, Florida                BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland           H. MORGAN GRIFFITH, Virginia
BEN RAY LUJAN, New Mexico            GUS M. BILIRAKIS, Florida
KURT SCHRADER, Oregon                BILLY LONG, Missouri
JOSEPH P. KENNEDY III,               LARRY BUCSHON, Indiana
    Massachusetts                    SUSAN W. BROOKS, Indiana
TONY CARDENAS, California            MARKWAYNE MULLIN, Oklahoma
PETER WELCH, Vermont                 RICHARD HUDSON, North Carolina
RAUL RUIZ, California                EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan             GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire         GREG WALDEN, Oregon (ex officio)
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
LISA BLUNT ROCHESTER, Delaware
BOBBY L. RUSH, Illinois
FRANK PALLONE, Jr., New Jersey (ex 
    officio)
                                CONTENTS

                              ----------                              
                                                                   Page
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     1
    Prepared statement...........................................     3
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     4
    Prepared statement...........................................     5
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     6
    Prepared statement...........................................     8
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     9
    Prepared statement...........................................    11

                               Witnesses

Anne L. Schwartz, Ph.D., Executive Director, Medicaid and CHIP 
  Payment and Access Commission..................................    12
    Prepared statement...........................................    15
    Answers to submitted questions...............................   142
Angela Avila, Executive Director, Administracion de Seguros de 
  Salud de Puerto Rico (Puerto Rico State Health Insurance 
  Administration)................................................    33
    Prepared statement...........................................    35
    Answers to submitted questions...............................   149
Sandra King Young, American Samoa Medicaid Director..............    50
    Prepared statement...........................................    52
    Answers to submitted questions...............................   161
Maria Theresa Arcangel, Chief Human Service Administrator, 
  Division of Public Welfare, Guam Department of Public Health 
  and Social Services............................................    57
    Prepared statement...........................................    59
    Answers to submitted questions...............................   162
Michal Rhymer-Browne, Assistant Commissioner, Department of Human 
  Services, U.S. Virgin Islands..................................    63
    Prepared statement...........................................    65
    Answers to submitted questions...............................   164
Helen C. Sablan, Medicaid Director, Commonwealth of the Northern 
  Mariana Islands................................................    75
    Prepared statement...........................................    77
    Answers to submitted questions...............................   166

                           Submitted Material

Statement of Delegate Aumua Amata Coleman Radewagen, a 
  Representative in Congress from the Territory of Puerto Rico, 
  June 19, 2019, submitted by Ms. Eshoo..........................   121
Letter of June 19, 2019, from Michael L. Munger, Board Chair, 
  American Academy of Family Physicians, to Ms. Eshoo and Mr. 
  Burgess, submitted by Ms. Eshoo................................   123
Letter of June 19, 2019, from Kenneth Rivera-Robles, President, 
  Puerto Rico Chamber of Commerce, to Mr. Pallone and Mr. Walden, 
  submitted by Ms. Eshoo.........................................   125
Statement of Natalie Jaresko, Executive Director, Financial 
  Oversight and Management Board for Puerto Rico, June 20, 2019, 
  submitted by Ms. Eshoo.........................................   127
Letter of June 19, 2019, from Rafael F. Torregrosa, President, 
  Multi-sectorial Council on Puerto Rico's Health System, to Ms. 
  Eshoo, submitted by Ms. Eshoo..................................   130
Letter of June 20, 2019, from the Partnership for Medicaid to 
  Hon. Mitch McConnell, Majority Leader, U.S. Senate, et al., 
  submitted by Ms. Eshoo.........................................   132
Statement of America's Health Insurance Plans, June 20, 2019, 
  submitted by Ms. Eshoo.........................................   134
Statement of Resident Commissioner Jenniffer Gonzalez-Colon, a 
  Representative in Congress from the Territory of Puerto Rico, 
  submitted by Mr. Burgess.......................................   137
Report of the Blue Ribbon Study Panel on Biodefense, ``Holding 
  the Line on Biodefense: State, Local, Tribal, and Territorial 
  Reinforcements Needed,'' October 2018, submitted by Mrs. Brooks 
  \1\


----------

\1\ The report has been retained in committee files and also is 
available at https://docs.house.gov/meetings/IF/IF14/20190620/109671/
HHRG-116-IF14-20190620-SD013.pdf.

 
STRENGTHENING HEALTHCARE IN THE U.S. TERRITORIES FOR TODAY AND INTO THE 
                                 FUTURE

                              ----------                              


                        THURSDAY, JUNE 20, 2019

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:29 a.m., in 
room 2322, Rayburn House Office Building, Hon. Anna G. Eshoo 
(chairwoman of the subcommittee) presiding.
    Members present: Representatives Eshoo, Engel, Butterfield, 
Castor, Sarbanes, Lujan, Schrader, Kennedy, Cardenas, Welch, 
Ruiz, Kuster, Kelly, Barragan, Blunt Rochester, Soto, Pallone 
(ex officio), Burgess (subcommittee ranking member), Guthrie, 
Griffith, Bilirakis, Long, Brooks, Mullin, Hudson, Carter, 
Gianforte, and Walden (ex officio).
    Staff present: Jeffrey C. Carroll, Staff Director; Waverly 
Gordon, Deputy Chief Counsel; Tiffany Guarascio, Deputy Staff 
Director; Saha Khaterzai, Professional Staff Member; Josh 
Krantz, Policy Analyst; Aisling McDonough, Policy Coordinator; 
Joe Orlando, Staff Assistant; Alivia Roberts, Press Assistant; 
Rick Van Buren, Health Counsel; C. J. Young, Press Secretary; 
Mike Bloomquist, Minority Staff Director; Jordan Davis, 
Minority Senior Advisor; Margaret Tucker Fogarty, Minority 
Staff Assistant; Caleb Graff, Minority Professional Staff 
Member, Health; Peter Kielty, Minority General Counsel; Ryan 
Long, Minority Deputy Staff Director; and J. P. Paluskiewicz, 
Minority Chief Counsel, Health.
    Ms. Eshoo. Good morning, everyone. The Subcommittee on 
Health will now come to order. The Chair now recognizes herself 
for 5 minutes for an opening statement.
    The committee is not in order.
    Thank you.

 OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Welcome to the witnesses, everyone that is in attendance 
here today.
    At the end of this coming September, the five U.S. 
territories face a Medicaid cliff, which means the 
supplementary Medicaid funding provided to the territories 
through the Affordable Care Act will run out. Without this 
Federal funding, over 1.5 million enrollees, including many 
children, could lose their healthcare. Each is an American 
citizen, and they are being treated differently than the 
constituents of every Member in this room.
    For too long, the territories have struggled with 
inadequate Federal funding for their Medicaid programs because 
Federal law caps Medicaid funding for the territories. The 
territories also receive a fixed Federal Medicaid match that is 
lower than the rate they would receive if they were States.
    Due to these restrictions, the territories routinely run 
out of Medicaid funds. Over the past decade, Congress has voted 
on five separate occasions to provide stopgap funds to certain 
territories. Even with these supplements, the funding for the 
territories is well below what a State Medicaid program would 
receive. In the territories, Medicaid spends an average of 
$1,866 per enrollee. In the States, on average, Medicaid spends 
more than four times that amount.
    In the States, the Medicaid program has a flexible 
financing structure. This structure guarantees funding if more 
individuals enroll due to an economic downturn, an epidemic, or 
a natural disaster. The territories do not have a guarantee. 
When disaster strikes, as it did with the 2017 hurricanes and 
the 2018 typhoons, the territories were forced to make very 
hard choices about coverage and services at the worst possible 
time.
    Simply put, the territories' Medicaid funding does not meet 
their needs. In Puerto Rico, 85 percent of residents report 
they are worried that they will be unable to access healthcare 
if they need it. A recent study found breast cancer patients in 
the territories were 82 percent less likely to receive timely 
radiation therapy.
    In American Samoa, Guam, and Commonwealth of the Northern 
Mariana Islands, the public hospitals face staff shortages due 
to low salaries, poor infrastructure, and high rates of 
uncompensated care. All of these challenges exist before--
before, Members--the Medicaid cliff hits on September 30th. If 
we allow that to happen, Puerto Rico would go from over 2 
billion in Federal funding to just 380 million. The other 
territories would have similar cuts of upwards of 70--that is 
7-0--percent of their Medicaid funding. These cuts would have 
dire consequences to hundreds of thousands of American 
citizens, and I think this is a crisis.
    Today, we have to ask a vital question: How can we fail to 
care for so many American citizens based solely on where they 
live? So we want to hear from the witnesses what the loss of 
the Medicaid funds will mean to the people you serve and what 
Congress should do to improve the situation, both in the 
immediate future and in the long term.
    Thank you for traveling such distances to be with us today. 
We all appreciate it. And I know for some of you that it was a 
multiday journey to be with us. So we all appreciate your time 
and your willingness to answer our subcommittee's questions. 
And I now would like to recognize the time remaining to the 
gentleman from New Mexico, Mr. Lujan.

             [The prepared statement of Ms. Eshoo follows:]

                Prepared Statement of Hon. Anna G. Eshoo

    At the end of this coming September, the five U.S. 
territories face a ``Medicaid cliff,'' which means the 
supplementary Medicaid funding provided to the territories 
through the Affordable Care Act will run out. Without this 
Federal funding, over 1.5 million enrollees, including many 
children, could lose their healthcare.
    Each is an American citizen and they're being treated 
differently than the constituents of every Member in this room.
    For too long the territories have struggled with inadequate 
Federal funding for their Medicaid programs because Federal law 
caps Medicaid funding for the territories. The territories also 
receive a fixed Federal Medicaid match that is lower than the 
rate they would receive if they were States.
    Due to these restrictions, the territories routinely run 
out of Medicaid funds. Over the past decade, Congress has voted 
on five separate occasions to provide stopgap funds to certain 
territories.
    Even with these supplements, the funding for the 
territories is well below what a State Medicaid program would 
receive. In the territories, Medicaid spends an average of 
$1,866 per enrollee. In the States, on average, Medicaid spends 
more than 4 times that amount.
    In the States, the Medicaid program has a flexible 
financing structure. This structure guarantees funding if more 
individuals enroll due to an economic downturn, an epidemic, or 
a natural disaster.
    The territories do not have a guarantee. When disaster 
strikes, as it did with the 2017 hurricanes and the 2018 
typhoons, the territories were forced to make hard decisions 
about coverage and services at the worst possible time.
    Simply put, the territories' Medicaid funding does not meet 
their needs.
    In Puerto Rico, 85% of residents report they're worried 
that they'll be unable to access healthcare if they need it. A 
recent study found breast cancer patients in the territories 
were 82% less likely to receive timely radiation therapy. In 
American Samoa, Guam, and the Northern Mariana Islands, the 
public hospitals face staff shortages due to low salaries, poor 
infrastructure, and high rates of uncompensated care.
    All of these challenges exist before the Medicaid cliff 
hits on September 30th. If we allow that to happen, Puerto Rico 
would go from $2.3 billion in Federal funding to just $360 
million. The other territories would have similar cuts of 
upwards of 70% of their Medicaid funding. These cuts would have 
dire consequences to hundreds of thousands of American 
citizens. This is a crisis.
    Today we must ask a vital question: How can we fail to care 
for so many American citizens based solely on where they live?
    I want to hear from the witnesses what the loss of the 
Medicaid funds will mean to the people you serve and what 
Congress should do to improve the situation both in 
theimmediate future and in the long term. Thank you for 
traveling to be with us today.
    I now recognize Congressman Ben Ray Lujan for the remainder 
of my time.

    Mr. Lujan. Thank you, Chairwoman Eshoo and Chairman 
Pallone. The lack of adequate funding for Medicaid programs in 
the territories is not only unacceptable, it is inhumane. 
Funding for territories' Medicaid programs has never been 
enough, and if Congress fails to act before September 30th, the 
Medicaid cliff could leave the territories in an even more dire 
financial situation. We are talking about people not being able 
to access basic healthcare, the sick unable to see a doctor, 
children without care.
    Territory officials have described the expiration of these 
Federal funds as catastrophic, and people are scared. Estimates 
predict a third to a half of Puerto Rican Medicaid enrollees 
are at risk for losing coverage. And in the U.S. Virgin 
Islands, estimates show 18,000 people out of the 28,000 current 
enrollees could lose coverage. That is more than 60 percent.
    These are our fellow Americans. Congress must embrace them 
as fellow citizens and stop jeopardizing their access to 
healthcare. I thank you, and I yield back.
    Ms. Eshoo. The gentleman yields back, and the Chair is now 
pleased to recognize Dr. Burgess, the ranking member of the 
Subcommittee on Health, for 5 minutes for his opening 
statement.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. Thank you, and I appreciate the recognition.
    During our last extenders hearing 2 weeks ago, I made note 
of the fact that we had left out an incredibly important piece 
of the conversation, Medicaid in the United States' 
territories. So I do want to thank you, Chairwoman Eshoo, for 
committing to hold this hearing, and I especially want to thank 
our representatives from each of our Nation's territories for 
having traveled such distances to be here today. I also want to 
recognize our representatives who waived on to the 
subcommittee, Representative Jenniffer Gonzalez-Colon and Ms. 
Radewagen from American Samoa, who have joined us today for 
this subcommittee hearing.
    The five United States territories--Puerto Rico, the U.S. 
Virgin Islands, Guam, American Samoa, the Commonwealth of the 
Northern Mariana Islands--each have a vulnerable population 
that depends on Medicaid and the Children's Health Insurance 
Program. The structure of these programs is different from that 
in the individual States. However, these programs are equally 
important, as these are United States citizens. The funding for 
Medicaid in some of our territories was last reauthorized in 
the Bipartisan Budget Act of 2018, but that funding is set to 
expire at the end of this September. It is critical that we act 
in a timely manner to reauthorize this funding.
    Over the course of the past few years, the territories have 
suffered tremendous damage from natural disasters. Hurricanes, 
typhoons--what were already at-risk populations have been made 
even more vulnerable as they have suffered destruction of their 
homes and their infrastructure, and in some cases healthcare 
professionals have left the territories for the mainland United 
States.
    As the territories continue to recover and prepare for 
future potential disasters, we need to be mindful of their 
inhabitants' access to healthcare and ensure adequate Medicaid 
funding that is integral to maintaining that access. As Dr. 
Schwartz points out in her testimony, the territories have 
sufficient funding to cover their expenses through the end of 
this fiscal year, which is rapidly approaching. However, it is 
the long-term challenge that we are facing today.
    I also think it is worth noting that Puerto Rico has by far 
the most enrollees and faces challenges that are not 
necessarily relevant in the other territories, but as we move 
forward in the process of extending Medicaid funding for all 
the five territories, we must remember that each territory is 
unique and may require a different approach in our legislation. 
Each territory has different benefits for its citizens, and 
only Puerto Rico uses Medicaid Managed Care, while other 
territories operate in the fee-for-service system. It is 
critical to ensure adequate funding for the territories so that 
they operate their Medicaid programs appropriately.
    I also believe it is important to have accountability 
measures and fraud detection and prevention. For our own 
States, the House has passed a permanent reauthorization of the 
Medicaid Fraud Control Units earlier this week, and we should 
perhaps think of a similar standard for the territories, 
especially if increased funding is provided in September. As we 
saw in Puerto Rico following the enactment of the Bipartisan 
Budget Act of 2018, it is possible for the territories to adopt 
and successfully implement program integrity measures.
    I hope we can use this hearing as an opportunity, an 
opportunity to have a productive conversation about any 
potential changes to the Federal payment mechanisms in the 
Medicaid programs in the territories, as we are willing to 
engage on this issue, but we need to strike the right balance 
between funding and structure of these programs so that they 
can succeed, be good shepherds of the taxpayer dollars, and 
deliver the services when and where they are needed.
    Again, I would like to thank all of our witnesses for being 
part of this. As the Chair will have noted, many of you 
traveled days to get here, and for that we are very 
appreciative. I look forward to your testimony.
    I21[The prepared statement of Mr. Burgess follows:]

             Prepared Statement of Hon. Michael C. Burgess

    Thank you, Madame Chair. During our last extenders hearing 
2 weeks ago, I noted that we had left out an incredibly 
important piece of the conversation--Medicaid in U.S. 
territories. I would like to thank Chairwoman Eshoo for her 
commitment to hold this hearing, and I would especially like to 
thank the representatives from each of our Nation's territories 
for traveling such distances to be here today. I would also 
like to recognize Representative Jenniffer Gonzalez-Colon from 
Puerto Rico, who is waiving onto our subcommittee for this 
hearing.
    The five U.S. territories, Puerto Rico, the U.S. Virgin 
Islands, Guam, American Samoa, and the Commonwealth of the 
Northern Mariana Islands, each have a vulnerable population 
that depends on Medicaid and the Children's Health Insurance 
Program. The structure of these programs is different than 
those of the individual States; however, these programs are 
equally important, as these are United States citizens. The 
funding for Medicaid in some of the territories was last 
reauthorized in the Bipartisan Budget Act of 2018, but that 
funding is set to expire at the end of this September. It is 
critical that we act in a timely manner to reauthorize this 
funding.
    Over the course of the past few years, the territories have 
suffered tremendous damage from natural disasters, including 
hurricanes and typhoons. What are already at-risk populations 
have been made more vulnerable as they have suffered 
destructions of their homes and infrastructure, and in some 
cases, healthcare professionals have left the territories for 
the United States.
    As the territories continue to recover and prepare for 
potential future devastation, we need to be mindful of their 
inhabitants' access to healthcare, and ensuring adequate 
Medicaid funding is integral in maintaining that access.
    As Dr. Schwartz points out in her testimony, the 
territories have sufficient funding to cover their expenses 
through the end of this fiscal year; however, it is the long-
term challenge that we are facing today. I also think it is 
worth noting that Puerto Rico has by far the most enrollees and 
faces challenges that are not necessarily relevant to the other 
territories. As we move forward in the process of extending 
Medicaid funding for all of the five territories, we must 
remember that each territory is unique and requires a different 
approach in our legislation.
    Each territory has different benefits for its citizens, and 
only Puerto Rico uses Medicaid managed care, while the other 
territories operate fee-for-service systems.
    While it is critical to ensure adequate funding for the 
territories to operate their Medicaid programs, I also believe 
that it is important to have appropriate accountability 
measures and fraud detection and prevention. For our own 
States, the House passed a permanent reauthorization of 
Medicaid Fraud Control Units earlier this week, and we should 
hold the territories to a similar standard--especially if 
increased funding is provided in September. As we saw in Puerto 
Rico following the enactment of the Bipartisan Budget Act of 
2018, it is possible for the territories to adopt and 
successfully implement program integrity measures.
    I hope that we can use this hearing as an opportunity to 
have a productive conversation about any potential changes to 
the Federal payment mechanisms in Medicaid programs in the 
territories. We are willing to engage on this issue, but we 
need to strike the right balance between funding and 
structuring these programs such that they can succeed and being 
good shepherds of taxpayer dollars.
    Again, I would like to thank all our witnesses for being 
part of this important conversation today. I yield back.

    Mr. Burgess. And let me yield, Ms. Chairwoman.
    Mr. Pallone. Mr. Ranking Member, would you yield a minute? 
Just some time. I just wanted----
    Mr. Burgess. Don't you have your own time?
    Mr. Pallone. No, but this is procedural.
    Mr. Burgess. As the chairman of the full committee, you 
usually get a lot of time.
    Mr. Pallone. Well, all I wanted to say is my understanding 
is that the Delegates that are here today from the various 
territories, when they waive in they are not actually allowed 
to participate, but some of them have statements, Madam Chair. 
So I was going to ask unanimous consent that the sStatement of 
Mr. Sablan and any of the other Delegates that are here be 
submitted for the record.
    Ms. Eshoo. So ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pallone. Thank you. That is all.
    Ms. Eshoo. The gentleman yields back. I now would like to 
recognize the chairman of the full committee, Mr. Pallone, for 
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, Madam Chair.
    Today, our committee continues its efforts to ensure that 
all Americans have access to healthcare, whether they live in 
one of the 50 States or one of the 5 territories. The 
territories are on the verge of a financial and humanitarian 
crisis. Experts predict that, unless Congress acts, none of the 
territories will have enough Federal funds to support their 
Medicaid programs next year. Puerto Rico could potentially 
spend all its Federal funds in a matter of months, facing a 
shortfall of billions of dollars for the year.
    And it is no secret how we got here. For years, the 
territories have been operating their Medicaid programs under 
Federal funding caps that haven't kept up with the needs of the 
people who live there. The Affordable Care Act provided 
increased funding that has helped the territories for the past 
decade, but that expires at the end of this year.
    Natural disasters in the territories have also put 
increased strain on their Medicaid programs that required 
Congress to provide additional support to ensure people didn't 
lose access to care. Medicaid in the territories doesn't 
operate like it does in the States. Each territory only 
receives a certain amount of Federal funds that is supposed to 
last them the whole year. It is essentially a block grant.
    In the States, increases in State Medicaid spending are 
matched with an increase in Federal Medicaid funding. And this 
means that, in times of economic downturn or in the period 
following a natural disaster when state Medicaid spending 
increases, the State receives an automatic increase in Federal 
Medicaid dollars.
    But that is not how it works for the territories. Once they 
spend their annual allotment, they have to pay for their 
Medicaid costs using local funds. And this outdated system 
forces the territories to pay a substantial amount out of their 
own pockets to ensure that people there have access to 
healthcare. It is also a stark reminder of why block grants for 
Medicaid simply don't work. The Federal funding shortfall means 
most of the territories aren't able to provide the full range 
of benefits that State Medicaid programs are required to cover. 
Payments to doctors and hospitals are so low that providers are 
leaving the islands for the States.
    While Congress has provided some time-limited increases to 
the territories' Medicaid funding, we need a longer-term 
solution. Doling out Federal funds in dribs and drabs has led 
to uncertainty about the financial future of the programs and 
calls into question the long-term sustainability of the 
territories' Medicaid programs if Congress fails to act.
    And that is why we are here today, to discuss the Medicaid 
cliff facing the territories and what we can do to avert a 
catastrophe. As we will hear today, without additional funds 
hundreds of thousands of people in the territories could lose 
their healthcare coverage. Some territories have said they 
would have to stop covering prescription drugs, dental care, 
durable medical equipment, and community health centers, and 
others have said they expect to lose even more providers.
    And none of this really has to happen. We can all see the 
cliff coming, but if we work together, we can stop the 
territories from going off it. We can ensure that they can 
continue to provide care to the people who need it the most, we 
can stop the flight of doctors and providers from the islands, 
and we can provide the certainty and sustainability that the 
territories deserve.
    Several Members recently introduced legislation that would 
provide Puerto Rico with both the amount of Federal funds 
requested by the Governor and establish a path to help 
transition its Medicaid program to a full State-like program. 
And this would provide sufficient funds to Puerto Rico to 
ensure its people receive the healthcare services they need.
    And I want to thank the Members for their hard work on this 
bill, especially Representative Soto, who is on our committee. 
I hope this can potentially be a roadmap to help strengthen the 
Medicaid program in other territories. And I also want to thank 
the witnesses for being here today, particularly those who have 
traveled long distances to share your expertise with us.
    [The prepared statement of Mr. Pallone follows:]

             Prepared Statement of Hon. Frank Pallone, Jr.

    Today, our committee continues its efforts to ensure that 
all Americans have access to healthcare, whether they live in 
one of the 50 States or one of the five territories.
    The territories are on the verge of a financial and 
humanitarian crisis. Experts predict that unless Congress acts, 
none of the territories will have enough Federal funds to 
support their Medicaid programs next year. Puerto Rico could 
potentially spend all its Federal funds in a matter of months, 
facing a shortfall of billions of dollars for the year.
    It's no secret how we got here. For years, the territories 
have been operating their Medicaid programs under Federal 
funding caps that haven't kept up with the needs of the people 
who live there. The Affordable Care Act provided increased 
funding that's helped the territories for the past decade, but 
that expires at the end of this year. Natural disasters in the 
territories have also put increased strain on their Medicaid 
programs that required Congress to provide additional support 
to ensure people didn't lose access to care.
    Medicaid in the territories doesn't operate like it does in 
the States. Each territory only receives a certain amount of 
Federal funds that's supposed to last them the whole year. It's 
essentially a block grant. In the States, increases in State 
Medicaid spending are matched with an increase in Federal 
Medicaid funding. This means that in times of economic 
downturn, or in the period following a natural disaster, when 
State Medicaid spending increases, the State receives an 
automatic increase in Federal Medicaid dollars. That's not how 
it works for the territories. Once they spend their annual 
allotment, they have to pay for their Medicaid costs using 
local funds. This outdated system forces the territories to pay 
a substantial amount out of their own pockets to ensure the 
people there have access to healthcare. It's also a stark 
reminder of why block grants for Medicaid simply don't work.
    The Federal funding shortfall means most of the territories 
aren't able to provide the full range of benefits that State 
Medicaid programs are required to cover. Payments to doctors 
and hospitals are so low that providers are leaving the islands 
for the States. While Congress has provided some time-limited 
increases to the territories' Medicaid funding, we need a 
longer-term solution. Doling out Federal funds in dribs and 
drabs has led to uncertainty about the financial future of the 
programs and calls into question the long-term sustainability 
of the territories' Medicaid programs if Congress fails to act.
    That's why we are here today--to discuss the Medicaid cliff 
facing the territories and what we can do to avert a 
catastrophe. As we will hear today, without additional funds, 
hundreds of thousands of people in the territories could lose 
their healthcare coverage. Some territories have said they 
would have to stop covering prescription drugs, dental care, 
durable medical equipment, and community health centers. Others 
have said they expect to lose even more providers.
    None of this has to happen. We can all see the cliff 
coming, but if we work together, we can stop the territories 
from going off it. We can ensure that they can continue to 
provide care to the people who need it the most. We can stop 
the flight of doctors and providers from the islands. And we 
can provide the certainty and sustainability that the 
territories deserve.
    Several Members recently introduced legislation that would 
provide Puerto Rico with both the amount of Federal funds 
requested by the Governor, and establish a path to help 
transition its Medicaid program to a full, State-like program. 
This would provide sufficient funds to Puerto Rico to ensure 
its people receive the healthcare services they need. I want to 
thank the Members for their hard work on this bill, especially 
Rep. Soto on our committee. I hope this can potentially be a 
road map to help strengthen the Medicaid program in other 
territories.
    I also want to thank the witnesses for being here today, 
particularly those that traveled long distances to share your 
expertise with us.
    Thank you.

    Mr. Pallone. I wanted to yield to Representative Soto. But 
just if I could say, I think many of our Members went after 
Hurricane Maria to Puerto Rico and the Virgin Islands. And when 
we were on that trip, both Stacey and Jenniffer representing 
the Virgin Islands and Puerto Rico were very helpful in 
explaining the problems with Medicaid at the time, so we 
learned a lot on that trip.
    But now I would like to yield to Representative Soto.
    Mr. Soto. Thank you, Mr. Chairman. We know that Puerto 
Ricans, the 3.3 million on the island, are experiencing a 
Medicaid crisis. Hospitals in disrepair, over 6,000 doctors 
have left the island over the past few years, debt increases 
just to try to keep the Medicaid program afloat, which ended 
up, in part, causing the PROMESA issues that we face, but it 
was mostly on display after Hurricane Maria, the decline in the 
healthcare infrastructure there.
    So I wanted to join Congresswoman Velazquez and the Puerto 
Rican Task Force to introduce legislation yesterday. I want to 
thank Governor Rossello for his leadership and input in that 
legislation as well as our Commissioner, Jenniffer Gonzalez-
Colon. It would be a $15.1 billion bill with an 83 percent 
Federal match transition period of 4 years from 2020 to 2024, 
followed by a 10-year transition period after that. Obviously, 
a game changer.
    And thank you again, both Chairwoman Eshoo and Chairman 
Pallone, for your consideration of this important legislation.
    Ms. Eshoo. The gentleman yields back. It is a pleasure to 
recognize Mr. Walden, the ranking member of the full committee, 
for his 5 minutes for an opening statement.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Oh, good morning, Madam Chair. And good morning 
to our witnesses and those in the audience. Thank you for being 
here.
    As the chairman of the committee mentioned, I led that 
CODEL, that congressional delegation trip to Puerto Rico and 
Virgin Islands, and it was a real eye-opener. And I know you 
all are still suffering, and in other places around the globe, 
from these terrible hurricanes. And we saw a hospital, as I 
recall it was in the Virgin Islands, that had to be shut down 
because of the mold and the water and the damage and, you know, 
we really appreciated your help, Stacey and others, in this 
effort. So we stand ready to do our part again. And today 
marks, I think, a really important step forward as we help you 
face these challenges in the territories.
    We have the honor of having before this committee a 
representative from each of the U.S. territories' Medicaid 
programs, and we are really pleased that you are here because 
we need to hear directly from you about the challenges you face 
due to the coming funding cliff in September. I know some of 
you had to quite literally fly around the world to join us here 
today, so we thank you for that. I complain about my trip to 
the West Coast every week, and I know you are a long way past 
that, so I will quit complaining.
    We are also pleased to have before us Anne Schwartz, the 
executive director of MACPAC. You and your team's work has been 
really helpful and invaluable over the years, so we are glad 
you could join us as well.
    As we know, the additional funding for the territories that 
they have received over the last decade expires September 30th, 
and this could have detrimental effects for each of the five 
territories here today. These consequences are not lost on me. 
It is a commitment. We will work together in a bipartisan way 
to find a solution that avoids this cliff and gets these 
programs on a more sustainable path.
    Last Congress, under my leadership, this committee led a 
robust bipartisan response to the damage inflicted by the 
Hurricanes Maria, Harvey, and Irma. I led a bipartisan 
delegation to Puerto Rico and the U.S. Virgin Islands to see 
the devastation firsthand and hear from people on the ground. I 
was thankful then and am now to Representative Gonzalez-Colon 
for her work and help on this important issue.
    Among other visits, the healthcare facilities we saw on 
both islands were in dire conditions, not only because of the 
direct damage sustained during the storms, but also because of 
the sustained lack of power to the islands after those storms. 
It was also our committee that pushed for the 2 years, a 
hundred percent funding included in the Bipartisan Budget Act 
of 2018 to help respond to that crisis, and we are interested 
to know how that funding has helped in the recovery.
    Included in the BBA was an incentive for both Puerto Rico 
and the Virgin Islands to draw down additional funds should 
those territories improve data reporting and program integrity 
measures, because we all care about those as well, conditions 
that both territories have met. That is good progress, but I 
would also like to hear from you both on what else we can do to 
improve program integrity as we look for ways to fund the 
existing shortfalls.
    Another reason this hearing is so important is that we need 
you all to help differentiate your territories' specific needs. 
Too often in Congress you all get lumped together, and that is 
not fair and it is not right. But as each of your territories 
makes clear, we have five distinct programs with five distinct 
sets of challenges and program designs, and understanding those 
differences will be key. We know how critical this situation 
is, and we are very thankful to each of you for being here 
today and your willingness to work with us over the coming 
months, and I look forward to your testimony.
    I mentioned the work of Representative Gonzalez-Colon, who 
has joined us on the dais. She is attending today's hearing but 
cannot participate due to our committee rules. That is the 
tradition of the committee, but she does work us over pretty 
well all the time on these issues. And I would also recommend 
that any Member that has a question regarding the current 
circumstances in Puerto Rico work with her. There is no better 
way to understand the issue, and she is a fierce advocate for 
Puerto Rico.
    We are also really pleased to welcome from American Samoa 
another terrific advocate, Representative Radewagen, who 
champions American Samoa. We are pleased to have her as well. 
And, of course, the gentlelady from the Virgin Islands too, who 
played host to us when we there and visiting. We are glad for 
her advocacy and help as well.
    And, Madam Chair, with that we will get on about our 
business. Thank you for having this hearing. We look forward to 
working with you to a positive outcome, and I yield back.
    [The prepared statement of Mr. Walden follows:]

                 Prepared Statement of Hon. Greg Walden

    Today marks an important step forward in our work to 
address the healthcare challenges faced by our territories.
    We have the honor of having before this committee a 
representative from each of the U.S. territories' Medicaid 
programs. We are thrilled to have each of you here as we 
thought it imperative to hear directly from each of you about 
the challenges you face due to the coming funding cliff in 
September. I know some of you had to quite literally fly around 
the world to join us here today, so thank you. We are also 
pleased to have before us Anne Schwartz, the Executive Director 
of MACPAC. You and your team's work on the territories has been 
invaluable over the years, and we are so glad you are able to 
join us today.
    As we know, the additional funding for the territories that 
they have received over the last decade expires September 30th, 
and this could have detrimental effects for each of the five 
territories here today. Those consequences are not lost on me. 
It is my commitment that we will work together, in a bipartisan 
way, to find a solution that avoids this cliff and gets these 
programs on a more sustainable path.
    Last Congress, under my leadership, this committee led a 
robust bipartisan response to the damage inflicted by 
hurricanes Maria, Harvey, and Irma. I led a bipartisan 
delegation of Members to Puerto Rico and the U.S. Virgin 
Islands to see the devastation firsthand. I was thankful then 
and am thankful now to Rep. Gonzalez-Colon for her work and 
help on this important issue. Among other visits, the heathcare 
facilities we saw on both islands were in dire conditions, not 
only because of the direct damage sustained during the storms, 
but also because of the sustained lack of power to the islands 
after the storms.
    It was also our committee that pushed for the 2 years of 
100% funding included in the Bipartisan Budget Act of 2018 to 
help respond to the crisis, and we are interested to know how 
that funding has helped the recovery. Included in the BBA was 
an incentive for both Puerto Rico and the Virgin Islands to 
draw down additional funds should those territories improve 
data reporting and program integrity measures, conditions that 
both territories met. That's good progress, but I would also 
like to hear from you both on what else we can do to improve 
program integrity as we look for ways to fund the existing 
shortfalls.
    Another reason this hearing is so important is that we need 
you all to help differentiate your territories' specific needs. 
Too often in Congress you all get lumped together, but as each 
of your testimonies make clear, we have five distinct programs 
with five distinct sets of challenges and program designs. 
Understanding those differences will be key.
    We know how critical this situation is, and we are very 
thankful to each of you for being here and for your willingness 
to work with us over the coming months. I look forward to your 
testimony.
    I mentioned the work of Representative Gonzalez-Colon. She 
is attending today's hearing today but cannot participate due 
to committee rules. I would recommend that any Member that has 
questions regarding the current circumstances in Puerto Rico 
talk with Ms. Gonzalez-Colon. There is no better authority and 
no fiercer advocate for the people of Puerto Rico.
    Thank you, and I yield back.

    Ms. Eshoo. I thank the gentleman. He yields back. The Chair 
would now like to remind Members that, pursuant to committee 
rules, all Members' written opening statements shall be made 
part of the record.
    I now would like to introduce the witnesses for today's 
hearing, thank them each and all again for being with us. 
First, Dr. Anne Schwartz, the executive director of Medicaid 
and CHIP Payment and Access Commission. Welcome to you.
    Angela Avila, welcome to you. She is the executive 
director, Puerto Rico State Health Insurance Administration. 
Welcome and thank you to you.
    Sandra King Young, the Medicaid director, American Samoa 
State Agency, welcome and thank you to you.
    Maria Theresa Arcangel--what a beautiful name, Arcangel. We 
want all the committee members to be archangels, how is that?
    [Laughter.]
    Ms. Eshoo. She is the chief Human Service Program 
administrator, Division of Public Welfare, Guam Department of 
Public Health and Social Services, thank you to you.
    And is it ``Mi-hall''?
    ``Mi-cal''?
    Ms. Rhymer-Browne. ``Mi-cal.''
    Ms. Eshoo. Michal Rhymer-Browne, the assistant commissioner 
of the United States Virgin Islands Department of Human 
Service, Oversight of the Medicaid Division.
    And last but not least, Helen Sablan, the Medicaid 
director, Commonwealth of the Northern Mariana Islands State 
Medicaid Agency.
    So again, thank you, and welcome to each one of you. The 
Chair is going to recognize each witness for 5 minutes. The 
light on the--you see them, light boxes before you. When it 
turns red, stop. How is that? Just like on the road.
    So let me begin with Dr. Schwartz. You are recognized for 5 
minutes.

  STATEMENTS OF ANNE L. SCHWARTZ, Ph.D., EXECUTIVE DIRECTOR, 
MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION; ANGELA AVILA, 
    EXECUTIVE DIRECTOR, PUERTO RICO STATE HEALTH INSURANCE 
  ADMINISTRATION; SANDRA KING YOUNG, AMERICAN SAMOA MEDICAID 
     DIRECTOR; MARIA THERESA ARCANGEL, CHIEF HUMAN SERVICE 
 ADMINISTRATOR, DIVISION OF PUBLIC WELFARE, GUAM DEPARTMENT OF 
   PUBLIC HEALTH AND SOCIAL SERVICES; MICHAL RHYMER-BROWNE, 
  ASSISTANT COMMISSIONER, DEPARTMENT OF HUMAN SERVICES, U.S. 
    VIRGIN ISLANDS; AND HELEN C. SABLAN, MEDICAID DIRECTOR, 
          COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS

              STATEMENT OF ANNE L. SCHWARTZ, Ph.D.

    Dr. Schwartz. Good morning, Chairwoman Eshoo, Ranking 
Member Burgess, and members of the Health Subcommittee. I 
appreciate the opportunity to share the MACPAC's work as this 
body considers the role of Medicaid and CHIP in the five U.S. 
territories.
    As you know, MACPAC is an independent, nonpartisan 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. The 
Commission's 17 members, including Chair Melanie Bella and Vice 
Chair Chuck Milligan, are appointed by the Comptroller General.
    As in the States and DC, Medicaid and CHIP play a vital 
role in providing access to health services for low-income 
individuals in the territories. The challenges are similar to 
those in the States, populations with significant healthcare 
needs, an insufficient number of providers, and constraints on 
local resources. With some exceptions, the territories operate 
under similar Federal rules and are subject to oversight by 
CMS.
    There is a somewhat tired old saying that, if you have seen 
one Medicaid program, you have seen one Medicaid program. This 
is because, despite common rules, State programs vary widely. 
For the purposes of the hearing today, it is important to note 
both that territory Medicaid programs differ from the States 
and they also differ from each other. These differences reflect 
their unique geography, history, local economy, and health 
system infrastructure.
    My written statement goes into detail as to how Medicaid 
operates in the territories, and if you are interested in even 
more information, MACPAC has published fact sheets describing 
each territory's program. But the most important point I wish 
to share today, one that has already been mentioned several 
times, is that Federal policy for financing Medicaid in the 
territories has led to chronic underfunding. This is because 
the policy differs from the States' in two key ways.
    First, territorial Medicaid programs are constrained by a 
ceiling on Federal funding referred to as the section 1108 cap 
or allotment. Territories receive a relatively small amount 
funding each year regardless of changes in enrollment and use 
of the services. In comparison, states receive federal funding 
for each state dollar spent with no cap.
    Second, the Federal Medical Assistance Percentage, the 
FMAP, or matching rate, is statutorily set at 55 percent. For 
the states, the FMAP provides higher reimbursement to those 
with lower per capita incomes relative to the national average 
and vice versa. This reflects States' differing abilities to 
generate local revenues to fund their Medicaid programs.
    If the FMAPs for the territories were set using the formula 
used for the States, the matching rate for all 5 territories 
would be much higher, and in most cases the maximum of 83 
percent. Congress has stepped in at multiple points with fiscal 
relief, most notably in 2010 as part of the Affordable Care 
Act, more recently in the aftermath of Hurricane Irma and 
Maria.
    The Balanced Budget Act of 2018 provided Puerto Rico and 
the U.S. Virgin Islands with additional funds available at a 
100 percent matching rate. Earlier this month, a disaster 
relief bill provided supplemental funds for the Commonwealth of 
the Northern Mariana Islands at a hundred percent FMAP through 
the end of this fiscal year, and it also allowed American Samoa 
and Guam to access the remaining ACA funds during this period 
at a hundred percent matching rate. As a result of these 
actions, all five territories should now have sufficient 
funding to cover program expenses through the end of fiscal 
year 2019. However, because all sources of supplemental fund 
will expire at the end of the calendar year, we anticipate that 
all five will experience funding shortfalls at some point in 
fiscal year 2020.
    As the Commission noted in its analysis of Puerto Rico's 
Medicaid program in our recently issued report to Congress, the 
history of responding to crises with short-term infusions of 
funds has caused a great deal of uncertainty. An additional 
time-limited allotment of Federal funds would certainly prevent 
a fiscal cliff and would in the short term ensure the continued 
delivery of critical health services to eligible individuals. 
But it would not address the underlying challenges with the 
financing structure that make it difficult for territorial 
officials to plan, manage, and sustain long-term reliable 
access for Medicaid beneficiaries residing in these 
jurisdictions.
    Thank you for the opportunity to share MACPAC's analyses, 
and I am happy to answer any questions.
    [The prepared statement of Dr. Schwartz follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Eshoo. Thank you, Dr. Schwartz.
    I would just like to take a moment to welcome to our 
hearing--I saw her come in the door--our colleague, 
Congresswoman Nydia Velazquez. Thank you for being here, and 
thank you for the legislation that you have authored and was 
dropped yesterday. I see Congresswoman Stacey Plaskett here, 
and I want to recognize her and thank her for her presence. And 
I also want to recognize Congressman Sablan from the Northern 
Mariana Islands for joining us. And if someone comes and takes 
that seat, you take another one.
    Nydia, would you like to come up and join us too? OK, hold 
onto that seat then. OK. But we are glad that you are here, and 
you are always welcome. It is an honor to have each one of you 
here.
    I now would like to recognize Ms. Avila. You are recognized 
for 5 minutes for your testimony.

                   STATEMENT OF ANGELA AVILA

    Ms. Avila. Good morning, Mrs. Chairman Eshoo, Mr. Chairman 
Pallone, Ranking Member Walden, and Mr. Ranking Member Burgess, 
and members of the committee. Thank you for the opportunity to 
testify today on Puerto Rico's healthcare system. I am honored 
to be here on behalf of the Government of Puerto Rico and to be 
joined at the witness table with colleagues from the other 
territories.
    Puerto Rico's Medicaid program serves approximately 1.5 
million people, nearly half of the total population and some of 
our Nation's most vulnerable citizens. We serve approximately 
425,000 children, 305,000 elderly and disabled, and more than 
17,000 pregnant women at any given time. Our beneficiaries are 
served by a network of thousands of healthcare providers such 
as doctors, nurses, and health technicians, 64 hospitals, 20 
federally qualified health centers, and 900 pharmacists.
    Puerto Rico's Medicaid system has been chronically 
underfunded due to a historically low Federal Medicare 
Assistance Percentage, known as FMAP, a correspondingly high 
local matching requirement, and the cap on Federal funding. 
Currently, we are operating under increased Medicaid funding 
and temporary 100 percent FMAP through the Bipartisan Budget 
Act of 2018, or BBA, which we received in the aftermath of 
Hurricane Maria, the worst natural disaster in our Nation's 
history.
    It is only through this additional Federal funding and the 
increased FMAP provided in the BBA that Puerto Rico has been 
able to sustain its healthcare system. We thank the members of 
this committee who worked to ensure Puerto Rico had received 
the necessary funding. We have made great progress in our 
program since the devastating hurricanes, thanks to the BBA. 
However, all that progress is in jeopardy due to the 
uncertainty of no additional Federal funding.
    With the upcoming expiration of the BBA on September 30, 
the increased Medicaid funding and the temporary 100 percent 
FMAP Puerto Rico received through the BBA will expire. If no 
action is taken for fiscal year 2020, the FMAP will revert to 
the statutorily mandated 55 percent FMAP up to the Federal 
Medicaid funding cap of approximately 380 million.
    This will result in effective Federal matching, including 
remaining ACA funds, of 30 percent for the program in fiscal 
year 2020 and 13 percent in fiscal year 2021. Once this funding 
is exhausted, Puerto Rico will have to fully fund the deficit 
as it has in the past and pay for its Medicaid services with 
100 percent local funding. Given the island's current financial 
situation, this level of local funding is not an option.
    Unless Congress acts, we will be faced with potentially 
catastrophic damage to our Medicaid program. We will be forced 
to potentially remove any services that are not required under 
Medicaid rules, such as pharmacy coverage and dental coverage 
that are already limited. We may have to end coverage for the 
current population who receive healthcare with local funds, and 
we will continue to lose more of our Medicare providers because 
of low reimbursement rates.
    Last month, Governor Rossello submitted Puerto Rico's 
official Medicaid ask to Congress, 5 years of funding at an 83 
percent FMAP for a total of 15.1 billion in funding. This 
funding will provide Puerto Rico with stability in the short 
term while we work together on a sustainable, long-term funding 
mechanism. The short-term, critical sustainability measures 
needed to stabilize the healthcare system in Puerto Rico are 
keeping physicians within the system to avoid critical 
shortages, providing lifesaving Hep C drugs, adjusting the 
Puerto Rico poverty level to increase fairness in Medicaid 
eligibility, and providing Medicare Part B premium assistance.
    The Medicaid cliff that Puerto Rico is facing is an 
emergency that must be dealt with urgently. I love my island, 
and it is my home and I am committed to working with Congress 
to create the Medicaid program that all of us can be proud of. 
Thank you for the opportunity to meet these urgent matters, and 
I welcome any questions you may have. Thank you.
    [The prepared statement of Ms. Avila follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Eshoo. Thank you very much.
    You know, it isn't--I want to make note of something. It 
isn't very often that a full panel of witnesses are all women, 
so I want to make note of that. Thank you. I think it is 
wonderful. Thank you.
    [Applause.]
    Ms. Eshoo. Ms. Young, you are recognized for 5 minutes for 
your testimony.

                 STATEMENT OF SANDRA KING YOUNG

    Ms. Young. Talofa, Chairwoman Eshoo, Ranking Member 
Burgess, and members of the committee. Thank you for the 
opportunity to testify before your committee on how to 
strengthen healthcare in the U.S. territories. I want to 
recognize that this is the first time that American Samoa and 
the other territories have this extraordinary opportunity to 
testify before this committee that has jurisdiction over 
Medicaid issues. A few weeks ago, we also testified before the 
Natural Resources Committee.
    This is a monumental step forward for the territories and 
our efforts for advocacy on Medicaid programs. The challenges 
with the U.S. territories are unique, and a cookie-cutter 
approach will not work. However, we do have some things in 
common. The key to strengthening healthcare in American Samoa 
and the territories lays with fixing two key statutory 
provisions in our Medicaid programs.
    First, the cap on the territories' Medicaid block grants 
must be lifted or increased. American Samoa has 12 million in 
this fiscal year, and we receive a nominal 2 to 3 percent 
increase every year.
    With the availability of the Affordable Care Act Medicaid 
funding in 2011, we were able to draw, on average, an 
additional 5.4 million a year. In 2017, our Medicaid agency 
added four new Medicaid services and providers to our program. 
With these new services, we exhaust our block grant in the 
second quarter.
    Funding these new services is limited also by the 
availability of our local matched dollars. This year, we 
suspended our new services in March because we had exhausted 
our 2 million in local match. That suspension was just lifted 
in the first week of June when the disaster supplemental bill 
was made available, providing us with relief with a 100 percent 
FMAP up until September 30th, 2019, for the 152 million ACA 
money that we couldn't spend.
    We do anticipate the cost of these new services to increase 
over the next 5 years, and our initial estimate to ensure 
adequate coverage is around 10 million a year, if we provide 
comprehensive coverage as required by our Medicaid State Plan 
and Social Security Act. If we are to continue with block 
grants, then American Samoa must have an increase of at $30 
million a year in Federal Medicaid dollars.
    Second, the current FMAP percentage is unsustainable for 
our government. We would like to propose a more sustainable 
FMAP rate of 90 percent Federal, 10 percent local match for at 
least the first few years, or a straight application of the 
FMAP formula based on American Samoa's actual poverty levels. 
Critical is the principle that both the cap and the FMAP must 
be addressed together. These two issues are interdependent, and 
one should not happen without addressing the other.
    Third, American Samoa has a unique 1902(j) waiver that 
allows us to manage our very small Medicaid program from being 
overregulated. Some of the things unique to our program is that 
we do not do individual enrollment for Medicaid because we 
administer a presumptive eligibility program allowed under our 
waiver. It is the position of our government that we want to 
maintain this statutory waiver that best suits the unique 
challenges we face as a remote island territory.
    Lastly, what is the real impact to our people when we don't 
have enough Medicaid Federal and local funding for our program? 
In short, once the ACA money expires in September, we will stop 
our off-island medical referral program for medically necessary 
care not available on island. We will stop payments for 
wheelchairs, CPAP machines, and prosthetics. We will stop 
payments for the Medicare dual eligible beneficiaries. The only 
Medicaid provider that we will continue to fund will be our one 
hospital.
    But Medicaid services like prostate or breast cancer 
treatment and all cancer treatments, knee or hip replacements, 
heart surgeries for adults, or rheumatic heart disease 
surgeries for our children will simply not be covered. That we 
must intentionally make decisions that could leave our people 
permanently incapacitated physically or mentally, or at worst, 
the risk of loss of life is morally unconscionable.
    This committee and Congress have the power to help American 
Samoa and the other territories finally fix the statutory 
barriers so we don't have to make these decisions. Everyone 
deserves to receive lifesaving treatments, even in the 
territories. On behalf of our people and our government, again 
I appreciate your time and efforts to hold this hearing. May 
God bless and guide you in the important work that you do for 
this country. I am happy to answer any questions. Thank you.
    [The prepared statement of Ms. Young follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Eshoo. Thank you very much.
    I now would like to recognize Ms. Arcangel for her 5 
minutes for testimony.

              STATEMENT OF MARIA THERESA ARCANGEL

    Ms. Arcangel. Hafa adai, Madam Chair and Ranking Minority 
Members. On behalf of Governor Leon Guerrero and the people of 
Guam, thank you for inviting us to testify regarding the 
healthcare issues that Guam Medicaid recipients endure and the 
cliff Guam will face if there is no immediate action taken by 
this Congress beginning fiscal year 2020 to increase the 
territories' Federal Medical Assistance Percentage and increase 
or remove the Federal funding cap.
    Like many stateside rural areas, Guam suffers from shortage 
of primary care providers and specialists. HRSA has qualified 
Guam as both a medically underserved and a health professional 
shortage area. The shortage of health professionals is 
attributed to the difficulty in recruiting providers due to 
Guam's remote location, the physician salary that is not 
comparable to U.S. rate, and the high cost of malpractice 
insurance on Guam.
    Clearly, there remains a shortage of primary care 
physicians, which is felt most especially among the Medicaid 
recipients who struggle finding a permanent medical home 
because of providers' refusal to accept patients due to low 
reimbursement and the late payments. Thus, Medicaid clients are 
forced to seek treatment at the emergency room, which is more 
costly. Additionally, due to gaps in the tertiary care 
services, there are instances when off-island doctors refuse to 
accept Medicaid's referrals due to untimely reimbursement.
    In some instances, patients needing to transfer from Guam 
Hospital to a highly equipped off-island medical facility must 
stay longer in our hospitals for several days before treatment 
can be obtained. As a result, patients' condition worsens, 
requiring air ambulance. Similarly, the cost of medical 
supplies and equipment are more expensive in Guam due to the 
limited distributors as compared to hundreds of companies 
available here. The high shipping costs and vendors' tendency 
to impose a higher price on medications due to lack of 
competition contribute to the high cost.
    All these factors add to the high cost of healthcare in 
Guam. The migration of FAS citizens in any U.S. soil under the 
Compact of Free Association according to the U.S. Census in 
2013, there were 17,170 Compact migrants on Guam. In fiscal 
year 2017, Guam estimated that 38.5 million was spent on 
healtcare and welfare services for this population. Moreover, 
of the 110.8 million expenditures of Guam Medicaid in fiscal 
year 2018, $29 million or 27 percent of total amount were spent 
for FAS population's healthcare needs. The influx of COFA 
citizens created an additional hardship on Guam's economy. As a 
result, the government is unable to guarantee the availability 
of 45 percent local matching funds required to draw down the 
Federal grant awards.
    The U.S. territories administer the Medicaid under Federal 
regulations that are different from the 50 States and District 
of Columbia. Guam Medicaid's FMAP rate is fixed at 55 percent. 
However, the FMAP for 50 States and DC varies by States' per 
capita income between 50 percent to 83 percent. In addition, 
the Federal Medicaid funding to Guam is subject to an annual 
cap, which is 18.38 million for next fiscal year, unlike the 
States and DC that are open-ended.
    Clearly, there is a huge disparity on the Medicaid funding 
distribution of Guam in comparison to the U.S. States. Those 
differences on Medicaid rules affect the quality of healthcare 
provided to program recipients and contribute to the economic 
destabilization of Guam. Due to increase in utilization, the 
number of eligibles, and new treatment modality and others, 
Guam's Medicaid expenditures increased by 323 percent over the 
past decade, 26 million in fiscal year 2009 and 110.8 million 
in fiscal year 2018.
    If no action is taken to increase the FMAP and remove the 
Federal funding cap, Guam Medicaid could be forced to terminate 
more than 50 percent of its 43,000 eligibles. This will further 
increase Guam's estimated uninsured population rate of 24.8 
percent in fiscal year 2017. Hence, in order to improve the 
healthcare services of our Medicaid recipients, Guam proposes 
to increase the U.S. territories' FMAP and remove the Federal 
funding cap.
    Thank you for the opportunity to testify on this important 
issue. We hope that the committee will develop a solution to 
assist the U.S. territories in resolving the longstanding 
disparity on Medicaid funding distribution that affects our 
economy.
    [The prepared statement of Ms. Arcangel follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Eshoo. Thank you very much.
    I now would like to recognize Ms. Rhymer-Browne for 5 
minutes for your testimony.

               STATEMENT OF MICHAL RHYMER-BROWNE

    Ms. Rhymer-Browne. Madam Chair Eshoo, Chairman Pallone, 
Ranking Member Walden, Ranking Member Burgess of the Health 
Subcommittee, and members of the committee, thank you for the 
opportunity to provide testimony on the significant impacts to 
our healthcare system and the people of the United States 
Virgin Islands considering the impending Medicaid fiscal 
funding cliff which will impact us beginning October 1, 2019. I 
am Michal Rhymer-Browne, assistant commissioner of the Virgin 
Islands Department of Human Services, and I have the distinct 
privilege to have oversight of the Medicaid Division.
    I must also thank today, Kimberley Causey-Gomez, my 
commissioner nominee, my boss, of the Virgin Islands Department 
of Human Services, who has extended to us her complete support 
as we prepared to come here to this important committee 
meeting. On behalf of the Honorable Governor Albert Bryan, Jr., 
and the more than 100,000 American citizens living in the U.S. 
Virgin Islands, we bring you greetings. And as we say in the 
Virgin Islands, ``a pleasant good morning.'' As a people, we 
want to convey our heartfelt gratitude, appreciation, and 
thanks for the concern and the support that you and your 
colleagues in Congress have provided as we continue to recover 
from the unprecedented damage caused by Hurricanes Irma and 
Maria, which ravaged our territory in September of 2017.
    We are a resilient people, but my testimony today is truly 
intended to actualize the empathy and to request your continued 
urgent support to address the critical Federal and local 
funding crisis we are facing here in our healthcare system in 
the Virgin Islands. My testimony is here today, and I just feel 
the need as I am sitting here with you to speak from my heart, 
and I will go back a little bit to the script.
    But as I am sitting here, I am sitting here with some hope, 
but I reflected just a few moments ago when I was sitting under 
a palm tree on one of our beaches one day on a cultural 
holiday. And I was called by our Medicaid director to tell me 
of a little boy who was just born about 3 days ago who had 
deteriorated digestive system and he would die in a few days.
    At that point, we faced the decision of whether we would 
send this child off island, and at that point we were terrified 
because we said if we send this child, we may not be able to 
pay immediately. But I called my commissioner and I recommended 
that we help to save this child. This child was just born 3 
days ago. As I was sitting there under the palm tree, I felt 
fear. I felt real fear that this child would die. And it was 
then we made the decision to move forth even with the cap at 
that time, even before our hundred percent FMAP. We were 
terrified at the choices we had to make.
    And as I am sitting here with some hope, I reflect on 
sitting at my dining room table just a few weeks ago, 
probably--no, a couple months ago--when I got the call from a 
teacher of a 20-year-old boy who had graduated early and she 
said, ``He is in the hospital and he is paralyzed and he needs 
to be airlifted. He is one of your Medicaid members, can you 
send him?''
    At that point, we had to make the decision. And I knew that 
our monies were running out under the BBA 100 percent funding, 
but I said we must, we must send this man, this young man, so 
he can walk again. And I will share with you 3 weeks ago we got 
this call that this young man is walking again because we made 
the decisions, the tough decisions.
    And in the U.S. Virgin Islands as I am sitting here, I sit 
here with hope, but I want to share with you that we need your 
help. We need your urgent help. We understand. We understand 
that permanent fixes may not be able to be done, but we need 
your support even if it is another hundred percent for a couple 
of years, even it is in the future you make a permanent fix.
    But as we approach this Medicaid funding cliff, I appeal to 
you, help us in the U.S. Virgin Islands. Help us in all of the 
U.S. territories. You can make a difference, and I know by your 
votes, one by one, if we put them together and with the larger 
Congress, we can make a difference for the people of the U.S. 
Virgin Islands and the other territories.
    So, I thank you. You have my testimony in writing. You can 
ask me questions. But just now I feel like I needed to speak 
from my heart.
    [The prepared statement of Ms. Rhymer-Browne follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Eshoo. Thank you very much. I like the sounds of your 
heart.
    I now would like to recognize--oh, that is it for the--no, 
we have Ms. Sablan. I would now like to recognize you for your 
testimony, and you have 5 minutes. Welcome.

                  STATEMENT OF HELEN C. SABLAN

    Ms. Sablan. Thank you. Good morning, honorable chairs, 
ranking members, and Members of the United States House of 
Representatives. We are very heartened that the committee of 
jurisdiction over the Medicaid program is holding this hearing 
and that Chairman Pallone recognized that the U.S. territories 
are on the verge of a humanitarian and financial crisis if 
Congress doesn't act swiftly to increase their Medicaid funding 
for the next year and beyond. That is the plain truth.
    The Commonwealth of the Northern Mariana Islands is indeed 
on the verge of a humanitarian health, healthcare system, and 
financial crisis because of the differences in the way the law 
treats territories versus the States. Avoiding the crisis will 
require an act of Congress because the difficulties are 
statutory.
    Before proceeding, I would like to express our deepest 
appreciation to Congress for the passage and enactment of H.R. 
2157 that included Medicaid disaster assistance for the CNMI 
resulting from the Category 5 Super Typhoon Yutu. While 
recovery efforts were initiated, a slower onset disaster was in 
the making.
    Throughout 2018, CNMI was sliding to the edge of the 
Medicaid fiscal cliff because the temporary funding was running 
out in fiscal year 2019. In March 2019, we reached and fell off 
the cliff with a complete exhaustion of Medicaid funds from the 
section 1108 budget caps, temporary increases by section 2005 
of the Affordable Care Act, and small amount from section 1323 
of the ACA.
    While it is complete free fall, we fortunately landed on a 
ledge with the passage of H.R. 2157. The ledge of the Medicaid 
fiscal cliff is tenuous, and that ledge will crumble on 
September 30 of this year. As of October 1, we will only have 
limited section 1108 CHIP and EAP funding. We will not have 
sufficient funding to support all mandatory services and many 
critical optional services. For example, medications and 
surgery will be severely cut or eliminated.
    The fiscal crises in the CNMI were made worse by adding to 
the debt obligation as well. The health system will be crippled 
because providers will stop taking Medicaid beneficiaries. 
There will be substantially more uninsured patients because the 
Medicaid program will effectively be ended. CHCC will not have 
funds for drugs, laboratory reagents, and other supplies. 
Frustrated clinicians and nurses may once again leave the CNMI, 
and all of this will affect the health of the whole population. 
The U.S. citizens of the CNMI are huddling on the ledge today 
but hope Congress will provide a path up the cliff and enable 
the territories to avert disaster.
    As shown in written testimony, there are 16,206 U.S. 
citizen beneficiaries enrolled in the Medicaid and CHIP 
programs today, or about 49 percent of the total U.S. citizens 
in the CNMI. The median household income for a CNMI family was 
less than one-third of the rest of the United States. And more 
will fall on the ledge because the CNMI government just 
instituted austerity measures where government employees have 
been placed on a mandatory reduced work schedule.
    There are two well-understood major causes of fiscal cliff, 
the section 1108 budget caps and the FMAP. Both require acts of 
Congress to fix.
    First, section 1108. The territories receive a budget 
appropriation under section 1108. The budget caps were 
established decades ago and do not bear any relationship to the 
actual cost of healthcare today, in the CNMI today. The ACA 
recognized the problem and provided a temporary increase of 
hundred million amount of expended from 2011 to 2019. During 
this period, the CNMI Medicaid was able to increase eligibility 
and add optional services. In FY 20, the CNMI total expenses 
and IBNR was around 71 million. Compared to the total of FY 
2020, CMS allotted funds so the shortfall will be about 48 
million.
    Second, the FMAP for the territories is an artificial 
percentage, unlike the FMAP for States, that is calculated 
based on per capita income relative to the national average. 
Although CNMI has much lower per capita income than most of all 
States, it must use a fixed and inequitable FMAP percentage. 
That makes it impossible for the CNMI government to fully fund 
the CNMI share.
    Finally, before closing my oral statement, I would like to 
say that the CNMI is very well aware of the requirements for 
submitting data to the Transformed Medicaid Statistical 
Information System, which is the T-MSIS, and establishment of a 
Medicaid Fraud Control Unit. We are fully committed to do so 
and have demonstrated our commitment and progress in our 
written testimony.
    In closing, the U.S. citizen Medicaid beneficiaries in the 
CNMI are clearly on the verge of a humanitarian and financial 
crisis if Congress doesn't act swiftly to increase their 
Medicaid funding for the next year and beyond. The CNMI is in 
desperate and dire situation and huddling on the edge. We are 
humbly pleading Congress to eliminate the section 1108 caps and 
provide us equal treatment with all States and that Congress 
apply the FMAP percentage using the same method for the States. 
Thank you one more time for the time in hearing our issues.
    [The prepared statement of Ms. Sablan follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Eshoo. Thank you. The gentlewoman's time is expired. I 
now would recognize--the Chair recognizes herself for 5 minutes 
of questions.
    First of all, to the full panel: I think I know the answer 
to this, but just in case there is someone that doesn't agree, 
do each of you support having the territories' Medicaid 
programs treated the same as the States', including lifting the 
cap on Federal funding and increasing the Federal match--excuse 
me, anyone disagree?
    Ms. Rhymer-Browne. No, we do not disagree.
    Ms. Eshoo. No, so you all agree. All right.
    Ms. Rhymer-Browne. We all agree.
    Ms. Eshoo. All the women agree. That is terrific.
    Ms. Young. Except maybe for me.
    Ms. Eshoo. All right, Ms. Young.
    Ms. Young. It is not that--I don't disagree, I just want 
to, and I think I stated this in my written testimony, that 
there is a caveat about treating American Samoa, in particular, 
like a State because of our 1902(j) waiver, so it really 
depends.
    We are not averse to further accountability in program 
integrity issues, but sometimes there are things that don't 
make sense with Federal laws to apply to us. For example, a few 
years ago we explored the possibility of acquiring an MMIS 
system just to do data gathering as required by CMS. But when 
we looked into it, it would have cost us over $20 million to 
implement an MMIS system. And when you only have $11 million in 
Medicaid funding block grant, that doesn't make sense.
    So it is not that I am disagreeing, but I am asking the 
committee that the question of whether we want to be treated 
like a State, I am wary of that. And I am very happy to work 
with the committee to define what does that actually mean by if 
we were going to be treated like States. Thank you.
    Ms. Eshoo. Thank you. I think each one of you, or the 
majority of you, made reference in your testimony to the cost 
of prescription drugs and air ambulance services. Can you 
enlarge on that, what percentage of your overall costs that 
these represent?
    Yes, Ms. Avila?
    Ms. Avila. Yes, Angela Avila from Puerto Rico. The cost on 
pharmacy in Puerto Rico is like this 30 percent of the total 
expenditure. Our total expenditure is around 2.9 billion, 
actually, so it is a major part of our expenditures right now.
    Ms. Eshoo. What about air ambulance services?
    Ms. Avila. Air ambulances as well, but we don't need to 
move our beneficiaries from the islands, so our----
    Ms. Eshoo. I see.
    Ms. Avila [continuing]. Like ordinary other costs are 
compared to the States.
    Ms. Eshoo. Ms. Young?
    Ms. Young. We just recently started implementing off-island 
referral 2 years ago, so--and with the availability of the ACA 
money we haven't really seen the real impact on that. But we 
are looking at maybe spending about $300,000 on air ambulance.
    Ms. Eshoo. What about the drugs, prescription drugs?
    Ms. Young. The prescription drugs are covered through our 
one hospital. We do have issues on that. There is just not 
enough money to cover prescription drugs across the board.
    Ms. Eshoo. Ms. Arcangel?
    Ms. Arcangel. With regards to air ambulance, we utilize air 
ambulance roughly two to three a year. It costs us $160,000 to 
send--from L.A. to Guam and Guam to L.A., because the airlines 
in Guam do not, especially for stretcher cases, they don't take 
patients for stretcher cases.
    Ms. Eshoo. And what about prescription drugs?
    Ms. Arcangel. For prescription drugs, that is second to the 
highest of our expenditures. First is the inpatient and then 
the pharmacy services.
    Ms. Rhymer-Browne. For the U.S. Virgin Islands, pharmacy 
costs are extremely expensive for us, and I would daresay about 
20 percent of our costs. I just approved a payment of $5 
million just last week for just the pharmacy for a couple 
months. Additionally, the airlifts for our territory in the 
Virgin Islands have increased because of the damages to both of 
our hospitals. So we have to send the traumatic cases, the 
serious complex cancer cases to the mainland.
    Ms. Eshoo. Ms. Sablan?
    Ms. Sablan. For CNMI, we spend about 25 percent on our 
prescription drugs. For air ambulance that is being done we 
use--actually, we don't have that available on the islands, so 
we have to use either out of Guam or out of the Philippines, 
and that is costing us a lot of money. I would say about 300-
some thousand.
    Ms. Eshoo. Thank you very much. I believe my time is 
expired, so I will recognize the ranking member of the 
subcommittee, Dr. Burgess, for his 5 minutes of questions.
    Mr. Burgess. Yes. And before I am recognized for question 
time, I have a unanimous consent request that the committee 
accept the testimony of Congresswoman Jenniffer Gonzalez-Colon 
as for her opening statement as part of the record.
    Ms. Eshoo. So ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Burgess. So I have a number of questions, and some of 
them are complex, so I will submit those in writing so we can 
get to the majority of the ones that answering in person I 
think would be advantageous. I don't need for you all to go 
through a bunch of numbers. We can do that on paper, and that 
will be a better way to approach that.
    But, Ms. Avila, in Puerto Rico--and I did travel to Puerto 
Rico with Representative Gonzalez-Colon a couple of times, once 
about a week and a half after the storm and it was pretty 
rough, and then with the subcommittee, with then-Chairman 
Walden.
    But one of the things that just was very--I am a physician 
by background. One of the things that was striking to me was, 
you know, the docs at the hospital, OK, they are there. They 
have got maybe the lights back on, the run of the generators 
full-time. It is dicey, but things are manageable. But then 
when they go home, their houses are dark and not air-
conditioned. Their families have been in that environment all 
day.
    So you can just imagine the pressure on the doctors, say: 
``Hey, those nice people from the University of Miami called me 
again today, and they want you to come interview for a nice job 
there.'' So that is hard when you are--yes, I get the 
commitment to their patients in the hospital, but then you go 
home and you are faced with a family that is saying, ``I don't 
know why we can't do what they are asking.''
    So how has it been over the past couple of years keeping 
your doctors in Puerto Rico?
    Ms. Avila. Thank you for the question. Angela Avila. It has 
been a real challenge just to keep our doctors in the island. 
Since 2014, we have been seeing like the exit of our healthcare 
professional because of their frustration and their economic 
circumstances, they need to go and face attending our 
beneficiaries, and that is why we are looking for to be like a 
full Medicaid program and be able to provide home care 
services.
    Right now we have identified that home care services are 
part of the new way of doing medicine in the States and in the 
territories. It is the right way to do it, and at the long run 
we will see the savings because we will save inpatient and 
admissions, they are so expensive if we have all that support, 
the other programs.
    So yes, it is a challenge for our doctors. The ones that 
have been--that stay in the island is because they love to be 
there, it is not because of economic reasons. And what we are 
looking is just for the basic baseline compared to a lower 
rate, reimbursement rate than in the States, but reasonable for 
our doctors to be able to serve the population.
    Mr. Burgess. So did the hundred percent FMAP, did that 
help?
    Ms. Avila. Oh, it will be a golden opportunity for our 
island to work with the healthcare system there.
    Mr. Burgess. So, Ms. Arcangel, let me ask you this. Are you 
also suffering from not being able to keep doctors on the 
island? Do they leave you after a period of time, or are they 
likely to stay?
    Ms. Arcangel. No. Yes, they do leave after a few months or 
a year. They do leave because of the nonpayment and low 
reimbursement as well as the low rate of salaries of the 
physicians.
    Mr. Burgess. Is there anything other--the funding questions 
aside, are there any other aspects that you can think of that 
would help when it comes to getting doctors to come to the 
island?
    Ms. Arcangel. We should provide more incentives by 
increasing the rate of their salaries, especially for our 
federally qualified health centers. They come and go. They 
don't stay in Guam.
    Mr. Burgess. So let me ask you a question about that, 
because you mentioned liability insurance in your testimony.
    Ms. Arcangel. Yes.
    Mr. Burgess. I think you were the only one that did. You 
got my attention because liability reform is something we have 
done in Texas and has been extremely helpful. Now the federally 
qualified health centers, those doctors are covered under the 
Federal Tort Claims Act. Is that not correct?
    Ms. Arcangel. Yes, but.
    Mr. Burgess. So is that helpful in keeping doctors in Guam?
    Ms. Arcangel. True, but then again the rate of, you know, 
the physician salary is very low. That is why they don't stay 
much in Guam.
    Mr. Burgess. Have you looked at any of the--some of the 
States have done liability reform, California and Texas two of 
the most notable. Have you looked at that as far as the 
activities in Guam as well? I will tell you from the standpoint 
of a physician practicing in Texas, it has been an attractant. 
I mean, it is easier to get a doctor to come to New Jersey 
because of what our liability rates are in Texas. I am not 
saying we are stealing doctors from New Jersey, but we could.
    Ms. Arcangel. Oh. That is a good idea. We will try to look 
at that. Yes.
    Mr. Burgess. I will be glad to follow up with you on that.
    Ms. Arcangel. Thank you.
    Ms. Eshoo. The gentleman's time is expired and he yields 
back. I now would like to recognize the chairman of the full 
committee, Mr. Pallone, for his 5 minutes of questions.
    Mr. Pallone. Thank you, Madam Chair. I thought I was going 
to get a New Jersey joke there for a while. I didn't know what 
Dr. Burgess was up to. Anyway, my questions are of Ms. King 
Young, and I want to thank you for being here.
    We have heard a lot today about the consequences the fiscal 
cliff faces, you know, provides to the territories, and I am 
especially concerned about the effects going over the cliff 
would have on people in the territories. And it sounds like you 
all would have to make some terrible choices to cut back on 
coverage, benefits, provider pay. It is also clear that none of 
you here today wants to implement these cuts, but you will have 
no choice if we don't provide you with additional Federal 
funds.
    And it seems to me that what is at the core of the problem 
that you all described is the completely outdated way the 
Federal Government funds the territories' Medicaid programs. In 
a State Medicaid program, the Federal Government matches State 
spending. If the State spends a dollar on Medicaid, the Federal 
Government spends at least a dollar and oftentimes spends a lot 
more. In other words, there is no limit on how much Federal 
funds a State gets.
    But it sounds like that is not the deal you all get, so you 
are all getting far less Medicaid funds than the States, and 
you are putting up way more of your own money. So let me try to 
get through this, Ms. King Young. Under the current capped 
allotment approach, your territory only receives a set amount 
of Federal funding for Medicaid. But what happens if your 
Federal funding isn't enough to cover your Medicaid expenses?
    Ms. Young. Thank you, Chairman Pallone. If we received 
enough Federal funding for our Medicaid program, it really 
would allow us to cover all or most of the comprehensive 
services that are required under the Social Security Act. For 
example----
    Mr. Pallone. But when you don't get the Federal funding, if 
it isn't enough, then what happens? How do you deal with the 
Medicaid expenses if----
    Ms. Young. The first thing we will do is we will suspend 
all of the new services that we recently added and was approved 
by CMS 2 years ago. It took us a while to implement those 
because they had never been done before. Prior to 2017, we only 
had one Medicaid provider, and that was our hospital.
    So all of the new services, medically necessary care that 
is referred off island to New Zealand will be suspended. We 
will stop all reimbursements to our federally qualified health 
centers, the five community clinics, and we will stop all 
payments to our providers that provide durable medical 
equipment, prosthetics, and orthotics. And we will also stop 
payments for the Medicaid dual-eligible population, the copay 
assistance that we offer them to pay the 20 percent.
    Mr. Pallone. All right, so looking back at your Medicaid 
spending in 2018, I see that your Federal spending was much 
more than the 1108 funds or the block grant you received. So 
where did the additional Federal funds come from beyond the 
block grant?
    Ms. Young. The additional funds came from the Affordable 
Care Act Medicaid----
    Mr. Pallone. Oh, all right.
    Ms. Young [continuing]. Funding that was made available in 
2011.
    Mr. Pallone. But now that expires. That additional funds 
from the ACA, those expire at the end of this year, some in 
September, the rest in December. Is that correct?
    Ms. Young. Yes. That is correct.
    Mr. Pallone. And then you are going to have a significant 
funding shortfall. Is that correct?
    Ms. Young. Yes.
    Mr. Pallone. OK. So I understand that the size of that 1108 
cap increases annually at the rate of inflation for medical 
services. Have those annual increases been sufficient to keep 
pace with the cost of providing care in the territories, and 
does that cap increase if Medicaid enrollment increases?
    Ms. Young. So, two ways. It is never enough. Our increase 
per year is about 2 percent a year, and there is a shortfall of 
about 6 million a year for the hospital alone.
    Mr. Pallone. But does the cap increase if Medicaid 
enrollment increases?
    Ms. Young. So the second answer to that is we do not do 
individual enrollment in American Samoa. We have a presumptive 
eligibility program where most of our people are presumed 
covered under Medicaid, which is about 36,000 people that we 
cover, so it doesn't affect the money that we get because we 
don't do individual enrollment.
    Mr. Pallone. So the cap doesn't increase if enrollment 
increases under that scenario, right?
    Ms. Young. No.
    Mr. Pallone. No.
    Ms. Young. It is simply a block grant.
    Mr. Pallone. All right, then let me ask you one more 
question. It sounds like you have to spend a lot more of your 
local funds on Medicaid than you would if you were a State. 
That means those local funds can't be used for other critical 
investments or services. So if you received the same Federal 
Medicaid funding as a State, it seems you would free up more of 
your territory's funds for investments and things like 
infrastructure and education. Is that correct?
    Ms. Young. Yes, but it is a very small, nominal amount. The 
hospital continues to get the subsidy that it needs to operate, 
but the only money that we receive for local match for the new 
services is $2 million.
    Mr. Pallone. But if you received the same Federal Medicaid 
funding as a State, it would free up more of your territory's 
funds for other things, correct?
    Ms. Young. Not really, because we would still have to come 
up with a local match.
    Mr. Pallone. I see.
    Ms. Young. So if the match doesn't change, then it doesn't 
help us.
    Mr. Pallone. Then it doesn't help you. All right. I just 
wanted to say, I mean I think it is clear that the simple fact 
is that the capped allotments that the territories receive from 
the Federal Government for Medicaid are just not enough to meet 
the needs of the people who live there. That is obvious, so 
that is why we have to act. Thank you.
    Ms. Young. Thank you.
    Ms. Eshoo. The gentleman yields back. And now I would like 
to recognize the gentleman from Oregon, ranking member of the 
full committee, Mr. Walden, for his 5 minutes of questions.
    Mr. Walden. Thank you, Madam Chair.
    Dr. Schwartz and Ms. Avila, according to MACPAC, in 2017 
the Medicaid program spent an average of $7,654 per year per 
enrollee, but only 1,866 per year per territorial enrollee, and 
only 1,844 per year per Puerto Rico enrollee. My colleague from 
Puerto Rico had this question she wanted me to ask. So how does 
this difference in Federal Medicaid spending affect the 
provision of healthcare to low-income individuals, and how does 
it affect the overall healthcare system in the non-Medicaid 
population in your territory?
    So, Dr. Schwartz, you might just want to tackle this from 
the MACPAC side and make sure our numbers are right, and Ms. 
Avila in terms of its implication. I have two other questions.
    Dr. Schwartz. I will just say that, in MACPAC's June 
report, we have an extensive chapter on the situation in Puerto 
Rico and for which we are grateful for getting a lot of data 
from the government of Puerto Rico and assess to help us do 
these analyses. And when we looked at spending per enrollee in 
Puerto Rico compared to the States and we adjusted for the 
enrollment mix and we also took out spending on the State side 
for long-term services and supports, Puerto Rico spending is 
below any of the other States, so it is substantially lower.
    So I will let----
    Mr. Walden. All right, Ms. Avila?
    Ms. Avila. It is like 36 percent lower than in the other 
States of the Nation.
    Mr. Walden. All right, that is helpful. And over the last 
several years that Congress, led by this committee, has 
provided billions of dollars in additional funding to help the 
territories keep your Medicaid programs afloat, these funds 
have gone well beyond the original caps set forth in section 
1108 allotments. And one of the ways we have done that is by 
temporarily increasing the territories' FMAP to increase the 
Federal Government's share of spending, as you all know.
    Now, I know that is something we are discussing here today. 
A problem with that as I see it, though, is that even if we 
increase the FMAP for your territories, the cap remains. So my 
question to each of you is, what would happen if we just 
increased the FMAP for each of your territories without 
touching the cap? And along with that, for each of your 
territories--because, again, there are unique challenges and 
circumstances that you have each addressed--which is a bigger 
hindrance to adequately funding your program: the cap or the 
FMAP? If we could just kind of go down the list there.
    Ms. Avila. I am sorry. Angela Avila from Puerto Rico.
    Mr. Walden. Yes.
    Ms. Avila. In the case of Puerto Rico, our actual cap 
according to the section 1108 is $380 million, approximately, 
so our actual expenditure is $2.9 billion. It is no way that we 
can cover such a high difference between what is the cap amount 
and what is it for expenditure. So increasing the FMAP will not 
resolve the problem if we don't increase the cap.
    Mr. Walden. Got it.
    Ms. Young?
    Ms. Young. I echo Ms. Avila's, and I think I also stated 
that in my statement. We cannot fix the FMAP and not also fix 
the cap, because what will happen is, if you only fix the FMAP, 
all that means is we will spend our Federal dollars faster and 
we will exhaust them----
    Mr. Walden. Got it.
    Ms. Young [continuing]. In the first quarter of the fiscal 
year.
    Mr. Walden. That would be a problem.
    Ms. Young. So it doesn't help.
    Mr. Walden. Yes, all right.
    Ms. Arcangel?
    Ms. Arcangel. For Guam, our total allotment is only 18.38 
million. That includes administration for fiscal year 2020. 
That will not last for first quarter for adults. So, if there 
is no increase on the cap, then that means we have to terminate 
some of our eligibles, adult eligibles. More than 50 percent of 
them will not have any coverage at all.
    Mr. Walden. Wow.
    All right, next?
    Ms. Rhymer-Browne. Yes, we need both. We need the FMAP 
increased and we need the cap, because if we don't have higher 
monies, just in fiscal year 2020 projected we are supposed to 
get 18.8 million that will not even last for the quarter. We 
are already projecting we would have to cut 15 of the 28,787 
people, so 15,000 of those would have to be cut if we were just 
to be given a hundred percent FMAP or raised FMAP with no 
increase on the cap.
    Mr. Walden. All right.
    Ms. Sablan. In the CNMI we are actually spending, based on 
the FY 2018, we spent 53 million, and we were advised that we 
are only going to get 18 million. That includes the 1108 
funding plus a CHIP. So in our case, we want the cap. Our 
preference is the cap.
    Mr. Walden. To raise the cap.
    Ms. Sablan. Yes. Raise the cap.
    Mr. Walden. All right. Thank you all for your testimony. It 
has been most helpful. Some of us are going back and forth 
between two subcommittee meetings simultaneously, but we do 
appreciate your input and counsel as we work together to solve 
this problem.
    So, Madam Chair, thank you for the hearing and I yield 
back.
    Ms. Eshoo. The gentleman yields back. I now have the 
pleasure of recognizing the gentleman from North Carolina, Mr. 
Butterfield, for his 5 minutes of questioning.
    Mr. Butterfield. Thank you very much, Madam Chair. And 
thank you to the six witnesses for your testimony today. I have 
heard some of it, and my staff has been here for the entire 
time, and they will tell me the details that I may have missed. 
But thank you so very much for your testimony.
    You know, I am a great friend of the territories. I have 
been for many, many years. It has always perplexed me that we 
have treated the residents and the citizens of the territories 
different from those on the mainland. That has always perplexed 
me. I have never been given a satisfactory explanation about 
why that has happened. The Delegates from the territories are 
great friends of mine, particularly Ms. Plaskett and Delegate 
Sablan and Delegate San Nicolas from Guam. The five Delegates 
have just advocated tirelessly and fiercely over the years for 
equal treatment for your people.
    Dr. Schwartz, can you help me in just a few words 
understand why the citizens of the territories are treated 
differently?
    Dr. Schwartz. The treatment of the territories in the 
Medicaid program really dates back to the beginning of the 
program. I was alive in 1965, but I obviously wasn't----
    Mr. Butterfield. I finished high school that year. It was a 
good year.
    Dr. Schwartz [continuing]. At that time. But I think it is 
a historical artifact of a very complex piece of legislation 
that has not been updated.
    Mr. Butterfield. To the gentlelady from the Virgin Islands, 
thank you for your testimony. I have family and friends in your 
homeland, and we will talk about that later. But I understand 
that the U.S. Virgin Islands will lose access to Federal 
funding provided under the ACA at the end of the year.
    Ms. Rhymer-Browne. Yes.
    Mr. Butterfield. You testified to that. You stated in your 
testimony that the Virgin Islands will receive only $18 million 
in Federal funding once the funding expires. I understand that 
this is only 25 percent of the Federal funding that the 
territory needs. Is that correct or incorrect?
    Ms. Rhymer-Browne. Well, we are actually over, we have 
spent over a hundred million in per annum with the--the 18.8 
would really not be sufficient. Additionally, we would be very, 
very much curtailed in our program accountability and integrity 
programs, where we are building systems and programs that build 
accountability. We do have the first-ever territory MMIS claims 
system. We just completed our eligibility system with our 
funding and our increased funding. So we would need even more 
monies to really meet the needs. When we----
    Mr. Butterfield. You don't have it in reserve? You don't 
have a couple billion dollars in reserve that you could draw 
from?
    Ms. Rhymer-Browne. Unfortunately, we don't. Even before the 
storms we were in dire straits, but now are even more so. Our 
schools are still devastated. Our hospitals are devastated. Our 
clinics are devastated. Our roads are still in need of repair. 
And so the basic infrastructure improvements that need to be 
made, really, may have to be curtailed if we have to then put 
more local monies to save the lives of our citizens.
    Mr. Butterfield. That is what I needed in the record. How 
many beneficiaries could lose access to coverage once these 
funds expire? Can you quantify the number?
    Ms. Rhymer-Browne. Yes, about 15,000 or a little bit more. 
Our numbers have even increased. We have 28,000 members, so 
approximately 15,000 of them would have to lose coverage.
    Mr. Butterfield. And these are American citizens?
    Ms. Rhymer-Browne. Yes, they are.
    Mr. Butterfield. Can you discuss the impact on providers 
and hospital systems very quickly?
    Ms. Rhymer-Browne. Well, the providers, if we were not able 
to provide the Medicaid funding for the care that they are 
providing, we may then have more of the exodus of our 
providers. Right now we are facing just a dearth of the 
specialty doctors for orthopedics, for cancer. Our cancer 
center was decimated during the storm, so our providers are 
desperately in need. Right now, we are reimbursing them at a 
hundred percent of the Medicare rate, and many of them for the 
specialties really need more monies.
    Mr. Butterfield. Ms. Young in her testimony said they would 
just have to cut off payments. That they just couldn't afford 
it, they would have to stop reimbursing. Yes.
    Ms. Rhymer-Browne. Well, in the case if we were to face 
this kind of cuts that we are looking at in fiscal year 2020, 
we would have similar hard decisions to make.
    Mr. Butterfield. Thank you. I yield back.
    Ms. Eshoo. The gentleman yields back. I now would like to 
recognize the gentleman from Kentucky, Mr. Guthrie, for his 5 
minutes of questions.
    Mr. Guthrie. Thank you, Madam Chair. And thank you for the 
opportunity to be here and all the witnesses here.
    I will tell you, before the storms in the Caribbean a 
couple years ago, we were--Dr. Burgess and I and all the both 
sides of the aisle have been talking about the territories and 
how we have to work with the Medicaid program. And I know that 
for the last couple of years in some of the areas, because of 
the devastation it has been hundred percent FMAP and other 
adjustments. What we need to look at as we are looking at it 
today, and I think it is--glad you are having this, Madam 
Chair--is how to make this program fair to territories and 
sustainable in the proper moving forward.
    And just for an example, I was talking with my friend Ms. 
Gonzalez and Ms. Radewagen, before--Ms. Plaskett, all of the 
different members--and in how do you get to be fair? I know in 
Puerto Rico if the fiscal year 2020 law in is in effect, 370 
million will be the cap at--375 million in Puerto Rico, and 
that is $285 per enrollee as compared to 7,600 in Mississippi 
or 7,900 in South Dakota.
    So those are some of the things that we are looking at to 
how we move forward. And as I was talking to Ms. Gonzalez 
earlier, I know there are sets of mandatory benefits and then 
sets of optional benefits that can move forward. And I guess my 
question, if Congress was to raise the FMAP or lower the cap--
or raise the cap, I guess would be the right word, remove the 
cap--what would be your priorities?
    I don't know if, Ms. Schwartz, this is--Dr. Schwartz--to 
you, but to the others, what would be your priorities to spend? 
Do you fund the mandatory benefits and what would be--where 
would you spend the money? And we will just kind of go down the 
aisle kind of quickly because I want to ask another question.
    Ms. Avila. Angela Avila from Puerto Rico. Our first 
priority will be increasing the reimbursement rates for our 
doctors. The specialists and healthcare providers and our 
hospitals are in jeopardy.
    Mr. Guthrie. OK, thank you.
    Ms. Young. Our priority would be to continue the new 
services that we just implemented in the last 2 years.
    Mr. Guthrie. OK, thank you.
    Ms. Arcangel. Our priority will be to add additional 
services, like for nursing services, because we have cap on 
nursing services and we need a lot of those.
    Mr. Guthrie. OK, thank you.
    Ms. Rhymer-Browne. Yes, our priority would be to continue 
serving the current clients and also go after the 10 to 15 
thousand who are currently uncovered but are eligible for 
Medicaid.
    Ms. Sablan. For CNMI, our priority is to cover the 
mandatory services plus some of the optional services like 
medications.
    Mr. Guthrie. OK, thank you. Yep. That sounds like good 
priorities to move forward on.
    The second, during the Bipartisan Budget Act of 2018, I 
know Puerto Rico and the Virgin Islands, because of the 
reactions and the relief, were required to have additional 
reporting methods move forward. I know that you did those on 
time, so we appreciate that. But--so what is the current 
status?
    And then the question for the rest of you would be, what 
program integrity measures--let me do the Puerto Rico and 
Virgin Islands and then go back. What program integrity 
measures would you be willing to put in place should Congress 
increase funding? So current status and what would you like to 
see in the----
    Ms. Avila. Yes. Our status right now, Puerto Rico already 
implemented the first phase for the MMIS Puerto Rico. And 
according to the BBA, $1.2 billion were tied to the compliance 
with the T-MSIS responsibility for CMS, which we did, and we 
have the certification from CMS. And also, to establish the 
Medicaid Fraud Control Unit, and it is already in place in the 
Justice Department and working. So we complied with the two 
requirements tied to the BBA.
    So next, what will be the improvements on those platforms 
and controls, we are just working right now with the second 
module, eligibility and enrollment for the MMIS infrastructure 
in Puerto Rico. Also, we have been perfecting our contacts with 
our managed care organizations starting with 92 MLR required 
through the contracts----
    Mr. Guthrie. I just have a few seconds left.
    Ms. Avila. Oh.
    Mr. Guthrie. So I guess Ms. Rhymer-Browne. I am sorry if I 
said that incorrectly.
    Ms. Rhymer-Browne. Yes. We did implement the first-ever 
Territory Medicaid Management Information System. That system 
has been operating since 2013, and I really believe that we are 
doing well with that. We also implemented a Medicaid MAGI-
compliant online Medicaid eligibility system in July 2017, and 
that is going well. We also already implemented a Medicaid 
Fraud Control Unit that is operating under the office of our 
Attorney General, and we are getting high marks with our T-MSIS 
efforts for integrity.
    We have finished our phase 1. We entered our phase 2, and 
we were told that all of the top 23 issues for the T-MSIS 2 has 
been completed.
    Mr. Guthrie. Thank you. And my time has expired, and I 
yield back. I appreciated your answers.
    Ms. Eshoo. The gentleman yields back. Pleasure to recognize 
the gentlewoman from Florida, Ms. Castor, for her 5 minutes of 
questions.
    Ms. Castor. Thank you, Chair Eshoo. And I want to thank all 
of the witnesses for being with us today and speaking up for 
the folks back home.
    I think it is patently unfair that we treat American 
citizens who live in Puerto Rico and the other territories 
differently when it comes to the healthcare they receive under 
Medicaid. Chairman Pallone said it is outdated. Dr. Schwartz, 
you said this has been a chronic underfunding problem for many 
years. I am heartened by the fact that Representative Soto, 
Representative Velazquez, and other Members now have come up 
with legislation that looks like it can help address this large 
inequity. There is nothing like having the devastation of a 
major hurricane like Hurricane Maria to shine the light on this 
inequity, so hopefully we can move to a better place so that 
all American citizens, no matter where they live, are treated 
equally.
    Ms. Avila, you explained to another congressional committee 
recently that this fiscal cliff that Puerto Rico is facing 
would be devastating for folks who rely on Medicaid for their 
healthcare. I understand that, if you do not receive additional 
Federal support, it is possible that over 125,000 American 
citizens in Puerto Rico would lose their access to the doctor's 
office and health services under Medicaid. That is a staggering 
number of people. And Ms. Rhymer-Browne just added to that 
total, and there are others.
    And then this--Medicaid is so important because, if you 
lost that many, if you faced this fiscal cliff, it would simply 
fray the provider network on hospitals, doctors, and nurses and 
lead to a major collapse. Could you explain why Puerto Rico 
would have to cut so many people from health services under 
Medicaid if this fiscal cliff comes to be?
    Ms. Avila. Thank you. It will be because, as I mentioned, 
our 1108 section only provide us with a cap amount of $389 
million. Our actual cost in the program is $2.9 billion. We 
have been able to continue as of today because of the segments 
of additional funding as ACA that is going to be ending on 
December this year, so we will be left with only the section 
1108, $380 million with an FMAP of 55 percent.
     So we are going to have like in aggregate $1.3 billion 
because Puerto Rico have already identify almost a billion 
dollars from our local funds to do the matching. So with $1.3 
billion, we only can afford just the baseline that we have in 
services, and we will not be able even to cover dental and 
pharmacy. And the population that we paid 100 percent with our 
local funds are the 125,000.
    But more than that, we will lose 500,000 Medicaid 
recipients right now because we will not have enough funds to 
cover for them.
    Ms. Castor. And who are we talking about? Explain, because 
Medicaid usually serves our working-class neighbors that don't 
have access to any other health insurance. Who are these folks?
    Ms. Avila. We are talking about our more vulnerable 
citizens in the island. We are talking about people that 
doesn't earn more than $400 per month, and that means that they 
cannot earn more than $11,000 a year, in comparison with the 
States that people earning like more than $30,000 a year to be 
able to participate of the Medicaid program. So that is the 
huge disparity that we have right now.
    Ms. Castor. So I have heard some people argue that, well, 
can't you just reduce provider rates or make Medicaid more 
efficient in Puerto Rico. What do you say to that?
    Ms. Avila. In terms of providers' rates, as I mentioned, it 
will be our priority if we have additional funding, because if 
we can't pay our physician visit in an ambulatory settlement 
that it runs like in Puerto Rico like no more than $20 per 
visit. Here in the States it is more than $100, and that is why 
our physicians are no longer able to keep providing services. 
That they are really financing them in some situations.
    So even if we have the cap amount, if we don't have doctors 
who can serve our population we will not be--by our program in 
Puerto Rico. So that will be the main cost, I will say, of this 
cliff.
    Ms. Castor. Thank you very much. I yield back.
    Ms. Eshoo. The gentlewoman yields back. I now recognize the 
gentleman from Florida, Mr. Bilirakis, for his 5 minutes of 
questions.
    Mr. Bilirakis. Thank you, Madam Chair. I appreciate it. 
Thank you for holding this hearing as well.
    Ms. Avila, I have a non-Medicaid question for you, but one 
that I think is important to the overall conversation. On May 
13th, Governor Rossello sent a letter to this committee 
highlighting additional challenges Puerto Rico faces in the 
Medicare Advantage Program. As I understand it, enrollment in 
Medicare Advantage in Puerto Rico exceeds 70 percent compared 
to the national average of 30 percent, so it is clearly an 
important part of the island's healthcare system.
    But the high enrollment also creates--and it was mentioned 
just now--but the high enrollment also creates States setting 
challenges for CMS that contribute to payment rates that are 40 
percent below the national average. Can you discuss the role of 
Medicare Advantage in Puerto Rico, and is this another area the 
committee should consider as part of creating long-term 
stability in Puerto Rico's healthcare system?
    Ms. Avila. Definitely, and thank you for the question. 
Angela Avila from Puerto Rico. Definitely, the Medicare 
Advantage line of business is crucial in Puerto Rico as well as 
the Medicaid program and the private sector. But in terms of 
Medicaid and Medicare, we have a huge penetration in the market 
because in Puerto Rico we have a high population of elderly 
that are the ones who participate from the Medicare Advantage 
programs.
    And I don't know if it is just because it is an island 
people stay there and that is why they tend to select the 
Medicare Advantage program, and they are underfunding as well 
when we compare their baseline against the ones that are in the 
States. So yes, it is still a difference in the Medicare 
Advantage area as well. And this has been aggravated because of 
the people losing their jobs and the economic situation of 
Puerto Rico. The high concentration of beneficiaries are under 
those two programs, Medicare and Medicaid. And that is why the 
importance in our economy for both lines of businesses.
    Mr. Bilirakis. OK, thank you. And this is panelwide. So, as 
my colleague Ranking Member Burgess mentioned in his opening 
remarks, often when discussing these issues, we tend to lump 
each program and the U.S. territories together as one instead 
of treating them as individual entities within individual 
challenges. Would you each briefly share your individual 
challenges and needs?
    I know you don't have a lot of time for that, but let's 
start over here, Doctor, if that is OK.
    Dr. Schwartz. Well, I think I will just pass the mic in the 
interest of time and allow them to----
    Mr. Bilirakis. OK. OK, maybe mention one challenge each or 
what have you, your top priority, your top challenge we might 
be able to address.
    Ms. Avila. For Puerto Rico, the biggest challenge is to 
keep our doctors and healthcare providers in the island, 
because if we don't have our professionals serving the 
population we don't have--you know, money would not be the 
reason. It would be they have the ability of the healthcare 
professionals.
    Mr. Bilirakis. Very good.
    What is your greatest need, Ms. Young?
    Ms. Young. Our greatest need is we just need more money. If 
we had more money we would be able to do more things and 
provide services like long-term support services, things that 
we can't do right now. So I think it just goes back to, we 
would like to increase our block grant and change the FMAP. 
That would allow us to----
    Mr. Bilirakis. So you have adequate enough providers?
    Ms. Young. No, we don't have enough providers. We have one 
hospital. We have two providers in New Zealand and we have one 
DME, durable medical equipment provider. But with more money we 
would be able to work on increasing providers and services as 
well.
    Mr. Bilirakis. OK, very good. Thank you.
    Ms. Arcangel. Our biggest challenge is the providers, also, 
and at the same time the uninsured population in Guam because 
our income guideline is very low. It doesn't increase. It is 
based on 2016, which is 30 to 31 percent below the Federal 
poverty level of 2016.
    Mr. Bilirakis. Thank you very much for that information.
    Ms. Rhymer-Browne. Yes, our biggest challenge would be to 
continue assisting the 28,000-plus Medicaid members. And, 
additionally, because of our aging community in the Virgin 
Islands, one of the biggest challenges is the continuum of care 
of healthcare services to include skilled nursing facilities, 
of which we do not have that program in the territory. So that 
would be a challenge that we would meet if we were able to get 
more funding.
    Mr. Bilirakis. Very good, thank you.
    Ms. Sablan. For CNMI, our challenge also is funding. We are 
spending a lot of--we spent 53 million in 2018, and if the 
service is not available on the island we have to send our 
patients off island, either to Guam, the Philippines, Hawaii, 
or the U.S. mainland. That is our biggest challenge.
    Mr. Bilirakis. All right, thank you very much. I appreciate 
it. I yield back, Madam Chair, appreciate it.
    Ms. Eshoo. The gentleman yields back. I now would like to 
recognize the--let's see, where? Ms. Kelly? Oh, I see. Robin 
Kelly, yes. Congresswoman Kelly from Illinois. I am looking on 
the wrong side of the aisle here. You are recognized for 5 
minutes--I have no question what side of the aisle you are on, 
I was just looking in the wrong way--for 5 minutes of 
questioning.
    Ms. Kelly. Thank you, Madam Chair and Ranking Member, for 
having this hearing. And I want to thank all of you for taking 
the time to come. Actually, my colleague asked some of the 
questions I wanted to ask, but I wanted to know from Ms. 
Rhymer-Browne and Ms. Sablan, you didn't talk about providers 
so much, but are you seeing physicians leave? And the reason I 
am curious about that question because when I went to the 
Virgin Islands and Puerto Rico after the hurricanes, and I know 
Congresswoman Plaskett talked a lot about you had to send 
people to Puerto Rico, but now you are saying that, you know, 
you can't really handle what you have. So that must continue to 
be a problem and just wondering about, both of you.
    Ms. Sablan. Yes, for CNMI because the salary is not that I 
guess attractive, so they won't stay for long. They will be 
there for a couple of months or even a year at the most.
    Ms. Kelly. And, Ms. Rhymer-Browne?
    Ms. Rhymer-Browne. For the U.S. Virgin Islands, when it 
comes to the providers we are really hurting for our specialty 
providers. And to attract those types of physicians to the 
territory, you will have to pay more money. So the provider 
issue is an issue for us, and of course after the storm some of 
our physicians did relocate and just leave the territory. And 
now with the damages to our infrastructure with the hospitals 
and the clinics, the providers are also being hurt there. So 
the provider issue is one for us that is a challenge.
    Ms. Kelly. And, Dr. Schwartz, if you could just snap your 
finger or wave a magic wand, what are two things that you would 
ask us to do?
    Dr. Schwartz. AS I pointed out in my testimony, the biggest 
problem is the chronic underfunding. The caps are extremely low 
and have not grown over time, and the matching rate creates 
other challenges, given the ability of the territories to raise 
the local share. Otherwise, the challenges are obviously 
different, given they are different health systems.
    Ms. Kelly. And I want to thank all of you again. And 
believe it or not, Madam Chair, I yield back.
    Ms. Eshoo. We thank the gentlewoman, and she yields back. I 
now have the pleasure of recognizing the gentlewoman from 
Indiana, Mrs. Brooks.
    Mrs. Brooks. Thank you, Madam Chairwoman. And thank you so 
much, thanks to all of you for coming and for sharing with us. 
I have a couple of different areas I would like to address.
    But, first of all, like so many of my colleagues, my 
colleagues on this side of the aisle, Representative Radewagen, 
Representative Gonzalez-Colon, have shared with us so much. 
Even though some of us have not been able to travel to the 
territories, especially after the hurricane, on a very regular 
basis they have been such incredible advocates for the 
territories and for all of the healthcare needs of the 
territories, and so just want to thank them.
    I do have a question from Congressman Gonzalez to Ms. 
Avila. If Congress does not provide for additional funding for 
Puerto Rico's Medicaid program for fiscal year 2020, how long 
will the currently assigned Federal Medicaid funding last, if 
you know?
    Ms. Avila. We have estimated that is going to be available 
up to March 2020, Federal funds.
    Mrs. Brooks. Thank you.
    Ms. Avila. Thank you.
    Mrs. Brooks. March 2020.
    Ms. Avila. March 2020.
    Mrs. Brooks. I am going to shift a moment because, as the 
chairwoman knows, we have both been very involved in the 
biodefense of our country, and very recently the Blue Ribbon 
Study Panel on Biodefense issued an October 28 report. The 
title is ``Holding the Line on Biodefense: State, Local, 
Tribal, and Territorial Reinforcements Needed,'' and I would 
ask unanimous consent to include this report for the record.
    Ms. Eshoo. So ordered.\1\
---------------------------------------------------------------------------
    \1\ The report has been retained in committee files and also is 
available at https://docs.house.gov/meetings/IF/IF14/20190620/109671/
HHRG-116-IF14-20190620-SD013.pdf.
---------------------------------------------------------------------------
    Mrs. Brooks. Thank you so much.
    Public health systems have to be prepared for biological 
incidents whether they are naturally occurring or whether they 
are attacks on our country, on our territories. And we know 
that this panel of experts identified several areas where 
territories would benefit from increased Federal assistance in 
preparing and conducting surveillance of and recovering from 
biological incidents.
    The most recent one that I want to ask, particularly Puerto 
Rico and U.S. Virgin Islands, has to do with Zika, OK, because 
the CDC said that, according to the 2017 numbers, Puerto Rico 
had 620 cases. This was in 2017, the last numbers that I saw, 
and there could be more. U.S. Virgin Islands had 46 as 
reported, and we learned as a body just the devastating health 
consequences of the issues of Zika.
    So I would like to start out maybe with you, Ms. Rhymer-
Browne. Can you share with us how prepared do you believe the 
territories are and what additional resources for biological 
incidents and what additional resources should the Federal 
Government bring to bear to address this?
    And then I am going to jump to you, Ms. Avila, because you 
have also experienced. Then if there is time, others.
    Ms. Rhymer-Browne. Yes. Incidents like Zika have been very 
terrifying for us. Our hospitals, who even before the 
hurricanes were not as prepared as they should be and even 
after the hurricanes we are definitely not prepared as we 
should be. We have been increasingly in the Virgin Islands 
really trying to improve our responses for all hazards of types 
of even if it is bioterrorism or anything like that.
    But right now, medically, with any kind of biological 
outbreaks we would really be hard pressed, our healthcare 
system as it stands, without the additional help. And of course 
our Medicaid members, which is 28,000-plus of our 100,000 
people, if they needed the care they--really, our healthcare 
system would not be able to sustain that.
    Mrs. Brooks. Thank you.
    Ms. Avila, since you have already had to deal with this.
    Ms. Avila. Yes, but in terms of the statistics I don't have 
the set numbers with me today.
    Mrs. Brooks. That is fine.
    Ms. Avila. I will defer to the epidemiology of Puerto Rico 
to answer. But as I know we have our labs and we have at the 
end of 2017, we were without Zika at that moment. So I would 
like to have the opportunity to give you additional information 
on that question.
    Mrs. Brooks. Is there any assistance in preparing for a 
large-scale biological event that you might need or that you 
know of?
    Ms. Avila. I will say that our needs are so many that every 
help, every additional money that we will receive, we will have 
the responsibility to improve our infrastructure for 
biosecurity, for our extraordinary emergencies that we have 
been facing. So in general terms, yes, we will need to look 
forward then and just to invest in the right matter.
    Mrs. Brooks. Thank you. I yield back.
    Ms. Eshoo. The gentlewoman yields back. I now would like to 
recognize the gentlewoman from Delaware, Ms. Blunt Rochester, 
for 5 minutes of her questions.
    Ms. Blunt Rochester. Thank you very much, Madam Chair, and 
thank you for this hearing. I want to first share with all of 
the panelists that, while you may see us coming and going, 
because there are multiple hearings happening at the same time, 
this hearing is vital. And we want you to know that we see you, 
we hear you, you are our family. There are Representatives as 
is on here on the panel, Stacey Plaskett, Mr. Sablan, people 
who advocate for you even in our caucus hearings, and so we 
want you to know that.
    In my State of Delaware, our Latin American Community 
Center, I remember when the hurricane happened and just the 
fear and the tears. And so my one message to you is that we 
have not forgotten. I want you to know we have not forgotten, 
and so I want to start with that. I want to also recognize--I 
am glad that our chairwoman talked about the strong women that 
are in front of us. You make us proud as well, so I want to 
share that with you as well.
    And I really wanted to just give you each an opportunity to 
highlight the impact. We already know that you start from a 
very tenuous place with this Medicaid cliff, but I know that 
natural disasters have an impact on top of that and sometimes, 
you know, some areas get more attention in the media than 
others.
    So if you could each just share, you know, a little bit 
about the impact above and beyond when a natural disaster hits, 
how does that impact you? And I will start with Ms. Rhymer-
Browne.
    Ms. Rhymer-Browne. Yes. I would just like to share, after 
Hurricane Irma impacted us in the Virgin Islands and Maria soon 
after, within a matter of about 2 weeks we had to airlift or 
cruise ship out 8 to 10 thousand people out of our 100,000 
population. This separated families. Mothers left with 
children. Fathers left with children. Entire families left. 
Even our graduating classes this year were smaller because of 
the number of people who had to leave.
    So the impact is really very great when these hurricanes 
happen. And with the hurricane of the Medicaid cliff pending, 
we are really afraid of what will happen. But we will continue 
to maintain hope change will come.
    Ms. Blunt Rochester. Thank you.
    Ms. Arcangel?
    Ms. Arcangel. For several years we have not experienced any 
of those, but we are trying to be ready, looking forward to an 
assistance from the Federal people in case this happens to us.
    Ms. Blunt Rochester. Ms. Young?
    Ms. Young. Yes. We also have been fortunate that we have 
not been hit with any devastating natural disasters in recent 
years. But if that were the case, the impact would be 
devastating. We only have one hospital. We only have one 
airport. And if a hurricane hits and, you know, crashes all of 
those systems, our only recourse is the fast response from the 
Federal Government.
    And we need more Medicaid money. We would need more 
Medicaid money to do off-island emergency evacuations that we 
don't have right now.
    Ms. Blunt Rochester. Ms. Sablan, would you like to share 
anything?
    Ms. Sablan. Yes. We just got hit by Super Typhoon, and we 
only also have one hospital that really impacted as a result of 
that typhoon. And I am glad that there is a lot of help that 
came, and that really helped us with that.
    Ms. Blunt Rochester. Thank you.
    And last, but not least, Ms. Avila?
    Ms. Avila. Well, and for me it is very difficult to talk 
about our experience because it is like, it is scary. It is 
terrifying just to think about going through this next time. I 
have lived in Puerto Rico for all my life, and I have never 
seen something like we lived under the circumstances of 
Hurricane Maria. So our experiences have been learning how to 
be resilient, how to improve our infrastructure not to suffer 
something like what we live with the hurricanes.
    Ms. Blunt Rochester. Thank you.
    Ms. Avila. Thank you.
    Ms. Blunt Rochester. I wanted you all to have that 
opportunity because sometimes the media doesn't pick it up.
    And, Dr. Schwartz, thank you for initially giving us those 
two big things that we need to address as well. I yield back.
    Ms. Eshoo. The gentlewoman yields back. And I now recognize 
the gentleman from Virginia, Mr. Griffith, for 5 minutes of 
questioning.
    Mr. Griffith. Thank you very much, Madam Chair. I 
appreciate you all being here. I apologize to you all, but I 
have been in another hearing most of the morning and, 
accordingly, I am going to yield my time to Dr. Burgess.
    Mr. Burgess. And I thank the gentleman for yielding. I 
thank him for his work on this committee. It is invaluable.
    So let me come back to Guam for a moment. Madam Arcangel, 
you mentioned in your testimony that one of the biggest issues 
in Guam is the untimely or delayed payments in Medicaid. Can 
you enlighten us as to why this is happening?
    Ms. Arcangel. Well, because at the beginning of fiscal 
year, the budget appropriation to match the Medicaid current is 
not enough. So I look for money within my division to match 
that, so providers wait in the meantime. And at the same time, 
it depends on the cash flow of the government. So if there is 
available cash to match the Federal grant, then that is the 
only time we can pay the providers. So sometimes they wait 3 
months, 6 months to get paid for those. So that is the reason 
why.
    And at the same time, the reimbursement of the providers is 
really low. Even our contracts we don't file on providers, we 
have thresholds. So if we meet our thresholds and we don't pay 
them, they don't accept our patients, so the patient stays at 
the hospital. In the meantime, the cost increases, the 
expenditure increases.
    Mr. Burgess. So it is a vicious cycle.
    Ms. Arcangel. Yes, it is a vicious cycle.
    Mr. Burgess. And of course from a provider's standpoint, if 
your days in accounts receivable are much over 60 or 90 days, 
it is very, very difficult to run your practice. So I am 
sympathetic to the doctors who say, ``Look, I can't afford to 
see your patients.''
    Ms. Arcangel. Yes.
    Mr. Burgess. But that does seem like a solvable problem. On 
the issue of the cap, some of the territories expanded Medicaid 
under the ACA, and some did not. So for the three that did--
Puerto Rico, Virgin Islands, and Guam--has that caused you to 
reach that 1108 cap faster than before the expansion occurred? 
So let's start with Puerto Rico.
    Ms. Avila. In the case of Puerto Rico, I don't think that 
will deplete our 1108 faster because we use the ACA funds 
first, and then we apply the 1108 cap amounts. So, right now, 
we have remaining balance from the ACA until December. We have 
a small remaining balance of ACA, and then we will apply the 
1108 cap amounts. So in that case----
    Mr. Burgess. So on the expansion population, in the States 
they draw down, or originally drew down, a hundred percent 
FMAP, and now it is down, I think, to 93 or 94 percent. Does 
that occur in Puerto Rico as well?
    Ms. Avila. Definitely, yes. Yes.
    Mr. Burgess. So you are actually affecting the burn rate of 
your dollars under the cap.
    Ms. Avila. So, yes. That is correct.
    Mr. Burgess. OK. Ms. Arcangel, in Guam?
    Ms. Arcangel. Yes, we finished that in the first month of 
the fiscal year. The reason being is because our IBNR are not 
paid. We paid that at the beginning of fiscal year, so we 
finish 1108 first, and then we need to draw down the request 
for additional from ACA funding, which is section 2005.
    Mr. Burgess. But does that affect your total under the cap, 
under the 1108 cap?
    Ms. Arcangel. Yes, it affects. But this, actually, the ACA 
helps us. The reason being is because the COFAs, which are 
under our locally funded program, we utilize the 1108 to pay 
for those emergency services. That is why we finish it at the 
beginning of the fiscal year.
    Mr. Burgess. OK, but it still increases your burn rate, it 
seems to me.
    Ms. Rhymer-Browne, let me ask you the same.
    Ms. Rhymer-Browne. Yes. It definitely--we are, we did 
expand our Medicaid, so 2012 we had about 12,000. Now we are at 
over 28,000. So it definitely has, we burn that up very 
quickly. And, of course, ACA has nothing to do with it, and 
then for the hundred percent, we were using that because we did 
not have to match it. Our ACA, we still have about 140 million 
sitting because we can't afford the 55/45 percent match.
    Mr. Burgess. But on that hundred percent match, was that 
still calculated under the 1108 cap?
    Ms. Rhymer-Browne. No. No, it is separate.
    Mr. Burgess. Oh, those were separate dollars you were 
drawing down. OK.
    Ms. Rhymer-Browne. Yes. Yes, separate.
    Mr. Burgess. OK. All right, I thank the gentleman for 
yielding, and I will yield back.
    Mr. Griffith. Yield back.
    Ms. Eshoo. The gentleman yields back. I recognize the 
gentleman from Maryland, Mr. Sarbanes, for 5 minutes of his 
questions.
    Mr. Sarbanes. Thank you, Madam Chair. Thank all of you for 
being here at this very important hearing, which I think for 
many of our members is very enlightening. We don't get this 
kind of testimony probably as often as we should so we can, in 
real time, understand the issues that you are facing. And you 
have presented a very united front in terms of the challenges. 
Obviously, each territory has special issues that need to be 
addressed and legacy issues and particular history. So I want 
to thank you for that testimony.
    I am very interested, and I think, Dr. Schwartz, you may be 
the best person to speak to this, sort of the origins of the 
differences in the formula, the FMAP, where the cap came from. 
Because it seems to me that, if we are going to address the 
funding issues going forward in a sustainable way, we have got 
to figure out what the arguments are for why those different 
formulas just are obsolete at this point, why they don't make 
sense.
    And I am sure some that will oppose changing them and 
making them more robust, making them more equivalent to what 
the States see, will anchor their opposition in the notion 
that, because of the special status of the territories, those 
formulas ought to stay the way they are. And there has been 
some references as to why it is outdated, why it is obsolete, 
why it came into existence at a different time that is no 
longer analogous to where we are today, but I think it is going 
to be important for us to make the case for that if we are 
going to get the formulas changed. So if you could maybe speak 
to that issue, that would be helpful to me.
    Dr. Schwartz. Sure. The caps were first added in the 1967 
Social Security amendments. Some of these programs started much 
later than that. We do know that in the Social Security Act at 
that time there were caps and special formulas for other public 
assistance programs. And while we don't know what factors 
Congress considered when setting those caps, I think it is 
fairly typical that, when new programs are introduced, they 
build on previous programs.
    I would also say that as far back as 1978, the Senate 
Finance Committee noted that the ceilings on Federal Medicaid 
expenditures have severely affected the amount of funds 
available to the territories to operate adequate Medicaid 
programs. So this is a longstanding problem. There has 
obviously been some changes over time. The ACA lifted the 
matching rate from 50 to 55 percent, the various infusions of 
Federal funds are recognition of that. But there has not been a 
significant statutory change in the Social Security Act since, 
you know, for over 40, 50 years.
     Mr. Sarbanes. Do you know whether--you just alluded to 
there being other programs different from the ones that are 
administered by the territories that were subject to different 
kinds of caps and matching formulas, and that that might have 
been a basis for putting those in place in these situations, or 
not.
    But do you know if any of those have been changed over time 
and moved up to where they are equivalent to what the State 
formulas are and what rationales might have been offered in 
those instances?
    Dr. Schwartz. I don't have that information at my 
fingertips, but we could certainly get that to you.
    Mr. Sarbanes. I think that would be very helpful, because 
we obviously have a very powerful argument based on the needs 
of the territories, and in some instances the recent challenges 
that have been faced, let's say, in the case of Puerto Rico and 
the U.S. Virgin Islands based on the disasters that have 
occurred.
    But I think if we are going to make the most robust 
argument, it has to be a combination of arguing that the needs 
are what they are and have to be met in a sustainable fashion 
and that, the whatever the rationale that previously may have 
justified the difference in the way the formulas were 
developed, that that rationale is no longer applicable.
    So getting that information, I think, would be extremely 
helpful. Thank you all for being here today. I yield back.
    Ms. Eshoo. The gentleman yields back. I now would like to 
recognize the gentlewoman from New Hampshire, Ms. Kuster, for 
her 5 minutes of questioning. And if no other Republicans come 
back, Mr. Soto will follow and then we will have, I think, have 
concluded our questions.
    So, Ms. Kuster, you are recognized.
    Ms. Kuster. Thank you, Chairwoman Eshoo, for holding this 
critical hearing today to discuss the remarkable disparities in 
our healthcare system between the territories and the States. 
If the conversation today has shown us anything, it is that 
Medicaid block granting simply does not work. Unfortunately, 
this example of poor policy is at the expense of Americans who 
live in the territories represented here.
    Though New Hampshire is a far distance, Granite Staters can 
relate all too well to many of the same issues you described 
here today. I cannot imagine how we would be able to combat the 
opioid epidemic in my State if we did not have the resources of 
the Medicaid program. Most of the people seeking treatment are 
eligible for healthcare for their substance use disorder and 
mental health issues because of the Medicaid expansion. As our 
population ages, it is Medicaid that is the safety net for our 
most vulnerable citizens.
    So I want to thank all of the witnesses for appearing 
before us today, and I share your view of the challenges facing 
your Medicaid programs.
    Ms. Avila, the Governor of Puerto Rico has submitted a 
request to Congress for 15.1, in funding, million. Is that the 
correct number?
     Ms. Avila. Yes, it is, 15.1 billion dollars for----
    Ms. Kuster. Billion.
    Ms. Avila. Billion, for 5----
    Ms. Kuster. Thank you. We try to keep track of the m's and 
the b's around here.
    Ms. Avila. Yes.
    Ms. Kuster. Fifteen point one billion.
    Ms. Avila. Billion, 5 years.
    Ms. Kuster. OK. And the Governor's request included 
specific program improvements that Puerto Rico would implement 
with this temporary funding. And I apologize if you have spoken 
to this earlier, I was in another hearing. But what are those 
improvements, and why are they necessary?
    Ms. Avila. Well, starting with the reimbursement rates for 
our doctors and healthcare professionals, our reimbursement 
rates if we compare to the ones in the States are lower than 19 
percent of what they have.
    Ms. Kuster. Nineteen percent?
    Ms. Avila. Percent of what we pay----
    Ms. Kuster. Of what physicians would receive?
    Ms. Avila. Yes, our physicians. For example, a procedure 
for, a cardiovascular procedure in the States is paid between 
1,000 to 2,000 dollars. In Puerto Rico we will pay no more than 
$300. Our doctors for a visit, they are paid like 20 to 25 
dollars, in comparison to 100, 125 dollars that is in the CMS 
fee schedules. And what we are trying to do is just to 
stabilize our system according to what is gathered in the fee 
schedules that are part of the programs in the States as 
Medicare, as Medicaid references, and that way is we will avoid 
our exodus of providers, because we are losing almost 1.5 
doctors per day right now because of the lower payments.
    Ms. Kuster. Lower reimbursement payments.
    Ms. Avila. Yes.
    Ms. Kuster. And can I just ask briefly, the rest of you, is 
the reimbursement equally low for you for physicians or--I am 
sorry. Let's just go--if you could.
    Ms. Young. For American Samoa it doesn't apply because we 
only have one hospital that utilizes a certified public 
expenditure payment method. So we simply pay based on the 
Medicare cost report that the hospital files every year, and we 
pay actual costs that it requires to operate the hospital. We 
don't have independent, private physicians that are Medicaid 
providers. The only other provider on island that we have is 
the federally qualified health center.
    Ms. Kuster. And for you?
    Ms. Arcangel. Our reimbursement rate is actually based on 
Medicare rate, but for the hospital alone the reimbursement 
rate is very low, which is 1,600 per day only. That is because 
of DEPRA. Our private hospital, it is 300 percent higher than 
our own government hospital.
    With regards to physicians, it is also based on Medicare 
rate or fee schedule. But the thing is, the cost of medical 
supplies as well as equipment is so high because of the 
shipping costs, because of there are only few vendors that ship 
those in Guam, so that there is a tendency on higher costs 
because of lack of competition.
    Ms. Kuster. My time is almost up, but----
    Ms. Rhymer-Browne. Yes, the Virgin Islands faces similar 
situations. We have 100 percent Medicare reimbursement, and so 
our providers, many of them who need, we need for specialty, do 
need to charge higher and therefore may not join to become a 
Medicaid provider.
    Ms. Kuster. Thank you. My time is up. Thank you very much. 
I yield back.
    Ms. Eshoo. The gentlewoman yields back. I now recognize the 
gentleman from Florida, Mr. Soto, for his 5 minutes of 
questioning.
    Mr. Soto. Thank you, Madam Chair. Thank you to all the 
witnesses for being here today. We know we have a financial 
crisis and a Medicaid crisis that just keeps coming around and 
coming around again. And for that on behalf of my constituents, 
you know, we apologize that you all have to go through this 
over and over again, when there should be a permanent fix. And 
this committee is intent on trying to fix that long term.
    Ms. Avila, you know, we talked a little bit about the 
Medicaid crisis in Puerto Rico, hospitals in disrepair. Nearly 
half of Puerto Rico's population is enrolled in Medicaid. Isn't 
that correct?
    Ms. Avila. Yes, it is correct.
    Mr. Soto. Yes. And we have seen the additional Federal 
funding for the Medicaid program is set to expire in September. 
Do you believe another temporary funding increase is sufficient 
to permanently address the financial challenges facing Puerto 
Rico's Medicaid problem?
    Ms. Avila. Well, anything that works for us in terms of 
additional funding, I would never say no. But short term is a 
very dangerous situation for Puerto Rico, because the short 
terms doesn't allow us to work with the Fiscal Board to work 
with investments for long-term periods that will stabilize the 
model, and we don't suffer those uncertainty periods that hurts 
a lot our economy.
    Mr. Soto. You know, Puerto Rico used to have 15,000 
doctors, and my understanding is over 6,000 have left the 
island over the past decade or so. Is that correct?
    Ms. Avila. That is correct.
    Mr. Soto. And why have they left?
    Ms. Avila. Because the reimbursement rates. They, you know, 
the difference from what they can earn here in the States, our 
doctors are prepared, are credentialized, are--I am sorry--are 
prepared according to the State standards and regulations. So 
here they can easily earn three or five times what they are 
going to be earning in Puerto Rico.
    Mr. Soto. And many are leaving to come to my home State of 
Florida.
    Ms. Avila. That is right.
    Mr. Soto. You know, we saw Puerto Rico have to go into debt 
to prop up the Medicaid program because the reimbursement rates 
were so--the matching rates were so low, and now we are stuck 
in this PROMESA Fiscal Board system. And then we saw after 
Hurricane Maria, it wasn't just the devastation of Hurricane 
Maria that led to people having a lack of access to healthcare, 
it was also the lack of funding to begin with through Medicaid. 
Would you agree with that statement?
    Ms. Avila. Of course, 100 percent. It has been a pattern 
and a trend that is supposed to be fixed way, way before.
    Mr. Soto. I am proud to have introduced, along with 
Congresswoman Velazquez and the rest of the Puerto Rican task 
force, a new Medicaid parity bill for Puerto Rico. I talked a 
little about it, $15.1 billion, 83 percent match for the FMAP. 
From 2020 to 2024, there would be four enhancement 
requirements. Hospital payments, physician payments need to be 
increased, Hep C coverage, and Part B reforms. I understand 
that at the end of the transition period, though, the bill 
would provide Puerto Rico with the same financial treatment and 
FMAP as a State program.
    Is Puerto Rico willing to cover all the mandatory Medicaid 
benefits if it means you would receive State-like funding and 
FMAP?
    Ms. Avila. The answer is absolutely yes.
    Mr. Soto. And can you discuss the benefits of providing 
Puerto Rico with sustainable funding? How would that financial 
certainty impact Puerto Rico's long-term financial problem?
    Ms. Avila. Well, first of all, we will be able to keep our 
doctors and healthcare professionals. And our hospitals need to 
be improving their infrastructure in their payment. We pay 
right now $700 per diem in comparison to thousands of dollars 
that has been paid in the States. So work with our hospital is 
an urgent matter as well of improving the poverty level, the 
income poverty level for Puerto Rico for to make justice to the 
more vulnerable ones in the island.
    Mr. Soto. Thanks, Ms. Avila.
    And, you know, I also want to take a moment to talk a 
little about the great work that not only my colleague 
Jenniffer Gonzalez-Colon has been doing in this area, but also 
Governor Rossello back on the island. They have been both 
drumming this drumbeat since well before Hurricane Maria, and a 
lot of the input from their ideas were included in this 
legislation.
    And I really appreciate your leadership as well, Ms. Avila. 
We are going to do our best to end this crisis for good in 
Puerto Rico with regard to Medicaid. I yield back.
    Ms. Avila. Thank you.
    Ms. Eshoo. The gentleman yields back. I now would like to 
recognize the gentleman from Georgia, Mr. Carter.
    Mr. Carter. Thank you, Madam Chair.
    Ms. Eshoo. The only pharmacist in the Congress. How is 
that?
    Mr. Carter. That is great. Thank you, Madam Chair, I 
appreciate it. And I appreciate all of you being here. This is 
certainly something that is very important, obviously, to all 
of us.
    Ms. Avila, I wanted to ask you, it is my understanding that 
Puerto Rico's largest benefit categories in terms of spending 
is outpatient prescription drugs and that the amount spent on 
drugs is projected to be over $800 million in fiscal year 2020. 
Why is that?
    Ms. Avila. Well, that is why because we work with a rebate 
program in Puerto Rico, but the rebates are coming to the 
government directly. It doesn't go to the MCOs, or the managed 
care organizations, so it is our artificially priced, the drugs 
are.
    Mr. Carter. I get that. But what I am getting at is, in 
comparison to the national average, it is much higher. That 
same program is applied all throughout the country. So you are 
right, 800 million is somewhat skewed, but at the same time, in 
comparison to the other numbers with the rest of the country, 
it is above the national average. And I am just wondering if 
there is a reason for that.
    Ms. Avila. Well, I will need to look for more information 
because our pharmacy program is mandatory generic. We are 
keeping it mandatory, and we have more than 85 percent of those 
are included in our gestation. So the prices, the drug prices 
has been increasing in 20 percent, you know.
    Mr. Carter. And I get all that. And again, where I am 
coming from is just in comparison.
    Ms. Avila. Yes.
    Mr. Carter. I am comparing you to the rest of the country, 
and in comparison the percentage you spend on prescription 
drugs is higher than it is elsewhere. I am just wondering why. 
And also, a lot of indicators are telling us that the outcomes 
are worsening.
    Ms. Avila. Well, we have a lot of diabetics, hypertension. 
We have some outliers in our population of those conditions 
that drive the costs to those extremes that we are looking, but 
we already have programs in place that monitor the utilization. 
But the behavior of the population, we haven't had all the 
programs in place to be able to track to go and look for those 
programs that monitor the clinical aspects of our population.
    But it is a reality, yes. We have sicker people in----
    Mr. Carter. Well, please understand, I am not coming from a 
critical perspective.
    Ms. Avila. No, I understand.
    Mr. Carter. I am inquisitive as to--and you have just 
answered some of my next question, and that is, you know, what 
kind of health problems are you having. I mean, I am from the 
South, and in the South we are the cardio belt. I mean, we have 
a lot of cardiovascular disease because of diet or whatever, 
but that is a big problem we have. Now you have just indicated 
that diabetes, hypertension--do you have any kind of wellness 
programs in place that you are trying to push forward?
    Ms. Avila. Yes. Since November 2018, we have implemented a 
new healthcare model in Puerto Rico, and we are looking higher-
quality programs that works with the social determinates of our 
population, and they need to bring new programs to our, you 
know, to our healthcare model. We are monitoring those changes 
as we speak since November 2018. We are in our first 6 months 
of that new implementation, and we are supposed to be gathering 
better outcomes.
    Mr. Carter. OK.
    Ms. Avila. Because that is why it was one of the main 
intentions of that change.
    Mr. Carter. OK.
    Let me move to Ms. Sablan and Ms. Young. Your two 
territories as I understand it--and please forgive me if I am 
being redundant in my questions, I have had another committee 
hearing going on at the same time. But it is my understanding 
that you have a waiver. That your Medicaid and your CHIP 
programs are under a section 1902(j) waiver. Are you familiar 
with that?
    Ms. Young. Yes.
    Mr. Carter. Ms. Young, you are?
    Ms. Young. Yes.
    Mr. Carter. And that waiver is specific, as I understand 
it, to just your country and Ms. Sablan's country. And I was 
just wondering, do you feel like that waiver might help some of 
the other territories? Is that something that has benefited 
your countries?
    Ms. Young. Well, our 1902(j) waiver has----
    Mr. Carter. Excuse me, territories. Excuse me, I am sorry.
    Ms. Young. Yes, it has definitely been to our advantage 
because we are so unique in so many different ways. We don't do 
individual enrollment. We are very remote. And we also only 
have one airline that has two flights a week to our territory, 
so it limits our ability to do a lot of things. But I think as 
to the other territories, I think it would be best for them.
    Mr. Carter. Right.
    Ms. Young. But I have heard that people are interested in 
our 1902(j) waiver.
    Mr. Carter. Right.
    Ms. Sablan?
    Ms. Sablan. Yes, that is a very unique program. And so what 
happens is, like, we drop off the categorically requirement, 
and it is applied to anybody that meets our income and resource 
limit. But we are doing eligibility----
    Mr. Carter. Good, good.
    Ms. Sablan [continuing]. Enrollment.
    Mr. Carter. Well, thank you all for your efforts in making 
these programs the best that they can be, and we certainly 
stand ready to help you in any way that we can. So thank you, 
and I yield back.
    Ms. Eshoo. The gentleman yields back. I now have the 
pleasure of recognizing the gentleman from Massachusetts, Mr. 
Kennedy, for 5 minutes of his questions.
    Mr. Kennedy. Madam Chair, thank you. Given the fact that I 
just jumped my good friend from California, I will happily 
yield. I will trade turns with the gentleman from California, 
if he is ready.
    Ms. Eshoo. Oh, I am sorry.
    Mr. Cardenas. That is all right.
    Ms. Eshoo. It is my mistake.
    Mr. Cardenas. Thank you.
    Now, that is a gentleman.
    Ms. Eshoo. I think.
    Mr. Cardenas. Let me tell you. We use that term loosely 
around here, but he proved it.
    Ms. Eshoo. No, we really mean it. We really mean it.
    Mr. Cardenas. Thank you, Madam Chair.
    Ms. Eshoo. Gentleman Cardenas.
    Mr. Cardenas. And I much appreciated the courtesy from the 
gentleman from Massachusetts. Thank you, Madam Chair, for 
holding this very important hearing.
    And my first question is to Ms. Avila regarding doctors and 
the comparison what is or isn't happening in the territories, 
specifically Puerto Rico compared to the rest of the country.
    I read a report about a family in Puerto Rico who wanted to 
take their newborn, a 6-week-old baby, to see a pediatric 
gastroenterologist, but the wait time was several months long. 
It also told the story of Diago, who was born with severely low 
muscle tone and travels an hour with his mother and a nurse 
just to receive medical care.
    With two-thirds of children in Puerto Rico on Medicaid, how 
has the loss of providers affected their ability to receive 
care?
    Ms. Avila. It is critical right now. There is uncertainty 
just to think about having 1.5 million beneficiaries without 
doctors. To be able to serve them is our main concern right 
now, and that is why our urgent just to do some immediate 
changes in the reimbursement rates that we are paying to our 
specialists and our doctors.
    Mr. Cardenas. It is my understanding that I heard a stat 
that over 4,000 doctors have left Puerto Rico since 2006. And 
according to some estimates, Puerto Rico is losing one doctor 
per day, currently, and that was before the hurricane. How has 
this affected wait times for people on Medicaid in Puerto Rico?
    Ms. Avila. It has been increasing the waiting time. We have 
been stating here that today we account for almost 9,000 
doctors in compared to 15 or 14 thousand a couple of years ago. 
And that will affect children, elderly, and all the population 
as well throughout the whole island. Because the doctors that 
serve the Medicaid population also serve the private sector and 
the Medicare Advantage and traditional Medicare as well, so the 
island will be affected islandwide.
    Mr. Cardenas. OK, across the board.
    Ms. Avila. Across the board, yes.
    Mr. Cardenas. Also, can you clarify for the American 
citizens who are listening to this hearing, a person who is 
born in Puerto Rico and a person who continues to live in 
Puerto Rico, whether they are 6 weeks old or 60 years old, is 
that individual an American citizen?
    Ms. Avila. Yes, it is.
    Mr. Cardenas. OK, so we are talking about American 
citizens.
    Ms. Avila. Yes, we are.
    Mr. Cardenas. And that is the case for all the territories, 
correct? OK. No exception? We are all--the subject matter today 
is talking about the territories of the United States, 
individuals who are born there are American citizens. Just like 
I was born in California, so I have the privilege and the 
blessing of being an American citizen. Is that the case for all 
of your constituents who were born in your territory?
    Ms. Young. Not for American Samoa. People born in American 
Samoa are U.S. nationals.
    Mr. Cardenas. OK.
    Ms. Rhymer-Browne. For the Virgin Islands, we are U.S. 
citizens.
    Ms. Sablan. For CNMI, we are U.S. citizens.
    Ms. Arcangel. For Guam, they are U.S. citizens, those who 
are under Medicaid program. But we also want to talk about the 
COFAs because we also are responsible for the them. They are 
not U.S. citizens, but the emergency services are incorporated 
under Medicaid, so technically we use Medicaid to pay for 
those.
    So not only U.S. citizens, but because of the treaty of the 
U.S. and the Compact of Free Association, so we are also 
responsible for them.
    Mr. Cardenas. So that treaty is a United States treaty?
    Ms. Arcangel. Yes.
    Mr. Cardenas. It is not a United Nations treaty.
    Ms. Arcangel. No, no.
    Mr. Cardenas. So we are not talking about a treaty that 
other foreign governments or other human beings around the 
world imposed upon us. This is a treaty that the United States 
Government agreed to.
    Ms. Arcangel. Yes.
    Mr. Cardenas. So, in the tradition and in the spirit of 
giving one's word--and a treaty is like giving someone's word 
in writing--we as the United States should probably follow 
through with that treaty and the obligations that we as the 
United States Government agreed to. That make sense?
    Ms. Arcangel. Yes.
    Mr. Cardenas. OK.
    Ms. Arcangel. And for them we spent $147 million in fiscal 
year 2017, and the amount that we receive, it is not enough.
    Mr. Cardenas. OK, so the amount that you receive, that 147 
million comes out of an amount of money that is a shortfall as 
it is. Is that what you are saying?
    Ms. Arcangel. Yes.
    Mr. Cardenas. OK. The reason why I want to ask those 
questions is because I think that it is unfortunate that--I 
don't know why, maybe in American history classes or what have 
you--a lot of American citizens think that the people sitting 
up here are not American citizens, that you are foreigners, and 
that is not true.
    So I just wanted to clarify that for the people watching 
and listening and just wanted to thank you, and I yield back 
the balance of my time.
    Ms. Eshoo. The gentleman yields back. And now I would like 
to recognize the gentleman from Massachusetts, Mr. Kennedy, for 
his 5 minutes of questions.
    Mr. Kennedy. Madam Chair, thank you. There has been some 
discussion about the (j) waiver, which is essentially a broad 
waiver authority that is available to American Samoa and the 
Commonwealth of the Mariana Islands. Crucially, the (j) waiver 
does not allow--does not allow--the Secretary of HHS to waive 
the cap amount or the FMAP.
    Based on what we have heard from the testimony today and in 
written statements, it sounds like folks aren't actually asking 
to expand the (j) waiver. They are asking for adequate, 
sustainable, long-term finance structure that allows them to 
operate Medicaid programs the way that they want without the 
constant threat of a funding shortfall. I think it is also 
worth reminding everybody that State Medicaid programs already 
have waiver authority through section 1115 of the Social 
Security Act.
    So, Dr. Schwartz, starting with you, it is my understanding 
that people generally consider waiver authority available 
under--to Medicaid, excuse me--under section 1115 to be pretty 
broad. Would you say that is an accurate characterization?
    Dr. Schwartz. Yes.
    Mr. Kennedy. So would expending (j) waiver authority to the 
rest of the territories increase the size of the Federal 
funding allotment?
    Dr. Schwartz. No.
    Mr. Kennedy. Would expanding the (j) waiver ensure that no 
beneficiaries lose coverage or benefits or that no providers 
see pay cuts if a territory exceeds its Federal allotment and 
doesn't have enough territory funds to cover its Medicaid 
costs?
    Dr. Schwartz. No.
    Mr. Kennedy. So no to the loss of coverage, no to the 
benefits, no to the pay cuts, and if you exceed the Federal 
allotment. No, no, no.
    Dr. Schwartz. That is correct.
    Mr. Kennedy. We have heard from both territories that 
currently operate under a (j) waiver, American Samoa and the 
Northern Mariana Islands, that their Medicaid programs have 
both experienced significant Federal funding shortfalls. Is it 
fair to say that a (j) waiver does not guarantee the financial 
sustainability of a territory's Medicaid program?
    Dr. Schwartz. That is correct.
    Mr. Kennedy. Thank you. And that was remarkably efficient. 
It sounds to me like the Medicare programs do have some 
flexibility under the law and that this (j) waiver does nothing 
to address the financial problems that are plaguing the 
territories as we have heard from multiple witnesses today, and 
that the waiver authority does not actually address the root 
cause of those challenges. Instead of looking for ways to 
weaken the protections of Medicaid, I hope that we can find a 
way to work together to find a way to strengthen those programs 
by providing the territories the funding that they so 
desperately need.
    And, Madam Chair, due to an extraordinarily efficient 
witness, I will yield back my 3 minutes of time. Grateful.
    Ms. Eshoo. The gentleman yields back. And now I would like 
to recognize the gentlewoman from California, Ms. Barragan, for 
her 5 minutes of questions.
    Ms. Barragan. Thank you. And thank you all for being here 
today and for providing testimony.
    When I first heard about what was happening, I couldn't 
help but think and say, ``Are you kidding me?'' American 
citizens, even though they are in another place, are not being 
treated fairly. They are not being treated equally as everybody 
else. It is my understanding that the territories receive 
Medicaid funding in the form of a block grant and that States 
receive open-ended Federal funds while the funds' territories 
received a fixed amount.
    I don't think this is something the American people know 
about. I think if I were in my congressional district, which is 
Compton-Watts--very working class, a lot of people who rely 
upon Medicare/Medicaid and services--they would be shocked to 
hear that if they lived, say, in Puerto Rico or one of the 
territories that they actually could have a period of time when 
their benefits would be effectively cut and said no more.
    The block grant funding amount does not come anywhere close 
to covering the cost of healthcare for the territories' 
Medicaid enrollees. For instance, Puerto Rico's block grant for 
fiscal year 2019 is $367 million, while Puerto Rico's total 
Medicaid expenditures are projected to be nearly $2.8 billion. 
That is pretty remarkable when you think about the difference 
in the amount that Puerto Rico has to come up with. That means 
that the block grant only accounts for 13 percent of Puerto 
Rico's total need. Now, once the block grant funding runs out, 
the territories must use their own funds to pay the entire 
remaining cost of Medicaid healthcare services.
    I have been to Puerto Rico twice since Maria hit, and the 
devastation and the amount of money that it is going to take to 
recover is pretty remarkable.
    Ms. Avila, is there some impact if Puerto Rico needs to 
use--come up with these extra dollars for the gap, does that 
mean they may have less money for disaster relief?
    Ms. Avila. Well, starting with we will not have money to 
cover for all the life that are receiving benefits right now. 
We will be facing a chaos in the island because this situation 
is affecting everybody on the island because of the lack of 
funding, so if something like that happen, we are expecting a 
mass exodus of Puerto Ricans to the States, and Puerto Rico 
will need to redefine our healthcare model to be able to 
comply.
    Because our fiscal situation is no way that we can cover 
with almost more than $1 billion from local funds right now, 
even the Fiscal Board wouldn't allow us to do so. So we will 
need to change everything according to what we are doing right 
now and Medicaid program will be very difficult to meet with 
all the requirements and of what we have right now in place.
    We are not looking for waivers. We are looking for ways to 
have a stabilized program and in a full capacity complying with 
all that the programs require.
    Ms. Barragan. OK, so just for the panel, how would you be 
able to expand coverage and services if the block grants were 
eliminated and you were treated the same as the States?
    Ms. Avila. We would not be able to cover with that. We 
would need to change the structure and to have like basic 
services, and the government will need to start providing 
services directly through our facilities. So.
    Ms. Barragan. So, I am asking if you got rid of block 
grants and you were treated like everybody else in the States, 
would that be helpful? Would that help you expand services?
    Ms. Avila. That will be the answer for Puerto Rico just to 
be able to comply and have a sustain of our programs. So I 
didn't understand your first question.
    Ms. Barragan. OK. Any others on the panel?
    Ms. Arcangel. For Guam, we will go in to reduce the number 
of uninsured population. We will definitely increase our income 
guideline and make them eligible under the program.
    Ms. Rhymer-Browne. For the U.S. Virgin Islands, we would do 
similarly to expand to the additional 10 to 15 thousand who are 
eligible, and that will definitely help our underinsured 
population and also reduce the amount of uncompensated care in 
our hospitals and our clinics.
    Ms. Sablan. For CNMI, we will provide the mandated services 
as well as some of the optional services that is important.
    Ms. Barragan. Great. So you say overall healthcare would 
improve in the territories?
    Ms. Arcangel. Yes.
    Ms. Barragan. Thank you. I yield back.
    Ms. Eshoo. The gentlewoman yields back. I now would like to 
recognize the gentleman from New York, Mr. Engel, for his 5 
minutes of questioning.
    Mr. Engel. Thank you, Madam Chair. Let me first say U.S. 
territories are subject to inequitable Medicaid funding 
policies, and we can see that today. States, for instance, 
receive Federal matching funds for each dollar they spend in 
their Medicaid programs, whereas territories are capped by 
section 1108 of the Social Security Act. And because of these 
inequities, Congress has had to appropriate additional funding 
on numerous occasions to avoid shortfalls in territorial 
Medicaid programs. And this piecemeal funding obviously creates 
uncertainty, which jeopardizes the ability of territories to 
provide Medicaid coverage to Americans residing in these 
communities.
    So let me ask you, Ms. Schwartz, what steps can Congress 
take to ensure that U.S. territories have a steady stream of 
Federal support for their Medicaid program?
    Dr. Schwartz. As I pointed out in my testimony, the chronic 
underfunding of the territories results from the combination of 
the very low caps that are provided annually and the very low 
matching rate. So addressing both of those is needed to address 
the chronic underfunding.
    Mr. Engel. OK, thank you. Nearly 2 years ago, Hurricane 
Maria made landfall in Puerto Rico and the U.S. Virgin Islands, 
claiming nearly 3,000 American lives. The island is still 
reeling from the aftermath of this natural catastrophe. And 
although Congress provided temporary support to Puerto Rico's 
Medicaid program, it needs significant long-term Federal 
support. And I believe if we fail to act, Puerto Rico will go 
off a Medicaid cliff, which could have disastrous consequences 
for its healthcare system.
    So, Ms. Avila, how would the Medicaid cliff affect Puerto 
Rico's ability to retain and recruit healthcare providers?
    Ms. Avila. Just to clarify, if we receive the funding or if 
we stay as we are right now?
    Mr. Engel. If you stayed where you are right now.
    Ms. Avila. Well, we will not be able to comply with the 
full requirements of the Medicaid program and we will be facing 
a lack of providers, because providers are leaving the island 
because we are not able to fulfill their needs in terms of 
reimbursement rates. So it will be very challenging for Puerto 
Rico to keep our providers in the island.
    Mr. Engel. Right. And, of course, as we have been stating 
today, American citizens are being treated as second-class 
citizens, and it is really unacceptable. Thank you.
    Ms. Avila. Thank you.
    Mr. Engel. Let me ask Ms. Young. As chairman of the Foreign 
Affairs Committee, I am the chairman, I always--I am shocked by 
the number of people who forget that individuals living in the 
U.S. territories are American citizens, and Congress has a duty 
to ensure that the healthcare needs of these Americans are 
fully met. So I am proud that I voted for the recent disaster 
supplemental which includes additional funding for territorial 
Medicaid programs such as those in American Samoa.
    So, Ms. Young, would you please describe how this funding 
will help our fellow citizens residing in American Samoa?
    Ms. Young. First of all, thank you, Congressman, for your 
vote on the disaster supp. The availability of the 100 FMAP 
percentage for our territory has allowed us to resume 
critically necessary medical services that we had suspended 
back in March. And it has also allowed us to pay our bills for 
the off-island medical referral program, and we are now able--
we have reinstated the services for durable medical equipment 
and prosthetics as well as we will now be able to pay the bills 
and invoices that have been in arrears for our federally 
qualified healthcare centers and our community clinics. So it 
has been an extremely helpful solution for us through the end 
of September, so thank you for that.
    Mr. Engel. OK, thank you very much. This is obviously a 
very important subject. I know that our chair takes it very 
seriously, and I am looking forward to working with her to 
continue to make sure that there are not inequities where we 
pit American citizens against other American citizens. We are 
all American citizens. We are all equal, and we shouldn't 
forget that. Thank you, Madam Chair.
    Ms. Eshoo. We thank the gentleman and also for your 
leadership at Foreign Relations, very important.
    I don't see any other Members here, so what I will do at 
this point is to--well, there are only a couple of us here--but 
for the record, remind Members that, pursuant to committee 
rules, they have 10 business days to submit additional 
questions for the record.
    And I think the witnesses heard several Members make 
reference to the fact that they were going to submit questions 
to you. You will need to answer those, so we ask that you 
answer them in full and in the most timely way, because the 
information that is provided to us is really foundational for 
what we want to do moving ahead.
    And I also would like to ask unanimous consent to enter 
into the record the following. These are documents for the 
record: a statement from Congresswoman Aumua Amata Coleman 
Radewagen; a statement from the American Academy of Family 
Physicians; a statement from the Puerto Rico Chamber of 
Commerce; a statement from the Financial Oversight and 
Management Board for Puerto Rico; a statement from the Multi-
sectorial Council on Puerto Rico's Health System; a statement 
from the Partnership for Medicaid; and a statement from 
America's Health Insurance Plans.
    So I ask unanimous consent that these documents be placed 
in the record. Hearing no objections, they will be placed in 
the record.
    [The information appears at the conclusion of the hearing.]
    Ms. Eshoo. Let me just close by saying a few words to the 
witnesses. I think everyone has recognized that you have 
traveled a long distance. For several of you, it has taken more 
than the hours it takes for me to commute across the country 
every week from California to DC.
    I want you to know that your travel is worth it. I believe 
that collectively this panel has moved the needle, moved the 
needle on what needs to be done. And the very good question 
about why these programs have such low caps, low matching rates 
and that in the stateside they are one figure, in the 
territories they are another, I can't help but think that there 
is some bias somewhere from many years ago. But I think that it 
is a form of negligence to allow it to go on. This has to 
change, people are desperate, and the overlay of the natural 
disaster has done more damage to exacerbate what you are 
already burdened with.
    I want to thank my colleagues for being present. Mr. Sablan 
has been here throughout. Congresswoman Coleman Radewagen--am I 
pronouncing your name correctly? Thank you. My name is a little 
odd, so I am sensitive about mispronunciation. You have been 
here throughout, and we are going to work with you.
    I know that my classmate, Congresswoman Nydia Velazquez, 
has introduced her legislation. The Delegates from the other 
territories have worked on a bill with Congresswoman Plaskett, 
1354. And so I look forward to this committee solving this once 
and for all. I don't want to see any more Band-Aids and kicking 
the can down the road. The citizens of our country deserve 
citizenship that is celebrated, not denigrated.
    There is an old saying that many of us use,--and it is an 
important one--that justice delayed is justice denied. I think 
healthcare denied is justice denied.
    So, on that note, we all thank you for your travels. We 
thank you for your professionalism, for answer--you really 
answered Members' questions so well, and we look forward to 
resolving this and continuing to work with you to resolve it.
    So, at this time, the subcommittee is adjourned.
    [Whereupon, at 1:11 p.m., the subcommittee was adjourned.]
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