[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


               AVERTING A CRISIS: PROTECTING ACCESS TO 
                HEALTHCARE IN THE U.S. TERRITORIES

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

                            VIRTUAL HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 17, 2021

                               __________

                           Serial No. 117-13
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


     Published for the use of the Committee on Energy and Commerce

                   govinfo.gov/committee/house-energy
                        energycommerce.house.gov
                        
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
46-304 PDF                 WASHINGTON : 2022                     
          
-----------------------------------------------------------------------------------                           
                        
                    COMMITTEE ON ENERGY AND COMMERCE

                     FRANK PALLONE, Jr., New Jersey
                                 Chairman
BOBBY L. RUSH, Illinois              CATHY McMORRIS RODGERS, Washington
ANNA G. ESHOO, California              Ranking Member
DIANA DeGETTE, Colorado              FRED UPTON, Michigan
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          BRETT GUTHRIE, Kentucky
KATHY CASTOR, Florida                DAVID B. McKINLEY, West Virginia
JOHN P. SARBANES, Maryland           ADAM KINZINGER, Illinois
JERRY McNERNEY, California           H. MORGAN GRIFFITH, Virginia
PETER WELCH, Vermont                 GUS M. BILIRAKIS, Florida
PAUL TONKO, New York                 BILL JOHNSON, Ohio
YVETTE D. CLARKE, New York           BILLY LONG, Missouri
KURT SCHRADER, Oregon                LARRY BUCSHON, Indiana
TONY CARDENAS, California            MARKWAYNE MULLIN, Oklahoma
RAUL RUIZ, California                RICHARD HUDSON, North Carolina
SCOTT H. PETERS, California          TIM WALBERG, Michigan
DEBBIE DINGELL, Michigan             EARL L. ``BUDDY'' CARTER, Georgia
MARC A. VEASEY, Texas                JEFF DUNCAN, South Carolina
ANN M. KUSTER, New Hampshire         GARY J. PALMER, Alabama
ROBIN L. KELLY, Illinois, Vice       NEAL P. DUNN, Florida
    Chair                            JOHN R. CURTIS, Utah
NANETTE DIAZ BARRAGAN, California    DEBBBIE LESKO, Arizona
A. DONALD McEACHIN, Virginia         GREG PENCE, Indiana
LISA BLUNT ROCHESTER, Delaware       DAN CRENSHAW, Texas
DARREN SOTO, Florida                 JOHN JOYCE, Pennsylvania
TOM O'HALLERAN, Arizona              KELLY ARMSTRONG, North Dakota
KATHLEEN M. RICE, New York
ANGIE CRAIG, Minnesota
KIM SCHRIER, Washington
LORI TRAHAN, Massachusetts
LIZZIE FLETCHER, Texas
                                 ------                                

                           Professional Staff

                   JEFFREY C. CARROLL, Staff Director
                TIFFANY GUARASCIO, Deputy Staff Director
                  NATE HODSON, Minority Staff Director
                         Subcommittee on Health

                       ANNA G. ESHOO, California
                                Chairwoman
G. K. BUTTERFIELD, North Carolina    BRETT GUTHRIE, Kentucky
DORIS O. MATSUI, California            Ranking Member
KATHY CASTOR, Florida                FRED UPTON, Michigan
JOHN P. SARBANES, Maryland, Vice     MICHAEL C. BURGESS, Texas
    Chair                            H. MORGAN GRIFFITH, Virginia
PETER WELCH, Vermont                 GUS M. BILIRAKIS, Florida
KURT SCHRADER, Oregon                BILLY LONG, Missouri
TONY CARDENAS, California            LARRY BUCSHON, Indiana
RAUL RUIZ, California                MARKWAYNE MULLIN, Oklahoma
DEBBIE DINGELL, Michigan             RICHARD HUDSON, North Carolina
ANN M. KUSTER, New Hampshire         EARL L. ``BUDDY'' CARTER, Georgia
ROBIN L. KELLY, Illinois             NEAL P. DUNN, Florida
NANETTE DIAZ BARRAGAN, California    JOHN R. CURTIS, Utah
LISA BLUNT ROCHESTER, Delaware       DAN CRENSHAW, Texas
ANGIE CRAIG, Minnesota               JOHN JOYCE, Pennsylvania
KIM SCHRIER, Washington              CATHY McMORRIS RODGERS, Washington 
LORI TRAHAN, Massachusetts               (ex officio)
LIZZIE FLETCHER, Texas
FRANK PALLONE, Jr., New Jersey (ex 
    officio)
                             
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     2
    Prepared statement...........................................     3
Hon. Brett Guthrie, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     4
    Prepared statement...........................................     6
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     7
    Prepared statement...........................................     8
Hon. Cathy McMorris Rodgers, a Representative in Congress from 
  the State of Washington, opening statement.....................     9
    Prepared statement...........................................    11

                               Witnesses

Delegate Gregorio Kilili Camacho Sablan, a Representative in 
  Congress from the Territory of the Northern Mariana Islands....    13
    Prepared statement...........................................    15
Delegate Aumua Amata Coleman Radewagen, a Representative in 
  Congress from the Territory of American Samoa..................    19
    Prepared statement...........................................    21
Delegate Stacey E. Plaskett, a Representative in Congress from 
  the Territory of the Virgin Islands............................    24
    Prepared statement...........................................    26
Resident Commissioner Jenniffer Gonzalez-Colon, a Representative 
  in Congress from the Territory of Puerto Rico..................    31
    Prepared statement...........................................    33
Delegate Michael F. Q. San Nicolas, a Representative in Congress 
  from the Territory of Guam.....................................    38
    Prepared statement...........................................    40
Anne L. Schwartz, Ph.D., Executive Director, Medicaid and CHIP 
  Payment and Access Commission..................................    43
    Prepared statement \1\
    Answers to submitted questions...............................   180
Carolyn L. Yocom, Director, Health Care, Government 
  Accountability Office..........................................    45
    Prepared statement...........................................    47
    Answers to submitted questions...............................   184

                           Submitted Material

Letter of March 16, 2021, from Senator Justo S. Quitugua, 
  Northern Mariana Islands Commonwealth Legislature, to Mr. 
  Pallone, et al., submitted by Ms. Eshoo........................    76
Statement of Helen C. Sablan, Medical Director, Commonwealth of 
  the Northern Mariana Islands, March 15, 2021, submitted by Ms. 
  Eshoo..........................................................    79
Letter of March 16, 2021, from Albert Bryan, Jr., Governor, 
  Territory of the Virgin Islands, to Mr. Pallone, et al., 
  submitted by Ms. Eshoo.........................................    91

----------

\1\ Dr. Schwartz's prepared statement has been retained in committee 
files and is available at https://docs.house.gov/meetings/IF/IF14/
20210317/111335/HHRG-117-IF14-Wstate-SchwartzA-20210317.pdf.
Letter of March 16, 2021, from James L. Madara, Chief Executive 
  Officer and Executive Vice President, American Medical 
  Association, to Mr. Pallone, et al., submitted by Ms. Eshoo....    94
Letter of March 17, 2021, from the Partnership for Medicaid to 
  Ms. Eshoo and Mr. Guthrie, submitted by Ms. Eshoo..............    96
Letter of March 17, 2021, from Gary L. LeRoy, Board Chair, 
  American Academy of Family Physicians, to Ms. Eshoo and Mr. 
  Guthrie, submitted by Ms. Eshoo................................    99
Letter of March 17, 2021, from Adam P. Carbullido, Director of 
  Policy and Advocacy, Association of Asian Pacific Community 
  Health Organizations, to Ms. Eshoo and Mr. Guthrie, submitted 
  by Ms. Eshoo...................................................   101
Statement of America's Health Insurance Plans, March 17, 2021, 
  submitted by Ms. Eshoo.........................................   103
Letter of January 14, 2021, from Michael Fraser, Chief Executive 
  Officer, Association of State and Territorial Health Officials, 
  to Hon. Gregorio Kilili Camacho Sablan, submitted by Ms. Eshoo.   106
Letter, undated, from Esther L. Muna, Chief Executive Officer, 
  State/Territorial Public Health Official, Commonwealth 
  Healthcare Corporation, the Territorial Hospital & Health 
  System, Commonwealth of the Northern Mariana Islands, to 
  Congressional Leaders, submitted by Ms. Eshoo..................   107
Letter of March 16, 2021, from Edmund Villagomez, Speaker, 
  Northern Mariana Islands Commonwealth Legislature, House of 
  Representatives, et al., to Mr. Pallone, et al., submitted by 
  Ms. Eshoo......................................................   110
Statement of the Department of Public Health and Social Services, 
  Government of Guam, March 16, 2021, submitted by Ms. Eshoo.....   114
Letter of March 17, 2021, from Ralph DLG. Torres, Governor, 
  Commonwealth of the Northern Mariana Islands, to Mr. Pallone, 
  et al., submitted by Ms. Eshoo.................................   117
Letter of March 15, 2021, from Michael W. Cruz, President and 
  Chief Executive Officer, Guam Regional Medical City, to Mr. 
  Pallone, et al., submitted by Ms. Eshoo........................   119
Statement of Michael Rhymer-Browne, Assistant Commissioner, 
  Virgin Islands Department of Human Services, June 20, 2019, 
  submitted by Ms. Eshoo.........................................   122
Report of the Army Corps of Engineers, ``Assessment of Health 
  Care Infrastructure and Services, Lyndon Baines Johnson 
  Tropical Medical Center, Pago Pago, American Samoa,'' April 22-
  24, 2019, submitted by Ms. Eshoo\1\
Statement of Sandra King Young, American Samoa Medicaid Director, 
  June 20, 2019, submitted by Ms. Eshoo..........................   132
Report by Epstein Becker & Green, ``Medicaid in Puerto Rico: 
  Differences from the States,'' March 15, 2021, submitted by Ms. 
  Eshoo..........................................................   136
Letter of March 10, 2021, from Arielle Buyum, Executive Director, 
  Pacific Islands Primary Care Association, to Subcommittee on 
  Health, submitted by Ms. Eshoo.................................   139
Letter of March 17, 2021, from Roberto Garcia, President, 
  Medicaid and Medicare Advantage Products Association of Puerto 
  Rico, to Ms. Eshoo and Mr. Guthrie, submitted by Ms. Eshoo.....   141
Report of the National Association of Medicaid Directors, 
  ``Inaugural Survey of Territory Medicaid Directors,'' November 
  2019, submitted by Ms. Eshoo...................................   145
Letter of March 17, 2021, from the National WIC Association to 
  Mr. Pallone, et al., submitted by Ms. Eshoo....................   153
Invoice of March 15, 2021, NWG Advocacy, LLC, to Puerto Rico 
  Hospital Association, submitted by Ms. Eshoo...................   154
Letter, March 16, 2021, from Esther L. Muna, Chief Executive 
  Officer, Commonwealth Healthcare Corporation, Commonwealth of 
  the Northern Mariana Islands, to Congressional Leaders, 
  submitted by Ms. Eshoo.........................................   155
PL 116-4 Congressional Requirements Summary of Activities, 
  January 28, 2021, submitted by Ms. Eshoo.......................   157
Letter of March 17, 2021, from Commonwealth Medicaid Providers 
  from the Commonwealth of the Northern Mariana Islands to Mr. 
  Pallone, et al., submitted by Ms. Eshoo........................   159

----------

\2\ The report has been retained in committee files and is available at 
https://docs.house.gov/meetings/IF/IF14/20210317/111335/HHRG-117-IF14-
20210317-SD018.pdf.
Letter of March 17, 2021, from Lourdes A. Leon Guerrero, Governor 
  of Guam, to Mr. Pallone, et al., submitted by Ms. Eshoo........   164
Statement of Jamie Pla Cortes, Executive President, Puerto Rico 
  Hospital Association, March 17, 2021, submitted by Ms. Eshoo...   167
Statement of Neil C. Weare, President and Founder, Equally 
  American Legal Defense and Education Fund, March 17, 2021, 
  submitted by Ms. Eshoo.........................................   175
Statement of Pedro R. Pierluisi, Governor of Puerto Rico, March 
  17, 2021, submitted by Ms. Eshoo...............................   177

 
    AVERTING A CRISIS: PROTECTING ACCESS TO HEALTHCARE IN THE U.S. 
                              TERRITORIES

                              ----------                              


                       WEDNESDAY, MARCH 17, 2021

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 1:02 p.m., via 
Cisco Webex online video conferencing, Hon. Anna G. Eshoo 
(chairwoman of the subcommittee), presiding.
    Members present: Representatives Eshoo, Butterfield, 
Matsui, Castor, Sarbanes, Schrader, Cardenas, Ruiz, Kelly, 
Barragan, Blunt Rochester, Craig, Schrier, Trahan, Fletcher, 
Pallone (ex officio), Guthrie (subcommittee ranking member), 
Burgess, Griffith, Bilirakis, Long, Bucshon, Hudson, Carter, 
Dunn, Curtis, Crenshaw, Joyce, and Rodgers (ex officio).
    Also present: Representative Soto.
    Staff present: Jeffrey C. Carroll, Staff Director; Waverly 
Gordon, General Counsel; Tiffany Guarascio, Deputy Staff 
Director; Saha Khaterzai, Professional Staff Member; Mackenzie 
Kuhl, Digital Assistant; Una Lee, Chief Health Counsel; Meghan 
Mullon, Policy Analyst; Kaitlyn Peel, Digital Director; Rick 
Van Buren, Health Counsel; C.J. Young, Deputy Communications 
Director; Sarah Burke, Minority Deputy Staff Director; Michael 
Cameron, Minority Policy Analyst, Consumer Protection and 
Commerce, Energy, Environment; William Clutterbuck, Minority 
Staff Assistant; Theresa Gambo, Minority Financial and Office 
Administrator; Marissa Gervasi, Minority Counsel, Oversight and 
Investigations; Grace Graham, Minority Chief Counsel, Health; 
Caleb Graff, Minority Deputy Chief Counsel, Health; Brittany 
Havens, Minority Professional Staff Member, Oversight and 
Investigations; Jack Heretik, Minority Press Secretary; Nate 
Hodson, Minority Staff Director; Sean Kelly, Minority Press 
Secretary; Peter Kielty, Minority General Counsel; Emily King, 
Minority Member Services Director; Bijan Koohmaraie, Minority 
Chief Counsel; Clare Paoletta, Minority Policy Analyst, Health; 
Kristin Seum, Minority Counsel, Health; Kristen Shatynski, 
Minority Professional Staff Member, Health; Olivia Shields, 
Minority Communications Director; Alan Slobodin, Minority Chief 
Investigative Counsel, Oversight and Investigations; Michael 
Taggart, Minority Policy Director; and Everett Winnick, 
Minority Director of Information Technology.
    Ms. Eshoo. I want to call the Subcommittee on Health to 
come to order now.
    And due to COVID-19, of course, today's hearing is being 
held remotely, and all Members and witnesses will be 
participating via video conferencing.
    As part of our hearing, microphones, of course, will be set 
on mute to eliminate any background noise. We know how 
irritating that is, especially when you are the one that is 
speaking and there is a lot of noise in the background. So 
Members and witnesses, you have to remember to unmute your 
microphones each time you wish to speak.
    And documents for the record should be sent to Meghan 
Mullon at the email address that we have provided to your 
staffs, and all documents will be entered into the record at 
the conclusion of the hearing.
    The Chair now recognizes herself for 5 minutes for an 
opening statement.

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

    My colleagues, in September of this year the five U.S. 
territories will face a Medicaid cliff. And I use this term 
because it means that the supplementary Medicaid funding that 
is provided to the territories through the Affordable Care Act 
will run out.
    Now, without this Federal funding, over one and a half 
million enrollees, including many children, could lose their 
healthcare.
    Each is an American citizen, but they are treated 
differently than the constituents of every member of this 
subcommittee. Since 1967, the territories have struggled with 
inadequate Federal funding for their Medicaid programs because 
the Social Security Act capped Medicaid funding for the 
territories. So since 1978 Congress is on the record noting 
that the caps on the Medicaid programs severely affect the 
territories' health and budgets. But there has been no 
significant statutory change to this part of the Social 
Security Act in over 50--five-oh--years.
    So this is a very important hearing that I hope we are 
going to build on and take action to reverse what I am 
referring to.
    Now, because of these restrictions, the territories 
routinely run out of Medicaid funds. Over the past decade, 
Congress has voted on six separate occasions to provide stopgap 
funds to certain territories, including as recently as December 
2019.
    Except for a temporary increase in Federal funding in FY 
2020 and 2021, the funding for the territories is typically 
three to four times below what a State Medicaid program would 
receive. In the States, the Medicaid program has a flexible 
financing structure, which guarantees funding if more 
individuals enroll due to an economic downturn, a pandemic, or 
a natural disaster. For the rest of us, that is the way it 
works. But not for the territories.
    So the territories do not have any guarantee. When disaster 
strikes, the territories are forced to make hard decisions 
about coverage and services at the worst possible time. Just 
when they need it most, that is when it hurts them the most.
    Fortunately, during the ongoing COVID-19 pandemic and 
economic downturn, the territories have benefited from an 
increased Federal match for fiscal years '20 and '21. American 
Samoa, the Northern Mariana Islands, Guam, and the U.S. Virgin 
Islands received an 83 percent Federal match, and Puerto Rico's 
current Federal match is 76 percent. With this additional 
money, Puerto Rico was able to cover the cure for hepatitis C 
for Medicaid patients for the very first time, and the Northern 
Mariana Islands were able to establish an oncology center to 
provide cancer treatment locally.
    But this funding, colleagues, is going to expire on 
September 30th, which is why the territories, obviously, need a 
long-term solution to their Medicaid funding so that they too 
can meet the needs of their constituents, as we all work to 
meet the needs of ours. In Puerto Rico 85 percent of residents 
report they are worried that they will be unable to access 
healthcare if they need it. 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.
    So, if we allow the Medicaid cliff to happen, each of the 
territories would have to cut--now, listen to this--they would 
have to cut 69 to 94 percent of their Medicaid program in 
fiscal year '22. Obviously, percentages this high, we all know, 
produce dire consequences, and it would--to hundreds of 
thousands of American citizens.
    So we cannot fail to care for so many American citizens 
based solely on where they live. I think we could probably all 
agree that this is short-term thinking, except the short-term 
thinking has been around for an awfully long time, and it has 
cost the constituents of our colleagues that are with us today 
to testify, and I am so happy to welcome each one of the 
Representatives.
    My hope is that the hearing will clear a path forward to a 
long-term financing solution that fits the needs of the 
territories and our fellow Americans who are part of them. So 
thank you, and welcome to our witnesses.
    We welcome you very warmly to our subcommittee.
    [The prepared statement of Ms. Eshoo follows:]

                Prepared Statement of Hon. Anna G. Eshoo

    In September of this year, the five U.S. territories will 
face a ``Medicaid cliff.'' I use this term because it means the 
supplementary Medicaid funding provided to the territories will 
run out. Without this Federal funding, over 1.5 million 
enrollees, including many children, could lose their 
healthcare.
    Each is an American citizen but they are treated 
differently than the constituents of every member of this 
subcommittee.
    Since 1967, the territories have struggled with inadequate 
Federal funding for their Medicaid programs because the Social 
Security Act capped Medicaid funding for the territories. Since 
1978, Congress is on the record noting that the caps on the 
Medicaid programs severely affect the territories' health and 
budgets, but there's been no significant statutory change to 
this part of the Social Security Act in over 50 years.
    This is a very important hearing that I hope we are going 
to build on and take action to reverse what I'm referring to.
    Because of these restrictions, the territories routinely 
run out of Medicaid funds. Over the past decade, Congress has 
voted on six separate occasions to provide stopgap funds to 
certain territories, including as recently as December 2019.
    Except for a temporary increase in Federal funding for FY 
2020 and 2021, the funding for the territories is typically 3 
to 4 times below what a State Medicaid program would receive.
    In the States, the Medicaid program has a flexible 
financing structure, which guarantees funding if more 
individuals enroll due to an economic downturn, a pandemic, or 
a natural disaster. For the rest of us that's the way it works, 
but not for the territories.
    The territories do not have a guarantee. When disaster 
strikes, the territories are forced to make hard decisions 
about coverage and services at the worst possible time. Just 
when they need it most, that's when it hurts them most.
    Fortunately, during the ongoing COVID-19 pandemic and 
economic downturn, the territories have benefited from an 
increased Federal match for fiscal years 2020 and 2021.
    American Samoa, the Northern Mariana Islands, Guam, and the 
U.S. Virgin Islands received an 83 percent Federal match, and 
Puerto Rico's current Federal match is 76 percent.
    With this additional money, Puerto Rico was able to cover 
the cure for hepatitis C for Medicaid patients for the very 
first time. The Northern Mariana Islands were able to establish 
an oncology center to provide cancer treatment locally.
    But this funding is going to expire September 30th, which 
is why the territories obviously need a long-term solution to 
their Medicaid funding so they too can meet the needs of their 
constituents as we all work to meet the needs of ours.
    In Puerto Rico, 85% of residents report they're worried 
that they'll be unable to access healthcare if they need it. 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.
    If we allow the Medicaid cliff to happen, each of the 
territories would have to cut 69% to 94% of their Medicaid 
program in FY 2022. Obviously, percentages this high, we all 
know, produce dire consequences and it would to hundreds of 
thousands of American citizens.
    We cannot fail to care for so many American citizens based 
solely on where they live. I think we could probably all agree 
that this is short-term thinking, except this short-term 
thinking has been around for an awfully long time. And it has 
caused the constituents of our colleagues that are with us 
today to testify, and I'm so happy to welcome each one of the 
Representatives, my hope is that the hearing will clear a path 
forward to a long-term financing solution that fits the needs 
of the territories and the Americans that are part of them.

    Ms. Eshoo. The Chair now recognizes Mr. Guthrie, who is the 
wonderful ranking member of our subcommittee, for his 5 minutes 
for an opening statement.

 OPENING STATEMENT OF HON. BRETT GUTHRIE, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    Mr. Guthrie. Thank you, Madam Chair. I appreciate that very 
much. And thank you for this important hearing, and I want to 
thank the witnesses. I want to thank my colleagues for being 
here today representing the people you represent. And I want 
to--hopefully, we can move forward on this hearing.
    So today Medicaid funding for five U.S. territories expires 
September 30th. And I am concerned the result of such an 
expiration would have a devastating impact on the residents in 
each of these territories. I am committed to working in a 
bipartisan way to find a solution that avoids this funding 
cliff.
    But, unfortunately, the two bills we are discussing today 
miss the mark and are not bipartisan.
    I want to examine how these programs are working for people 
in the territories while also improving program integrity and 
maintaining congressional oversight. We should be working 
together to achieve these goals to ultimately help these 
Americans.
    The hearing today is on the Medicaid programs in the U.S. 
Virgin Islands, American Samoa, Northern Mariana Islands, Guam, 
and Puerto Rico. The Federal Government is projected to spend 
around $3 billion on these programs this year, or roughly half 
of the annual budget of the FDA. These five programs cover a 
little over 1.3 million people, but over 90 percent of those 
are in Puerto Rico. For comparison, in my home State of 
Kentucky, about one and a half million people participate in 
Medicaid.
    This committee has a proud history of working together on 
these programs. Two years ago we passed unanimously out of 
committee a bill that would have increased funding for 4 years 
in Puerto Rico and 6 years for the other territories. These 
bipartisan extensions included new program integrity measures 
for each program to make sure Federal dollars were being spent 
on the people in these programs. Congress ended up increasing 
funding for 2 years for all five programs. So we are again here 
to examine ways to move forward.
    However, I must point out that, technically, this hearing 
is a legislative hearing. Although Congress recently passed, in 
a bipartisan way, the most substantial increase in funding ever 
to these programs, before us are two partisan bills that remove 
any guardrails on the amount of Federal spending. We anticipate 
these bills will cost tens of billions of dollars, and include 
no policy changes to address program integrity, health 
outcomes, and a framework for increased flexibility.
    Instead of this partisan approach, we should first look at 
how the bipartisan measures of increased funding and 
accountability have worked, and what measures should be 
continued.
    It is my hope that the majority will return to the 
bipartisan tradition of working together on this issue moving 
forward. Although it is unfortunate the majority chose to start 
the discussion on these programs with a partisan legislative 
hearing today, today's hearing is important to discuss the 
territories' specific needs. Too often, Congress lumps all five 
programs together. But, as we know, we have five distinct 
populations with five distinct programs, with five sets of 
challenges and program designs. Understanding the differences 
in the programs and making sure any extension considers the 
unique needs of each population will be key.
    We also want to have an open and robust conversation on the 
program integrity measures that the territories have been 
working on over the past 2 years. The Government Accountability 
Office is here today to discuss the report on the contracting 
issues Puerto Rico and the Center for Medicare and Medicaid 
Services have had with Puerto Rico's contracting practices.
    In addition to the work GAO was doing, the Department of 
Health and Human Services Office of Inspector General is also 
conducting two audits of Puerto Rico's Medicaid program. 
Working with them this spring and summer will be of paramount 
importance, as we want to be sure that any issues identified 
are addressed as we work to continue this important funding.
    Finally, I just want to reiterate my strong desire for this 
work to be bipartisan. We have seen time and time again that 
simply pouring money into something doesn't fix the underlying 
problem. We can address funding needs for U.S. territories 
while also ensuring programs better serve residents and program 
integrity measures are in place. We can do this together, and 
we can do it together like we have in the past.
    I look forward to the discussion, and I yield back.
    [The prepared statement of Mr. Guthrie follows:]

                Prepared Statement of Hon. Brett Guthrie

    Thank you to the witnesses for being here today. Medicaid 
funding for five U.S. territories expires September 30th, and 
I'm concerned the result of such an expiration would have a 
devastating impact on the residents in each of the territories. 
I am committed to working together in a bipartisan way to find 
a solution that avoids this funding cliff, but unfortunately 
the two bills we're discussing today miss the mark and are not 
bipartisan. I want to examine how these programs are working 
for people in the territories, while also improving program 
integrity and maintaining congressional oversight. We should be 
working together to achieve these goals to ultimately help 
these Americans.
    The hearing today is on the Medicaid programs in U.S. 
Virgin Islands, American Samoa, N. Mariana Islands, Guam, and 
Puerto Rico. The Federal Government is projected to spend 
around $3 billion on these programs this year, or roughly half 
of the annual budget of the Food and Drug Administration. These 
5 programs cover a little over 1.3 million people, but over 90 
percent of those are in Puerto Rico. For comparison, in my home 
State of Kentucky, around 1.5 million people participate in 
Medicaid.
    This committee has a proud history of working together on 
these programs. Two years ago, we passed unanimously out of 
committee a bill that would have increased funding for four 
years in Puerto Rico and six years for the other territories. 
These bipartisan extensions included new program integrity 
measures for each program to make sure Federal dollars being 
spent on the people in these programs. Congress ended up only 
increasing funding for two years for all five programs, so we 
are again here to examine ways to move forward
    However, I must point out that technically this hearing is 
a legislative hearing. Although Congress recently passed, in a 
bipartisan way, the most substantial increase in funding ever 
to these programs, before us are two partisan bills that remove 
any guardrails on the amount of Federal spending. We anticipate 
these bills will cost tens of billions of dollars and include 
no policy changes to address program integrity, health 
outcomes, and a framework for increased flexibility. Instead of 
this partisan approach, we should first look at how the 
bipartisan measures of increased funding and accountability 
have worked, and what measures should be continued.
    It is my hope that the Majority will return to the 
bipartisan tradition of working together on this issue moving 
forward.
    Although it's unfortunate the Majority chose to start the 
discussion on these programs with a partisan legislative 
hearing, today's hearing is important to discuss the 
territories' specific needs. Too often Congress lumps all five 
programs together, but as we know, we have five distinct 
populations with five distinct programs with five sets of 
challenges and program designs. Understanding the differences 
in the programs and making sure any extension considers the 
unique needs of each population will be key.
    We also want to have an open and robust conversation on the 
program integrity measures that the territories have been 
working on over the past two years. The Government 
Accountability Office is here today to discuss their report on 
the contracting issues Puerto Rico and Center for Medicare and 
Medicaid Services have had with Puerto Rico's contracting 
practices. In addition to the work GAO is doing, the Department 
of Health and Humans Services Office of Inspector General (OIG) 
is also conducting two audits of Puerto Rico's Medicaid 
program. Working with them this spring and summer will be of 
paramount importance as we want to be sure that any issues 
identified are addressed as we work to continue this important 
funding.
    Finally, I just want to reiterate my strong desire for this 
work to be bipartisan. We've seen time and time again that 
simply pouring money into something doesn't fix the underlying 
problem. We can address funding needs for U.S. territories, 
while also ensuring programs better serve residents and program 
integrity measures are in place. We can do this in a bipartisan 
way like we have in the past.
    I look forward to the discussion and I yield back.

    Ms. Eshoo. The gentleman yields back. I want to say to the 
gentleman that we have worked with the minority to build this 
hearing. We worked together on the witnesses.
    Yes, there are pieces of legislation out there. We welcome 
the minority putting forth legislation and/or working with the 
two main authors of legislation, relative to the subject matter 
of our hearing.
    But this is not partisan. This is bipartisan. This is about 
American citizens. And so I look forward to hearing from them, 
and the gentleman yields back.
    I now would like to recognize Mr. Pallone, the chairman of 
the full committee, for his 5 minutes of questions.

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

    Mr. Pallone. Well, thank you, Congresswoman and Chairwoman 
Eshoo, and I know not only this is an important hearing, but 
this is something that you care very much about.
    And for--I hope I am not missing anybody, but I just wanted 
to say that I really appreciate the input from all the 
Congresspeople that represent the territories. I mean, I just 
have to say, you know, Congressman Sablan has been--I don't 
think a day goes by without him mentioning this issue to me.
    And certainly, when--I think it was in the aftermath of 
Hurricane Maria--I know we have had so many hurricanes that I 
can't even remember which--the name of it, but I think it was 
Maria, when we went down to the Virgin Islands with 
Congresswoman Plaskett, and with Jenniffer, with Congresswoman 
Gonzalez. And they were talking about this, you know, the whole 
time, how we need a permanent solution. This just can't be 
done, you know, by kicking the can down the road.
    And, of course, ever since he has been elected, Congressman 
San Nicolas has been talking to me about it, as well.
    In addition to that, you know, you have, you know, Members 
like Congressman Soto on our committee and Congresswoman 
Velazquez, who are of Puerto Rican descent, who--you know, who 
constantly bring this to our attention and want solutions.
    So, look, all of you have been so helpful, and so I am glad 
that we are having this hearing today, and all of you have an 
opportunity to express your views. It wasn't that long ago that 
we had our last hearing on how disastrous it would be for 
Medicaid funding in the territories to collapse. And I was 
proud that we were able to work together on a strong bipartisan 
bill that combined critical increases to the territory's 
funding and Federal medical assistance with FMAP, you know, for 
program integrity improvements.
    But look, we know that Medicaid in the territories has been 
chronically underfunded for decades. The consequences of this 
inequity can be seen in the crumbling health infrastructure, 
emergency restrictions on provider networks, the failure to 
offer coverage of certain lifesaving drugs, and even the debt 
crisis in Puerto Rico.
    Years of inadequate Medicaid block grants have forced the 
territories to divert more of their own dollars to ensure the 
residents have received the care that they need. And this 
funding structure has forced the territories to pay more than 
their fair share for Medicaid, much more than they would have 
to pay if they were treated like States.
    Last Congress the committee passed legislation that would 
have provided several years of increased funding and a higher 
FMAP to all the territories. Thanks to the leadership of 
Representatives Soto and Bilirakis, we were able to find common 
ground on this legislation. Unfortunately, I was very 
disappointed. At the last minute, former President Trump 
refused to support our bipartisan, bicameral agreement and 
insisted at the last minute on reducing that long-term solution 
to 2 years. And because of that, we are now once again on the 
verge of another crisis.
    I believe the stakes are too high. The consequences of 
inaction are too tragic to continue down a path of short-term 
fixes. The territories need a permanent solution to their 
Medicaid funding shortfalls. They need a solution that assures 
that they can make improvements to their programs with 
certainty and that the increased funds they are relying on will 
be there for more than a couple of years. Beneficiaries need 
certainty about the services they critically need and rely on, 
and permanent improvements to these critical programs and to 
the health of beneficiaries can only be expected if Congress 
guarantees permanent, adequate funding.
    So I am glad our colleagues from the territories could be 
here today to share their perspectives. I know that bipartisan 
committee staff recently met with health officials from the 
territories, and we have also received statements for the 
record from all the territories.
    In just over 6 months, the territories will face a 
catastrophic loss of Federal Medicaid funding that will 
jeopardize access to care. Long before that, the territories 
will have to begin the process of contingency planning to make 
the cuts necessary to address this looming fiscal cliff, and 
this would include limiting reimbursements to providers, 
reversing expansions of eligibility that provided thousands of 
residents with access to Medicaid for the first time, and 
ending coverage of life-saving medications.
    But we can't allow this to happen. We just can't allow this 
to happen. So bipartisan members of this committee fought hard 
last Congress to secure additional Medicaid funding. With that 
funding they have made tremendous progress. But that progress 
will be lost if we don't act quickly. So we are going to act. 
We want a permanent solution. We don't want to kick the can 
down the road.
    Thank you again for being here, and thank you to Chairwoman 
Eshoo for having this hearing and for all the concern that you 
have expressed and leadership on this issue.
    [The prepared statement of Mr. Pallone follows:]

             Prepared Statement of Hon. Frank Pallone, Jr.

    Thank you, Madam Chair, for holding this important hearing. 
It wasn't long ago that we had our last hearing on how 
disastrous it would be for Medicaid funding in the territories 
to collapse. I was proud that we were able to work together on 
a strong, bipartisan bill that combined critical increases to 
the territories' funding and Federal medical assistance 
percentage (FMAP) with important program integrity 
improvements.
    While there may be differences between Republicans and 
Democrats on how best to address the Medicaid cliff, I think we 
all agree that we cannot let Medicaid funding in the 
territories collapse, especially during the COVID-19 public 
health emergency. The loss of access to healthcare would be 
devastating.
    Medicaid in the territories has been chronically 
underfunded for decades. The consequences of this historic 
inequity can be seen in the crumbling healthcare 
infrastructure, emergency restrictions on provider networks, 
the failure to offer coverage of certain life-saving drugs, and 
even the debt crisis in Puerto Rico. Years of inadequate 
Medicaid block grants have forced the territories to divert 
more of their own dollars to ensure their residents have 
received the care they needed, and it has impeded access to 
critical healthcare services for the territories' residents.
    This funding structure has forced the territories to pay 
more than their fair share for Medicaid--much more than they 
would have to pay if they were treated like States. These 
programs have been starved for decades, and unfortunately these 
are the results.
    Last Congress, this committee passed legislation that would 
have provided several years of increased funding and a higher 
FMAP to all the territories. Thanks to the leadership of 
Representatives Soto and Bilirakis, we were able to find common 
ground on this legislation. Unfortunately, I was deeply 
disappointed that, at the last minute, former President Trump 
refused to support our bipartisan, bicameral agreement and 
insisted at the last minute on reducing that long-term solution 
to 2 years. Because of that, we are now, once again, on the 
verge of another crisis.
    The stakes are too high, and the consequences of inaction 
are too tragic, to continue down a path of short-term fixes. 
The territories need a permanent solution to their Medicaid 
funding shortfalls. They need a solution that ensures that they 
can make improvements to their programs with certainty that the 
increased funds they are relying on will be there for more than 
a couple of years. Beneficiaries need certainty about the 
services they critically need and rely on. And permanent 
improvements to these critical programs and to the health of 
beneficiaries can only be expected if Congress guarantees 
permanent, adequate funding.
    I'm glad that our colleagues from the territories could be 
here to share their perspectives. I also know that bipartisan 
committee staff recently met with health officials from the 
territories, and we have also received statements for the 
record from all of the territories. Hearing directly from the 
territories, through both their elected representatives and 
their local health officials, is an important part of this 
process; and we should make sure their voices are heard.
    In just over six months, the territories will face a 
catastrophic loss in Federal Medicaid funding that will 
jeopardize access to care. Long before that, the territories 
will have to begin the process of contingency planning to make 
the cuts necessary to address the looming fiscal cliff. This 
would include limiting reimbursement to providers, reversing 
expansions of eligibility that provided thousands of residents 
with access to Medicaid for the first time, and ending coverage 
of life-saving medications. We simply cannot allow this to 
happen.
    Bipartisan members of this committee fought hard last 
Congress to secure additional Medicaid funding for the 
territories. With that funding, they have made tremendous 
progress in improving their Medicaid programs. That progress, 
however, will be lost if we don't act quickly.
    I look forward to hearing from the witnesses today, and I 
yield back.

    Mr. Pallone. I yield back. Thank you.
    Ms. Eshoo. The gentleman yields back.
    Thank you for your good words, Mr. Chairman. The Chair now 
recognizes the ranking member of the full committee, Mrs. Cathy 
McMorris Rodgers, for her 5 minutes for an opening statement.
    Mrs. Rodgers. Thank you----
    Ms. Eshoo. Oh, I am sorry.
    Mrs. Rodgers [continuing]. Madam Chair----
    Ms. Eshoo. Yes, go ahead.
    Mrs. Rodgers. Thank you----
    Ms. Eshoo. Go ahead, I am sorry.

      OPENING STATEMENT OF HON. CATHY McMORRIS RODGERS, A 
    REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

    Mrs. Rodgers. Great. And thanks to my friends and 
colleagues for being here today.
    As others have mentioned, increased funding for Puerto 
Rico, Guam, the Virgin Islands, Northern Mariana Islands, 
American Samoa expires September 30th. And I am committed to 
reauthorizing funding in a way that is best for the people who 
get Medicaid care in the territories. I hope that we can work 
together on this issue to ensure Medicaid is caring for our 
most vulnerable in the territories and across America.
    As I have said many times before, we should be coming 
together in a bipartisan way to modernize and improve Medicaid, 
especially for pregnant women and people with disabilities. 
However, I want to be sure that we discuss three problems I 
have with this hearing before we have a discussion about 
extending these important programs.
    First, it is important that we hear from the territories 
themselves and get to ask them questions about their programs. 
There are serious and valid concerns about how we oversee the 
Medicaid programs in the territories. If this hearing was later 
in the year, the OIG could provide an update on their audit. We 
could review Puerto Rico's report that is due in June.
    Over the last decade there has been a dramatic increase in 
the amount of Federal taxpayer dollars going to Medicaid 
programs in the territories. Are we seeing health outcome 
improvements with that spending?
    And if we don't have the data to answer that question, 
there is a gap that we need to address in this reauthorization.
    Second, we are going to a straight legislative hearing on 
two partisan bills. These bills are only introduced--or only 
have Democrat cosponsors, and they were drafted, unfortunately, 
without the input from the Republicans. These bills do not 
address program integrity or getting better data on healthcare 
outcomes for those that are in Medicaid.
    In addition, the last time this committee met on these 
programs, it reported out bipartisan legislation. It is our 
hope that the majority will work with us on moving forward in a 
bipartisan way.
    And let's not forget that this committee--who moved a 
bipartisan bill out of committee 2 years ago that would have 
funded Puerto Rico for 4 years and the other territories for 6 
years--that work should be our model of how to proceed this 
year.
    My third and final concern is not related to the 
territories but to request that we do some more work on 
additional challenges in the Medicaid space. We should be 
investigating the devastating reports about New York 
underreporting COVID-19 deaths in nursing homes. Families 
deserve justice.
    As I wrote to the majority 2 weeks ago, we should also be 
working together to understand more about the troubling reports 
regarding certain States undercounting and potentially 
falsifying reports of COVID-19 deaths in nursing homes. It 
appears that a few States took actions early that increased the 
COVID-19 crisis in nursing homes.
    Washington State was one of the first States with an 
outbreak of COVID-19, and nursing homes were especially hard 
hit. Washington State provided additional Medicaid funds to 
nursing homes accepting COVID-19 patients. We should 
investigate whether the incentive of increased Medicaid dollars 
made the crisis worse.
    This is an important hearing, and I am disappointed that we 
will not hear or get to ask the questions that I believe need 
to be asked. Instead, we are going straight to a legislative 
hearing on two partisan bills when we should be gathering 
facts, working together on legislation to continue Federal 
support of these vital programs.
    I also encourage the majority to schedule a hearing as soon 
as possible to learn more about the tools that are available to 
ensure States accurately report nursing home deaths that COVID-
19 or any infectious disease may have, to ensure that future 
pandemics and Medicaid dollars aren't used as an incentive that 
ends up further endangering nursing home patients. We owe our 
families and those who lost someone to COVID-19 nothing less.
    And with that, I yield back.
    [The prepared statement of Mrs. Rodgers follows:]

           Prepared Statement of Hon. Cathy McMorris Rodgers

INTRO
    Thank you to the witnesses for being here.
    Increased funding for Puerto Rico, Guam, Virgin Islands, 
Northern Mariana Islands, and American Samoa expires September 
30th.
    I am committed to reauthorizing funding in a way that is 
best for the people who get Medicaid care in the territories.
    I hope that we can work together on this issue and to 
ensure Medicaid is caring for our most vulnerable in the 
territories and across America.
    As I've said many times before, we should be coming 
together in a bipartisan way to modernize and improve 
Medicaid--especially for pregnant women and people with 
disabilities.
    However, I want to be sure that we discuss three problems I 
have with this hearing before we have a discussion about 
extending these important programs.
WITNESSES AND LACK OF INFORMATION
    First, it's important that we hear from the territories 
themselves and get to ask them questions about their programs.
    There are serious and valid concerns about how we oversee 
the Medicaid programs in the territories.
    If this hearing was later in the year, the OIG could 
provide an update on their audits and we could review Puerto 
Rico's report that is due in June.
    Over the last decade, there has been a dramatic increase in 
the amount of Federal taxpayer dollars going to Medicaid 
programs in the territories.
    I want to know, are we seeing health outcome improvements 
with that spending?
    And, if we don't have the data to answer that question, 
that is a gap we should address in this reauthorization.
CONCERNS WITH LEGISLATION
    Second, we are going straight to a legislative hearing on 
two partisan bills that were drafted without any input from the 
Minority.
    These bills do not address program integrity, or getting 
better data on healthcare outcomes for those that are in the 
Medicaid program.
    In addition, the last time this committee met on these 
programs, it reported out bipartisan legislation.
    I would request that the Majority work with us on this 
moving forward..
    Let's not forget that it was this committee who moved a 
bipartisan bill out of committee two years ago that would have 
funded Puerto Rico for four years and the other territories for 
six years.
    That work should be our model of how to proceed this year.
NURSING HOME DEATHS
    My third and final concern is not related to the 
territories but to request that we do some work on additional 
challenges in the Medicaid space.
    We should be investigating the devastating reports about 
New York underreporting COVID-19 deaths in nursing homes.
    Families deserve justice.
    As I wrote to the Majority two weeks ago.
    ... we should also be working together to understand more 
about the troubling reports regarding certain States 
undercounting--and potentially falsifying--reports of COVID-19 
deaths in nursing homes.
    It appears that a few States took actions early on that 
exacerbated the COVID-19 crisis in nursing homes...
    ...Washington was one of the first States with an outbreak 
of COVID-19 and nursing homes were particularly hard hit.
    Washington State provided additional Medicaid dollars to 
nursing homes accepting COVID-19 patients. We should 
investigate whether the incentive of increased Medicaid dollars 
made this crisis worse.
CLOSING
    This is an important hearing, and I'm disappointed that we 
will not hear from, and get to ask questions of, the 
territories themselves.
    We should be.
    Instead, we are going straight to a legislative hearing on 
partisan legislation.
    ...when we should be gathering the facts and working 
together on legislation to continue Federal support for these 
vital programs.
    I also implore the Majority to schedule a hearing as soon 
as possible to learn more about what tools are available to 
ensure States accurately report nursing home deaths from COVID-
19 or any infectious disease, and to ensure in future pandemics 
Medicaid dollars aren't used as an incentive that ends up 
further endangering nursing home patients.
    We owe the families of who lost someone to COVID-19 nothing 
less.

    Ms. Eshoo. The gentlewoman yields back.
    I just want to say to my Republican colleagues, you know, 
you can keep saying that a hearing is partisan, it is fine, but 
it is kind of a broken record.
    Each one of you are legislators. You have a keen interest 
in this, as you do.
    [Audio malfunction] territories to start--to kick off our 
hearing, each one of them representing a territory. Just as we 
pride ourselves on knowing our constituents and what their 
needs are, so do they. So it is a real pleasure to welcome each 
witness.
    First, the Honorable Gregorio Camacho Sablan, a longtime 
friend and Member of Congress representing the Commonwealth of 
the Northern Mariana Islands, welcome to you, my friend.
    The Honorable Aumua Amata Coleman Radewagen, Member of 
Congress, and representing American Samoa, welcome to you.
    The Honorable Stacey Plaskett, Member of Congress 
representing the U.S. Virgin Islands, thank you for being with 
us, Stacey, and it is wonderful to have you with us.
    The Honorable Jenniffer Gonzalez-Colon, Member of Congress 
representing Puerto Rico.
    And the Honorable Michael F.Q. San Nicolas, a Member of 
Congress representing Guam.
    So a warm welcome from the entire subcommittee to each one 
of you. It is really an honor to have you with us today.
    So we are going to begin with Congressman Sablan. You are 
recognized for 5 minutes, and you need to unmute so we can all 
hear every word you want to share with us.

    STATEMENT OF DELEGATE GREGORIO KILILI CAMACHO SABLAN, A 
 REPRESENTATIVE IN CONGRESS FROM THE TERRITORY OF THE NORTHERN 
  MARIANA ISLANDS; DELEGATE AUMUA AMATA COLEMAN RADEWAGEN, A 
   REPRESENTATIVE IN CONGRESS FROM THE TERRITORY OF AMERICAN 
    SAMOA; DELEGATE STACEY E. PLASKETT, A REPRESENTATIVE IN 
  CONGRESS FROM THE TERRITORY OF THE VIRGIN ISLANDS; RESIDENT 
  COMMISSIONER JENNIFFER GONZALEZ-COLON, A REPRESENTATIVE IN 
   CONGRESS FROM THE TERRITORY OF PUERTO RICO; AND DELEGATE 
 MICHAEL F. Q. SAN NICOLAS, A REPRESENTATIVE IN CONGRESS FROM 
                     THE TERRITORY OF GUAM

        STATEMENT OF HON. GREGORIO KILILI CAMACHO SABLAN

    Mr. Sablan. Good morning. Good morning and thank you to 
Chairs Pallone and Eshoo and Ranking Members McMorris Rodgers 
and Guthrie for holding today's hearing, ``Averting a Crisis: 
Protecting Access to Healthcare in the United States 
Territories.''
    It feels like Groundhog Day. Not 2 years ago, the Medicaid 
director from the Marianas testified before this committee, 
along with their counterparts from other insular areas, on 
averting the crisis they faced with the end of Obamacare 
Medicaid money.
    The subcommittee did avert that crisis, and it is through 
your work, Public Law, 116-94, and you provided the Marianas 
Medicaid with $60 million in fiscal year 2020 and fiscal year 
2021. This funding made a huge difference, especially because 
the economic effects of this unexpected pandemic doubled 
medical enrollment in the Marianas from about 16,000 then to 
32,000 today.
    But the money you helped provide was only a temporary fix.
    Could we have the first slide, please?
    [Slide.]
    Mr. Sablan. Come October 1st, funding for Medicaid in the 
Northern Marianas will drop back to the statutory cap, $7.2 
million, or an 88 percent reduction. This is the crisis we now 
must avert.
    My proposal in H.R. 265 is simply to repeal the statutory 
cap. Sixty Members have cosponsored my proposal, including 
several committee chairs and the two Republican Members whose 
districts are affected. So my bill is bipartisan.
    Lifting the cap may seem an invitation to spend, but in 
fact the $60 million provided in both fiscal 2020 and 2021 have 
proven an accurate estimate of actual need over the last 2 
years. And that amount lines up closely with a 2018 
Congressional Budget Office estimate that permanently lifting 
the cap for the Marianas will only result in a $15 million 
annual increase in spending.
    That relatively modest investment has already proven its 
worth. Not only was the Marianas Medicaid program able to 
handle the sudden increase in enrollment as people lost income 
during the pandemic, the certainty of funding allowed our only 
hospital, which depends on Medicaid for 44 percent of revenues, 
to invest in capacity, saving money and increasing quality of 
care.
    Could we have the second slide, please?
    [Slide.]
    Mr. Sablan. Knowing Medicaid funds would be available, the 
hospital established an oncology center. Now, instead of 
sending cancer patients off island to Guam or Hawaii, most can 
get treatment in the Marianas. And look at the results: off-
island referrals down by 90 percent. Not only are we saving 
transportation and housing costs for off-island referrals, but 
fewer people sick with cancer must leave their families and 
face the rigors of travel. What a virtual circle.
    By investing in Medicaid, Congress has lowered costs and 
improved care. How much more the Marianas could do if we had 
continued certainty of adequate Medicaid funding.
    Let me note it is not just Medicaid patients who have 
benefited from this oncology center. Everyone in the community, 
even those with private insurance, are better off because of 
the funding Congress, you, provided in Public Law 116-94.
    But with greater funding comes greater responsibility. And 
Public Law 116-94 required the Marianas and other insular areas 
to move towards the same program integrity standards that your 
States all face. And you will see in testimony our Medicaid 
agency submitted for today's hearing, the Marianas is meeting 
the program integrity requirements attached to the funding in 
Public Law 116-94, to the satisfaction of the Centers for 
Medicare and Medicaid Services. And this determination by CMS 
did not come in the last 2 months; it was made last year by a 
Republican administration, further demonstrating the Marianas' 
commitment to program integrity.
    Our legislature passed Public Law 21-35 last year, giving 
our Medicaid director the authority to transfer funding as 
necessary to ensure compliance and program integrity measures 
are always sufficiently funded. It is said she now has more 
reprogramming authority than our Governor.
    In closing, I suggest we rename today's hearing. Instead of 
saying we are here to avert a crisis, why don't we acknowledge 
all the positive benefits that resulted from the increased 
funding we provided less than 2 years ago? We improved the 
quality of healthcare in the Marianas for those insured by 
Medicaid and for the whole community. We helped reduce costs. 
We are increasing the program integrity that is so important to 
us all.
    So let us not say today's hearing is to avoid a crisis. Let 
us say we are here to seize an opportunity to lift the cap on 
Medicaid funding in the Marianas so we can continue the 
progress we have made.
    Thank you very much again, Madam Chair, for holding today's 
hearing. Thank you, everyone, for giving us an opportunity to 
represent our islands in Congress.
    [The prepared statement of Mr. Sablan follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Eshoo. Thank you----
    Mr. Sablan. I yield back.
    Ms. Eshoo. Thank you, Congressman Sablan, and from your 
lips to every Member's ears. Thank you for joining us today. It 
is always wonderful to be with you. You are a friend to all of 
us.
    It is now a pleasure to recognize Congresswoman Radewagen 
for 5 minutes.
    We welcome you again. We are delighted that you are here, 
and you need to unmute so we don't miss a word that you want to 
share with us.

        STATEMENT OF HON. AUMUA AMATA COLEMAN RADEWAGEN

    Mrs. Radewagen. Talofa lava. Hello, and good afternoon. 
Thank you, Chairwoman Eshoo and Ranking Member Guthrie, as well 
as full committee Chairman Pallone and my friend, Ranking 
Member McMorris Rodgers, for soliciting the views of American 
Samoa on our Medicaid program.
    And thank you for consideration of mine and my colleagues' 
bill on improving the insular areas' Medicaid programs, the 
Insular Areas Medicaid Parity Act, which will provide stable, 
permanent funding, lift the caps, and maintain an increase to 
FMAP for the territories.
    I know every State and every territory has their unique 
challenges, as do we. But factually, we are the most remote 
U.S. jurisdiction in the Medicaid program, almost 10,000 miles 
away, south of the equator, and have not had any commercial air 
service to our territory almost 1 year, not since March 23rd, 
2020. That was the last commercial flight from Honolulu to 
American Samoa.
    Hundreds are still stranded and going through a monthlong 
quarantine process--2 weeks in Hawaii, 2 weeks in Pogo Pogo--
just to get home after being restricted elsewhere in the 
country. We have had two of six emergency charters from our 
local government completed, with four more scheduled over the 
next 3 months. Our health services and only hospital simply 
cannot handle a sudden influx of thousands of new arrivals at 
this time.
    Our newly elected Governor, Lemanu P. S. Mauga, and 
Lieutenant Governor Talauega E. V. Ale have made a submission 
through their Medicaid director providing updated data on the 
current capacity, utilization, and program integrity efforts to 
the committee and will be providing additional information in 
the days and weeks ahead.
    We appreciate the temporary increase in our FMAP, which has 
been helpful, but we need improvement to our only hospital, 
which is over 50 years old, in order to expand and improve 
services and attract broader physician services. And we need 
more reliable and stable funding than just every 2 years. Our 
residents and veterans face challenging logistics and most 
often need to travel to Hawaii for more serious care. And the 
pandemic has shown us that it has become a limited option to 
our sick during this crisis. So improvements to our local 
hospital are needed.
    In normal circumstances, our people have only two flights 
per week to get to Hawaii. That limitation would be recognized 
alone as an emergency in most jurisdictions. Some of my 
constituents who are stranded are stranded because they were 
off-island receiving care that they could not get in the 
territory.
    So services were reduced due to our closed-border policy, 
but that policy saved lives and prevented COVID from arriving 
in American Samoa. Today we are the only part of the United 
States that is COVID free, absolutely.
    So I ask the committee to maintain our current emergency 
matching level, eliminate the annual ceiling on Federal 
financial participation referred to as a Section 1108 cap or a 
Section 1108 allotment. Congress needs to address the funding 
cliff for the territories. Not doing so would spell financial 
and medical disaster to our people.
    During the pandemic emergency we have been adjusted like 
other jurisdictions, with an additional 6.2 percent Federal 
cost share, so we are at an 89.2 percent FMAP. This has been 
welcomed, as we are indeed very much in a continued emergency 
state.
    And I would argue our program and hospital capabilities 
have been in an emergency state long before the pandemic. The 
Army Corps of Engineers recently did a study and report to 
Congress on the state of the hospital, indicating that it 
needed a substantial, if not wholesale, modernization, update, 
or total replacement. The Army Corps found our LBJ Hospital in 
a state of failure and disrepair due to age and projected 
repair. And replacement costs between 161 to 900 million 
dollars, depending on minimum modernization or total 
replacement.
    American Samoa's Section 1108 Medicaid allotment for fiscal 
years 2020 and 2021 were raised substantially, from about 12.5 
to 86 million, with a temporary FMAP increase from 55:45 to 
almost 90:10. We were able to stretch our local matching funds. 
With an improved hospital infrastructure, we could utilize even 
more and potentially reach and exceed our current cap for the 
next few years. Stable, multiyear funding with caps raised will 
be key to that progress.
    We do not have sizable tourism or diversified businesses 
and economies like the other territories. The local government 
and tuna cannery account for nearly half of local jobs, and our 
small businesses have taken a huge hit with the island closed 
off. But our young people continue to serve in record numbers 
in the armed services, with record per capita enlistments in 
the Army, and our veterans give so much back to our community. 
We need to carry them through with an improved hospital VA 
facility.
    I look forward to working with members of the Energy and 
Commerce Committee on our critical Medicaid and hospital 
funding needs this year.
    Thank you, Chairwoman Eshoo, I yield back.
    [The prepared statement of Mrs. Radewagen follows:]
   [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Eshoo. The gentlewoman yields back, and the Chair 
thanks her for her passionate testimony. We all could hear it 
in your voice, what the incredible needs are. And we thank you 
for being with us today.
    I am going to go over to the Capitol to vote, and place the 
committee in the hands of Mr. Sarbanes, who I am sure is going 
to do a great job.
    So over to you, and I believe our next witness is 
Congresswoman Plaskett.
    And thank you for being with us, our friend.
    And thank you, John Sarbanes, for taking the--chairing the 
hearing until I get back. I appreciate it.
    Voice. This meeting is being recorded.

              STATEMENT OF HON. STACEY E. PLASKETT

    Ms. Plaskett. Thank you so much, Chairwoman Eshoo and 
Ranking Member Guthrie. I also want to thank the interim chair, 
Mr. Sarbanes, for controlling the time right now.
    Members of the subcommittee, thank you for allowing me the 
opportunity to present a brief statement of the views of the 
healthcare concerns of the U.S. Virgin Islands as it relates to 
the work of this committee in the 117th Congress.
    The Virgin Islands will need significant investments in 
healthcare in this session. Even before our severe hurricane 
disasters of 2017 and the COVID-19 pandemic, the healthcare 
systems in the territories were under great stress.
    Specifically regarding Medicaid, the arbitrarily high local 
match required of U.S. territories by Federal law imposes 
severe and unsustainable financial demands. Each of the 
territories tried earnestly to resolve this with little success 
until, beginning in 2018 in the wake of the unprecedented 
disasters, more equitable matching rates were allowed on a 
temporary basis.
    In addition, while overall Federal Medicaid funding to the 
States and the District of Columbia is open-ended, Medicaid in 
U.S. territories is unfairly subject to annual Federal funding 
caps. Once the cap is reached, the territory must assume the 
full cost of Medicaid services.
    While the capped Federal funding has been supplemented by 
additional block grants since 2011, beginning with the 
Affordable Care Act and continuing through the Further 
Consolidated Appropriation Act of 2020 and the Families First 
Corona Response Act, the Virgin Islands and all other 
territories face yet another cliff on September 30th, as has 
been discussed. And the Federal matching funds, the FMAP, will 
drop precipitously, by over 20 percentage points. Tens of 
thousands of residents of my district will lose access to 
healthcare unless Congress takes action to eliminate the 
Federal Medicaid fiscal cliff in the territories once and for 
all.
    Listen, to have us continually come and beg you for money 
to be treated equitably is absolutely unfair. And all of us, as 
Members of Congress, all of you on this committee, should be 
embarrassed that you have Members of Congress asking you to be 
treated fairly. This is a bipartisan request. If you have seen 
all of the Members of the territories, we are not just 
Democrats. We are Republicans and Democrats, and we are all 
asking for the same thing. So I do not see why this becomes a 
question of Republicans and Democrats not all agreeing to what 
your colleagues, who are Democrat and Republican, are asking of 
you.
    We cannot vote on the floor when final passage on this bill 
comes. But you know what the will of your colleagues are on 
both sides of the aisles. And the fact that you continually 
make us request this is frustrating, and it is demeaning to us, 
as individuals, as Americans, to have to continually ask for 
this.
    I am grateful that the committee took action to address the 
Medicaid cliff in the past to provide an additional stream of 
Medicaid funds from my home in the Virgin Islands and the other 
territories. That Medicaid--normally is only about $19 million. 
It increased to 128.7 million, and all of that money has been 
used by our district. All that money was needed.
    I have here and ask unanimous consent to submit for the 
record the written testimony of Michal Rhymer-Browne, the 
assistant commissioner of our Department of Human Services, who 
testified before the House Committee on Energy and Commerce on 
June 20th of 2019.
    Mr. Sarbanes [presiding]. Without objection, that will be 
entered into the record. Thank you.
    [The information appears at the conclusion of the hearing.]
    Ms. Plaskett. Thank you. And in that testimony, in answer 
to the ranking member of the full committee Mrs. Rodgers' 
question, we used that money to put in place compliance as well 
as oversight over that funds. We have already testified that we 
have done that.
    There are pages of points that she makes, putting the goal 
for IAP opportunity to support the Medicaid program, the data 
analytical exchange, having--submitting IAPD to the U.S. 
Department of Health and Human Services, having MOUs with the 
Department of Justice to create a Southeastern Unified Program 
Integrity Project to ensure that this money is used correctly, 
because we have no intentions for the money not to go to the 
people who need it most.
    I have written testimony, and I will submit that for the 
record, as well. But again, I am asking for the support that 
you see of the Members of the territories who represent, you 
know, territories both in the Pacific as well as in the 
Caribbean, who are all asking for the same thing for the almost 
4 million Americans who reside there.
    Thank you, and I yield back.
    [The prepared statement of Ms. Plaskett follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Sarbanes. Thank you very much, Congresswoman Plaskett.
    Resident Commissioner Gonzalez-Colon, you are now 
recognized for 5 minutes. Thank you.

           STATEMENT OF HON. JENNIFFER GONZALEZ-COLON

    Miss Gonzalez-Colon. Thank you, Chair.
    Total Federal funding for the territorial Medicaid programs 
has been inadequate to meet the healthcare expenditures for 
patients to receive effective diagnosis, treatment, and care. 
And as a result of that, territories have had to finance a 
proportionally larger share of the program than any of the 50 
States, just as the Member just said.
    Puerto Rico, in this case, has received funds to supplement 
those provided by the Social Security Act to pay for this 
Medicaid program. These funds have been characterized by their 
temporary nature and the need for their renewal on a crisis-to-
crisis basis, and for the inequity in the reimbursement 
formula, which is consistently lower in amount with a lower 
FMAP when compared similarly with the States.
    Americans in Puerto Rico should be able to enjoy a Medicaid 
program with the same standards and benefits enjoyed by 
Americans elsewhere, and Congress needs to eliminate the 
artificial funding limits that have forced, in my case, Puerto 
Ricans, both beneficiaries and providers, to leave their homes 
and island's healthcare system.
    Just in 2019 Puerto Rico sought additional Federal funds to 
supplement the insufficient Medicaid cap, which at the time 
provided only for approximately 10 percent of the program total 
cost, a program which covers only 10 percent--10 of the 17 
Medicaid mandatory benefits in Puerto Rico.
    We also requested additional funds for measures which were 
indispensable for the continued operation of the program and 
for the implementation of additional program integrity measures 
which we have been successfully implementing, and I think it--
that is important to note. Those initiatives took the 2019 
baseline Medicaid cost from $2.8 billion to $3.5 billion for 
the years 2020 and 2021 and were accompanied by an increase of 
investment from 55 percent to 76 percent.
    And those initiatives were implemented with $350 million to 
increase the eligibility from 40 percent to 85 percent of the 
Federal poverty level, just to cover approximately 200,000 
additional beneficiaries with annual income of less than 
$20,000 for a family of four a year, $190 million to increase 
reimbursements to Medicare Part B providers and physicians with 
capitated arrangement.
    And I need you to know that this increase of 70 percent of 
the Medicare fee schedule, which is more about 60 percent of 
the national average Medicare reimbursement, has been 
instrumental in helping physicians just to stay afloat during 
this pandemic.
    Many of the mechanisms included in the CARES Act to provide 
immediate cash flow to healthcare providers in Puerto Rico 
receiving few--were ineffective with our providers. And why? 
Because they were receiving fewer dollars per capita from the 
provider relief fund than any other State, than any other 
territory, with an example of a per capita distribution on the 
island of $23.98, compared to the national per capita of 
$174.14.
    One hundred sixteen million dollars to increase hospital 
reimbursement to at least 90 percent of the Medicare fees 
schedule, just to compensate for Medicaid beneficiaries' 
pension losses, given that the hospitals in Puerto Rico are 
ineligible for Medicaid DHS payments.
    Thirty-eight million dollars to cover hepatitis C 
treatments, chronic liver disease patients.
    And to this day, our island is on track to spend the total 
incremental amount for the sustainability measures by the end 
of the fiscal year.
    The additional funding that we were provided in 2019, just 
as the chairwoman explained, will expire on September 30th. And 
the amount of Federal funds for Puerto Rico's Medicaid program 
will revert to approximately $380 million, or just about 10 
percent of the program's current total cost.
    And this is the reason we need to act swiftly to prevent 
the territories and Puerto Rico's Medicaid program from 
becoming underfunded and to provide sufficient funding to allow 
for a smooth transition into the next fiscal year without 
cutting benefits, lowering provider payments, or withdrawing 
coverage for hundreds of thousands of current beneficiaries in 
the middle of a pandemic.
    And that is the reason the Governor of Puerto Rico just 
asked Congress for additional funds for 2020 and beyond, and to 
achieve a greater degree of equality in programs that are 
crucial to healthcare in the island, programs in which Puerto 
Rico does not have the financial capacity to bear itself, and 
which are usually provided by Medicaid in the States, such as 
the nonflu adult vaccination recommended by the CDC, the 
nonemergency transportation, and diabetes, among many others.
    I just urge you and all the members of this committee--I 
mean, this committee went to Puerto Rico and had roundtables 
with professionals and with the providers and has addressed 
this issue in the past, in 2017, in 2018, 2019, 2020. And this 
is time to do it again. Make the funding available for the 
territories. This is a priority for millions of Americans who 
depend on it for our healthcare.
    And I just want to say thank you for the invitation to 
testify, and I yield back.
    [The prepared statement of Miss Gonzalez-Colon follows:]
   [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Sarbanes. Thank you very, very much for your testimony.
    Congressman San Nicolas, you are now recognized for 5 
minutes. Please remember to unmute.

          STATEMENT OF HON. MICHAEL F. Q. SAN NICOLAS

    Mr. San Nicolas. Thank you, Mr. Chairman, honorable members 
of the esteemed Energy and Commerce Committee, Chairman Frank 
Pallone, Ranking Member Cathy McMorris Rodgers, Health 
Subcommittee Chairwoman Anna Eshoo, and Ranking Member Brett 
Guthrie.
    Let me open by expressing my thanks for your graciousness 
in inviting Guam and our territory to testify at today's 
hearing, thanking all of you for your leadership in passing 
Public Law 116-94, which temporarily increased the Federal 
Medicaid assistance percentage, FMAP, for Guam to its current 
rate of 83 percent Federal match to 17 percent local match from 
the prior 55 percent Federal match and 45 percent local 
Medicaid matching formula, grossly insufficient for communities 
like Guam, with among the highest per capita poverty levels in 
the country.
    Additionally, prior to Public Law 116-94, the pool of 
available matching funds for Guam was limited to approximately 
$18 million. And with the sunset of these laws, it will revert 
to $19.2 million in fiscal year 2022. In the interim, Public 
Law 116-94 has increased the pool of available funds to 
approximately $130 million.
    The whole point of FMAP and a proper pool of Federal 
matching funds is to enable a formulaic basis for our Federal 
Government to be able to support the Medicaid program as it is 
intended. Common sense would assume that, if the Medicaid 
program is intended to help those of limited resources, similar 
logic will be applied to the FMAP and Medicaid cap in 
communities of limited resources to fund Medicaid itself.
    With Public Law 116-94, such progress towards basic 
equality for United States territories has been transformative 
for us in our Medicaid programs in its ability to reach 
Americans as intended under the law. The current temporary $130 
million pool at an 83:17 match translates into a Medicaid 
program funded at approximately $156 billion overall for Guam, 
which is $3,612 per Medicaid enrollee, based on our fiscal year 
2020 levels of enrollment at 43,185 people, and a population of 
170,000.
    Assuming a static level of enrollment and a reversion to 
FMAP and capped levels and the Medicaid cliff, the amount 
available per Guam Medicaid enrollee drops precipitously to 
$757, from 3,612 to 757, a drop of more than 79 percent. As 
evidently unsustainable as this is, a drill-down of the 
implications of this bleak outlook only prove it more so.
    First, even at the current elevated levels, Guam's per-
enrollee amount of 3,612 is still 32 percent lower than our 
next-lowest high-data usability jurisdiction. And even today's 
elevated levels under Public Law 116-94 do not reflect per 
capita equity.
    Second, Medicaid cliff aversion means greater local funding 
needs to be expended for less Federal match under current 
circumstances. At $18 million local funds, or approximately $8 
million, would fund that program entirely, whereas the same $8 
million in local funding would result in more than $47 million 
in program healthcare, a difference of over 62 percent.
    Third, Medicaid cliff aversion means a return to Medicaid-
induced medical cannibalism for Guam, with lower caps and lower 
FMAP leaving Guam to fund Medicaid at a higher matching rate, 
with a smaller pool, and ultimately picking up 100 percent of 
the total costs beyond $750 per enrollee. Such medical 
cannibalism materializes in deferred maintenance of our 
facilities and equipment, which today have ballooned our Army 
Corps of Engineer estimates for a suitable hospital to over 
$700 million, due to systemic underfunding of our healthcare 
system. Medical cannibalism means delayed vendor payments, with 
an underfunded healthcare system stretching vendor payments to 
90 days and beyond, resulting in exponentially higher risk-
based pricing.
    Further, payment uncertainties implode Medicaid service 
provider environments. Private healthcare operators are 
unwilling or unable to accept Medicaid-eligible patients due to 
unsustainable delays in Medicaid and indigent receivables.
    And finally, let us not forget that historic Medicaid 
inequity is but one of many Federal inequities that have 
exacerbated healthcare in Guam and in our territories. We do 
not have supplemental security income on Guam, leaving our 
disabled without a basic level of support and depriving our 
community of a pool of resources to fund the operations of 
medical service providers for those SSI eligible.
    We do not have the Affordable Care Act and its 
corresponding Federal subsidies, leaving many of our people 
uninsured and underinsured. We must work to also remedy these 
healthcare gaps for our Americans on Guam to truly build an 
equitable healthcare system.
    The only solution equitable for Americans in Guam is actual 
equity. Let us complete the work of Public Law 116-94 by 
permanently closing the territorial and Guam Medicaid gap with 
FMAP levels concurrent with the rest of the country and lifting 
of the Medicaid cap also concurrent with the rest of the 
country.
    Thank you, and God bless the United States, Tribes, and 
territories of America.
    [The prepared statement of Mr. San Nicolas follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Sarbanes. Thank you very much, Congressman San Nicolas, 
and I want to thank all of my colleagues, our colleagues, for 
their passionate testimony. There is no passion greater than 
fighting for your constituents, and certainly that was evident 
today. So thank you all for being with us.
    We are now going to turn to a second panel of witnesses on 
this very important issue and the challenges that are faced in 
the territories: Dr. Anne Schwartz, who is the Executive 
Director of the Medicaid and CHIP Payment and Access 
Commission; and Ms. Carolyn Yocom, Director of Health Care for 
the Government Accountability Office.
    So we are looking forward to hearing from both of you on 
this topic.
    Dr. Schwartz, you are now recognized for 5 minutes. Please 
remember to unmute, thank you.

   STATEMENT OF ANNE L. SCHWARTZ, Ph.D., EXECUTIVE DIRECTOR, 
MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION, AND CAROLYN L. 
 YOCOM, DIRECTOR, HEALTH CARE, GOVERNMENT ACCOUNTABILITY OFFICE

              STATEMENT OF ANNE L. SCHWARTZ, Ph.D.

    Dr. Schwartz. Thank you, and good afternoon, members of the 
Health Subcommittee. I appreciate the opportunity to share 
MACPAC's work as this body considers next steps in Medicaid 
financing for 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 on issues affecting these 
programs. I want to note that we do not conduct oversight or do 
audits.
    Medicaid and CHIP play a vital role in providing access to 
healthcare 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, territories operate under similar Federal rules as 
States and are subject to oversight by CMS.
    It is frequently said that, if you have seen one Medicaid 
program, you have seen one Medicaid program, and this is 
because, despite common rules, States have a lot of flexibility 
in how they manage their programs. But for the purposes of the 
hearing today, it is important to note both that territory 
Medicaid programs differ from the States' and that they also 
differ from each other. And 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 you can find factsheets on the MACPAC website 
describing each territory's policies related to eligibility, 
benefits, delivery system, data and reporting, quality, and 
program integrity. But the most important point I want to 
underscore today 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 funding referred to as the Section 1108 cap or 
allotment. Territories receive a relatively small, set amount 
of Federal funding each year regardless of changes in 
enrollment and use of services. And in comparison, States 
receive Federal matching funds 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, in order to reflect States' differing abilities to 
fund Medicaid from their own revenues. If the FMAPs for the 
territories were set using the formula used for the States, the 
matching rate for all five territories would be much higher 
and, for most, the maximum of 83 percent.
    Now, Congress has stepped in at multiple points with fiscal 
relief, notably in the consolidated appropriations bill passed 
in December 2019, which increased the 1108 allotments for 
fiscal year 2020 and 2021, and temporarily raised the FMAP to 
76 percent for Puerto Rico, and 83 percent for the other 
territories. This legislation also directed the territories to 
make certain programmatic improvements related to data 
reporting and programming integrity. And, to our knowledge, 
they have either addressed these issues or made important 
progress.
    The Families First Coronavirus Relief Act enacted last 
March further increased the 1108 allotments and extended to the 
territories a 6.2 percentage point increase in the FMAP through 
the end of the quarter in which the public health emergency 
ends. This is the same FMAP increase as received by the States.
    So, as a result of these actions, all five territories now 
have enough money to cover program expenses through the end of 
this fiscal year. However, without additional congressional 
action, we anticipate that they will all experience funding 
shortfalls at some point in fiscal year 2022. And at this time 
MACPAC does not have sufficient data on actual or projected 
spending to comment on the exact date of exhaustion.
    In the face of such a shortfall, the territories will have 
to make tough decisions. The options before them, including 
funding Medicaid entirely with unmatched local funds--a 
scenario we think is unlikely--cutting services, reducing or 
suspending provider payments, or some combination of these 
strategies. It is worth noting that territories, like States, 
are currently prohibited from decreasing eligibility standards 
or just enrolling beneficiaries if they accept the increased 
FMAP provided in the Families First legislation.
    The history of responding to crises with a short-term 
infusion of funds has caused a great deal of uncertainty. And 
while an additional time-limited allotment of funds would 
certainly prevent a fiscal cliff, it would ensure that, in the 
short term, a continued delivery of services, but it would not 
address the underlying challenges with a financing structure 
that make it difficult for territories to plan, manage, and 
sustain long-term, reliable access to care for Medicaid 
beneficiaries residing in these territories.
    Thank you for the opportunity to share MACPAC's work, and I 
am happy to answer any questions.\1\
---------------------------------------------------------------------------
    \1\ Dr. Schwartz's prepared statement has been retained in 
committee files and is available at https://docs.house.gov/meetings/IF/
IF14/20210317/111335/HHRG-117-IF14-Wstate-SchwartzA-20210317.pdf.
---------------------------------------------------------------------------
    Mr. Sarbanes. Thank you very much. I appreciate that, you 
were exactly 5 minutes. Well done.
    Ms. Yocom, you are now recognized for 5 minutes. Please 
remember to unmute yourself. Thanks very much for being here.

                 STATEMENT OF CAROLYN L. YOCOM

    Ms. Yocom. My pleasure. Chairwoman Eshoo, Ranking Member 
Guthrie, and members of the subcommittee, I appreciate the 
opportunity to discuss GAO's most recent work looking at the 
Medicaid program in Puerto Rico.
    My remarks today focus on key findings from our February 
report that evaluated Federal oversight of Puerto Rico's 
Medicaid contracting process. I am going to focus on our 
findings as they relate to Puerto Rico's contracting reform 
plan and then also discuss some additional actions needed to 
improve Medicaid program oversight.
    Contracting is central to many States' and territories' 
Medicaid programs, and effective contracting relies on 
competition. Competition can reduce costs, improve contractor 
performance, curb fraud, and promote accountability. Through an 
open, competitive process, States and territories can evaluate 
and select contractors who provide the greatest value to their 
Medicaid programs.
    Puerto Rico's plan to reform Medicaid contracting outlines 
a process but doesn't yet offer details on the substance of the 
actions it will take. For example, it sets timeframes for 
determining reforms, but it offers limited information on what 
these reforms will be and the extent to which they will result 
in a more competitive process. It is not clear what changes 
will occur.
    And changes are needed. Our review of eight contracting 
processes did find that one competitive process, the largest, 
fully disclosed information on factors used to evaluate the 
proposals and make awards. We didn't find such information on 
the other two processes. And in the five noncompetitive 
contracting processes reviewed, three lacked any justification 
for excluding competition, and the reasons for the remaining 
were not clear.
    Officials explained that Puerto Rico law does not require 
competition. However, competitive contracts can reduce risks of 
waste, fraud, and abuse. The concerns we identified underscore 
the need for Federal oversight.
    Unfortunately, the Centers for Medicare and Medicaid 
Services, or CMS, does not oversee Puerto Rico's contracting 
procedures, leaving the program at risk. CMS officials noted, 
however, that the agency has treated Puerto Rico the same as 
other U.S. territories and States and that CMS does not oversee 
Medicaid contracting procedures in any State or territory.
    Nationwide, contracts make up at least half of Medicaid 
spending. And in Puerto Rico, this percentage is 96 percent. 
CMS has taken the position that the States and territories are 
best suited to ensure compliance with their respective laws. We 
recommended that CMS take steps to implement ongoing risk-based 
oversight of Puerto Rico's Medicaid contracting procedures, 
citing CMS's statutory requirement to ensure the administration 
of Medicaid programs using necessary methods for efficient 
program operations. The agency agreed.
    As I believe every witness so far has presented, GAO's work 
also shows the challenges that Puerto Rico and the territories 
face compared with State Medicaid programs. Congress has 
increased funding, allowing the territories to avoid funding 
shortfalls or to cover more services. However, our work shows 
that the temporary and inconsistent nature of these increases 
create uncertainty and can complicate efforts to maintain 
program changes and retain and then sustain fiscal health. 
These concerns are real.
    The need for an increased focus on program integrity is 
also critically important. Some improvements, such as Puerto 
Rico establishing a Medicaid fraud control unit, have been 
taken. However, more actions are needed to ensure Medicaid 
spending is meeting the needs of Puerto Rico's beneficiaries.
    As Congress considers changes to funding the territories' 
Medicaid programs, Puerto Rico and other territories must 
continue to develop and carry out planned reforms, measuring 
their results, and adjusting oversight as needed to better 
ensure the efficient use of Medicaid.
    This concludes my prepared statement.
    I would be pleased to answer any questions.
    [The prepared statement of Ms. Yocom follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Eshoo [presiding]. I want to thank----
    Mr. Sarbanes. Ms. Eshoo, I think you are back, so I will 
turn the reins back over to you, and I will go vote. Thanks 
very----
    Ms. Eshoo. Thank you very much, Mr. Sarbanes. I am sure it 
went as smooth as glass. Thank you very much.
    And thank you to each one of our colleagues who came to be 
witnesses today. We really appreciate it. First of all, I 
appreciate it. I think it is a great way for us to begin our 
hearing, and to the witnesses, to the other witnesses that are 
with us.
    We are now going to move to Member questions, and I am 
going to recognize myself first for 5 minutes.
    To Dr. Schwartz, the last time you testified before our 
committee you explained that the caps were made in law in 
1967--1967, that is 33, 43, 55 years ago. Do you know what 
Congress' reasoning was for putting the caps in the Social 
Security Act?
    What was--do you know what the intent was, what maybe the 
debate would have been?
    I really--I will be real frank with you. I think that there 
is a lot of bias in this, but that is my thinking. So can you 
tell us why they did this?
    Dr. Schwartz. I wish I could tell you. This is something 
they have looked into, because it is frequently asked.
    And so we don't know what factors Congress considered when 
setting the amounts of those caps. They have been commented on 
as being insufficient going back to the late 1970s. So I am 
sorry, but the legislative history is not crystal clear on 
this.
    Ms. Eshoo. I see. And when we talk about a long-term 
solution, how would you describe it?
    How would you advise us?
    That is what we want to do, or many of us want to do, maybe 
some don't. How would you spell that out to us?
    Dr. Schwartz. So let me first say, in speaking on behalf of 
the 17 members of the Commission, the Commission hasn't come up 
with a specific proposal for a long-term solution. And I think 
that we have merely pointed out that the short-term fixes are 
problematic because they don't provide an opportunity for the 
territories to plan and implement in scale and phase the 
programmatic improvements that----
    Ms. Eshoo. Well, they--the hospitals that our colleague 
pointed out is a case in point. I mean, the hospital is falling 
apart. Other territories are having to fly patients to other 
areas. It is expensive to do that. Each one should have--be 
able to have their own system. If people get sick, they should 
be covered.
    So to Ms. Yocom, is there anything inherent to the 
territory's financing structure that helps prevent fraud or 
abuse?
    For example, you found that the territories' block grants 
result in stronger program integrity than if there was the 
open-ended funding structure that the States have. Can you 
elaborate on that?
    Ms. Yocom. Congresswoman----
    Ms. Eshoo. Did you find any evidence of increases in fraud 
thanks to the increase in funding?
    It seems to me that there are some that are drawing a nexus 
between the two. So can you be specific about that?
    Ms. Yocom. Sure. I don't believe that that necessarily is 
the right conclusion to draw from our work.
    Our work has found that, very similar to what Dr. Schwartz 
has mentioned, that the changes to the--the uncertainty of the 
funding stream does cause a lot of issues for any entity. And--
--
    Ms. Eshoo. Of course.
    Ms. Yocom [continuing]. The territories are not to be 
excluded. When you have a block grant, compared with a stream 
that is dependent on needs and beneficiary growth and changes, 
you have a very different set of circumstances and a very 
different----
    Ms. Eshoo. Yes, but we already know that. We already know 
that. We are all saying that.
    Ms. Yocom. Right----
    Ms. Eshoo. But I am asking you about the specifics relative 
to--so you do--let me put it this way: You do not find any 
nexus between fraud in an open-ended funding structure and what 
the territories have today?
    Ms. Yocom. I don't--I do not believe our work has made that 
kind of a connection, no----
    Ms. Eshoo. Has anybody's work concluded that?
    Ms. Yocom. Not that I am aware of, but----
    Ms. Eshoo. Dr. Schwartz, has anyone brought forth evidence 
relative to a supposed nexus between fraud and abuse and an 
open-funded--you know, the way the States--the way Medicaid 
operates for the 50 States?
    Dr. Schwartz. Not that I am aware of.
    Ms. Eshoo. It is so interesting that this thing keeps 
coming up. It is like a bad penny.
    Anyway, well, I think that my time is used up. The Chair 
will now recognize the--again, the wonderful ranking member of 
our subcommittee, Mr. Brett, for his 5 minutes of questions.
    Mr. Guthrie. Thank you, Madam Chair, I appreciate it. And 
thanks for everybody being here, my colleagues prior who 
testified.
    And I just want to comment on my opening statement. You 
know, the subject matter is not part of--this is a bipartisan 
subject matter we all know we need to--have to address and we 
have to fix. The difference I was saying is, instead of having 
a hearing, we are having a legislative hearing on specific 
pieces of legislation that doesn't have bipartisan input and 
bipartisan--so we need to work together as we move forward on 
this, and that is what we need to do.
    And first, you know, one of the questions is the cap. And I 
think all of us--and I have talked with several of my 
colleagues, spent some time meeting with Delegate--Resident 
Commissioner Gonzalez quite a bit, and talked to others about 
the level of the cap. And the cap is sufficient. The cap in 
statute that we have had to relieve several times is not 
sufficient. It is low.
    And so, you know, the question--before we say is a cap 
right or wrong, the question is, is the cap accurate? If it is 
an accurate cap, is it right? And that is kind of where we are 
trying to go with it.
    And Ms. Schwartz, as we know, none of the territories have 
requested additional funding over the past 2 years. Would you 
agree that this would indicate that the cap amount put in place 
and trended forward for the past 2 years has been, at a 
minimum, sufficient to cover the needs of each of the 
territories?
    Dr. Schwartz. I think that the amount of funding that has 
been available for the past few years has been substantially 
higher than what was available historically, and we have not 
heard that it has been insufficient. Twenty twenty was a very 
[audio problem] year in spending throughout the U.S. because of 
COVID, and so there is some issues around unspent funds there.
    But, you know, year-to-year spending trends can be hard to 
interpret. But I think we haven't heard anything about these 
amounts being insufficient.
    Mr. Guthrie. Thanks, thanks. You know, a cap that is too 
small is ``problemsome.'' A cap that is accurate is--that is 
what we would like to address.
    And so, Ms. Yocom, and--so talking a little bit about--you 
said we can conclude certain things from your report. But in 
your report, the GAO report, you mentioned contracting and 
procurement concerns that have arisen at both CMS and Puerto 
Rico.
    Around that time, Puerto Rico released a report on how they 
planned to address program integrity issues moving forward. So 
then my question would be, are there issues within Puerto 
Rico's report that we should watch closely, such as issues that 
are not in alignment with your report?
    Ms. Yocom. You know, I think what is important to keep an 
eye on is there are two reporting timeframes that Puerto Rico 
has set. One is in April, where they will discuss ways to make 
their contracting procedures more competitive, which is a good 
thing. And then the end is at the end of the year, in 2021, 
there will be further outlines of timeframes and 
implementation. I think keeping track of both of those is going 
to be important, and getting more detail on what steps are 
going to be taken to make the process more competitive.
    Mr. Guthrie. OK, thank you. And then, Ms. Yocom also, in 
your testimony you write that in 2018 procurement costs 
represented 2.4 billion of Puerto Rico's 2.5 billion in total 
Medicaid expenditures. That is a startling number, given that a 
2019 Federal indictment led to the arrest of Puerto Rico 
officials who unlawfully steered Medicaid contracts to certain 
individuals.
    We know that CMS requires States and territories to use the 
same process for Medicaid procurements as they do for 
nonfederal procurements. However, CMS has not taken steps to 
ensure Puerto Rico has met this requirement. Should requiring 
CMS to ensure Puerto Rico has taken the steps be something we 
should consider putting into place?
    Ms. Yocom. I think it would be important to consider that 
for not just Puerto Rico but for the States as well. It is 
clear that CMS doesn't know for certain what is happening, in 
terms of following procurements.
    Mr. Guthrie. OK, thank you. And I just want to interrupt 
again. I know we have discussed my opening statement, and the 
concern with the two bills is that I want to make sure our 
colleagues and my fellow members of this committee that--the 
current system--I know we have changed the caps temporarily--is 
not sufficient, and it needs to be addressed, and we want to 
address it. We want to just work together moving forward to 
address it.
    So I appreciate the time, and I guess I will go vote and 
come right back. But Madam Chair, I appreciate the time, and I 
yield back.
    Ms. Eshoo. The gentleman yields back. I always appreciate 
what the gentleman says. I just want to add to the record, 
though, that the two bills on this subject matter are 
bipartisan. They are bipartisan.
    Mr. Guthrie. There are bipartisan sponsors, right, that is 
right. I am just saying we are going to work together----
    Ms. Eshoo. They are.
    Mr. Guthrie [continuing]. With the committee to----
    Ms. Eshoo. And I think that is very important. I think 
sometimes the cosponsorship of our colleagues from the 
territories seems to be worth 75 percent rather than 100 
percent. But these bills are bipartisan, and they are a part of 
it. So--which I think is wonderful. So we look forward to 
working with you on it.
    The Chair now recognizes Mr. Pallone, chairman of the full 
committee, for 5 minutes of questions.
    Mr. Pallone. Thank you, Chairwoman Eshoo, and thanks for 
emphasizing the bipartisan nature of the bills, because we have 
approached this in a bipartisan way in the past and will 
continue to. Thank you.
    I mean, the concern that I have, obviously, is that, if 
Congress fails to act and the territories go over the Medicaid 
fiscal cliff, the consequences are devastating. And I know that 
we have a number of territories here, but in Puerto Rico alone 
I understand it is possible that hundreds of thousands of 
people could lose their Medicaid coverage if the island doesn't 
receive additional Federal funding. And, you know, that is 
ridiculous, in the context of a pandemic.
    And also, you know, this is a crisis of our own making. I 
mean, Puerto Rico has this Medicaid block grant. And, as a 
result, since 2009 Congress has intervened eight times to 
either increase their funding or increase their FMAP. And, you 
know, I just don't want to do this. I don't want to keep 
kicking this can down the road because the way we do this 
Medicaid in the territories is fundamentally broken, and now is 
the time to fix it.
    So let me ask Dr. Schwartz. Initially, can you explain why 
so many people lose coverage if the territories go over the 
fiscal cliff, if you would?
    Dr. Schwartz. So it is basically simple math. If you have 
less money to spend, there are typically three things you can 
do: you can cut people, you can cut payment rates, or you can 
cut benefits.
    And when payment rates are low, that may be a difficult 
strategy. When benefits have been provided, and there are not 
many optional benefits are provided, it is harder to cut those. 
And so that is the consequence.
    Mr. Pallone. Well, I think it is also critical--thank you, 
really, Doctor. But it is really critical to understand who is 
going to lose coverage, right? These are Medicare--I am sorry, 
Medicaid, Medicaid beneficiaries. So we are talking about, 
generally, very low-income individuals, is that correct?
    Dr. Schwartz. Yes.
    Mr. Pallone. And then, if you use Puerto Rico as an 
example--you know, I apologize to the others, but if you use 
Puerto Rico as an example, it uses its own eligibility levels 
for Medicaid, and they are generally lower than those that are 
used in State programs.
    So in this scenario, a family of four with a monthly income 
of $943, which is lower than the Federal poverty level for one 
person in the contiguous States, those people could lose their 
coverage, is that right?
    Dr. Schwartz. Yes, generally, although I want to note that 
Puerto Rico did implement a temporary eligibility expansion, up 
to 85 percent of the Federal poverty level, at the end of the 
fiscal year, which would allow a family of four to make 
approximately $1,800 per month and remain eligible. But your 
general point is correct.
    Mr. Pallone. All right. And then, given their low income, 
it is safe to assume that the people who lose Medicaid would 
not be able to afford private insurance. Is that correct?
    Dr. Schwartz. Yes.
    Mr. Pallone. So we know that declines in coverage lead to 
declining overall health. When an uninsured person needs care, 
they tend to show up in an emergency room. So what do you 
expect is going to happen to the health of these individuals at 
risk of losing their Medicaid coverage?
    Dr. Schwartz. I think we would expect that people would not 
seek care unless they were in crisis, and that means that they 
would not receive preventive care, which could be immunizations 
or routine screenings. They also wouldn't get maintenance care 
for chronic conditions such as high blood pressure.
    Mr. Pallone. Yes. So, I mean--let me thank you, Dr. 
Schwartz.
    You know, Jenniffer and Stacey and Gregorio, I don't want 
you to misunderstand what I am saying. I mean, I believe the 
territories would only roll coverage back as a last resort, but 
without these additional Federal funds they may have not--they 
may not have a choice. And that is a choice they should never--
that, you know, the territories should never have to make. And 
we just have to stop--I know I sound like a broken record, but 
we have to stop.
    Madam Chair, we have to stop these short-term fixes and 
look for a permanent solution. So that is what I know you are 
trying to do in the context of the Health Subcommittee and all 
of us in the context of the full committee. And, you know, I 
just want to make a pledge to all our Congresspeople from the 
territories that we understand this, and this is what we want 
to do. We want to have a permanent solution. Thank you, 
Chairwoman Eshoo.
    Ms. Eshoo. Thank you, Mr. Chairman. He yields back.
    It is a pleasure to recognize the ranking member of the 
full committee, Congresswoman Cathy McMorris Rodgers, for 5 
minutes of questioning.
    Mrs. Rodgers. Thank you. Thank you, Madam Chair, and thank 
you, everyone, for being with us this afternoon.
    I wanted to start with Ms. Schwartz, and I just wanted to 
ask, do we have any data on the health outcomes in the 
territories and potential changes in those outcomes since the 
Federal Government has increased the funding for Medicaid in 
the territories?
    Dr. Schwartz. Sure. In general, I want to say that, in 
Medicaid, most of the data are focused on managed care 
arrangements. And four of the territories operate primarily on 
fee-for-service, with Puerto Rico being the only one in managed 
care.
    And Puerto Rico is moving to increase its various 
initiatives around quality, including reporting measures to the 
CMS scorecard, having plan level report cards, using an 
external quality review organization to calculate quality 
measures. And so that is all the infrastructure, the baseline 
activities that it would need to be able to assess quality.
    Most of those measures are based on process measures, 
receipt of certain services that would be recommended from a 
clinical perspective, and that would be similar to the States, 
for which there are relatively few outcome measures, I would 
say, with the exception of low birth weight.
    Mrs. Rodgers. Yes, it is something that I would like to see 
us consider as we are looking at Medicaid, both for the 
territories and beyond, because I think one of the valuable 
aspects of the Medicaid program is that we can see better 
outcomes, we can provide some flexibility to look at getting 
better outcomes for individuals, potentially even lowering 
costs, but making sure that that is also built--those kind of 
measures are built into the program that are encouraging the 
focus on improved health outcomes. I would like to see that 
included. Is that something that you think would be beneficial 
for Congress?
    Dr. Schwartz. I think the caution that I would provide 
would be just ensuring that you have the--that the territories 
have the necessary infrastructure and the scaled infrastructure 
to do those sorts of activities. And I think Puerto Rico has 
been working on that. And the activities for the other 
territories would also have to be sort of scaled to what their 
capabilities are.
    Mrs. Rodgers. OK. Another question. The Medicaid benefits 
vary across the territories. American Samoa and CNMI are not 
required to offer all mandatory Medicaid benefits under their 
Section 1902(j) waivers. Guam, Puerto Rico, and the Virgin 
Islands are required to offer all mandatory benefits and are 
not eligible for the 1902(j) waiver. And currently Guam is the 
only territory that offers all mandatory benefits.
    I would be interested in knowing, do you think that the 
Federal Government would have better insight into the programs, 
and why certain benefits are or are not offered in each of the 
territories, if those territories could get the J waiver, 
similar to the American Samoa and the Northern Mariana Islands?
    Dr. Schwartz. I am not sure if the availability of those 
services is tied to the authority, the J waiver, versus 
operating under another authority as to the availability of the 
providers to provide the specific services in those 
territories.
    So I am not sure what else I could say.
    Mrs. Rodgers. OK.
    Mr. Sablan. May I suggest something? This is Sablan----
    Mrs. Rodgers. Yes.
    Mr. Sablan [continuing]. Ranking Member.
    Mrs. Rodgers. Yes.
    Mr. Sablan. Yes, I think, for the Northern Marianas, it is 
possibly the limited number of specialized care that is 
available in our community. That is why we sent some patients 
here, whether both in Medicaid or in private insurance, sent 
them off to Guam, to Honolulu, to Hawaii. And so that is 
possibly one reason.
    The other reason, which Ranking Member Guthrie brought up, 
is that nobody asked for more money. It is because we get a 
block grant, and our Medicaid agencies are told to operate 
within that block grant, you are not going to--you shouldn't 
expect additional money for this particular fiscal year.
    I hope that may provide help, some idea of why we have that 
waiver.
    Mrs. Rodgers. OK, that is helpful, I appreciate you adding 
those comments.
    Miss Gonzalez-Colon. Ranking----
    Mrs. Rodgers. Yes?
    Miss Gonzalez-Colon. Can you--it is Jenniffer Gonzalez. Can 
you yield just 10 seconds?
    Ms. Eshoo. I think that, well, the time has expired, and I 
would just like to add that one of the rules of the committee, 
the overall committee, is that once witnesses have spoken, they 
can't go back to have them speak again. So--with Members.
    Mrs. Rodgers. OK.
    Ms. Eshoo. OK?
    So, Mr. Sablan, you got yourself in under the wire there, 
my friend.
    Mr. Sablan. My apologies.
    Mrs. Rodgers. OK.
    Ms. Eshoo. OK?
    Mrs. Rodgers. I will talk to them individually. I do have 
some further questions----
    Ms. Eshoo. We will----
    Mrs. Rodgers. Thank you very much.
    Ms. Eshoo. Sure.
    Mrs. Rodgers. I will yield back.
    Ms. Eshoo. The gentlewoman yields back, and of course, all 
Members have the opportunity to submit questions to all of our 
witnesses. And that is always an important part of what we do. 
And I know I always take advantage of it, and others should, as 
well.
    It is a pleasure to recognize the gentlewoman from 
California, Ms. Matsui, for her 5 minutes of questioning.
    Ms. Matsui. Thank you very much, Madam Chair, for calling 
this very, very important hearing.
    I am really deeply concerned about the devastating impact 
the upcoming Medicaid fiscal cliff may have on patients and 
providers in the territories. And while it has been positive to 
hear about the improvements the territories have been able to 
make over the past 2 years with increased funding to the 
Medicaid programs, it also highlights all there is to lose if 
Congress fails to act for the long term.
    If we are going to really address the historical inequities 
that limit access and health outcomes, we cannot be revisiting 
this funding question year after year. It is time to 
permanently raise the bar to ensure adequate funding that will 
improve our territorial Medicaid programs.
    Dr. Schwartz, I want to talk to you a little bit about 
provider flight. Thank you, by the way, for being here today. 
It is my understanding that a State Medicaid program needs to 
ensure that hospitals and providers are reimbursed at rates 
sufficient to maintain participation in the program. Without 
adequate pay, providers may stop accepting Medicaid 
beneficiaries or may seek to provide care elsewhere, which 
leads to decreased access to healthcare.
    In Puerto Rico there was an exodus of providers even prior 
to the recent catalyst. This island was facing a fiscal crisis, 
and doctors were making half of what their mainland 
counterparts were making. Thousands of healthcare providers 
left. Then Hurricane Maria and COVID-19 hit.
    I want to discuss the consequences of lower reimbursement 
rates in the territories and what that means to access to care.
    Dr. Schwartz, I understand that 50 percent of Puerto Ricans 
are on Medicaid. That is a significant number. With that many 
families relying on Medicaid, what would be the effect of 
continued provider flight on the people, including the children 
of Puerto Rico, and their ability to access care when they need 
it?
    [No response.]
    Ms. Matsui. Dr. Schwartz?
    Dr. Schwartz. Yes. Clearly, fewer providers would mean 
fewer opportunities to receive care, delayed care, gaps in 
care.
    Ms. Matsui. OK. In 2018 it was reported that about 15 
percent of Puerto Rico's provider population left the island 
after Hurricane Maria. With the increases in Medicaid funding 
in the last 2 years, has Puerto Rico been able to implement any 
policies that would help end the flight of providers from the 
island?
    Dr. Schwartz. Sure. Puerto Rico actually has implemented 
payment increases for certain providers, including acute care 
hospitals, physician services. Unfortunately, I don't have any 
information to quantify how those payment increases have 
affected provider participation in the program or access to 
care.
    Ms. Matsui. OK, I think that would be helpful to find out.
    If Puerto Rico were to go off the fiscal cliff, do you 
think it would be able to continue paying the increased rates 
to doctors and hospitals that it has been over the past few 
years?
    Dr. Schwartz. Well, as I said previously, provider payment 
is one place where any Medicaid program would seek savings. And 
for Puerto Rico it would be a decision that they would have to 
make. Among the options, provider payment is often the first 
step that Medicaid programs face [audio malfunction].
    Ms. Matsui. So if Puerto Rico is forced to reverse the 
temporary pay increases and cut doctor pay, can you speculate 
about what effect, if any, that might have on provider flight 
and access to care?
    Dr. Schwartz. Yes, well, we certainly have heard from 
officials in Puerto Rico that any reductions in provider 
payment would result in more providers leaving Puerto Rico, or 
leaving the Medicaid program, and worsen any existing access 
issues.
    Ms. Matsui. So it is clear to me that, if we really fail to 
act, these temporary policies that help keep doctors on the 
island will end, and we will have provider flight.
    So I do look forward to working with my colleagues on both 
sides of the aisle to try to find a permanent fix to the 
antiquated way that we fund Medicaid in the territories.
    And with that, I yield back. Thank you very much.
    Ms. Eshoo. The gentlewoman yields back. It is a pleasure to 
recognize the gentleman from Virginia, Mr. Griffith, for your 5 
minutes of questions, sir.
    Mr. Griffith. Thank you very much----
    Ms. Eshoo. Nice to see you.
    Mr. Griffith [continuing]. Madam Chair. Thank you. And I 
respect the committee rules, but I do look forward to having a 
conversation with my colleague, Jenniffer Gonzalez-Colon, about 
what she wanted to get in there, that--when she was talking 
with Mrs. McMorris Rodgers.
    That being said, Ms. Yocom, I was concerned to read that 
the GAO report found Puerto Rico did not take important steps 
to enable or seek competition. I am, however, pleased to see 
that GAO found managed care organizations to be a shining 
example of what is being done right by Puerto Rico's health 
insurance administrators. I am hopeful that we can build off of 
what works and what has worked there. Could you tell us more 
about your findings in relationship to these managed care 
organizations in Puerto Rico?
    Ms. Yocom. Sure. I want to caveat that what we looked at is 
the procedures used to establish and award the contracts, and 
we did find that the largest organization, ASES, was in charge 
of establishing these contracts with different managed care 
organizations. And they did, indeed, follow policies that are 
important to a competitive procurement, and basically letting 
people know what factors that are going to be rated on, and how 
important those factors are, relative to each other, as an 
example of the type of information that they were requesting.
    Mr. Griffith. And, you know, what changes do you think 
could be made to better foster competition in these contracts, 
or in other things that you looked at?
    Ms. Yocom. Yes, I think there are a couple of things: 
making sure that those processes are more standardized across 
the different types of contracts and then, if there truly is no 
way to make a competitive process, making it clear why you 
aren't doing something competitive. If it is an emergency, or 
if it is only one source on the island that can do the work, 
having those kinds of processes more standardized across the 
contracting would be important.
    Mr. Griffith. I appreciate that. Is there anything that you 
had that you wanted to tell Congress that you hadn't had an 
opportunity to tell us?
    I know you want to answer questions, but I just want to 
give you the opportunity, if there is something else that you 
want to get in, to make sure we--that you want to underline 
from your report, et cetera.
    Ms. Yocom. Well, I think, beyond the contracting process, 
our work in the past has really shown the impact of the 
uncertainty of the fiscal situation and the additional funds. 
When they--when you are waiting to see what will happen, it is 
harder to make strong decisions that look beyond the moment. So 
I think that is critically important to understand.
    Mr. Griffith. I appreciate that very much. I have about 2 
minutes left. If anyone would like time, I am happy to yield. 
Otherwise, I can yield back. Is there anybody who wishes to 
take my time that is left?
    [Pause.]
    Mr. Griffith. Hearing none, I yield back, Madam Chair.
    Ms. Eshoo. Seeing--hearing none, the gentleman yields back.
    Now it is a pleasure to recognize the gentlewoman from 
Florida, Ms. Castor, for her 5 minutes of questions.
    Ms. Castor. Well, thank you, Chairwoman Eshoo, for having 
this important hearing, and thank you to my colleagues for 
appearing before us today and fighting to stand up for your 
neighbors back home.
    Dr. Schwartz, under the current capped allotment approach, 
each territory only receives a set amount of Federal funding 
for Medicaid. I just want to be crystal clear. If a territory 
has Medicaid expenses, and it has already hit its cap, it 
cannot receive any more Federal matching dollars, unless 
Congress intervenes. Isn't that right?
    Dr. Schwartz. Yes.
    Ms. Castor. And I understand a few years ago the Northern 
Mariana Islands did, in fact, hit their Federal cap. What 
changes did that force to health services under Medicaid, as a 
result?
    [Pause.]
    Dr. Schwartz. Sorry, yes, it is my understanding that CNMI 
suspended providing services for a period of time, during which 
they experienced the funding gap. And, you know, basically, 
also suggested that certain--only--excuse me--beneficiaries 
could only be seen by one provider on the island, limiting 
people's ability to go to their usual source of care.
    Ms. Castor. I can't imagine that you have a health need and 
you are limited in this country.
    So when a territory uses up its Federal Medicaid allotment, 
you said in your testimony then they have to turn to their 
Federal sources to make up the difference. So that, obviously, 
means that they--it has fewer resources for investments like 
schools, or modernizing the electric grid, or other services. 
Is that correct?
    Dr. Schwartz. Yes.
    Ms. Castor. And on top of all this, you know, we have seen 
some amazing medical breakthroughs, particularly in the field 
of gene therapy and biologics, and more on the way. And these 
can be lifesaving products, but they are often incredibly 
expensive, especially when they first come onto the market. 
When a new, expensive, life-saving medication comes on the 
market, does the size of the cap increase, if you have a cap?
    Dr. Schwartz. No.
    Ms. Castor. So thank you for answering those questions. You 
are helping to make it very plain that this Medicaid cliff 
really puts the citizens that live in the territories at a 
disadvantage compared to their fellow citizens. I think this 
underlying system is deeply inequitable, and it has been for a 
long time.
    Even if we raise the caps, the territories will always be 
one economic downturn or one natural disaster or one medical 
breakthrough away from being able to fully care for its 
residents. So I think it is time that we finally end the unfair 
treatment for the territories and end Medicaid block grants, 
ensure that Medicaid is there as the safety net that it is 
intended to be for all American citizens.
    Thanks, I yield back.
    Ms. Eshoo. The gentlewoman yields back. It is a pleasure to 
recognize another wonderful Floridian, Mr. Bilirakis.
    You have 5 minutes for your questions.
    Mr. Bilirakis. Thank you, Madam Chair. I appreciate it, and 
I want to thank all of you for participating in this hearing. 
We appreciate it so much.
    Ms. Yocom, last Congress I joined my fellow Floridian E&C 
colleague, Representative Soto, in introducing the Territories 
Health Care Improvement Act, which added robust program 
integrity measures in response to the malfeasance. From what 
GAO has observed to date, has Puerto Rico taken sufficient 
action to prevent the fraud and theft of government funds, 
which was at the center of the law enforcement action taken on 
July 10, 2019?
    And if not, what more should occur?
    Again, for Ms. Yocom.
    Ms. Yocom. We haven't looked in great detail at what Puerto 
Rico has done since our--that past work you spoke of. We do 
know, however, that the contracting risks that we have already 
talked about are there.
    And then additionally, while the Medicaid fraud control 
unit is set up, it is not coordinating well with the other 
program integrity efforts on the island.
    Mr. Bilirakis. OK, you know, you need to please follow up 
with this, because I think that is a pretty important question 
that everybody would like to have an answer to.
    Currently, the--are there any territories that--with post-
eligibility determination process, for that process to validate 
beneficiary program eligibility?
    Ms. Yocom. Yes, we haven't done work to speak to that. I 
don't know if Dr. Schwartz has.
    Mr. Bilirakis. Dr. Schwartz, would you like to comment on 
that?
    Dr. Schwartz. Well, I know that Puerto Rico has been 
reporting for the payment error rate measurement program and 
the Medicaid eligibility quality control program, even though 
it is--they are technically not required to do so. But I am not 
aware of what the results from that activity are, or how their 
error rates compare to other jurisdictions.
    Mr. Bilirakis. We need these answers, folks.
    One question again for Ms. Yocom. Are there any concerns 
that ineligible providers may also remain enrolled in the 
Medicaid program throughout the territories, or in any 
particular territories?
    Ms. Yocom. I would say throughout the territories and 
throughout the States, that is an area where we need to be 
doing stronger work of screening and enrolling providers, and 
making sure that they are not on the OIG list for providers who 
should be excluded.
    Mr. Bilirakis. So you said throughout the States, as well.
    Ms. Yocom. Yes, our work has shown that there is still a 
lot of work to be done there.
    Mr. Bilirakis. That is something we need to be focused on, 
then.
    Dr. Schwartz, the Northern Mariana Islands, American Samoa, 
and Guam are required to demonstrate the following by October 
of this year: progress in implementing methods for the 
collection and reporting of reliable data to the Transformed 
Medicaid Statistical Information System, in addition to 
progress in establishing a State Medicaid fraud control unit. 
Can you provide us with an update regarding the progress made 
to date on both fronts, please?
    Dr. Schwartz. So the information I have is that Puerto Rico 
and the U.S. Virgin Islands are both reporting to TMSIS, and 
Guam is working towards production on that. American Samoa and 
CNMI are exempt, although CNMI is beginning to work on that. 
Both Puerto Rico and U.S. Virgin Islands have also established 
fraud control units. The other three territories have not. 
American Samoa and CNMI are exempt under their J waiver.
    Mr. Bilirakis. OK, thank you very much.
    And folks, these are American citizens, and we want to help 
them, obviously. But we need some accountability here, and that 
is why I believe we are having this hearing.
    So I really appreciate it, Madam Chair. And if anyone wants 
my 22 seconds, they can have it. Otherwise, I yield back.
    Ms. Eshoo. Any takers?
    [Pause.]
    Ms. Eshoo. No hands. OK, we are going to----
    Ms. Plaskett. Madam Chair?
    Ms. Eshoo. Yes?
    Ms. Plaskett. This is Congresswoman Plaskett. Thank you so 
much, Mr. Bilirakis.
    I just wanted to submit for the record--I know that 
leadership on the committee has received a letter from Governor 
Bryan of the Virgin Islands. I just ask unanimous consent that 
his letter--I am sure the letters of these other Governors have 
written to--from the territories that have written----
    Ms. Eshoo. It is already in the record.
    Ms. Plaskett. Thank you very much.
    Ms. Eshoo. It is already in the record, and we thank you.
    Ms. Plaskett. I appreciate that.
    Ms. Eshoo. The gentleman yields back. It is a pleasure to 
recognize the gentleman from California, Mr. Cardenas, for his 
5 minutes of questions.
    Mr. Cardenas. Thank you very much, Chairwoman Eshoo, and I 
appreciate Ranking Member Guthrie for having this incredibly 
important hearing.
    It is a unique and horrible feeling to be in this great 
country but feel like a second-class citizen. And I believe 
today's hearing is exposing how, when it comes to something as 
precious and as important as human beings' health, it is being 
treated in the territories as though people are less than human 
or second-class citizens. And I challenge anybody to try to 
argue otherwise.
    We have heard a lot about the cap, and how harmful it is 
and it has been to the territories over the years. I want to 
focus on the other aspect of Medicaid in the territories that 
is a major detriment to the program, and that is the inequity 
of how the Federal Medicaid assistance percentage, otherwise 
known as FMAP, is calculated.
    Dr. Schwartz, just the level set--can you briefly explain 
what the FMAP is, and how it is set for typical State Medicaid 
programs?
    [Pause.]
    Mr. Cardenas. Dr. Schwartz?
    Dr. Schwartz. Sure.
    Mr. Cardenas. OK.
    Dr. Schwartz. So the FMAP is based on the State's per 
capita income, relative to the national average, with higher 
FMAPs for States with lower per capita incomes, and vice versa.
    There is a minimum of 50 percent, and there is a maximum of 
83 percent, and those FMAPs are adjusted modestly each year, 
based on changes in per capita income relative to the national 
average. And then, for the territories, it is set at 55 
percent, unless a specific increase has been given, as under 
the Families First bill or under the consolidated 
appropriations bill.
    Mr. Cardenas. So therefore, when it comes to States and the 
FMAP, that means that you get more assistance from the Federal 
Government if you have a lower economic income.
    Dr. Schwartz. That is right.
    Mr. Cardenas. OK, thank you.
    The FMAP is different for the territories, though. As you 
stated in your testimony, the territorial FMAP is set by law at 
55 percent, which is much lower than what it would be if they 
were calculated like a State.
    Dr. Schwartz. That is right.
    Mr. Cardenas. OK. Dr. Schwartz, in your testimony you 
stated that some of the territories have struggled in the past 
to generate the local funds necessary to draw down Federal 
funds. Which territories are you aware of that have struggled 
with this?
    Dr. Schwartz. So, to my knowledge, all the territories have 
struggled with this, but I believe it has been a particular 
problem in several of the Pacific territories.
    Mr. Cardenas. OK. So the territories, it seems that all of 
them end up in a position where they have a greater need. And 
even though there is inadequate funding, even that inadequate 
funding isn't even drawn down, not because they don't have the 
need but because they don't have the ability to match and draw 
down those funds.
    Dr. Schwartz. Yes.
    Mr. Cardenas. OK, that seems completely backwards to me. 
And with all due respect, I think Congress has every right and 
responsibility to recognize this glaring problem and correct it 
as soon as possible.
    Dr. Schwartz, you also said in your testimony that you 
expect all of the territories to struggle with generating the 
local Medicaid funds if the FMAP were to revert back to 55 
percent. So, even if we do increase the Federal funding, the 
territories won't be able to take full advantage of it unless 
we also increase the FMAP, correct?
    Dr. Schwartz. Yes.
    Mr. Cardenas. OK. So basically, what we have been able to 
prove recently with our actions of increasing the FMAP for the 
territories is that that is a much better right-sized give-and-
take with the territories and the Federal Government funding 
than the 55 percent. Has that been demonstrated?
    Dr. Schwartz. Well, I think if you look at what per capita 
incomes are in the territories, if you calculated them based on 
the State formula, you would come up with a much higher FMAP.
    Mr. Cardenas. Yes. Colleagues, I hope and pray that this 
hearing does bring us to a point where we actually properly 
fund.
    And one of the things I would like to point out, again, 
being the territories are being treated like second-class 
citizens, in my opinion, in this country, if you are of a 
certain background or what have you, you are not considered 
suspect, even though you may actually do things that are beyond 
suspect and even criminal. But when it comes to the 
territories, I think that we are holding the territories to a 
standard that is unreal and is unfair, just because they are 
territories.
    There are States and actors within States of the Union that 
have actually done wrong, and they have been able to even run 
for office later, get elected to things like, you know, U.S. 
Senator, what have you. But yet the territories are being held 
suspect when we truly don't have proof that we should be 
holding them suspect. Instead, we should be funding them 
appropriately and also holding them accountable, just like we 
would any State.
    I am sorry, Madam Chair, I am out of time, and thank you 
very much. I yield back.
    [Pause.]
    Mr. Cardenas. Madam Chair?
    Ms. Eshoo. I thank you for the clarity of your comments. I 
think that it is a--you painted a tough picture, because that 
is what it is. But I don't know any one of us--if we were in 
the position of any one of the territories in our State, we 
would be shouting out from the top of the Capitol on this. And 
I think it has just gone on for far too long.
    No one really understands why the Congress did what it did 
a half a century ago. I think this darn thing has gone on long 
enough. If we haven't learned how essential to life is--and our 
livelihoods--healthcare--we struggle with it in the 50 States. 
Why wouldn't it be the same way with people in the territories, 
who are our fellow citizens, and just squeezing, squeezing, 
squeezing--it just is beyond me.
    Anyway, I want to call on and recognize the gentleman from 
Missouri, Mr. Long, our friend.
    Mr. Long, you have 5 minutes.
    Mr. Long. Thank you, Madam Chair, and thank you all for 
being here today.
    Dr. Schwartz, I wanted to ask you about the history of the 
J waivers. Two territories in--the Northern Mariana Islands and 
American Samoa operate their Medicaid and CHIP programs under 
Section 1902, the J waivers. Why were these two territories 
granted one, and what have they allowed these territories to 
do?
    Dr. Schwartz. I do not have information at my fingertips 
about the history of why the J waivers were granted, but we can 
certainly get that information to you.
    I know the J waiver provides an opportunity to waive many 
areas of the statute, and so I--we can provide that specific 
information to you for the record. And I apologize I don't have 
it at my fingertips.
    Mr. Long. OK, yes, I really would appreciate it, because I 
would like to get an answer to that. And I appreciate you 
following up with my staff on that and getting the information 
to us.
    You may not be able to answer this next question, either, 
but do they want these waivers to continue? Are you apprised of 
that? Do you know if they want them to continue?
    Dr. Schwartz. I have not heard either way. But again, I can 
check on that for you.
    Mr. Long. OK--go ahead, I am sorry.
    Dr. Schwartz. I just wanted to also, while I had a moment, 
to correct something I said earlier about the TMSIS data. I 
mentioned that Puerto Rico and the Virgin Islands were both 
providing TMSIS data, and several others were exempt. But I 
want to make clear that, actually, the other three territories 
must demonstrate progress on TMSIS by October of this year. And 
so I just want to make sure that that is correctly reflected.
    Mr. Long. OK, thank you.
    And Ms. Yocom, obviously, the focus of your report was on 
Puerto Rico, but I wanted to make sure we didn't neglect the 
other territories and the good work they have done on their 
program integrity measures. Are there any things we should 
consider implementing or reviewing for the other territories?
    Ms. Yocom. I am afraid the work that we have done on all 
the territories together is likely too old to be helpful here.
    In general, what you want your Medicaid program to have is 
good data, so you know where the money is going; good 
screening, so you know the providers are eligible and in good 
standing; and strong eligibility systems, so you are covering 
the people who need the program the most.
    Mr. Long. OK, OK, thanks, I appreciate that.
    And Madam Chairman, I yield back.
    Ms. Eshoo. Thank you, Mr. Long, and the gentleman yields 
back.
    It is a pleasure to recognize the gentlewoman from 
Illinois, Ms. Kelly, for your 5 minutes of questions.
    [Pause.]
    Ms. Eshoo. Are you on board?
    I saw her earlier. All right, then we will go to the 
gentlewoman from California, Ms. Barragan, for 5 minutes of 
questions.
    Ms. Barragan. Thank you, Madam Chairwoman. I just wanted to 
state that I think it is incredibly unfair the territories 
receive Medicaid funding in the form of a block grant. States 
receive open-ended Federal funds, for the funds territories 
receive are fixed. The block grant funding does not come 
anywhere close to covering the cost of healthcare for the 
territories' Medicaid enrollees.
    And with that I want to yield to a champion on these 
issues, my former CHC colleague, Darren Soto.
    Mr. Soto. Thank you so much, Representative Barragan, and 
thank you, Chair Eshoo, for hosting this really critical issue. 
Representing more island-born Puerto Ricans than any other 
district, of course, than the island of Puerto Rico and 
Jenniffer Gonzalez-Colon herself, this is a key issue.
    You know, last term we had a great bill that came out of 
this committee, where majority and minority staff worked 
together with the leadership of Chair Eshoo and others. And I 
co-introduced, with Representative Gus Bilirakis, our 
Territories Medicaid Parity Bill, and it represented a really 
great balance. It set a 5-year set of benchmarks. It raised the 
funding for each of the territories. It literally would have 
set us on a great path forward. And we know that, sadly, the 
Senate went back on that deal, despite bipartisan, unanimous 
support out of our committee, at the urging of then-President 
Trump, even though I think there was great support among 
Republicans and Democrats in the Senate, as well.
    So, you know, I strongly encourage both our chairs and our 
ranking members and our majority and minority staff to work 
together to see if we can get something together that we could 
both get behind that makes sure we, once and for all, set 
ourselves at least on a 5-year path to get to 100 percent 
Medicaid parity.
    We heard from champions like Representative Sablan and 
Radewagen, Plaskett, Gonzalez-Colon, and San Nicolas about how 
it set our territories behind. When you think of the billions 
of dollars that they had to dig deep in from their own local 
territorial budgets, we saw patients left behind in Hurricane 
Maria or in the many cyclones we saw out in the Pacific 
territories. We saw that patients can't get transportation. We 
saw hospitals that ended up not having enough funding to be 
maintained, so when they were hit with Hurricane Irma and 
Hurricane Maria, they looked like they were going to be 
inoperable for many years.
    Ms. Schwartz and Ms. Yocom, my question to you all is, 
based upon that bill from last term, is there a path we could 
get at, a 5-year path, to get all the services up to what we 
need to, equal to States, where we can have that funding be 
equal?
    Is that something you think is achievable in these next 5 
years, if we work this out?
    Dr. Schwartz. I think the general idea of having a longer-
term funding arrangement and a phased implementation of 
benefits, repayment rates, or eligibility levels makes a lot of 
sense. I couldn't comment on whether 5 years would be 
sufficient to do the whole thing.
    I also imagine that, across the different territories, you 
might want to stage the implementation of those different steps 
differently, depending upon their own needs. And that is the 
kind of thing that territories and perhaps CMS could comment on 
and come up with a plan. So I think the general idea of it 
seems sound.
    Mr. Soto. Thanks.
    And Ms. Yocom?
    Ms. Yocom. We would be glad to work with you to help. We 
think it is definitely a good plan, and we can give it a try. 
We are glad to help with data and doing the--some of the 
analysis.
    Mr. Soto. Thank you. Just as we close, you know, the 
pandemic has exposed how key coverage and services for Medicaid 
and insurance coverage, generally, is to make sure that 
Americans in our territories are treated with the same dignity, 
respect, and access to healthcare as those of us living on the 
mainland in States.
    So I thank you all for this opportunity, and I yield back.
    Ms. Barragan. Madam Chairwoman, I yield back. Thank you.
    Ms. Eshoo. The gentlewoman yields back.
    It is a pleasure to recognize Dr. Bucshon for your 5 
minutes of questions. Good to see you.
    Mr. Bucshon. Good to see you. Thank you, Madam Chairwoman.
    Ms. Yocom, aside from contracts not being negotiated in a 
competitive way in Puerto Rico, one of the more alarming 
aspects of your report is that CMS is not conducting oversight 
of Medicaid contracts at any level. I want to ask, what has CMS 
said about changing this behavior for both the territories and 
the States moving forward?
    And are there requirements Congress should put in place, or 
policies we should consider for both the territories and 
States?
    Ms. Yocom. Yes, CMS has said a couple of things to us on 
this work.
    The first was that they did feel like States and 
territories were in the best position to understand their own 
laws and regulations when it comes to contracting. They do, 
however, have authority to step in when there are issues or 
concerns that would lead them to want to know more information 
about contracting processes. I think that is an important thing 
to look at.
    When we asked CMS what circumstances might lead them to do 
that, they did not have a response for us. So, within current 
law and regulation, that seems like a really important place to 
start, is under what circumstances do you want the Federal 
Government in and assisting?
    The last thing CMS said is that it would provide technical 
assistance, and they can, if need be, withhold Federal monies 
if they deem that necessary.
    Mr. Bucshon. Thank you very much for that response. I 
appreciate it. It sounds like we have got a little bit of work 
to do in that space.
    Ms. Yocom. I think so.
    Mr. Bucshon. Ms. Schwartz, the two bills before the 
subcommittee today would remove the caps from all the 
territories. If either of these were signed into law, would the 
territories be in compliance with the Medicaid program?
    Dr. Schwartz. Well, I have not read these bills in detail.
    Removing the caps, in and of itself, does not mean that all 
territories will be providing the full suite of services, or 
conducting a full set of oversight or data-reporting measures 
that are required of the States. And, you know, you would need 
to be explicit on all of those items.
    Also, I just further want to comment that, as--removing the 
caps without addressing the FMAP is problematic for the reasons 
shared earlier.
    Mr. Bucshon. Yes, and I was going to follow up with that, 
and it seems maybe a more important discussion is to provide 
long-term certainty and fix some of the other underlying 
problems. What does the long-term certainly look like, and what 
can Congress do to help provide that certainty for the 
territories?
    Dr. Schwartz. So a couple of issues have been raised 
about--or concerns about the adequacy of the program from the 
territories, one being provider payment and then the second 
being the breadth of the benefits.
    And for a program administrator, committing to an increase 
in provider payment without certainty about the availability of 
the funds to back up those provider payment increases, I think, 
would be difficult.
    And similarly, for extending a benefit, I think all 
Medicaid programs are in this situation, that they do not like 
to provide benefits and then have to be able to say the next 
year, ``No, sorry, there is not enough money, and we are not 
going to provide that.'' It is very disruptive to providers. It 
is, obviously, very disruptive to beneficiaries, who have 
expectations.
    So those are some examples of how the uncertainty affects 
the program on a very day-to-day basis.
    Mr. Bucshon. OK, well, thank you.
    I also want to know--it seems, you know, like we are going 
to work off the extension we passed 2 years ago. But we need to 
understand, for a long-term fix, we really need to find a way 
to pay for the services, and that need must be part of our work 
moving forward.
    I would--as a healthcare provider, I want everyone who is a 
U.S. citizen--territories, the--and all the other States--to 
have the same access to quality medical care as everyone does 
in my State, Indiana, and the rest of the country. So this is 
really a critical issue for our territories that we really need 
to find a solid, long-term solution to ensure that the U.S. 
citizens in the territories really have the same quality of 
program, and program integrity, as well as the same amount of 
resources, financially, for quality healthcare. And I want to 
make--I want to be part of that solution.
    Madam Chairwoman, I yield back.
    Ms. Eshoo. Those are very generous comments, Dr. Bucshon.
    The Chair is delighted to recognize the gentlewoman from 
Washington State, Dr. Schrier, for 5 minutes of questions.
    Not there? Then we will call on the gentlewoman from 
Massachusetts, Ms. Trahan, for your 5 minutes of questions.
    Not there? Well, we--I think a lot of Members have left 
their seats to go over to the Capitol to vote. Let's see who is 
next.
    Voice. It should be--look at the Republicans, Mr. Dunn.
    Ms. Eshoo. Mr. Dunn--from where?
    Mr. Dunn, are you there?
    [Pause.]
    Ms. Eshoo. Then Dr. Joyce, you are recognized. Thank God 
you are there.
    Mr. Joyce. It is great to be here. Thank you, Chair Eshoo, 
thank you for holding this, and Ranking Member Guthrie, for 
allowing us to convene. I would also like to thank my 
colleagues on their first panel for their testimony here today.
    First, Ms. Schwartz, too often we make policy with each of 
the territories getting lumped together. Can you give us some 
examples of how they differ from each other?
    Dr. Schwartz. Sure. Here is one quick example. In 2019 the 
number of enrollees in Puerto Rico was 1.2 million. In the 
Commonwealth of the Northern Mariana Islands it was a little 
over 16,000. In Puerto Rico, they have a managed care 
infrastructure, and in the other territories it is primarily 
fee-for-service. So those are some good examples of the scale 
and the scope differences across the various territories.
    Mr. Joyce. In face--continuing along that line, Ms. 
Schwartz--in face of these differences, not only geographic, 
but the number of insured lives that can be covered 
effectively, how should we as Members of Congress be better 
addressing this?
    And that is for you, Ms. Schwartz.
    Dr. Schwartz. Sure. I think the one suggestion that I would 
make and plan for enhanced requirements to go with an enhanced 
funding is consultation with the territories about their 
capacity to provide those requirements and staging those in a 
way that is consistent, both with what the committee wants to 
achieve and what is realistic in the short and the long term.
    Mr. Joyce. Ms. Yocom, I understand that we do have a need 
for stability and the goal of increasing the cap and FMAP for 
the territories. Specifically, I want to discuss Puerto Rico.
    Last Congress this committee agreed on bipartisan proposals 
to provide 4 years of relief tied to important program 
integrity measures. However, I am concerned with what occurred 
with the former Director of SS and the GAO findings related to 
procurement processes. What are concrete steps that SS has 
taken to address the concern from the GAO's report on program 
integrity?
    Ms. Yocom. Well, as I noted earlier, Puerto Rico has 
produced a contracting reform plan, and it has two key points 
where the details that they flesh out their plan with will be 
very important to know about. The first deadline is in April, 
where their plan says they will talk more about how they will 
foster competition and what kind of steps they will take to 
improve contracting procedures.
    And then the second one is at the end of this year, which 
has more detail on how they are going to go about it.
    I think keeping track of that, thinking about 
standardization across contracting processes as Puerto Rico 
considers how to implement its plan, is going to be two really 
important things to do.
    Mr. Joyce. What steps has the Governor committed to take as 
part of this revised fiscal plan?
    Ms. Yocom. You know, I don't know that I can speak to that. 
I would be glad to find that out for you.
    Mr. Joyce. Thank you. I think that would be important for 
us to have that information, as well.
    Thank you for the opportunity to have this dialogue, and 
Chair Eshoo, I yield the remaining time.
    Ms. Eshoo. The gentleman yields back. I thank him for his 
questions. I don't see any other Members at this time that I 
can recognize from either side of the aisle.
    So I want to once again thank this panel of witnesses for 
your testimony today and, of course, our colleagues that headed 
up the hearing from the territories. We appreciate each one of 
you and your sharing your--you know, answering the Members' 
questions. Hearings are very important, and we always learn 
from them.
    I am going to submit the----
    Voice. There's over 30 documents.
    Ms. Eshoo [continuing]. Over 30 documents. They are 
statements for the record. And I want to ask my colleague, the 
ranking member of the subcommittee, if he would grant a 
unanimous consent request that those be--those statements be 
placed in the record, so we don't have to read 30 of them----
    Mr. Guthrie. Yes, ma'am. No objection.
    Ms. Eshoo [continuing]. With you.
    Mr. Guthrie. No objection, yes.
    Ms. Eshoo. Thank you. Thank you.
    [The information appears at the conclusion of the 
hearing.\1\]
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    \1\ One document, an Army Corps of Engineers report, has been 
retained in committee files and is available at https://docs.house.gov/
meetings/IF/IF14/20210317/111335/HHRG-117-IF14-20210317-SD018.pdf.
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    Ms. Eshoo. Pursuant to committee rules, Members have 10 
business days to submit additional questions for the record, 
and I am sure that the witnesses will respond promptly to any 
questions that you receive. It is a very important part of our 
hearing process.
    And at this time, the subcommittee is adjourned. Thank you, 
everyone.
    [Whereupon, at 3:16 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    

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