[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
THE INSULAR AREAS MEDICAID CLIFF
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OVERSIGHT HEARING
BEFORE THE
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
Thursday, May 23, 2019
__________
Serial No. 116-18
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Printed for the use of the Committee on Natural Resources
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
or
Committee address: http://naturalresources.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
36-525 PDF WASHINGTON : 2019
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COMMITTEE ON NATURAL RESOURCES
RAUL M. GRIJALVA, AZ, Chair
DEBRA A. HAALAND, NM, Vice Chair
GREGORIO KILILI CAMACHO SABLAN, CNMI, Vice Chair, Insular Affairs
ROB BISHOP, UT, Ranking Republican Member
Grace F. Napolitano, CA Don Young, AK
Jim Costa, CA Louie Gohmert, TX
Gregorio Kilili Camacho Sablan, Doug Lamborn, CO
CNMI Robert J. Wittman, VA
Jared Huffman, CA Tom McClintock, CA
Alan S. Lowenthal, CA Paul A. Gosar, AZ
Ruben Gallego, AZ Paul Cook, CA
TJ Cox, CA Bruce Westerman, AR
Joe Neguse, CO Garret Graves, LA
Mike Levin, CA Jody B. Hice, GA
Debra A. Haaland, NM Aumua Amata Coleman Radewagen, AS
Jefferson Van Drew, NJ Daniel Webster, FL
Joe Cunningham, SC Liz Cheney, WY
Nydia M. Velazquez, NY Mike Johnson, LA
Diana DeGette, CO Jenniffer Gonzalez-Colon, PR
Wm. Lacy Clay, MO John R. Curtis, UT
Debbie Dingell, MI Kevin Hern, OK
Anthony G. Brown, MD Russ Fulcher, ID
A. Donald McEachin, VA
Darren Soto, FL
Ed Case, HI
Steven Horsford, NV
Michael F. Q. San Nicolas, GU
Matt Cartwright, PA
Paul Tonko, NY
Vacancy
David Watkins, Chief of Staff
Sarah Lim, Chief Counsel
Parish Braden, Republican Staff Director
http://naturalresources.house.gov
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CONTENTS
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Page
Hearing held on Thursday, May 23, 2019........................... 1
Statement of Members:
Gonzalez-Colon, Hon. Jenniffer, Resident Commissioner of the
Commonwealth of Puerto Rico................................ 4
Prepared statement of.................................... 5
Sablan, Hon. Gregorio Kilili, a Delegate in Congress from the
Territory of the Northern Mariana Islands.................. 1
Prepared statement of.................................... 3
Statement of Witnesses:
Arcangel, Theresa, Chief Administrator, Guam Division of
Public Welfare............................................. 31
Prepared statement of.................................... 32
Questions submitted for the record....................... 35
Avila, Angela, Executive Director, Puerto Rico State Health
Insurance Administration................................... 54
Prepared statement of.................................... 55
Questions submitted for the record....................... 58
King Young, Sandra, Medicaid Director, American Samoa
Government................................................. 45
Prepared statement of.................................... 46
Questions submitted for the record....................... 49
Muna, Esther L., Chief Executive Officer, Commonwealth of the
Northern Mariana Islands Healthcare Corporation............ 8
Prepared statement of.................................... 9
Questions submitted for the record....................... 16
Rhymer-Browne, Michal, Assistant Commissioner, U.S. Virgin
Islands Department of Human Services....................... 37
Prepared statement of.................................... 39
Questions submitted for the record....................... 42
Sablan, Helen C., Director, Commonwealth of the Northern
Mariana Islands State Medicaid Agency...................... 19
Prepared statement of.................................... 20
Questions submitted for the record....................... 25
Additional Materials Submitted for the Record:
List of documents submitted for the record retained in the
Committee's official files................................. 92
Submissions for the Record by Representative Gonzalez-Colon
PowerPoint Slides on the Healthcare and Medicaid Funding
in the U.S. Territories................................ 68
Statement by Jaime Pla Cortes, Executive President of the
Puerto Rico Hospital Association dated May 23, 2019.... 69
Submission for the Record by Representative Grijalva
Statement for the Record from Natalie A. Jaresko,
Executive Director of the Financial Oversight and
Management Board for Puerto Rico dated May 22, 2019.... 91
OVERSIGHT HEARING ON THE INSULAR AREAS MEDICAID CLIFF
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Thursday, May 23, 2019
U.S. House of Representatives
Committee on Natural Resources
Washington, DC
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The Committee met, pursuant to notice, at 10:06 a.m., in
room 1324, Longworth House Office Building, Hon. Gregorio
Sablan [Vice Chairman of the Committee] presiding.
Present: Representatives Grijalva, Sablan, Lowenthal, Cox,
Van Drew, Cunningham, Soto, Horsford, Tonko, Radewagen,
Gonzalez-Colon, and Hern.
Also present: Representative Plaskett.
Vice Chair Sablan. Good morning. The Committee will now
come to order.
The Committee is meeting today to hear testimony on the
impact of the end of Medicaid funding for the insular areas
under the Affordable Care Act, also known as the insular areas
Medicaid cliff.
Under Committee Rule 4(f), any oral opening statements at
hearings are limited to the Chairman and the Ranking Member.
Therefore, I ask unanimous consent that all other Members'
opening statements be made part of the hearing record if they
are submitted to the Clerk by 5 p.m. today.
I ask unanimous consent that the gentlewoman from the U.S.
Virgin Islands, Ms. Plaskett, be allowed to sit on the dais and
question the witnesses.
Hearing no objection, so ordered.
STATEMENT OF THE HON. GREGORIO KILILI SABLAN, A DELEGATE IN
CONGRESS FROM THE TERRITORY OF THE NORTHERN MARIANA ISLANDS
Vice Chair Sablan. Good morning again, everyone.
The Mariana Islands, which I represent, and the four other
U.S. insular areas all face a Medicaid cliff at the end of this
year. Supplemental funding for the Medicaid programs in our
areas included in the Patient Protection and Affordable Care
Act, or ``Obamacare'' as we like to call it, expires this year.
And I can just recall as if it was only yesterday when
Pedro Pierluisi and I enlisted the help of the congressional
Hispanic Caucus and met with the President on this issue, and
the Senator from New Jersey joined us. And I think from that
meeting we were able to get this money, because we were not
included in the Affordable Care Act under the reconciliation
budget process.
But loss of that funding puts healthcare delivery at risk,
not just for Medicaid recipients in our islands, but for the
population at large. Today's hearing is meant to shine a light
on that imminent crisis.
I want to thank the directors of the insular areas Medicaid
programs for being here as witnesses. Your programs are already
short of cash, so the cost of coming to Washington was not
taken lightly, but I think that we could have no better
spokespeople to describe how truly dire the situation is. I
hope we will be able to learn from you what the loss of
Medicaid funds will mean to the people you serve--real people,
our people, who simply have no other means of getting basic
health care.
Also invited to testify today is the Chief Executive
Officer of the Commonwealth Healthcare Corporation, Ms. Esther
Muna runs the one and only hospital in the Marianas, and that
hospital depends on Medicaid for over one-quarter of its
revenue.
I hope Ms. Muna will be able to tell us what the loss of
Medicaid funding will mean to the hospital's ability to deliver
services and how that will impact not only Medicaid patients,
but all her patients. I think Ms. Muna's description of how the
hospital depends on Medicaid revenue will help us understand
how losing Medicaid revenues will hurt healthcare providers in
private practice as well.
So, we are all working from a common set of facts, let me
quickly review the situation. In the states and the District of
Columbia, Medicaid is an entitlement program. To the extent
there is a need for services and to the extent a state can
provide local matching funds, Federal Medicaid funds are always
available.
In the five insular areas, this is not the case. Up until
2011, we each received a fixed block grant. That block grant, I
am sorry to say, is unrelated to the needs of each of our
areas. It seems to have been set rather arbitrarily decades
ago. And the local match to access that block grant was set in
law at 50/50. And 50/50 is the same matching rate as the
wealthiest states, while states as poor as the insular areas
only match at a rate of 24 local/76 Federal.
Obamacare provided some relief--an extra $7.3 billion in
temporary Medicaid funding and a permanent change to the match
to 45 local/55 Federal. But the Obamacare money is no longer
available after this year, and all the insular areas will
revert to their block grants.
Using 2018 data for American Samoa, that means going from
$20 million in Federal funding to $12 million; for Guam, from
$56 million to $18 million; for the Marianas, from $25 million
to $7 million; for the U.S. Virgin Islands, from $70 million to
$18 million; and for Puerto Rico, from $2.3 billion to just
$360 million. We cannot suffer cuts like that and continue to
deliver services.
The path forward is unclear. Certainly, more money is
needed, and an equitable matching rate. But there is also the
need for each of the insular areas to build capacity to deliver
care. Because, ultimately, the goal is not just to have the
same funding as states. What we want is medical care for those
who need it in the insular areas to be every bit as good as
medical care in the states.
I look forward to hearing from the witnesses for their
advice and experience.
Last, I want to report that one of the meetings we arranged
for the directors to add value to their time in Washington has
paid off. Some of you already knew this prior to coming here.
But you met yesterday with staff from the Senate Finance
Committee and the House Energy and Commerce Committee. We also
arranged for you to meet with administration officials of CMS,
the Centers for Medicare and Medicaid Services.
You asked them at that meeting to allow for Obamacare
Section 1323 money to be used in Fiscal Year 2020 before you
use the Section 1108 annual block grant. I received word last
night that CMS has decided to do what you asked. That will make
more money available that otherwise would have been lost.
So, if we are able to do nothing else, your trip here was
rewarded. I would like to say that we will get something else
done here. But I certainly do believe that your trip here and
today's hearing will have positive results.
[The prepared statement of Vice Chair Sablan follows:]
Prepared Statement of the Hon. Gregorio Kilili Sablan, a Delegate in
Congress from the Territory of the Northern Mariana Islands
Good morning. The Mariana Islands, which I represent, and the four
other U.S. insular areas all face a ``Medicaid cliff'' at the end of
this year. Supplemental funding for the Medicaid programs in our areas,
included in the Patient Protection and Affordable Care Act--or
Obamacare as we like to call it--expires this year.
Loss of that funding puts healthcare delivery at risk--not just for
Medicaid recipients in our islands, but for the population at large.
Today's hearing is meant to shine a light on that imminent disaster.
I want to thank the directors of each of the insular areas Medicaid
programs for being here today as witnesses. Your programs are already
short of cash, so the cost of coming to Washington was not taken
lightly, but I think that we could have no better spokespeople to
describe how truly dire the situation is. I hope we will be able to
learn from you what the loss of Medicaid funds will mean to the people
you serve--real people, who simply have no other means of getting basic
health care.
Also, invited to testify today is the Chief Executive Officer of
the Marianas Health Care Corporation. Ms. Esther Muna runs the one and
only hospital in the Marianas. That hospital depends on Medicaid for
over one-quarter of its revenue.
I hope Ms. Muna will be able to tell us what the loss of Medicaid
funding will mean to the hospital's ability to deliver services, and
how that will impact not only Medicaid patients, but all patients. I
think Ms. Muna's description of how the hospital depends on Medicaid
revenue will help us understand how Medicaid revenues will affect
healthcare providers in private practice, as well.
So, we are all working from a common set of facts, let me quickly
review the situation. In the states and the District of Columbia,
Medicaid is an entitlement program. To the extent there is a need for
services and to the extent a state can provide local matching funds,
Federal Medicaid funds are always available.
In the five insular areas this is not the case. Up until 2011 we
each received a block grant. That block grant, I am sorry to say, is
unrelated to the need in each of our areas. It seems to have been set
rather arbitrarily, decades ago. And the local match to access that
block grant was set in law at 50-50. That is the same matching rate as
the wealthiest states. While states as poor as the insular areas only
match at a rate of 24-76.
Obamacare provided some relief: an extra $7.3 billion in temporary
Medicaid funding and a permanent change in the FMAP to 55-45. But the
Obamacare money is no longer available after this year. And all the
insular areas will revert to their block grants.
For American Samoa, this means going from $20 million in Federal
funding to $12 million. For Guam, from $56 million to $18 million. For
the Marianas, from $25 million to $7 million. For the Virgin Islands
from $70 million to $18 million. And for Puerto Rico, from $2.3 billion
to just $360 million. You cannot suffer cuts like that and continue to
deliver services.
The path forward is unclear. Certainly, more money is needed and an
equitable matching rate. But there is also the need for each of the
insular areas to build capacity. Because ultimately the goal is not
just to have the same funding as states. What we want is medical care
for those who need it in the insular areas to be every bit as good as
medical care in the states.
I look forward to hearing from the witnesses for their advice and
experience.
______
Vice Chair Sablan. I now recognize my colleague, the
gentlelady from the Puerto Rico, for an opening statement.
STATEMENT OF THE HON. JENNIFFER GONZALEZ-COLON, RESIDENT
COMMISSIONER OF THE COMMONWEALTH OF PUERTO RICO
Miss Gonzalez-Colon. Thank you, Vice Chairman.
I really appreciate this hearing taking place. I want to
thank you all for being here today to discuss one of the most
important and critical issues currently affecting all the U.S.
territories: the impending expiration of the additional
Medicaid funds granted by the Affordable Care Act and the
instability of our healthcare infrastructure.
In 2017, 1.6 million Americans living in the territories
were enrolled in Medicaid. That breaks down to 79 percent of
the population of American Samoa, 21 percent of the population
of Guam, 33 percent of the population of the Northern Mariana
Islands, 47 percent of the population of Puerto Rico, and 16
percent of the population of the U.S. Virgin Islands. The
national average enrollment for the states and the District of
Columbia was 21 percent.
During the same year, the Medicaid program spent an average
of $1,800 a year per territory enrollee. In contrast, the
national average, excluding the territories, was more than
$7,000 per enrollee.
Medicaid in the territories is subject to a statutory
Federal Matching Percentage, what we call ``FMAP.'' The FMAP
for the states varies annually relative to each state's per
capita income. The FMAP for the territories, however, is
completely different. We are permanently capped by law to 55
percent. If the formula used to determine the FMAP for the
states were applied to Puerto Rico, the Federal Government's
matching share would be increasing up to 83 percent, the
program maximum.
For the 50 states and the District of Columbia, Medicaid
provides a guarantee of Federal matching payments with no pre-
set limit. And this is the main difference between the
treatment to the territories and the rest of the states.
However, annual Federal funding for Medicaid in the territories
is subject to this statutory cap. Once a territory exhausts its
capped Federal funds, it will no longer receive Federal
financial support for its Medicaid program during that fiscal
year.
In 2011, the Affordable Care Act granted the territories an
additional $8.25 billion in Federal funds for their Medicaid
programs in lieu of establishing a health insurance
marketplace. The additional funding for each territory ranged
from $109.2 million for the Northern Marianas to $6.3 billion
for Puerto Rico and was available to be drawn down between July
2011 and September 2019.
Since 2011, Federal Medicaid spending in Puerto Rico has
exceeded the statutory cap by using the funds available under
the Affordable Care Act. These funds were depleted in February
of last year.
During the last Congress, the 115th Congress, President
Trump acted to avert this crisis in Puerto Rico's Medicaid
program, with a temporary increase of the Federal cap to $296
million for Fiscal Year 2018-2019 in the Consolidated
Appropriations Act of 2017. Moreover, as a result of the state
of emergency caused by Hurricanes Irma and Maria in 2017, we
again increased the Federal cap to $4.8 billion, for the first
time with 100 percent Federal cost share through Fiscal Year
2019, to keep Puerto Rico's Medicaid program operational. All
these additional sources of Federal funding for Puerto Rico's
Medicaid program will expire in September of this year.
For my island, the Medicaid cap set by statute for Fiscal
Year 2020 will be approximately $375 million, with no
additional source of Federal funding available. This means that
Puerto Rico will exhaust its Federal Medicaid allotment in the
first 3 months of Fiscal Year 2020 and will bear the expense in
excess of 85 percent of the Federal program, placing additional
pressure on sparse territory resources. And I know this is
going to be happening in all territories as well.
Each territory is affected by this inequitable treatment in
healthcare funding in their own way. However, all of the
Medicaid programs, as currently conceived, are unsustainable.
This underfunding contributes to larger systemic problems,
including lower provider reimbursement rates and provider
shortages.
To correct these challenges, I have introduced H.R. 2306,
the Puerto Rico Medicaid Act, which seeks to strengthen the
Medicaid program on the island by increasing the cap and
removing the statutory FMAP limitation.
I am also an original co-sponsor of H.R. 1354, the
Territories Health Equity Act, legislation introduced by
Congresswoman Plaskett of the Virgin Islands that attempts to
fix this problem for all five territories.
Both bills are currently under the jurisdiction of the
Energy and Commerce Committee, and I will continue to work with
my fellow delegates and the members of that committee to
advocate for the advancement of those bills.
I trust that today's testimonies will help my colleagues
understand the urgent need for action. If we fail to act with
the expediency that the situation requires, the provision of
health care in all territories will be severely affected, with
far-reaching repercussion for the rest of our Nation.
Although I recognize that this is not the committee with
jurisdiction, I would like to thank Vice Chairman Sablan and
members of this Committee for this important hearing. Having
the witnesses testify and be on the record on the impacts of
the Medicaid cliff will undoubtedly help us as we continue
working for a long-term solution on this issue.
Thank you, Chairman.
[The prepared statement of Ms. Gonzalez-Colon follows:]
Prepared Statement of the Hon. Jenniffer Gonzalez-Colon, Resident
Commissioner of the Commonwealth of Puerto Rico
Good morning, everyone. I thank you all for being here today to
discuss one of the most critical issues currently affecting all of the
U.S. territories: the impending expiration of the additional Medicaid
funds granted by the Affordable Care Act and the accompanying
instability of our healthcare infrastructure.
In 2017, 1.6 million Americans living in the territories were
enrolled in Medicaid. That breaks down to 79 percent of the population
of American Samoa, 21 percent of the population of Guam, 33 percent of
the population of the Northern Mariana Islands, 47 percent of the
population of Puerto Rico, and 16 percent of the population of the U.S.
Virgin Islands. The national average enrollment for the states and the
District of Columbia was 21 percent.
During that same year, the Medicaid program spent an average of
$1,866 a year per territory enrollee. In contrast, the national average
(excluding the territories) was $7,654 per year per enrollee.
Medicaid in the territories is subject to a statutory Federal
Matching Percentage (FMAP). The FMAP for the states varies annually
relative to each state's per capita income. The FMAP for the
territories, however, is permanently set by law at 55 percent. If the
formula used to determine the FMAP for the states were applied to
Puerto Rico, the Federal Government's matching share would increase to
the 83 percent program maximum.
For the 50 states and DC, Medicaid provides a guarantee of Federal
matching payments with no pre-set limit. However, annual Federal
funding for Medicaid in the territories is subject to a statutory cap.
Once a territory exhausts its capped Federal funds, it no longer
receives Federal financial support for its Medicaid program during that
fiscal year.
In 2011, the Affordable Care Act granted the territories an
additional $8.25 billion in Federal funds for their Medicaid programs
in lieu of establishing a health insurance marketplace. The additional
funding for each territory ranged from $109.2 million for the Northern
Mariana Islands to $6.325 billion for Puerto Rico and was available to
be drawn down between July 2011 and September 2019.
Since 2011, Federal Medicaid spending in Puerto Rico has exceeded
the statutory cap by using the funds available under the Affordable
Care Act. These funds were depleted by February 2018.
Last Congress, we acted to avert a crisis in Puerto Rico's Medicaid
Program with a temporary increase in the Federal cap of $296 million
for FY 2018-2019 in the Consolidated Appropriations Act of 2017.
Moreover, as a result of the state of emergency caused by Hurricanes
Irma and Maria in 2017, we again increased the Federal cap to $4.8
billion with 100 percent FMAP through FY 2019r to keep Puerto Rico's
Medicaid program operational. All these additional sources of Federal
funding for Puerto Rico's Medicaid program will expire by September 30,
2019.
For Puerto Rico, the Medicaid cap set by statute for FY 2020 will
be approximately $375 million, with no additional source of Federal
funding available. This means that Puerto Rico will exhaust its Federal
Medicaid allotment in the first 3 months of FY 2020, and will bear the
expense in excess of 85 percent of the Federal program, placing
additional pressure on sparse territory resources.
Each territory is affected by this inequitable treatment in
healthcare funding in their own way. However, all of our Medicaid
programs--as currently conceived--are unsustainable. This underfunding
contributes to larger systemic problems, including lower provider
reimbursement rates and provider shortages.
To correct these challenges, I have introduced H.R. 2306, the
Puerto Rico Medicaid Act, which seeks to strengthen the Medicaid
program on the Island by increasing the cap and removing the statutory
FMAP limitation. I am also an original co-sponsor of H.R. 1354, the
Territories Health Equity Act, legislation introduced by Congresswoman
Plaskett of the Virgin Islands that addresses this fix for all five
U.S. territories. Both bills are currently under the jurisdiction of
the Energy & Commerce Committee. I will continue to work with my fellow
delegates and the members of that committee to advocate for the
advancement of these bills.
I trust that today's testimonies will help my colleagues understand
the urgent need for action. If we fail to act with the expediency that
the situation requires, the provision of health care in all the
territories will be severely affected, with far-reaching repercussion
for the rest of our Nation.
Although I recognize that this is not the committee of
jurisdiction, I would like to thank Vice Chairman Sablan and members of
this Committee for this important hearing. Having the witnesses testify
and be on the record on the impacts of the Medicaid Cliff will
undoubtedly help us as we continue working on a long-term solution for
this issue.
Thank you.
______
Vice Chair Sablan. I thank the gentlelady for her opening
statement.
I now recognize the Chairman of the Full Committee,
Chairman Grijalva.
Mr. Grijalva. Thank you very much. No opening statement,
Mr. Chairman. Just to thank you for organizing a meeting. I
think it is an excellent panel, and I am here to learn
something on which direction legislatively we are going to go
in terms of dealing with this issue.
So, thank you very much, Mr. Chairman. I appreciate it.
I was just commenting to Mr. Lowenthal here that when you
are Chairman of a Full Committee, Mr. Sablan, you are always a
little conscious, whether people say it or not, of a possible
coup, where your power is removed and you are thrown off the
chair. And having said that, Mr. Sablan, of all the people, Mr.
Sablan, I just can't believe it, you know?
With that, I yield back.
Vice Chair Sablan. Thank you. I am going to have to analyze
those comments, but I think he meant well.
And I would now like to introduce our witnesses.
Ms. Esther Lizama Muna, who is the Chief Executive Officer
of the Commonwealth of the Northern Mariana Islands Healthcare
Corporation. Ms. Muna, again, runs our only hospital in the
Marianas, whose revenue is about one-quarter, if not more, of
the--comes from Medicaid patients.
Ms. Helen Castro Sablan, who is the Director of the
Commonwealth of the Northern Mariana Islands State Medicaid
Agency.
Welcome to the two of you.
I am going to go ahead and also acknowledge Ms. Theresa
Arcangel, who is the Chief Administrator of the Guam Division
of Public Welfare, which runs the Medicaid program.
And I would like to ask Mrs. Radewagen to introduce her
witness.
Mrs. Radewagen. Thank you, Mr. Chairman.
Our Medicaid Director and CEO is Chief Tofoitaufa Sandra
King Young. She came into the position of CEO and Director of
Medicaid, and she has been there for most of the time that the
ACA funds have been there. She has been working very hard on
it, and I want to welcome her and her delegation to town.
Vice Chair Sablan. Thank you.
I will now recognize the Ranking Member for introduction of
her witness.
Miss Gonzalez-Colon. Thank you, Mr. Sablan.
I would love to introduce Ms. Angie Avila. She is Executive
Director of the Puerto Rico State Health Insurance
Administration.
Actually, we held a panel yesterday, and she is the one
providing the data related to our healthcare system in
coordination with the Secretary of Health in Puerto Rico, Mr.
Rodriguez.
Vice Chair Sablan. All right.
And I recognize Ms. Plaskett to introduce the witness from
the U.S. Virgin Islands.
Ms. Plaskett. Thank you, Mr. Chairman. It is an honor and a
pleasure to be here under your leadership.
Mr. Grijalva, I would have you note that I called the
leadership of this subcommittee for Mr. Sablan, so please be
careful.
This is a really important issue, and I am really grateful
to have Ms. Michael Rhymer-Browne, who is the Assistant
Commissioner of the U.S. Virgin Islands Department of Human
Services, which does tremendous work and is managing this issue
as well.
I do note that the governor has his chief of staff here, as
well as other members of the administration, because we
recognize, and our governor, Governor Albert Bryan, recognizes
what a tremendously important issue and the need for this
funding is to the people of the Virgin Islands.
Thank you.
Vice Chair Sablan. Thank you, everyone.
And, again, witnesses are welcome.
Under Committee Rules, oral statements are limited to 5
minutes, but your entire statement will appear in the hearing
record. The light in front of you will turn yellow when there
is 1 minute left and then red when your time is expired.
I like to keep a time frame. We may, if necessary, do two
rounds of questioning. But, at the moment, we will start with
Ms. Esther Muna, please.
STATEMENT OF ESTHER L. MUNA, CHIEF EXECUTIVE OFFICER,
COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS HEALTHCARE
CORPORATION
Ms. Muna. Chairman Grijalva, Ranking Member Bishop, Vice
Chairman Sablan, and distinguished Committee members, thank you
for the opportunity to appear before you today.
As Chief Executive Officer, I oversee the work of the
Commonwealth Healthcare Corporation, known as CHCC. CHCC is
responsible for CNMI's sole hospital, dialysis services, mental
health or public health services, and several outpatient
clinics on Saipan, Tinian, and Rota.
As one born and raised on Saipan, I relied on our
healthcare services long before I became responsible for them.
I have seen how being in a remote location poses a host of
challenges for our population.
For example, in the 1990s, a baby with a congenital heart
disease had to take a total of 8 hours in flight time to
receive care, costing $1 million accumulated in a year.
Several residents that are my neighbors, my relatives, and
my friends are unable to return home to the CNMI because we do
not have an oncologist on-island to manage their complex cancer
treatment.
A gentleman with a neurological injury waited for days
before being transported off-island because the cheapest and
safest way for him to receive treatment for his injury was at a
hospital in the Philippines and, like many U.S. citizens, did
not own a U.S. passport. Patients with complex medical issues
like this gentleman are often flown to Guam, Hawaii, the
Philippines, and Taiwan in order to receive care.
In addition to these challenges of access to care,
delivering health services in a remote island is more costly,
with the high cost of shipping, and we are competing with U.S.
hospitals for the same work force. Fifteen years ago, with only
the capped and inadequate Medicaid funding and the CNMI
undergoing a major economic crisis due to several global and
U.S. Federal policy shifts, the hospital struggled to stock
medical supplies and recruit healthcare workers.
The 2007 CMS survey revealed many problems. With no funding
improvements, paydays were missed, and doctors and nurses left
the island. In September 2012, CMS issued a termination notice
to our hospital. It was clear that without adequate funding the
CHCC could not sustain lifesaving services, much less the
healthcare needs of our residents.
The $100 million available to the CNMI through supplemental
Medicaid funding in 2011 gave us the chance to deliver a little
more than basic healthcare services that our people deserve.
Prior to 2011, we were receiving the leftover crumbs of the
capped funding since the insufficient Medicaid funding was
desperately needed and was utilized to save the lives that were
going off-island.
With the supplemental Medicaid funding, the CHCC accepted a
payment methodology that allowed the hospital to be paid at 55
cents of its $1 cost because the CNMI government's declining
economy could not afford to make the match of the 45 cents. It
wasn't the most ideal funding; however, if it were not for that
boost in Medicaid funding that supplemented that statutory cap,
we may have lost our hospital, and I wouldn't be here before
you today.
Thanks to the steady Medicaid reimbursements, my team has
brought the hospital operations to the highest level that it
has ever been. With increased revenue, we have implemented an
electronic health record system, a quality assurance unit,
outpatient pharmacy, telemedicine services, and added specialty
services such as podiatry, ENT, orthopedic surgery, and, as of
this month, oncology.
We have tripled our medical staff, with clinic visits
nearly doubling since 2013. We have cut our readmission rate in
half, far below the national average. We did this by maximizing
efficiency and innovation to maintain U.S. hospital standards
in our remote rural environment.
During two of the worst storms in U.S. history, we ensured
uninterrupted patient services while bringing medical attention
directly to the villages that were hit hard by the storms.
The reliable monthly reimbursements from Medicaid protected
CHCC's cash-flow and enabled our staff to do their jobs. We
took full advantage of the opportunity presented to us in 2011
to stabilize our healthcare system.
So, on the heels of Typhoons Yutu and Mangkhut, we face
another crisis. Our Medicaid program is unable to sustain the
needs of our healthcare system. Earlier this year, the program
exhausted the Federal funds made available in 2011. A return to
the low statutory cap on Federal contributions and the low
fixed Federal share endangers the very existence of our
healthcare system, threatens to further erode our economy, and
puts at risk the health and well-being of our people.
Help us maintain our progress and avoid a return to those
dark days. Stabilize our Medicaid funding, and provide equity
to the U.S. citizens in the CNMI.
Thank you.
[The prepared statement of Ms. Muna follows:]
Prepared Statement of Esther L. Muna, Chief Executive Officer,
Commonwealth Healthcare Corporation,
Commonwealth of the Northern Mariana Islands
Chairman Grijalva, Vice Chairman Sablan, and distinguished
Committee members, thank you for the opportunity to appear before you
today to discuss an issue of significant importance to the Commonwealth
of the Northern Mariana Islands (CNMI). On the heels of Super Typhoon
Yutu, which devastated the CNMI economy and its people, we face another
crisis--our Medicaid program is unable to sustain its operations with
the low statutory cap on Federal contributions.\1\ Low Federal
contributions, coupled with the exhaustion of PPACA funds this year,
creates a fiscal cliff for our Medicaid program. This fiscal cliff
threatens to unweave our substantial improvements over the past 10
years in the delivery of health care, further erode our economy, and
threaten the health and well-being of our people.
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\1\ Section 1108 of the Social Security Act.
cnmi medicaid financing
The framework for Medicaid financing in the CNMI resembles that of
the fifty states: the cost of the program (up to a point) is shared
between the Federal Government and the Territory and the Federal
Government pays a fixed percentage of CNMI Medicaid costs. For CNMI,
that fixed percentage is 55 percent. However, unlike the 50 states, the
Federal Government pays a fixed percentage of the CNMI Medicaid costs
within a fixed amount of Federal funding. Should CNMI Medicaid
expenditures exceed the territory's Federal Medicaid cap, the CNMI
becomes responsible for 100 percent of Medicaid costs going forward.
Moreover, the CNMI receive a relatively low fixed percentage, which
is known as the Federal Medical Assistance Percentage or
FMAP.1
The FMAP rate for the CNMI is, and has been, lower than most of the
50 states. The formula by which FMAP is calculated for the 50 states is
based on the average per capita income for each state relative to the
national average. Thus, the poorer the state, the higher the FMAP is
for that jurisdiction in a given year. However, due to statutory
restrictions on Medicaid financing for the CNMI, the FMAP we receive is
not based on per capita income of residents; subsequently, the
territories' FMAP does not reflect the financial need of the CNMI in
the same way as the states' financial need is reflected, and the FMAP
rate for our territory remains largely stagnant.
Thus, the CNMI is at a disadvantage in their Medicaid financings in
two ways: (1) a low FMAP requires a territory to contribute more local
funds than a state is required to provide in order to run a Medicaid
program; and (2) a cap on Federal Medicaid contributions stifles the
overall ability of CNMI Medicaid to function.
cnmi background
In 1975, voters of the Northern Mariana Islands chose to enter into
a covenant that established the political union between the Northern
Mariana Islands and the United States. The Covenant recognizes U.S.
sovereignty but limits, in some respects, applicability of Federal law.
The Covenant established that the, ``United States will assist the
Government of the Northern Marianas to achieve a progressively higher
standard of living for its people as part of the American economic
community and to develop the economic resources needed to meet the
financial responsibilities of local self-government.'' \2\
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\2\ 48 U.S.C. Sec. 1801 Article VII Section 701.
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From 2004 to 2007, the CNMI lost one-third of its economy.\3\ This
economic downfall was due largely to several concomitant U.S. Federal
and global policy shifts, including the lifting of quotas on garment
exports to the United States,\4\ the imposition of the Federal minimum
wage,\5\ and implementation of Federal immigration authority in the
territory.\6\ Figure 1 demonstrates the severity of this economic
spiral.
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\3\ ``Economic Impact of Federal Laws on The Commonwealth of The
Northern Mariana Islands.'' October 2008. Malcolm D. McPhee &
Associates and Dick Conway. https://marianaslabor.net/news/
economic_impact.pdf.
\4\ The 1994 Uruguay Round Agreement on Textiles and Clothing
called for the World Trade Organization (WTO) members to eliminate
quotas on textiles and clothing by January 2005. This meant the CNMI
garment industry could no longer compete with cheap labor in countries
such as China, Bangladesh, and the Philippines. (Source: Northern
Mariana Islands Business Law Handbook: Strategic Information and Laws.
International Business Publications, 2013.)
\5\ On May 25, 2007, Congress enacted Public Law 110-28, increasing
the minimum wage in the CNMI by fifty cents per hour. The act further
increased the CNMI minimum wage by fifty cents per year until parity
with the U.S. minimum wage was reached.
\6\ On May 8, 2008, the president signed P.L. 110-229 applying the
U.S. immigration law to the CNMI.
Figure 1--CNMI Gross Domestic Product 2002-2009
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Source: Bureau of Economic Analysis, U.S. Department of Commerce,
Released October 17, 2018
the inception of the commonwealth healthcare corporation (chcc)
In 1978, the CNMI Department of Public Health was formed under the
executive branch of government. Over the next 30 years it came to
operate the sole territory hospital and emergency department, several
outpatient clinics, a dialysis unit, ancillary services, behavioral
health services, and all public health functions. In 2007, in the thick
of the CNMI's economic collapse, the Department of Public Health began
experiencing financial shortfalls due to reduced government revenues,
and struggled to stock adequate medical supplies, and recruit
healthcare workers. At the CMS Region IX visit in 2007, surveyors
identified many problems with the delivery of health care at the
hospital, and cited several cases where harm and injury to patients was
found to be imminent if immediate corrective actions were not
implemented.
In FY 2009, the CNMI government appropriated roughly $31 million of
local government resources (about 20 percent of the total budgetary
resources identified for appropriation that year) to the CNMI
Department of Public Health. In January 2009, to conserve stagnant
public funding improve efficiency, the CNMI government reformed its
Department of Public Health into an autonomous government corporation,
the Commonwealth Healthcare Corporation (CHCC).\7\ The CHCC took over
operations of the sole hospital, primary care services, dialysis
services, disease surveillance, substance abuse, mental health, and all
public health services. In 2010, in the face of dwindling revenues, the
CNMI government slashed the budget for public health and healthcare
service delivery. Only $5 million was appropriated to the newly
established CHCC, and even this was not made available all at once.\8\
For an operation that normally received a local government
appropriation of $30-$40 million annually, with only $5 million for the
newly established CHCC, it became known as the ``baby born with no
blanket.'' Figure 2 below demonstrates the series of events which have
significantly impacted the delivery of health care in the CNMI.
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\7\ CNMI Public Law 16-51.
\8\ Special to the Saipan Tribune by former CHCC CEO Juan Nekai
Babauta. August 7, 2018. https://www.saipantribune.com/index.php/the-
struggles-of-chcc/.
Figure 2--Factors Affecting the CNMI Public Healthcare System 2005-2019
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Several more visits were made by CMS surveyors, and it was
clear that due to inadequate funding, the CHCC, was not meeting medical
care standards, and was not meeting the needs of CNMI residents.
In July 2011, the Federal Government awarded a total of $7.3
billion in additional funds available across all five territory
Medicaid programs under the Patient Protection and Affordable Care Act
(PPACA), including an additional $100.1 million for the CNMI \9\ from
July 2011-September 2019. This meant the CNMI Medicaid program could
receive an average of $11 million of Federal funds beyond its statutory
cap every year until the funds were scheduled to expire in September
2019. With the statutory Federal cap for the CNMI Medicaid program
typically around $6 to $7 million each year, these additional funds
created an unprecedented opportunity to make improvements to delivery
of healthcare services in the CNMI. This extra funding opportunity
meant that the CHCC could rely on receiving reimbursement for seeing a
higher volume of patients, and could expand services sustainably with
improved financing streams through Medicaid. However, the local
government still needed to come up with a local match of roughly $10
million each year to take full advantage of this opportunity and turn
around the CNMI's failing system. In FY 2012, on the heels of deep
economic recession, roughly $2.7 million was appropriated from local
funds to cover the expenses of the CNMI Medicaid program, which meant
the CNMI Medicaid Agency didn't have enough local funds to draw down
the Federal contribution in full. This meant the Medicaid Agency was
not able to fulfill its obligations to the CHCC and to private medical
providers, so payments to private providers were prioritized.
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\9\ Section 2005 of the Patient Protection and Affordable Care Act.
CHCC and the CNMI Medicaid program proposed a Certified Public
Expenditure reimbursement methodology to CMS, otherwise known as CPE.
The CPE methodology meant that the CHCC's expenditures, as a public
entity, would contribute to the local government's match. This meant
that although the CHCC would not receive a 100 percent reimbursement on
claims submitted to Medicaid, it would at least receive the Federal
share of the reimbursement at 55 percent. The CPE methodology is a
statutorily recognized Medicaid financing approach by which a
governmental entity, including a governmental provider (e.g., public
hospital), incurs an expenditure eligible for Federal Financial
Participation (FFP) under the state's approved Medicaid state plan. The
governmental entity (CHCC) certifies that the funds expended are public
funds used to support the full cost of providing the Medicaid-covered
service. The CPE methodology was approved by CMS in 2012; the Federal
match that the CPE permitted improved financial stressors at CHCC
---------------------------------------------------------------------------
almost immediately.
However, the same month this new funding methodology was
implemented, in September 2012, CMS issued a notice of termination to
the CHCC for not meeting the standards of care required as conditions
of participation in the Medicare. This meant the CHCC was at serious
risk of losing all Medicaid and Medicare funding.
The 2012 notice of termination prompted the Department of the
Interior and the U.S. Department of Health & Human Services to deploy
several U.S.P.H.S. Commissioned Corps Personnel with expertise in
internal medicine, pharmacy, pediatric medicine, laboratory services
and nursing to assist the hospital in complying with the standards of
care.
The Federal reimbursement opportunities available due to the newly
established CPE methodology coupled with support received from HHS in
response to the CHCC's notice of termination from CMS, enabled the CHCC
to make the corrections necessary to meet the standards of care
required as conditions of participation by CMS regulations. A 2014 CMS
survey found numerous improvements; and another survey which took place
just a few months ago demonstrated maintenance of these corrections and
even further advancement.
exceeding expectations
In 2008, the CNMI Department of Public Health generated roughly $15
million in revenue.\10\ In 2018, the CHCC generated nearly four times
that amount at $56 million. Since 2011, we've implemented an electronic
health records system, a quality assurance unit, an outpatient
pharmacy, sustainable telemedicine services, have tripled our medical
staff, added specialty services such as podiatry, ENT, orthopedic
surgery, and, as of this month, oncology. We have maintained the only
CLIA-certified laboratory in the territory, and renovated our inpatient
pharmacy to be compliant with new compounding standards more than a
year ahead of schedule.\11\ Clinic visits have nearly doubled since
2013, and earlier this year, clinic hours were expanded to accommodate
a greater volume of patients. We have improved patient care outcomes
and significantly reduced hospital readmission rates by developing a
discharge planning process which includes the unpaid caregivers of
patients (See Figure 3). During this same period, we weathered two of
the worst storms in U.S. history,\12\ avoiding any interruption to our
inpatient and emergency departments, and getting other services such as
dialysis, primary care up and running within 48 hours of each storm.
Beyond maintaining services through these disasters, the CHCC was also
able to provide medical outreach, disease surveillance of local
shelters, and conduct post-disaster rapid community health assessments.
Providing these services was possible because of the reliable monthly
reimbursements from Medicaid which protected the CHCC's cashflow.
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\10\ ``Finance: Public Health Generates only $15M Annually.''
August 13, 2008. Marianas Variety. http://www.mvariety.com/cnmi/cnmi-
news/local/9257-finance-public-health-generates-only-15m-annually-.
\11\ USP 797 and USP 800 are updated standards for the compounding
intravenous drugs. The deadline to meet these standards.
\12\ Typhoon Soudelor in August 2015 was a Category 4 typhoon,
while typhoon Yutu in October 2018 was classified as a Category 5 super
typhoon.
Figure 3--CHCC Readmission Improvement
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
*Data is only available for October through December 2013
Source: CHCC Corporate Quality and Performance Management (CQPM)
dependence on medicaid funds
In FY 2018, Medicaid reimbursements made up almost one-half (49
percent) of all third-party payer reimbursements to the CHCC and about
30 percent of CHCC's total revenues (about $17.3 million). This high
proportion exists even though the CHCC only receives a 55 percent
reimbursement \13\ from Medicaid, and is not eligible for supplemental
Medicaid payments, such as Disproportionate Share Hospital (DSH)
payments or Critical Access Hospital designation on the remote islands
because of its location in a U.S. territory.\14\ Furthermore, because
the CHCC is located in a U.S. territory, the CHCC's hospital is not
eligible for other programs designed to assist rural hospitals serving
low-income populations, such as the Medicare EHR incentive program, and
the 340B drug discount program.\15\ As the sole hospital service
provider, the CHCC provides 100 percent of on-island inpatient and
emergency care to CNMI Medicaid beneficiaries, and provides far more
outpatient visits to Medicaid beneficiaries than any other provider in
the CNMI.
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\13\ CHCC services, including outpatient pharmacy, dental clinic,
Tinian Health Center, and Rota Health Center are billed outside of the
CPE methodology and reimbursed at the regular Medicaid Assistance
Program. The 55 percent reimbursement represents the Federal share of
the CNMI Medicaid program funding.
\14\ Section 1886(d) of the Social Security defines eligible
hospitals as being located in one of the 50 states or District of
Columbia.
\15\ Although several public health programs in the CNMI are able
to use the 340B drug discount program tied to their grant funding, the
CNMI hospital and its outpatient clinics are not eligible because of
the territories' exclusion from Section 1886 of the Social Security
Act. In April 2019, Governor Torres requested assistance from Secretary
Alex Azar to consider including rural health systems of the territories
in designations such as sole community hospital and disproportionate
share hospital. This request letter is attached to this testimony.
Therefore, the operation of the CHCC is highly dependent on
Medicaid's ability to pay for services, especially given that 28
percent of the CNMI population relies on Medicaid \16\ to access
healthcare services, approximately 34 percent of the total population
were uninsured in 2010,\17\ and an estimated 46 percent of CNMI adults
didn't have any form of health insurance coverage in 2016.\18\
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\16\ CNMI Medicaid Program Enrollment Data 2018.
\17\ 2010 Census.
\18\ 2016 CNMI Non-Communicable Disease and Risk Factor Hybrid
Survey.
Fifty-two percent of CNMI residents, it must be noted, live on
incomes at or below the Federal Poverty Level,\19\ and the median
household income for CNMI families was less than half of the U.S.
Nationwide median household income in 2010. Despite the high poverty
rate, many CNMI residents don't qualify for Medicaid coverage because
they do not hold the necessary permanent resident status to be
eligible.12
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\19\ 2010 Census.
Employer-sponsored insurance is not a requirement for any class of
employee in the CNMI, and individual health insurance plans are not
available from private insurance companies operating in the CNMI.\20\
---------------------------------------------------------------------------
\20\ The majority of the Patient Protection and Affordable Care Act
health insurance market reforms and health insurance mandates do not
apply to the CNMI as a U.S. territory.
---------------------------------------------------------------------------
impact of additional aca funding on cmni and chcc
We are deeply grateful that Congress took the steps to provide
additional resources to the CMNI Medicaid program through the ACA. This
funding has been critical to expand services on the island such as
enabled to expanding services, establish new ones such as ENT,
podiatry, orthopedic surgery, and oncology, reducing patient
readmissions, and increasing access to primary care. Outpatient visits
at the CHCC's Saipan clinics have steadily increased by more than 50
percent in just 3 years from 2013 to 2017 (See Figure 5). Earlier this
year, the adult clinic hours needed to be expanded to evenings and
Saturdays to accommodate the growing patient demand. In 2018 alone, the
adult clinic added psychiatry, podiatry and otolaryngologist services,
further improving access to on-island care, but also increasing the
number of patient visits.
The additional ACA funding for the territories expires at the end
of September 2019. If no action is taken by U.S. Congress to cushion
the free fall from the Medicaid fiscal cliff for the CNMI, the CHCC
would not be able to continue to sustain the range of services from
inpatient care, primary care, dialysis, behavioral health services,
laboratory, pharmacy, and many public health services that it makes
available to all CNMI residents today. This would impact all health
services as personnel at the CHCC may need to be drastically cut,
leaving residents to either forego the care they need, or seek care
off-island, possibly becoming Medicaid beneficiaries of other states or
territories such as Guam. For most island residents, off-island care is
not a viable option due to the cost of travel and services.
Figure 4 demonstrates how thoroughly the CNMI has utilized Section
2005 Patient Protection and Affordable Care Act (PPACA) funds. A return
to the Federal statutory cap would not cover even half of what is
needed to deliver the healthcare services needed by our population.
Figure 4--CMS Payments to CHCC Compared with Section 1108 Cap on
Federal Funds to the CNMI Medicaid Program
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Section 1108 Federal Ceiling Amounts taken from ``Medicaid and CHIP
in the Commonwealth of the Northern Mariana Islands'' March 2019
document published by MACPAC found here https://wwwmacpac.gov/wp-
content/uploads/2019/03/Medicaid-and-CHIP-in-the-Commonwealth-of-the-
Northern-Mariana-Islands.pdf. Data on payment to CHCC from CMS is from
CHCC Financial Records.
Earlier this month, our Medicaid program announced that it had
exhausted all Federal and local funds for the program amid deep CNMI
government budget cuts.\21\ As a result, the CNMI Medicaid program has
chosen to divert Medicaid beneficiaries to the CHCC for all outpatient
care in order to maximize the savings for the local government through
the CPE methodology. This means that the maximum amount of Medicaid
funding will be channeled to the CHCC, the only public healthcare
services and safety net provider. Although this will help the CHCC to
maintain its operations, as Figure 4 demonstrates, even this strategy
will not keep the CHCC operating at the level it is today, much less
keep moving us forward.
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\21\ ``Starting June 1, NMI Medicaid will no longer reimburse
private health providers'' May 16, 2019. Lori Lyn C. Lirio. http://
www.mvariety.com/cnmi/cnmi-news/local/112741-starting-june-1-nmi-
medicaid-will-no-longer-reimburse-private-health-providers.
Figure 5--Outpatient Clinic Visits at CHCC Facility on Saipan
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Source: CHCC Resource and Patient Management System (RPMS).
Super Typhoon Yutu, which tore through the CNMI in October 2018,
brought the CNMI's tourism industry to a stand-still for several
months, and devastated many local businesses and residents. Two deaths
were attributed to typhoon Yutu, and although fortunately there were no
major disease outbreaks, many residents found it difficult to maintain
their regimens for chronic disease care during the recovery months
after the disaster. The CNMI government is in no position to make up
the significant financing shortfall caused by the depletion of Section
2005 funds. U.S. Congress must act to increase or eliminate the CNMI's
Section 1108 cap on Federal contributions.
Without continued additional Federal support of the CNMI Medicaid
program, services will be eliminated, and doctors and nurses will once
again leave the island thereby threatening our CMS accreditation. In
order to remain compliant with CMS, ensuring patient safety and quality
services while maintaining the ongoing operations of the sole hospital
service on the island, we would need to make the hard decision to
prioritize urgent care needs at the expense of preventive and primary
care services.
Although the CHCC offers a sliding fee discount for patients who
live on low incomes and don't have health insurance, this program is
unfunded, and is primarily a means to reduce barriers to care. The CHCC
provided roughly $18 million uncompensated care to uninsured patients
in the FY 2018, and about $4 million in charity care under the sliding
fee discount program. If the CNMI Medicaid program is unable to pay for
services for the Medicaid beneficiaries, then, the CHCC, as the safety-
net provider, will bear an even larger burden of uncompensated and
charity care, making operations even more difficult to sustain. This
will affect any resident of CNMI who requires any form of healthcare
services, not only Medicaid beneficiaries. An investment in the CNMI
Medicaid program is an investment in the CNMI economy.
looking forward
The CHCC has many plans for further improvements to our healthcare
system, but without greater certainty that Medicaid will be able to
reimburse for services, these plans may need to be put on hold. Our
plans for future enhancements include:
Expanding telemedicine services, including, but not
limited to, telepharmacy and teledentistry on the smaller
islands of Tinian and Rota.
Improving care efficiency by adopting the Patient-Centered
Medical Home models at our outpatient clinics.
Transforming our clinics on the islands of Tinian and Rota
into Federally-Qualified Health Centers (FQHCs).
Constructing a new 40,000+ sq. ft. outpatient facility to
accommodate a greater range of services and higher patient
capacity, including an outpatient chemotherapy center, and
Skilled Nursing Facility.
Expanding the sole hospital, which was built in 1986 to
accommodate a population of fewer than 20,000 people.
Today, the CNMI population is nearly three times this size,
but the hospital has undergone very little renovation.
These plans include expanding the emergency and radiology
departments to more than double their current size, and
expanding other units of the hospital such as the operating
room, laboratory, labor and delivery ward, and intensive
care units.
Investing in photo-voltaic energy generation to improve
self-sufficiency and mitigate interruption to hospital
services by storm damage to the CNMI's electricity
infrastructure.
Building the first ever comprehensive cancer center in the
CNMI.
Investing in local students who pursue medicine, nursing,
pharmacy, and behavioral and public health to build a
strong and diverse healthcare work force. We are committed
to bringing health workers back home, but we need a
financially stable health system to do that.
Bringing value-based services using population health
models and eliminate fee for service models that are paid
by volume.
Working with Medicaid to identify cost-saving
opportunities to control costs in the program.
Offering sustainable and innovative healthcare services in
the CNMI.
______
Questions Submitted for the Record to Ms. Esther L. Muna, Chief
Executive Officer, Commonwealth of the Northern Mariana Islands
Healthcare Corporation
Questions Submitted by Rep. Sablan
Question 1. If Congress finally treats the territories equitably
and provides uncapped funding with Federal match determined in the same
was as states, what would the Commonwealth of the Northern Mariana
Islands do to ensure that Medicaid beneficiaries have access to
comprehensive services comparable to what states must provide?
Answer. With reliable, full reimbursement, the Commonwealth
Healthcare Corporation (CHCC) could expand the availability of services
on island even further than it has since the ACA funding became
available in 2011. Currently, the CHCC only receives a 55 percent
reimbursement for services rendered to Medicaid beneficiaries. While
this reimbursement has been regular, reliable, and essential for the
cashflow of the CHCC, full and dependable reimbursement from CNMI
Medicaid would enable to CHCC to pursue new healthcare services. Most
of the CHCC's insured patients are covered by Medicaid, so Medicaid
reimbursement is essential to assure sustainability of any new service.
The assurance of Medicaid reimbursement for new and expanded lines of
healthcare services means that these services would also be available
to patients who are uninsured or insured through other third parties.
With the security of equitable Medicaid funding, the CNMI
healthcare system could make available a more robust suite of
healthcare services on our islands for Medicaid beneficiaries. This
would serve the additional benefit to our community as an investment in
our economy and healthcare workforce.
1a. With the additional Federal funding, what specific investments
could you make to improve eligibility and benefits over time?
Answer. Because this question refers to Medicaid eligibility and
benefits, please refer to the CNMI Medicaid Agency's response for the
answer to this question.
Question 2. What improvements in your healthcare infrastructure
would be needed?
Answer. The Commonwealth Healthcare Corporation (CHCC) has many
plans for further improvements to our healthcare system, but without
greater certainty that Medicaid will be able to reimburse for services,
these plans may need to be put on hold. Our plans for future
enhancements include:
Expanding telemedicine services, including, but not
limited to, telepharmacy and teledentistry on the smaller
islands of Tinian and Rota.
Improving care efficiency by adopting the Patient-Centered
Medical Home models at our outpatient clinics.
Transforming our clinics on the islands of Tinian and Rota
into Federally-Qualified Health Centers (FQHCs).
Constructing a new 40,000+ sq. ft. outpatient facility to
accommodate a greater range of services and higher patient
capacity, including an outpatient chemotherapy center, and
Skilled Nursing Facility.
Expanding the sole hospital, which was built in 1986 to
accommodate a population of fewer than 20,000 people.
Today, the CNMI population is nearly three times this size,
but the hospital has undergone very little renovation.
These plans include expanding the emergency and radiology
departments to more than double their current size, and
expanding other units of the hospital such as the operating
room, laboratory, labor and delivery ward, and intensive
care units.
Investing in photo-voltaic energy generation to improve
self-sufficiency and mitigate interruption to hospital
services by storm damage to the CNMI's electricity
infrastructure.
Building the first ever comprehensive cancer center in the
CNMI.
Investing in local students who pursue medicine, nursing,
pharmacy, and behavioral and public health to build a
strong and diverse healthcare workforce. We are committed
to bringing health workers back home, but we need a
financially stable health system to do that.
Bringing value-based services using population health
models and eliminate fee for service models that are paid
by volume.
Working with Medicaid to identify cost-saving
opportunities to control costs in the program.
Offering sustainable and innovative healthcare services in
the CNMI.
Technical assistance to implement systems for utilization
review. For example assessing use of brand name vs. generic
pharmaceuticals for Medicaid beneficiaries.
2a. Would dedicated up-front funding be needed to make those
changes?
Answer. MMIS and Utilization review technical assistance and
systems. As this speaks to Medicaid program infrastructure, please
refer to the CNMI Medicaid Agency's response for the answer to this
question.
Question 3. Would provider payments have to be increased and to
what extent?
Answer. Please refer to the CNMI Medicaid Agency's response for the
answer to this question.
Question 4. Are there particular Medicaid eligibility, benefit or
other requirements you wouldn't be able to meet within a reasonable
time due to territory-specific limitations, and if so, what changes
could the Commonwealth of the Northern Mariana Islands make to ensure
residents get high quality health care in other ways that meets their
needs?
Answer. Please refer to the CNMI Medicaid Agency's response for the
answer to this question.
Question 5. Overall, what do you see as the necessary steps to
better ensure access to quality, comprehensive care for the
Commonwealth of the Northern Mariana Islands residents and what would
be a reasonable timeline to reach such a goal?
Answer. The operation of the Commonwealth Healthcare Corporation
(CHCC) is highly dependent on Medicaid's ability to pay for services,
especially given that 28 percent of the population relies on Medicaid
to access healthcare services and about 46 percent of CNMI adults don't
have any form of health insurance coverage.\1\ Fifty-two percent of
CNMI residents, it must be noted, live on incomes at or below the
Federal Poverty Level,\2\ and the median household income for CNMI
families was less than half of the U.S. Nationwide median household
income in 2010.\3\ Despite the high poverty rate, many CNMI residents
don't qualify for Medicaid coverage because they do not hold the
necessary permanent resident status to be eligible. As of 2010, 43
percent (23,184) of all CNMI residents were non-U.S. citizens, with
fewer than one-fifth of them holding the immigration status necessary
to be eligible for CNMI Medicaid assistance. Employer-sponsored
insurance is not a requirement for any class of employee in the CNMI,
and individual health insurance plans are not available from private
insurance companies operating in the CNMI. A major step to improving
access to quality, comprehensive care for CNMI residents is to improve
reimbursement mechanisms for services. Equitable financing for the CNMI
Medicaid program would bring the CNMI closer to the reimbursements that
are needed to sustain its healthcare system. Other steps must be taken
at the local CNMI level to reduce the rate of the non-Medicaid eligible
uninsured population and assist low income residents to pay for health
care.
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\1\ 2016 CNMI Non-Communicable Disease and Risk Factor Hybrid
Survey.
\2\ 2010 U.S. Census.
\3\ 2010 U.S. Census.
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Question 6. What will you have to cut if you go off the cliff?
Answer. Please refer to the CNMI Medicaid Agency's response for the
answer to this question.
Question 7. What will be the impact on individuals and the
healthcare delivery system in the territory, when Obamacare funding
ends this year?
Answer. If no action is taken to cushion the free fall from the
Medicaid fiscal cliff for the CNMI, the CHCC would not be able to
continue to sustain the range of services that it makes available to
all CNMI residents today. This would impact all health services as
personnel at the CHCC may need to be drastically cut, leaving residents
to either forego the care they need, or seek care off-island, possibly
becoming Medicaid beneficiaries of other states or territories such as
Guam. For most island residents, off-island care is not a viable option
due to the cost of travel and services.
The healthcare system problems of 2011/2012 will reoccur, where
services would need to be eliminated and doctors and nurses leave
island. In order to consistently ensure patient safety and services
quality, CHCC will need to make the hard decision to cut back on
essential services and refer off-island.
Although the CHCC offers a sliding fee discount for patients who
live on low incomes and don't have health insurance, this program is
unfunded, and is primarily a means to reduce barriers to care. The CHCC
incurred roughly $18 mil of uncompensated care from uninsured patients
in the FY 2018, and about $7 mil in charity care under the sliding fee
discount program.
If CNMI Medicaid is unable to pay for services for the Medicaid
beneficiaries, then, the CHCC, as a safety-net provider of care, will
bear an even larger burden of uncompensated and charity care, making
operations even more difficult to continue, thereby affecting the whole
population requiring any form of healthcare services.
______
Vice Chair Sablan. Wow. Perfect timing, Ms. Muna. Thank you
for that.
We are trying to get our witnesses' testimony, because some
Members will need to run to vote.
Ms. Sablan, you are recognized for 5 minutes.
STATEMENT OF HELEN C. SABLAN, DIRECTOR, COMMONWEALTH OF THE
NORTHERN MARIANA ISLANDS STATE MEDICAID AGENCY
Ms. Helen Sablan. Honorable Chairman Grijalva, Ranking
Member Bishop, Vice Chairman Sablan, members of the Committee
on Natural Resources, thank you so very much for holding a
hearing on the insular areas Medicaid fiscal cliff and for
providing the Commonwealth of the Northern Mariana Islands the
opportunity to present information on what the fiscal cliff
means for the U.S. citizens of the CNMI.
We recognize that we are the smallest of the U.S.
territories in terms of population and geographic size.
Nevertheless, the CNMI and its U.S. citizens value their U.S.
citizenship and the Medicaid program.
The CNMI Medicaid lives under Section 1108 budget caps that
are totally inadequate. The ACA recognized the problem and
temporarily adjusted the budget caps. The Federal Medical
Assistance Percentages (FMAP) was also adjusted to 55/45
percent when calculations give the CNMI income would be higher
than almost all states. What does that mean for the CNMI today
and tomorrow?
In Fiscal Year 2018, the CNMI Medicaid program expended
over $53 million to provide care for the 15,138 eligible
Medicaid populations. Today, the number of enrolled Medicaid
beneficiaries has increased to 16,206 following the two
typhoons in 2018, including the Category 5 Super-Typhoon Yutu.
In March 2019, the CNMI Medicaid program completely
exhausted its Medicaid program funding, including the final
amounts made available through ACA. The CNMI is not at the
fiscal cliff, but it is in free-fall.
For Fiscal Year 2020, Region 9 has informed us that our
allotment will be $6.85 million for MAP and $11.2 million for
CHIP. This is not much of a change in the cap and means that
the shortfall between the actual Medicaid expenditures for
Fiscal Year 2018 and the CMS Fiscal Year 2019 allotment will be
around $50 million when the accounts payable for 2018 and
Fiscal Year 2019 are accumulated.
The median income for a family of four, based on data
provided by the U.S. Census in 2010, shows that the CNMI family
earned $19,958 in the same year that the average U.S. family
earned $61,564. If we step back for a minute and think about
just this basic information, we can clearly understand why so
many residents in the CNMI rely on Medicaid for health care or
are uninsured. The more than 16,206 individuals in the Medicaid
program constitute 46 percent of the U.S. citizens in the CNMI.
The CNMI government, the Medicaid program and its
beneficiaries, and the CNMI health system is in a dire
situation following the end of additional funding provided
under the ACA and the devastating impacts of Typhoon Mangkhut
and Super-Typhoon Yutu in 2018. I am here to plead the U.S.
Congress to provide Medicaid disaster assistance and to address
the inequities in the Medicaid program for the territories.
I have worked in the CNMI Medicaid program since 1986, over
32 years ago. In all these years, I have never been more
emotionally affected than I have in the past year. We are
currently in the process of severely curtailing services,
limiting choice of providers in the program, and are making
decisions knowing full well the adverse short- and long-term
consequences our decisions will have. I am frightened and
saddened at each step in our undertaking because I understand
the effects on our people and our health system.
While we are doing our very best to determine what might be
intellectually characterized as the so-called ``best
interests'' given the ``limited resources''--decisions
regarding what services should be continued, what should be
curtailed or dropped, and what providers can be paid, are and
will continue to be made.
It is very hard to explain to those that come to our office
asking whether the health services that they are receiving will
be cut. It is very hard to listen to their stories. What should
we do with the patient that has been in an off-island hospital
in another state that may be dying? Should we now inform the
patient and parents that we are sorry but we will no longer pay
for any of their medical bills? It is impossible for me not to
see the faces of the people behind the numbers and impact that
each decision made will have.
In summary, the CNMI is in a desperate and dire situation,
and the U.S. citizens in these islands deserve equity in health
care. As such, we are humbly pleading for the U.S. Congress to
please help to treat this equitably and, if I may humbly ask,
quickly.
Thank you once more for taking the time to hear this issue.
[The prepared statement of Ms. Helen Sablan follows:]
Prepared Statement of Helen Sablan, Medicaid Director, Commonwealth of
the Northern Mariana Islands
Honorable Chairman Grijalva, Ranking Member Bishop, and members of
the U.S. House of Representatives Committee on Natural Resources: Thank
you so very much for holding a hearing on the Insular Areas Medicaid
Fiscal Cliff and for providing the Commonwealth of the Northern Mariana
Islands (CNMI) the opportunity to present information on what the
``Fiscal Cliff'' means for the U.S. citizens of the CNMI.
We recognize that we are the smallest of the U.S. territories in
terms of population and geographic size. While World War II has long
past and memory and knowledge of the Americans that died on Saipan or
remembrance of the Enola Gay, the bomber that dropped the nuclear bomb
on Japan, flew from the island of Tinian in the CNMI, may have faded,
we believe the CNMI remains a location of strategic value in the Asia-
Pacific region. Our citizenry appreciates becoming a U.S. territory in
1978 and a participant in the Medicaid program since 1979. The CNMI and
its U.S. citizens value their U.S. citizenship and the Medicaid
program.
The purpose of this testimony is to provide the facts and
challenges of the CNMI Medicaid program and the impacts the Medicaid
Fiscal Cliff will have on the U.S. citizens in the territory. There is
already so much information on the Medicaid program by U.S. government
agencies and non-profit organizations, as well as expertise within the
Congress and congressional offices, that I will not try to be
duplicative of what this Committee and Congress already knows. At the
same time, I will present some data to highlight important
considerations.
basic information
The Medicaid and CHIP programs in the CNMI today have about 15,136
U.S. citizens enrolled in the programs. The number of U.S. citizens in
the territory are about 33,273 or 61 percent of the total population of
54,546 in the CNMI. Medicaid and CHIP provides critical healthcare
services for about 46 percent of the total U.S. citizens in the CNMI
today.
In 2010, the U.S. Census provided data on the per-family median
income in the United States. Figure 1 shows that the median income for
a family of four in the CNMI was $19,958, in comparison to the median
family income of $61,544 for the United States. Figure 1 also shows the
income disparities among the ethnic groups in the CNMI. The income
disparities among the indigenous Chamorros, Carolinians, and ``Other,''
principally Caucasian populations, when compared to the Asian
populations are even more stark but important to note since they are
principally non-U.S. and because of their income levels, constitute the
vast majority of the uninsured population in the CNMI.
Figure 1--Median Household Income in the CNMI from the CNMI State
Innovation Model Plan
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
As a result of the low-income levels and the high cost of
health insurance in the CNMI, there should be no surprise that 46
percent of the eligible U.S. citizens in the CNMI are enrolled in the
Medicaid program. In 2016, the uninsured rate was estimated to be 34
percent of adults. The 20 percent of the population that do have
private health insurance include the government employees which account
for about 10 percent of the population.
the medicaid fiscal cliff
The CNMI Medicaid program is not approaching the Medicaid Cliff.
Today, the CNMI Medicaid program has fallen off the cliff and is
currently in freefall. The CNMI, in FY 2019, has expended all Medical
Assistance and ACA funding, although there remains some funding for
CHIP that are expected to be fully expended by the end of FY 2019.
Table 1 shows that in FY 2018, the CNMI Medicaid program expended
over $53 million dollars. Additionally, as shown in Table 1, there is
an Accounts Payables estimate of $18 million dollars remaining at the
end of FY 2018.
Table 1 further shows that in the current fiscal year, FY 2019, the
Section 1108 budget cap amounts, CHIP funding, and the balance of the
ACA increases that have been fully expended will result in an estimated
shortfall for FY 2019 of around $42 million. This will result in
another carry-over of Accounts Payables. The Accounts Payable amounts
will depend on how much additional debt is incurred from services that
cannot be reduced or eliminated and whether there is any relief through
Medicaid Disaster Assistance for the current FY 2019.
For FY 2020, the CMS has informed the CNMI of the MAP and CHIP
amounts. Based on the formula for the CAPs, the amounts will remain
around $19 million. Again, assuming no Medicaid Disaster Assistance or
lifting of the Section 1108 caps in Title XIX, the shortfall will be
over $42 million, higher than the $36 million estimated by CMS needed
for Medicaid Disaster Assistance. This is largely due to the Accounts
Payables that are not reflected in the CNMI government financial
accounting system.
Table 1--Summary of Fiscal Year Expenditures and Fiscal Year Shortfall
Given the End of Additional Funding under the ACA
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
the people behind the numbers
There are many reports of agencies of U.S. government and non-
profit corporations that collectively describe the situation of the
Medicaid and CHIP programs in the CNMI and other U.S. territories.
These include publications from the Medicaid and CHIP Payment and
Access Commission (MACPAC), Kaiser Family Foundation (KFF), U.S.
Government Accountability Office (GAO), and many others. We believe
that these organizations collectively provide very useful information
and data on the situation with the Medicaid programs in the U.S.
territories. However, please, let us not forget the people behind the
numbers.
As Judge Gladys Kessler in the Salazar v. District of Columbia
precedential Medicaid case once stated:
``. . . let there be no forgetting the real people to whom this
dry and bloodless language gives voice: anxious, working
parents who are too poor to obtain medications or heart
catheter procedures or lead poisoning screens for their
children, AIDS patients unable to get treatment, elderly
persons suffering from chronic conditions like diabetes and
heart disease who require constant monitoring and medical
attention. Behind every ``fact'' found herein is a human face
and the reality of being poor in the richest nation on earth.''
\1\
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\1\ https://www.courtlistener.com/opinion/2468509/salazar-v-
district-of-columbia/.
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impacts on the u.s. citizens in the commonwealth of the northern
mariana islands
I have worked in the CNMI Medicaid Program since 1986, over 32
years ago. In 1998, I served as the Acting Medicaid Administrator and
since 2000, as the Medicaid Administrator/Director for the CNMI
Government. In all these years, I have never been more emotionally
affected than I have been in the past year.
With the end of the additional funding provided under the
Affordable Care Act, the inequitable Section 1108 budget caps under
Title XIX, the inequitable FMAP, the chronic lack of local funding, the
added financial challenges created by Typhoons Mangkut and Yutu, some
of the very highest rates of Medicaid and uninsured in the United
States, and the many other challenges of distance, time, and costly air
travel, I have had to lead an organization that is planning and
executing Medicaid program cuts that will have both short- and long-
term harsh and life-threatening impacts on our U.S. citizen
beneficiaries.
The CNMI Medicaid Program is in the process of severely curtailing
services, limiting choice of providers in the program, and are making
decisions knowing full well the adverse short- and long-term
consequences this will have on the U.S. citizens in the CNMI. It has
been a very emotional and difficult time for our office to plan and
implement decisions because we recognize and understand the impacts
that this will have on the health of some of the most-needy people in
the United States.
I am frightened and saddened at each step in our undertaking
because I understand the effects on our people and our health system.
While we are doing our very best to determine what might be
intellectually characterized as the so-called ``best interests'' given
the ``limited resources''--decisions regarding what services should be
continued, what should be curtailed or dropped, and what providers can
be paid, are and will continue to be made. We very clearly understand
the consequences to each decision on the health of the people that we
serve and I am frightened for the short- and long-term impacts that
will occur.
It is even more of an emotional toll because in our small
territory, we know many people that are Medicaid beneficiaries. We have
relatives and friends through extended familial or community
connections that are Medicaid beneficiaries. It is unavoidable that we,
the Medicaid program, not see them at the grocery store, at churches,
or the checkout clerk or the restaurant server, the laborer fixing
roads, and everywhere else in the community. It is difficult not to
know, as I see them, that decisions we are making in the Medicaid
program are directly affecting their access to health care and the
impacts that very lack of care will have on them, if not immediately,
then, very certainly over the long-run.
It is very hard to explain to those that come to our office asking
whether the health services that they are receiving will be cut. It is
very hard to listen to their stories. What should we do with the
patient that has been in an off-island hospital in another state that
may be dying? Should we now inform the patient and parents that we are
sorry, but we will no longer pay for any of their medical bills? It is
impossible for me, not to see the faces of the people behind the
numbers and the impacts that each decision made will have.
notice to beneficiaries and providers
The CNMI Medicaid Program informed Medicaid Beneficiaries this
month that they must seek primary care services only from the
Commonwealth Healthcare Corporation (CHCC). We have also informed
private providers that effective June 1, there will be no
reimbursements from the Medicaid program. The notification was provided
in accordance with the CNMI Medicaid State Plan.
Since August 2018, when the public became informed of the Medicaid
Cliff, our small Medicaid office has been busy fielding many questions
from both our beneficiaries and private providers. Today, our response
is that we cannot pay the providers what we simply do not have in
funding. Even now, at the same time that we are initiating further
restrictions in the program, we are fully aware that the CNMI
Government is already accumulating additional debt and that the
Accounts Payables for the Medicaid program is growing.
Further, while we are struggling with eliminating or reducing
services, we have had to forewarn our private providers, including the
CHCC, that we will not be able to pay our accumulating debts until we
are provided funding again. We are, and continue to be, fully aware
that the CNMI is still trying to financially recover from Typhoon
Mangkut and Super Typhoon Yutu, a Category 5 that ripped through the
center of the CNMI islands and that territory general funds are not
available. The reason is that even our office has been forewarned that
austerity may affect our Medicaid staff as well.
How can we get national attention to the plight of the CNMI, the
small territory located only 140 miles from the Territory of Guam where
there is the U.S. Navy and U.S. Air Force? And will people hear us?
impacts on the cnmi government and the safety net health system
The U.S. Government Accountability Office (GAO), about 2 months
ago, had a teleconference with the CNMI Government and the Medicaid
program. Specifically, they asked questions and requested information
and insight into the impacts of the Medicaid Fiscal Cliff and its
impacts on the general fiscal conditions of the CNMI government
especially following the typhoons.
We explained how we have reached the point, where, without Medicaid
Disaster Assistance or a lifting of the Section 1108 Caps and an
adjustment to the FMAP, the Medicaid program will add to the further
debt burden of the CNMI until the CNMI Medicaid program is able to cut
all services including off-island care, dental services, and even
drugs, unless we don't even pay the CHCC for the amounts that the CMS
has determined are appropriate to pay under the Certified Public
Expenditure methodology. We have been praying for Medicaid Disaster
Assistance funding and for the U.S. Government to lift the Section 1108
budget caps and let the FMAP be based on the same formula as other
states.
This is what the CNMI Medicaid program is doing today to our U.S.
citizens. This is what I will have to continue to do when I return
home.
impacts on the commonwealth healthcare corporation
The CNMI Medicaid program is also very cognizant and worried with
the impact the shortfalls will have on the health system of the CNMI.
The CNMI has a unique public corporation that provides hospital,
clinical, and public health services. It is a safety-net health system
and has also been doing its best given its own challenges. Due to the
chronic financial shortfalls and when the CNMI government austerity
program reduced work hours for all government employees by 20 percent
for 2 years, the Medicaid program, in 2012, proposed use of the
Certified Public Expenditures (CPE) payment methodology because the
CNMI Government simply did not have funds to provide the matching
amounts. Unfortunately, this also means that the full Medicaid
reimbursement has not been provided to the CHCC since the program took
effect.
The CPE was proposed to the Centers for Medicare and Medicaid
Services (CMS) as the only way that the Medicaid program could provide
Federal Medicaid funding because of the public expenditures by the
CHCC. The CMS calculates the amounts based on its annual analysis of
the Medicare Cost Reports submitted by the CHCC and conducts audits to
reconcile these amounts.
Under the CPE methodology, the monthly payment for the CHCC, again,
as determined by the CMS, is currently $1.64 million per month or
$16.34 million per year. I point this out because the Medicaid MAP for
2019, based on the Section 1108 budgetary caps, the CNMI Medicaid
program will barely compensate the CHCC public corporation for an
amount that the CMS determines should be paid. This means that all
other expenses and services would need to be curtailed, including
radiology services (because we have no radiologist on island), cancer
care treatment, off-island surgeries that cannot be performed at the
CHCC, and many others. The list is endless and dooms the U.S. citizens
in the CNMI to substandard or no care.
There are further consequences. Not only will the CHCC not be
reimbursed even the full estimated Federal-local share of Medicaid
services. What are we to do?
averting the medicaid cliff
The CNMI Medicaid program believes that the U.S. House of
Representatives clearly understands the major sources of the challenges
and the recent questions sent by the U.S. Senate Committee on Natural
Resources strongly suggests an understanding of the very serious nature
of the Medicaid Cliff.
There are three major policy proposals that will provide the level
of assistance that is needed. First, the CNMI Medicaid Program requests
Medicaid Disaster Assistance in the amounts minimally described as
needed by the CMS. Second, the CNMI Medicaid Program strongly supports
the lifting of the Section 1108 caps and allow the standard methodology
to apply to the U.S. territories for the Medicaid Federal Medical
Assistance Percentages (FMAP). Passage of the proposed H.R. 1354, the
Territories Health Equity Act of 2019, would provide equitable
treatment for one of the most important U.S. programs that affects the
U.S. territories and the U.S. citizens of the Commonwealth of the
Northern Mariana Islands (CNMI)--Medicaid.
summary
The CNMI is in a desperate and dire situation; and, the U.S.
citizens in the Northern Mariana Islands deserve equity in health care.
As such, we are humbly pleading for the U.S. Congress to please help to
treat the U.S. citizens of the U.S. Commonwealth of the Northern
Mariana Islands equitably, and if I may humbly ask, quickly.
Thank you once more for taking the time to hear this issue.
______
Questions Submitted for the Record to Helen Sablan, Director,
Commonwealth of the Northern Marinas Islands State Medical Agency
Questions Submitted by Rep. Sablan
Question 1. If Congress finally treats the territories equitably
and provides uncapped funding with Federal match determined in the same
was as states, what would the Commonwealth of the Northern Mariana
Islands do to ensure that Medicaid beneficiaries have access to
comprehensive services comparable to what states must provide?
1a. With the additional Federal funding, what specific investments
could you make to improve eligibility and benefits over time?
Answer. The CNMI Medicaid program, today, provides the statutory
and regulatory required mandatory Medicaid services. Additionally, the
CNMI Medicaid program, today, provides many optional services,
including, but not limited to, prescription drugs (all states provide
this option), dental services for adults; physical therapy; prosthetic
devices; eyeglasses; medical supplies; and other services. The optional
Medicaid services were made possible because of the additional funding
available through Patient Protection and Affordable Care Act (ACA).
For FY 2019, the Medicaid Disaster Assistance passed by Congress
provides temporary relief to continue the services until September 30,
2019 for the CNMI Medicaid program, and the CNMI greatly appreciates
this assistance. The lifting of the Section 1108 caps or a second year
of Medicaid Disaster Assistance is not provided for Fiscal Year (FY),
then, the CNMI Medicaid program will not be able to fully provide the
mandatory services for the full duration of the 2020 Fiscal Year and
both mandatory and optional services that are currently being provided
will be eliminated or curtailed.
Should equitable funding as the states be provided, then, the
amount of the optional services comparable to what the states provide
will be substantially improved. Specifically, the CNMI Medicaid program
would assess the optional services permitted under the program. We
would assess what other states have done and assess the optional
services on the basis of need, feasibility, benefit-cost,
effectiveness/cost and other criteria.
The adjustment to the FMAP and the commitment of territorial
funding are essential to planning optional services include diagnostic,
screening, preventive, and rehabilitative services, respiratory care
services, home and community-based services, and other services
provided by other states. The CNMI will also be in a position to
evaluate managed care service delivery options and the use of Medicaid
waivers and other Medicaid program service options to improve care and
health of the Medicaid population, and to lessen the cost of health
care. We would also work closely with the policy makers that would need
to appropriate the CNMI matching funds on the value of the proposed
optional services.
With respect to eligibility, the CNMI and the CMS implemented a
1902(j) waiver that enables the maximum participation in the Medicaid
Program.
Question 2. What improvements in your healthcare infrastructure
would be needed?
2a. Would dedicated up-front funding be needed to make those
changes?
Answer. The CNMI needs improvements in the clinical, financial, and
technology infrastructure. The following is a brief discussion of the
needed improvements.
Health Care Services Infrastructure--The clinical and public health
infrastructure in the CNMI has significantly improved since the
Commonwealth Healthcare Corporation was established as a public
corporation in 2011 and the additional Medicaid funding became
available through the ACA. There are more clinicians and healthcare
services that are currently provided and the quality of services has
continuously improved. Still, despite the substantial progress, there
are many clinical services that are not currently provided in the CNMI
at this time because of the Section 1108 caps, the inequitable FMAP,
and the high rates of uninsured in the CNMI. The small size of the
territory, the lack of specialists, and the uncertainties of Medicaid
program fiscal cliff have been barriers to improving the overall
healthcare services infrastructure in the CNMI. The CNMI Medicaid
program is studying the Medicaid services to determine what are the
high priority areas where services and other infrastructure can be
effectively provided within the territory. Given the small size of
territory, there will be continued reliance on specialized healthcare
providers and services that are outside of the CNMI.
Financial Infrastructure--In terms of the financial infrastructure
to support the health system, the two main problems remain the Medicaid
caps and FMAP, and the high uninsured rate resulting from the repeal of
the CNMI Employer Responsibility law for immigrant laborers in 2013.
The amount of charity and sliding fee supported care results in
additional millions of losses in revenue for the CHCC, the safety net
provider in the CNMI. Again, the limited financial infrastructure for
health care will be the limited financial structure will be devastated
especially since the funds provided under the Section 1108 caps of
$6.85 in FY 2020 is not even sufficient to cover the CPE amounts
determined by CMS for the CHCC.
The capped amount of $6.85 million and the CHIP amount of $11.2
million and current proposed CNMI appropriation for Medicaid of $5
million are around $48 million short of the 2018 Medicaid expenditures
of $53 million and the Incurred But Not Booked Accounts Payable of $18
million. The 16,206 current Medicaid beneficiaries will become
uninsured in the CNMI second quarter of FY 2020 without the equitable
treatment as states. Finally, it is important to note that the
estimated amounts provided by the CMS to Congress of the $36 million
amount needed for FY 2019 Disaster Assistance did not include the IBNR
Accounts Payables and was based on two quarters of available ACA
funding that was exhausted in March 2019. CNMI respectfully requests
that in addition to lifting the Section 1108 caps and adjustment of the
FMAP, that an additional year of 100 percent Federal funding be
provided based on Medicaid Disaster Assistance.
Health Information Technology Infrastructure--The Health
Information Technology for Economic and Clinical Health (HITECH) Act
was instrumental in helping the nation to establish a Health
Information Technology (HIT) infrastructure by incentivizing the use of
Electronic Health Records (EHR) systems and providing funding for
Health Information Exchange (HIE), and public health information system
interfaces. Unfortunately, the CNMI, today, remains behind the states.
In part, the reason is that the small size of the territory has
resulted in a different inequity. For example, it should be clearly
noted that the CNMI received only $800,000 to plan, design, and
implement a Health Information Exchange (HIE). The amount was obviously
insufficient. According to the Office of the National Coordinator for
Health Information Technology (ONC), the three Pacific territories
received the equivalent of a small state. As a result, none of the
Pacific Territories had a functioning HIE. Efforts were made to reach
out to other states. However, all efforts were rebuffed.
Further, under the HITECH, the CNMI CHCC hospital did not qualify
for both the Medicare EHR incentive funding because of a quirk in the
law, despite the CHCC's role as a Medicare provider. The HITECH Act
failed to mention the territories for the Medicare EHR incentive. As a
result, the CHCC was unable to use the full incentive provided to all
other state hospitals that provide Medicare services. CHCC was only
eligible for the Medicaid EHR Incentive.
In the CNMI, the HIT infrastructure to improve clinical care,
patient safety, public health and the like, remains a challenge. Even
the CHCC health system has not been able to meet the Promoting
Interoperability Standards of the CMS to receive the formerly ``Stage
2'' of Meaningful Use incentives; and no private providers in the CNMI
have met the standards as well. Of course, this means that the use of
HIT and HIE to improve clinical care, undertake care coordination,
submit data for public health disease surveillance, and conduct studies
on the population health of Medicaid beneficiaries is not equal to the
infrastructure of other states. Still, despite these facts, the CNMI
Medicaid continues to work with all provider to make progress in all of
these areas. There is some health data exchange that use Direct Secure
Messaging to comply with both ONC and the Health Insurance Portability
and Accountability Act (HIPAA), as amended by the HITECH Act.
Medicaid Enterprise Systems (MES)/Medicaid Management Information
System (MMIS) Administrative Information Infrastructure--The CNMI has
planned meetings with the CMS to initiate the planning and
implementation of an MMIS claims processing both to improve
administrative efficiency, eliminate errors with claims, conduct
ongoing fraud analysis, and to achieve the national objectives of
submitting data to the CMS Transformed Medicaid Statistical Information
System (T-MSIS). CNMI has received initial planning funds from the CMS
to initiate a Medicaid claims data warehouse that is absolutely
integral to enable data analysis to improve care quality; conduct
service utilization and cost studies; improve care services and
coordination; detect waste/fraud and abuse; and identify opportunities
to lessen the cost of health care.
Federal funding is available for these program activities and the
CNMI Medicaid program will seek the both Federal funding and the local
matching funds to move forward with the information technology
infrastructure for MES/MMIS and a Medicaid claims and clinical data
warehouse. As such, the CNMI Medicaid program is not seeking any
``special'' treatment to fund the MES/MMIS/Health Information
Technology activities. The CNMI is only requesting equity with the
funding and FMAP as provided to other states for the Medicaid
Assistance program.
The CNMI Government will need to find the match, as all other
states have done, for the full MES/MMIS and data warehouse activities
so that data can be submitted to the CMS T-MSIS data systems and to
enable an effective Medicaid Fraud Control Unit to function with the
continuous monitoring of Medicaid claims. Nonetheless, with equitable
funding and FMAP, then, the CNMI would need to prioritize local
funding.
Question 3. Would provider payments have to be increased and to
what extent?
Answer. The provider payments would have to be increased since
almost all our providers are paid using Medicare reimbursement. We
should use the Medicare reimbursement times 20 percent at least. Some
of the providers are not willing to treat our patients because of the
low reimbursement. For example, the Guam Memorial Hospital Authority
(GMHA) has not been accepting our patients since 2011 because of the
low reimbursement; and, because of the Section 1108 caps, we are unable
to develop waiver and other programs that can facilitating our desire
to improve care, improving quality, improve population health, and
lessen costs for the Medicaid program and beneficiaries. However, no
provider payment adjustments can be contemplated without equity in the
caps and FMAP.
Question 4. Are there particular Medicaid eligibility, benefit or
other requirements you wouldn't be able to meet within a reasonable
time due to territory-specific limitations, and if so, what changes
could the Commonwealth of the Northern Mariana Islands make to ensure
residents get high quality health care in other ways that meets their
needs?
Answer. The CNMI Medicaid program is constantly assessing ways to
improve benefits and at the same time ways to lessen Medicaid expenses.
We want to have a fully functional program that is able to efficiently
process Medicaid claims, have a Medicaid data warehouse that would
enable our program to analyze the cost and quality of care and
determine the high-costs areas and areas where we might use waivers and
other Medicaid programs to improve care and lessen costs. We believe
that there are many program changes that we might be able to accomplish
but are unable to do so of the Section 1108 caps, FMAP, and CNMI
general funds for a match.
Question 5. Overall, what do you see as the necessary steps to
better ensure access to quality, comprehensive care for the
Commonwealth of the Northern Mariana Islands residents and what would
be a reasonable timeline to reach such a goal?
Answer. The following are some of the steps that will be taken
should the caps be lifted and the Federal Matching Assistance
Percentage (FMAP) be adjusted to be the same as states or
substantially. The CNMI will: (a) continue the review of the Medicaid
program to determine optional services and evaluate the other optional
services for inclusion; (b) assess the quality of services; (c) analyze
alternatives to lessen the cost of care; (d) plan and implement a full
Medicaid Enterprise System services; and evaluate the use of Medicaid
program options. Just as important, the CNMI Medicaid program, just as
one example, will immediately initiate planning to implement waiver
programs as a diabetes care/management/education program under Section
1115(c) or Section 1915(i). Diabetes is a major problem in the CNMI and
has long-term consequences for Medicaid costs, comorbidities, and
debilitating problems such as renal, vision, cardiovascular and others.
The program design will be based on the many evidenced-based studies
that have shown the efficacy of diabetes self-management and patient
education and care coordinated followup. The program will be closely
coordinated with public health education for the general public and
schools and a public awareness campaign organized with the Commonwealth
Healthcare Corporation (CHCC).
The CNMI Medicaid program believes that such a program will achieve
the objectives of improving care, care coordination, population health,
and lessen the costs over a period of time. This would be coordinated
with the CHCC, a unique public corporation, that has both clinical and
public health functional responsibilities. Due to its unique public
corporation structure, the CHCC is well positioned to implement a
multi-faceted program intervention that would, as suggested in
evidenced-based literature, result in long-term reductions in diabetes
and lessen debilitating and costly diseases such as Chronic Kidney
Disease, cardiovascular problems, vision, and the many well-understood
comorbidities.
The anticipated reductions from diabetes alone, will lessen the
cost of care and serves as only one example of how the CNMI would move
forward with implementing programs that not only improve the health of
beneficiaries but lessen healthcare costs at the same time. This will
take time. However, the CNMI Medicaid program is fully committed to
continuously improving the program for Medicaid beneficiaries.
Waiver programs could not be implemented today because of the gap
between the Medicaid funding, as a result of the Section 1108 caps,
where the Medicaid program struggled to meet the healthcare financing
of the current program.
The CNMI has already initiated a plan to establish a Medicaid
Claims Data Warehouse to provide the data needed to evaluate the cost
of services, the quality of care, and the population health conditions
that are driving healthcare expenditures. The reasonable timeline to
reach such a goal is about 3 years because of the limited resources.
Question 6. What will you have to cut if you go off the cliff?
Answer. The CNMI Medicaid program was not approaching the cliff but
fell off the cliff at the end of March 2019 when ALL Federal MAP and
ACA increases were exhausted, including even the Section 1323 funding
provided to CNMI because it did not elect to establish a Health
Insurance Exchange. Now that H.R. 2157 is signed into law, the
mandatory and optional services provided will be continued until
September 30, 2019. At that time, we will again fall off the cliff
within the first quarter given that the capped MAP will not even cover
the cost of Medicaid Federal share amounts due to CHCC as determined by
CMS. So, to be clear, it is not what we will have to cut to preserve
the program, the CNMI will not be able to maintain even the mandatory
services for the year.
The CNMI has initiated consultation with the CMS Region IX. The
purpose of the consultations is to ensure that when services are cut,
the program remains even though the Federal and local funding will have
been exhausted. The situation is that dire. There is no exaggeration
since all government and non-government agencies recognize the gap
caused by the Section 1108 MAP caps and the FMAP.
Another option could be to have the CNMI Government continue to
incur Accounts Payables that could lead to severe financial problems
for the territory, Medicaid providers dropping out of the program, and
even more severe consequences given the financial situation of the CNMI
government following Typhoons Mangkhut and Yutu.
Question 7. What will be the impact on individuals and the
healthcare delivery system in the territory, when Obamacare funding
ends this year?
Answer. The health care of the 16,206 U.S. citizens and Medicaid
Beneficiaries will be very severely affected in both the short and long
run. Medicaid Beneficiaries that need tertiary cancer care or surgeries
and other services that public acute Commonwealth Health Center
hospital is unable to provide may need to finance it themselves or use
the CNMI citizen benefits if eligible or forego getting the care that
they need. If we use the full amount of the Medicaid MAP and CHIP
allotment under the caps to pay the public CHCC, then, the CNMI
Medicaid program will not be able to pay all other ``on-island'' or
``off-island'' Medicaid providers. The CHCC does not have a radiologist
on staff, does not provide advanced cancer care treatment, does not
have a gastroenterologist, and unable to perform many surgeries.
Questions Submitted by Rep. Gonzalez-Colon
Question 1. How will the overall healthcare system and the non-
Medicaid population in the Northern Mariana Islands be affected if
Medicaid funding is not increased for FY 2020?
Answer. The impacts on the overall healthcare system will be
clearly devastating for the non-Medicaid populations if the Medicaid
funding is not increased for FY 2020.
The main provider of care is the Commonwealth Healthcare
Corporation (CHCC), a unique public corporation that was constituted in
late 2011. The CHCC is responsible for the sole acute care hospital in
the territory; adult, children, family, dental, dialysis clinics on the
CHCC campus on Saipan; and clinics on the two remotely populated main
islands of Rota and Tinian. The CHCC also has statutory
responsibilities for all public health program functions that are
operated by state and/or county governments throughout the United
States, including a behavioral health program. The unique public
corporation is the safety net provider in the CNMI.
There are also several private clinics, a Section 330 Community
Health Center, a second renal dialysis clinic, several dental clinics,
and a private laboratory. There is no on-island radiologist or
gastroenterologist or cancer treatment center, to name only a few of
the medical services that are not provided in the CNMI. Medicaid
Beneficiaries that need those services must see ``off-island''
healthcare providers in Guam, Philippines, Hawaii, and the U.S.
mainland.
If a second year of Medicaid Disaster Assistance is not provided or
the Section 1108 caps are not eliminated, then, the CHCC will need to
survive on a portion of the $6.85 million of total Medical Assistance
funding under the caps. This amount, even if all funds were provided to
the CHCC, will not even meet the Federal amounts the CMS has determined
should be provided to the CHCC as the Federal share under the Certified
Public Expenditure (CPE) methodology. The current CPE amount as
determined by the CMS is $1.5 million or $18 million a year based on
the CHCC Medicare Cost Reports. So, loss will be $12 million to the
CHCC if you assume that all funding is provided to the CHCC. When you
include the fact that the CHCC treats the uninsured and provides a
sliding fee for indigent patients at a loss of $19 million a year, the
impact will be devastating to the CHCC and to health system of the
CNMI.
It is critical to understand again that the CHCC includes an acute
care hospital that does not cover all types of specialties. As a
result, the use of ``off-island'' providers is unavoidable. Further,
even with lifting the Section 1108 caps, there will need to be
significant reliance on Providers that are outside of the CNMI since
the territory would not have the patient volume to support the
specialist within the territory. The CHCC renal dialysis center has
been rated highly by the annual CMS conducted surveys. Nonetheless, the
CHCC does not have sufficient dialysis stations and must rely on the
second dialysis center to meet the number of dialysis patients in the
CNMI.
Finally, it should be noted that following the CHCC lost five
physicians and a significant number of nurses when the CHCC was unable
to make payroll due to the financial conditions at the birth of the
CHCC. History will repeat itself without lifting the caps and adjusting
the FMAP.
Question 2. Currently, the Social Security Act provides for capped
Medicaid funding for the territories. For FY 2017, the cap in the
Northern Mariana Islands was $6.34 million. How much did the Medicaid
program benefits actually cost?
Answer. As shown in Table 1, below, the actual Medicaid
expenditures for FY 2018 was $53.11 Million. With an additional
Incurred But Not Booked (IBNR) Accounts Payable of $18 Million, the FY
2018 total was $71.42 Million.
Table 1
Summary of FY 2018 Expenditures and FY 2020 Shortfall Given the End of
Additional Funding under the ACA
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
.epsFor FY 2020, the CMS has informed the CNMI of the MAP and CHIP
amounts. Based on the formula for the CAPs, the amounts will remain
around $19 million. Again, assuming no Medicaid Disaster Assistance or
lifting of the Section 1108 caps in Title XIX for FY 2020, the
shortfall will be over $42 million, higher than the $36 million
estimated by CMS needed for Medicaid Disaster Assistance. This is
largely due to the Accounts Payables that are not reflected in the CNMI
government financial accounting system.
For the current FY 2019, the CNMI completely exhausted its $6.48
million in the Section 1108 Cap as well as the last of the ACA funding,
including the Section 1323 funding since the CNMI did not elect to
implement a Health Insurance Exchange.
For FY 2020, the CMS informed the CNMI Medicaid program that the
allocation would be $6.85 million for the Medical Assistance Program
and $11.20 for the Children's Health Insurance Program. The gap between
the FY 2020 allocation and the 2018 Medicaid expenditures, including
Accounts Payables, is about $42.27 Million. Again, this staggering
amount for the CNMI does not include the 2019 Accounts Payable IBNR
that is currently accruing.
Question 3. Could you please provide the Committee actual examples
of how the current statutory FMAP of 55 percent affects the provision
of health care in the Northern Mariana Islands?
Answer. The following are two very specific examples of how the
FMAP affects the provision of health care in the CNMI Medicaid program.
At the same time, please keep in mind that without the lifting of the
Medicaid Section 1108 caps, the total amount required will not even be
available.
First, the Statutory FMAP of 55-45 percent affects the provision of
health care is illustrated by two facts. Fact 1--the CNMI Legislature
has never appropriated sufficient general fund appropriations to match
the Federal expenditures at the 55-45 percent level. This helps to
explain the IBNR Accounts Payables of $18 million. The IBNR AP amount
is for private providers.
If the CNMI did not implement the Certified Public Expenditure
(CPE) payment methodology that uses the public expenditures of the
Commonwealth Healthcare Corporation, a public corporation, as the CNMI
match for both inpatient and outpatient services, then, the CNMI would
NOT have been able to even expend the amounts provided by the ACA and
the optional services would have had to be severely curtain.
Fortunately, the CNMI Medicaid program elected in 2012 to implement
the CPE methodology. The Federal share based on the CPE payment
methodology is calculated by the Centers for Medicare and Medicaid
Services (CMS) each year. As a result of the use of the CPE
methodology, the CNMI was able to expend the much-needed amounts
provided under the ACA for the CHCC; and, as the CHCC testified, was
instrumental in helping the CHCC to make improvements. Unfortunately,
at the same time, the use of the CPE essentially means that the CHCC
did not receive the 45 percent in the local match. Nonetheless, the
CHCC health system has made substantial improvements over the years due
to the increased amount under the ACA.
A second example of how the FMAP is a barrier is with payments to
private providers. The CNMI government has not appropriated sufficient
funds based on the inequitable FMAP requirements of a 45 percent CNMI
share. As described above, this led the CNMI to use the CPE methodology
for payments to the CHCC. But, for the other providers, the inability
of the CNMI government to fund the 45 percent share of the artificial
FMAP has resulted in Incurred But Not Reported (IBNR) Accounts Payables
of $18 million at the end of FY 2018.
The CNMI Medicaid program, as with all other states and
territories, absolutely must match the Federal funds that are provided
for Medicaid program based on the FMAP. However, since the CNMI
Government has not been able to appropriate the full matching
requirements needed, the CNMI Medicaid program must defer payments to
Private Providers because of the inability of the CNMI to provide a 45
percent match. This results in the IBNR Accounts Payables. The same
problem has occurred in other territories.
If both the Section 1108 and FMAP inequities are corrected, then,
the CNMI would be able to pay the non-CHCC providers in a far more
timely manner since payments to private providers must be deferred
until matching funds are available. This has led many Medicaid
providers, especially specialist off-island providers, to stop
providing services for the CNMI Medicaid population.
______
Vice Chair Sablan. Thank you. Another perfect-timing
witness. Thank you very much, Ms. Sablan.
At this time, I would like to recognize Ms. Theresa
Arcangel for her 5 minutes, please.
STATEMENT OF THERESA ARCANGEL, CHIEF ADMINISTRATOR, GUAM
DIVISION OF PUBLIC WELFARE
Ms. Arcangel. Hafa adai, Mr. Chairman and Ranking Minority
Member. For the record, my name is Maria Theresa Arcangel,
Chief Administrator for the Division of Public Welfare, Guam
Department of Public Health and Social Services. I oversee
Medicaid administration.
I am here with Ms. Linda DeNorcey, director of the
department. On behalf of Governor Leon Guerrero and the people
of Guam, we thank you for inviting us to testify regarding Guam
Medicaid financial issues.
The cost of providing health care in Guam is quite high due
to its geographic location and the lack of tertiary centers and
other healthcare professionals. Some medical providers refuse
to accept Medicaid patients due to delayed payments. This
further increases the medical cost because recipients are
forced to seek treatment at the hospital emergency room.
Additionally, the cost of drugs is more expensive in Guam
compared to the U.S. mainland because there are only five to
six wholesalers that ship drugs to Guam in comparison to the
hundreds of companies available here. These vendors may tend to
impose a higher price due to lack of competition. The shipping
costs and the risk of stocking drugs that have limited shelf
life also contribute to this high cost.
Guam has been burdened for years by U.S. treaty obligations
with the Compact of Freely Associated States, which allows
unrestricted immigration. These immigrants have contributed to
the changes in Guam's demographics. In Fiscal Year 2017, Guam
estimated that nearly $147 million was spent on education,
public safety, health care, and social services for these
migrants. Of that amount, $38.5 million was for health care and
welfare services.
Guam's economy is heavily dependent on the tourism industry
and U.S. military spending. The influx of COFA migrants created
an additional hardship on Guam's economy. As a result, the
government is unable to guarantee the availability of local
matching funds to draw down the Federal grant awards.
Guam administers Medicaid under Federal regulations that
are different from the 50 states and the District of Columbia.
Guam Medicaid's Federal Medical Assistance Percentage is fixed
at 55 percent. In addition, the Federal Medicaid funding to
Guam is subject to an annual funding cap, which is $17.97
million for this fiscal year, unlike the states and DC that are
open-ended.
Furthermore, beginning in 2014, the Federal Government
funded the states that implemented the ACA Medicaid expansion
for childless adults at 100 percent of the coverage costs for
the first 3 years. This is not applicable in Guam.
Instead, Section 2005 of ACA provided Guam with $268
million, which partly alleviated the financial shortfall not
only of our Medicaid program but also of Guam's locally funded
medical assistance program, where most of the COFA citizens
qualify. This funding allowed Guam to shift the cost of COFA
migrants' emergency services to Medicaid. But the 45 percent
required local match provides hardship in fully expanding the
program to cover more uninsured population. Unfortunately, Guam
would not be able to expend all the ACA funding, which will
expire this fiscal year.
If ACA is not extended or replaced, the Guam Medicaid could
be forced to decrease its income guidelines and terminate some
of its program eligibles. This will further increase the
uninsured population in Guam.
The U.S. territories receive fewer Federal dollars for low-
income healthcare programs than the U.S. states due to long-
standing regulations. There should be no disparity on the
Medicaid funding distribution. The low-income U.S. citizens in
Guam and other U.S. territories are no different from the U.S.
citizens in the mainland, and so their healthcare benefits and
needs should not be viewed or treated differently.
Hence, Guam proposes to remove the expiration date of
funding appropriation under Sections 2005 and 1323 of ACA until
it is fully expanded, remove the Medicaid cap, and increase the
FMAP of Guam and the other U.S. territories.
We applaud the Committee for this oversight and for taking
the necessary steps to evaluate the needs of Guam and the other
territories. Thank you for the opportunity to speak regarding
this important issue.
[The prepared statement of Ms. Arcangel follows:]
Prepared Statement of Ms. Maria Theresa Arcangel, Chief Human Service
Program Administrator, Division of Public Welfare-Guam
Hafa adai, Mr. Chairman and Ranking Minority Member, my name is
Maria Theresa Arcangel, Chief Human Service Program Administrator for
the Division of Public Welfare, Guam Department of Public Health and
Social Services that oversees the administration of Medicaid. I am here
with Ms. Linda Unpingco DeNorcey, Director of the Department.
On behalf of Governor Leon Guerrero and the people of Guam, we
thank you for inviting us to testify before the Committee on Natural
Resources on the matter of Medicaid and the cliff Guam faces if there
is no meaningful action taken by the Congress before the expiration of
ACA Medicaid Funding on September 30, 2019 and more broadly how
Medicaid is applied to Guam as well as other U.S. territories.
My testimony will cover the Medicaid issues in several contexts:
(1) access to healthcare services, (2) the cost of health care and high
cost of medications, (3) immigration of the Compact of Freely
Associated States citizens, (4) Guam financial instability, (5) the
limited time to fully utilize funding appropriated under Section 2005
and Section 1323 of the Affordable Care Act, and (6) the disparity on
the Medicaid Program funding distribution of the U.S. Territories in
comparison to the U.S. states given Guam Medicaid's Federal Medical
Assistance Percentage (FMAP) rate of 55 percent and Guam's annual
Medicaid Federal capped funding.
As you know, Guam became a U.S. territory in 1950; the island is
210 square miles, located approximately 5,800 miles west of San
Francisco, and has an estimated population of 170,000. It is the
largest island in the western Pacific and is a part of Marianas
Archipelago, which includes the Commonwealth of the Northern Mariana
Islands.
Guam's proximity to Asia (3-4 hours by air) makes it the most
strategically important U.S. location in the Pacific for defense and
for U.S. force projection.
Moreover, as the U.S. regional hub in the Pacific, a healthy
visitor industry which eclipses more than 1.5 million visitors annually
and the primary destination for migrating FAS citizens, the risk of
communicable and infectious disease outbreaks (i.e., Tuberculosis,
Hepatitis, Influenza, etc.) is heightened.
Like many stateside rural areas, Guam suffers from a shortage of
primary care physicians, specialists, dentists, and psychiatrists.
Health Resources and Services Administration (HRSA) has qualified Guam
as both a Medically Underserved Area (MUA) and a Health Professional
Shortage Area (HPSA). The shortage of health professionals is primarily
attributed to the difficulty in recruiting providers due to Guam's
remote island setting, small scale, and territorial status (i.e., not
linked to any larger state entity), the physician salary not comparable
to U.S. rate, and the high cost of malpractice insurance on Guam.
Clearly, with an estimated population of 170,000 individuals, there
remains a shortage of primary care physicians, which is felt most
especially among the Medicaid, Medically Indigent, and the uninsured
patients who struggle finding a provider and a permanent ``medical
home'' since providers on island refuse to accept Medicaid patients due
to delayed Medicaid payments. Thus, clients are forced to seek
treatment at the hospital emergency room, which is more costly.
Other than the shortage of providers, there are gaps in tertiary
care services (there are no tertiary care facilities on Guam as in the
United States), off-island referral services, and inpatient care
services. Additionally, there are instances when off-island hospitals/
doctors refuse to accept Guam's Medicaid referrals due to untimely
reimbursements. Thus, the difficulty of accessing health care
(facilities and specialists) increases patients' physical and emotional
stress, reducing the likelihood of seeking medical care, and so they
forego medical care until their condition worsens that they have to be
hospitalized.
Given the above factors, the cost of providing health care on Guam
is quite high because of its unique geographic location, limited number
of primary care physicians, specialists, and allied-health
professionals, and the lack of tertiary care facilities.
Similarly, the cost of drugs is more expensive in Guam as compared
to the U.S. mainland due to limited choices of pharmaceutical
wholesalers and distributors (only 5 or 6) that can ship drugs and
medical devices to Guam effectively as compared to hundreds of
companies available to the U.S. mainland. These vendors may tend to
take advantage of this lack of competition by imposing a higher price
on medications. Other factors contributing to the high cost of
pharmaceuticals is the shipping cost and the stocking of drugs with a
limited shelf life. Thus, pharmaceutical services rank as the second
highest Medicaid expenditure on Guam.
The migration of FAS immigrants is allowed under the Compact of
Free Association (COFA) signed between the U.S. Federal Government and
former U.S. associated Pacific Islands. This U.S. treaty obligation
allows unrestricted migration of FAS citizens (often ill individuals)
from the Federated States of Micronesia (FSM) (Pohnpei, Yap, Kosrae,
Chuuk), the Republic of Marshall Islands, and the Republic of Palau to
the United States and its Territories (Guam, Commonwealth of the
Northern Mariana Islands, and America Samoa).
According to the U.S. Census Bureau, in 2013, there were 17,170
compact migrants on Guam. Guam is an attractive place due to the
availability of health and social services programs. These immigrants
have contributed to the changes in Guam's demographics and have
adversely impacted the financial well-being of Guam. In 2017, Guam
estimates that nearly $147 million dollars was spent on education,
public safety, health care, and social services. Of this amount, $38.5
million was spent on health care and welfare services for this
population while living on Guam. Moreover, of the $110.8 million
(Federal and local) spent by the Guam Medicaid Program in Fiscal Year
2018, $29 million, or 27 percent of the total expenditures were spent
for FAS population healthcare needs. Thus, there is no equitable
reciprocal healthcare services payment from the Federal Government for
the FAS population.
Furthermore, Guam's economy is heavily dependent on the tourism
industry and U.S. military spending. The influx of Compact Impact of
Free Association created an additional hardship on Guam's economy. As a
result, the government is unable to guarantee the availability of local
matching funds to drawdown the Federal grant awards to pay the medical
providers timely for the services rendered to program recipients.
Prior to the supplemental funding of $268 million brought about by
Section 2005 of the ACA, Guam Medicaid always expends its annual
Federal capped funding before each fiscal year ends. The ACA provides
significant benefits and important health insurance reforms. However,
the limited application of its provisions to the U.S. territories, its
insufficient funding allocation of Federal funds to implement Health
Insurance Exchange, and the Medicaid Program Expansion significantly
limits Guam's opportunity to implement new healthcare innovations and
provide coverage to the Guam's uninsured population. Because of the
ACA's limitations in funding and the exemption of some of its most
important provisions to the insular territories, Guam has decided that
the health insurance exchange would not be beneficial to implement.
Additionally, there are some disparities in the law that affects
the U.S. Territories. Beginning in 2014, the Federal Government funded
the states that implemented the ACA Medicaid Expansion provision for
childless adults at 100 percent of the coverage costs of newly eligible
individuals for the first 3 years; and phased down gradually to a
permanent rate in 2020 at 90 percent FMAP. However, this is not
applicable in Guam. Even though ACA increased the Territories FMAP by 5
percent, this is not enough to alleviate the local budget shortfall.
The ACA funding of $268 million partly alleviated the financial
shortfall not only of Medicaid, but also of Guam's locally funded
medical assistance program called Medically Indigent Program, where
most of the COFAS citizens qualify. The additional funding provided by
Section 2005 of ACA allowed Guam to shift the cost of COFAS emergency
services to Medicaid. Though Guam obtained some additional funding of
$268 million as a separate ACA provision to help alleviate its Medicaid
funding shortfall, the 45 percent required local match provides
hardship in fully expanding the program and utilizing the $268 million.
Unfortunately, Guam would be unable to expend all the aforementioned
ACA funding, which will expire in September 30, 2019.
The U.S. territories administer their Medicaid Program under
Federal regulations that are different from those applicable to the
fifty (50) states and the District of Columbia. The U.S. territories'
Federal matching rate is fixed in statute, unlike the statutory formula
for U.S. states. For instance, Guam Medicaid's Federal Medical
Assistance Percentage (FMAP) rate is 55 percent, the same as the other
U.S. territories. However, the FMAP for the 50 states and DC varies by
state's per capita income, which ranges from 50 percent to 83 percent.
In addition, the Medicaid programs in the U.S. territories are subject
to annual Federal capped funding, unlike the states and DC that are
open-ended. Guam's regular Medicaid funding for FY 2019 is $17.97
million dollars (administration and medical services payments), which
increases yearly based on Medical Consumers Price Index. However, the
$17.97 million dollars may not even be enough to last for one quarter
of a fiscal year based on the trend of Guam's Medicaid program
expenditures, which increases annually.
Guam Medicaid's expenditure increased by 323 percent over the past
decade (from $26,185,419 in FY 2009 to $110,876,286 in FY 2018) due to
an increase in utilization, cost of medical treatment, new medical
technology or mode of treatment, and the increasing cost of drugs. If
ACA funding is not extended or replaced, the Guam Medicaid Program
could be forced to decrease its income guideline and terminate more
than 50 percent of its current eligible individuals. This will further
increase the rate of the estimated uninsured population, which was 24.8
percent (adults 18 years and above) of Guam population in 2017 (2017
Guam Behavioral Risk Factor Surveillance Survey). Guam's residents who
cannot afford the needed health care will delay getting care at an
early stage of their illness until they are forced to go to the
hospital emergency room. This will aggravate the operational and
financial issues of the only government hospital even more, which
continues to struggle because of EMTALA (Emergency Medical Treatment
and Labor Act). This will continue to heighten the financial problem of
Guam.
Additionally, Guam and other territories received fewer Federal
dollars for low-income healthcare program than the U.S. states due to
long-standing regulations. According to Guam Department of Labor, the
2010 Guam's per capita income was $12,864, which is lower than any of
the U.S. states per capita income including Mississippi (one of the
lowest per capita income in the United States). Mississippi's FMAP rate
ranges between 73.05 to 84.86 from FY 2010 to FY 2019 (Kaiser Family
Foundation FMAP Rate Listing) as compared to Guam Medicaid's FMAP rate
of 55 percent and a funding cap. Thus, there is a huge disparity on the
Medicaid Program funding distribution of Guam including the U.S.
Territories in comparison to the U.S. states. Those differences on
Medicaid rules contribute to the economic destabilization of Guam.
Hence, Guam proposes to remove the expiration date of funding
appropriation under Section 2005 and Section 1323 of ACA until the
funding is fully expended; remove the Medicaid cap; and increase the
FMAP of Guam and the other U.S. territories. The low-income U.S.
citizens in Guam and other U.S. territories are no different from the
U.S. citizens in the mainland and so their healthcare benefits and
needs should neither be viewed, nor treated any differently.
We applaud the Committee on Natural Resources for this oversight
hearing and for taking the necessary steps to evaluate the needs of
Guam, and we hope that the Committee will develop a solution to assist
Guam's U.S. citizens.
Thank you for the opportunity to provide Guam's written and oral
testimonies on this important issue during the ``Insular Areas Medicaid
Cliff'' hearing.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
__
Questions Submitted for the Record to Ms. Theresa Arcangel, Chief
Administrator, Division of Public Welfare, Guam
Questions Submitted by Rep. Sablan
Question 1. If Congress finally treats the territories equitably
and provides uncapped funding with Federal match determined in the same
was as states, what would Guam do to ensure that Medicaid beneficiaries
have access to comprehensive services comparable to what states must
provide?
Answer. The Guam Medicaid Program will conduct a survey to analyze
medical providers practices and perceptions to determine the reasons
for not participating under the program.
Conduct a study to determine if Managed Care is more beneficial for
Guam Medicaid Program.
Encourage program participation by conducting an island-wide
medical provider comprehensive informational outreach/conference or
training.
Structure the Medicaid Program payment methodology to a capitated
(prepaid) model.
Provide Medicaid incentives to providers if Medicaid patients seen
is equal or more than 10 percent of their practice.
1a. With the additional Federal funding, what specific investments
could you make to improve eligibility and benefits over time?
Answer. Guam Medicaid Program is in need of dramatic technology
transformation. Currently, due to shortage of staff eligibility
application processing is untimely, and influx of clients' inquiries on
benefits and applications' follow-up is tremendous. Guam Medicaid
program is going to leverage the use of digital technology to submit
program application and inform or assist existing clients and new
applicants regarding eligibility requirements, application status,
scheduled appointments, etc. Thereby, improving client accessibility
and customer service, streamlining application processing for a
timelier receipt of benefits.
Though there is a separate funding for MMIS (90/10), we would like
to add that we plan to enhance our existing customized automated system
(PHPRO) to meet the MITA (Medicaid Information Technology Architecture)
requirements for a certified MMIS (Medicaid Management Information
System) and to be able to comply with TMSIS (Transformed Medicaid
Statistical Information System). The local funding that we can save
from increasing the Guam FMAP can be utilized as the 10 percent local
funding match to enhance our current system.
Question 2. What improvements in your healthcare infrastructure
would be needed?
2a. Would dedicated up-front funding be needed to make those
changes?
Answer. There is a need for a tertiary care facility and a
hospital-based outpatient clinic facility to properly manage patients'
condition and reduce hospital admissions. The only Government of Guam
hospital is not well-equipped to treat critical patients. Due to TEFRA
regulation the hospital Medicare and Medicaid reimbursement is very low
to support and sustain the facility operation.
A dedicated up-front funding is needed to physically improve the
facility that will make care accessible with trained staff and
healthcare professionals. Additionally, funding is needed to procure
new modernized medical equipment, medications, and other supplies.
Question 3. Would provider payments have to be increased and to
what extent?
Answer. The healthcare cost in Guam is higher compared to the U.S.
mainland because of its geographic location, lack of tertiary
facilities, and the limited number of healthcare professionals
including specialists. An increase in provider payments would be
beneficial in order to attract more provider participation and at the
same time attract providers from the U.S. mainland to come and stay in
Guam. If CMS or the regulation will allow through a state plan
amendment to increase the provider reimbursement beyond the Medicare
Upper Payment Limit (UPL) up to 120 percent to 150 percent depending on
providers specialty that would be helpful to ensure that our recipients
have a medical home.
Question 4. Are there particular Medicaid eligibility, benefit or
other requirements you wouldn't be able to meet within a reasonable
time due to territory-specific limitations, and if so, what changes
could Guam make to ensure residents get high quality health care in
other ways that meets their needs?
Answer. No, provided funding is available.
Question 5. Overall, what do you see as the necessary steps to
better ensure access to quality, comprehensive care for Guam residents
and what would be a reasonable timeline to reach such a goal?
Answer. Steps to ensure access to quality comprehensive care for
Guam residents include: recruitment and retention of more physicians
and specialists from the U.S. mainland; increasing Medicaid provider
participation; and creating an alternative payment models for a more
coordinated primary care approach.
Timeline would be 5 to 6 years (depending on the recruitment and
retention of physicians, specialists, and other healthcare
professionals).
Question 6. What will you have to cut if you go off the cliff?
Answer. Medicaid would be forced to terminate 50 percent or more
than 23,000 eligibles and remove some of the optional benefits such as
dental services, some prescription drugs, clinic services, optometry
services and eyeglasses, etc.
Question 7. What will be the impact on individuals and the
healthcare delivery system in the territory, when Obamacare funding
ends this year?
Answer. Currently, there are around 43,000 to 44,000 eligibles
under Medicaid program. If Obamacare funding to the U.S. territories is
not extended or replaced, Guam would be forced to reduced its current
Guam Medicaid Poverty Level income guideline, which is 30 percent to 31
percent below the Federal Poverty Level for 48 contiguous states and
DC, to terminate 50 percent or more than 23,000 of its current
eligibles. This will further increase the estimated 24.8 percent
uninsured population in Guam. The two hospitals (Government and
private) in Guam will be inundated with a lot of self-pay patients
because the facilities would not be able to refuse any patient that
present to their door due to EMTALA and would eventually suffer huge
losses and may end up filing bankruptcy.
Questions Submitted by Rep. Gonzalez-Colon
Question 1. You testified that Guam will be unable to spent the ACA
funds before they are set to expire. Why is that? In addition to
extending their expiration date, what would Congress need to do to help
Guam spend these funds in healthcare services to its residents?
Answer. Due to Guam's limited financial resources, the Government
is unable to guarantee the 45 percent required local matching funds to
drawdown the Federal grant awards. Additionally, although Guam Medicaid
expanded the program to include the childless adults to reduce the
uninsured population, which was 24.8 percent of Guam population in
2017, the income guideline was reduced by 30 percent to 31 percent
(based on household size) from the existing 100 percent Federal Poverty
Level for the entire Medicaid population except the program for Old Age
Assistance and Assistance to Permanently and Totally Disabled
individuals because of the required 45 percent local match.
Congress needs to increase the FMAP to 100 percent and extend the
expiration date of ACA Section 2005 and Section 1323 to help Guam spend
all the funds and provide quality healthcare services to the
disadvantage population in Guam.
Question 2. How will the overall healthcare system and the non-
Medicaid population in Guam be affected if Medicaid funding is not
increased for FY 2020?
Answer. If Medicaid Funding is not increased, Guam Medicaid would
be forced to terminate 50 percent or more than 23,000 of its eligibles
by reducing the income guideline, which will further increase the
uninsured population in Guam, or remove some of the optional services
such as prescription and dental services. Guam's residents including
the non-Medicaid population (COFAS) who cannot afford the needed health
care will delay getting care at an early stage of their illness until
they are forced to go to the hospital emergency room. This will further
aggravate the operational and financial issues of the only government
hospital even more, which is already struggling because of EMTALA
(Emergency Medical Treatment and Labor Act). More providers will refuse
to accept Medicaid patients and so the two Guam Federally Qualified
Health Centers (Northern and Southern Region Community Health Centers)
with limited healthcare practitioners will be inundated with patients.
This will continue to heighten the financial problem of Guam.
Question 3. Currently, the Social Security Act provides for capped
Medicaid funding for the U.S. Territories. For FY 2017, the cap in Guam
was $17.02 million. How much did the Medicaid program benefits actually
cost?
Answer. Guam Medicaid Program is a 100 percent fee-for-service
delivery system. All mandatory and most of the optional services are
covered. The income guideline is below the 100 percent of the Federal
Poverty Level (FPL) and so there are no deductibles, nor co-payments
except for minimal co-pays for childless adults.
In FY 2017, Guam Medicaid paid out $108.6 million dollars to
medical providers for services rendered to 43,749 program eligibles.
The FY 2017 total IBNR (Incurred But Not Reported) expenditure was
$19.2 million dollars. The yearly expenditure is controlled by the
budget appropriation and Guam's revenue.
Question 4. Could you please provide the Committee actual examples
of how the current statutory FMAP of 55 percent affects the provision
of health care in Guam?
Answer. The required 45 percent local match is a financial barrier
to the provision of quality healthcare services on Guam. The Guam
Department of Administration reimburses the providers based on cash-
flow. The providers have to wait 2 to 4 months or more depending on the
revenue to receive payments for medical services rendered. As a result,
providers on- and off-island refuse to accept Medicaid patients. Thus,
patients requiring treatment on island are forced to seek treatment at
the hospital emergency room. Additionally, patients that need to be
transported to an off-island facility (services unavailable on island)
have to wait until the off-island provider receives payment and also
agrees to accept them. Meanwhile, the patient's condition worsens
because the needed immediate treatment is unavailable. Thus, with a
debilitating medical condition, this translates to an even higher
healthcare cost.
Furthermore, Guam Medicaid program's lack of prompt payment and its
low reimbursement rate have cascading effects on Guam's only Government
hospital in that GMH is unable to pay vendors timely for medication,
laboratory supplies, facilities and maintenance, etc. Without the
financial resources, the Government hospital cannot improve its
facility and services, which in turn affects the quality of patient
care.
______
Vice Chair Sablan. Wow. Thank you, Ms. Arcangel. Perfect
timing again. I appreciate your coming here and testifying.
I would like to now recognize Ms. Michal Rhymer-Browne.
Did I get that right, Ms. Browne?
Ms. Rhymer-Browne. ``Michal.''
Vice Chair Sablan. All right. You are recognized for 5
minutes.
STATEMENT OF MICHAL RHYMER-BROWNE, ASSISTANT COMMISSIONER, U.S.
VIRGIN ISLANDS DEPARTMENT OF HUMAN SERVICES
Ms. Rhymer-Browne. Chairman Sablan, Ranking Member Bishop,
and members of the Committee, thank you for the opportunity to
provide testimony on the significant impacts to our healthcare
system and the people of the U.S. Virgin Islands in light of
the impending Medicaid fiscal funding cliff, which will impact
us beginning October 2019.
I am Michal Rhymer-Browne, Assistant Commissioner of the
Virgin Islands Department of Human Services, and I have direct
oversight of the Medicaid division. Accompanying me today is
Mr. Gary Smith, our Virgin Islands Medicaid Director.
I must also thank Kimberley Causey-Gomez, Commissioner
Designee of the VI Department of Human Services, who has
extended to us her complete support as we prepared to come to
this important Committee meeting today.
On behalf of the Honorable Governor Albert Bryan, Jr., and
the more than 100,000 American citizens living in the U.S.
Virgin Islands, we bring you greetings and, as we say in the
Virgin Islands, a pleasant good morning.
As a people, we want to convey our heartfelt gratitude,
appreciation, and thanks for the concern and the support that
you and your colleagues in Congress have provided as we
continue to recover from the unprecedented damages caused by
Hurricanes Irma and Maria, two Category 5 hurricanes which
ravaged the Virgin Islands in September 2017.
We are a resilient people, but my testimony today is truly
intended to actualize the empathy. I appear before you today to
request your continued urgent support to address the critical
Federal and local funding crisis we are facing in our
healthcare system.
On September 30, 2019, by that date, we are currently
projecting we will have fully expended the additional $142.5
million in Federal medical funding provided under the BBA.
Members, with no exaggeration, the Congress, together with
the Administration, must act by September 30, 2019, to avert
catastrophic damage to our healthcare system. At that point,
the Federal Medicaid matching rate will revert back to the
statutorily mandated 55 percent matching rate for most of our
Medicaid program and the Federal Medicaid funding cap of
approximately $18.8 million.
This is not sustainable given the current state of our
Medicaid program. If the Virgin Islands only receives the
statutory cap amount of $18.7 million at the 55 percent rate,
that funding is projected to only cover 26 percent of the
Federal funding needed during the fiscal year.
We believe that there needs to be a permanent statutory fix
that addresses the unfair and disparate treatment all
territories face in their Medicaid programs along the lines of
H.R. 1354, the Territories Health Equity Act, introduced on
February 25, 2019, by our Delegate, Stacey Plaskett.
We are requesting that Congress and the Administration work
with us to support the following 5-year Medicaid funding
request.
We are requesting a 100 percent Federal Medicaid matching
rate be extended to the U.S. Virgin Islands for 2 additional
Federal fiscal years. And we are currently projecting that at
least $251.5 million in additional Federal Medicaid funding be
provided during this period, as was done in the BBA 2018.
Second, we are requesting at least an additional $377
million in Federal Medicaid funding based upon our current
projection, in lieu of our annual Medicaid cap, be provided to
the U.S. Virgin Islands.
Unless the Congress and the Administration act to support
the two requests I have outlined above before September 30,
2019, we will be faced with potentially catastrophic damage to
our Medicaid program and our healthcare system, to include
having to remove upwards of 15,000 individuals from our
Medicaid program who still need healthcare services and having
to deny men, women, and, children and infants who need to be
transferred to the U.S. mainland for care.
We want to thank you for the opportunity for being here
today, and we strongly urge that we are considered for
additional funding going forth in the next fiscal years.
Thank you very much.
[The prepared statement of Ms. Rhymer-Browne follows:]
Prepared Statement of Michal Rhymer-Browne, Assistant Commissioner,
U.S. Virgin Islands Department of Human Services
Chairman Grijalva, Ranking Member Bishop, and members of the
Committee: Thank you for the opportunity to provide testimony on the
significant impacts to our healthcare system and the people of the U.S.
Virgin Islands, in light of the impending Medicaid fiscal funding cliff
which will impact us beginning October 2019. I am Michal Rhymer-Browne,
Assistant Commissioner of the Virgin Islands Department of Human
Services, and I have direct oversight of the Medicaid Division.
Accompanying me today is Mr. Gary Smith, our Virgin Islands Medicaid
Director. I must also thank Kimberley Causey-Gomez, Commissioner
Designee of the V.I. Department of Human Services, who has extended to
us her complete support as we prepared to come to this important
committee meeting today.
On behalf of the Honorable Governor Albert Bryan, Jr. and the more
than 100,000 American citizens living in the U.S. Virgin Islands, we
bring you greetings, and as we say in the Virgin Islands, ``a pleasant
good morning.'' As a people, we want to convey our heartfelt gratitude,
appreciation, and thanks for the concern and the support that you and
your colleagues in Congress have provided as we continue to recover
from the unprecedented damage caused by Hurricanes Irma and Maria--two
Category 5 Hurricanes, which ravaged the Virgin Islands in September
2017. We are a resilient people, but my testimony today is truly
intended to actualize the empathy.
I appear before you today to request your continued urgent support
to address the critical Federal and local funding crisis we are facing
in our healthcare system on September 30, 2019. By that date we are
currently projecting we will have fully expended the additional $142.5
million in Federal Medicaid funding provided under the Bipartisan
Budget Act of 2018 (BBA) and the 100 percent Federal matching rate will
expire. Along with this, we are projecting we will lose access to the
nearly $158.9 million in remaining Federal funding provided under the
Affordable Care Act (ACA). It is only through this additional Federal
funding and the 100 percent matching rate that we have been able to
sustain our healthcare system during these trying times.
Members, with no exaggeration, the Congress, together with the
Administration, must act by September 30, 2019, to avert catastrophic
damage to our healthcare system, if left on its current course. At that
point, the Federal Medicaid matching rate will revert back to the
statutorily mandated 55 percent matching rate for most of our Medicaid
program and the Federal Medicaid funding cap of approximately $18.8
million. This is not sustainable, given the current state of our
Medicaid program. If the Virgin Islands only receives the statutory cap
amount of $18.7 million at the 55 percent matching rate, that funding
is projected to only cover 26 percent (barely one-quarter) of the
Federal funding needed during the fiscal year for the Medicaid
expenditures supported by that cap. This is the Medicaid ``fiscal
cliff'' that we have been warning about for some time. Once the cap is
exhausted, the Virgin Islands would have to fully make up the deficit
in Federal Medicaid funding, as it has in the past, and pay for its
Medicaid services with 100 percent local funding. That local funding is
not available, and our citizens will not be able to receive the
essential health care they need, and our already fragile healthcare
infrastructure would be further destabilized, and its recovery would be
further delayed.
We believe that there needs to be a permanent statutory fix that
addresses the unfair and disparate treatment all Territories face in
their Medicaid programs along the lines of H.R. 1354, ``The Territories
Health Equity Act,'' introduced on February 25, 2019, by our Delegate
Stacey Plaskett. However, we understand from various informal
discussions with congressional and Administration staff that such a
permanent fix may not be possible at this time. Therefore, I am
requesting that the Congress and the Administration work with us to
support the following 5-year (Fiscal Years 2020-2024) Medicaid funding
request:
1. 100 percent Federal Medicaid matching rate be extended to the
U.S. Virgin Islands for two additional Federal fiscal years
(October 1, 2019 through September 30, 2021) and we are
currently projecting that at least $238 million in
additional Federal Medicaid funding be provided during this
period, as was done in the BBA 2018. This assumes that
other Federal requirements and funding under the Medicaid
program remain in place during this period.
2. At least an additional $377 million in Federal Medicaid funding
based upon our current projections, in lieu of our annual
Medicaid cap, be provided to the U.S. Virgin Islands at an
83 percent Federal matching rate for three additional
Federal fiscal years (October 1, 2021 through September 30,
2024). This assumes that other Federal matching
requirements and funding under the Medicaid program remain
in place during this period for areas such as CHIP
allotments, MMIS, Eligibility and Enrollment, and Medicare
Part D Co-insurance and deductibles.
As we reiterated in previous meetings with the Administration, and
in testimony before Congress, healthcare funding in the Virgin Islands
was under great stress even before the two hurricanes. Under Medicaid,
an arbitrarily low Federal matching rate (FMAP) and a correspondingly
high local matching requirement added to the limited capped Federal
funding have imposed severe and unsustainable financial demands on the
Territory. We have had to contribute a vastly disproportionate share of
our own limited local funding for our Medicaid Program compared to that
of the states.
We are particularly grateful for the additional Federal funding
provided under the ACA and the temporary disaster-related waiver of the
local match and additional Federal funding provided through the BBA
2018. These actions have allowed us to more than double our Medicaid
program to over 27,000 individuals from approximately 12,000
individuals since 2012, increase total expenditures under our Medicaid
program to over $120.5 million, provide much needed healthcare services
to our people, and allowed our Medicaid program to continue to operate
during these trying times.
However, unless the Congress and the Administration act to support
the two requests I have outlined above before September 30, 2019, the
U.S. Virgin Islands will be faced with potentially catastrophic damage
to our Medicaid program and our healthcare system as detailed below:
The U.S. Virgin Islands will have to remove upwards of
15,000 individuals from our Medicaid program who still need
healthcare services.
We will not be able to continue the outreach to the
community to bring into the Medicaid program those 15,000
to 20,000 additional Virgin Islanders who we believe are
eligible for the program currently but not yet enrolled.
The U.S. Virgin Islands will have to pay for any needed
healthcare services with all local funds that are not
available in our budget at this time.
We will face further delays in rebuilding our hospitals
and clinics and other healthcare infrastructure as funds
will have to be diverted to pay for needed ongoing day-to-
day healthcare services.
The U.S. Virgin Islands will have to continue to evacuate
even more patients to the mainland, at even further costs
to us, which we are unable to support with local funding as
delays in the rebuilding of our healthcare infrastructure
continue.
We will be faced with losing more and more of our medical
providers if we are unable to pay and retain them. This
will be compounded by our inability to attract new medical
professionals willing to come and work in the islands when
we are facing such a critical financial crisis in our
healthcare system and they are concerned with whether they
will be able to be paid.
We will not be able to expand much needed long-term care
support services to our elderly and disabled population--
our most fragile population--as we have no certified
nursing homes in the U.S. Virgin Islands and such care has
to be provided mainly in the community.
Finally, the U.S. Virgin Islands is facing a mental health
and behavioral health crisis as declared by Governor Albert
Bryan, Jr. in March 2019 as a result of the lack of
providers and facilities to address the demand for these
services in the territory, and we will not have access to
needed Federal funds to help address these critical issues.
We are also keenly aware that with the added Federal support being
provided by our Federal partners comes additional responsibility on our
part to utilize and oversee that support in an efficient and effective
manner and with full accountability. Toward that end, the U.S. Virgin
Islands has moved forth with purposeful actions, and we are
implementing various activities, as outlined below which will ensure
that this accountability continues:
We implemented the first ever Territory Medicaid
Management Information System (MMIS) in 2013.
The U.S. Virgin Islands implemented a Medicaid MAGI
compliant online Medicaid eligibility system in July 2017,
called the Virgin Island Benefit Eligibility System
(VIBES). This system will be expanded beginning later this
year to complete integration with our other Federal
programs like SNAP and TANF.
We implemented a Medicaid Fraud Control Unit (MFCU) in
2018.
The U.S. Virgin Islands also implemented the Transformed
Medicaid Statistical Information System (TMSIS) with CMS
through our Medicaid Management Information System (MMIS)
in 2018 to ensure detailed statistical and financial
reporting be provided to the Centers for Medicare &
Medicaid Services (CMS).
We will shortly be completing cost report audit
reconciliations for our two hospitals and two Federally
Qualified Health Centers (FQHCs) to bring those audits and
reconciliations current.
The U.S. Virgin Islands will shortly begin the audit and
reconciliation process for our Department of Health
Clinics.
We recently completed the CMS Medicaid Program Integrity
(PI) Review.
We also executed a memorandum of understanding with CMS to
receive technical assistance in additional Medicaid PI
activities and Medicaid data analytics.
The U.S. Virgin Islands is working with HHS to finalize an
advance planning document which will provide upwards of $15
million to implement a territory wide health information
exchange system.
We believe that all of these activities indicate our strong ongoing
commitment to ensuring the integrity of our programs and our
responsible stewardship of the Federal Medicaid funding that we
receive. The U.S. Virgin Islands is also committed to the ongoing
improvement of program integrity, transparency, and efficiency and the
Federal funding outlined above is needed to continue these efforts and
maintain our programs.
For the forgoing reasons, I strongly urge the Congress, in
conjunction with the Administration, to promptly act on this matter of
critical urgency to the people of the U.S. Virgin Islands. The
enactment of our proposal will serve to enable us to continue to
provide urgent healthcare services to our citizens while we work to
rebuild our healthcare infrastructure and economic viability, and will
serve to provide a temporary ``fix'' to the disparate arbitrary, and
unfair treatment that the Territories continue to receive under the
Medicaid Program.
Given the very short time remaining in this fiscal year, and the
need for the U.S. Virgin Islands and other Territories to be able to
reliably and predictably plan their upcoming internal Medicaid program
changes and budget request, I ask that you address this issue in the
next available legislative vehicle.
I appreciate the opportunity to share my views with you. We look
forward to working together with you to address the immediate issue of
the impending Medicaid fiscal funding cliff and we look forward to
collaborating with you on achieving a permanent solution that can
finally eliminate the unequal treatment of Virgin Islands and the other
Territories under the Medicaid Program and provide parity for Medicaid
enrollees and the full benefits of the Federal Medicaid program for our
citizens and our providers.
Thank you for your consideration and attention to these urgent
matters. I am honored to be here and open to answer any questions you
may have, along with Gary Smith, our U.S. Virgin Islands Medicaid
Director.
______
Questions Submitted for the Record to Michal Rhymer-Browne, Assistant
Commissioner, U.S. Virgin Islands Department of Human Services
Questions Submitted by Rep. Sablan
Question 1. If Congress finally treats the territories equitably
and provides uncapped funding with Federal match determined in the same
was as states, what would the U.S. Virgin Islands do to ensure that
Medicaid beneficiaries have access to comprehensive services comparable
to what states must provide?
1a. With the additional Federal funding, what specific investments
could you make to improve eligibility and benefits over time?
Answer. No response.
Question 2. What improvements in your healthcare infrastructure
would be needed?
2a. Would dedicated up-front funding be needed to make those
changes?
Answer. The immediate priority is to restore on-island services at
least to the level available before the storms.
We need to rebuild the two hospitals in the Virgin Islands
to be able to provide the full range of on-island inpatient
services and other critical care hospital services which
are currently very limited and result in our having to
evacuate upwards of 20 persons per month to Puerto Rico or
the mainland for these critical services at a considerable
extra cost to our very limited budget.
We need to rebuild our Department of Health public clinic
system which was severely impacted by the storms and has
resulted in a reduced level of critical primary care for
our residents.
We are in critical need of at least two certified nursing
facilities on the island. We need to repair and upgrade our
current Herbert Grigg Home for the Aged on St. Croix so
that it meets Federal reimbursement standards. Similarly,
we need to acquire, repair, and upgrade the other Home for
the Aged at Seaview so it meets Federal reimbursement
standards and is operated by the Virgin Islands.
We need to address the critical need for behavioral health
treatment on the island through the development of
inpatient and outpatient treatment facilities that are
federally reimbursable.
Finally, even as we work to rebuild and improve our
institutional infrastructures on the islands we need to
take this opportunity to emulate the approach taken by
Medicaid Programs on the mainland to provide community
based care for persons with disabilities and mental
illnesses.
We believe this dual approach of structural improvements
and community based service improvements is necessary to
ensure that our citizens have access to comprehensive care
and services comparable to the mainland.
We believe that dedicated funding for these improvements is perhaps
the only way to make these improvements possible as the Virgin Islands
is not in a financial position to pay for and complete this on our own.
Further, dedicated funding must be outside the capped Medicaid funding
we need to have for providing the basic ongoing healthcare services
under our Medicaid program.
Question 3. Would provider payments have to be increased and to
what extent?
Answer.
Currently, under our Medicaid program we pay our hospitals
and other public providers at the full Medicaid cost of
providing services to Medicaid patients. This is the
maximum that can be paid to public providers.
What we need for Congress to provide through legislation
is for our hospitals to be able to receive Medicare and
Medicaid disproportionate share hospital (DSH) payments for
uncompensated care in our hospitals as is provided to
hospitals on the mainland. Our hospitals are precisely the
types of facilities that the DSH program was intended to
support.
Additionally, we need for Congress to provide through
legislation that CMS be directed to work with the Virgin
Islands hospitals to update the Medicare base period for
our TEFRA hospital reimbursement system. The base periods
for Medicare have not been updated since the early 1990s
and results in artificially low Medicare reimbursements
rates that do not support the cost for the services being
provided to Medicare eligibles.
With respect to community non-public providers the Virgin
Islands pays those providers (including nurses) for
Medicaid services at the established Medicare rates for
those services. The problem with respect to those providers
is that given the costs of relocating and living in the
Virgin Islands it is difficult to attract providers and
other specialists to work here. We would ask that the
Congress provide through legislation that we be allowed to
pay providers who work in the Virgin Islands a supplemental
add-on to the Medicare rates that we pay to offset the
additional costs here and make it attractive for providers
to relocate and stay here in the Virgin Islands.
Question 4. Are there particular Medicaid eligibility, benefit or
other requirements you wouldn't be able to meet within a reasonable
time due to territory-specific limitations, and if so, what changes
could the U.S. Virgin Islands make to ensure residents get high quality
health care in other ways that meets their needs?
Answer.
We ask that the Congress modify Section 1902(j) of the
Social Security Act to add the Virgin Islands to this
provision of the law. This would allow the Secretary to
waive certain aspects of Title XIX to provide the Virgin
Islands with greater flexibilities in the eligibility,
reimbursement, and coverage under the Medicaid program.
As a result of the significant matching requirement (45
percent for most of our program) we have been unable to
come up with the local share necessary to fully enroll all
of the potentially eligible Virgin Islanders into the
Medicaid Program. We estimate that there may be 15,000 to
20,000 eligibles who are not yet enrolled. Since our last
expansion in early 2017 we have proceeded slowly because of
the local match requirement and our financial limitations
of our budget. So, treating the VI as a state for matching
purposes would enable to expand our program eligibility.
Similarly, as we move to expand our community based
services and reintroduce nursing facility services and
cancer treatment services on the island to meet the needs
of our population we would be able to do this within our
budget limitations if the matching rate were computed like
the states and if the cap on our program funding was
removed.
Question 5. Overall, what do you see as the necessary steps to
better ensure access to quality, comprehensive care for U.S. Virgin
Islands residents and what would be a reasonable timeline to reach such
a goal?
Answer.
Access to quality of care will be a significant struggle
in the short term (3-5 years) because of the infrastructure
issues discussed already above. Without fully functioning
hospitals, dialysis, and cancer treatment facilities we are
faced with providing limited services on island and having
to rely on higher cost evacuation to the Puerto Rico and
the Mainland for critical health services.
Additionally, we currently do not have certified nursing
facilities and those facilities (old age homes) which are
currently providing care to our disabled and frail elderly
were severely damaged by the hurricanes. These facilities
first have to be repaired from the storm damage and they
then have to be brought up to Federal code. This will
require a significant investment of up-front funding before
these facilities can provide quality care and receive
Federal reimbursement.
We face a shortage of specialty and other physicians and
nurses to provide quality of care. We need to be able to
pay these types of providers at higher rates or with some
type of supplemental payment in order to be able to attract
providers to relocate to the Virgin Islands and to remain
here once they are here. Without being able to offer such
financial advantages and incentives we will continue to
face a shortage of service providers and this will continue
to negatively impact our access to quality care.
We have very limited behavioral treatment on the island as
a result of the lack of providers and facilities. Building
new treatment centers or converting current facilities will
take time and money. Additionally, attracting service
providers in this area will face all of the problems
previously discussed for attracting and retaining
providers.
Question 6. What will you have to cut if you go off the cliff?
Answer. Unless the Congress and the Administration act before
September 30, 2019, the U.S. Virgin Islands will be faced with
potentially catastrophic damage to our Medicaid program and our
healthcare system as detailed below:
The U.S. Virgin Islands will have to remove upwards of
15,000 individuals from our Medicaid program who still need
healthcare services.
We will not be able to continue the outreach to the
community to bring into the Medicaid program those 15,000
to 20,000 additional Virgin Islanders who we believe are
eligible for the program currently but not yet enrolled.
The U.S. Virgin Islands will have to pay for any needed
healthcare services with all local funds that are not
available in our budget at this time.
We will face further delays in rebuilding our hospitals
and clinics and other healthcare infrastructure as funds
will have to be diverted to pay for needed ongoing day-to-
day healthcare services.
The U.S. Virgin Islands will have to continue to evacuate
even more patients to the mainland, at even further costs
to us, which we are unable to support with local funding as
delays in the rebuilding of our healthcare infrastructure
continue. However, when we enter the new fiscal year and
return to the capped Federal funding amount of $18.7
million the U.S. Virgin Islands will have to severely limit
the number of transfers to the U.S. mainland hospitals of
very ill and injured Medicaid members who cannot get the
necessary medical care (e.g., trauma cases, selected
orthopedic surgeries, cancer treatments, and services for
severe cardiological issues). The U.S. Virgin Islands would
simply be unable to afford the expenses associated with
airlifting the patients to the mainland and paying for
their medical care and rehabilitation services.
We will be faced with losing more and more of our medical
providers if we are unable to pay and retain them. This
will be compounded by our inability to attract new medical
professionals willing to come and work in the islands when
we are facing such a critical financial crisis in our
healthcare system and they are concerned with whether they
will be able to be paid.
We will not be able to expand much needed long-term care
support services to our elderly and disabled population--
our most fragile population--as we have no certified
nursing homes in the U.S. Virgin Islands and such care has
to be provided mainly in the community.
Question 7. What will be the impact on individuals and the
healthcare delivery system in the territory, when Obamacare funding
ends this year?
Answer.
The impact will be that a decade of progress in expanding
enrollment and access to services will come to an end and
things will revert to the situation prior to 2011 when the
funds became available.
All of the impacts outlined above related to the fiscal
cliff will be the necessary result of reverting to Medicaid
current law for the Virgin Islands--a capped program with a
55 percent matching rate.
The stark reality for the Virgin Islands is that if we
revert to the annual cap of $18.7 million in FY 2020 we
will be at least $53.3 million short in the Federal funding
we need for those services covered by that cap in FY 2020.
We cannot make that up with local funding. That shortfall
only increases in the out years as the program grows and
the need for Federal matching funds increases.
______
Vice Chair Sablan. Wow. Thank you. Such wonderful
witnesses. I love you all.
Thank you again, Ms. Rhymer-Browne.
I would like to, at this time, recognize Ms. Sandra King
Young. This is not her first appearance, she has been here
before.
Ms. Young, you have 5 minutes, please.
STATEMENT OF SANDRA KING YOUNG, MEDICAID DIRECTOR, AMERICAN
SAMOA GOVERNMENT
Ms. Young. Good morning, Chairman Sablan, Ranking Member
Gonzalez-Colon, and honorable members of the Committee. I bring
to you greetings from our governor, Lolo Matalasi Moliga, and
our lieutenant governor, Lemanu Peleti Mauga. And thank you for
this important hearing to provide information on the impact of
the September expiration of the Medicaid funding for American
Samoa and our sister territories.
My name is Sandra King Young, Medicaid Director for
American Samoa. My written testimony submitted for the record
to the Committee outlines the devastating impact of the loss of
the ACA funds that American Samoa has not been able to spend
and the reasons why, so I will not reiterate those points here.
At the outset, I want to point out again that, for American
Samoa, Medicaid is our only health insurance plan available to
the public at large. Insurance carriers have historically
declined to provide health insurance to our people because we
are a high-risk and very sick population with one of the
highest rates of obesity and non-communicable diseases in the
world.
And we are a very poor community. Without Medicaid, our
people will have no health insurance coverage, and our
healthcare system would face an absolute collapse and
insolvency. Medicaid is our people's and our territory's
lifeline for medical care services.
As we have repeatedly shared, the two biggest challenges
with our Medicaid program are our government's inability to
fund the local match requirement for the Medicaid program.
Second, the statutory capped annual funding, or block grants,
placed on the territories prohibits us from fully executing the
benefits requirements under our state plan and the Social
Security Act.
Because we have exhausted our local match for this fiscal
year, as of today, our Medicaid agency has suspended all
referrals of any new off-island patients to New Zealand. We
have suspended any new patients needing wheelchairs or other
durable medical equipment, including prosthetics. And we are
cutting back on co-pay assistance to our Medicaid dual-eligible
population.
Our hospital, however, continues to receive its Medicaid
funding under the ACA because it does not need local-match
dollars under its certified public expenditure payment method.
Oftentimes, when we try to explain why we need the relief
from local match and why we cannot spend all of ACA Medicaid
dollars, I think people nod their heads, but they don't really
know what that means to a patient's life, to their family, or
to our community.
The real-life stories of life-changing impact on patients
because of the availability of the ACA funding justifies an
increase in the territory's block grant. The devastating life-
and-death outcomes that we face with the potential loss of this
ACA funding without a resolution justifies an increase in the
territory's Medicaid funding block grants.
Last year, I had to make a difficult decision on whether we
were going to refer a child, an infant of 6 months, to New
Zealand. Severely disabled, cerebral palsy. We got the quote
back from New Zealand that the child, ethically, they must
accept, but prognosis, they don't think the child will survive
beyond 12 months. And in that 12 months, they would have to
care for the child, because we can't care for the child on-
island. But the child will likely die anyway. And it would cost
us a million dollars, if not more.
Our government only provided us $2 million in local match
to do the off-island referral. We made a difficult decision to
deny the referral of this child because we didn't have the
local match. A few weeks later, the infant died.
Currently, we have two patients in New Zealand. One is a
middle-aged father who was sent for neurological surgery on his
back. This week, we got word that the man is severely ill and
requires triple bypass heart surgery, at a cost of nearly
$100,000. And I had to deny that because we don't have the
local match. And just yesterday, I had to reverse my decision,
because the family is devastated. And we have to deal with that
now, on how we are going to make that payment when the invoice
arrives in our office.
We have one patient in New Zealand, a young man with his
whole life ahead of him. He had an on-the-job injury, a pile of
plywood fell on his back and broke his neck. And he had to be
air-ambulanced to New Zealand. And last week, New Zealand
requested if he could stay 2 more months to do a sleep study to
see how well he could survive if he returns home. Again, we had
to deny the referral, but, again, this week, we reversed our
decision because we have to deal with that. New Zealand won't
discharge the patient. Ethically, they won't.
Why are we sending our patients to New Zealand? Because we
have a block grant, and we can't afford the local match. We
cannot afford the Medicare costs in the United States.
For Congress to fail to increase the territories' annual
Medicaid block grant and to provide a more fair FMAP for the
territories in light of the knowledge of the consequences and
the loss of lives and potentially crippling physical and
cognitive outcomes for our people because of insufficient
medical funding is morally unconscionable. We need your help.
Only Congress can solve these Medicaid challenges for the
territories.
Thank you, Mr. Chairman and the Committee, for this
opportunity, and thank you for holding this hearing.
[The prepared statement of Ms. Young follows:]
Prepared Statement of Sandra King Young, Medicaid Director, American
Samoa
Good morning Chairman Sablan, Ranking Member Bishop, and members of
the Committee. I bring to you greetings from our Governor Lolo Matalasi
Moliga and our Lt. Governor Lemanu Peleti Mauga. On behalf of our
government and our people, thank you for the opportunity to appear
before you today to provide information on the impact of the September
expiration of the Medicaid funding for American Samoa and the other
territories contained in the Patient Protection and Affordable Care Act
(ACA) of 2011. I'd like to recognize that today with me, is our
Medicaid Finance Analyst, Mrs. Faiilagi Poufa-Faiai.
Since Governor Lolo Matalasi Moliga and Lt. Governor Lemanu Peleti
Mauga came into office in January 2013, we have been very concerned
about the need to address the expiration of the ACA funds. Over the
past 6 years, we have consistently shared our concerns with the
Administration through the Centers for Medicare and Medicaid Services
as well as Congress to either extend the availability of the ACA funds
or to increase the territories Medicaid block grants. Although grateful
for the additional Medicaid funding provided by ACA, due to several
challenges, our government was never going to be able to expend the
full $197,800,000 million made available to American Samoa within the
time frame of the ACA law. At the time that Governor Lolo and Lt.
Governor Lemanu began their administration in 2013, our territory had
only spent $10,357,446.17 million of the ACA funds. Currently, we have
a remaining balance of $152,338,473 million in our ACA Medicaid account
(See Table 1. American Samoa ACA spending history).
The ability of our territory to expend the ACA funds is constrained
by a number of factors. First, we cannot access the ACA funds until we
first spend our regular annual block grant which is currently at $12
million a year. Our regular annual block grant is usually exhausted by
the 3rd quarter of the fiscal year and only then, is our territory able
to tap into the ACA funds. Our territory's historical spending of ACA
funds has averaged only $5.4 million a year. Further, ACA funding can
only be spent for eligible allowable Medicaid expenditures. It cannot
be used for construction or renovation of hospital facilities or any
other non-medical services not allowed for under the Medicaid State
Plan.
Table 1. American Samoa ACA Spending History
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Up until 2017, we were unable to add any new Medicaid providers
because our local government did not have the local revenues to provide
the local match for new providers. The government-owned hospital
utilizes a certified public expenditure payment method that does not
require direct cash match, but any new providers or services outside of
the hospital would require direct cash match. In 2017, our government
was able to provide $2 million in the Governor's special programs
budget to launch new Medicaid services such as the off-island referral
program to New Zealand.
Second, American Samoa's small population only incurs a certain
level of expenditures per annum based on medical care services
delivered by providers; and third, our government does not have enough
Medicaid providers that could increase reimbursement claims. Adding new
Medicaid providers to deliver services outside of the hospital can
never be done unless our government can identify sources of revenues to
provide Medicaid local match. Currently, the hospital receives
government subsidies from the general fund to support hospital
operations. Based on the hospital's annual final settled Medicare Cost
Report, Medicaid is able to provide stable monthly reimbursement funds
to the hospital. The new providers outside of the hospital is supported
by the Governor's Special Programs budget that also comes from the
government's general fund.
One oft-misunderstood facet of American Samoa's Medicaid program is
our consistent inability to spend our allotted ACA funds each year.
There seems to be a fundamental misunderstanding of the root causes
that explain American Samoa's unspent ACA monies to date. Only the
medical providers can incur ``allowable eligible'' Medicaid expenses to
draw down Federal Medicaid dollars--the Medicaid office does not spend
the Medicaid funds. The Medicaid program also cannot advance Medicaid
dollars--it is a reimbursement program wherein the medical providers
must first provide services that are eligible ``allowable'' expenses
payable under Medicaid. The Medicaid office is simply the
administrating office that pays out Medicaid funds. Because of ACA
funding, our government was able to significantly improve delivery of
medical care services to our people with the addition of new Medicaid
services and providers to the Medicaid program. The new providers have
helped our territory draw a little more of the ACA funds, but it will
always be limited by the availability of local matching dollars.
Without more local match funds to serve more patients and add more
services, spending the ACA funds will always be a challenge.
As the territory faces the looming ACA expiration deadline this
September, it will again be unprepared to absorb the loss of nearly
$152 million in unspent ACA funds. Absent an ACA funds extension or
without an increase in the statutory cap placed on the territories,
American Samoa will be forced to suspend all new Medicaid benefits. We
will suspend our off-island program to New Zealand that has been a
life-saving program for many of our patients who otherwise would not be
alive today had it not been for the ACA funding. ACA funding has
allowed us to save and improve lives by providing a direct pipeline for
residents to medical services and care that is not available at the
local hospital.
Consider the case of a young 30-year-old mother and nurse of five
who is alive and fully functioning today after experiencing a traumatic
brain hemorrhage--she is alive today because ACA funds paid for the Air
Ambulance and nearly $300,000 of medical treatment costs to save her
life and rehabilitate her so she can still live life to the fullest as
a mother. Although no longer working as a nurse, she is fully able to
care for her children and her family. ACA made a difference to
residents, young and old, adults and children alike, who live on
because they received off-island, life-saving medical treatment not
available at our local hospital. Amputees, diabetics, orthopedic and
cancer patients have benefited from our off-island referral program,
gaining critical medical treatment they otherwise would not have access
to. People whose lives have been transformed, living life with less
pain and an overall higher quality of life--all because of ACA Medicaid
funding. All of these success stories hinge on the presence of ACA
monies. Viewed in this light, failure to act by Congress before the
September expiration deadline would be disastrous for our people. It
literally will mean the loss of lives and permanent disabilities for
people who will lose access to medically necessary care. All of these
new services will have to be suspended in the new fiscal year--if there
is no solution provided to increase our annual Medicaid block grant.
This point cannot be overstated: Medicaid is the only health
insurance program that is available to the general population in
American Samoa, including government workers, cabinet directors and
other government officials from the legislative and judicial branches.
Cannery workers. Children. Working folk from the private sector and
service industries. All of them rely on U.S. Medicaid. As a Medicaid
Director here in the United States, I have no health insurance coverage
unless I buy travel insurance. My Finance Analyst, Mrs. Faiilagi Poufa-
Faiai, also sits before this Committee without health insurance
coverage as an American Samoa government employee and as U.S.
nationals. Why only Medicaid? Because for decades in spite of efforts
by our government to recruit health insurance providers, health
insurance companies refuse to serve a community that is high risk and
low income.
In the worst-case scenario that Congress fails to act before
September, the American Samoa Government is prepared to:
1. Suspend all new services implemented by the Lolo administration
and preserve the regular annual Medicaid funding for the
LBJ hospital--all funds would be exhausted in the third
quarter; or
2. Support all Medicaid services, in which case Medicaid funds will
be exhausted in the second quarter, then suspend all new
services while the local government pursues options to
continue the operations of the hospital.
Clearly, neither option is ideal. Both represent what would
objectively be a devastating blow to American Samoa's healthcare
delivery system and substantially harm hard-working families of
American Samoa. Medicaid is the lifeline for the people of American
Samoa and without additional funds in the new fiscal year, we face an
unconscionable medical crisis that could have been prevented by
Congress.
Given what we know, the best long-term, sustainable fixes are ones
that only Congress can provide at this point and do so in ways that are
sustainable and address long-term and systemic concerns. Northern
Marianas, Guam, Puerto Rico, Virgin Islands, and American Samoa--all of
us since the launch of Medicaid in the territories have operated under
what is essentially a block grant system of payments. Before the ACA,
the territories' annual Medicaid block payments under the statutory cap
were, by and large, insufficient. Moreover, in American Samoa's case,
the recent increase in additional ACA monies were ostensibly negated by
demographics and the local government's inability to make the required
annual dollar match. In order to mitigate the loss of monies that will
occur when ACA funding expires at the end of September 2019, we
recommend that Congress undertake the following steps:
First, extend the ACA expiration date for ACA monies for American
Samoa. It is long overdue for Congress to increase the cap on block
grants to give the territories more equitable access to the benefits of
the Medicaid program and to ensure essential monies are not left on the
table because of the match requirements.
Second, the territories' FMAP formula must also be adjusted in
order to align with that of the states. The FMAP formula for the states
is based on the Federal poverty level. However, the territories are
subjected to an arbitrary percentage that makes no sense, since the
territories are some of the poorest jurisdictions in the Nation. The
territories FMAP formula is similar to the wealthiest states in the
country. If the FMAP formula were applied the same way as the states,
American Samoa would have an 88 percent Federal FMAP rather than the
current 55 percent. This would greatly assist American Samoa with the
local match requirements which it currently cannot meet to access more
ACA funds.
Finally, while adjusting the territories' FMAP formula so it aligns
with the current formula in use by the states is important, it is only
a partial and first step. The cap on the territories' block grants must
also be raised. These two steps are complementary and must be taken in
conjunction together in order for them to truly be effective in the
long term. Either of those two fixes in isolation without the other
simply means American Samoa's Medicaid block grant funding will be
exhausted faster. In that scenario, the territory is left with having
to either take out a loan or find new public revenues to offset the
financial shortfall. Receiving the FMAP at 100 percent under the
disaster supplemental going through Congress now would provide much
needed relief to our Medicaid program that has suspended new services
due to the exhaustion of the local match share.
Thank you again Mr. Chairman and the members of this Committee for
this opportunity to appear before you today. We appreciate the time and
attention given to the territories Medicaid issues. I would be happy to
answer any questions that you may have.
______
Questions Submitted for the Record to Sandra King Young, Medicaid
Director, American Samoa
Questions Submitted by Rep. Sablan
Question 1. If Congress finally treats the territories equitably
and provides uncapped funding with Federal match determined in the same
was as states, what would the American Samoan Government do to ensure
that Medicaid beneficiaries have access to comprehensive services
comparable to what states must provide?
Answer. The only acute care hospital facility that serves our
people is located on the island of Tutuila (the largest island). There
are five community health centers, three in the outlying islands of
Ta'u, Ofu and Olosega. Residents of these outlying islands must either
travel by boat or airplane to access medical care services for severe
illnesses or major healthcare challenges. Air travel to the Manu'a
islands is sporadic given our dependence on a foreign airline to
provide transportation between Tutuila and the outlying islands. The
residents of these islands are considered severely underserved. It is
abundantly clear that we need to improve the quality of healthcare
services to these outlying islands, but the demands for improving the
main acute care hospital facility on Tutuila continue to dwarf and
overshadow the needs of this population. Additional Federal funding
support would go a long way for us to address this inequity. As a
start, American Samoa would increase service providers to expand the
delivery of comprehensive healthcare services including to the outlying
islands.
We will attract private healthcare providers to set up operations
in American Samoa as the full actual cost of rendering healthcare
services will be captured and be reimbursed. These would include Long
Term Support Services, home health services, nursing facility services,
rural health clinic services, plus expanded pharmacy services, drug and
tobacco cessation services and other mandatory and optional health
benefits currently not being supported due to the cap and unsustainable
FMAP. While this pathway is being pursued, the American Samoa
Government would immediately invest in attracting Board Certified
Doctors and specialists to render the same quality of service available
in the United States. Moreover, the American Samoa Government will
increase the diagnostic abilities of our only acute medical care
facility--the Lyndon Baines Johnson Tropical Medical Center. We would
invest in purchasing state-of-the-art diagnostic equipment along with
ensuring that qualified Radiologists and technicians are on site to
facilitate optimization of the equipment's effectiveness. Unlike CNMI,
the nearest U.S. Medical Institution for medically necessary care not
available on island is Hawaii and the cost of travel is cost
prohibitive. The frequency of flights is twice (2) weekly, throughout
the year except for an added third flight during the Christmas Holiday
and summer. The remoteness of American Samoa and the limitation of only
one airline and two flights a week to the United States contributes to
the high cost of providing healthcare services compared to the states
and some of the territories.
1a. With the additional Federal funding, what specific investments
could you make to improve eligibility and benefits over time?
Answer. AS would engage in a full-scale reassessment of our
presumptive eligibility program which does not do individual
enrollment. This is the way our Medicaid program was set up when it was
first established in 1982 under our 1902(j) Waiver. It is important to
know that AS continues to support our presumptive eligibility program
as it is relevant to our environment. We would continue to strengthen
our collaboration with our providers to invest in the improvement of
their operational and financial systems to better manage healthcare
costs and provide more equitable access to services. Ultimately, we
hope that with additional financial resources, our Medicaid program
will be able to provide comprehensive healthcare services to our
people.
Question 2. What improvements in your healthcare infrastructure
would be needed?
Answer. We would need major investment in upgrading our hospital
facility and major investment to build new or upgrade our existing
community health clinics. In particular, a tremendous gap is the lack
of diagnostic equipment that would better diagnose patients to provide
more effect treatment plans for patients. The American Samoa Government
has been working to elevate the quality of services and the appropriate
medical environment to facilitate compliance with Joint Commission on
Accreditation of Healthcare Organizations (Joint Commission) standards
demanded of all U.S. Medical facilities in the United States. In
addition, the current physician and nursing shortage requires a more
targeted focus on investment in our local nursing program and as well
as inspiring and motivating enrollment in medical schools through the
provision of scholarships.
2a. Would dedicated up-front funding be needed to make those
changes?
Answer. Yes, absolutely this would be very helpful. The current
effort to waive the Medicaid local match reflects the financial
inability of the American Samoa Government to address not only the
myriad of territorial needs but also to invest in the repair and
rehabilitation of aged facilities. Up-front funding would greatly help
facilitate immediate attention to mitigate our aging facilities and
acquire diagnostic equipment that would help improve patient
treatments.
Question 3. Would provider payments have to be increased and to
what extent?
Answer. With a small number of providers and with our presumptive
eligibility (PE) formula, payments to providers are simple to
administer. Payments are based on our population numbers that is
calculated on an annual basis and the PE can either go up or go down
tied to population increase or decrease. Payment methods are provider-
specific and based on actual costs from prior year Medicare Cost
Reports, actual costs for off-island referral and encounter rates for
the FQHC community health clinics--but they are all still based on the
PE formula. I cannot comment on any increase on provider payments
except to state that we do have the authority to accept or deny any
increases that would make provision of services cost prohibitive for
the Medicaid program.
Question 4. Are there particular Medicaid eligibility, benefit or
other requirements you wouldn't be able to meet within a reasonable
time due to territory-specific limitations, and if so, what changes
could American Samoa make to ensure residents get high quality health
care in other ways that meets their needs?
Answer. The immediate option that AS has to provide high quality
health care to meet the needs of our patients is the off-island program
to New Zealand. We would like to expand this program to Hawaii or to
other states in the United States, but we are unable to do this under
our existing block grant and the FMAP we have. As to other ways, it
would be to increase services at our local hospital, invest in
diagnostic equipment, increase physician services, increase community
base healthcare providers, etc.
Question 5. Overall, what do you see as the necessary steps to
better ensure access to quality, comprehensive care for American Samoan
residents and what would be a reasonable timeline to reach such a goal?
Answer. The U.S. Army Corps of Engineers recently completed its
assessment of American Samoa's healthcare facilities under an
engagement by the U.S. Department of the Interior responding to the
congressional directive calling for this healthcare infrastructure
assessment. This report would provide the most current information on
the condition and status of American Samoa's healthcare facilities. In
addition, I refer the Committee to the State Innovation Model Report
that was issued by American Samoa through the Medicaid State Agency
that identifies the gaps, recommendations and lays out a pathway to
improve the healthcare services system in the territory. This report
will be forthcoming under a separate cover. Briefly however, the
necessary steps to better ensure access to quality, comprehensive care
for our residents is: (1) the lifting of the Medicaid cap and adopting
a fairer FMAP for the territories. Our biggest barrier to access to
quality and comprehensive health care is the lack of financial
resources; and (2) increasing medical care and other services providers
under the Medicaid program.
Question 6. What will you have to cut if you go off the cliff?
Answer. If AS goes off the cliff with the expiration of ACA funds
and without a replacement source of funding, we will have to cut all
the new services and new providers approved during the Lolo
administration--(1) the Off-island medical referral program to New
Zealand; (2) the Department of Health Federally Qualified Health
Center's community clinics; (3) the Durable Medical Equipment,
Prosthetics, Orthotics and Supplies; and the Medicare Dual-Eligible Co-
Pay assistance program. Our block grant can only afford to cover
services for our only hospital and this is the priority of our
government, to keep the hospital open.
Question 7. What will be the impact on individuals and the
healthcare delivery system in the territory, when Obamacare funding
ends this year?
Answer. The impact would be devastating. People would not have
access to life saving services. For example, children who need
rheumatic heart disease surgeries would not get them, people who need
cancer treatment would not get them, any heart surgery would not be
available and all other medically necessary care that are not available
on island would not be accessible to our people.
Questions Submitted by Rep. Radewagen
Question 1. Given service utilization and the historical issues
with generating local matching funds, what is the minimum FMAP that
American Samoa's Medicaid system needs if the annual allotment is
raised to $30 million?
Answer. American Samoa would like to need the maximum FMAP that it
is eligible for under the standard poverty formula used by the states
to determine their FMAP. Currently, the American Samoa government can
only put up $2 million for local match. It would be unable to come up
with the match for the additional $13-$10 million we are requesting. AS
thus requests an initial FMAP of 90/10 for the next 2 years, to
increase to 85/15 in year 3 and 4 and then to 80 percent in year 5.
Question 2. The Senate version of the disaster relief bill in
addition to temporarily increasing American Samoa's FMAP to 100 percent
from January 1-September 30 for FY 2019, requires American Samoa to
submit a plan on how the territory will collect and report reliable
data to the Transformed Medicaid Statistical Information System (T-
MSIS). American Samoa is currently exempt from many data reporting
requirements. If passed, what is the projected cost of implementing
such a system.
Answer. American Samoa does not have a T-MSIS system because that
would not make sense for American Samoa whose annual cap is $12
million. A traditional T-MSIS system is estimated to cost over $20
million and even a smaller version would not be financially feasible
for American Samoa. The Medicaid agency keeps internal data on
expenditures and patient utilization and is able to report this data to
CMS.
Question 3. American Samoa's Medicaid program covers 14 of the 17
mandatory benefits and some optional benefits. What is the projected
cost and time frame it would take for American Samoa to become 100
percent compliant?
Answer. I cannot comment on this time frame because we would need
to do a full-scale evaluation and cost-benefit analysis together with
CMS to plan this out. The territory's existing work force, education
pipeline to train new medical providers, local and Federal regulations
would all need to be reviewed to come up with the projected cost and
time frame for full compliance. It is not possible for AS to be
compliant under the current capped funding and heavy FMAP requirement.
Question 4. In the 2016 GAO report on Medicaid in the Territories,
American Samoan Health Officials stated they planned to use some of the
new ACA funds to expand services. Please explain in detail what these
new services are and what suspending them may mean for American
Samoans.
Answer. The new services added during Governor Lolo Matalasi Moliga
and Lt. Governor Lemanu Peleti Mauga's administration are the (1) Off-
island medical referral program to New Zealand, (2) the Department of
Health Federally Qualified Health Center's community clinics, (3) the
Durable Medical Equipment, Prosthetics, Orthotics and Supplies, and (4)
the Medicare Dual-Eligible Co-Pay assistance program. Suspending all
the four services would put people's lives at risk of permanent
disability or worse, loss of life. Our people would not have access to
medically necessary care that is not available on island.
Question 5. GAO reported they ``found little assurance that
territory Medicaid funds are protected from fraud, waste, and abuse''--
A discussion area that will be discussed as the Congress debates a
greater Territorial Medicaid solution. Could you please tell us about
the current efforts and its successes?
Answer. In American Samoa, there has only been one Medicaid
provider until 2017. CMS in 2011, put in place the certified public
expenditure payment method for the hospital significantly reducing any
risk of fraud, waste and abuse. Now with the four new services added
since 2017, CMS continues to work closely with our Medicaid office to
improve policies and procedures to implement tight controls and checks
on all approvals for expenditures of Medicaid funds. AS Medicaid is
working with the CMS Program Integrity Contractor Qlarant to improve
and implement program integrity procedures in all Medicaid activities.
It is not feasible to establish a full scale Medicaid control fraud
unit for American Samoa because it would cost disproportionately more
than what AS actually receives in a block grant.
Question 6. The Federally Qualified Health Centers (FQHCs) do not
operate on the certified public expenditure method. Relative to LBJ
Hospital, how much spending do FQHCs account for annually?
Answer. The FQHC just became a Medicaid provider in 2017. They
utilize an encounter rate payment method and incurred $1,128,741.95 in
Federal funds and $711,424.67 in local funds in FY 2018. Medicaid
anticipates transitioning the FQHC to the CPE payment method once they
have a couple of years of audited financial statements available.
Question 7. States currently do not have capped Federal Medicaid
contributions and they have FMAP based on the average per capita income
for each state relative to the national average. You mentioned in your
testimony that given a lifting of the cap and a better FMAP, American
Samoa would be able to attract more providers, but there are states
that still struggle to attract providers despite not having these same
statutory burdens. How exactly would removing the Federal cap and
raising the FMAP, allow American Samoa to attract providers?
Answer. We would be able to have the financial resources to hire
board certified doctors to serve in the LBJ hospital. We would also be
able to encourage the development of the private sector healthcare
providers with the availability of more Medicaid funding and lessening
the burden on the FMAP. Because the local match must come from the
government, the FMAP is key to expanding the private sector healthcare
providers. No matter how much Federal Medicaid funds we receive,
drawing these funds down are subject to the local match. Without the
local match, we cannot draw Federal funds and this is when we suspend
all services.
7a. Would you raise reimbursement rates?
Answer. Only in so much as cost of living increases because
reimbursement rates for American Samoa are based on actual costs and on
the CMS Medicare Fee Schedule.
Question 8. Would raising the FMAP and the Federal cap allow
American Samoa to attract private insurers?
Answer. Highly unlikely, because Medicaid is essentially the
universal healthcare provider for American Samoa. The majority of the
population that fall within the poverty line threshold for the
presumptive eligibility program in American Samoa is covered under
Medicaid. The high poverty rates, high risk population and
unsustainability of local revenues to cover private insurance premiums
and deductibles would continue to be a great deterrent to the
attraction of private insurers.
Question 9. Has there been any efforts to investigate or adopt a
Kaiser Health Care model--the creation of an internal non-profit
insurance plan managed by the facility that delivers care--for LBJ
hospital?
Answer. That is a question best addressed to the LBJ hospital.
Medicaid does not have the authority to investigate or adopt the
creation of an internal non-profit insurance plan to be managed by the
facility that delivers care for LBJ hospital. Medicaid did however,
engage Kaiser Permanente at the beginning of the Lolo administration,
regarding off-island services using their facilities in Hawaii. Kaiser
was not prepared at the time to engage AS in that area without an
identifiable and guaranteed source of long-term local funding from the
American Samoa Government.
Question 10. What behavioral health services and or programs
designed to address top public health priorities such as obesity and
hypertension, if any, are currently covered under American Samoa's
Medicaid program?
Answer. All behavioral health services are covered under the AS
State Plan--the challenge is not having sufficient numbers of
behavioral health providers to provide these services and not having
sufficient financial resources to support these services--due to the
capped funding and unsustainable local match.
Questions Submitted by Rep. Gonzalez-Colon
Question 1. American Samoa will end this fiscal year with an unused
balance of $153 million in ACA funds. You have explained to us the
reasons for this balance but, from your testimony, extending the
expiration date on these funds will not get you very far.
Answer. It will not get us far because we cannot come up with
sufficient local match.
1a. What are the most important restrictions for the use of these
funds that Congress must change in order for American Samoa to
effectively use them to improve the provision of health care to its
residents.
Answer. In terms of the $153 million, the President recently signed
the Disaster Supplemental bill that gives AS 100 percent FMAP through
September 30, 2019. Our territory would not be able to expend these
funds by that date. It would be ideal if AS is allowed to use these
funds past September 2019 until fully expended using a less burdensome
FMAP or to be to obligate these funds for services delivered by this
deadline. In addition, it would be helpful for AS if these funds were
made available for infrastructure improvement and work force
development. Currently, it is allowable only for medical care, but the
major gaps in our healthcare system that impacts the delivery of
quality medical care, deal with inadequate work force, poor facilities
and lack of medical diagnostic equipment that could better diagnose our
patients in order to better provide proper clinical response and prompt
treatment strategies.
Question 2. How will the overall healthcare system and the non-
Medicaid population in American Samoa be affected if Medicaid funding
is not increased for FY 2020?
Answer. Overall, it would be devastating as we would have to cut
back on the new services the territory implemented. As for the non-
Medicaid population which is nominal, they would not be affected as
they are not eligible for Medicaid and they pay out-of-pocket for
medical services. However, the term non-Medicaid population is not
generally used because all residents in American Samoa are
presumptively covered under the Medicaid program. Because of the cap on
AS Medicaid funding and the burdensome FMAP rate, healthcare services
are limited to the extent of funding available.
Question 3. Currently, the Social Security Act provides for capped
Medicaid funding for the territories. For FY 2017, the cap in American
Samoa was $11.51 million. How much did the Medicaid program benefits
actually cost?
Answer. Based on actuals contained in the Medicare Cost Report for
allowable Medicaid costs for the hospital and expenditures from the
private providers we have, program benefits cost approximately $17
million in Federal Medicaid funds only. Because we are only 2 years
into our new services, this number is expected to increase based on the
increase in patient utilization patterns as a result of increased
public outreach on the availability of these new services.
Question 4. Could you please provide the Committee actual examples
of how the current statutory FMAP of 55 percent affects the provision
of health care in American Samoa?
Answer. The 55 percent FMAP greatly limits our territory's ability
to provide comprehensive healthcare services to our people. Basically,
it limits the provision of mandatory and optional services that the
Medicaid program can provide under the Medicaid State Plan. The LBJ
Tropical Medical Center receives locally generated revenues to provide
medical care services and uses a certified public expenditure method
that provides predictable funding and does not require actual cash
match. The issue for the hospital is the capped funding which is not
enough to cover the hospital's service for the year. Further, there are
many services that are not available at the hospital for any number of
reasons--no equipment, no physician specialists, no diagnostic
equipment, etc. The Medicaid program to address this gap added new
services which do require actual local cash match. Because the FMAP is
so high comparable to the wealthy states in the United States, the
territory which generates very limited local revenues, is unable to
provide any substantial local dollars for the local match. The Medicaid
program only receives $2 million in local match dollars a year for the
off-island referral program. When this is exhausted in the second
quarter, we suspend all reimbursements to providers and effectively
suspend services.
______
Vice Chair Sablan. Thank you very much for that, Ms. Young.
Ms. Avila from Puerto Rico, you are recognized for 5
minutes.
STATEMENT OF ANGELA AVILA, EXECUTIVE DIRECTOR, PUERTO RICO
STATE HEALTH INSURANCE ADMINISTRATION
Ms. Avila. Thank you. Good morning, Mr. Chairman, Ranking
Member Gonzalez, and members of this Committee. Thank you for
the opportunity to testify today on Puerto Rico's impending
Medicaid cliff. I am honored to be here on behalf of the
government of Puerto Rico and to be at the witness table with
friends and colleagues from the other territories.
Puerto Rico's Medicaid program serves some of our Nation's
most vulnerable citizens. We serve approximately 425,000
children and 305,000 elderly and disabled. We provide care to
1.5 million individuals out of a population of 3.2 million U.S.
citizens.
Yet, Federal healthcare funding for Puerto Rico has been
insufficient for generations. Puerto Rico's Medicaid system has
been chronically underfunded due to the historical low Federal
Medical Assistance Percentage, known as FMAP, and
correspondingly high local matching requirement and the cap on
Federal funding.
Currently, we are operating under increased Medicaid
funding and a temporary 100 percent FMAP, which we received in
the aftermath of Hurricane Maria, the worst natural disaster in
our nation's history.
However, this supplemental funding will expire on September
30, 2019. If no action is taken for Fiscal Year 2020, the FMAP
will revert back to the statutorily mandated 55 percent FMAP,
up to the Federal Medicaid funding cap of approximately $380
million.
This level of Federal funding is not sustainable, as it
will only cover 19 percent of the Federal funding needed during
Fiscal Year 2020 and will last approximately 3 months. Once
this funding is exhausted, Puerto Rico would have to fully fund
the deficit, as it has in the past, and pay for its Medicaid
services with 100 percent local funding. Given the island's
current financial situation, local funding is not available.
Unless Congress acts, we will be faced with potentially
catastrophic damage to our Medicaid program and our healthcare
system. We will be forced to potentially remove any services
that are not required under the Medicaid rules, such as
pharmacy coverage and dental coverage. We will have to end
coverage for the current population who receive health care
with local funds.
We will face further delays in much-needed improvements to
our hospitals, clinics, and other healthcare providers. We will
continue to lose more of our medical providers because we will
not be able to ensure reasonable reimbursement. We will face a
mental health crisis as individuals and families continue to
struggle to have their most basic needs met.
Earlier this month, Governor Rossello submitted Puerto
Rico's official Medicaid ask to Congress: $15.1 billion in
funding at an 83 percent FMAP for 5 years. This funding would
provide Puerto Rico with certainty in the short term while we
work together on a sustainable, long-term funding mechanism.
As part of the Governor's request, we have identified
critical sustainability measures needed to further stabilize
and improve the healthcare system in Puerto Rico as a whole,
which include: keeping physicians within the system to avoid
critical shortages, provide lifesaving hep C drugs, provide
Medicaid Part B premium coverage, and adjust the Puerto Rico
poverty level to increase fairness in Medicaid eligibility.
The Medicaid cliff that Puerto Rico is facing is an
emergency that must be dealt with swiftly and smartly. I love
my island. It is my home. And I am committed to working with
Congress to create a Medicaid program that all of us can be
proud of and that provides the necessary care to the 1.5
million U.S. citizens who rely on it.
Thank you for your attention on these urgent matters. I
welcome any questions you may have. Thank you.
[The prepared statement of Ms. Avila follows:]
Prepared Statement of Angela Avila, Executive Director, Puerto Rico
State Health Insurance Administration
Chairman Grijalva, Ranking Member Bishop, and Members of the
Committee: Thank you for the opportunity to testify today on Puerto
Rico's impending Medicaid cliff and the significant and detrimental
impact this funding cliff will have on the people of Puerto Rico and
our healthcare system if Congress fails to act. I am honored to be here
on behalf of the Government of Puerto Rico and to be joined at the
witness table with my friends and colleagues from the other
territories. We are united in our need for sustained Federal funding
for Medicaid so that we can provide adequate health care to our people.
I appear before you today to request Congress' continued and
expedient support to remedy the Medicaid funding crisis Puerto Rico is
facing. On September 30, 2019, the increased Medicaid funding and the
temporary 100 percent Federal Medical Assistance Percentage (FMAP) we
received in the aftermath of Hurricane Maria--the worst natural
disaster in our Nation's history--will expire. It is only through this
additional Federal funding and the 100 percent FMAP that we have been
able to sustain our healthcare system.
Without this temporary funding provided in the Bipartisan Budget
Act for Puerto Rico's Medicaid system, Medicaid beneficiaries in Puerto
Rico would have been forced to forgo care, would have suffered
needlessly and in many cases, would have died prematurely. These people
include some of the most vulnerable citizens of the United States of
America. We serve approximately 425,000 children, 305,000 elderly and
disabled individuals, and more than 17,000 pregnant women at any given
time. We provide care to 1.5 million individuals through our Medicaid
program--out of a population of 3.2 million U.S. citizens--who may be
suffering from mental and physical illnesses, often both and, all of
whom are financially destitute. Without a more permanent and
sustainable funding solution, we will be unable to complete the
planning necessary to stabilize the system and improve health outcomes
for our citizens.
Congress must act before September 30, 2019, to avert catastrophic
damage to our healthcare system and the health and well-being of the
people of Puerto Rico. If no action is taken for Fiscal Year 2020, the
FMAP will revert back to the statutorily mandated 55 percent FMAP
(established in 1968) for most of our Medicaid program, up to the
Federal Medicaid funding cap of approximately $380 million. This level
of Federal support for Puerto Rico's Medicaid program is not
sustainable as that funding is projected to only cover 19 percent of
the Federal funding needed during Fiscal Year 2020 for the Medicaid
expenditures supported by that capped Federal allotment. If Puerto Rico
only receives its statutory cap of $380 million at the fixed FMAP of 55
percent for FY 2020, Federal funding of Puerto Rico's Medicaid will
only last 3 months. These simple and stark numbers represent the
Medicaid ``fiscal cliff'' that we have been talking about for some
time. Unless Congress acts on the Government of Puerto Rico's request
before September 30, 2019, we will be faced with potentially
catastrophic damage to our Medicaid program and our healthcare system:
We will have to conduct a review of all current benefits
and potentially remove any services that are not required
under Medicaid rules, such as Pharmacy coverage and Dental
coverage.
We will have to abandon all plans to modify the Puerto
Rico Poverty Level to add uninsured individuals presenting
at hospitals to receive uncompensated care.
We may have to end coverage for the current population who
receives health care with local funds.
We will have to pay for any needed Medicaid healthcare
services with all local funds that are not available in our
budget at this time.
We will face further delays in much needed improvements to
our hospitals, clinics, and other healthcare infrastructure
as funds will have to be diverted to current Medicaid
obligations.
We will continue to lose more of our medical providers
because we will not be able to ensure reasonable
reimbursement to retain this critical work force. Our
healthcare work force shortage is compounded by our
inability to attract new medical professionals to Puerto
Rico due to concerns of financial instability and is
especially problematic with specialty providers needed to
treat expensive and prevalent health conditions.
Finally, we will face a mental health crisis as
individuals and families continue to struggle to have their
most basic needs met, particularly in the aftermath of
Hurricane Maria which provoked a 20 percent increase in
suicide rates.
Due to the disproportionately low level of Federal Medicaid funding
historically available to Puerto Rico, we have been forced to limit
Medicaid eligibility to income levels well below the Federal poverty
level used by the states. For example, Puerto Rico covers individuals
with income up to 138 percent of the Puerto Rico poverty level, which
is $11,736 annually for a family of four or approximately 46 percent of
the Federal poverty level for a family of the same size in 2019 on the
mainland.
Once the cap is exhausted, Puerto Rico would have to fully fund the
deficit in Federal Medicaid funding, as it has in the past, and pay for
its Medicaid services with 100 percent local funding. Given the
island's current financial situation, local funding is not available.
Come October, if Congress fails to act, nearly 1.5 million U.S.
citizens may lose the essential health care they need, our already
fragile healthcare infrastructure would be further destabilized, and
the island's recovery would be further delayed.
I would like to take a moment to clear up a misconception that
seems to be all-to-common when it comes to Puerto Rico. Puerto Rico has
not mismanaged any funds in administering its Medicaid program, in
fact, we have made extraordinary efforts and worked tirelessly to
provide the best care for our citizens with the fewest resources. For
FY 2020, for example, Puerto Rico's projected total spend per full year
equivalent, including Federal and state funds, is estimated to be lower
than the Federal spending in any of the states. We are aware that
additional and sustained Federal support comes with additional
responsibility on our part to ensure that the Medicaid program is
efficient, effective, and accountable. Toward that end, we have already
taken several actions outlined below:
We implemented a fully functioning Medicaid Management
Information System (MMIS).
We implemented a Medicaid Fraud Control Unit (MFCU).
We enhanced our most recent Managed Care Organization
(MCO) Contracts with additional requirements, including
financial conditions, related to encounter data, program
integrity activities, achieving improved health outcomes,
and one of the highest Medical Loss Ratios in the Nation.
We believe that all of these activities, in addition to our
complete responsiveness to the Financial Oversight Management Board
(FOMB) created by Congress under the Puerto Rico Oversight Management
and Economic Stability Act (PROMESA), P.L. 114-187, indicate the
island's ongoing commitment to ensuring the integrity of our programs
and our responsible stewardship of the Federal Medicaid funding that we
receive.
Earlier this month, the Governor of Puerto Rico, the Honorable
Ricardo Rossello submitted Puerto Rico's official Medicaid ask to
Congress--$15.1 billion in funding at an 83 percent FMAP for 5 years in
order to prevent the collapse of the healthcare system in Puerto
Rico.\1\ This funding would provide the island with certainty in the
short term while Congress works with us to determine a sustainable,
long-term funding mechanism that eliminates the inequity in funding and
allows us to meet the healthcare needs of our most vulnerable
residents. As part of the Governor's request, we have identified
critical sustainability measures needed to further stabilize and
improve the healthcare system in Puerto Rico as a whole:
---------------------------------------------------------------------------
\1\ This assumes that other Federal matching requirements and
funding under the Medicaid program remain in place during this period
for areas such as CHIP allotments, MMIS, Eligibility and Enrollment,
and Medicare Part D co-insurance and deductibles.
Keep physicians within the system to avoid critical
shortages--The number of registered physicians has
decreased due in part to low reimbursement rates and lack
of infrastructure. This is especially problematic with key
specialty physicians. We are working on a strategy to
ensure dollars earmarked for increased provider
reimbursement reach providers under managed care, whether
the provider is an individual practitioner or part of a
---------------------------------------------------------------------------
larger group practice.
Provide life-saving Hepatitis-C drugs--Unlike in the
mainland's Medicaid system, currently, Puerto Rico's
Medicaid system does not cover the drugs that cure the
Hepatitis-C virus and there are an estimated 14,000 Puerto
Ricans with the disease. While the short-term cost of
proving this benefit is high, significant savings can be
realized by investing in the long-term health of our
members and avoiding costly treatment options in the
future.
Prevent collapse of hospital system due to losses--
According to the latest Centers for Medicare and Medicaid
Services (CMS) cost reports, over 50 percent of Puerto
Rico's hospitals reported losses. Because Medicaid covers
over half of the population of the island and has the
lowest reimbursement rates for hospitals, our funding
status jeopardizes the hospitals' ability to operate and
reinvest in infrastructure. Additional funds are needed to
compensate hospitals for losses attributable to Medicaid.
Provide Medicare Part B Premium coverage--Coverage of Part
B premiums has the potential to help approximately 282,000
Medicaid and Medicare dual eligibles that pay Medicare Part
B premium out-of-pocket or opted not to enroll in Medicare
Part B due to the cost. In most cases, this is a deduction
from each individuals Social Security check, which for most
recipients is their sole source of income. Since premiums
can be as high as $135.50 per month, some elderly residents
must choose between food, rent and health care. This is a
choice no U.S. citizen should be forced to make.
Adjust the Puerto Rico Poverty Level to increase fairness
in Medicaid eligibility--Due to the low level of Federal
Medicaid funding, Puerto Rico uses its own poverty level as
the basis for determining eligibility. As I mentioned
earlier, the Puerto Rico Poverty Level is less than 50
percent of the Federal Poverty Level used by other states.
As a result, a significant percentage of vulnerable
families and individuals in Puerto Rico lack healthcare
coverage. Currently, Puerto Rico covers approximately
120,000 of these individuals directly with local funds. As
local dollars may not consistently be available to cover
these individuals, they may have no choice but to move to
the mainland in search of adequate healthcare coverage.
As we have stated in previous meetings with the Administration, and
in testimony before Congress and recently, the Medicaid and CHIP
Payment and Access Commission (MACPAC), Federal healthcare funding in
Puerto Rico has been insufficient for generations. Under Medicaid, the
historically low FMAP, a correspondingly high local matching
requirement, and the cap on Federal funding have imposed severe and
unsustainable financial demands on Puerto Rico.
The Medicaid cliff that Puerto Rico is facing is an emergency that
must be dealt with swiftly and smartly. As this Committee knows, the
Government of Puerto Rico is currently in the midst of working with the
Oversight Board to obtain approval of our revised Fiscal Plan and our
FY 2020-2021 state budget, all of which must happen by June 30, 2019.
Given the very limited time available for approval, we ask that you
address this issue in the next available legislative vehicle. Our
proposal will allow us to continue to provide urgent healthcare
services to our citizens while we work to rebuild our healthcare
infrastructure and economic viability and will serve to provide a
temporary ``fix'' to the disparate, arbitrary, and insufficient
treatment that Puerto Rico continues to receive under the Medicaid
Program.
I am grateful for the opportunity to share these facts with you and
thank you for allowing me to testify before this Committee on this
critically important issue. I love my island--it is my home, and I am
committed to working with Congress to create a Medicaid system that all
of us can be proud of and that provides the necessary care to the 1.5
million U.S. citizens who rely on it. We look forward to working
together to address the immediate issue of the impending Medicaid
fiscal funding cliff and we look forward to finding a solution that can
eliminate the unequal treatment for Puerto Rico, provide parity for
Medicaid enrollees and the full benefits of the Federal Medicaid
program for our citizens and our providers once and for all. Thank you
for your consideration and attention to these urgent matters. I am
honored to be heard and open to answer any questions you may have.
______
Questions Submitted for the Record to Angela Avila, Executive Director,
Puerto Rico Health Insurance Administration
Questions Submitted by Rep. Sablan
Question 1. If Congress finally treats the territories equitably
and provides uncapped funding with Federal match determined in the same
was as states, what would Puerto Rico do to ensure that Medicaid
beneficiaries have access to comprehensive services comparable to what
states must provide?
1a. With the additional Federal funding, what specific investments
could you make to improve eligibility and benefits over time?
Answer. For the first time since the beginning of the program,
Puerto Rico would be able to stabilize the Government Health Plan by
having adequate funding for the provision of services. Currently,
Puerto Rico covers many mandatory services for all beneficiaries, and
additionally covers some optional services such as dental care,
pharmacy benefits and some behavioral health services. Providing all
mandatory services such as Nursing Facility Care and Non-Emergency
Medical Transportation requires reliable long-term funding, sufficient
time to assess the need and current provider capacity in Puerto Rico
and remedy any deficiencies in capacity and infrastructure to support
the new services. ASES is fully committed to initiating these projects
if the funding is available.
Specific investments include provider capacity, development, and
availability; management capacity and subject matter expertise within
the Medicaid agency; IT solutions; and stakeholder outreach and
training for Medicaid staff, the provider community, the managed care
organizations, and broader stakeholder community. In addition, with the
available funding Puerto Rico would:
Increase provider reimbursement;
Provide life-saving Hepatitis-C drugs;
Provide improved financial support to hospitals;
Provide Medicare Part B Premium coverage for approximately
282,000 Medicaid and Medicare dual eligible individuals
that pay the Medicare Part B premium out-of-pocket or opted
not to enroll in Medicare Part B due to the cost; and
Adjust the Puerto Rico Poverty Level to cover more
uninsured or underinsured individuals.
In the event that Puerto Rico receives sustainable funding
sufficient to cover the costs of providing long-term care, we would
also invest in the administrative framework required to support the
provision of these services and begin reimbursing the same.
Question 2. What improvements in your healthcare infrastructure
would be needed?
2a. Would dedicated up-front funding be needed to make those
changes?
Answer. Funding would be needed for Puerto Rico to be able to begin
reimbursement of mandatory services that are not currently being
provided. Dedicated up-front funding would also be needed to create the
necessary infrastructure to begin providing such services and perform
responsible oversight of the same. We would need to build and improve
infrastructure across all areas of the program in order to be able to
operate in a more ``state-like'' manner. Puerto Rico would need to
invest in additional staff and staff training and development at
Medicaid and ASES. We would continue and expand investments in IT
solutions to efficiently oversee the Managed Care Organizations (MCOs)
and we need to build formalized structures from policy to payment for
any new services.
We would need to invest in our providers and support their
capabilities with regard to electronic health records (EHR) and provide
adequate reimbursements such that they may invest in upgrades to
infrastructure and equipment. We are working on a strategy to ensure
dollars earmarked for increased provider reimbursement reach providers
under managed care, whether the provider is an individual practitioner
or part of a larger group practice. We cannot fully accomplish this
without the reliable long-term solution we are requesting.
Question 3. Would provider payments have to be increased and to
what extent?
Answer. Providers are leaving the island for a variety of reasons,
including the low reimbursement rates that barely covers the basic cost
of providing services and for the lack of financial stability to
improve their practices, equipment and technology. The number of
registered physicians in Puerto Rico continues to decrease due to low
reimbursement rates and lack of infrastructure. This is especially
problematic with key specialty physicians. An increase of provider
rates to a minimum of 70 percent of Medicare rates in Puerto Rico is
necessary to begin the process of retaining our providers.
Question 4. Are there particular Medicaid eligibility, benefit or
other requirements you wouldn't be able to meet within a reasonable
time due to territory-specific limitations, and if so, what changes
could Puerto Rico make to ensure residents get high quality health care
in other ways that meets their needs?
Answer. As indicated in the responses to Questions 1 and 2,
significant changes to the array of services or system of care will
require planning, resources and time. Some changes may require
recruiting provider types, building licensing requirements, and
modifying Puerto Rico regulations to account for services that do not
currently exist, like free-standing birth centers. In addition, ASES
must work cooperatively with the Fiscal Oversight Management Board
(FOMB) and the ASES Board of Directors to plan and implement
substantial changes to the program. Some initial changes which could
occur in the near-term would include immediate coverage of Hepatitis C
drug, increases to provider reimbursements that will allow Puerto Rico
to rebuild the network, and increases to the Puerto Rico Poverty Level.
It could also increase its staff to levels that would allow improved
oversight of the program, noting that Puerto Rico currently only spends
approximately 2.5 percent of program budget on administration of the
Government Health Plan, compared to approximately 5 percent
administrative spending in other states. This shortfall in human
resources would have to be addressed in the event Puerto Rico begins
providing mandatory services it currently is unable to.
Question 5. Overall, what do you see as the necessary steps to
better ensure access to quality, comprehensive care for Puerto Rican
residents and what would be a reasonable timeline to reach such a goal?
Answer. Puerto Rico's primary need is sufficient and reliable long-
term funding that will allow it to improve provider reimbursements and
provide services it is currently unable to due to low funding levels.
The transition from the Medicaid program as it is delivered today to a
more robust and state-like program would be accomplished in stages,
with some areas completed more quickly (in the next 0-2 years) while
others such as the addition of long-term care or complex IT solutions
may take more than 5 years.
Question 6. What will you have to cut if you go off the cliff?
Answer. Puerto Rico would have to conduct a review of all current
benefits and potentially remove any services that are not required
under Medicaid rules, such as Pharmacy coverage and Dental coverage,
which would be catastrophic to the health and well-being of Puerto
Rico's population. Our review may also identify mandatory benefits for
which we will need to apply strict limitations to access those services
that may not exist today. In addition, Puerto Rico currently covers an
additional 125,000 enrollees who do not otherwise qualify under the
current Medicaid eligibility rules using only Puerto Rico funds. These
low-income individuals and families may lose coverage completely, and
at less than $800.00 per month income, will be unable to afford private
coverage. Puerto Rico will have to pay for most required Medicaid
services entirely from local funds that are not available in our budget
at this time.
Puerto Rico will be unable to improve hospitals, clinics, and other
healthcare infrastructure as funds will have to be diverted to current
Medicaid obligations. We will also continue to lose medical providers
as they emigrate outside of Puerto Rico because we will not be able to
ensure reasonable reimbursements to retain this critical workforce. Our
healthcare workforce shortage is compounded by our inability to attract
new medical professionals to Puerto Rico due to concerns of financial
instability, which is especially problematic regarding specialty
providers needed to treat prevalent health conditions.
Question 7. What will be the impact on individuals and the
healthcare delivery system in the territory, when Obamacare funding
ends this year?
Answer. It is expected that a catastrophic chain of events will
occur. Current enrollees may lose essential benefits and experience
increasing shortages of providers, particularly specialists. These
shortages will result in increased wait times for appointments, which
in turn creates worsened medical and behavioral health conditions. In
the event no further additional funding is identified and drug coverage
has to be terminated, Puerto Rico will have effectively ceased covering
the medical needs of its most vulnerable population, one which will be
unable to provide for itself. This would certainly mean the difference
between life and death for many beneficiaries.
Puerto Rico may also have to end all coverage for the current
population that receives health care using only local funds. Those who
are able, will leave the island to seek more reliable care in Florida,
Texas, New York and other continental states, thus damaging the
stability of Puerto Rico and incurring additional costs for those
Medicaid programs.
If we reduce services, we will have to prepare for the negative
impact on people's health and will most likely face a mental health
crisis as individuals and families continue to struggle to have their
most basic needs met.
Questions Submitted by Rep. Gonzalez-Colon
Question 1. Ms. Avila, to have a broader picture of what
insufficient funds would look like on the ground, how many people in
Puerto Rico will lose their healthcare coverage if we do not address
the impending Medicaid cliff? How will they see their benefits or
coverage reduced?
Answer. Currently the Puerto Rico Poverty Level used to determine
eligibility for Medicaid is less than the Federal Poverty Level. This
means that only a small fraction of people who would be eligible for
Medicaid in Florida or Alabama are eligible for Medicaid in Puerto
Rico. Puerto Rico's already extremely low thresholds for Medicaid
eligibility mean that we are unlikely to further reduce our eligibility
standards. However, we do cover an additional 125,000 individuals who
are not eligible under our Federal program using only local funds.
These government enrollees may lose coverage if no further Federal
funding is appropriated. Reductions in benefits are almost certain and
would be focused on non-mandatory benefits such as dental and
prescription drug coverage.
Question 2. Last Congress, in response to the devastation of
Hurricanes Irma and Maria, we successfully secured an increase in the
Federal cap to $4.8 billion for Puerto Rico's Medicaid program at 100
percent FMAP, which expires at the end of this fiscal year. Within
this, an increase was to be made available if HHS certified that Puerto
Rico had taken steps to report reliable data to the Transformed-
Medicaid Statistical Information System and had established a Medicaid
Fraud Control Unit.
2a. Has Puerto Rico been able to access the entire $4.8 billion
increase in the cap, including the additional $1.2 billion?
Answer. Yes, Puerto Rico met the required standards to access all
funds. The report to Congress issued by the Centers for Medicare and
Medicaid Services (CMS) noted that Puerto Rico implemented the
requested requirements faster than any other state or territory. This
demonstrates Puerto Rico's capacity to operate a program of the highest
standards so long as adequate funding is available.
Question 3. Did HHS certify that Puerto Rico was reliably reporting
data and established a Medicaid Fraud Control Unit? What is the status
of the implementation of a Medicaid Fraud Control Unit in Puerto Rico?
Answer. Yes, the island's Medicaid Fraud Control Unit (MFCU) is
fully certified and operational. It has already received referrals and
is conducting investigations, in coordination with the HHS-OIG.
Question 4. How does the long-standing, unequal treatment under the
Medicaid program, and the fact that we are facing a cliff every couple
of years, impact the Government of Puerto Rico's ability to budget for,
modernize and reform our healthcare system? How does it impact your
ability to deliver high-quality services to our most vulnerable
citizens?
Answer. Without predictable, long-term funding solutions, the
Government of Puerto Rico is unable to plan and reliably manage
necessary changes and improvements to the Medicaid program such as
adding mandatory benefits like nursing home facilities, expanding
eligibility standards, or increasing provider payments. The temporary
funding solutions that Puerto Rico has received in the past have been
helpful and necessary but have resulted in short-term solutions that do
not allow Puerto Rico to responsibly plan and strategize for the
future. Puerto Rico needs the security to invest in sustainable
permanent solutions on which our beneficiaries and providers can count
on.
Additionally, facing a funding cliff every few years consumes
considerable time and effort in order to create contingency plans,
budget scenarios, and devising strategies to advocate for Federal
funds. The time and money spent on this recurring matter can be better
spent on improving the program and quality of services offered.
Question 5. As you are aware, over the last couple of years Puerto
Rico has been facing a shortage of doctors. Some estimates show that
from 2006 to 2016, the number of physicians and surgeons on the island
dropped from 14,000 to 9,000. This trend was undoubtedly exacerbated by
the 2017 hurricanes.
5a. Can you elaborate on how many doctors are currently on the
island and briefly discuss how the Medicaid cliff and the uncertainty
of funds contribute to our shortage of physicians? How does it prevent
us from attracting new medical professionals?
Answer. The question for Puerto Rico's Medicaid program is not just
the number of physicians available on the island, but instead the
number who are willing to participate as providers in the Medicaid
program where reimbursement rates are very low. The number of providers
has decreased over the years due (in part) to low reimbursement rates,
deteriorating infrastructure, and practice conditions. As Puerto Rico
has difficulty incentivizing new physicians to move to or stay on the
island, older physicians are retiring and reducing the available
workforce.
The exodus and attrition of providers is especially critical for
specialist who receive much higher reimbursement rates and enjoy more
favorable work conditions on the mainland. The uncertainty of Federal
funds has not permitted Puerto Rico's Medicaid program to invest in
provider reimbursements and payment arrangement that can attract and
retain our healthcare professionals. In fact, the FOMB has permitted
ASES to temporarily suspend planned provider reimbursement cuts thanks
to the BBA funding provided after the hurricanes. However, this
temporary stay is only permitted while these funds are available.
Therefore, the long-term planning of initiatives that can help retain
and attract providers is not dependent on the amount of funding
available at any given moment, but the certainty that any initiative
that we develop will have enough financing from both local and Federal
funds in the longer term.
Question 6. You mentioned in your written statement that due to
Puerto Rico's unequal treatment under the Medicaid program and the
historically low funding we receive, the island has been forced to
limit Medicaid eligibility to income levels well below the Federal
poverty level used by the states.
6a. Do you have an estimate of how many Medicaid eligible
individuals are currently not covered in Puerto Rico because of the
disproportionately low level of Federal funding? How many more people
would we be able to cover if the island received state-like treatment?
Answer. If Puerto Rico received state-like treatment, the Federal
Medical Assistance Percentage (FMAP) would be approximately 83 percent,
and the amount of Federal funds received would not be capped. This
would allow Puerto Rico to increase the Puerto Rico Poverty Level
(PRPL) to cover currently uninsured populations. Based on projections,
we would increase the PRPL to provide Federal Medicaid to approximately
140,000 additional individuals.
Question 7. It is my understanding that although the Federal rules
for Medicaid benefits generally apply to the island, Puerto Rico
provides only 10 of Medicaid's 17 mandatory benefits, in large part due
to insufficient funding.
7a. Could you provide examples of services currently covered by
Medicaid in the 50 states but that you are not able to offer in Puerto
Rico due to this unequal treatment?
Answer. Due to inadequate Federal funding and unequal treatment,
Puerto Rico is unable to provide the same Medicaid benefits to its
residents as states provide. As a result, the nearly 1.5 million
Medicaid recipients in Puerto Rico do not receive:
Home Health Services for those entitled to Nursing
Facility Services
Nursing Facility Services
Certified Pediatric and Family Nurse Practitioner Services
Non-Emergency Medical Transportation
Nurse Midwife Services
Freestanding Birth Center Services
Emergency Services for Legalized and Undocumented Aliens
Question 8. Ms. Avila, would you agree that not addressing the
Medicaid cliff, in Puerto Rico and the rest of the U.S. territories,
will cost the Federal Government and the American taxpayer more money
over time than if we enact a solution now?
8a. For instance, any money that is currently being saved by not
giving Puerto Rico equal treatment will likely be at least partially
offset by the additional costs borne by the Federal Government and
state governments as a result of conditions-based migration from Puerto
Rico to the U.S. mainland?
Answer. Yes, our experience has been that the need for appropriate
medical care does not disappear simply because it is not available.
Puerto Ricans have been moving to the U.S. mainland for a variety of
reasons for a long time, including the need for improved health care.
When they do, they join a state-side Medicaid program and begin
accessing care at a rate that is twice or even four times more
expensive than in Puerto Rico, who currently has the lowest per member
per month rates among the states. Knowing that people will seek medical
care with or without insurance coverage and that the care provided in a
planned and preventative manner is better and less expensive care, it
is certainly more cost-effective to enact a long-term sustainable
funding solution now.
8b. Isn't it more cost-effective to enact a long-term solution?
Answer. Analysis performed by the Medicaid and CHIP Payment and
Access Commission (MACPAC) has shown that the total Medicaid spending
per enrollee in Puerto Rico is less than just the Federal Share of
Medicaid spending for the lowest cost state. The analysis accounts for
the additional benefits that are covered in the United States and are
not covered in Puerto Rico to make apt comparisons. This means that if
a Puerto Rico enrollee moves to any of the states, the Federal
Government will be paying more per person than the total cost per
person of providing care in Puerto Rico (Federal + Local funds). This
spending difference will also grow over time because healthcare cost
increases tend to be higher in the mainland United States than in
Puerto Rico.
Question 9. Over the past few years this Committee has made it a
priority to ensure Puerto Rico has the necessary tools to improve our
economy and stabilize our finances although it's important to recognize
that this Committee doesn't have jurisdiction over the Medicaid
program.
9a. Could you discuss how the Medicaid cliff hurts these efforts?
That is, how does it hurt Puerto Rico's economy and our efforts to
balance our budget and stabilize our finances?
Answer. The Medicaid program is approximately 30 percent of the
Government's FY 2020 budget and provides healthcare benefits to close
to half of the island's population. Consequently, the Medicaid programs
expenditures, in the form of reimbursement to providers, contracting of
local vendors, and payment for ancillary services is a large
contribution to the Puerto Rico healthcare industry and ultimately the
island's economy. If the program does not receive any additional
Federal funding, the financing of the Medicaid program will decrease,
because the funding gap leftover by the cliff cannot be replaced with
state funds. Consequently, the money that is paid to our providers,
hospitals, ancillary healthcare workers and for administrative support
will greatly decrease and will cause a downstream economic decrease,
job loss, and further deterioration of the healthcare infrastructure.
As long as the funding provided for the program is insufficient,
the Government must allocate funds from other necessary services such
as education, roads, and infrastructure projects thus hurting the
overall economy and investment.
The Congressional Task Force on Economic Growth in Puerto Rico
report of the 114th Congress recommended that Puerto Rico and the
territories should be treated in a more equitable and sustainable
manner in Medicaid funding for many reasons, including to ``stabilize
and strengthen the fiscal condition of the territory governments.''
Sufficient and long-term Federal funding for the Medicaid program will
mean that Puerto Rico will have the ability to adequately compensate
providers, increase hospital investment, incentivize investment in
healthcare infrastructure and provide security to our healthcare
workers and beneficiaries that the program will improve and provide
better quality services. Undoubtedly, this certainty will have a
positive economic effect for Puerto Rico's economy as a whole as the
Congressional Task Force on Economic Growth in Puerto Rico recognized.
Question 10. It has been said that there is no real ``Medicaid
Financing Cliff'' for Puerto Rico because the Financial Oversight and
Management Board established by PROMESA has required the Government of
Puerto Rico to assume that no further Federal financing will be
provided and to fund this program as part of the Fiscal Plan.
10a. Why should Congress increase the funding for the Puerto Rico
Medicaid program, if according to some, sufficient local funds have
been set aside for this purpose?
Answer. The premise that there are sufficient local funds set aside
for this purpose is incorrect. The method by which the FOMB considers
the expiration of Federal funds in relation to the long-term financing
of the program, is not by providing additional local funds to replace
the gap leftover by the Medicaid Cliff, but by making ``significant
reductions in healthcare spending necessary.'' The fiscal plan details
the ``stop-gap measures'' that will be implemented to compensate for
the loss of Federal funding such as: reduction in provider
reimbursement, elimination of benefits, restricting access to care, and
increases in member cost-sharing. Furthermore, the FOMB has not
evaluated the viability of these stop-gap measures or taken into
account the downstream effects of these cuts for the Puerto Rico
healthcare system and Puerto Rico's economy as a whole.
While we agree that some initiatives presented in the fiscal plan
are achievable and are being diligently implemented, such as improving
quality of care via value-based payments, and reducing fraud, waste,
and abuse, to conclude that the fiscal plan provides a path for a
sustainable Medicaid program with no additional Federal funding is
false.
Question 11. How will the overall healthcare system and the non-
Medicaid population in Puerto Rico be affected if Medicaid funding is
not increased for FY 2020?
Answer. If no additional funds are appropriated, the cost of health
care in Puerto Rico is expected to rise overall. The amount of
uncompensated care borne by our hospitals, Federally Qualified Health
Centers and other safety net providers will rise. Much of that cost
will be passed on through higher fees and premiums to individuals with
private insurance and those who are uninsured. Shortages of providers
will continue to increase, and general health outcomes will worsen.
When people are unwell, they are less productive at home and at work
and ultimately further deteriorate the well-being of the island's
economy overall.
Question 12. Currently, the Social Security Act provides for capped
Medicaid funding for the territories. For FY 2017, the cap in Puerto
Rico was $347.4 million. How much did the Medicaid program benefits
actually cost?
Answer. Approximately $2.4 billion in Medicaid-only spending, at
current program levels, which reflects unsustainably low provider rates
and does not include certain mandatory services such as nursing health
facilities, hepatitis C drugs, and non-emergency medical
transportation, among others.
______
Vice Chair Sablan. Thank you very much, Ms. Avila.
We are going to go to questioning. Members will have 5
minutes.
But before I do that, I would like to ask unanimous
consent--I have a set of six questions. I can hear all of us
here speaking to the fact that we all want to be part of the
full Medicaid program, state-like. So, I have the six questions
that I am going to ask you to take home, and if you could
provide us your written response within 10 days, they would
become a part of the record.
And it is not just a matter of money. There are many
requirements that all of us, our governments, have to set up
before we could become eligible for the full program like any
state or like the District of Columbia.
So, if I may, I have for each one of you, all of the state
directors--and Helen can share with Esther and work together on
responses.
Thank you, all of you, for your valuable testimony.
The Chair will now recognize Members for questions. Under
Committee Rule 3(d), each Member will be recognized for 5
minutes.
I would like to recognize myself--actually, I am going to
recognize the gentlelady from American Samoa first. She needs
to catch a flight.
Congresswoman Radewagen, you have 5 minutes, please.
Mrs. Radewagen. Thank you, Vice Chairman Sablan and Ranking
Member Gonzalez-Colon, for putting together this hearing on the
Medicaid cliff currently facing the U.S. territories.
The Medicaid funding provided by the ACA is set to expire
this calendar year, and the lack of a funding solution will be
particularly harmful for American Samoa, as I know it will be
for the other territories.
I would like to thank our witnesses for making the long
trip to Washington to testify before the Committee today.
Welcome. Each of your firsthand experiences will provide
Congress with an accurate assessment of the situation.
ACA's first allotment of funds became available in July
2011, long before I and many of us here were elected to
Congress. Those funds were only accessible after the normal
annual allotment was exhausted.
The Medicaid and CHIP Payment and Access Commission,
otherwise known as MACPAC, published a fact sheet for American
Samoa which has a historical table of total Medicaid spending
from Fiscal Year 2011 to Fiscal Year 2017, taken from reported
expenditures to the Centers for Medicare and Medicaid Services.
The average total Medicaid expenditure in American Samoa,
according to MACPAC's report, is $30 million for that period.
Mr. Chairman, I ask for unanimous consent to enter into the
record a March 2019 MACPAC report on Medicaid and CHIP in
American Samoa; a May 2019 MACPAC issue brief on territory
exhaustion of Federal Medicaid funds; the April 2016 GAO report
on Medicaid in the U.S. territories; and a letter to Governor
Lolo Matalasi Moliga dated March 15, 2019.
Vice Chair Sablan. Without objection, so ordered.
Mrs. Radewagen. I do have a couple of questions here for
the Director.
The maximum FMAP is statutorily set at 83 percent. Now, if
Congress is unable to align the territory FMAP formula to that
of the states, is there a level that American Samoa, given an
appropriate Federal cap, would be able to sufficiently operate
the Medicaid program?
Ms. Young. The answer to that question would be yes.
Our major Medicaid provider is the hospital, and the
hospital has the best payment method under the state plan,
which is a certified public expenditure. So, we don't have a
real issue with the local match or the FMAP with our local
hospital. It really has to do with the new services and any
future planned services that we want to do outside of the
hospital, which is very much needed, and this includes the
Department of Health.
I cannot comment exactly on what the appropriate FMAP would
be that we could give that would make it sustainable. But based
on historical utilization of what we have used, it would be
about 80 percent, minimum 80 percent, for FMAP. But we can
definitely do more financial analysis, study our history of
spending, and give you a more accurate FMAP.
Mrs. Radewagen. Thank you. Thank you for your response.
We know the FMAP and the Federal caps need to be changed
because they are not equitable to the territories. FMAP aside,
what is the needed amount of Federal funding to fully support
American Samoa's Medicaid system?
Ms. Young. Currently, we have submitted information that
what we would like to request is a $30 million annual allotment
for Medicaid.
This is based on the historical spending out of the
Medicaid spending that we have. I provided a chart of
expenditures, historical expenditures, based on the
availability of the ACA, that shows that we need, for the
hospital alone, an additional $8 million for the $20 million
Federal share, and then we would need an additional $10 million
for all new services for Federal share. That would make it a
$30 million Federal share block grant increase for American
Samoa.
Mrs. Radewagen. Thank you, Director.
I have more questions that I will be submitting for the
record.
Mr. Chairman, I yield back.
Vice Chair Sablan. Thank you.
The gentlelady yields back.
I would like to recognize myself, but before doing so, I
ask unanimous consent to enter into the record a letter from
the Financial Oversight and Management Board for Puerto Rico; a
letter from the Association of Asian Pacific Community Health
Organizations; a letter from national and community
organizations, supported by many organizations, actually, a
list over 20; and also a letter from the Guam Regional Medical
City that I have been asked to submit for the record.
Miss Gonzalez-Colon. Mr. Chairman?
Vice Chair Sablan. Yes?
Miss Gonzalez-Colon. Mr. Chairman, sorry to interrupt. Can
I do the same thing and introduce something?
Vice Chair Sablan. When I recognize you, yes, you can.
Miss Gonzalez-Colon. OK. Perfect.
Vice Chair Sablan. Thank you.
I now recognize myself for questioning.
Ms. Sablan, hafa adai, Helen. Welcome. I want to compliment
you on how you and all your colleagues, including Ms. Muna,
manage the Obamacare money.
American Samoa, Guam, and the U.S. Virgin Islands, they
have hundreds of millions of dollars of Obamacare funding
unspent, but you have been able to use up all your money. Is
that correct?
Ms. Helen Sablan. Yes.
Vice Chair Sablan. And you used certified public
expenditures to make the local match and release the Federal
funds. Is that also right?
Ms. Helen Sablan. Yes. We work at the hospital to use the
CPE for our local match.
Vice Chair Sablan. And that is good, because the
Commonwealth Government would have had to match the $109
million we put into Obamacare with about $50 million of local
funds, but the Commonwealth did not make that match, did it?
Ms. Helen Sablan. No. We don't have the money.
Vice Chair Sablan. That is interesting, actually, because,
all last year, the Chairman of the Northern Marianas
Legislature Ways and Means Committee kept bragging about how he
was responsible for the biggest budget ever in the Commonwealth
history, yet he could not find matching funds for Obamacare
Medicaid money.
So, again, I understand that you have had to stop making
medical payments to private providers at this time, yes?
Ms. Helen Sablan. That is right.
Vice Chair Sablan. And you also have had to stop paying for
Medicaid patients to use the federally qualified Kagman
Community Health Center. Is that correct?
Ms. Helen Sablan. Yes.
Vice Chair Sablan. Could the Kagman Community Health Center
also use the CPE system to make the local match?
Ms. Helen Sablan. No.
Vice Chair Sablan. OK.
While I know that our legislature is not paying its share
for Medicaid, it is not your responsibility. You have to do the
best you could with what you were given--or, actually, not
given, I guess I would have to say, right?
Ms. Helen Sablan. Yes.
Vice Chair Sablan. And, working with the Federal Centers
for Medicare and Medicaid Services, the Marianas' congressional
office was recently able to help you get another $8.2 million,
but that has to be adjusted, and we could now be down at $4
million.
But we also have another $36 million in the disaster
supplemental appropriation, where it is my hope that you could
see yourself through the end of the year.
Would that help you, help your program?
Ms. Helen Sablan. Yes. Thank you, Congressman. That would
be very much appreciated.
Vice Chair Sablan. OK. Again, I want to thank you.
I have a little bit more time.
Now, Ms. Muna, thank you also, Esther, for coming here, and
thank you for helping managing this program and, of course,
their only hospital.
What I want to know, Ms. Muna, is how important Obamacare
funding has been to the hospital. You said local funding was
cut in 2010, from about $40 million to $5 million, for your
hospital. But then Obamacare began in 2011. Without Obamacare,
would the hospital have stayed open?
Ms. Muna. I don't think so.
Vice Chair Sablan. At the same time you were losing local
funding, you were also in danger of losing CMS certification.
Without Obamacare, would you have lost certification?
Ms. Muna. Absolutely.
Vice Chair Sablan. Wow. And, of course, if you lost
certification, that would mean Medicare patients, as well as
Medicaid patients, probably as well as private insurance
patients, could not use the hospital. Is that correct?
Ms. Muna. That is correct.
Vice Chair Sablan. So, you testified that Obamacare money
made it possible to see more patients and to expand services.
You tripled your medical staff, added specialty services,
including oncology, and implemented a quality assurance unit.
Is that right?
Ms. Muna. That is correct.
Vice Chair Sablan. And Medicaid money helped?
Ms. Muna. Yes, absolutely.
Vice Chair Sablan. And as a result of these improvements,
patient outcomes have improved for our Northern Marianas
patients?
Ms. Muna. Yes, and we will be able to have it at home.
Vice Chair Sablan. And readmission rates have improved?
Ms. Muna. Correct.
Vice Chair Sablan. You said that the hospital revenues also
quadrupled during this time. It looks like the improvement in
services that Medicaid made possible helped to make the
hospital more financially viable. Is that true?
Ms. Muna. Yes, it is true.
Vice Chair Sablan. So, to summarize, the Obamacare that
Congress provided you, $109 million, meant the hospital stayed
open, helped you keep your certification, expand services,
improve patient outcomes, and add to your bottom line.
Ms. Muna. Yes.
Vice Chair Sablan. OK.
In my last 10 seconds, ladies, please, the six questions
you have, I would really like for you to respond in writing to
the Committee in 10 days. It is going to be part of the hearing
record. It is critical that we answer that as completely and as
correctly as possible.
Thank you. My time is up.
At this time, I would like to yield to my colleague, the
Ranking Member, Miss Gonzalez.
Miss Gonzalez-Colon. Thank you, Mr. Chairman.
And before my time commences, I want to ask unanimous
consent to put in the record a memorandum of the Medicaid
financing in Puerto Rico and the U.S. Virgin Islands made by
the Kaiser Foundation. They were in a panel yesterday of health
care that we did here with the Puerto Rico administration,
Moran Group, and many others in the private sectors. So, this
will be one.
And the second one will be a letter from the Puerto Rico
Hospital Association to be introduced in the record.
Vice Chair Sablan. Without objection, so ordered.
[The information follows:]
PowerPoint Slides submitted by Rep. Gonzalez-Colon
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Statement for the Record
Jaime Pla Cortes
Executive President of the Puerto Rico Hospital Association
Chairman Grijalva, Ranking Member Bishop and Committee Members:
Thank you for the opportunity to present my statement on behalf of
the Puerto Rico Hospital Association (PRHA) representing our 58
hospital members and over 45 thousand plus health care professionals
and staff. Hospitals are the core of our island's health care system
and vital to the quality of life for the 3.4 million U.S. Citizens
residing in our Territory; the Commonwealth of Puerto Rico.
We appreciate this hearing's attention to the impending ``Medicaid
Cliff'' facing Puerto Rico's Medicaid system in the third quarter of
2019. Without action by Congress, we face the devastating loss of 85%
of our Federal Medicaid funding likely forcing a large number of
Medicaid enrollees to lose their coverage and jeopardize the financial
viability of our island's hospital system.
It is vitally important to note that the Medicaid Cliff and the
uncertainty it has created over the past decade has been a major
contributing factor to the loss of doctors, specialists and health care
professionals who have been recruited away by Stateside health care
systems offering more generous compensation packages. The uncertainty
and financial squeeze imposed on Puerto Rico's hospitals and other
providers has made it very difficult to offer attractive and
competitive compensation packages to retain our experienced, bilingual
medical staff and professionals. The inability of our Medicaid system
to provide a reimbursement increase for hospitals and other providers
since 2011 due to the combination of the reduced level of Federal
funding along with uncertainty of the impending Medicaid Cliff has been
a primary factor for this loss.This has certainly impacted the ability
of Puerto Rico's health care system to provide readily available care
to the Medicaid population as well as to the general population
throughout Puerto Rico.
For example, we have witnessed a significant loss of doctors,
specialists and healthcare professionals over the past decade. The
waiting lists to see specialists has grown and it is impacting the
availability of care. In the area of Pediatrics, we only have one
remaining Child Psychologist currently serving the entire island of
Puerto and I will emphasize that the majority of children born on our
island are Medicaid eligible. Overall, we have witnessed a significant
drop in the overall availability of specialists over the past decade
increasing waiting times for patients and general decrease in
availability of specialized care.
Another consequence of the uncertainty created by the Medicaid
Cliff is the impact on the ability of Puerto Rico's hospitals to
modernize and upgrade their physical plant and facilities as well as
medical diagnostic and treatment technologies. Approximately, 90% of
local hospitals are privately owned and have 30-40 year old buildings
and physical plant. These hospitals are dependent on bank financing to
make physical improvements and upgrades. However, the short-term
approach to addressing the Medicaid Cliff has resulted in the Puerto
Rico's banks being hesitant to provide financing for improvements.
Puerto Rico's hospitals are willing to invest and want the most state-
of-the-art facilities and equipment to provide quality health care. We
must remember that banks always look at the long-term ability of their
clients to repay their loans and without the guarantees provided by a
permanent solution to the Medicaid Cliff, bank financing has been
limited. This lack of financing has delayed and frozen the ability of
local hospitals to modernize and obtain the best medical technologies.
We must also draw attention to the recently negotiated Debt
Restructuring Agreement (RSA) between Puerto Rico's electric utility
monopoly, PREPA, and its bondholders. Respected Third Party experts
predict this RSA will cause an increase of 28% in costs to consumers
and local hospitals. Hospitals do not receive any discounted rate from
PREPA and this will only burden local hospitals further with financial
pressures. The PRHA has joined many organizations in opposition to this
RSA and we hope the Federal Courts will reject it.
BACKGROUND:
Like many States, America's largest Territory; Puerto Rico,
operates its Medicaid system by enlisting managed care to serve a
jurisdiction of 3.5 million U.S. Citizens. However, that is where the
similarity ends as Puerto Rico's eligibility for Federal Medicaid
funding is statutorily capped at $375 million annually, limiting the
total amount of funding it can receive compared to any State which
operates with no funding cap. Oregon for example has a similar
population size, although with a much smaller poverty level and still
receives $5 billion in Federal Medicaid funding.
An estimated 1.25 million of PR's population is now eligible for
Medicaid. Hurricane Maria left the island with a weaker economy and
reduced population. However, the Medicaid-eligible population has
increased as a proportion of the population and the majority of
newborns today are Medicaid eligible.
Every health care provider in PR is a Medicaid provider including
all hospitals, doctors and community health care centers. Without
action by Congress, it is projected that PR will lose an estimated 85%
of its Federal funding later in 2019, when the Cliff occurs with
terrible consequences for the local health care system. To maintain the
current level of overall Medicaid funding, it will require an
allocation of $1.625 Billion in Federal funding to just maintain the
balance while returning to the 55% FMAP.
Many Stateside policymakers have made an incorrect assumption about
Medicaid coverage available in Puerto Rico, unfortunately, reduced
Federal support has also caused limitations in what Puerto Rico's
Medicaid system will offer Medicaid-eligible patients. Some of the
important coverage offered Stateside that is not available to Puerto
Rico's Medicaid population due to financial constraints include these
listed below:
Durable medical equipment
Home healthcare
Other non-durable medical products
Skilled Nursing care facilities
Continuity care retirement communities
Rehab
Institutional rehab services
We argue it's time to come up with a permanent solution that
provides long-term stability to our health care system so that our
hospitals retain our doctors and health care professionals currently
being recruited away by better salaries and stable health care systems
located Stateside.
In previous years, Puerto Rico health care providers have asked to
remove this funding cap and provide for equitable treatment under
Medicaid for our Medicaid system. Congress last attempted to address
this need in the FY 2018 by providing for an allocation of additional
funds with the anticipation that these funds would be exhausted in the
last quarter of FY 2019. Congress also waived the FMAP requirement to
provide a local match due to the devastating impact of the hurricane on
local government finances. CMS has since certified that PR's Medicaid
system has met the requirements to establish a Medicaid Fraud Unit and
provide for better data collection. Time has now passed, and these
additional funds are now projected to be exhausted at the end of the
Federal Government's FY 2019; only one quarter of the way through
Puerto Rico's upcoming fiscal year.
A PERMANENT SOLUTION NOW IS NEEDED DURING THE MID-YEAR OF 2019:
The Governor's recent request on May 1st for an allocation of $15.1
Billion to be dispursed over five years with an 83% FMAP is a major
step forward toward this goal. We believe that permanently removing the
statutory cap will help Congress achieve this goal to provide greater
confidence to our health care system and allow for delivery of the
highest quality health care which we all wish to deliver to the U.S.
Citizens of Puerto Rico.
The Puerto Rico Medicaid system needs to enter into contracts for
its FY 2020 Medicaid Program immediately because CMS must certify that
these contracts are actuarily sound before they can go into effect for
the local FY 2020 operating budget for the coming year. Without the
confidence of certainty regarding the level of funding available, it
will be very difficult to attract willing contractors to administer and
implement a managed care system between July 1, 2019, and June 30,
2020. The current fiscal state of the local government prevents it from
making up any of the difference; something no State would be asked to
do.
We continue to urge removing the current statutory cap to allow
equal access for Medicaid funding needed to maintain a quality health
care system for the 1.25 million Medicaid eligibles in Puerto Rico.
Frankly, the uncertainty of Federal funding complicates our ability to
retain and recruit doctors and other vital health care professionals
who are constantly tempted to leave our island for higher salaries
elsewhere in the United States. The uncertainty over Congress's
resolution of the Medicaid Cliff also hampers the ability of local
hospitals to obtain bank financing for moderation and upgrades.
We ask that a provision be included in the first available Federal
funding package to be acted on by Congress to provide continuity for
Puerto Rico's health care system. We've suggested language which
provides a permanent solution to prevent the Cliff from occurring in
the coming year by eliminating the statutory cap on Puerto Rico's
Medicaid funds.
PR's health system and its hospitals are under a tremendous amount
of financial stress because of the island's weak economy and overall
underfunding by Medicaid. The lack of certainty regarding funding
complicates the ability to meet CMS requirements for operation of PR's
Medicaid program for the coming Fiscal Year beginning July 1, 2019.
Here's the sense of urgency: Many doctors and health care
professionals would prefer to remain in their homes in Puerto Rico but
the lack of certainty is weakening their resistance to being recruited
away by other offers. Hospitals are laying off workers and continue to
reduce services. Local hospitals also struggle to obtain the bank
financing needed to upgrade and modernize their facilities. It will
take many years to recover the current capacity of PR's health care
system if more talented and experienced health professionals leave the
island and hospitals are unable to modernize their facilities. By
providing certainty through a permanent solution, Congress can inject
the needed sense of confidence to PR's hospitals necessary to continue
delivering the high level of quality care expected by patients and the
Federal government and retain top medical staff.
We also emphasize that Congress has continually returned to face
this issue of the Medicaid Cliff and removing the cap will eliminate
the need for Congress to return to the issue time and time again.
Removing the statutory cap will be the permanent solution to this
perennial problem facing Puerto Rico and the Congress.
We are prepared to collaborate and provide whatever information is
necessary to address and solve this urgent issue and we look forward to
working with you.
______
Miss Gonzalez-Colon. Thank you, Mr. Chairman.
Now we will begin with my line of questioning.
In the case of Puerto Rico, actually, I have some slides
regarding some of the data that it is important to know, the
difference.
This is the Medicaid funding that has been approved for all
the territories. When you see the difference of the spending in
terms of how much is Federal funding approved and how much is
state-funded or territories put in their money, you can see
that most of our territories are actually doing the spending by
using local funds to comply with the requirements of the
programs.
If the Congress is not acting, a lot of people are going to
lose their insurance, a lot of people are going to lose their
services. And that is the reason behind this hearing.
The other information I want to show is how different it
is, the spending for territories and for the states. In the
case of Puerto Rico, as an example, you can have Mississippi
and many other states receiving more than $7,000 per enrollee
and less than $2,000 to our territory. And I know this is kind
of the same thing with the rest of the territories as well.
That is the reason the FMAP, the formula for the matching
funds, needs to be changed. There are several options to this.
We can have 100 percent Federal cost share, like we did during
the bipartisan bill last year, and Puerto Rico got $4.8 billion
for 2 years, and they are going to be expired in December; or
we can lift the cap of 55 percent, and that would allow in the
case of Puerto Rico, with their per capita, up to 83 percent of
Federal funding.
And I think this is the best way to do it, just allowing
the territories to have the same formula as the states. And
that is a bill that we actually filed.
And there, we are talking about how much money we will be
receiving in each state if we don't do something with that. In
that case, I would like to ask--this is the difference between
some states for Medicaid funding per enrollee. We are not
talking about a difference of just 20 percent. It is up to 70
and 80 percent of difference, the funding that the states are
receiving.
In the case of Puerto Rico, we are losing providers, we are
losing doctors. Our professionals in the healthcare system are
receiving less than half of whatever other professionals are
receiving in the mainland. And that is the reason we are losing
a doctor per day during the last years. During the last 10
years, we have been losing a lot of our professionals, even
lacking specialized physicians.
So, Ms. Avila, I would like to begin with you, and I would
love to have an answer directly in ``yes'' or ``no'' or the
numbers.
How many people in Puerto Rico will lose their healthcare
coverage if we do not address the impending Medicaid cliff? And
how many people will see their benefits or coverage service be
reduced if Congress is not acting by September of this year?
Ms. Avila. We have found out, according to the reading
statements that we are----
Miss Gonzalez-Colon. Just a number. I just need a number.
Ms. Avila. Well, approximately 600,000 lives. And that will
be if we can keep the program viable for Puerto Rico.
Miss Gonzalez-Colon. OK, 600,000 people may lose their
insurance if we do not act by September.
Ms. Avila. That is right.
Miss Gonzalez-Colon. OK.
In the last Congress, I just said that we received $4.8
billion that were approved and the President signed after the
hurricane season. As of this Sunday, $1.2 billion were made
available through HHS if Puerto Rico certified that they have
reliable data to the Transformed Medicaid Statistical
Information System and established a Medicaid fraud control
unit.
The question will be, has Puerto Rico been able to access
the entire allocation of $4.8 billion, including the additional
$1.2 billion?
Ms. Avila. Yes. The answer is yes.
Miss Gonzalez-Colon. OK. Did HHS certify that Puerto Rico
had reliable reporting data and established a Medicaid fraud
control unit?
Ms. Avila. Yes, that is correct.
Miss Gonzalez-Colon. How does the unequal treatment under
the Medicaid program and the fact that we are losing a lot of
our people every year--how does the Government of Puerto Rico
have the ability to budget for, modernize, and reform our
healthcare system if we don't receive the money?
Ms. Avila. We are not allowed to forecast any funding that
we don't have any assurance. It has to be certified. This is
because the fiscal board requires that.
Miss Gonzalez-Colon. So,the Oversight Board required to the
island to include all future plans regarding health care. And
that means, if we don't receive the money, the state, in this
case Puerto Rico, needs to put up front the money from the
state to do the job that the Federal Government is supposed to
do in the state.
Ms. Avila. Yes, that is correct.
Miss Gonzalez-Colon. Thank you.
I will wait for a second round of questions. Thank you, Mr.
Chairman.
Vice Chair Sablan. I like the Ranking Member's suggestion.
But thank you.
At this time, I would like to recognize the gentlelady from
the U.S. Virgin Islands, Ms. Plaskett, for 5 minutes.
Ms. Plaskett. Thank you, Mr. Chairman.
And thank you to all of the witnesses who are here.
I didn't see Mr. Smith with you, sitting behind you. I
guess he is there to provide support and any additional
information.
Thank you, as well, for being with us.
I wanted to just get straight to the questions, because I
know in your written testimony you give a lot more statistics
and a lot more specific examples of how this has affected us.
We have seen on the chart that was demonstrated by my good
friend and my colleague about the difference between what we
have provided locally as well as what the Federal Government
has provided.
But one of the things that I need to highlight and I think
would be important for you to highlight, specific to the Virgin
Islands--which may be different from other places; I am not
sure. You stated that there were approximately how many people
that would need to come off of the books or the support that we
are receiving now if this funding ends? Meaning, how many
people presently have we been able to include that no longer
will be able to receive those services?
Ms. Rhymer-Browne. We would have to reduce upward of 15,000
individuals of the 27,000, approximately, members of the
Medicaid program.
Ms. Plaskett. Great.
But I think another number that was not brought out that I
would love for you to--if you have that number, is, how many
individuals would we like to bring on the rolls that we believe
qualify for Medicaid but we have not given those services to?
Ms. Rhymer-Browne. An additional 15,000 to 20,000
individuals who would be eligible for the Medicaid program.
Ms. Plaskett. So, there are individuals that are presently
in the Virgin Islands, maybe in other territories as well, who
are just not receiving any health insurance. We have a large
population that have no health insurance that would qualify
except for the fact that there is this arbitrary cap that has
been put on the amount of money that Congress gives to us.
And the Virgin Islands, rather than going out and borrowing
money, finding other ways, we have done the fiscally prudent
and responsible thing and said we just can't service those
individuals. Is that correct?
Ms. Rhymer-Browne. Exactly. That is correct.
Ms. Plaskett. And how are some of the other ways that this
is impacting us? If you can talk about the hospitals in the
Virgin Islands.
Presently, we do not receive DSH, as other places do, for
the disproportionate share for hospitals that is an additional
bump-up that is given in rural areas. Although the Virgin
Islands qualifies for it, meets the qualifications, Congress
and CMS have said we would not receive that.
What are some of the other ways that our hospital
healthcare services are impacted because of the trickle-down
effect of not receiving this funding?
Ms. Rhymer-Browne. Well, our hospitals on an everyday basis
are struggling even now. Since 2017, they have been
experiencing extreme infrastructure issues. The hospital is
unable, because of the limited monies that we are able to give
them, to bring all of the specialties and all of the
specialized equipment.
That is one of the reasons that the hospital has frequently
called us over the last 2 years to airlift many of the
individuals who go there who have real catastrophic illnesses
and need specialized procedures. So, the hospital, in effect,
has to turn away several individuals who have these extreme
circumstances and illnesses, and we have to airlift them to the
United States for treatment.
Ms. Plaskett. Thank you.
I know that our governor has declared an emergency with
mental health issues and others. Can you talk about that very
briefly?
Ms. Rhymer-Browne. Yes. Our behavioral health situation is
really burdened right now. Again, the need for more
psychiatrists, the need for more of our individuals to have
long-term care. Behavioral health services, this has been
hampered because of just the inequities of our hospitals and of
our Medicaid program as a whole.
It is very, very important for us to also have a skilled
nursing facility in both districts of the U.S. Virgin Islands.
We don't have a skilled nursing program within the territory.
Our hospitals are really, really burdened to provide behavioral
health services, as well as our community clinics.
Ms. Plaskett. Thank you.
And, finally, could you state the things that the Virgin
Islands has done, things that we have put in place to provide
the compliance and the accountability that Congress has asked
for for Medicaid? I know that there are quite a number of
systems that we have put in place.
Ms. Rhymer-Browne. Certainly.
We implemented the first-ever territory Medicaid Management
Information System for claims. The CMS also certified MAGI-
compliant our online Medicaid eligibility system. We too
implemented a Medicaid fraud control unit in 2018. We also
implemented the TMSIS, the Transformed Medicaid Statistical
Information System.
We also will be completing all of our cost report audit
reconciliations of our two hospitals. We recently completed the
Medicaid program integrity review. And we have a host of other
programs that we have been going through for the last few
years.
And especially with the ACA dollars, we have been able to
do all of these things that I just mentioned prior.
Ms. Plaskett. Thank you so much for all the work that you
are doing.
And thank you, Mr. Chairman, for allowing us the
opportunity to highlight those for our colleagues here in
Congress.
Vice Chair Sablan. Yes. Thank you.
We are going to have a second round of questioning, and I
am going to start with myself, please.
Ms. Rhymer-Browne, you just listed a series of items that
you have implemented in your program, establishing the
relationship between the extra Medicaid money the Virgin
Islands received in last year's disaster appropriations and the
improvements you made in administering the program fraud unit.
You began reporting data to CMS through the Medicaid Management
Information System. But you were able do that because of the
incentive funding included in the disaster bill. Is that
correct?
Ms. Rhymer-Browne. That is totally correct. Without that,
we would have been unable----
Vice Chair Sablan. That was my next question. I think you
are reading my script here, right?
Without that incentive funding, would you have been able to
add those state-like features to the Virgin Islands Medicaid
programs?
Ms. Rhymer-Browne. Could you repeat that, please?
Vice Chair Sablan. Without that incentive funding, would
you have been able to do what you did?
Ms. Rhymer-Browne. No way. We could not have.
Vice Chair Sablan. So, it seems to me there is a model
there for how we can add other state-like features to the
territorial Medicaid programs, that if we provide incentive
funding, if we give you the resources you need to build
capacity, then you are willing to do it. Is that right?
Ms. Rhymer-Browne. We certainly are.
Vice Chair Sablan. I congratulate the Virgin Islands on the
work you are doing. And I do think what is happening in your
islands could be a model, again, for how me make Medicaid more
state-like in the other insular areas. So, thank you for
showing us what can be done.
Let me ask the other directors very quickly: If you had up-
front money to make your programs more state-like, in terms of
the services you offer and in terms of how you manage your
system, would you make those changes, become more like a state?
Ms. Sablan?
Ms. Helen Sablan. I think so.
Vice Chair Sablan. OK.
Ms. Arcangel?
Ms. Arcangel. Definitely.
Vice Chair Sablan. Ms. Young, Director Young, could your
program be run like a state if you had state-like funding?
Ms. Young. Yes, I believe so.
Vice Chair Sablan. Thank you.
And how long do you think that would take? Could you do it
over a period of 10 years? Would that be reasonable?
Ms. Sablan?
Ms. Helen Sablan. Probably.
Vice Chair Sablan. Ms. Arcangel?
Ms. Arcangel. I believe so, yes.
Vice Chair Sablan. Ten years? I didn't hear your answer.
Ms. Arcangel. Yes.
Vice Chair Sablan. OK. Wow.
And Ms. Rhymer-Browne?
Ms. Rhymer-Browne. Yes.
Vice Chair Sablan. And, of course, Ms. Avila, I am not
ignoring you, it is just that Puerto Rico's program is so huge.
But would you also be able to do these things, some of which
you are already starting to do?
Ms. Avila. Yes. The answer is yes. Thank you.
Vice Chair Sablan. OK.
Look, the fact is that the Federal Government isn't saving
money by not treating the territories equally in Medicaid. It
has been a big factor in many territorial citizens moving to a
state. So, for example, many Puerto Ricans have abandoned the
territory for a state. There are more than three-fifths of all
people of Puerto Rican heritage who live in the states.
Further, Medicaid programs in the states spend multiples
per beneficiary of what territories spend--in the case of
Puerto Rico, three times as much.
So, they are not treating us the same, but they are not
saving any money.
Right, Ms. Avila? They are not giving you the money, but
the Federal Government is not saving money, because your
citizens move to Florida and----
Ms. Avila. I will say that it is more costly for the states
to have our residents here.
Vice Chair Sablan. And also costly to us, because we are
having our people leave home.
And, again, I cannot over-emphasize the importance of your
written response, as concise and as complete, to the six items
I gave you. Those are going to, again, go into the record. It
will be shared with the committee of jurisdiction, Energy and
Commerce. And it is a plan that would allow its territory to
work through a program, get financial incentive to do those
things that will get us, hopefully, to a full state-like
Medicaid program, not just in terms of money but in terms of
services to our citizens.
My time is up. At this time, I yield to the Ranking Member,
Miss Gonzalez-Colon.
Miss Gonzalez-Colon. Thank you, Mr. Chairman.
And I will take the same question you were asking. You were
saying about American taxpayers' money will be more effective
if we address this issue now, because in the case of Puerto
Rico, at least, more than 1 million Puerto Ricans have just
moved to Florida. In our case, we just take a ticket and we
move to a state and we receive the full benefits.
So, it will take more money for the United States to
address this issue in the long term. If we fix it now, we may
save a lot of Federal funds.
In that sense, I would like to ask Ms. Avila, Puerto Rico
at this time just offers 10 programs of the 17 Medicaid
programs. Is that correct?
Ms. Avila. Pardon? Could you repeat the question? I am
sorry.
Miss Gonzalez-Colon. Yes. The Federal rules for Medicaid in
Puerto Rico, all the same benefits generally apply to island,
but because we don't have enough funds to match the Federal
share, we are required to limit a lot of those benefits.
So, we are just offering 10 of 17 programs on the island.
Is that correct? Yes or no?
Ms. Avila. I will say, I don't recall 10 or 17. I can
mention----
Miss Gonzalez-Colon. Just tell me the programs that do not
apply on the island.
Ms. Avila. Well, right now, we don't cover hep C patients
within the program. Either we have a cure right now for that
condition or we are not able----
Miss Gonzalez-Colon. What other programs?
Ms. Avila. No emergency transportation. We haven't been
able to----
Miss Gonzalez-Colon. What other programs?
Ms. Avila. Long-term care. And we lost a lot of people.
Miss Gonzalez-Colon. What other programs?
Ms. Avila. Those are the main ones that I can highlight
right now.
Miss Gonzalez-Colon. OK.
You mentioned in your written statement that, due to Puerto
Rico's unequal treatment and the historic low funding, we have
been forced to limit Medicaid eligibility to income levels well
below the Federal poverty level used by the states. Puerto Rico
has 47 percent of poverty level.
Ms. Avila. That is correct.
Miss Gonzalez-Colon. So, what benefits are the ones you are
limiting?
Ms. Avila. Well, the main ones would be pharmacy benefits
and mental coverage benefits. Drugs are necessary for a
healthcare system, and we will not have funds to be able to
sustain the drug program within the Medicaid program in Puerto
Rico.
Miss Gonzalez-Colon. So, in your experience, and having
identified areas of the programs, including drugs, how many
Medicaid-eligible individuals in the mainland are not currently
covered in Puerto Rico because of the disproportionate low-
level Federal funding?
Ms. Avila. We are estimating more than half a million U.S.
citizens have not had the right right now to get into the
program.
Miss Gonzalez-Colon. So, more than half a million American
citizens living in Puerto Rico, they are not covered by
Medicaid full programs as they were in the states just because
of the lack of funding of the treatment of a state of Puerto
Rico. And I know it is the same case for the rest of the
territories as well. Because if you don't have the funds, you
need to be cutting some of the benefits in order to have more
people--or trying to at least address the most urgent needs of
the islands.
During the years 2006 to 2016, the numbers of physicians,
surgeons, and providers of the island dropped from 14,000 to
9,000.
Ms. Avila. That is correct.
Miss Gonzalez-Colon. Has this trend been exacerbated by the
hurricanes in 2017?
Ms. Avila. That is correct. It has been.
Miss Gonzalez-Colon. Do we have any number of how many
physicians and surgeons we do have on the island at this time?
Ms. Avila. Well, we are just validating the numbers, but we
have received preliminary information that 3,000 or more
physicians have left the island since the hurricane.
Miss Gonzalez-Colon. So, we can say that between 6,000 and
7,000 physicians and doctors are still on the island?
Ms. Avila. That is right.
Miss Gonzalez-Colon. And that trend will continue if they
are paid less than the rest of the physicians that provide the
same services that you would receive in the states.
My time is running out, but I do want to have some
questions for the record, so you can answer later on. And that
will be specifically for all of the territories represented
here. I know you do a lot with less resources. And one of those
will be: How much did Medicare program benefits actually cost
in the states?
And in the case of Puerto Rico, there is no real Medicaid
financial help cleared for Puerto Rico. This is the PROMESA
Board saying a few weeks ago. Now, in the letter that was
submitted for the record, they are endorsing receiving the
Medicaid funds for Puerto Rico. And I think that is finally
common sense.
But there are some--and this is for American Samoa. During
the fiscal year, there was an unused balance of $153 million in
Affordable Care Act funds in American Samoa. You explained the
reasons for this balance in your testimony.
But my question will be--and you can answer it later on--do
we need to do something for the territories so they can spend
the money? Is there any other requirement of the Federal
Government, CMS, HHS, that was given to the territories so that
you can't access those funds? What is the reason behind it?
With that, I yield back the balance.
Vice Chair Sablan. Thank you.
The gentlelady's time has expired. But I also agree, for
American Samoa, it is an anomaly. There are not too many
private providers. I found that out after our last time that
you were on the witness stand, Ms. Young.
But Ms. Plaskett has 5 minutes, please.
Ms. Plaskett. Thank you. I won't use the 5 minutes. I am
needed in another meeting. But I just wanted to follow up with
a couple of short questions, particularly, of course, for the
good woman from the Virgin Islands, Ms. Rhymer-Browne.
You talked about the disaster-related circumstances in
which we have been given $100,000, that if we move back to the
55 percent match that had been previously, that that cap would
bring us to about $18.7 million, correct?
Ms. Rhymer-Browne. Correct.
Ms. Plaskett. And what is the amount of money if we were
given the state-like treatment that it would be at? Do you know
what that number would be?
Ms. Rhymer-Browne. I am not sure. However, we are
requesting, as I said, for the 100 percent, we would be
requesting $251 million for 2 years. And then we would continue
at the 83 percent Federal level, and those would be for the
next 3 years. But I am not sure exactly that number.
Ms. Plaskett. What the percent of the 83 percent would be?
Ms. Rhymer-Browne. Yes.
Ms. Plaskett. We know for 55 percent it would be $18.7
million, right?
Ms. Rhymer-Browne. Yes.
Ms. Plaskett. And that is woefully inadequate.
What would be the delta that you would need from the $18.7
million to satisfy the needs of all the individuals that would,
if given state-like treatment, be eligible for it?
[Ms. Rhymer-Browne confers.]
Ms. Plaskett. You are not sure at this time?
Ms. Rhymer-Browne. We are not sure at this time.
Ms. Plaskett. OK. But if you could get that number to me,
that would be really helpful for the record.
Ms. Rhymer-Browne. Yes, I will.
Ms. Plaskett. One of the other things that I wanted to talk
about--we talked a little bit about the physicians. And can you
state specifically what specialty services we are not providing
for individuals right now?
Ms. Rhymer-Browne. Yes. There are several cancer-related
situations that we need to airlift. Our major cancer center was
tremendously damaged on the island of St. Thomas. We used to
fly individuals from the island of St. Croix over to St.
Thomas, but now that center has been down for the last 2 years.
The orthopedic specialist, the trauma specialist. When we
have major accidents and situations, workplace accidents, we
have to airlift our members off-island to receive the treatment
on the mainland.
Ms. Plaskett. And how does this impact recruiting
physicians to the Virgin Islands in terms of, if there is a
belief that we will be reduced in our Medicaid treatment moving
forward, how will that impact the ability to not just have
specialty doctors but to have regular physicians, general
practitioners, pediatricians, et cetera, to treat this
population?
Ms. Rhymer-Browne. It would greatly reduce it. Before our
ACA treatment and getting the additional monies, we were
perhaps maybe at about 200 to 300 providers. We have over 700
now, because individuals were attracted that we had the
additional monies to provide services for our members. But if
we were to be reduced once again, the ability to attract those
specializations would be greatly--it would be very hard for the
territory do that.
Ms. Plaskett. Thank you very much.
I saw you had a note. Was there anything you wanted to add?
Ms. Rhymer-Browne. Yes. He has----
Ms. Plaskett. Mr. Smith, she can't read your handwriting.
You are not only the Director of Medicaid, you must be a doctor
as well.
Ms. Rhymer-Browne. OK. At the 55 percent Federal, we would
require $87.2 million. And at the 83 percent, $52.6 million.
Ms. Plaskett. OK. Thank you very much.
I yield back the balance of my time.
Vice Chair Sablan. Thank you.
I now recognize the gentleman from Nevada, Mr. Horsford,
for 5 minutes.
Mr. Horsford. Thank you, Mr. Chairman, for organizing
today's hearing on the funding of Medicaid in the U.S.
territories. I appreciate the opportunity to discuss the
shortfalls of Medicaid funding in our territories and shed
light on this very important issue.
To start, I want to make it clear that it is my priority,
as a member of this Committee as well as the Ways and Means
Committee, to ensure all Americans, including those living in
U.S. territories, have access to affordable and quality health
care.
Sadly, as is often the case with the Federal Government's
treatment of American Samoa, the Northern Mariana Islands,
Guam, Puerto Rico, and the U.S. Virgin Islands, U.S. citizens
and nationals living in the insular areas do not receive the
same services and benefits afforded to the rest of the American
people. That is a very sad fact that we need to address.
American citizens living in our territories are too often
overlooked, mistreated, and forgotten, and the government
services many of them depend on are treated similarly.
Territories commonly experience higher rates of poverty than
states, and, in many cases, our territories depend on Medicaid
even more than our states. For example, in American Samoa,
because private health insurers refuse to provide the island
healthcare coverage, Medicaid is their only option.
Sadly, due to significant shortfalls in Federal Medicaid
funding, territories face serious challenges finding the
funding needed to support Medicaid coverage for all those who
depend on it. These challenges have increased in recent years,
as debt crises, decreased tourism, and natural disasters,
including hurricanes and typhoons, have added to their burdens
and heightened economic distress. As a result, all territories
are forced to cut Medicaid programs, heighten eligibility
requirements, and limit coverage options.
We cannot continue to stand by while people in need lose
their healthcare coverage. Our territories face a significant
crisis, and they need this Congress to find a Medicaid funding
solution that can address the serious funding setbacks they
face.
More than 1.3 million people in U.S. territories rely on
Medicaid, which provides health coverage to children, pregnant
women, parents, seniors, and individuals with disabilities.
Without a Medicaid funding fix, thousands of individuals in
need risk losing healthcare coverage and benefits under
Medicaid.
I want to thank each one of you for your testimony today. I
hope your insight can help the Members of this Congress better
understand the challenges our territories face and solutions
that are needed.
Ms. Sablan, I want to share my sympathy with you and
express my regret that you and your colleagues have been forced
to make such tough decisions regarding cuts to Medicaid.
Can you talk through what services the Commonwealth would
be forced to cut if we do not address the Medicaid cliff? Will
women not be able to get a mammogram? Will children not be able
to have an annual physical? Will seniors lose access to nursing
facilities? What options are left for these individuals if they
lose their Medicaid coverage?
Ms. Helen Sablan. We will have to cut those optional
services and some of the mandatory services, because by the
first quarter of the fiscal year, we exhaust our 1108 funding.
Mr. Horsford. And explain what you mean by ``cut optional
services.'' When I was in the Nevada State Senate and we had a
Republican governor who wanted to cut Medicaid across the
board, it meant cutting diapers from seniors in nursing homes,
and we rejected that. What does it mean to you?
Ms. Helen Sablan. Optional services include prescription
drugs, dental services, and other care services that are
critical for our patients.
Mr. Horsford. And what will happen to those individuals
without that support?
Ms. Helen Sablan. If they don't get their medications, then
eventually they will end up at the hospital, and that will cost
us more money in our in-patient services. Also, dental
services, if they are not treated, then they are going to end
up in emergency room services, and that costs us more money.
Mr. Horsford. Right. And, again, is it the case that there
are no other options available to them?
Ms. Helen Sablan. There are no other options, because they
don't afford to get health insurance. The income that they get
is pretty much to put food on their table.
Mr. Horsford. Thank you very much.
This is a very important issue, one that affects all the
U.S. territories. And I commend the Chairman and the members of
this Committee. We have to address this issue. It cannot
continue to persist.
Thank you. I yield back.
Vice Chair Sablan. Thank you. Thank you to the gentleman.
I recognize Mr. Cox from California. No questions?
Mr. Cox. No questions.
Vice Chair Sablan. All right.
There is another Californian at the table here, Mr.
Lowenthal.
Mr. Lowenthal. Thank you, Mr. Chair. And I thank you for
recognizing the great state of California also.
I have two questions. One is about the future, and one is a
little bit about how we got here.
The first question is, if Congress does take the steps we
have discussed today to treat the territories equitably, such
as providing uncapped Medicaid funding, calculating fund
matching in the same way it does for the states, really begins
to treat the territories as part of the United States in an
equitable and fair way, are there any mandatory Medicaid
benefit requirements the territories still wouldn't be able to
meet due to territory-specific limitations? Are there still
other things that need to be addressed?
Maybe anybody from the Committee.
Are there any unique characteristics of any of the
territories that will prevent you from being able to provide
the mandatory Medicaid benefits?
We have to get rid of the cap. We are hearing that. You
have to have the match in an equitable way that doesn't
penalize. But is there anything else we should be looking at
also to make sure that the uniqueness of the territories does
not preclude them from receiving certain benefits?
Anybody? Because we are really trying to figure out where
do we go from here. Yes?
Ms. Avila. Mrs. Avila from Puerto Rico.
Besides what is mandatory for the healthcare system within
the Medicaid program, just to be able to keep the expertise of
the doctors and healthcare providers, it is a great challenge
for the island and for the other territories as well. So, we
need to find a way to, with the distance and the structure that
we already have, just to start stabilizing the program and see
what other needs we have to confront right now.
But it is so urgent just to keep the doctors in the
islands, it is so urgent to avoid having the hospitals
collapse, that I will say probably we will need to have more
support in terms of long-term care to develop the structure to
support that population and that area.
But according to the guidelines of the CMS or HHS Federal
healthcare program, we will need to identify what else we can
do better just to have a more continued and sustainable program
in the island.
Mr. Lowenthal. OK.
Anybody else want to add something that might be----
Ms. Rhymer-Browne. Yes, I just want to echo, for the long-
term care, that this will be a very, very important area for
the U.S. Virgin Islands. We have an aging population, and from
CMS we definitely would need additional technical assistance to
not only obtain a skilled nursing facility certification but to
maintain the skilled nursing facility certification. So, that
technical assistance would be greatly, greatly needed.
Mr. Lowenthal. That is looking forward, but the other
question I have is--how did we get here? And I don't know if
anybody can answer it.
I am just sitting here wondering, in the negotiations, does
anybody--maybe Gregorio knows better. In the passage of the
ACA, there were benefits. There was the Medicaid expansion.
And, in some sense, it did provide for certain kinds of
services for the territories. Yet, looking back, it was a
terrible hindrance also. It put limits on the territories that
it did not put on the rest of the country.
How did that happen?
Vice Chair Sablan. Will the gentleman yield?
Mr. Lowenthal. Yes, I will yield.
Vice Chair Sablan. When we had passed the Affordable Care
Act and the PPA also, under the budget reconciliation process,
we had to address the Senate bill. At that time, in all
truthfulness, we couldn't go into conference, because when we
come out, there would not be enough votes to pass the bill.
Mr. Lowenthal. OK.
Vice Chair Sablan. So, we used the budget reconciliation
process. And, of course, we had to go into the Senate version,
which the Senate addressed the states, not territories. So, we
worked with the White House, and we got increased money in
addition to the regular block grants. But those monies were
used as block grants itself.
Now, if we are going to get into the full program, there
has to also be improvements to not just the procedures and the
process of the program but also the care, the standard of care
for patients.
The improvements that they would implement to satisfy
Medicaid would not just benefit Medicaid patients. They would
also benefit the entire patient population and the needs of the
territories or combined like they do in the states. So, they
would provide services that are not at the present time
available to the territories but are available in the states.
And we could do this over a period of 10 years. There would
be money to help them, incentivize them to meet those
standards. And, at the same time, allow--maybe one territory
could get this done in 5 years, and the other one may take 6
years--but allow them to work with the Secretary of HHS. And
when they submit plans, when the HHS Secretary approved a plan,
and then that territory would get into a full Medicaid program
like they do in the states. And the rest would take the
additional time they would need.
It will take time. It will take incentivizing them--of
course, they would need financial assistance. But, yes, it can
be done. It is possible. And that is also, for me personally,
that is my hope, that we would get into the full program.
Did I answer the gentleman's question?
Mr. Lowenthal. Yes.
Vice Chair Sablan. Thank you. And your time is up, so----
Mr. Lowenthal. And I used my time very wisely.
Vice Chair Sablan. No question. You always do, Mr.
Lowenthal.
Mr. Tonko from New York is recognized for 5 minutes.
Mr. Tonko. Thank you, Mr. Chairman.
And thank you to our witnesses, as well, for being here
today.
I believe, in the richest country on Earth, health care
should be a guaranteed right for all, full stop, and not just
for residents of the 50 states but for all who call themselves
Americans. Unfortunately, health care in America has always
been segregated between the haves and the have-nots, and the
status of Medicaid in the insular areas is no exception.
Like many aspects of Federal law, the way that the Medicaid
program views the insular area is of second-class citizens,
providing fewer resources and less predictability to care for
some of our most vulnerable.
The territories are generally poorer than the 50 states but
are subjected to Medicaid funding caps and restrictions that
have made it significantly challenging for them to provide
services to individuals living below the Federal poverty level.
Despite temporary increases in Federal Medicaid funds to
Puerto Rico and the U.S. Virgin Islands, healthcare systems are
fragile, especially in the wake of Hurricanes Irma and Maria.
Following these two disasters, residents have struggled with
substantial health needs.
It is imperative, I believe, that Congress properly address
the Medicaid financing issues. Expiration of funding could
result in even more significant shortfalls and could further
restrict programs' eligibilities and cut benefits and suspend
programs. This could be devastating for territory budgets,
coverage, and the healthcare systems more broadly.
So, my question to Ms. Sablan and Ms. Young, both American
Samoa and the Commonwealth of the Northern Mariana Islands rely
on a single hospital to provide most of the care to Medicaid
beneficiaries. What are some of the challenges that arise with
this model? And would having uncapped Medicaid Federal funding
and a higher Federal match help the territories draw in
additional providers outside the hospital system?
Ms. Sablan?
Ms. Helen Sablan. Can you repeat your question again? I'm
sorry.
Mr. Tonko. Sure. With your reliance on a single hospital
for most of the care for Medicaid-eligible, what are some of
the challenges that arise with this model? And would having
uncapped Medicaid Federal funding and a higher Federal match
help the territories draw in additional providers outside those
in that hospital system?
Ms. Helen Sablan. We would have to send our patients off-
island, either to Guam, Hawaii, or the U.S. Mainland. And it
really is costing us a lot of money to send our patients with
the limited cap that we get, and then requiring our local
match.
Mr. Tonko. If we undo the cap and provide a higher Federal
match, what is the impact, do you think?
Ms. Helen Sablan. That would really help us. We would be
able to provide more services.
Mr. Tonko. And, Ms. Young, do you have any response?
Ms. Young. Yes. To answer the first prong of your question,
we provide basic services at our one hospital. And, basically,
in our state plan, medically necessary care that is not
available in our hospital must be sent off-island. And,
currently, we send our patients to New Zealand because it is
the closest country to us. It is closer than Hawaii. So,
everything from orthopedics to cardiology to urology, to acute
serious pediatrics, go to New Zealand.
If the cap were lifted and we received a better FMAP, that
would truly transform our healthcare system. And what is
amazing about this situation, if you look at the territories,
it doesn't take much in the overall scheme of the Federal
budget to just give us a little more in our block grants so
that we can fully provide the services to our people and care
for them.
So, if that cap was lifted and we got a better FMAP,
absolutely, we would be able to recruit more providers in our
island. Because that is part of our problem. We don't have
enough certified doctors for CMS with compliance issues and
reimbursement requirements. I think there are three doctors
with M.D. degrees from the United States that allows us to
claim for Medicare. But if we had more funding to recruit
doctors from the United States with M.D. degrees, we would be
able to do more of those types of claiming.
Mr. Tonko. Thank you.
Mr. Chair, I yield back.
Vice Chair Sablan. Thank you, Mr. Tonko.
I now recognize Miss Gonzalez-Colon for 5 minutes.
Miss Gonzalez-Colon. Thank you, Mr. Chairman.
I want to thank Mr. Tonko, Horsford, Soto, and all the
Members who are here taking into account the situation in the
territories. I think it is important for Congress to do
something. And I am willing, as the Representative of Puerto
Rico, to work across the aisle to reach a long-term solution
for the territories. And I think we can do that in the Energy
and Commerce Committee--they went to the island during the last
Congress, both today's Chairman as the Ranking Member at the
time. And I think there is a common-sense opportunity to reach
an agreement.
There are two bills that have been filed, one from Ms.
Plaskett that has been sponsored by all the Members of the
territories in a bipartisan way, H.R. 2306. And the other one
is H.R. 1354. And I commend the Members that could co-sponsor
those bills that would find a solution, a permanent solution,
in taking the cap of 55 percent off or increasing the funding
for Medicaid in Puerto Rico and the rest of the territories as
well.
And I want to commend Mr. Soto for always being an original
co-sponsor of all those bills. I think this is something that
we can achieve during this Congress knowing that most of the
territories suffered different disasters, including typhoons
and hurricanes, during the last 2 years.
Ms. Arcangel, you were willing to answer the last question,
and the time was up. Did you finish?
Ms. Arcangel. Thank you, Senator--sorry.
Miss Gonzalez-Colon. Not yet. When we become a state, I
will be a Senator. But now, I will be here in the House. Go
ahead.
Ms. Arcangel. I am used to speaking to Guam Senators. I'm
sorry.
Yes, so to answer the questions of the Congressman from New
York, increasing the FMAP and removing the cap will definitely
help all the territories.
One, for Guam, our experience is, because of lack of local
funding, we are unable to match the Federal. So, what happens
then is, because we have the late payments to our providers,
they don't accept our patients, even for off-island providers.
What happens? Our patients become more sick, their condition
becomes more complicated, so the cost of health care increases.
While we are waiting for a local match to draw down the Federal
funding, our patients are staying in the hospital.
Though we have two hospitals, we don't have a tertiary
center, really, that is complete with specialists who can
handle these people, even for nurses. Tertiary centers requires
all the professionals in order for them to completely heal the
patient. But these patients are waiting months in order to go
off-island because the providers off-island do not want to
accept our payments because of the late payments.
Miss Gonzalez-Colon. Thank you.
Ms. Arcangel. And one more thing with regards to----
Miss Gonzalez-Colon. Don't use up my time.
Ms. Arcangel. OK. I'm sorry. I just wanted to emphasize----
Vice Chair Sablan. I will give you an extra minute.
Miss Gonzalez-Colon. OK. Perfect.
Go ahead.
Ms. Arcangel. I'm sorry. I just wanted to emphasize that
the territories do not receive any DSH money. And that will
help our hospital.
Miss Gonzalez-Colon. The DSH money, for the knowledge of
the Members, is disproportionate share hospital segment. And
that means that the low-income patients are being attended by
many of the hospitals without receiving their fair share in
order to make that happen.
Same thing happened with the low-income subsidy and the
HIT, the health insurance tax. Our hospitals are paying a tax
included in the Obamacare, but we can't benefit for the tax
incentive that the law provided for those hospitals. In the
case of Puerto Rico, we are paying more than $200 million a
year in the health insurance tax without getting the benefit.
And I know it would be the same for all the hospitals because
we don't have the exchange.
So, there are several parts of the healthcare problems.
Medicaid is one of them. Medicare is another problem as well.
And I began the questioning during my last turn to the lady
from American Samoa. And I know that we knew each other. How
long you been in the post, Ms. Young?
Ms. Young. Six years.
Miss Gonzalez-Colon. Six years. What is the reason that
American Samoa has not used or spent the money that was
allocated to the island?
Ms. Young. Up until 2017, we only had one Medicaid
provider, which is the hospital. And the hospital doesn't
provide all of the mandatory services under the Medicaid
program.
In trying to reform our Medicaid state plan to add new
providers to try to help us draw the Federal money, the barrier
for that was the local match. So, for the first time, our
government was--when our administration came in, there was a
lot of old debt that their priority was to focus on. So, we
weren't able to get local match for new services until 2017.
Our hospital doesn't require a local match, but all new
services outside of the hospital require a local match.
Miss Gonzalez-Colon. And I would yield. And I would love to
have recommendations from the territories that have not spent
the Medicaid funds. Give me any problems you are facing. You
have been 6 years there, so there should be some
recommendations in order to actually draw that money.
With that, I will yield back.
Vice Chair Sablan. The gentlelady's time has expired. Thank
you.
I will now recognize the gentleman from Florida, Mr. Soto.
Mr. Soto. Thank you, Chairman Sablan. That does sound nice.
Not as good as ``Grijalva,'' but Chairman, I am still with you.
I am Team Grijalva, but I love Sablan.
There has been a long-running injustice in this country--
and I think we all understand that--with our territories with
regard to health care, taxes, benefits, even the right to vote.
And we continue to be in this Committee to right those wrongs,
to fix those injustices.
In Puerto Rico, under the current Medicaid system, we have
seen over 6,000 doctors leave the island, many of them for our
great state of Florida; hospitals are in disrepair; debt is
added to try to prop up a Medicaid program--all because Puerto
Rico is not treated equally for purposes of Medicaid. And I
know there is a similar story in each of our territories, and
that is why we are here today.
I have the honor of serving on the Energy and Commerce
Committee that--the name has been invoked about 100 times
today. So, you are looking at someone who will be working in
both committees on this issue specifically.
But it gets worse than that, with Hurricane Maria or
Typhoon Yutu, our territories have been decimated by some of
these storms. And it has led to tragic deaths that are in part
because of the lack of money in the healthcare system to be
able to provide people with health care after these
emergencies, including in Puerto Rico and the Virgin Islands
and in the Northern Mariana Islands, along with other areas.
So, if you remember nothing else, it is time to end this
injustice. And that is why we appreciate all of you coming from
so far away, from so many different corners of the United
States to be here today and to make sure that Americans have
healthcare equality throughout the territories.
I want to thank my fellow hermana Boricua, Representative
Gonzalez-Colon, as well as Representatives Plaskett, Sablan,
San Nicolas, Radewagen, and others. Because H.R. 2306 and H.R.
2304 are great ideas and starting points of where we need to be
in Energy and Commerce with regard to these bills, as well as
here.
We would like to remove the cap altogether, and we would
like territories to be treated as states and get the same type
of treatment that they would get otherwise. And I think that is
where we want to go with either these bills or with sort of a
combination of them.
Another bill that we will be working on is to give access
to the Affordable Care Act exchanges, which right now the
territories don't have access to. In my family's native island
of Puerto Rico, only 30 percent of people are on employer-based
insurance, which is mind-blowing compared to the states. So, we
need to boost that up.
I noticed--and this is where I am going to get to my
question for each of you--because you are not fully funded with
Medicaid, some of you aren't providing all the services yet,
although Guam--who is from Guam?--Guam is doing all the
services already. You get the gold star for today. Very
impressive. You are not getting the full funding to do that.
But for each of you, going down the list, it would be great
to hear, if we provided you the full FMAP funding that you
would get as a state, whether you believe you could provide,
over the course of a certain number of years, all these
services.
We will start with Ms. Avila and we will go down the list.
If you got the full Medicaid treatment that a state would, the
full funding, would you be able to provide all the services
under a mandatory Medicaid benefit? And what kind of time
period would you need?
Ms. Avila. Well, we were talking about that. We would start
immediately just adjusting the reimbursement rates to our
medical providers.
And I will say that in a time frame of no more than 3 years
we will be able to stabilize the program as it needs right now.
Because the uncertainty that we have, it is one of the most----
Mr. Soto. I understand. My time is limited, so I just want
to get to other people,
Ms. Young?
Ms. Young. Thank you. Yes, we would be able to do a lot
more if we were treated equitably like the states and releasing
uncapped funding as well as an improvement in the FMAP.
Mr. Soto. Ms. Rhymer-Browne?
Ms. Rhymer-Browne. Yes, we would definitely be able to do
more. And one of the areas would be to increase--well, even
develop our skilled nursing facilities and not have a cap when
we do have the skilled nursing facilities.
Mr. Soto. And we already covered Guam. Ms. Sablan?
Ms. Helen Sablan. We will definitely provide all the
services that are mandated. Right now, there are some that we
are not covering because----
Mr. Soto. Of course. Because you are not getting full
funding. I understand that.
And Ms. Muna?
Ms. Muna. We are already providing some of the services,
and we will be definitely expanding and providing more services
for the community at home.
Mr. Soto. Thanks.
And I yield back.
Vice Chair Sablan. I thank the gentleman.
I now recognize the Chairman of the Committee, Mr.
Grijalva.
Mr. Grijalva. Thank you very much, Chairman Sablan. And
like I said earlier, I appreciate you putting this meeting
together, this hearing. It is impactful to shine a brighter
light on this inequity that every one of you has spoken to,
both in your oral and written testimonies.
And it is an equal-treatment issue, to me, very
fundamentally and very simplistically. And the way to deal with
that unequal treatment is to create resource equity on par with
what communities here in the United States on the mainland
receive, period. That is the goal.
And I look forward to the various legislation under Mr.
Sablan and the Representatives from all the territories and
Puerto Rico. I think that from that would come a significant
piece of legislation that we can look at, promote. And
certainly I would be talking with Chairman Pallone about
expediting a good piece of legislation, to start to move that.
Having said all that, I really want to ask one question to
all of you--just one question. And thank you all for making the
effort and coming from such a long way to be here.
The one question is--If you had to choose between a larger
Federal match, for example, 85 percent, or more money or just
more resources and more money but the same 55/45 match that is
present, which would you prefer and why?
I think that is the question. Why don't we just add more
money to what exists versus fundamentally changing, making the
formula equitable, the reimbursement formula equitable?
But that is the one question for all of you. And we can
begin with Ms. Muna. Then we can just go down the panel, if you
don't mind.
Thank you, Mr. Chairman.
Ms. Muna. If we were going to choose, we would have to
choose more money over the FMAP. And the reason is, even if you
increase the FMAP--for us personally in the hospital, we use
the certified public expenditure. If the funds are not
available, you won't be able to--even if you increase the FMAP,
it would basically just be faster for you to expend the money
rather than having actual cash available to pay for services
that you are going to provide at home.
Mr. Grijalva. OK. Thank you.
Ms. Helen Sablan. I go with removal of the cap instead of
the FMAP. And the reason why is we are spending more. We are
spending over $72 million.
Ms. Arcangel. The same way for Guam. We spent $110.8
million last year. So, if you are just going to increase the
FMAP, our current cap right now is $17.97 million. That is not
enough to pay for those services, so we prefer to increase the
funding.
Ms. Rhymer-Browne. Very hard. We would need more money, so
definitely we want the cap off. But the FMAP is needing to be
off as well, because more money and still have the 55 percent
FMAP would make no sense. We can't make it. We can't go after
it, as seen in the ACA dollars.
Ms. Young. I think for American Samoa, this is an
interesting question. In an ideal situation, both of these
options need to be addressed simultaneously, complementary. But
if we were given an option, then we would have to go for more
money, lifting of the cap.
But what we would have to do as a territory, then, is we
would have to permanently omit and eliminate all outside
providers outside of the hospital, because our government is
not able to raise the local match. And I think we can do that
over years, continually improve our hospital and use our CPE
method that doesn't require the match.
Ms. Avila. We will need to agree with the Virgin Islands
that it is a combination of both. Even though we have more
money, if we don't have the local match to be able to comply
with the matching funds, we are not doing anything good for the
program.
So, it would be an increase of both relatively. We need to
have more money, and we need to have a higher FMAP to be able
to do the matching of funds and not to be in the situation that
Puerto Rico is facing right now. Because trying to cope with
the matching of 45 percent has taken our island to a financial
situation that we are living today with the fiscal board and
looking for funds to be able to pay what we get to be able to
sustain the program and pay for the matching.
Mr. Grijalva. Thank you.
Mr. Chairman, I hope that going forward under your
leadership that the consensus, the fact that all the
stakeholders are before us, that, as we move forward or move
legislation, that we seek to continue to promote that
consensus. It makes the effort much more powerful, to be honest
with you.
So, with that, thank you very much again for the hearing. I
yield back, sir.
Vice Chair Sablan. Thank you, Mr. Chairman.
I am going to take the liberty of asking Ms. Muna if she
could respond, maybe take 30 seconds, 1 minute, to respond to
Mr. Tonko's question.
Ms. Muna. About expending services?
I mean, if you remove the cap--yes. If you remove the cap,
there are a lot of opportunities for us to reform our
healthcare system, given the opportunity to have that
predictable funding. You have to have predictable funding and
sustainable funding.
And if you are able to have those, then you will be able to
basically manage the population, bring healthcare reform, bring
population health, and have a healthier population for your
people. And that is an opportunity for us that we would love to
have.
Thank you.
Vice Chair Sablan. Thank you.
Thank you very much, everyone.
And I want to let everyone know that we didn't hold this
hearing just on our own. We have been working with outside
groups. We have been working with the Energy and Commerce
Committee staff on trying to address this also. We don't want
to blind-side them.
So, again, I will emphasize the importance of giving us a
complete and concise answer to those six items I gave to you.
I also would like again--I am really pleased with the
Virgin Islands model that they have started. And I understand
that some of you have agreed to kick back and pay your own
bill, of course. But somewhere, maybe at Longworth Cafe, maybe
you can sit back and talk a little bit more on how to address a
model, so we could put together something for legislation.
I want to thank the witnesses for their truly, truly
valuable testimony and many of the Members for their questions
and their patience.
The members of the Committee may have some additional
questions for our witnesses, and we would ask you to respond to
these in writing. Under Committee Rule 3(o), members of the
Committee must submit witness questions within 3 business days
following the hearing, and the hearing record will be held open
for 10 business days for these responses.
If there is no further business, without objection, the
Committee stands adjourned.
[Whereupon, at 12:18 p.m., the Committee was adjourned.]
[ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]
Submission for the Record by Rep. Grijalva
Statement for the Record
Natalie A. Jaresko
Executive Director
Financial Oversight and Management Board for Puerto Rico
Chairman Grijalva, Ranking Member Bishop, and Members of the
Committee, thank you for the opportunity to provide comments to the
Committee on behalf of the Financial Oversight and Management Board for
Puerto Rico (the ``Board'') specific to Puerto Rico as you examine the
Medicaid situation in the U.S. territories and consider proposals to
address issues as to federal funding for Medicaid services in the
territories.
As the bipartisan Congressional Task Force on Economic Growth in
Puerto Rico (the ``Congressional Task Force'') concluded in its Report
to the House and Senate of the 114th Congress, on December 20, 2016,
federal policymakers seeking to address Puerto Rico's economic and
social challenges must include a solution to the future financing of
the Medicaid program in Puerto Rico. The Board strongly agrees and
previously supported the Bipartisan Budget Act of 2018, which provided
additional Medicaid federal funding for Puerto Rico like the Affordable
Care Act had.
The Board is very concerned that come September 2019, when that
additional funding from the Bipartisan Budget Act and Affordable Care
Act expires, Puerto Rico will revert back to the statutorily capped
federal funding that it receives for Medicaid, which is a small
fraction of what similar states receive. Not only does Puerto Rico have
a predefined 55% as its federal matching assistance percentage, but
also Section 1108 of the Social Security Act imposes an additional
hard, lower cap on Puerto Rico's Medicaid share.
For example, in fiscal year 2018, the Section 1108 cap for Puerto
Rico was just under $360 million while the total cost of Medicaid in
Puerto Rico was over $2.8 billion. In the absence of one-time funds
from Congress through the Affordable Care Act and Bipartisan Budget
Act, the cap on matching assistance available to Puerto Rico would have
yielded an effective federal match of roughly 13%. Had Puerto Rico
received its predefined 55% federal match without a cap, it would have
received over $1.3 billion. Had Puerto Rico received the federal match
that the most relevant comparable state gets (Mississippi at 76%), it
would have received over $1.8 billion.
Each dollar that the federal government does not provide for
Medicaid the Government of Puerto Rico must find, while it contends
with the devastating aftermath of hurricanes Irma and Maria and
attempts to resolve its crushing debt burden. Furthermore, without a
long-term solution to the Federal government's share of Puerto Rico's
Medicaid costs, the Government of Puerto Rico's spending on Medicaid
will account for an unprecedented portion of its annual budget. Absent
action by Congress, by fiscal year 2021, the Commonwealth's Medicaid
costs are projected to comprise roughly 23% of the General Fund's
budget.
While urging Congress to address this major shortfall, the
Government of Puerto Rico and the Board have been working on a series
of reform priorities for the Island's healthcare system to improve the
delivery of high quality, cost-effective care. In particular, the May
2019 Certified Fiscal Plan for the Government of Puerto Rico requires
the Government to:
1. Implement systems and controls (e.g., T-MSIS, Medicaid Fraud
Control Unit) to reduce fraud, waste and abuse within the
public insurance system and ensure that all current
enrollees are qualified to receive benefits;
2. Establish value-based payment models to incentivize better care
coordination among providers, particularly for those with
chronic conditions who currently generate the majority of
the Island's healthcare expenditures and suffer from the
worst health outcomes;
3. Enable primary care physicians to provide preventive care and
encourage a shift toward lower-cost care settings, reducing
the number of emergency room visits; and
4. Ensure communities have the infrastructure and coordination
capacity to promote efficiency of services and a community-
wide focus on health.
These value-based savings measures represent a joint effort between
the Government of Puerto Rico and the Board to permanently ``bend the
curve'' on the Island's unsustainable medical cost growth, while also
providing better services to the residents of Puerto Rico.
While these reforms are underway and the Medicaid cliff looms, the
Board encourages the Committee and the Congress to support the
recommendation of the Congressional Task Force to treat Puerto Rico in
a more equitable and sustainable manner under the Medicaid program, in
order to improve patient outcomes, to strengthen the health care system
on the Island and federal oversight of that system, and to reduce the
incentive for migration from the Island to the states and the
associated financial costs to state governments and the federal
government.
Going forward, the Board believes that federal financing of the
Medicaid program in Puerto Rico should be more closely tied to the size
and needs of its low-income population and that the Commonwealth's
recovery and fulfillment of PROMESA's objectives will be significantly
aided by the Congress legislating a long-term Medicaid program solution
to mitigate the drastic reduction in federal funding for healthcare in
Puerto Rico that will happen later this year absent congressional
action.
______
[LIST OF DOCUMENTS SUBMITTED FOR THE RECORD RETAINED IN THE COMMITTEE'S
OFFICIAL FILES]
Submissions for the Record by Rep. Sablan
-- Letter from the Association of Asian Pacific Community
Health Organizations (AAPCHO) to Reps. Grijalva,
Bishop, and Sablan dated May 23, 2019.
-- Letter from the President and CEO of Guam Regional
Medical City (GRMC) to Vice Chair Sablan dated May
23, 2019.
-- Pacific Island Health Officers' Association Resolution
No. 2019-65-01.
-- Letter from Marianas Medical Center to Vice Chair Sablan
dated May 13, 2019.
-- Letter from Various Asian-Pacific and Pacific Island
Organizations to House Majority and Minority
Leadership dated May 23, 2019.
Submissions for the Record by Rep. Radewagen
-- Letter from Rep. Radewagen to Governor Lolo Moliga of
American Samoa dated March 15, 2019.
-- Briefing from the Medicaid and CHIP Payment and Access
Commission (MACPAC) dated May 2019.
-- GAO Report on Medicaid and CHIP: Increased Funding in
U.S. Territories Merits Improved Program Integrity
Efforts, GAO-16-324, dated April 2016.
-- Fact Sheet from MACPAC on Medicaid and CHIP in American
Samoa dated March 2019.
Submission for the Record by Ms. Avila
-- Letter from Gov. Rossello to Rep. Pallone and Rep. Walden
dated May 1, 2019.
Submissions for the Record by Ms. Muna
-- Briefing Packet from Commonwealth of the Northern Mariana
Islands Healthcare Corporation dated March 2019.
-- Letter from Governor Torres of the Commonwealth of the
Northern Mariana Islands to the Secretary of the
U.S. Department of Health and Human Services dated
April 23, 2019.
[all]