[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
STRENGTHENING HEALTHCARE IN THE U.S.
TERRITORIES FOR TODAY AND INTO THE FUTURE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
JUNE 20, 2019
__________
Serial No. 116-50
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
40-616 PDF WASHINGTON : 2022
-----------------------------------------------------------------------------------
COMMITTEE ON ENERGY AND COMMERCE
FRANK PALLONE, Jr., New Jersey
Chairman
BOBBY L. RUSH, Illinois GREG WALDEN, Oregon
ANNA G. ESHOO, California Ranking Member
ELIOT L. ENGEL, New York FRED UPTON, Michigan
DIANA DeGETTE, Colorado JOHN SHIMKUS, Illinois
MIKE DOYLE, Pennsylvania MICHAEL C. BURGESS, Texas
JAN SCHAKOWSKY, Illinois STEVE SCALISE, Louisiana
G. K. BUTTERFIELD, North Carolina ROBERT E. LATTA, Ohio
DORIS O. MATSUI, California CATHY McMORRIS RODGERS, Washington
KATHY CASTOR, Florida BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland PETE OLSON, Texas
JERRY McNERNEY, California DAVID B. McKINLEY, West Virginia
PETER WELCH, Vermont ADAM KINZINGER, Illinois
BEN RAY LUJAN, New Mexico H. MORGAN GRIFFITH, Virginia
PAUL TONKO, New York GUS M. BILIRAKIS, Florida
YVETTE D. CLARKE, New York, Vice BILL JOHNSON, Ohio
Chair BILLY LONG, Missouri
DAVID LOEBSACK, Iowa LARRY BUCSHON, Indiana
KURT SCHRADER, Oregon BILL FLORES, Texas
JOSEPH P. KENNEDY III, SUSAN W. BROOKS, Indiana
Massachusetts MARKWAYNE MULLIN, Oklahoma
TONY CARDENAS, California RICHARD HUDSON, North Carolina
RAUL RUIZ, California TIM WALBERG, Michigan
SCOTT H. PETERS, California EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan JEFF DUNCAN, South Carolina
MARC A. VEASEY, Texas GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
LISA BLUNT ROCHESTER, Delaware
DARREN SOTO, Florida
TOM O'HALLERAN, Arizona
------
Professional Staff
JEFFREY C. CARROLL, Staff Director
TIFFANY GUARASCIO, Deputy Staff Director
MIKE BLOOMQUIST, Minority Staff Director
Subcommittee on Health
ANNA G. ESHOO, California
Chairwoman
ELIOT L. ENGEL, New York MICHAEL C. BURGESS, Texas
G. K. BUTTERFIELD, North Carolina, Ranking Member
Vice Chair FRED UPTON, Michigan
DORIS O. MATSUI, California JOHN SHIMKUS, Illinois
KATHY CASTOR, Florida BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland H. MORGAN GRIFFITH, Virginia
BEN RAY LUJAN, New Mexico GUS M. BILIRAKIS, Florida
KURT SCHRADER, Oregon BILLY LONG, Missouri
JOSEPH P. KENNEDY III, LARRY BUCSHON, Indiana
Massachusetts SUSAN W. BROOKS, Indiana
TONY CARDENAS, California MARKWAYNE MULLIN, Oklahoma
PETER WELCH, Vermont RICHARD HUDSON, North Carolina
RAUL RUIZ, California EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire GREG WALDEN, Oregon (ex officio)
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
LISA BLUNT ROCHESTER, Delaware
BOBBY L. RUSH, Illinois
FRANK PALLONE, Jr., New Jersey (ex
officio)
CONTENTS
----------
Page
Hon. Anna G. Eshoo, a Representative in Congress from the State
of California, opening statement............................... 1
Prepared statement........................................... 3
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, opening statement.............................. 4
Prepared statement........................................... 5
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 6
Prepared statement........................................... 8
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 9
Prepared statement........................................... 11
Witnesses
Anne L. Schwartz, Ph.D., Executive Director, Medicaid and CHIP
Payment and Access Commission.................................. 12
Prepared statement........................................... 15
Answers to submitted questions............................... 142
Angela Avila, Executive Director, Administracion de Seguros de
Salud de Puerto Rico (Puerto Rico State Health Insurance
Administration)................................................ 33
Prepared statement........................................... 35
Answers to submitted questions............................... 149
Sandra King Young, American Samoa Medicaid Director.............. 50
Prepared statement........................................... 52
Answers to submitted questions............................... 161
Maria Theresa Arcangel, Chief Human Service Administrator,
Division of Public Welfare, Guam Department of Public Health
and Social Services............................................ 57
Prepared statement........................................... 59
Answers to submitted questions............................... 162
Michal Rhymer-Browne, Assistant Commissioner, Department of Human
Services, U.S. Virgin Islands.................................. 63
Prepared statement........................................... 65
Answers to submitted questions............................... 164
Helen C. Sablan, Medicaid Director, Commonwealth of the Northern
Mariana Islands................................................ 75
Prepared statement........................................... 77
Answers to submitted questions............................... 166
Submitted Material
Statement of Delegate Aumua Amata Coleman Radewagen, a
Representative in Congress from the Territory of Puerto Rico,
June 19, 2019, submitted by Ms. Eshoo.......................... 121
Letter of June 19, 2019, from Michael L. Munger, Board Chair,
American Academy of Family Physicians, to Ms. Eshoo and Mr.
Burgess, submitted by Ms. Eshoo................................ 123
Letter of June 19, 2019, from Kenneth Rivera-Robles, President,
Puerto Rico Chamber of Commerce, to Mr. Pallone and Mr. Walden,
submitted by Ms. Eshoo......................................... 125
Statement of Natalie Jaresko, Executive Director, Financial
Oversight and Management Board for Puerto Rico, June 20, 2019,
submitted by Ms. Eshoo......................................... 127
Letter of June 19, 2019, from Rafael F. Torregrosa, President,
Multi-sectorial Council on Puerto Rico's Health System, to Ms.
Eshoo, submitted by Ms. Eshoo.................................. 130
Letter of June 20, 2019, from the Partnership for Medicaid to
Hon. Mitch McConnell, Majority Leader, U.S. Senate, et al.,
submitted by Ms. Eshoo......................................... 132
Statement of America's Health Insurance Plans, June 20, 2019,
submitted by Ms. Eshoo......................................... 134
Statement of Resident Commissioner Jenniffer Gonzalez-Colon, a
Representative in Congress from the Territory of Puerto Rico,
submitted by Mr. Burgess....................................... 137
Report of the Blue Ribbon Study Panel on Biodefense, ``Holding
the Line on Biodefense: State, Local, Tribal, and Territorial
Reinforcements Needed,'' October 2018, submitted by Mrs. Brooks
\1\
----------
\1\ The report has been retained in committee files and also is
available at https://docs.house.gov/meetings/IF/IF14/20190620/109671/
HHRG-116-IF14-20190620-SD013.pdf.
STRENGTHENING HEALTHCARE IN THE U.S. TERRITORIES FOR TODAY AND INTO THE
FUTURE
----------
THURSDAY, JUNE 20, 2019
House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:29 a.m., in
room 2322, Rayburn House Office Building, Hon. Anna G. Eshoo
(chairwoman of the subcommittee) presiding.
Members present: Representatives Eshoo, Engel, Butterfield,
Castor, Sarbanes, Lujan, Schrader, Kennedy, Cardenas, Welch,
Ruiz, Kuster, Kelly, Barragan, Blunt Rochester, Soto, Pallone
(ex officio), Burgess (subcommittee ranking member), Guthrie,
Griffith, Bilirakis, Long, Brooks, Mullin, Hudson, Carter,
Gianforte, and Walden (ex officio).
Staff present: Jeffrey C. Carroll, Staff Director; Waverly
Gordon, Deputy Chief Counsel; Tiffany Guarascio, Deputy Staff
Director; Saha Khaterzai, Professional Staff Member; Josh
Krantz, Policy Analyst; Aisling McDonough, Policy Coordinator;
Joe Orlando, Staff Assistant; Alivia Roberts, Press Assistant;
Rick Van Buren, Health Counsel; C. J. Young, Press Secretary;
Mike Bloomquist, Minority Staff Director; Jordan Davis,
Minority Senior Advisor; Margaret Tucker Fogarty, Minority
Staff Assistant; Caleb Graff, Minority Professional Staff
Member, Health; Peter Kielty, Minority General Counsel; Ryan
Long, Minority Deputy Staff Director; and J. P. Paluskiewicz,
Minority Chief Counsel, Health.
Ms. Eshoo. Good morning, everyone. The Subcommittee on
Health will now come to order. The Chair now recognizes herself
for 5 minutes for an opening statement.
The committee is not in order.
Thank you.
OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Welcome to the witnesses, everyone that is in attendance
here today.
At the end of this coming September, the five U.S.
territories face a Medicaid cliff, which means the
supplementary Medicaid funding provided to the territories
through the Affordable Care Act will run out. Without this
Federal funding, over 1.5 million enrollees, including many
children, could lose their healthcare. Each is an American
citizen, and they are being treated differently than the
constituents of every Member in this room.
For too long, the territories have struggled with
inadequate Federal funding for their Medicaid programs because
Federal law caps Medicaid funding for the territories. The
territories also receive a fixed Federal Medicaid match that is
lower than the rate they would receive if they were States.
Due to these restrictions, the territories routinely run
out of Medicaid funds. Over the past decade, Congress has voted
on five separate occasions to provide stopgap funds to certain
territories. Even with these supplements, the funding for the
territories is well below what a State Medicaid program would
receive. In the territories, Medicaid spends an average of
$1,866 per enrollee. In the States, on average, Medicaid spends
more than four times that amount.
In the States, the Medicaid program has a flexible
financing structure. This structure guarantees funding if more
individuals enroll due to an economic downturn, an epidemic, or
a natural disaster. The territories do not have a guarantee.
When disaster strikes, as it did with the 2017 hurricanes and
the 2018 typhoons, the territories were forced to make very
hard choices about coverage and services at the worst possible
time.
Simply put, the territories' Medicaid funding does not meet
their needs. In Puerto Rico, 85 percent of residents report
they are worried that they will be unable to access healthcare
if they need it. A recent study found breast cancer patients in
the territories were 82 percent less likely to receive timely
radiation therapy.
In American Samoa, Guam, and Commonwealth of the Northern
Mariana Islands, the public hospitals face staff shortages due
to low salaries, poor infrastructure, and high rates of
uncompensated care. All of these challenges exist before--
before, Members--the Medicaid cliff hits on September 30th. If
we allow that to happen, Puerto Rico would go from over 2
billion in Federal funding to just 380 million. The other
territories would have similar cuts of upwards of 70--that is
7-0--percent of their Medicaid funding. These cuts would have
dire consequences to hundreds of thousands of American
citizens, and I think this is a crisis.
Today, we have to ask a vital question: How can we fail to
care for so many American citizens based solely on where they
live? So we want to hear from the witnesses what the loss of
the Medicaid funds will mean to the people you serve and what
Congress should do to improve the situation, both in the
immediate future and in the long term.
Thank you for traveling such distances to be with us today.
We all appreciate it. And I know for some of you that it was a
multiday journey to be with us. So we all appreciate your time
and your willingness to answer our subcommittee's questions.
And I now would like to recognize the time remaining to the
gentleman from New Mexico, Mr. Lujan.
[The prepared statement of Ms. Eshoo follows:]
Prepared Statement of Hon. Anna G. Eshoo
At the end of this coming September, the five U.S.
territories face a ``Medicaid cliff,'' which means the
supplementary Medicaid funding provided to the territories
through the Affordable Care Act will run out. Without this
Federal funding, over 1.5 million enrollees, including many
children, could lose their healthcare.
Each is an American citizen and they're being treated
differently than the constituents of every Member in this room.
For too long the territories have struggled with inadequate
Federal funding for their Medicaid programs because Federal law
caps Medicaid funding for the territories. The territories also
receive a fixed Federal Medicaid match that is lower than the
rate they would receive if they were States.
Due to these restrictions, the territories routinely run
out of Medicaid funds. Over the past decade, Congress has voted
on five separate occasions to provide stopgap funds to certain
territories.
Even with these supplements, the funding for the
territories is well below what a State Medicaid program would
receive. In the territories, Medicaid spends an average of
$1,866 per enrollee. In the States, on average, Medicaid spends
more than 4 times that amount.
In the States, the Medicaid program has a flexible
financing structure. This structure guarantees funding if more
individuals enroll due to an economic downturn, an epidemic, or
a natural disaster.
The territories do not have a guarantee. When disaster
strikes, as it did with the 2017 hurricanes and the 2018
typhoons, the territories were forced to make hard decisions
about coverage and services at the worst possible time.
Simply put, the territories' Medicaid funding does not meet
their needs.
In Puerto Rico, 85% of residents report they're worried
that they'll be unable to access healthcare if they need it. A
recent study found breast cancer patients in the territories
were 82% less likely to receive timely radiation therapy. In
American Samoa, Guam, and the Northern Mariana Islands, the
public hospitals face staff shortages due to low salaries, poor
infrastructure, and high rates of uncompensated care.
All of these challenges exist before the Medicaid cliff
hits on September 30th. If we allow that to happen, Puerto Rico
would go from $2.3 billion in Federal funding to just $360
million. The other territories would have similar cuts of
upwards of 70% of their Medicaid funding. These cuts would have
dire consequences to hundreds of thousands of American
citizens. This is a crisis.
Today we must ask a vital question: How can we fail to care
for so many American citizens based solely on where they live?
I want to hear from the witnesses what the loss of the
Medicaid funds will mean to the people you serve and what
Congress should do to improve the situation both in
theimmediate future and in the long term. Thank you for
traveling to be with us today.
I now recognize Congressman Ben Ray Lujan for the remainder
of my time.
Mr. Lujan. Thank you, Chairwoman Eshoo and Chairman
Pallone. The lack of adequate funding for Medicaid programs in
the territories is not only unacceptable, it is inhumane.
Funding for territories' Medicaid programs has never been
enough, and if Congress fails to act before September 30th, the
Medicaid cliff could leave the territories in an even more dire
financial situation. We are talking about people not being able
to access basic healthcare, the sick unable to see a doctor,
children without care.
Territory officials have described the expiration of these
Federal funds as catastrophic, and people are scared. Estimates
predict a third to a half of Puerto Rican Medicaid enrollees
are at risk for losing coverage. And in the U.S. Virgin
Islands, estimates show 18,000 people out of the 28,000 current
enrollees could lose coverage. That is more than 60 percent.
These are our fellow Americans. Congress must embrace them
as fellow citizens and stop jeopardizing their access to
healthcare. I thank you, and I yield back.
Ms. Eshoo. The gentleman yields back, and the Chair is now
pleased to recognize Dr. Burgess, the ranking member of the
Subcommittee on Health, for 5 minutes for his opening
statement.
OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. Burgess. Thank you, and I appreciate the recognition.
During our last extenders hearing 2 weeks ago, I made note
of the fact that we had left out an incredibly important piece
of the conversation, Medicaid in the United States'
territories. So I do want to thank you, Chairwoman Eshoo, for
committing to hold this hearing, and I especially want to thank
our representatives from each of our Nation's territories for
having traveled such distances to be here today. I also want to
recognize our representatives who waived on to the
subcommittee, Representative Jenniffer Gonzalez-Colon and Ms.
Radewagen from American Samoa, who have joined us today for
this subcommittee hearing.
The five United States territories--Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, the Commonwealth of the
Northern Mariana Islands--each have a vulnerable population
that depends on Medicaid and the Children's Health Insurance
Program. The structure of these programs is different from that
in the individual States. However, these programs are equally
important, as these are United States citizens. The funding for
Medicaid in some of our territories was last reauthorized in
the Bipartisan Budget Act of 2018, but that funding is set to
expire at the end of this September. It is critical that we act
in a timely manner to reauthorize this funding.
Over the course of the past few years, the territories have
suffered tremendous damage from natural disasters. Hurricanes,
typhoons--what were already at-risk populations have been made
even more vulnerable as they have suffered destruction of their
homes and their infrastructure, and in some cases healthcare
professionals have left the territories for the mainland United
States.
As the territories continue to recover and prepare for
future potential disasters, we need to be mindful of their
inhabitants' access to healthcare and ensure adequate Medicaid
funding that is integral to maintaining that access. As Dr.
Schwartz points out in her testimony, the territories have
sufficient funding to cover their expenses through the end of
this fiscal year, which is rapidly approaching. However, it is
the long-term challenge that we are facing today.
I also think it is worth noting that Puerto Rico has by far
the most enrollees and faces challenges that are not
necessarily relevant in the other territories, but as we move
forward in the process of extending Medicaid funding for all
the five territories, we must remember that each territory is
unique and may require a different approach in our legislation.
Each territory has different benefits for its citizens, and
only Puerto Rico uses Medicaid Managed Care, while other
territories operate in the fee-for-service system. It is
critical to ensure adequate funding for the territories so that
they operate their Medicaid programs appropriately.
I also believe it is important to have accountability
measures and fraud detection and prevention. For our own
States, the House has passed a permanent reauthorization of the
Medicaid Fraud Control Units earlier this week, and we should
perhaps think of a similar standard for the territories,
especially if increased funding is provided in September. As we
saw in Puerto Rico following the enactment of the Bipartisan
Budget Act of 2018, it is possible for the territories to adopt
and successfully implement program integrity measures.
I hope we can use this hearing as an opportunity, an
opportunity to have a productive conversation about any
potential changes to the Federal payment mechanisms in the
Medicaid programs in the territories, as we are willing to
engage on this issue, but we need to strike the right balance
between funding and structure of these programs so that they
can succeed, be good shepherds of the taxpayer dollars, and
deliver the services when and where they are needed.
Again, I would like to thank all of our witnesses for being
part of this. As the Chair will have noted, many of you
traveled days to get here, and for that we are very
appreciative. I look forward to your testimony.
I21[The prepared statement of Mr. Burgess follows:]
Prepared Statement of Hon. Michael C. Burgess
Thank you, Madame Chair. During our last extenders hearing
2 weeks ago, I noted that we had left out an incredibly
important piece of the conversation--Medicaid in U.S.
territories. I would like to thank Chairwoman Eshoo for her
commitment to hold this hearing, and I would especially like to
thank the representatives from each of our Nation's territories
for traveling such distances to be here today. I would also
like to recognize Representative Jenniffer Gonzalez-Colon from
Puerto Rico, who is waiving onto our subcommittee for this
hearing.
The five U.S. territories, Puerto Rico, the U.S. Virgin
Islands, Guam, American Samoa, and the Commonwealth of the
Northern Mariana Islands, each have a vulnerable population
that depends on Medicaid and the Children's Health Insurance
Program. The structure of these programs is different than
those of the individual States; however, these programs are
equally important, as these are United States citizens. The
funding for Medicaid in some of the territories was last
reauthorized in the Bipartisan Budget Act of 2018, but that
funding is set to expire at the end of this September. It is
critical that we act in a timely manner to reauthorize this
funding.
Over the course of the past few years, the territories have
suffered tremendous damage from natural disasters, including
hurricanes and typhoons. What are already at-risk populations
have been made more vulnerable as they have suffered
destructions of their homes and infrastructure, and in some
cases, healthcare professionals have left the territories for
the United States.
As the territories continue to recover and prepare for
potential future devastation, we need to be mindful of their
inhabitants' access to healthcare, and ensuring adequate
Medicaid funding is integral in maintaining that access.
As Dr. Schwartz points out in her testimony, the
territories have sufficient funding to cover their expenses
through the end of this fiscal year; however, it is the long-
term challenge that we are facing today. I also think it is
worth noting that Puerto Rico has by far the most enrollees and
faces challenges that are not necessarily relevant to the other
territories. As we move forward in the process of extending
Medicaid funding for all of the five territories, we must
remember that each territory is unique and requires a different
approach in our legislation.
Each territory has different benefits for its citizens, and
only Puerto Rico uses Medicaid managed care, while the other
territories operate fee-for-service systems.
While it is critical to ensure adequate funding for the
territories to operate their Medicaid programs, I also believe
that it is important to have appropriate accountability
measures and fraud detection and prevention. For our own
States, the House passed a permanent reauthorization of
Medicaid Fraud Control Units earlier this week, and we should
hold the territories to a similar standard--especially if
increased funding is provided in September. As we saw in Puerto
Rico following the enactment of the Bipartisan Budget Act of
2018, it is possible for the territories to adopt and
successfully implement program integrity measures.
I hope that we can use this hearing as an opportunity to
have a productive conversation about any potential changes to
the Federal payment mechanisms in Medicaid programs in the
territories. We are willing to engage on this issue, but we
need to strike the right balance between funding and
structuring these programs such that they can succeed and being
good shepherds of taxpayer dollars.
Again, I would like to thank all our witnesses for being
part of this important conversation today. I yield back.
Mr. Burgess. And let me yield, Ms. Chairwoman.
Mr. Pallone. Mr. Ranking Member, would you yield a minute?
Just some time. I just wanted----
Mr. Burgess. Don't you have your own time?
Mr. Pallone. No, but this is procedural.
Mr. Burgess. As the chairman of the full committee, you
usually get a lot of time.
Mr. Pallone. Well, all I wanted to say is my understanding
is that the Delegates that are here today from the various
territories, when they waive in they are not actually allowed
to participate, but some of them have statements, Madam Chair.
So I was going to ask unanimous consent that the sStatement of
Mr. Sablan and any of the other Delegates that are here be
submitted for the record.
Ms. Eshoo. So ordered.
[The information appears at the conclusion of the hearing.]
Mr. Pallone. Thank you. That is all.
Ms. Eshoo. The gentleman yields back. I now would like to
recognize the chairman of the full committee, Mr. Pallone, for
5 minutes for an opening statement.
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Madam Chair.
Today, our committee continues its efforts to ensure that
all Americans have access to healthcare, whether they live in
one of the 50 States or one of the 5 territories. The
territories are on the verge of a financial and humanitarian
crisis. Experts predict that, unless Congress acts, none of the
territories will have enough Federal funds to support their
Medicaid programs next year. Puerto Rico could potentially
spend all its Federal funds in a matter of months, facing a
shortfall of billions of dollars for the year.
And it is no secret how we got here. For years, the
territories have been operating their Medicaid programs under
Federal funding caps that haven't kept up with the needs of the
people who live there. The Affordable Care Act provided
increased funding that has helped the territories for the past
decade, but that expires at the end of this year.
Natural disasters in the territories have also put
increased strain on their Medicaid programs that required
Congress to provide additional support to ensure people didn't
lose access to care. Medicaid in the territories doesn't
operate like it does in the States. Each territory only
receives a certain amount of Federal funds that is supposed to
last them the whole year. It is essentially a block grant.
In the States, increases in State Medicaid spending are
matched with an increase in Federal Medicaid funding. And this
means that, in times of economic downturn or in the period
following a natural disaster when state Medicaid spending
increases, the State receives an automatic increase in Federal
Medicaid dollars.
But that is not how it works for the territories. Once they
spend their annual allotment, they have to pay for their
Medicaid costs using local funds. And this outdated system
forces the territories to pay a substantial amount out of their
own pockets to ensure that people there have access to
healthcare. It is also a stark reminder of why block grants for
Medicaid simply don't work. The Federal funding shortfall means
most of the territories aren't able to provide the full range
of benefits that State Medicaid programs are required to cover.
Payments to doctors and hospitals are so low that providers are
leaving the islands for the States.
While Congress has provided some time-limited increases to
the territories' Medicaid funding, we need a longer-term
solution. Doling out Federal funds in dribs and drabs has led
to uncertainty about the financial future of the programs and
calls into question the long-term sustainability of the
territories' Medicaid programs if Congress fails to act.
And that is why we are here today, to discuss the Medicaid
cliff facing the territories and what we can do to avert a
catastrophe. As we will hear today, without additional funds
hundreds of thousands of people in the territories could lose
their healthcare coverage. Some territories have said they
would have to stop covering prescription drugs, dental care,
durable medical equipment, and community health centers, and
others have said they expect to lose even more providers.
And none of this really has to happen. We can all see the
cliff coming, but if we work together, we can stop the
territories from going off it. We can ensure that they can
continue to provide care to the people who need it the most, we
can stop the flight of doctors and providers from the islands,
and we can provide the certainty and sustainability that the
territories deserve.
Several Members recently introduced legislation that would
provide Puerto Rico with both the amount of Federal funds
requested by the Governor and establish a path to help
transition its Medicaid program to a full State-like program.
And this would provide sufficient funds to Puerto Rico to
ensure its people receive the healthcare services they need.
And I want to thank the Members for their hard work on this
bill, especially Representative Soto, who is on our committee.
I hope this can potentially be a roadmap to help strengthen the
Medicaid program in other territories. And I also want to thank
the witnesses for being here today, particularly those who have
traveled long distances to share your expertise with us.
[The prepared statement of Mr. Pallone follows:]
Prepared Statement of Hon. Frank Pallone, Jr.
Today, our committee continues its efforts to ensure that
all Americans have access to healthcare, whether they live in
one of the 50 States or one of the five territories.
The territories are on the verge of a financial and
humanitarian crisis. Experts predict that unless Congress acts,
none of the territories will have enough Federal funds to
support their Medicaid programs next year. Puerto Rico could
potentially spend all its Federal funds in a matter of months,
facing a shortfall of billions of dollars for the year.
It's no secret how we got here. For years, the territories
have been operating their Medicaid programs under Federal
funding caps that haven't kept up with the needs of the people
who live there. The Affordable Care Act provided increased
funding that's helped the territories for the past decade, but
that expires at the end of this year. Natural disasters in the
territories have also put increased strain on their Medicaid
programs that required Congress to provide additional support
to ensure people didn't lose access to care.
Medicaid in the territories doesn't operate like it does in
the States. Each territory only receives a certain amount of
Federal funds that's supposed to last them the whole year. It's
essentially a block grant. In the States, increases in State
Medicaid spending are matched with an increase in Federal
Medicaid funding. This means that in times of economic
downturn, or in the period following a natural disaster, when
State Medicaid spending increases, the State receives an
automatic increase in Federal Medicaid dollars. That's not how
it works for the territories. Once they spend their annual
allotment, they have to pay for their Medicaid costs using
local funds. This outdated system forces the territories to pay
a substantial amount out of their own pockets to ensure the
people there have access to healthcare. It's also a stark
reminder of why block grants for Medicaid simply don't work.
The Federal funding shortfall means most of the territories
aren't able to provide the full range of benefits that State
Medicaid programs are required to cover. Payments to doctors
and hospitals are so low that providers are leaving the islands
for the States. While Congress has provided some time-limited
increases to the territories' Medicaid funding, we need a
longer-term solution. Doling out Federal funds in dribs and
drabs has led to uncertainty about the financial future of the
programs and calls into question the long-term sustainability
of the territories' Medicaid programs if Congress fails to act.
That's why we are here today--to discuss the Medicaid cliff
facing the territories and what we can do to avert a
catastrophe. As we will hear today, without additional funds,
hundreds of thousands of people in the territories could lose
their healthcare coverage. Some territories have said they
would have to stop covering prescription drugs, dental care,
durable medical equipment, and community health centers. Others
have said they expect to lose even more providers.
None of this has to happen. We can all see the cliff
coming, but if we work together, we can stop the territories
from going off it. We can ensure that they can continue to
provide care to the people who need it the most. We can stop
the flight of doctors and providers from the islands. And we
can provide the certainty and sustainability that the
territories deserve.
Several Members recently introduced legislation that would
provide Puerto Rico with both the amount of Federal funds
requested by the Governor, and establish a path to help
transition its Medicaid program to a full, State-like program.
This would provide sufficient funds to Puerto Rico to ensure
its people receive the healthcare services they need. I want to
thank the Members for their hard work on this bill, especially
Rep. Soto on our committee. I hope this can potentially be a
road map to help strengthen the Medicaid program in other
territories.
I also want to thank the witnesses for being here today,
particularly those that traveled long distances to share your
expertise with us.
Thank you.
Mr. Pallone. I wanted to yield to Representative Soto. But
just if I could say, I think many of our Members went after
Hurricane Maria to Puerto Rico and the Virgin Islands. And when
we were on that trip, both Stacey and Jenniffer representing
the Virgin Islands and Puerto Rico were very helpful in
explaining the problems with Medicaid at the time, so we
learned a lot on that trip.
But now I would like to yield to Representative Soto.
Mr. Soto. Thank you, Mr. Chairman. We know that Puerto
Ricans, the 3.3 million on the island, are experiencing a
Medicaid crisis. Hospitals in disrepair, over 6,000 doctors
have left the island over the past few years, debt increases
just to try to keep the Medicaid program afloat, which ended
up, in part, causing the PROMESA issues that we face, but it
was mostly on display after Hurricane Maria, the decline in the
healthcare infrastructure there.
So I wanted to join Congresswoman Velazquez and the Puerto
Rican Task Force to introduce legislation yesterday. I want to
thank Governor Rossello for his leadership and input in that
legislation as well as our Commissioner, Jenniffer Gonzalez-
Colon. It would be a $15.1 billion bill with an 83 percent
Federal match transition period of 4 years from 2020 to 2024,
followed by a 10-year transition period after that. Obviously,
a game changer.
And thank you again, both Chairwoman Eshoo and Chairman
Pallone, for your consideration of this important legislation.
Ms. Eshoo. The gentleman yields back. It is a pleasure to
recognize Mr. Walden, the ranking member of the full committee,
for his 5 minutes for an opening statement.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. Oh, good morning, Madam Chair. And good morning
to our witnesses and those in the audience. Thank you for being
here.
As the chairman of the committee mentioned, I led that
CODEL, that congressional delegation trip to Puerto Rico and
Virgin Islands, and it was a real eye-opener. And I know you
all are still suffering, and in other places around the globe,
from these terrible hurricanes. And we saw a hospital, as I
recall it was in the Virgin Islands, that had to be shut down
because of the mold and the water and the damage and, you know,
we really appreciated your help, Stacey and others, in this
effort. So we stand ready to do our part again. And today
marks, I think, a really important step forward as we help you
face these challenges in the territories.
We have the honor of having before this committee a
representative from each of the U.S. territories' Medicaid
programs, and we are really pleased that you are here because
we need to hear directly from you about the challenges you face
due to the coming funding cliff in September. I know some of
you had to quite literally fly around the world to join us here
today, so we thank you for that. I complain about my trip to
the West Coast every week, and I know you are a long way past
that, so I will quit complaining.
We are also pleased to have before us Anne Schwartz, the
executive director of MACPAC. You and your team's work has been
really helpful and invaluable over the years, so we are glad
you could join us as well.
As we know, the additional funding for the territories that
they have received over the last decade expires September 30th,
and this could have detrimental effects for each of the five
territories here today. These consequences are not lost on me.
It is a commitment. We will work together in a bipartisan way
to find a solution that avoids this cliff and gets these
programs on a more sustainable path.
Last Congress, under my leadership, this committee led a
robust bipartisan response to the damage inflicted by the
Hurricanes Maria, Harvey, and Irma. I led a bipartisan
delegation to Puerto Rico and the U.S. Virgin Islands to see
the devastation firsthand and hear from people on the ground. I
was thankful then and am now to Representative Gonzalez-Colon
for her work and help on this important issue.
Among other visits, the healthcare facilities we saw on
both islands were in dire conditions, not only because of the
direct damage sustained during the storms, but also because of
the sustained lack of power to the islands after those storms.
It was also our committee that pushed for the 2 years, a
hundred percent funding included in the Bipartisan Budget Act
of 2018 to help respond to that crisis, and we are interested
to know how that funding has helped in the recovery.
Included in the BBA was an incentive for both Puerto Rico
and the Virgin Islands to draw down additional funds should
those territories improve data reporting and program integrity
measures, because we all care about those as well, conditions
that both territories have met. That is good progress, but I
would also like to hear from you both on what else we can do to
improve program integrity as we look for ways to fund the
existing shortfalls.
Another reason this hearing is so important is that we need
you all to help differentiate your territories' specific needs.
Too often in Congress you all get lumped together, and that is
not fair and it is not right. But as each of your territories
makes clear, we have five distinct programs with five distinct
sets of challenges and program designs, and understanding those
differences will be key. We know how critical this situation
is, and we are very thankful to each of you for being here
today and your willingness to work with us over the coming
months, and I look forward to your testimony.
I mentioned the work of Representative Gonzalez-Colon, who
has joined us on the dais. She is attending today's hearing but
cannot participate due to our committee rules. That is the
tradition of the committee, but she does work us over pretty
well all the time on these issues. And I would also recommend
that any Member that has a question regarding the current
circumstances in Puerto Rico work with her. There is no better
way to understand the issue, and she is a fierce advocate for
Puerto Rico.
We are also really pleased to welcome from American Samoa
another terrific advocate, Representative Radewagen, who
champions American Samoa. We are pleased to have her as well.
And, of course, the gentlelady from the Virgin Islands too, who
played host to us when we there and visiting. We are glad for
her advocacy and help as well.
And, Madam Chair, with that we will get on about our
business. Thank you for having this hearing. We look forward to
working with you to a positive outcome, and I yield back.
[The prepared statement of Mr. Walden follows:]
Prepared Statement of Hon. Greg Walden
Today marks an important step forward in our work to
address the healthcare challenges faced by our territories.
We have the honor of having before this committee a
representative from each of the U.S. territories' Medicaid
programs. We are thrilled to have each of you here as we
thought it imperative to hear directly from each of you about
the challenges you face due to the coming funding cliff in
September. I know some of you had to quite literally fly around
the world to join us here today, so thank you. We are also
pleased to have before us Anne Schwartz, the Executive Director
of MACPAC. You and your team's work on the territories has been
invaluable over the years, and we are so glad you are able to
join us today.
As we know, the additional funding for the territories that
they have received over the last decade expires September 30th,
and this could have detrimental effects for each of the five
territories here today. Those consequences are not lost on me.
It is my commitment that we will work together, in a bipartisan
way, to find a solution that avoids this cliff and gets these
programs on a more sustainable path.
Last Congress, under my leadership, this committee led a
robust bipartisan response to the damage inflicted by
hurricanes Maria, Harvey, and Irma. I led a bipartisan
delegation of Members to Puerto Rico and the U.S. Virgin
Islands to see the devastation firsthand. I was thankful then
and am thankful now to Rep. Gonzalez-Colon for her work and
help on this important issue. Among other visits, the heathcare
facilities we saw on both islands were in dire conditions, not
only because of the direct damage sustained during the storms,
but also because of the sustained lack of power to the islands
after the storms.
It was also our committee that pushed for the 2 years of
100% funding included in the Bipartisan Budget Act of 2018 to
help respond to the crisis, and we are interested to know how
that funding has helped the recovery. Included in the BBA was
an incentive for both Puerto Rico and the Virgin Islands to
draw down additional funds should those territories improve
data reporting and program integrity measures, conditions that
both territories met. That's good progress, but I would also
like to hear from you both on what else we can do to improve
program integrity as we look for ways to fund the existing
shortfalls.
Another reason this hearing is so important is that we need
you all to help differentiate your territories' specific needs.
Too often in Congress you all get lumped together, but as each
of your testimonies make clear, we have five distinct programs
with five distinct sets of challenges and program designs.
Understanding those differences will be key.
We know how critical this situation is, and we are very
thankful to each of you for being here and for your willingness
to work with us over the coming months. I look forward to your
testimony.
I mentioned the work of Representative Gonzalez-Colon. She
is attending today's hearing today but cannot participate due
to committee rules. I would recommend that any Member that has
questions regarding the current circumstances in Puerto Rico
talk with Ms. Gonzalez-Colon. There is no better authority and
no fiercer advocate for the people of Puerto Rico.
Thank you, and I yield back.
Ms. Eshoo. I thank the gentleman. He yields back. The Chair
would now like to remind Members that, pursuant to committee
rules, all Members' written opening statements shall be made
part of the record.
I now would like to introduce the witnesses for today's
hearing, thank them each and all again for being with us.
First, Dr. Anne Schwartz, the executive director of Medicaid
and CHIP Payment and Access Commission. Welcome to you.
Angela Avila, welcome to you. She is the executive
director, Puerto Rico State Health Insurance Administration.
Welcome and thank you to you.
Sandra King Young, the Medicaid director, American Samoa
State Agency, welcome and thank you to you.
Maria Theresa Arcangel--what a beautiful name, Arcangel. We
want all the committee members to be archangels, how is that?
[Laughter.]
Ms. Eshoo. She is the chief Human Service Program
administrator, Division of Public Welfare, Guam Department of
Public Health and Social Services, thank you to you.
And is it ``Mi-hall''?
``Mi-cal''?
Ms. Rhymer-Browne. ``Mi-cal.''
Ms. Eshoo. Michal Rhymer-Browne, the assistant commissioner
of the United States Virgin Islands Department of Human
Service, Oversight of the Medicaid Division.
And last but not least, Helen Sablan, the Medicaid
director, Commonwealth of the Northern Mariana Islands State
Medicaid Agency.
So again, thank you, and welcome to each one of you. The
Chair is going to recognize each witness for 5 minutes. The
light on the--you see them, light boxes before you. When it
turns red, stop. How is that? Just like on the road.
So let me begin with Dr. Schwartz. You are recognized for 5
minutes.
STATEMENTS OF ANNE L. SCHWARTZ, Ph.D., EXECUTIVE DIRECTOR,
MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION; ANGELA AVILA,
EXECUTIVE DIRECTOR, PUERTO RICO STATE HEALTH INSURANCE
ADMINISTRATION; SANDRA KING YOUNG, AMERICAN SAMOA MEDICAID
DIRECTOR; MARIA THERESA ARCANGEL, CHIEF HUMAN SERVICE
ADMINISTRATOR, DIVISION OF PUBLIC WELFARE, GUAM DEPARTMENT OF
PUBLIC HEALTH AND SOCIAL SERVICES; MICHAL RHYMER-BROWNE,
ASSISTANT COMMISSIONER, DEPARTMENT OF HUMAN SERVICES, U.S.
VIRGIN ISLANDS; AND HELEN C. SABLAN, MEDICAID DIRECTOR,
COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS
STATEMENT OF ANNE L. SCHWARTZ, Ph.D.
Dr. Schwartz. Good morning, Chairwoman Eshoo, Ranking
Member Burgess, and members of the Health Subcommittee. I
appreciate the opportunity to share the MACPAC's work as this
body considers the role of Medicaid and CHIP in the five U.S.
territories.
As you know, MACPAC is an independent, nonpartisan advisory
body charged with analyzing and reviewing Medicaid and CHIP
policies and making recommendations to Congress, the Secretary
of HHS, and the States on issues affecting these programs. The
Commission's 17 members, including Chair Melanie Bella and Vice
Chair Chuck Milligan, are appointed by the Comptroller General.
As in the States and DC, Medicaid and CHIP play a vital
role in providing access to health services for low-income
individuals in the territories. The challenges are similar to
those in the States, populations with significant healthcare
needs, an insufficient number of providers, and constraints on
local resources. With some exceptions, the territories operate
under similar Federal rules and are subject to oversight by
CMS.
There is a somewhat tired old saying that, if you have seen
one Medicaid program, you have seen one Medicaid program. This
is because, despite common rules, State programs vary widely.
For the purposes of the hearing today, it is important to note
both that territory Medicaid programs differ from the States
and they also differ from each other. These differences reflect
their unique geography, history, local economy, and health
system infrastructure.
My written statement goes into detail as to how Medicaid
operates in the territories, and if you are interested in even
more information, MACPAC has published fact sheets describing
each territory's program. But the most important point I wish
to share today, one that has already been mentioned several
times, is that Federal policy for financing Medicaid in the
territories has led to chronic underfunding. This is because
the policy differs from the States' in two key ways.
First, territorial Medicaid programs are constrained by a
ceiling on Federal funding referred to as the section 1108 cap
or allotment. Territories receive a relatively small amount
funding each year regardless of changes in enrollment and use
of the services. In comparison, states receive federal funding
for each state dollar spent with no cap.
Second, the Federal Medical Assistance Percentage, the
FMAP, or matching rate, is statutorily set at 55 percent. For
the states, the FMAP provides higher reimbursement to those
with lower per capita incomes relative to the national average
and vice versa. This reflects States' differing abilities to
generate local revenues to fund their Medicaid programs.
If the FMAPs for the territories were set using the formula
used for the States, the matching rate for all 5 territories
would be much higher, and in most cases the maximum of 83
percent. Congress has stepped in at multiple points with fiscal
relief, most notably in 2010 as part of the Affordable Care
Act, more recently in the aftermath of Hurricane Irma and
Maria.
The Balanced Budget Act of 2018 provided Puerto Rico and
the U.S. Virgin Islands with additional funds available at a
100 percent matching rate. Earlier this month, a disaster
relief bill provided supplemental funds for the Commonwealth of
the Northern Mariana Islands at a hundred percent FMAP through
the end of this fiscal year, and it also allowed American Samoa
and Guam to access the remaining ACA funds during this period
at a hundred percent matching rate. As a result of these
actions, all five territories should now have sufficient
funding to cover program expenses through the end of fiscal
year 2019. However, because all sources of supplemental fund
will expire at the end of the calendar year, we anticipate that
all five will experience funding shortfalls at some point in
fiscal year 2020.
As the Commission noted in its analysis of Puerto Rico's
Medicaid program in our recently issued report to Congress, the
history of responding to crises with short-term infusions of
funds has caused a great deal of uncertainty. An additional
time-limited allotment of Federal funds would certainly prevent
a fiscal cliff and would in the short term ensure the continued
delivery of critical health services to eligible individuals.
But it would not address the underlying challenges with the
financing structure that make it difficult for territorial
officials to plan, manage, and sustain long-term reliable
access for Medicaid beneficiaries residing in these
jurisdictions.
Thank you for the opportunity to share MACPAC's analyses,
and I am happy to answer any questions.
[The prepared statement of Dr. Schwartz follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Eshoo. Thank you, Dr. Schwartz.
I would just like to take a moment to welcome to our
hearing--I saw her come in the door--our colleague,
Congresswoman Nydia Velazquez. Thank you for being here, and
thank you for the legislation that you have authored and was
dropped yesterday. I see Congresswoman Stacey Plaskett here,
and I want to recognize her and thank her for her presence. And
I also want to recognize Congressman Sablan from the Northern
Mariana Islands for joining us. And if someone comes and takes
that seat, you take another one.
Nydia, would you like to come up and join us too? OK, hold
onto that seat then. OK. But we are glad that you are here, and
you are always welcome. It is an honor to have each one of you
here.
I now would like to recognize Ms. Avila. You are recognized
for 5 minutes for your testimony.
STATEMENT OF ANGELA AVILA
Ms. Avila. Good morning, Mrs. Chairman Eshoo, Mr. Chairman
Pallone, Ranking Member Walden, and Mr. Ranking Member Burgess,
and members of the committee. Thank you for the opportunity to
testify today on Puerto Rico's healthcare system. I am honored
to be here on behalf of the Government of Puerto Rico and to be
joined at the witness table with colleagues from the other
territories.
Puerto Rico's Medicaid program serves approximately 1.5
million people, nearly half of the total population and some of
our Nation's most vulnerable citizens. We serve approximately
425,000 children, 305,000 elderly and disabled, and more than
17,000 pregnant women at any given time. Our beneficiaries are
served by a network of thousands of healthcare providers such
as doctors, nurses, and health technicians, 64 hospitals, 20
federally qualified health centers, and 900 pharmacists.
Puerto Rico's Medicaid system has been chronically
underfunded due to a historically low Federal Medicare
Assistance Percentage, known as FMAP, a correspondingly high
local matching requirement, and the cap on Federal funding.
Currently, we are operating under increased Medicaid funding
and temporary 100 percent FMAP through the Bipartisan Budget
Act of 2018, or BBA, which we received in the aftermath of
Hurricane Maria, the worst natural disaster in our Nation's
history.
It is only through this additional Federal funding and the
increased FMAP provided in the BBA that Puerto Rico has been
able to sustain its healthcare system. We thank the members of
this committee who worked to ensure Puerto Rico had received
the necessary funding. We have made great progress in our
program since the devastating hurricanes, thanks to the BBA.
However, all that progress is in jeopardy due to the
uncertainty of no additional Federal funding.
With the upcoming expiration of the BBA on September 30,
the increased Medicaid funding and the temporary 100 percent
FMAP Puerto Rico received through the BBA will expire. If no
action is taken for fiscal year 2020, the FMAP will revert to
the statutorily mandated 55 percent FMAP up to the Federal
Medicaid funding cap of approximately 380 million.
This will result in effective Federal matching, including
remaining ACA funds, of 30 percent for the program in fiscal
year 2020 and 13 percent in fiscal year 2021. Once this funding
is exhausted, Puerto Rico will have to fully fund the deficit
as it has in the past and pay for its Medicaid services with
100 percent local funding. Given the island's current financial
situation, this level of local funding is not an option.
Unless Congress acts, we will be faced with potentially
catastrophic damage to our Medicaid program. We will be forced
to potentially remove any services that are not required under
Medicaid rules, such as pharmacy coverage and dental coverage
that are already limited. We may have to end coverage for the
current population who receive healthcare with local funds, and
we will continue to lose more of our Medicare providers because
of low reimbursement rates.
Last month, Governor Rossello submitted Puerto Rico's
official Medicaid ask to Congress, 5 years of funding at an 83
percent FMAP for a total of 15.1 billion in funding. This
funding will provide Puerto Rico with stability in the short
term while we work together on a sustainable, long-term funding
mechanism. The short-term, critical sustainability measures
needed to stabilize the healthcare system in Puerto Rico are
keeping physicians within the system to avoid critical
shortages, providing lifesaving Hep C drugs, adjusting the
Puerto Rico poverty level to increase fairness in Medicaid
eligibility, and providing Medicare Part B premium assistance.
The Medicaid cliff that Puerto Rico is facing is an
emergency that must be dealt with urgently. I love my island,
and it is my home and I am committed to working with Congress
to create the Medicaid program that all of us can be proud of.
Thank you for the opportunity to meet these urgent matters, and
I welcome any questions you may have. Thank you.
[The prepared statement of Ms. Avila follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Eshoo. Thank you very much.
You know, it isn't--I want to make note of something. It
isn't very often that a full panel of witnesses are all women,
so I want to make note of that. Thank you. I think it is
wonderful. Thank you.
[Applause.]
Ms. Eshoo. Ms. Young, you are recognized for 5 minutes for
your testimony.
STATEMENT OF SANDRA KING YOUNG
Ms. Young. Talofa, Chairwoman Eshoo, Ranking Member
Burgess, and members of the committee. Thank you for the
opportunity to testify before your committee on how to
strengthen healthcare in the U.S. territories. I want to
recognize that this is the first time that American Samoa and
the other territories have this extraordinary opportunity to
testify before this committee that has jurisdiction over
Medicaid issues. A few weeks ago, we also testified before the
Natural Resources Committee.
This is a monumental step forward for the territories and
our efforts for advocacy on Medicaid programs. The challenges
with the U.S. territories are unique, and a cookie-cutter
approach will not work. However, we do have some things in
common. The key to strengthening healthcare in American Samoa
and the territories lays with fixing two key statutory
provisions in our Medicaid programs.
First, the cap on the territories' Medicaid block grants
must be lifted or increased. American Samoa has 12 million in
this fiscal year, and we receive a nominal 2 to 3 percent
increase every year.
With the availability of the Affordable Care Act Medicaid
funding in 2011, we were able to draw, on average, an
additional 5.4 million a year. In 2017, our Medicaid agency
added four new Medicaid services and providers to our program.
With these new services, we exhaust our block grant in the
second quarter.
Funding these new services is limited also by the
availability of our local matched dollars. This year, we
suspended our new services in March because we had exhausted
our 2 million in local match. That suspension was just lifted
in the first week of June when the disaster supplemental bill
was made available, providing us with relief with a 100 percent
FMAP up until September 30th, 2019, for the 152 million ACA
money that we couldn't spend.
We do anticipate the cost of these new services to increase
over the next 5 years, and our initial estimate to ensure
adequate coverage is around 10 million a year, if we provide
comprehensive coverage as required by our Medicaid State Plan
and Social Security Act. If we are to continue with block
grants, then American Samoa must have an increase of at $30
million a year in Federal Medicaid dollars.
Second, the current FMAP percentage is unsustainable for
our government. We would like to propose a more sustainable
FMAP rate of 90 percent Federal, 10 percent local match for at
least the first few years, or a straight application of the
FMAP formula based on American Samoa's actual poverty levels.
Critical is the principle that both the cap and the FMAP must
be addressed together. These two issues are interdependent, and
one should not happen without addressing the other.
Third, American Samoa has a unique 1902(j) waiver that
allows us to manage our very small Medicaid program from being
overregulated. Some of the things unique to our program is that
we do not do individual enrollment for Medicaid because we
administer a presumptive eligibility program allowed under our
waiver. It is the position of our government that we want to
maintain this statutory waiver that best suits the unique
challenges we face as a remote island territory.
Lastly, what is the real impact to our people when we don't
have enough Medicaid Federal and local funding for our program?
In short, once the ACA money expires in September, we will stop
our off-island medical referral program for medically necessary
care not available on island. We will stop payments for
wheelchairs, CPAP machines, and prosthetics. We will stop
payments for the Medicare dual eligible beneficiaries. The only
Medicaid provider that we will continue to fund will be our one
hospital.
But Medicaid services like prostate or breast cancer
treatment and all cancer treatments, knee or hip replacements,
heart surgeries for adults, or rheumatic heart disease
surgeries for our children will simply not be covered. That we
must intentionally make decisions that could leave our people
permanently incapacitated physically or mentally, or at worst,
the risk of loss of life is morally unconscionable.
This committee and Congress have the power to help American
Samoa and the other territories finally fix the statutory
barriers so we don't have to make these decisions. Everyone
deserves to receive lifesaving treatments, even in the
territories. On behalf of our people and our government, again
I appreciate your time and efforts to hold this hearing. May
God bless and guide you in the important work that you do for
this country. I am happy to answer any questions. Thank you.
[The prepared statement of Ms. Young follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Eshoo. Thank you very much.
I now would like to recognize Ms. Arcangel for her 5
minutes for testimony.
STATEMENT OF MARIA THERESA ARCANGEL
Ms. Arcangel. Hafa adai, Madam Chair and Ranking Minority
Members. On behalf of Governor Leon Guerrero and the people of
Guam, thank you for inviting us to testify regarding the
healthcare issues that Guam Medicaid recipients endure and the
cliff Guam will face if there is no immediate action taken by
this Congress beginning fiscal year 2020 to increase the
territories' Federal Medical Assistance Percentage and increase
or remove the Federal funding cap.
Like many stateside rural areas, Guam suffers from shortage
of primary care providers and specialists. HRSA has qualified
Guam as both a medically underserved and a health professional
shortage area. The shortage of health professionals is
attributed to the difficulty in recruiting providers due to
Guam's remote location, the physician salary that is not
comparable to U.S. rate, and the high cost of malpractice
insurance on Guam.
Clearly, there remains a shortage of primary care
physicians, which is felt most especially among the Medicaid
recipients who struggle finding a permanent medical home
because of providers' refusal to accept patients due to low
reimbursement and the late payments. Thus, Medicaid clients are
forced to seek treatment at the emergency room, which is more
costly. Additionally, due to gaps in the tertiary care
services, there are instances when off-island doctors refuse to
accept Medicaid's referrals due to untimely reimbursement.
In some instances, patients needing to transfer from Guam
Hospital to a highly equipped off-island medical facility must
stay longer in our hospitals for several days before treatment
can be obtained. As a result, patients' condition worsens,
requiring air ambulance. Similarly, the cost of medical
supplies and equipment are more expensive in Guam due to the
limited distributors as compared to hundreds of companies
available here. The high shipping costs and vendors' tendency
to impose a higher price on medications due to lack of
competition contribute to the high cost.
All these factors add to the high cost of healthcare in
Guam. The migration of FAS citizens in any U.S. soil under the
Compact of Free Association according to the U.S. Census in
2013, there were 17,170 Compact migrants on Guam. In fiscal
year 2017, Guam estimated that 38.5 million was spent on
healtcare and welfare services for this population. Moreover,
of the 110.8 million expenditures of Guam Medicaid in fiscal
year 2018, $29 million or 27 percent of total amount were spent
for FAS population's healthcare needs. The influx of COFA
citizens created an additional hardship on Guam's economy. As a
result, the government is unable to guarantee the availability
of 45 percent local matching funds required to draw down the
Federal grant awards.
The U.S. territories administer the Medicaid under Federal
regulations that are different from the 50 States and District
of Columbia. Guam Medicaid's FMAP rate is fixed at 55 percent.
However, the FMAP for 50 States and DC varies by States' per
capita income between 50 percent to 83 percent. In addition,
the Federal Medicaid funding to Guam is subject to an annual
cap, which is 18.38 million for next fiscal year, unlike the
States and DC that are open-ended.
Clearly, there is a huge disparity on the Medicaid funding
distribution of Guam in comparison to the U.S. States. Those
differences on Medicaid rules affect the quality of healthcare
provided to program recipients and contribute to the economic
destabilization of Guam. Due to increase in utilization, the
number of eligibles, and new treatment modality and others,
Guam's Medicaid expenditures increased by 323 percent over the
past decade, 26 million in fiscal year 2009 and 110.8 million
in fiscal year 2018.
If no action is taken to increase the FMAP and remove the
Federal funding cap, Guam Medicaid could be forced to terminate
more than 50 percent of its 43,000 eligibles. This will further
increase Guam's estimated uninsured population rate of 24.8
percent in fiscal year 2017. Hence, in order to improve the
healthcare services of our Medicaid recipients, Guam proposes
to increase the U.S. territories' FMAP and remove the Federal
funding cap.
Thank you for the opportunity to testify on this important
issue. We hope that the committee will develop a solution to
assist the U.S. territories in resolving the longstanding
disparity on Medicaid funding distribution that affects our
economy.
[The prepared statement of Ms. Arcangel follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Eshoo. Thank you very much.
I now would like to recognize Ms. Rhymer-Browne for 5
minutes for your testimony.
STATEMENT OF MICHAL RHYMER-BROWNE
Ms. Rhymer-Browne. Madam Chair Eshoo, Chairman Pallone,
Ranking Member Walden, Ranking Member Burgess of the Health
Subcommittee, and members of the committee, thank you for the
opportunity to provide testimony on the significant impacts to
our healthcare system and the people of the United States
Virgin Islands considering the impending Medicaid fiscal
funding cliff which will impact us beginning October 1, 2019. I
am Michal Rhymer-Browne, assistant commissioner of the Virgin
Islands Department of Human Services, and I have the distinct
privilege to have oversight of the Medicaid Division.
I must also thank today, Kimberley Causey-Gomez, my
commissioner nominee, my boss, of the Virgin Islands Department
of Human Services, who has extended to us her complete support
as we prepared to come here to this important committee
meeting. On behalf of the Honorable Governor Albert Bryan, Jr.,
and the more than 100,000 American citizens living in the U.S.
Virgin Islands, we bring you greetings. And as we say in the
Virgin Islands, ``a pleasant good morning.'' As a people, we
want to convey our heartfelt gratitude, appreciation, and
thanks for the concern and the support that you and your
colleagues in Congress have provided as we continue to recover
from the unprecedented damage caused by Hurricanes Irma and
Maria, which ravaged our territory in September of 2017.
We are a resilient people, but my testimony today is truly
intended to actualize the empathy and to request your continued
urgent support to address the critical Federal and local
funding crisis we are facing here in our healthcare system in
the Virgin Islands. My testimony is here today, and I just feel
the need as I am sitting here with you to speak from my heart,
and I will go back a little bit to the script.
But as I am sitting here, I am sitting here with some hope,
but I reflected just a few moments ago when I was sitting under
a palm tree on one of our beaches one day on a cultural
holiday. And I was called by our Medicaid director to tell me
of a little boy who was just born about 3 days ago who had
deteriorated digestive system and he would die in a few days.
At that point, we faced the decision of whether we would
send this child off island, and at that point we were terrified
because we said if we send this child, we may not be able to
pay immediately. But I called my commissioner and I recommended
that we help to save this child. This child was just born 3
days ago. As I was sitting there under the palm tree, I felt
fear. I felt real fear that this child would die. And it was
then we made the decision to move forth even with the cap at
that time, even before our hundred percent FMAP. We were
terrified at the choices we had to make.
And as I am sitting here with some hope, I reflect on
sitting at my dining room table just a few weeks ago,
probably--no, a couple months ago--when I got the call from a
teacher of a 20-year-old boy who had graduated early and she
said, ``He is in the hospital and he is paralyzed and he needs
to be airlifted. He is one of your Medicaid members, can you
send him?''
At that point, we had to make the decision. And I knew that
our monies were running out under the BBA 100 percent funding,
but I said we must, we must send this man, this young man, so
he can walk again. And I will share with you 3 weeks ago we got
this call that this young man is walking again because we made
the decisions, the tough decisions.
And in the U.S. Virgin Islands as I am sitting here, I sit
here with hope, but I want to share with you that we need your
help. We need your urgent help. We understand. We understand
that permanent fixes may not be able to be done, but we need
your support even if it is another hundred percent for a couple
of years, even it is in the future you make a permanent fix.
But as we approach this Medicaid funding cliff, I appeal to
you, help us in the U.S. Virgin Islands. Help us in all of the
U.S. territories. You can make a difference, and I know by your
votes, one by one, if we put them together and with the larger
Congress, we can make a difference for the people of the U.S.
Virgin Islands and the other territories.
So, I thank you. You have my testimony in writing. You can
ask me questions. But just now I feel like I needed to speak
from my heart.
[The prepared statement of Ms. Rhymer-Browne follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Eshoo. Thank you very much. I like the sounds of your
heart.
I now would like to recognize--oh, that is it for the--no,
we have Ms. Sablan. I would now like to recognize you for your
testimony, and you have 5 minutes. Welcome.
STATEMENT OF HELEN C. SABLAN
Ms. Sablan. Thank you. Good morning, honorable chairs,
ranking members, and Members of the United States House of
Representatives. We are very heartened that the committee of
jurisdiction over the Medicaid program is holding this hearing
and that Chairman Pallone recognized that the U.S. territories
are on the verge of a humanitarian and financial crisis if
Congress doesn't act swiftly to increase their Medicaid funding
for the next year and beyond. That is the plain truth.
The Commonwealth of the Northern Mariana Islands is indeed
on the verge of a humanitarian health, healthcare system, and
financial crisis because of the differences in the way the law
treats territories versus the States. Avoiding the crisis will
require an act of Congress because the difficulties are
statutory.
Before proceeding, I would like to express our deepest
appreciation to Congress for the passage and enactment of H.R.
2157 that included Medicaid disaster assistance for the CNMI
resulting from the Category 5 Super Typhoon Yutu. While
recovery efforts were initiated, a slower onset disaster was in
the making.
Throughout 2018, CNMI was sliding to the edge of the
Medicaid fiscal cliff because the temporary funding was running
out in fiscal year 2019. In March 2019, we reached and fell off
the cliff with a complete exhaustion of Medicaid funds from the
section 1108 budget caps, temporary increases by section 2005
of the Affordable Care Act, and small amount from section 1323
of the ACA.
While it is complete free fall, we fortunately landed on a
ledge with the passage of H.R. 2157. The ledge of the Medicaid
fiscal cliff is tenuous, and that ledge will crumble on
September 30 of this year. As of October 1, we will only have
limited section 1108 CHIP and EAP funding. We will not have
sufficient funding to support all mandatory services and many
critical optional services. For example, medications and
surgery will be severely cut or eliminated.
The fiscal crises in the CNMI were made worse by adding to
the debt obligation as well. The health system will be crippled
because providers will stop taking Medicaid beneficiaries.
There will be substantially more uninsured patients because the
Medicaid program will effectively be ended. CHCC will not have
funds for drugs, laboratory reagents, and other supplies.
Frustrated clinicians and nurses may once again leave the CNMI,
and all of this will affect the health of the whole population.
The U.S. citizens of the CNMI are huddling on the ledge today
but hope Congress will provide a path up the cliff and enable
the territories to avert disaster.
As shown in written testimony, there are 16,206 U.S.
citizen beneficiaries enrolled in the Medicaid and CHIP
programs today, or about 49 percent of the total U.S. citizens
in the CNMI. The median household income for a CNMI family was
less than one-third of the rest of the United States. And more
will fall on the ledge because the CNMI government just
instituted austerity measures where government employees have
been placed on a mandatory reduced work schedule.
There are two well-understood major causes of fiscal cliff,
the section 1108 budget caps and the FMAP. Both require acts of
Congress to fix.
First, section 1108. The territories receive a budget
appropriation under section 1108. The budget caps were
established decades ago and do not bear any relationship to the
actual cost of healthcare today, in the CNMI today. The ACA
recognized the problem and provided a temporary increase of
hundred million amount of expended from 2011 to 2019. During
this period, the CNMI Medicaid was able to increase eligibility
and add optional services. In FY 20, the CNMI total expenses
and IBNR was around 71 million. Compared to the total of FY
2020, CMS allotted funds so the shortfall will be about 48
million.
Second, the FMAP for the territories is an artificial
percentage, unlike the FMAP for States, that is calculated
based on per capita income relative to the national average.
Although CNMI has much lower per capita income than most of all
States, it must use a fixed and inequitable FMAP percentage.
That makes it impossible for the CNMI government to fully fund
the CNMI share.
Finally, before closing my oral statement, I would like to
say that the CNMI is very well aware of the requirements for
submitting data to the Transformed Medicaid Statistical
Information System, which is the T-MSIS, and establishment of a
Medicaid Fraud Control Unit. We are fully committed to do so
and have demonstrated our commitment and progress in our
written testimony.
In closing, the U.S. citizen Medicaid beneficiaries in the
CNMI are clearly on the verge of a humanitarian and financial
crisis if Congress doesn't act swiftly to increase their
Medicaid funding for the next year and beyond. The CNMI is in
desperate and dire situation and huddling on the edge. We are
humbly pleading Congress to eliminate the section 1108 caps and
provide us equal treatment with all States and that Congress
apply the FMAP percentage using the same method for the States.
Thank you one more time for the time in hearing our issues.
[The prepared statement of Ms. Sablan follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Eshoo. Thank you. The gentlewoman's time is expired. I
now would recognize--the Chair recognizes herself for 5 minutes
of questions.
First of all, to the full panel: I think I know the answer
to this, but just in case there is someone that doesn't agree,
do each of you support having the territories' Medicaid
programs treated the same as the States', including lifting the
cap on Federal funding and increasing the Federal match--excuse
me, anyone disagree?
Ms. Rhymer-Browne. No, we do not disagree.
Ms. Eshoo. No, so you all agree. All right.
Ms. Rhymer-Browne. We all agree.
Ms. Eshoo. All the women agree. That is terrific.
Ms. Young. Except maybe for me.
Ms. Eshoo. All right, Ms. Young.
Ms. Young. It is not that--I don't disagree, I just want
to, and I think I stated this in my written testimony, that
there is a caveat about treating American Samoa, in particular,
like a State because of our 1902(j) waiver, so it really
depends.
We are not averse to further accountability in program
integrity issues, but sometimes there are things that don't
make sense with Federal laws to apply to us. For example, a few
years ago we explored the possibility of acquiring an MMIS
system just to do data gathering as required by CMS. But when
we looked into it, it would have cost us over $20 million to
implement an MMIS system. And when you only have $11 million in
Medicaid funding block grant, that doesn't make sense.
So it is not that I am disagreeing, but I am asking the
committee that the question of whether we want to be treated
like a State, I am wary of that. And I am very happy to work
with the committee to define what does that actually mean by if
we were going to be treated like States. Thank you.
Ms. Eshoo. Thank you. I think each one of you, or the
majority of you, made reference in your testimony to the cost
of prescription drugs and air ambulance services. Can you
enlarge on that, what percentage of your overall costs that
these represent?
Yes, Ms. Avila?
Ms. Avila. Yes, Angela Avila from Puerto Rico. The cost on
pharmacy in Puerto Rico is like this 30 percent of the total
expenditure. Our total expenditure is around 2.9 billion,
actually, so it is a major part of our expenditures right now.
Ms. Eshoo. What about air ambulance services?
Ms. Avila. Air ambulances as well, but we don't need to
move our beneficiaries from the islands, so our----
Ms. Eshoo. I see.
Ms. Avila [continuing]. Like ordinary other costs are
compared to the States.
Ms. Eshoo. Ms. Young?
Ms. Young. We just recently started implementing off-island
referral 2 years ago, so--and with the availability of the ACA
money we haven't really seen the real impact on that. But we
are looking at maybe spending about $300,000 on air ambulance.
Ms. Eshoo. What about the drugs, prescription drugs?
Ms. Young. The prescription drugs are covered through our
one hospital. We do have issues on that. There is just not
enough money to cover prescription drugs across the board.
Ms. Eshoo. Ms. Arcangel?
Ms. Arcangel. With regards to air ambulance, we utilize air
ambulance roughly two to three a year. It costs us $160,000 to
send--from L.A. to Guam and Guam to L.A., because the airlines
in Guam do not, especially for stretcher cases, they don't take
patients for stretcher cases.
Ms. Eshoo. And what about prescription drugs?
Ms. Arcangel. For prescription drugs, that is second to the
highest of our expenditures. First is the inpatient and then
the pharmacy services.
Ms. Rhymer-Browne. For the U.S. Virgin Islands, pharmacy
costs are extremely expensive for us, and I would daresay about
20 percent of our costs. I just approved a payment of $5
million just last week for just the pharmacy for a couple
months. Additionally, the airlifts for our territory in the
Virgin Islands have increased because of the damages to both of
our hospitals. So we have to send the traumatic cases, the
serious complex cancer cases to the mainland.
Ms. Eshoo. Ms. Sablan?
Ms. Sablan. For CNMI, we spend about 25 percent on our
prescription drugs. For air ambulance that is being done we
use--actually, we don't have that available on the islands, so
we have to use either out of Guam or out of the Philippines,
and that is costing us a lot of money. I would say about 300-
some thousand.
Ms. Eshoo. Thank you very much. I believe my time is
expired, so I will recognize the ranking member of the
subcommittee, Dr. Burgess, for his 5 minutes of questions.
Mr. Burgess. Yes. And before I am recognized for question
time, I have a unanimous consent request that the committee
accept the testimony of Congresswoman Jenniffer Gonzalez-Colon
as for her opening statement as part of the record.
Ms. Eshoo. So ordered.
[The information appears at the conclusion of the hearing.]
Mr. Burgess. So I have a number of questions, and some of
them are complex, so I will submit those in writing so we can
get to the majority of the ones that answering in person I
think would be advantageous. I don't need for you all to go
through a bunch of numbers. We can do that on paper, and that
will be a better way to approach that.
But, Ms. Avila, in Puerto Rico--and I did travel to Puerto
Rico with Representative Gonzalez-Colon a couple of times, once
about a week and a half after the storm and it was pretty
rough, and then with the subcommittee, with then-Chairman
Walden.
But one of the things that just was very--I am a physician
by background. One of the things that was striking to me was,
you know, the docs at the hospital, OK, they are there. They
have got maybe the lights back on, the run of the generators
full-time. It is dicey, but things are manageable. But then
when they go home, their houses are dark and not air-
conditioned. Their families have been in that environment all
day.
So you can just imagine the pressure on the doctors, say:
``Hey, those nice people from the University of Miami called me
again today, and they want you to come interview for a nice job
there.'' So that is hard when you are--yes, I get the
commitment to their patients in the hospital, but then you go
home and you are faced with a family that is saying, ``I don't
know why we can't do what they are asking.''
So how has it been over the past couple of years keeping
your doctors in Puerto Rico?
Ms. Avila. Thank you for the question. Angela Avila. It has
been a real challenge just to keep our doctors in the island.
Since 2014, we have been seeing like the exit of our healthcare
professional because of their frustration and their economic
circumstances, they need to go and face attending our
beneficiaries, and that is why we are looking for to be like a
full Medicaid program and be able to provide home care
services.
Right now we have identified that home care services are
part of the new way of doing medicine in the States and in the
territories. It is the right way to do it, and at the long run
we will see the savings because we will save inpatient and
admissions, they are so expensive if we have all that support,
the other programs.
So yes, it is a challenge for our doctors. The ones that
have been--that stay in the island is because they love to be
there, it is not because of economic reasons. And what we are
looking is just for the basic baseline compared to a lower
rate, reimbursement rate than in the States, but reasonable for
our doctors to be able to serve the population.
Mr. Burgess. So did the hundred percent FMAP, did that
help?
Ms. Avila. Oh, it will be a golden opportunity for our
island to work with the healthcare system there.
Mr. Burgess. So, Ms. Arcangel, let me ask you this. Are you
also suffering from not being able to keep doctors on the
island? Do they leave you after a period of time, or are they
likely to stay?
Ms. Arcangel. No. Yes, they do leave after a few months or
a year. They do leave because of the nonpayment and low
reimbursement as well as the low rate of salaries of the
physicians.
Mr. Burgess. Is there anything other--the funding questions
aside, are there any other aspects that you can think of that
would help when it comes to getting doctors to come to the
island?
Ms. Arcangel. We should provide more incentives by
increasing the rate of their salaries, especially for our
federally qualified health centers. They come and go. They
don't stay in Guam.
Mr. Burgess. So let me ask you a question about that,
because you mentioned liability insurance in your testimony.
Ms. Arcangel. Yes.
Mr. Burgess. I think you were the only one that did. You
got my attention because liability reform is something we have
done in Texas and has been extremely helpful. Now the federally
qualified health centers, those doctors are covered under the
Federal Tort Claims Act. Is that not correct?
Ms. Arcangel. Yes, but.
Mr. Burgess. So is that helpful in keeping doctors in Guam?
Ms. Arcangel. True, but then again the rate of, you know,
the physician salary is very low. That is why they don't stay
much in Guam.
Mr. Burgess. Have you looked at any of the--some of the
States have done liability reform, California and Texas two of
the most notable. Have you looked at that as far as the
activities in Guam as well? I will tell you from the standpoint
of a physician practicing in Texas, it has been an attractant.
I mean, it is easier to get a doctor to come to New Jersey
because of what our liability rates are in Texas. I am not
saying we are stealing doctors from New Jersey, but we could.
Ms. Arcangel. Oh. That is a good idea. We will try to look
at that. Yes.
Mr. Burgess. I will be glad to follow up with you on that.
Ms. Arcangel. Thank you.
Ms. Eshoo. The gentleman's time is expired and he yields
back. I now would like to recognize the chairman of the full
committee, Mr. Pallone, for his 5 minutes of questions.
Mr. Pallone. Thank you, Madam Chair. I thought I was going
to get a New Jersey joke there for a while. I didn't know what
Dr. Burgess was up to. Anyway, my questions are of Ms. King
Young, and I want to thank you for being here.
We have heard a lot today about the consequences the fiscal
cliff faces, you know, provides to the territories, and I am
especially concerned about the effects going over the cliff
would have on people in the territories. And it sounds like you
all would have to make some terrible choices to cut back on
coverage, benefits, provider pay. It is also clear that none of
you here today wants to implement these cuts, but you will have
no choice if we don't provide you with additional Federal
funds.
And it seems to me that what is at the core of the problem
that you all described is the completely outdated way the
Federal Government funds the territories' Medicaid programs. In
a State Medicaid program, the Federal Government matches State
spending. If the State spends a dollar on Medicaid, the Federal
Government spends at least a dollar and oftentimes spends a lot
more. In other words, there is no limit on how much Federal
funds a State gets.
But it sounds like that is not the deal you all get, so you
are all getting far less Medicaid funds than the States, and
you are putting up way more of your own money. So let me try to
get through this, Ms. King Young. Under the current capped
allotment approach, your territory only receives a set amount
of Federal funding for Medicaid. But what happens if your
Federal funding isn't enough to cover your Medicaid expenses?
Ms. Young. Thank you, Chairman Pallone. If we received
enough Federal funding for our Medicaid program, it really
would allow us to cover all or most of the comprehensive
services that are required under the Social Security Act. For
example----
Mr. Pallone. But when you don't get the Federal funding, if
it isn't enough, then what happens? How do you deal with the
Medicaid expenses if----
Ms. Young. The first thing we will do is we will suspend
all of the new services that we recently added and was approved
by CMS 2 years ago. It took us a while to implement those
because they had never been done before. Prior to 2017, we only
had one Medicaid provider, and that was our hospital.
So all of the new services, medically necessary care that
is referred off island to New Zealand will be suspended. We
will stop all reimbursements to our federally qualified health
centers, the five community clinics, and we will stop all
payments to our providers that provide durable medical
equipment, prosthetics, and orthotics. And we will also stop
payments for the Medicaid dual-eligible population, the copay
assistance that we offer them to pay the 20 percent.
Mr. Pallone. All right, so looking back at your Medicaid
spending in 2018, I see that your Federal spending was much
more than the 1108 funds or the block grant you received. So
where did the additional Federal funds come from beyond the
block grant?
Ms. Young. The additional funds came from the Affordable
Care Act Medicaid----
Mr. Pallone. Oh, all right.
Ms. Young [continuing]. Funding that was made available in
2011.
Mr. Pallone. But now that expires. That additional funds
from the ACA, those expire at the end of this year, some in
September, the rest in December. Is that correct?
Ms. Young. Yes. That is correct.
Mr. Pallone. And then you are going to have a significant
funding shortfall. Is that correct?
Ms. Young. Yes.
Mr. Pallone. OK. So I understand that the size of that 1108
cap increases annually at the rate of inflation for medical
services. Have those annual increases been sufficient to keep
pace with the cost of providing care in the territories, and
does that cap increase if Medicaid enrollment increases?
Ms. Young. So, two ways. It is never enough. Our increase
per year is about 2 percent a year, and there is a shortfall of
about 6 million a year for the hospital alone.
Mr. Pallone. But does the cap increase if Medicaid
enrollment increases?
Ms. Young. So the second answer to that is we do not do
individual enrollment in American Samoa. We have a presumptive
eligibility program where most of our people are presumed
covered under Medicaid, which is about 36,000 people that we
cover, so it doesn't affect the money that we get because we
don't do individual enrollment.
Mr. Pallone. So the cap doesn't increase if enrollment
increases under that scenario, right?
Ms. Young. No.
Mr. Pallone. No.
Ms. Young. It is simply a block grant.
Mr. Pallone. All right, then let me ask you one more
question. It sounds like you have to spend a lot more of your
local funds on Medicaid than you would if you were a State.
That means those local funds can't be used for other critical
investments or services. So if you received the same Federal
Medicaid funding as a State, it seems you would free up more of
your territory's funds for investments and things like
infrastructure and education. Is that correct?
Ms. Young. Yes, but it is a very small, nominal amount. The
hospital continues to get the subsidy that it needs to operate,
but the only money that we receive for local match for the new
services is $2 million.
Mr. Pallone. But if you received the same Federal Medicaid
funding as a State, it would free up more of your territory's
funds for other things, correct?
Ms. Young. Not really, because we would still have to come
up with a local match.
Mr. Pallone. I see.
Ms. Young. So if the match doesn't change, then it doesn't
help us.
Mr. Pallone. Then it doesn't help you. All right. I just
wanted to say, I mean I think it is clear that the simple fact
is that the capped allotments that the territories receive from
the Federal Government for Medicaid are just not enough to meet
the needs of the people who live there. That is obvious, so
that is why we have to act. Thank you.
Ms. Young. Thank you.
Ms. Eshoo. The gentleman yields back. And now I would like
to recognize the gentleman from Oregon, ranking member of the
full committee, Mr. Walden, for his 5 minutes of questions.
Mr. Walden. Thank you, Madam Chair.
Dr. Schwartz and Ms. Avila, according to MACPAC, in 2017
the Medicaid program spent an average of $7,654 per year per
enrollee, but only 1,866 per year per territorial enrollee, and
only 1,844 per year per Puerto Rico enrollee. My colleague from
Puerto Rico had this question she wanted me to ask. So how does
this difference in Federal Medicaid spending affect the
provision of healthcare to low-income individuals, and how does
it affect the overall healthcare system in the non-Medicaid
population in your territory?
So, Dr. Schwartz, you might just want to tackle this from
the MACPAC side and make sure our numbers are right, and Ms.
Avila in terms of its implication. I have two other questions.
Dr. Schwartz. I will just say that, in MACPAC's June
report, we have an extensive chapter on the situation in Puerto
Rico and for which we are grateful for getting a lot of data
from the government of Puerto Rico and assess to help us do
these analyses. And when we looked at spending per enrollee in
Puerto Rico compared to the States and we adjusted for the
enrollment mix and we also took out spending on the State side
for long-term services and supports, Puerto Rico spending is
below any of the other States, so it is substantially lower.
So I will let----
Mr. Walden. All right, Ms. Avila?
Ms. Avila. It is like 36 percent lower than in the other
States of the Nation.
Mr. Walden. All right, that is helpful. And over the last
several years that Congress, led by this committee, has
provided billions of dollars in additional funding to help the
territories keep your Medicaid programs afloat, these funds
have gone well beyond the original caps set forth in section
1108 allotments. And one of the ways we have done that is by
temporarily increasing the territories' FMAP to increase the
Federal Government's share of spending, as you all know.
Now, I know that is something we are discussing here today.
A problem with that as I see it, though, is that even if we
increase the FMAP for your territories, the cap remains. So my
question to each of you is, what would happen if we just
increased the FMAP for each of your territories without
touching the cap? And along with that, for each of your
territories--because, again, there are unique challenges and
circumstances that you have each addressed--which is a bigger
hindrance to adequately funding your program: the cap or the
FMAP? If we could just kind of go down the list there.
Ms. Avila. I am sorry. Angela Avila from Puerto Rico.
Mr. Walden. Yes.
Ms. Avila. In the case of Puerto Rico, our actual cap
according to the section 1108 is $380 million, approximately,
so our actual expenditure is $2.9 billion. It is no way that we
can cover such a high difference between what is the cap amount
and what is it for expenditure. So increasing the FMAP will not
resolve the problem if we don't increase the cap.
Mr. Walden. Got it.
Ms. Young?
Ms. Young. I echo Ms. Avila's, and I think I also stated
that in my statement. We cannot fix the FMAP and not also fix
the cap, because what will happen is, if you only fix the FMAP,
all that means is we will spend our Federal dollars faster and
we will exhaust them----
Mr. Walden. Got it.
Ms. Young [continuing]. In the first quarter of the fiscal
year.
Mr. Walden. That would be a problem.
Ms. Young. So it doesn't help.
Mr. Walden. Yes, all right.
Ms. Arcangel?
Ms. Arcangel. For Guam, our total allotment is only 18.38
million. That includes administration for fiscal year 2020.
That will not last for first quarter for adults. So, if there
is no increase on the cap, then that means we have to terminate
some of our eligibles, adult eligibles. More than 50 percent of
them will not have any coverage at all.
Mr. Walden. Wow.
All right, next?
Ms. Rhymer-Browne. Yes, we need both. We need the FMAP
increased and we need the cap, because if we don't have higher
monies, just in fiscal year 2020 projected we are supposed to
get 18.8 million that will not even last for the quarter. We
are already projecting we would have to cut 15 of the 28,787
people, so 15,000 of those would have to be cut if we were just
to be given a hundred percent FMAP or raised FMAP with no
increase on the cap.
Mr. Walden. All right.
Ms. Sablan. In the CNMI we are actually spending, based on
the FY 2018, we spent 53 million, and we were advised that we
are only going to get 18 million. That includes the 1108
funding plus a CHIP. So in our case, we want the cap. Our
preference is the cap.
Mr. Walden. To raise the cap.
Ms. Sablan. Yes. Raise the cap.
Mr. Walden. All right. Thank you all for your testimony. It
has been most helpful. Some of us are going back and forth
between two subcommittee meetings simultaneously, but we do
appreciate your input and counsel as we work together to solve
this problem.
So, Madam Chair, thank you for the hearing and I yield
back.
Ms. Eshoo. The gentleman yields back. I now have the
pleasure of recognizing the gentleman from North Carolina, Mr.
Butterfield, for his 5 minutes of questioning.
Mr. Butterfield. Thank you very much, Madam Chair. And
thank you to the six witnesses for your testimony today. I have
heard some of it, and my staff has been here for the entire
time, and they will tell me the details that I may have missed.
But thank you so very much for your testimony.
You know, I am a great friend of the territories. I have
been for many, many years. It has always perplexed me that we
have treated the residents and the citizens of the territories
different from those on the mainland. That has always perplexed
me. I have never been given a satisfactory explanation about
why that has happened. The Delegates from the territories are
great friends of mine, particularly Ms. Plaskett and Delegate
Sablan and Delegate San Nicolas from Guam. The five Delegates
have just advocated tirelessly and fiercely over the years for
equal treatment for your people.
Dr. Schwartz, can you help me in just a few words
understand why the citizens of the territories are treated
differently?
Dr. Schwartz. The treatment of the territories in the
Medicaid program really dates back to the beginning of the
program. I was alive in 1965, but I obviously wasn't----
Mr. Butterfield. I finished high school that year. It was a
good year.
Dr. Schwartz [continuing]. At that time. But I think it is
a historical artifact of a very complex piece of legislation
that has not been updated.
Mr. Butterfield. To the gentlelady from the Virgin Islands,
thank you for your testimony. I have family and friends in your
homeland, and we will talk about that later. But I understand
that the U.S. Virgin Islands will lose access to Federal
funding provided under the ACA at the end of the year.
Ms. Rhymer-Browne. Yes.
Mr. Butterfield. You testified to that. You stated in your
testimony that the Virgin Islands will receive only $18 million
in Federal funding once the funding expires. I understand that
this is only 25 percent of the Federal funding that the
territory needs. Is that correct or incorrect?
Ms. Rhymer-Browne. Well, we are actually over, we have
spent over a hundred million in per annum with the--the 18.8
would really not be sufficient. Additionally, we would be very,
very much curtailed in our program accountability and integrity
programs, where we are building systems and programs that build
accountability. We do have the first-ever territory MMIS claims
system. We just completed our eligibility system with our
funding and our increased funding. So we would need even more
monies to really meet the needs. When we----
Mr. Butterfield. You don't have it in reserve? You don't
have a couple billion dollars in reserve that you could draw
from?
Ms. Rhymer-Browne. Unfortunately, we don't. Even before the
storms we were in dire straits, but now are even more so. Our
schools are still devastated. Our hospitals are devastated. Our
clinics are devastated. Our roads are still in need of repair.
And so the basic infrastructure improvements that need to be
made, really, may have to be curtailed if we have to then put
more local monies to save the lives of our citizens.
Mr. Butterfield. That is what I needed in the record. How
many beneficiaries could lose access to coverage once these
funds expire? Can you quantify the number?
Ms. Rhymer-Browne. Yes, about 15,000 or a little bit more.
Our numbers have even increased. We have 28,000 members, so
approximately 15,000 of them would have to lose coverage.
Mr. Butterfield. And these are American citizens?
Ms. Rhymer-Browne. Yes, they are.
Mr. Butterfield. Can you discuss the impact on providers
and hospital systems very quickly?
Ms. Rhymer-Browne. Well, the providers, if we were not able
to provide the Medicaid funding for the care that they are
providing, we may then have more of the exodus of our
providers. Right now we are facing just a dearth of the
specialty doctors for orthopedics, for cancer. Our cancer
center was decimated during the storm, so our providers are
desperately in need. Right now, we are reimbursing them at a
hundred percent of the Medicare rate, and many of them for the
specialties really need more monies.
Mr. Butterfield. Ms. Young in her testimony said they would
just have to cut off payments. That they just couldn't afford
it, they would have to stop reimbursing. Yes.
Ms. Rhymer-Browne. Well, in the case if we were to face
this kind of cuts that we are looking at in fiscal year 2020,
we would have similar hard decisions to make.
Mr. Butterfield. Thank you. I yield back.
Ms. Eshoo. The gentleman yields back. I now would like to
recognize the gentleman from Kentucky, Mr. Guthrie, for his 5
minutes of questions.
Mr. Guthrie. Thank you, Madam Chair. And thank you for the
opportunity to be here and all the witnesses here.
I will tell you, before the storms in the Caribbean a
couple years ago, we were--Dr. Burgess and I and all the both
sides of the aisle have been talking about the territories and
how we have to work with the Medicaid program. And I know that
for the last couple of years in some of the areas, because of
the devastation it has been hundred percent FMAP and other
adjustments. What we need to look at as we are looking at it
today, and I think it is--glad you are having this, Madam
Chair--is how to make this program fair to territories and
sustainable in the proper moving forward.
And just for an example, I was talking with my friend Ms.
Gonzalez and Ms. Radewagen, before--Ms. Plaskett, all of the
different members--and in how do you get to be fair? I know in
Puerto Rico if the fiscal year 2020 law in is in effect, 370
million will be the cap at--375 million in Puerto Rico, and
that is $285 per enrollee as compared to 7,600 in Mississippi
or 7,900 in South Dakota.
So those are some of the things that we are looking at to
how we move forward. And as I was talking to Ms. Gonzalez
earlier, I know there are sets of mandatory benefits and then
sets of optional benefits that can move forward. And I guess my
question, if Congress was to raise the FMAP or lower the cap--
or raise the cap, I guess would be the right word, remove the
cap--what would be your priorities?
I don't know if, Ms. Schwartz, this is--Dr. Schwartz--to
you, but to the others, what would be your priorities to spend?
Do you fund the mandatory benefits and what would be--where
would you spend the money? And we will just kind of go down the
aisle kind of quickly because I want to ask another question.
Ms. Avila. Angela Avila from Puerto Rico. Our first
priority will be increasing the reimbursement rates for our
doctors. The specialists and healthcare providers and our
hospitals are in jeopardy.
Mr. Guthrie. OK, thank you.
Ms. Young. Our priority would be to continue the new
services that we just implemented in the last 2 years.
Mr. Guthrie. OK, thank you.
Ms. Arcangel. Our priority will be to add additional
services, like for nursing services, because we have cap on
nursing services and we need a lot of those.
Mr. Guthrie. OK, thank you.
Ms. Rhymer-Browne. Yes, our priority would be to continue
serving the current clients and also go after the 10 to 15
thousand who are currently uncovered but are eligible for
Medicaid.
Ms. Sablan. For CNMI, our priority is to cover the
mandatory services plus some of the optional services like
medications.
Mr. Guthrie. OK, thank you. Yep. That sounds like good
priorities to move forward on.
The second, during the Bipartisan Budget Act of 2018, I
know Puerto Rico and the Virgin Islands, because of the
reactions and the relief, were required to have additional
reporting methods move forward. I know that you did those on
time, so we appreciate that. But--so what is the current
status?
And then the question for the rest of you would be, what
program integrity measures--let me do the Puerto Rico and
Virgin Islands and then go back. What program integrity
measures would you be willing to put in place should Congress
increase funding? So current status and what would you like to
see in the----
Ms. Avila. Yes. Our status right now, Puerto Rico already
implemented the first phase for the MMIS Puerto Rico. And
according to the BBA, $1.2 billion were tied to the compliance
with the T-MSIS responsibility for CMS, which we did, and we
have the certification from CMS. And also, to establish the
Medicaid Fraud Control Unit, and it is already in place in the
Justice Department and working. So we complied with the two
requirements tied to the BBA.
So next, what will be the improvements on those platforms
and controls, we are just working right now with the second
module, eligibility and enrollment for the MMIS infrastructure
in Puerto Rico. Also, we have been perfecting our contacts with
our managed care organizations starting with 92 MLR required
through the contracts----
Mr. Guthrie. I just have a few seconds left.
Ms. Avila. Oh.
Mr. Guthrie. So I guess Ms. Rhymer-Browne. I am sorry if I
said that incorrectly.
Ms. Rhymer-Browne. Yes. We did implement the first-ever
Territory Medicaid Management Information System. That system
has been operating since 2013, and I really believe that we are
doing well with that. We also implemented a Medicaid MAGI-
compliant online Medicaid eligibility system in July 2017, and
that is going well. We also already implemented a Medicaid
Fraud Control Unit that is operating under the office of our
Attorney General, and we are getting high marks with our T-MSIS
efforts for integrity.
We have finished our phase 1. We entered our phase 2, and
we were told that all of the top 23 issues for the T-MSIS 2 has
been completed.
Mr. Guthrie. Thank you. And my time has expired, and I
yield back. I appreciated your answers.
Ms. Eshoo. The gentleman yields back. Pleasure to recognize
the gentlewoman from Florida, Ms. Castor, for her 5 minutes of
questions.
Ms. Castor. Thank you, Chair Eshoo. And I want to thank all
of the witnesses for being with us today and speaking up for
the folks back home.
I think it is patently unfair that we treat American
citizens who live in Puerto Rico and the other territories
differently when it comes to the healthcare they receive under
Medicaid. Chairman Pallone said it is outdated. Dr. Schwartz,
you said this has been a chronic underfunding problem for many
years. I am heartened by the fact that Representative Soto,
Representative Velazquez, and other Members now have come up
with legislation that looks like it can help address this large
inequity. There is nothing like having the devastation of a
major hurricane like Hurricane Maria to shine the light on this
inequity, so hopefully we can move to a better place so that
all American citizens, no matter where they live, are treated
equally.
Ms. Avila, you explained to another congressional committee
recently that this fiscal cliff that Puerto Rico is facing
would be devastating for folks who rely on Medicaid for their
healthcare. I understand that, if you do not receive additional
Federal support, it is possible that over 125,000 American
citizens in Puerto Rico would lose their access to the doctor's
office and health services under Medicaid. That is a staggering
number of people. And Ms. Rhymer-Browne just added to that
total, and there are others.
And then this--Medicaid is so important because, if you
lost that many, if you faced this fiscal cliff, it would simply
fray the provider network on hospitals, doctors, and nurses and
lead to a major collapse. Could you explain why Puerto Rico
would have to cut so many people from health services under
Medicaid if this fiscal cliff comes to be?
Ms. Avila. Thank you. It will be because, as I mentioned,
our 1108 section only provide us with a cap amount of $389
million. Our actual cost in the program is $2.9 billion. We
have been able to continue as of today because of the segments
of additional funding as ACA that is going to be ending on
December this year, so we will be left with only the section
1108, $380 million with an FMAP of 55 percent.
So we are going to have like in aggregate $1.3 billion
because Puerto Rico have already identify almost a billion
dollars from our local funds to do the matching. So with $1.3
billion, we only can afford just the baseline that we have in
services, and we will not be able even to cover dental and
pharmacy. And the population that we paid 100 percent with our
local funds are the 125,000.
But more than that, we will lose 500,000 Medicaid
recipients right now because we will not have enough funds to
cover for them.
Ms. Castor. And who are we talking about? Explain, because
Medicaid usually serves our working-class neighbors that don't
have access to any other health insurance. Who are these folks?
Ms. Avila. We are talking about our more vulnerable
citizens in the island. We are talking about people that
doesn't earn more than $400 per month, and that means that they
cannot earn more than $11,000 a year, in comparison with the
States that people earning like more than $30,000 a year to be
able to participate of the Medicaid program. So that is the
huge disparity that we have right now.
Ms. Castor. So I have heard some people argue that, well,
can't you just reduce provider rates or make Medicaid more
efficient in Puerto Rico. What do you say to that?
Ms. Avila. In terms of providers' rates, as I mentioned, it
will be our priority if we have additional funding, because if
we can't pay our physician visit in an ambulatory settlement
that it runs like in Puerto Rico like no more than $20 per
visit. Here in the States it is more than $100, and that is why
our physicians are no longer able to keep providing services.
That they are really financing them in some situations.
So even if we have the cap amount, if we don't have doctors
who can serve our population we will not be--by our program in
Puerto Rico. So that will be the main cost, I will say, of this
cliff.
Ms. Castor. Thank you very much. I yield back.
Ms. Eshoo. The gentlewoman yields back. I now recognize the
gentleman from Florida, Mr. Bilirakis, for his 5 minutes of
questions.
Mr. Bilirakis. Thank you, Madam Chair. I appreciate it.
Thank you for holding this hearing as well.
Ms. Avila, I have a non-Medicaid question for you, but one
that I think is important to the overall conversation. On May
13th, Governor Rossello sent a letter to this committee
highlighting additional challenges Puerto Rico faces in the
Medicare Advantage Program. As I understand it, enrollment in
Medicare Advantage in Puerto Rico exceeds 70 percent compared
to the national average of 30 percent, so it is clearly an
important part of the island's healthcare system.
But the high enrollment also creates--and it was mentioned
just now--but the high enrollment also creates States setting
challenges for CMS that contribute to payment rates that are 40
percent below the national average. Can you discuss the role of
Medicare Advantage in Puerto Rico, and is this another area the
committee should consider as part of creating long-term
stability in Puerto Rico's healthcare system?
Ms. Avila. Definitely, and thank you for the question.
Angela Avila from Puerto Rico. Definitely, the Medicare
Advantage line of business is crucial in Puerto Rico as well as
the Medicaid program and the private sector. But in terms of
Medicaid and Medicare, we have a huge penetration in the market
because in Puerto Rico we have a high population of elderly
that are the ones who participate from the Medicare Advantage
programs.
And I don't know if it is just because it is an island
people stay there and that is why they tend to select the
Medicare Advantage program, and they are underfunding as well
when we compare their baseline against the ones that are in the
States. So yes, it is still a difference in the Medicare
Advantage area as well. And this has been aggravated because of
the people losing their jobs and the economic situation of
Puerto Rico. The high concentration of beneficiaries are under
those two programs, Medicare and Medicaid. And that is why the
importance in our economy for both lines of businesses.
Mr. Bilirakis. OK, thank you. And this is panelwide. So, as
my colleague Ranking Member Burgess mentioned in his opening
remarks, often when discussing these issues, we tend to lump
each program and the U.S. territories together as one instead
of treating them as individual entities within individual
challenges. Would you each briefly share your individual
challenges and needs?
I know you don't have a lot of time for that, but let's
start over here, Doctor, if that is OK.
Dr. Schwartz. Well, I think I will just pass the mic in the
interest of time and allow them to----
Mr. Bilirakis. OK. OK, maybe mention one challenge each or
what have you, your top priority, your top challenge we might
be able to address.
Ms. Avila. For Puerto Rico, the biggest challenge is to
keep our doctors and healthcare providers in the island,
because if we don't have our professionals serving the
population we don't have--you know, money would not be the
reason. It would be they have the ability of the healthcare
professionals.
Mr. Bilirakis. Very good.
What is your greatest need, Ms. Young?
Ms. Young. Our greatest need is we just need more money. If
we had more money we would be able to do more things and
provide services like long-term support services, things that
we can't do right now. So I think it just goes back to, we
would like to increase our block grant and change the FMAP.
That would allow us to----
Mr. Bilirakis. So you have adequate enough providers?
Ms. Young. No, we don't have enough providers. We have one
hospital. We have two providers in New Zealand and we have one
DME, durable medical equipment provider. But with more money we
would be able to work on increasing providers and services as
well.
Mr. Bilirakis. OK, very good. Thank you.
Ms. Arcangel. Our biggest challenge is the providers, also,
and at the same time the uninsured population in Guam because
our income guideline is very low. It doesn't increase. It is
based on 2016, which is 30 to 31 percent below the Federal
poverty level of 2016.
Mr. Bilirakis. Thank you very much for that information.
Ms. Rhymer-Browne. Yes, our biggest challenge would be to
continue assisting the 28,000-plus Medicaid members. And,
additionally, because of our aging community in the Virgin
Islands, one of the biggest challenges is the continuum of care
of healthcare services to include skilled nursing facilities,
of which we do not have that program in the territory. So that
would be a challenge that we would meet if we were able to get
more funding.
Mr. Bilirakis. Very good, thank you.
Ms. Sablan. For CNMI, our challenge also is funding. We are
spending a lot of--we spent 53 million in 2018, and if the
service is not available on the island we have to send our
patients off island, either to Guam, the Philippines, Hawaii,
or the U.S. mainland. That is our biggest challenge.
Mr. Bilirakis. All right, thank you very much. I appreciate
it. I yield back, Madam Chair, appreciate it.
Ms. Eshoo. The gentleman yields back. I now would like to
recognize the--let's see, where? Ms. Kelly? Oh, I see. Robin
Kelly, yes. Congresswoman Kelly from Illinois. I am looking on
the wrong side of the aisle here. You are recognized for 5
minutes--I have no question what side of the aisle you are on,
I was just looking in the wrong way--for 5 minutes of
questioning.
Ms. Kelly. Thank you, Madam Chair and Ranking Member, for
having this hearing. And I want to thank all of you for taking
the time to come. Actually, my colleague asked some of the
questions I wanted to ask, but I wanted to know from Ms.
Rhymer-Browne and Ms. Sablan, you didn't talk about providers
so much, but are you seeing physicians leave? And the reason I
am curious about that question because when I went to the
Virgin Islands and Puerto Rico after the hurricanes, and I know
Congresswoman Plaskett talked a lot about you had to send
people to Puerto Rico, but now you are saying that, you know,
you can't really handle what you have. So that must continue to
be a problem and just wondering about, both of you.
Ms. Sablan. Yes, for CNMI because the salary is not that I
guess attractive, so they won't stay for long. They will be
there for a couple of months or even a year at the most.
Ms. Kelly. And, Ms. Rhymer-Browne?
Ms. Rhymer-Browne. For the U.S. Virgin Islands, when it
comes to the providers we are really hurting for our specialty
providers. And to attract those types of physicians to the
territory, you will have to pay more money. So the provider
issue is an issue for us, and of course after the storm some of
our physicians did relocate and just leave the territory. And
now with the damages to our infrastructure with the hospitals
and the clinics, the providers are also being hurt there. So
the provider issue is one for us that is a challenge.
Ms. Kelly. And, Dr. Schwartz, if you could just snap your
finger or wave a magic wand, what are two things that you would
ask us to do?
Dr. Schwartz. AS I pointed out in my testimony, the biggest
problem is the chronic underfunding. The caps are extremely low
and have not grown over time, and the matching rate creates
other challenges, given the ability of the territories to raise
the local share. Otherwise, the challenges are obviously
different, given they are different health systems.
Ms. Kelly. And I want to thank all of you again. And
believe it or not, Madam Chair, I yield back.
Ms. Eshoo. We thank the gentlewoman, and she yields back. I
now have the pleasure of recognizing the gentlewoman from
Indiana, Mrs. Brooks.
Mrs. Brooks. Thank you, Madam Chairwoman. And thank you so
much, thanks to all of you for coming and for sharing with us.
I have a couple of different areas I would like to address.
But, first of all, like so many of my colleagues, my
colleagues on this side of the aisle, Representative Radewagen,
Representative Gonzalez-Colon, have shared with us so much.
Even though some of us have not been able to travel to the
territories, especially after the hurricane, on a very regular
basis they have been such incredible advocates for the
territories and for all of the healthcare needs of the
territories, and so just want to thank them.
I do have a question from Congressman Gonzalez to Ms.
Avila. If Congress does not provide for additional funding for
Puerto Rico's Medicaid program for fiscal year 2020, how long
will the currently assigned Federal Medicaid funding last, if
you know?
Ms. Avila. We have estimated that is going to be available
up to March 2020, Federal funds.
Mrs. Brooks. Thank you.
Ms. Avila. Thank you.
Mrs. Brooks. March 2020.
Ms. Avila. March 2020.
Mrs. Brooks. I am going to shift a moment because, as the
chairwoman knows, we have both been very involved in the
biodefense of our country, and very recently the Blue Ribbon
Study Panel on Biodefense issued an October 28 report. The
title is ``Holding the Line on Biodefense: State, Local,
Tribal, and Territorial Reinforcements Needed,'' and I would
ask unanimous consent to include this report for the record.
Ms. Eshoo. So ordered.\1\
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\1\ The report has been retained in committee files and also is
available at https://docs.house.gov/meetings/IF/IF14/20190620/109671/
HHRG-116-IF14-20190620-SD013.pdf.
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Mrs. Brooks. Thank you so much.
Public health systems have to be prepared for biological
incidents whether they are naturally occurring or whether they
are attacks on our country, on our territories. And we know
that this panel of experts identified several areas where
territories would benefit from increased Federal assistance in
preparing and conducting surveillance of and recovering from
biological incidents.
The most recent one that I want to ask, particularly Puerto
Rico and U.S. Virgin Islands, has to do with Zika, OK, because
the CDC said that, according to the 2017 numbers, Puerto Rico
had 620 cases. This was in 2017, the last numbers that I saw,
and there could be more. U.S. Virgin Islands had 46 as
reported, and we learned as a body just the devastating health
consequences of the issues of Zika.
So I would like to start out maybe with you, Ms. Rhymer-
Browne. Can you share with us how prepared do you believe the
territories are and what additional resources for biological
incidents and what additional resources should the Federal
Government bring to bear to address this?
And then I am going to jump to you, Ms. Avila, because you
have also experienced. Then if there is time, others.
Ms. Rhymer-Browne. Yes. Incidents like Zika have been very
terrifying for us. Our hospitals, who even before the
hurricanes were not as prepared as they should be and even
after the hurricanes we are definitely not prepared as we
should be. We have been increasingly in the Virgin Islands
really trying to improve our responses for all hazards of types
of even if it is bioterrorism or anything like that.
But right now, medically, with any kind of biological
outbreaks we would really be hard pressed, our healthcare
system as it stands, without the additional help. And of course
our Medicaid members, which is 28,000-plus of our 100,000
people, if they needed the care they--really, our healthcare
system would not be able to sustain that.
Mrs. Brooks. Thank you.
Ms. Avila, since you have already had to deal with this.
Ms. Avila. Yes, but in terms of the statistics I don't have
the set numbers with me today.
Mrs. Brooks. That is fine.
Ms. Avila. I will defer to the epidemiology of Puerto Rico
to answer. But as I know we have our labs and we have at the
end of 2017, we were without Zika at that moment. So I would
like to have the opportunity to give you additional information
on that question.
Mrs. Brooks. Is there any assistance in preparing for a
large-scale biological event that you might need or that you
know of?
Ms. Avila. I will say that our needs are so many that every
help, every additional money that we will receive, we will have
the responsibility to improve our infrastructure for
biosecurity, for our extraordinary emergencies that we have
been facing. So in general terms, yes, we will need to look
forward then and just to invest in the right matter.
Mrs. Brooks. Thank you. I yield back.
Ms. Eshoo. The gentlewoman yields back. I now would like to
recognize the gentlewoman from Delaware, Ms. Blunt Rochester,
for 5 minutes of her questions.
Ms. Blunt Rochester. Thank you very much, Madam Chair, and
thank you for this hearing. I want to first share with all of
the panelists that, while you may see us coming and going,
because there are multiple hearings happening at the same time,
this hearing is vital. And we want you to know that we see you,
we hear you, you are our family. There are Representatives as
is on here on the panel, Stacey Plaskett, Mr. Sablan, people
who advocate for you even in our caucus hearings, and so we
want you to know that.
In my State of Delaware, our Latin American Community
Center, I remember when the hurricane happened and just the
fear and the tears. And so my one message to you is that we
have not forgotten. I want you to know we have not forgotten,
and so I want to start with that. I want to also recognize--I
am glad that our chairwoman talked about the strong women that
are in front of us. You make us proud as well, so I want to
share that with you as well.
And I really wanted to just give you each an opportunity to
highlight the impact. We already know that you start from a
very tenuous place with this Medicaid cliff, but I know that
natural disasters have an impact on top of that and sometimes,
you know, some areas get more attention in the media than
others.
So if you could each just share, you know, a little bit
about the impact above and beyond when a natural disaster hits,
how does that impact you? And I will start with Ms. Rhymer-
Browne.
Ms. Rhymer-Browne. Yes. I would just like to share, after
Hurricane Irma impacted us in the Virgin Islands and Maria soon
after, within a matter of about 2 weeks we had to airlift or
cruise ship out 8 to 10 thousand people out of our 100,000
population. This separated families. Mothers left with
children. Fathers left with children. Entire families left.
Even our graduating classes this year were smaller because of
the number of people who had to leave.
So the impact is really very great when these hurricanes
happen. And with the hurricane of the Medicaid cliff pending,
we are really afraid of what will happen. But we will continue
to maintain hope change will come.
Ms. Blunt Rochester. Thank you.
Ms. Arcangel?
Ms. Arcangel. For several years we have not experienced any
of those, but we are trying to be ready, looking forward to an
assistance from the Federal people in case this happens to us.
Ms. Blunt Rochester. Ms. Young?
Ms. Young. Yes. We also have been fortunate that we have
not been hit with any devastating natural disasters in recent
years. But if that were the case, the impact would be
devastating. We only have one hospital. We only have one
airport. And if a hurricane hits and, you know, crashes all of
those systems, our only recourse is the fast response from the
Federal Government.
And we need more Medicaid money. We would need more
Medicaid money to do off-island emergency evacuations that we
don't have right now.
Ms. Blunt Rochester. Ms. Sablan, would you like to share
anything?
Ms. Sablan. Yes. We just got hit by Super Typhoon, and we
only also have one hospital that really impacted as a result of
that typhoon. And I am glad that there is a lot of help that
came, and that really helped us with that.
Ms. Blunt Rochester. Thank you.
And last, but not least, Ms. Avila?
Ms. Avila. Well, and for me it is very difficult to talk
about our experience because it is like, it is scary. It is
terrifying just to think about going through this next time. I
have lived in Puerto Rico for all my life, and I have never
seen something like we lived under the circumstances of
Hurricane Maria. So our experiences have been learning how to
be resilient, how to improve our infrastructure not to suffer
something like what we live with the hurricanes.
Ms. Blunt Rochester. Thank you.
Ms. Avila. Thank you.
Ms. Blunt Rochester. I wanted you all to have that
opportunity because sometimes the media doesn't pick it up.
And, Dr. Schwartz, thank you for initially giving us those
two big things that we need to address as well. I yield back.
Ms. Eshoo. The gentlewoman yields back. And I now recognize
the gentleman from Virginia, Mr. Griffith, for 5 minutes of
questioning.
Mr. Griffith. Thank you very much, Madam Chair. I
appreciate you all being here. I apologize to you all, but I
have been in another hearing most of the morning and,
accordingly, I am going to yield my time to Dr. Burgess.
Mr. Burgess. And I thank the gentleman for yielding. I
thank him for his work on this committee. It is invaluable.
So let me come back to Guam for a moment. Madam Arcangel,
you mentioned in your testimony that one of the biggest issues
in Guam is the untimely or delayed payments in Medicaid. Can
you enlighten us as to why this is happening?
Ms. Arcangel. Well, because at the beginning of fiscal
year, the budget appropriation to match the Medicaid current is
not enough. So I look for money within my division to match
that, so providers wait in the meantime. And at the same time,
it depends on the cash flow of the government. So if there is
available cash to match the Federal grant, then that is the
only time we can pay the providers. So sometimes they wait 3
months, 6 months to get paid for those. So that is the reason
why.
And at the same time, the reimbursement of the providers is
really low. Even our contracts we don't file on providers, we
have thresholds. So if we meet our thresholds and we don't pay
them, they don't accept our patients, so the patient stays at
the hospital. In the meantime, the cost increases, the
expenditure increases.
Mr. Burgess. So it is a vicious cycle.
Ms. Arcangel. Yes, it is a vicious cycle.
Mr. Burgess. And of course from a provider's standpoint, if
your days in accounts receivable are much over 60 or 90 days,
it is very, very difficult to run your practice. So I am
sympathetic to the doctors who say, ``Look, I can't afford to
see your patients.''
Ms. Arcangel. Yes.
Mr. Burgess. But that does seem like a solvable problem. On
the issue of the cap, some of the territories expanded Medicaid
under the ACA, and some did not. So for the three that did--
Puerto Rico, Virgin Islands, and Guam--has that caused you to
reach that 1108 cap faster than before the expansion occurred?
So let's start with Puerto Rico.
Ms. Avila. In the case of Puerto Rico, I don't think that
will deplete our 1108 faster because we use the ACA funds
first, and then we apply the 1108 cap amounts. So, right now,
we have remaining balance from the ACA until December. We have
a small remaining balance of ACA, and then we will apply the
1108 cap amounts. So in that case----
Mr. Burgess. So on the expansion population, in the States
they draw down, or originally drew down, a hundred percent
FMAP, and now it is down, I think, to 93 or 94 percent. Does
that occur in Puerto Rico as well?
Ms. Avila. Definitely, yes. Yes.
Mr. Burgess. So you are actually affecting the burn rate of
your dollars under the cap.
Ms. Avila. So, yes. That is correct.
Mr. Burgess. OK. Ms. Arcangel, in Guam?
Ms. Arcangel. Yes, we finished that in the first month of
the fiscal year. The reason being is because our IBNR are not
paid. We paid that at the beginning of fiscal year, so we
finish 1108 first, and then we need to draw down the request
for additional from ACA funding, which is section 2005.
Mr. Burgess. But does that affect your total under the cap,
under the 1108 cap?
Ms. Arcangel. Yes, it affects. But this, actually, the ACA
helps us. The reason being is because the COFAs, which are
under our locally funded program, we utilize the 1108 to pay
for those emergency services. That is why we finish it at the
beginning of the fiscal year.
Mr. Burgess. OK, but it still increases your burn rate, it
seems to me.
Ms. Rhymer-Browne, let me ask you the same.
Ms. Rhymer-Browne. Yes. It definitely--we are, we did
expand our Medicaid, so 2012 we had about 12,000. Now we are at
over 28,000. So it definitely has, we burn that up very
quickly. And, of course, ACA has nothing to do with it, and
then for the hundred percent, we were using that because we did
not have to match it. Our ACA, we still have about 140 million
sitting because we can't afford the 55/45 percent match.
Mr. Burgess. But on that hundred percent match, was that
still calculated under the 1108 cap?
Ms. Rhymer-Browne. No. No, it is separate.
Mr. Burgess. Oh, those were separate dollars you were
drawing down. OK.
Ms. Rhymer-Browne. Yes. Yes, separate.
Mr. Burgess. OK. All right, I thank the gentleman for
yielding, and I will yield back.
Mr. Griffith. Yield back.
Ms. Eshoo. The gentleman yields back. I recognize the
gentleman from Maryland, Mr. Sarbanes, for 5 minutes of his
questions.
Mr. Sarbanes. Thank you, Madam Chair. Thank all of you for
being here at this very important hearing, which I think for
many of our members is very enlightening. We don't get this
kind of testimony probably as often as we should so we can, in
real time, understand the issues that you are facing. And you
have presented a very united front in terms of the challenges.
Obviously, each territory has special issues that need to be
addressed and legacy issues and particular history. So I want
to thank you for that testimony.
I am very interested, and I think, Dr. Schwartz, you may be
the best person to speak to this, sort of the origins of the
differences in the formula, the FMAP, where the cap came from.
Because it seems to me that, if we are going to address the
funding issues going forward in a sustainable way, we have got
to figure out what the arguments are for why those different
formulas just are obsolete at this point, why they don't make
sense.
And I am sure some that will oppose changing them and
making them more robust, making them more equivalent to what
the States see, will anchor their opposition in the notion
that, because of the special status of the territories, those
formulas ought to stay the way they are. And there has been
some references as to why it is outdated, why it is obsolete,
why it came into existence at a different time that is no
longer analogous to where we are today, but I think it is going
to be important for us to make the case for that if we are
going to get the formulas changed. So if you could maybe speak
to that issue, that would be helpful to me.
Dr. Schwartz. Sure. The caps were first added in the 1967
Social Security amendments. Some of these programs started much
later than that. We do know that in the Social Security Act at
that time there were caps and special formulas for other public
assistance programs. And while we don't know what factors
Congress considered when setting those caps, I think it is
fairly typical that, when new programs are introduced, they
build on previous programs.
I would also say that as far back as 1978, the Senate
Finance Committee noted that the ceilings on Federal Medicaid
expenditures have severely affected the amount of funds
available to the territories to operate adequate Medicaid
programs. So this is a longstanding problem. There has
obviously been some changes over time. The ACA lifted the
matching rate from 50 to 55 percent, the various infusions of
Federal funds are recognition of that. But there has not been a
significant statutory change in the Social Security Act since,
you know, for over 40, 50 years.
Mr. Sarbanes. Do you know whether--you just alluded to
there being other programs different from the ones that are
administered by the territories that were subject to different
kinds of caps and matching formulas, and that that might have
been a basis for putting those in place in these situations, or
not.
But do you know if any of those have been changed over time
and moved up to where they are equivalent to what the State
formulas are and what rationales might have been offered in
those instances?
Dr. Schwartz. I don't have that information at my
fingertips, but we could certainly get that to you.
Mr. Sarbanes. I think that would be very helpful, because
we obviously have a very powerful argument based on the needs
of the territories, and in some instances the recent challenges
that have been faced, let's say, in the case of Puerto Rico and
the U.S. Virgin Islands based on the disasters that have
occurred.
But I think if we are going to make the most robust
argument, it has to be a combination of arguing that the needs
are what they are and have to be met in a sustainable fashion
and that, the whatever the rationale that previously may have
justified the difference in the way the formulas were
developed, that that rationale is no longer applicable.
So getting that information, I think, would be extremely
helpful. Thank you all for being here today. I yield back.
Ms. Eshoo. The gentleman yields back. I now would like to
recognize the gentlewoman from New Hampshire, Ms. Kuster, for
her 5 minutes of questioning. And if no other Republicans come
back, Mr. Soto will follow and then we will have, I think, have
concluded our questions.
So, Ms. Kuster, you are recognized.
Ms. Kuster. Thank you, Chairwoman Eshoo, for holding this
critical hearing today to discuss the remarkable disparities in
our healthcare system between the territories and the States.
If the conversation today has shown us anything, it is that
Medicaid block granting simply does not work. Unfortunately,
this example of poor policy is at the expense of Americans who
live in the territories represented here.
Though New Hampshire is a far distance, Granite Staters can
relate all too well to many of the same issues you described
here today. I cannot imagine how we would be able to combat the
opioid epidemic in my State if we did not have the resources of
the Medicaid program. Most of the people seeking treatment are
eligible for healthcare for their substance use disorder and
mental health issues because of the Medicaid expansion. As our
population ages, it is Medicaid that is the safety net for our
most vulnerable citizens.
So I want to thank all of the witnesses for appearing
before us today, and I share your view of the challenges facing
your Medicaid programs.
Ms. Avila, the Governor of Puerto Rico has submitted a
request to Congress for 15.1, in funding, million. Is that the
correct number?
Ms. Avila. Yes, it is, 15.1 billion dollars for----
Ms. Kuster. Billion.
Ms. Avila. Billion, for 5----
Ms. Kuster. Thank you. We try to keep track of the m's and
the b's around here.
Ms. Avila. Yes.
Ms. Kuster. Fifteen point one billion.
Ms. Avila. Billion, 5 years.
Ms. Kuster. OK. And the Governor's request included
specific program improvements that Puerto Rico would implement
with this temporary funding. And I apologize if you have spoken
to this earlier, I was in another hearing. But what are those
improvements, and why are they necessary?
Ms. Avila. Well, starting with the reimbursement rates for
our doctors and healthcare professionals, our reimbursement
rates if we compare to the ones in the States are lower than 19
percent of what they have.
Ms. Kuster. Nineteen percent?
Ms. Avila. Percent of what we pay----
Ms. Kuster. Of what physicians would receive?
Ms. Avila. Yes, our physicians. For example, a procedure
for, a cardiovascular procedure in the States is paid between
1,000 to 2,000 dollars. In Puerto Rico we will pay no more than
$300. Our doctors for a visit, they are paid like 20 to 25
dollars, in comparison to 100, 125 dollars that is in the CMS
fee schedules. And what we are trying to do is just to
stabilize our system according to what is gathered in the fee
schedules that are part of the programs in the States as
Medicare, as Medicaid references, and that way is we will avoid
our exodus of providers, because we are losing almost 1.5
doctors per day right now because of the lower payments.
Ms. Kuster. Lower reimbursement payments.
Ms. Avila. Yes.
Ms. Kuster. And can I just ask briefly, the rest of you, is
the reimbursement equally low for you for physicians or--I am
sorry. Let's just go--if you could.
Ms. Young. For American Samoa it doesn't apply because we
only have one hospital that utilizes a certified public
expenditure payment method. So we simply pay based on the
Medicare cost report that the hospital files every year, and we
pay actual costs that it requires to operate the hospital. We
don't have independent, private physicians that are Medicaid
providers. The only other provider on island that we have is
the federally qualified health center.
Ms. Kuster. And for you?
Ms. Arcangel. Our reimbursement rate is actually based on
Medicare rate, but for the hospital alone the reimbursement
rate is very low, which is 1,600 per day only. That is because
of DEPRA. Our private hospital, it is 300 percent higher than
our own government hospital.
With regards to physicians, it is also based on Medicare
rate or fee schedule. But the thing is, the cost of medical
supplies as well as equipment is so high because of the
shipping costs, because of there are only few vendors that ship
those in Guam, so that there is a tendency on higher costs
because of lack of competition.
Ms. Kuster. My time is almost up, but----
Ms. Rhymer-Browne. Yes, the Virgin Islands faces similar
situations. We have 100 percent Medicare reimbursement, and so
our providers, many of them who need, we need for specialty, do
need to charge higher and therefore may not join to become a
Medicaid provider.
Ms. Kuster. Thank you. My time is up. Thank you very much.
I yield back.
Ms. Eshoo. The gentlewoman yields back. I now recognize the
gentleman from Florida, Mr. Soto, for his 5 minutes of
questioning.
Mr. Soto. Thank you, Madam Chair. Thank you to all the
witnesses for being here today. We know we have a financial
crisis and a Medicaid crisis that just keeps coming around and
coming around again. And for that on behalf of my constituents,
you know, we apologize that you all have to go through this
over and over again, when there should be a permanent fix. And
this committee is intent on trying to fix that long term.
Ms. Avila, you know, we talked a little bit about the
Medicaid crisis in Puerto Rico, hospitals in disrepair. Nearly
half of Puerto Rico's population is enrolled in Medicaid. Isn't
that correct?
Ms. Avila. Yes, it is correct.
Mr. Soto. Yes. And we have seen the additional Federal
funding for the Medicaid program is set to expire in September.
Do you believe another temporary funding increase is sufficient
to permanently address the financial challenges facing Puerto
Rico's Medicaid problem?
Ms. Avila. Well, anything that works for us in terms of
additional funding, I would never say no. But short term is a
very dangerous situation for Puerto Rico, because the short
terms doesn't allow us to work with the Fiscal Board to work
with investments for long-term periods that will stabilize the
model, and we don't suffer those uncertainty periods that hurts
a lot our economy.
Mr. Soto. You know, Puerto Rico used to have 15,000
doctors, and my understanding is over 6,000 have left the
island over the past decade or so. Is that correct?
Ms. Avila. That is correct.
Mr. Soto. And why have they left?
Ms. Avila. Because the reimbursement rates. They, you know,
the difference from what they can earn here in the States, our
doctors are prepared, are credentialized, are--I am sorry--are
prepared according to the State standards and regulations. So
here they can easily earn three or five times what they are
going to be earning in Puerto Rico.
Mr. Soto. And many are leaving to come to my home State of
Florida.
Ms. Avila. That is right.
Mr. Soto. You know, we saw Puerto Rico have to go into debt
to prop up the Medicaid program because the reimbursement rates
were so--the matching rates were so low, and now we are stuck
in this PROMESA Fiscal Board system. And then we saw after
Hurricane Maria, it wasn't just the devastation of Hurricane
Maria that led to people having a lack of access to healthcare,
it was also the lack of funding to begin with through Medicaid.
Would you agree with that statement?
Ms. Avila. Of course, 100 percent. It has been a pattern
and a trend that is supposed to be fixed way, way before.
Mr. Soto. I am proud to have introduced, along with
Congresswoman Velazquez and the rest of the Puerto Rican task
force, a new Medicaid parity bill for Puerto Rico. I talked a
little about it, $15.1 billion, 83 percent match for the FMAP.
From 2020 to 2024, there would be four enhancement
requirements. Hospital payments, physician payments need to be
increased, Hep C coverage, and Part B reforms. I understand
that at the end of the transition period, though, the bill
would provide Puerto Rico with the same financial treatment and
FMAP as a State program.
Is Puerto Rico willing to cover all the mandatory Medicaid
benefits if it means you would receive State-like funding and
FMAP?
Ms. Avila. The answer is absolutely yes.
Mr. Soto. And can you discuss the benefits of providing
Puerto Rico with sustainable funding? How would that financial
certainty impact Puerto Rico's long-term financial problem?
Ms. Avila. Well, first of all, we will be able to keep our
doctors and healthcare professionals. And our hospitals need to
be improving their infrastructure in their payment. We pay
right now $700 per diem in comparison to thousands of dollars
that has been paid in the States. So work with our hospital is
an urgent matter as well of improving the poverty level, the
income poverty level for Puerto Rico for to make justice to the
more vulnerable ones in the island.
Mr. Soto. Thanks, Ms. Avila.
And, you know, I also want to take a moment to talk a
little about the great work that not only my colleague
Jenniffer Gonzalez-Colon has been doing in this area, but also
Governor Rossello back on the island. They have been both
drumming this drumbeat since well before Hurricane Maria, and a
lot of the input from their ideas were included in this
legislation.
And I really appreciate your leadership as well, Ms. Avila.
We are going to do our best to end this crisis for good in
Puerto Rico with regard to Medicaid. I yield back.
Ms. Avila. Thank you.
Ms. Eshoo. The gentleman yields back. I now would like to
recognize the gentleman from Georgia, Mr. Carter.
Mr. Carter. Thank you, Madam Chair.
Ms. Eshoo. The only pharmacist in the Congress. How is
that?
Mr. Carter. That is great. Thank you, Madam Chair, I
appreciate it. And I appreciate all of you being here. This is
certainly something that is very important, obviously, to all
of us.
Ms. Avila, I wanted to ask you, it is my understanding that
Puerto Rico's largest benefit categories in terms of spending
is outpatient prescription drugs and that the amount spent on
drugs is projected to be over $800 million in fiscal year 2020.
Why is that?
Ms. Avila. Well, that is why because we work with a rebate
program in Puerto Rico, but the rebates are coming to the
government directly. It doesn't go to the MCOs, or the managed
care organizations, so it is our artificially priced, the drugs
are.
Mr. Carter. I get that. But what I am getting at is, in
comparison to the national average, it is much higher. That
same program is applied all throughout the country. So you are
right, 800 million is somewhat skewed, but at the same time, in
comparison to the other numbers with the rest of the country,
it is above the national average. And I am just wondering if
there is a reason for that.
Ms. Avila. Well, I will need to look for more information
because our pharmacy program is mandatory generic. We are
keeping it mandatory, and we have more than 85 percent of those
are included in our gestation. So the prices, the drug prices
has been increasing in 20 percent, you know.
Mr. Carter. And I get all that. And again, where I am
coming from is just in comparison.
Ms. Avila. Yes.
Mr. Carter. I am comparing you to the rest of the country,
and in comparison the percentage you spend on prescription
drugs is higher than it is elsewhere. I am just wondering why.
And also, a lot of indicators are telling us that the outcomes
are worsening.
Ms. Avila. Well, we have a lot of diabetics, hypertension.
We have some outliers in our population of those conditions
that drive the costs to those extremes that we are looking, but
we already have programs in place that monitor the utilization.
But the behavior of the population, we haven't had all the
programs in place to be able to track to go and look for those
programs that monitor the clinical aspects of our population.
But it is a reality, yes. We have sicker people in----
Mr. Carter. Well, please understand, I am not coming from a
critical perspective.
Ms. Avila. No, I understand.
Mr. Carter. I am inquisitive as to--and you have just
answered some of my next question, and that is, you know, what
kind of health problems are you having. I mean, I am from the
South, and in the South we are the cardio belt. I mean, we have
a lot of cardiovascular disease because of diet or whatever,
but that is a big problem we have. Now you have just indicated
that diabetes, hypertension--do you have any kind of wellness
programs in place that you are trying to push forward?
Ms. Avila. Yes. Since November 2018, we have implemented a
new healthcare model in Puerto Rico, and we are looking higher-
quality programs that works with the social determinates of our
population, and they need to bring new programs to our, you
know, to our healthcare model. We are monitoring those changes
as we speak since November 2018. We are in our first 6 months
of that new implementation, and we are supposed to be gathering
better outcomes.
Mr. Carter. OK.
Ms. Avila. Because that is why it was one of the main
intentions of that change.
Mr. Carter. OK.
Let me move to Ms. Sablan and Ms. Young. Your two
territories as I understand it--and please forgive me if I am
being redundant in my questions, I have had another committee
hearing going on at the same time. But it is my understanding
that you have a waiver. That your Medicaid and your CHIP
programs are under a section 1902(j) waiver. Are you familiar
with that?
Ms. Young. Yes.
Mr. Carter. Ms. Young, you are?
Ms. Young. Yes.
Mr. Carter. And that waiver is specific, as I understand
it, to just your country and Ms. Sablan's country. And I was
just wondering, do you feel like that waiver might help some of
the other territories? Is that something that has benefited
your countries?
Ms. Young. Well, our 1902(j) waiver has----
Mr. Carter. Excuse me, territories. Excuse me, I am sorry.
Ms. Young. Yes, it has definitely been to our advantage
because we are so unique in so many different ways. We don't do
individual enrollment. We are very remote. And we also only
have one airline that has two flights a week to our territory,
so it limits our ability to do a lot of things. But I think as
to the other territories, I think it would be best for them.
Mr. Carter. Right.
Ms. Young. But I have heard that people are interested in
our 1902(j) waiver.
Mr. Carter. Right.
Ms. Sablan?
Ms. Sablan. Yes, that is a very unique program. And so what
happens is, like, we drop off the categorically requirement,
and it is applied to anybody that meets our income and resource
limit. But we are doing eligibility----
Mr. Carter. Good, good.
Ms. Sablan [continuing]. Enrollment.
Mr. Carter. Well, thank you all for your efforts in making
these programs the best that they can be, and we certainly
stand ready to help you in any way that we can. So thank you,
and I yield back.
Ms. Eshoo. The gentleman yields back. I now have the
pleasure of recognizing the gentleman from Massachusetts, Mr.
Kennedy, for 5 minutes of his questions.
Mr. Kennedy. Madam Chair, thank you. Given the fact that I
just jumped my good friend from California, I will happily
yield. I will trade turns with the gentleman from California,
if he is ready.
Ms. Eshoo. Oh, I am sorry.
Mr. Cardenas. That is all right.
Ms. Eshoo. It is my mistake.
Mr. Cardenas. Thank you.
Now, that is a gentleman.
Ms. Eshoo. I think.
Mr. Cardenas. Let me tell you. We use that term loosely
around here, but he proved it.
Ms. Eshoo. No, we really mean it. We really mean it.
Mr. Cardenas. Thank you, Madam Chair.
Ms. Eshoo. Gentleman Cardenas.
Mr. Cardenas. And I much appreciated the courtesy from the
gentleman from Massachusetts. Thank you, Madam Chair, for
holding this very important hearing.
And my first question is to Ms. Avila regarding doctors and
the comparison what is or isn't happening in the territories,
specifically Puerto Rico compared to the rest of the country.
I read a report about a family in Puerto Rico who wanted to
take their newborn, a 6-week-old baby, to see a pediatric
gastroenterologist, but the wait time was several months long.
It also told the story of Diago, who was born with severely low
muscle tone and travels an hour with his mother and a nurse
just to receive medical care.
With two-thirds of children in Puerto Rico on Medicaid, how
has the loss of providers affected their ability to receive
care?
Ms. Avila. It is critical right now. There is uncertainty
just to think about having 1.5 million beneficiaries without
doctors. To be able to serve them is our main concern right
now, and that is why our urgent just to do some immediate
changes in the reimbursement rates that we are paying to our
specialists and our doctors.
Mr. Cardenas. It is my understanding that I heard a stat
that over 4,000 doctors have left Puerto Rico since 2006. And
according to some estimates, Puerto Rico is losing one doctor
per day, currently, and that was before the hurricane. How has
this affected wait times for people on Medicaid in Puerto Rico?
Ms. Avila. It has been increasing the waiting time. We have
been stating here that today we account for almost 9,000
doctors in compared to 15 or 14 thousand a couple of years ago.
And that will affect children, elderly, and all the population
as well throughout the whole island. Because the doctors that
serve the Medicaid population also serve the private sector and
the Medicare Advantage and traditional Medicare as well, so the
island will be affected islandwide.
Mr. Cardenas. OK, across the board.
Ms. Avila. Across the board, yes.
Mr. Cardenas. Also, can you clarify for the American
citizens who are listening to this hearing, a person who is
born in Puerto Rico and a person who continues to live in
Puerto Rico, whether they are 6 weeks old or 60 years old, is
that individual an American citizen?
Ms. Avila. Yes, it is.
Mr. Cardenas. OK, so we are talking about American
citizens.
Ms. Avila. Yes, we are.
Mr. Cardenas. And that is the case for all the territories,
correct? OK. No exception? We are all--the subject matter today
is talking about the territories of the United States,
individuals who are born there are American citizens. Just like
I was born in California, so I have the privilege and the
blessing of being an American citizen. Is that the case for all
of your constituents who were born in your territory?
Ms. Young. Not for American Samoa. People born in American
Samoa are U.S. nationals.
Mr. Cardenas. OK.
Ms. Rhymer-Browne. For the Virgin Islands, we are U.S.
citizens.
Ms. Sablan. For CNMI, we are U.S. citizens.
Ms. Arcangel. For Guam, they are U.S. citizens, those who
are under Medicaid program. But we also want to talk about the
COFAs because we also are responsible for the them. They are
not U.S. citizens, but the emergency services are incorporated
under Medicaid, so technically we use Medicaid to pay for
those.
So not only U.S. citizens, but because of the treaty of the
U.S. and the Compact of Free Association, so we are also
responsible for them.
Mr. Cardenas. So that treaty is a United States treaty?
Ms. Arcangel. Yes.
Mr. Cardenas. It is not a United Nations treaty.
Ms. Arcangel. No, no.
Mr. Cardenas. So we are not talking about a treaty that
other foreign governments or other human beings around the
world imposed upon us. This is a treaty that the United States
Government agreed to.
Ms. Arcangel. Yes.
Mr. Cardenas. So, in the tradition and in the spirit of
giving one's word--and a treaty is like giving someone's word
in writing--we as the United States should probably follow
through with that treaty and the obligations that we as the
United States Government agreed to. That make sense?
Ms. Arcangel. Yes.
Mr. Cardenas. OK.
Ms. Arcangel. And for them we spent $147 million in fiscal
year 2017, and the amount that we receive, it is not enough.
Mr. Cardenas. OK, so the amount that you receive, that 147
million comes out of an amount of money that is a shortfall as
it is. Is that what you are saying?
Ms. Arcangel. Yes.
Mr. Cardenas. OK. The reason why I want to ask those
questions is because I think that it is unfortunate that--I
don't know why, maybe in American history classes or what have
you--a lot of American citizens think that the people sitting
up here are not American citizens, that you are foreigners, and
that is not true.
So I just wanted to clarify that for the people watching
and listening and just wanted to thank you, and I yield back
the balance of my time.
Ms. Eshoo. The gentleman yields back. And now I would like
to recognize the gentleman from Massachusetts, Mr. Kennedy, for
his 5 minutes of questions.
Mr. Kennedy. Madam Chair, thank you. There has been some
discussion about the (j) waiver, which is essentially a broad
waiver authority that is available to American Samoa and the
Commonwealth of the Mariana Islands. Crucially, the (j) waiver
does not allow--does not allow--the Secretary of HHS to waive
the cap amount or the FMAP.
Based on what we have heard from the testimony today and in
written statements, it sounds like folks aren't actually asking
to expand the (j) waiver. They are asking for adequate,
sustainable, long-term finance structure that allows them to
operate Medicaid programs the way that they want without the
constant threat of a funding shortfall. I think it is also
worth reminding everybody that State Medicaid programs already
have waiver authority through section 1115 of the Social
Security Act.
So, Dr. Schwartz, starting with you, it is my understanding
that people generally consider waiver authority available
under--to Medicaid, excuse me--under section 1115 to be pretty
broad. Would you say that is an accurate characterization?
Dr. Schwartz. Yes.
Mr. Kennedy. So would expending (j) waiver authority to the
rest of the territories increase the size of the Federal
funding allotment?
Dr. Schwartz. No.
Mr. Kennedy. Would expanding the (j) waiver ensure that no
beneficiaries lose coverage or benefits or that no providers
see pay cuts if a territory exceeds its Federal allotment and
doesn't have enough territory funds to cover its Medicaid
costs?
Dr. Schwartz. No.
Mr. Kennedy. So no to the loss of coverage, no to the
benefits, no to the pay cuts, and if you exceed the Federal
allotment. No, no, no.
Dr. Schwartz. That is correct.
Mr. Kennedy. We have heard from both territories that
currently operate under a (j) waiver, American Samoa and the
Northern Mariana Islands, that their Medicaid programs have
both experienced significant Federal funding shortfalls. Is it
fair to say that a (j) waiver does not guarantee the financial
sustainability of a territory's Medicaid program?
Dr. Schwartz. That is correct.
Mr. Kennedy. Thank you. And that was remarkably efficient.
It sounds to me like the Medicare programs do have some
flexibility under the law and that this (j) waiver does nothing
to address the financial problems that are plaguing the
territories as we have heard from multiple witnesses today, and
that the waiver authority does not actually address the root
cause of those challenges. Instead of looking for ways to
weaken the protections of Medicaid, I hope that we can find a
way to work together to find a way to strengthen those programs
by providing the territories the funding that they so
desperately need.
And, Madam Chair, due to an extraordinarily efficient
witness, I will yield back my 3 minutes of time. Grateful.
Ms. Eshoo. The gentleman yields back. And now I would like
to recognize the gentlewoman from California, Ms. Barragan, for
her 5 minutes of questions.
Ms. Barragan. Thank you. And thank you all for being here
today and for providing testimony.
When I first heard about what was happening, I couldn't
help but think and say, ``Are you kidding me?'' American
citizens, even though they are in another place, are not being
treated fairly. They are not being treated equally as everybody
else. It is my understanding that the territories receive
Medicaid funding in the form of a block grant and that States
receive open-ended Federal funds while the funds' territories
received a fixed amount.
I don't think this is something the American people know
about. I think if I were in my congressional district, which is
Compton-Watts--very working class, a lot of people who rely
upon Medicare/Medicaid and services--they would be shocked to
hear that if they lived, say, in Puerto Rico or one of the
territories that they actually could have a period of time when
their benefits would be effectively cut and said no more.
The block grant funding amount does not come anywhere close
to covering the cost of healthcare for the territories'
Medicaid enrollees. For instance, Puerto Rico's block grant for
fiscal year 2019 is $367 million, while Puerto Rico's total
Medicaid expenditures are projected to be nearly $2.8 billion.
That is pretty remarkable when you think about the difference
in the amount that Puerto Rico has to come up with. That means
that the block grant only accounts for 13 percent of Puerto
Rico's total need. Now, once the block grant funding runs out,
the territories must use their own funds to pay the entire
remaining cost of Medicaid healthcare services.
I have been to Puerto Rico twice since Maria hit, and the
devastation and the amount of money that it is going to take to
recover is pretty remarkable.
Ms. Avila, is there some impact if Puerto Rico needs to
use--come up with these extra dollars for the gap, does that
mean they may have less money for disaster relief?
Ms. Avila. Well, starting with we will not have money to
cover for all the life that are receiving benefits right now.
We will be facing a chaos in the island because this situation
is affecting everybody on the island because of the lack of
funding, so if something like that happen, we are expecting a
mass exodus of Puerto Ricans to the States, and Puerto Rico
will need to redefine our healthcare model to be able to
comply.
Because our fiscal situation is no way that we can cover
with almost more than $1 billion from local funds right now,
even the Fiscal Board wouldn't allow us to do so. So we will
need to change everything according to what we are doing right
now and Medicaid program will be very difficult to meet with
all the requirements and of what we have right now in place.
We are not looking for waivers. We are looking for ways to
have a stabilized program and in a full capacity complying with
all that the programs require.
Ms. Barragan. OK, so just for the panel, how would you be
able to expand coverage and services if the block grants were
eliminated and you were treated the same as the States?
Ms. Avila. We would not be able to cover with that. We
would need to change the structure and to have like basic
services, and the government will need to start providing
services directly through our facilities. So.
Ms. Barragan. So, I am asking if you got rid of block
grants and you were treated like everybody else in the States,
would that be helpful? Would that help you expand services?
Ms. Avila. That will be the answer for Puerto Rico just to
be able to comply and have a sustain of our programs. So I
didn't understand your first question.
Ms. Barragan. OK. Any others on the panel?
Ms. Arcangel. For Guam, we will go in to reduce the number
of uninsured population. We will definitely increase our income
guideline and make them eligible under the program.
Ms. Rhymer-Browne. For the U.S. Virgin Islands, we would do
similarly to expand to the additional 10 to 15 thousand who are
eligible, and that will definitely help our underinsured
population and also reduce the amount of uncompensated care in
our hospitals and our clinics.
Ms. Sablan. For CNMI, we will provide the mandated services
as well as some of the optional services that is important.
Ms. Barragan. Great. So you say overall healthcare would
improve in the territories?
Ms. Arcangel. Yes.
Ms. Barragan. Thank you. I yield back.
Ms. Eshoo. The gentlewoman yields back. I now would like to
recognize the gentleman from New York, Mr. Engel, for his 5
minutes of questioning.
Mr. Engel. Thank you, Madam Chair. Let me first say U.S.
territories are subject to inequitable Medicaid funding
policies, and we can see that today. States, for instance,
receive Federal matching funds for each dollar they spend in
their Medicaid programs, whereas territories are capped by
section 1108 of the Social Security Act. And because of these
inequities, Congress has had to appropriate additional funding
on numerous occasions to avoid shortfalls in territorial
Medicaid programs. And this piecemeal funding obviously creates
uncertainty, which jeopardizes the ability of territories to
provide Medicaid coverage to Americans residing in these
communities.
So let me ask you, Ms. Schwartz, what steps can Congress
take to ensure that U.S. territories have a steady stream of
Federal support for their Medicaid program?
Dr. Schwartz. As I pointed out in my testimony, the chronic
underfunding of the territories results from the combination of
the very low caps that are provided annually and the very low
matching rate. So addressing both of those is needed to address
the chronic underfunding.
Mr. Engel. OK, thank you. Nearly 2 years ago, Hurricane
Maria made landfall in Puerto Rico and the U.S. Virgin Islands,
claiming nearly 3,000 American lives. The island is still
reeling from the aftermath of this natural catastrophe. And
although Congress provided temporary support to Puerto Rico's
Medicaid program, it needs significant long-term Federal
support. And I believe if we fail to act, Puerto Rico will go
off a Medicaid cliff, which could have disastrous consequences
for its healthcare system.
So, Ms. Avila, how would the Medicaid cliff affect Puerto
Rico's ability to retain and recruit healthcare providers?
Ms. Avila. Just to clarify, if we receive the funding or if
we stay as we are right now?
Mr. Engel. If you stayed where you are right now.
Ms. Avila. Well, we will not be able to comply with the
full requirements of the Medicaid program and we will be facing
a lack of providers, because providers are leaving the island
because we are not able to fulfill their needs in terms of
reimbursement rates. So it will be very challenging for Puerto
Rico to keep our providers in the island.
Mr. Engel. Right. And, of course, as we have been stating
today, American citizens are being treated as second-class
citizens, and it is really unacceptable. Thank you.
Ms. Avila. Thank you.
Mr. Engel. Let me ask Ms. Young. As chairman of the Foreign
Affairs Committee, I am the chairman, I always--I am shocked by
the number of people who forget that individuals living in the
U.S. territories are American citizens, and Congress has a duty
to ensure that the healthcare needs of these Americans are
fully met. So I am proud that I voted for the recent disaster
supplemental which includes additional funding for territorial
Medicaid programs such as those in American Samoa.
So, Ms. Young, would you please describe how this funding
will help our fellow citizens residing in American Samoa?
Ms. Young. First of all, thank you, Congressman, for your
vote on the disaster supp. The availability of the 100 FMAP
percentage for our territory has allowed us to resume
critically necessary medical services that we had suspended
back in March. And it has also allowed us to pay our bills for
the off-island medical referral program, and we are now able--
we have reinstated the services for durable medical equipment
and prosthetics as well as we will now be able to pay the bills
and invoices that have been in arrears for our federally
qualified healthcare centers and our community clinics. So it
has been an extremely helpful solution for us through the end
of September, so thank you for that.
Mr. Engel. OK, thank you very much. This is obviously a
very important subject. I know that our chair takes it very
seriously, and I am looking forward to working with her to
continue to make sure that there are not inequities where we
pit American citizens against other American citizens. We are
all American citizens. We are all equal, and we shouldn't
forget that. Thank you, Madam Chair.
Ms. Eshoo. We thank the gentleman and also for your
leadership at Foreign Relations, very important.
I don't see any other Members here, so what I will do at
this point is to--well, there are only a couple of us here--but
for the record, remind Members that, pursuant to committee
rules, they have 10 business days to submit additional
questions for the record.
And I think the witnesses heard several Members make
reference to the fact that they were going to submit questions
to you. You will need to answer those, so we ask that you
answer them in full and in the most timely way, because the
information that is provided to us is really foundational for
what we want to do moving ahead.
And I also would like to ask unanimous consent to enter
into the record the following. These are documents for the
record: a statement from Congresswoman Aumua Amata Coleman
Radewagen; a statement from the American Academy of Family
Physicians; a statement from the Puerto Rico Chamber of
Commerce; a statement from the Financial Oversight and
Management Board for Puerto Rico; a statement from the Multi-
sectorial Council on Puerto Rico's Health System; a statement
from the Partnership for Medicaid; and a statement from
America's Health Insurance Plans.
So I ask unanimous consent that these documents be placed
in the record. Hearing no objections, they will be placed in
the record.
[The information appears at the conclusion of the hearing.]
Ms. Eshoo. Let me just close by saying a few words to the
witnesses. I think everyone has recognized that you have
traveled a long distance. For several of you, it has taken more
than the hours it takes for me to commute across the country
every week from California to DC.
I want you to know that your travel is worth it. I believe
that collectively this panel has moved the needle, moved the
needle on what needs to be done. And the very good question
about why these programs have such low caps, low matching rates
and that in the stateside they are one figure, in the
territories they are another, I can't help but think that there
is some bias somewhere from many years ago. But I think that it
is a form of negligence to allow it to go on. This has to
change, people are desperate, and the overlay of the natural
disaster has done more damage to exacerbate what you are
already burdened with.
I want to thank my colleagues for being present. Mr. Sablan
has been here throughout. Congresswoman Coleman Radewagen--am I
pronouncing your name correctly? Thank you. My name is a little
odd, so I am sensitive about mispronunciation. You have been
here throughout, and we are going to work with you.
I know that my classmate, Congresswoman Nydia Velazquez,
has introduced her legislation. The Delegates from the other
territories have worked on a bill with Congresswoman Plaskett,
1354. And so I look forward to this committee solving this once
and for all. I don't want to see any more Band-Aids and kicking
the can down the road. The citizens of our country deserve
citizenship that is celebrated, not denigrated.
There is an old saying that many of us use,--and it is an
important one--that justice delayed is justice denied. I think
healthcare denied is justice denied.
So, on that note, we all thank you for your travels. We
thank you for your professionalism, for answer--you really
answered Members' questions so well, and we look forward to
resolving this and continuing to work with you to resolve it.
So, at this time, the subcommittee is adjourned.
[Whereupon, at 1:11 p.m., the subcommittee was adjourned.]
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